Exhibit 10.1
NOTE AGREEMENT
between
GSRT, LLC, as Payee
and
REALEN-TURNBERRY/CHERRY HILL, LLC, as Issuer
Dated as of November 29, 2000
TABLE OF CONTENTS
Page
SECTION 1 - ISSUANCE OF NOTE 1
1.1 Authorization of Note. 1
1.2 Issuance of the Note 1
1.3 Definitions, etc. 1
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THE COMPANY 1
2.1 Organization and Authority. 1
2.2 Membership Interests; Operating Agreement. 2
2.3 Contravention; Authority. 2
2.4 Consents. 3
2.5 Compliance with Other Instruments, etc. 3
2.6 Compliance with Law, etc. 3
2.7 Litigation. 3
2.8 Broker's or Finder's Commissions. 4
2.9 Other Names. 4
2.10 Solvency. 4
2.11 Transactions with Affiliates. 4
SECTION 2A - REPRESENTATIONS AND WARRANTIES OF THE PAYEE 4
SECTION 3 - CONDITIONS TO OBLIGATION OF PAYEE TO ACCEPT THE NOTE 6
3.1 Opinion of Counsel of the Company. 6
3.2 Performance of Obligations. 6
3.3 Representations True; No Note Event of Default. 6
3.4 Consents and Approvals. 7
3.5 Operating Agreement. 7
3.6 Proceedings, Instruments, etc. 7
3.7 Closing Documents. 7
3.8 Legislation. 7
3.9 No Proceedings. 7
3.10 Agreement of Sale. 7
3.11 Security Agreement. 8
SECTION 4 - NEGATIVE COVENANTS 8
4.1 Covenants of the Company. 8
SECTION 5 - AFFIRMATIVE COVENANTS 9
5.1 Existence. 9
5.2 Maintenance of Properties and Business, etc. 9
5.3 Notice of Certain Events and Conditions. 10
5.4 Inspection. 11
5.5 Payment of Taxes and Claims. 11
5.6 Payment; Performance of Contracts. 12
5.7 Financial Statements. 12
5.8 Copies of Management Letters, etc. 12
5.9 Management. 13
5.10 Notice and Payment of Subject Costs and Expenses 13
SECTION 6 - NOTE CONVERSION OPTION 14
6.1 Grant of Note Conversion Option. 14
6.2 Access to Information 15
SECTION 7 - DEFINITIONS; MISCELLANEOUS 15
7.1 Definitions. 15
7.2 Directly or Indirectly. 22
7.3 Accounting Terms. 22
7.4 Governing Law. 22
7.5 Independence of Covenants. 22
7.6 Construction. 22
7.7 Notices. 23
7.8 Survival. 24
7.9 Successors and Assigns; Transfer of the Note. 24
7.10 Amendment and Waiver. 24
7.11 Severability. 25
7.12 Indemnification Against Claims, etc. 25
7.13 Counterparts. 26
7.14 Reproduction of Documents. 26
7.15 Captions. 26
7.16 No Agency. 26
7.17 Entire Agreement. 26
7.18 No Waiver. 27
7.19 Expenses. 27
7.20 Subordination; Estoppel. 26
7.21 Set-Off for Certain Excess Conveyance Obligation
Costs, Chiller Obligations and Excess
Environmental Costs 27
EXHIBITS
Exhibit A.........................................................Form of Note
Exhibit B...........................................Form of Security Agreement
SCHEDULES
Schedule 2.11.....................................Transactions with Affiliates
NOTE AGREEMENT
This NOTE AGREEMENT ("Agreement") is dated as of November 29, 2000, between
GSRT, LLC, a Delaware limited liability company (the "Payee"), and
Realen-Turnberry/Cherry Hill, LLC, a Delaware limited liability company, as
issuer (the "Company"). In consideration of the premises and mutual covenants
and agreements contained in this Agreement, the parties hereto agree as follows:
1. ISSUANCE OF NOTE
1.1 Authorization and Terms of Note.
The Company has duly authorized the execution, delivery, and issuance of a
promissory note having a principal amount of $10,000,000 and a maturity date of
the fifteenth (15th) anniversary of the date of issuance (which, together with
any note or notes, issued in substitution therefor or upon transfer to a Person
other than the Payee, is herein collectively referred to as the "Note"). The
Note shall have such terms, provisions and conditions as are set forth in the
form of the Note attached as Exhibit A hereto and made a part hereof.
1.2 Issuance of the Note.
(a) Consideration. On the terms and subject to the conditions hereof, the
Company agrees to issue and the Payee agrees to accept the Note in payment of
$10 million of the purchase price payable by the Company to the Payee pursuant
to that certain Agreement of Sale dated as of January 25, 2000, between the
Company and the Payee, as amended (the "Agreement of Sale").
(b) The Closing. The Note is to be issued and delivered at closing under
the Agreement of Sale (the date and time of such closing being hereinafter
called the "Closing Date").
1.3 Definitions, etc. Certain terms used in this Agreement and/or the Note
are defined in Section 7 hereof; references to a "Schedule" or "Exhibit" are,
unless otherwise specified, to the Schedules and Exhibits attached to this
Agreement. All of the Schedules and Exhibits attached to this Agreement are
hereby incorporated by reference herein in their entirety.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Payee as follows:
2.1 Organization and Authority. The Company:
a) is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware;
b) has all requisite power and authority to own and operate its properties,
to conduct its business as currently conducted and as currently proposed to be
conducted;
c) is duly qualified to do business as a foreign limited liability company
and is in good standing in New Jersey, if required by New Jersey law to be so
qualified; and
d) has no Subsidiaries, does not own, directly or indirectly, more than one
percent (1%) of the total outstanding capital stock or similar class of equity
securities of any Person, and does not, directly or indirectly, exercise control
or have the ability, directly or indirectly to exercise control, over any
Person.
2.2 Membership Interests; Operating Agreement. On the date hereof and on
the Closing Date, 100% of the outstanding membership interests of the Company
are owned, of record and beneficially, by Realen-Turnberry/Cherry Hill
Associates, a Delaware general partnership the sole general partners of which
are Realen Garden State Park Associates, L.P., a Pennsylvania limited
partnership, and Soffer/Cherry Hill Partners, L.P., a Florida limited
partnership. There are no Liens, encumbrances, subscriptions, options, warrants,
calls or other rights, agreements or commitments (other than the conversion
rights of Payee hereunder) relating to the purchase from or issuance by the
Company of any membership interests. No further approval or authority of the
Members will be required for the issuance and sale to the Payee of the
membership interests pursuant to the provisions of Section 6.1 of this
Agreement. The Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any outstanding
membership interests in the Company.
2.3 Contravention; Authority.
(a) Contravention. The execution, delivery and performance by the Company
of this Agreement, and the execution, delivery, offer, sale and issuance by the
Company of the Note and each of the other documents and agreements related to
any of the foregoing, the consummation by the Company of the transactions
contemplated hereby and thereby, and the incurrence by the Company of the debt
represented by the Note will not, with or without the giving of notice, the
passage of time or both, (i) result in any breach or violation of, or conflict
with, any statute, law (including any judicial decision), or any judgment, writ,
injunction, order, rule, award, decree or regulation of any court, governmental
authority or arbitration board or other tribunal; (ii) violate or result in any
breach of any of the provisions of, or constitute a default under, give rise to
a right of termination or cancellation of, or accelerate the performance
required by any terms of, as the case may be, any indenture, mortgage,
agreement, lease, license, note, permit, franchise, contract, deed of trust or
other instrument to which the Company is a party or by which the Company or any
of its properties may be bound, or result in the creation of any Lien upon any
of the properties or assets owned by the Company; or (iii) violate or conflict
with any provision of the certificate of formation or Operating Agreement of the
Company.
