Document:

Unassociated Document

     

    CONTRIBUTION
      AGREEMENT

     

    THIS
      CONTRIBUTION AGREEMENT (the “Agreement”) is entered into as of the 26th day of
      October, 2007, by and between The 500 Group, LLC (the “Funding Party”), a New
      York entity, and PubliCARD, Inc., a Pennsylvania corporation (the “Debtor”).

     

    W I T N E S S E T H:

     

    WHEREAS,
      on May 17, 2007, the Debtor filed with the United States Bankruptcy Court for
      the Southern District of New York (the “Bankruptcy Court”) a voluntary petition
      for relief under Chapter 11 of the United States Bankruptcy Code. 

     

    WHEREAS,
      on October 26, 2007, the Debtor filed a plan of reorganization (the
“Plan”)1 
      with the
      Bankruptcy Court.

     

    WHEREAS,
      pursuant to the Plan, the Funding Party would receive
      370,000
      shares of New Common Stock, which shares would represent, as of the Effective
      Date, 90% of the outstanding shares of New Common Stock.

     

    WHEREAS,
      in exchange for such New Common Stock and the releases and related provisions
      set forth in the Plan, the Funding Party wishes to contribute $500,000
      to
      the
      Debtor on the Effective Date to allow the Debtor to satisfy its obligations
      under the Plan, among other things;

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the Funding Party and the Debtor hereby agree
      as
      follows:

     

    1.  Contribution.
      In
      exchange for the New Common Stock provided to the Funding Party under the Plan
      and the releases and related provisions set forth therein,
      the
      Funding Party shall contribute $500,000
      to the
      Debtor on the Effective Date to allow the Debtor to satisfy its obligations
      under the Plan, among other things.

     

    2.  Acceptance.
      The
      Debtor hereby agrees to accept such contribution and to record such contribution
      as a capital contribution in a corresponding amount on its books and records.
      

     

    3.  Bankruptcy
      Court Approval.
      This
      Agreement shall be subject to Bankruptcy Court approval.

     

    4.  Authorization.
      Each
      party has the full power and authority to execute, deliver, and perform his
      or
      its obligations under this Agreement, subject to Bankruptcy Court
      approval.

    
      

        

        
          1 Capitalized
            terms not otherwise defined herein shall have the meanings ascribed to
            them in
 the
            Plan.

           

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.  Binding
      Agreement.
      This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto and their respective successors.

     

    6.  Choice
      of Law.
      This
      Agreement shall be construed and enforced in accordance with the internal laws
      of the State of New York.

     

    7.  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all of which shall constitute one and the same
      instrument. 

     

    8.  Amendments.
      This
      Agreement may not be modified, amended, or terminated except by a written
      agreement executed by all of the parties hereto. 

     

    IN
      WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
      as
      of the date first above written. 

     

    
      	 	 	 
	 	THE
              500
              GROUP, LLC
	 
 	 
 	 
 
	
            	By:  	/s/
              Joseph E. Sarachek
	 	
              
Joseph
              E. Sarachek
	 	Managing
              Member

    

     

    
      	 	 	 
	 	PUBLICARD,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/
              Jay
              S. Goldsmith
	 	
              
Jay
              S. Goldsmith
	 	
              Director

            

      
        	 	 	 
	 	
              
	 
 	 
 	 
 
	
              	By:  	/s/
                Harry I. Freund
	 	
                

                Harry
                  I. Freund

              
	 	Director

        
          	 	 	 
	 	
                
	 
 	 
 	 
 
	
                	By:  	/s/
                  Emil
                  Vogel
	 	
                  
Emil
                  Vogel
	 	Director

          
            	 	 	 
	 	
                  
	 
 	 
 	 
 
	
                  	By:  	/s/
                    Larry G. Schafran
	 	
                    
Larry
                    G. Schafran
	 	Director

            
              	 	 	 
	 	
                    
	 
 	 
 	 
 
	
                    	By:  	/s/
                      Clifford B. Cohn
	 	
                      
Clifford
                      B. Cohn
	 	Director

            

             

          

        

      

    

    
      
         

      

      
        2Unassociated Document

    FUNDING
      AGREEMENT

     

    FUNDING
      AGREEMENT (this “Agreement”),
      dated
      as of January 18, 2008, by and among PubliCARD, Inc., a Pennsylvania corporation
      (the “Debtor”),
      The
      500 Group, LLC, a [Delaware] limited liability company (the “500
      Group”),
      and
      Charlie Fisch, Folio Holdings, LLC, IA Capital Partners, LLC, Ridge View Group,
      LLC, and Joseph E. Sarachek (collectively, the “Investors”).

