Exhibit 10.6

 

EXECUTION VERSION

 

DATED 2016

 

Intercreditor amendment deed

 

Between

 

Electronic Cigarettes International Group, Ltd

 

(as Borrower)

 

and

 

The persons named in Schedule 1

 

(as Guarantors)

 

and

 

The persons named in Schedule 2

 

(as Senior Creditors)

 

and

 

The persons named in Schedule 3

 

(as Subordinated Creditors)

 

and

 

Miguel Carlos Corral

 

(as Junior Security Trustee)

 

 

 

 

Table of contents

 

1. definitions and interpretation 1 2. conditions precedent 2 3. amendments TO
the original Inter-creditor Deed 2 4. COVENANTS 2 5. confirmation of existing
security 2 6. continuity and further assurance 2 7. miscellaneous 3 Schedule 1
GUARANTORS 4 SCHEDULE 2 SENIOR CREDITORS 5 SCHEDULE 3 subordinated creditors 6
SCHEDULE 4 conditions precedent 7 SCHEDULE 5 AMENDMENTS TO INTERCREDITOR DEED 8

 

 

 

  

THIS DEED is made on 2016

 

Between:

 

(1)ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD, registered in the State of
Nevada, USA under number C13461-2004 whose registered office is at 1707 Cole
Boulevard Golden, Colorado 80401, USA (Borrower).

 

(2)THE PERSONS, whose details are set out in Schedule 1 (each a Guarantor and
together the Guarantors).

 

(3)THE PERSONS, whose details are set out in Schedule 2 (each a Senior Creditor
and together the Senior Creditors).

 

(4)THE PERSONS, whose details are set out in Schedule 3 (each a Subordinated
Creditor and together the Subordinated Creditors).

 

(5)MIGUEL CARLOS CORRAL, of 1 Sergeants Lane, Whitefield, M45 7TR as security
agent and trustee for the Subordinated Creditors (Junior Security Trustee).

 

Whereas:

 

(A)The parties entered into an intercreditor deed dated 24 April 2015 as amended
pursuant to an amendment letter dated 26 June 2015, an amendment letter dated 25
October 2015 and an amendment letter dated 11 January 2016 and as amended,
varied, supplemented, novated or replaced from time to time (Original
Intercreditor Deed).

 

(B)The parties hereto have agreed to amend the Original Intercreditor Deed as
set out in this deed.

 

IT IS AGREED as follows:

 

1.definitions and interpretation

 

1.1Terms defined in the Original Intercreditor Deed shall have the same meaning
when used in this deed, unless defined below. In addition, the definitions below
apply in this deed:

 

Agreement No.5 to Credit Agreement: the amendment number 5 to the CW Credit
Agreement dated on or around the date of this deed between the Borrower and the
Senior Creditors amending the CW Credit Agreement to increase the aggregate
principal amount of the Terms Loans thereunder by $4,000,000 and to, among other
things, reduce the interest rate payable pursuant thereto and extend the term
thereof.

 

CW Credit Agreement: the credit agreement dated 27 April 2015 between CW and the
Borrower as amended pursuant to the Amendment No. 1 to the Credit Agreement
dated 25 June 2015, the Amendment No. 2 to Credit Agreement dated 30 June 2015,
the Amendment No. 3 to Credit Agreement dated 30 October 2015, the Amendment No.
4 to Credit Agreement dated 11 January 2016 (each as defined therein) and the
Amendment No.5 to Credit Agreement.

 

CW: Calm Waters Partnership a Wisconsin General Partnership with registered
office at 115 S. 84th Street, Suite 200, Milwaukee, Wisconsin 53214, USA.

 

Effective Date: the date on which the CW informs the Borrower that the
conditions precedent have been satisfied in accordance with clause 2.

 

- 1 - 

 

 

Original Intercreditor Deed: has the meaning given in recital (A).

 

1.2This deed is a Finance Document.

 

1.3The rules of interpretation of the Original Intercreditor Deed shall (where
relevant) apply to this deed as if set out in this deed save that references in
the Original Intercreditor Deed to "this deed" shall be construed as references
to this deed.

 

1.4In this deed:

 

1.4.1any reference to a "clause" or "Schedule" is, unless the context otherwise
requires, a reference to a clause of Schedule of this deed; and

 

1.4.2clause and Schedule headings are for ease of reference only.

 

2.conditions precedent

 

2.1The Effective Date is conditional on CW having received all of the documents
and evidence specified in Schedule 4 in the form and substance, and containing
the information, that it requires.

 

2.2On satisfaction of the conditions precedent referred to in clause 2.1, CW
shall promptly notify the Borrower in writing that those conditions have been
satisfied.

 

3.amendments TO the original Inter-creditor Deed

 

With effect on and from the Effective Date, the Original Intercreditor Deed
shall be amended as set out in Schedule 5.

