UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
13D
Under The
Securities Exchange Act of 1934
SkyPostal
Networks, Inc.
|
(Name
of Issuer)
|
Common
Stock, $
0.001
par
value per share
|
(Title
of Class of Securities)
|
830-86M104
|
(CUSIP
Number)
|
A.J.
Hernandez
|
(Name,
Address and Telephone Number of Person Authorized to Receive
Notices
and Communications)
|
May
19, 2010
|
(Date
of Event Which Requires Filing of this
Statement)
|
If
the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.240.13D-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box [_].
|
|
Note: Schedules
filed in paper format shall include a signed original and five copies of
the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
|
|
|
|
* The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover
page.
|
|
The
information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the
Notes).
|
1.
|
NAME
OF REPORTING PERSONS
LBI
Investments, LLC
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
WC
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
Delaware
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
CO
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
LBI
Management II, LLC
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
WC
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
Delaware
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
CO
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
MLM
Trust
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
OO
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
Davos
Partners, LP
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
PN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
Theodore
Wachtell
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
IN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
James
Connelly
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
|
|
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
IN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
Richard
Thomson
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
IN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
Michael
Margolies
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
IN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
|
|
1.
|
NAME
OF REPORTING PERSONS
Marc
Lehman
|
|
|
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
|
|
|
|
|
2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
|
|
|
(a)
|
[_]
|
|
|
(b)
|
[_]
|
3.
|
SEC
USE ONLY
|
|
|
|
|
4.
|
SOURCE
OF FUNDS*
|
|
|
|
|
|
PF
|
|
5.
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
|
|
[_]
|
|
|
|
6.
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
|
|
|
|
|
|
United
States
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
|
|
|
|
7.
|
SOLE
VOTING POWER
|
|
|
0
|
|
|
|
|
8.
|
SHARED
VOTING POWER
|
|
|
54,240,000
|
|
|
|
|
9.
|
SOLE
DISPOSITIVE POWER
|
|
0
|
|
10.
|
SHARED
DISPOSITIVE POWER
|
|
|
|
54,240,000
|
|
|
|
|
11.
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
|
|
|
PERSON
|
|
|
54,240,000
|
|
|
|
|
12.
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
|
[ ]
|
|
CERTAIN
SHARES*
|
|
|
|
|
13.
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
|
|
43.97%
|
|
|
|
|
14.
|
TYPE
OF REPORTING PERSON*
|
|
|
IN
|
|
|
*SEE
INSTRUCTIONS
|
|
|
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1.
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NAME
OF REPORTING PERSONS
William
McCauley
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I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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2.
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
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(a)
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[_]
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(b)
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[_]
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3.
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SEC
USE ONLY
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4.
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SOURCE
OF FUNDS*
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PF
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
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[_]
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
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United
States
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NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
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7.
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SOLE
VOTING POWER
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0
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8.
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SHARED
VOTING POWER
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54,240,000
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9.
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SOLE
DISPOSITIVE POWER
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0
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10.
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SHARED
DISPOSITIVE POWER
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54,240,000
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
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PERSON
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54,240,000
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
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[ ]
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CERTAIN
SHARES*
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13.
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PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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43.97%
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14.
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TYPE
OF REPORTING PERSON*
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IN
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*SEE
INSTRUCTIONS
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CUSIP
No.
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830-86M104
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Item
1.
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Security
and Issuer.
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The
name of the issuer is SkyPostal Networks, Inc., a Nevada Corporation, (the
"Issuer"). The principal executive office and mailing address
of the Issuer is 7805 NW 15
th
Street, Miami Florida, 33126. This Schedule 13D relates to
shares of the Issuer's common stock, par value $0.001 per share (the
"Shares"). The Shares are traded on the over the counter
bulletin board under the symbol SKPN.OB.
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Item
2.
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Identity
and Background.
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(a),
(c) and (f) LBI Investments LLC is a Delaware limited liability company
("LBI") that was formed for the purpose of investing in and holding the
securities of the Issuer, (ii) LBI Management II, LLC is a Delaware
limited liability company ("LBI Management") that was acts as the manager
of LBI Investments, (iii) MLM Trust is a trust over which James Tisch has
sole voting and dispositive power ("MLM") and is a non-managing member of
LBI, (iv) Davos Partners, LP is a partnership over which David P. Nolan
has sole voting and dispositive power ("Davos") and is a non-managing
member of LBI, (v) Theodore Wachtell is a natural person and citizen of
the United States ("Wachtell") and is a non-managing member of LBI, (vi)
James Connelly is a natural person and citizen of the United States
("Connelly") and is a non-managing member of LBI, (vii) Richard Thomson is
a natural person and citizen of the United States ("Thomson") and is a
non-managing member of LBI, (viii) Michael Margolies is a natural person
and citizen of the United States ("Margolies") and is a non-managing
member of LBI and is the managing member of LBI Management, (ix) Marc
Lehman is a natural person and citizen of the United States ("Lehman") and
is a non-managing member of LBI and (x) William McCauley is a natural
person and citizen of the United States and is a non-managing member of
LBI.
This
Schedule 13D is being filed on behalf of LBI, LBI Management and each of
the persons listed in (iii) through (x), above, referred to collectively
as the "Reporting Persons."
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LBI
Management does not have the discretion to sell or control the sale or
vote or control the vote of any securities of the Issuer on behalf of LBI
Investments except with the consent of a majority in interest of the
Members of LBI. LBI Management was formed for the purposes of
acting as the managing member of LBI.
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(b) The
principal business office and mailing address of the Reporting Persons is
c/o LBI Investment, LLC, c/o 601 S. Federal Hwy. Suite 201, Boca Raton, FL
33432.
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(d)
and (e) None of the Reporting Persons has, during the past five
years, been convicted of any criminal proceeding (excluding traffic
violations or similar misdemeanors), nor been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such
laws.
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Item
3.
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Source
and Amount of Funds or Other Consideration.
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LBI
holds a Senior Secured Convertible Note (the "Note") in the principal
outstanding amount of $2,260,000, which Note is convertible into an
aggregate of 45,200,000 shares of Shares of the Issuer at a conversion
price of $0.05 per Share, representing on a fully converted basis 36.7% of
the Issuer's issued and outstanding Shares. LBI is also the
holder of a warrant to purchase an aggregate of 9,040,000 Shares of the
Issuer, representing 7.3% of the Issuer's issued and outstanding Shares,
resulting in each of the Reporting Persons being deemed to beneficially
own 54,240,000 Shares of the Issuer, representing 43.97% of the Issuer's
issued and outstanding Shares. The Note and the Warrant reflect
in the aggregate 54,240,000 Shares of the Issuer, representing 43.97% of
the Issuer's issued and outstanding
Shares.
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The
funds of LBI paid to the Issuer in exchange for the Note and the Warrants
(collectively the "Investment") constitutes the working capital of the LBI
derived from investment in LBI by each of the non-management members of
LBI identified in Item 2, above. None of the Investment was
borrowed by the Reporting Persons.
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Item
4.
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Purpose
of Transaction.
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(a)
– (c), (e) - (j) The Reporting Persons have acquired beneficial
ownership of the Shares for investment purposes and will evaluate their
investment in the Shares on a continual basis. The Reporting
Persons have no plans or proposals that would relate to or would result
in: the acquisition of additional securities of the Issuer or the
disposition of presently-owned securities of the Issuer; any extraordinary
corporate transaction involving the Issuer; a sale or transfer of a
material amount of assets of the Issuer; any material change in the
present capitalization or dividend policy of the Issuer; any material
change in the operating policies or corporate structure of the Issuer; any
change in the Issuer's charter or by-laws; the Shares of the Issuer
ceasing to be authorized to be quoted in the over-the-counter bulletin
board; or causing the Issuer to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act
of 1934. The Reporting Persons, however, reserve the right, at
a later date, to effect one or more of such changes or transactions in the
number of Shares they may be deemed to beneficially
own.
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(d)
At the time of the Investment and the issuance of the Note and the Warrant
to LBI, four persons were appointed to the board of directors of the
Issuer as representatives of LBI. Neither LBI nor any other
Reporting Person has any rights to appoint additional or different members
to the board of directors of the Issuer and have no plans or proposals to
do so or to change the number or terms of directors or to fill any
existing vacancies on the board of the
issuer.
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Item
5.
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Interest
in Securities of the Issuer.
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(a)
– (b), (d) As of the date hereof, the Reporting Persons may be
deemed to be the beneficial owner of 54,240,000 Shares, representing
43.97%, of the Issuer, based upon the 69,123,292 Shares outstanding as of
March 31, 2010, as reported by the Issuer on its form 10-Q for the quarter
ending March 31, 2010.
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None
of the Reporting Persons has the sole power to vote or direct the vote of
any of the Shares. LBI Management together with non-managing
members identified in Item two representing not less than a majority of
the membership interests in LBI have the shared power to vote or direct
the vote of 54,240,000 Shares.
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(c)
The trading dates, number
of Shares purchased and sold and price per share for all transactions in
the Shares by the Reporting Persons since the Reporting Persons' most
recently filed Schedule 13D are set forth in Exhibit B. All
such transactions were effected in transactions with
brokers.
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(e)
Not applicable.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships with Respect
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to
Securities of the Issuer.
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Senior Secured Convertible
Note:
LBI is the issuer of the Senior Secured
Convertible Note in the principal amount of $2,260,000 (the
"Note"). The Note is convertible in an aggregate of 45,200,000
shares of common stock of the Company at a conversion price of $0.05 per
Share, representing on a fully converted basis 36.7% of the Company's
Shares. The Notes bears interest at the rate of 3.0% and
matures on May 19, 2013.
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Warrants:
LBI
Investment is the holder of a warrant (the "Warrant") to purchase an
aggregate of 9,040,000 Shares at an exercise price of $0.15 per shares at
any time prior to the third anniversary of the issuance of the Warrant on
May 19, 2010.
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Registration Rights
Agreement:
LBI has entered into a registration rights
agreement with the Issuer pursuant to which the Company agreed to register
the shares issuable upon conversion of the Note and exercise of the
Warrant for resale by LBI under the Securities Act of 1933, as
amended.
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To
the knowledge of the Reporting Persons, there are no other contracts,
arrangements, understandings or relationships (legal or otherwise) among
the persons named in Item 2 with respect to any securities of the
Issuer.
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Item
7.
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Material
to be Filed as Exhibits.
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Exhibit
A – Joint Filing Undertaking.
