EXHIBIT 4.4
TARGET LOGISTICS, INC.
STOCK SUBSCRIPTION AGREEMENT
Target Logistics, Inc.
000 Xxxxxxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
This Stock Subscription Agreement (the "SUBSCRIPTION AGREEMENT") is being
furnished to Target Logistics, Inc. (the "COMPANY"), a Delaware corporation, by
the undersigned subscriber (the "INVESTOR") in connection with offering by the
Company to sell shares (the "SHARES") of its common stock, par value $0.01 per
share, (the "COMMON STOCK"). This offering is being made only to persons or
entities who are "accredited investors" as defined below. The Investor hereby
agrees to purchase Shares in a private transaction, as described herein.
In consideration for the acceptance by the Company of this Subscription
Agreement, the Investor hereby agrees, covenants, represents and warrants as
follows:
1. Purchase. Subject to the terms of this Subscription Agreement, the
Investor hereby subscribes for 200,000 Shares at a price of $0.60 per share, or
an aggregate purchase price of $120,000 (the "SUBSCRIPTION PRICE") and hereby
delivers to the Company upon the execution hereof, payment of $10,000 in cash
and/or in cancellation of amounts due from the Company to the Investor for
services theretofore provided, and a Promissory Note for the balance of the
Subscription Price. Certificates for the Shares shall be issued to the Investor
as follows: 11 certificates for 16,666 Shares each, and one certificate for
16,674 Shares.
2. Representation and Warranties of the Investor.
(i) The Investor is acquiring the Shares solely for investment,
solely for the Investor's own account, not for the account of any other person,
and not for distribution, assignment or resale to others and no other person has
a direct or indirect beneficial interest in any Shares so acquired.
(ii) The Investor has consulted with the Investor's professional and
tax advisors with respect to the financial and tax consequences of an investment
in the Company, as well as the suitability of this investment, based on the
Investor's individual circumstances.
(iii) Investor represents and acknowledges that the Investor has had
a reasonable opportunity, at a reasonable time prior to the Investor's
investment in the Company, to ask questions of and receive answers from the
Company or other representative of the Company concerning the terms and
conditions of the offering of the Shares, and the Company and its operations,
and all such questions have been answered to the Investor's full satisfaction.
The Investor further acknowledges that the Investor has had a reasonable
opportunity to obtain any relevant information which the Company possesses or
can acquire without unreasonable effort or expense.
(iv) The Investor has neither relied upon nor seen any form of
advertising or general or public solicitation, including communications
published in or broadcasted by any print or electronic medium and mass mailings,
in connection with the offering of the Shares, and are aware of no such
solicitation or advertisement received by others.
(v) The Investor is an "accredited investor" within the meaning of
Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and has checked the box(es) below which are next to the
category or categories under which the Investor qualifies as an accredited
investor:
|X| An entity, including a grantor trust, in which all of the
equity owners are accredited investors (for this purpose, a beneficiary of
a trust is not an equity owner, but the grantor of a grantor trust is an
equity owner).
|_| A corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Shares,
or an organization described in Section 501(c)(3) of the Internal Revenue
Code, with total assets in excess of $5 million.
|_| A bank as defined in Section 3(a)(2) of the Securities
Act, or any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity.
|_| An insurance company as defined in Section 2(a)(13) of the
Securities Act.
|_| A broker-dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
|_| An investment company registered under the Investment
Company Act of 1940 (the "INVESTMENT COMPANY ACT").
|_| A business development company as defined in Section
2(a)(48) of the Investment Company Act of 1940.
|_| A small business investment company licensed by the Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
|_| A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940.
|_| A trust with total assets in excess of $5 million not
formed for the specific purpose of acquiring the Shares, whose purchase is
directed by a person with such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Shares.
|_| An employee benefit plan within the meaning of ERISA if
the decision to invest in the Shares 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 adviser, or
if the employee benefit plan has total assets in excess of $5 million or,
if a self-directed plan, with investment decisions made solely by persons
that are accredited investors.
|_| A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if the plan has
total assets in excess of $5 million.
