10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

Commission File Number 0-24634

TRACK DATA CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	22-3181095
(State or other jurisdiction	(I.R.S. Employer
of incorporation)	Identification No.)

95 Rockwell Place

Brooklyn, NY 11217

(Address of principal executive offices)

(718) 522-7373

(Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ                      No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such filings).

Yes ¨                      No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o                            Accelerated Filer o                   Non-Accelerated Filer o      Smaller Reporting Companyþ

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o                      No þ

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of July 31, 2009 there were 2,098,000 shares of common stock outstanding.

PART I.   FINANCIAL INFORMATION
Item 1.	Financial Statements
	See pages 2-17
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	See pages 18-24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	See page 25
Item 4T.	Controls and Procedures
	See page 25
PART ll.  OTHER INFORMATION
	See page 26

1

Track Data Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	June 30,			December 31,
			2009			2008
	(Unaudited)
ASSETS
CASH AND EQUIVALENTS		$	5,647		$	7,139
ACCOUNTS RECEIVABLE – net of allowance for doubtful
accounts of $160 in 2009 and $213 in 2008			917			976
DUE FROM CLEARING BROKER			926			760
DUE FROM BROKER			19,655			42,029
MARKETABLE SECURITIES			2,274			3,616
FIXED ASSETS - at cost (net of accumulated depreciation and amortization)			1,631			1,818
CONSTRUCTION IN PROGRESS			13,508			-
EXCESS OF COST OVER NET ASSETS ACQUIRED – net			1,700			1,700
PERFORMANCE GUARANTEE DEPOSIT			543			-
OTHER ASSETS			868			848
TOTAL ASSETS		$	47,669		$	58,886
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Promissory note payable -bank		$	3,800		$	-
Accounts payable and accrued expenses			4,309			3,707
Trading securities sold, but not yet purchased			8,249			30,896
Construction contract deposits			2,930			-
Property taxes payable			517			-
Net deferred income tax liabilities			687			496
Other liabilities			362			168
Total liabilities			20,854			35,267
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Track Data Stockholders’ Equity
Common stock - $.01 par value; 15,000,000 shares
authorized; issued and outstanding – 2,098,000 shares			21			21
Additional paid-in capital			10,246			10,246
Retained earnings			13,623			13,132
Accumulated other comprehensive income			506			220
Total Track Data stockholders’ equity			24,396			23,619
Noncontrolling interest			2,419			-
Total equity			26,815			23,619
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	47,669		$	58,886

See notes to condensed consolidated financial statements

2

Track Data Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(in thousands, except earnings per share)

(unaudited)

		2009			2008
SERVICE FEES AND REVENUE
Market Data Services	$	7,666		$	9,060
ECN Services		602			1,346
Broker-Dealer Commissions (includes $12
in 2009 and $38 in 2008 from related party)		5,533			5,125
Total		13,801			15,531
COSTS, EXPENSES AND OTHER:
Direct operating costs (includes depreciation and amortization
of  $319 and $368 in 2009 and 2008, respectively)		8,229			9,812
Selling and administrative expenses (includes depreciation and
amortization of $50 and $32 in 2009 and 2008, respectively)		4,411			4,557
Rent expense – related party		328			328
Marketing and advertising		95			124
Gain on arbitrage trading		(28	)		(723	)
Gain on sale of marketable securities – Innodata		(2	)		(65	)
Interest income		(58	)		(201	)
Interest expense		8			131
Total		12,983			13,963
INCOME BEFORE INCOME TAXES		818			1,568
INCOME TAX PROVISION		327			627
NET INCOME	$	491		$	941
BASIC AND DILUTED NET INCOME PER SHARE		$.23			$.45
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		2,098			2,098
ADJUSTED DILUTIVE SHARES OUTSTANDING		2,098			2,098

See notes to condensed consolidated financial statements

3

Track Data Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED JUNE 30, 2009 AND 2008

(in thousands, except earnings per share)

(unaudited)

	2009			2008
SERVICE FEES AND REVENUE
Market Data Services	$	3,778		$	4,524
ECN Services		280			568
Broker-Dealer Commissions (includes $7 in 2009
and $18 in 2008 from related party)		3,124			2,669
Total		7,182			7,761
COSTS, EXPENSES AND OTHER:
Direct operating costs (includes depreciation and amortization
of $159 and $184 in 2009 and 2008, respectively)		4,009			4,769
Selling and administrative expenses (includes depreciation and
amortization of $25 and $16 in 2009 and 2008, respectively)		2,238			2,256
Rent expense – related party		164			164
Marketing and advertising		30			81
Gain on arbitrage trading		(47	)		(352	)
Gain on sale of marketable securities – Innodata		(2	)		-
Interest income		(37	)		(106	)
Interest expense		2			32
Total		6,357			6,844
INCOME BEFORE INCOME TAXES		825			917
INCOME TAX PROVISION		330			366
NET INCOME	$	495		$	551
BASIC AND DILUTED NET INCOME PER SHARE		$.24			$.26
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		2,098			2,098
ADJUSTED DILUTIVE SHARES OUTSTANDING		2,098			2,098

See notes to condensed consolidated financial statements

4

Track Data Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

EQUITY AND COMPREHENSIVE INCOME

SIX MONTHS ENDED JUNE 30, 2009

(in thousands)

(unaudited)

	Track Data Corporation Stockholders
												Accumulated
	Number					Additional						Other			Noncon-				Compre-
	of		Common			Paid-in			Retained			Comprehensive			trolling		Total		hensive
	Shares		Stock			Capital			Earnings			Income			Interest		Equity		Income
BALANCE, JANUARY 1, 2009		2,098		$	21		$	10,246		$	13,132		$	220	$	-	$	23,619
Net income											491							491		$	491
Investment in subsidiary
by third parties																2,419		2,419
Unrealized gain
on marketable
securities - net of taxes														286				286			286
Comprehensive income																				$	777
BALANCE, JUNE 30, 2009		2,098		$	21		$	10,246		$	13,623		$	506	$	2,419	$	26,815

See notes to condensed consolidated financial statements

5

Track Data Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(in thousands)

(unaudited)

		2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	491		$	941
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		369			401
Gain on sale of Innodata common stock		(2)			(65	)
Changes in operating assets and liabilities:
Accounts receivable and due from clearing broker		(107	)		265
Due from broker		22,374			(7,598	)
Marketable securities		1,815			(1,564	)
Construction in progress		(323	)		-
Other assets		(49	)		326
Accounts payable and accrued expenses		(336	)		(189	)
Trading securities sold, but not yet purchased		(22,647	)		9,598
Other liabilities, including deferred income taxes		195			369
Net cash provided by operating activities		1,780			2,484
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate development		(5,000	)		-
Purchase of fixed assets		(177	)		(110	)
Performance guarantee deposit		(543	)		-
Proceeds from sale of Innodata common stock		5			77
Purchase of Innodata common stock		-			(35	)
Issuance of note receivable		-			(100	)
Repayment of note receivable		24			4
Net cash used in investing activities		(5,691	)		(164	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Noncontrolling interest investment in subsidiary		2,419			-
Net repayments on loans from employees		-			(782	)
Net cash provided by (used in) financing activities		2,419			(782	)
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS		(1,492	)		1,538
CASH AND EQUIVALENTS, BEGINNING OF PERIOD		7,139			5,275
CASH AND EQUIVALENTS, END OF PERIOD	$	5,647		$	6,813
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	11		$	131
Income taxes		36			2
NON-CASH INVESTING AND  FINANCING ACTIVITIES
Real Estate Development Acquisition
Construction in progress	$	8,185
Promissory note payable		(3,800	)
Deposits payable		(2,930	)
Accounts payable		(938	)
Real estate taxes payable		(517	)

See notes to condensed consolidated financial statements

6

Track Data Corporation and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2009 AND 2008

(unaudited)

1.   In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring items) necessary to present fairly the financial position as of June 30, 2009, and the results of operations for the three and six month periods ended June 30, 2009 and 2008 and cash flows for the six months ended June 30, 2009 and 2008.  The results of operations for the six months ended June 30, 2009 are not necessarily indicative of results that may be expected for any other interim period or for the full year.  The unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

These financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2008 included in the Company’s Annual Report on Form 10-K. The accounting policies used in preparing these financial statements are the same as those described in the December 31, 2008 financial statements.  The December 31, 2008 condensed balance sheet presented was derived from the audited financial statements.

The Company has evaluated events that occurred subsequent to June, 30, 2009 through August 14, 2009, the date on which the financial statements for the period ended June 30, 2009 were issued.  Except as disclosed herein, management concluded that no other events required disclosure in these financial statements.

On April 20, 2009, the Board of Directors authorized a one for four reverse stock split, which was consented to by the Company's principal stockholder and certain family trusts.  The stock split became effective on May 27, 2009. All share, per share, related equity accounts and stock option information in this report have been retroactively adjusted to reflect such stock split.

2.   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 purchased the note and mortgage on a real estate development known as Sterling Place, located in Lakewood, New Jersey. The mortgage was in default and the subject of a foreclosure proceeding by Sovereign which Sovereign agreed to assign to SPLLC.  The total purchase price was $8.8 million, of which $5 million was 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.

7

The acquisition was accounted for as a purchase in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141R, “Business Combinations.” Accordingly, assets and liabilities were recorded at fair value at the date of acquisition, and the results of operations are included in the consolidated financial statements as of acquisition date.  The assets and liabilities acquired are as follows:

Assets:
Capitalized construction costs	$	13,185
Liabilities:
Accounts payable		938
Deposits payable		2,930
Real estate taxes payable		517
Total liabilities		4,385
Purchase price	$	8,800

The Company invested $3 million in SPLLC and an aggregate of $2.5 million ($2,419,000 as of June 30, 2009) 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 required 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 was not arranged by June 15, 2009 or under certain circumstances, July 15, 2009, SPLLC would have been 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. The Company provided a loan of $543,000 to Silver Polish LLC to place a cash deposit with the municipality to replace the standby letter of credit.

SPLLC has been consolidated in the Company’s financial statements since May 4, 2009.

The accounting policy for the Company’s real estate activities is as follows:  The Company recognizes revenues from all homebuilding activities at the closing of the sale using the deposit method. During construction, all direct material and labor costs and those indirect costs related to acquisition and construction are capitalized, and all customer deposits are treated as liabilities.  Capitalized costs are charged to earnings upon closing.  Costs incurred in connection with completed homes and selling, general, and administrative costs are charged to expenses as incurred. Provision for estimated losses on uncompleted contracts and on speculative projects is made in the period in which such losses are determined.

8

The Company accounts for its investment in Silver Polish LLC pursuant to FASB’s SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 established accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as minority interests). Accordingly, the Company reports its noncontrolling interest as a separate component of stockholders’ equity. The Company is also required to present any net income allocable to noncontrolling interests and net income attributable to the stockholders of the Company separately in its consolidated statements of operations.

3.   The Company charges all costs incurred to establish the technological feasibility of a product or product enhancement, as well as correction of software bugs and minor enhancements to existing software applications to research, development and maintenance expense. Research, development and maintenance expense included in direct operating costs, were approximately $37,000 and $37,000 for the six months and $18,000 and $18,000 for the three months ended June 30, 2009 and 2008, respectively.

4.   The Company applies Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”), for assets and liabilities measured at fair value on a recurring basis. SFAS 157 accomplishes the following key objectives:

·   Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date;

·   Establishes a three-level hierarchy (“Valuation Hierarchy”) for fair value measurements;

·   Requires consideration of the Company’s creditworthiness when valuing liabilities; and

·   Expands disclosures about instruments measured at fair value.

The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the Valuation Hierarchy and the distribution of the Company’s financial assets within it are as follows:

·   Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. The fair values of the Company’s arbitrage trading securities and Innodata common stock are based on quoted prices and therefore classified as level 1.

·   Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·   Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s assets carried at fair value on a recurring basis are as follows (in thousands):

		Quoted Market Prices
		in Active Markets
		(Level 1)
	June 30,			December 31,
			2009			2008
Arbitrage trading securities
Long Positions		$	1,165		$	2,980
Short Positions			8,249			30,896
Available for sale securities (1)
Innodata common stock			1,109			636

(1) Available-for-sale securities are carried at fair value based on quoted market prices.

9

Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, prepaid expenses, promissory note, accounts payable and accrued expenses.

Unrealized gains and losses on available for sale securities are recorded as a separate component of other comprehensive income in the condensed consolidated statements of comprehensive income.

Marketable securities consists of the following (in thousands):

	June 30,			December 31,
			2009			2008
Innodata - Available for sale securities - at market		$	1,109		$	636
Arbitrage trading securities - at market			1,165			2,980
Marketable securities		$	2,274		$	3,616
Arbitrage trading securities sold but not yet purchased – at market		$	8,249		$	30,896

The Company owns 253,272 shares of Innodata, a provider of digital content outsourcing services.  The Company carries the investment at $1,109,000, the market value at June 30, 2009. The difference between the cost of $265,000 and fair market value of these securities, net of $338,000 in deferred taxes, or $506,000 is classified as a component of accumulated other comprehensive income included in stockholders' equity as of June 30, 2009.  The Company sold 1,000 shares, received proceeds of $5,000  and recorded a gain of $2,000 during the six months ended June 30, 2009.  At December 31, 2008, the Company owned 254,272 shares of Innodata.  The Company carried the investment at $636,000, the market value at December 31, 2008. The difference between the cost of $269,000 and fair market value of these securities, net of $147,000 in deferred taxes, or $220,000 is classified as a component of accumulated other comprehensive income included in stockholders' equity as of December 31, 2008. The Company sold 13,030 shares, received proceeds of $77,000 and recorded a gain of $65,000 during the six months ended June 30, 2008.

