Document:

ex10-4.htm

Exhibit 10.4

 

 

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of May 17, 2010, is by and between SKYPOSTAL NETWORKS, INC., a Nevada corporation (the “Company”), and each of the entities whose names appear on the signature pages hereof.  Such entities are each referred to herein as an “Investor” and, collectively, as the “Investors”.

The Company has agreed, on the terms and subject to the conditions set forth in the Note Purchase Agreement, dated as of May 17, 2010 (the “Note Purchase Agreement”), to issue and sell to each Investor named therein (A) one or more Senior Secured Convertible Notes in the form attached to the Note Purchase Agreement (each, a “Note” and, collectively, the “Notes”) and (B) one or more Warrants in the respective forms attached to the Note Purchase Agreement (each, a “Warrant” and, collectively, the “Warrants”).

The Notes are convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The Warrants are exercisable into shares of Common Stock (the “Warrant Shares”) in accordance with their terms.

In order to induce each Investor to enter into the Note Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”), and under applicable state securities laws.

In consideration of each Investor entering into the Note Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	
1.

	
DEFINITIONS.

For purposes of this Agreement, the following terms shall have the meanings specified:

“Business Day” means any day other than a Saturday, a Sunday or a day on which the Commission is closed or on which banks in the City of New York are authorized by law to be closed.

“Commission” means the Securities and Exchange Commission.

“Effective Date” means the date on which the Registration Statement is declared effective by the Commission.

“Effectiveness Deadline” means the ninetieth (90th) day following the date on which demand for registration is made pursuant to Section 2(a) hereof.

 

  

  

  

 

“Filing Deadline” means the sixtieth (60th) calendar day following a written demand delivered to the Company by the holders of a majority of the Registrable Securities issued or issuable under the Notes and the Warrants (without giving effect to any limitations on such issuance).

“Holder” means any person owning or having the right to acquire, through conversion of the Notes or exercise of the Warrants or otherwise, Registrable Securities, including initially each Investor and thereafter any permitted assignee thereof.

“Registrable Securities” means the Conversion Shares and the Warrant Shares, and any other shares of Common Stock issuable pursuant to the terms of the Notes or the Warrants, and any shares of capital stock issued or issuable from time to time (with any adjustments) in replacement of, in exchange for or otherwise in respect of the Conversion Shares or the Warrant Shares.

“Registration Period” has the meaning set forth in paragraph 2(c) below.

“Registration Statement” means the Registration Statement or statements prepared in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act (“Rule 415”) or any successor rule providing for the offering of securities on a continuous or delayed basis.

Capitalized terms used herein and not otherwise defined shall have the respective meanings specified in the Note Purchase Agreement.

 

2.             REGISTRATION.

(a)           Filing of Registration Statement.  At any time and from time to time until the date on which all of the Registrable Securities eligible for resale thereunder have been publicly sold pursuant to either the Registration Statement or Rule 144, the Holders may make a written demand for registration under the Securities Act of all or part of their Registrable Securities. On or before the Filing Deadline, the Company shall prepare and file with the Commission the Registration Statement on Form S-3, or such other form for which the Company shall qualify, as a “shelf” registration statement under Rule 415 covering the resale of the number of shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants (such number to be determined without regard to any restriction on such conversion or exercise). Such Registration Statement shall state, to the extent permitted by Rule 416 under the Securities Act, that it also covers such indeterminate number of additional shares of Common Stock as may become issuable upon the conversion of the Notes and exercise of the Warrants in order to prevent dilution resulting from stock splits, stock dividends or similar events. The parties acknowledge that Registrable Securities may be required to be excluded from a Registration Statement due to applicable law or Commission policy and that the Company shall not be deemed in breach of its obligations hereunder in the event of any such exclusion.

 

  

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(b)           S-1 Registration Statement.  Notwithstanding the foregoing paragraph 2(a), if on Filing Deadline the Company does not meet the eligibility requirements for filing the Registration Statement on Form S-3, then the Company shall instead prepare and file with the Commission the Registration Statement meeting the foregoing requirements on Form S-1.  In the event that the Company files the Registration Statement on Form S-1 and thereafter meets the eligibility requirements to use Form S-3 for the resale of Registrable Securities by the Investor, the Company shall re-file such Registration Statement, or file a new Registration Statement covering at least the number of shares then registered on the existing Registration Statement(s) (and not previously sold pursuant to an existing Registration Statement or pursuant to Rule 144 under the Securities Act (“Rule 144”)), on Form S-3 as promptly as practicable (but in no event later than thirty (30) days) after the Company meets such requirements.

(c)           Effectiveness.  The Company shall use reasonable best efforts to cause the Registration Statement to become effective as soon as practicable following the filing thereof but in no event later than the Effectiveness Deadline, and shall respond promptly to any and all comments made by the staff of the Commission on with respect to the Registration Statement. The Company shall submit to the Commission, within two (2) Business Days after the Company learns that no review of such Registration Statement will be made by the staff of the Commission or that the staff of the Commission has no further comments on such Registration Statement, as the case may be, a request for acceleration of the effectiveness of such Registration Statement to a time and date not later than two (2) Business Days after the submission of such request.  The Company will maintain the effectiveness of the Registration Statement filed pursuant to this Agreement until the earliest to occur of (i) the date on which all of the Registrable Securities eligible for resale thereunder have been publicly sold pursuant to either the Registration Statement or Rule 144, and (ii) the date on which all of the Registrable Securities remaining to be sold under such Registration Statement (in the reasonable opinion of counsel to the Company) may be immediately sold to the public under Rule 144 without regard to the number of shares that may be sold by a Holder during any period (the period beginning on the Closing Date and ending on the earliest to occur of (i) or (ii) above being referred to herein as the “Registration Period”).

(d)           Allocation of Conversion Shares and Warrant Shares. The initial number of Conversion Shares and Warrant Shares included in any Registration Statement and each increase in the number thereof included therein shall be allocated pro rata among the Holders based on the aggregate number of Registrable Securities issuable to each Holder at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the Commission (such number to be determined using the Conversion Price or Exercise Price, as applicable, in effect at such time and without regard to any restriction on the ability of a Holder to convert such Holder’s Note or exercise such Holder’s Warrant as of such date).  In the event that a Holder sells or otherwise transfers any of such Holder’s Registrable Securities, each transferee shall be allocated the portion of the then remaining number of Registrable Securities included in such Registration Statement allocable to the transferor.

