Document:

Exhibit 10.42

Note Modification Agreement

This agreement is dated as of April 21, 2011 (the "Agreement Date"), by and between COLONIAL FULL SERVICE CAR WASH, INC. (the "Borrower") and JPMorgan Chase Bank, N.A. (together with its successors and assigns, the "Bank"). The provisions of this agreement are effective on April 21, 2011 (the "Effective Date"). This agreement amends, restates and replaces the Note Modification Agreement between the Bank and the Borrower dated as of April 28, 2011.

WHEREAS, the Borrower executed a PROMISSORY NOTE dated as of June 21, 1996 in the original principal amount of One Million Nine Hundred Seventy Thousand and 00/100 Dollars ($1,970,000.00), as renewed, extended and modified by the Note Modification Agreement dated as of June 21, 2001, the Note Modification Agreement dated as of June 16, 2004 and the Note Modification Agreement dated as of April 16, 2009 which extended the maturity date to April 21, 2011 (as same may have been amended or modified from time to time, the "Note") as evidence of an extension of credit from the Bank to the Borrower, which Note has at all times been, and is now, continuously and without interruption outstanding in favor of the Bank; and,

WHEREAS, the Borrower has requested and the Bank has agreed that the Note be modified to the limited extent as hereinafter set forth in this agreement;

NOW THEREFORE, in mutual consideration of the agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.    ACCURACY OF RECITALS. The Borrower acknowledges the accuracy of the Recitals stated above.

2.    DEFINITIONS. Capitalized terms used in this agreement shall have the same meanings as in the Note, unless otherwise defined in this agreement.

3.   MODIFICATION OF NOTE.

3.1 The "Maturity Date" of the Note is hereby extended from April 21, 2011 to February 28, 2012.

3.2 From and after the Effective Date, the Note shall be payable in consecutive monthly installments of principal each in the amount of $12,779.32, plus accrued interest, commencing April 21, 2011 and continuing on the same day of each month thereafter to and including February 21, 2012.  On February 28, 2012, the entire balance of unpaid principal, accrued interest and all other amounts payable under the Note shall be due and payable immediately. The Note may be prepaid at any time without premium or penalty.

3.3 Each of the Related Documents is modified to provide that it shall be a default or an event of default thereunder if the Borrower shall fail to comply with any of the covenants of the Borrower herein or if any representation or warranty by the Borrower herein or by any guarantor in any Related Documents is materially incomplete, incorrect, or misleading as of the date hereof. As used in this agreement, the "Related Documents" shall include the Note and all applications for letters of credit, loan agreements, credit agreements, reimbursement agreements, security agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, or any other instrument or document executed in connection with the Note or in connection with any other obligations of the Borrower to the Bank.

3.4 Each reference in the Related Documents to any of the Related Documents shall be a reference to such document as modified by this agreement.

4.   RATIFICATION OF RELATED DOCUMENTS AND COLLATERAL. The Related Documents are ratified and reaffirmed by the Borrower and shall remain in full force and effect as they may be modified by this agreement. All property described as security in the Related Documents shall remain as security for the Note, as modified by this agreement, and the Liabilities under the other Related Documents.

5.   BORROWER REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to the Bank that each of the representations and warranties made in the Note and the other Related Documents and each of the following representations and warranties are and will remain, true and correct until the later of maturity or the date on which all Liabilities evidenced by the Note are paid in full:

5.1 No default, event of default or event that would constitute a default or event of default but for the giving of notice, the lapse of time or both, has occurred and is continuing under any provision of the Note, as modified by this agreement, or any other Related Document.

 

  

  

  

5.2 No event has occurred which may in any one case or in the aggregate materially and adversely affect the financial condition, properties, business, affairs, prospects or operations of the Borrower or any guarantor or any subsidiary of the Borrower.

5.3 The Borrower has no defenses or counterclaims, offsets or adverse claims, demands or actions of any kind, personal or otherwise, that it could assert with respect to the Note or any other Liabilities.

5.4 The Note, as modified by this agreement, and the other Related Documents are the legal, valid, and binding obligations of the Borrower and the other parties, enforceable against the Borrower and other parties in accordance with their terms, except as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and by general principles of equity.

5.5 The Borrower, other than any Borrower who is a natural person, is validly existing under the laws of the State of its formation or organization. The Borrower has the requisite power and authority to execute and deliver this agreement and to perform the obligations described in the Related Documents as modified herein. The execution and delivery of this agreement and the performance of the obligations described in the Related Documents as modified herein have been duly authorized by all requisite action by or on behalf of the Borrower. This agreement has been duly executed and delivered by or on behalf of the Borrower.