The Company engages in arbitrage trading activity. The Company's trading strategy consists principally of establishing hedged positions consisting of stocks and options.  The Company is subject to market risk in attempting to establish a hedged position, as the market prices could change, precluding a profitable hedge.  In these instances, any positions that were established for this hedge would be immediately sold, usually resulting in small losses.  If the hedged positions are successfully established at the prices sought, the positions generally stay until the next option expiration date, resulting in small gains, regardless of market value changes in these securities.  While virtually all positions are liquidated at option expiration date, certain stock positions remain.  The liquidation of these positions generally results in small profits or losses.  From time to time, losses may result from certain dividends that may have to be delivered on positions held, as well as from certain corporate restructurings and mergers that may not have been taken into account when the positions were originally established.

The Company also engages in options trading with a higher risk profile.   The Company's trading strategy consists of selling short deep out-of-the-money calls and puts.  These naked option positions (when there is no underlying security position held) are not hedged.  The investment strategy is to take advantage of options that have a very low probability of becoming “in-the-money”.  The Company seeks to earn the low premiums that these options are selling for, and expects that all or most of the options will end up expiring worthless.  To minimize risk, the Company limits its exposure to any one underlying stock and constantly monitors the option against the real time underlying stock price, and immediately seeks to cover its option position by buying/selling the underlying stock to protect against a larger loss.  From time to time, significant losses may result from option positions whose underlying stock price realized a sudden large increase or decrease.

10

As of June 30, 2009, trading securities had a long market value of $1,165,000 with a cost of $1,137,000, or a net unrealized gain of $28,000. Securities sold but not yet purchased, had a short market value of $8,249,000 with a cost/short proceeds of $8,243,000, or a net unrealized loss of $6,000.  The Company expects that its June 30, 2009 positions will be closed during the third quarter of 2009 and that other positions with the same strategy will be established.  The Company pledged its holdings in Innodata as collateral for its trading accounts.  In addition, the Company's Principal Stockholder pledged approximately 575,000 shares of his holdings in the Company's common stock as collateral for these accounts.  The Company is paying its Principal Stockholder at the rate of 2% per annum on the value of the collateral pledged.  Such payments aggregated $7,000 and $23,000 for the six months and $2,000 and $12,000 for the three months ended June 30, 2009 and 2008, respectively.

The Company recognized gains from arbitrage trading of $28,000 and $723,000 for the six months and $47,000 and $352,000 for the three months ended June 30, 2009 and 2008, respectively.

At December 31, 2008, trading securities had a long market value of $2,980,000 with a cost of $3,108,000, or a net unrealized loss of $128,000.  Securities sold but not yet purchased, had a short market value of $30,896,000 with a cost/short proceeds of $31,030,000, or a net unrealized gain of $134,000.

In connection with the arbitrage trading activity, the Company incurs margin loans.  The Company is exposed to interest rate change market risk with respect to these margin loans.  The level of trading in the arbitrage trading account is partially dependent on the margin value of the Company’s common stock pledged by its Principal Stockholder, and Innodata common stock, which is used as collateral. The market value of such securities is dependent on future market conditions for these companies over which the Company has little or no control.

5.   The Company has a revolving line of credit up to a maximum of $3 million which bears interest at a per annum rate of 1.75% above the bank’s prime rate (7.75% at June 30, 2009) and is due on demand. The line expires in August, 2010, subject to automatic renewal. The note is collateralized by substantially all of the assets of Track Data Corporation. The Company may borrow up to 80% of eligible accounts receivable and is required to maintain a compensating cash balance of not less than 10% of the outstanding loan obligation and is required to comply with certain covenants.  There were no borrowings outstanding at June 30, 2009. Borrowings available under the line of credit at June 30, 2009 were $463,000 based on these formulas.

6.   Earnings Per Share--Basic earnings per share is computed based on the weighted average number of common shares outstanding without consideration of potential common stock.  Diluted earnings per share is computed based on the weighted average number of common and potential dilutive common shares outstanding.  There was no effect on earnings per share as a result of potential dilution.  The calculation takes into account the shares that may be issued upon exercise of stock options, reduced by the shares that may be repurchased with the funds received from the exercise, based on the average price during the period.  For the three and six months ended June 30, 2009, the Company had 43,000 stock options outstanding. For the three and six months ended June 30, 2008, the Company had 108,000 stock options outstanding.  Outstanding options for the aforementioned periods were not included in the dilutive calculation because the effect on earnings per share is antidilutive.

11

Earnings per share (in thousands, except per share):

	Three Months Ended				Six Months Ended
		June 30,				June 30,
		2009		2008		2009		2008
Net income	$	495	$	551	$	491	$	941
Weighted average common shares outstanding		2,098		2,098		2,098		2,098
Dilutive effect of outstanding options		-		-		-		-
Adjusted for dilutive computation		2,098		2,098		2,098		2,098
Basic income per share		$.24		$.26		$.23		$.45
Diluted income per share		$.24		$.26		$.23		$.45

7.   At June 30, 2009, the Company had seven stock-based employee compensation plans of which there were outstanding awards exercisable into 43,000 shares of common stock. No stock-based employee compensation cost is reflected in the statement of operations, as there was no vesting of outstanding stock option awards in 2008 or 2009.  The Company is required pursuant to SFAS 123(R) “Share-Based Payments” to account for its options and other stock based awards at fair value.  Compensation expense is recognized over the service period of the award.

8.   Segment Information--The Company is a financial services company that provides real-time financial market data, fundamental research, charting and analytical services to institutional and individual investors through dedicated telecommunication lines and the Internet.  The Company also disseminates news and third-party database information from more than 100 sources worldwide.  The Company owns Track Data Securities Corp. (“TDSC”), a registered securities broker-dealer and member of the Financial Industry Regulatory Authority (“FINRA”).  The Company provides a proprietary, fully integrated Internet-based online trading and market data system, proTrack, for the professional institutional traders, and myTrack and myTrack Edge, for the individual trader.  The Company also operates Track ECN, an electronic communications network that enables traders to display and match limit orders for stocks.  The Company's operations are classified in four business segments:  (1) market data services and trading, including ECN services, to the institutional professional investment community, (2) Internet-based online trading and market data services to the non-professional individual investor community, (3) arbitrage trading, and (4) real estate.

The accounting policies of the segments are the same as those described in Note A, Summary of Significant Accounting Policies in the Company’s financial statements for the year ended December 31, 2008 included in Form 10-K.  Segment data includes charges allocating corporate overhead to each segment.  The Company has not disclosed asset information by segment, except for the real estate segment, as the information is not produced internally.  Assets of the real estate segment as of June 30, 2009 consist of construction in progress of $13,508,000, a performance bond of $543,000 and other assets of approximately $140,000.  One market data customer of the Non-Professional Segment accounted for 10% of that segment’s revenues during the three and six month periods ended June 30, 2009 and 2008, respectively. Substantially all long-lived assets are located in the U.S.  The excess of the purchase price of acquired businesses over the fair value of net assets (“goodwill”) on the dates of acquisition amounts to $1,700,000, net of accumulated amortization of $2,494,000 and a 2008 impairment charge of $200,000, as of June 30, 2009 and December 31, 2008. Goodwill is an asset of the non-professional market segment. The Company’s business is predominantly in the U.S.  Revenues and net income (loss) from international operations are not material.

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Information concerning operations in its business segments is as follows (in thousands):

		Three Months						Six Months
		Ended June 30,						Ended June 30,
		2009			2008			2009			2008
Revenues
Professional Market	$	2,751		$	3,651		$	5,687		$	7,567
Non-Professional Market		4,431			4,110			8,114			7,964
Total Revenues	$	7,182		$	7,761		$	13,801		$	15,531
Arbitrage Trading – gain on sale
of marketable securities	$	47		$	352		$	28		$	723
(Loss) income before unallocated
amounts and income taxes:
Professional Market	$	(264	)	$	(342	)	$	(789	)	$	(525	)
Non-Professional Market		1,222			1,086			1,960			1,730
Arbitrage Trading (including interest)		11			346			(25	)		644
Unallocated amounts:
Depreciation and amortization		(184	)		(200	)		(369	)		(400	)
Gain on sale of Innodata common stock		2			-			2			65
Interest income, net		38			27			39			54
Income before income taxes	$	825		$	917		$	818		$	1,568

9.   Transactions with Clearing Broker and Customers—The Company conducts business through a clearing broker which settles all trades for the Company, on a fully disclosed basis, on behalf of its customers.  The Company earns commissions as an introducing broker for the transactions of its customers.  In the normal course of business, the Company’s customer activities involve the execution of various customer securities transactions.  These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the obligation at a loss.

The Company’s customer securities activities are transacted on either a cash or margin basis.  In margin transactions, the clearing broker extends credit to the Company’s customers, subject to various regulatory margin requirements, collateralized by cash and securities in the customers’ accounts.  However, the Company is required to either obtain additional collateral or to sell the customer’s position if such collateral is not forthcoming.  The Company is responsible for any losses on such margin loans, and has agreed to indemnify its clearing broker for losses that the clearing broker may sustain from the customer accounts introduced by the Company.  At June 30, 2009, the Company had $9.3 million in margin credit extended to its customers.  The Company believes it is unlikely it will have to make material payments under the indemnification agreement and has not provided any related liability in the condensed consolidated financial statements. There were no indemnifications paid by the Company under this agreement.

The Company and its clearing broker seek to control the risks associated with customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company and its clearing broker monitor required margin levels daily and, pursuant to such guidelines, require the customer to deposit additional collateral or to reduce positions when necessary.

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10.   Net Capital Requirements—The Securities and Exchange Commission (“SEC”), FINRA, and various other regulatory agencies have stringent rules requiring the maintenance of specific levels of net capital by securities brokers, including the SEC’s uniform net capital rule, which governs TDSC.  Net capital is defined as assets minus liabilities, plus other allowable credits and qualifying subordinated borrowings less mandatory deductions that result from excluding assets that are not readily convertible into cash and from valuing other assets, such as a firm’s positions in securities, conservatively. Among these deductions are adjustments in the market value of securities to reflect the possibility of a market decline prior to disposition.

As of June 30, 2009, TDSC was required to maintain minimum net capital, in accordance with SEC rules, of approximately $1 million and had total net capital of $4,037,000, or approximately $3,037,000 in excess of minimum net capital requirements.

If TDSC fails to maintain the required net capital it may be subject to suspension or revocation of registration by the SEC and suspension or expulsion by FINRA and other regulatory bodies, which ultimately could require TDSC’s liquidation. In addition, a change in the net capital rules, the imposition of new rules, a specific operating loss, or any unusually large charge against net capital could limit those operations of TDSC that require the intensive use of capital and could limit its ability to expand its business.

The operations of TDSC are subject to reviews by regulators within its industry, which include the SEC and FINRA. In the past, certain reviews have resulted in the Company incurring fines and required the Company to change certain of its internal controls and operating procedures. The Company was fined $260,000 in 2008, $200,000 of which was accrued at December 31, 2008.  Ongoing and future reviews may result in the Company incurring additional fines and changes in its internal control and operating procedures. Management does not expect any ongoing reviews to have a material affect on the Company’s financial position or statement of operations.

1.   Comprehensive income is as follows (in thousands):

	Three Months Ended						Six Months Ended
		June 30,						June 30,
		2009		2008				2009		2008
Net income		$	495	$	551			$	491	$	941
Unrealized gain (loss) on marketable
securities-net of taxes			138		(218	)			286		(376	)
Reclassification adjustment for
loss on marketable securities
- net of taxes			-		-				-		(34	)
Comprehensive income		$	633	$	333			$	777	$	531

12.   The Company leases its executive office facilities in Brooklyn from a limited partnership owned by the Company’s Principal Stockholder and members of his family.  A lease effective October 1, 2007 provides for the Company to pay $657,000 per annum plus real estate taxes through September 30, 2009. The Company paid the partnership rent of $328,000 for each of the six month periods ended June 30, 2009 and 2008.