 

(e)           Registration of Other Securities.  The Company shall be permitted to include on the Registration Statement shares of Common Stock issuable pursuant to securities outstanding on the date of this Agreement, provided that if all of the Registrable Securities to be included in a Registration Statement filed hereunder cannot be so included due to applicable law or Commission policy, the Company shall not be permitted to include such other shares of Common Stock. The Company may not, while any Registrable Securities are outstanding, file a registration statement covering any securities other than Registrable Securities or such outstanding securities without the prior written consent of the holders of a majority of the Registrable Securities into which all of the Note and Warrants then outstanding are convertible or exercisable (without regard to any limitation on such conversion or exercise).

 

  

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(f)            Liquidated Damages.  If: (i) a Registration Statement covering the Registrable Securities is not filed with the Commission on or prior to the applicable Filing Deadline; or (ii) a Registration Statement is not declared effective on or prior to the applicable Effectiveness Deadline; or (iii) after the effective date of any Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement or the Holders are otherwise not permitted to utilize the prospectus therein to resell such Registrable Securities for more than an aggregate of sixty (60) calendar days during any twelve (12) month period (which need not be consecutive calendar days) (any such failure or breach being referred to as an “Event), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each monthly anniversary of each such Event until the applicable Event is cured, the Company shall pay to each Holder on a monthly basis within five (5) Business Days of the end of the month an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate amount invested by such Holder.  If the Company fails to pay any partial liquidated damages pursuant to this Section in full within five (5) Business Days after the date payable, the Company will pay interest thereon at a rate of 10% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to such Holder accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.  The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event. In no event shall any liquidated or other damages accrue as a result of the exclusion of Registrable Securities from a Registration Statement due to applicable law or Commission policy.

 

3.             OBLIGATIONS OF THE COMPANY.

In addition to performing its obligations hereunder, including without limitation those pursuant to Section 2 above, the Company shall, with respect to the Registration Statement:

(a)           prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act or to maintain the effectiveness of such Registration Statement during the Registration Period, or as may be reasonably requested by a Holder in order to incorporate information concerning such Holder or such Holder’s intended method of distribution;

(b)           at such time following the Closing that the Company is eligible to do so, use commercially reasonable efforts to secure the listing on the Principal Market of all Registrable Securities issuable upon conversion of the Notes and exercise of the Warrants, and at any Holder’s request, provide such Holder with reasonable evidence thereof;

(c)           so long as the Registration Statement is effective covering the resale of the applicable Registrable Securities owned by a Holder, furnish to each Holder such number of copies of the prospectus included in such Registration Statement, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as such Holder may reasonably request in order to facilitate the disposition of such Holder’s Registrable Securities;

 

  

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(d)           use commercially reasonable efforts to register or qualify the Registrable Securities under the securities or “blue sky” laws of such jurisdictions within the United States as shall be reasonably requested from time to time by a Holder, and do any and all other acts or things which may reasonably be necessary or advisable to enable such Holder to consummate the public sale or other disposition of the Registrable Securities in such jurisdictions; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction;

(e)           notify each Holder immediately after becoming aware of the occurrence of any event (but shall not, without the prior written consent of such Holder, disclose to such Holder any facts or circumstances constituting material non-public information) as a result of which the prospectus included in such Registration Statement, as then in effect, contains an untrue statement of material fact or omits to state a 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, and as promptly as practicable prepare and file with the Commission and furnish to each Holder a reasonable number of copies of a supplement or an amendment to such prospectus as may be necessary so that such prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

(f)            use commercially reasonable efforts to prevent the issuance of any stop order or other order suspending the effectiveness of such Registration Statement and, if such an order is issued, to use commercially reasonable efforts obtain the withdrawal thereof at the earliest possible time and to notify each Holder in writing of the issuance of such order and the resolution thereof;

(g)           furnish to each Holder, on the date that such Registration Statement, or any successor registration statement, becomes effective, a letter, dated such date, signed by an officer of or counsel to the Company and addressed to such Holder, confirming such effectiveness and, to the knowledge of  such counsel, the absence of any stop order;

(h)           provide to each Holder and its representatives the reasonable opportunity to conduct a reasonable inquiry of the Company’s financial and other records during normal business hours and make available during normal business hours and with reasonable advance notice its officers, directors and employees for questions regarding information which such Holder may reasonably request in order to fulfill any due diligence obligation on its part;

(i)           permit counsel for each Holder to review such Registration Statement and all amendments and supplements thereto, and any comments made by the staff of the Commission concerning such Holder and/or the transactions contemplated by the Transaction Documents and the Company’s responses thereto, within a reasonable period of time prior to the filing thereof with the Commission (or, in the case of comments made by the staff of the Commission, within a reasonable period of time following the receipt thereof by the Company); and

 

  

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(j)           in the event that, at any time, the number of shares available under the Registration Statement is insufficient to cover all of the Registrable Securities issuable under the Notes and Warrants (such number to be determined using the Conversion Price or Exercise Price, as applicable, in effect at such time and without regard to any restriction on the ability of any Holder to convert such Holder’s Note or exercise such Holder’s Warrant) the Company shall promptly amend such Registration Statement or file a new registration statement, in any event as soon as practicable, but not later than the tenth (10th) day following notice from a Holder of the occurrence of such event, so that such Registration Statement or such new registration statement, or both, covers no less than all of the Registrable Securities eligible for resale thereunder and issuable under the Notes and Warrants (such number to be determined using the Conversion Price or Exercise Price, as applicable, in effect at the time of such amendment or filing and without regard to any restriction on the ability of any Holder to convert such Holder’s Note or exercise such Holder’s Warrant). The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. Any Registration Statement filed pursuant to this paragraph 3(j) shall state that, to the extent permitted by Rule 416 under the Securities Act, such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable upon conversion of the Note and exercise of the Warrants in order to prevent dilution resulting from stock splits, stock dividends or similar events.

