Exhibit 10.17
VOLUNTARY SURRENDER AGREEMENT
THIS VOLUNTARY SURRENDER AGREEMENT (this "Voluntary Surrender
Agreement") is made effective the 24th day of November, 2009 by and among Amish
Naturals, Inc. (the "Borrower"), a Nevada corporation having its principal place
of business at 0000 Xxxxxx Xxxx 00, Xxxxxxxxxxx, Xxxx 00000 and Castlerigg
Master Investment Ltd., an entity organized under the laws of the British Virgin
Islands, in its capacity as collateral agent (in such capacity, the "Collateral
Agent'") and party to (i) a Securities Purchase Agreement, dated as of August
31, 2007, (the "2007 SPA") and (ii) a Securities Purchase Agreement, dated as of
February 20, 2008, (the "2008 SPA" and together with the 2007 SPA, the "SPAs")
and having a mailing address in care of Xxxxxxx Asset Management Corp., 00 Xxxx
00xx Xxxxxx, Xxx Xxxx XX 00000.
RECITALS:
A. Pursuant to the 2007 SPA, on September 9, 2007 the Borrower issued
to the Collateral Agent as holder for those parties listed as a "Buyer" on the
Schedule of Buyers attached to the 2007 SPA (collectively, the "2007 Buyers") a
first Senior Secured Convertible Note (the "First Debenture").
B. Pursuant to the 2008 SPA, on February 20, 2008 the Borrower issued
to the Collateral Agent as holder for those parties listed as a "Buyer" on the
Schedule of Buyers attached to the 2008 SPA (collectively, the "2008 Buyers" and
together with the 2007 Buyers, the "Buyers") a second Senior Secured Convertible
Note (the "Second Debenture" and together with the First Debenture, the
"Notes").
C. The undersigned subsidiary of the Borrower (the "Guarantor")
executed and delivered a Guaranty dated as of September 10, 2007 (the
"Guaranty") in favor of the Collateral Agent for the benefit of itself and the
Buyers, with respect to the Borrower's obligations under the SPAs and the Notes
(together with all ancillary documents, the "Transaction Documents")
D. In order to secure the full and complete payment, performance, and
observance of all of its then existing or thereafter arising obligations under
the Transaction Documents, the Borrower granted the Collateral Agent a security
interest in, among other things, all assets of the Borrower, including but not
limited to all accounts, chattel paper, commercial tort claims, deposit
accounts, documents, equipment, general intangibles, goods, instruments,
inventory, investment property, copyrights, trademarks and licenses,
letter-of-credit rights, supporting obligations and the proceeds and products
thereof, whether then owned or thereafter acquired (collectively, the
"Collateral").
E. By letter dated November 9, 2009, the Collateral Agent provided
Borrower written notice (the "Notice") of the existence of defaults of the
Borrower's obligations under the Notes by virtue of the Borrower's failure to
pay interest which was due and payable in respect of the First Debenture on
January 1, 2009, April 1, 2009, July 1, 2009 and October 1, 2009 (collectively,
the "Events of Default") and on account thereof the Collateral Agent has among
other rights and remedies under the Transaction Documents the rights and
remedies of a secured party under the Uniform Commercial Code as adopted in the
governing jurisdiction (the "UCC").
F. The Borrower does not dispute that: (i) the Events of Default exist
and are continuing as of the date of this Voluntary Surrender Agreement (ii) the
Collateral Agent holds a properly perfected, valid, security interest in the
Collateral, and (iii) the Collateral Agent has rights under the UCC and the
Transaction Documents on account thereof.
G. The Borrower has in the prudent exercise of its business judgment
determined to cease operations and to enter into this Voluntary Surrender
Agreement with respect to the surrender of substantially all of the Collateral
by the Borrower to the Collateral Agent and to determine in accordance with
section 9-603 of the UCC the standards measuring the fulfillment of the rights
of the Borrower and the duties of the Collateral Agent relating thereto.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and promises herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, and wishing to be legally bound hereby, the Borrower and the
Collateral Agent hereby agree as follows:
1. Surrender of Collateral. Effective at 9:00 a.m. (prevailing Eastern
Time) on November 24, 2009 (the "Surrender Date") the Borrower shall in partial
satisfaction of Borrower's obligations under the Transaction Documents surrender
possession of substantially all of the Collateral to the Collateral Agent,
excepting only from such surrender: (a) one (1) Toyota Forklift Model no.
7FBEU18 having serial number 17535; (b) one (1) battery-GNB model no.
2601808517B serial no. GEJ2248; and (c) one (1) charger-Ametek model no.
750M1-18C serial no. 207CS52711. The Borrower hereby waives with respect to the
Collateral any right of redemption, stay or appraisal, as well as any right to
exoneration, subrogation, reimbursement arising at law, in equity or otherwise,
and any other requirement of law with respect to the subject matter of this
Voluntary Surrender Agreement to the extent permitted by law. The Borrower
expressly acknowledges that the Collateral Agent is assuming no liabilities of
the Borrower in connection with the Collateral.
