EXHIBIT 10.2
AGREEMENT
AGREEMENT (this "Agreement"), dated as of February 4, 2004 is made by
and between New York Regional Rail Corporation, a Delaware corporation, with
offices located at 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company")
and Xxxx Xxxxxxx, an individual having an address at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000 ("Marsala").
W I T N E S S E T H
WHEREAS, Marsala is the holder of 440,000 shares of the Company's
Series C Preferred Stock (the "Shares"); and
WHEREAS, as a condition of Marsala waiving certain rights pursuant to
the Series C Preferred Stock and certain actions by Marsala in connection with
the Investment Agreement dated February 4, 2004 by and between the Company and
Transit Rail LLC ("Investor") , the Company and Marsala desire to among other
things modify and clarify Marsala's rights with respect to the Shares.
NOW, THEREFORE, in consideration of the above premises and the
mutual promises set forth in this Agreement, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. ADDITIONAL SHARES; ADJUSTMENT PROVISIONS.
The Company and Marsala each acknowledge that (i) pursuant to Section
8(b) of the Certificate of Designation, Preferences and Rights of the Series C
Preferred Stock of the Company (the "Certificate") that as of January 2, 2004
Marsala is entitled to be issued 20,336,726 Additional Shares, as such term is
defined in the Certificate and (ii) pursuant to paragraph 8(d) of the
Certificate that the Fixed Conversion Price, as defined in the Certificate, is
subject to adjustment in connection with the transactions contemplated by the
Investment Agreement. Marsala hereby waives (i) the right to (A) such 20,336,726
Additional Shares, (B) any Additional Shares issuable after January 2, 2004,
with respect to 60,000 shares of Series C Preferred Stock and the accrued
dividends thereon which have been converted into shares of common stock by
Marsala , (C) any Additional Shares issuable with respect to the 20,336, 726
Additional Shares issuable prior to January 2, 2004 and (D) any Additional
Shares issuable with respect to the 2,050,887 Additional Shares issued as of
December 31, 2003 and (ii) the adjustment of the Fixed Conversion Price solely
in connection with the shares of Series D Preferred Stock issuable to the
Investor pursuant to the Investment Agreement; PROVIDED THAT (x) there is no
breach of (A) the Investment Agreement by the Investor, (B) the Tri-Party
Agreement of even date herewith among the Company, the Investor and Marsala by
the Investor or (C) this Agreement and (y) the Company amends the Company's
Certificate of Incorporation within 120 days of the date hereof such that the
Company has a sufficient number of authorized shares of common stock with
respect to all outstanding options, warrants and conversion rights (other than
the Additional Shares).
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2. RELEASE.
The Company agrees to obtain the release of Marsala with respect to (i)
the lease agreement with EAB-MHT loan no.9902602-002, and (ii) the lease
agreement with All-Points Capital in the original amount of 99,494.00.
3. ADJUSTMENTS; EXERCISE OF WARRANT.
The Company hereby acknowledges to Marsala that in connection with the
warrants to purchase 1,868,096 shares of common stock of the Company issued in
connection with Marsala's conversion of 60,000 shares of Series C Preferred
Stock in accordance with Section 8(e) of the Certificate that the exercise price
is not subject to an upward adjustment and that the number of shares of common
stock issuable is not subject to a downward adjustment in the event of a reverse
stock split of the shares of the Company's common stock. The Company also
acknowledges to Marsala that pursuant to Section 8(e) of the Certificate and in
accordance herewith that Marsala is entitled to warrants in connection with
accrued dividends on the Series C Preferred Stock and that as of December 31,
2003 the number of warrants issuable to Marsala for such accrued dividends is
equal to 4,830,576 and that such warrants shall be issuable to Marsala for any
accrued and unpaid dividends on the terms set forth in Section 8(e) of the
Certificate for any dividends accruing after December 31, 2003. The Company also
hereby acknowledges that the warrants issuable pursuant to the Certificate and
pursuant hereto shall be exercisable for a period of 90 days following the
effectiveness of a registration statement covering the resale of the shares of
common stock underlying the warrants. Notwithstanding the foregoing each of the
parties hereto acknowledge that in the event of a reverse stock split after the
date hereof: (i) the Fixed Conversion Price, as defined in Section 8(c) of the
Certificate is subject to adjustment and (ii) as a result (A) the Fixed
Conversion Price shall be proportionately increased, and thereby the number of
shares of common stock shall be proportionately reduced, (B) the number of
warrants issuable to Marsala shall equal the number of shares of common stock
issuable to Marsala and (C) the exercise price of the warrants shall be equal
$0.12 per share.