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Exhibit
B – List of Transactions
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Exhibit
C: 3% Senior Secured Convertible Note
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Exhibit
D: Warrant to Purchase Common Stock
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SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
*The
Reporting Person disclaims beneficial ownership in the shares reported herein
except to the extent of their voting and dispositive interests
therein.
Attention: Intentional
misstatements or omissions of fact constitute Federal criminal violations (see
18 U.S.C. 1001).
|
LBI
Investments, LLC
by
its Manager
LBI
Management II, LLC
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Name:Michael
Margolies
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Title:
Authorized Signatory
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LBI
Management II, LLC
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Name:
Michael Margolies
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Title:
Authorized Signatory
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MLM
Trust
/s/ James Tisch
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Name:
James Tisch
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Title:
Authorized Signatory
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Davos
Partners, LP
/s/ David P.
Nolan
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Name:
David P. Nolan
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Title:
Authorized Signatory
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Theodore
Wachtell
/s/ Theodore
Wachtell
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James
Connelly
/s/ James
Connelly
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Richard
Thomson
/s/ Richard
Thomson
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Michael Margolies
./s/ Michael Margolies
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Marc Lehman
/s/ Marc Lehman
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William McCauley
/s/ William McCauley
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EXHIBIT
A
JOINT
FILING UNDERTAKING
The
undersigned, being duly authorized thereunto, hereby executes this agreement as
an exhibit to this Schedule 13D with respect to the Common Shares of SkyPostal
Networks Inc. to evidence the agreement of the below-named parties, in
accordance with the rules promulgated pursuant to the Securities Exchange Act of
1934, as amended, to file this Schedule 13D jointly on behalf of each such
party.
|
LBI
Investments, LLC
by
its Manager
LBI
Management II, LLC
/s/ Michael
Margolies
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Name:
Michael Margolies
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Title:
Authorized Signatory
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LBI
Management II, LLC
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Name:
Michael Margolies
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Title:
Authorized Signatory
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MLM
Trust
/s/ James Tisch
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Name:
James Tisch
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Title:
Authorized Signatory
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Davos
Partners, LP
/s/ David P.
Nolan
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Name:
David P. Nolan
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Title:
Authorized Signatory
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Theodore
Wachtell
/s/ Theodore
Wachtell
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James
Connelly
/s/ James
Connelly
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Richard
Thomson
/s/ Richard
Thomson
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Michael Margolies
/s/ Michael Margolies
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Marc Lehman
/s/ Marc Lehman
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William McCauley
/s/ William McCauley
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EXHIBIT
B
TRANSACTIONS
IN THE COMMON SHARES
Date
of the Transaction
|
Number
of Shares Acquired
|
Price
Per Share
|
May
19, 2010
|
54,240,000
|
$2,260,000
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EXHIBIT C
[Execution
Copy]
Exhibit
A to the
Note
Purchase Agreement
THIS NOTE
AND THE SECURITIES
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT\"), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE OR SOLD UNLESS A REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE
WITH RESPECT THERETO OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER
OR SALE.
THIS
NOTE
DOES
NOT REQUIRE PHYSICAL SURRENDER HEREOF IN ORDER TO EFFECT A PARTIAL PAYMENT,
REDEMPTION OR CONVERSION HEREOF. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS
NOTE
MAY BE
LESS THAN THE PRINCIPAL AMOUNT SHOWN BELOW.
SKYPOSTAL
NETWORKS, INC.
3%
SENIOR SECURED CONVERTIBLE NOTE
Issue
Date: May 17, 2010
|
$2,260,000
|
FOR VALUE RECEIVED,
SKYPOSTAL
NETWORKS, INC.,
a
Nevada corporation (the "
Company
"),
hereby promises to pay to the order of LBI Investments, LLC or its permitted
successors or assigns (the "
Holder
")
the sum of Two Million Two Hundred Sixty Dollars ($
2,260,000
) in same day funds
on or before the three (3) year anniversary of the Issue Date (the "
Maturity
Date
"). The Holder may convert amounts of principal of and interest
accrued on this Note into shares ("
Conversion
Shares
") of the Company's common stock, par value $.001 per share (the
"
Common
Stock
"), on the terms and subject to the conditions set forth
herein.
The
Company has issued this Note pursuant to a Note Purchase Agreement, dated as of
May 17, 2010 (the "
Note Purchase
Agreement
"). This Note may be sold, transferred or assigned only in
accordance with the terms of the Note Purchase Agreement. The Notes issued by
the Company pursuant to the Note Purchase Agreement, including this Note, are
collectively referred to herein as the "
Notes
".
The
following terms shall apply to this Note:
1.
DEFINITIONS
.
"
Affiliate
"
shall mean, when used with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"
Applicable
Interest Rate
" means an annual rate equal to three percent (3%), computed
on the basis of a 360-day year and calculated using the actual number of days
elapsed since the Issue Date or the date on which Interest was most recently
paid, as the case may be, and compounded monthly.
"
Board Appointment
Date
" has the meaning set forth in the Note Purchase
Agreement.
"
Business
Day
" means any day other than a Saturday, a Sunday or a day on which the
New York Stock Exchange is closed or on which banks are authorized by law to
close in New York, New York.
"
Cash Flow
Positive
" means that the Company has achieved net positive cash flow from
operations (determined in accordance with GAAP after deducting capital
expenditures in an aggregate amount not to exceed $500,000) of at least $750,000
for three (3) consecutive fiscal quarters
"
Continuing
Director
" means at any date a member of the Company's Board of Directors
(i) who was a member of such board on the Board Appointment Date or (ii) who was
nominated or appointed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or appointment or whose
election to the Company's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such recommendation or endorsement or such lesser number comprising a majority
of a nominating committee if authority for such recommendation or endorsement
has been delegated to a nominating committee whose authority and composition
have been approved by at least a majority of the directors who were Continuing
Directors at the time such committee was formed.
"
Control
"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"
Controlling
"
and "
Controlled
"
shall have meanings correlative thereto.
"
Conversion
Price
" means $.05 (subject to adjustment as provided
herein).
"
Convertible
Securities
" means securities or other instruments which are convertible
into or exercisable or exchangeable for Common Stock.
"
Daily Trading
Volume
" means, as of any Trading Day, the trading volume of the Common
Stock, expressed as an aggregate dollar amount, on the Principal Market as
reported by the Principal Market.
"
Debt
"
means as to any Person at any time: (a) all indebtedness, liabilities and
obligations of such Person for borrowed money; (b) all indebtedness, liabilities
and obligations of such Person to pay the deferred purchase price of Property or
services, except trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than 90 days; (c) all capital
lease obligations of such Person; (d) all Debt of others guaranteed by such
Person; (e) all indebtedness, liabilities and obligations secured by a Lien
existing on Property owned by such Person, whether or not the indebtedness,
liabilities or obligations secured thereby have been assumed by such Person or
are non-recourse to such Person; (f) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds and similar instruments; and (g) all
liabilities and obligations of such Person to redeem or retire shares of capital
stock of such Person.
"
Default Interest
Rate
" means the lower of eight percent (8%) and the maximum rate
permitted by applicable law or by the applicable rules or regulations of any
Governmental Authority.
"
Governmental
Authority
" means any nation or government, any state, provincial or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including without limitation any stock exchange, securities market or
self-regulatory organization.
"
Issue
Date
" means the date on which this Note is issued pursuant to the Note
Purchase Agreement.
"
Lien
" and
"
Permitted
Lien
" shall have the respective meanings set forth in the Note Purchase
Agreement.
"
Liquidity
Event
" means the existence or occurrence of any of the following: (a) a
liquidation, dissolution or winding up of the Company; (b) a merger,
consolidation or similar transaction of the Company with or into another entity
if, after such merger, the holders of a majority of the Company's voting
securities immediately prior to the transaction do not hold a majority of the
voting securities of the successor entity, (c) the sale, license or lease of all
or substantially all of the Company's assets.
"
Major
Transaction
" means a merger, consolidation, business combination, tender
offer, exchange of shares, recapitalization, reorganization, redemption or other
similar event, as a result of which shares of Common Stock shall be changed into
the same or a different number of shares of the same or another class or classes
of stock or securities or other assets of the Company or another entity or the
Company shall sell all or substantially all of its assets.
"
Material Adverse
Effect
" shall mean (a) a materially adverse effect on the business,
assets, liabilities, operations, condition (financial or otherwise), operating
results or prospects of the Company and the Subsidiaries, taken as a whole, (b)
a material impairment of the ability of the Company to perform any of its
obligations under any Transaction Document to which it is or will be a party or
(c) a material impairment of the rights and remedies of or benefits available to
the Holder under any Transaction Document.
"
Maturity
Date
" has the meaning set forth in the preamble to this
Agreement.
"
Person
"
means any individual, corporation, trust, association, company, partnership,
joint venture, limited liability company, joint stock company, Governmental
Authority or other entity.
"
PIK
Amount
" has the meaning specified in
paragraph
2(b)
hereof.
"
Principal
Market
" means the principal securities exchange or market on which the
Common Stock is listed or traded.
"
Purchase
Rights
" means any options, warrants or other rights to purchase or
subscribe for Common Stock or Convertible Securities.
"
Registrable
Securities
" has the meaning set forth in the Registration Rights
Agreement.
"
Registration
Rights Agreement
" means the agreement between the Holder and the Company
pursuant to which the Company has agreed to register the shares of Common Stock
issuable under the Notes and the Warrants.
"
Registration
Statement
" has the meaning set forth in the Registration Rights
Agreement.
"
Scheduled
Interest Payment Date
" means June 1, 2010 and the first day of each
calendar month thereafter,
provided
, that if any of such
days in any year is not a Business Day, then the Scheduled Interest Payment Date
shall be the Business Day immediately following such date.
"
subsidiary
"
shall mean, with respect to any Person (herein referred to as the "
parent
"),
any corporation, partnership, limited liability company, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, Controlled or held, or (b) that is, at the
time any determination is made, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"
Subsidiary
"
shall mean any subsidiary of the Company.
"
Trading
Day
" means a Business Day on which shares of Common Stock are purchased
and sold on the Principal Market.
"
Transaction
Documents
" means (i) the Note Purchase Agreement, (ii) the Notes, (iii)
the Warrants, (iv) the Registration Rights Agreement, and (v) all other
agreements, documents and other instruments executed and delivered by or on
behalf of the Company any of its officers at the Closing.
