AGREEMENT
Exhibit
10.12
AGREEMENT
This
Agreement is made as of this 4th day of May, 2009 by and between the Parties
listed below:
The
Parties
SOVEREIGN BANK, having an
office at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
(“Lender”);
YOMAH, INC., a New Jersey
corporation, having an address of 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000
(“Borrower”);
XXXXXX XXXXXXXXXX, XXXXXX
XXXXXXXXXX (collectively, the “Individual Guarantors”), and KEDMA, INC., a New Jersey
corporation (the “Corporate Guarantor” and, together with the “Individual
Guarantors” collectively referred to herein as “Guarantors”) for purposes of
this Agreement all having an address at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx
00000 (singly by name, and collectively, “Guarantors”);
XXXXX XXXXX, TRACK DATA CORPORATION,
a Delaware corporation, SILVER POLISH, LLC, a New Jersey limited liability
company, and XXXXX
XXXXXX, for purposes of this Agreement having an address c/o Xxxxxx
Xxxxxxx, Esq., 0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 (jointly
and severally, singly by name, and collectively, “Assignees”)
The
Facts
WHEREAS, Borrower is justly
indebted to Lender in the principal amount of $22,029,000.00 (the “Loan”)
pursuant to two promissory notes executed by Borrower, the first being a
promissory note dated April 4, 2005 in the principal amount of $20,943,147.00
(“Note I”), and the second being a promissory note entitled Letter of Credit
Reimbursement Note, dated April 4, 2005 in the principal amount of $1,085,853.00
(“Note II”); and
WHEREAS, Note I has an unpaid
principal balance as of April 1, 2009 of $12,887,657.60 exclusive of interest,
late fees, fees and costs due Lender (the “Note I Underlying Indebtedness”);
and
WHEREAS, Note II serves as
evidence of the Borrower’s obligation to pay Lender up to $542,927.00 in the
event the Township of Lakewood (“Beneficiary”) draws down upon a certain Amended
LC (herein defined) prior to its expiration date of April 4, 2010 (the “Note II
Underlying Indebtedness”); and
WHEREAS, the Note I Underlying
Indebtedness and the Note II Underlying Indebtedness are collectively referred
to herein as the “Underlying Indebtedness”); and
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WHEREAS, Note I and Note
II (collectively,
the “Notes”) are secured by a certain Mortgage made by Borrower in favor of
Lender dated April 4, 2005 and recorded in the Ocean County Clerk’s Office on
April 11, 2005 in MB 12558 at Page 29 et seq. (the “Mortgage”)
which Mortgage continues to encumber all of the real property described therein
including, but not limited to, Borrower’s rights in and to the common areas,
unimproved streets and rights of way, together with all other appurtenances and
hereditaments located within and related to that certain subdivision located in
the Township of Lakewood, New Jersey commonly known as Sterling Place
(collectively, the “Mortgaged Premises” or “Mortgaged Property”);
and
WHEREAS, The Individual
Guarantors and Corporate Guarantor executed guaranties of payment in favor of
Lender dated April 4, 2005 (collectively, the “Guaranties”) guaranteeing payment
in full of all sums due Lender under the Notes, Mortgage, Modification Agreement
(hereinafter defined), and the other documents executed by Borrower and/or
Guarantors in favor of Lender in connection with the Loan (such Notes, Mortgage,
Mortgage Modification and other documents being collectively, the “Loan
Documents”); and
WHEREAS, To better secure the
Guaranties, the Guarantors executed and delivered to Lender a second mortgage
and security agreement which was recorded in the Ocean County Clerk’s Office on
July 27, 2007 in Mortgage Book 13726 at page 157 et seq. (the “Second
Mortgage”) which Second Mortgage encumbers, among other properties, twenty-four
(24) condominium units owned by Individual Guarantors located in the Township of
Lakewood, Ocean County, New Jersey (the “Condo Units”); and
WHEREAS, Yomah and the
Guarantors executed in favor of Lender a Modification and Extension Agreement
dated July 26, 2007, which was recorded in the Ocean County Clerk’s Office on
July 27, 2007, in MB 13726 at page 0176 et seq. (Modification
Agreement”); and
WHEREAS, At Borrower’s
request, Lender issued an Irrevocable Standby Letter of Credit dated April 4,
2005 in favor of the Beneficiary in the face amount of $1,085,853.00 bearing No.
3844 (the “Original LC”); and
WHEREAS, By resolution dated
December 13, 2007, the Beneficiary agreed to reduce the face amount of the
Original LC to $542,927.00, and on July 8, 2008, Lender issued an amendment to
the Original LC entitled Amendment #1 to Irrevocable Standby Letter of Credit
No. 3844 reducing the face amount of the Original LC from $1,085,853.00 to
$542,927.00 (the “Amended LC”) which Amended LC was accepted by the Beneficiary
on July 17, 2008; and
WHEREAS, The Amended LC
expires pursuant to its terms on April 4, 2010. The Amended LC has not been
drawn upon as of the date hereof; and
WHEREAS, Borrower acknowledges
the accuracy of the Underlying Debt and Borrower’s obligation to pay same to
Lender’ and
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WHEREAS, Borrower acknowledges
that it has defaulted on the Notes and the Guarantors acknowledge that they have
defaulted on their respective Guaranties and that said events of default
continue through the date hereof; and
WHEREAS, By virtue of
Borrower’s and Guarantors’ aforementioned defaults, Lender has instituted a
foreclosure action against Yomah, Inc. et als. in the Superior
Court, Chancery Division, Ocean County (the “Court”), bearing Docket No.