(vi) The Investor has the financial means to make an investment in
the Company; the Investor is able to bear the economic risk of an investment in
the Company; and the Investor's present financial condition is such that the
Investor is under no present or contemplated future need to dispose of any
portion of the Shares to satisfy any existing or contemplated undertaking, need
or indebtedness.
(vii) The Investor acknowledges that an investment in the Company
involves a high degree of risk.
(viii) The Investor understands that limited rights exist to
transfer the Shares.
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(ix) The Investor is a New York corporation, and its principal
business address is located at 000 Xxxxxxx Xxxx, Xxxxx 000 Xxxx, Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000.
(x) The signature of the undersigned is binding upon the Investor to
purchase the Shares. The Investor has previously made other investments or
engaged in other substantive business activities prior to receiving an
opportunity to purchase the Shares and was not formed with a view to investment
in the Shares.
(xi) The foregoing representations and warranties and all other
information which the Investor has provided to the Company concerning the
Investor, the financial position of the Investor, and the knowledge of financial
and business matters of the person making the investment decision on behalf of
the Investor, including all information contained herein, are true and accurate.
3. Covenants of the Investor. The Investor covenants and agrees that the
Investor will not take, or cause to be taken any action with respect to the
Shares that would cause the Investor to be deemed an "underwriter" as defined in
Section 2(11) of the Securities Act.
4. Indemnification. The Investor understands and acknowledges that the
Company and its control persons are relying on the representations, warranties
and agreements made by the Investor in this Subscription Agreement and the
Investor agrees to indemnify and hold harmless the Company, its control persons,
the Company's affiliates and anyone acting on its behalf from and against all
damages, losses, costs and expenses (including reasonable attorneys' fees) which
they may incur by reason of my failure to fulfill any of the terms or conditions
of this Subscription Agreement, or by reason of any breach of the
representations and warranties made by the Investor herein, or in any document
provided by the Investor to the Company.
5. Transferability and Resale.
(i) The Investor acknowledges that the Shares have not been
registered under the Securities Act and any applicable State securities laws
(the "STATE ACTS"), and may not be sold, pledged, hypothecated, donated or
otherwise transferred (whether or not for consideration) by the Investor unless
registered pursuant to the Act and the State Acts, or upon presentation to the
Company of evidence satisfactory to the Company, or submission to the Company of
a favorable opinion of counsel acceptable to the Company, to the effect that any
such transfer is subject to an applicable exemption under and will not be in
violation of the Act and the State Acts.
(ii) The Investor acknowledges that the Company is subject to the
periodic report filing requirements pursuant to the Securities Exchange Act of
1934, as amended.
(iii) The Investor acknowledges that it may be required to hold the
Shares indefinitely and therefore may not realize any liquidity from any sale of
the Shares.
(iv) The Investor and the Company agree that the Company will
register the Shares in accordance with the Registration Rights Addendum attached
hereto and incorporated herein by reference.
6. Binding Effect; Successors and Assigns. This Subscription Agreement
will be binding upon the parties hereto, the successors and assigns of the
Company and the successors and assigns of the Investor. This Subscription
Agreement will inure to the benefit of the Company and its successors and
assigns. Neither this Subscription Agreement nor any part of it will be
assignable by the Investor.
7. Miscellaneous.
(i) This Subscription Agreement constitutes the entire agreement
among the parties hereto with respect to the subscription of the Investor's
Shares and may be amended only by a writing executed by the parties hereto.
(ii) Within 10 days after receipt of a written request from the
Company, the Investor agrees to provide such information and to execute and
deliver such documents as reasonably may be necessary to comply with any and all
laws and ordinances to which the Company is subject.
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(iii) In this Subscription Agreement the singular shall include the
plural and the masculine gender shall include the feminine and neuter and vice
versa, as the context requires.
(iv) Each provision of this Subscription Agreement shall be
considered separable and if for any reason any provision or provisions hereof
are determined to be invalid or contrary to applicable law, such invalidity
shall not impair the operation of or affect the remaining portions of this
Subscription Agreement.