"
VWAP
" on a
Trading Day means the volume weighted average price of the Common Stock for such
Trading Day on the Principal Market as reported by Bloomberg Financial Markets
or, if Bloomberg Financial Markets is not then reporting such prices, by a
comparable reporting service of national reputation selected by the Holder and
reasonably satisfactory to the Company. If VWAP cannot be calculated
for the Common Stock on such Trading Day on any of the foregoing bases, then the
Company shall submit such calculation to an independent investment banking firm
of national reputation reasonably acceptable to the Investors, and shall cause
such investment banking firm to perform such determination and notify the
Company and the Investors of the results of determination no later than two (2)
Business Days from the time such calculation was submitted to it by the
Company. All such determinations shall be appropriately adjusted for
any stock dividend, stock split or other similar transaction during such
period.
"
Warrants
"
means the warrants issued pursuant to the Note Purchase Agreement.
All definitions contained in this Note
are equally applicable to the singular and plural forms of the terms
defined. The words "hereof", "herein" and "hereunder" and words of
similar import referring to this Note refer to this Note as a whole and not to
any particular provision of this Note. Any capitalized term used but not defined
herein has the meaning specified in the Note Purchase Agreement.
2.
INTEREST
.
(a)
Interest Rate
. This
Note shall bear interest on the unpaid principal amount hereof ("
Interest
")
at a rate per annum equal to the Applicable Interest Rate.
(b)
Interest
Payments
. The Company shall pay accrued and unpaid Interest
(i) on each Scheduled Interest Payment Date, (ii) on the Maturity Date and (iii)
on any date on which the entire principal amount of this Note is paid in full
(whether through conversion or otherwise) (each of (i), (ii) and (iii) being
referred to herein as an "
Interest Payment
Date
"). The Company shall pay Interest in cash by wire
transfer of immediately available funds;
provided, however,
that prior
to the date on which the Company becomes Cash Flow Positive, it may, in lieu of
paying interest in cash on any Scheduled Interest Payment Date, pay interest "in
kind" (a "
PIK
Amount
"), which shall be capitalized and added on each Scheduled Interest
Payment Date to the then outstanding principal amount of this
Note. In no event may interest on any Loan be paid in kind on a
Scheduled Interest Payment Date if, on such Scheduled Interest Payment Date, an
Event of Default (or an event or circumstance that, with the giving of notice or
passage of time (or both) would constitute an Event of Default, has occurred,
and in such event Interest shall be due and payable in cash in immediately
available funds on such Scheduled Interest Payment Date in accordance with the
terms of this Note. For all purposes under this Agreement, all PIK
Amounts capitalized under this paragraph shall be treated as principal amount of
this Note. Interest that is due in cash and which is not paid on the applicable
Interest Payment Date shall bear interest until paid at the Default Interest
Rate. The Company shall give notice to the Holder of its intention to pay
interest in kind by delivering written notice thereof at least five (5) Business
Days prior to the applicable Scheduled Interest Payment Date.
(a)
Right to
Convert
. Subject to the conditions and limitations
specifically provided herein or in the Note Purchase Agreement, the Holder shall
have the right to convert, at any time and from time to time after the Issue
Date, all or any part of the outstanding and unpaid principal amount of this
Note and, at the option of the Holder, accrued and unpaid Interest, into such
number of fully paid and non-assessable Conversion Shares as is determined in
accordance with the terms hereof (a "
Conversion
").
Any accrued and unpaid Interest that is not converted pursuant to this
paragraph
3(a)
shall be paid in accordance with
paragraph
2(b)
above.
(b)
Conversion
Notice
. In order to convert principal of (and, if the Holder
so chooses, Interest accrued on) this Note, the Holder shall send by facsimile
transmission, at any time prior to 5:00 p.m., eastern time, on the Business Day
on which the Holder wishes to effect such Conversion (the "
Conversion
Date
"), a properly completed notice of conversion to the Company,
in
the form
set forth on
Annex I
hereto, stating the amount of principal to be converted (and, if the Holder so
chooses, accrued and unpaid Interest to be converted) and a calculation of the
number of shares of Common Stock issuable upon such Conversion (a "
Conversion
Notice
"). The Conversion Notice shall also state the name or
names (if not the Holder) in which the shares of Common Stock that are issuable
on such Conversion shall be issued. The Holder shall not be required to
physically surrender this Note to the Company in order to effect a Conversion.
The Company shall maintain a record showing, at any given time, the unpaid
principal amount of this Note and the date of each Conversion or other payment
of principal hereof. The Holder shall amend
Annex II
hereto upon any such Conversion or payment of principal to reflect the unpaid
principal amount hereof. In the case of a dispute as to the number of
Conversion Shares issuable upon a Conversion (including without limitation as a
result of adjustments to the Conversion Price made in accordance with
Section 4
below), the Company shall promptly issue to the Holder the number of Conversion
Shares that are not disputed and shall submit the disputed calculations to its
independent accountants within two (2) Business Days of receipt of the Holder's
Conversion Notice. The Company shall use its best efforts to cause such
accountants to calculate the Conversion Price as provided herein and to notify
the Company and the Holder of the results in writing no later than two (2)
Business Days following the day on which such accountant received the disputed
calculations (the "
Dispute
Procedure
"). Such accountant's calculation shall be deemed conclusive
absent manifest error. The fees of any such accountant shall be borne
by the party whose calculations are most at variance with those of such
accountant.
(c)
Number of Conversion Shares;
Conversion Price
. The number of Conversion Shares to be
delivered by the Company pursuant to a Conversion shall be equal to the
principal amount of (and, if the Holder so elects, Interest accrued on) this
Note being converted
divided by
the
Conversion Price.
(d)
Delivery of Common Stock
Upon Conversion
. (i) Upon receipt of a Conversion Notice, the
Company shall, no later than the close of business on the third (3rd) Business
Day following the Conversion Date set forth in such Conversion Notice (the
"
Delivery
Date
"), issue and deliver or cause to be delivered to the Holder the
number of Conversion Shares determined pursuant to
paragraph
3(c)
above,
provided,
however
, that any Conversion Shares that are the subject of a Dispute
Procedure shall be delivered no later than the close of business on the third
(3rd) Business Day following the determination made pursuant thereto. The
Company shall effect delivery of Conversion Shares to the Holder, as long as the
Company's designated transfer agent or co-transfer agent in the United States
for the Common Stock (the "
Transfer
Agent
") participates in the Depository Trust Company ("
DTC
") Fast
Automated Securities Transfer program ("
FAST
") and
no restrictive legend is required pursuant to the terms of this Note or the Note
Purchase Agreement, by crediting the account of the Holder or its nominee at DTC
(as specified in the applicable Conversion Notice) with the number of Conversion
Shares required to be delivered, no later than the close of business on such
Delivery Date. In the event that the Transfer Agent is not a participant in FAST
or if the Holder so specifies in a Conversion Notice or otherwise in writing on
or before the Conversion Date, or if a restrictive legend is required pursuant
to the terms of this Note or the Note Purchase Agreement, the Company shall
effect delivery of Conversion Shares by delivering to the Holder or its nominee
physical certificates representing such Conversion Shares, no later than the
close of business on such Delivery Date. If any Conversion would create a
fractional Conversion Share, such fractional Conversion Share shall be
disregarded and the number of Conversion Shares issuable upon such Conversion,
in the aggregate, shall be rounded up or down, as the case may be, to the
nearest whole number of Conversion Shares. Conversion Shares
delivered to the Holder shall not contain any restrictive legend unless such
legend is required pursuant to the terms of the Note Purchase
Agreement.
(ii) If
the Company shall fail, for any reason or for no reason, to issue and deliver to
the Holder on the Delivery Date therefor the number of Conversion Shares to
which the Holder is entitled upon a conversion of this Note in accordance with
subparagraph (d)(i) above, then, in addition to all other remedies available to
the Holder, the Company shall pay in cash to the Holder, for each period of
thirty (30) days (pro rated for partial periods) following such Delivery Date
until such Conversion Shares are delivered to the Holder, an amount equal to
1.5% of the product of (A) the sum of the number of shares of Common Stock not
issued to the Holder on a timely basis and to which the Holder is entitled and
(B) VWAP.
(iii) In
addition to any amounts payable pursuant to paragraph (ii) above, if the Company
fails to timely deliver the required number of Conversion Shares in the manner
required pursuant to this Section, and if prior to the receipt of such
Conversion Shares, the Holder or the Holder's broker purchases (in an open
market transaction or otherwise) shares of Common Stock for delivery in
satisfaction of a sale by the Holder of the Conversion Shares which the Holder
anticipated receiving upon such conversion (a "Buy-In"), then the Company shall
(1) pay in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Conversion Shares that the Company was required to deliver to the
Holder in connection with the conversion at issue by (B) the closing bid price
of the Common Stock on the Conversion Date and (2) at the option of the Holder
upon written notice delivered to the Company prior to the date on which such
Conversion Shares are delivered to the Holder, either reinstate the portion of
this Note and equivalent number of Conversion Shares for which such conversion
was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its conversion
and delivery obligations hereunder. The Holder shall provide to the Company a
written notice indicating the amounts payable to the Holder in respect of the
Buy-In, together with the calculation thereof in reasonable detail.
(iv) In
the event that the Company fails to deliver the required number of Conversion
Shares in the manner and within the time period(s) required pursuant to this
Section, then the Holder will have the right to rescind such conversion upon
delivering to the Company a written notice to such effect prior to the date on
which such Conversion Shares are delivered in accordance with this
Section.
(v) The
Company's obligations to issue and deliver Conversion Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver the required Conversion Shares in the manner required pursuant to
this Section upon conversion of this Note.
