Document:

ex10_26.htm

Exhibit 10.26

ASSIGNMENT AND ASSUMPTION OF FINANCING

AND FINANCING DOCUMENTS

This Assignment and Assumption of Financing and Financing Documents (the “Assignment”) is made by and between Summit Financial Resources, L.P., a Hawaii limited partnership (“Assignor”), Artisanal Cheese, LLC, a New York limited liability company (“Client”), American Home Food Products, Inc., a New York corporation (“AHFP”), Daniel W. Dowe, an individual (“Dowe”), (AHFP and Dowe are collectively referred to as “Guarantors”) and Frederick G. Perkins, III, an individual (“Assignee”).

 

RECITALS

 

1.             Assignor and Client 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”), each attached hereto as Exhibit A, pursuant to which Assignor provided certain accounts receivable and inventory financing to Client (the “Financing”).

 

2.             AHFP guaranteed the obligations of Client under the Financing Agreement pursuant to a Guarantee executed by AHFP in favor of Assignor dated February 19, 2009 (the “AHFP Guarantee”), attached hereto as Exhibit B.

 

3.             Dowe guaranteed certain obligations of Client under the Financing Agreement pursuant to an Amended and Restated Guarantee executed by Dowe in favor of Assignor dated November 18, 2009 (the “Dowe Guarantee”), attached hereto as Exhibit C. The AHFP Guarantee and the Dowe Guarantee are collectively referred to as the “Guarantees.”

 

4.             Pursuant to the Financing Agreement, Assignor has been granted a security interest in certain assets of Client, including, but not limited to, Client’s accounts receivable, equipment, and inventory, which security interest was perfected by the filing of that certain UCC Financing Statement, with Assignor as secured party and Client as debtor, filed with the New York Secretary of State, File No. 200812196349753 (the “Financing Statement”). The Financing Agreement, the Guarantees, and the Financing Statement are collectively referred to in this Assignment as the “Financing Documents.”

 

5.             As requested by Assignee, Assignor has agreed to assign, transfer, and convey the Financing Documents and all of Assignor’s right, title, and interest therein, along with any and all of Assignor’s claims, demands, actions, causes of action, damages, costs, expenses, and other rights of any nature whatsoever, whether known or unknown, arising thereunder or related thereto, (collectively, the “Assigned Property”) to Assignee. This Assignment sets forth the terms and conditions of that assignment.

 

AGREEMENT

 

For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor, Assignee, Client, and Guarantors agree as follows:

 

2.             Purchase Price. Upon execution and delivery hereof, Assignee shall pay to Assignor for the Assigned Property the total purchase price (the “Purchase Price”) of Two Hundred Twenty Thousand and Eighty Dollars ($220,080.00) by wire transfer of immediately available funds as follows:

  

  

  

 

Summit Financial Resources, L.P.

JP Morgan Chase Bank

80 West Broadway, Suite 200

Salt Lake City, Utah 84101

ABA #: 021000021

Acct #: 901001814

 

3.             Assignment and Assumption of Assigned Property.

 

a.             Upon receipt of the Purchase Price and subject to the terms and conditions provided herein, Assignor assigns, transfers, and conveys to Assignee all of Assignor’s rights, titles, claims, interests, and obligations in and to the Assigned Property.

 

b.             The Assigned Property is assigned and transferred to Assignee without recourse and with no representations or warranties of any kind by Assignor, express or implied, except as expressly set forth herein. Assignor makes no representations or warranties as to the collectability of the obligations evidenced by the Financing Documents, the collectability of the accounts receivable which are collateral under the Financing Documents, or the value, condition, location, existence, warranties of fitness, merchantability, suitability for a particular purpose, or as to title of any collateral. IN ACCEPTING THE ASSIGNED PROPERTY, ASSIGNEE ACKNOWLEDGES THAT ASSIGNEE IS ACQUIRING THE ASSIGNED PROPERTY IN ITS CURRENT STATUS “AS IS” AND “WHERE IS.” Assignee has been afforded an opportunity to review the Financing Documents and any other documents, instruments, agreements or records of Assignor with regard to the Financing Documents. Assignee further acknowledges that it has reviewed the status of title to the Financing Documents and the status and priority of the lien evidenced by the Financing Statement and that Assignor makes no representation or warranty of any kind with regard to the title to the Financing Documents or the priority of the lien evidenced by the Financing Statement.

