EXHIBIT 10.50
GLOBAL BEVERAGE SOLUTIONS, INC. AND CERTAIN OF ITS SUBSIDIARIES
MASTER SECURITY AGREEMENT
To: XStream Beverage Network, Inc.
0 X. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Date: January 31, 2007
To Whom It May Concern:
1. To secure the payment of all Obligations (as hereafter defined), Global
Beverage Solutions, Inc., a Nevada corporation (the "Company"), and each
other entity that is required to enter into this Master Security Agreement
(each an "Assignor" and, collectively, the "Assignors") hereby assigns and
grants to XStream Beverage Network, Inc., Nevada corporation ("XStream"), a
continuing security interest in all of the following property now owned or
at any time hereafter acquired by the Company or an Assignor, or in which
the Company or any Assignor now has or at any time in the future may
acquire any right, title or interest (the "Collateral"): all cash, cash
equivalents, accounts, accounts receivable, deposit accounts, inventory,
equipment, goods, fixtures, documents, instruments (including, without
limitation, promissory notes), contract rights, general intangibles
(including, without limitation, payment intangibles and an absolute right
to license on terms no less favorable than those current in effect among
the Company's or an Assignor's affiliates), chattel paper, supporting
obligations, investment property (including, without limitation, all
partnership interests, limited liability company membership interests and
all other equity interests owned by the Company or any Assignor),
letter-of-credit rights, trademarks, trademark applications, tradestyles,
patents, patent applications, copyrights, copyright applications and other
intellectual property in which the Company and an Assignor now has or
hereafter may acquire any right, title or interest, all proceeds and
products thereof (including, without limitation, proceeds of insurance) and
all additions, accessions and substitutions thereto or therefor. Except as
otherwise defined herein, all capitalized terms used herein shall have the
meanings provided such terms in the Plan and Agreement of Merger or Note
referred to below.
2. The term "Obligations" as used herein shall mean and include all debts,
liabilities and obligations owing by the Company and each Assignor to
XStream arising under, out of, or in connection with: (i) that certain Plan
and Agreement of Merger, dated as of the date hereof, by and between the
Company, XStream, Beverage Network of Maryland, Inc. and Global Merger
Corp. (the "Merger Agreement"), (ii) Secured Promissory Note, dated the
date hereof (the "Note"), and (iii) the related agreements described in the
Merger Agreement and Note (the Merger Agreement, Note and each related
agreement as each may be amended, modified, restated or supplemented from
time to time, collectively, the "Documents"), and in connection with any
documents, instruments or agreements relating to or executed in connection
with the Documents or any documents, instruments or agreements referred to
therein or otherwise, and in connection with any other indebtedness,
obligations or liabilities of the Company or any Assignor to XStream,
whether now existing or hereafter arising, direct or indirect, liquidated
or unliquidated, absolute or contingent, due or not due and whether under,
pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise, including, without limitation, obligations and
liabilities of the Company and each Assignor for post-petition interest,
fees, costs and charges that accrue after the commencement of any case by
or against the Company or any Assignor under any bankruptcy, insolvency,
reorganization or like proceeding (collectively, the "Debtor Relief Laws")
in each case, irrespective of the genuineness, validity, regularity or
enforceability of such Obligations, or of any instrument evidencing any of
the Obligations or of any collateral therefor or of the existence or extent
of such collateral, and irrespective of the allowability, allowance or
disallowance of any or all of the Obligations in any case commenced by or
against the Company or any Assignor under any Debtor Relief Law.
