FORM OF
SUBSCRIPTION AGREEMENT PRIVATE
AND
LETTER OF INVESTMENT INTENT
U-Ship, Inc.
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▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
Gentlemen:
The undersigned desires to become a shareholder of U-Ship, Inc. a Utah
corporation (the "Company"), and hereby subscribes for ____________ shares of
the Company's common stock, $.004 par value (the "Shares"), upon the terms and
conditions set forth below:
1. The undersigned hereby agrees to purchase the Shares for the sum of
$_____________, representing the purchase price of $___ per Share for each Share
subscribed for above. The undersigned acknowledges this subscription is
contingent upon acceptance in whole or in part by the Company.
2. The undersigned acknowledges and represents as follows:
(a) That it believes it is able to bear the economic risk of the
investment in the Shares;
(b) That it believes that it has knowledge and experience in financial
and business matters, that it is capable of evaluating the merits and risks
of the prospective investment in the Shares and that it is able to bear
such risks.
(c) That it understands an investment in the Shares is highly
speculative but believes that the investment is suitable for it based upon
its investment objectives and financial needs, and has adequate means for
providing for its current financial needs and personal contingencies and
has no need for liquidity of investment with respect to the Shares;
(d) That it has reviewed copies of the Company's recent reports filed
under the Securities Exchange Act of 1934, as amended, including, but not
limited to, the Company's 10-KSB Report for the fiscal year ended June 30,
1996 and is familiar with the factors contained therein under the caption
"Factors That May Affect Future Operating Results" which are intended to
serve as cautionary factors within the meaning of the Private Securities
Litigation Reform Act of 1995.
(e) That it has been given access to full and complete information
regarding the Company (including the opportunity to meet with Company
officers and review all documents as it may have requested in writing) and
has utilized such access to its satisfaction for the purpose of obtaining
information about the Company;
(f) That it recognizes that the Shares, as an investment, involve a
high degree of risk; and
(g) That it realizes that (i) the purchase of Shares is a long-term
investment; (ii) purchasers of Shares must bear the economic risk of
investment for an indefinite period of time because the Shares have not
been registered under the Securities Act of 1933, as amended (the "Act")
and, therefore, cannot be sold unless they are subsequently registered
under the Act or an exemption from such registration is available; and
(iii) the transferability of the Shares is restricted, and (A) requires the
written consent of the Company, (B) requires conformity with the
restrictions contained in paragraph 3 below, and (C) will be further
restricted by a legend placed on the certificate(s) representing the Shares
stating that the Shares have not been registered under the Act and
referring to the restrictions on transferability of the Shares, and by stop
transfer orders or notations on the Company's records referring to the
restrictions on transferability.
3. The undersigned has been advised that the Shares are not being
registered under the Act or the relevant state securities laws pursuant to
exemptions from the Act and laws, and that the Company's reliance upon such
exemptions is predicated in part on the undersigned's representations to the
Company as contained herein. The undersigned represents and warrants that the
Shares are being purchased for its own account and for investment and without
the intention of reselling or redistributing the same, that the undersigned has
made no agreement with others regarding any of such Shares and that its
financial condition is such that it is not likely that it will be necessary to
dispose of any of such Shares in the foreseeable future. The undersigned is
aware that, in the view of the Securities and Exchange Commission and applicable
state bodies that administer state securities laws, a purchase of Shares with an
intent to resell by reason of any foreseeable specific contingency or
anticipated change in market values, or any change in the condition of the
Company or its business, or in connection with a contemplated liquidation or
settlement of any loan obtained for the acquisition of the Shares and for which
the Shares were pledged as security, would represent an intent inconsistent with
the representations set forth above. The undersigned further represents and
agrees that if, contrary to its foregoing intentions, it should later desire to
dispose of or transfer any of such Shares in any manner, it shall not do so
without first obtaining (a) the opinion of counsel designated by the Company
that such proposed disposition or transfer lawfully may be made without the
registration of such Shares for such purpose pursuant to the Act, as then in
effect, and applicable state securities laws, or (b) such registrations (it
being expressly understood that the Company shall not have any obligation to
register the Shares for such purpose).
