Exhibit 10.2
(MASS FINANCIAL CORP LOGO) [v27280v2728001.gif]
February 9, 2007
Stonepath Group, Inc.
2200 Alaskan Way, Suite 200
Seattle, Washington
Attention: Mr. Bob Arovas
Dear Sirs:

RE:   Proposed Financing by Mass Financial Corp.

     The following letter agreement sets out the terms upon which Mass Financial
Corp. or one of its affiliates (“Mass”) will provide financing to Stonepath
Group, Inc. (“Stonepath”). The terms are as follows:

1.   Assignment: Mass expects to purchase from Laurus Master Fund. Ltd.
(“Laurus”) all the amounts loaned by Laurus to Stonepath together with all of
the various security granted by Stonepath to Laurus (the “Assignment”).

2.   Financing: Mass will provide or arrange a revolving line of credit in the
amount of $20 million (the “LOC”), which LOC will be convertible into common
shares of Stonepath at a conversion rate equal to 85% of the per share of common
stock value to be established by a third party

             
 
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  Dina House, Ruttonjee Centre        
 
  11 Duddell Street, Central        
 
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  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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independent valuator jointly appointed by Mass and Stonepath. Any advances may
only be drawn down against Stonepath’s receivables meeting acceptable credit
standards, or such other purpose as approved in advance by Mass, all as
determined by Mass in its sole discretion. The LOC will contain terms and
provisions customary for lines of credit made in a transaction of a similar
nature to that contemplated herein.

3.   Additional Financing: Mass will be granted a right of first refusal to
arrange any additional financing required by Stonepath for a period of three
(3) years following the date of this Letter Agreement, at applicable market
rates in the circumstances at the time, and upon terms and conditions to be
negotiated in good faith.

4.   Security: All security granted to Laurus will continue to act as security
for and will be assigned to Mass in connection with the Assignment. As further
security for Mass agreeing to complete the Assignment and the LOC, Stonepath
agrees, subject to consent by SBI Brightline, LLC, (“Asia Lender”), that it will
assign, pledge and grant a continuing security interest, in second position
behind the Asia Lender, in and upon all of the assets and collateral owned by
Stonepath Holdings (Hong Kong) Limited, Stonepath Freight Express (Hong Kong)
Limited, G-Link Express Logistics (Singapore) Pte. Ltd., G-Link Express
Logistics (Cambodia) Pte. Ltd., G-Link Express Logistics (Penang) Sdn. Bhd.,
G-Link Express Logistics (KL) Sdn. Bhd., G-Link Express Logistics (JB) Sdn.
Bhd., Planet Logistics Express (Singapore) Pte. Ltd., Group Logistics Pte. Ltd.,
Shaanxi Sunshine Cargo Services International Co. Ltd., Shaanxi Sunshine Cargo
Services (Hong Kong) Co., Ltd., Stonepath Logistics (China) Limited, Glink
Express Freight (Asia Pacific) Pte. Ltd., Stonepath Logistics (Asia Pacific)
Pte. Ltd. and Stonepath Logistics (Hamburg) GmbH (collectively, the “Asian
Companies”). If a second position security interest cannot be

             
 
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  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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obtained, Stonepath agrees to grant a negative pledge that it will not grant any
other security interest over the assets or shares of the Asian Companies.

5.   Pledge: As further security for Mass agreeing to complete the Assignment
and the LOC, Stonepath agrees that it will also cause all shares of stock of its
subsidiaries, which were previously pledged under a Stock Pledge Agreement dated
August 31, 2005, to be registered in the name of Mass.

6.   Board: Within two (2) days following the closing of the Assignment,
Stonepath will reduce the number of directors on its board of directors to three
(3), which persons will consist of independent non-management representatives
with qualifications acceptable to Mass. At closing of the transactions
contemplated by this Letter Agreement, Stonepath will purchase a tail directors
and officers liability policy, provided that the cost of such policy is
reasonable and Stonepath has sufficient funds to purchase such policy.

7.   Management: Stonepath shall use its best efforts to ensure each of Bob
Arovas and Bob Christensen continues their employment with Stonepath for a
period of at least one (1) year from the date of this Letter Agreement.

