Document:

ex10_24.htm

Exhibit 10.24

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (“Agreement”) is made as of the 22nd day of February 2010 by ARTISANAL CHEESE, LLC, a New York limited liability company with an address at 500 West 37th Street, 2nd Floor, New York, New York  10018 (“Borrower”), in favor of Frederick G. Perkins, III, Declaration of Trust dated 1995 amended in 2007, having an address at 200 Ocean Lane Drive, Apt. 806, Key Biscayne, FL  33149 (“Lender").

W I T N E S S E T H :

WHEREAS, Borrower is indebted to the Lender for certain payments under the Promissory Note dated the date hereof (the “Note”) given by Borrower to the respective Lender in connection with that certain Loan Agreement dated the date hereof between Borrower and Lender (the “Loan Agreement”); and

WHEREAS, it is a condition of the Note and the Loan Agreement that Borrower execute and deliver this Agreement to the Lender to secure Borrower’s obligations thereunder.

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

1.           As used in this Agreement, the term “Collateral” means all assets, accounts, goods, general intangibles, inventory, furniture, fixtures, tools, equipment, materials, supplies, instruments, securities, chattel paper, contract rights, general intangibles, credits, claims and other property, rights and interests owned by Borrower, together with all additions and accession thereto, all substitutions and replacements therefore, and all proceeds and products thereof, whether now or hereafter existing or now owned or hereafter acquired, wherever located, of every kind and description.

 

2.           As used in this Agreement, the term “Liability” or “Liabilities” means all present and future obligations of Borrower to the Lender, whether direct or indirect, joint or several, otherwise secured or unsecured, primary or secondary, absolute or contingent, which are due or that may become due under the Note or the Loan Agreement.

 

3.           To secure the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Liabilities, the Borrower hereby assigns, conveys, mortgages, pledges, transfers and grants to the Lender a first priority security interest in and to all of the Collateral subject to the limitation set forth in Paragraph 4 hereof.

 

4.           The Borrower represents that the Collateral and its books and records relating to the Collateral are located at the address of Borrower set forth above.  The Borrower covenants and agrees that it will promptly notify the Lender in writing of any change of such location.

  

  

  

 

The Borrower represents, warrants and covenants that:  (a) except for certain intellectual property previously pledged as security to Terrence Brennan and Marvin Numeroff as disclosed to Lender, Borrower is the sole owner of the Collateral, free and clear of any liens, security interests, charges or encumbrances; (b) subject only to the prior security interest in certain intellectual property held by Terrence Brennan and Marvin Numeroff as previously disclosed to Lender, Borrower has the right to grant the security interest created by this Agreement; (c) except for two financing statements relating to the security interest held by Terrence Brennan and Marvin Numeroff, no other financing statements, or other instruments of similar effect, covering all or any part of the Collateral are on file in any recording office; (d) it is a corporation, duly organized, validly existing and in good standing in the place of its incorporation, and the execution and delivery of this Agreement, the Note and Loan Agreement have been duly authorized by all necessary corporate action; (e) it is and will continue to be eligible to do business and is otherwise in good standing in all jurisdictions where it owns property or transacts business, except to the extent that the failure to be eligible or in good standing could not, in the aggregate, reasonably be expected to have a material adverse effect; (f) it is and will continue to be in compliance with all applicable laws, statutes, rules and regulations, including without limitation, those concerning the environment, employee pension and benefit plans and the payment of taxes, assessments and other governmental charges, except to the extent that the failure to comply could not, in the aggregate, reasonably be expected to have a material adverse effect; and (g) neither this Agreement nor any other document delivered by the Borrower to the Lender contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made as of the date made or deemed made.

 

5.           The Borrower covenants and agrees that, until its obligations under the Note and Loan Agreement have been paid or fulfilled in full: (a) it will defend the Collateral against the claims and demands of all persons; (b) it will not sell, lease, encumber, remove, conceal, grant or permit any security interest in the Collateral, nor part with possession of any thereof, nor permit the same to be used in violation of any law or ordinance; (c) it will maintain the Collateral in good condition and repair at its sole expense; (d) it will pay all taxes levied on the Collateral, and will make due and timely payment or deposit of all federal, state and local taxes, assessments or contributions required by law and will execute and deliver to the Lender, on reasonable demand, appropriate certificates attesting to such payment or deposit; (e) it shall procure and maintain adequate insurance on the tangible Collateral against the risks of fire, theft and such other risks; (f) it will permit the Lender, with or without notice, to inspect the Collateral and to make extracts from the books and records of Borrower; (g) it will join with the Lender in doing whatever may be necessary under applicable law to perfect the Lender’s security interest; and (h) the Lender may at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements, continuations and amendments thereto with respect to the Collateral and the Liabilities.

