| Re: |
Future Recovery – 2026 Litigation Funding Agreement (“BARC 2026 LFA”)
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| 1. |
Upon execution of this BARC 2026 LFA by all parties, all principal amounts outstanding as of the date of this BARC 2026 LFA pursuant to that certain Senior Promissory Note between BARC and the
Company (the “Promissory Note”), in the aggregate amount of Two Million Dollars ($2,000,000), shall be deemed converted pursuant to this BARC 2026 LFA , and such amounts
that are so converted are payable only in accordance with the terms of this BARC 2026 LFA . Notwithstanding the foregoing, the accrued but unpaid interest pursuant to the Promissory Notes, in the total amount of approximately Two Hundred
Thousand Dollars ($200,000), shall remain outstanding and continue to accrue interest on the same terms as set forth in the Promissory Note provided that the maturity date of such indebtedness shall be three (3) years from the end of the
month immediately following the execution date of this BARC 2026 LFA . For the purposes of this BARC 2026 LFA, “business day” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are
authorized or required to close. The date that the entire initial funding amount from Bianco is received by the Company pursuant to that certain 2026 Litigation Funding Agreement between Bianco and the Company shall be deemed to be the “Funding Date”.
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| 2. |
BARC shall, within ten (10) business days of a written request from the Company, provided any such request is received on or before March 31, 2028, pay to the Company by wire transfer of immediately
available funds, such other additional amounts as may be mutually agreed to by BARC and the Company to be additional amounts included in the BARC Litigation Fund Amount, to pay for other continuing working capital needs of the Company and
other continuing litigation costs and expenses, or to repay any loans or debts accrued by the Company in order to pay for such costs and expenses, including attorneys’ fees, expert witness fees, consulting fees and disbursements incurred by
the Company or reasonably anticipated to be incurred by the Company in connection with any proceedings (i) involving the Sponsors and/or the lenders in the 111 West 57th Street Property project, or (ii) seeking to recover value for the
Company with respect to its equity investment in the 111 West 57th Street Property. The foregoing provision shall not impose upon either BARC or the Company any obligation to negotiate for the provision or receipt of any additional amounts to
be included in the BARC Litigation Fund Amount.
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| 3. |
In consideration for the Funders’ commitment to provide the Litigation Fund Amount, the Company shall distribute any and all consideration it actually receives in connection with any Future Recovery
Litigation, including an amount in cash equal to the fair market value of any non-cash consideration received, whether by judgment, award, order, settlement or otherwise, including, without limitation, any damages (punitive or otherwise),
penalties, or interest (such amounts, collectively, the “Litigation Proceeds”) as follows:
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| • |
Twenty-five percent (25%) of all Litigation Proceeds that are in excess of Seven Million Five Hundred Thousand Dollars ($7,500,000) (the “Preliminary Company Preference Amount”) to Bianco, pursuant to the 2017 LFA. The remaining seventy-five percent (75%) of all Litigation Proceeds that are in excess of the Preliminary Company Preference Amount, plus the Preliminary Company Preference Amount, to the Funders (pro rata in proportion to the Litigation Fund Amount provided by each Funder) and
the Company as follows:
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| • |
If and to the extent the Litigation Proceeds are received after the Funding Date but on or before September 30, 2026: (x) first, to the Funders (pro rata in proportion to the Litigation Fund Amount
provided by each Funder) until the aggregate amount received by the Funders hereunder equals the sum of the Litigation Fund Amount plus an amount equal to fifty percent (50%) of the aggregate Litigation Fund Amount, and (y) then, the
remaining Litigation Proceeds, if any, to the Company; and
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| • |
If and to the extent the Litigation Proceeds are received after September 30, 2026 but on or before the twelve (12) month anniversary of the Funding Date: (x) first, to the Funders (pro rata in
proportion to the Litigation Fund Amount provided by each Funder) until the aggregate amount received by the Funders hereunder equals the sum of the Litigation Fund Amount plus one (1) times the aggregate Litigation Fund Amount, and (y) then,
the remaining Litigation Proceeds, if any, to the Company.
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| • |
If and to the extent the Litigation Proceeds are received after the twelve (12) month anniversary of the Funding Date but on or before the twenty four (24) month anniversary of the Funding Date: (x)
first, to the Funders (pro rata in proportion to the Litigation Fund Amount provided by each Funder) until the aggregate amount received by the Funders hereunder equals the sum of the Litigation Fund Amount plus one and one-half (1.5) times
the aggregate Litigation Fund Amount, and (y) then, the remaining Litigation Proceeds, if any, to the Company.