(v) This Subscription Agreement shall be construed in accordance
with the laws of the State of Maryland, without regard to principles of conflict
of laws.
IN WITNESS WHEREOF, the undersigned has executed and sealed this
Subscription Agreement as of this 30th day of April, 2004.
BENCHMARK CONSULTING, INC.
By: /s/ . (SEAL)
-------------------------------
Xxxx Xxxxx, President
ACCEPTED THIS 30TH DAY OF APRIL, 2004
TARGET LOGISTICS, INC.
By: /s/ .
-------------------------------
Xxxxxx Xxxxxxxxx, President
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REGISTRATION RIGHTS ADDENDUM
1. Right to Piggyback.
1.1. If The Company proposes to register any securities of the
Company under the Securities Act on any registration form (otherwise than for
the registration of securities to be offered and sold by the Company pursuant to
(i) an employee benefit plan, (ii) a dividend or interest reinvestment plan,
(iii) other similar plans or (iv) reclassification of securities, mergers,
consolidations and acquisitions of assets) permitting a secondary offering or
distribution, not less than 30 days prior to each such registration the Company
shall give to the Investor written notice of such proposal which shall describe
in detail the proposed registration and distribution and, upon the written
request of the Investor furnished within 30 days after the date of any such
notice, proceed to include in such registration such Shares ("PIGGY-BACK
SHARES") as have been requested by the Investor to be included in such
registration. The Investor shall in their request describe briefly the proposed
disposition of such Shares. The Company will in each instance use its best
efforts to cause all such Piggy-Back Shares to be registered under the
Securities Act, to the extent necessary to permit the sale or other disposition
thereof (in the manner stated in such request) by the Investor.
1.2. If the managing underwriter, if any, who shall be selected by
the Company advises the Company in writing that, in its opinion, the inclusion
of the Piggy-Back Shares with the securities being registered by the Company
would materially adversely affect the distribution of all such securities, then
the Company will include in such registration (i) first, the securities the
Company proposes to sell and (ii) second, the Piggy-Back Shares requested by the
Investor to be included in such registration.
2. Selection of Underwriter; Participation in Underwritten Registrations.
The Investor agrees to the selection by the Company of a underwriter
to manage such registration and to execute an underwriting agreement with such
underwriter that is in customary form. The Investor may not participate in any
registration hereunder which is underwritten unless the Investor (i) agrees to
sell its Piggy-Back Shares on the basis provided in any underwriting
arrangements approved by the Company, and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements;
provided that the Investor shall not be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding the Investor and the Investor's intended method of
distribution.
3. Withdrawal of Registration.
Nothing in this Agreement shall be deemed to require the Company to
proceed with any registration of its securities after giving the notice as
provided herein.
4. Registration and Qualification Procedures.
Whenever the Company is required by the provisions of this Agreement
to use its best efforts to effect the registration of any of its securities
under the Securities Act, the Company will, as expeditiously as is possible:
(i) prepare and file with the SEC a registration statement
with respect to such securities in connection with which the Company will give
the Investor and its counsel and accountants the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the SEC, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Investor's counsel, to conduct a
reasonable investigation within the meaning of the Securities Act;
(ii) prepare and file with the SEC 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 and
the prospectus current and to comply with the provisions of the Securities Act
with respect to the sale of all securities covered by such registration
statement whenever the Investor shall desire to sell the same; provided,
however, the Company shall have no obligation to file any amendment or
supplement at its own expense more than nine months after the effective date of
such registration statement;
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(iii) furnish to the Investor such number of copies of
preliminary prospectuses and prospectuses and each supplement or amendment
thereto and such other documents as they may reasonably request in order to
facilitate the sale or other disposition of the securities owned by them in
conformity with (a) the requirements of the Securities Act and (b) the proposed
method of distribution;
(iv) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC;
(v) cause all such Piggy-Back Shares to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and to be qualified for trading on each system on which similar
securities issued by the Company are from time to time qualified;
(vi) provide a transfer agent and registrar for all such
Piggy-Back Shares not later than the effective date of such registration
statement and thereafter maintain such a transfer agent and registrar; and
otherwise cooperate with the Investor and the managing underwriter to facilitate
the timely preparation and delivery of certificates representing Piggy-Back
Shares to be sold and not bearing any restrictive legends, and enable such
Piggy-Back Shares to be in such denominations and registered in such names as
the managing underwriter may reasonably request at least two business days prior
to any sale of Piggy-Back Shares to the underwriters;
(vii) enter into and perform an underwriting agreement with
the managing underwriter, if any, containing customary (i) terms of offer and
sale of the securities, payment provisions, underwriting discounts and
commissions, and (ii) representations, warranties, covenants, indemnities, terms
and conditions;
(viii) notify the Investor during any time when a prospectus
relating to the registration is required to be delivered under the Securities
Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and at the request of the Investor promptly prepare and furnish to the
Investor a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they are made;
(ix) keep the Investor advised in writing as to the initiation
and progress of any registration under this Agreement.