4.           OBLIGATIONS OF EACH HOLDER.

In connection with the registration of Registrable Securities pursuant to the Registration Statement, each Holder shall:

(a)    timely furnish to the Company (i) a completed Shareholder Questionnaire and (ii) such information in writing regarding itself and the intended method of disposition of such Registrable Securities as the Company shall reasonably request in order to effect the registration thereof;

(b)    upon receipt of any notice from the Company of the happening of any event of the kind described in paragraphs 3(e) or 3(f), immediately discontinue any sale or other disposition of such Registrable Securities pursuant to such Registration Statement until the filing of an amendment or supplement as described in paragraph 3(e) or withdrawal of the stop order referred to in paragraph 3(f), and use commercially reasonable efforts to maintain the confidentiality of such notice and its contents;

(c)    to the extent required by applicable law, deliver a prospectus to the purchaser of such Registrable Securities;

(d)    notify the Company when it has sold all of the Registrable Securities held by it; and

(e)    notify the Company in the event that any information supplied by such Holder in writing for inclusion in such Registration Statement or related prospectus is untrue or omits to state a material fact required to be stated therein or necessary to make such information not misleading in light of the circumstances then existing; immediately discontinue any sale or other disposition of such Registrable Securities pursuant to such Registration Statement until the filing of an amendment or supplement to such prospectus as may be necessary so that such prospectus does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and use commercially reasonable efforts to assist the Company as may be appropriate to make such amendment or supplement effective for such purpose.

 

  

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5.             INDEMNIFICATION.

In the event that any Registrable Securities are included in the Registration Statement under this Agreement:

(a)           To the extent permitted by law, the Company shall indemnify and hold harmless each Holder, the officers, directors, employees, agents and representatives of such Holder, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against any losses, claims, damages, liabilities or reasonable out-of-pocket expenses (whether joint or several) (collectively, including reasonable legal expenses or other expenses reasonably incurred in connection with investigating or defending same, “Losses”), insofar as any such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement under which such Registrable Securities were registered, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or (ii) the omission or alleged omission to state therein a 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.  Subject to the provisions of paragraph 5(c) below, the Company will reimburse such Holder, and each such officer, director, employee, agent, representative or controlling person, for any reasonable legal expenses or other out-of-pocket expenses as reasonably incurred by any such entity or person in connection with investigating or defending any Loss; provided, however, that the foregoing indemnity shall not apply to amounts paid in settlement of any Loss if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be obligated to indemnify any person for any Loss to the extent that such Loss arises out of or is based upon (i) any disclosure that is based upon or in conformity with written information furnished by such person expressly for use in such Registration Statement or (ii) a failure of such person to deliver or cause to be delivered the final prospectus contained in the Registration Statement and made available by the Company, if such delivery is required by applicable law.

(b)           To the extent permitted by law, each Holder who is named in such Registration Statement as a selling shareholder, acting severally and not jointly, shall indemnify and hold harmless the Company, the officers, directors, employees, agents and representatives of the Company, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any Losses to the extent (and only to the extent) that any such Losses arise out of or are based upon (i) any disclosure or any omission or alleged omission (to state a material fact required to be stated therein or necessary to make statements therein not misleading) that is based upon or in conformity with written information furnished (or not furnished, in the case of an omission) by such person expressly for use in such Registration Statement, or (ii) a failure of such Holder to deliver or cause to be delivered the final prospectus contained in the Registration Statement and made available by the Company, if such delivery is required under applicable law . Subject to the provisions of paragraph 5(c) below, such Holder will reimburse any legal or other expenses as reasonably incurred by the Company and any such officer, director, employee, agent, representative, or controlling person, in connection with investigating or defending any such Loss; provided, however, that the foregoing indemnity shall not apply to amounts paid in settlement of any such Loss if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further, that, in no event shall any indemnity under this paragraph 5(b) exceed the net proceeds resulting from the sale of the Registrable Securities sold by such Holder under such Registration Statement.

 

  

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(c)           Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 5, promptly deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and to assume the defense thereof with counsel selected by the indemnifying party and reasonably acceptable to the indemnified party; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonably incurred fees and expenses of one such counsel for all indemnified parties to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate under applicable standards of professional conduct due to actual or potential conflicting interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the delivery of notice of any such action, to the extent prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5 with respect to such action, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5 or with respect to any other action unless the indemnifying party is materially prejudiced as a result of not receiving such notice.

(d)           In the event that the indemnity provided in paragraph (a) or (b) of this Section 5 is unavailable or insufficient to hold harmless an indemnified party for any reason, the Company and each Holder agree, severally and not jointly, to contribute to the aggregate Losses to which the Company or such Holder may be subject in such proportion as is appropriate to reflect the relative fault of the Company and such Holder in connection with the statements or omissions which resulted in such Losses; provided, however, that in no case shall such Holder be responsible for any amount in excess of the net proceeds resulting from the sale of the Registrable Securities sold by it under the Registration Statement.  Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or by such Holder.  The Company and each Holder agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above.  Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.  For purposes of this Section 5, each person who controls a Holder within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer, director, employee, agent or representative of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).

 

  

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(e)           The obligations of the Company and each Holder under this Section 5 shall survive the conversion of the Note and exercise of the Warrants in full, the completion of any offering or sale of Registrable Securities pursuant to the Registration Statement under this Agreement, or otherwise.

6.           REPORTS.

 

With a view to making available to each Holder the benefits of Rule 144 and any other similar rule or regulation of the Commission that may at any time permit such Holder to sell securities of the Company to the public without registration, the Company agrees to:

(a)           make and keep public information available, as those terms are understood and defined in Rule 144;

(b)           file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and

 

(c)           furnish to such Holder, so long as such Holder owns any Registrable Securities, promptly upon written request (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144 and the Exchange Act, (ii) to the extent not publicly available through the Commission’s EDGAR database, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the Commission, and (iii) such other information as may be reasonably requested by such Holder in connection with such Holder’s compliance with any rule or regulation of the Commission which permits the selling of any such securities without registration.

6A.           PIGGYBACK RIGHTS.

 

(a)           Whenever the Company proposes to register any of its securities for its own account or the account of any holders of such securities, and the registration form to be filed may be used for the registration or qualification for distribution of Registrable Securities, the Company will give prompt written notice to all Holders of its intention to effect such a registration (but in no event less than ten (10) days prior to the anticipated filing date) and will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) Business Days after the date of the Company’s notice (a “Piggyback Registration”). Any Holder that has made such a written request may withdraw its Registrable Securities from such Piggyback Registration by giving written notice to the Company and the managing underwriter, if any, on or before the fifth (5th) Business Day prior to the planned effective date of such Piggyback Registration. The Company may terminate or withdraw any registration under this Section 6A prior to the effectiveness of such registration, whether or not any Holder has elected to include Registrable Securities in such registration.

