Document:

Letter of
Intent

    

    

    November
9, 2010

    

    Carlos
Orellana, Chief Executive Officer

    Zonein2,
Inc.

    333 City
Blvd. West

    17th
Floor

    Orange CA
92830

    

    Dear Mr.
Orellana:

    

    This letter (the “Letter”) will confirm
our discussion regarding a merger transaction (the “Transaction”) between
Zonein2, Inc. (“Zone” or the "Company") and Phreadz, Inc.
("PHDZ").  Subject to the preparation, execution and performance of
"Definitive Agreements" (as defined below) containing such additional terms,
conditions, covenants, representations and warranties as the parties thereto may
in good faith require, we have agreed in principle to the
following:

    

    1.  At
the time of the "Closing" (as defined below):

    

    A. Carlos Orellana, Javier
Correa, Sergio Correa, Carlos Constantini, Edgar Macias, Barbara Ruano, Acosta
Investments, Eleazar Trylesinski, Clover Systems and Cristone Financial,
collectively representing all the issued and outstanding shareholders of ZONE as
of the date of this Letter, and referred to hereinafter as the "Shareholders,"
shall transfer to PHDZ all of the outstanding ownership of the Company per an
agreed upon definitive agreement..

    

    B.  At
the time of closing PHDZ will issue the shareholders of Zonein2 8,750,000 shares
of Phreadz Inc. in exchange for all the shares (specifically 20,000,000) shares
of Zonein2.

    

    C.  PHDZ
shall have at least $500,000 in cash from a financing or pre-sale that will
close concurrent with the close as agreed to in a definitive agreement. This
financing will be an equity financing.

    

    D. The
board of Directors of each Company shall have approved the transactions
contemplated herein to the extent required under applicable laws of
incorporation or jurisdiction.

    

    E.    PHDZ
shall enter into employment agreements with specified members of the Zonein2
team in the amount of 5,500,000 stock options, on mutually acceptable terms.
These agreements are to include milestones specifying equity awards that will be
granted on achievement and following the adoption by the Company of an employee
Stock Option Plan.

    

    2.    The
closing ("Closing“) on the Transaction described in paragraph 1 above shall
occur upon: (a) the parties agreeing upon, executing and delivering such
agreements (the "Definitive Agreements") as may be necessary or appropriate,
including those listed in paragraph 1 above, to implement the Transaction
described herein or such adjusted transactions as the parties may mutually agree
upon.     It is the intent of the parties to cause the
Closing to occur on or before December 15, 2010 subject too the Company meeting
regulatory requirements including a two year audit.   The parties
agree to use their best efforts and to fully cooperate with each other in
promptly obtaining any necessary regulatory approvals.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.   The
Company represents and warrants that (a) the Company is a corporation duly
organized and in good standing under the laws of the state of its formation, (b)
the Shareholders each own the interests in the Company, (c) the Company has the
authority to enter into this Letter and (d) execution and performance of this
Letter will not cause a breach of any other agreement to which the Company is a
party.

    

    4.     PHDZ
represents and warrants that (a) it is a corporation organized and in good
standing under the laws of its jurisdiction or incorporation, (b) it has the
authority to enter into this Letter, and (c) execution and performance of this
Letter will not cause a breach of any other agreement to which either is a
party.   PHDZ represents and warrants that each of the directors
or representatives of PHDZ signing this Letter has the authority to enter into
this Letter.

    

    5.   Until
the Closing, the Company shall (including any subsidiaries and affiliates) to:
(a) grant PHDZ and its representatives, access to its and their premises and
books and records and (b) furnish to PHDZ and its respective representatives
such financial, operating and other information with respect to its business and
properties as PHDZ shall from time to time reasonably
request.   With the prior consent of the Company, which will not
be unreasonably withheld PHDZ and their respective representatives may
communicate in connection with their examination of the Company with any person
having business dealings with the Company.  All of such access,
investigation and communication by PHDZ will be conducted in a manner designed
not to interfere unduly with the normal business of the Company.

    

    6.   Until
the Closing, PHDZ shall: (a) grant the Company, as well as its representatives,
access to its books and records and (b) furnish to the Company as well as its
representatives such financial, operating and other information with respect to
PHDZ’s business and properties as the Company shall from time to time reasonably
request.  With the prior written consent of PHDZ, which will not be
unreasonably withheld, the Company and its respective representatives may
communicate in connection with their examination of PHDZ with any person having
business dealings with PHDZ.   All of such access, investigation
and communication by the Company will be conducted in a manner designed not to
interfere unduly with the normal business of PHDZ.

    

    7.  Each
party shall be responsible for its own costs in connection with this Letter and
the transactions contemplated herein.