 

c.             Assignee assumes and accepts from Assignor all of Assignor’s rights, titles, claims, interests, and obligations in and to the Assigned Property, and Assignee shall hereafter perform and discharge, in accordance with their respective terms, the obligations of Assignor with respect to the Financing Documents.

 

4.             Delivery of Documents. Upon Assignor’s receipt of the Purchase Price and a fully executed copy of this Assignment, Assignor shall deliver to Assignee (i) the original executed Financing Agreement and the Guarantees, (ii) a UCC Financing Statement Amendment, assigning Assignor’s interest in the Financing Statement to Assignee, and (iii) a notice prepared by Summit on Summit’s letterhead signed by Summit that Client and/or Assignee may send to the customers of Client informing them that Summit no longer maintains an interest in Client’s accounts receivable.

 

To the extent any documents delivered by Assignor need to be recorded or filed in any manner in any public office, Assignee, not Assignor, will be responsible for all such filings and recordings and the costs thereof and Assignee is hereby authorized to do so.

 

5.             Representations and Warranties of Assignor. As of the date hereof, Assignor represents and warrants to Assignee that:

 

a.             Holder. Assignor is the sole holder of the Assigned Property and has good right and title to assign and convey the Assigned Property to Assignee as contemplated hereby. To the best of Assignor’s knowledge, each of the Financing Documents is genuine, within the meaning of Section 1-201(19) of the Uniform Commercial Code. Assignor is in possession of the original of each of the Financing Agreement and the Guarantees.

  

  

  

 

b.             Default Status of Financing. The Financing is in DEFAULT, and Assignor, Client, and Guarantors have entered into three forbearance agreements regarding the Financing Documents and the defaults thereunder.

 

c.             Execution. The Financing Documents and any other document made and given by the Assignor in connection therewith and herewith have been duly authorized, executed, and delivered by Assignor, and are legally enforceable against Assignor according to their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, other laws relating to or affecting creditors’ rights generally and by general equity principles, and the obligations owing for failure to maintain the monthly minimum volume may be subject to legal and equitable defenses.

 

d.             Limitation on Representations and Warranties of Assignor. Except for the express representations and warranties of Assignor set forth in this Section 4, Assignee confirms, acknowledges, and agrees that Assignor: (i) makes no representation or warranty with respect to, and assumes no responsibility with respect to any statements, warranties or representations made by Client in or in connection with the Financing or any of the Financing Documents; (ii) makes no representation or warranty, and assumes no responsibility with respect to, the execution, legality, validity, enforceability, sufficiency or value of the Financing or any of the Assigned Property or any assets serving as collateral for the Financing; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Client or with regard to any collateral for the Financing or the Guarantees; and (iv) makes no representation or warranty and assumes no responsibility with respect to the performance or observance by Client of any of its obligations with respect to the Financing or under any Financing Document or any other instrument or document furnished pursuant thereto.

 

6.             Representations and Warranties of Assignee. As of the date hereof, Assignee represents and warrants to Assignor that:

 

a.             Inspection. Assignee has received all information it considers necessary or appropriate for deciding whether to purchase and assume the Assigned Property from Assignor. Assignee has been provided full and complete access to all Financing Documents and other documents, instruments and agreements pertaining to the Financing, has inspected and reviewed all of the Financing Documents, together with such other documents, instruments, reports, certificates, and other materials as Assignee has deemed necessary or appropriate in connection with this transaction, including without limitation, all agreements and documents referenced herein whether or not Assignor is a party thereto.

 

b.             Knowledgeable Investor. Assignee is acquiring the Financing for its own account only and not for any other person. Assignee considers itself a sophisticated investor, having such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investment in the Financing.

