Exhibit 10.2
March 3, 2006
Gibraltar Financial Corporation
00 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 ("GIBRALTAR")
Re : General Environmental Management, Inc. ("CLIENT")
Dear Gibraltar:
This letter sets forth our agreement in connection with the repayment in full of
all obligations due GIBRALTAR by CLIENT, except as provided for herein, and
termination by GIBRALTAR of its UCC-1 filings. As of March 3, 2006 (the "Cutoff
Date"), the entire balance including principal and interest due GIBRALTAR net of
all reserves and other balances due CLIENT is $973,774.96 (The "Funding
Balance"). The Funding Balance shall be increased by per diem interest of
$280.83 for each day beyond the Cutoff Date that it remains unpaid.
Notwithstanding anything to the contrary herein contained, this letter agreement
shall be null and void unless the funding balance and any applicable per diem is
received by Gibraltar on or before March 10, 2006.
Payment of the Funding Balance will be remitted by wire transfer of federal
funds with the following instructions:
Bank Name: LaSalle Bank N.A.
ABA Number: 00000000
Account Number: 5800268178
For the Account of: Gibraltar Financial Corp
For Further Credit: General Environmental Management, Inc.
Upon payment of the Funding Balance to GIBRALTAR, and upon payment of the Escrow
Payment of $250,000 to the Escrow Agent pursuant to that certain Funds Escrow
Agreement dated March 3, 2006, by and between CLIENT, GIBRALTAR AND Deutsch,
Levy & Xxxxx, Chartered as Escrow Agent thereunder, GIBRALTAR hereby (i)
irrevocably agrees and grants its consent and authorization to permit CLIENT or
its agents or designees to file UCC-3s terminating GIBRALTAR'S UCC filings on
all assets of CLIENT, (ii) agrees that all obligations (the "Obligations")
outstanding under the RARFA and the other documents related thereto (the "RARFA
Documents") shall be deemed satisfied in full (except for obligations pursuant
to indemnification and other provisions of the RARFA Documents which by their
terms survive the payment of the Obligations), (iii) hereby releases, effective
upon the receipt of the Funding Balance , all security interests and liens which
CLIENT may have granted to GIBRALTAR, and ( iv ) agrees that it will, at
CLIENT'S expense, terminate all of its agreements with CLIENT, other than in
respect of indemnification and expense reimbursement provisions of such
agreements and such other provisions thereof as expressly survive the payment in
full of the Obligations.
GIBRALTAR represents to CLIENT that it has full power and authority to perform
this Letter Agreement. As a further condition of the payment by CLIENT to
GIBRALTAR of the Funding Balance, GIBRALTAR, agrees to use its best efforts to
immediately forward to CLIENT or its designees any and all payments received
relating to the Accounts Receivable. GIBRALTAR will not be responsible for any
damages CLIENT may sustain if GIBRALTER is negligent in forwarding payments but
GIBRALTAR will be responsible for damages occurring because of gross negligence
or willful misconduct. In addition, CLIENT agree to indemnify and hold Gibraltar
harmless as to any claim that may be asserted against GIBRALTAR arising out of
its making any payments to a designee for payments received by GIBRALTAR
relating to the Accounts Receivable, which are remitted to CLIENT or a designee.
The remittance address for CLIENT for this purpose is:
(1) From and after the date hereof through and including March 12,
2006:
General Environmental Management, Inc.
0000 Xxxxxx Xxxxxx, Xxx 000
Xxxxxx, XX 00000
(2) On and after March 13, 2006:
GEM INC.
Dept 9705
Los Angeles, CA 90084-9705
CLIENT hereby agrees to use its best efforts to ensure that no such payments
shall be deposited or collected by any party other than Client or its designee.
All such payments are to be immediately forwarded to the above address, or an
address designated by CLIENT or designee in their original form, duly endorsed
to the designee, as instructed in writing by the CLIENT or designee .
CLIENT agrees to pay GIBRALTAR, upon demand, the face amount of any check for
CLIENT's account which is returned to GIBRALTAR unpaid within 60 days of the
Cutoff Date upon CLIENT'S receipt of GIBRALTAR'S written request and a copy of
the returned check.
CLIENT, by signing below, hereby releases, discharges and acquits GIBRALTAR, its
successors and assigns, from any and all liabilities and obligations whatsoever,
including, without limitation, all claims, demands, accounts, actions,
proceedings and sums of money that CLIENT at any time had or may have or that
its successors and assigns can assert or may have against GIBRALTAR, by reason
of any act, cause, matter or thing whatsoever up to and including the Cutoff
Date and/or by reason of any act, cause, matter or thing whatsoever which
pertains in any way to the RARFA dated May 8, 2003 between CLIENT and GIBRALTAR
and/or the transactions described therein and/or herein. In the event that any
claim against GIBRALTAR is made by a trustee in bankruptcy, debtor in
possession, receiver, custodian or other party on behalf of or related to an
account debtor of CLIENT (a "Bankruptcy Claim"), and upon GIBRALTAR'S written
notice to CLIENT of a final decision by a Bankruptcy Court or other Court,
requiring GIBRALTAR to return monies received by GIBRALTAR on behalf of CLIENT,
CLIENT shall pay GIBRALTAR the full amount of the Bankruptcy Claim, provided
GIBRALTAR assigns the Bankruptcy Claim to CLIENT. This does not in any way limit
any of GIBRALTAR'S other rights and remedies against CLIENT pursuant to the
RARFA.
Facsimile copies of signatures on this Letter Agreement shall have the same
force and effect of originals of such signatures. Simultaneous to the receipt by
CLIENT of a fully acknowledged counterpart of this letter from GIBRALTAR, CLIENT
will wire the Funding Balance to GIBRALTAR.
Please confirm your agreement with the foregoing by signing where indicated
below and returning a copy to me by facsimile and by overnight delivery.
General Environmental Management, Inc.
By: _________________________
Its: _________________________
X X Investments as nominee and/or as a division of
Gibraltar Financial Corporation
By: ______________________
Its: ______________________