 

4.COVENANTS

 

4.1The Borrower and the Guarantor make the covenants set out in clause 3 of the
Original Intercreditor Deed on the date of this deed and on the Effective Date.

 

4.2The Subordinated Creditors and Junior Security Trustee make the covenants set
out in clause 4 of the Original Intercreditor Deed on the date of this deed and
the Effective Date.

 

5.confirmation of existing security

 

The Borrower confirms, acknowledges and agrees that the Senior Security and the
Junior Security shall continue in full force and effect in all respects and such
security documents and this deed shall be read and construed together.

 

6.continuity and further assurance

 

6.1The provisions of the Original Intercreditor Deed shall, save as amended in
this deed, continue in full force and effect.

 

6.2The Borrower and Guarantors shall, at the request of CW and at their own
expense, do all such acts and things necessary or desirable to give effect to
the provisions of this deed.

 

- 2 - 

 

 

7.miscellaneous

 

7.1The provisions of clauses 18 – 30 of the Original Intercreditor Deed shall
apply to this deed as if set out in full and so that references in those
provisions to "this deed" shall be construed as references to this deed and
references to "party" or "parties" shall be construed as references to parties
to this deed.

 

7.2This deed may be executed and delivered in any number of counterparts, each
of which is an original and which, together, have the same effect as if each
party had signed the same document.

 

This deed has been entered into on the date stated at the beginning of it.

 

- 3 - 

 

 

Schedule 1
GUARANTORS

 

 Name

  Company Number   Registered Office          

Must Have Limited

 

  05101019  

Units 3-8

Bury South Business Park

Riverview Close

Dumers Lane

Manchester

M26 2AD

         

E-CIGS UK Holding Company Limited

 

  09031860   25 Harley Street
London
W1G 9BR           Vapestick Holdings Limited   07777233  

73 Cornhill
London

EC3V 3QQ

          Hardwire Interactive Acquisition Company   Delaware 5543781  

Corporations USA, LLC

341 Raven Circle

Wyoming, DE

County of Kent, 19934

USA

          Victory Electronic Cigarettes, Inc.   Nevada E0117932013-0  

Nevada Agency and Transfer Company

50 West Liberty Street

Suite 880

Reno Nevada

County of Washoe, 89501

USA

          VCIG LLC   Delaware 5477751  

Corporations USA, LLC

341 Raven Circle

Wyoming, DE

County of Kent, 19934

USA

          FIN Branding Group, LLC   Illinois 03606309  

National Registered Agents Inc.

208 South LaSalle Street

Suite 814

Chicago

Illinois, 60604

USA

 

- 4 - 

 

 

SCHEDULE 2
SENIOR CREDITORS

 

Name   Address      

Calm Waters Partnership

 

 

115 S. 84th Street

Suite 200

Milwaukee

Wisconsin 53214

USA

      Tiburon Opportunity Fund, L.P. acting in its capacity as agent for itself
and each of the lenders signatory to the Co-Investor Credit Agreement  

13313 Point Richmond Beach Road NW

Gig Harbor

WA  98332

USA

      Tiburon Opportunity Fund, L.P. acting in its capacity as agent for each
noteholder to a Secured Convertible Note  

13313 Point Richmond Beach Road NW

Gig Harbor

WA  98332

USA

 

- 5 - 

 

 

SCHEDULE 3
subordinated creditors

 

Name   Address       David Steven Levin  

7 Ringley Chase

Whitefield

Manchester

M45 7UA

      Melanie Levin  

7 Ringley Chase

Whitefield

Manchester

M45 7UA

      Miguel Carlos Corral  

1 Sergeants Lane

Whitefield

M45 7TR

      David Ryder  

6 Greenock Close

Ladybridge

Bolton

BL3 4UD

 

- 6 - 

 

 

SCHEDULE 4
conditions precedent

 

1.A certificate, signed by a director of the Borrower and each Guarantor stating
that there has been no change in name and no change to its constitutional
documents since 27 April 2015.

 

2.A copy of the resolutions duly passed by the Borrower's and each Guarantor's
board of directors:

 

2.1.1approving the entry into, terms of and transactions contemplated by this
deed; and

 

2.1.2authorising specified persons to execute this deed on its behalf and take
all other action in connection with this deed.

 

3.A specimen of the signature of each person authorised by the resolutions
referred to in paragraph 2 in relation to this deed.

 

4.This deed, duly executed by each party.

 

5.The Agreement No.5 to Credit Agreement, duly executed by each party and the
satisfaction of the conditions of borrowing set out in section 3 thereof.

 

6.The power of attorney for David Ryder appointing David Steven Levin to execute
this deed on his behalf, duly executed.