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| • |
If and to the extent the Litigation Proceeds are received after the twenty-four (24) month anniversary of the Funding Date: (x) first, to the Funders (pro rata in proportion to the Litigation Fund
Amount provided by each Funder) until the aggregate amount received by the Funders hereunder equals the sum of the Litigation Fund Amount plus one and eight tenths (1.8) times the aggregate Litigation Fund Amount, and (y) then, the remaining
Litigation Proceeds, if any, to the Company.
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| 4. |
For avoidance of doubt, Litigation Proceeds shall include anything of value, including any property or other non-cash consideration, received from any Sponsor, lender, and/or their respective
affiliates, shareholders, partners, members, managers, officers and directors or any other individuals connected to the 111 West 57th Property project, as a result of any Future Recovery Litigation. If there is a dispute regarding the
appropriate valuation of any non-cash portion of the Litigation Proceeds and the parties are unable to resolve such dispute within twenty (20) business days, then either party may submit the dispute for arbitration pursuant to Section 11 of
this BARC 2026 LFA.
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| 7. |
The Company shall distribute any Litigation Proceeds it receives within five (5) business days of receipt of such amounts in accordance with the terms of this BARC 2026 LFA. For avoidance of doubt,
the Litigation Fund Amount shall only become due and payable by the Company upon the receipt of, and to the extent of, any Litigation Proceeds.
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| 8. |
This BARC 2026 LFA commenced on the date hereof and shall continue in effect until (a) the final resolution of all Future Recovery Litigation pursuant to (i) a final, non-appealable judgment of a
court of competent jurisdiction or (ii) a written settlement agreement between the Company and the respective defendants in such proceedings, and (b) the disbursement in full of all Litigation Proceeds, if any, in accordance with this BARC
2026 LFA, unless the BARC 2026 LFA is earlier terminated by the mutual written agreement of all parties hereto.
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| 9. |
This BARC 2026 LFA constitutes the entire agreement between the parties with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings, agreements,
representations and warranties, both written and oral, with respect to such subject matter.
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| 10. |
This BARC 2026 LFA shall inure to the benefit of, and be binding upon, the successors, heirs and permitted assigns of each of the parties hereto. The Company may not assign the BARC 2026 LFA or its
rights and obligations hereunder to another person without BARC’s prior written consent, which consent may be withheld in BARC’s sole discretion. BARC may, at any time, without the consent of the Company, assign to one or more assignees all
or a portion of its rights and obligations under this BARC 2026 LFA (including the right to receive all or a portion of the Litigation Proceeds due to BARC hereunder).
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| 11. |
This BARC 2026 LFA shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of laws. Any claim or dispute arising out of or
in any way relating to this agreement or its alleged breach shall be determined in a binding arbitration by a single arbitrator that is a retired State or Federal court judge. The arbitration shall be administered by the American Arbitration
Association under its commercial dispute resolution procedures which are in effect at the time of the arbitration. The arbitration shall take place in New York City. The parties may seek, from a court of competent jurisdiction, provisional
remedies or injunctive relief in support of their respective rights and remedies hereunder without waiving their right to arbitration and, for such purposes, each party irrevocably consents to the jurisdiction of any of the courts of the
State of New York in New York County, and the United States District Court for the Southern District of New York. However, the merits of the action that involves such provisional remedies or injunctive relief, including without limitation,
the terms of any permanent injunction, shall be determined by arbitration under this Section 11. Judgment on the arbitrator’s award may be entered in any court of competent jurisdiction.
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| 12. |
This BARC 2026 LFA shall not be modified, amended or supplemented except by a written agreement signed by the parties hereto. This BARC 2026 LFA may be executed in any number of counterparts (and by
facsimile), each of which will be deemed an original, but all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this BARC 2026 LFA by facsimile, electronic portable
document format (PDF) file or other means of electronic transmission will be as effective as delivery of a manually executed counterpart to this BARC 2026 LFA.
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Sincerely,
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AMBASE CORPORATION,
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a Delaware corporation
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By:
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/s/ John Ferrara
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John Ferrara
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Vice President and Chief Financial Officer and Controller
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Acknowledged and Agreed:
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BARC INVESTMENTS, LLC
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a Connecticut limited liability company
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By: /s/ Richard A. Bianco, Jr.
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Name: Richard A. Bianco, Jr.
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Title: Member
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By: /s/ Alessandra F. Bianco
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Name: Alessandra F. Bianco
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Title: Member
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By: /s/ Christina A. Bianco
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Name: Christina A. Bianco
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Title: Member
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