    

    8.  Each
party agrees that it will not make any public announcements relating to this
Letter or the transactions contemplated herein, other than that announcement
concerning the signing of this Letter by  PHDZ, without the prior
written consent of the other parties hereto, except as may be required upon the
written advice of counsel to comply with applicable laws or regulatory
requirements after consulting with the other parties hereto and seeking their
consent to such announcement.  Each party further agrees that it will
not release or issue any reports, statements or releases pertaining to this
Letter and the implementation hereof or that any information or material which
is obtained from another party hereto without the prior written consent of the
other parties hereto except to professional advisors under a duty of
confidentiality as necessary to consummate the transaction.  Each
party agrees that such information will be used solely for the purposes of
evaluating the other parties hereto in connection with the transactions
contemplated herein and that such information will not be used or disclosed
other than in furtherance of such purpose under the terms of this
Letter.   Upon the actual Closing and as incorporated into the
Definitive Agreement, press releases will be made at the discretion of the
management of the Investor.   Furthermore, PHDZ acknowledges that
prior to the Closing, the Company may make select institutional and individual
investors aware of the transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    9.    This
Letter shall terminate only upon the earliest to occur of (a) the execution of
the Definitive Agreements; (b) the execution and delivery by the parties of an
agreement superseding this letter; (c) the notification to, the Company by PHDZ
or to PHDZ by the Company, of its election to terminate this Letter based on the
results of their due diligence investigation; (d) the notification by any party
to the other party hereto of the election to terminate this Letter for material
departure by the other party from the agreements set forth in this Letter; (e)
the giving of a notification by the Company to PHDZ that any representations or
warranties made by PHDZ in this Letter are false, misleading or incomplete in
any material respect; (f) the giving of a notification by PHDZ to the Company
that any representations or warranties made by the Company in this Letter are
false, misleading or incomplete in any material respect; or (g) failure of the
Closing to occur within 90 days of the date of this Letter.

    

    10.  This
Letter is intended to be binding on the parties hereto.   Except
as otherwise provided in the preceding sentence, the respective rights and
obligations of the parties remain to be defined in the Definitive Agreements,
into which this letter and any prior discussions shall merge and which shall
contain representations and warranties and other terms yet to be agreed upon and
may reflect additional or different terms consistent with the economic and other
objectives set out above as may be necessary to meet the needs of the parties
including without limitation tax and securities
matters.   Notwithstanding any other provisions in this Letter,
(a) the obligations of PHDZ are subject to the satisfaction of each with their
respective due diligence examinations of the Company, including, without
limitation, satisfaction as to the Company's business plans, management,
competition, technologies and financial condition; and (b) no party shall be
under any obligation to consummate the transactions contemplated herein if, in
the sole discretion of such party, it determines not to proceed with any of such
transactions whether as described herein or on other terms. The parties agree to
work in good faith to timely enter into and consummate the Definitive
Agreements.

    

    11.   Each
party to this Letter agrees to indemnify and hold harmless the other party, in
any way, from being liable for consequential, special, indirect, incidental,
punitive, or exemplary loss, damage, cost or expense (including, without
limitation, lost profits and opportunity costs) related to this Letter or
otherwise.   Each party further agrees to indemnify and hold
harmless each other and their respective personnel and any affiliates from and
against any and all actions, losses, damages, claims, liabilities, costs and
expenses (including without limitation, reasonable legal fees and expenses) in
any way arising out of or relating to this Letter.  The provision of
this paragraph shall apply regardless of the form of action, loss, damage,
claim, liability, cost, or expense, whether in contract, statute, tort
(including without limitation, negligence), or otherwise. The provisions of this
paragraph shall survive the completion or termination of this
Letter.

    

    12.    This
Letter as well as any disputes directly or indirectly affecting this Letter
shall be subject to and interpreted in accordance with the laws of
California.   Notices shall be deemed given when delivered to a
party at the address or fax number for such party listed under their signatures
below.

    

    13.     Notwithstanding
any language to the contrary contained herein, either party, in its own
discretion with or without cause, may terminate this agreement and all
negotiations related thereto by providing written notice to the other party of
its intention to so terminate.

    

    If the
foregoing correctly expresses our understanding, please indicate your agreement
by signing and dating the enclosed copy of this letter in the space indicated
below and returning it to the address or fax provided below.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	Yours
      very truly,	 
	 	 	 
	 	Phreadz,
      Inc	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	Name:      
      Douglas Toth	 
	 	Title         
      Chairman	 
	 	Address:  
      63 Main Street, 202	 
	 	                  Flemington,
      NJ 08558	 
	 	Fax:          
      646-349-5811	 

      

    

    

    

    THE
UNDERSIGNED AGREE TO THE FOREGOING.