  

  

  

 

c.             Non-Reliance. Assignee expressly acknowledges that except as expressly set forth herein, neither Assignor nor any of its officers, directors, employees, representatives, agents, attorneys or affiliates, has made any representations or warranties to Assignee and that no act by Assignor hereafter taken, including any review of the affairs of Client or Guarantors, shall be deemed to constitute any representation or warranty by Assignor to Assignee. Assignee represents to Assignor that Assignee has, independently and without reliance upon Assignor and based on such documents and information as Assignee has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and credit-worthiness of Client and Guarantors and made its own decision to enter into this Assignment and to accept the Assigned Property as provided herein. Assignee also represents that it will, independently and without reliance upon Assignor and based on the documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions concerning the Assigned Property, Client, and Guarantors, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and credit-worthiness of Client and Guarantors. Assignor shall not have any duty or responsibility to provide Assignee with any credit or other information concerning the business, operations, property, financial and other condition or credit-worthiness of Client or Guarantors that may come into the possession of Assignor or any of its officers, directors, employees, representatives, agents, attorneys or affiliates except as expressly provided herein.

 

Assignee further expressly acknowledges that neither Assignor nor any of its officers, directors, employees, representatives, agents, attorneys or affiliates, has made any representations or warranties to Assignee as to the validity, effectiveness, genuineness, enforceability, priority, or sufficiency of the Assigned Property. Assignee represents that it has, independently and without reliance upon Assignor or Assignor’s attorneys, made its own review and determination of the validity, effectiveness, genuineness, enforceability, priority, and sufficiency of the Assigned Property and the sufficiency, value, and condition of any property serving as collateral for the Financing.

 

d.             Securities Laws Compliance.

 

i.           Assignee has been represented by such legal and tax counsel and others, each of whom has been personally selected by Assignee, as Assignee has found necessary to consult concerning transactions contemplated hereby, and such representation has included an examination of applicable documents, and an analysis of all tax, financial, and securities law aspects. Assignee, either alone or with its advisors, if any, has sufficient knowledge and experience in business and financial matters that it is capable of evaluating the above information and making an informed investment decision with respect thereto.

 

ii.           Assignor has made available to Assignee, its counsel and other advisors, prior to the date hereof, the opportunity to ask questions of, and to receive answers from, the Assignor and its representatives, concerning the terms and conditions of this Assignment and access to obtain any information, documents, financial statements, records and books in the possession of Assignor relative to the Client and its business. All materials and information requested by Assignee, its counsel and advisors, or others representing Assignee, have been made available and examined.

 

7.             Payments Received by Assignor. All payments received by Assignor on behalf of Client after Assignor’s receipt of the Purchase Price shall be forwarded to Assignee or to such other entity as instructed by Assignee by wire / EFT transfer, subject to Summit’s standard electronic funds charges (currently $20.00) which may be deducted from any such payment, within two (2) business days following receipt of the same together with electronic notice to Assignee or its designee of the details of each payment received by Assignor.

 

8.             Reimbursement to Assignor. Assignee shall reimburse Assignor for all payments received by Assignor on behalf of Client within thirty (30) days prior to payment of the Purchase Price, if the instrument constituting such payment is returned for nonpayment or for any other reason, after receipt of the Purchase Price, provided that all such reimbursement claims are sent to Assignee within ninety (90) days of receipt of the Purchase Price. Assignee agrees, with respect to all payments forwarded to Assignee pursuant to Section 6 hereof which are returned for nonpayment or for any other reason, to repay Assignor the amount of any check or other payment instrument, upon demand, if the instrument constituting such payment is returned, provided all such reimbursement claims shall be sent to Assignee within ninety (90) days of the date such amount was forwarded to Assignee under Section 6 hereof

  

  

  

 

9.             Consent and Agreement of Client and Guarantors.

 

a.             Client and Guarantors each acknowledge and consent to the assignment of the Assigned Property and all other matters in this Assignment.

 

b.             Client and Guarantors each fully, finally, and forever release and discharge Assignor, its successors, assigns, directors, officers, employees, agents, and representatives from any and all actions, causes of action, claims, debts, demands, liabilities, obligations, and suits of whatever kind or nature, in law or equity, that they have or in the future may have, whether known or unknown, in respect of the Financing, the Financing Documents, the Assigned Property, or the actions or omissions of Assignor in respect of the Financing, the Financing Documents, and the Assigned Property, and acknowledge and agree that Assignor shall have no further obligation to perform any at or take any action under the Financing Documents from the date hereof.