 

  

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(b)           If the registration referred to in Section 6A(a) is proposed to be underwritten, the Company will so advise all Holders as a part of the written notice given pursuant to Section 6A(a).  In such event, the right of the Holders to registration pursuant to this Section 6A will be conditioned upon such persons’ participation in such underwriting and the inclusion of such person’s Registrable Securities in the underwriting, and each such person will (together with the Company and the other persons distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. If any participating person disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the managing underwriter and the Holders.

 

(c)           If a Piggyback Registration relates to an underwritten primary offering on behalf of the Company, and the managing underwriters advise the Company that in their reasonable opinion the number of securities requested to be included in such registration exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or prospectus only such number of securities that in the reasonable opinion of such underwriters can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the securities the Company proposes to sell (if the offering involves a primary offering by the Company), and (ii) second, Registrable Securities of all Holders who have requested registration of Registrable Securities pursuant to Section 6A(a) and any other security holders participating in such registration, pro rata on the basis of the aggregate number of such securities or shares owned by each such person.

7.             MISCELLANEOUS.

(a)           Expenses of Registration.  Except as otherwise provided in the Note Purchase Agreement, all reasonable expenses, other than underwriting discounts and commissions and fees and expenses of counsel and other advisors to each Holder, incurred in connection with the registrations, filings or qualifications described herein, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, the fees and disbursements of counsel for the Company, and the fees and disbursements incurred in connection with the opinion and letter described in paragraph 3(g) hereof, shall be borne by the Company.

 

(b)           Amendment; Waiver.  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended or waived except pursuant to a written instrument executed by the Company and the Holders of at least two-thirds (2/3) of the Registrable Securities into which all of the Note and Warrants then outstanding are convertible or exercisable (without regard to any limitation on such conversion or exercise). Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder, each future Holder and the Company.  The failure of any party to exercise any right or remedy under this Agreement or otherwise, or the delay by any party in exercising such right or remedy, shall not operate as a waiver thereof.

 

  

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(c)           Notices.  Any notice, demand or request required or permitted to be given by the Company or a Holder pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day and (ii) on the next Business Day after timely delivery to a reputable overnight courier, addressed as follows:

If to the Company:

SkyPostal Networks, Inc.

7805 NW 15th Street

Miami, Florida  33126

Attn:           Chief Financial Officer

Tel:           (305) 599-1812

Fax:           (305) 593-0843

with a copy to:

Mazzeo Song & Bradham LLP

708 Third Avenue

New York, New York 10017

Attn:           David S. Song, Esq.

Tel:            (212) 599-0700

Fax:           (212) 599-8400

and, if to a Holder, to such address as shall be designated by such Holder in writing to the Company. Any party may change its address for receiving notice by giving written notice thereof to the other parties in accordance with this paragraph 7(c).

(d)           Assignment.  Upon the transfer of any Note, Warrants or Registrable Securities by a Holder, the rights of such Holder hereunder with respect to such securities so transferred shall be assigned automatically to the transferee thereof, and such transferee shall thereupon be deemed to be a “Holder” for purposes of this Agreement, as long as: (i) the Company is, within a reasonable period of time following such transfer, furnished with written notice of the name and address of such transferee, (ii) the transferee agrees in writing with the Company to be bound by all of the provisions hereof, and (iii) such transfer is made in accordance with the applicable requirements of the Note Purchase Agreement, the Notes or the Warrants, as applicable.

 

(e)           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall be deemed one and the same instrument.  This Agreement, once executed by a party, may be delivered to any other party hereto by facsimile transmission.

 

(f)           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.

(g)           Holder of Record.  A person is deemed to be a Holder whenever such person owns or is deemed to own of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the record owner of such Registrable Securities.

 

  

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(h)           Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement and the other Transaction Documents supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

 

(i)           Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(j)           Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

[Signature Pages to Follow]

  

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IN WITNESS WHEREOF, the undersigned have executed this Registration Rights Agreement as of the date first-above written.

	
SKYPOSTAL NETWORKS, INC

	  
	  	  	  
	
By:

	  	  
	  	
Name:

	  
	  	
Title:

	  

LBI INVESTMENTS, LLC

	
By:

	
LBI Management II, LLC, its Manager

	  
	  	  	  	  
	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  
	  	  	
Title:ex10-5.htm

Exhibit 10.5

 

SECURITY AGREEMENT

This SECURITY AGREEMENT (this “Agreement”), dated as of May 17, 2010, is made by and among SKYPOSTAL NETWORKS, INC., a Nevada corporation (the “Borrower”), and SKYSHOP LOGISTICS, INC., a Florida corporation (the “Guarantor and, together with the Borrower, the “Obligors”), and LBI INVESTMENTS, LLC (the “Agent”), as agent for each of the lenders whose names appear on the signature pages hereof (collectively, the “Secured Parties”).

This Agreement is being executed and delivered by the Obligors and the Secured Parties in connection with that certain Note Purchase Agreement dated concurrently herewith (the “Purchase Agreement”) by and between the Borrower and each Secured Party pursuant to which the Secured Parties have agreed to purchase from the Borrower, and the Borrower has agreed to sell to the Secured Parties, Senior Secured Convertible Notes (the “Notes”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Purchase Agreement or the Notes, as applicable.

NOW, THEREFORE, in consideration of the foregoing, the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agent, the Secured Parties and the Obligors hereby agree as follows.

ARTICLE I

COLLATERAL; OBLIGATIONS SECURED

Section 1.1   Grant and Description.