(b) Validity. The Company has all requisite power and authority to execute,
deliver and perform this Agreement, to execute, deliver, issue, sell and pay or
satisfy its obligations under the Note, and to consummate the transactions
contemplated hereunder. This Agreement has been and, upon consummation of the
Closing, the Note will have been, duly and validly authorized, executed and
delivered by the Company, and this Agreement constitutes and, upon consummation
of the Closing, the Note will constitute, legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Sole Member has all requisite power and authority to execute, deliver and
perform the Security Agreement, and to consummate the transactions contemplated
thereunder. The Security Agreement has been duly and validly authorized,
executed and delivered by the Sole Member, and constitutes the legal, valid and
binding obligation of the Sole Member, enforceable against the Sole Member in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and except as enforceability
may be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2.4 Consents. The execution, delivery and performance by the Company of
this Agreement and the consummation of the transactions contemplated hereby, and
the execution, delivery and issuance by the Company of the Note, are within its
powers, have been duly authorized by all necessary action on its part and do not
and will not require any consent or approval of any Person (other than consents
or approvals which have been obtained) or any authorization, consent or approval
by, or registration, qualification, declaration or filing with, or notice to any
federal, state, municipal or other governmental body, official, department,
commission, board, bureau, agency or instrumentality, domestic or foreign (other
than actions and filings that have been taken or made). The Company has obtained
all consents, approvals or authorizations of, made all declarations or filings
with, and given all notices to, all federal, state or local governmental or
public authorities or agencies which are necessary for the conduct by the
Company of its businesses as now conducted or as proposed to be conducted and
which the failure to so obtain, make or give might have a Material Adverse
Effect.
2.5 Compliance with Other Instruments, etc. The Company is not: (a) in
violation of any term of its Operating Agreement or certificate of formation; or
(b) in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in, and is not otherwise in
default under, (i) any evidence of Indebtedness for Money Borrowed or any other
evidence of Indebtedness or any instrument or agreement under or pursuant to
which any evidence of Indebtedness for Money Borrowed or other evidence of
Indebtedness has been issued, or (ii) any other material instrument or agreement
to which it is a party or by which it is bound or any of its properties is
affected.
2.6 Compliance with Law, etc. The Company is not in violation of laws,
ordinances or governmental rules and regulations to which it is subject, except
where such violations(s) would not have a Material Adverse Effect. The Company
is not in default with respect to any order, decision, finding, writ,
injunction, judgment or decree of any court or other governmental or public
body, department, official, authority or agency or arbitrator or arbitration
panel except where such default would not have a Material Adverse Effect.
2.7 Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the best knowledge of the Company, threatened,
against the Company which, individually or in the aggregate, might have a
Material Adverse Effect, or a material adverse effect on the ability of the
Company to consummate the transactions contemplated in this Agreement. The
Company is not subject to any outstanding order, writ, injunction or decree
which, insofar as can be reasonably foreseen, individually or in the aggregate,
might have a material adverse effect on the ability of the Company to consummate
the transactions
contemplated by this Agreement or that could question the validity or
enforceability of this Agreement or the Note.
2.8 Broker's or Finder's Commissions. No broker's or finder's fee or
similar fee or commission will be payable by the Company with respect to the
issuance and delivery of the Note or with respect to any of the transactions
contemplated hereby.
2.9 Other Names. The Company was formed as a Delaware limited liability
company under the name "Turnberry/Cherry Hill LLC" and, by a certificate of
amendment filed with the Delaware Secretary of State, has changed its name to
"Realen-Turnberry/Cherry Hill, LLC." Jeffrey Soffer originally was Managing
Member of the Company. The businesses conducted by the Company and the Sole
Member prior to the date hereof have not been conducted, during the past four
(4) months, under any names other than their present names or, in the case of
the Company, under its original name stated above.
2.10 Solvency. The Company is and, immediately after giving effect to the
issuance and delivery of the Note and the consummation of the other transactions
contemplated by this Agreement will be, Solvent.
For purposes of this Section 2.10, the term "Solvent" shall mean that:
(a) the assets of the Company, at a fair valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of the Company; and
(b) the Company does not have an unreasonably small capital with which to
engage in its current or anticipated business.
For purposes of this Section 2.10, the "fair valuation" of the assets of
the Company shall be determined on the basis of the amount which may be realized
within a reasonable time, either through collection or sale of such assets at
the regular market value (including the sale of the entire business of the
Company as a going concern), conceiving the latter as the amount which could be
obtained for the property in question within such period by a capable and
diligent businessman from an interested buyer who is willing to purchase under
ordinary selling conditions. For the purpose of this Section 2.10, contingent
and unmatured liabilities shall be computed at amounts that, in light of all
facts and circumstances existing at the time of determination thereof, can
reasonably be expected to become actual or matured liabilities.
2.11 Transactions with Affiliates. Except as disclosed in Schedule 2.11,
the Company is not a party to any contract, agreement or arrangement (whether
written or oral) with any Member of the Company (or any of their Material
Related Persons) or any of their respective Affiliates the terms of which are
not commercially reasonable or are less favorable to the Company than the
Company could obtain in a comparable arm's-length transaction with an unrelated
Person.
2A. REPRESENTATIONS AND WARRANTIES OF THE PAYEE
The Payee hereby represents and warrants to the Company as follows:
2A.1 Organization and Authority. The Payee:
a) is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware;
b) has all requisite power and authority to own and operate its properties,
to conduct its business as currently conducted and as currently proposed to be
conducted; and
c) is duly qualified to do business as a foreign limited liability company
and is in good standing in each jurisdiction in which the failure to so qualify
might have a Material Adverse Effect.
2A.2 Power and Authority. The Payee has all requisite power and authority
to enter into this Agreement, to consummate the transactions contemplated
hereunder, and to perform its obligations under this Agreement. This Agreement
and the transactions contemplated hereunder have been duly and validly
authorized by all necessary action on the part of the Payee. This Agreement has
been duly executed and delivered by the Payee and constitutes the legal, valid
and binding obligation of the Payee, enforceable against the Payee in accordance
with its terms except as enforceability may be limited by applicable bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2A.3 No Conflicts; Consents and Approvals. The execution, delivery and
performance of this Agreement by the Payee, and the consummation of the
transactions contemplated in this Agreement, will not:
a) violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with the giving of notice, the passage
of time or otherwise, would constitute a default) under, or entitle any Person
(with the giving of notice, the passage of time or otherwise) to terminate,
accelerate or call a default under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Payee under any of the terms, conditions or provisions of the certificate of
formation or operating agreement of the Payee, or any material note, bond,
mortgage, indenture, deed of trust, license, contract, undertaking, agreement,
lease or other instrument or obligation to which the Payee is a party and which
is material to the Payee, including but not limited to the Conveyance Obligation
and the Lease, as each such term is defined in the Agreement of Sale, and the
instruments and agreements governing, securing and evidencing the Indebtedness
of the Payee (or its Affiliates) to CSFB;
b) violate any material order, writ, injunction, decree, statute, rule or
regulation, applicable to the Payee or its properties or assets; or
c) require any action or consent or approval of, or review by, or
registration with any governmental entity.
