EXHIBIT 10.12
XXXXXXX FOODS INC.
000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
April 20, 2007
Xxxxxxx Management, Inc.
Xx. Xxxx Xxxxxx
and
Xx. Xxxx Xxxxxx
c/o Vaughan Foods, Inc.
000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
This will set forth the agreement pursuant to which we, or a wholly
owned subsidiary formed for that purpose, will acquire all of your current 40%
limited partnership interests in Allison's Gourmet Kitchens, LP ("Allisons") and
the general partnership interest in Allison's of Xxxxxxx Management, Inc.
("Xxxxxxx").
1. Simultaneously with the effectiveness of an initial public
offering of our equity securities ("IPO"), we will acquire all of the limited
partnership interests held by you for $2.5 million payable in cash (the
"Purchase Price"). $1.5 million of the Purchase Price will be payable
immediately after the closing of the IPO. The remaining $1.0 million of the
Purchase Price will be paid on the earlier of June 30, 2008 or the closing of an
equity financing by the company, as combined after the closing of the IPO, that
raises at least $4 million in gross proceeds. The company will pay interest at
the rate of 10% on such $1.0 million of the Purchase Price, commencing on the
day of closing of the IPO. The Purchase Price will be divided 12 1/2 to Xxxx and
87 1/2 to Herb.
2. Simultaneously with the transfer of the limited partnership
interests, Xxxxxxx will assign to us its general partnership interest in
Allison's in return for our undertaking, as set forth herein, to indemnify and
hold harmless Xxxxxxx from all liability as the former general partner of
Allison's other that those liabilities, if any, resulting from Xxxxxxx'x
criminal conduct or gross negligence.
3. The limited partnership interests in Allison's conveyed
hereunder, together with the 60% interest in Allison's currently owned by Xxxx
X. Xxxxxxx and Xxxxxx X. Xxxxxx, Xx. and to be conveyed under a separate
agreement, will be held in an operating division or by a separate subsidiary
that we will organize for that purpose. Herb will serve as the Chairman and
Chief Executive Officer of that division or subsidiary and will be compensated
in accordance with the agreement previously reached with us.
If this letter accurately sets forth our understanding, please sign and
return a copy of this letter to us.
Very truly yours,
XXXXXXX FOODS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, President
Accepted and agreed to
This 20th day of April, 2007
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Xxxxxxx Management, Inc.
By: /s/ Xxxx Xxxxxx
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