13.   The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the Company’s financial position or results of operations.

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On June 14, 2005, the SEC filed a civil complaint against Barry Hertz, the Company’s Chairman and CEO at that time, in the U.S. District Court for the Eastern District of New York in Brooklyn alleging violations of various provisions of the federal securities laws in connection with certain transactions in the Company’s stock owned by others. Mr. Hertz reached a settlement with the SEC regarding these charges.   Mr. Hertz consented, without admitting or denying the allegations in the SECs complaint, to a permanent injunction from violations of Section 10(b) and 10b-5 of the Exchange Act and Section 17(a) of the Securities Act of 1933, a two-year bar from serving as an officer or director of a publicly traded company, a permanent bar from association with a broker or dealer, with the right to apply for reinstatement after a two-year period, and also agreed to pay approximately $136,000 in disgorgement, interest and civil penalties.  On March 16, 2007, Mr. Hertz resigned as Chairman and CEO of the Company.  In May, 2007, the Board of Directors agreed to reimburse Mr. Hertz under the indemnification provisions of Delaware law, $75,000 for the disgorgement and interest portion of the amounts paid to the SEC by him.  The Company from time to time is subject to informal inquiries and document requests from the SEC to review compliance with Mr. Hertz's association bar. As of March 16, 2009, the two-year officer or director bar expired.  Mr. Hertz has not applied for reinstatement and termination of his association bar.

14.   In May 2006, the Company purchased a non-dilutable 15% interest in SFB Market Systems, Inc. (“SFB”) for $150,000 cash.  SFB is a privately held company that provides an online centralized securities symbol management system and related equity and option information for updating and loading master files. The Company currently has a representative on SFB’s four member Board of Directors.  The Company accounts for its investment in SFB under the cost method, and is included in other assets in the balance sheet as of June 30, 2009 and December 31, 2008.

15.   In April 2006, the Company’s Principal Stockholder formed a private limited partnership of which he is the general partner for the purpose of operating a hedge fund for trading in certain options strategies. The Company has no financial interest in or commitments related to, the hedge fund. The hedge fund opened a trading account with the Company’s broker-dealer. The Company charged commissions to the hedge fund of $12,000 and $38,000 for the six months and $7,000 and $18,000 for the three months ended June 30, 2009 and 2008, respectively.

In May, 2008, the Company made a non-interest bearing loan of $100,000 to a qualified charitable organization, which the Company’s Principal Stockholder is a member of its Board of Directors.  The loan is repayable in 25 consecutive equal monthly installments of $4,000 which repayments commenced in June, 2008. The balance, included in other assets, at December 31, 2008 was $72,000, and at June 30, 2009 was $48,000.

16.   The Company accounts for uncertainties in income tax positions in accordance with the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 48, "Accounting for Uncertainty in Income Taxes (as amended) - an interpretation of FASB Statement No. 109" ("FIN 48") which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 states that a tax benefit from an uncertain tax position may be recognized only if it is "more likely than not" that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information. Under FIN 48, the liability for unrecognized tax benefits is classified as noncurrent unless the liability is expected to be settled in cash within 12 months of the reporting date.

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No liability for unrecognized tax benefits was required to be reported at December 31, 2008 or June 30, 2009.  The Company has identified its federal tax return and its state and city tax returns in New York as "major" tax jurisdictions, as defined.  The Company is also subject to filings in multiple other state and city jurisdictions.  Based on the Company's evaluation, it has concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements.  The Company's evaluation was performed for tax years ended 2003 through 2008, the only periods subject to examination.  The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. The Company's New York City tax returns for 2003 through 2005 are presently under audit. The outcome cannot be reasonably estimated at this time.

The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income before income taxes.  Penalties are recorded in other expense and interest paid or received is recorded in interest expense or interest income, respectively, in the statement of operations.  For the year ended December 31, 2008 and the six months ended June 30, 2009, penalties and interest related to the settlements of audits was insignificant.

17.   The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from estimates and assumptions made. In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

18.   In September 2008, the EITF issued EITF issue no. 08-06 (“EITF 08-6”), “Equity Method Investment Accounting Considerations.” EITF 08-6 requires that the initial carrying value of an equity method investment should be based on the cost accumulation model described in SFAS No. 141(R), “Business Combinations.” EITF 08-6 also concluded that an equity method investor (1) should not separately test an investee’s underlying indefinite-life intangible assets for impairment, (2) should account for an investee’s share as if the equity method investor sold a proportionate share of its investment and (3) should continue applying the guidance of APB Opinion No. 18, “The Equity Method of Accounting for Investors of Common Stock,” upon a change in the investor’s accounting from the equity to the cost method. EITF 08-6 is effective on a prospective basis in fiscal years beginning on or after December 15, 2008 including interim periods within those fiscal years.  The adoption of EITF 08-6 did not have an impact on the Company’s condensed consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS 107-1 and APB 28-1 “Interim Disclosures about Fair Value of Financial Instruments.” The objective of this FSP is to require public companies to disclose information relating to fair value of financial instruments for interim and annual reporting periods.  This FSP will require additional disclosure for all financial instruments for which it is practicable to estimate fair value, including the fair value and carrying value and the significant assumptions used to estimate the fair value of these financial instruments. FSP 107-1 and APB 28-1 is effective for interim reporting periods ending after June 15, 2009 on a prospective basis with comparative disclosures only for periods after initial adoption. The Company is currently evaluating the impact of adopting FAS 107-1 and APB 28-1 on its condensed consolidated financial statements.

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In April 2009, the FASB released (FSP) FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than Temporary Impairments.” This FSP amends the other-than-temporary impairment (“OTTI”) guidance for debt securities by establishing new criteria for the recognition of OTTI on debt securities and also requiring additional disclosure of OTTI on debt and equity securities in the financial statements. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. FSP FAS 115-2 and FSP FAS 124-2 is effective for interim and annual periods ending after June 15, 2009.  The implementation of the FSP did not have an effect on the  condensed consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.”  This FSP provides additional guidance on determining fair value when the volume and level of activity for a level 2 or level 3 asset or liability have significantly decreased when compared with normal market activity for that asset or liability (or similar assets or liabilities). This FSP amends FAS 157 to require companies to disclose in interim and annual periods the inputs and valuation technique(s) used to measure fair value and changes in valuation techniques and related inputs if applicable.  Additionally, this FSP requires disclosure of major equity and debt security types as described in paragraph 19 of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities” and SFAS No. 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” for all equity and debt securities measured at fair value even if these securities are not within the scope of SFAS No. 115. FSP FAS 157-4 is effective for interim and annual reporting periods ending after June 15, 2009 on a prospective basis with comparative disclosures only for periods after initial adoption. The adoption of FSP 157-4 did not have an effect on the condensed consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” This Statement sets forth 1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transaction that may occur for potential recognition or disclosure in the financial statements; 2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements; and 3) the disclosure that an entity should make about events or transactions that occurred after the balance sheet date.  This statement is effective for interim and annual periods ending after June 15, 2009.  The Company adopted this statement in the quarter ended June 30, 2009.  This statement did not impact the Company’s consolidated financial position and results of operations.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 eliminates Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its rights to receive benefits of an entity must be disregarded in applying Interpretation 46(R)’s provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. SFAS 167 will be effective January 1, 2010.  We do not expect the adoption of SFAS 167 to have any impact on our financial statements or results of operations.

In July 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 establishes the FASB Accounting Standards Codification to become the source of authoritative U.S. GAAP recognized by the FASB to be applied by non-governmental entities.  Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supercede all then-existing non-SEC accounting and reporting standards.  All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. SFAS 168, which changes the referencing of financial standards, is effective for interim or annual financial periods ending after September 15, 2009. We do not expect the adoption of SFAS 168 to materially impact our financial statements or results of operations.

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Disclosures in this Form 10-Q contain certain forward-looking statements, including, without limitation, statements concerning the Company's operations, economic performance and financial condition.  These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate" and other similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based largely on the Company's current expectations and are subject to a number of risks and uncertainties, including, without limitation, changes in external market factors, changes in the Company's business or growth strategy or an inability to execute its strategy due to changes in its industry or the economy generally, the emergence of new or growing competitors, various other competitive factors and other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. Actual results could differ materially from the results referred to in the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements contained in this Form 10-Q will in fact occur.  The Company makes no commitment to revise or update any forward looking statements in order to reflect events or circumstances after the date any such statement is made.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Business

Track Data Corporation (the "Company") is a financial services company that provides real-time financial market data, fundamental research, charting and analytical services to institutional and individual investors through dedicated telecommunication lines and the Internet.  The Company also disseminates news and third-party database information from more than 100 sources worldwide.  The Company owns TDSC, a registered securities broker-dealer and member of FINRA. The Company provides a proprietary, fully integrated Internet-based online trading and market data system, proTrack, for the professional institutional traders, and myTrack and myTrack Edge, for the individual trader.  The Company also operates Track ECN, an electronic communications network that enables traders to display and match limit orders for stocks.  The Company's operations are classified in four business segments: (1) Professional Market -- Market data services and trading, including ECN services, to the institutional professional investment community, (2) Non-Professional Market -- Internet-based online trading and market data services to the non-professional individual investor community, (3) arbitrage trading, and (4) real estate.

Relevant Factors

The Company's Professional Market segment market data revenues experienced significant declines since 2001 from a combination of staffing reductions in the securities industry, the use by customers of internally developed services, or lower priced services offered by the Company or other vendors.  This trend has continued into 2009.  Track ECN currently displays its orders on the National Stock Exchange (NSX).  In November, 2008, the NSX changed its pricing for accessing its order delivery system pursuant to which it no longer pays rebates for adding liquidity to its book.  As a result, Track ECN can only pay its subscribers for adding liquidity when there is an internal match on its own book.  This change resulted in further deterioration of the trading volume on the Track ECN.  The Company is presently exploring other venues for displaying its orders.  Until such time, there is no expectation of increasing volume of trading.

The Non-Professional Market segment revenues have been inconsistent month to month, but grew overall in 2008. The Company is attempting to grow revenues in this segment, principally through marketing alliances and limited advertising to attract new customers, and by offering additional services to existing customers.  The Company presently offers trading of U.S. based stocks, options and e-mini futures.

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The trading and market data services for both segments require the Company to maintain a market data ticker plant on a 24/7 basis, as well as all back office trading functions.  The Company's focus is to increase revenues in both segments, as the underlying costs of maintaining the operations and back office will not increase commensurate with any revenue increase, allowing greater operating margins on incremental revenues.

The Company engages in arbitrage trading activity. The Company's trading strategy consists principally of establishing hedged positions consisting of stocks and options.  The Company is subject to market risk in attempting to establish a hedged position, as the market prices could change, precluding a profitable hedge.  In these instances, any positions that were established for this hedge would be immediately sold, usually resulting in small losses.  If the hedged positions are successfully established at the prices sought, the positions generally stay until the next option expiration date, resulting in small gains, regardless of market value changes in these securities.  While virtually all positions are liquidated at option expiration date, certain stock positions remain.   The liquidation of these positions generally results in small profits or losses.  From time to time, losses may result from certain dividends that may have to be delivered on positions held, as well as from certain corporate restructurings and mergers that may not have been taken into account when the positions were originally established.

The Company also engages in options trading with a higher risk profile.   The Company's trading strategy consists of selling short deep out-of-the-money calls and puts.  These naked option positions (when there is no underlying security position held) are not hedged.  The investment strategy is to take advantage of options that have a very low probability of becoming “in-the-money.”  The Company seeks to earn the low premiums that these options are selling for, and expects that all or most of the options will end up expiring worthless.  To minimize risk, the Company limits its exposure to any one underlying stock and constantly monitors the option against the real time underlying stock price, and immediately seeks to cover its option position by buying/selling the underlying stock to protect against a larger loss.  From time to time, significant losses may result from option positions whose underlying stock price realized a sudden large increase or decrease.

In connection with the arbitrage trading activity, the Company incurs margin loans.  The Company is exposed to interest rate change market risk with respect to these margin loans.  The level of trading in the arbitrage trading account is partially dependent on the margin value of Track Data common stock pledged by its Principal Stockholder and Innodata common stock, which is used as collateral.  The market value of such securities is dependent on future market conditions for these companies over which the Company has little or no control.

In May, 2009, the Company acquired a residential home development that was in foreclosure for a total acquisition cost of $13,185,000.  The Company intends to complete construction of the development and sell the homes.

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Results of Operations

Three Months Ended June 30, 2009 and 2008

Revenues for the three months ended June 30, 2009 and 2008 were $7,182,000 and $7,761,000, respectively, a decrease of 7%. The Company’s Professional Market segment had revenues for the three months ended June 30, 2009 and 2008 of $2,751,000 and $3,651,000, respectively, a decrease of 25% for this segment.  The Company’s Non-Professional Market segment had revenues of $4,431,000 and $4,110,000, respectively, for the three months ended June 30, 2009 and 2008, an increase of 8% for this segment.  The Company’s Track ECN revenues decreased approximately $300,000. In November, 2008, the NSX changed its pricing for accessing its order delivery system pursuant to which it no longer pays rebates for adding liquidity to its book.  As a result, Track ECN can only pay its subscribers for adding liquidity when there is an internal match on its own book.  This change resulted in further deterioration of the trading volume of the Track ECN. The Company is presently exploring other venues for displaying its orders. Until such time, there is no expectation of increasing volume of trading. Market data revenues decreased approximately $750,000 in 2009 compared to 2008. Since 2001, the Company has experienced a decline in revenues from its market data services to the Professional Market segment due principally to staffing reductions in the securities industry, the use by customers of internally developed services, or lower priced services that are offered by the Company or other vendors.  This trend has continued in 2009, negatively impacting revenues and profits. Broker-dealer commissions increased approximately $450,000, principally from the Non-Professional Market.