2A.4 Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the best knowledge of the Payee, threatened,
against the Payee which, individually or in the aggregate, might
have a material adverse effect on the ability of the Payee to consummate the
transactions contemplated in this Agreement. The Payee is not subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen, individually or in the aggregate, might have a material
adverse effect on the ability of the Payee to consummate the transactions
contemplated by this Agreement.
2A.5 Investment Intent. The Payee is acquiring the Note solely for its own
account for investment and not with a view to, or for resale in connection with,
any distribution thereof in violation of the Securities Act or applicable state
securities laws. The Payee hereby acknowledges (i) that neither the Note nor the
membership interest in the Company issuable upon conversion of the Note as
provided for in Section 6.1 of this Agreement (the "Conversion LLC Interest")
(the Note and the Conversion LLC Interest being sometimes collectively referred
to herein as the "Securities") have been or will be registered under the
provisions of the Securities Act, and must be held indefinitely unless they are
subsequently registered thereunder or an exemption from such registration is
available; (ii) that any sale of the Securities made in reliance upon Rule 144
(as defined herein) or Rule 144A (as defined herein) can be made only in
accordance with the terms and conditions of such Rules and, further, that if
such Rules are not applicable, any resale of the Securities under circumstances
in which the seller, or the Person through whom the sale is made, may be deemed
to be an underwriter, as that term is used in the Securities Act, may require
compliance with some other exemption under the Securities Act (as defined
herein) or the rules and regulations of the Securities and Exchange Commission
(as defined herein), or other governmental authority substituted therefor; and
(iii) that the Company is under no obligation to register the Securities under
the Securities Act or to comply with the terms and conditions of any exemption
thereunder.
3. CONDITIONS TO OBLIGATION OF PAYEE TO ACCEPT THE NOTE
The Payee's obligation to accept the Note and to consummate the other
transactions contemplated by this Agreement on the Closing Date shall be subject
to the satisfaction (or waiver by the Payee, in its sole discretion), prior to
or on the Closing Date, of the following conditions:
3.1 Opinion of Counsel of the Company. The Payee shall have received an
opinion, dated the Closing Date, from outside counsel to the Company, in
connection with the transactions contemplated by this Agreement as to (i) the
Company's power and authority, (ii) due authorization, execution and delivery,
(iii) enforceability, (iv) usury and (v) non- contravention of laws, regulations
or (to such counsel's knowledge) orders, in form and substance reasonably
satisfactory to the Payee.
3.2 Performance of Obligations. The Company shall have performed and
complied with all of its agreements and conditions contained herein prior to or
on the Closing Date, and the Payee shall have received a certificate from the
Chief Financial Officer of the Company, dated the Closing Date, to such effect.
3.3 Representations True; No Note Event of Default. The representations and
warranties of the Company set forth in Section 2 of this Agreement shall be true
and correct in all respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of the
Closing Date. There shall not exist on the Closing Date any Note Event of
Default, assuming for this purpose that the Note had been
outstanding immediately prior to the Closing Date. The Payee shall have received
a certificate from the Chief Financial Officer of the Company, dated as of the
Closing Date, to the effect of each of the foregoing sentences, as applicable.
3.4 Consents and Approvals. The Company shall have obtained all necessary
consents, waivers, approvals and authorizations required to consummate the
transactions contemplated by this Agreement.
3.5 Operating Agreement. The Company's certificate of formation,
certificate of amendment thereof, and the Operating Agreement in the form
delivered to the Payee under Section 3.7 shall be in full force and effect
without further amendment or modification thereto, and the Payee shall have
received evidence of the filing of such certificate of formation and certificate
of amendment.
3.6 Proceedings, Instruments, etc. All proceedings and actions taken on or
prior to the Closing Date in connection with the transactions contemplated by
this Agreement and all instruments incident thereto shall be in form and
substance reasonably satisfactory to the Payee and its counsel, and the Payee
and its counsel shall have received copies of all documents that the Payee or
its counsel may request in connection with such proceedings, actions and
transactions (including, without limitation, copies of court documents,
certifications and evidence of the correctness of the representations and
warranties contained herein and certifications and evidence of the compliance
with the terms and the fulfillment of the conditions of this Agreement, in form
and substance reasonably satisfactory to the Payee and the Payee's counsel).
3.7 Closing Documents. The Payee and its counsel shall have received from
the Company and found satisfactory in form and substance, a certificate of an
authorized officer: (i) certifying complete and accurate copies of the
certificate of formation and all amendments thereto and of the Operating
Agreement in effect as of the Closing Date, (ii) certifying the approvals by the
Member and all of the partners of the Member of this Agreement, the Note and the
other agreements, documents and instruments contemplated by this Agreement or
the Note, and the transactions contemplated therein, respectively, and (iii)
certifying the incumbency and signatures of the officers, manager(s) or other
representatives of the Company, the Sole Member and the Sole Member's general
partners authorized to execute this Agreement, the Note and each of the
foregoing agreements, documents and instruments. The Payee and its counsel shall
have also received, and found satisfactory in form and substance, copies of such
other agreements, documents, certificates and instruments as the Payee and its
counsel may reasonably request in connection with the consummation of the
transactions contemplated by this Agreement and the Note.
3.8 Legislation. No federal, state, local or foreign law, rule or
regulation shall have been enacted which prohibits the consummation of the
transactions contemplated hereby.
3.9 No Proceedings. No order of any court or governmental authority shall
be in effect which restrains or prohibits the transactions contemplated hereby.
3.10 Agreement of Sale. The Agreement of Sale shall have been executed and
delivered by the Company and the Payee and the closing thereunder shall be
occurring concurrently with the closing hereunder.
3.11 Security Agreement. The Security Agreement (and UCC-1 financing
statements required thereby) shall have been executed and delivered by the
Company and the Sole Member in favor of the Payee on the Closing Date.