8.   Transaction Fees: In connection with the Assignment and the LOC, Stonepath
will pay to Mass a transaction fee of $2,500,000 (the “Transaction Fee”). The
Transaction Fee will be payable on closing of the LOC and may be paid from an
advance on the LOC. At the sole discretion of Mass, the Transaction Fee will be
convertible into common shares of Stonepath at the same rate as under the LOC.

9.   Merchant Banking Fees: In connection with arranging the LOC, Stonepath will
pay to Mass a non-refundable commitment fee of

             
 
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  Dina House, Ruttonjee Centre        
 
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  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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$1,200,000 (the “Merchant Banking Fee”), which may be paid from an advance on
the LOC. At the sole discretion of Mass, the Merchant Banking Fee will be
convertible into common shares of Stonepath at the same rate as under the LOC.
Stonepath acknowledges and agrees that the Merchant Banking Fee is payable to
Mass as consideration for the time, effort and expenses of Mass and its
employees and agents to:

  (a)   review and/or study documents pertaining to the transaction(s)
contemplated hereby (including but not limited to any credit reports and
financial statements);     (b)   underwrite the LOC;     (c)   reserve funds in
contemplation of the LOC; and     (d)   forego any opportunities to use the
funds elsewhere.

Stonepath agrees that the actual determination of the costs and expenses so
incurred by Mass is not feasible, and the Merchant Banking Fee represents a
reasonable estimate thereof and is payable to Mass in the manner set out below
without set-off, abatement or deduction.
Stonepath further agrees that the Merchant Banking Fee will be earned and
payable by Mass on its issuance of the LOC to Stonepath.

10.   Break Fees: Should Stonepath elect to enter into an alternative financing
transaction with a third party within three (3) months after signing this Letter
Agreement, a break-up fee of $750,000 in cash will immediately become due and
payable to Mass.

11.   Access to Information: The parties hereto agree that immediately upon
execution of this Letter Agreement, Mass and its respective advisors will have
full access during normal business hours to, or Stonepath will deliver

             
 
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  Dina House, Ruttonjee Centre        
 
  11 Duddell Street, Central        
 
  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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to Mass, such information and copies of all documents as reasonably requested by
Mass, all upon reasonable notice to Stonepath.

12.   Condition(s) Precedent for Mass: The obligation of Mass to proceed with
the transactions contemplated by this Letter Agreement will be subject to
satisfaction or written waiver by Mass of conditions precedent customary for
loan transactions like the LOC, including without limitation the following
condition(s) (the “Conditions Precedent”):

  •   review and approval of all materials in the possession and control of
Stonepath which are germane to the decision to complete the Assignment and the
LOC;     •   loan and security documentation and guarantees appropriate to the
risks identified by due diligence conducted by Mass and its advisors;     •  
Mass and its solicitors having had a reasonable opportunity to perform the
searches and other due diligence reasonable or customary in a transaction of a
similar nature to that contemplated herein and that both the solicitors and Mass
are satisfied with the results of such due diligence;     •   Mass having had a
reasonable opportunity to review the audited financial statements (including
corporate tax returns, general ledger listings, adjusting entries and opening
trial balances) of Stonepath, prepared in accordance with generally accepted
accounting principles and that Mass are satisfied with the content of such
financial statements;

             
 
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  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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  •   satisfactory arrangements being made to continue the employment of Bob
Arovas and Bob Christensen with Stonepath for at least one year from the date of
this Letter Agreement;     •   Mass consummating the Assignment;     •  
Stonepath obtaining consent from any parties from whom consent to any of the
transactions contemplated by this Letter Agreement is required;     •   no
material adverse change having occurred in connection with the business of
Stonepath;     •   no legal proceedings pending or threatened to enjoin,
restrict or prohibit the transactions contemplated in this Letter Agreement;    
•   a satisfactory legal opinion being available from counsel for Stonepath;    
•   approval of the Board of Directors of Mass being obtained; and     •  
approval of the Board of Directors of Stonepath and, if required, approval of
all of the securityholders of Stonepath being obtained.

13.   Expenses: At the date of the first advance under the LOC, Stonepath will
pay all legal fees incurred by Mass to date.