Direct operating costs were $4,009,000 for the three months ended June 30, 2009 and $4,769,000 for the similar period in 2008, a decrease of 16%.  Direct operating costs as a percentage of revenues were 56% in 2009 and 61% in 2008.  Without giving effect to unallocated depreciation, amortization expense and costs directly allocated to the Arbitrage segment, the Company’s Professional Market segment had $1,849,000 and $2,446,000 of direct costs for the three months ended June 30, 2009 and 2008, respectively, a decrease of 24%.   Direct operating costs as a percentage of revenues for the Professional segment were 67% in 2009 and 67% in 2008.  The dollar decrease in direct costs is due principally to the decrease in ECN rebates due to reduced ECN revenues and reduced expenses related to the reduced market data revenues. The Company’s Non-Professional Market segment had $1,968,000 and $2,084,000 in direct costs for the three months ended June 30, 2009 and 2008, respectively, a decrease of 6%.  Direct operating costs as a percentage of revenues for the Non-Professional segment were 44% in 2009 and 51% in 2008.  Certain direct operating costs are allocated to each segment based on revenues. Direct operating costs include direct payroll, direct telecommunication costs, computer supplies, depreciation, equipment lease expense and the amortization of software development costs, costs of clearing, back office payroll and other direct broker-dealer expenses and ECN customer commissions and clearing.

Selling and administrative expenses were $2,238,000 and $2,256,000 in the 2009 and 2008 periods, respectively, a decrease of 1%.  Selling and administrative expenses as a percentage of revenues were 31% in 2009 and 29% in 2008. Without giving effect to unallocated depreciation, amortization expense and costs directly allocated to the Arbitrage segment, selling and administrative expenses for the Professional Market segment were $1,119,000 and $1,417,000 in the 2009 and 2008 periods, respectively, a decrease of 21%.  For the Professional Market segment selling and administrative expenses as a percentage of revenues were 41% in 2009 and 39% in 2008. Selling and administrative expenses for the Non-Professional segment were $1,093,000 and $824,000 in the 2009 and 2008 periods, respectively, an increase of 33%.  For the Non-Professional segment selling and administrative expense as a percentage of revenue was 25% in 2009 and 20% in 2008.  Certain selling and administrative expenses are allocated to each segment based on revenues.

The Professional Market segment realized a loss of $264,000 in 2009 compared to a loss of $342,000 in 2008 before unallocated amounts and income taxes.  The Non-Professional Market segment realized income of $1,222,000 in 2009 and $1,086,000 in 2008 before unallocated amounts and income taxes. The Arbitrage segment realized income of $11,000 in 2009 compared to income of $346,000 in 2008 before unallocated amounts and income taxes.

Net interest income in 2009 was $35,000 compared to $74,000 in 2008.

As a result of the above-mentioned factors, the Company realized income before income taxes of $825,000 in the 2009 period compared to income before income taxes of $917,000 in the 2008 period.

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The Company realized net income of $495,000 in 2009 compared to net income of $551,000 in 2008.

Six Months Ended June 30, 2009 and 2008

Revenues for the six months ended June 30, 2009 and 2008 were $13,801,000 and $15,531,000, respectively, a decrease of 11%.  The Company’s Professional Market segment had revenues for the six months ended June 30, 2009 and 2008 of $5,687,000 and $7,567,000, respectively, a decrease of 25% for this segment.  The Company’s Non-Professional Market segment had revenues of $8,114,000 and $7,964,000, respectively, for the six months ended June 30, 2009 and 2008, an increase of 2% for this segment, principally due to increased broker-dealer commissions.  The Company’s Track ECN revenues decreased approximately $750,000.  In November, 2008, the NSX changed its pricing for accessing its order delivery system pursuant to which it no longer pays rebates for adding liquidity to its book.  As a result, Track ECN can only pay its subscribers for adding liquidity when there is an internal match on its own book.  This change resulted in further deterioration of the trading volume of the Track ECN. The Company is presently exploring other venues for displaying its orders. Until such time, there is no expectation of increasing volume of trading. Market data revenues decreased approximately $1.4 million in 2009 compared to 2008. Since 2001, the Company has experienced a decline in revenues from its market data services to the Professional Market segment due principally to staffing reductions in the securities industry, the use by customers of internally developed services, or lower priced services that are offered by the Company or other vendors.  This trend has continued in 2009, negatively impacting revenues and profits.  Broker-dealer commissions increased $400,000, principally from the Non-Professional Market.

Direct operating costs were $8,229,000 for the six months ended June 30, 2009 and $9,812,000 for the similar period in 2008, a decrease of $16%.  Direct operating costs as a percentage of revenues were 60% in 2009 and 63% in 2008.  Without giving effect to unallocated depreciation, amortization expense and costs directly allocated to the Arbitrage segment, the Company’s Professional Market segment had $3,919,000 and $5,095,000 of direct costs for the six months ended June 30, 2009 and 2008, respectively, a decrease of 23%.   Direct operating costs as a percentage of revenues for the Professional segment were 69% in 2009 and 67% in 2008.  The dollar decrease in direct costs is due principally to cost reductions commensurate with reduced revenues and a decrease in ECN rebates due to reduced ECN revenues and lower costs related to the reduced market data revenues. The Company’s Non-Professional Market segment had $3,927,000 and $4,252,000 in direct costs for the six months ended June 30, 2009 and 2008, respectively, a decrease of 8%.  Direct operating costs as a percentage of revenues for the Non-Professional segment were 48% in 2009 and 53% in 2008.  Certain direct operating costs are allocated to each segment based on revenues.

Selling and administrative expenses were $4,411,000 and $4,557,000 in the 2009 and 2008 periods, respectively, a decrease of 3%.  Selling and administrative expenses as a percentage of revenues were 32% in 2009 and 29% in 2008. Without giving effect to unallocated depreciation, amortization expense and costs directly allocated to the Arbitrage segment, selling and administrative expenses for the Professional Market segment were $2,403,000 and $2,768,000 in the 2009 and 2008 periods, respectively, a decrease of 13%.  For the Professional Market segment selling and administrative expenses as a percentage of revenues were 42% in 2009 and 37% in 2008. Selling and administrative expenses for the Non-Professional segment were $1,957,000 and $1,758,000 in the 2009 and 2008 periods, respectively, an increase of 11%.  For the Non-Professional segment selling and administrative expense as a percentage of revenue was 24% in 2009 and 22% in 2008. Certain selling and administrative expenses are allocated to each segment based on revenues.

The Professional Market segment realized a loss of $789,000 in 2009 compared to a loss of $525,000 in 2008 before unallocated amounts and income taxes.  The Non-Professional Market segment realized income of $1,960,000 in 2009 and $1,730,000 in 2008 before unallocated amounts and income taxes. The Arbitrage segment realized a loss of $25,000 in 2009 compared to income of $644,000 in 2008 before unallocated amounts and income taxes.

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In 2009 and 2008, the Company recognized gains of $2,000 and $65,000, respectively, from the sale of available-for-sale securities of Innodata.

Net interest income in 2009 was $50,000 compared to net interest income of $70,000 in 2008.

As a result of the above-mentioned factors, the Company realized income before income taxes of $818,000 in the 2009 period compared to $1,568,000 in the 2008 period.

The Company realized net income of $491,000 in 2009 compared to $941,000 in 2008.

Liquidity and Capital Resources

During the six months ended June 30, 2009, cash provided by operating activities was $1,780,000 compared to $2,484,000 in 2008.  The decrease in 2009 was principally due to decreased earnings of $450,000 and a net decrease of $254,000 in the changes in operating assets and liabilities. Cash flows used in investing activities were $5,691,000 in 2009 compared to $164,000 in 2008. The increase in 2009 was principally due to a $5,000,000 payment for the acquisition of a real estate development and a cash deposit of $543,000 in connection with a construction performance guarantee.  Cash provided by financing activities was $2,419,000 in 2009 compared to cash used in financing activities of $782,000 in 2008.  The cash provided in 2009 was from a noncontrolling interest investment by third parties in the Company’s consolidated subsidiary.  The cash used in 2008 was principally used for the repayment of employee savings upon the termination of an employee savings program.

The Company has a line of credit with a bank up to a maximum of $3 million.  The line is collateralized by the assets of the Company and is guaranteed by its Principal Stockholder.  Interest is charged at 1.75% above the bank’s prime rate and is due on demand.  The line expires in August, 2010, subject to automatic renewal. The Company may borrow up to 80% of eligible market data service receivables, as defined, and is required to maintain a compensating balance of 10% of the outstanding loans.  At June 30, 2009, the Company had no borrowings under the line.  Borrowings available on the line of credit at June 30, 2009 were $463,000 based on these formulas.

The Company has significant positions in stocks and options and receives significant proceeds from the sale of trading securities sold but not yet purchased under the arbitrage trading strategy described in Note 4 in the accompanying Notes to Condensed Consolidated Financial Statements.  The Company expects that its June 30, 2009 positions will be closed during the third quarter of 2009 and that other positions with the same strategy will be established.  The level of trading activity is partially dependent on the value of the shares of Track Data pledged by its Principal Stockholder, and Innodata common stock that is held as collateral.

In November, 2005, the Board authorized the purchase of up to 250,000 shares from time to time in market purchases or in negotiated transactions.  Since that authorization, the Company purchased approximately 1,500 shares of its common stock for $20,000. No major capital expenditures are anticipated beyond the normal replacement of equipment and additional equipment to meet customer requirements.  The Company believes that borrowings available under the Company’s line of credit, its present cash position, including cash available in its Arbitrage trading, and any cash that may be generated from operations are sufficient for the Company’s cash requirements for the next 12 months.

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The Company’s broker-dealer subsidiary, TDSC, is subject to a minimum net capital requirement of $1 million by FINRA.  TDSC operations are subject to reviews by regulators within its industry, which include the SEC, FINRA and various exchanges.  In the past, certain reviews have resulted in the Company incurring fines ($260,000 in 2008, of which $200,000 was accrued at December 31, 2008), and required the Company to change certain of its internal control and operating procedures.  Ongoing and future reviews may result in the Company incurring additional fines and changes in its internal control and operating procedures.  Management does not expect any ongoing reviews to have a material affect on the Company's financial position or statement of operations.

The Company's New York City tax returns for 2003 through 2005 are presently under audit. The outcome cannot be reasonably estimated at this time.

From time to time the Company is subject to legal proceedings and claims that arise in the ordinary course of its business.  In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the Company's financial position.

Off Balance Sheet Risk

In connection with the Company's broker-dealer operations, certain customer securities activities are transacted on a margin basis.  The Company's clearing broker extends credit to the Company's customers, subject to various regulatory margin requirements, collateralized by cash and securities in the customers' accounts.  In the event of a decline in the market value of the securities in a margin account, the Company is required to either obtain additional collateral from the customer or to sell the customer's position if such collateral is not forthcoming.  The Company is responsible for any losses on such margin loans, and has agreed to indemnify its clearing broker for losses that the clearing broker may sustain from the customer accounts introduced by the Company.  The Company and its clearing broker seek to control the risks associated with customer activities by monitoring required margin levels daily and, pursuant to such guidelines, requiring the customer to deposit additional collateral or to reduce positions when necessary.  At June 30, 2009, the Company had $9.3 million in margin credit extended to its customers.  The Company’s margin loans in connection with Arbitrage trading were immaterial at June 30, 2009.  The Company believes it is unlikely it will have to make material payments under the indemnification agreement and has not recorded any related liability in the Condensed Consolidated Financial Statements.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results when different assumptions are utilized.  We believe that our principal critical accounting policies are described below.   For a detailed discussion on the application of these and other accounting policies, see Note A in the Notes to Consolidated Financial Statements in the Company’s Form 10-K for the year ended December 31, 2008.

Revenue Recognition

The Companyrecognizes revenue from market data and ECN services as services are performed. Billings in advance of services provided are recorded as unearned revenues. All other revenues collected in advance of services are deferred until services are rendered.  The Company earns commissions as an introducing broker and for licensing its trading system for the transactions of its customers.  Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur.

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For ECN services, transaction fees are earned on a per trade basis, based on shares transacted, and are recognized as transactions occur. For each transaction executed, there is an associated liquidity payment or routing charge paid. Pursuant to Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent” (“EITF 99-19”), the Company records such expenses as liquidity payments or routing charges in the consolidated statements of operations.

The Company recognizes revenues from all homebuilding activities at the closing of the sale using the deposit method. During construction, all direct material and labor costs and those indirect costs related to acquisition and construction are capitalized, and all customer deposits are treated as liabilities.  Capitalized costs are charged to earnings upon closing.  Costs incurred in connection with completed homes and selling, general, and administrative costs are charged to expenses as incurred. Provision for estimated losses on uncompleted contracts and on speculative projects is made in the period in which such losses are determined.

Marketable Securities

Arbitrage marketable securities transactions are recorded on trade date. Gains and losses are recognized based on closed transactions and the difference between market value and cost at balance sheet date.