3. The Company and each Assignor hereby jointly and severally represents,
warrants and covenants to XStream that:
(a) it is a corporation, partnership or limited liability company, as the
case may be, validly existing, in good standing and formed under the
respective laws of its jurisdiction of formation set forth on Schedule
A, and it will provide XStream thirty (30) days' prior written notice
of any change in any of its respective jurisdiction of formation;
(b) its legal name is as set forth in its Certificate of Incorporation or
other organizational document (as applicable) as amended through the
date hereof and as set forth on Schedule A, and it will provide
XStream thirty (30) days' prior written notice of any change in its
legal name;
(c) its organizational identification number (if applicable) is as set
forth on Schedule A hereto, and it will provide XStream thirty (30)
days' prior written notice of any change in its organizational
identification number;
(d) it is the lawful owner of its Collateral and it has the sole right to
grant a security interest therein and will defend the Collateral
against all claims and demands of all persons and entities;
(e) it will keep its Collateral free and clear of all attachments, levies,
taxes, liens, security interests and encumbrances of every kind and
nature ("Encumbrances"), except (i) Encumbrances securing the
Obligations and (ii) Encumbrances securing indebtedness of the Company
or each any Assignor (i) not to exceed $50,000 in the aggregate for
the Company or any Assignor so long as all such Encumbrances are
removed or otherwise released to XStream's satisfaction within ten
(10) days of the creation thereof;
(f) it will, at its and the other Assignors' joint and several cost and
expense keep the Collateral in good state of repair (ordinary wear and
tear excepted) and will not waste or destroy the same or any part
thereof other than ordinary course discarding of items no longer used
or useful in its or other Assignors' business;
(g) it will not, without XStream's prior written consent, sell, exchange,
lease or otherwise dispose of any Collateral, whether by sale, lease
or otherwise, except for the sale of inventory in the ordinary course
of business and for the disposition or transfer in the ordinary course
of business during any fiscal year of obsolete and worn-out equipment
or equipment no longer necessary for its ongoing needs, having an
aggregate fair market value of not more than $25,000 and only to the
extent that:
(i) the proceeds of each such disposition are used to acquire
replacement Collateral which is subject to XStream's second
priority perfected security interest, or are used to repay the
Obligations or to pay general corporate expenses; or
(ii) following the occurrence of an Event of Default which continues
to exist the proceeds of which are remitted to XStream to be held
as cash collateral for the Obligations;
(h) it will insure or cause the Collateral to be insured in XStream's name
(as an additional insured and loss payee) against loss or damage by
fire, theft, burglary, pilferage, loss in transit and such other
hazards as XStream shall specify in amounts and under policies by
insurers acceptable to XStream and all premiums thereon shall be paid
by the Company or Assignor and the policies delivered to XStream. If
the Company or any Assignor fails to do so, XStream may procure such
insurance and the cost thereof shall be promptly reimbursed by the
Company or the Assignors, jointly and severally, and shall constitute
Obligations;
(i) it will at all reasonable times allow XStream or XStream's
representatives free access to and the right of inspection of the
Collateral;
(j) the Company and Assignors (jointly and severally with each other)
hereby indemnifies and saves XStream harmless from all loss, costs,
damage, liability and/or expense, including reasonable attorneys'
fees, that XStream may sustain or incur to enforce payment,
performance or fulfillment of any of the Obligations and/or in the
enforcement of this Master Security Agreement or in the prosecution or
defense of any action or proceeding either against XStream, the
Company or any Assignor concerning any matter growing out of or in
connection with this Master Security Agreement, and/or any of the
Obligations and/or any of the Collateral except to the extent caused
by XStream's own gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and nonappealable
decision).
4. The occurrence of any of the following events or conditions shall
constitute an "Event of Default" under this Master Security Agreement:
(a) any covenant or any other term or condition of this Master Security
Agreement is breached in any material respect and such breach, to the
extent subject to cure, shall continue without remedy for a period of
fifteen (15) days after the occurrence thereof;
(b) any representation or warranty, or statement made or furnished to
XStream under this Master Security Agreement by the Company or any
Assignor or on the Company's or any Assignor's behalf should prove to
any time be false or misleading in any material respect on the date as
of which made or deemed made;
(c) the loss, theft, substantial damage, destruction, sale or encumbrance
to or of any of the Collateral or the making of any levy, seizure or
attachment thereof or thereon except to the extent:
(i) such loss is covered by insurance proceeds which are used to
replace the item or repay XStream; or
(ii) said levy, seizure or attachment does not secure indebtedness in
excess of $25,000 in the aggregate for the Company or any
respective Assignor and such levy, seizure or attachment has been
removed or otherwise released within ten (10) days of the
creation or the assertion thereof;
(d) an Event of Default shall have occurred under and as defined in any
Document.