 

- 7 - 

 

 

SCHEDULE 5
AMENDMENTS TO INTERCREDITOR DEED

 

The Original Intercreditor Deed shall be amended as set out below:

 

1.The definition of "Senior Creditors" at Schedule 2 shall be deleted and
replaced by the following:

 

Name   Address       Calm Waters Partnership  

115 S. 84th Street

Suite 200

Milwaukee

Wisconsin 53214

USA

      Tiburon Opportunity Fund, L.P. acting in its capacity as agent for itself
and each of the lenders signatory to the Co-Investor Credit Agreement  

13313 Point Richmond Beach Road NW

Gig Harbor

WA 98332

USA

      Tiburon Opportunity Fund, L.P. acting in its capacity as agent for each
noteholder to a Secured Convertible Note  

13313 Point Richmond Beach Road NW

Gig Harbor

WA 98332

USA

 

2.The definition of "Senior Debt" in clause 1.1 (Definitions) shall be deleted
and replaced with the following:

 

"Senior Debt: all Liabilities which are or may become payable or owing by the
Borrower and/or a Guarantor to any Senior Creditor under the Senior Debt
Documents or the Secured Convertible Notes together with all Ancillary
Liabilities relating thereto."

 

3.The definition of "Senior Debt Documents" in clause 1.1 (Definitions) shall be
deleted and replaced with the following:

 

"Senior Debt Documents: any document referred to in Schedule 4."

 

4.The following definition shall be added to clause 1.1 (Definitions):

 

"Secured Convertible Note: each of:

 

(a)the 15% senior secured convertible note dated 14 January 2014 (as amended in
January 2015 by amendment no. 1 and to be amended by amendment no. 2 on or
around the Effective Date) delivered by the Borrower to each holder of each such
note;

 

(b)the 15% senior secured convertible note dated 28 February 2014 (as amended in
January 2015 by amendment no. 1 and to be amended by amendment no. 2 on or
around the Effective Date) delivered by the Borrower to each holder of each such
note; and

 

- 8 - 

 

 

(c)the 8% senior secured convertible note dated 14 January 2014 (to be amended
by amendment no. 1 on or around the Effective Date) delivered by the Borrower to
each holder of each such note,

 

and, together, the Secured Convertible Notes."

 

5.Schedule 4 (Senior Debt Documents) shall be deleted and replaced with the
following:

 

"Part 1: Senior Lending Documents

 

Senior Credit Agreements.

 

Part 2: Senior Security Documents

 

Share charge between the Borrower and Calm Waters Partnership in respect of the
Borrower's shares in Must Have Limited, dated on or about the date of this deed.

 

Share charge between the Borrower and Calm Waters Partnership in respect of the
Borrower's shares in Vapestick Holdings Limited, dated on or about the date of
this deed.

 

Share charge between the Borrower and Calm Waters Partnership in respect of the
Borrower's shares in E-Cigs UK Holding Company Limited, dated on or about the
date of this deed.

 

Guarantee between each Guarantor and Calm Waters Partnership, dated on or about
the date of this deed.

 

Debenture between Must Have Limited and Calm Waters Partnership, dated on or
about the date of this deed.

 

Debenture between Vapestick Holdings Limited and Calm Waters Partnership, dated
on or about the date of this deed.

 

Debenture between E-Cigs UK Holding Company Limited and Calm Waters Partnership,
dated on or about the date of this deed.

 

Security Agreement between Tiburon Opportunity Fund, L.P. (as agent for the
noteholders to each Secured Convertible Note) and the Borrower dated 14 January
2014."

 

6.Clause 2.3 (Ranking and subordination of debt) shall be deleted and replaced
with the following:

 

"2.3Ranking and subordination of debt

 

2.3.1Each of the parties agree that the Senior Debt and the Junior Debt shall
rank on a pari passu basis.

 

2.3.2No payments shall (except as otherwise provided in this deed) be made by
any person in respect of the Junior Debt while the Senior Debt is outstanding."

 

- 9 - 

 

 

7.Clause 2.4 (Ranking and subordination of security) shall be deleted and
replaced with the following:

 

"2.4Ranking and subordination of debt

 

Each of the parties agree that all Senior Security and Junior Security shall
rank on a pari passu basis."

 

8.Clause 4.1.6 (No payment, Security or guarantee) shall be deleted and replaced
with the following:

 

"4.1.6 modify, amend, waive or release any term of the Junior Debt Documents,
except for an amendment which does not prejudice any Senior Debt, the Senior
Creditors or impair the subordination or priorities contemplated in this deed."

 

9.Clause 7.1.1 (Subordination on insolvency) shall be deleted and replaced with
the following:

 

"7.1.1 the Junior Debt and the Senior Debt shall rank on a pari passu basis;"

 

10.Clause 11.1 (Continuing subordination) shall be deleted and the sub-clauses
in clause 11 shall be renumbered accordingly.