The undersigned agrees that the Company may place a following restrictive
legend on the certificate(s) representing the Shares, containing substantially
the following language:
"The shares represented by this Certificate were issued without
registration under the Securities Act of 1933, as amended (the "Act") and
without registration under Minnesota securities laws, in reliance upon
exemptions contained in the Act and such laws. No transfer of these shares
or any interest therein may be made except pursuant to effective
registration statements under said laws unless this Corporation has
received an opinion of counsel satisfactory to it that such transfer or
disposition does not require registration under said laws and, for any
sales under Rule 144 of the Act, such evidence as it shall request for
compliance with that rule."
The undersigned agrees and consents that the Company may place a stop transfer
order on the Certificate(s) representing the Shares to assure the undersigned's
compliance with this Agreement and the matters referenced above.
The undersigned agrees to save and hold harmless, defend and indemnify the
Company and its directors, officers and agents from any claims, liabilities,
damages, losses, expenses or penalties arising out of any misrepresentation of
information furnished by the undersigned to the Company in this Subscription
Agreement.
4. The Company agrees to the following terms and conditions relative to
registration of the Shares under the Act:
(a) Definitions. As used in this Agreement, the following terms shall
have the meanings set forth respectively:
"Advice" has the meaning set forth in Section 4(c).
"Affiliate" means, with respect to any specified person, any other
person who, directly or indirectly, controls, is controlled by, or is under
common control with such specified person.
"Closing Date" means the date on which the Shares were initially
purchased from the Company.
"Commission" means the Securities and Exchange Commission.
"Controlling Persons" has the meaning set forth in Section 4(e)(1).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"Holder" means (i) the undersigned purchaser of the Shares and (ii)
each person to whom Holder transfers the Shares as provided in Section 4(g)
hereof, if the person to whom such Shares are transferred acquires such Shares
as Registrable Securities.
"Lock-up Period" has the meaning set forth in Section 4(f).
"Lock-up Request" has the meaning set forth in Section 4(f).
"Prospectus" means the prospectus included in any Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, and by all other
amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Shares; provided, however, that any
Shares shall cease to be Registrable Securities when (i) a Registration
Statement covering such Registrable Securities has been declared effective and
such Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities become eligible for
sale pursuant to Rule 144 (or any similar provision then in force) ("Rule 144")
under the Securities Act or (iii) such Shares cease to be outstanding.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Suspension Notice" has the meaning set forth in Section 4(c).
"Suspension Period" has the meaning set forth in Section 4(c).
(b) Resale Registration.
(1) Filing, Effectiveness. If on any one occasion, one or
more Holders holding Registrable Securities shall notify the Company
in writing that they intend to offer or cause to be offered for public
resale all or any portion of their Registrable Securities, the Company
will notify all of the Holders of Registrable Securities of its
receipt of such notification and will as soon as practicable, but not
later than 120 days after receipt from the Company of such
notification, prepare and file a registration statement with the
Commission under the Securities Act on Form S-3 (the "Resale
Registration Statement"), or on such other form as may be available
and for which the Company is eligible, in the event it is not eligible
to use Form S-3, covering the resale by such Holders of their
Registrable Securities pursuant to Rule 415 under the Securities Act
from time to time in transactions not involving any underwritten
public offering and use its best efforts (i) to cause such Resale
Registration Statement to be declared effective by the Commission for
such Registrable Securities as soon as practicable thereafter and (ii)
to keep the Resale Registration Statement continuously effective until
the earliest of (x) the date on which such Holders no longer hold any
Registrable Securities registered under the Resale Registration
Statement, (y) the second anniversary of the Closing Date, or (z) the
date on which the Shares subject to one or more Registration
Statements could be sold pursuant to Rule 144(k).