4. NEGATIVE COVENANTS
4.1 Covenants of the Company. The Company covenants and agrees that, for so
long as the Note is outstanding, the Company shall not, without the prior
written consent of the Payee, which consent will not be unreasonably withheld or
delayed:
(a) Related Transactions. Enter into any transaction (including, without
limitation, the purchase, sale or exchange of property, the rendering of any
services or the payment of management fees or other amounts) with any Member,
Material Related Person or employee of the Company or any Affiliate of any of
the foregoing, except that (i) the Company may retain the services of Turnberry,
Realen or an Affiliate thereof to manage the Company, including management of
all of the day-to-day business of the Company and all major management
decisions, (ii) the Company may retain the services of Turnberry, Realen or an
Affiliate thereof to provide pre-development, development, property management,
sales, marketing, construction management or other specific services required by
the Company provided that the entity so retained has the capability and
competency to provide such services and the compensation therefor does not
exceed that amount which the Company would otherwise pay for such services if it
were to hire a non-affiliated third party to perform them; and further provided
as to clauses (i) and (ii) that all compensation paid by the Company is solely
for services actually rendered to the Company and that such compensation will be
reduced by amounts (if any) paid or payable by the Company to any other Person
for providing the same or overlapping services to the Company, (iii) any Member,
Turnberry, Realen or Affiliate of any of them may lend money to the Company, as
reasonably necessary for the Company's business, at such interest rates and on
such other terms as are not less favorable to the Company than could be obtained
by the Company in an arm's length transaction with an unaffiliated lender,
provided that if and to the extent any Member, Turnberry, Realen or an Affiliate
of any of them advances money as a loan to the Company which, if advanced as a
capital contribution to the Company by a Member would (taking into account
Section 5.9 of this Agreement and Section 1.1(a)(iii) of the Note) be permitted
to earn a Section 1.1(a) Return (as defined in the Note), then the Company may
pay interest on such loan at a rate per annum equal to the Section 1.1(a) Return
which would have been and would continue to be permitted to be so paid had such
money been advanced as a capital contribution (and, in calculating such
interest, payments of principal of such loans and/or distributions to Members
shall be deemed to be applied to loans and/or capital contributions which bear
the highest interest rate or return before being applied to loans and/or capital
contributions which bear lower interest rates or returns), and (iv) the Company
may employ persons who are or were employed by Turnberry, Realen, or Affiliates
of Turnberry or Realen (including use of individuals who are shared employees of
the Company and Turnberry, Realen or their respective Affiliates at the same
time) provided that the compensation payable by the Company does not exceed that
amount which the
Company would otherwise pay for such services if it were to hire persons who had
no present or prior connection to Turnberry, Realen or any of their respective
Affiliates and provided that in cases where an employee performs services for
the benefit of the Company and Turnberry, Realen or any of their respective
Affiliates, a fair allocation of the compensation expenses shall be made between
such entities;
(b) Restricted Payments. Authorize or make any distribution to a Member or
any other Restricted Payment, whether or not to any Member, any Material Related
Person or to their respective Affiliates, or otherwise; provided, however, that
(i) distributions to Members may be made to the extent not prohibited by the
Note, if no Note Event of Default has occurred and is continuing and no event
which with the giving of notice or the passage of time, or both, would become an
Event of Default under Section 5.1(a) or 5.1(b) of the Note has occurred and is
continuing or would result upon such Restricted Payment, and (ii) compensation
may be paid as permitted by Section 4.1(a) above;
(c) Loan and Guarantees. Make any loan to any Person or make any Guaranty,
except for Guarantees issued in the ordinary course of the Company's business;
(d) Investments. Make any Investment in (i) any Person other than in the
ordinary course of business, except for Investments in obligations of or
guaranteed by the United States, short-term certificates of deposit or similar
instruments issued by commercial banks and other money market instruments, (ii)
any real property other than the Cherry Hill Property or (iii) any project,
development or venture other than development of the Cherry Hill Property and
any project, business or venture which is principally conducted at such real
property;
(e) Subsidiaries and Affiliates. Create any Subsidiary of the Company,
except if and so long as such Subsidiary is wholly owned by the Company and
engaged solely in the operation or development of the Premises (as defined in
the Agreement of Sale);
(f) Certain Decisions. Approve any decision or take any action other than
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Company; or
(g) Admission of Members. Admit any Person as a member in the Company
unless such Person shall have joined in and agreed to be bound as a member by
the Security Agreement.
5. AFFIRMATIVE COVENANTS
The Company covenants and agrees that, for so long as the Note is
outstanding, the Company shall:
5.1 Existence. Take and fulfill, or cause to be taken and fulfilled, all
actions and conditions necessary to preserve and keep in full force and effect
its existence, rights and privileges as a limited liability company, and will
not liquidate or dissolve and will take and fulfill, or cause to be taken and
fulfilled, all actions and conditions necessary to qualify, and to preserve and
keep in full force and effect its qualification, to do business in the
jurisdictions in which the conduct of its business or the ownership or leasing
of its properties requires such qualification unless the failure to be so
qualified would not have a Material Adverse Effect.
5.2 Maintenance of Properties and Business, etc.
(a) Maintain its property in such condition and make such reasonable and
necessary renewals, replacements, additions, betterments and improvements
thereof and thereto, so that the business carried on in connection therewith
shall be conducted in a commercially reasonable manner at all times except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect;
(b) Maintain or cause to be maintained, with financially sound insurers of
nationally recognized stature and responsibility, insurance with respect to its
properties and business of such a nature, with such terms and in such amounts,
as a prudent person would maintain with respect to similar properties and a
similar business, and, in any event, will maintain insurance on all its
properties of a character usually insured by Persons engaged in the same or a
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against and for by such Persons, and carry or
cause to be carried, with such insurers in customary amounts, such other
insurance, including public liability insurance, as is usually carried by
Persons engaged in the same or a similar business similarly situated;
(c) Keep proper books of record and accounts in which full, true and
correct entries in all material respects will be made of its dealings and
business transactions in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved;
(d) Set aside on its books from its earnings for each Fiscal Year, in
amounts deemed adequate in the reasonable opinion of the Company, all proper
accruals and reserves that, in accordance with generally accepted accounting
principles, should be set aside from such earnings in connection with its
business, including reserves for depreciation, obsolescence and/or amortization,
third party insurance payment and claims and accruals for taxes based on or
measured by income or profits and for all other taxes; and
(e) Use commercially reasonable efforts to obtain and maintain in full
force and effect, and without revision or amendment that might have a Material
Adverse Effect, all licenses, authorizations, building and other permits,
variances, certificates, consents, approvals, registrations, franchises,
permits, waivers, copyrights, trademarks, service marks, trade names and
patents, commitments, contracts, agreements and arrangements, and all rights
with respect to the foregoing, that are necessary to effectuate the Company's
business plan (as in effect from time to time).
5.3 Notice of Certain Events and Conditions. Give prompt written notice to
the Payee of (a) any event of default (or any event which with notice or lapse
of time or both would constitute an event of default) or default (i) under any
evidence of Indebtedness (including the Note) in an aggregate amount of $250,000
or more of the Company or (ii) under any indenture, mortgage or other agreement
or instrument relating to any such evidence of Indebtedness (including this
Agreement or the Note) or (iii) under any other agreement or instrument relating
to the membership interests in the Company, (b) any threatened or pending
action, suit or proceeding against the Company or its properties or assets which
might have a Material Adverse Effect or which in any manner questions the
validity of this Agreement, the Note, the Conversion Interest or
any other document or agreement relating to any of the foregoing, (c) any event
or condition which might have a Material Adverse Effect, (d) any default beyond
any applicable grace period under the terms and provisions of any material
contract to which the Company is a party or by which it or any of its properties
may be bound or affected, (e) any threatened or actual suspension, termination
or revocation of any material license, permit, authorization, franchise or other
certificate necessary to the proper conduct of the business of the Company, and
(f) any claim, action, suit or proceeding against the Company based upon or
arising out of either of the Leases, the Conveyance Obligation or the Asset
Purchase Agreement. The Company will provide the Payee with reasonably prompt
notice and with copies of all amendments and supplements to the Company's
Operating Agreement, and with such additional information with respect to all of
the foregoing as may be reasonably requested by the Payee.