The Company classifies its investment in Innodata as available for sale securities.  The Company carries this investment at fair value, based on quoted market prices, and unrealized gains and losses, net of taxes, are included in accumulated other comprehensive income, which is reflected as a separate component of stockholders' equity.  Realized gains and losses are recognized in the consolidated statement of operations when realized.  The Company reviews its holdings on a regular basis to evaluate whether or not each security has experienced an other-than-temporary decline in fair value.  If the Company believes that an other-than-temporary decline exists in the marketable securities, the equity investments are written down to market value and an investment loss is recorded in the consolidated statement of operations.

Long-lived Assets

In assessing the recoverability of the Company's goodwill and other intangibles, the Company must make assumptions regarding estimated undiscounted expected future cash flows to be generated by the assets to determine the fair value of the respective assets.  If these estimated cash flows and related assumptions change in the future, the Company may be required to record an impairment charge in the consolidated statement of operations.

New Pronouncements

See Note 18 of the accompanying Condensed Consolidated Financial Statements.

Inflation and Seasonality

To date, inflation has not had a significant impact on the Company’s operations.  The Company’s revenues are not affected by seasonality.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4T.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain a set of disclosure controls and procedures, as defined in Section 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports filed by us under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

An evaluation has been carried out under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and the operation of our "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2009 (“Evaluation Date”). Based on such evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, as of the Evaluation Date, the disclosure controls and procedures are effective.

Notwithstanding the foregoing, there can be no assurance that the Company’s disclosure controls and procedures will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.

Changes in Internal Control over Financial Reporting

An evaluation was performed under the supervision of the Company’s management, including the Chief Executive Officer/Chief Financial Officer, as requested under Exchange Act Rule 13a-15(d) and 15-d-15(d), of whether any change in the Company’s internal control over financial reporting occurred during the fiscal quarter ended June 30, 2009. Based on that evaluation, the Company’s management, including the Chief Executive Officer/Chief Financial Officer, concluded that no change in the Company’s internal controls over financial reporting occurred during the fiscal quarter ended June 30, 2009 that has materially affected or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings. Not Applicable
Item 1a.	Risk Factors.  Not Required
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.
						Total Number
						of Shares
			Number of			Purchased as		Maximum Number
			Shares of		Average	Part of		of Shares That May
	Period		Common Stock		Price Paid	Publicly		Yet be Purchased
	Purchased		Purchased		Per Share	Announced Plans		Under the Plans
	April, 2009
	May, 2009
	June, 2009
	Total			None			None		248,375
	On November 1, 2005, the Board of Directors approved a buy back of up to 250,000 shares of the Company’s Common Stock in market or privately negotiated transactions from time to time.
Item 3.	Defaults upon Seniro Securities. Not Applicable
Item 4.	Submission of Matters to a Vote of Security Holders. Not Applicable
Item 5.	Other Information. Not Applicable
Item 6.	Exhibits
	10.12	Agreement dated May 4, 2009 providing for Silver Polish LLC to purchase property from Sovereign Bank.
	10.13	Promissory Note dated May 7, 2009 providing for the balance of payment due from Silver Polish LLC to Sovereign Bank.
	31	Certification of Martin Kaye pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
	32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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.

TRACK DATA CORPORATION

Date:	8/14/09	/s/  Martin Kaye
		Martin Kaye
		Chief Executive Officer
		Principal Financial Officer

EX-10.12

Exhibit 10.12

AGREEMENT

This Agreement is made as of this 4th day of May, 2009 by and between the Parties listed below:

The Parties

SOVEREIGN BANK, having an office at 619 Alexander Road, Princeton, New Jersey 08540 (“Lender”);

YOMAH, INC., a New Jersey corporation, having an address of 207 Carey Street, Lakewood, New Jersey 08701 (“Borrower”);

SHEILA ROTTENBERG, AHARON ROTTENBERG (collectively, the “Individual Guarantors”), and KEDMA, INC., a New Jersey corporation (the “Corporate Guarantor” and, together with the “Individual Guarantors” collectively referred to herein as “Guarantors”) for purposes of this Agreement all having an address at 207 Carey Street, Lakewood, New Jersey 08701 (singly by name, and collectively, “Guarantors”);

BARRY HERTZ, TRACK DATA CORPORATION, a Delaware corporation, SILVER POLISH, LLC, a New Jersey limited liability company, and ISAAC GENUTH, for purposes of this Agreement having an address c/o Steven Pfeffer, Esq., 2105 West County Line Road, Jackson, New Jersey 08527 (jointly and severally, singly by name, and collectively, “Assignees”)

The Facts

WHEREAS, Borrower is justly indebted to Lender in the principal amount of $22,029,000.00 (the “Loan”) pursuant to two promissory notes executed by Borrower, the first being a promissory note dated April 4, 2005 in the principal amount of $20,943,147.00 (“Note I”), and the second being a promissory note entitled Letter of Credit Reimbursement Note, dated April 4, 2005 in the principal amount of $1,085,853.00 (“Note II”); and

WHEREAS, Note I has an unpaid principal balance as of April 1, 2009 of $12,887,657.60 exclusive of interest, late fees, fees and costs due Lender (the “Note I Underlying Indebtedness”); and

WHEREAS, Note II serves as evidence of the Borrower’s obligation to pay Lender up to $542,927.00 in the event the Township of Lakewood (“Beneficiary”) draws down upon a certain Amended LC (herein defined) prior to its expiration date of April 4, 2010 (the “Note II Underlying Indebtedness”); and

WHEREAS, the Note I Underlying Indebtedness and the Note II Underlying Indebtedness are collectively referred to herein as the “Underlying Indebtedness”); and

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WHEREAS, Note I and Note II(collectively, the “Notes”) are secured by a certain Mortgage made by Borrower in favor of Lender dated April 4, 2005 and recorded in the Ocean County Clerk’s Office on April 11, 2005 in MB 12558 at Page 29 et seq. (the “Mortgage”) which Mortgage continues to encumber all of the real property described therein including, but not limited to, Borrower’s rights in and to the common areas, unimproved streets and rights of way, together with all other appurtenances and hereditaments located within and related to that certain subdivision located in the Township of Lakewood, New Jersey commonly known as Sterling Place (collectively, the “Mortgaged Premises” or “Mortgaged Property”); and

WHEREAS, The Individual Guarantors and Corporate Guarantor executed guaranties of payment in favor of Lender dated April 4, 2005 (collectively, the “Guaranties”) guaranteeing payment in full of all sums due Lender under the Notes, Mortgage, Modification Agreement (hereinafter defined), and the other documents executed by Borrower and/or Guarantors in favor of Lender in connection with the Loan (such Notes, Mortgage, Mortgage Modification and other documents being collectively, the “Loan Documents”); and

WHEREAS, To better secure the Guaranties, the Guarantors executed and delivered to Lender a second mortgage and security agreement which was recorded in the Ocean County Clerk’s Office on July 27, 2007 in Mortgage Book 13726 at page 157 et seq. (the “Second Mortgage”) which Second Mortgage encumbers, among other properties, twenty-four (24) condominium units owned by Individual Guarantors located in the Township of Lakewood, Ocean County, New Jersey (the “Condo Units”); and

WHEREAS, Yomah and the Guarantors executed in favor of Lender a Modification and Extension Agreement dated July 26, 2007, which was recorded in the Ocean County Clerk’s Office on July 27, 2007, in MB 13726 at page 0176 et seq. (Modification Agreement”); and

WHEREAS, At Borrower’s request, Lender issued an Irrevocable Standby Letter of Credit dated April 4, 2005 in favor of the Beneficiary in the face amount of $1,085,853.00 bearing No. 3844 (the “Original LC”); and

WHEREAS, By resolution dated December 13, 2007, the Beneficiary agreed to reduce the face amount of the Original LC to $542,927.00, and on July 8, 2008, Lender issued an amendment to the Original LC entitled Amendment #1 to Irrevocable Standby Letter of Credit No. 3844 reducing the face amount of the Original LC from $1,085,853.00 to $542,927.00 (the “Amended LC”) which Amended LC was accepted by the Beneficiary on July 17, 2008; and

WHEREAS, The Amended LC expires pursuant to its terms on April 4, 2010. The Amended LC has not been drawn upon as of the date hereof; and

WHEREAS, Borrower acknowledges the accuracy of the Underlying Debt and Borrower’s obligation to pay same to Lender’ and

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WHEREAS, Borrower acknowledges that it has defaulted on the Notes and the Guarantors acknowledge that they have defaulted on their respective Guaranties and that said events of default continue through the date hereof; and

WHEREAS, By virtue of Borrower’s and Guarantors’ aforementioned defaults, Lender has instituted a foreclosure action against Yomah, Inc. et als. in the Superior Court, Chancery Division, Ocean County (the “Court”), bearing Docket No. F25192-08 (the “Yomah Foreclosure Action”) seeking to foreclose upon those lots in Sterling Place which continue to be encumbered by the Mortgage; and

WHEREAS, in consideration of payment to Lender of the sums referenced below, (i) Assignees desire to acquire from Lender an assignment without representations, warranties or recourse of all of Lender’s rights in and to the Yomah Foreclosure Action and in and to the loan documents referred to therein related to the Sterling Place property (collectively, the “Yomah Loan Documents”), except Assignees do not desire to take an assignment of any corporate or personal guarantees executed by the Guarantors in favor of Lender, inclusive of those Guaranties executed by Borrower and Guarantors in favor of Lender with respect to the Second Mortgage encumbering the Condo Units, and (ii) Lender desires to assign all of such rights under the terms and conditions set forth herein; and

WHEREAS, Borrower, Guarantors and Assignees have jointly proposed a settlement arrangement to Lender for its consideration; and

WHEREAS, Borrower, Guarantors and Assignees have advised Lender that they have entered into separate agreement(s) by, between and among themselves with respect to the subject matter of this Agreement (the “Other Agreements”); and

WHEREAS, Borrower, Guarantors and Assignee acknowledge and confirm that Lender is not a party to any of the Other Agreements nor privy to the contents of same and further, that none of said parties have entered into any separate or side agreement, written or oral, with Lender regarding the subject matter of this Agreement.

NOW THEREFORE, in consideration of the sum of Ten and 00/100 ($10.00) Dollars and other good and valuable consideration, and in further consideration of the mutual promises and covenants made by the Parties set forth herein, the Parties agree as follows:

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1. (A) So long as the Borrower, Guarantors and Assignees perform their respective duties and obligations set forth herein and are free from default hereunder, Lender agrees to forbear from issuing execution or seeking the appointment of a receiver or becoming mortgagee in possession concerning the Mortgaged Property or under the Yomah Foreclosure Action, except as otherwise permitted in Section 4 of this Agreement. In consideration therefor, and of the Lender’s conditional agreement to accept a discounted price for the assignment of the Loan, and with Borrower’s and Guarantors’ full knowledge, approval and consent, Assignees shall pay to Lender the Loan purchase sum of EIGHT MILLION EIGHT HUNDRED THOUSAND AND 00/100 ($8,800,000.00) (the “Settlement Sum”) in the manner provided in Section 2 of this Agreement which Settlement Sum Borrower, Guarantors and Assignees acknowledge represents a substantial discount of the Underlying Indebtedness due Lender. In addition to payment of the Settlement Sum to Lender, Assignees also agree to “replace” (which term shall include a payment to the Lender in the form of bank or certified check in the amount of $542,927 and, if such Amended LC is sooner drawn upon by its beneficiary, Township of Lakewood, then, to the extent such draft is honored, “replace” shall also include the reimbursement of Lender for the amount of such honored drafts) the Amended LC prior to June 15, 2009, TIME BEING OF THE ESSENCE, unless that deadline is extended as permitted pursuant to Section 2(d) herein, of if the Amended LC is drawn upon by the Beneficiary prior to the “Amended LC Payment Deadline” or the “Extended Amended LC Payment Deadline” (as those terms are defined in Section 2(d) herein), in which case Assignees shall pay the Lender the sum of $542,927 within twenty- four hours of notice by Lender to the Assignees that the Amended LC has been drawn upon, TIME BEING OF THE ESSENCE.

(B) Upon (a) full payment of the Settlement Sum, and (b) replacement of the Amended LC, whichever event is last to occur, and only then, shall Lender be obligated to assign to Assignees, without representations, warranties or recourse, all of the Lender’s then right, title and interest in and to the existing Yomah Foreclosure Action and the Loan Documents (specifically excluding from such assignment (i) The Guaranties (ii) Lender’s rights against the Guarantors pursuant to their respective Guaranties, (iii) the Second Mortgage and (iv) Lender’s rights and remedies against the properties encumbered by the Second Mortgage). So long as there is no default hereunder by the Borrower, Guarantors and/or Assignees, then, pending final payment of the Settlement Sum and replacement of the Amended LC as herein provided, and provided Borrower, Guarantors or Assignees have not defaulted on this Agreement, Lender agrees, at Borrower’s, Guarantors’ and Assignees’ request, not to issue execution to enforce the foreclosure judgment against Borrower and/or Guarantors and/or the Mortgaged Property in the Yomah Foreclosure Action but may obtain a Final Judgment against the named defendants in said Yomah Foreclosure Action. No provision in this Agreement shall limit or is intended to limit or prevent Lender from enforcing its rights and pursuing its remedies against any of the Guarantors under their respective Guaranties or under the Second Mortgage encumbering the Condo Units. Additionally, Borrower and Assignees agree that they shall not, singly and/or collectively, interfere with Lender’s rights to foreclose upon the Condo Units or pursue any other right Lender possesses under the Guaranties, the Second Mortgage, or by virtue of law including, but not limited to, Lender’s right to have a rent receiver appointed for the Condo Units.