In the event the Company does not file the registration
statement within 120 days after receipt of the notice referred to
above, the Holder may demand in writing and without further
compensation to the Company, that the Company issue additional shares
to the Holder equal to ten (10) percent of the amount of shares
purchased by the Holder. Such demand shall be made not later than the
second anniversary of the Closing Date.
The Company shall not be required to cause a registration statement
requested pursuant to this Section 4(b) to become effective prior to 90 days
following the effective date of a registration statement initiated by the
Company if any managing underwriter named in such registration statement has
advised the Company in writing that the registration or sale of additional
securities by Stockholders of the Company within such 90-day period would have a
material adverse effect on the likelihood of success of such underwritten
offering; provided, however, that the Company shall use its best efforts to
achieve such effectiveness promptly following such 90-day period if the request
pursuant to this Section 4(b) has been made prior to the expiration of such
90-day period. The Company may postpone the filing of any Registration Statement
required hereunder for a reasonable period of time, not to exceed 60 days, if
the Company has been advised by outside legal counsel that such filing would
require the disclosure of a material transaction or other matter and the Company
determines reasonably and in good faith that such disclosure would have a
material adverse effect on the Company; provided, however, that the Company
shall (A) use reasonable efforts to disclose such material transaction or other
matter as soon as in its good faith judgment it is prudent to do so and (B) may
so postpone such filing only if all other persons who are named as selling
securityholders under then effective registration statements filed by the
Company with the Commission and all directors of the Company are advised of the
fact that a material transaction or other matter is not being disclosed during
the length of such postponement and of the consequences of such nondisclosure
under the Securities Act and the Exchange Act.
(2) Effective Registration. A registration will not be
deemed to have been effected as a Resale Registration unless the
Resale Registration Statement with respect thereto has been declared
effective by the Commission; provided, however, that if after it has
been declared effective, the offering of Registrable Securities
pursuant to a Resale Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the Commission
or any other governmental agency or court, such Resale Registration
Statement will be deemed not to have become effective during, the
period of such interference until the offering of Registrable
Securities pursuant to such Resale Registration Statement may legally
resume.
(c) Registration Procedures. In connection with the obligations of the
Company to effect or cause the registration of any Registrable Securities
pursuant to the terms and conditions of this Agreement, the Company shall use
reasonable efforts to effect the registration and sale of such Registrable
Securities in accordance with the intended method of distribution thereof, and
in connection therewith:
(1) The Company shall prepare and file with the Commission a
Registration Statement on Form S-3 or other similar form under the
Securities Act which permits secondary sales of securities in a "shelf
registration," and use reasonable efforts to cause such Registration
Statement to become effective and remain effective in accordance with
the provisions of this Agreement;
(2) The Company shall promptly prepare and file with the
Commission such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration
Statement effective for as long as such registration is required to
remain effective pursuant to the terms hereof; shall cause the
Prospectus to be supplemented by any required Prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 or 430A
under the Securities Act; and shall comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
Registrable Securities covered by such Registration Statement during
the applicable period in accordance with the intended methods of
disposition by the Holders set forth in such Registration Statement or
supplement to the Prospectus;
(3) The Company shall promptly furnish to any Holder such
number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, as such Holder
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities being sold by such Holder;
(4) The Company shall, on or prior to the date on which a
Registration Statement is declared effective, use reasonable efforts
to register or qualify the Registrable Securities covered by such
Registration Statement under such other securities or "blue sky" laws
of such states of the United States as any Holder requests; provided,
however, that the Company shall not be required (i) to qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(c)(4) or (ii)
to file any general consent to service of process;
(5) The Company shall promptly notify each Holder, (i) when
a Prospectus or any Prospectus supplement or post-effective amendment
has been filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of
any request by the Commission or any state securities authority for
amendments and supplements to a Registration Statement and Prospectus
or for additional information after the Registration Statement has
become effective, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement, (iv)
of the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Securities under state
securities or "blue sky" laws, and (v) of the happening of any event
which makes any statement made in a Registration Statement or related
Prospectus untrue or which requires the making of any changes in such
Registration Statement or Prospectus so that they will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As soon as practicable following expiration of the
Suspension Period (as defined below), the Company shall prepare and
file with the Commission and furnish a supplement or amendment to such
Prospectus so that, as thereafter deliverable to the purchasers of
such Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Upon receipt of any notice (a "Suspension Notice") from the Company of
the happening of any event of the kind described in Section 4(c)(5)(v) the
Holder shall forthwith discontinue disposition of the Registrable Securities
pursuant to the Resale Registration Statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(c) or until it is advised in
writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the Prospectus, and, if so directed by the
Company, such Holder will, or will request any broker-dealer acting as such
Holder's agent or as an underwriter to, deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's or
broker-dealer's possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice; provided, however,
that in no event shall the period from the date on which any Holder receives a
Suspension Notice to the date on which any Holder receives either the Advice or
copies of the supplemented or amended Prospectus contemplated by Section 4(c).