    

    Zonein2,
Inc

     

    
      
        	By:
      ____________________________	 	 	
                Address:
      333 City Blvd. West

                17th Floor

                Orange CA 92830

              	 

      

    

     

    
      	Name:  Carlos
      Orellana	 	 	 	 
	Title:    CEO	 	 	Fax:EXHIBIT
10.1

     

    SECOND AMENDMENT TO CREDIT
AND SECURITY AGREEMENT

     

    THIS
SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this “Amendment”) is dated as
of November 11, 2010, (the “Effective Date”) by and among COLE TAYLOR BANK (the
“Lender”) and CLARK HOLDINGS
INC., THE CLARK GROUP, INC., CLARK DISTRIBUTION SYSTEMS, INC., HIGHWAY
DISTRIBUTIONS SYSTEMS, INC., CLARK WORLDWIDE TRANSPORTATION, INC., and EVERGREEN
EXPRESS LINES, INC. (collectively, the “Borrowers”).

     

    WITNESSETH:

     

    WHEREAS, the Borrowers and the
Lender entered into that certain Credit and Security Agreement dated as of March
5, 2010, as amended by that certain First Amendment to Credit and Security
Agreement dated as of May 17, 2010, by and among Borrowers and Lender
(collectively, the “Credit Agreement”); and

    

    WHEREAS, the Borrowers have
requested that the Lender agree to amend the Credit Agreement, and the Lender
has agreed to amend the Credit Agreement on the terms and conditions set forth
below.

    

    NOW, THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

    

    1.           All
capitalized terms used herein and not otherwise expressly defined herein shall
have the respective meanings given to such terms in the Credit
Agreement.

     

    2.           The
Borrowers acknowledge and agree that effectiveness of this Amendment is
conditioned on:  (a) the payment of the amendment fee of Twenty
Thousand and No/100 Dollars ($20,000.00); (b) the delivery of a fully-executed
original of this Amendment; and, (c) the delivery of such other documents or
instruments as the Lender and its counsel may reasonably request, each in form
and substance satisfactory to the Lender and its counsel.

     

    3.           The
Credit and Security Agreement is amended by deleting Section 12.02 entitled
“Fixed
Charge Coverage” and substituting the following in lieu
thereof:

     

    “12.02  Fixed
Charge Coverage.

     

    Borrowers
shall not permit Fixed Charge Coverage as of each date set forth below to be
less than the corresponding ratio for such date set forth
below:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    EXHIBIT
10.1

     

    
      
        
          
            
              
                	
                        Date

                      	 
      	
                        Ratio

                      	 	 
	 
      	 
      	 
      	 	 
	
                        (a)  for
      the nine (9) week fiscal period ending March 5, 2011 and each fiscal
      period ending thereafter on a cumulative year to date basis through
      February 4, 2012.

                      	
                          

                      	
                        1.05
      to 1.0

                      	 	 
	 
      	 
      	 
      	 	 
	
                        (b)  from
      and after February 4, 2012, for each fiscal period end on a rolling twelve
      (12) month basis

                      	 
      	
                        1.05
      to 1.0

                      	 	      
                        ”

                      

              

            

          

        

      

    

    

    4.           The
Credit and Security Agreement is amended by deleting Section 12.03 entitled
“EBITDA”
and substituting the following in lieu thereof:

     

    “12.03  EBITDA.

    

    Borrowers shall not permit EBITDA to be
less than the amount set forth below for the corresponding period set forth
below:

    

    
      
        
          
            
              
                
                  
                    	
                            Time Period

                          	 	
                            Minimum

                            Cumulative

                            EBITDA

                          	 	 
      
	
                            thirty-five
      (35) week period  ending September 4, 2010

                          	 	$	<4,505,000.00>	 	 
      
	
                            thirty-nine
      (39) week period ending October 2, 2010

                          	 	$	<4,505,000.00>	 	 
      
	
                            forty-four
      (44) week period week period ending November 6, 2010

                          	 	$	<4,505,000.00>	 	 
      
	
                            forty-eight
      (48) week period ending December 4, 2010

                          	 	$	<4,505,000.00>	 	 
      
	
                            fifty-two
      (52) week period ending January 1, 2011

                          	 	$	<4,505,000.00>	 	 
      
	
                            fifty-six
      (56) week period ending February 5, 2011

                          	 	$	<4,505,000.00>	 	
                            ”

                          

                  

                

              

            

          

        

      

    

     

    5.           The
Borrowers hereby acknowledge that prior to giving effect to this Amendment, the
Borrowers are in default under Sections 12.03 and 13.01(b) of the Credit
Agreement.  The Lender hereby waives the Event of Default under
Sections 12.03 and 13.01(b) through and including the Effective Date, but the
Lender expressly reserves its rights and remedies with respect to any other
default or Event of Default, including, without limitation, any default or Event
of Default with respect to Section 12.03 of the Credit Agreement arising after
the Effective Date.  The Borrowers hereby acknowledge and agree that
the execution and delivery of this Amendment has not established any course of
dealing between the Borrowers and the Lender or any obligation of the Lender
with respect to any future restructuring or modification of the Credit Agreement
or the exercise of the Lender’s rights and remedies thereunder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
10.1

