Exhibit 10.1

 

CONSULTING AGREEMENT

 

CONSULTING AGREEMENT, dated as of October 22, 2007 (the “Agreement”), by and
between Ascendia Brands, Inc., with principal offices at 100 American Metro
Boulevard, Suite 108, Hamilton, NJ 08619 (“ABI” or the “Company”) and Carl Marks
Advisory Group LLC, with principal offices at 900 Third Avenue, New York, NY
10022 (“CMAG” or “Consultant”).

 

WHEREAS, ABI desires to engage the financial and management consulting services
of CMAG, subject to the terms and conditions hereinafter set forth; and

 

WHEREAS, CMAG has agreed to provide such financial and management consulting
services subject to the terms and conditions hereinafter set forth;

 

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

 

1. Engagement: ABI engages CMAG, and CMAG hereby agrees to serve ABI, as a
financial and management consultant. Mark L. Claster, a Partner of CMAG, will
serve as the project partner on this engagement with Douglas A. Booth, a Partner
of CMAG, serving as the review partner. Messrs. Claster and Booth shall
supervise this engagement with whatever additional resources from CMAG are
reasonably required. ABI understands and acknowledges that CMAG and
Messrs. Claster and Booth have and will continue to have other engagements
during the term of this Agreement.

 

2. Scope: CMAG will provide Managing Director, Jack Wissman, to act as Interim
Chief Financial Officer to assume the typical duties associated therein. In that
connection, CMAG and Jack Wissman will:

 

 

•

Perform Chief Financial Officer duties, including without limitation (i)
assuming responsibility for overseeing the compilation of any Quarterly Report
on Form 10-Q, Annual Report on Form 10-K or other disclosure document required
to be filed during the term of this Agreement, (ii) liaison with the Company’s
independent auditor (BDO Seidman LLP) and auditing consultants, (iii) liaison
with regulatory bodies, including the American Stock Exchange and the U.S.
Securities & Exchange Commission, (iv) operational supervision of the Company’s
Finance Department and maintenance of appropriate internal controls therein, and
(v) such other duties as the Company may from time to time specify, consistent
with the position of Chief Financial Officer;

 

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•

Analyze the Company’s financial and capital needs in detail including all
significant underlying assumptions;

 

o

Review past performance and current financial trends

 

 

o

Review revenue assumptions by business segment, customer, channel and product
category, considering competitive factors, pricing pressures and recent trends

 

 

o

Review orders/backlog and program commitments and compare to forecasts and
historical experience

 

 

o

Review margin assumptions

 

 

o

Review cost assumptions including current run rates, cost reduction programs
already in progress, prospective cost reduction programs, etc.

 

 

o

Review balance sheet and liquidity assumptions

 

 

•

Review 13-week cash flow forecasts to understand and refine the liquidity
outlook;

 

•

Review existing projections, internal budget, current performance, variances,
monthly and quarterly financials ;

 

•

Review the Company’s overall business plan and financial projections, current
execution to the plan and expected efficiencies and cost savings;

 

•

Assist with further identification of actionable opportunities, cost related or
otherwise, intended to improve the Company’s performance;

 

•

Assist the Company in evaluating optimal capital structures including, but not
limited to, participating in negotiations with all current and potential
participants in the Company’s capital structure;

 

•

Communicate and interface with the Company’s creditors and stakeholders;

 

•

Assist with the development and review of the business plan and organizational
business model for the Company intended to optimize its current asset
utilization to provide profitability and overall performance improvement;

 

•

Execute the proposed business plan and organizational model;

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•

Participate in the development of the 2009 forecast; and

 

•

Perform other tasks and duties related to this engagement as are reasonably
directed by ABI and acceptable to CMAG.

Upon mutual agreement between ABI and CMAG of the additional services to be
provided, this Agreement will be incorporated into a broader and subsequent
engagement at a later time.

 

3. Term: The term of this Agreement shall commence as of the date of this
Agreement and shall continue until the engagement is completed unless canceled
with or without cause by either party on ten (10) business days prior written
notice, in which event all compensation and expenses owing to CMAG pursuant to
Sections 4 and 5 below shall be immediately due and payable.

 

4. Compensation: For work performed by CMAG as described in Section 2, ABI shall
pay CMAG for its Consulting Services a fixed monthly fee of $75,000 which shall
be payable in advance commencing from the date of this Agreement. CMAG shall
submit consulting service fee invoices for each payment due. It is agreed that
all of those invoices will be paid upon receipt.