F25192-08 (the “Yomah Foreclosure Action”) seeking to foreclose upon those lots
in Sterling Place which continue to be encumbered by the Mortgage;
and
WHEREAS, in consideration of
payment to Lender of the sums referenced below, (i) Assignees desire to acquire
from Lender an assignment without representations, warranties or recourse of all
of Lender’s rights in and to the Yomah Foreclosure Action and in and to the loan
documents referred to therein related to the Sterling Place property
(collectively, the “Yomah Loan Documents”), except Assignees do not desire to
take an assignment of any corporate or personal guarantees executed by the
Guarantors in favor of Lender, inclusive of those Guaranties executed by
Borrower and Guarantors in favor of Lender with respect to the Second Mortgage
encumbering the Condo Units, and (ii) Lender desires to assign all of such
rights under the terms and conditions set forth herein; and
WHEREAS, Borrower, Guarantors
and Assignees have jointly proposed a settlement arrangement to Lender for its
consideration; and
WHEREAS, Borrower, Guarantors
and Assignees have advised Lender that they have entered into separate
agreement(s) by, between and among themselves with respect to the subject matter
of this Agreement (the “Other Agreements”); and
WHEREAS, Borrower, Guarantors
and Assignee acknowledge and confirm that Lender is not a party to any of the
Other Agreements nor privy to the contents of same and further, that none of
said parties have entered into any separate or side agreement, written or oral,
with Lender regarding the subject matter of this Agreement.
NOW THEREFORE, in
consideration of the sum of Ten and 00/100 ($10.00) Dollars and other good and
valuable consideration, and in further consideration of the mutual promises and
covenants made by the Parties set forth herein, the Parties agree as
follows:
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1. (A) So
long as the Borrower, Guarantors and Assignees perform their respective duties
and obligations set forth herein and are free from default hereunder, Lender
agrees to forbear from issuing execution or seeking the appointment of a
receiver or becoming mortgagee in possession concerning the Mortgaged Property
or under the Yomah Foreclosure Action, except as otherwise permitted in Section
4 of this Agreement. In consideration therefor, and of the Lender’s conditional
agreement to accept a discounted price for the assignment of the Loan, and with
Borrower’s and Guarantors’ full knowledge, approval and consent, Assignees shall
pay to Lender the Loan purchase sum of EIGHT MILLION EIGHT HUNDRED THOUSAND
AND 00/100 ($8,800,000.00) (the “Settlement Sum”) in the manner provided
in Section 2 of this
Agreement which Settlement Sum Borrower, Guarantors and Assignees acknowledge
represents a substantial discount of the Underlying Indebtedness due Lender. In
addition to payment of the Settlement Sum to Lender, Assignees also agree to
“replace” (which term shall include a payment to the Lender in the form of bank
or certified check in the amount of $542,927 and, if such Amended LC is sooner
drawn upon by its beneficiary, Township of Lakewood, then, to the extent such
draft is honored, “replace” shall also include the reimbursement of Lender for
the amount of such honored drafts) the Amended LC prior to June 15, 2009, TIME BEING OF THE ESSENCE,
unless that deadline is extended as permitted pursuant to Section 2(d) herein,
of if the Amended LC is drawn upon by the Beneficiary prior to the “Amended LC
Payment Deadline” or the “Extended Amended LC Payment Deadline” (as those terms
are defined in Section 2(d) herein), in which case Assignees shall pay the
Lender the sum of $542,927 within twenty- four hours of notice by Lender to the
Assignees that the Amended LC has been drawn upon, TIME BEING OF THE
ESSENCE.
(B) Upon
(a) full payment of the Settlement Sum, and (b) replacement of the Amended LC,
whichever event is last to occur, and only then, shall Lender be obligated to
assign to Assignees, without representations, warranties or recourse, all of the
Lender’s then right, title and interest in and to the existing Yomah Foreclosure
Action and the Loan Documents (specifically excluding from such assignment (i)
The Guaranties (ii) Lender’s rights against the Guarantors pursuant to their
respective Guaranties, (iii) the Second Mortgage and (iv) Lender’s rights and
remedies against the properties encumbered by the Second Mortgage). So long as
there is no default hereunder by the Borrower, Guarantors and/or Assignees,
then, pending final payment of the Settlement Sum and replacement of the Amended
LC as herein provided, and provided Borrower, Guarantors or Assignees have not
defaulted on this Agreement, Lender agrees, at Borrower’s, Guarantors’ and
Assignees’ request, not to issue execution to enforce the foreclosure judgment
against Borrower and/or Guarantors and/or the Mortgaged Property in the Yomah
Foreclosure Action but may obtain a Final Judgment against the named defendants
in said Yomah Foreclosure Action. No provision in this Agreement shall limit or
is intended to limit or prevent Lender from enforcing its rights and pursuing
its remedies against any of the Guarantors under their respective Guaranties or
under the Second Mortgage encumbering the Condo Units. Additionally, Borrower
and Assignees agree that they shall not, singly and/or collectively, interfere
with Lender’s rights to foreclose upon the Condo Units or pursue any other right
Lender possesses under the Guaranties, the Second Mortgage, or by virtue of law
including, but not limited to, Lender’s right to have a rent receiver appointed
for the Condo Units.