5. Holdback Agreements.
If any registration pursuant to this Agreement is in connection with
an underwritten public offering, the Investor agrees, if so required by the
managing underwriter, not to effect any public sale or distribution Piggy-Back
Shares (other than as part of such underwritten public offering) during the
period beginning 15 days prior to the effective date of such registration
statement and ending on the 90th day (or such longer period of time as may be
requested by the managing underwriter (which period shall in no event exceed 180
days)) after the effective date of such registration statement.
6. Registration Expenses.
If the Company is required by the provisions of this Agreement to
use its best efforts to effect the registration or qualification under the
Securities Act of any of the Piggy-Back Shares, the Company shall pay all
expenses in connection therewith, including (i) all expenses incident to filing
with the National Association of Securities Dealers, Inc., (ii) registration
fees, (iii) printing expenses, (iv) accounting and legal fees and expenses, and
(v) expenses of any special audits incident to or required by any such
registration or qualification; provided, however, the Company shall not be
liable for (a) any discounts or commissions to any underwriter attributable to
Piggy-Back Shares being sold; (b) any stock transfer taxes incurred in respect
of the Piggy-Back Shares being sold; or (c) the legal fees of the Investor.
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7. Indemnification.
7.1. In connection with any registration or qualification of
securities under this Agreement, the Company agrees to indemnify the Investor
and each officer, director and controlling person of the Investor against all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) caused by any untrue, or alleged untrue, statement of a material
fact contained in any registration statement, preliminary prospectus, prospectus
or notification or offering circular (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 required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by any untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to the Company by
either the Investor or any underwriter expressly for use therein.
7.2. In connection with any registration or qualification of
securities under this Agreement, the Investor agrees to indemnify the Company
and each officer, director and controlling person of the Company against all
losses, claims, damages, liabilities and expenses (including the costs of
reasonable investigation) caused by any untrue, or alleged untrue, statement of
a material fact contained in any registration statement, preliminary prospectus,
prospectus or notification or offering circular (as amended or supplemented if
the Investor shall have furnished information for any amendments or supplements
thereto) or caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent such losses, claims, damages,
liabilities or expenses are caused by any untrue statement or alleged untrue
statement or omission or alleged omission based upon information furnished in
writing to the Company by the Investor expressly for use therein.
7.3. Any person entitled to indemnification hereunder will (i) give
reasonably prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification 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, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will 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.
7.4. The indemnification provided for under this Agreement will
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 will survive the transfer of Piggy-Back Shares.
7.5. The parties agree to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the event
indemnification is unavailable for any reason. Such right to contribution shall
be in such proportion as is appropriate to reflect the relative fault of and
benefits to the Company on the one hand and the Investor on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits to the indemnifying party and
indemnified parties shall be determined by reference to, among other things, the
total proceeds received by the indemnifying party and indemnified parties in
connection with the offering to which such losses, claims, damages, liabilities
or expenses relate. The relative fault of the indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether the
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission or state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or the
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The parties
hereto agree that it would not be just or equitable if contribution pursuant
hereto were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Agreement. No person found guilty of any fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.
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