2. The Settlement Sum shall be paid to the Lender by the Assignees as follows:

(a) Upon execution of this Agreement by Borrower, Guarantors and Assignees, the Assignees shall pay to Lender the sum of $500,000.00 representing a “good faith” deposit (the “Initial Deposit”). Once this Agreement is executed by Borrower, Guarantors and Assignees and delivered to Lender, their agreement herewith shall be irrevocable for a period of twenty-one (21) days from the date Lender receives same to afford the Lender a power of acceptance hereof to be manifest by the Lender countersigning same within the twenty-one (21) day interval. The Initial Deposit shall be in the form of a bank or certified check payable to the Lender, or by federal wire transfer as Lender may instruct. In the event Lender does not approve of the terms of this Agreement and fails to sign same within twenty-one (21) days following its full execution by Borrower, Guarantors and Assignee, this Agreement shall automatically cease and terminate and be of no force and effect and the Initial Deposit shall be returned to Assignees whereupon Lender shall be free to enforce the Loan, including, without limitation, resuming the prosecution of the Yomah Foreclosure. However, once Lender signs this Agreement and transmits a copy of same to Abraham Penzer, Esq. and Steven Pfeffer, Esq. (“Date of Delivery”) in accordance with the provisions of Section 16 herein, the Initial Deposit shall thereupon become the Lender’s property and shall become non-refundable to Assignees (the “Non-Refundable Initial Deposit”).

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(b) Within three (3) business days following the Date of Delivery, TIME BEING OF THE ESSENCE, Assignees shall pay to Lender the additional sum of $4,500,000.00 (the “Additional Deposit”) by federal wire transfer to Lender’s account as Lender may instruct and thereupon the Additional Deposit shall become the Lender’s property and be non-refundable (the “Non-Refundable Additional Deposit”). The Non-Refundable Initial Deposit and the Non-Refundable Additional Deposit are sometimes collectively referred to herein as the “Non-Refundable Deposits”.

(c) In the event the Non-Refundable Additional Deposit is not timely paid to Lender as herein provided, this Agreement shall be null and void and Lender shall retain the Non-Refundable Initial Deposit and may proceed to enforce the Loan, including, without limitation, prosecuting the Yomah Foreclosure Action. In such an event, Borrower, Guarantors and Assignees acknowledge that the Non-Refundable Initial Deposit shall not be applied to reduce the principal balance, interest, fees or costs due Lender under the Notes or any of the Loan Documents but, rather, shall serve as agreed liquidated damages for Assignees’ failure to consummate the transaction as contemplated herein which sum Borrower, Guarantors and Assignees agree represents fair and reasonable damages for Assignees’ failure to pay the Additional Deposit since it is extremely difficult with any degree of accuracy to measure the actual damages Lender would incur if the Borrower, Guarantors and/or Assignees default hereunder.

(d) Simultaneously with the payment of the Additional Deposit, the Assignees shall execute in favor of Lender a promissory note (“Assignees’ Note”) as evidence and not in payment of the balance, which Assignees’ Note shall be in the form annexed and in the principal sum of $4,342,927 (which sum includes the balance of the Settlement Amount ($3,800,000) plus the amount of the Amended LC ($542,927)). The Assignees’ Note shall provide that by June 15, 2009, TIME BEING OF THE ESSENCE, (the “Amended LC Payment Deadline”) Assignees shall reduce the principal amount of the Note by the principal sum of $542,927 which shall be paid to Lender in the form of a certified check, bank check, or federal wire transfer as Lender may instruct. In the event Assignees fail to reduce the Assignees’ Note in the amount of $542,927 by the Amended LC Payment Deadline, Assignees shall be in default hereunder and the provisions of Section 6 of this Agreement shall be applicable and controlling. The Assignees’ Note shall also provide that Assignees shall be permitted to extend the Amended LC Payment Deadline until July 15, 2009, TIME BEING OF THE ESSENCE (the “Extended Amended LC Payment Deadline”), provided no later than May 1, 2009, or ten (10) days following the date the Lender executes this Agreement, whichever event is later to occur, TIME BEING OF THE ESSENCE as to all such dates, assuming the Beneficiary has not drawn upon the Amended LC by said date, Assignees post with the Beneficiary a Replacement LC and request in writing that the Beneficiary accept same in substitution of the Amended LC.

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A copy of the written request shall be delivered to the Lender at the same time it is delivered to the Beneficiary. In the event the Beneficiary has not accepted the Replacement LC by the Extended Amended LC Replacement Deadline, Assignees shall pay Lender the sum of $542,927 within two business days thereafter, TIME BEING OF THE ESSENCE, which payment shall be applied toward reducing the outstanding principal balance of the Assignee’s Note and in the event Assignees fail to reduce the Note in the amount of $542,927 as herein provided, Assignees shall be in default hereunder and the provisions of Section 6 of this Agreement shall be applicable and controlling. The Assignees’ Note shall have a term of six (6) months and be payable in full upon the expiration thereof (the “Maturity Date”). Assignees shall have the right to make prepayments on the Assignees’ Note at any time prior to the Maturity Date without penalty. Interest shall be payable upon the Note’s maturity date, whether at stated maturity or by acceleration, and accrue on the principal sum of the Assignees’ Note at the annual rate of ten percent(10.00%). However, Lender agrees to waive the interest due on the Assignee’s Note if, and only if, the full principal sum due Lender is paid in full on or before the Maturity Date. In the event that the Assignee’s Note is not paid on the Maturity Date, whether by virtue of the stated maturity or by acceleration, then such interest from the date of the Assignee’s Note shall be due upon Lender’s demand and shall continue to accrue until the Assignee’s Note is paid in full.

3. Provided the total of $5,000,000 in such Non-Refundable Deposits has been timely paid to Lender without default or offset as required in Sections 2(a) and 2(b) above, and Assignees have executed and delivered to Lender the Assignee’s Note as set forth in Section 2(d) above, and provided further that the Borrower, Guarantors and/or Assignees are not in default under this Agreement, then, in that event, pending the Maturity Date set forth in the Assignee’s Note and subject to the following provisions and protocols and upon the written request of Borrower (or a legal representative of Assignee if Borrower has theretofore conveyed title to Assignees pursuant to Section 5 of this Agreement), the Lender agrees to execute and deliver releases of individual Sterling Place dwelling units and respective lots from the lien of the Mortgage (each release so requested is referred to herein as a “Unit Release”) in consideration of payment to the Lender of the fixed sum of $275,000 each (the “Unit Release Fee”). Each Unit Release Fee shall be applied both toward the principal balance due Lender under the Assignee’s Note referenced in Section 2(d) above, which represents the deferred portion of the Settlement Sum discounted purchase price for the Loan and replacement of the Amended LC. Lender shall also credit the undiscounted Loan principal balance (now $12,887,657.60) in the same Unit Release Fee amount. Lender shall not be obligated to execute Unit Releases if the Assignee’s Note has not been paid in full by the Maturity Date. The required protocol to secure a Unit Release from Lender shall be as follows, viz., there shall be delivered to Lender (a) a duly acknowledged affidavit signed by Borrower (or a legal representative of Assignee if Borrower has theretofore conveyed title to Assignees pursuant to Section 5 of this Agreement) certifying that the contract of sale, a full and complete copy of which shall be attached, for the unit/lot sought to be released has been signed by the Borrower (or a legal representative of Assignee if Borrower has theretofore conveyed title to Assignees pursuant to Section 5 of this Agreement) and an unrelated third party bona-fide purchaser (“Purchaser”), and (b) a HUD Settlement Statement in a form acceptable to Borrower (or Assignee, as the case may be) and the Purchaser for such unit as evidenced by a writing to that effect from the Purchaser’s legal counsel addressed to Lender.

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LENDER SHALL HAVE ABSOLUTELY NO OBLIGATION TO TERMINATE THE GUARANTORS’ GUARANTIES OR MAKE ANY ASSIGNMENT TO ASSIGNEES OF THE YOMAH FORECLOSURE ACTION AND/OR THE LOAN DOCUMENTS REFERENCED THEREIN PERTAINING TO THE STERLING PLACE PROPERTY UNLESS AND UNTIL (A) LENDER HAS TIMELY RECEIVED THE $8,800,000.00 DUE LENDER PURSUANT TO SECTIONS 2(a) AND 2(b) HEREIN AND (B) THE ASSIGNEES’ NOTE REFERENCED IN SECTION 2(d) HEREIN HAS BEEN PAID IN FULL AND (C) EITHER THE ENTIRE AMENDED LC HAS BEEN REPLACED (AND ACCEPTED BY THE BENEFICIARY), OR THE LENDER HAS BEEN PAID THE FACE AMOUNT OF THE AMENDED LC. UNDER NO CIRCUMSTANCES SHALL LENDER HAVE ANY OBLIGATION TO RENEW THE AMENDED LC BEYOND THE DATE THE AMENDED LC IS TO EXPIRE.

4           Withdrawal of Contesting Answers. Within five (5) business days following Lender’s receipt of the Additional Deposit, TIME BEING OF THE ESSENCE, Borrower and Guarantors shall file with the New Jersey Superior Court in the Yomah Foreclosure Action a stipulation irrevocably withdrawing Borrower’s and Guarantors’ contesting answers. In addition, within the same time period, Assignees shall cause David Frankel and Rivka Frankel (collectively, the “Frankels”), additional named defendants in the Yomah Foreclosure Action, to also file a stipulation with the Superior Court withdrawing their contesting answer filed with the Court on October 27, 2008 so that, by the end of the fifth business day there shall not be any contesting answers in the Yomah Foreclosure Action thus allowing the Yomah Foreclosure Action to proceed as an uncontested foreclosure to the Foreclosure Unit of the Superior Court in Trenton, New Jersey, and affording Lender the right to apply to the Superior Court for a final judgment of foreclosure without contest or challenge by Borrower, Guarantors, Assignees or the Frankels.. In the event Borrower, Guarantors and Assignees fail to timely comply with the requirements set forth above, or in the event Borrower, Guarantors, Assignees or the Frankels shall contest Lender’s application for a final judgment in the Yomah Foreclosure Action, same shall constitute an event of default hereunder and the provisions of Section 6 of this Agreement shall be applicable and controlling.

5           No Conveyance of Mortgaged Premises Prior to Payment of Certain Sums Due Lender. Notwithstanding anything to the contrary herein provided, Borrower shall neither directly nor indirectly convey to Assignees or their assigns or affiliates, and Assignees shall not accept from Borrower, a conveyance of title (“Deed”) to any portion of the Mortgaged Premises until such time as Lender has been paid the Non-Refundable Deposits and Assignees shall have executed and delivered to Lender the Assignee’s Note, and the conditions set forth in Section 4 herein have been fully satisfied. The Deed shall be expressly subject to the Mortgage held by Lender encumbering the Mortgaged Premises and to this Agreement and shall contain the following recital:

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“This conveyance is expressly made subject to (a) the lien of a certain mortgage dated April 4, 2005 (“Mortgage”) executed by Grantor in favor of Sovereign Bank given to secure Grantor’s obligation to Sovereign Bank in the principal amount of $22,029,000 which Mortgage was recorded in the Ocean County Clerk’s Office on April 11, 2005 in Mortgage Book 12558 at page 29, and (b)is expressly subject to the terms and conditions of that certain Agreement dated April ___, 2009 between Lender, Grantor, Sheila Rottenberg, Aharon Rottenberg, Kedma, Inc., Barry Hertz, Track Data Corporation, Silver Polish, LLC and Isaac Genuth, the terms of which are incorporated herein by reference and made a part hereof.”

Lender shall be provided with a copy of the Deed immediately following the date it is recorded and returned to Assignees. A violation of the terms of this Section 5 of the Agreement shall constitute an event of default hereunder and the terms of Section 6 herein shall be applicable and control.