(e)
Limitations on Right to
Convert
. In no event shall the Holder be permitted to convert
principal of this Note if, upon such conversion, (x) the number of Conversion
Shares to be issued pursuant to such Conversion
plus
(y) the number
of shares of Common Stock beneficially owned by the Holder (other than Common
Stock which may be deemed beneficially owned except
for being
subject to a limitation on conversion or exercise analogous to the limitation
contained in this
paragraph
3(e)
would exceed 4.99% of the number of shares of Common Stock then
issued and outstanding (the "
Maximum
Percentage
"), it being the intent of the Company and the Holder that the
Holder not be deemed at any time to have the power to vote or dispose of greater
than 4.99% of the number of shares of Common Stock issued and outstanding at any
time. Nothing contained herein shall be deemed to restrict the right of the
Holder to convert such excess principal amount at such time as such Conversion
will not violate the provisions of this
paragraph
3(e)
. As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act. To the extent that the
limitation contained in this
paragraph
3(e)
applies (and without limiting any rights the Company may otherwise
have), the Company may rely on the Holder's determination of whether this Note
is convertible pursuant to the terms hereof, the Company shall have no
obligation whatsoever to verify or confirm the accuracy of such determination,
and the submission of a Conversion Notice by the Holder shall be deemed to be
the Holder's representation that this Note is convertible pursuant to the terms
hereof. No prior inability to convert this Note pursuant to this
paragraph
3(e)
shall have any effect on the applicability of the provisions of
this
paragraph
3(e)
with respect to any subsequent determination of whether or not this
Note is convertible. In determining the number of outstanding shares of Common
Stock, the Holder may rely on (1) the Company's most recent Form 10-K, Form
10-Q, Current Report on Form 8-K or other public filing with the Commission (as
the case may be), (2) a more recent public announcement by the Company or (3)
any other notice by the Company setting forth the number of Common Shares
outstanding. Upon the request of the Holder, the Company shall,
within one (1) Business Day of such request, confirm to the Holder the number of
shares of Common Stock then outstanding. By written notice to the Company, the
Holder may increase or decrease the Maximum Percentage to any other percentage
specified in such notice, provided that (i) any such increase will not be
effective until the sixty-first (61st) day after such notice is delivered to the
Company, and (ii) any such increase or decrease will apply only to the Holder
and not to any other holder of Notes.
4.
ADJUSTMENTS
TO CONVERSION PRICE
.
(a)
Stock Splits, Stock
Interests, Etc
. If, at any time on or after the Issue Date,
the Company subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then after the date of record for effecting such
subdivision, the Conversion Price shall be proportionately reduced or, if the
Company combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) its shares of Common Stock into a smaller number
of shares, the Conversion Price shall be proportionately increased.
(b)
Adjustment Upon Dilutive
Issuances
.
(i)
Dilutive Issuances
.
If, at any time after the Issue Date, the Company issues or sells, or in
accordance with
subparagraph
(ii)
of this
paragraph
4(b)
is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share less than the Conversion Price on
the date of such issuance or sale (or deemed issuance or sale) (a "
Dilutive
Issuance
"), then effective immediately upon the Dilutive Issuance, the
Conversion Price shall be adjusted so as to equal the consideration per share
received or receivable by the Company (on a per share basis) for the additional
shares of Common Stock so issued, sold or deemed issued or sold in such Dilutive
Issuance (which, in the case of a deemed issuance or sale, shall be calculated
in accordance with
subparagraph
(ii)
below). Notwithstanding the foregoing, prior to the
Effective Date, the Company will not engage in any transaction that would result
in the issuance or deemed issuance of shares of Common Stock for no
consideration.
(ii)
Effect On Conversion Price
Of Certain Events
. For purposes of determining the adjusted
Conversion Price under
subparagraph
(i)
of this
paragraph
4(b)
, the following will be applicable:
(A)
Issuance Of Purchase
Rights
. If, at any time on or after the Issue
Date, the Company issues or sells any Purchase Rights, whether or not
immediately exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Purchase Rights (or the price of any
conversion of Convertible Securities that may be acquired under such Purchase
Rights, if applicable) is less than the Conversion Price in effect on the date
of issuance or sale of such Purchase Rights, then the maximum total number of
shares of Common Stock issuable upon the exercise of all such Purchase Rights
(assuming full conversion, exercise or exchange of Convertible Securities, if
applicable) shall, as of the date of the issuance or sale of such Purchase
Rights, be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. If the Purchase Rights so issued are not
Variable Rate Securities, then for purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon the exercise of such
Purchase Rights" shall be determined by dividing (x) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Purchase Rights, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Purchase Rights,
plus
, in the case of
Convertible Securities issuable upon the exercise of such Purchase Rights, the
minimum aggregate amount of additional consideration payable upon the
conversion, exercise or exchange thereof (determined in accordance with the
calculation method set forth in
subparagraph
(ii)(B)
below) at the time such Convertible Securities first become
convertible, exercisable or exchangeable, by (y) the maximum total number of
shares of Common Stock issuable upon the exercise of all such Purchase Rights
(assuming full conversion, exercise or exchange of Convertible Securities, if
applicable). No further adjustment to the Conversion Price shall be made upon
the actual issuance of such Common Stock upon the exercise of such Purchase
Rights or upon the conversion, exercise or exchange of Convertible Securities
issuable upon exercise of such Purchase Rights. To the extent that shares of
Common Stock or Convertible Securities are not delivered pursuant to such
Purchase Rights, upon the expiration or termination of such Purchase Rights, the
Conversion Price shall be readjusted to the Conversion Price that would then be
in effect had the adjustments made upon the issuance of such Purchase Rights
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.
(B)
Issuance Of Convertible
Securities
. If, at any time on or after the Issue Date, the
Company issues or sells any Convertible Securities, whether or not immediately
convertible, exercisable or exchangeable, and the price per share for which
Common Stock is issuable upon such conversion, exercise or exchange is less than
the Conversion Price in effect on the date of issuance or sale of such
Convertible Securities, then the maximum total number of shares of Common Stock
issuable upon the conversion, exercise or exchange of all such Convertible
Securities shall, as
of the
date of the issuance or sale of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. If the Convertible Securities so issued or sold are not Variable Rate
Securities, then for the purposes of the immediately preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion,
exercise or exchange" shall be determined by dividing (A) the total amount, if
any, received or receivable by the Company as consideration for the issuance or
sale of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion,
exercise or exchange thereof (determined in accordance with the calculation
method set forth in this
subparagraph
(ii)(B)
) at the time such Convertible Securities first become
convertible, exercisable or exchangeable, by (B) the maximum total number of
shares of Common Stock issuable upon the exercise, conversion or exchange of all
such Convertible Securities. No further adjustment to the Conversion Price shall
be made upon the actual issuance of such Common Stock upon conversion, exercise
or exchange of such Convertible Securities. To the extent that shares of Common
Stock are not delivered pursuant to conversion of such Convertible Securities,
upon the expiration or termination of the right to convert such Convertible
Securities into Common Stock, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the
issuance of such Convertible Securities been made on the basis of delivery of
only the number of shares of Common Stock actually delivered.
(C)
Issuance of Variable Rate
Securities
. If any Purchase Rights or Convertible Securities,
including Convertible Securities issuable on exercise of Purchase Rights,
constitute Variable Rate Securities, then for purposes of the first sentence of
subparagraphs
(ii)(A)
and
(ii)(B)
of
this
paragraph
4(b)
, the "price per share for which Common Stock is issuable upon such
conversion, exercise or exchange" shall be deemed to be the lowest price per
share which would be applicable (assuming all holding period and other
conditions to any discounts contained in such Variable Rate Security have been
satisfied) if the conversion price of such Variable Rate Security on the date of
issuance or sale thereof were seventy-five percent (75%) of the actual
conversion price on such date (the "
Assumed Variable
Market Price
"), and, further, if such Variable Rate Security at any time
or times thereafter is exercised, purchased, or converted at a price lower that
the Assumed Variable Market Price, the Conversion Price in effect at such time
shall be readjusted to equal the actual conversion price of such Variable Rate
Convertible Security existing at the time of such exercise, purchase or
conversion. To the extent that shares of Common Stock are not
delivered pursuant to the exercise, purchase or conversion of such Variable Rate
Securities, upon the expiration or termination of the right to exercise,
purchase or convert such Variable Rate Securities into Common Stock, the
Conversion Price shall be readjusted to the Conversion Price that would then be
in effect had the adjustments made upon the issuance of such Variable Rate
Securities been made on the basis of delivery of only the number of shares of
Common Stock actually delivered.
(D)
Change In Option Price Or
Conversion Rate
. If there is a change at any time in (x) the
amount of additional consideration payable to the Company upon the exercise of
any Purchase Rights; (y) the amount of additional consideration, if any, payable
to the Company upon the conversion, exercise or exchange of any Convertible
Securities; or (z) the formula for determining the number of shares issuable
under a Variable Rate Security (in each such case, other than under or by reason
of provisions designed to protect against dilution), the Conversion Price in
effect at the time of such change shall be readjusted to the Conversion Price
which would have been in effect at such time had such Purchase Rights,
Convertible Securities or Variable Securities still outstanding provided for
such changed additional consideration or changed conversion, exercise or
exchange rate, as the case may be, at the time initially issued or
sold.
(E)
Calculation Of Consideration
Received
. If any Common Stock, Purchase Rights or Convertible
Securities are issued or sold for cash, the consideration received therefor will
be the amount received by the Company therefor. In case any Common Stock,
Purchase Rights or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, including in the case of a
strategic or similar arrangement in which the other entity will provide services
to the Company, purchase services from the Company or otherwise provide
intangible consideration to the Company, the amount of the consideration other
than cash received by the Company (including the net present value of the
consideration expected by the Company for the provided or purchased services)
shall be the fair market value of such consideration reasonably determined in
good faith by the independent members of the Company's Board of Directors and
approved by the holders of a majority in principal amount of the Notes, except
where such consideration consists of securities, in which case the amount of
consideration received by the Company will be the average of the last sale
prices thereof on the principal market for such securities during the period of
ten Trading Days immediately preceding the date of receipt. In case any Common
Stock, Purchase Rights or Convertible Securities are issued in connection with
any merger or consolidation in which the Company is the surviving corporation,
the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving corporation
as is attributable to such Common Stock, Purchase Rights or Convertible
Securities, as the case may be.
(F) Other
Changes. If any other event occurs as to which the other provisions
of this sub-paragraph 4(b)(ii) are not strictly applicable or if strictly
applicable, would not fairly protect the conversion rights of the Holder in
accordance with such provisions, then the Company shall make an adjustment in
the number of and class of shares available under this Note, the Conversion
Price or the application of such provisions, so as to protect such conversion
rights as aforesaid. The adjustment shall be such as will give the Holder upon
conversion for the same aggregate Conversion Price the total number, class and
kind of shares as the Holder would have owned had this Note been converted prior
to the event and had the Holder continued to hold such shares until after the
event requiring adjustment.