 

c.             Client and Guarantors each acknowledge and agree that the indemnification obligations owing to Assignor under the Financing Documents shall remain in full force and effect in favor of Assignor and shall survive the assignment and transfer of the Assigned Property to Assignee.

 

10.           Limitation. The execution and delivery of this Assignment and the existence and exercise of any of the foregoing remedies shall in no way be deemed or act as a waiver, nor impair, diminish or in any way affect Assignor’s rights and remedies under the Financing Documents with respect to the Financing at any time prior to the assignment of the Assigned Property pursuant hereto.

 

11.           Binding Effect. This Assignment 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.

 

12.           Authority. Each of the representatives signing this Assignment on behalf of Assignor, Assignee, Client, and Guarantors, as the case may be, hereby represents and warrants that said representative has the authority to execute and deliver this Assignment and that this Assignment shall be valid, binding, and enforceable in accordance with its terms as to the company, if any, for whom said representative has signed.

 

13.           General.

 

a.             No Third-Party Benefits. This Assignment is made for the sole and exclusive benefit of Assignor, Assignee, 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 Assignment.

 

b.             Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of Utah without regard to conflicts of law principles.

 

c.             Severability. Any provision of this Assignment 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.

  

  

  

 

d.             Interpretation. All references in this Assignment 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. Any section headings contained in this Assignment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Assignment.

 

e.             Jury Waiver and Exclusive Jurisdiction. ASSIGNEE, 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 ASSIGNMENT.

 

Assignee, Client, and Guarantors each acknowledge that by execution and delivery of this Assignment, they have each 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 Assignment. 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 THIS ASSIGNMENT AND/OR THE TRANSACTIONS CONTEMPLATED HEREBY. NO LAWSUIT, PROCEEDING, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THIS ASSIGNMENT AND/OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE COMMENCED OR PROSECUTED IN ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING BY ASSIGNOR.

 

f.             Attorney Fees. In any action or proceeding arising out of or related to this Assignment, the prevailing party shall be entitled to its reasonable attorney fees and related costs, including fees and costs incurred prior to formal initiation of an action or proceeding, and including fees and costs incurred for collecting or attempting to collect any judgment or award.

 

g.             Survival. The parties hereto agree that the representations, warranties, and agreements contained in this Assignment shall survive and remain in full force and effect until the payment of all obligations arising under the Financing Documents.

 

h.             Counterparts. This Assignment may be executed simultaneously in two or more counterparts (including by facsimile or other electronic delivery), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

i.              Notices: All notices or demands by any party to this Assignment shall be in writing and may be sent by certified mail, return receipt requested. Notices so mailed shall be deemed received when deposited in a United States post office box, postage prepaid, properly addressed to Assignor or Assignee at the respective mailing address stated below or to such other address as Assignor or Assignee may specify in writing. Any notice so addressed and otherwise delivered shall be deemed given when actually received by the addressee.

 

	
  

	
If to Assignor:

	
Summit Financial Resources, L.P.

2455 E. Parley’s Way, Suite 200

Salt Lake City, Utah 84109

Attention: Portfolio Manager

  

  

  

 

	
  

	
If to Assignee:

	
Frederick G. Perkins, III

200 Ocean Lane Drive, Apartment 806

Key Biscayne, Florida 33149

 

	
  

	
If to Client:

	
Artisanal Cheese LLC

500 West 37th Street, 2nd Floor

New York, New York 10018

Attention: Daniel W. Dowe, President

 

j.             Entire Agreement. This Assignment 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 all parties hereto. All prior and contemporaneous agreements concerning the subject matter hereof are merged herein.

 

[Remainder of Page Intentionally Left Blank]

  

  

  

Dated: March 3, 2010.

 

	  	
Summit Financial Resources, L.P.