5.4 Inspection. Permit the Payee, by its representatives, agents or
attorneys, to examine all books of account, records, reports and other papers of
the Company, to make copies and take extracts from any thereof, to discuss the
affairs, finances and accounts of the Company with its officers, managers,
Realen, Turnberry and independent accountants (and by this provision the Company
hereby authorizes Realen, Turnberry and said accountants to discuss with the
Payee the affairs, finances and accounts of the Company) and to visit and
inspect, at reasonable times during normal business hours, the properties of the
Company. Each such inspection shall be at the expense of the Payee making the
inspection, unless such inspection shall be made as a result of the occurrence
and during the continuance of any Note Event of Default (in which event, the
expense of such inspection shall be borne by the Company). Notwithstanding the
foregoing sentence, it is understood and agreed by the Company that all expenses
in connection with any such inspection incurred by the Company, any officers and
employees thereof and the attorneys and independent accountants therefor shall
be expenses payable by the Company and shall not be expenses of the Payee. The
Payee acknowledges that the Payee will hold, and will cause its counsel and
agents to hold, in confidence and not disclose any confidential data or
information (other than information that is now or hereafter becomes in the
public domain other than through the actions of any holder or their agents or
that was previously in the Payee's possession) made available to the Payee in
connection with this Agreement using the same standard of care to protect such
confidential data or information as is used to protect the Payee's confidential
information.
5.5 Payment of Taxes and Claims. Pay and discharge promptly when due:
(a) all taxes, assessments, levies, fees, water and sewer rents and charges
and all other governmental charges and levies imposed upon it, its income or
profits or any of its properties, before the imposition of any interest or
penalty; and
(b) all claims of materialmen, mechanics, carriers, warehousemen, landlords
and other similar Persons for labor, materials, supplies and rentals that, if
unpaid, might by law become a Lien upon any of its property which could
reasonably be expected in the judgment of a prudent business person to have a
Material Adverse Effect;
provided, however, that none of the foregoing above need be paid while the same
is being contested in good faith by appropriate proceedings diligently conducted
so long as adequate reserves shall have been established and maintained in
accordance with generally accepted accounting principles with respect
thereto, title of the Company to the particular property shall not be divested
thereby and the right of the Company to use the particular property shall not be
materially adversely affected thereby. The Company will file all federal, state
and local tax returns and all other tax reports as required by law.
5.6 Payment; Performance of Contracts. Duly and punctually pay or cause to
be paid the principal of, and interest on, the Note and will duly and punctually
perform or cause to be performed all actions to be done or performed under this
Agreement, the Note, and the Security Agreement.
5.7 Financial Statements.
(a) Furnish to the Payee, as soon as available, but in any event within
forty-five (45) days after the close of each of the first three (3) quarterly
accounting periods in each Fiscal Year, (i) an unaudited balance sheet of the
Company prepared in accordance with generally accepted accounting principles as
at the end of such quarter, (ii) an unaudited statement of income of the Company
prepared in accordance with generally accepted accounting principles for that
quarter and for the portion of the Fiscal Year ending with such quarter, (iii)
an unaudited statement of members' equity of the Company prepared in accordance
with generally accepted accounting principles for that quarter, and (iv) an
unaudited statement of cash flows of the Company prepared in accordance with
generally accepted accounting principles; all such statements provided for by
clauses (i), (ii), (iii) and (iv) shall be in reasonable detail and shall set
forth comparable figures for the same accounting period in the preceding Fiscal
Year.
(b) Furnish to the Payee, as soon as available, but in any event within
ninety (90) days after the close of each Fiscal Year of the Company, a balance
sheet of the Company prepared in accordance with generally accepted accounting
principles as at the end of such year, and statements of income, retained
earnings and cash flows of the Company prepared in accordance with generally
accepted accounting principles, reflecting their operations during said year.
All such financial statements shall be in reasonable detail and shall set forth
comparable figures for the preceding Fiscal Year, and shall be reviewed (or
audited) by the Company's independent public accountants.
(c) Deliver to the Payee, at the time of the delivery to the Payee of the
reports and financial statements referred to in paragraphs (a) and (b) above, a
certificate signed by the Chief Financial Officer of the Company or of its
manager (or a general partner of such manager), (i) certifying that such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied (except for changes in application in
which the accountants concur), and present fairly the financial condition of the
Company as of the end of such periods and the results of its operations for the
periods then ended, subject, in the case of interim financial statements, to
year-end adjustments; and (ii) setting forth whether there existed as of the
date of such financial statements and whether, to the best of his or her
knowledge, there exists on the date of his or her certificate or existed at any
time during the period covered by such financial statements, any Note Event of
Default , and, if any such Note Event of Default exists on the date of his or
her certificate or existed during such period, specifying the nature and period
of existence thereof and the action the Company is taking, has taken or proposes
to take with respect thereto.
5.8 Copies of Management Letters, etc. Furnish to the Payee, promptly after
the receipt thereof by the Company, copies of all management letters
or similar documents submitted to the Company by independent certified public
accountants in connection with each annual and any interim audit of the accounts
of the Company.
5.9 Management. Be managed by Realen-Turnberry/Cherry Hill Associates, as
sole member of the Company, or by Turnberry, Realen or an Affiliate thereof
under the direction, control and supervision of such sole member, (i) in a
commercially reasonable manner, with the same skill and care as a reasonably
prudent person would exercise under like circumstances, and (ii) in good faith
with undivided loyalty to the Company, all consistent with such member's duties
to the Company and, if applicable, such other Person's duties to the Company,
under the Delaware Limited Liability Company Act (regardless of any other
standard set forth in the Operating Agreement).
5.10 Notice and Payment of Subject Costs and Expenses.
(a) Notify the Payee in writing when it incurs more than $800,000 and again
when it incurs more than $1,000,000 of aggregate costs and expenses, on a
cumulative basis from inception of the Company, of or for the following: (A)
Chiller Obligations; (B) Excess Conveyance Obligation Costs; (C) Excess
Environmental Costs; (D) losses, damages, costs and expenses (including
reasonable attorneys' fees) from claims against the Company arising out of any
breach or claimed breach by the Payee of (x) any of Leases or (y) the Asset
Purchase Agreement insofar as such breach relates to the Leases, the Premises,
or any property (real, personal or mixed) leased by GSRT, Inc. to Tenant; or (E)
losses, damages, costs and expenses (including reasonable attorneys' fees) from
any representation or warranty made by the Payee in the Agreement of Sale or any
officer's certificate delivered by the Payee at closing under the Agreement of
Sale being untrue or incorrect as of the Closing Date. Amounts actually paid by
the Company towards the items set forth in clauses (A) through (E) above,
excluding any portions thereof which shall not have been commercially reasonable
for the Company to incur, are herein collectively called "Subject Costs and
Expenses"). The notice required hereby shall be given by the Company reasonably
promptly after it incurs obligations or liabilities which, when paid, would
cause aggregate Subject Costs and Expenses to reach $800,001 and again
reasonably promptly after it incurs obligations or liabilities which, when paid,
would cause aggregate Subject Costs and Expenses to reach $1,000,001. Before and
after aggregate Subject Costs and Expenses reach $800,001, the Payee shall have
the right to receive information from time to time reasonably requested by the
Payee, to inspect and copy records and documents of the Company, and to discuss
the Company's affairs with management and with representatives of and
independent contractors retained by the Company whose activities are relevant to
the Subject Costs and Expenses or the accounting therefor, for the purpose of
keeping advised as to the affairs of the Company which could give rise to, or
have given rise to, the Company's incurring any Subject Costs and Expenses as
well as the Company's funding (by borrowing or by obtaining capital
contributions from Members) of payment thereof. Before discussing affairs of the
Company with any such persons other than management of the Company, the Payee
will provide to the Company advance notice of and an opportunity to participate
in such discussion. The Payee shall maintain the confidentiality of all
information received by it under this Section 5.10 and Section 6.2 below, except
as necessary to enforce its rights hereunder or to comply with requirements of
law or court order.