2. The
Settlement Sum shall be paid to the Lender by the Assignees as
follows:
(a) Upon
execution of this Agreement by Borrower, Guarantors and Assignees, the Assignees
shall pay to Lender the sum of $500,000.00 representing a
“good faith” deposit (the “Initial Deposit”). Once this Agreement is executed by
Borrower, Guarantors and Assignees and delivered to Lender, their agreement
herewith shall be irrevocable for a period of twenty-one (21) days from the date
Lender receives same to afford the Lender a power of acceptance hereof to be
manifest by the Lender countersigning same within the twenty-one (21) day
interval. The Initial Deposit shall be in the form of a
bank or certified check payable to the Lender, or by federal wire transfer as
Lender may instruct. In the event Lender does not approve of the terms of this
Agreement and fails to sign same within twenty-one (21) days following its full
execution by Borrower, Guarantors and Assignee, this Agreement shall
automatically cease and terminate and be of no force and effect and the Initial
Deposit shall be returned to Assignees whereupon Lender shall be free to enforce
the Loan, including, without limitation, resuming the prosecution of the Yomah
Foreclosure. However, once Lender signs this Agreement and transmits a copy of
same to Xxxxxxx Xxxxxx, Esq. and Xxxxxx Xxxxxxx, Esq. (“Date of Delivery”) in
accordance with the provisions of Section 16 herein, the Initial Deposit shall
thereupon become the Lender’s property and shall become non-refundable to
Assignees (the “Non-Refundable Initial Deposit”).
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(b)
Within three (3) business days following the Date of Delivery, TIME BEING OF THE ESSENCE,
Assignees shall pay to Lender the additional sum of $4,500,000.00 (the “Additional
Deposit”) by federal wire transfer to Lender’s account as Lender may instruct
and thereupon the Additional Deposit shall become the Lender’s property and be
non-refundable (the “Non-Refundable Additional Deposit”). The Non-Refundable
Initial Deposit and the Non-Refundable Additional Deposit are sometimes
collectively referred to herein as the “Non-Refundable Deposits”.
(c) In
the event the Non-Refundable Additional Deposit is not timely paid to Lender as
herein provided, this Agreement shall be null and void and Lender shall retain
the Non-Refundable Initial Deposit and may proceed to enforce the Loan,
including, without limitation, prosecuting the Yomah Foreclosure Action. In such
an event, Borrower, Guarantors and Assignees acknowledge that the Non-Refundable
Initial Deposit shall
not be applied to reduce the principal balance, interest, fees or costs
due Lender under the Notes or any of the Loan Documents but, rather, shall serve
as agreed liquidated damages for Assignees’ failure to consummate the
transaction as contemplated herein which sum Borrower, Guarantors and Assignees
agree represents fair and reasonable damages for Assignees’ failure to pay the
Additional Deposit since it is extremely difficult with any degree of accuracy
to measure the actual damages Lender would incur if the Borrower, Guarantors
and/or Assignees default hereunder.
(d)
Simultaneously with the payment of the Additional Deposit, the Assignees shall
execute in favor of Lender a promissory note (“Assignees’ Note”) as evidence and
not in payment of the balance, which Assignees’ Note shall be in the form
annexed and in the principal sum of $4,342,927 (which sum includes
the balance of the Settlement Amount ($3,800,000) plus the amount of the Amended
LC ($542,927)). The Assignees’ Note shall provide that by June 15, 2009, TIME BEING OF THE ESSENCE,
(the “Amended LC Payment Deadline”) Assignees shall reduce the principal amount
of the Note by the principal sum of $542,927 which shall be paid to Lender in
the form of a certified check, bank check, or federal wire transfer as Lender
may instruct. In the event Assignees fail to reduce the Assignees’ Note in the
amount of $542,927 by the Amended LC Payment Deadline, Assignees shall be in
default hereunder and the provisions of Section 6 of this Agreement shall be
applicable and controlling. The Assignees’ Note shall also provide that
Assignees shall be permitted to extend the Amended LC Payment Deadline until
July 15, 2009, TIME BEING OF
THE ESSENCE (the “Extended Amended LC Payment Deadline”), provided no
later than May 1, 2009, or ten (10) days following the date the Lender executes
this Agreement, whichever event is later to occur, TIME BEING OF THE ESSENCE as
to all such dates, assuming the Beneficiary has not drawn upon the Amended LC by
said date, Assignees post with the Beneficiary a Replacement LC and request in
writing that the Beneficiary accept same in substitution of the Amended LC.
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A copy of
the written request shall be delivered to the Lender at the same time it is
delivered to the Beneficiary. In the event the Beneficiary has not accepted the
Replacement LC by the Extended Amended LC Replacement Deadline, Assignees shall
pay Lender the sum of $542,927 within two business days thereafter, TIME BEING OF THE ESSENCE,
which payment shall be applied toward reducing the outstanding principal balance
of the Assignee’s Note and in the event Assignees fail to reduce the Note in the
amount of $542,927 as herein provided, Assignees shall be in default hereunder
and the provisions of Section 6 of this Agreement shall be applicable and
controlling. The Assignees’ Note shall have a term of six (6) months and be
payable in full upon the expiration thereof (the “Maturity Date”). Assignees
shall have the right to make prepayments on the Assignees’ Note at any time
prior to the Maturity Date without penalty. Interest shall be payable upon the
Note’s maturity date, whether at stated maturity or by acceleration, and accrue
on the principal sum of the Assignees’ Note at the annual rate of ten percent(10.00%). However,
Lender agrees to waive the interest due on the Assignee’s Note if, and only if,
the full principal sum due Lender is paid in full on or before the Maturity
Date. In the event that the Assignee’s Note is not paid on the Maturity Date,
whether by virtue of the stated maturity or by acceleration, then such interest
from the date of the Assignee’s Note shall be due upon Lender’s demand and shall
continue to accrue until the Assignee’s Note is paid in full.
