Exhibit 10.6
LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, Inc.
335 Madison Ave., 10th Floor
New York, NY 10017
January 23, 2008
Jerry Pearring
President and Chief Executive Officer
Global Beverage Solutions, Inc.
2 S. University Drive, Suite 220
Plantation, Florida 33324
Mr. Ronald Ratner
Chief Executive Officer and President
XStream Beverage Network, Inc.
18851 N.E. 29th Avenue, Suite 700
Aventura, Florida 33180
Re: Release of Lien
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Dear Messrs. Pearring and Ratner:
Laurus Master Fund, Ltd. ("Laurus") is pleased to confirm its agreement
with Global Beverage Solutions, Inc. ("Global Beverage") regarding the terms and
conditions under which Laurus will release all of the liens it has on the
inventory and receivables of Beverage Network of Maryland, Inc., an entity that
is wholly owned by Global Beverage.
Furthermore, upon the payment and release described herein, the
principal amount of that certain $2,000,000 Secured Promissory Note (which as of
the date hereof is $1,086,524.87), dated January 31, 2007 (the "Initial Note"),
as amended by that certain Amendment No. 1 to the Initial Note, dated as of
February 23, 2007 ("Note Amendment No. 1") and by that certain Amendment No. 2
to the Initial Note, dated as of January 23, 2008 ("Note Amendment No. 2," and
together with Note Amendment No. 1 and the Initial Note, the "Note") made by
Global Beverage in favor of XStream Beverage Network, Inc. ("XStream") shall be
reduced by the Payment Amount (as defined below).
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1. PAYMENT AND RELEASE. If, prior to May 1, 2008, Global Beverage
remits payment to Laurus in the amount of $500,000 in good, cleared funds (the
"Payment Amount"):
(a) Laurus agrees to release promptly thereafter all of the liens
(the "Liens") it has on the inventory and receivables of Beverage Network of
Maryland, Inc. Upon its receipt of the Payment Amount, Laurus agrees to take any
and all actions necessary or appropriate to effect and evidence its release of
the Liens, including without limitation, the filing of UCC Termination
Statements, as appropriate, all at the sole cost and expense of Global Beverage.
(b) XStream and Laurus agree to terminate promptly thereafter: (i)
that certain Master Security Agreement, dated as of January 31, 2007 (the
"Master Security Agreement"), by which Global Beverage and the other Assignors
(as defined in the Master Security Agreement) granted a security interest in the
Collateral (as defined in the Master Security Agreement) to XStream, and (ii)
that certain Stock Pledge Agreement, dated as of January 31, 2007 (the "Stock
Pledge Agreement"), by which Global Beverage granted to XStream a security
interest in all of the stock of Beverage Network of Maryland, Inc. that is owned
by Global Beverage. XStream and Laurus further agree to release all security
interests, liens, and any other encumbrances (the "Encumbrances") on the stock
of Beverage Network of Maryland, Inc. and on all other collateral secured by the
Master Security Agreement and the Stock Pledge Agreement and to take all
necessary or appropriate actions to effect and evidence the release of the
Encumbrances, including without limitation, the filing of UCC Termination
Statements, as appropriate. Global Beverage agrees to the termination of the
Master Security Agreement and the Stock Pledge Agreement and all other actions
set forth in this SECTION 1(b).
2. SOURCE OF FUNDS FOR PAYMENT AMOUNT. If, pursuant to the provisions
of Amendment No. 2, that certain letter agreement by and between Global Beverage
and XStream dated as of January 23, 2008 by which Global Beverage repurchases
60,500,000 shares of its common stock from XStream (the "Stock Repurchase
Agreement"), and that certain Convertible Promissory Note dated the date hereof
from Global Beverage in favor of XStream in the original principal amount of
$700,000 (the "Stock Repurchase Note"), Global Beverage pays a "35% Payment" (as
defined in each of Amendment No. 2, the Stock Repurchase Agreement, and the
Stock Repurchase Note) on or before May 1, 2008, such 35% Payment shall be used
to satisfy the Payment Amount to the extent of the dollar amount of such 35%
Payment, PROVIDED, HOWEVER, that to the extent such 35% Payment does not satisfy
the entire amount of the Payment Amount, the remaining balance of the Payment
Amount shall remain outstanding and payable.
3. REDUCTION OF PRINCIPAL AMOUNT OF THE NOTE. Upon the receipt of the
Payment Amount by Laurus pursuant to the terms of this letter agreement, (i) the
principal amount of the Note shall be reduced by the Payment Amount, and (ii)
XStream or Laurus will make a notation on the Note reflecting such reduction in
the principal amount outstanding under the Note; PROVIDED, HOWEVER, that the
failure to make such notation shall not limit or otherwise affect the
obligations of Global Beverage with respect to the payment of such principal.
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4. COLLATERAL ASSIGNMENT OF NOTE AND STOCK REPURCHASE NOTE.
