CONTINGENT PAYMENT AGREEMENT
THIS CONTINGENT PAYMENT AGREEMENT (the "Agreement") is entered into as of
October 16, 2002, between Regency Affiliates, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxxx, Xx. ("Xxxxxxxx").
WHEREAS, in consideration of Ponsoldt's contribution to the success of the
Company, the Company entered into an Employment Agreement with Xxxxxxxx, dated
as of June 3, 1997;
WHEREAS, pursuant to the Employment Agreement (which is being terminated
as of the date hereof without the payment of any severance or other amounts to
Xxxxxxxx), Xxxxxxxx is owed $1,508,000 of accrued compensation from the Company;
and
WHEREAS, Xxxxxxxx is willing to condition payment of such accrued
compensation on satisfaction of certain conditions precedent.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants hereinafter set forth and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto have agreed, and do
hereby agree, as follows:
1. Conditions to Payment. Xxxxxxxx agrees that the $1,508,000 of accrued
compensation shall be paid (without interest) only upon satisfaction of all of
the following conditions:
(a) The lease on the 0000 Xxxxxxxx Xxxxx, Xxxxxxxx XX property (the
"Property") owned by Security Land and Development Company Limited
Partnership ("Security") shall have been renewed by the tenant
thereunder upon expiration of the current lease term;
(b) The Company shall have received cash distributions as a limited
partner in Security in respect of a sale or refinancing of the
Property, or otherwise, sufficient for the Company, on an after-tax
basis, to (i) fully discharge all of its obligations in respect of
the June 24, 1998 loan (the "Loan") from KBC Bank, N.V. or any
indebtedness incurred in respect of a refinancing or other
satisfaction of the Loan, including, without limitation,
indebtedness incurred in respect of proceeds from the Company's
residual value insurance policy with R.V.I. American Insurance
Company and (ii) otherwise satisfy its current obligations; and
(c) At the time of satisfaction of the conditions set forth in clauses
(a) and (b) above, no judicial order or other legal bar to payment
of such accrued compensation shall be in existence.
The payment of the accrued compensation shall only be made upon satisfaction of
each of the foregoing conditions. Xxxxxxxx shall not be entitled to any payment
hereunder if for any reason any of the foregoing conditions is not satisfied or
becomes impossible to satisfy.
2. No Impact on Operations. The Company shall not be under any obligation
to seek to satisfy the conditions set forth in paragraph 1 hereof and this
Agreement shall not in any way proscribe or limit, or be deemed to proscribe or
limit, the manner in which the Company manages its investment in Security.
3. Choice of Law. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York.
4. Entire Agreement. This Agreement constitutes the entire obligation of
the parties hereto with respect to the subject matter hereof and shall supersede
any prior expressions of intent or understanding with respect to the subject
matter hereof.
5. Amendment. Any amendment to this Agreement shall be in writing and
signed by the Company and Xxxxxxxx.
6. Waiver; Cumulative Rights. The failure or delay of either party to
require performance by the other party of any provision hereof shall not affect
its right to require performance of such provision unless and until such
performance has been waived in writing. Each and every right hereunder is
cumulative and may be exercised in part or in whole from time to time.
7. Counterparts. This Agreement may be signed in two counterparts, each of
which shall be an original, but both of which shall constitute but one and the
same instrument.
8. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
9. Severability. If any provision of this Agreement shall for any reason
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not effect any other provision hereof, and this Agreement shall be
construed as if such invalid or unenforceable provision were omitted.
10. Withholding. The Contingent Payment shall be reduced by any
withholding obligation determined by the Company to be applicable to such
payment.
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IN WITNESS WHEREOF, the Company and Xxxxxxxx have executed this Agreement
as of the date first above written.
REGENCY AFFILIATES, INC.
By:
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Title:
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Xxxxxxx X. Xxxxxxxx, Xx.
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