3.
Provided the total of $5,000,000 in such
Non-Refundable Deposits has been timely paid to Lender without default or offset
as required in Sections 2(a) and 2(b) above, and Assignees have executed and
delivered to Lender the Assignee’s Note as set forth in Section 2(d) above, and
provided further that the Borrower, Guarantors and/or Assignees are not in
default under this Agreement, then, in that event, pending the Maturity Date set
forth in the Assignee’s Note and subject to the following provisions and
protocols and upon the written request of Borrower (or a legal representative of
Assignee if Borrower has theretofore conveyed title to Assignees pursuant to
Section 5 of this Agreement), the Lender agrees to execute and deliver releases
of individual Sterling Place dwelling units and respective lots from the lien of
the Mortgage (each release so requested is referred to herein as a “Unit
Release”) in consideration of payment to the Lender of the fixed sum of $275,000 each (the “Unit
Release Fee”). Each Unit Release Fee shall be applied both toward the principal
balance due Lender under the Assignee’s Note referenced in Section 2(d) above,
which represents the deferred portion of the Settlement Sum discounted purchase
price for the Loan and replacement of the Amended LC. Lender shall also credit
the undiscounted Loan principal balance (now $12,887,657.60) in the same Unit
Release Fee amount. Lender shall not be obligated to execute Unit Releases if
the Assignee’s Note has not been paid in full by the Maturity Date. The required
protocol to secure a Unit Release from Lender shall be as follows, viz., there
shall be delivered to Lender (a) a duly acknowledged affidavit signed by
Borrower (or a legal representative of Assignee if Borrower has theretofore
conveyed title to Assignees pursuant to Section 5 of this Agreement) certifying
that the contract of sale, a
full and complete copy of which shall be attached, for the unit/lot sought to be
released has been signed by the Borrower (or a legal representative of Assignee
if Borrower has theretofore conveyed title to Assignees pursuant to Section 5 of
this Agreement) and an unrelated third party bona-fide purchaser (“Purchaser”),
and (b) a HUD Settlement Statement in a form acceptable to Borrower (or
Assignee, as the case may be) and the Purchaser for such unit as evidenced by a
writing to that effect from the Purchaser’s legal counsel addressed to
Lender.
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LENDER SHALL HAVE ABSOLUTELY
NO OBLIGATION TO TERMINATE THE GUARANTORS’ GUARANTIES OR MAKE ANY ASSIGNMENT TO
ASSIGNEES OF THE YOMAH FORECLOSURE ACTION AND/OR THE LOAN DOCUMENTS REFERENCED
THEREIN PERTAINING TO THE STERLING PLACE PROPERTY UNLESS AND UNTIL (A) LENDER
HAS TIMELY RECEIVED THE $8,800,000.00 DUE LENDER PURSUANT TO SECTIONS 2(a) AND
2(b) HEREIN AND (B) THE ASSIGNEES’ NOTE REFERENCED IN SECTION 2(d) HEREIN HAS
BEEN PAID IN FULL AND (C) EITHER THE ENTIRE AMENDED LC HAS BEEN REPLACED (AND
ACCEPTED BY THE BENEFICIARY), OR THE LENDER HAS BEEN PAID THE FACE AMOUNT OF THE
AMENDED LC. UNDER NO CIRCUMSTANCES SHALL LENDER HAVE ANY OBLIGATION TO RENEW THE
AMENDED LC BEYOND THE DATE THE AMENDED LC IS TO EXPIRE.
4 Withdrawal of Contesting
Answers. Within five (5) business days following Lender’s receipt of the
Additional Deposit, TIME BEING
OF THE ESSENCE, Borrower and Guarantors shall file with the New Jersey
Superior Court in the Yomah Foreclosure Action a stipulation irrevocably
withdrawing Borrower’s and Guarantors’ contesting answers. In addition, within
the same time period, Assignees shall cause Xxxxx Xxxxxxx and Xxxxx Xxxxxxx
(collectively, the “Frankels”), additional named defendants in the Yomah
Foreclosure Action, to also file a stipulation with the Superior Court
withdrawing their contesting answer filed with the Court on October 27, 2008 so
that, by the end of the fifth business day there shall not be any contesting
answers in the Yomah Foreclosure Action thus allowing the Yomah Foreclosure
Action to proceed as an uncontested foreclosure to the Foreclosure Unit of the
Superior Court in Trenton, New Jersey, and affording Lender the right to apply
to the Superior Court for a final judgment of foreclosure without contest or
challenge by Borrower, Guarantors, Assignees or the Frankels.. In the event
Borrower, Guarantors and Assignees fail to timely comply with the requirements
set forth above, or in the event Borrower, Guarantors, Assignees or the Frankels
shall contest Lender’s application for a final judgment in the Yomah Foreclosure
Action, same shall constitute an event of default hereunder and the provisions
of Section 6 of this Agreement shall be applicable and controlling.