	  	  	  
	  	  	  
	  	
By:

	
/ss/Mark J. Picillo

	  	
Name:

	
Mark J. Picillo

	  	
Title:

	
Sr. Vice President

	  	  	  
	  	  	  
	  	
Artisanal Cheese, LLC

	  	  	  
	  	  	  
	  	
By:

	
/ss/Daniel W. Dowe

	  	
Name:

	
Daniel W. Dowe

	  	
Title:

	
President/CEO

	  	  	  
	  	  	  
	  	
American Home Food Products, Inc.

	  	  	  
	  	  	  
	  	
By:

	
/ss/Daniel W. Dowe

	  	
Name:

	
Daniel W. Dowe

	  	
Title:

	
President/CEO

	  	  	  
	  	  	  
	  	
/ss/Daniel W. Dowe

	  	
Daniel W. Dowe

	  	  	  
	  	  	  
	  	
/ss/Frederick G. Perkins, III

	  	
Frederick G. Perkins, IIIex10_27.htm

Exhibit 10.27

Amended and Restated Employment Agreement

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, is made and entered into as of February 25, 2010 (hereinafter “Agreement”) by and between Artisanal Cheese LLC, a New York limited liability company ("Artisanal"), American Home Food Products, Inc., a New York corporation ("AHFP") and Daniel W. Dowe (“Executive”):

WHEREAS, pursuant to that Loan Agreement by and between Artisanal, AHFP Executive and Frederick G. Perkins, III, Declaration of Trust 1995 amended 2007 ("Lender") of even date herewith, Lender agreed to extend a loan to Artisanal subject to certain conditions which included, among other things, that a new employment agreement be entered into between Executive, AHFP and Artisanal extending Executive's employment for at least three more years; cancelling Executive's common stock option; and issuing to Executive shares of AHFP's common stock.

WHEREAS Artisanal, AHFP and Executive are mutually agreeable to amending Executive's existing employment agreement accordingly, subject to certain amendments as set forth herein,

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

 

	
1.0

	
Scope of Engagement

 

	
1.1

	
Term: Artisanal shall employ Executive until February 22, 2013, unless terminated pursuant to Section 4.0 below, but shall continue to the February 22, 2015 if more than $1,500,000 of the Redeemable Convertible Preferred Stock offering is still issued and outstanding. If, on February 22, 2013, less than $1,500,000 of the Redeemable Convertible Preferred Stock offering is issued and outstanding, Executive shall have the sole right to extend the Term of this Agreement for another three (3) year period.

 

	
1.2

	
Duties: AHFPand Artisanal agree to employ and Executive agrees to serve AHFP and Artisanal as their respective Chairman, Chief Executive Officer and President during the Term of this Agreement and shall have and undertake the duties and responsibilities commensurate with these positions. Executive shall report to the Board of Directors of AHFP and shall be the highest ranking executive officer of Artisanal and AHFP during the Term. Any change in the titles, duties and responsibilities of the Executive shall require the prior written consent of the Executive. Executive shall have final executive authority over all operational and financial functions at AHFP and Artisanal, including personnel decisions, except for executive compensation which shall be subject to the approval of AHFP’s full board of directors, unless the board shall delegate a committee of the board to make final determinations on executive compensation. During the term of this Agreement, Executive shall use his best efforts to promote the best interests of AHFP and Artisanal in the normal course of business. Executive shall not engage in any other activity, which could reasonably be expected to interfere materially with the performance of his duties, services and responsibilities hereunder. Executive may assume directorship positions, including board committee assignments, at other private and public companies, but shall not undertake operating executive functions outside of Artisanal, AHFP or one of its wholly- or partially-owned subsidiaries, without the prior written consent of AHFP’s board of directors.

  

  

  

 

	
2.0

	
compensation

 

	
2.1

	
Compensation.  Upon the execution of this Agreement, , Executive shall continue to receive from Artisanal an annual base salary equal to two hundred thousand dollars ($200,000.00), or such greater sum as may be fixed by the board of directors in accordance with AHFP’s policy on executive compensation (“Base Salary”). Any and all bonus compensation payable to Executive, if anyshall be at the sole discretion of the board of directors of AHFP and shall be paid to Executive in addition to the Base Salary (“Bonus”). Artisanal may withhold from Base Salary and Bonus all applicable federal, state and local withholding taxes. For the duration of the Term the Base Salary and Bonus shall be determined by the board of directors of AHFP and Executive, however in all subsequent years up to the conclusion of the Term, the Base Salary shall never be lower than the Base Salary set forth above.