(the "Suspension Period") exceed 60 days; and provided further that such
Suspension Notice shall not be effective unless the Company has
contemporaneously riven an analogous notice to all other persons named as
selling securityholders in then effective registration statements filed by the
Company with the Commission and to the Company's directors. In the event that
the Company shall give any Suspension Notice, the time periods for which a
Resale Registration Statement is required to be kept effective pursuant to
Section 4(b) hereof shall be extended by the number of days during the
Suspension Period.
(d) Registration Expenses. The Company shall bear all expenses
incurred in connection with the registration of the Registrable Shares pursuant
to Section 4(b) of this Agreement. Such expenses shall include, without
limitation, all printing, legal and accounting expenses incurred by the Company
and all registration and filing fees imposed by the Commission, any state
securities commission or the NASDAQ National Market. The Holders shall be
responsible for any brokerage or underwriting commissions and taxes of any kind
(including, without limitation, transfer taxes) with respect to any disposition,
sale or transfer of Registrable Securities and for any legal, accounting and
other expenses incurred by them.
(e) Indemnification and Contribution.
(1) Indemnification by the Company. The Company agrees to
indemnity and hold harmless, to the full extent permitted by law, each
Holder, its partners, officers, directors, trustees, Stockholders,
employees and agents, and each person who controls such Holder within
the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, or is under common control with, or is controlled
by, such Holder, together with the partners, officers, directors,
trustees, Stockholders, employees and agents of such controlling
person (collectively, the "Controlling Persons"), from and against all
losses, claims, damages, liabilities and expenses (including without
limitation reasonable legal fees and expenses incurred by any Holder
or any such Controlling Person documented in writing) (collectively,
the "Damages") to which such Holder, its partners, officers,
directors, trustees, Stockholders, employees and agents, and any such
Controlling Person may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect thereat)
arise out of or are based upon any untrue or alleged untrue statement
of material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were
registered under the Securities Act, or caused by any omission or
alleged omission to state therein a material fact necessary to make
the statements therein in light of the circumstances under which they
were made not misleading, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make
the statements therein in light of the circumstances under which they
were made not misleading, except insofar as such Damages arise out of
or are based upon any such untrue statement or omission based upon
information relating to such Holder furnished in writing to the
Company by such Holder specifically for use therein; provided,
however, that the Company shall not be liable to any Holder under this
Section 4(e)(1) to the extent that any such Damages were caused by the
fact that such Holder sold Shares to a person as to whom it shall be
established that there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus as then
amended or supplemented if, and only if, (i) the Company has
previously furnished copies of such amended or supplemented Prospectus
to such Holder and (ii) such Damages were caused by any untrue
statement or omission or alleged untrue statement or omission
contained in the Prospectus so delivered which was corrected in such
amended or supplemented Prospectus.