5 No Conveyance of Mortgaged Premises
Prior to Payment of Certain Sums Due Lender. Notwithstanding anything to
the contrary herein provided, Borrower shall neither directly nor indirectly
convey to Assignees or their assigns or affiliates, and Assignees shall not
accept from Borrower, a conveyance of title (“Deed”) to any portion of the
Mortgaged Premises until such time as Lender has been paid the Non-Refundable
Deposits
and Assignees shall have executed and delivered to Lender the Assignee’s Note,
and the conditions set forth in Section 4 herein have been fully satisfied. The
Deed shall be expressly subject to the Mortgage held by Lender encumbering the
Mortgaged Premises and to this Agreement and shall contain the following
recital:
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“This conveyance is expressly made
subject to (a) the lien of a certain mortgage dated April 4, 2005 (“Mortgage”)
executed by Grantor in favor of Sovereign Bank given to secure Grantor’s
obligation to Sovereign Bank in the principal amount of $22,029,000 which
Mortgage was recorded in the Ocean County Clerk’s Office on April 11, 2005 in
Mortgage Book 12558 at page 29, and (b)is expressly subject to the terms and
conditions of that certain Agreement dated April ___, 2009 between Lender, Grantor, Xxxxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, Kedma, Inc., Xxxxx Xxxxx, Track Data Corporation,
Silver Polish, LLC and Xxxxx Xxxxxx, the terms of which are incorporated herein
by reference and made a part hereof.”
Lender
shall be provided with a copy of the Deed immediately following the date it is
recorded and returned to Assignees. A violation of the terms of this Section 5
of the Agreement shall constitute an event of default hereunder and the terms of
Section 6 herein shall be applicable and control.
6. Additional Events of Default and
Additional Remedies.
(A) In
addition to any other event of default expressly provided in this Agreement or
any other remedy permitted herein, the term “event of default” or “default” as
used in this Agreement shall also mean the occurrence of any one or more of the
following events:
(i) Any
representation or warranty made by the Borrower, Guarantors and/or Assignees in
this Agreement or in any other writing given to the Lender in connection
herewith shall prove to have been false, incorrect or misleading in any
substantial and material respect on the date as of which made; or
(ii) The
Borrower, Guarantors or Assignees shall have failed to make to the Lender any
monetary payment due under the Assignees’ Note or herein by any due date set
forth therein or herein for said payment; or
(iii) Borrower,
Guarantors and/or Assignees shall have failed to duly observe or perform any
non-monetary covenant, condition or agreement set forth in the Assignees’ Note
and/or this Agreement and such default shall have remained uncured for a period
of ten (10) days after written notice thereof to the Borrower, Guarantors and
Assignees; or
(iv) The
Borrower shall have failed to comply with any law, ordinance, order, rule or
regulation of any governmental authority having jurisdiction over the Mortgaged
Property or shall have failed to remove any work condemned by any of the said
governmental authorities or prohibited by law, unless contested by the Borrower,
Guarantors and/or Assignees in good faith pursuant to appropriate proceedings
and such default
shall have remained uncured for a period of thirty (30) days after written
notice thereof to the Borrower by the Lender; or
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(v) A
construction lien or any other lien or encumbrance shall have been filed against
the Mortgaged Property and the Borrower, Guarantors and/or Assignees shall have
failed to procure within thirty (30) days after the same is filed, a
cancellation of said lien or a discharge thereof, in the manner and form
provided by law, or a bond against said lien or encumbrance, in form and amount
satisfactory to the Lender; or
(vi) If
the Borrower, Guarantors and/or Assignees do not permit a representative of the
Lender the right to enter upon the Mortgaged Property to inspect the
improvements thereon at a reasonable time, provided that the Lender’s inspection
shall not interfere with the normal business operations of any tenant occupying
space in the improvements; or
(vii) The
Borrower, and/or any of the Guarantors and/or any of the Assignees shall have
applied for or consented to the appointment of a custodian, receiver, trustee or
liquidator of all or a substantial part of their respective assets; a custodian
shall have been appointed with or without consent of the Borrower, and/or the
Guarantors and/or Assignees and shall not have been dismissed for a period of
thirty (30 consecutive days; the Assignees shall generally not be paying their
respective debts as they become due; the Borrower, and/or the Guarantors and/or
the Assignees shall have made a general assignment for the benefit of their
respective creditors; the Borrower, and/or the Guarantors and/or Assignees shall
have filed a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with their respective creditors, or
shall have taken advantage of any insolvency law, or shall have filed an answer
admitting the material allegations of a petition in bankruptcy, reorganization
or insolvency proceeding; or a petition in bankruptcy shall have been filed
against the Borrower, and/or the Guarantors and/or the Assignees or if an Order
for Relief has been entered under the Bankruptcy Code and shall not have been
dismissed for a period of thirty (30) consecutive days; or an order, judgment or
decree shall have been entered without the application, approval or consent of
the Borrower, and/or the Guarantors and/or the Assignees by any court of
competent jurisdiction appointing a receiver, trustee, custodian or liquidator
of the Borrower, and/or the Guarantors and/or the Assignees of a substantial
part of their respective assets and such order, judgment or decree shall have
continued unstayed and in effect for any period of thirty (30) consecutive days;
or
(viii) The
Borrower, Guarantors or Assignees shall have caused or permitted a security
interest, perfected or otherwise, other than the security interest specifically
provided for or permitted under the Loan Documents and not removed within thirty
(30) days, or shall have failed to take any action reasonably requested by the
Lender to perfect or protect the security interest provided for herein;
or
(ix) Any
individual Assignee shall die and/or the Track Data Corporation shall have
reorganized, disbanded, dissolved or merged, voluntarily or involuntarily and
the Assignees’ Note is not paid in full within five (5) days following any such
event; or
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(x) Except
for a transfer of a “Unit” in accordance with the provisions of Section 3 herein
for conveyance of the Deed referred to in Section 5 in conformity with the
provisions thereof, Borrower, Guarantors and/or Assignees shall have
transferred, or caused to have been transferred, title to or possession of any
interest in any portion of the Mortgaged Property, or any part thereof, to any
person or entity, without the prior express written consent of the Lender,
whether such transfer is done voluntarily, involuntarily or by operation of
law.
