Exhibit 4.29
[LOGO] STONEPATH GROUP
September 11, 2003
[Investor Name and address]
Re: Recent Stonegate Financing
Dear [Investor Name]:
Reference is made to your recent investment in Stonepath Group, Inc. (the
"Company"). Our records indicate that you acquired shares of our common stock on
March 6, 2003 in a private placement transaction (the "Transaction) arranged by
Stonegate Securities.
The Registration Rights Agreement applicable to the Transaction (the
"Registration Rights Agreement") entitles you to a payment of $____ (the
"Registration Amount") as a result of the delay in effectiveness of the
Registration Statement registering your shares.
This correspondence shall serve as a Subscription Agreement ("Agreement")
pursuant to which you have agreed to subscribe for, and the Company has agreed
to issue to you, in lieu of payment of the Registration Amount, and at no
additional cost, [ ] newly issued shares of the Common Stock of the Company (the
"Shares"). The shares would be issued to you as full and final payment of all
obligations owed to you by the Company under the Registration Rights Agreement.
1. The Closing and Closing Conditions.
A closing of this transaction (the "Closing"), at which the Shares shall be
issued to you, shall occur once the Company has secured the approval of its
Board of Directors and the American Stock Exchange to the issuance of the
Shares. Should the Closing not occur by September 30, 2003, either party hereto
has the right to terminate this Agreement by written notice to the other.
2. Nature of the Shares.
Although the Company has agreed to register the public resale of the
Shares, upon delivery, the Shares will constitute "restricted securities."
Therefore, the Company requires that you provide the following representations
and warranties.
(a) Understanding the Nature of Securities. You understand and
acknowledge that:
(i) The Shares have not been registered under the Act or any
state securities laws and are being issued and sold in reliance upon certain
exemptions contained in the Securities Act of 1933, as amended (the "Act");
(ii) The Shares are "restricted securities" as that term is
defined in Rule 144 promulgated under the Act;
(iii) The Shares cannot be sold or transferred without
registration under the Act and applicable state securities laws, or unless the
Company receives an opinion of counsel reasonably acceptable to it (as to both
counsel and the opinion) that such registration is not necessary; and
(iv) the Shares and any certificates issued in replacement
therefore shall bear the following legend, in addition to any other legend
required by law or otherwise:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT
A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE TRANSFERRED OR DISPOSED
OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER
OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
RULES AND REGULATIONS THEREUNDER."
(b) Sophisticated Investor. You have such knowledge and experience in
business and financial matters such that you are capable of evaluating the
merits and risks of an investment in the Shares;
(c) Investment Intent. You hereby acknowledge that you have been
advised that the offer and sale of the Shares covered by this Agreement has not
been registered with, or reviewed by, the Securities and Exchange Commission
("SEC") because this offering is intended to be a non-public offering pursuant
to Section 4(2) of the Act and Regulation D promulgated thereunder. You
represent that the Shares are being purchased for your own account and not on
behalf of any other person, for investment purposes only and not with a view
towards distribution or resale to others;
(d) State Securities Laws. You understand that no securities
administrator of any state has made any finding or determination relating to the
fairness of this investment and that no securities administrator of any state
has recommended or endorsed, or will recommend or endorse, the offering of the
Shares;
(e) No General Solicitation. You acknowledge that no general
solicitation or general advertising (including communications published in any
newspaper, magazine or other broadcast) has been received by you and that no
public solicitation or advertisement with respect to the offering of the Shares
has been made to you;
(f) Loss of Investment. Your overall commitment to investments which
are not readily marketable is not disproportionate to your net worth. Your
investment in the Company will not cause such overall commitment to become
excessive. You can afford to bear the loss of you entire investment in the
Company. You have adequate means of providing for your current needs and
personal contingencies and you have no need for liquidity in your investment in
the Company;
(g) Advice of Tax and Legal Advisors. You have relied solely upon the
advice of your own tax and legal advisors with respect to the tax and other
legal aspects of this investment;
(h) Access to Information. You have had access to all material and
relevant information concerning the Company, its management, financial
condition, capitalization, market information, properties and prospects
necessary to enable you to make an informed investment decision with respect to
your subscription for the Shares. You acknowledge that you have been provided
with an opportunity to review a copy of the reports filed by the Company with
the SEC under the Securities Exchange Act of 1934. You have carefully read and
reviewed, and are familiar with and understand the contents thereof and hereof,
including, without limitation, the risk factors and other disclosures described
in the Company's Annual Report on Form 10K-A for the year ended December 31,
2002, and our most recent quarterly report on Form 10-Q/A for the period ended
June 30, 2003.
(i) Accredited Investor Status. You are an "Accredited Investor" as
that term is defined in Rule 501(a) of Regulation D promulgated by the SEC under
the Act, relevant portions of which are attached to this Agreement.