4. INDEMNITY.
The Company shall indemnify and hold harmless Marsala from and against
any losses, claims, damages, judgments, assessments, costs and other liabilities
in connection with the action entitled (i) Xxxxxx Xxxxxxxx, Xxxxxx X. Xxxxxxxx,
and Citrus Springs Trust, plaintiffs, against the Company and Marsala,
defendants and (ii) the Company, New Rail Holding, plaintiffs against Xxxxxx
Xxxxx Xxxxxxxx, Citrus Springs Trust, Xxxxxxx Xxxxxxxx,Xxxxx Xxxxxxxx,
defendants, or any related action (collectively, "Liabilities"), and will
reimburse Marsala for all fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, "Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim, action, proceeding or
investigation in connection therewith; provided that the Company will not be
responsible for any Liabilities or Expenses of Marsala that are determined by a
judgment of a court of competent jurisdiction, which judgment is no longer
subject to appeal or further review, to have resulted
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from Marsala's gross negligence or willful misconduct. The Company shall also
reimburse Marsala for all Expenses as they are incurred in connection with
enforcing Marsala's rights under this Agreement. Marsala shall reasonably
cooperate with the defense of any of the Liabilities. Upon receipt by Marsala of
actual notice of any other action against Marsala with respect to which
indemnity may be sought under this Agreement, Marsala shall promptly notify the
Company in writing; provided that failure to so notify the Company shall not
relieve the Company from any liability which the Company or any other person may
have on account of this indemnity or otherwise, except to the extent the Company
shall have been materially prejudiced by such failure. The Company may, upon
receipt of notice, assume the defense of any such action including the
employment of counsel reasonably satisfactory to Marsala. Marsala shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of Marsala, unless: (i) the Company has failed promptly to assume the
defense and employ counsel or (ii) in the written opinion of Marsala's legal
counsel a conflict of interest exists with the Company. The Company shall not be
liable for any settlement of any action effected without its written consent
(which shall not be unreasonably withheld). In addition, the Company will not,
without prior written consent of Marsala (which shall not be unreasonably
withheld), settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened action in respect of which
indemnification or contribution may be sought hereunder (whether or not Marsala
is a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of Marsala from all liabilities arising out of
such action.
5. GOVERNING LAW; MISCELLANEOUS.
(a) GOVERNING LAW. The corporate laws of the State of Delaware shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(b) COUNTERPARTS. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement and shall become
effective when counterparts have
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been signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all other
prior oral or written agreements between Marsala and the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, no party makes any representation, warranty, covenant or undertaking
with respect to such matters. No provision of this Agreement may be amended
other than by an instrument in writing signed by all of the parties hereto, and
no provision hereof may be waived other than by an instrument in writing signed
by the party against whom enforcement is sought.
(g) NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally or by air courier or (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party). The addresses
and facsimile numbers for such communications shall be:
IF TO THE COMPANY: IF TO MARSALA:
----------------- -------------
Xxxxxx Xxxx 000 Xxxx 00xx Xxxxxx
Xxx Xxxx Regional Rail Corp. Xxx Xxxx, XX 00000
0000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
WITH A COPY TO:
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Marc. X. Xxxxxxxxx, Esq.s
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Each party shall provide five (5) days' prior written notice to the other party
of any change in address or facsimile number.
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(h) SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by the
parties hereto.
(i) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and is not for the benefit of, nor may any
provision hereof be enforced by, any other person.
(j) FURTHER ASSURANCES. Except as set forth herein, each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
(k) NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
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IN WITNESS WHEREOF, the parties hereto have caused this Investment
Agreement to be duly executed as of the date and year first above written.
NEW YORK REGIONAL RAIL CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President
/s/ Xxxx Xxxxxxx
XXXX XXXXXXX
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