 

As security for the Obligors’ obligations under this Agreement, the Purchase Agreement, the Notes and the Subsidiary Guarantee (collectively, the “Transaction Documents”), each Obligor hereby grants to each Secured Party a continuing first priority security interest in and Lien upon, and pledges to each Secured Party, all of such Obligor’s right, title and interest in, to and under all of such Obligor’s assets (other than Excluded Assets (as defined below), now owned or hereafter acquired, including, without limitation, all of the following property and interests in property of such Obligor (collectively and each individually, the “Collateral”):

(i)    all of such Obligor’s tangible personal property, including without limitation all present and future goods, inventory and equipment (including items of equipment which are or become fixtures), software and computer hardware and software, now owned or hereafter acquired;

 

(ii)    all of such Obligor’s intangible personal property, including without limitation all present and future accounts, securities, contract rights, permits, general intangibles, chattel paper, investment property, intellectual property, documents, instruments, deposit accounts, letter-of-credit rights and supporting obligations, rights to the payment of money or other forms of consideration of any kind, tax refunds, insurance proceeds (including, without limitation, proceeds of any life insurance policy), now owned or hereafter acquired, and all intangible and tangible personal property relating to or arising out of any of the foregoing;

 

  

  

  

 

(iii)   4,500,000 shares of the common stock of the Guarantor held by the Borrower, constituting all of the issued and outstanding common stock of the Guarantor (the “Pledged Capital Stock”), including, but not limited to, (a) all securities or other property representing a dividend on any of the Pledged Capital Stock, or representing a distribution or return of capital upon or in respect of the Pledged Capital Stock, or resulting from a stock split, revision, reclassification or other exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Capital Stock; and (b) in the event of any consolidation or merger involving the Guarantor in which it is not the surviving entity, all shares of each class of the capital stock of the successor entity formed by or resulting from such consolidation or merger; and

 

(iv)   any and all additions to any of the foregoing, and any and all replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

 

 For purposes hereof, “Excluded Assets” means any assets leased or licensed by an Obligor if the granting or enforcement of a security interest in those assets is prohibited by or otherwise would breach the terms of that lease or license.

 

Section 1.2   Financing Statements; Further Assurances.  Each Obligor hereby authorizes the Agent to file, transmit or communicate, as applicable, UCC financing statements and amendments (collectively, “Financing Statements”) in order to perfect each Secured Party’s first priority security interest in the Collateral without such Obligor’s signature to the extent permitted by applicable law, provided that the Agent shall concurrently copy such Obligor on all such filings.  In addition to the foregoing, at any time upon the written request of the Agent, such Obligor shall promptly (i) execute (or cause to be executed) and deliver to the Agent, any and all agreements, Financing Statements, certificates, instruments and other documents (the “Additional Documents”) upon which such Obligor’s signature may be required and that the Agent may reasonably request in form and substance satisfactory to the Agent, and/or (ii) perform any acts; in each case, to perfect and continue perfected or better perfect each Secured Party’s security interest in the Collateral (whether now owned or hereafter arising or acquired), and in order to fully consummate all of the transactions contemplated hereby and under the other Transaction Documents that the Agent reasonably believes to be necessary as a result of any amendment to the Uniform Commercial Code in effect from time to time in any applicable jurisdiction (the “UCC”), provided, that any Additional Documents that require such Obligor to assume any new obligations shall be subject to the review and approval of such Obligor, such approval not to be unreasonably withheld or delayed.  Each Obligor also hereby ratifies its authorization for the Agent to have filed in any jurisdiction the Financing Statements or amendments thereto filed prior to the date hereof (if any), copies of which have previously been provided to such Obligor.  No Obligor shall terminate, amend or file any correction statement with respect to any Financing Statement filed pursuant to this Agreement without obtaining the prior written consent of Secured Parties holding at least a majority of the Registrable Securities into which all of the Notes then outstanding are convertible (without regard to any limitation on such conversion).  Each Obligor appoints the Agent as such Obligor’s attorney-in-fact, with a power of attorney to execute and file in any appropriate filing office on behalf of such Obligor, to the extent not performed by such Obligor within two (2) Business Days of a request therefor by the Agent, such Additional Documents and other similar instruments as the Agent may from time to time deem necessary or desirable to protect or perfect the security interest in the Collateral, provided, that any Additional Documents that require such Obligor to assume any new obligations shall be subject to the review and approval of such Obligor, such approval not to be unreasonably withheld or delayed.  Such power of attorney is coupled with an interest and shall be irrevocable.

 

  

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Section 1.3   Obligations Secured.  The Collateral and the power of collection pertaining thereto shall secure any and all indebtedness, liabilities and obligations of each Obligor to the Secured Parties evidenced by and/or arising pursuant to any of the Transaction Documents now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several, including, without limitation, the obligations of the Borrower to repay principal of the Notes, to pay interest on the Notes (including, without limitation, interest accruing after any bankruptcy, insolvency, reorganization or other similar filing) and to pay all fees, indemnities, costs and expenses (including attorneys’ fees) provided for in any of the Transaction Documents (collectively the “Obligations”).

Section 1.4   Delivery of Pledged Capital Stock. Borrower shall deliver as security to the Agent, simultaneously with or prior to the execution and delivery of this Security Agreement, all certificates representing the Pledged Capital Stock. All such certificates shall be delivered in suitable form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, in forms reasonably acceptable to the Agent. If Borrower shall receive by virtue of its being or having been the owner of any Pledged Capital Stock, any (i) certificate, including without limitation, any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares of capital stock, stock splits, spin-off or split-off, promissory notes or other instruments; (ii) option or right, whether as an addition to, substitution for, or an exchange for, any Pledged Capital Stock or otherwise; (iii) dividends payable in capital stock; or (iv) distributions of capital stock or other equity interests in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then Borrower shall receive such certificate, instrument, option, right or distribution in trust for the benefit of the Agent, shall segregate it from Borrower’s other property and shall deliver it forthwith to the Agent in the form received accompanied by duly executed instruments of transfer or assignment in blank, in forms reasonably acceptable to the Agent, to be held by the Agent as Collateral and as further security for the Obligations.

ARTICLE II

COVENANTS

Section 2.1   Duties of the Obligors Regarding Collateral.  At all times after the date hereof, each Obligor agrees that it shall:

(a)   Preserve the Collateral in good condition and order (ordinary wear and tear excepted) and not permit it to be abused or misused; provided, however, that Agent and Secured Parties shall be obligated to exercise reasonable care with respect to any Collateral that comes into any of their possession;

 

  

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(b)   Not allow any of the Collateral to be affixed to real estate, except for any property deemed to be fixtures;

(c)   Maintain good and complete title to the Collateral subject to Permitted Liens;

(d)   Keep the Collateral free and clear at all times of all Liens other than Permitted Liens;

(e)   Take or cause to be taken such acts and actions as shall be necessary or appropriate to assure that the Secured Parties’ security interest in the Collateral shall not become subordinate or junior to the security interests, liens or claims of any other Person (other than Permitted Liens);