6.   BORROWER COVENANTS. The Borrower covenants with the Bank:

6.1 The Borrower shall execute, deliver, and provide to the Bank such additional agreements, documents, and instruments as reasonably required by the Bank to effectuate the intent of this agreement.

6.2 The Borrower fully, finally, and forever releases and discharges the Bank, its successors, and assigns and their respective directors, officers, employees, agents, and representatives (each a "Bank Party") from any and all causes of action, claims, debts, demands, and liabilities, of whatever kind or nature, in law or equity, of the Borrower, whether now known or unknown to the Borrower, (i) in respect of the loan evidenced by the Note and the Related Documents, or of the actions or omissions of any Bank Party in any manner related to the loan evidenced by the Note or the Related Documents and (ii) arising from events occurring prior to the date of this agreement ("Claims"); provided, however, that the foregoing RELEASE SHALL INCLUDE ALL CLAIMS ARISING OUT OF THE NEGLIGENCE OF ANY BANK PARTY, but not the gross negligence or willful misconduct of any Bank Party.

6.3 To the extent not prohibited by applicable law, the Borrower shall pay to the Bank:

6.3.1 All the internal and external costs and expenses incurred (or charged by internal allocation) by the Bank in connection with this agreement (including, without limitation, inside and outside attorneys, appraisal, appraisal review, processing, title, filing, and recording costs, expenses, and fees).

7.   EXECUTION AND DELIVERY OF AGREEMENT BY THE BANK. The Bank shall not be bound by this agreement until (i) the Bank has executed this agreement and (ii) the Borrower performed all of the obligations of the Borrower under this agreement to be performed contemporaneously with the execution and delivery of this agreement.

8.   INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER. The Note, as modified by this agreement, and the other Related Documents contain the complete understanding and agreement of the Borrower and the Bank in respect of any Liabilities evidenced by the Note and supersede all prior understandings, and negotiations. If any one or more of the obligations of the Borrower under this agreement or the Note, as modified by this Agreement, is invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Borrower shall not in any way be affected or impaired, and the invalidity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of the obligations of the Borrower under this agreement, the Note as modified by this agreement and the other Related Documents in any other jurisdiction. No provision of the Note, as modified by this agreement, or any other Related Documents may be changed, discharged, supplemented, terminated, or waived except in a writing signed by the party against whom it is being enforced.

9.  GOVERNING LAW AND VENUE. This agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to its laws of conflicts). The Borrower agrees that any legal action or proceeding with respect to any of its obligations under the Note or this agreement may be brought by the Bank in any state or federal court located in the State of Texas, as the Bank in its sole discretion may elect. By the execution and delivery of this agreement, the Borrower submits to and accepts, for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts. The Borrower waives any claim that the State of Texas is not a convenient forum or the proper venue for any such suit, action or proceeding. This agreement binds the Borrower and its successors, and benefits the Bank, its successors and assigns. The Borrower shall not, however, have the right to assign the Borrower's rights under this agreement or any interest therein, without the prior written consent of the Bank.

 

  

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10.  COUNTERPART EXECUTION. This agreement may be executed in multiple counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts, taken together, shall constitute one and the same agreement.

11.  NOT A NOVATION. This agreement is a modification only and not a novation. In addition to all amounts hereafter due under the Note, as modified by this agreement, and the other Related Documents, all accrued interest evidenced by the Note being modified by this agreement and all accrued amounts due and payable under the Related Documents shall continue to be due and payable until paid. Except for the modification(s) set forth in this agreement, the Note, the other Related Documents and all the terms and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein. This agreement is to be considered attached to the Note and made a part thereof. This agreement shall not release or affect the liability of any guarantor, surety or endorser of the Note or release any owner of collateral securing the Note. The validity, priority and enforceability of the Note shall not be impaired hereby. References to the Related Documents and to other agreements shall not affect or impair the absolute and unconditional obligation of the Borrower to pay the principal and interest on the Note when due. The Bank reserves all rights against all parties to the Note and the other Related Documents.

12. TIME IS OF THE ESSENCE. Time is of the essence under this agreement and in the performance of every term, covenant and obligation contained herein.

THIS AGREEMENT AND THE OTHER RELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

	  	  	
Borrower:

	
Address:

	
240 Gibraltar Road, Suite 220

Horsham, PA 85677

	
COLONIAL FULL SERVICE CAR WASH, INC.

	  	  	
By:

	
/s/Gregory M. Krzemien

	  	  	  	
Gregory M. Krzemien

	
Chief Financial Officer

	  	  	  	
Printed Name

	
Title

 

	  	
Date Signed: 

	
9/14/2011

BANK’S ACCEPTANCE

The foregoing agreement is hereby agreed to and acknowledged.