(iii)
Exceptions To Adjustment Of
Conversion Price
. Notwithstanding the foregoing, no adjustment
to the Conversion Price shall be made pursuant to this paragraph 4(b) upon the
issuance of any Excluded Securities. For purposes hereof, "
Excluded
Securities
" means (I) securities purchased under the Note Purchase
Agreement (including all securities issued to any finder or broker for
facilitating the purchase of the Notes and the Warrants, the aggregate amount of
which shall be identified in writing to the Holder on or before the Issue Date);
(II) securities issued upon conversion or exercise of the Notes or the Warrants;
(III) shares of Common Stock issuable or issued to (x) employees, consultants or
directors from time to time upon the exercise of options, in such case granted
or to be granted in the discretion of the Board of Directors pursuant to one or
more stock option plans or restricted stock plans in effect as of the Issue Date
or adopted after the Issue Date by the independent members of the Board of
Directors with substantially the same terms as such plans in effect as of the
Issue Date, and (y) vendors pursuant to warrants to purchase Common Stock that
are outstanding on the date hereof or issued hereafter, provided such issuances
are approved by the Board of Directors; (IV) shares of Common Stock issued in
connection with any stock split, stock dividend or recapitalization of the
Company; (V) shares of Common Stock issued in connection with the acquisition by
the Company of any corporation or other entity or business unit occurring after
the Effective Date; and (VI) shares of Common Stock issued in connection with
any Convertible Securities or Purchase Rights outstanding on the Issue
Date.
(iv)
Notice Of
Adjustments
. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this
paragraph
4(b)
or any change in the number or type of stock, securities and/or
other property issuable upon Conversion of this Note, the Company, at its
expense, shall promptly compute such adjustment, readjustment or change and
prepare and furnish to the Holder a certificate setting forth such adjustment,
readjustment or change and showing in detail the facts upon which such
adjustment, readjustment or change is based. The Company shall, upon
the written request at any time of the Holder, furnish to the Holder a
certificate setting forth (i) such adjustment, readjustment or change, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time
would be received upon Conversion of this Note.
(c)
Major
Transactions
. If, at any time after the Issue Date, any Major
Transaction shall occur, then the Holder shall thereafter have the right to
receive upon Conversion, in lieu of the shares of Common Stock otherwise
issuable, such shares of stock, securities and/or other property as would have
been issued or payable upon such Major Transaction with respect to or in
exchange for the number of shares of Common Stock which would have been issuable
upon Conversion had such Major Transaction not taken place (without giving
effect to any limitations on such Conversion contained in this Note or the Note
Purchase Agreement). The Company shall not effect any Major Transaction unless
(i) the Holder has received written notice of such transaction at least thirty
(30) days prior thereto and (ii) the resulting successor or acquiring entity (if
not the Company) assumes by written instrument (in form and substance reasonable
satisfactory to the Holder) the obligations of the Company under this Note
(including, without limitation, the obligation to make payments of Interest
accrued but unpaid through the date of such consolidation, merger or sale and
accruing thereafter). The above provisions shall apply regardless of
whether or not there would have been a sufficient number of shares of Common
Stock authorized and available for issuance upon conversion of this Note as of
the date of such transaction, and shall similarly apply to successive Major
Transactions.
(d)
Distributions
. If,
at any time after the Issue Date, the Company declares or makes any distribution
of cash or any other assets (or rights to acquire such assets) to holders of
Common Stock, including without limitation any dividend or distribution to the
Company's stockholders in shares (or rights to acquire shares) of capital stock
of a subsidiary) (a "
Distribution
"),
the Company shall deliver written notice of such Distribution (a "
Distribution
Notice
") to the Holder at least fifteen (15) days prior to the earlier to
occur of (i) the record date for determining stockholders entitled to such
Distribution (the "
Record
Date
") and (ii) the date on which such Distribution is made (the "
Distribution
Date
")(the earlier of such dates being referred to as the "
Determination
Date
"). In the event of a Distribution, the Company shall
reduce the Conversion Price in effect on the Business Day immediately preceding
the Record Date by an amount equal to the fair market value of the assets to be
distributed
divided
by
the number of shares of Common Stock as to which such Distribution is
to be made, such fair market value to be reasonably determined in good faith by
the independent members of the Company's Board of Directors and approved by the
holders of a majority in principal amount of the Notes; provided,
however
, that if the Holder
notifies the Company prior to the Determination Date that it wishes to receive
its share of the assets being distributed, the Company shall deliver to the
Holder, at the same time that it makes such Distribution to its stockholders,
the same amount and type of assets (including, without limitation, cash) being
distributed as though the Holder were, on the Determination Date, the holder of
a number of Conversion Shares into which this Note is convertible as of such
Determination Date (such number of shares to be determined without giving effect
to any limitations on such conversion). If the Holder does not notify the
Company of its election pursuant to the preceding sentence on or prior to the
Determination Date, the Company shall reduce the Conversion Price as described
in the preceding sentence.
5.
LIQUIDITY
EVENT
. Upon the occurrence of a Liquidity Event, the Holder may, by
written notice to the Company delivered within five (5) Business Days following
the effective date of such Liquidity Event (or, if later, the date on which the
Holder first learns of such Liquidity Event), redeem this Note for an amount
equal to two hundred percent (200%) of all remaining principal of and unpaid
Interest accrued hereon (the "
Note Redemption
Amount
"). The Company will pay the Note Redemption Amount to the Holder
within ten (10) Business Days following the receipt of such notice.
6.
EVENTS
OF DEFAULT; ACCELERATION
.
Upon the
occurrence of any of the following events (each, an "
Event of
Default
"):
(a)
any representation or warranty made or deemed made in or in connection with any
Transaction Document or the borrowings hereunder, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or pursuant
to any Transaction Document, shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default
shall be made in the payment of any principal of this Note when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or by acceleration thereof or otherwise;
(c) default
shall be made in the payment of any interest on this Note (other than any PIK
Amount) or any other amount (other than an amount referred to in (b) above) due
under any Transaction Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of three (3)
Business Days; or
(d) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of the
Company or any of its Subsidiaries, or of a substantial part of the property or
assets of the Company or any of its Subsidiaries under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any of its Subsidiaries or for a substantial
part of the property or assets of the Company or any of its Subsidiaries or
(iii) the winding-up or liquidation of the Company or any of its Subsidiaries;
and such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(e) the
Company or any of its Subsidiaries shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any of its Subsidiaries or
for a substantial part of the property or assets of the Company or any of its
Subsidiaries, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its inability
or fail generally to pay its debts as they become due or (vii) take any action
for the purpose of effecting any of the foregoing;
(f) default
shall be made in the due observance or performance by the Company of any
covenant, condition or agreement contained in this Note or any Transaction
Document (other than those specified in (b) or (c) above) and such default shall
continue unremedied for a period of three (3) Business Days following notice
thereof from the Holder to the Company;
(g) the
Company or any Subsidiary shall default in the payment when due of any Debt in a
principal amount greater than $500,000 and, as a result of such default, such
Debt becomes immediately due and payable;
(h) the
Company shall fail to obtain Stockholder Approval on or before August 15,
2010;
(i) any
judgment or order for the payment of money in excess of $500,000 shall be
rendered against the Company or any Subsidiary, shall remain unpaid or unstayed
for a period of sixty (60) days, and shall not be covered by insurance;
or
(j) the
Continuing Directors do not at any time following the Board Appointment Date
constitute at least a majority of the Board of Directors of the
Company.
then, and
in every such event and at any time thereafter during the continuance of such
event, the Holder may, by written notice to the Company, accelerate the payment
of all amounts due under this Note, whereupon the principal of this Note,
together with accrued Interest hereon and all other liabilities of the Company
accrued hereunder and under any other Transaction Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Company,
anything contained herein or in any other Transaction Document to the contrary
notwithstanding. Notwithstanding anything herein to the contrary, if an Event of
Default described in paragraph (d) or (e) above occurs, all amounts due under
this Note shall become immediately due and payable without notice or other act
on the part of the Holder.
7.
PREPAYMENT
.
Except as
specifically provided by the terms of this Note, the Company shall not have the
right to prepay principal of this Note prior to the Maturity Date.
8.
MISCELLANEOUS
.
(a)
Priority
. This Note
shall rank
pari passu
with the other Notes issued pursuant to the Note Purchase Agreement and, except
as otherwise set forth herein or in the Note Purchase Agreement, senior to all
other Debt of the Company in right of payment, whether at maturity, upon
acceleration or otherwise. This Note is an unconditional obligation of the
Company and is secured pursuant to the terms of the Security
Agreement.
(b)
Failure to Exercise Rights
not Waiver
. No failure or delay on the part of the Holder in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude any other or further exercise
thereof. All rights and remedies of the Holder hereunder are
cumulative and not exclusive of any rights or remedies otherwise available, and
all such rights and remedies may be exercised or enforced by the Holder without
notice to the Company, which notice the Company hereby expressly
waives.
(c)
Notices
. Any
notice, demand or request required or permitted to be given by the Company or
the Holder pursuant to the terms of this Note 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 and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid), addressed as follows:
|
If to the
Company
:
|
|
|
|
SkyPostal
Networks, Inc.
|
|
7805
NW 15
th
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
the Holder, at such address as the Holder shall have furnished the Company in
writing. Any party may change its address for receiving notice by giving written
notice thereof to the other parties in accordance with this
paragraph
8(c)
.
(d)
Amendments
. No
amendment, modification or other change to, or waiver of any provision of, this
Note may be made unless such amendment, modification or change is set forth in
writing and is signed by the Company and the Holder.
(e)
Lost or Stolen
Note
. Upon receipt by the Company of evidence of the loss,
theft, destruction or mutilation of this Note, and (in the case of loss, theft
or destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender and cancellation of this Note, if mutilated, the Company
shall execute and deliver to the Holder a new Note identical in all respects to
this Note.
(f)
Governing
Law
. This Note 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)
Successors and
Assigns
. The terms and conditions of this Note shall inure to
the benefit of and be binding upon the respective successors (whether by merger
or otherwise) and permitted assigns of the Company and the Holder. The Company
may not assign its rights or obligations under this Note except as specifically
required or permitted pursuant to the terms hereof.
(h)
Usury
. This
Note is subject to the express condition that at no time shall the Company be
obligated or required to pay interest hereunder at a rate which could subject
the Holder to either civil or criminal liability as a result of being in excess
of the maximum interest rate which the Company is permitted by applicable law to
contract or agree to pay. If by the terms of this Note, the Company
is at any time required or obligated to pay interest hereunder at a rate in
excess of such maximum rate, the rate of interest under this Note shall be
deemed to be immediately reduced to such maximum rate and the interest payable
shall be computed at such maximum rate and all prior interest payments in excess
of such maximum rate shall be applied and shall be deemed to have been payments
in reduction of the principal balance of this Note.
