NOTICE OF EXERCISE OF INITIAL OPTION Level 5 Beverage Company, Inc. 16501 Sherman Way, Suite 215 Van Nuys, California 91411
NOTICE OF EXERCISE OF INITIAL OPTION
Level 5 Beverage Company, Inc.
00000 Xxxxxxx Xxx, Xxxxx 000
Van Nuys, California 91411
March 24, 2015
Avanzar Sales and Distribution, LLC
0000 Xxxxx Xxxxxx
Long Beach, California 90808
Attention: Xxxxxxx Xxxxxx
Ladies and Gentlemen:
Reference is made to that certain Membership Interest Purchase Agreement (the “Purchase Agreement”), made and entered into on the 24th day of October, 2014, with an Effective Date of September 15, 2014, by and between Level 5 Beverage Company, Inc., a Delaware corporation, with offices located at 00000 Xxxxxxx Xxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000 (the “Purchaser”), Avanzar Sales and Distribution, LLC, a California limited liability company with offices at 0000 Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000 (the “Company”), and Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxxx and Xxxxxx Xxxxxxxx, with an address at 0000 Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
In accordance with Section 1.1, Section 1.2, Section 2.1 and Section 8.1 of the Purchase Agreement, the Purchaser hereby notifies the Company of its exercise of the Initial Option Membership Interests, which when added to the Initial Membership Interests and Initial Option Membership Interests issued to Purchaser, shall represent a right to fifty-one percent (51%) of the total economic benefits of the membership interests outstanding of the Company at the time of the issuance (which shall be thirty percent (30%) of the outstanding Class A Membership Interests after taking into account the issuance).
The parties hereto agree that the consideration payable by the Purchaser to the Company for the Initial Option Membership Interests to be acquired on the date of the term sheet, February 27, 2015, shall be an aggregate cash payment of Four Hundred Thousand Dollars ($400,000) of which: (i) the initial payment in an amount of $50,000 by the Purchaser was paid on February 27, 2015, and (ii) additional payments in amounts of at least $25,000 payable every 30 days until the aggregate of Four Hundred Thousand U.S Dollars ($400,000) is paid in full no later than December 31, 2015.
Please confirm that the foregoing is in accordance with your understanding by signing in the space provided below and returning to us a duplicate of this notice.
Very truly yours,
LEVEL 5 BEVERAGE COMPANY, INC.
By: | /s/ X. Xxxxx Xxxxx |
Name: X. Xxxxx Xxxxx | |
Title: Chief Executive Officer | |
ACCEPTED AND AGREED TO:
AVANZAR SALES AND DISTRIBUTION, LLC
By: ___/s/ Xxxxxxx Xxxxxx, Xx.____________
Name: Xxxxxxx Xxxxxx, Xx.
Title: President
