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