(xi) The
Assignees, Borrower or Guarantors or their agents commit waste concerning the
Mortgaged Property.
(xii) The
Assignees, Borrower or Guarantors or their agents construct or complete the
dwelling houses on the Mortgaged Property in other than a good and workmanlike
manner or fail to comply with all applicable governmental
regulations.
(xiii) The
Assignees, Borrower or Guarantors or their agents fail to demonstrate to the
Lender that it is insured as a mortgagee under policies of hazard insurance
including builders risk coverage satisfactory in form, amount and issuer to
Lender concerning the improvements on the Mortgaged Property.
(B). Remedies.
(i) Upon
the occurrence of an event of default by the Borrower, Guarantor and/or
Assignees under any provision of the Assignee’s Note and/or this Agreement
beyond any applicable notice and cure period, any obligation of the Lender to
assign the Loan, the Yomah Foreclosure Action, or the Loan Documents and any
obligation of the Lender to accept a reduced or discounted payment on account of
any of the Loan obligations and any obligation of the Lender to forbear from
enforcing the Loan obligations against any person or property interest shall
become null and void and of no further effect but the Lender (a) shall cause to
be applied all payments made by Assignees to Lender pursuant to this Agreement,
except for any sums retained by Lender as agreed liquidated damages pursuant to
Section 2(c) herein, as a credit against the Underlying Debt including, without
limitation, the Borrower’s reimbursement obligations concerning the Amended LC
or any renewal thereof, such allocation among the Underlying Debt’s various
components to be in the Lender’s sole and unfettered discretion, and (b) may
proceed to enforce the Loan including, without limitation, the Yomah Foreclosure
Action in accordance with the applicable law.
(ii) Upon
the occurrence and during the continuance of an event of default, the Lender,
may take any of the remedies otherwise available to it under the Loan Documents
and/or as a matter of law or equity.
7. Continuing Liability.
Notwithstanding anything to the contrary provided herein or in any of the Loan
Documents, Borrower’s liability and obligations to Lender for payment of the
balance of the Underlying Debt and Guarantors’ joint and several obligations
to Lender under their respective Guaranties, shall continue and not be
diminished or affected until such time as the Assignee has fully performed its
obligations hereunder. Any other provision of this Agreement to the contrary
notwithstanding, the Lender may, but shall not be obligated to, enforce its
rights, powers, privileges and immunities concerning the Loan, any collateral
security or supporting obligations which it deems proper to protect the rights
planned to be assigned to Assignees.
10
8. Disclaimers By Lender. Agreement to
Indemnify. Except as expressly set forth herein, it is understood and
agreed that Lender has not at any time made and is not now making, and it
specifically disclaims, any warranties or representations of any kind or
character, express or implied, with respect to the terms, conditions and
provisions set forth in the Loan Documents and/or the Mortgaged Property,
including, but not limited to, warranties or representations as to (i) matters
of title, (ii) environmental matters relating to the any such Mortgaged Property
or any portion thereof, including, without limitation, the presence of Hazardous
Materials in, on, under or in the vicinity of the Mortgaged Property, (iii)
geological conditions, including, without limitation, subsidence, subsurface
conditions, water table, underground water reservoirs, limitations regarding the
withdrawal of water, and geologic faults and the resulting damage of past and/or
future faulting, (iv) whether, and to the extent to which the Mortgaged Property
or any portion thereof is affected by any stream (surface or underground), body
of water, wetlands, flood prone area, flood plain, floodway or special flood
hazard, (v) drainage, (vi) soil conditions, including the existence of
instability, past soil repairs, soil additions or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any undershoring, (vii) the
presence of endangered species or any environmentally sensitive or protected
areas, (viii) zoning or building entitlements to which the Mortgaged Property or
any portion thereof may be subject, (ix) the availability of any utilities to
the Mortgaged Property or any portion thereof including, without limitation,
water, sewage, gas and electric, (x) usages of adjoining property, (xi) access
to the Mortgaged Property or any portion thereof, (xii) the value, compliance
with the plans and specifications, size, location, age, use, design, quality,
description, suitability, structural integrity, operation, title to, or physical
or financial condition of the Mortgaged Property or any portion thereof, or any
income, expenses, charges, liens, encumbrances, rights or claims on or affecting
or pertaining to the Mortgaged Property or any part thereof, (xiii) the
condition or use of the Mortgaged Property or compliance of the Mortgaged
Property with any or all past, present or future federal, state or local
ordinances, rules, regulations or laws, building, fire or zoning ordinances,
codes or other similar laws, (xiv) the existence or non-existence of underground
storage tanks, surface impoundments, or landfills, (xv) the merchantability of
the Mortgaged Property or fitness of the Mortgaged Property for any particular
purpose, (xvi) the truth, accuracy or completeness of the Loan Documents, (xvii)
tax consequences, or (xviii) any other matter or thing with respect to the Loan
Documents and/or the Mortgaged Property.
Except as
expressly set forth herein, Borrower, Guarantors, and Assignees have not relied
upon, and will not rely on, and Lender has not made and is not liable for or
bound by, any express or implied warranties, guarantees, statements,
representations or information pertaining to the Mortgaged Property or, Loan
Documents or any other matter or document relating thereto made or furnished by
Lender or any agent or third party
representing or purporting to represent Lender, to whomever made or given,
directly or indirectly, orally or in writing. Borrower, Guarantors and Assignees
represent that they are knowledgeable, experienced and sophisticated real estate
and business savvy entities and that they are relying solely on their own
expertise and that of their respective consultants in entering into this
Agreement.