3. Registration Rights.
The Company agrees to register the public resale of the Shares in the
manner set forth in the Registration Rights Agreement attached hereto as Exhibit
"A".
4. Entire Agreement.
This Agreement constitutes the entire understanding and agreement between
the parties hereto and supersedes all prior and contemporaneous agreements,
whether oral or written, of the parties. There have been no representations or
promises, written or oral, made by any of the parties hereto except as expressly
set forth herein. The titles and captions of the paragraphs of this Agreement
are for the convenience of the parties only and shall not affect, enlarge or
modify the terms and conditions of this Agreement, nor shall they be considered
in any manner whatsoever in the interpretation, intent or meaning of this
Agreement.
Would you kindly confirm the representations and agreements made above,
as well as your agreement to subscribe for the Shares, by placing your signature
on the line provided below intending to be legally bound thereby.
STONEPATH GROUP, INC.
BY: ____________________
Acknowledged and Agreed to:
[Investor Name]
By: ____________________________
Authorized Executive Officer
Exhibit A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of September 11, 2003 by and
among Stonepath Group, Inc., a Delaware corporation (the "Company") and [Name of
Investor] (the "Holder").
W I T N E S S E T H:
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WHEREAS, the Company and the Holder are parties to a Letter Agreement dated
as of the date hereof (the "Agreement"), pursuant to which the Holder is to
receive [ ] shares of the Company's common stock (the "Common Stock");
WHEREAS, the parties hereto desire to set forth their agreement concerning
the registration under the Securities Act of 1933, as amended, of the Common
Stock issuable to the Holders.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. Definitions.
(a) "Closing" shall mean the date of the Closing under the Agreement.
(b) "Company" shall mean Stonepath Group, Inc.
(c) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any relevant time.
(d) "Person" means an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.
(e) "Registration Statement" shall mean the Registration
Statement of the Company filed with the SEC pursuant to the provisions of
Paragraph 2 of this Agreement which covers the resale of the Restricted Stock on
an appropriate form then permitted by the SEC to be used for such registration
and the sales contemplated to be made thereby under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such Registration Statement, including any pre-and post- effective amendments
thereto, in each case including the prospectus contained therein, all exhibits
thereto and all materials incorporated by reference therein.
(f) "Restricted Stock" shall mean the shares of Common Stock and any
additional shares or other equity securities of the Company issued or issuable
after the date hereof in respect of such Common Stock by way of a stock dividend
or stock split, in connection with a combination, exchange, reorganization,
recapitalization or reclassification of Company securities, or pursuant to a
merger, division, consolidation or other similar business transaction or
combination involving the Company; provided that: as to any particular shares of
Restricted Stock, such securities shall cease to constitute Restricted Stock (i)
when a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of thereunder, or (ii) when and to the extent such securities are
permitted to be distributed pursuant to subparagraph (k) of Rule 144 (or any
successor provision to such Rule) under the Securities Act or are otherwise
freely transferable to the public without further registration under the
Securities Act.
(g) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any relevant time.
(h) "SEC" shall mean the United States Securities and Exchange
Commission.
(i) "Trading Day" shall mean any day on which the New York Stock
Exchange is open for trading.
2. Piggyback Registration Rights.
(a) The Company shall advise the Holder by adequate written notice
prior to the filing of a newly filed Registration Statement under the Securities
Act (excluding registration on Forms S-8, S-4, or any successor forms thereto,
and excluding the amendment of any registration statement filed by the Company
with the SEC prior to the Closing), covering securities of the Company to be
offered and sold by the Company or other holders of the Company's securities and
shall, upon the request of the Holder given at least ten (10) business days
prior to the filing of such Registration Statement, include in any such
Registration Statement such information as may be required to permit a public
offering of the Restricted Stock. The Holder shall furnish such information as
may be reasonably requested by the Company in order to include such Restricted
Stock in the Registration Statement. In the event that any registration pursuant
to this Paragraph 2 shall be, in whole or in part, an underwritten public
offering of Common Stock 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 an orderly manner in such offering within a price range acceptable to
the Company, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, and (ii) second, the Restricted Stock
and any other registerable securities eligible and requested to be included in
such registration to the extent that the number of shares to be registered will
not, in the opinion of the managing underwriters, adversely affect the offering
of the securities pursuant to clause (i), pro rata among the holders of such
registerable securities, including the Holder of the Restricted Stock, on the
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basis of the number of shares eligible for registration which are owned by all
such holders. Notwithstanding the foregoing, the Company may withdraw any
registration statement referred to in this Paragraph 2 without thereby incurring
liability to the holders of the Restricted Stock.