     

    RECITALS

     

    WHEREAS,
      the 500 Group and the Debtor are parties to a Contribution Agreement, entered
      into as of October 26, 2007 (the “Contribution
      Agreement”),
      pursuant to which the 500 Group has agreed to purchase shares representing
      90%
      of the outstanding shares (the “Shares”)
      of the
      Common Stock, par value $0.01 per share (the “New
      Common Stock”),
      of
      Chazak Value Corp. (as successor to the Debtor upon its emergence from
      bankruptcy, the “Company”)
      in
      connection with the implementation of the Debtor’s Plan of Reorganization, as
      amended (the “Plan”);

     

    WHEREAS,
      the Investors desire to fund the 500 Group’s acquisition of Shares under the
      Contribution Agreement through the investment of an aggregate of $500,000 in
      exchange for membership interests in the 500 Group and to provide for the
      distribution of the Shares to the Investors following the 500 Group’s receipt of
      such Shares pursuant to the Plan in proportion to 500 Group membership interests
      purchased hereunder;

     

    WHEREAS,
      in connection with the receipt of their portion of the Shares, the Investors
      and
      the Company desire to enter into a stockholders agreement, substantially in
      the
      form attached hereto as Exhibit A (the “Stockholders
      Agreement”),
      and a
      registration rights agreement, substantially in the form attached hereto as
      Exhibit B (the “Registration
      Rights Agreement”).

     

    NOW,
      THEREFORE, in consideration of these premises and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

     

    SECTION
      1.  
      INVESTMENT

     

    1.1  Purchase
      of 500 Group Membership Interests; Funding Under the Contribution
      Agreement.

     

    (a)  On
      the
      date hereof, each Investor shall deliver by wire transfer to an account
      specified by the 500 Group the amount set forth below its name on the signature
      page hereto, which amounts shall total $500,000 (the “Investment”),
      each
      such Investor shall execute a counterpart signature to the 500 Group’s operating
      agreement and the 500 Group shall issue to each Investor limited liability
      company membership interests in the 500 Group reflecting the amount of its
      investment (the “LLC
      Interests”).

     

    (b)  Upon
      receipt of the Investment, the 500 Group shall deliver such funds to the Debtor
      pursuant to the Contribution Agreement, which funds shall be held separate
      and
      apart by the Debtor from its other funds, and Debtor shall not otherwise use
      such funds pending the effectiveness of the Plan. In the event that the Plan
      does not become effective by February 15, 2008, the Investment shall be returned
      to the 500 Group, which will then deliver such funds, as applicable, to the
      Investors in cancellation of the LLC Interests acquired by the
      Investors.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2  Issuance
      and Distribution of Shares of New Common Stock.
      Under
      the terms of the Plan and upon its effectiveness, the Company shall deliver
      to
      the 500 Group a certificate representing the Shares purchased under the
      Contribution Agreement pursuant to the Plan. Upon its receipt of such Shares,
      the 500 Group shall distribute to each Investor 20% of the Shares of New Common
      Stock in respect of the LLC Interests purchased hereunder (the “Distribution”).
      In
      connection with the Distribution of such shares of New Common Stock to the
      Investors, the 500 Group shall deliver to the Company, duly endorsed for
      transfer, its certificate representing the Shares and shall direct that the
      Company issue to each Investor a certificate representing its shares of New
      Common Stock to be received hereunder. 

     

    1.3  Stockholders
      Agreement and Registration Rights Agreement.
      In
      connection with the Distribution, each of the Investors and the Company shall
      execute and deliver the Stockholders Agreement and Registration Rights
      Agreement.