Initial Contract Compensation.  In recognition of the professional services undertaken by Executive to develop a business plan for AHFP, identify Artisanal Cheese, LLC as an acquisition target, transactional structuring, personally guarantying sellers’ financing and arranging acquisition financing, Executive received under his initial employment agreement dated August 15, 2007, the sum of one hundred thousand dollars ($100,000.00) (“Initial Contract Compensation”) in two installments, as follows: the first fifty thousand dollars ($50,000.00) upon the signing of Agreement and the remaining fifty thousand dollars ($50,000.00) upon Artisanal's completion of the maximum equity offering contemplated in its acquisition of Artisanal Cheese, LLC. This Initial Contract Compensation was not deemed Bonus compensation for calendar year 2007.

Bonus Compensation Criteria.  In determining Bonus payable to Executive, the board of directors of AHFP shall have full discretion in the awarding of any such Bonus, but in determining if a Bonus shall be granted it shall consider the following overall criteria: annual increase in earnings per share, annual revenue growth, management of operating and capital budgets, investor relations efforts, market capitalization, corporate-wide execution of the AHFP’s and Artisanal's business plan and strategic objectives including Executive’s role in identifying and completing acquisitions, mergers, strategic alliances, launching of new business lines and the raising of capital for AHFP and Artisanal

Any Bonus shall be finalized by the board of directors of AHFP and paid to the Executive by February 15th (“Bonus Payment Date”) of each year and shall be based on the above criteria in the previous calendar year throughout the duration of the Term. Any compensation due to Executive, whether Base Salary or Bonus that accrues during the final calendar year of the Term shall be paid to Executive by the Bonus Payment Date even if the Term has expired.

Stock Compensation.  As of the date of this Employment Agreement, the stock option granted under Executive's initial employment contract dated August 15, 2007, shall be deleted in its entirety and, instead, Executive shall be granted six million three hundred seventy-five thousand (6,375,000) shares of AHFP's $.001 par value common stock, legally issued, fully-paid, and non-assessable. Such stock shall be fully-vested and possess all voting rights.

Notwithstanding the foregoing, Executive shall be restricted from selling, transferring or otherwise disposing of more than two million one hundred twenty-five thousand (2,125,000) shares of said stock in each successive twelve month period commencing February 22, 2010.Specifically, Executive may sell, transfer or otherwise dispose of no more than two million one hundred twenty-five thousand (2,125,000) shares of said stock on or after February 22, 2011; and no more than four million two hundred fifty thousand (4,250,000) shares on or after February 22, 2012; and Executive shall be free to sell, transfer or otherwise dispose of up to all six million three hundred seventy-five thousand (6,375,000) shares of said stock on or after February 22, 2013 subject only to such other restrictions as may be imposed by federal, state or local law or regulation, including the regulations of the Securities and Exchange Commission then in effect.

  

  

  

 

The tax basis of these shares shall be five cents ($0.05) per share which is the closing market price of the common stock on the date hereof subject to any further discount which might apply because of the restrictions imposed by this Agreement and by law. APC shall bear one-half of the personal income tax liability incurred by Executive with respect to the issuance of these shares as verified by Mr. Paul Ehrlich, tax advisor to each of Executive and APC/AHFP or his designee.

Benefits.  Executive shall be entitled to full reimbursement of his current family life and medical benefit coverage, including medical, dental and prescription. Executive shall be reimbursed for a monthly parking allowance of no greater than five hundred dollars per month ($500.00) and reimbursement for corporate use of his personal automobile for business development purposes only (not including daily commutation) at a rate of $.30 per mile. Subject toArtisanal's standard rules and practices, Executive shall be reimbursed for all reasonable and necessary business expenses incurred by Executive in the ordinary course of business on behalf of AHFP or Artisanal, subject to the presentation of appropriate documentation and approval, in accordance with policies approved by AHFP.

