Attached files
| file | filename |
|---|---|
| 10-Q - AMERICAN HOME FOOD PRODUCTS 10-Q 8-31-2009 - Artisanal Brands, Inc. | form10q.htm |
| EX-32.1 - EXHIBIT 32.1 - Artisanal Brands, Inc. | ex32_1.htm |
| EX-31.2 - EXHIBIT 31.2 - Artisanal Brands, Inc. | ex31_2.htm |
| EX-32.2 - EXHIBIT 32.2 - Artisanal Brands, Inc. | ex32_2.htm |
| EX-31.1 - EXHIBIT 31.1 - Artisanal Brands, Inc. | ex31_1.htm |
| EX-10.21 - EXHIBIT 10.21 - Artisanal Brands, Inc. | ex10_21.htm |
| EX-10.22 - EXHIBIT 10.22 - Artisanal Brands, Inc. | ex10_22.htm |
| EX-10.23 - EXHIBIT 10.23 - Artisanal Brands, Inc. | ex10_23.htm |
| EX-10.20 - EXHIBIT 10.20 - Artisanal Brands, Inc. | ex10_20.htm |
| EX-10.24 - EXHIBIT 10.24 - Artisanal Brands, Inc. | ex10_24.htm |
Exhibit
10.19
Forbearance
Agreement
This
Forbearance Agreement is made by and between Summit Financial Resources, L.P., a
Hawaii limited partnership (“Summit”), Artisanal Cheese, LLC, a New York limited
liability company (“Client”), American Home Food Products, Inc., a New York
corporation (“AFP”), and Daniel W. Dowe, an individual (“Dowe”) (AFP and Dowe
are collectively referred to as “Guarantors”).
RECITALS
1.
Summit and Client have entered into a Financing Agreement dated February
19, 2009, and an Addendum to Financing Agreement (Inventory Financing) dated
February 19, 2009 (collectively, the “Financing Agreement”).
2.
Pursuant to the Financing Agreement, Summit has been granted a security interest
in, among other things, the accounts, inventory, and equipment of Client to
secure the obligations of Client under the Financing Agreement.
3. FP
guaranteed the obligations of Client under the Financing Agreement pursuant to a
certain Guarantee executed by AFP on or about February 19, 2009 (the “AFP
Guarantee”).
4.
Dowe guaranteed certain obligations of Client under the Financing Agreement
pursuant to a certain Guarantee executed by Dowe on or about February 19, 2009
(the “Dowe Guarantee”) (the AFP Guarantee and the Dowe Guarantee are
collectively referred to as the “Guarantees”).
5. Events
of Default have occurred under the Financing Agreement.
6. Summit,
Client, and Guarantors have reached an agreement wherein, in exchange for the
considerations provided herein, Summit has agreed to forbear from exercising its
rights and remedies under the Financing Agreement and the Guarantees until July
31, 2009. This Forbearance Agreement sets forth the terms and conditions of that
agreement.
AGREEMENT
For good
and valuable consideration, receipt of which is hereby acknowledged, Summit,
Client, and Guarantors agree as follows:
1.
Definitions.
Capitalized terms used in this Forbearance Agreement which are defined in the
Financing Agreement shall have the same meaning as provided in the Financing
Agreement, except as otherwise expressly provided herein. Terms defined in the
singular shall have the same meaning when used in the plural and vice versa.
2. Acknowledgments.
Client and Guarantors acknowledge and agree:
a.
The Financing Agreement, the Guarantees, and all other agreements and documents
executed in connection with the Financing Agreement (collectively, the
“Financing Documents”) have been duly executed and delivered by all parties
thereto and are legal, valid, and binding obligations of Client and Guarantors,
as the case may be, enforceable in accordance with their respective terms.
b.
The following Events of Default have occurred and are existing (the “Existing
Events of Default”): (i) Client has failed to make payment to Summit of an
amount equal to an existing Overadvance that is not an Authorized Overadvance,
(ii) Client has failed to provide satisfactory evidence to Summit that the
Client Affiliate Past Due Taxes have been paid in full or otherwise subordinated
to Summit in a manner acceptable in Summit’s sole discretion.
c.