(b) Notify the Payee in writing when aggregate Subject Costs and Expenses
at any time paid or to be paid by the Company, on a cumulative basis from
inception of the Company, first
equal or exceed $6,000,000. Once aggregate Subject Costs and Expenses paid or to
be paid, on a cumulative basis, first equal or exceed $6,000,000, the Payee will
have the right to join with the Members of the Company in making loans to the
Company to fund payment of such excess Subject Costs and Expenses over
$6,000,000 and all Subject Costs and Expenses thereafter to be paid by the
Company. The Payee shall have the right, exercisable at its option, to
participate in such loans by Members to the extent of one-third (1/3) of the
principal amount thereof, and, if the Members of the Company fund any of such
Subject Costs and Expenses by making capital contributions (in lieu of loans) to
the Company, the Payee nevertheless may elect to fund one-third of the Subject
Costs and Expenses by making loans to the Company. All such loans by the Payee
will bear interest at the rate of 33-1/3% per annum and the interest and
principal thereof will be paid to the Payee ratably as and when the Company pays
interest and principal on loans by Members or pays distributions and the
"Section 1.1(a) Return" (as defined in the Note) on distributions to Members.
Loans by the Payee under this Section 5.10(b) will not be evidenced by the Note
and, instead, the Company will issue such evidence of indebtedness as the Payee
reasonably may request in order to evidence the Company's indebtedness to the
Payee in respect of such loans.
6. NOTE CONVERSION OPTION
6.1 Grant of Note Conversion Option. (a) The Company hereby grants to the
Payee an option pursuant to which the Payee will have the right, but not the
obligation, to elect to convert the principal amount of the Note then
outstanding into the Conversion LLC Interest representing 33-1/3% of the then
outstanding membership interests in the Company, exercisable, by written notice
to the Company in which the Payee joins as a member in, and agrees to be bound
as a member by, the Operating Agreement, at the following times: (i) at any time
during the 180-day period immediately preceding the Maturity Date (as defined in
the Note), provided, however, that if the amount of Shared Appreciation (as
defined in the Note) shall not have been finally determined within 30 days prior
to such Maturity Date, then the foregoing 180-day period will be extended until
30 days after the date on which the amount of Shared Appreciation is finally
determined in accordance with the Note; (ii) at any time after any claim shall
have been made in writing by the Company, any successor thereto, any Member or
any other person claiming through the Company, or by any governmental agency or
official purporting to have jurisdiction, that any amount of interest or other
sum payable under the Note exceeds any maximum rate or charge permitted by
applicable law, or is civilly or criminally usurious, until such claim is
withdrawn or dismissed; and (iii) at any time during the existence of a Note
Event of Default described in Section 5.1(e) or (f) of the Note or any one or
more Note Events of Default described in Section 5.1(a), (b) or (c) wherein the
amount involved, individually or in the aggregate, exceeds $100,000. Upon
exercise of such option to convert, the Note automatically shall be deemed
converted into a membership interest in the Company having (A) all rights and
obligations incident to a 33-1/3% equity interest in the Company, (B) an initial
capital account in the Company equal to 33-1/3% of the total capital accounts of
all Members (including assignees whether or not the assignees are admitted as
Members) of the Company, including the Payee as of the time immediately after
the Payee shall have become a Member, and (C) the same proportional voting
rights and other rights as any other member pursuant to the Operating Agreement
(in addition to its rights hereunder), without further action by any Person. The
Company promptly shall confirm, in writing, the issuance of the Conversion LLC
Interest as aforesaid by written notice to the Payee. Promptly upon the Payee's
receipt of such written confirmation, the Payee shall mark the Note "canceled"
and return it to the Company, except that if any amounts were due and payable
under Section
1.1(a)(ii) or Section 1.1(b) of the Note prior to conversion, such amount shall
continue to be due and payable notwithstanding any such conversion and the Payee
shall have the right to retain and enforce the Note until all amounts owing
under the Note immediately prior to the conversion shall have been fully paid
and satisfied.
6.2 Access to Information. In order to facilitate the exercise of the
Conversion Option by the Payee, the Company shall provide copies of the
Operating Agreement and all amendments thereto to the Payee upon the Payee's
request from time to time, and the Company and the Members shall permit the
Payee, its Affiliates and their representatives to inspect, during the Company's
normal business hours and with two (2) Business Days' notice, the books and
records of the Company and of the Members (with respect to the Members' books
and records, only to the extent that such information relates to the Company),
and to meet with, ask questions of and receive answers from the management and
independent accountants of the Company.
7. DEFINITIONS; MISCELLANEOUS
7.1 Definitions. Except as the context shall otherwise require, the
following terms shall have the following meanings for all purposes of this
Agreement (the definitions to be applicable to both the singular and the plural
form of the terms defined, where either such form is used in this Agreement):
"Affiliate," with respect to any Person, shall mean any other Person who
(a) is a director, officer, manager, member, or employee of such Person or of
any Affiliate of such Person, (b) directly or indirectly controls or controlled
by or under direct or indirect common control with such Person, (c) beneficially
owns or holds, directly or indirectly, five percent (5%) or more of any class of
voting securities of such Person or any entity of which such Person beneficially
owns or holds, in the aggregate, directly or indirectly, 5% or more of any class
of voting securities or (d) has the power to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that neither the Payee
nor any Person directly or indirectly controlled by the Payee shall be deemed to
be an Affiliate of the Company solely by reason of ownership of or the exercise
of rights resulting from the ownership of any of the Securities or other
securities issued in exchange therefor, or by reason of having the benefits of
any agreements or covenants of the Company contained in this Agreement. The term
"Affiliate," when used herein without reference to any Person, shall mean an
Affiliate of the Company, Turnberry or Realen, and shall include, without
limitation (with respect to the Company), any subsequent or additional Members
and any Material Related Person.
"Agreement of Sale" shall mean the Agreement of Sale between the Company
and Payee dated as of January 25, 2000, as amended or supplemented from time to
time.
"Asset Purchase Agreement" means the Asset Purchase Agreement dated July 2,
1998, among Greenwood New Jersey, Inc., GSRT, Inc., Freehold Raceway
Association, Atlantic City Harness, Inc., Circa 1850, Inc., and International
Thoroughbred Breeders, Inc., as amended from time to time (including but not
limited to the First Amendment to Asset Purchase Agreement dated as of January
28, 1999, among the parties to the aforesaid Asset Purchase Agreement and Penn
National Gaming, Inc.).
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in Philadelphia, Pennsylvania.
"Cherry Hill Property" means the real property located in Cherry Hill, New
Jersey, conveyed or to be conveyed by the Payee to the Company pursuant to the
Agreement of Sale.
"Chiller Obligations" shall mean that certain indebtedness of GSRT, Inc. to
General Electric Capital Corporation evidenced by GSRT, Inc.'s note dated July
23, 1996 in the original principal amount of $827,890.54 and the obligation of
GSRT, Inc. contained in Section 6 of the Lease Summary dated January 28, 1999,
between GSRT, Inc. and Tenant to reimburse Tenant for Aggregate Chiller Payments
(as defined therein) made by Tenant and to pay interest thereon.
"Closing Date" shall have the meaning set forth in Section 1.2(b) hereof.
"Company" shall have the meaning set forth in the preamble hereto.
"Conversion Option" shall mean, the right to convert the Note into a
membership interest in, and become a member of, the Company, as more fully
described in Section 6.1 of this Agreement.