2. Rights and Powers Following the Surrender Date. In addition to the
other rights and powers available to a secured creditor following foreclosure
including, without limitation, those rights and powers set forth in the
Transaction Documents and hereinafter set forth, following the Surrender Date
the Collateral Agent shall serve as the Borrower's true and lawfully appointed
attorney, with full power of substitution, in the name of the Borrower or
otherwise, to exercise any power permitted by applicable law with respect to any
Collateral, which appointment is irrevocable and is coupled with an interest.
3. Right to Dispose of the Collateral. The Borrower acknowledges that
following surrender of the Collateral the Collateral Agent may sell or otherwise
dispose of the Collateral at a commercially reasonable public or private sale,
for cash, upon credit or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. Pursuant to Borrower's right to dispose
of the Collateral, the parties acknowledge that Borrower is entering into a
separate Consulting Agreement with Mr. Xxxxx Xxxxxxx, President of Collateral
Agent, for the purpose of disposing of this collateral in a commercially
reasonable manner.
4. Method of Disposition. The Borrower agrees not to challenge the
disposition of the Collateral on the grounds of commercial reasonableness
pursuant to section 9-610 of the UCC.
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5. Collection and Enforcement Rights. Following the Surrender Date, the
Collateral Agent may, in its discretion, (i) notify any account debtor or other
person obligated to Borrower to make payment or otherwise render performance to
or for the benefit of the Collateral Agent, (ii) take any proceeds to which the
Collateral Agent is entitled under section 9-315 of the UCC, (iii) enforce the
obligations of an account debtor or other person obligated to Borrower and
exercise the rights of the Borrower with respect to the obligation of the
account debtor or other person obligated to make payment or otherwise render
performance to the Borrower, and with respect to any property that secures the
obligations of the account debtor. The Borrower agrees not to challenge the
collection and enforcement such collateral if conducted in accordance with the
terms hereof on the grounds of commercial reasonableness pursuant to section
9-607 of the UCC.
6. Application of Proceeds; Determination of Surplus or Deficiency. The
Collateral Agent shall apply against the Notes the cash proceeds realized from
the sale, collection and enforcement of the Collateral in accordance with the
provisions of sections 9-608 and 9-615 of the UCC and will upon request provide
the Borrower with a written explanation of the calculation of any surplus or
deficiency in accordance with section 9-616 of the UCC (the "Accounting").
7. [INTENTIONALLY OMITTED]
8. Representations and Warranties and Covenants of the Borrower. The
Borrower represents, warrants and covenants to the Collateral Agent that, as of
the Surrender Date:
(a) Organization, Power, Standing and Qualifications. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and has all requisite corporate power and authority to
enter into and perform this Voluntary Surrender Agreement and consummate the
transactions contemplated hereby.
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(b) Enforceability. This Voluntary Surrender Agreement is the valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
except as such enforceability may be qualified by equitable principles and
pursuant to laws enacted for the protection of creditors.
(c) Required Notification to Borrower. The Borrower acknowledges that
all notices required to be given to the Borrower pursuant to any applicable
provisions of the UCC have been so given. The execution of this Voluntary
Surrender Agreement by the Borrower's authorized representative serves as
acknowledgment of receipt of such notice by the Borrower.
(d) Legal Representation. The Borrower has been represented by
independent competent counsel in connection with this Voluntary Surrender
Agreement and the circumstances giving rise hereto.
(e) No Governmental Action. The Collateral is not subject to or the
subject of any governmental orders, restrictions on transfer, or other relevant
orders of any court of law.
9. Representations, Warranties and Covenants of the Collateral Agent.
The Collateral Agent represents and warrants and covenants to the Borrower that,
as of the Surrender Date:
(a) Organization, Power and Standing. The Collateral Agent is an
entity, duly organized, validly existing and in good standing under the laws of
the British Virgin Islands. The Collateral Agent has all requisite power and
authority to enter into and perform this Voluntary Surrender Agreement and
consummate the transactions contemplated hereby.
(b) Due Authorization. (i) The execution and delivery of this Voluntary
Surrender Agreement by the Collateral Agent, and the performance by the
Collateral Agent of its obligations hereunder, and the transactions contemplated
hereby, have been duly and validly authorized by all necessary action on the
part of the Collateral Agent, and (ii) this Voluntary Surrender Agreement is the
valid and binding obligation of the Collateral Agent, enforceable in accordance
with its terms, except as such enforceability may be qualified by equitable
principles and pursuant to laws enacted for the protection of creditors.
10. Additional Agreements.
(a) Additional Documents and Actions. The Borrower agrees to execute
and deliver such documents, including without limitation
assignments, licenses and other instruments of transfer, and take
such other action as the Collateral Agent deems necessary or
advisable in order to effect in accordance with applicable law
the surrender of the Collateral.
(b) Information. The Borrower agrees to provide upon request such
information regarding and access to the Collateral as the
Collateral Agent (and/or its agents and representatives) deems
appropriate in its sole discretion.
11. Assignment and Binding Effect. This Voluntary Surrender Agreement
may not be assigned by any party hereto without the prior written consent of the
other party hereto and any purported assignment in violation of the terms of
this Section 11 shall be null and void ab initio. All of the terms and
provisions of this Voluntary Surrender Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and permitted
assigns of the parties hereto.