Vacation.  In accordance with standard company policy on absenteeism during regular business hours and peak business cycle at Artisanal, in any calendar year Executive shall be entitled to four (4) weeks vacation whereby no more than ten (10) business days can be taken at any one time. Executive shall reserve the right to take the time or receive cash compensation equal to the time worked on behalf of Artisanal and/or AHFP in lieu of vacation days at the same Base Salary rate in effect at the time.

 

	
3.0

	
Confidential Or Proprietary Information.

 

	
3.1

	
Definition of Confidential and Proprietary Information.  “Confidential” and “Proprietary” Information means any information: (a) from which Artisanal/AHFP shall provide to Executive involving its business strategy, plans, operations and employees which information is not generally known to the public or to other persons who can obtain economic value from its disclosure or use, or (b) which is not generally known to the public and which, if disclosed, could cause embarrassment or other harm to Artisanal/AHFP, or (c) that is obtained by Executive from third-party resources or information which Executive had reason to know that such information was secured unlawfully. Examples of Confidential and Proprietary Information include, but are not limited to, business plans, marketing strategies, acquisition targets, trade secrets, business opportunities, information regarding pending transactions involving Artisanal/AHFP, customer lists, financial data (both historical and projected), tax information and personnel information pertaining to Artisanal/AHFP or third-party information disclosed to Artisanal/AHFP.

 

	
3.2

	
Nondisclosure and Nonuse of Confidential and Proprietary Information.  During the Term and three (3) years after the Term, including any extensions of the Term, Executive will not disclose to any person in any manner any Confidential and Proprietary Information except with the prior written authorization of an authorized official of Artisanal/AHFP. Executive agrees to cooperate with Arisanal/AHFP and to use its best efforts, to prevent the unauthorized disclosure, use, publication or reproduction of any Confidential and Proprietary Information. In the event, Executive is served with a subpoena or any other legal demand for information under federal or state law (“Discovery Request”) demanding the disclosure of any information about Artisanal/AHFP, including, but not limited to, Confidential and Proprietary Information, Executive shall be required to tender a copy of said Discovery Request to Artisanal/AHFP within one (1) business day from its receipt of said subpoena. Upon its receipt of the Discovery Request from Executive, Artisanal/AHFP shall take whatever actions necessary to quash the Discovery Request and until a court of competent jurisdiction shall dismiss Artisasnal's/AHFP’s motion to quash the Discovery Request, Executive shall refrain from tendering any information to the third-party that issued the subpoena.

  

  

  

 

	
3.3

	
Confidential and Proprietary Information of Others.  The obligations of Executive pursuant to this Agreement will also apply to Confidential and Proprietary Information belonging to the Artisanal/AHFP customers, suppliers, joint venturers, licensors and others with whom the Artisanal/AHFP does business.

 

	
3.4

	
Return of Materials.  Upon the cessation of any future role with Artisanal/AHFP for any reason, Executive will immediately deliver to Artisanal/AHFP all tangible materials containing or disclosing Confidential and Proprietary Information in Executive's possession or under his control, whether those materials are written, graphical, machine-readable (such as computer files and databases) or in any other format, including all duplicate copies made. Furthermore, Executive is restricted from making unauthorized copies of such materials upon the cessation of employment.

 

	
4.0

	
Termination

 

	
4.1

	
BY Artisanal/AHFP.  Artisanal/AHFP may only terminate this Agreement and Executive’s employment at any time during the Term “with cause” which shall be defined as either Executive’s: (a) conviction of a crime constituting a felony offense, (b) gross negligence, recklessness, or malfeasance in the performance of duties hereunder, which in AHFP’s board of directors reasonable judgment has caused, or is likely to cause, material harm to Artisanal and/or AHFP, (c) death, or (d) permanent irreversible medical disability. If this Agreement is terminated pursuant to subsection (a) or (b) Executive shall receive payment of Base Salary, Bonus and Benefits for the next succeeding three (3) months of this Agreement, thereafter the Agreement shall be deemed null and void. Any other termination under subsection 4.1 shall require the full payment of compensation due to Executive for the remaining duration of the Term, payable to Executive or his estate, whichever the case may be, within three (3) months of the event resulting in the termination of this Agreement. Any Bonus due under subsections (c) or (d) shall be based on the last Bonus paid to Executive as increased by at least ten percent (10%) each year unless the AHFP board of directors shall approve a greater sum to Executive for future Bonus due to Executive under this Agreement.