	  	
Bank:

	  	
JPMorgan Chase Bank, N.A.

	  	  
	  	
By:

	
/s/ R. Alan Green

	  	  	
R. Alan Green

	  
	  	  	
Printed Name

	
Title

 

	  	
Date Signed: 

	
9/16/2011

 

Glenda L. Raisor \ TXCDP-91000000000 Non-Standard

790379119000 \ DW000B0096158133C674

Modified by Midge Hirsch

 

  

3Unassociated Document

 

 

Exhibit 10.44

Execution version

 

AMENDMENT

 

This AMENDMENT (this “Amendment”) dated as of November 10, 2011 (the “Effective Date”) between Net Element, Inc. (“Net Element”), Denise Muyco (“Muyco”), and StratusCore, Inc. (“StratusCore”) amends that certain Stock Purchase Agreement (the “SPA”) dated August 9, 2011 (the “SPA Date”) between Net Element and Muyco.  All capitalized terms not otherwise defined herein shall have the meaning so proscribed in the SPA.

 

WHEREAS, the parties mutually agree that it is in the best interest of the parties not to consummate the acquisition as contemplated in the SPA and to leave the all control and ownership of StratusCore with Muyco and to work together in the furtherance of their individual companies as provided herein.

 

NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.           SPA Null and Void.  Net Element and Muyco acknowledge that the Closing, as contemplated in the SPA has not occurred as of the SPA Date.  The SPA shall be null and void in its entirety ab initio and shall be replaced in its entirety with the terms of this Amendment. The parties hereto agree to take all steps reasonably required and necessary or advisable in order to unwind the transactions contemplated pursuant to the SPA with the effect that each of parties hereto will be reverted to the same position economically and with respect to the ownership of StratusCore and the assets of StratusCore.

 

2.           Confidential Materials.  Net Element and StratusCore agree that all of their respective confidential materials and assets (plans, strategy, works, findings, product development, codes, specifications, R&D efforts/findings, physical assets, accounts, domain names, and all other assets developed/purchased in the in the interest of StratusCore will be returned to StratusCore not later than ten (10) business days after the Effective Date.  StratusCore shall reciprocate and cooperate in good faith returning all confidential materials to Net Element no later than ten (10) business days from the Effective Date.  Confidentiality covenants will be honored from all individuals who received such confidential information during and after the Closing.

 

3.           Additional Funding/Support.  Net Element shall continue to fund agreed upon operations of StratusCore until January 31, 2012 (the “Stub Period”) with such monthly amounts beginning on November 1, 2011 based on an agreed upon budget.  In addition, StratusCore may continue to use certain agreed upon development assets of Net Element beyond the Stub Period at a cost plus basis.

 

4.           Accounting/Convertible Note.  Net Element shall conduct an accounting of amounts actually expended (not allocations of overhead expenses) on the operations of StratusCore between the Effective Date and the end of the Stub Period of this Amendment and upon agreement by Muyco such amount shall be accounted for in an interest free, convertible note from StratusCore, that shall be converted into equity of StratusCore at the same rate as Muyco agrees to accept investment from a bona fide third party in the next investment round or lender terms.  In the event that there is no further investment required, the amount invested in StratusCore by Net Element will be based on the valuation originally set in June 2011.

 

  

  

  

 

5.           Business Development/Partnerships.  The parties continue to believe in the synergies between the various business units of the parties and intend to pursue mutually beneficial business development and partnership opportunities when appropriate in the future.  The terms and scope of any such business development and/or partnership opportunities and the resulting terms, conditions, and obligations will be mutually agreed upon in the sole discretion of each party.

 

6.           Signatures.  This Amendment may be executed in several counterparts or counterpart signature pages, and all so executed shall constitute one instrument notwithstanding that all of the undersigned are not signatories to the original thereof or the same counterpart or counterpart signature page.  A facsimile or PDF of a signature to this Amendment shall be deemed and treated for all purposes of execution to be as valid as an original signature thereto.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized signatories as of the Effective Date.

 

	 	 
NET ELEMENT, INC., a Delaware corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Jonathan New	 
	 	 	Name: Jonathan New	 
	 	 	Title:  Chief Financial Officer	 
	 	 	 	 
	 	 	/s/ Denise Muyco	 
	 	 	 
Denise Muyco, in her individual capacity

	 

 

	 	 
STRATUSCORE, INC., a Washington corporation

	 
	 	 	 	 
	
 

	
By: 

	/s/ Denise Muyco	 
	 	 	Name: Denise Muyco	 
	 	 	Title:  President

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