As of June 1, 2009, the outstanding balance owing pursuant to the Financing
Agreement is the sum of (i) three hundred twenty thousand eight hundred
forty-two and 60/100 dollars ($320,842.60) for Outstanding Advances on Accounts,
plus (ii) forty-six and 79/100 dollars ($46.79) for accrued interest on
Outstanding Advances on Accounts, plus (iii) three thousand six hundred nineteen
and 34/100 dollars ($3,619.34) for accrued fees related to Advances on Accounts,
plus (iv) one hundred seventy three thousand five hundred dollars ($173,500.00)
for outstanding advances on Acceptable Inventory, plus (v) twenty-five and
30/100 dollars ($25.30) for accrued interest on outstanding advances on
Acceptable Inventory, plus (vi) two thousand five hundred fifteen and 75/100
dollars ($2,515.75) for accrued fees related to advances on Acceptable
Inventory.
d.
The aforesaid outstanding balance, together with other expenses of Summit,
including, without limitation, reasonable attorneys fees, as provided in the
Financing Documents (collectively, the “Balance Owing”), are due and owing, and
there is no defense to or offset against payment of such amounts.
e.
AFP is jointly and severally liable for the aforesaid amounts pursuant to the
AFP Guarantee.
f.
Dowe is jointly and severally liable for the aforesaid amounts so far as such
amounts are owing by Dowe pursuant to the Dowe Guarantee.
3.
Terms of
Forbearance. Summit hereby agrees that it will forbear and not exercise
its rights and remedies under the Financing Documents and at law against Client
and Guarantors until July 31, 2009, subject to the following terms and
conditions:
a. Post Default
Advances. Client and Guarantors hereby acknowledge and agree that the
Financing Agreement provides that the obligation of Summit to advance any
additional funds pursuant to the Financing Agreement shall, at the sole
discretion of Summit, terminate upon the occurrence of an Event of Default.
Client and Guarantors further acknowledge and agree that Summit may, in its sole
discretion and without any obligation to do so, elect to continue to make
advances pursuant to the Financing Agreement (“Post-Default Advances”) and that
(i) Summit may terminate making Post-Default Advances at any time, in Summit’s
sole discretion, and without any notice to Client, (ii) Client has no right to
receive Post-Default Advances, (iii) any Post-Default Advance made shall not be
construed as a course of dealing or conduct between Summit and Client creating
any further obligation of Summit to make additional Post-Default Advances, and
(iv) all Post-Default Advances shall be subject to the terms and conditions of
the Financing Agreement as modified herein.
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b. Client Affiliate Past Due
Taxes. On or before July 31, 2009, Client shall provide satisfactory
evidence to Summit, in Summit’s sole discretion, that the Client Affiliate Past
Due Taxes have been paid in full or otherwise subordinated to Summit in a manner
acceptable in Summit’s sole discretion.
c.
Amendment to Financing
Agreement. The second paragraph of Section 20 Renewal of Financing Period
and Termination of Financing of the Financing Agreement is hereby amended
and restated in its entirety as follows:
“If
Client elects to terminate a Financing Period at any time during the first six
(6) months after initial funding, Client agrees to pay Summit Twenty-Five
Thousand Dollars ($25,000.00). If Client elects to terminate a Financing Period
at any time after the initial six (6) months from initial funding, except to
replace this financing with Qualified Bank Financing as provided herein, or if
an Event of Default terminates the financing of Client’s Accounts, Client shall
pay Summit the greater of Two Percent (2.00%) of the Maximum Credit Line or the
Supplemental Fee for the remainder of the Financing Period, which amount shall
be due and payable in full upon such termination.”
d.
Increase in Daily
Funds Rate. Until Client has (i) provided satisfactory evidence to
Summit, in Summit’s sole discretion, that the Client Affiliate Past Due Taxes
have been paid in full or otherwise subordinated to Summit in a manner
acceptable in Summit’s sole discretion, and (ii) provided satisfactory evidence
to Summit, in Summit’s sole discretion, that Client has obtained at least an
additional One Million Seven Hundred Thousand Dollars ($1,700,000.00) in cash
equity, the Daily Funds Rate shall be increased by Six Percent (6.0%) so that
the Daily Funds Rate with regards to Outstanding Advances on Accounts and for
purposes of determining charges for Advances based upon Acceptable Inventory
shall mean the prime rate as announced in the Wall Street Journal plus Eight
Percent (8.0%) divided by 360, adjusted as of the date of any change in the
prime rate.
4.
Financing Documents.