(b) Notwithstanding anything to the contrary contained herein, the
Company's obligation in Paragraph 2(a) above shall extend only to the inclusion
of the Restricted Stock in a Registration Statement filed under the Securities
Act. The Company shall have no obligation to assure the terms and conditions of
distribution, to obtain a commitment from an underwriter relative to the sale of
the Restricted Stock or to otherwise assume any responsibility for the manner,
price or terms of the distribution of the Restricted Stock. Furthermore, the
Company shall not be restricted in any manner from including within the
Registration Statement or the distribution, the issuance or resale of any of its
or any other securities.
3. Registration Procedures. Whenever it is obligated to register any
Restricted Stock pursuant to this Agreement, the Company shall:
(a) prepare and file with the Commission a Registration Statement with
respect to the Restricted Stock in the manner set forth at
Paragraph 2 hereof and use its best efforts to cause such Registration Statement
to become effective as promptly as possible and to remain effective for that
period identified in Paragraph 3(g) hereafter;
(b) 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
the period specified in Paragraph 3(g) below and to comply with the provisions
of the Securities Act with respect to the disposition of all Restricted Stock
covered by such Registration Statement in accordance with the Holders intended
method of disposition set forth in such Registration Statement for such period;
(c) furnish to the Holder and to each underwriter, if any, such number
of copies of the Registration Statement and the prospectus included therein
(including each preliminary prospectus), as such person may reasonably request
in order to facilitate the public sale or other disposition of the Restricted
Stock covered by such Registration Statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such Registration Statement under the securities or blue sky laws of
such jurisdictions as the Holder, and in the case of an underwritten public
offering, the managing underwriter shall reasonably request; provided, however,
that the Company shall not for any such purpose be required to qualify generally
to transact business as a foreign corporation in any jurisdiction where it is
not so qualified or to consent to general service of process in any such
jurisdiction;
(e) immediately notify the Holder under such Registration Statement
and each underwriter, 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 contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required or necessary to be stated therein in order to make the
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statements contained therein not misleading in light of the circumstances under
which they were made;
(f) make available for inspection by the Holder, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by any such Holder or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by the Holder,
underwriter, attorney, accountant or agent in connection with such Xxxxxxxxxxxx
Statement;
(g) for purposes of Paragraphs 3(a) and 3(b) above, the Company shall
be obligated to keep any Registration Statement declared effective pursuant to
this Agreement current until the earlier to occur of the following: (A) in the
case of an underwritten public offering of securities of the Company ninety days
following the date on which all underwriters have completed the distribution of
all securities purchased by them; (B) in any other registration, date on which
all shares of Restricted Stock covered thereby shall have been sold or two (2)
years from the effective date of the Registration Statement filed by the Company
with the SEC pursuant to this Agreement;
(h) if the Common Stock of the Company is listed on any securities
exchange or automated quotation system, the Company shall list the Restricted
Stock covered by such Registration Statement on such exchange or automated
quotation system on or prior to the date on which the Registration Statement
becomes effective.
(i) enter into normal and customary underwriting arrangements or an
underwriting agreement and take all other reasonable and customary actions if
the Holder sells its shares of Restricted Stock pursuant to an underwriting
(however, in no event shall the Company, in connection with such underwriting,
be required to undertake any special audit of a fiscal period in which an audit
is normally not required);
(j) notify the Holder if there are any amendments to the Registration
Statement, any requests by the SEC to supplement or amend the Registration
Statement, or of any threat by the SEC or state securities commission to
undertake a stop order with respect to sales under the Registration Statement;
and
(k) cooperate in the timely removal of any restrictive legends from
the shares of Restricted Stock in connection with the resale of such shares
covered by an effective Registration Statement.
4. Expenses.
(a) For the purposes of this Paragraph 4, the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Paragraphs 2 and 3 of this Agreement, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, "blue sky" fees,
fees of the National Association of Securities Dealers, Inc. ("NASD"), fees and
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expenses of listing shares of Restricted Stock on any securities exchange or
automated quotation system on which the Company's shares are listed and fees of
transfer agents and registrars. The term "Selling Expenses" shall mean: all
underwriting discounts and selling commissions applicable to the sale of
Restricted Stock and all accountable or non-accountable expenses paid to any
underwriter in respect of the sale of Restricted Stock.
(b) Except as otherwise provided herein, the Company will pay all
Registration Expenses in connection with the Registration Statement filed
pursuant to Paragraph 2 of this Agreement. All Selling Expenses in connection
with any Registration Statement filed pursuant to Paragraph 2 of this Agreement
shall be borne by the participating Holders in proportion to the number of
shares sold by each, or by such persons other than the Company (except to the
extent the Company may be a seller) as they may agree.