12. Waiver. Any term or provision of this Voluntary Surrender Agreement
may be waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party and duly given to the other
party.
13. Notices. Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to
such party personally or sent to such party by registered or certified mail
(return receipt requested), with postage and registration or certification fees
thereon prepaid, or delivered by facsimile transmission with receipt confirmed,
addressed to the party at its address set forth below:
To Borrowers:
Amish Naturals, Inc.
0000 Xxxxx Xxxxx 00
Xxxxxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Xxxxxx X. Xxxxxx XX, Esq. and
Xxxxxx X. Xxxxx, Esq.
XXXXX XXXXX XXXXXXX
-------------------
TOWNE EVANCHAN XXXXXXXXX & XXXXXX, LLC.
000 X. Xxxx Xx., Xxxxx 000
Xxxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To the Collateral Agent:
Castlerigg Master Investment Ltd.
c/o Sandell Asset Management Corp.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address or person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other communication shall be deemed to have been
given as of the date so delivered.
14. Severability. If any provision of this Voluntary Surrender
Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (i) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision,
and (ii) the remainder of this Voluntary Surrender Agreement and the application
of such provision to other Persons or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
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15. Governing Law. This Voluntary Surrender Agreement shall be governed
by and interpreted and enforced in accordance with the laws of the State of Ohio
as applied to contracts made and fully performed in such state.
16. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Voluntary Surrender Agreement are for the sole
benefit of the parties hereto and their respective successors and permitted
assigns and shall not be construed as conferring, and are not intended to
confer.
17. Section Headings. All section headings are for convenience only and
shall in no way modify or restrict any of the terms or provisions hereof.
18. Counterparts. This Voluntary Surrender Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, and the
Borrower and the Collateral Agent may become parties hereto by executing a
counterpart hereof. This Voluntary Surrender Agreement and any counterpart so
executed shall be deemed to be one and the same instrument. It shall not be
necessary in making proof of this Voluntary Surrender Agreement or any
counterpart hereof to produce or account for any of the other counterparts. A
facsimile copy of the signature page hereof transmitted by a party hereto shall
be effective to constitute the execution and delivery hereof by such party.
19. Time for Performance. If the final day of any period or any date of
performance under this Voluntary Surrender Agreement falls on a Saturday, Sunday
or legal holiday, then the final day of the period or the date of performance
shall be extended to the next day which is not a Saturday, Sunday or legal
holiday.
20. Construction. This Voluntary Surrender Agreement and the documents
to be delivered hereunder constitute the entire understanding and agreement
among the parties hereto concerning the subject matter hereof. All negotiations
between the parties hereto are merged into this Voluntary Surrender Agreement,
and there are no representations, warranties, covenants, understandings or
agreements, oral or otherwise, in relation hereto between the parties other than
those incorporated herein. The parties agree that the terms and conditions of
this Voluntary Surrender Agreement are the result of negotiations between the
parties and that this Voluntary Surrender Agreement shall not be construed in
favor of or against any party by reason of the extent to which any party or its
professionals participated in the preparation of this Voluntary Surrender
Agreement.
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21. Amendment. Subject to the Collateral Agent's rights under the
Transaction Documents, neither this Voluntary Surrender Agreement nor any term
hereof may be amended, released, discharged, abandoned, changed or modified in
any manner except by an instrument in writing which refers to this Voluntary
Surrender Agreement and is executed by the parties hereto.
22, Waiver of Claims. Provided Xxxxx Xxxxxxx carries out his duties in
good faith pursuant to the terms of the separate consulting agreement,
Collateral Agent shall provide a Waiver of Claims to Borrower and Guarantor
stating that Collateral Agent, on behalf of itself, its successors, assigns and
representatives thereby fully and forever releases and discharges Borrower and
Guarantor, their assigns, officers, shareholders, directors, employees,
attorneys, successors, and representatives, whatever the case may be, from any
and all actions, causes of action, damages, judgments, claims and demands of
whatsoever kind and nature, in law or equity, whether known or unknown, from the
beginning of time until the issuance of the Waiver of Claims.
AMISH NATURALS, INC.
By: /s/ Xxxxx Xxxxxxx, Sr.
----------------------------------------
Name: Xxxxx Xxxxxxx, Sr.
Title: Chief Executive Officer
CASTLERIGG MASTER INVESTMENTS LTD.
By: Xxxxxxx Asset Management Corp., its Investment Manager
By: //signed//
----------------------------------------
Name:
Title:
CONSENT OF GUARANTOR
The undersigned guarantor hereby consents to the waivers given and the
actions to be taken by the Borrower and by the Collateral Agent as set forth in
this Voluntary Surrender Agreement, and agrees not to challenge the disposition
of the Collateral on the grounds of commercial reasonableness. The undersigned
further acknowledges that all notices required to be given to the undersigned by
applicable provisions of the UCC have been given and received, or are hereby
waived.
AMISH NATURAL SUB, INC.
By: ______________________
Name:
Title:
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