(2) Indemnification by the Holders. Each Holder agrees,
severally and not jointly, to indemnity and hold harmless the Company,
its Stockholders, directors, officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with
reference to information relating to such Holder furnished in writing
to the Company by such selling Holder specifically for use in any
Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto); provided, however, that such
selling Holder shall not be obligated to provide such indemnity to the
extent that such Damages result from the failure of the Company to
promptly amend or take action to correct or supplement any such
Registration Statement or Prospectus on the basis of corrected or
supplemental information provided by such selling Holder to the
Company expressly for such purpose. In no event shall the liability of
any Holder of Registrable Securities hereunder be greater in amount
than the amount of the proceeds received by such Holder upon the sale
of the Registrable Securities giving rise to such indemnification
obligation.
(3) Contribution. To the extent that the indemnification
provided for in paragraph (1) or (2) of this Section 4(e) is
unavailable to an indemnified party or insufficient in respect of any
Damages, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of
such Damages in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions that
resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and
of the Holders on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
If indemnification is available under paragraph (1) or (2) of this
Section 4(e), the indemnifying parties shall indemnity each indemnified party to
the full extent provided in such paragraphs without regard to the relative fault
of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 4(e)(3).
The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 4(e)(3) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to herein.
(f) Restrictions on Sale. In the event of an underwritten public
offering for the account of the Company, upon the written request (the "Lock-up
Request") of the managing underwriter (or underwriters) of such offering, each
Holder agrees not to effect any public sale or distribution of any securities
similar to those being registered in such offering (other than pursuant to such
offering), including, without limitation, through sales of Shares pursuant to a
Resale Registration Statement, during the 14 days prior to, and during the
90-day period beginning on the effective date of the Registration Statement
relating to such offering (the "Lock-up Period"); provided, however, that the
Holders shall not be required to comply with such Lock-up Request unless the
Company simultaneously demands analogous restrictions on sale and uses all
reasonable efforts to obtain from all other persons who are contractually bound
with the Company to comply with such Lock-up Requests and from the Company's
directors. In the event of the delivery of a Lock-up Request, the time periods
for which a Resale Registration Statement is required to be kept effective
pursuant to Section 4(b) hereof shall be extended by the number of days during
the Lock-up Period.
(g) Transfer of Registration Rights. The registration rights of Holder
and any Holders under this Section 4 may be transferred to any transferee of
Registrable Securities that acquires at least 10,000 shares of Registrable
Securities (appropriately adjusted for stock splits, stock dividends and the
like). Each such transferee shall be deemed to be a "Holder" for purposes of
this Section 4.
(5) The undersigned represents and warrants that except as otherwise
specified in Section 9, the undersigned is a bona fide resident of, and is
domiciled in, the State of Minnesota and that the Shares are being purchased
solely for the beneficial interest of the undersigned and not as nominee, for,
or on behalf of, or for the beneficial interest of, or with the intention to
transfer to, any other person, trust or organization, except as specifically set
forth in paragraph 8 of this Agreement.
PARAGRAPH 5 IS REQUIRED IN CONNECTION WITH THE EXEMPTIONS FROM THE ACT
AND STATE LAWS BEING RELIED ON BY THE COMPANY WITH RESPECT TO THE OFFER AND SALE
OF THE SHARES. ALL OF SUCH INFORMATION WILL BE KEPT CONFIDENTIAL AND WILL BE
REVIEWED ONLY BY THE COMPANY, THE AGENT, IF ANY, AND THEIR RESPECTIVE COUNSEL.
The undersigned agrees to furnish any additional information which the Company,
the Agent, if any, or their respective legal counsel deem necessary in order to
verify the responses set forth below.
(6) Accredited Status. The undersigned represents and warrants as
follows (CHECK IF APPLICABLE):
_______ (a) The undersigned is an individual with a net worth, or a joint net
worth together with his or her spouse, in excess of $1,000,000. (In
calculating net worth, you may include equity in personal property and
real estate, including your principal residence, cash, short-term
investments, stock and securities. Equity in personal property and
real estate should be based on the fair market value of such property
minus debt secured by such property.)