(f)   Refrain from selling, assigning or otherwise disposing of any of the Collateral or moving or removing any of the Collateral, without obtaining the prior written consent of the Secured Parties holding a majority of the Registrable Securities into which all of the Notes then outstanding are convertible (without regard to any limitation on such conversion), or until all of the Obligations have been fully performed and paid in full other than (i) sales or dispositions of inventory in the ordinary course of business, (ii) sales or dispositions of obsolete or unused assets and (iii) sales or dispositions of assets having an aggregate value (when combined with all other assets sold or disposed of) less than or equal to $1 million made in connection with sale-leaseback transactions; provided, however, that concurrently with any disposition permitted by this Section 2.1(f), (x) the security interest granted hereby shall automatically be released from the Collateral so disposed, and (y) the security interest shall continue in the Proceeds (as defined in the UCC) of such Collateral and such Proceeds shall be applied against the Obligations in such order as the Agent shall determine in its sole discretion; and provided further, that, Agent and Secured Parties shall execute and deliver, at such Obligor’s sole cost and expense, any releases or other documents reasonably requested by such Obligor, that is in form and substance reasonably acceptable to the executing party, confirming the release of the security interest in that portion of the Collateral that is the subject of a disposition permitted by this Section 2.1(f);

(g)   Promptly provide to Agent and each Secured Party such financial statements, reports, lists and schedules related to the Collateral and any other information relating to the Collateral as Agent or such Secured Party may reasonably request from time to time;

(h)   Upon reasonable notice, permit Agent or any Secured Party to inspect all books and records of such Obligor relating to the Collateral at such times and as often as Agent or any such Secured Party may reasonably request;

(i)   Promptly notify Agent and each Secured Party if any Event of Default (as hereinafter defined) occurs;

 

  

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(j)   Promptly pay when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or operation of the Collateral or incurred in connection therewith;

(k)   Continue to operate its business in compliance in all material respects with all applicable provisions of federal, state and local statutes, ordinances and governmental rules and regulations; and

(l)   Maintain insurance on the Collateral with reputable insurance companies against loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards and risks and in such amounts as is customarily maintained by similar businesses or as may be required by applicable law.  All premiums on such insurance shall be paid by each Obligor and certified copies of the policies, or other evidence of insurance, shall be delivered to the Agent promptly upon request. At the request of the Agent, all insurance policies required under this Section shall contain standard lender’s loss payable clauses, naming the Agent for the benefit of the Secured Parties as loss payees, and providing that: (a) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (b) such policies and loss payable clauses may not be canceled, amended or terminated unless at least thirty (30) days’ prior written notice is given to the Agent.

Section 2.2   Other Encumbrances.  At all times after the date hereof, each Obligor shall:  (i) defend its title to, and the Secured Parties’ interest in, the Collateral against all claims, (ii) take any action necessary to remove any encumbrances on the Collateral other than Permitted Liens, and (iii) defend the right, title and interest of the Secured Parties in and to any of such Obligor’s rights in the Collateral.

Section 2.3   Change Name or Location.  No Obligor shall, except upon 30 days’ prior written notice to Agent and each Secured Party, change its company name or conduct its business under any name other than that set forth herein or change its jurisdiction of organization or incorporation, chief executive office, place of business from the current location.

ARTICLE III

EVENTS OF DEFAULT

Section 3.1   Events of Default Defined.  The occurrence of any of the following events shall constitute an event of default under this Agreement (each, an “Event of Default”):

(a)           The failure of an Obligor to perform or comply in a material respect with any act, duty or obligation required to be performed under this Agreement if such failure is not remedied within ten (10) Business Days after such Obligor receives written notice of such failure from any Secured Party, provided, that if during such ten Business Day period, such Obligor is diligently and in good faith taking steps to cure such breach, such period will be extended from ten Business Days to fifteen (15) Business Days;

(b)           If any of the representations or warranties of an Obligor set forth in this Agreement shall prove to have been incorrect in any material respect when made;

 

  

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(c)           If any material portion of the Collateral shall be damaged, destroyed or otherwise lost and such damage, destruction or loss is not covered by insurance; or

(d)           If an Event of Default or Fundamental Change (as each such term is defined in the Notes) occurs.

Section 3.2    Rights and Remedies Upon Default.  If an Event of Default shall have occurred hereunder and is continuing, any Secured Party may, at its option, without notice or demand, declare the Obligations to be immediately due and payable.  As to any Collateral, the Agent shall, in its capacity as collateral agent for the Secured Parties, have the rights and remedies of any secured creditor under the UCC, such rights to be exercised in such order or manner as the Secured Parties may determine against any Obligor.  If for any reason the Agent should be required by law or otherwise to give notice to an Obligor of the sale of any Collateral, such Obligor agrees that any written notice sent by overnight delivery service not less than ten (10) calendar days before the sale or mailed postage prepaid, return receipt requested, to such Obligor’s address listed below not less than fifteen (15) calendar days before the sale shall be deemed reasonable and adequate.

Section 3.3   Allocation of Proceeds Among Secured Parties.  Any funds received by the Agent or a Secured Party pursuant to this Agreement shall be allocated among and paid to the Secured Parties on a pro rata basis based on the amount of principal and accrued and unpaid interest then outstanding on their respective Notes.  To the extent that a Secured Party receives greater than its pro rata share, such Secured Party shall promptly remit such overpayment to each other Secured Party as required to comply with the preceding sentence. Each Secured Party may determine the order in which to apply funds received by it regardless of the order in which any other Secured Party applies funds (e.g., a Secured Party may determine to apply funds first to expenses, second to interest and third to principal and another Secured Party may determine to apply funds first to interest, second to expenses and third to principal).

ARTICLE IV

ADDITIONAL REMEDIES

Upon the occurrence and during the continuance of an Event of Default, each Obligor shall:

(a)           Endorse any and all documents evidencing any Collateral to the Agent, or as otherwise instructed by the Agent, and notify any payor that said documents have been so endorsed and that all sums due and owing pursuant to them should be paid directly to the Agent, or as otherwise instructed by the Agent;

(b)           Turn over to the Agent, or as otherwise instructed by the Agent, copies of all documents evidencing any right to collection of any sums due such Obligor arising from or in connection with any of the Collateral;

 

  

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(c)           Take any action reasonably required by the Agent with reference to the Federal Assignment of Claims Act; and

(d)           Keep all of its books, records, documents and instruments relating to the Collateral in such manner as the Agent may reasonably require.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Obligor represents and warrants to the Agent and the Secured Parties as follows:

Section 5.1   Title to Collateral Authorization of Pledged Capital Stock.  Such Obligor is the owner of and has good and marketable title to, or has a valid and subsisting leasehold interest in, all of its assets and properties comprising the Collateral. The Pledged Capital Stock is duly authorized and validly issued, is fully paid and nonassessable and is not subject to the preemptive rights of any Person. The Pledged Capital Stock constitutes all of the issued and outstanding voting equity of the Guarantor.