6. Additional Events of Default and Additional Remedies.

(A)           In addition to any other event of default expressly provided in this Agreement or any other remedy permitted herein, the term “event of default” or “default” as used in this Agreement shall also mean the occurrence of any one or more of the following events:

(i)           Any representation or warranty made by the Borrower, Guarantors and/or Assignees in this Agreement or in any other writing given to the Lender in connection herewith shall prove to have been false, incorrect or misleading in any substantial and material respect on the date as of which made; or

(ii)           The Borrower, Guarantors or Assignees shall have failed to make to the Lender any monetary payment due under the Assignees’ Note or herein by any due date set forth therein or herein for said payment; or

(iii)           Borrower, Guarantors and/or Assignees shall have failed to duly observe or perform any non-monetary covenant, condition or agreement set forth in the Assignees’ Note and/or this Agreement and such default shall have remained uncured for a period of ten (10) days after written notice thereof to the Borrower, Guarantors and Assignees; or

(iv)           The Borrower shall have failed to comply with any law, ordinance, order, rule or regulation of any governmental authority having jurisdiction over the Mortgaged Property or shall have failed to remove any work condemned by any of the said governmental authorities or prohibited by law, unless contested by the Borrower, Guarantors and/or Assignees in good faith pursuant to appropriate proceedings and such default shall have remained uncured for a period of thirty (30) days after written notice thereof to the Borrower by the Lender; or

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(v)           A construction lien or any other lien or encumbrance shall have been filed against the Mortgaged Property and the Borrower, Guarantors and/or Assignees shall have failed to procure within thirty (30) days after the same is filed, a cancellation of said lien or a discharge thereof, in the manner and form provided by law, or a bond against said lien or encumbrance, in form and amount satisfactory to the Lender; or

(vi)           If the Borrower, Guarantors and/or Assignees do not permit a representative of the Lender the right to enter upon the Mortgaged Property to inspect the improvements thereon at a reasonable time, provided that the Lender’s inspection shall not interfere with the normal business operations of any tenant occupying space in the improvements; or

(vii)           The Borrower, and/or any of the Guarantors and/or any of the Assignees shall have applied for or consented to the appointment of a custodian, receiver, trustee or liquidator of all or a substantial part of their respective assets; a custodian shall have been appointed with or without consent of the Borrower, and/or the Guarantors and/or Assignees and shall not have been dismissed for a period of thirty (30 consecutive days; the Assignees shall generally not be paying their respective debts as they become due; the Borrower, and/or the Guarantors and/or the Assignees shall have made a general assignment for the benefit of their respective creditors; the Borrower, and/or the Guarantors and/or Assignees shall have filed a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with their respective creditors, or shall have taken advantage of any insolvency law, or shall have filed an answer admitting the material allegations of a petition in bankruptcy, reorganization or insolvency proceeding; or a petition in bankruptcy shall have been filed against the Borrower, and/or the Guarantors and/or the Assignees or if an Order for Relief has been entered under the Bankruptcy Code and shall not have been dismissed for a period of thirty (30) consecutive days; or an order, judgment or decree shall have been entered without the application, approval or consent of the Borrower, and/or the Guarantors and/or the Assignees by any court of competent jurisdiction appointing a receiver, trustee, custodian or liquidator of the Borrower, and/or the Guarantors and/or the Assignees of a substantial part of their respective assets and such order, judgment or decree shall have continued unstayed and in effect for any period of thirty (30) consecutive days; or

(viii)           The Borrower, Guarantors or Assignees shall have caused or permitted a security interest, perfected or otherwise, other than the security interest specifically provided for or permitted under the Loan Documents and not removed within thirty (30) days, or shall have failed to take any action reasonably requested by the Lender to perfect or protect the security interest provided for herein; or

(ix)           Any individual Assignee shall die and/or the Track Data Corporation shall have reorganized, disbanded, dissolved or merged, voluntarily or involuntarily and the Assignees’ Note is not paid in full within five (5) days following any such event; or

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(x)           Except for a transfer of a “Unit” in accordance with the provisions of Section 3 herein for conveyance of the Deed referred to in Section 5 in conformity with the provisions thereof, Borrower, Guarantors and/or Assignees shall have transferred, or caused to have been transferred, title to or possession of any interest in any portion of the Mortgaged Property, or any part thereof, to any person or entity, without the prior express written consent of the Lender, whether such transfer is done voluntarily, involuntarily or by operation of law.

(xi)           The Assignees, Borrower or Guarantors or their agents commit waste concerning the Mortgaged Property.

(xii)           The Assignees, Borrower or Guarantors or their agents construct or complete the dwelling houses on the Mortgaged Property in other than a good and workmanlike manner or fail to comply with all applicable governmental regulations.

(xiii)           The Assignees, Borrower or Guarantors or their agents fail to demonstrate to the Lender that it is insured as a mortgagee under policies of hazard insurance including builders risk coverage satisfactory in form, amount and issuer to Lender concerning the improvements on the Mortgaged Property.

(B).           Remedies.

(i)           Upon the occurrence of an event of default by the Borrower, Guarantor and/or Assignees under any provision of the Assignee’s Note and/or this Agreement beyond any applicable notice and cure period, any obligation of the Lender to assign the Loan, the Yomah Foreclosure Action, or the Loan Documents and any obligation of the Lender to accept a reduced or discounted payment on account of any of the Loan obligations and any obligation of the Lender to forbear from enforcing the Loan obligations against any person or property interest shall become null and void and of no further effect but the Lender (a) shall cause to be applied all payments made by Assignees to Lender pursuant to this Agreement, except for any sums retained by Lender as agreed liquidated damages pursuant to Section 2(c) herein, as a credit against the Underlying Debt including, without limitation, the Borrower’s reimbursement obligations concerning the Amended LC or any renewal thereof, such allocation among the Underlying Debt’s various components to be in the Lender’s sole and unfettered discretion, and (b) may proceed to enforce the Loan including, without limitation, the Yomah Foreclosure Action in accordance with the applicable law.

(ii)           Upon the occurrence and during the continuance of an event of default, the Lender, may take any of the remedies otherwise available to it under the Loan Documents and/or as a matter of law or equity.

7.           Continuing Liability. Notwithstanding anything to the contrary provided herein or in any of the Loan Documents, Borrower’s liability and obligations to Lender for payment of the balance of the Underlying Debt and Guarantors’ joint and several obligations to Lender under their respective Guaranties, shall continue and not be diminished or affected until such time as the Assignee has fully performed its obligations hereunder. Any other provision of this Agreement to the contrary notwithstanding, the Lender may, but shall not be obligated to, enforce its rights, powers, privileges and immunities concerning the Loan, any collateral security or supporting obligations which it deems proper to protect the rights planned to be assigned to Assignees.

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8.           Disclaimers By Lender. Agreement to Indemnify. Except as expressly set forth herein, it is understood and agreed that Lender has not at any time made and is not now making, and it specifically disclaims, any warranties or representations of any kind or character, express or implied, with respect to the terms, conditions and provisions set forth in the Loan Documents and/or the Mortgaged Property, including, but not limited to, warranties or representations as to (i) matters of title, (ii) environmental matters relating to the any such Mortgaged Property or any portion thereof, including, without limitation, the presence of Hazardous Materials in, on, under or in the vicinity of the Mortgaged Property, (iii) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water, and geologic faults and the resulting damage of past and/or future faulting, (iv) whether, and to the extent to which the Mortgaged Property or any portion thereof is affected by any stream (surface or underground), body of water, wetlands, flood prone area, flood plain, floodway or special flood hazard, (v) drainage, (vi) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (vii) the presence of endangered species or any environmentally sensitive or protected areas, (viii) zoning or building entitlements to which the Mortgaged Property or any portion thereof may be subject, (ix) the availability of any utilities to the Mortgaged Property or any portion thereof including, without limitation, water, sewage, gas and electric, (x) usages of adjoining property, (xi) access to the Mortgaged Property or any portion thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, operation, title to, or physical or financial condition of the Mortgaged Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Mortgaged Property or any part thereof, (xiii) the condition or use of the Mortgaged Property or compliance of the Mortgaged Property with any or all past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (xiv) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (xv) the merchantability of the Mortgaged Property or fitness of the Mortgaged Property for any particular purpose, (xvi) the truth, accuracy or completeness of the Loan Documents, (xvii) tax consequences, or (xviii) any other matter or thing with respect to the Loan Documents and/or the Mortgaged Property.

Except as expressly set forth herein, Borrower, Guarantors, and Assignees have not relied upon, and will not rely on, and Lender has not made and is not liable for or bound by, any express or implied warranties, guarantees, statements, representations or information pertaining to the Mortgaged Property or, Loan Documents or any other matter or document relating thereto made or furnished by Lender or any agent or third party representing or purporting to represent Lender, to whomever made or given, directly or indirectly, orally or in writing. Borrower, Guarantors and Assignees represent that they are knowledgeable, experienced and sophisticated real estate and business savvy entities and that they are relying solely on their own expertise and that of their respective consultants in entering into this Agreement.

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Borrower and Guarantors and Assignees agree to indemnify and hold Lender, Lender’s officers, agents, employees and professionals harmless of and from any and all liabilities, claims, demands and expenses of any kind or nature related to the ownership, maintenance or operation of any of the Mortgaged Property whether arising or accruing before or after the date the Amended LC is replaced and terminated by Lender. The indemnification herein provided shall extend to court costs and expenses and fees paid by Lender to any attorneys, accountants or other professionals. This provision shall survive replacement of the Amended LC and cancellation thereof by Lender. This indemnification shall survive the termination of this Agreement.

9.           Lender Released from Liability. As further inducement to Lender to execute this Agreement, Borrower, Guarantors and Assignees hereby FOREVER RELEASE AND DISCHARGE Lender from any and all responsibility and liability, including without limitation, liabilities generally regarded as “lender liability claims”, claims which could or may arise under the loan commitments made by Lender to Borrower, claims which could or may arise under the Yomah Foreclosure Action and under any provision of the Loan Documents referenced therein, claims arising against Lender by any purchaser of any unit/lot in Sterling Place subdivision, or claims which could or may arise under the Comprehensive Environmental Response, Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as amended (“CERCLA”), regarding the condition (including the presence in the soil, air, structures and surface and subsurface waters, of Hazardous Materials (as defined by law in New Jersey) or other materials or substances that have been or may in the future be determined to be toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Mortgaged Property under current or future federal, state and local laws, regulations or guidelines), valuation, salability or utility of the Mortgaged Property, or its suitability for any purpose whatsoever. Borrower, Guarantors and Assignees further hereby WAIVE (and by signing the Agreement will be deemed to have waived) any and all objections to or complaints regarding (including, but not limited to, federal, state and common law based actions), or any private right of action under, state and federal law to which the Mortgaged Property and/or Loan Documents is, are, or may be subject. The releases provided herein shall survive the termination of this Agreement.

10.           Parties Bound; No Assignment. This Agreement, and the terms, covenants, and conditions herein contained, shall inure to the benefit of and be binding upon the heirs, personal representatives, successors, and assigns of each of the parties hereto. Borrower, Guarantors and Assignees shall not assign their rights or delegate their duties under this Agreement unless specifically allowed herein or unless Lender has consented to such an assignment in writing, which consent shall be in the Lender’s sole and unfettered discretion. Any assignment or delegation in derogation of this provision shall be void and constitute an event of default hereunder in which case the provisions of Section 6 of this Agreement shall be applicable and controlling.

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11.           Headings. The article, section, subsection, paragraph and/or other headings of this Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language hereof.

12.           Invalidity and Waiver. If any portion of this Agreement is held invalid or inoperative, then it alone shall be held for naught so far as is reasonable in light of the benefit of the parties’ bargain and the remainder of this Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The failure by either party to enforce against the other any term or provision of this Agreement shall not be deemed to be a waiver of such party’s right to enforce against the other party the same or any other such term or provision in the future. Nothing contained in this Agreement is intended to serve as a waiver of Lender’s rights to proceed against Borrower and/or Guarantors prior to Lender(a) receiving $8,800,000, and (b) having the Amended LC replaced, or the face amount thereof paid to the Lender as herein provided.

13.           Governing Law. This Agreement shall, in all respects, be governed, construed, applied, and enforced in accordance with the law of the State of New Jersey without regard to conflicts of law principles.

14.           Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the sale of the Loan or the Mortgaged Property, the Yomah Foreclosure Action, and/or assignment of the Yomah Loan Documents referenced therein. This Agreement may be amended, modified, waived or supplemented only by an instrument in writing executed by the party against whom enforcement is sought. Any other purported amendment, modification, waiver or supplement shall be deemed a nullity.

15.           Time. Time is of the essencein the performance of this Agreement unless otherwise agreed in a writing signed by the Lender, Borrower, Guarantors and Assignees.

16.           Notices. All notices required or permitted hereunder shall be in writing and shall be served only upon Abraham Penzer, Esq. and Steven Pfeffer, Esq., the legal representatives of the Parties (except Lender). Notices to Abraham Penzer, Esq., shall be addressed to him at his office located at 1203 Madison Avenue, Lakewood, New Jersey 08701 and notices to Steven Pfeffer, Esq. shall be addressed to him at his office, Levin, Shea and Pfeffer, PA 2105 West County Line Road, Jackson, New Jersey 08527. Any such notices shall, unless otherwise provided herein, be given or served (i) by depositing the same in the United States mail, postage paid, certified and addressed to the legal representative of the party to be notified, with return receipt requested, (ii) by overnight delivery using a nationally recognized overnight courier, (iii) by personal delivery, or (iv) by facsimile, evidenced by confirmed receipt. Notice deposited in the mail in the manner hereinabove described shall be effective on the third (3rd) business day after such deposit. Notice given in any other manner shall be effective only if and when received by the legal representative of a party to be notified between the hours of 8:00 a.m. and 5:00 p.m. of any business day with delivery made after such hours to be deemed received the following business day. The address of a party’s legal representative may be changed by written notice to the other party’s legal representative; provided, however, that no notice of a change of address shall be effective until actual receipt of such notice. Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice.