 

	
4.2

	
BY Executive.  Executive, at his sole discretion, shall be entitled to terminate this Agreement if at any time, Artisanal or AHFP, acting through its board of directors, shall resolve to either: (a) make a material change in his title, his responsibilities or his reporting status at Artisanal or AHFP, (b) enter into a corporate transaction with another person or legal entity (affiliated or non-affiliated) that results in a Change of Control (as defined below). If Executive shall elect to terminate this Agreement pursuant to subsections 4.2 (a) or (b) Executive shall receive a full payment in cash within twenty (20) days of submitting a written termination notice to Artisanal and AHFP equal to his Base Salary, Bonus and benefits under this Agreement for the duration of the Term. For any future calendar period where the Bonus has not been calculated it shall be the higher of one hundred thousand dollars ($100,000) or twenty percent (20%) over the previous year’s Bonus.

  

  

  

 

For purposes of this Agreement, a "Change in Control" of Artisanal or AHFP shall be deemed to have occurred if (i) AHFP and its affiliates cease to own all of the membership interests of Artisanal , or (ii) within any 12-month period beginning on or after the date hereof, the persons who were directors of AHFP immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board of Directors of AHFP or the board of directors of any successor to AHFP, provided that any director who was not a director of AHFP immediately before the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board of Directors of AHFP by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of this sub-section, unless such election, recommendation or approval was the result of an actual or threatened election contest of the type contemplated by Regulation 14a-11 promulgated under the Exchange Act.

For purposes of this Agreement, a "Change in Control" of the Company shall also be deemed to have occurred if (iv) a change in control of the Company of a nature that would be required to be reported in response to Item 5.01 of Current Report on Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act, other than a change of control resulting in control by Lender or a group including Lender occurs, (v) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than Lender or a group including Lender, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of AHFP representing 20% or more of the combined voting power of AHFP's then outstanding securities.

 

Notwithstanding anything stated to the contrary herein, unless there is a final non-appealable determination by a court of competent jurisdiction that the conditions underlying the Executive’s vesting of his Common were not lawfully fulfilled, the Executive shall be entitled to receive the Common Stock, regardless of the reasons for the termination of the Agreement.

 

	
5.0

	
Miscellaneous

 

	
5.1

	
Modification, Amendment.  This Agreement may not be modified or terminated in whole or in part unless the modification, termination or waiver is in writing and signed by Executive .

 

	
5.2

	
Severability.  If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction in any case, that provision will be construed by such court as broadly as possible to allow the provision to be enforceable to maximum extent allowed by law. The unenforceability of any one provision will not impair the enforceability of any other provision.

 

	
5.3

	
Governing Law, Forum.  This Agreement shall be governed by and construed in a accordance with the laws of the State of New York, excluding any conflicts of laws principles which would require the application of the laws of any other jurisdiction. Any action pertaining to this Agreement shall be brought in the federal or state courts located in the State of New York, County of New York and all parties hereby waive all objections to the bringing of such an action in those courts on the basis of lack of personal jurisdiction, improper venue or forum non conveniens.

 

	
5.4

	
Entire Agreement.  Executive, Artisanal and AHFP acknowledge receipt of a copy of this Agreement, and agree that this Agreement contains the complete agreement by and among Artisanal, AHFP and Executive concerning the subject matter contained herein, and supersedes all other prior or contemporaneous agreements or understandings, whether oral or written, between the parties with respect to that subject matter.

  

  

  

 

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first above written.

 

	  	  	
American Home Food Products, Inc.

	  	  	  	  
	  	  	
By:

	  
	
Daniel W. Dowe

	  	  	  
	  	  	
Artisanal Cheese LLC

	  	  	  	  
	  	  	
By:

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