FILED: NASSAU COUNTY CLERK 09/30/2016 02:39 PM INDEX NO. 014491/2011 NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 09/30/2016 Exhibit 15
STATE OF NEW YORK SUPREME COURT: COUNTY OF NASSAU KENNETH SCHLOSSBERG 143 Lagoon Blvd. Massapequa, New York 11758, STEUBEN FOODS, INC. 15504 Liberty Ave. Jamaica, New York 11433, Plaintiff, Affidavit for Judgment by Confession Index No. [ ] Defendant. STATE OF NEW YORK ) ) ss: COUNTY OF NASSAU ) HENRY SCHWARTZ, duly sworn, deposes and says: 1. I am the Chief Executive Officer of Steuben Foods, Inc. ( Steuben ) and am authorized to execute this Affidavit for Judgment by Confession ( Steuben Confession of Judgment ) on Steuben s behalf. I hereby authorize entry of judgment against Steuben as set forth below in the Supreme Court, Nassau County, New York. 2. This Steuben Confession of Judgment is for a payment obligation justly due from Steuben to Kenneth Schlossberg ( Mr. Schlossberg ) for the sum of $13,000,000 under the Stipulation of Settlement entered between Steuben and Mr. Schlossberg on June, 2016 (the Settlement Agreement ) in Schlossberg v. Schwartz, et al., Sup. Ct. Nassau Co. Index No. 11-014491 (the Schlossberg Action ). Steuben hereby confesses judgment pursuant to CPLR 3218 in favor of Mr. Schlossberg in the amount of $13,000,000 less any portion thereof already paid to Mr. Schlossberg under the Settlement Agreement. 1
3. This Steuben Confession of Judgment is for Steuben s payment obligation due to Schlossberg arising out of the following facts: Mr. Schlossberg was a 10% shareholder and former President and director of Steuben. In the Schlossberg Action, Mr. Schlossberg asserted: (a) direct claims as a shareholder and former employee of Steuben, including claims for breach of alleged agreements concerning Steuben shareholder distributions, alleged improper transfer of certain business from Steuben to its affiliates, failure to pay alleged earned bonus and vacation pay, and age discrimination under the applicable New York State and City statutes; (b) derivative claims on behalf of Steuben against its majority shareholder and affiliates, including claims for breach of fiduciary duty, mismanagement, corporate waste, self-dealing, misappropriation of assets, diversion of corporate opportunity, and unjust enrichment, based on allegations of improper diversion of funds, business, opportunities, and resources from Steuben to its affiliates; and (c) a claim for common law dissolution of Steuben, based on allegations of minority oppression, mismanagement, and looting and diversion of corporate funds and resources by the controlling majority. Pursuant to the Settlement Agreement, it was agreed that the Schlossberg Action would be dismissed with prejudice and Mr. Schlossberg would surrender his shares in Steuben in consideration for Steuben s payment to Mr. Schlossberg of $13,000,000 (the Settlement Amount ), including: $10,000,000 being paid for Steuben s repurchase of Mr. Schlossberg s 10% shares of Steuben; $273,676 is being paid for interest on the amount being paid for Steuben s repurchase of Mr. Schlossberg s 10% of shares of Steuben; $1,500,000 being paid as reimbursement of Mr. Schlossberg s attorneys fees and other litigation costs and expenses incurred in the Schlossberg Action, including those related to the counterclaims against Mr. 2
Schlossberg; and the remaining $1,226,324500,000 being paid in settlement of all remaining direct (i.e., non-derivative) claims. Under Section 4 of the Settlement Agreement, the $13,000,000 Settlement Amount is to be paid by Steuben as follows: (a) $3,000,000, allocated to the settlement of direct claims against Steuben, the interest on the amount being paid for Steuben s repurchase of Mr. Schlossberg s 10% of shares of Steuben, and the reimbursement of attorneys fees, upon execution of the Settlement Agreement; (b) $1,000,000 /twelve months after execution of the Settlement Agreement allocated to the Stock repurchase by Steuben of Mr. Schlossberg s 10% shares of Steuben; and (c) $9,000,000 in forty-eight (48) equal monthly payments of $187,500 each, due and owing to Mr. Schlossberg no later than on the first business day of each calendar month, with the first of such payments due and owing to Mr. Schlossberg on the first business day of the first calendar month after execution of the Settlement Agreement, which monthly payments are allocated to the Stock repurchase by Steuben of Mr. Schlossberg s 10% shares of Steuben. Under Section 7(a) of the Settlement Agreement, if Steuben fails to make any payment required by Section 4 thereof (each such failure, a Default ), and if such Default is not cured within ten (10) business days after Mr. Schlossberg s counsel provides written notice to Steuben of the payment failure in accordance with the terms of the Settlement Agreement, the entire portion of the Settlement Amount that remains unpaid shall become accelerated and immediately become due and owing to Mr. Schlossberg. Without limiting the foregoing, under Section 7(a) of the Settlement Agreement, in the event of three Defaults (irrespective of the fact that Steuben may have cured any of such Defaults), the entire portion of the Settlement Amount that remains unpaid (i.e. $13 Million minus any prior payments) shall become accelerated and immediately become due and owing to Mr. Schlossberg. 3
4. In the event of a Default as set forth above, or otherwise in the event of acceleration of the Settlement Amount pursuant to the terms of the Settlement Agreement, Steuben hereby irrevocably authorizes the Nassau County clerk to appear for and enter judgment against it in the amount of $13,000,000 (less any portion already paid to Mr. Schlossberg under the Settlement Agreement), with interest at the rate of 9% per annum from the date that any failed payment became due. 5. This Steuben Confession of Judgment shall be held by Mr. Schlossberg s counsel in escrow and may only be filed in accordance with the provisions of Section 7 of the Settlement Agreement. 6. Steuben hereby acknowledges, consents and agrees that it shall be sufficient for Mr. Schlossberg to establish the right to enter this Steuben Confession of Judgment and the amount for which it may be entered by submitting an Affidavit from Mr. Schlossberg or his counsel. STEUBEN FOODS, INC. By: Name: Henry Schwartz Title: Chief Executive Officer STATE OF NEW YORK ) ) SS: COUNTY OF NASSAU ) On this day of JuneMay, 2016 before me personally appeared Henry Schwartz, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity and that by his signature on the instrument, the individual or the person upon behalf the individual acted, executed the instrument. 4
5 Notary Public