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17.           Authority. Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and agree that the normal rule of construction - to the effect that any ambiguities are to be resolved against the drafting party - shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto. Borrower, Kedma, Inc. and Track Data Corporation represent to Lender that all of the necessary corporate action required in order to authorize their execution of this Agreement has been taken and authorized and their signatures below serve to bind said Parties to the terms of this Agreement.

18.           Calculation of Time Periods. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday for national banks in the location where the Encumbered Property is located, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday, or legal holiday. The last day of any period of time described herein shall be deemed to end at 5:00 p.m. local time in New Jersey. For purposes of this Agreement the term “business days” shall not include April 8, 2009, through and including April 18, 2009.

19.           Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Agreement.

20.           No Recordation. Without the prior written consent of Lender which may withheld for any reason or no reason, there shall be no recordation of either this Agreement or any memorandum hereof, or any affidavit pertaining hereto, and any such recordation of this Agreement or memorandum without the prior written consent of Lender shall be deemed an event of default hereunder in which event the provisions of Section 6 of this Agreement shall be applicable and controlling.

21.           No Third Party Beneficiary. No third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered by Lender to Assignees pursuant to this Agreement.

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22.           No Affect on Other Litigation. Nothing contained herein shall have any affect or impact in and upon a certain lawsuit Lender currently maintains against the Individual Guarantors, et als. pending in the Superior Court of New Jersey, Chancery Division, Ocean County, bearing Docket No. F-4789-08 (the “Rottenberg Foreclosure Action”) which Rottenberg Foreclosure Action seeks to foreclose upon certain condominium units owned by the Individual Guarantors and encumbered by that certain Mortgage and Security Agreement dated July 26, 2007 recorded in the Ocean County Clerk’s Office on July 27, 2007, in MB 13726 at Page 0157 et seq.. Lender agrees that if, and only if, the sum of $8,800,000 is finally and timely paid to Lender, and if, and only if, the Amended LC has been timely replaced or, in lieu thereof if, and only if, Lender has been timely paid the sum of $542,927, all as herein more fully provided, then Lender shall not seek thereafter to enforce any foreclosure judgment against Borrower or Guarantors in the Yomah Foreclosure Action or in the Rottenberg Foreclosure Action for the shortfall between the Settlement Sum ($8,800,000) and the Note I Underlying Indebtedness ($12,887,657.60), provided, however, nothing set forth herein shall serve to limit or prevent Lender from pursuing all of its rights and remedies against the Guarantors for all sums due Lender under the “Rottenberg Note” and “Rottenberg Mortgage” which terms are defined in the Complaint in Foreclosure in the Rottenberg Foreclosure Action.

(signatures appear on the following page)

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IN WITNESS WHEREOF, the undersigned have signed this Agreement on the dates set forth to the left of their respective signatures.

Date
	LENDER:
	SOVEREIGN BANK
5/4/2009	By:	/s/ CHRISTOPHER TONKOVICH
		CHRISTOPHER TONKOVICH
	BORROWER:
	YOMAH, INC.
4/29/2009	By:	/s/ SHEILA ROTTENBERG
		SHEILA ROTTENBERG
	INDIVIDUAL GUARANTORS:
	/s/ AHARON ROTTENBERG
4/29/2009	AHARON ROTTENBERG
	/s/ SHEILA ROTTENBERG
4/29/2009	SHEILA ROTTENBERG
	CORPORATE GAURANTOR:
	KEDMA INC.
4/29/2009	By:	/s/ AHARON ROTTENBERG
		AHARON ROTTENBERG
	ASSIGNEES:
	TRACK DATA CORPORATION
4/29/2009	By:	/S/ MARTIN KAYE
		MARTIN KAYE, CHIEF EXECUTIVE OFFICER
	/s/ ISAAC GENUTH
4/29/2009	ISAAC GENUTH
	/s/ BARRY HERTZ
4/29/2009	BARRY HERTZ
	SILVER POLISH, LLC
	/s/ BARRY HERTZ
4/29/2009	BARRY HERTZ, Manager

EX-10.13

Exhibit 10.13

PROMISSORY NOTE

 $4,342,927.00    May 7, 2009

FOR VALUE RECEIVED, BARRY HERTZ, TRACK DATA CORPORATION, a Delaware corporation, SILVER POLISH, LLC, a New Jersey limited liability company, and ISAAC GENUTH, for purposes of this Agreement having an address  c/o Steven Pfeffer, Esq., 2105 West County Line Road, Jackson, New Jersey 08527 (jointly and severally, (singly by name, and collectively, jointly and severally, the “Borrowers”), hereby promises to pay without defalcation or offset to the order of SOVEREIGN BANK, having an office at 619 Alexander Road, Princeton, New Jersey 08540, and its successors and assigns (“Lender”), in lawful money of the United States of America in immediately available funds, the principal sum of FOUR MILLION, THREE HUNDRED FORTY TWO THOUSAND, NINE HUNDRED TWENTY SEVEN AND 00/100 ($4,342,927.00) DOLLARS, together with interest according to the following terms and conditions.

1.   Payments. This Promissory Note (“Note”) shall be paid as follows:

(A)           The sum of $542,927.00 shall be paid to Lender on or before June 15, 2009 unless within ten (10 days from the date hereof, the Borrowers demonstrate to the Lender that Borrowers have delivered to the Township of Lakewood, ocean county, New Jersey as beneficiary (“Beneficiary”), an irrevocable standby letter of credit issued by a commercial bank having capital and surplus of not less that $100,000,000 in substantially the same form annexed hereto as Exhibit “A” in the face amount of $542,927 (the ”Replacement LC”) coupled with a written request to the Beneficiary to accept the Replacement LC in substitution of the Lender’s existing Amendment #1 to Irrevocable Standby Letter of Credit No. 3844 dated July 8, 2008 (the “Amended LC”), a copy of which is annexed hereto as Exhibit “B” and made a part hereof, in which case, and only in which case, the payment of the $542,927.00 shall be deferred until July 17, 2009, TIME BEING OF THE ESSENCE AS TO ALL DATES HEREIN. Even if the Beneficiary fails or refuses to accept the Replacement LC in substitution of the Amended LC, for any reason or no reason, Borrowers shall nevertheless pay the sum  of $542,927.00 to lender no later that 3:00 P.M. prevailing time on July 17, 2009.

(B)           The balance due Lender under this Note shall be due and payable, if not sooner paid, on November 7, 2009, TIME BEING OF THE ESSENCE, (the “Maturity Date”) at which time all remaining principal and accrued interest, if any, and all other sums owing under this Note shall be due and payable in full.

2.           Interest.  The rate of interest on the principal balance due on this Note shall be ten percent (10.0%) per annum. Provided Borrowers are free from default hereunder and under the “Yomah Agreement” (hereinafter defined), Lender agrees to waive any interest payable on said amounts. However, in the event Borrowers default under the “Yomah Agreement” (hereinafter defined) or fail to make any principal payment required hereunder when due, then interest at the aforementioned rate shall accrue on all unpaid amounts from the date of this Note until all sums due Lender hereunder are paid in full. Interest shall be computed on the basis of a 360 day year but shall be charged for the actual number of days elapsed.

3.           Application of payments.  Payments received under this Note (including prepayments) shall be applied first to principal and then to interest. The making of any prepayment shall not change the Maturity Date or the date payments referenced in Section 1(A) are due.

4.           Prepayments.  Prepayment of the sums due lender under this Note are permitted at any time without penalty or premium.

5.           Place and manner of Payment.  Payments under this Note are to be made in immediately available funds at the offices of Lender listed in this Note or at such other location designated by lender.

6.           Credits for Unit Release Fees.  Borrowers have been afforded the right to secure “Unit Releases” pursuant to Section 3 of that certain Agreement between Lender, Borrowers, Yomah, Inc., Sheila Rottenberg, Aharon Rottenberg and Kedma, Inc. dated even date herewith (the “Yoham Agreement”), a copy of which Section 3 of the Yomah Agreement is incorporated herein by reference and made apart hereof. Provided Borrowers are free from default under the Yomah Agreement and under this Note, Lender agrees to apply each “Unit Release Fee” (as defined in Section 3) it receives, dollar for dollar, as a credit against the principal sum due from time to time under Section 1(B) of this Note.

7.           Defaults and Remedies. A default by Borrowers in the payment of any sum due lender pursuant to this Note, or a default by Borrowers (or any of the parties comprising Borrowers) under the Yoman Agreement shall automatically constitute an Event of Default hereunder, and Event of Default by Borrowers under the Yomah Agreement. In any such event, all sums outstanding under this Note, Together with accrued interest thereon from the dates hereof, may at lender’s sole option, become, or exercise any of its other rights and remedies as set forth in the Yomah Agreement. Lender’s delay or failure to accelerate this Note or to exercise any other available right or remedy shall not impair any such right or remedy, nor shall it be construed to be a forbearance or waiver.

8.         New Jersey Law.  This Note shall be governed by, and construed in accordance with, the laws of the State of New Jersey. Borrowers hereby consent to personal jurisdiction in the state of New Jersey with respect to any and all matters arising under or relating to this Note.

9         Partial Invalidity.  If any term or provision of this Note is at any time held to be invalid by any court of competent jurisdiction, the remaining terms and provisions of this Note shall not be affected and shall remain in full force and effect.

10.           Waiver to Jury Trial. No implied Waivers.  Borrowers hereby irrevocably waive presentment, demand, protest, notice of protest, diligence and all other demands and notices in connection with the payment and enforcement of this Note.  BORROWERS HEREBY IRREVOCABLY WAIVE ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.   By accepting this Note, Lender also waives its right to request a trial by jury.  Additionally, the failure by Lender to enforce against the Borrower any term or provision of this Agreement shall not be deemed to be a waiver of Lender’s right to enforce against Borrower such term or provision in the future.

11.           Interest Limits.   If any provision of this Note relating to the rate of interest violates any applicable law in effect at the time payment is due, the interest rate then in effect shall be automatically reduced to the maximum rate then permitted by law. If for any reason Lender should receive as interest an amount that would exceed the highest applicable lawful rate of interest, the amount that would exceed that highest lawful rate shall be deemed to be credited against principal and not to the payment of interest.

12.           Successors and Assigns.   This Note shall be binding on Borrowers and their respective heirs, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. The term “Lender” in this Note shall refer to Sovereign Bank or to any other future holder of this Note.

13.           Collections and Post-Judgment Interest.  If this Note is placed in the hands of an attorney for collection, by suit or otherwise, or to enforce its collection, or to protect the security for its payment, the Borrowers immediately and without demand shall pay all costs of collection and litigation, together with reasonable attorney’s fees.  In the event of a judgment on this note, the Borrowers agree to pay to the Lender on demand all costs and expenses incurred by the Lender in satisfying such judgment, including with limitation, all of Lender’s reasonable expenses and fees including (a) all reasonable fees and disbursements of Lender’s counsel and (b) all expenses of, or in anticipation of, litigation including fees and expenses of witnesses, experts, stenographers, title and lien searches, appraisals, taxes, insurance premiums and post-judgment interest (“Post-Judgment Expenses”).  It is expressly understood that such agreement by the Borrowers to pay the Post-Judgment Expenses of the Lender is absolute and unconditional and (i) shall survive (and not merge into) the entry of a judgment for amounts owing hereunder and (ii) shall not be limited regardless of whether this Note or other obligation of Borrowers or a Guarantor, as applicable, is secured or unsecured, and regardless of whether lender exercises any available rights or remedies against any collateral pledge as security for this note. Moreover, any such agreement by Borrowers shall not be limited or extinguished by merger of the Note, Mortgage or other loan documents into a judgment of foreclosure or other judgment of a court or competent jurisdiction and shall remain in full force and effect post judgment and shall continue tin full force and effect with regard to any subsequent proceedings in a court of competent jurisdiction including, but not limited to bankruptcy court proceedings and shall remain in full force and effect until such fees and costs are paid in full.  Such fees or costs shall be added to the Lender’s lien and shall survive the entry of a judgment of foreclosure or other judgment entered by a court of competent jurisdiction.

14         No oral modifications. This note may be amended, modified, waived or supplemented only by an instrument in writing executed by the Borrower and the Lender. Any other purported amendment, modification, waiver or supplement shall be deemed nullity.

ATTEST:
		Track Data Corporation
/s/ Laurel Louison	By:	/s/ Martin Kaye
Laurel Louison		Martin Kaye, Chief Executive Officer
ATTEST
		Silver Polish, LLC
/s/ Laurel Louison	By:	/s/ Barry Hertz
Laurel Louison		Barry Hertz, Individually
	By:	/s/Isaac Genuth,
		Isaac Genuth, Individually

EX-1

Exhibit 31

CERTIFICATION

I, Martin Kaye, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Track Data Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	8/14/09	/s/ Martin Kaye
		Martin Kaye, CEO and CFO
		(principal executive and financial officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Track Data Corporation on Form 10-Q for the six months ended June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Martin Kaye, Chief Executive Officer and Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Martin Kaye

Martin Kaye

Chief Executive Officer and Chief Financial Officer

August 14, 2009