 

6.           The following shall be an Event of Default under this Agreement: (a) a breach by Borrower of any term, covenant, obligation or warranty arising under this Agreement; (b) any statement made in or pursuant to this Agreement, the Loan Agreement or the Note shall prove to be untrue in any material respect, and such untruth is not attributable to the Lender; or (c) any default shall occur under the Loan Agreement or the Note.

 

Upon the occurrence of any Event of Default which Event cannot be cured within fifteen (15) calendar days, all Liabilities of the Borrower shall immediately be due and payable and the Lender may: (a) proceed, with or without judicial process, to take possession of all or any part of the Collateral; (b) assign, transfer and deliver at any time any portion of the Collateral; (c) upon proper notice, elect to retain the Collateral in partial satisfaction of Liabilities; (d) set off against any money due from the respective Lender, if any; and (e) pursue any remedy available to it by law or equity, including without limitation, all rights and remedies granted to a secured party under the Uniform Commercial Code in effect in the State of New York and/or under any other agreement between the Borrower and the Lender unless otherwise stated therein.  The Borrower agrees that upon receipt of notice from the Lender demanding possession of the Collateral, the Borrower will do everything necessary to assemble the Collateral and make it available to the Lender at a location designated by the Lender within five (5) days of the date of the Lender’ request.  Any sale of the Collateral may be public or private.  Any sale or other disposition of the Collateral may, at the option of the Lender, be for cash, for credit, for future delivery, in bulk or in parcels and with or without having the Collateral present at the sale or disposition.  The Lender may be the purchaser at any public sale.  In the event of a sale or other disposition of the Collateral, the Lender shall apply all proceeds first to all costs and expenses of disposition, including attorneys' fees, and then to the Liabilities.  Any required notification of a sale or other disposition of the Collateral or of any action by the Lender will be sufficient and reasonable if given personally or received from overnight courier service not less than seven (7) days prior to the day on which the action is to be taken.

  

  

  

 

If the Collateral is or includes equipment or inventory the Borrower shall (a) keep accurate books and records with respect to the Collateral, including without limitation, maintenance records and current stock, cost and sales records accurately itemizing the types and quantities, and (b) upon request, deliver to the Lender all evidence of ownership including certificates of title with the Lender' interest appropriately noted on the certificate.

 

7.           The Lender shall not be deemed to waive, by any act, delay, omission or otherwise, any of their rights or remedies hereunder unless such waiver is in writing and signed by the Lender and then only to the extent specifically set forth therein.  A waiver in one event shall not be continuing or a bar to or waiver of such right or remedy on a subsequent event.  Any rights and remedies provided for in this Agreement may be exercised singly or concurrently.

 

8.           This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

 

9.           The Borrower waives presentment for payment, demand, notice of nonpayment, notice of protest, and protest of all commercial paper at any time held by the Lender on which the Borrower is in any way liable.  The Borrower consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by the Lender with respect to the payment or other provisions of any such commercial paper, and to the release of any Collateral, with or without substitution, and to the release of any party against which the Borrower has a right of recourse.  The liability of the Borrower shall not be affected by the loss, theft, damage, destruction or seizure of the Collateral.

 

10.         This Agreement shall be governed by and construed under the laws of the State of New York without regard to conflict of laws principles.  Borrower irrevocably agrees that any suit regarding this Note shall be brought in the state or federal courts located in New York, New York and Borrower submits to such jurisdiction.

 

11.         BORROWER AND THE LENDER ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE LENDER OR BORROWER OR ANY SUCCESSOR OR ASSIGN OF THE LENDER OR BORROWER, ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (iii) THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THE LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.

  

  

  

 

12.         This Agreement may be executed in two or more counterparts, each of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

WITNESS WHEREOF, this Agreement has been executed and delivered by the undersigned as of the date and year first above written.