     

    6.           Each
of the Borrowers hereby restates, ratifies, and reaffirms each and every term,
condition, representation and warranty heretofore made by it under or in
connection with the execution and delivery of the Credit Agreement as amended
hereby and the other Loan Documents (which shall include all documents executed
in connection with this Amendment) as fully as though such representations and
warranties had been made on the date hereof and with specific reference to this
Amendment and the Loan Documents.

     

    7.           As
amended hereby, the Credit Agreement shall be and remain in full force and
effect, and shall constitute the legal, valid, binding and enforceable
obligations of the Borrowers to the Lender.

     

    8.           The
Borrowers agree to pay on demand all costs and expenses of the Lender in
connection with the preparation, execution, delivery and enforcement of this
Amendment and all other Loan Documents and any other transactions contemplated
hereby, including, without limitation, the reasonable fees and out-of-pocket
expenses of legal counsel to the Lender.

     

    9.           The
Borrowers agree to take such further action as the Lender shall reasonably
request in connection herewith to evidence the amendments herein contained to
the Credit Agreement.

     

    10.         This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same instrument.

     

    11.         This
Amendment shall be binding upon and inure to the benefit of the successors and
permitted assigns of the parties hereto.

     

    12.         This
Amendment shall be governed by, and construed in accordance with,
Section 15.03 of the Credit Agreement.

     

    IN WITNESS WHEREOF, the
Borrowers and the Lender have caused this Amendment to be duly executed as of
the date first above written.

    

    
      
        
          
            	
                    BORROWERS:

                  	 
      
	 	 
	
                    CLARK
      HOLDINGS INC.,

                  	 
      
	
                    a
      Delaware Corporation

                  	 
      
	 
      	 
      
	
                    By:

                  	 
      	 
      
	 
      	 
      
	
                    Name:  Kevan
      D. Bloomgren

                  	 
      
	 
      	 
      
	
                    Title:  CFO

                  	 
      

          

        

      

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    EXHIBIT
10.1

    

    
      
        
          
            
              
                	
                        THE
      CLARK GROUP, INC.,

                      	 
      
	
                        a
      Delaware Corporation

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	 
      	 
      
	
                        Name:  Stephen
      M. Spritzer

                      	 
      
	 
      	 
      
	
                        Title:  Vice
      President and Treasurer

                      	 
      
	 
      	 
      
	
                        CLARK
      DISTRIBUTION SYSTEMS, INC.,

                      	 
      
	
                        a
      Delaware Corporation

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	 
      	 
      
	
                        Name:  Stephen
      M. Spritzer

                      	 
      
	 
      	 
      
	
                        Title:  Vice
      President and Treasurer

                      	 
      
	 
      	 
      
	
                        HIGHWAY
      DISTRIBUTION SYSTEMS, INC.,

                      	 
      
	
                        a
      Delaware Corporation

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	 
      	 
      
	
                        Name:  Stephen
      M. Spritzer

                      	 
      
	 
      	 
      
	
                        Title:  Vice
      President and Treasurer

                      	 
      
	 
      	 
      
	
                        CLARK
      WORLDWIDE TRANSPORTATION, INC.,

                      	 
      
	
                        a
      Pennsylvania Corporation

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	 
      	 
      
	
                        Name:  Stephen
      M. Spritzer

                      	 
      
	 
      	 
      
	
                        Title:  Vice
      President and Treasurer

                      	 
      

              

            

          

        

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    EXHIBIT
10.1

     

    
      
        
          
            	
                    EVERGREEN
      EXPRESS LINES, INC.,

                  	 
      
	
                    a
      Pennsylvania Corporation

                  	 
      
	 
      	 
      
	
                    By:

                  	 
      	 
      
	 
      	 
      
	
                    Name:  Stephen
      M. Spritzer

                  	 
      
	 
      	 
      
	
                    Title:  Vice
      President and Treasurer

                  	 
      
	 
      	 
      
	
                    LENDER:

                  	 
      
	 
      	 
      
	
                    COLE
      TAYLOR BANK,

                  	 
      
	
                    an
      Illinois banking corporation

                  	 
      
	 
      	 
      
	
                    By:

                  	 
      	 
      
	 
      	 
      
	
                    Name:  Donald
      A. Tomlinson

                  	 
      
	 
      	 
      
	
                    Title:  SVP

                  	 
      

          

        

      

    
 

    
      
         

      

      
        5

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