(a) Contemporaneously with the execution hereof, XStream shall
execute and deliver to Laurus a collateral assignment of the Note and the Stock
Repurchase Note (collectively, the "Assigned Notes"), and all collateral
security for the Assigned Notes, in the form attached hereto as EXHIBIT A (the
"Collateral Assignment of Notes"). The Collateral Assignment of Notes shall be
acknowledged and agreed to by Global Beverage on the terms set forth on the
acknowledgement therein. Laurus' agreement to release the Liens and Encumbrances
and to terminate the Master Security Agreement and Stock Pledge Agreement in
accordance with PARAGRAPH 1 above is further conditioned upon its receipt of a
fully executed Collateral Assignment of Notes including the aforementioned
acknowledgement by Global Beverage and the sole original Note and Stock
Repurchase Note.
(b) Except as may result from the assignments set forth in PARAGRAPH
3(A) above, neither XStream nor Laurus will assign, pledge, sell or otherwise
transfer the Master Security Agreement or the Stock Pledge Agreement prior to
the termination of this letter agreement.
5. ACKNOWLEDGEMENT OF STOCK REPURCHASE. Laurus, as a creditor of
XStream, hereby acknowledges and agrees to the sale by XStream to Global
Beverage of sixty million five hundred thousand (60,500,000) shares of Global
Beverage's common stock pursuant to and in accordance with the terms of the
Stock Repurchase Agreement.
6. TERMINATION. This letter agreement will terminate, without liability
to any party hereto, on May 1, 2008 if Laurus has not received the Payment
Amount in good, cleared funds.
7. REPRESENTATIONS AND WARRANTIES OF LAURUS. Laurus represents and
warrants to Global Beverage and XStream that:
(a) Laurus has the full power and authority to enter into, execute
and deliver this letter agreement and perform the obligations contained herein;
(b) the execution and delivery by Laurus of this letter agreement
and the performance by it of its obligations contemplated in this letter
agreement have been duly authorized by all necessary corporate or other action
of Laurus; and
(c) the execution, delivery and performance of this letter agreement
by Laurus will not conflict with or result in any material breach or violation
of any of the terms and conditions of, or constitute (with notice or lapse of
time or both) a default under, any instrument, contract or other agreement to
which Laurus is a party or by which it is bound.
8. REPRESENTATIONS AND WARRANTIES OF XSTREAM. XStream represents and
warrants to Laurus and Global Beverage that:
(a) XStream has the full power and authority to enter into, execute
and deliver this letter agreement and perform the obligations contained herein;
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(b) the execution and delivery by XStream of this letter agreement
and the performance by it of its obligations contemplated in this letter
agreement have been duly authorized by all necessary corporate or other action
of XStream;
(c) the execution, delivery and performance of this letter agreement
by XStream will not conflict with or result in any material breach or violation
of any of the terms and conditions of, or constitute (with notice or lapse of
time or both) a default under, any instrument, contract or other agreement to
which XStream is a party or by which it is bound;
(d) as of the date of this letter agreement, XStream has not entered
into any agreement or understanding with any person or entity relating to the
sale, hypothecation, pledge, assignment, disposal or transfer of the Note and is
the owner of, and has good and marketable title to the Note, free and clear of
all liens, pledges and encumbrances of any kind, except for liens granted in
favor of Laurus; and
(e) as of the date of this letter agreement, XStream has not
assigned, pledged, sold or otherwise transferred the Master Security Agreement
or the Stock Pledge Agreement, except for liens granted in favor of Laurus.
9. REPRESENTATIONS AND WARRANTIES OF GLOBAL BEVERAGE. Global Beverage
represents and warrants to Laurus and XStream that:
(a) Global Beverage has the full power and authority to enter into,
execute and deliver this letter agreement and perform the obligations contained
herein;
(b) the execution and delivery by Global Beverage of this letter
agreement and the performance by it of its obligations contemplated in this
letter agreement have been duly authorized by all necessary corporate or other
action of Global Beverage; and
(c) the execution, delivery and performance of this letter agreement
by Global Beverage will not conflict with or result in any material breach or
violation of any of the terms and conditions of, or constitute (with notice or
lapse of time or both) a default under, any instrument, contract or other
agreement to which Global Beverage is a party or by which it is bound.
10. MISCELLANEOUS.
(a) No waiver, amendment or other modification of this letter
agreement shall be effective unless in writing and signed by each party to be
bound thereby. This letter agreement shall inure to the benefit of and be
binding on the parties hereto and their respective successors.
(b) In case any provision of this letter agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this letter agreement shall not in any way be affected
or impaired thereby.
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(c) This letter agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
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Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter.
LAURUS MASTER FUND, LTD.
By: /S/ PATRICK REGAN
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Name: Patrick Regan
Title: Senior Managing Director
Acknowledged and Agreed
to as of the date first
written above:
GLOBAL BEVERAGE SOLUTIONS, INC.
By: /S/ JERRY PEARRING
--------------------------------------------
Name: Jerry Pearring
Title: Chief Executive Officer and President
XSTREAM BEVERAGE NETWORK, INC.
By: /S/ RONALD RATNER
--------------------------------------------
Name: Ronald Ratner
Title: Chief Executive Officer and President
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EXHIBIT A
COLLATERAL ASSIGNMENT OF NOTES
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COLLATERAL ASSIGNMENT OF NOTES made as of this 23rd day of
January, 2008 (this "ASSIGNMENT") by XStream Beverage Network, Inc., a Nevada
corporation ("ASSIGNOR"), to Laurus Master Fund, Ltd. ("ASSIGNEE").