	  	
BORROWER:

	  	  	  
	  	
Artisanal Cheese, LLC

	  	  	  
	  	  	  
	  	
By:

	
/ss/Daniel W. Dowe

	  	
Name: Daniel W. Dowe

	  	
Title: President

	  	  	  
	  	  	  
	  	  	  
	  	
LENDER:

	  
	  	  	  
	  	
Frederick G. Perkins, III,

	  	
Declaration of Trust dated 1995

	  	
amended 2007

	  	  	  
	  	  	  
	  	
/ss/Frederick G. Perkins, III

	  	
Frederick G. Perkins, III, Trusteeex10_25.htm

Exhibit 10.25

PROMISSORY NOTE

 

	
$2,500,000.00

	
Feb. 22, 2010

Artisanal Cheese, LLC

a New York Limited Liability Company

500 West 37th Street

2nd Floor

New York, New York 10018

(Hereinafter referred to as “Borrower”)

Frederick G. Perkins, III

Declaration of Trust dated 1995

amended 2007

200 Ocean Lane Drive

Apt. 806

Key Biscayne, FL 33149

(Hereinafter referred to as “Lender”)

Pursuant to a Loan Agreement dated the date hereof (“Loan Agreement”) by and among Borrower, Lender, Lender's Affiliate, AHFP and Dowe, Borrower promises to pay to the order of Lender, in lawful money of the United States of America, at his address indicated above or wherever else Lender may specify, the sum of Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) with interest on the unpaid principal balance at the rate and on the terms provided for in this Promissory Note (including all renewals, extensions or modifications hereof, this “Note”).

LOAN AGREEMENT. This Note is issued in connection with and pursuant to the Loan Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan Agreement.

 

SECURITY. As security for the payment of the monies owing under this Note, the Borrower has delivered or has caused to be delivered to the Lender a security agreement (“Security Agreement”) dated the date hereof. Lender shall have a first priority security interest in all assets of the Borrower pursuant to the Security Agreement subject only to a prior security interest in certain intellectual property held by Terrence Brennan and Marvin Numeroff as previously disclosed to Lender.

 

INTEREST RATE TO BE APPLIED. Interest shall accrue on the unpaid principal balance of this Note from the date hereof at a fixed rate of eight percent (8.00%) per annum (“Interest Rate”).

  

  

  

INTEREST AND FEE(S) COMPUTATION. (Actual/365). Interest and fees, if any, shall be computed on the basis of a 365-day year for the actual number of days in the applicable period.

 

PREPAYMENT. The Note may be prepaid, in whole or in part, at any time. Any prepayment shall include accrued and unpaid interest to the date of prepayment on the principal amount prepaid and all other sums due and payable hereunder. All prepayments received on this Note may be applied in such order as the Lender in his sole discretion shall determine.

 

REPAYMENT TERMS. Interest on this Note shall be due and payable in quarterly payments in the amount of Fifty Thousand Dollars ($50,000.00) commencing on May 22, 2010, and continuing on August 22, 2010, November 22, 2010, and February 22, 2011 and continuing on the same day of each quarter thereafter. If such payment dates shall fall on a weekend or holiday, then such payment shall be due on the first business banking date following such due date. In any event, all principal and accrued interest, together with all other amounts due hereunder, shall be due and payable in full on February 21, 2013.

 

APPLICATION OF PAYMENTS. Monies received by Lender for application toward payment of this Note shall first be applied to accrued interest and then to principal. If a Default occurs, monies may be applied to the obligations in any manner or order deemed appropriate by Lender. If any payment received by Lender under this Note is rescinded, avoided or for any reason returned by Lender because of any adverse claim or threatened action, the returned payment shall remain payable as an obligation of all persons liable under this Note as though such payment had not been made.

 

ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Lender’s reasonable expenses incurred to enforce or collect any of the obligations under this Note, including, without limitation, reasonable court, arbitration, paralegals', attorneys' fees and expenses, whether incurred without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in any appellate or bankruptcy proceeding.

 

DEFAULT. If any of the following occurs, a default (“Default”) under this Note shall exist: Nonpayment. The failure of Borrower to pay any of the obligations under this Note within ten (10) calendar days of when due. Nonperformance. The failure of timely performance of the obligations hereunder or under the Security Agreement, other than payment obligations, and such default shall continue unremedied for a period of fifteen (15) calendar days after Borrower shall receive notice of such default. False Warranty. A warranty or representation made or deemed made in this Note, the Loan Agreement or the Security Agreement, or furnished Lender in connection with the loan evidenced by this Note, proves materially false, or if of a continuing nature, becomes materially false. Cessation; Bankruptcy. The dissolution of, termination of existence of, loss of good standing status by, appointment of a receiver for, assignment for the benefit of creditors of, lender workout proceedings, or commencement of any bankruptcy or insolvency proceeding by or against the Borrower or AHF, or any of their subsidiaries or affiliates. Material Capital Structure or Business Alteration. Without the prior written consent of Lender, which shall not be unreasonably withheld (i) a material alteration in the kind or type of Borrower's business or that of Borrower's subsidiaries or affiliates; (ii) the sale of all or substantially all or a material portion of the business or assets of Borrower or any of Borrower's subsidiaries or affiliates if such a sale is outside the ordinary course of business of Borrower; (iii) the acquisition of substantially all of the business or assets or more than 50% of the outstanding stock, membership interests, or voting power of any other entity; (iv) should Borrower or any of Borrower's subsidiaries enter into any merger or consolidation or similar transaction; or (v) any change in the members of the Borrower resulting in a change of a majority or more of the membership interests or equity interests of Borrower.