 

11.Clause 16.1 (Priorities) shall be deleted and replaced with the following:

 

"16.1 Priorities

 

The priority of the Creditors shall stand (regardless of the order of execution,
registration or notice or otherwise) so that all amounts from time to time
received or recovered by a Creditor pursuant to the terms of any Debt Document
or in connection with the realisation or enforcement of all or any part of the
Security constituted by any of the Security Documents shall, after providing for
all reasonable outgoings, costs, charges, expenses and liabilities of
enforcement, exercising rights on winding up and payments ranking in priority as
a matter of law, be applied in the following order of priority:

 

16.1.1first, in or towards discharge of the Senior Debt or, as the case may be,
the Junior Debt on a pari passu basis; and

 

16.1.2second, after the Senior Debt and Junior Debt has been fully discharged,
to the Borrower and the Guarantors or any other person entitled to it."

 

- 10 - 

 

 

EXECUTION PAGES

 

Borrower           EXECUTED as a deed on behalf of     ELECTRONIC CIGARETTES    
INTERNATIONAL GROUP, LTD., a    

Nevada corporation by 

                    Authorised Signatory             being [a] person[s] who, in
accordance   Authorised Signatory with the laws of that territory, [is OR are]  
acting under the authority of the     corporation    

 

- 11 - 

 

 

Guarantors          

EXECUTED as a deed on behalf of

VICTORY ELECTRONIC

CIGARETTES, INC., a Nevada

corporation by

                    Authorised Signatory           being [a] person[s] who, in
accordance
with the laws of that territory, [is OR are]
acting under the authority of the
corporation   Authorised Signatory

 

EXECUTED as a deed on behalf of

VCIG LLC, a Delaware corporation by

                  Authorised Signatory         being [a] person[s] who, in
accordance
with the laws of that territory, [is OR are]
acting under the authority of the
corporation   Authorised Signatory

 

EXECUTED as a deed on behalf of FIN

BRANDING GROUP, LLC, an Illinois 

corporation by

                    Authorised Signatory             being [a] person[s] who, in
accordance
with the laws of that territory, [is OR are]
acting under the authority of the
corporation   Authorised Signatory

 

- 12 - 

 

 

EXECUTED as a deed on behalf of
HARDWIRE INTERACTIVE
ACQUISITION COMPANY, a Delaware
corporation by                     Authorised Signatory             being [a]
person[s] who, in accordance
with the laws of that territory, [is OR are]
acting under the authority of the
corporation   Authorised Signatory

 

EXECUTED as a deed by MUST HAVE   LIMITED acting by               a director  
Director in the presence of    

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

- 13 - 

 

 

EXECUTED as a deed by VAPESTICK
HOLDINGS LIMITED acting by               a director   Director in the presence
of  

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

EXECUTED as a deed by E-CIGS UK
HOLDING COMPANY LIMITED acting
by               a director   Director in the presence of    

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

- 14 - 

 

 

Senior Creditors         EXECUTED as a deed on behalf of
CALM WATERS PARTNERSHIP., a Wisconsin general partnership, acting
by                   Authorised Signatory             being [a] person[s] who,
in accordance
with the laws of that territory, [is OR are]
acting under the authority of the
partnership   Authorised Signatory

 

EXECUTED as a deed on behalf of
TIBURON OPPORTUNITY FUND, L.P.,
a Delaware limited partnership, acting
by                   Authorised Signatory             being [a] person[s] who,
in accordance
with the laws of that territory, [is OR are]
acting under the authority of the
partnership   Authorised Signatory

 

- 15 - 

 

 

      EXECUTED as a deed on behalf of
TIBURON OPPORTUNITY FUND, L.P.,
a Delaware limited partnership, acting
by                   Authorised Signatory             being [a] person[s] who,
in accordance with the laws of that territory, [is OR are] acting under the
authority of the partnership   Authorised Signatory    

 

- 16 - 

 

 

Subordinated Creditors           EXECUTED as a deed by
MELANIE LEVIN   in the presence of   Melanie Levin

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

EXECUTED as a deed by
DAVID STEVEN LEVIN     in the presence of   David Steven Levin

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

EXECUTED as a deed by
DAVID STEVEN LEVIN as attorney for DAVID RYDER   in the presence of   David
Steven Levin as attorney for David Ryder      

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

- 17 - 

 

 

EXECUTED as a deed by
MIGUEL CARLOS CORRAL     in the presence of   Miguel Carlos Corral

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

- 18 - 

 

 

Junior Security Trustee

 

EXECUTED as a deed by
MIGUEL CARLOS CORRAL     in the presence of   Miguel Carlos Corral

 

Witness:               Signature:               Name:               Address:    
                          Occupation:      

 

- 19 -