UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of
Report: May 4, 2009
(Date of
earliest event reported)
TRACK
DATA CORPORATION
(Exact
name of Registrant as specified in its Charter)
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Delaware
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0-24634
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22-3181095
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(State
or other jurisdiction of
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(Commission
File Number)
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(IRS
Employer Identification
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incorporation
or organization)
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Number)
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95
Rockwell Place, Brooklyn, New York
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11217
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(Address
of Principal Executives Offices)
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(Zip
Code)
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(718)
522-7373
(Registrant's
telephone number including Area Code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the follow
provisions:
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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q
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (14 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement.
The
following information is furnished pursuant to Item 1.01, “Entry into a Material
Definitive Agreement.”
On May 4,
2009, the Company, Barry Hertz, its Principal Stockholder, Silver Polish LLC
(“SPLLC”), a New Jersey limited liability company of which Mr. Hertz is the
general manager, and another unrelated individual, entered into an agreement
with Sovereign Bank (“Sovereign”), pursuant to which SPLLC will purchase the
note and mortgage on a real estate development known as Sterling Place, located
in Lakewood, New Jersey. The mortgage is currently in default and is the subject
of a foreclosure proceeding by Sovereign which Sovereign has agreed to assign to
SPLLC. The total purchase price is $8.8 million, of which $5 million
has been paid to Sovereign by SPLLC and $3.8 million of which is payable in
November 2009 and is evidenced by a promissory note payable by SPLLC, on which
the Company, Mr. Hertz and the other party to the Agreement are jointly and
severally liable.
The
Company has invested $3 million in SPLLC and an aggregate of $2 million has been
invested by Mr. Hertz, a limited partnership of which Mr. Hertz is the general
partner, and certain other persons. The agreement among the SPLLC
investors provides for the investors to first recover their investments, and
that from any profits above such investments, an unrelated construction manager
will be paid a fee of 15 to 25% of such profits, depending on the amount of the
profits realized. In addition, in the event the investors receive a
return of at least 20% after payment of the construction manager fee, Mr. Hertz
will receive a syndication fee of up to 15% providing that after such payment to
Mr. Hertz the investors still receive at least a 20% return on their
investment.
SPLLC
intends to pay the note to Sovereign from the proceeds of sales of the
unfinished homes in the development, many of which have been substantially
completed. To the extent that there are not sufficient sale proceeds
to pay the note in full by its maturity date SPLLC will be required to pay off
the balance of the note or forfeit the initial $5 million paid to
Sovereign.
In
addition, the agreement with Sovereign requires the replacement with an
alternative surety of a standby letter of credit issued by Sovereign to the
municipality to assure completion of certain site improvements. If such
alternative surety acceptable to the municipality is not arranged by June 15,
2009 or under certain circumstances, July 15, 2009, SPLLC will be liable to pay
the Bank an additional $543,000. This obligation is also evidenced by the
promissory note referred to above, the aggregate amount of such note being $4.3
million. It is expected that a performance bond will be provided in lieu of such
standby letter of credit. If a performance bond is not acceptable to
the municipality, it is expected that SPLLC will obtain a letter of credit, in
which case it may be required to place a back-to-back deposit at the bank
providing such letter of credit.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Date:
May 7, 2009
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By
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/s/ Martin
Kaye
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Martin
Kaye
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CEO,
CFO
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