5. Upon the occurrence of any Event of Default and at any time thereafter,
XStream may declare all Obligations immediately due and payable and XStream
shall have the remedies of a secured party provided in the Uniform
Commercial Code as in effect in the State of Florida, this Agreement and
other applicable law. Upon the occurrence of any Event of Default and at
any time thereafter, XStream will have the right to take possession of the
Collateral and to maintain such possession on the Company or any Assignor's
premises or to remove the Collateral or any part thereof to such other
premises as XStream may desire. Upon XStream's request, the Company and
each Assignor shall assemble or cause the Collateral to be assembled and
make it available to XStream at a place designated by XStream. If any
notification of intended disposition of any Collateral is required by law,
such notification, if mailed, shall be deemed properly and reasonably given
if mailed at least ten (10) days before such disposition, postage prepaid,
addressed to the Company or applicable Assignor either at such party's
address shown herein or at any address appearing on XStream's records for
such party. Any proceeds of any disposition of any of the Collateral shall
be applied by XStream to the payment of all expenses in connection with the
sale of the Collateral, including reasonable attorneys' fees and other
legal expenses and disbursements and the reasonable expenses of retaking,
holding, preparing for sale, selling, and the like, and any balance of such
proceeds may be applied by XStream toward the payment of the Obligations in
such order of application as XStream may elect, and the Company and each
Assignor shall be liable for any deficiency. For the avoidance of doubt,
following the occurrence and during the continuance of an Event of Default,
XStream shall have the immediate right to withdraw any and all monies
contained in any deposit account in the name of the Company or any Assignor
and controlled by XStream and apply same to the repayment of the
Obligations (in such order of application as XStream may elect).
6. If the Company or any Assignor defaults in the performance or fulfillment
of any of the terms, conditions, promises, covenants, provisions or
warranties on such party's part to be performed or fulfilled under or
pursuant to this Master Security Agreement, XStream may, at its option
without waiving its right to enforce this Master Security Agreement
according to its terms, immediately or at any time thereafter and without
notice to the Company or any Assignor, perform or fulfill the same or cause
the performance or fulfillment of the same for the Company's or each
Assignor's joint and several account and at the Company's or each
Assignor's joint and several cost and expense, and the cost and expense
thereof (including reasonable attorneys' fees) shall be added to the
Obligations and shall be payable on demand with interest thereon at the
highest rate permitted by law, or, at XStream's option, debited by XStream
from any other deposit accounts in the name of the Company or any Assignor
and controlled by XStream.
7. With effect solely upon the occurrence and during the continuance of an
Event of Default beyond any applicable grace period, the Company and each
Assignor appoints XStream, any of XStream's officers, employees or any
other person or entity whom XStream may designate as such party's attorney,
with power to execute such documents in each party's behalf and to supply
any omitted information and correct patent errors in any documents executed
by the Company or any Assignor or on their respective behalf; to file
financing statements against the Company or any Assignor covering the
Collateral (and, in connection with the filing of any such financing
statements, describe the Collateral as "all assets and all personal
property, whether now owned and/or hereafter acquired" (or any
substantially similar variation thereof)); to sign such party's name on
public records; and to do all other things XStream deem necessary to carry
out this Master Security Agreement. The Company and each Assignor hereby
ratifies and approves all acts of the attorney and neither XStream nor the
attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision). This power being coupled with an
interest, is irrevocable so long as any Obligations remains unpaid.
8. No delay or failure on XStream's part in exercising any right, privilege or
option hereunder shall operate as a waiver of such or of any other right,
privilege, remedy or option, and no waiver whatever shall be valid unless
in writing, signed by XStream and then only to the extent therein set
forth, and no waiver by XStream of any default shall operate as a waiver of
any other default or of the same default on a future occasion. XStream's
books and records containing entries with respect to the Obligations shall
be admissible in evidence in any action or proceeding, shall be binding
upon the Company and each Assignor for the purpose of establishing the
items therein set forth and shall constitute prima facie proof thereof,
absent manifest error. XStream shall have the right to enforce any one or
more of the remedies available to XStream, successively, alternately or
concurrently. The Company and each Assignor agrees to join with XStream in
executing such documents or other instruments to the extent required by the
Uniform Commercial Code in form satisfactory to XStream and in executing
such other documents or instruments as may be required or deemed necessary
by XStream for purposes of affecting or continuing XStream's security
interest in the Collateral.
9. THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. All of the rights, remedies, options, privileges and
elections given to XStream hereunder shall inure to the benefit of
XStream's successors and assigns. The term "XStream" as herein used shall
include XStream, any parent of XStream's, any of XStream's subsidiaries and
any co-subsidiaries of XStream's parent, whether now existing or hereafter
created or acquired, and all of the terms, conditions, promises, covenants,
provisions and warranties of this Agreement shall inure to the benefit of
each of the foregoing, and shall bind the representatives, successors and
assigns of the Company and each Assignor.
10. The Company and each Assignor hereby consents and agrees that the state of
federal courts located in the County of Broward, State of Florida shall
have exclusive jurisdiction to hear and determine any claims or disputes
between the Company or Assignor, on the one hand, and XStream, on the other
hand, pertaining to this Master Security Agreement or to any matter arising
out of or related to this Master Security Agreement, provided, that
XStream, the Company and each Assignor acknowledges that any appeals from
those courts may have to be heard by a court located outside of the County
of Broward, State of Florida, and further provided, that nothing in this
Master Security Agreement shall be deemed or operate to preclude XStream
from bringing suit or taking other legal action in any other jurisdiction
to collect, the Obligations, to realize on the Collateral or any other
security for the Obligations, or to enforce a judgment or other court order
in favor of XStream. The Company and each Assignor expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in
any such court, and the Company and each Assignor hereby waives any
objection which it may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens. The Company and each Assignor
hereby waives personal service of the summons, complaint and other process
issues in any such action or suit and agrees that service of such summons,
complaint and other process may be made by registered or certified mail
addressed to such party at the address set forth on the signature lines
hereto and that service so made shall be deemed completed upon the earlier
of the Company's or such Assignor's actual receipt thereof or three (3)
days after deposit in the U.S. mails, proper postage prepaid.
The parties desire that their disputes be resolved by a judge applying such
applicable laws. Therefore, to achieve the best combination of the benefits
of the judicial system and of arbitration, the parties hereto waive all
rights to trial by jury in any action, suite, or proceeding brought to
resolve any dispute, whether arising in contract, tort, or otherwise
between XStream, the Company and/or any Assignor arising out of, connected
with, related or incidental to the relationship established between them in
connection with this Master Security Agreement or the transactions related
hereto.
11. It is understood and agreed that any person or entity that desires to
become an Assignor hereunder, or is required to execute a counterpart of
this Master Security Agreement after the date hereof pursuant to the
requirements of any Document, shall become an Assignor hereunder by (x)
executing a Joinder Agreement in form and substance satisfactory to
XStream, (y) delivering supplements to such exhibits and annexes to such
Documents as XStream shall reasonably request and (z) taking all actions as
specified in this Master Security Agreement as would have been taken by
such Assignor had it been an original party to this Master Security
Agreement, in each case with all documents required above to be delivered
to XStream and with all documents and actions required above to be taken to
the reasonable satisfaction of XStream.
12. All notices from XStream to any Assignor shall be sufficiently given if
mailed or delivered to such Assignor's address set forth below.
[SIGNATURES TO FOLLOW]
Very truly yours,
GLOBAL BEVERAGE SOLUTIONS, INC.
By:
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Name:
Title: President
GLOBAL MERGER CORP.
By:
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Name:
Title: Chief Executive Officer
BEVERAGE NETWORK OF MARYLAND, INC.
By:
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Name:
Title: Chief Executive Officer
ACKNOWLEDGED:
XSTREAM BEVERAGE NETWORK, INC.
By:
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Name: Xxx Xxxxxxxxxx
Title: Chairman & CEO
SCHEDULE A
ORGANIZATION
JURISDICTION OF IDENTIFICATION
ENTITY FORMATION NUMBER
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Global Merger Corp. Nevada
Beverage Network of Maryland, Inc. Florida