WHEREAS, Assignor, certain subsidiaries of Assignor and
Assignee have entered into a Security and Purchase Agreement dated as of March
31, 2006 (as amended, modified, restated and/or supplemented from time to time,
the "SECURITY AGREEMENT"), pursuant to which Assignee has provided certain
financial accommodations to the Assignor and certain subsidiaries of the
Assignor. All capitalized terms not herein defined shall have the meanings given
to them in the Security Agreement.
FOR VALUE RECEIVED, and as collateral security for all debts,
liabilities and obligations of Assignor to Assignee, now existing or hereafter
arising under any agreement between Assignor and Assignee, including, without
limitation, the Security Agreement and the Ancillary Agreements, Assignor hereby
assigns, transfers and sets over unto Assignee and its successors and assigns,
all of its rights, but not its obligations, under (i) that certain Secured
Promissory Note dated as of February 23, 2007 from Global Beverage Solutions,
Inc. ("MAKER") in favor of Assignor in the original principal amount of
$2,000,000 (as amended, modified, restated and/or supplemented from time to
time, the "SECURED NOTE"), and (ii) that certain Convertible Promissory Note
dated the date hereof from Maker in favor of Assignor in the original principal
amount of $700,000 (as amended, modified, restated and/or supplemented from time
to time, the "CONVERTIBLE NOTE," and collectively with the Secured Note, the
"NOTES") including, without limitation, all moneys and claims for moneys due
and/or to become due to Assignor under the Notes and all collateral security
therefor and all rights to convert the indebtedness evidenced thereby into
shares of common stock of the Maker as set forth in the Convertible Note and the
Purchase Agreement (as defined in the Convertible Note).
Assignor hereby (i) specifically authorizes and directs Maker
to make all payments due under or arising under the Notes directly to Assignee
and hereby irrevocably authorizes and empowers Assignee (a) to ask, demand,
receive, receipt and give acquittance for any and all amounts which may be or
become due or payable, or remain unpaid at any time and times to Assignor by
Maker under and pursuant to the Notes, (b) to endorse any checks, drafts or
other orders for the payment of money payable to Assignor in payment thereof,
and (c) in Assignee's discretion to file any claims or take any action or
institute any proceeding, either in its own name or in the name of Assignor or
otherwise, which Assignee may deem necessary or advisable to effectuate the
foregoing. It is expressly understood and agreed, however, that Assignee shall
not be required or obligated in any manner to make any demand or to make any
inquiry as to the nature or sufficiency of any payment received by it, or to
present or file any claim or take any other action to collect or enforce the
payment of any amounts which may have been assigned to Assignee or to which
Assignee may be entitled hereunder at any time or times.
A-1
Maker is hereby authorized to recognize Assignee's claims to
rights hereunder without investigating any reason for any action taken by
Assignee or the validity or the amount of the obligations or existence of any
default, or the application to be made by Assignee of any of the amounts to be
paid to Assignee. Checks for all or any part of the sums payable under this
Assignment shall be drawn to the sole and exclusive order of Assignee.
Without first obtaining the written consent of Assignee,
Assignor and Maker shall not (i) amend or modify the Notes, or (ii) agree to or
suffer any amendment, extension, renewal, release, acceptance, forbearance,
modification or waiver with respect to any rights arising under the Notes.
Without first obtaining the written consent of Assignee,
Assignor shall not exercise any right it has under the Convertible Note to
convert the indebtedness evidenced thereby into shares of Common Stock of Maker
(the "CONVERSION SHARES"). In the event Assignor converts all or any portion of
the outstanding principal amount and/or accrued interest and fees payable under
and in accordance with the terms of the Convertible Note into Conversion Shares,
Assignor shall use its reasonable best efforts to immediately sell the
Conversion Shares, in accordance with the terms and restrictions of Section 5 of
the Convertible Note and with all applicable federal and state securities laws,
and simultaneously remit to Assignee all of the cash proceeds (net of brokerage
fees) received by Assignor therefrom.
The occurrence of any Event of Default or default under any
Note shall constitute an Event of Default under the Security Agreement and each
Ancillary Agreement.
In the event Assignor declines to exercise any rights under
the Notes, Assignee shall have the right to enforce any and all such rights of
Assignor against Maker.
This Assignment shall be governed by and construed in
accordance with the laws of the State of New York, without resort to the
conflict of law principles thereof.
This Assignment may be executed in any number of counterparts
and by different signatories hereto on separate counterparts, each of which,
when so executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. This Assignment may be executed by
facsimile or electronic transmission.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Assignor has duly executed this Assignment
the day and year first above written.
XSTREAM BEVERAGE NETWORK, INC.
By:
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Name:
Title:
Maker hereby acknowledges, consents and agrees to the provisions of this
Collateral Assignment and agrees to make all payments under the Notes to
Assignee as of this 23rd day of January, 2008.
GLOBAL BEVERAGE SOLUTIONS, INC.
By:
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Name:
Title:
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