"Conversion LLC Interest" shall have the meaning set forth in Section 2A.5
of this Agreement.
"Conveyance Obligation" has the meaning given thereto in the Agreement of
Sale.
"Distributable Cash" shall have the meaning given thereto in the Note.
"Excess Conveyance Obligation Costs" shall mean the aggregate costs
incurred by the Company in excess of $30,000 for completing the subdivision,
preparing any documents and satisfying any other obligations required to convey
to Tenant the ten acre parcel referred to in that certain Memorandum of
Conveyance Obligation dated January 28, 1999 between GSRT, Inc. and Tenant.
"Excess Environmental Costs" shall mean the following costs and expenses:
The Extension Fee in the amount of $146,680 paid by or for the account of
Jeffrey Soffer to Credit Suisse First Boston Mortgage Capital LLC ("CSFB")
pursuant to paragraph 2(c) of that certain letter agreement dated as of August
31, 2000, among CSFB, REPG Garden State Corporation, the Payee, entities which
are Affiliates of the Payee, and Jeffrey Soffer; the amount of premium paid on
or before the date hereof by the Company for insurance against environmental
claims against it or its lenders; and costs and expenses of investigating after
August 23, 2000, and of remediating environmental conditions now existing on, in
or under the Premises which the Company is required by law or by governmental
agency, authority or order of any court to so remediate, including but not
limited to those certain environmental conditions described under the caption
"Conclusions" in that certain draft letter dated August 23, 2000, from Marathon
Engineering & Environmental Services, Inc. to Buyer (the "Draft Report")
summarizing the results of the Phase I and Phase II environmental investigations
of the Premises, and also including but not limited to costs of further
investigations conducted after August 23, 2000 and referred to in such
Conclusions, and costs of removal and/or other remediation of contaminated soil
as referred to in such
Conclusions, costs of clean up of soil and groundwater as referred to in such
Conclusions and removal or closure of underground tanks as referred to in such
Conclusions, excluding however, (i) any costs or expenses of investigating or
remediating any condition that would be incurred in the ordinary course of the
development of the Premises, (ii) any costs or expenses of investigating for any
environmental condition which is not referred to in above-mentioned Conclusions
and is either required by a third party buyer or lender or is undertaken without
reasonable cause to believe that such environmental condition exists, and (iii)
any portion of costs or expenses the incurring of which is not commercially
reasonable. By way of example with respect to clause (i), costs of removal of an
underground tank will not be included in Excess Environmental Costs if such tank
would be removed in the ordinary course of the development of the Premises for
the use(s) intended by the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Fiscal Year" shall mean a fiscal year of the Company, which shall end on
December 31st.
"GSRT, Inc." shall mean Garden State Race Track, Inc., a New Jersey
corporation.
The phrase "generally accepted accounting principles" shall mean, as of the
date of any determination with respect thereto, generally accepted accounting
principles as used by the Financial Accounting Standards Board and/or the
American Institute of Certified Public Accountants, consistently applied and
maintained throughout the periods indicated.
"Guaranty" or "Guarantees," with respect to any Person, shall mean all
obligations of such Person guarantying or, in effect, guarantying any
Indebtedness, dividend or other obligation or investment of any other Person in
any manner, whether directly or indirectly, including obligations incurred
through an agreement, contingent or otherwise, by such Person (a) to purchase
such Indebtedness, obligation or investment or any property or assets
constituting security therefor; (b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness, obligation or investment or (ii) to
maintain working capital or equity capital, or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness, obligation or
investment; (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, obligation or investment of
the ability of the primary obligor to make payment of such Indebtedness,
obligation or investment; or (d) otherwise to assure the owner of such
Indebtedness, obligation or investment against loss in respect thereof.
The words "hereof", "herein", "hereunder" and other words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular Section or other subdivision.
The word "holder," with respect to the Note, shall mean the Person(s) in
whose name such Note shall be registered with the Company.
"Immediate Family" shall include, with respect to any Material Related
Person, a Person's spouse, parents, children, siblings, mother and
father-in-law, sons and daughters-in-law and brothers and sisters-in-law.
"Indebtedness", with respect to any Person, shall mean all items (other
than capital stock, capital surplus, retained earnings and deferred credits),
which in accordance with generally accepted accounting principles would be
included in determining total liabilities of such Person as shown on the
liability side of a balance sheet of such Person as at the date on which
Indebtedness is to be determined. "Indebtedness" shall also include, whether or
not so reflected, (a) indebtedness, obligations and liabilities secured by any
Lien on property of such Person whether or not the indebtedness secured thereby
shall have been assumed by such Person, (b) all obligations in respect of
capital leases and (c) all Guaranties of any of the above. Notwithstanding the
foregoing, in determining the indebtedness of the Company, there shall be
included all indebtedness of the Company of the character referred to in the
foregoing clauses (a), (b) and (c) deemed to be extinguished under generally
accepted accounting principles but for which such Person remains legally liable.
"Indebtedness for Money Borrowed", with respect to any Person, shall mean
and include the aggregate amount of, without duplication: (a) all obligations of
such Person for borrowed money; (b) all obligations of such Person evidenced by
bonds, debentures, notes (except the Note), or other similar instruments, and
all reimbursement or other obligations of such Person in respect of letters of
credit (except letters of credit or bonds that have not been presented for
payment and which have been issued to secure the obligations of the Company to
any municipality to construct, develop or complete any on-site or off-site
improvements, or to secure a contribution to a municipality for such
improvements which contribution is required of the Company in connection with
the development or the final approval of the project being developed by the
Company), banker's acceptances, interest rate swaps or other financial products;
(c) all obligations of such Person to pay the deferred purchase price of assets
or services, exclusive of trade payables which, by their terms, are due and
payable within ninety (90) calendar days of the creation thereof; (d) all
capitalized lease obligations of such Person; (e) all obligations or liabilities
of others secured by a Lien on any asset owned by such Person, irrespective of
whether such obligation or liability is assumed, to the extent of such
obligation or liability; and (f) any guarantees of such Person of any
Indebtedness for Money Borrowed of another Person.
"Investment" shall mean as applied to any Person: (a) any direct or
indirect purchase or other acquisition by such Person of capital stock or other
securities of or any limited liability company interest, partnership interest or
joint venture interest in any other Person, or (b) any direct or indirect loan
(including, without limitation, any Guaranty), advance or capital contribution
by such Person to any other Person, including all Indebtedness and accounts
receivable from such other Person which are not current assets or did not arise
from sales to such other Person in the ordinary course of business, and (c) any
direct or indirect purchase or other acquisition by such Person of any assets
other than assets used in the ordinary course of business.
"Leases" shall have the meaning given thereto in the Agreement of Sale.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute or contract, whether or not
such interest shall be recorded or perfected and whether or not such interest
shall be contingent upon the occurrence of some future event or events or the
existence of some future circumstance or circumstances, and including the lien
or security interest arising from a mortgage, security agreement, encumbrance,
pledge, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment or bailment for security purposes. "Lien"
shall also include, without limitation, reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale agreement
or other arrangement (including a leasing arrangement) pursuant to which title
to the property shall have been retained by or vested in some other Person for
security purposes.
"Material Adverse Effect" shall mean a material adverse effect on the
business, results of operations, properties or condition (financial or
otherwise) of the Company.
"Material Related Person" shall mean Turnberry, Realen, and their
respective Affiliates.