     

    1.4  Representations
      and Warranties of the Investors.
      Each of
      the Investors hereby, severally and not jointly, represents and warrants as
      follows.

     

    (a)  Investment
      Intent.
      Such
      Investor is (i) an "accredited investor" as defined in Regulation D of the
      Securities Act of 1933, as amended (the “Securities
      Act”),
      and
      (ii) acquiring the shares of New Common Stock to be distributed to such Investor
      hereunder for investment only and not with a view to the distribution thereof.
      

     

    (b)  Investment
      Risk and Experience.
      Such
      Investor is in a financial position to hold its portion of the Shares for an
      indefinite period of time and able to bear the economic risk and withstand
      a
      complete loss of its or his investment in such Shares and is experienced in
      evaluating and investing in companies such as the Company, or is familiar with
      the risks associated with the business and operations of the Company, and has
      such knowledge and experience in financial and business matters as to be capable
      of evaluating the merits and risks of its investment.

     

    (c)  Authorization.
      The
      execution, delivery and performance of this Agreement and each of the
      Stockholders Agreement and Registration Rights Agreement to which it or he
      is or
      will be a party have been duly authorized by all necessary or appropriate
      action.

     

    (d)  Enforceability.
      The
      execution and delivery by such Investor of this Agreement and each of the
      Stockholders Agreement and Registration Rights Agreement will result in legally
      binding obligations of such Investor enforceable against such Investor in
      accordance with the respective terms and provisions hereof and thereof, except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium and
      other similar laws of general applicability relating to or affecting creditors’
rights or general equity principles (regardless of whether considered at law
      or
      in equity).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (e)  Exemption.
      Such
      Investor understands that the Shares are not registered under the Securities
      Act
      on the grounds that the Company intends the sale and the issuance of securities
      hereunder to be exempt from registration under the Securities Act pursuant
      to
      Regulation D thereof, and that the Company's reliance on such exemption is
      predicated on the Investor’s representations set forth herein.

     

    (f)  Restrictions
      on Resale.
      Such
      Investor understands that the Shares may not be sold, transferred or otherwise
      disposed of without registration under the Securities Act and applicable state
      securities laws or an exemption therefrom, and that in the absence of an
      effective registration statement covering the Shares or an available exemption
      from registration under the Securities Act and applicable state securities
      laws,
      the Shares must be held indefinitely. Such Investor understands that any
      certificates representing the Shares will bear a restrictive legend to this
      effect as set forth below.

     

    (g)  No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and each of the
      Stockholders Agreement and Registration Rights Agreement and the consummation
      of
      the transactions contemplated hereby and thereby do not and will not, with
      notice or passage of time or both (i) conflict with or result in a breach of
      the
      terms, conditions, or provisions of, (ii) constitute a default under or result
      in a violation of, (iii) result in the creation of any lien upon its portion
      of
      the Shares or assets, properties or rights of such Investor pursuant to, (iv)
      give any person the right to modify, terminate or accelerate any liability
      of,
      or charge any fee, penalty or similar payment to such Investor under, or (v)
      require any authorization, consent, approval, exemption or other action by
      or
      declaration or notice to any person pursuant to any law, contract or agreement
      to which such Investor is a party, by which such Investor is bound or to which
      any of such Investor’s assets are subject.

     

    (h)  Separate
      Counsel.
      Each
      Investor has had the opportunity to seek the advice of counsel and other
      personal advisors and acknowledges that neither the Company nor any of its
      affiliates has provided such Investor with any advice regarding the tax,
      economic or other impacts to such Investor of the arrangements contemplated
      hereby or by the Stockholders Agreement or Registration Rights
      Agreement.