Except as expressly amended or modified by this Forbearance Agreement, the
Financing Documents, including, without limitation, the Financing Agreement and
the Guarantees, remain in full force and effect. Client hereby confirms that the
security interest granted in the Financing Agreement also secures the Financing
Agreement as amended by this Forbearance Agreement. Guarantors hereby confirms
that they guarantee, pursuant to their respective Guarantees, the obligations of
Client under the Financing Agreement as amended by this Forbearance Agreement
and as set forth in their respective Guarantees.
5.
Termination of Forbearance. Summit’s
agreement to forbear shall automatically terminate, without any notice to Client
or Guarantors or any right to cure, upon the earlier of (i) July 31, 2009, or
(ii) upon the occurrence of any of the following:
a.
Breach of Forbearance
Agreement. A breach or default by Client or Guarantors of any of the
covenants or agreements set forth in this Forbearance
Agreement.
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b.
New Event of Default. The occurrence of any new Event of Default, or the
occurrence of any event, which, with the passage of time or giving of notice or
both, would constitute a default, breach, or event of default under the
Financing Agreement.
c.
False
Representation. Any representation or warranty by Client or Guarantors
made hereunder is materially false, incorrect, or misleading as of the date
made.
d.
Solvency.
Client makes a general appointment of a trustee, receiver, or other custodian
for Client’s property or any part thereof, or in the absence of such
application, consent, or acquiescence, a trustee, receiver, or other custodian
is appointed for Client or its property or any part thereof, except as otherwise
provided in this Forbearance Agreement.
e.
Bankruptcy.
Commencement of any case under the Bankruptcy Code, Title 11 of the United
States Code, or commencement of any other bankruptcy arrangement,
reorganization, liquidation, receivership, custodianship, or similar proceeding
under any federal, state, or foreign law by or against either Client or
Guarantors.
f.
Repudiation of
Forbearance Agreement. Client or Guarantors take any action to repudiate
this Forbearance Agreement or this Forbearance Agreement shall otherwise cease
to be in full force and effect other than in accordance with its
terms.
g.
Third Party Exercise
of Remedies; Termination of Forbearance. Any other lender or creditor,
secured or unsecured, initiates the exercise of remedies against Client,
Guarantors, or their affiliates to collect or enforce any obligation or
indebtedness of such party, or commences any collection or foreclosure action,
or alleges in writing the breach of any obligation of any Client, Guarantors, or
their affiliates to such lender or creditor.
6.
Release and Waiver of Claims. Client
and Guarantors each hereby release and waive any and all claims, demands,
actions, causes of action, damages, costs, expenses, and other rights of any
nature whatsoever, whether known or unknown, whether or not accrued, presently
existing, against Summit arising out of or in any way relating to the Financing
Documents and/or this Forbearance Agreement.
7.
No Waiver of Default. Execution and
delivery of this Forbearance Agreement and the actions contemplated herein,
including, without limitation, the failure of Summit to exercise any rights and
remedies at this time, do not constitute a waiver of the Existing Events of
Default. Summit reserves the right to exercise, upon termination of this
forbearance as provided in Section 5, any and all of its rights and remedies
under the Financing Documents, at law, or in equity. Any future re-occurrence of
the Existing Events of Default or any other existing or future event of default
shall not be subject to or governed by this Forbearance Agreement. No course of
dealing or delay or failure to assert any event of default shall constitute a
waiver of the event of default or of any prior or subsequent event of default.
Client and Guarantors should not assume or infer that Summit will waive any
future event of default. Summit may, at any time hereafter, regardless of any
prior course of conduct or waiver, require strict compliance with all terms and
conditions of the Financing Documents.
8.
Default Under
Forbearance Agreement. Failure of Client and/or Guarantors to timely
perform any agreement or covenant provided herein or in the event any
representation or warranty by Client or Guarantors provided herein is materially
false or misleading, such event shall constitute a default under this
Forbearance Agreement and an Event of Default under the Financing
Agreement.
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9. Indemnification. Client and
Guarantors shall jointly and severally indemnify Summit for any and all claims
and liabilities, and for damages which may be awarded against or incurred by
Summit, and for all reasonable attorneys’ fees, legal expenses, and other
out-of-pocket expenses incurred in defending such claims, arising from or
related in any manner to the negotiation, execution, or performance by Summit of
this Forbearance Agreement or any of the agreements, documents, obligations, or
transactions contemplated by this Forbearance Agreement, but excluding any such
claims based upon breach or default by Summit or gross negligence or willful
misconduct of Summit.