[Signature
Page to Follow]
IN
WITNESS WHEREOF, the Company has caused this Note to be signed in its name by
its duly authorized officer on the date first above written.
SKYPOSTAL
NETWORKS, INC.
ANNEX I
NOTICE OF
CONVERSION
The
undersigned hereby elects to convert principal of and/or interest accrued on the
Senior Secured Convertible Note (the "
Note
")
issued by SKYPOSTAL NETWORKS, INC. (the "
Company
")
into shares of common stock ("
Common
Stock
") of the Company according to the terms and conditions of the Note.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Note.
|
Date
of Conversion:
|
|
|
|
|
|
Principal
Amount of
|
|
|
Note
to be Converted:
|
|
|
|
|
|
Interest
Accrued on
|
|
|
Note
to be Converted:
|
|
|
|
|
|
Number
of Shares of
|
|
|
Common
Stock to be Issued:
|
|
|
|
|
|
Name
of Holder:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Signature:
|
|
|
|
Name:
|
|
|
Title:
|
Holder Requests Delivery to
be made
: (check one)
[_]
|
By
Delivery of Physical Certificates to the Above Address
|
|
|
|
|
[_]
|
Through
Depository Trust Corporation
|
|
|
(Account ___________________________
)
|
|
ANNEX II
Schedule
of
Decreases
of Principal
Amount
Principal
Balance
|
|
Amount
of Decrease
|
|
Date
|
|
|
|
|
|
$
2,260,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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EXHIBIT D
[Final]
EXHIBIT
B TO THE
NOTE
PURCHASE AGREEMENT
THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS SHALL
BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
WITH SUCH OFFER, SALE OR TRANSFER
.
SUBJECT TO
COMPLIANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS,
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE PLEDGED
OR HYPOTHECATED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY THIS WARRANT OR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT.
WARRANT
TO
PURCHASE COMMON STOCK
OF
SKYPOSTAL
NETWORKS, INC.
Issue
Date:
May
[
·
],
2010
THIS
CERTIFIES that
[ ]
or any subsequent holder hereof (the "
Holder
"),
has the right to purchase from SKYPOSTAL NETWORKS, INC., a Nevada corporation
(the "
Company
"),
up to
[ [([ ])
fully paid and nonassessable shares of the Company's common stock, par value
$0.001 per share (the "
Common
Stock
"), subject to adjustment as provided herein, at a price per share
equal to the Exercise Price (as defined below), at any time and from time to
time beginning on the date on which this Warrant is issued (the "
Issue
Date
") and ending at 5:00 p.m., eastern time, on the third (3
rd
)
anniversary of the Issue Date or, if such day is not a Business Day, on the next
succeeding Business Day (the "
Expiration
Date
"). This Warrant is issued pursuant to a Note Purchase
Agreement, dated as of May [
·
], 2010 (the "
Note Purchase
Agreement
"), together with Senior Secured Convertible Notes of the
Company (the "
Notes
"). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Note Purchase Agreement or the Notes, as the case may
be.
1.
Exercise
.
(a)
Right to Exercise; Exercise
Price
. The Holder shall have the right to exercise this
Warrant at any time and from time to time during the period beginning on the
Issue Date and ending on the Expiration Date as to all or any part of the shares
of Common Stock covered hereby (the "
Warrant
Shares
"). The "
Exercise
Price
" for each Warrant Share purchased by the Holder upon the exercise
of this Warrant shall be equal to $0. 15, subject to adjustment for the events
specified in Section 6 below.
(b) Exercise
Notice. In order to exercise this Warrant, the Holder shall (i) send
by facsimile transmission, at any time prior to 5:00 p.m., eastern time, on the
Business Day on which the Holder wishes to effect such exercise (the "Exercise
Date"), to the Company an executed copy of the notice of exercise in the form
attached hereto as Exhibit A (the "Exercise Notice"), (ii) deliver the original
Warrant and, in the case of a Cash Exercise (as defined below), the Exercise
Price to the Company. The Exercise Notice shall also state the name
or names in which the Warrant Shares issuable on such exercise shall be
issued. In the case of a dispute as to the calculation of the
Exercise Price or the number of Warrant Shares issuable hereunder (including,
without limitation, the calculation of any adjustment pursuant to Section 6
below), the Company shall promptly issue to the Holder the number of Warrant
Shares that are not disputed and shall submit the disputed calculations to a
certified public accounting firm of national recognition reasonably acceptable
to the Holder (other than the Company's independent accountants) within two (2)
Business Days following the date on which the Exercise Notice is delivered to
the Company. The Company shall cause such accountant to calculate the Exercise
Price and/or the number of Warrant Shares issuable hereunder and to notify the
Company and the Holder of the results in writing no later than three (3)
Business Days following the day on which such accountant received the disputed
calculations (the "Dispute Procedure"). Such accountant's calculation shall be
deemed conclusive absent manifest error. The fees of any such
accountant shall be borne by the party whose calculations were most at variance
with those of such accountant.
(c)
Holder of
Record
. The Holder shall, for all purposes, be deemed to have
become the holder of record of the Warrant Shares specified in an Exercise
Notice on the Exercise Date specified therein, irrespective of the date of
delivery of such Warrant Shares. Except as specifically provided herein, nothing
in this Warrant shall be construed as conferring upon the Holder hereof any
rights as a stockholder of the Company prior to the Exercise Date.
(d)
Cancellation of
Warrant
. This Warrant shall be canceled upon its exercise and,
if this Warrant is exercised in part, the Company shall, at the time that it
delivers Warrant Shares to the Holder pursuant to such exercise as provided
herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised);
provided
,
however
, that the
Holder shall be entitled to exercise all or any portion of such new warrant at
any time following the time at which this Warrant is exercised, regardless of
whether the Company has actually issued such new warrant or delivered to the
Holder a certificate therefor.
2.
Delivery of Warrant Shares
Upon Exercise
. (i) Upon receipt of an Exercise Notice pursuant
to paragraph 1 above, the Company shall, (A) in the case of a Cash Exercise (as
defined below) no later than the close of business on the later to occur of (i)
the third (3rd) Business Day following the Exercise Date set forth in such
Exercise Notice and (ii) the date on which the Company has received payment of
the Exercise Price, (B) in the case of a Cashless Exercise (as defined below),
no later than the close of business on the third (3rd) Business Day following
the Exercise Date set forth in such Exercise Notice, and (C) with respect to
Warrant Shares that are the subject of a Dispute Procedure, the close of
business on the third (3
rd
)
Business Day following the determination made pursuant to paragraph 1(b) (each
of the dates specified in (A), (B) or (C) being referred to as a "
Delivery
Date
"), issue and deliver or cause to be delivered to the Holder the
number of Warrant Shares as shall be determined as provided herein. The Company
shall effect delivery of Warrant Shares to the Holder by, as long as the
Transfer Agent participates in the Depository Trust Company ("
DTC
") Fast
Automated Securities Transfer program ("
FAST
"),
crediting the account of the Holder or its nominee at DTC (as specified in the
applicable Exercise Notice) with the number of Warrant Shares required to be
delivered, no later than the close of business on such Delivery Date. In the
event that the Transfer Agent is not a participant in FAST, or if the Warrant
Shares are not otherwise eligible for delivery through FAST, or if the Holder so
specifies in an Exercise Notice or otherwise in writing on or before the
Exercise Date, the Company shall effect delivery of Warrant Shares by delivering
to the Holder or its nominee physical certificates representing such Warrant
Shares, no later than the close of business on such Delivery Date.
(ii) If
the Company shall fail, for any reason or for no reason, to issue and deliver to
the Holder on the Delivery Date therefor the number of Warrant Shares to which
the Holder is entitled upon a exercise of this Warrant in accordance with
subparagraph
2(i)
above, then, in addition to all other remedies available to the
Holder, the Company shall pay in cash to the Holder, for each period of thirty
(30) days (pro rated for partial periods) following such Delivery Date until
such Warrant Shares are delivered to the Holder, an amount equal to 1.5% of the
product of (A) the sum of the number of shares of Common Stock not issued to the
Holder on a timely basis and to which the Holder is entitled and (B)
VWAP.
(iii) In
addition to any amounts payable pursuant to
paragraph
(ii)
above, if the Company fails to timely deliver the required number of
Warrant Shares in the manner required pursuant to this Section, and if prior to
the receipt of such Warrant Shares, the Holder or the Holder's broker purchases
(in an open market transaction or otherwise) shares of Common Stock for delivery
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "
Buy-In
"),
then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue by (B) the
closing bid price of the Common Stock on the Exercise Date and (2) at the option
of the Holder upon written notice delivered to the Company prior to the date on
which such Warrant Shares are delivered to the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares
for which
such exercise was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder. The Holder shall provide to the
Company a written notice indicating the amounts payable to the Holder in respect
of the Buy-In, together with the calculation thereof in reasonable
detail.
(iv) In
the event that the Company fails to deliver the required number of Warrant
Shares in the manner and within the time period(s) required pursuant to this
Section, then the Holder will have the right to rescind such exercise upon
delivering to the Company a written notice to such effect prior to the date on
which such Warrant Shares are delivered in accordance with this
Section.
(v) The
Company's obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver the required Warrant Shares in the manner required pursuant to
this Section upon exercise of the Warrant.
3.
Exercise
Limitations
. In no event shall the Holder be permitted to
exercise this Warrant, or part thereof, if, upon such exercise, the number of
shares of Common Stock beneficially owned by the Holder (other than shares which
would otherwise be deemed beneficially owned except for being subject to a
limitation on exercise or exercise analogous to the limitation contained in this
paragraph 3), would exceed 4.99% of the number of shares of Common Stock
then issued and outstanding (the "
Maximum
Percentage
"). As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act. To the extent that the
limitation contained in this paragraph 3 applies, the submission of an Exercise
Notice by the Holder shall be deemed to be the Holder's representation that this
Warrant is exercisable pursuant to the terms hereof and the Company shall be
entitled to rely on such representation without making any further inquiry as to
whether this paragraph 3 applies. Nothing contained herein shall be deemed to
restrict the right of a Holder to exercise this Warrant, or part thereof, at
such time as such exercise will not violate the provisions of this paragraph 3.