 

5. Expenses: CMAG shall be entitled to reimbursement for all reasonable expenses
incurred by it in the performance of its duties (the “Expenses”) upon
presentation of appropriate documentation therefor. Such Expenses shall include,
but not be limited to, transportation of any of CMAG senior personnel, employees
or associates on business related to the engagement, all legal expenses without
limitation, cost of hotels, meals, etc. Such Expenses shall also include, but
not be limited to, all reasonable legal fees incurred by CMAG in connection with
the performance of the services contemplated by this Agreement, provided that
ABI first consents to the retention of such counsel for such services (which
consent shall not be unreasonably withheld or delayed). All Expenses shall be
reimbursed upon receipt of invoices therefor, which shall be submitted promptly
after the end of each week in which consulting services are provided.

 

6. Indemnification: ABI shall indemnify CMAG and hold it harmless for all acts
or omissions, and all decisions made, by CMAG (other than as a result of CMAG’s
gross negligence or willful misconduct) while performing services for ABI and
agrees to pay directly, upon presentation thereof, all statements or invoices
for all fees and expenses, including reasonable attorneys’ fees incurred by CMAG
in connection with the defense of

 

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any such claims based on CMAG’s alleged acts, omissions or decisions (other than
made or taken through gross negligence or willful misconduct), including any
suit or proceeding relating thereto and any appeal therefrom and the costs of
any settlement thereof (“Claim”), provided that with respect to costs incurred
in any appeal of a judgment, ABI first consents to appealing such judgment
(which consent shall not be unreasonably withheld or delayed) not withstanding
anything to the contrary in Section 5. CMAG shall have the sole right to select
counsel of its choosing and control the defense of any such Claim, but ABI shall
have the right to accept or reject the settlement of any Claim for which
indemnification is sought by CMAG hereunder (which acceptance or rejection shall
not be unreasonably withheld or delayed). For purposes of this Section “CMAG”
includes its members, officers, directors, employees and/or agents, and CMAG’s
affiliates and each of their respective shareholders, members, officers,
directors, employees and/or agents. The provisions of this Section 6 shall
survive the term of this Agreement.

 

7. Proprietary Work Product and Confidential Company Information: ABI
acknowledges and agrees that any work product produced by CMAG is for the sole
use of ABI and is not intended for distribution to, or to be relied upon by, any
third parties.

 

In addition, CMAG acknowledges and agrees that as a result of the services to be
provided hereunder, the persons performing such services may acquire knowledge
and information of a secret and confidential nature. CMAG further acknowledges
and agrees that this information constitutes valuable property of ABI generally
not being disseminated or made known to persons or organizations outside ABI at
all, or if made known, being done so only under specific and restrictive
conditions such as to ensure that it does not become readily available to the
public, and also that confidential information of others may be received by ABI
with restrictions on its use and disclosure. Accordingly, CMAG agrees that:

 

(i)

CMAG and any person performing any services for CMAG hereunder shall not, during
the term of this Agreement or at any time thereafter, disclose to anyone outside
ABI or use in other than ABI’s business any secret or confidential information
of ABI or its subsidiaries or affiliates, except as authorized by ABI. ABI
information that is not readily available to the public shall be considered
secret and confidential for the purpose of this Agreement and shall include, but
not be limited to, information relating to ABI, its subsidiaries and affiliates,
customers,

 

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processes, products, apparatus, data, compounds, business studies, business and
contracting plans, business procedures and finances;

 

(ii)

CMAG and any person performing any services for CMAG hereunder shall not, during
the term of this Agreement or at any time thereafter, disclose to any other
person or use secret or confidential information of others that, to the
knowledge of CMAG, has been disclosed to ABI with restriction on the use or
disclosure thereof, in violation of those restrictions;

 

(iii)

CMAG and any person performing any services for CMAG hereunder shall not, during
the term of this Agreement or at any time thereafter, disclose to ABI or induce
ABI to use, without prior permission of the owner, any secret or confidential
information or material of others of which CMAG is or may become possessed; and

 

(iv)

Notwithstanding the foregoing, CMAG and any person performing services for CMAG
hereunder shall not be liable for the disclosure of information that may
otherwise be deemed confidential hereunder:

 

 

(a)

if the information is in, or becomes part of, the public domain, other than by
CMAG’s disclosure of the information; or

 

 

(b)

if the information is furnished to a third party by ABI without restriction on
the third party’s right to disseminate the information; or

 

 

(c)

if CMAG can document that the information is already of record in CMAG’s files
at the time of disclosure, or is disclosed to CMAG by a third party as a matter
of right; or

 

 

(d)

if the information is disclosed with ABI’s written approval; or

 

 

(e)

if the information is compelled to be revealed via subpoena, civil investigative
demand or other judicial or administrative process, provided that in such event
CMAG shall provide the Company (unless prohibited from so doing) with as much
advance notice as is practicable so that the Company may seek an appropriate
protective order, and shall limit disclosure strictly to those items of
information as to which disclosure is required.