11
Borrower
and Guarantors and Assignees agree to indemnify and hold Lender, Lender’s
officers, agents, employees and professionals harmless of and from any and all
liabilities, claims, demands and expenses of any kind or nature related to the
ownership, maintenance or operation of any of the Mortgaged Property whether
arising or accruing before or after the date the Amended LC is replaced and
terminated by Lender. The indemnification herein provided shall extend to court
costs and expenses and fees paid by Lender to any attorneys, accountants or
other professionals. This provision shall survive replacement of the Amended LC
and cancellation thereof by Lender. This indemnification shall survive the
termination of this Agreement.
9. Lender Released from
Liability. As further inducement to Lender to execute this Agreement,
Borrower, Guarantors and Assignees hereby FOREVER RELEASE AND DISCHARGE
Lender from any and all responsibility and liability, including without
limitation, liabilities generally regarded as “lender liability claims”, claims
which could or may arise under the loan commitments made by Lender to Borrower,
claims which could or may arise under the Yomah Foreclosure Action and under any
provision of the Loan Documents referenced therein, claims arising against
Lender by any purchaser of any unit/lot in Sterling Place subdivision, or claims
which could or may arise under the Comprehensive Environmental Response,
Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as amended
(“CERCLA”),
regarding the condition (including the presence in the soil, air, structures and
surface and subsurface waters, of Hazardous Materials (as defined by law in New
Jersey) or other materials or substances that have been or may in the future be
determined to be toxic, hazardous, undesirable or subject to regulation and that
may need to be specially treated, handled and/or removed from the Mortgaged
Property under current or future federal, state and local laws, regulations or
guidelines), valuation, salability or utility of the Mortgaged Property, or its
suitability for any purpose whatsoever. Borrower, Guarantors and Assignees
further hereby WAIVE
(and by signing the Agreement will be deemed to have waived) any and all
objections to or complaints regarding (including, but not limited to, federal,
state and common law based actions), or any private right of action under, state
and federal law to which the Mortgaged Property and/or Loan Documents is, are,
or may be subject. The releases provided herein shall survive the termination of
this Agreement.
10. Parties Bound; No Assignment.
This Agreement, and the terms, covenants, and conditions herein contained, shall
inure to the benefit of and be binding upon the heirs, personal representatives,
successors, and assigns of each of the parties hereto. Borrower, Guarantors and
Assignees shall not assign their rights or delegate their duties under this
Agreement unless specifically allowed herein or unless Lender has consented to
such an assignment in writing, which consent shall be in the Lender’s sole and
unfettered discretion. Any assignment or delegation in derogation of this
provision shall be
void and constitute an event of default hereunder in which case the provisions
of Section 6 of this Agreement shall be applicable and controlling.
12
11. Headings. The article,
section, subsection, paragraph and/or other headings of this Agreement are for
convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.
12. Invalidity and Waiver. If any
portion of this Agreement is held invalid or inoperative, then it alone shall be
held for naught so far as is reasonable in light of the benefit of the parties’
bargain and the remainder of this Agreement shall be deemed valid and operative,
and, to the greatest extent legally possible, effect shall be given to the
intent manifested by the portion held invalid or inoperative. The failure by
either party to enforce against the other any term or provision of this
Agreement shall not be deemed to be a waiver of such party’s right to enforce
against the other party the same or any other such term or provision in the
future. Nothing contained
in this Agreement is intended to serve as a waiver of Lender’s rights to proceed
against Borrower and/or Guarantors prior to Lender(a) receiving $8,800,000, and
(b) having the Amended LC replaced, or the face amount thereof paid to the
Lender as herein provided.
13. Governing Law. This Agreement
shall, in all respects, be governed, construed, applied, and enforced in
accordance with the law of the State of New Jersey without regard to conflicts
of law principles.
14. Entirety and Amendments. This
Agreement embodies the entire agreement between the parties and supersedes all
prior agreements and understandings relating to the sale of the Loan or the
Mortgaged Property, the Yomah Foreclosure Action, and/or assignment of the Yomah
Loan Documents referenced therein. This Agreement may be amended, modified,
waived or supplemented only by an instrument in writing executed by the party
against whom enforcement is sought. Any other purported amendment, modification,
waiver or supplement shall be deemed a nullity.
15. Time. Time is of the
essence in
the performance of this Agreement unless otherwise agreed in a writing signed by
the Lender, Borrower, Guarantors and Assignees.
16. Notices. All notices required
or permitted hereunder shall be in writing and shall be served only upon Xxxxxxx
Xxxxxx, Esq. and Xxxxxx Xxxxxxx, Esq., the legal representatives of the Parties
(except Lender). Notices to Xxxxxxx Xxxxxx, Esq., shall be addressed to him at
his office located at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 and
notices to Xxxxxx Xxxxxxx, Esq. shall be addressed to him at his office, Xxxxx,
Xxxx and Xxxxxxx, PA 0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000. Any
such notices shall, unless otherwise provided herein, be given or served (i) by
depositing the same in the United States mail, postage paid, certified and
addressed to the legal representative of the party to be notified, with return
receipt requested, (ii) by overnight delivery using a nationally recognized
overnight courier, (iii) by personal delivery, or (iv) by facsimile, evidenced
by confirmed receipt. Notice deposited in the mail in the manner hereinabove
described shall be effective on the third (3rd) business day after such
deposit. Notice given in any other manner shall be effective only if and when
received by the legal representative of a party to be notified between the hours
of 8:00 a.m. and 5:00 p.m. of any business day with delivery made after such
hours to be deemed received the following business day. The address of a party’s
legal representative may be changed by written notice to the other party’s legal
representative; provided, however, that no notice of a change of address shall
be effective until actual receipt of such notice. Copies of notices are for
informational purposes only, and a failure to give or receive copies of any
notice shall not be deemed a failure to give notice.