Summit
shall have the sole and complete control of the defense of any such
claims. Summit is hereby authorized to settle or otherwise compromise
any such claims as Summit in good faith determines shall be in its best
interests.
10.
Revival. If any payment of any money
to Summit by or on behalf of Client and/or Guarantors should for any reason
subsequently be determined to be “voidable” or “avoidable” in whole or in part
within the meaning of any state or federal law (collectively “voidable
transfers”), including, without limitation, fraudulent conveyances or
preferential transfers under the United States Bankruptcy Code or any other
federal or state law, and Summit is required to repay or restore any voidable
transfers or the amount or any portion thereof, or upon the advice of counsel
for Summit is advised to do so, then, as to any such amount or property repaid
or restored, including, without limitation, all reasonable costs, expenses, and
attorneys fees of Summit related thereto, the liability of Client and Guarantors
shall automatically be revived, reinstated, and restored and shall exist as
though the voidable transfers had never been made.
11.
Authority. Each of
the representatives signing this Forbearance Agreement on behalf of Summit,
Client, and Guarantors, as the case may be, hereby represents and warrants that
said representative has the authority to execute and deliver this Forbearance
Agreement and that this Forbearance Agreement shall be valid, binding and
enforceable in accordance with its terms as to the company, if any, for whom
said representative has signed.
12.
Ownership of
Claims. Client and Guarantors each represent and warrant that it, he or
she is the sole owner of the claims and actions which are waived and/or settled
by this Forbearance Agreement, that there has been no prior assignment or
transfer of those claims and actions, and that those claims and actions are not
subject to any security interest, lien, or other encumbrance.
13.
Binding Effect. This
Forbearance Agreement shall be binding upon, extend to, and inure to the benefit
of the heirs, successors, and assigns of the parties hereto, to the officers,
directors, employees, partners, agents and representatives of the parties
hereto, and to all persons or entities claiming by, through or under any of the
parties hereto.
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14.
General. This Forbearance Agreement is
made for the sole and exclusive benefit of Summit, Client, and Guarantors and is
not intended to benefit any third party. No such third party may claim any right
or benefit or seek to enforce any term or provision of this Forbearance
Agreement.
This
Forbearance Agreement shall be governed by and construed in accordance with the
laws of the State of Utah.
Any
provision of this Forbearance Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction only, be unenforceable without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
All
references in this Forbearance Agreement to the singular shall be deemed to
include the plural if the context so requires and vice versa. References in the
collective or conjunctive shall also include the disjunctive unless the context
otherwise clearly requires a different interpretation.
Client
and Guarantors each acknowledge that by execution and delivery of this
Forbearance Agreement, the Financing Agreement, and the Guarantees, Client and
Guarantors have transacted business in the State of Utah and voluntarily submit
to, consent to, and waive any defense to the jurisdiction of the courts located
in the State of Utah as to all matters relating to or arising from this
Forbearance Agreement, the Financing Agreement, and the
Guarantees. THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF UTAH
SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION OF ANY AND ALL CLAIMS, DISPUTES, AND
CONTROVERSIES, ARISING UNDER OR RELATING TO THE FINANCING AGREEMENT, THE
GUARANTEES, THIS FORBEARANCE AGREEMENT AND/OR THE TRANSACTIONS CONTEMPLATED
THEREBY AND HEREBY. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR
ARISING UNDER THE FINANCING AGREEMENT, THE GUARANTEES, THIS FORBEARANCE
AGREEMENT, AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY OR HEREBY MAY BE
COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING
BY SUMMIT.
CLIENT
AND GUARANTORS EACH HEREBY IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT
LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS FORBEARANCE
AGREEMENT.
This
Forbearance Agreement constitutes the entire agreement between the parties
hereto concerning the subject matter hereof and may not be altered or amended
except by written agreement signed by Summit, Client, and Guarantors. All prior
and contemporaneous agreements concerning the subject matter hereof, other than
the Financing Documents, are merged herein.
[Remainder
of Page Intentionally Left Blank]
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Dated:
June ___, 2009.
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Summit
Financial Resources, L.P.
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By:
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Name:
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Title:
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Artisanal
Cheese, LLC
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By:
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Title:
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Name:
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American
Home Food Products, Inc.
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By:
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Title:
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Name:
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Daniel
W. Dowe
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