 

The provisions of this Section 7 shall survive the term of this Agreement.

 

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8. Client Cooperation; Reliance on Client’s Information: ABI acknowledges and
agrees that the ability of CMAG to perform its services under this Agreement
requires the full cooperation and assistance of ABI and its personnel.
Accordingly, ABI covenants and agrees to furnish to CMAG all information,
documents and other materials reasonably requested by CMAG and to make available
to CMAG for meetings, conference calls and otherwise, upon reasonable notice,
all personnel designated by CMAG to enable CMAG to receive on a timely basis, in
writing and verbally, all information reasonably requested by CMAG related to
its engagement under this Agreement. ABI acknowledges and agrees that CMAG, in
performance of its duties under this Agreement, will be relying on the truth,
completeness and accuracy of the written documentation delivered and the verbal
communications made by ABI and its representatives to CMAG and its
representatives in connection with all matters relating to CMAG’s engagement
under this Agreement.

 

9. Conflicts of Interest: Nothing contained in this Agreement or otherwise,
shall diminish or impair the right of CMAG to accept engagements, directly or
indirectly, to ABI’s lenders or other professionals provided such engagements do
not involve the relationship of the lenders or other professionals to ABI.

 

10. Limitation on CMAG Liability: If CMAG fails to perform its obligations under
or is otherwise in breach of or default under this Agreement, the maximum
liability of CMAG in respect thereof shall be limited to an amount equal to the
aggregate of all fees and expenses paid to CMAG pursuant to this Agreement.

 

11. Notices: All notices, requests, demands and other communications provided
for by this Agreement shall be in writing addressed to the parties at the
address for such party first set forth above, and shall be transmitted by either
facsimile (fax), personal or overnight courier delivery or by certified mail.
All notices, etc. shall be deemed given when received by the party to whom it is
addressed.

 

12. Successors and Assigns: This Agreement shall inure to the benefit of, and be
binding upon, each of ABI and CMAG and their respective successors and assigns.
Neither party may assign its rights and/or obligations under this Agreement
without the written consent of the other party, which consent shall not be
unreasonably withheld or delayed.

 

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13. Applicable Law: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York as if the contract were
performed wholly within the state.

 

14. Amendments: No amendment, modification, termination or waiver of any
provision of this Agreement or consent to any departure by any party therefrom
shall be effective unless in writing signed by the parties hereto, and, in any
event, shall be effective only in the specific instance and for the specific
purpose for which given.

 

15. No Waiver; Cumulative Remedies: No failure or delay on the part of either
party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

 

16. Headings: Headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.

 

17. Counterparts: This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

18. Waiver of Jury Trial: Each of the parties to this Agreement hereby waives
its right to a jury trial with respect to any claim, action, suit or proceeding
made or brought by one of the parties against the others in connection with or
arising under this Agreement.

 

19. Publication: CMAG may, at its expense, place an announcement in such
newspapers, periodicals, electronic publications and other print as CMAG may
choose stating that CMAG has acted as a consultant for the Company in connection
therewith.

 

20. Independent Contractor Relationship: CMAG shall serve as an independent
contractor to ABI pursuant to the terms and conditions of this Agreement. This
Agreement does not create and shall not be construed to create a relationship of
principal and agent, joint venturer, co-partners, employer and employee, master
and servant or any similar relationship between CMAG and ABI, and the parties
hereto expressly deny the existence of any such relationship.

 

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21. Search Fees: Should CMAG introduce any individual to ABI, and ABI
subsequently hires that individual, ABI shall pay CMAG an additional fee equal
to 25% of the total first year’s compensation package of that individual. If ABI
subsequently hires any CMAG personnel, members, officers, directors, employees
and/or agents, ABI shall pay CMAG an additional fee equal to 100% of that
individual’s total prior year’s compensation package.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
written above.

 

ASCENDIA BRANDS, INC.

 

 

By:

/s/ Andrew Sheldrick

 

Andrew Sheldrick

 

General Counsel

 

 

CARL MARKS ADVISORY GROUP LLC

 

 

By:

/s/ Mark L. Claster

 

Mark L. Claster

 

Partner

 

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