Section 5.2   No Other Encumbrances.  Such Obligor has not granted, nor will it grant, a security interest in the Collateral to any other individual or entity, and such Collateral is free and clear of any mortgage, pledge, lease, trust, bailment, lien, security interest, encumbrance, charge or other arrangement (other than the Permitted Liens).

Section 5.3    Authority; Enforceability.  Such Obligor has the authority and capacity to perform its obligations hereunder, and this Agreement, when executed and delivered, will be the valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights or general equitable principals, whether applied in law or equity.

Section 5.4    Company Name; Place of Business; Location of Collateral.  Such Obligor’s true and correct company name, all trade name(s) under which it conducts its business, its jurisdiction of organization or incorporation and each of its chief executive office, its place(s) of business and the locations of its Collateral or records relating to such Collateral are set forth beneath such Obligor’s name in Exhibit A hereto.

Section 5.5    Perfection; First Priority Security Interest.  The taking of possession by the Agent of the certificates representing the Pledged Capital Stock will perfect and establish the first priority of the Agent’s security interest in all certificated Pledged Capital Stock. Upon the filing of Financing Statements with the state of incorporation of an Obligor, the security interest in such Obligor’s Collateral granted hereunder shall constitute at all times a valid first priority security interest (other than (i) with respect to Permitted Liens and (ii) where the Secured Parties have failed to file necessary continuation statements, perfected with respect to all Collateral for which the filing of the Financing Statements is a valid method of perfection, vested in the Secured Parties, in and upon the Collateral, free and clear of any liens (other than the Permitted Liens).

 

  

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ARTICLE VI

MISCELLANEOUS

Section 6.1    Survival; Severability.  The representations, warranties, covenants and indemnities made by the Obligors herein shall survive the execution and delivery of this Agreement notwithstanding any due diligence investigation made by or on behalf of the party seeking to rely thereon.  In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal, unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the parties.

Section 6.2    Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the Agent and the Secured Parties.  Each Secured Party may assign its rights hereunder in connection with any private sale or transfer of the Notes in accordance with the terms of the Purchase Agreement, in which case the term “Secured Party” shall be deemed to refer to such transferee as though such transferee was an original signatory hereto.  The Agent may resign or be replaced, in which case the term “Agent” shall be deemed to refer to the successor agent as though such agent was an original signatory hereto.  The Obligors may not assign its rights or obligations under this Agreement.

Section 6.3    Governing Law; Jurisdiction.  This Agreement shall be governed by and construed under the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York.  Each Obligor hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in the City of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each Obligor hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such Obligor at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

Section 6.4    Headings.  The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

Section 6.5    Notices. Any notice, demand or request required or permitted to be given by any Obligor, the Agent or a Secured Party pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission, unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the next succeeding Business Day and (ii) on the next Business Day after timely delivery to an overnight courier, addressed as follows:

 

  

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If to an Obligor:

c/o SkyPostal Networks, Inc.

7805 NW 15th Street

Miami, Florida 33126

Attn:        Chief Financial Officer

Tel:           (305) 599-1812

Fax:           (305) 593-0843

with a copy to:

Mazzeo Song & Bradham LLP

708 Third Avenue

New York, New York 10017

Attn:        David S. Song, Esq.

Tel:           (212) 599-0700

Fax:           (212) 599-8400

If to the Agent or a Secured Party:

c/o LBI Investments, LLC

601 S. Federal Hwy. Suite 201

Boca Raton, FL 33432

Attn:         Michael Margolies

Tel:           (561) 922-3700

Fax:           (561) 948-8924

and if to a Secured Party, to the address for such Secured Party as shall appear on Annex I to the Purchase Agreement. Any party may change its address for receiving notice by giving written notice thereof to the other parties in accordance with this Section 6.5.

Section 6.6    Entire Agreement; Amendments.  This Agreement and the other Transaction Documents constitute the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between or among the parties.  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Obligors, the Agent and the Secured Parties holding at least two-thirds (2/3) of the Registrable Securities into which all of the Notes then outstanding are convertible (without regard to any limitation on such conversion), and no provision hereof may be waived other than by a written instrument signed by the party against whom enforcement of any such waiver is sought.

 

  

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Section 6.7    No Waiver.  Neither the Agent nor any Secured Party shall by any act (except as provided in Section 6.6 above), any failure to act or any delay in acting be deemed to have (i) waived any right or remedy under this Agreement, any other Transaction Document or any document, agreement or instrument made, delivered or given in connection with this Agreement or the other Transaction Documents, or (ii) acquiesced in any Event of Default or in any breach of any of the terms and conditions of this Agreement, any other Transaction Document or any document, agreement or instrument made, delivered or given in connection with this Agreement or the other Transaction Documents.  No failure to exercise, nor any delay in exercising, any right, power or privilege of the Agent or any Secured Party under this Agreement, any other Transaction Document or any document, agreement or instrument made, delivered or given in connection with this Agreement or the other Transaction Documents shall operate as a waiver of any such right, power or privilege.  No single or partial exercise of any right, power or privilege under this Agreement, any other Transaction Document or any document, agreement or instrument made, delivered or given in connection with this Agreement or the other Transaction Documents shall preclude any other or further exercise of any other right, power or privilege.  A waiver by the Agent or a Secured Party of any right or remedy under this Agreement, any other Transaction Document or any other document or instrument made, delivered or given in connection with this Agreement or the other Transaction Documents on any one occasion shall not be construed as a bar to any right or remedy that the Agent or such Secured Party would otherwise have on any future occasion.

Section 6.8    Cumulative Remedies.  The rights and remedies provided in this Agreement are cumulative, may be exercised singly or concurrently, and are not exclusive of any other rights or remedies provided by law.

Section 6.9    Waivers of Jury Trial.  Each Obligor hereby irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to this Agreement or any other Transaction Document to which it is a party and for any counterclaim therein.