No prior inability to exercise this Warrant pursuant to this paragraph 3 hall
have any effect on the applicability of the provisions of this paragraph 3 with
respect to any subsequent determination of whether or not this Warrant is
exercisable. In determining the number of outstanding shares of Common Stock,
the Holder may rely on (1) the Company's most recent Form 10-K, Form 10-Q,
Current Report on Form 8-K or other public filing with the Commission (as the
case may be), (2) a more recent public announcement by the Company or (3) any
other notice by the Company setting forth the number of Common Shares
outstanding. Upon the request of the Holder, the Company shall,
within one (1) Business Day of such request, confirm to the Holder the number of
shares of Common Stock then outstanding. By written notice to the Company, the
Holder may increase or decrease the Maximum Percentage to any other percentage
specified in such notice, provided that (i) any such increase will not be
effective until the sixty-first (61st) day after such notice is delivered to the
Company, and (ii) any such increase or decrease will apply only to this Warrant
and not to any other Warrants.
4.
Payment of the Exercise
Price; Cashless Exercise
. The Holder may pay the Exercise
Price in either of the following forms or, at the election of Holder, a
combination thereof:
(a) through
a cash exercise (a "
Cash
Exercise
") by delivering immediately available funds, or
(b) if
an effective Registration Statement is not available for the resale of all of
the Warrant Shares issuable hereunder at the time an Exercise Notice is
delivered to the Company, through a cashless exercise (a "
Cashless
Exercise
"). The Holder may effect a Cashless Exercise by
surrendering this Warrant to the Company and noting on the Exercise Notice that
the Holder wishes to effect a Cashless Exercise, upon which the Company shall
issue to the Holder a number of Warrant Shares determined as
follows:
X = Y x (A-B)/A
where:
|
X =
the number of Warrant Shares to be issued to the
Holder;
|
|
Y =
the number of Warrant Shares with respect to which this Warrant is being
exercised;
|
|
A =
the Market Price as of the Exercise Date;
and
|
It is
intended and acknowledged that the Warrant Shares issued in a Cashless Exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares required by Rule 144 shall be deemed to have been
commenced, on the Issue Date. For purposes hereof, (A) "
Market
Price
" means, as of a particular date, the average of the Closing Bid
Prices for the Common Stock occurring during the ten (10) Trading Day period
ending on (and including) the Trading Day immediately preceding such date, and
(B) "
Closing Bid
Price
" means, with respect to the Common Stock as of any Trading Day, the
Closing Bid Price on such date for the Common Stock on the Principal Market as
reported by Bloomberg Financial Markets ("
Bloomberg
"),
or if the Principal Market begins to operate on an extended hours basis, and
does not designate the Closing Bid Price, then the last price at 4:00 p.m.
(eastern time), as reported by Bloomberg, or if the foregoing do not apply, the
last Closing Bid Price of the Common Stock in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
Closing Bid Price is reported for such security by Bloomberg, the last closing
trade price for such security as reported by Bloomberg, or, if no last closing
trade price is reported for such security by Bloomberg, the average of the
prices of any market makers for such security as reported in the "pink sheets"
by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
the Closing Bid Price cannot be calculated for the Common Stock on such date on
any of the foregoing bases, then the Company shall submit such calculation to an
independent investment banking firm of national reputation and
reasonably
acceptable
to the Holder, and shall cause such investment banking firm to perform such
determination and notify the Company and the Holder of the results of
determination no later than two (2) Business Days from the time such calculation
was submitted to it by the Company. Such investment banking firm's determination
shall be deemed conclusive absent manifest error. All such determinations shall
be appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period.
5.
Anti-Dilution Adjustments;
Distributions; Other Events
. The Exercise Price and the number of Warrant
Shares issuable hereunder shall be subject to adjustment from time to time as
provided in this Section 5.
(a)
Subdivision or Combination
of Common Stock
. If the Company, at any time after the Issue
Date, subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then after the date of record for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of Warrant Shares issuable
pursuant to this Warrant shall be proportionately increased. If the
Company, at any time after the Issue Date, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record for
effecting such combination, the Exercise Price in effect immediately prior to
such combination will be proportionally increased and the number of Warrant
Shares issuable pursuant to this Warrant shall be proportionately
reduced.
(b)
Distributions
. If
the Company shall declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock (including without limitation any
dividend or distribution to the Company's stockholders in cash or shares (or
rights to acquire shares) of capital stock of a subsidiary) (a "
Distribution
"),
the Company shall deliver written notice of such Distribution (a "
Distribution
Notice
") to the Holder at least ten (10) Business Days prior to the
earlier to occur of (i) the record date for determining stockholders entitled to
such Distribution (the "
Record
Date
") and (ii) the date on which such Distribution is made (the "
Distribution
Date
")(the earlier of such dates being referred to as the "
Determination
Date
"). In the event of a Distribution, the Company shall reduce the
Exercise Price in effect on the Business Day immediately preceding the Record
Date by an amount equal to the fair market value of the assets to be distributed
divided by
the
number of shares of Common Stock as to which such Distribution is to be made,
such fair market value to be reasonably determined in good faith by the
independent members of the Board of Directors of the Company and approved by the
holders of a majority of the Registrable Securities into which the Warrants are
then exercisable (without giving effect to any restrictions on such exercise);
provided
,
however
, that if the Holder
notifies the Company prior to the Determination Date that it wishes to receive
its share of the assets being distributed, the Company shall deliver to the
Holder, at the same time that it makes such Distribution to its stockholders,
the same amount and type of assets (including, without limitation, cash) being
distributed as though the Holder were, on the Determination Date, the holder of
a number of Conversion Shares into which this Note is convertible as of such
Determination Date (such number of shares to be determined without giving effect
to any limitations on such conversion). If the Holder does not notify the
Company of its election pursuant to the preceding sentence on or prior to the
Determination Date, the Company shall reduce the Exercise Price as described in
the preceding sentence.
(c)
Dilutive
Issuances
.
(i)
Adjustment Upon Dilutive
Issuance
. If, at any time after the Issue Date, the Company
issues or sells, or in accordance with subparagraph (iii) of this paragraph
6(c), is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share less than the Exercise Price on
the date of such issuance or sale (or deemed issuance or sale) (a "
Dilutive
Issuance
"), then the Exercise Price shall be adjusted so as to equal the
consideration per share received or receivable by the Company (on a per share
basis) for the additional shares of Common Stock so issued, sold or deemed
issued or sold in such Dilutive Issuance (which, in the case of a deemed
issuance or sale, shall be calculated in accordance with
subparagraph
(ii)
below).
(ii)
Effect On Exercise Price Of
Certain Events
. For purposes of determining the adjusted
Exercise Price under subparagraph (i) of this paragraph 5(c), the following will
be applicable:
(A) Issuance
Of Purchase Rights. If, at any time after the Issue Date, the Company
issues or sells any Purchase Rights, whether or not immediately exercisable, and
the price per share for which Common Stock is issuable upon the exercise of such
Purchase Rights (or the price of any exercise of Convertible Securities that may
be acquired under such Purchase Rights, if applicable) is less than the Market
Price in effect on the date of issuance or sale of such Purchase Rights, then
the maximum total number of shares of Common Stock issuable upon the exercise of
all such Purchase Rights (assuming full exercise, exercise or exchange of
Convertible Securities, if applicable) shall, as of the date of the issuance or
sale of such Purchase Rights, be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. If the Purchase Rights
so issued are not Variable Rate Securities, then for purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon the
exercise of such Purchase Rights" shall be determined by dividing (x) the total
amount, if any, received or receivable by the Company as consideration for the
issuance or sale of all such Purchase Rights, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the exercise of
all such Purchase Rights, plus, in the case of Convertible Securities issuable
upon the exercise of such Purchase Rights, the minimum aggregate amount of
additional consideration payable upon the exercise, exercise or exchange thereof
(determined in accordance with the calculation method set forth in subparagraph
(ii)(B) below) at the time such Convertible Securities first become convertible,
exercisable or exchangeable, by (y) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Purchase Rights (assuming full
exercise, exercise or exchange of Convertible Securities, if applicable). No
further adjustment to the Exercise Price shall be made upon the actual issuance
of such Common Stock upon the exercise of such Purchase Rights or upon the
exercise, exercise or exchange of Convertible Securities issuable upon exercise
of such Purchase Rights. To the extent that shares of Common Stock or
Convertible Securities are not delivered pursuant to such Purchase Rights, upon
the expiration or termination of such Purchase Rights, the Exercise Price shall
be readjusted to the Exercise Price that would then be in effect had the
adjustments made upon the issuance of such Purchase Rights been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered.
(B)
Issuance Of Convertible
Securities
. If, at any time after the Issue Date, the Company
issues or sells any Convertible Securities, whether or not immediately
convertible, exercisable or exchangeable, and the price per share for which
Common Stock is issuable upon such exercise, exercise or exchange is less than
the Market Price in effect on the date of issuance or sale of such Convertible
Securities, then the maximum total number of shares of Common Stock issuable
upon the exercise, exercise or exchange of all such Convertible Securities
shall, as of the date of the issuance or sale of such Convertible Securities, be
deemed to be outstanding and to have been issued and sold by the Company for
such price per share. If the Convertible Securities so issued or sold are not
Variable Rate Securities, then for the purposes of the immediately preceding
sentence, the "price per share for which Common Stock is issuable upon such
exercise, exercise or exchange" shall be determined by dividing (x) the total
amount, if any, received or receivable by the Company as consideration for the
issuance or sale of all such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
exercise, exercise or exchange thereof (determined in accordance with the
calculation method set forth in this subparagraph (ii)(B)) at the time such
Convertible Securities first become convertible, exercisable or exchangeable, by
(y) the maximum total number of shares of Common Stock issuable upon the
exercise, exercise or exchange of all such Convertible Securities. No further
adjustment to the Exercise Price shall be made upon the actual issuance of such
Common Stock upon conversion, exercise or exchange of such Convertible
Securities. To the extent that shares of Common Stock are not delivered pursuant
to conversion of such Convertible Securities, upon the expiration or termination
of the right to convert such Convertible Securities into Common Stock, the
Exercise Price shall be readjusted to the Exercise Price that would then be in
effect had the adjustments made upon the issuance of such Convertible Securities
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.
(C)
Change In Option Price Or
Exercise Rate
. If, following an adjustment to the Exercise
Price upon the issuance of Purchase Rights or Convertible Securities pursuant to
a Below Market Issuance, there is a change at any time in (x) the amount of
additional consideration payable to the Company upon the exercise of any
Purchase Rights; (y) the amount of additional consideration, if any, payable to
the Company upon the exercise, exercise or exchange of any Convertible
Securities; or (z) formula for determining the number of shares issuable under a
Variable Rate Security (in each such case, other than under or by reason of
provisions designed to protect against dilution), then in any such case, the
Exercise Price in effect at the time of such change shall be readjusted to the
Exercise Price which would have been in effect at such time had such Purchase
Rights or Convertible Securities still outstanding provided for such changed
additional consideration or changed exercise, exercise or exchange rate, as the
case may be, at the time initially issued or sold.
