Exhibit 10.28

 

LAURUS MASTER FUND, LTD.
c/o Laurus Capital Management, LLC
825 Third Avenue
New York, New York 10022

 

August 31, 2005

 

Stonepath Group, Inc.
Stonepath Logistics Domestic Services, Inc.
Stonepath Logistics International Services, Inc.
Stonepath Offshore Holdings, Inc.
World Trade Center
220 Alaskan Way, Suite 200
Seattle, Washington 98121

 

M.G.R., Inc.
Distribution Services, Inc.
1150 Gateway Dr. W.
Shakopee, Minnesota 55379

 

Stonepath Logistics Government Services, Inc.
45070 Old Ox Road
Sterling, Virginia 20166

 

United American Acquisitions and Management, Inc.
30610 Ecorse Road
Romulus, Michigan 48174

 

Stonepath Logistics International Services, Inc.
Global Container Line, Inc.
1930 6th Avenue S., Suite 401
Seattle, Washington 98134

 

Re:  Escrow Letter

 

Ladies and Gentlemen:

 

Reference is made to (a) the Security Agreement dated as of the date hereof (as
amended, restated, modified and supplemented from time to time, the “Security
Agreement”) among Stonepath Group, Inc., Stonepath Logistics Domestic
Services, Inc., Stonepath Logistics International Services, Inc., a Delaware
corporation, Stonepath Offshore Holdings, Inc., M.G.R., Inc., Distribution
Services, Inc., Stonepath Logistics Government Services, Inc., United American
Acquisitions and Management, Inc., Stonepath Logistics International
Services, Inc. and Global Container Line, Inc. (each, a “Company” and
collectively, the “Companies”), and Laurus Master Fund, Ltd. (“Laurus”) and
(b) the Ancillary Agreements (as defined in the Security Agreement) (the
Security Agreement and the Ancillary Agreements, collectively, the

 

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“Release Documents”).  Capitalized terms used herein that are not defined shall
have the meanings given to them in the Security Agreement.

 

The Companies have requested that Laurus close into escrow the transactions
contemplated by the Security Agreement and Laurus is willing to do so on the
terms and conditions set forth herein.

 

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree and acknowledge as follows:

 

1.                                       Until such time as the Escrow Release
Conditions (as defined in Section 2 below) are satisfied, the Companies shall
jointly and severally pay to Laurus interest on the Capital Availability Amount
at the Contract Rate set forth in the Notes.  The aforementioned interest
payments shall accrue and be charged by Laurus to the Companies’ account on the
date the Escrow Release Conditions are satisfied.  In the event the Escrow
Release Conditions are not satisfied by the Outside Date (as defined in
Section 3 below), the aggregate accrued and unpaid interest payments shall be
jointly and severally payable by the Companies to Laurus on demand.

 

2.                                       Executed originals of the documents,
instruments and agreements set forth on Exhibit A hereto (the “Release
Documents”) have been duly executed by the Companies (to the extent the
Companies are parties thereto) and have been delivered to Laurus in escrow based
upon the express understanding that such Release Documents will be held and
retained by Laurus in escrow until such time as each of the following conditions
shall have been satisfied in a manner and pursuant to such documentation
satisfactory to Laurus (collectively, the “Escrow Release Conditions”):
 (a) Laurus shall have received a payoff letter from Patriarch Partners Agency
Services, LLC (“Patriarch”), pursuant to which Patriarch agrees, among other
things, that, upon receipt of the payment in good funds of all obligations and
liabilities owing by the Companies to Patriarch, Patriarch’s Lien in the
Companies’ assets shall be automatically released, (b) no Event of Default shall
have occurred and then be continuing, and (c) Laurus shall have otherwise
determined in its sole and absolute discretion to consummate the transactions
contemplated by the Security Agreement.

 

3.                                       In the event the Release Documents are
not released from escrow on or prior to 5:00 p.m. on September 12, 2005 (the
“Outside Date”), (a) at Laurus’ option, the Release Documents shall be of no
further force and effect and shall be returned to the Companies and (b) the
Companies shall immediately jointly and severally pay to Laurus a break-up fee
in cash in the amount of $875,000 (the “Break-up Fee”).  If the transactions
contemplated under the Security Agreement are consummated with Laurus’ consent
following the Outside Date, the amount of the Closing/Annual Payment required to
be paid by the Companies to Laurus in accordance with Section 5(b)(i) of the
Security Agreement shall be offset by the amount of the Break-up Fee actually
received by Laurus.

 

This letter agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and shall be governed
by and construed in accordance with the laws of the State of New York.

 

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This letter agreement may be executed by the parties hereto in one or more
counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement.  Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.

 

If you are in agreement with the foregoing, please sign this letter below.

 

 

Very truly yours,

 

 

 

LAURUS MASTER FUND, LTD.

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

CONSENTED AND AGREED TO:

 

STONEPATH GROUP, INC.

 

 

By:

 

 

Name:

Title:

 

 

STONEPATH LOGISTICS DOMESTIC

SERVICES, INC.

 

 

By:

 

 

Name:

Title:

 

 

STONEPATH LOGISTICS INTERNATIONAL

SERVICES, INC., a Delaware corporation

 

 

By:

 

 

Name:

Title:

 

[Additional Signature Page to Follow]

 

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STONEPATH OFFSHORE HOLDINGS, INC.

 

 

By:

 

 

Name:

Title:

 

 

M.G.R., INC.

 

 

By:

 

 

Name:

Title:

 

DISTRIBUTION SERVICES, INC.

 

 

By:

 

 

Name:

Title:

 

STONEPATH LOGISTICS GOVERNMENT

SERVICES, INC.

 

 

By:

 

 

Name:

Title:

 

UNITED AMERICAN ACQUISITIONS

AND MANAGEMENT, INC.

 

 

By:

 

 

Name:

Title:

 

[Additional Signature Page to Follow]

 

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STONEPATH LOGISTICS INTERNATIONAL
SERVICES, INC., a Washington corporation

 

 

By:

 

 

Name:

Title:

 

GLOBAL CONTAINER LINE, INC.

 

 

By:

 

 

Name:

Title:

 

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