Section 6.10   Waivers.  Each Obligor acknowledges that the Obligations arose out of a commercial transaction and hereby knowingly and intelligently waives any right to require the Agent or any Secured Party to (i) proceed against any person or entity, (ii) proceed against any other collateral under any other agreement, (iii) pursue any other remedy available to the Agent or such Secured Party, or (iv) make presentment, demand, dishonor, notice of dishonor, acceleration and/or notice of non-payment.  Each Obligor further waives any defense that it may have to the exercise by the Agent or any Secured Party of its rights under this Agreement, other than the defense that the Obligations have fully been paid and performed.

Section 6.11   Attorney-in-Fact.  Each Obligor appoints the Agent its true attorney-in-fact to perform any of the following powers, which are irrevocable until termination of this Agreement and may be exercised, from time to time, by the Agent’s officers and employees or any of them if an Event of Default occurs:  (i) to perform any obligation of such Obligor hereunder in such Obligor’s name or otherwise; (ii) to collect by legal proceedings or otherwise all dividends, interest, principal or other sums now or hereafter payable upon or on account of the Collateral, to accept other property in exchange for the Collateral, and any money or property received in exchange for the Collateral may be applied to the Obligations or held by the Agent under this Agreement; (iii) to make any compromise or settlement the Agent deems desirable or proper in respect of the Collateral; and (iv) to insure, process and preserve the Collateral.  The foregoing power of attorney shall take effect only upon an Event of Default.

 

  

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Section 6.12   Cross Default.  Each Obligor agrees and acknowledges that a default under the terms of this Agreement shall constitute a default under the other Transaction Documents, and a default under any of the other Transaction Documents shall constitute a default under this Agreement.

Section 6.13   Fees and Expenses.  On demand by the Agent or any Secured Party, without limiting any of the terms of any other Transaction Document, each Obligor is obligated to pay all reasonable filing fees, and out-of-pocket costs incurred by the Agent or such Secured Party in connection with (i) filing or recording any documents (including all taxes in connection therewith) in public offices; and (ii) paying or discharging any taxes, counsel fees, maintenance fees, encumbrances, or other amounts in connection with protecting, maintaining, or preserving the Collateral or defending or prosecuting any actions or proceedings arising out of or related to the Collateral (including, without limitation, reasonable legal fees and disbursements); and (iii) the enforcement of this Agreement and any amendment, waiver or consent relating hereto (including, without limitation, reasonable legal fees and disbursements).

Section 6.14   Release.  No transfer or renewal, extension, assignment or termination of this Agreement or of any instrument or document executed and delivered by an Obligor or any other obligor to a Secured Party, nor additional advances made by any Secured Party to an Obligor, nor the taking of further security, nor the retaking or re-delivery of the Collateral to an Obligor by the Agent or any Secured Party nor any other act of the Agent or any Secured Party shall release any Obligor from any Obligation, except a release or discharge executed in writing by each Secured Party with respect to such Obligation or upon full payment and satisfaction of all Obligations and termination of the Notes.  At such time the Obligations have been satisfied in full, the Agent and each Secured Party shall execute and deliver to the Obligors all assignments, authorizations and other instruments as may be reasonably necessary or proper to terminate such Secured Party’s security interest in the Collateral, subject to any disposition of the Collateral that may have been made by the Agent or such Secured Party pursuant to this Agreement.  For the purpose of this Agreement, the Obligations shall be deemed to continue if an Obligor enters into any bankruptcy or similar proceeding at a time when any amount paid to the Agent or a Secured Party could be ordered to be repaid as a preference or pursuant to a similar theory, and shall continue until it is finally determined that no such repayment can be ordered.

Section 6.15   Marshalling and Other Matters.  Each Obligor hereby waives, to the extent permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Collateral or any part thereof or any interest therein.  Further, each Obligor hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Agreement on behalf of such Obligor, and on behalf of each and every person acquiring any interest in or title to the Collateral subsequent to the date of this Agreement and on behalf of all persons to the extent permitted by applicable law.

[Signatures Page to Follow]

  

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IN WITNESS WHEREOF, the Obligors, the Agent and each Secured Party have duly executed this Agreement as of the date first written above.

	 	
BORROWER:

	  
	 	  	  	  	  
	 	
SKYPOSTAL NETWORKS, INC.

	  
	 	  	  	  	  
	 	  	  	  	  
	 	
By:

	
 

	  
	 	  	
Name:

	  
	 	  	
Title:

	  
	 	  	  	  	  
	 	
GUARANTOR:

	  
	 	  	  	  	  
	 	
SKYSHOP LOGISTICS, INC.

	  
	 	  	  	  	  
	 	  	  	  	  
	 	
By:

	  	  
	 	  	
Name:

	
 

	  
	 	  	
Title:

	  	  
	 	  	  	  	  
	 	  	  	  	  
	 	
AGENT:

	  
	 	  	  	  	  
	 	
LBI INVESTMENTS, LLC

	  
	 	  	  	  	  
	 	
By:

	
LBI Management II, LLC, its Manager

	  
	 	  	  	  	  
	 	  	  	  	  
	 	
By:

	
 

	  
	 	  	
Name:

	  
	 	  	
Title:

	  
	 	  	  	  	  
	 	
SECURED PARTY:

	  
	 	  	  	  	  
	 	
LBI INVESTMENTS, LLC

	  
	 	  	  	  	  
	 	
By:

	
LBI Management II, LLC, its Manager

	  
	 	  	  	  	  
	 	  	  	  	  
	 	  	  	  	  
	 	
By:

	
 

	  
	 	  	
Name:

	  
	 	  	
Title:

	  

  

  

  

 

Exhibit A

List of Collateral Locations, Executive Offices and

Jurisdiction of Incorporation of Obligors

Borrower:

	
Executive Offices:

	
7805 NW 15th Street, Miami, Florida 33126

	  	  
	  	  
	
Collateral Location:

	
Same as above

	  	  
	  	  
	
Jurisdiction of Incorporation:

	
Nevada

	  	  
	  	  
	  	  
	
Guarantor:

	  
	  	  
	
Executive Offices:

	
7805 NW 15th Street, Miami, Florida 33126

	  	  
	
Collateral Location:

	
Same as above

	  	  
	  	  
	
Jurisdiction of Incorporation:

	
Florida

 

 

 

 

A-1

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