  

  

  

 

REMEDIES UPON DEFAULT. If a Default occurs under this Note or the Security Agreement, Lender may at any time thereafter take the following actions: Acceleration Upon Default. Accelerate the maturity of this Note and all obligations hereunder, and all of the obligations hereunder shall be immediately due and payable. Cumulative. Exercise any rights and remedies as provided under the Note or the Security Agreement, or as provided by law or equity.

 

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note shall be valid as against Lender unless in writing and signed by Lender. No waiver by Lender of any Default shall operate as a waiver of any other Default or the same Default on a future occasion. Neither the failure nor any delay on the part of Lender in exercising any right, power, or remedy under this Note, the Loan Agreement or the Security Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

 

Borrower and any person liable under this Note waives presentment, protest, notice of dishonor, demand for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, notice of sale and all other notices of any kind. Further, Borrower agrees that Lender may extend, modify or renew this Note or make a novation of the loan evidenced by this Note for any period and grant any releases, compromises or indulgences with respect to any collateral securing this Note, all without notice to or consent of each Borrower or each person who may be liable under this Note and without affecting the liability of Borrower or any person who may be liable under this Note.

 

NOTICE. All notices, consents, waivers and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

	
  

	
If to Borrower, to:

	
Artisanal Cheese, LLC

500 West 37th Street, Second Floor

New York, New York 10018

Attn: Daniel W. Dowe, President

Telephone No.: (212) 871-3150

Telecopy No.: (212)-239-1417

Email: ddowe@artisanalcheese.com

	
  

	
If to Lender, to:

	
Frederick G. Perkins, III

200 Ocean Lane Drive, Apt. 806

Key Biscayne, FL 33149

Telephone No.: (305) 361-8992

Telecopy No.: (305) 361-0463

Email: fgperkins@yahoo.com

  

  

  

 

MISCELLANEOUS PROVISIONS. Assignment. This Note shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors and assigns. With the prior consent of Borrower, which shall not be unreasonably withheld, this Note may be assigned or pledged by Lender to a bank, other financing source or other person or entity that is not a competitor of Borrower. Borrower shall not assign its rights and interest hereunder without the prior written consent of Lender, and any attempt by Borrower to assign without Lender’s prior written consent is null and void. Any assignment shall not release Borrower from its obligations hereunder. Applicable Law; Conflict Between Documents. This Note shall be governed by and construed under the laws of the State of New York without regard to conflict of laws principles. If the terms of this Note should conflict with the terms of the Loan Agreement or the Security Agreement, the terms of this Note shall control. Jurisdiction and Venue. Borrower irrevocably agrees that any suit regarding this Note shall be brought in the state or federal courts located in New York, New York and Borrower submits to such jurisdiction. Severability. If any provision of this Note shall be prohibited or invalid under applicable law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note or other such document. Plural; Captions. All references in this Note to Borrower, person, document or other nouns of reference mean both the singular and plural form, as the case may be, and the term “person” shall mean any individual, person or entity. The captions contained in this Note are inserted for convenience only and shall not affect the meaning or interpretation of the Note. Binding Contract. Borrower by execution of and Lender by acceptance of this Note agree that each party is bound to all terms and provisions of this Note. Fees and Taxes. Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this transaction whether assessed at closing or arising from time to time.

 

WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY LENDER OR BORROWER OR ANY SUCCESSOR OR ASSIGN OF LENDER OR BORROWER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY; (ii) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (iii) THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE.

  

  

  

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has caused this Note to be executed.

 

	  	
ARTISANAL CHEESE, LLC

	  
	  	  	  
	  	  	  
	  	  	  
	  	
By:

	
/ss/Daniel W. Dowe

	  	
Name:

	
Daniel W. Dowe

	  	
Title:

	
President

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