     

    1.5  Legends.
      Each
      certificate to be issued to an Investor representing its portion of the Shares
      shall be stamped or otherwise imprinted with legends substantially similar
      to
      the following (in addition to any legend required under applicable state
      securities laws):

     

    THE
      SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
      TRANSFERRED, ASSIGNED OR PLEDGED UNLESS AND UNTIL REGISTERED UNDER THE ACT
      OR
      UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
      COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    THE
      SALE,
      PLEDGE OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
      TO
      THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT, WHICH ALSO
      INCLUDES CERTAIN
      RESTRICTIONS ON THE VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON
      ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL
      BECOME BOUND BY ALL THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH AGREEMENT
      WILL BE FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
      WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    SECTION
      2.  
      MISCELLANEOUS.

     

    2.1  Governing
      Law. 

     

    (a) This
      Agreement shall be governed by and construed under the laws of the State of
      Delaware in all respects as such laws are applied to agreements among Delaware
      residents entered into and to be performed entirely within Delaware, without
      reference to principles of conflicts of laws. The parties agree that any action
      brought by any party under or in relation to this Agreement, including without
      limitation to interpret or enforce any provision of this Agreement, shall be
      brought in, and each party agrees to and does hereby submit to the jurisdiction
      and venue of, any state or federal court located in the City of New York, New
      York.

     

    (b) Each
      party hereto hereby irrevocably and unconditionally waives any right such party
      may have to a trial by jury in respect of any litigation directly or indirectly
      arising out of or relating to this Agreement, or the transactions contemplated
      by this Agreement. Each party certifies and acknowledges that (i) no
      representative, agent or attorney of any other party has represented, expressly
      or otherwise, that such other party would not, in the event of litigation,
      seek
      to enforce the foregoing waiver, (ii) each party understands and has considered
      the implications of this waiver, (iii) each party makes this waiver voluntarily,
      and (iv) each party has been induced to enter into this Agreement by, among
      other things, the mutual waivers in this paragraph 2.1(b).

     

    2.2  Successors
      and Assigns.
      Except
      as otherwise expressly provided herein, the provisions hereof shall inure to
      the
      benefit of, and be binding upon, the parties hereto and their respective
      successors, assigns, heirs, executors and administrators. 

     

    2.3  Entire
      Agreement.
      This
      Agreement, the Contribution Agreement and the Exhibits hereto constitute the
      full and entire understanding and agreement between the parties with regard
      to
      the subjects hereof and no party shall be liable or bound to any other in any
      manner by any oral or written representations, warranties, covenants and
      agreements except as specifically set forth herein and therein. Each party
      expressly represents and warrants that it is not relying on any oral or written
      representations, warranties, covenants or agreements outside of this
      Agreement.

     

    2.4  Severability.
      In the
      event one or more of the provisions of this Agreement should, for any reason,
      be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality, or unenforceability shall not affect any other provisions of this
      Agreement, and this Agreement shall be construed as if such invalid, illegal
      or
      unenforceable provision had never been contained herein.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.5  Amendment
      and Waiver. Subject
      to the provisions applicable law (i) this Agreement may be amended, modified
      or
      supplemented only in writing executed by each of the parties hereto, and (ii)
      any provisions herein may be waived only in writing executed by the party or
      parties against whom such waiver is asserted; provided,
      that,
      no such waiver shall be deemed to extend to any prior or subsequent default,
      misrepresentation or breach of warranty or covenant hereunder or affect in
      any
      way any rights arising by virtue of any prior or subsequent default,
      misrepresentation, or breach of warranty or covenant.

     

    2.6  Delays
      or Omissions.
      It is
      agreed that no delay or omission to exercise any right, power or remedy accruing
      to any party, upon any breach, default or noncompliance by another party under
      this Agreement shall impair any such right, power, or remedy, nor shall it
      be
      construed to be a waiver of any such breach, default or noncompliance, or any
      acquiescence therein, or of any similar breach, default or noncompliance
      thereafter occurring. It is further agreed that any waiver, permit, consent
      or
      approval of any kind or character on any party’s part of any breach, default or
      noncompliance under this Agreement or any waiver on such party’s part of any
      provisions or conditions of this Agreement must be in writing and shall be
      effective only to the extent specifically set forth in such writing. All
      remedies, either under this Agreement, by law, or otherwise afforded to any
      party, shall be cumulative and not alternative.

