Exhibit 10.13
Form SB-2
Skypath Networks, Inc.
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, Skypath Networks, Inc., a Delaware
Corporation (the "Borrower"), promise to pay to the order of
____________________ ___________________________________("Lender"), in lawful
money of the United States of America, the principal sum of ___________________
dollars ($______), together with interest in arrears on the unpaid principal
balance. This Note has been executed and delivered pursuant to and in accordance
with the terms and conditions of the Note and Warrant Purchase Agreement, dated
______, 2003, by and between Borrower, the lender and certain other Lenders (the
"Agreement") and is subject to the terms and conditions of the Agreement, which
are, by this reference, incorporated herein and made a part hereof. Capitalized
terms used in this Note without definition shall have the respective meanings
set forth in the Agreement.
1. Principal Amount. The principal amount of this Note is
______________Dollars ($________).
2. Interest. Interest shall accrue daily on the unpaid balance of this Note
at the rate of twelve percent (12%) per annum, based on a 365 day year. In the
Event of Default, interest shall accrue at the rate of eighteen percent (18%)
per annum.
3. Payments. Subject to the mandatory prepayment requirements set forth in
Section 5 below, the principal balance of this Note, together with all accrued
interest, shall be paid in full on March 31, 2004. Each payment shall be applied
first to accrued interest and the balance to the reduction of principal.
4. Optional Prepayment. Borrower may, without premium or penalty, at any
time and from time to time, prepay all or any portion of the outstanding
principal balance due under this Note, provided that each such prepayment is
accompanied by accrued interest on the amount of principal prepaid calculated to
the date of such prepayment. Any partial prepayments shall be applied to
installments of principal in inverse order of their maturity.
5. Mandatory Prepayment. The Company intends to file a Registration
Statement on Form SB-2 to register shares of Common Stock to be sold by the
Company and certain selling shareholders. In the event the Company receives
offering proceeds from such offering prior to March 31, 2004, the Company shall
use such offering proceeds to prepay this Note in full.
6. Late Payments. If any payment of principal or interest is not made
within five days of the date on which it is due, Borrowers shall pay a late fee
equal to ten percent (10%) of the late payment.
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7. Default. Each of the following shall constitute an Event of Default
under this Agreement: ss. 6.1 Events Of Default.
EACH OF THE FOLLOWING SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS AGREEMENT:
(a) Nonpayment of the Note. If the Borrower fails to pay the principal
or interest on this Note when it becomes due and payable; or
(b) Other Covenants. If the Borrower fails to perform or observe any
other of the covenants, conditions or agreements on the part of the
Borrower set forth in the Agreement or this Note and such failure shall
have continued for 30 days, provided, however, that if such failure is
incapable of cure then the Event of Default shall occur upon such failure;
or
(c) Misrepresentations. If any representation, warranty or statement
made by the Borrower in the Agreement, this Note or the Warrant, or in any
certificate or other instrument delivered to the Purchaser pursuant to this
Agreement, shall be incorrect in any material respect as of the time when
made; or
(d) Voluntary Bankruptcy and Insolvency Proceedings. If the Borrower
shall file a petition in bankruptcy or for reorganization or for an
arrangement or any composition, readjustment, liquidation, dissolution or
similar relief pursuant to Title 11 of the United States Code or under any
similar present or future federal law or the law of any other jurisdiction
or shall be adjudicated a bankrupt or insolvent, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the
Borrower or for all or any substantial part of its property, or shall make
a general assignment for the benefit of its creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or
shall take any corporate action in furtherance of any of the foregoing; or
(e) Adjudication of Bankruptcy. If a petition or answer shall be filed
proposing the adjudication of the Borrower or any of its Subsidiaries as
bankrupt or its reorganization or arrangement, or any composition,
readjustment, liquidation, dissolution or similar relief with respect to it
pursuant to Title 11 of the United States Code or under any similar present
or future federal law or the law of any other jurisdiction, and the
Borrower, as the case may be, shall consent to or acquiesce in the filing
thereof, or such petition or answer shall not be discharged or denied
within 60 days after the filing thereof; or
8. Acceleration. If any Event of Default shall Occur, Lender may, by Five
day written notice to the Borrower, declare the entire outstanding principal of
this Note, and all accrued and unpaid interest thereon, to be due and payable
immediately. Upon any such declaration, the entire outstanding principal of the
Note and all accrued and unpaid interest shall become and be immediately due and
payable, without presentment, demand, protest or other notice whatsoever, all of
which are hereby expressly waived.
However, if an Event of Default under clause (d) or (e) of ss. 7 shalL have
occurred, the outstanding principal of this Note, and all accrued and unpaid
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interest thereon, shall immediately become due and payable, without any
declaration and without presentment, demand, protest or other notice whatsoever,
all of which are hereby expressly waived, anything in this Note or the Agreement
to the contrary notwithstanding
9. No Waiver; Expenses of Default. The acceptance of any payment after
default shall not constitute a waiver of Lender's right of acceleration with
respect to such default or any subsequent default. Following default, unpaid
interest shall be compounded monthly and late fees shall accrue interest from
the date due at the default rate. Following default Borrowers agree to pay all
of Xxxxxx's costs and expenses of collection either with or without suit,
including attorney's fees.
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10. Place of Payment. All payments required under this Note shall be made
to the following address unless the Lender gives written instructions to the
Borrowers to change the place of payment:
_____________________________
_____________________________
_____________________________
11. Waiver. Borrowers waive presentment for payment, demand and notice of
dishonor and nonpayment of this Note, and consent to any and all extensions of
time, renewals, waivers, or modifications that may be granted by the Lender with
respect to the payment or other provisions of this Note, and to the release of
any security, or any part thereof, with or without substitution.
12. Governing Law. The substantive laws of Rhode Island shall govern the
validity, construction, enforcement, and interpretation of this Note.
Dated this ______ day of ___________, 2003.
Skypath Networks, Inc.,
A Delaware corporation
By___________________________
Xxxxx X. Xxxxx, President
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