5. Obligations of Holder.
(a) In connection with each registration hereunder, each selling
Holder will furnish to the Company in writing such information with respect to
such seller and the securities held by such seller, and the proposed
distribution by him or them as shall be reasonably requested by the Company in
order to assure compliance with federal and applicable state securities laws, as
a condition precedent to including such seller's Restricted Stock in the
Registration Statement. Each selling Holder also shall agree to promptly notify
the Company of any changes in such information included in the Registration
Statement or prospectus as a result of which there is an untrue statement of
material fact or an omission to state any material fact required or necessary to
be stated therein in order to make the statements contained therein not
misleading in light of the circumstances then existing.
(b) In connection with each registration pursuant to this Agreement,
the Holder whose shares are included therein will not effect sales thereof until
notified by the Company of the effectiveness of the Registration Statement, and
thereafter will suspend such sales after receipt of telegraphic or written
notice from the Company to suspend sales to permit the Company to correct or
update a Registration Statement or prospectus. At the end of any period during
which the Company is obligated to keep a Registration Statement current, the
Holder included in said Registration Statement shall discontinue sales of shares
pursuant to such Registration Statement upon receipt of notice from the Company
of its intention to remove from registration the shares covered by such
Registration Statement which remain unsold, and such Holder shall notify the
Company of the number of shares registered which remain unsold immediately upon
receipt of such notice from the Company.
6. Information Blackout.
(a) At any time when a Registration Statement effected pursuant to
Paragraph 2 relating to Restricted Stock is effective, upon written notice from
the Company to the Holder that the Company has determined in good faith that
sale of Restricted Stock pursuant to the Registration Statement would require
the premature disclosure of non-public material information as to which the
Company has a bonafide business purpose for maintaining its confidentiality, the
Holder shall suspend sales of Restricted Stock pursuant to such Registration
Statement until such time as the Company notifies the Holder that such material
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information has been disclosed to the public or has ceased to be material or
that sales pursuant to such Registration Statement may otherwise be resumed;
provided, however, that the number of days of any such suspension may not exceed
an aggregate of 120 days in any 360-day period; and provided, further, that upon
the expiration of such suspension the Company will file any required supplement
or amendment to the prospectus included in part of such Registration Statement
with the SEC.
7. Indemnification
(a) The Company agrees to indemnify, to the extent permitted by law,
each Holder of Restricted Stock, its officers and directors and each Person who
controls such Holder (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of material fact contained in any Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are caused by
or contained in any information furnished to the Company by such Holder for use
therein or by such Xxxxxx's failure to deliver a copy of the Registration
Statement or prospectus or any amendments or supplements thereto after the
Company has furnished such Holder with a sufficient number of copies of the
same.
(b) In connection with any Registration Statement in which a Holder of
Restricted Stock is participating, each such Holder shall furnish to the Company
in writing such information and affidavits as the Company reasonably requests
for use in connection with any such Registration Statement or prospectus and, to
the extent permitted by law, shall indemnify the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and expenses
resulting from: (i) any untrue or alleged untrue statement of material fact
contained in the Registration Statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, (but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
by such Holder); or (ii) any disposition of the Restricted Stock in a manner
that fails to comply with the permitted methods of distribution identified
within the Registration Statement; provided that the obligation to indemnify (if
there shall be more than one Holder) shall be individual, not joint and several,
for each Holder and shall be limited to the net amount of proceeds received by
such Holder from the sale of Restricted Stock pursuant to such Registration
Statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
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the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities. The Company also
agrees to make such provisions, as are reasonably requested by any indemnified
party, for contribution to such party in the event the Company's indemnification
is unavailable for any reason.
8. Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
(b) Counterparts. This Agreement may be signed in any number of
counterparts, each of whom shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and the Holders.
(d) Notices. All communications under this Agreement shall be
sufficiently given if delivered by hand or by overnight courier or mailed by
registered or certified mail, postage prepaid, addressed,
(i) if to the Company, to:
Xxxxxxx X. Xxxxx, Esquire
General Counsel
Stonepath Group, Inc.
0000 Xxxxxx Xxxxxx,
Xxxxx 0000 Xxxxxxxxxxxx, XX 00000
Telephone 000.000.0000
Fax 000.000.0000
(ii) if to the Holder, to :
[Address]
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or, at such other address as any of the parties shall have furnished in writing
to the other parties hereto.
(e) Successors and Assigns; Holders as Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties and their
respective successors and assigns, and the agreements of the Company herein
shall inure to the benefit of the Holders and their respective successors and
assigns.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Entire Agreement; Survival; Termination. This Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
STONEPATH GROUP, INC.
By:________________________________
Authorized Executive Officer
[INVESTOR]
By: _______________________________
Authorized Executive Officer