13
17. Authority. Construction. The
parties acknowledge that the parties and their counsel have reviewed and revised
this Agreement and agree that the normal rule of construction - to the effect
that any ambiguities are to be resolved against the drafting party - shall not
be employed in the interpretation of this Agreement or any exhibits or
amendments hereto. Borrower, Kedma, Inc. and Track Data Corporation represent to
Lender that all of the necessary corporate action required in order to authorize
their execution of this Agreement has been taken and authorized and their
signatures below serve to bind said Parties to the terms of this
Agreement.
18. Calculation of Time Periods.
Unless otherwise specified, in computing any period of time described herein,
the day of the act or event after which the designated period of time begins to
run is not to be included and the last day of the period so computed is to be
included, unless such last day is a Saturday, Sunday or legal holiday for
national banks in the location where the Encumbered Property is located, in
which event the period shall run until the end of the next day which is neither
a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. local time in New Jersey.
For purposes of this Agreement the term “business days” shall not include April
8, 2009, through and including April 18, 2009.
19. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of such counterparts shall constitute
one Agreement.
20. No Recordation. Without the
prior written consent of Lender which may withheld for any reason or no reason,
there shall be no recordation of either this Agreement or any memorandum hereof,
or any affidavit pertaining hereto, and any such recordation of this Agreement
or memorandum without the prior written consent of Lender shall be deemed an
event of default hereunder in which event the provisions of Section 6 of this
Agreement shall be applicable and controlling.
21. No Third Party Beneficiary. No
third party shall have the right to enforce the provisions of this Agreement or
of the documents to be executed and delivered by Lender to Assignees pursuant to
this Agreement.
14
22. No Affect on Other Litigation.
Nothing contained herein shall have any affect or impact in and upon a certain
lawsuit Lender currently maintains against the Individual
Guarantors, et
als. pending in
the Superior Court of New Jersey, Chancery Division, Ocean County, bearing
Docket No. F-4789-08 (the “Xxxxxxxxxx Foreclosure Action”) which Xxxxxxxxxx
Foreclosure Action seeks to foreclose upon certain condominium units owned by
the Individual Guarantors and encumbered by that certain Mortgage and Security
Agreement dated July 26, 2007 recorded in the Ocean County Clerk’s Office on
July 27, 2007, in MB 13726 at Page 0157 et seq.. Lender agrees
that if, and only if, the sum of $8,800,000 is finally and timely paid to
Lender, and if, and only if, the Amended LC has been timely replaced or, in lieu
thereof if, and only if, Lender has been timely paid the sum of $542,927, all as
herein more fully provided, then Lender shall not seek thereafter to enforce any
foreclosure judgment against Borrower or Guarantors in the Yomah Foreclosure
Action or in the Xxxxxxxxxx Foreclosure Action for the shortfall between the
Settlement Sum ($8,800,000) and the Note I Underlying Indebtedness
($12,887,657.60), provided, however, nothing set forth herein shall serve to
limit or prevent Lender from pursuing all of its rights and remedies against the
Guarantors for all sums due Lender under the “Xxxxxxxxxx Note” and “Xxxxxxxxxx
Mortgage” which terms are defined in the Complaint in Foreclosure in the
Xxxxxxxxxx Foreclosure Action.
(signatures
appear on the following page)
15
IN WITNESS WHEREOF, the undersigned have signed this Agreement on the dates set forth to the left of their respective signatures.
|
Date
|
||||
|
LENDER:
|
||||
|
SOVEREIGN
BANK
|
||||
|
5/4/2009
|
By:
|
/s/
XXXXXXXXXXX XXXXXXXXX
|
||
|
XXXXXXXXXXX
XXXXXXXXX
|
||||
|
BORROWER:
|
||||
|
YOMAH,
INC.
|
||||
|
4/29/2009
|
By:
|
/s/
XXXXXX XXXXXXXXXX
|
||
|
XXXXXX
XXXXXXXXXX
|
||||
|
INDIVIDUAL
GUARANTORS:
|
||||
|
/s/
XXXXXX XXXXXXXXXX
|
||||
|
4/29/2009
|
XXXXXX
XXXXXXXXXX
|
|||
|
/s/
XXXXXX XXXXXXXXXX
|
||||
|
4/29/2009
|
XXXXXX
XXXXXXXXXX
|
|||
|
CORPORATE GAURANTOR:
|
||||
|
KEDMA
INC.
|
||||
|
4/29/2009
|
By:
|
/s/
XXXXXX XXXXXXXXXX
|
||
|
XXXXXX
XXXXXXXXXX
|
||||
|
ASSIGNEES:
|
||||
|
TRACK
DATA CORPORATION
|
||||
|
4/29/2009
|
By:
|
/S/
XXXXXX XXXX
|
||
|
XXXXXX
XXXX, CHIEF EXECUTIVE OFFICER
|
||||
| /s/ XXXXX XXXXXX | ||||
|
4/29/2009
|
XXXXX
XXXXXX
|
|||
| /s/ XXXXX XXXXX | ||||
|
4/29/2009
|
XXXXX
XXXXX
|
|||
|
SILVER
POLISH, LLC
|
||||
| /s/ XXXXX XXXXX | ||||
|
4/29/2009
|
XXXXX
XXXXX, Manager
|
|||