(D)
Calculation Of Consideration
Received
. If any Common Stock, Purchase Rights or Convertible
Securities are issued or sold for cash, the consideration received therefor will
be the amount received by the Company therefor. In case any Common Stock,
Purchase Rights or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, including in the case of a
strategic or similar arrangement in which the other entity will provide services
to the Company, purchase services from the Company or otherwise provide
intangible consideration to the Company, the amount of the consideration other
than cash received by the Company (including the net present value of the
consideration expected by the Company for the provided or purchased services)
shall be the fair market value (reasonably determined in good faith by the
independent members of the Board of Directors of the Company and approved by the
holders of a majority of the Registrable Securities into which the Warrants are
the exercisable (without giving effect to any restrictions on such exercise)) of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
average of the last sale prices thereof on the principal market for such
securities during the period of ten Trading Days immediately
preceding the date of receipt. In case any Common Stock, Purchase
Rights or Convertible Securities are issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair market value reasonably
determined in good faith by the independent members of the Board of Directors of
the Company and approved by the holders of a majority of the Registrable
Securities into which the Warrants are the exercisable (without giving effect to
any restrictions on such exercise) of such portion of the net assets and
business of the non-surviving corporation as is attributable to such Common
Stock, Purchase Rights or Convertible Securities, as the case may
be.
(E) Other
Changes. If any other event occurs as to which the other provisions
of this Section 5(c) are not strictly applicable or if strictly applicable,
would not fairly protect the rights of the Holder in accordance with such
provisions, then the Company shall make an adjustment in the number of and class
of shares available under this Warrant, the Exercise Price and/or the
application of such provisions, so as to protect such rights as aforesaid. The
adjustment shall be such as will give the Holder upon exercise for the same
aggregate Exercise Price the total number, class and kind of shares as the
Holder would have owned had this Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring
adjustment.
(iv)
Exceptions To Adjustment Of
Exercise Price
. Notwithstanding the foregoing, no adjustment
to the Exercise Price shall be made pursuant to this paragraph 5(c) upon the
issuance of any Excluded Securities (as defined in the Notes).
(d)
Major
Transactions
. In the event of a merger, consolidation,
business combination, tender offer, exchange of shares, recapitalization,
reorganization, redemption or other similar event, as a result of which shares
of Common Stock shall be changed into the same or a different number of shares
of the same or another class or classes of stock or securities or
other
assets of the Company or another entity or the Company shall sell all or
substantially all of its assets (each of the foregoing being a "
Major
Transaction
"), the Company will give the Holder at least ten (10) Trading
Days' written notice prior to the earlier of (I) the closing or effectiveness of
such Major Transaction and (II) the record date for the receipt of such shares
of stock or securities or other assets, and the Holder shall be permitted to
exercise this Warrant in whole or in part at any time prior to the record date
for the receipt of such consideration and shall be entitled to receive, for each
share of Common Stock issuable to the Holder upon such exercise, the same per
share consideration payable to the other holders of Common Stock in connection
with such Major Transaction. If and to the extent that the Holder
retains this Warrant or any portion hereof following such record date, the
Company will cause the surviving or, in the event of a sale of assets,
purchasing entity, as a condition precedent to such Major Transaction, to assume
the obligations of the Company with respect to this Warrant, with such
adjustments to the Exercise Price and the securities covered hereby as may be
necessary in order to preserve the economic benefits of this Warrant to the
Holder.
(e)
Notice Of
Adjustments
. Upon the occurrence of one or more adjustments or
readjustments of the Exercise Price pursuant to this paragraph 5 or any change
in the number or type of stock, securities and/or other property issuable upon
exercise of this Warrant, the Company, at its expense, shall promptly compute
such adjustment or readjustment or change and prepare and furnish to the Holder
a certificate setting forth such adjustment or readjustment or change and
showing in detail the facts upon which such adjustment or readjustment or change
is based. The Company shall, upon the written request at any time of
the Holder, furnish to the Holder a like certificate setting forth (i) such
adjustment or readjustment or change, (ii) the Exercise Price at the time in
effect and (iii) the number of shares of Common Stock and the amount, if any, of
other securities or property which at the time would be received upon exercise
of this Warrant.
(f)
Adjustments; Additional
Shares, Securities or Assets
. In the event that at any time,
as a result of an adjustment made pursuant to this paragraph 5, the Holder of
this Warrant shall, upon exercise of this Warrant, become entitled to receive
securities or assets (other than Common Stock) then, wherever appropriate, all
references herein to shares of Common Stock shall be deemed to refer to and
include such shares and/or other securities or assets; and thereafter the number
of such shares and/or other securities or assets shall be subject to adjustment
from time to time in a manner and upon terms as nearly equivalent as practicable
to the provisions of this paragraph 5.
6.
Fractional
Interests
. No
fractional shares or scrip representing fractional shares shall be issuable upon
the exercise of this Warrant. If, on exercise of this Warrant, the
Holder hereof would be entitled to a fractional share of Common Stock or a right
to acquire a fractional share of Common Stock, the Company shall, in lieu of
issuing any such fractional share, pay to the Holder an amount in cash equal to
the product resulting from multiplying such fraction by the Market Price as of
the Exercise Date.
7.
Transfer of this
Warrant
. The Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant (collectively, a "
Transfer
"),
in whole or in part, as long as Transfer is made pursuant to an effective
registration statement or an exemption from the registration requirements of the
Securities Act, and applicable state securities laws, and is
otherwise
made in accordance with the applicable provisions of the Note Purchase
Agreement. Upon such Transfer, the Holder shall deliver this Warrant
to the Company together with a written notice to the Company, substantially in
the form of the Transfer Notice attached hereto as
Exhibit B
(the "
Transfer
Notice
"), indicating the person or persons to whom this Warrant shall be
transferred and, if less than all of this Warrant is transferred, the number of
Warrant Shares to be covered by the part of this Warrant to be transferred to
each such person. Within ten (10) Business Days of receiving a Transfer Notice
and the original of this Warrant, the Company shall deliver to the each
transferee designated by the Holder a Warrant or Warrants of like tenor and
terms for the appropriate number of Warrant Shares and, if less than all this
Warrant is transferred, shall deliver to the Holder a Warrant for the remaining
number of Warrant Shares.
8.
Benefits of this
Warrant
.
This Warrant shall be for the sole and
exclusive benefit of the Holder of this Warrant and nothing in this Warrant
shall be construed to confer upon any person other than the Holder of this
Warrant any legal or equitable right, remedy or claim hereunder.
9.
Loss, theft, destruction or
mutilation of Warrant
.
Upon receipt by the Company of evidence
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of indemnity reasonably satisfactory to the
Company, and upon surrender of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date in replacement for the
lost, stolen, destroyed or mutilated Warrant.
10.
Notice or
Demands
.
Any notice, demand or request required
or permitted to be given by the Company or the Holder pursuant to the terms of
this Warrant 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 the
Company
:
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SkyPostal
Networks, Inc.
|
|
7805
NW 15
th
Street
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Miami,
Florida 33126
|
|
Attn: Chief
Financial Officer
|
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Tel: (305)
599-1812
|
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Fax: (305)
593-0843
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with a copy
to
:
|
|
|
|
Mazzeo
Song & Bradham LLP
|
|
708
Third Avenue
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|
New
York, New York 10017
|
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Attn: David
S. Song, Esq.
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Tel: (212)
599-0700
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Fax: (212)
599-8400
|
and if to
the Holder, at such address as the Holder shall have furnished the Company in
writing. Any party may change its address for receiving notice by giving written
notice thereof to the other parties in accordance with this paragraph
10.
11.
Taxes
.
The issue
of stock certificates on exercises of this Warrant shall be made without charge
to the exercising Holder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock in any name other than that of the Holder of any Warrant
exercised, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been
paid.
12.
Applicable
Law
.
This Warrant is issued under and shall
for all purposes 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.
13.
Amendments
.
No amendment, modification or other
change to, or waiver of any provision of, this Warrant may be made unless such
amendment, modification or change is set forth in writing and is signed by the
Company and the Holder.
[Signature
Page to Follow]
IN
WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of
the Issue Date.
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SKYPOSTAL
NETWORKS, INC.
|
|
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By:
|
|
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Name:
|
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Title:
|
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EXHIBIT A
to WARRANT
EXERCISE
NOTICE
The undersigned Holder hereby
irrevocably exercises the right to purchase
of the shares of Common Stock ("
Warrant Shares
") of
SKYPOSTAL NETWORKS, INC. evidenced by the attached Warrant (the "
Warrant
"). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:
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a
Cash
Exercise
with respect to
|
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Warrant
Shares; and/or
|
|
|
|
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a
Cashless
Exercise
with respect to
|
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Warrant
Shares, as
|
permitted
by Section 4(b) of the attached Warrant.
|
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2. Payment
of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder shall pay the sum of $________________ to the Company in
accordance with the terms of the Warrant.
Date:
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Name
of Registered Holder
|
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By tendering this Exercise Notice, the
Holder represents to the Company that it is an "accredited investor" as that
term is defined in Rule 501 of Regulation D, and that it is acquiring the
Warrants Shares solely for its own account, and not with a present view to the
public resale or distribution of all or any part thereof, except pursuant to
sales that are registered under the Securities Act or are exempt from the
registration requirements of the Securities Act;
provided
,
however
, that, in
making such representation, the Holder does not agree to hold the Warrants
Shares for any minimum or specific term and reserves the right to sell, transfer
or otherwise dispose of the Warrants Shares at any time in accordance with the
provisions of the Warrant and with Federal and state securities laws applicable
to such sale, transfer or disposition.
EXHIBIT B to
WARRANT
TRANSFER
NOTICE
FOR VALUE
RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns
and transfers unto the person or persons named below the right to purchase
________ shares of the Common Stock of SKYPOSTAL NETWORKS, INC. evidenced by the
attached Warrant. By signing this Transfer Notice, the transferee agrees to be
legally bound by the terms of the attached Warrant and of the related Note
Purchase Agreement and Registration Rights Agreement applicable to an
Investor.
Date:
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Name
of Registered Holder
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Accepted
and Agreed:
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Transferee
Name
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Skyshop Logistics (GM) (USOTC:SKPN)
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