_______ (b) The undersigned is an individual with income in excess of $200,000
in each of the prior two years and reasonably expects an income in
excess of $200,000 in the current year.
_______ (c) The undersigned is an individual who, with his or her spouse, had
joint income in excess of $300,000 in each of the prior two years and
reasonably expects joint income in excess of $300,000 in the current
year.
_______ (d) The undersigned is a director or executive officer of U-Ship, Inc.
_______ (e) The undersigned, if other than an individual, is an entity all of
whose equity owners meet one of the tests set forth in (A) through (D)
above.
_______ (f) The undersigned is an entity, and is an "Accredited Investor" as
defined in Rule 501(a) of Regulation D under the Act. This
representation is based on the following (check one or more, as
applicable):
______i. The undersigned (or, in the case of a trust, the
undersigned trustee) is a bank or savings and loan
association as defined in Sections 3(a)(2) and 3(a)(5)(A),
respectively, of the Act acting either in its individual or
fiduciary capacity.
______ii. The undersigned is an insurance company as defined in
section 2(13) of the Act.
______iii.The undersigned is an investment company registered
under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that
Act.
______iv. The undersigned is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958.
______v. The undersigned is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974 ("ERISA") and either (check one or
more, as applicable):
___a. the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan
association, insurance company, or registered
investment advisor; or
___b. the employee benefit plan has total assets in
excess of $5,000,000; or
___c. the plan is a self-directed plan with investment
decisions made solely by persons who are
"Accredited Investors" as defined under the Act.
______vi. The undersigned is a private business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
______vii.The undersigned has total assets in excess of
$5,000,000, was not formed for the specific purpose of
acquiring shares of the Company and is one or more of the
following (check one or more, as appropriate):
___a. an organization described in Section 501(c)(3) of
the Internal Revenue Code; or
___b. a corporation; or
___c. a Massachusetts or similar business trust; or
___d. a partnership.
______viii. The undersigned is a trust with total assets exceeding
$5,000,000 which was not formed for the specific
purpose of acquiring shares of the Company and
whose purchase is directed by a person who has
such knowledge and experience in financial and
business matters that he or she is capable of
evaluating the merits and risks of the investment
in the Shares. (IF ONLY THIS RESPONSE IS CHECKED,
please contact the Company to receive and complete
an information statement before this subscription
can be considered).
7. NASD Affiliation. The undersigned is affiliated or associated,
directly or indirectly, with a National Association of Securities Dealers, Inc.
("NASD") member firm or person.
Yes ________ No ________
If yes, list the affiliated member firm or person:____________
________________________________________________________________________________
________________________________________________________________________________
Your relationship to such member firm or person:______________
________________________________________________________________________________
________________________________________________________________________________
8. Entities. If the undersigned is not an individual but an entity,
the individual signing on behalf of such entity and the entity jointly and
severally agree and certify that:
(a) The undersigned was not organized for the specific purpose of
acquiring the Shares; and
(b) This Agreement has been duly authorized by all necessary action on
the part of the undersigned, has been duly executed by an authorized officer or
representative of the undersigned, and is a legal, valid and binding obligation
of the undersigned enforceable in accordance with its terms.
9. Miscellaneous.
(a) (Manner in which title is to be held: (check one)
_____ Individual Ownership
_____ Joint Tenants with Right of Survivorship*
_____ Partnership*
_____ Tenants in Common*
_____ Corporation
_____ Trust
_____ Other ________________________________
________________________________(describe)
(b) The undersigned agrees that the undersigned understands the
meaning and legal consequences of the agreements, representations and warranties
contained herein, agrees that such agreements, representations and warranties
shall survive and remain in full force and effect after the execution hereof and
payment for the Shares, and further agrees to indemnify and hold harmless the
Company, each current and future officer, director, employee, agent and
shareholder from and against any and all loss, damage or liability due to, or
arising out of, a breach of any agreement, representation or warranty of the
undersigned contained herein.