14.   Closing: The closing (the “Closing”) of the transactions contemplated by
this Letter Agreement will occur not later than 30 days following the
satisfaction or written waiver by Mass of the Conditions Precedent. The Closing
may take place by exchange of the appropriate solicitor’s undertakings, which
will involve each party’s solicitors delivering to his or her counterpart all
required cash and documentation, to be held in trust

             
 
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  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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    and not released until all such cash and documentation has been executed and
delivered to the respective parties hereto.   15.   Confidentiality: All
negotiations regarding this Letter Agreement will be confidential and will not
be disclosed to anyone other than respective advisors and internal staff of the
parties and necessary third parties, such as lenders approached for financing.
No press or other publicity release will be issued to the general public
concerning the proposed transaction without mutual consent unless required by
law, and then only upon prior written notice to the other party.

16.   Binding Agreement: Mass and Stonepath agree that this Letter Agreement
creates a binding and enforceable contract which will be enforceable.

17.   Proper Law: This Letter Agreement will be governed by and construed in
accordance with the law of the Province of British Columbia and the parties
hereby attorn to the jurisdiction of the Courts of competent jurisdiction of the
Province of British Columbia in any proceeding hereunder.

18.   Currency: All references to “$” in this Letter Agreement shall refer to
currency of the United States of America.

19.   Counterparts and Electronic Means: This Letter Agreement may be executed
in several counterparts, each of which will be deemed to be an original and all
of which will together constitute one and the same instrument. Delivery to us of
an executed copy of this Letter Agreement by electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy
will be deemed to be execution and delivery to us of this Letter Agreement as of
the date of successful transmission to us.

             
 
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  Dina House, Ruttonjee Centre        
 
  11 Duddell Street, Central        
 
  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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20.   Further Assurances: The parties will execute and deliver all such further
documents, do or cause to be done all such further acts and things, and give all
such further assurances as may be necessary to give full effect to the
provisions and intent of this Letter Agreement.

21.   Assignment: This Letter Agreement and any benefits hereunder may not be
transferred, assigned or otherwise disposed of by Stonepath to any other party
without the prior written consent of Mass. Mass may assign any portion of this
Letter Agreement to any of its affiliates.

22.   Damages Inadequate: Each of the parties hereto acknowledges and agrees
that damages at law may be an inadequate remedy for a breach or threatened
breach of this Letter Agreement and hereby agrees that, in the event of a breach
or threatened breach of any provision hereof, the respective rights and
obligations hereunder will be enforceable by specific performance, injunction,
or other equitable remedy.

23.   Electronic Means: Delivery of an executed copy of this Letter Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Letter Agreement as of the date set forth on page one of this Letter
Agreement.

24.   Enurement: This Agreement will enure to the benefit of and be binding upon
the parties and their respective heirs, executors, administrators, successors,
and assigns.

25.   Notices: Any notice required or permitted to be given to any of the
parties to this Agreement will be in writing and may be given by prepaid
registered post, electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy to the address of such party
first above stated or such other address as any party may specify by

             
 
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  Dina House, Ruttonjee Centre        
 
  11 Duddell Street, Central        
 
  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689        

 

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    notice in writing to the other parties and any such notice will be deemed to
have been given and received by the party to whom it was addressed if mailed, on
the third day following the mailing thereof, if by facsimile or other electronic
communication, on successful transmission, or, if delivered, on delivery; but if
at the time of mailing or between the time of mailing and the third business day
thereafter there is a strike, lockout, or other labour disturbance affecting
postal service, then the notice will not be effectively given until actually
delivered.   26.   Acceptance: If you are agreeable to the foregoing terms,
please sign and return a duplicate copy of this Letter Agreement by no later
than by 4:00 p.m. on February 9, 2007. Facsimile is acceptable.

Yours truly,
MASS FINANCIAL CORP.
James M. Carter
Vice President
The above terms are accepted this 9th day of February, 2007.
STONEPATH GROUP, INC.
Bob Arovas
Chief Executive Officer

             
 
  Unit 803 — 8th Floor     9  
 
  Dina House, Ruttonjee Centre        
 
  11 Duddell Street, Central        
 
  Hong Kong        
 
  Phone + 852 2537 3613 Facsimile + 852 2537 3689