     

    2.7  Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given: (a) upon personal delivery to the party to be notified,
      (b)
      when sent by confirmed electronic mail or facsimile if sent during normal
      business hours of the recipient; if not, then on the next business day, (c)
      five
      (5) days after having been sent by registered or certified mail, return receipt
      requested, postage prepaid, or (d) one (1) day after deposit with a nationally
      recognized overnight courier, specifying next day delivery, with written
      verification of receipt. All communications to the Investors shall be sent
      to
      the address as set forth on the signature pages hereof and communications to
      the
      Company and the 500 Group, at their respective corporate offices, or at such
      other address as any such party may designate by ten (10) days advance written
      notice to the other parties hereto.

     

    2.8  Attorneys’
      Fees.
      In the
      event that any suit or action is instituted under or in relation to this
      Agreement, including without limitation to enforce any provision in this
      Agreement, the prevailing party in such dispute shall be entitled to recover
      from the losing party all fees, costs and expenses of enforcing any right of
      such prevailing party under or with respect to this Agreement, including without
      limitation, such reasonable fees and expenses of attorneys and accountants,
      which shall include, without limitation, all fees, costs and expenses of
      appeals.

     

    2.9  Titles
      and Subtitles.
      The
      titles of the sections and subsections of this Agreement are for convenience
      of
      reference only and are not to be considered in construing this
      Agreement.

     

    2.10  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one instrument.
      Facsimile or email transmission of an executed counterpart of this Agreement
      shall be deemed to constitute due and sufficient delivery of such counterpart,
      and such signatures shall be deemed original signatures for purposes of the
      enforcement and construction of this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
      PAGES TO FOLLOW]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this FUNDING AGREEMENT as
      of
      the date set forth in the first paragraph hereof.

     

    
      	 	 	 
	 	PUBLICARD,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/
              Joseph E. Sarachek
	 	
              
Name:
Joseph
              E. Sarachek
	 	
              Title:
                 Chief
                Executive Officer 

            

    
      	 	 	 
	 	THE
              500
              GROUP, LLC
	 
 	 
 	 
 
	
            	By:  	/s/
              Joseph E. Sarachek  
	 	
              
Name:
Joseph
              E. Sarachek
	 	Title:
               Managing
              Member

    

    

      
        	 	INVESTORS: 
	 	 	 
	 	CHARLIE
                FISCH
	 
 	 
 	 
 
	
              	By:  	/s/
                Charlie Fisch 
	 	
                

              
	 	Amount
                to be invested in 
	 	The 500 Group, LLC: $100,000 

      

      

        
          	 	 	 
	 	FOLIO
                  HOLDINGS, LLC
	 
 	 
 	 
 
	
                	By:  	/s/ Jonathan Lewis   
	 	
                  
Name:
Jonathan
                  Lewis
	 	Title:  Managing
                  Member
	 	 
	 	Amount to be invested in  
	 	The 500 Group, LLC: $100,000 

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

          
            	 	 	 
	 	
                    IA
                      CAPITAL PARTNERS, LLC

                  
	 
 	 
 	 
 
	
                  	By:  	/s/
                    Roger Ehrenberg  
	 	
                    
Name:
Roger
                    Ehrenberg
	 	Title:
                     Managing
                    Member
	 	 
	 	
                    Amount
                      to be invested in  

                  
	 	The 500 Group, LLC: $100,000 

          

          

            
              	 	 	 
	 	RIDGE
                      VIEW
                      GROUP, LLC
	 
 	 
 	 
 
	
                    	By:  	/s/
                      David Marcus
	 	
                      
Name:
David
                      Marcus
	 	Title:
                       Managing
                      Partner
	 	 
	 	Amount to be invested in  
	 	
                      The
                        500 Group, LLC: $100,000 

                    

            

            

              
                	 	 	 
	 	JOSEPH
                        E.
                        SARACHEK
	 
 	 
 	 
 
	
                      	By:  	/s/
                        Joseph E. Sarachek 
	 	
                        

                      
	 	Amount
                        to be invested in 
	 	The 500 Group, LLC: $100,000

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