(c) This Agreement shall be construed and interpreted in accordance
with Minnesota law without regard to conflict of law provisions.
(d) The undersigned agrees to furnish to the Company or the Agent, if
applicable, upon request, such additional information as may be deemed necessary
to determine the undersigned's suitability as an investor.
[Note: Signature page follows]
----------
* Multiple signatures required
Dated: April ___, 1997.
____________________________________ ____________________________________
____________________________________ ____________________________________
Signature Signature
____________________________________ ____________________________________
Name Typed or Printed Name Typed or Printed
____________________________________ ____________________________________
Residence Address Residence Address
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
City, State and Zip Code City, State and Zip Code
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company ____________________________________
------------------------------------
Mailing Address Mailing Address
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ____________________________________
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ _______________________________________
------------------------------------
City, State and Zip Code City, State and Zip Code
____________________________________ ____________________________________
Tax Identification or Social Tax Identification or Social
Security Number Security Number
ACCEPTANCE BY THE COMPANY
U-Ship, Inc. hereby agrees to and accepts the foregoing Subscription Agreement
to the extent of _______________ shares of its common stock.
U-SHIP, INC.
By _________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
April 28, 1997
VIA TELECOPIER
Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: PRIVATE PLACEMENT OF U-SHIP, INC. COMMON STOCK
Dear ▇▇. ▇▇▇▇▇▇▇:
By way of follow-up to our recent conversations, and pursuant to the
terms of Section 4(b)(1) of the Subscription Agreement and Letter of Investment
Intent (the "Agreement"), dated April 28, 1997, between U-Ship, Inc. (the
"Company") and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company ("▇▇▇▇▇▇▇▇▇"), pursuant to which
▇▇▇▇▇▇▇▇▇ will purchase 869,565 shares of the Company's common stock (the
"Shares"), I am writing to confirm that immediately upon receipt by the Company
of the written notice given by ▇▇▇▇▇▇▇▇▇ discussed in Section 4(b)(1) of the
Agreement, the Company will undertake to prepare and file a registration
statement with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, on Form SB-2, or on such other form as may be available to
the Company and for which the Company is eligible. In accordance with the terms
of the Subscription Agreement, the Company will file the registration statement
as soon as practicable, but not later than 120 days after receipt by the Company
of such notice.
Further, this will confirm that if at any time during the three (3)
month period immediately following the date of the Agreement, the Company sells
shares of its common stock to any third party (the "Third Party Shares") at a
per share price which is lower than the per share price paid by ▇▇▇▇▇▇▇▇▇ for
the Shares, the Company will issue to ▇▇▇▇▇▇▇▇▇ such additional shares of its
common stock as would have been issued to ▇▇▇▇▇▇▇▇▇ had the Company sold the
Shares to ▇▇▇▇▇▇▇▇▇ at the lower per share price that it sold the Third Party
Shares. The rights granted to ▇▇▇▇▇▇▇▇▇ hereunder shall not be triggered by the
Company's (i) granting options to purchase shares of its common stock to its
employees, directors, officers, consultants or independent contractors pursuant
to the terms of one of the company's stock option plans, or (ii) making an award
of its shares of its common stock to one of its employees, directors, officers,
consultants or independent contractors. In addition, the rights granted to
▇▇▇▇▇▇▇▇▇ hereunder shall not be triggered by the issuance by the Company of
shares of its common stock upon the exercise of any such option or warrant,
whether now existing or hereinafter granted or issued.
Further, the Company's obligation to issue to ▇▇▇▇▇▇▇▇▇ the additional shares of
its common stock discussed herein shall be triggered only if the Company
actually closes on the sale of the shares of its common stock and receives the
intended remuneration therefor, i.e., a mere offer to sell such shares shall not
trigger ▇▇▇▇▇▇▇▇▇'▇ rights under this paragraph.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and CEO