"Member" shall mean each member (or similar equity owner) of the Company,
including any additional or successor members of the Company who may be admitted
after the Closing Date as members of the Company pursuant to the Operating
Agreement (and applicable law) and in a manner not violative of the terms of
this Agreement. For the purposes of Sections 4, 5 and 6 of this Agreement, the
term "Member" shall include all Material Related Persons.
"Note" shall mean the promissory note to be issued to the Payee by the
Company as more fully described in Section 1.1(a) hereof.
"Note Event of Default" shall mean an Event of Default as defined in and
under the Note.
"Operating Agreement" shall mean the limited liability company or operating
agreement entered into among the Members of the Company relating to the
existence, governance and operation of the Company, as amended from time to
time.
"Payee" shall mean GSRT, LLC or any subsequent holder of the Note, and
their respective successors and permitted assigns.
"Permitted Liens" shall mean the following:
a) liens for taxes, assessments, levies or other charges not otherwise
required to be paid pursuant to the provisions of Section 5.5 hereof;
b) liens and the amount thereof in connection with workmen's compensation,
unemployment insurance or other social security obligations;
c) pledges or deposits made with third parties to secure obligations of the
Company (including customer deposits) in the ordinary course of business;
d) statutory liens, including without limitation liens of mechanics,
workmen and contractors, provided that the liens permitted by this clause (iv)
either have not been filed or, if such liens have been filed, either (x) a stay
of enforcement thereof has been obtained, or (y) such liens have been
satisfied of record within thirty (30) days after the date of filing thereof;
and
e) reservations, exceptions, building or use restrictions, encroachments,
easements, rights-of-way, variances and other similar title exceptions affecting
the real property owned by the Company, provided that such title exceptions
existed as of the consummation of closing under the Agreement of Sale or do not
materially interfere with the Company's use or proposed use of such property.
"Person" shall mean any individual, corporation, partnership, entity, joint
venture, association, joint stock company, trust, unincorporated organization or
government (or any agency or political subdivision thereof).
"Premises" shall mean that certain real property located in Cherry Hill,
Camden County, New Jersey, with buildings thereon and improvements thereto,
which is purchased by the Company from the Payee on the date of this Note
Agreement
"Realen" shall mean Realen Garden State Park Associates, L.P., its
successors and assigns.
"Qualified Institutional Buyer" shall have the meaning set forth in Rule
144A.
"Restricted Payment" shall mean (a) any distribution, whether in cash or
property, direct or indirect, in respect of membership interests (or similar
equity interests) of the Company, or (b) any purchase, redemption, retirement or
other acquisition of membership interests (or similar equity interests) of the
Company now or hereafter outstanding, or of any warrants, rights or options
evidencing a right to purchase or acquire any such membership interests (or
similar equity interests); (c) any optional redemption, retirement, purchase or
other acquisition of any Indebtedness for Money Borrowed of the Company that, by
its terms, is subordinate to any other Indebtedness for Money Borrowed of the
Company and (d) any other payment to a Member, a Material Related Person or any
Affiliate of the Company, a Member or a Material Related Person.
"Rule 144" shall mean Rule 144 under the Securities Act, as presently in
effect and as hereafter amended from time to time, or any superseding or
substituted rule adopted by the SEC from time to time.
"Rule 144A" shall mean Rule 144A under the Securities Act, as presently in
effect and as hereafter amended from time to time, or any superseding or
substituted rule adopted by the SEC from time to time.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities" shall have the meaning set forth in Section 2A.5 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder (including,
without limitation, Rule 144 and Rule 144A).
"Security Agreement" shall mean that certain security agreement, the form
of which is attached hereto as Exhibit B, to be dated as of the Closing Date,
executed and delivered by each of the Company, its Sole Member and all partners
of the Sole Member in favor of the Payee, pursuant to which the Payee will be
granted a security interest in the Sole Member's rights to receive
distributions, in order to secure the Company's obligations under the Note.
"Shared Appreciation" shall have the meaning set forth in Section 1.2 of
the Note.
"Sole Member" means Realen-Turnberry/Cherry Hill Associates, a Delaware
general partnership which at the date hereof is the sole member of the Company.
"Subject Costs and Expenses" has the meaning given thereto in Section 5.10
hereof.
"Subsidiary", with respect to any Person, shall mean any corporation 50% of
the outstanding shares of voting stock or similar interest of which are owned,
directly or indirectly, by such Person. "Subsidiary", when used herein without
reference to any particular Person, shall mean a Subsidiary of the Company.
"Taxes" means any income taxes, franchise taxes, gross receipts taxes,
transfer taxes, real estate transfer taxes, value added taxes, sales taxes, use
taxes, wage and/or employment taxes, excise taxes, real and personal property
taxes, taxes measured on or imposed by capital, levies, imposts, duties
licensing fee, registration fees, withholding taxes, estimate taxes, and charges
of any nature whatsoever relating to any of the foregoing, including without
limitation, interest, penalties, fines, additions to tax, assessments and
deficiencies related thereto.
"Tenant" means GS Park Racing, L.P., a New Jersey limited partnership.
The phrase "this Agreement" shall mean this Note Agreement (including the
annexed exhibits and schedules, and all other collateral agreements, documents,
instruments and certificates executed and/or delivered in connection herewith),
as it may from time to time be amended, supplemented or modified in accordance
with its terms.
"Turnberry" shall mean Soffer/Cherry Hill Partners, L.P., a Florida limited
partnership.
7.2 Directly or Indirectly. Any provision in this Agreement referring to
action to be taken by any Person, or that such Person is prohibited from taking,
shall be applicable whether such action is taken directly or indirectly by such
Person.
7.3 Accounting Terms. All accounting terms used herein that are not
otherwise expressly defined shall have the respective meanings given to them in
accordance with generally accepted accounting principles at the particular time.
7.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
conflicts of laws principles of such state. No waiver of any defenses, rights or
actions is to be implied by any provision hereof. If any action or proceeding
shall be brought by the Payee in order to enforce any right or remedy under this
Agreement or under any Securities, the Company hereby consents and will submit
to the jurisdiction of any of the courts of the Commonwealth of Pennsylvania or
Delaware and of any federal court located therein and the Payee may bring suit
against the Company in any of such courts. The Company also hereby waives the
right to bring any counterclaims against the Payee (but specifically reserves
the right to assert any defenses and affirmative defenses against the Payee and
compulsory counterclaims) in any suit or action in any court of law or equity in
which the Payee and the Company are adverse parties. The Company waives any
right to a jury trial in any action with respect to this Agreement, the
Securities, and any other document, agreement or instrument delivered in
connection herewith or therewith.
7.5 Independence of Covenants. Each covenant made by the Company herein is
independent of each other covenant so made. The fact that the operation of any
such covenant permits a particular action to be taken or condition to exist does
not mean that such action or condition is not prohibited, restricted or
conditioned by the operation of the provisions of any other covenant herein.
7.6 Construction. This Agreement is the result of arms-length negotiations
between the parties hereto and has been prepared jointly by the parties. In
applying and interpreting the provisions of this Agreement, there shall be no
presumption that the Agreement was prepared by any one party or that the
Agreement shall be construed in favor of or against any one party.
7.7 Notices. All notices, advices and communications to be given or
otherwise made to any party to this Agreement shall be deemed given upon receipt
thereof if contained in a written instrument and delivered in person, sent by
overnight courier, sent by first class registered or certified mail, postage
prepaid and return receipt requested, or sent by facsimile telecopier, confirmed
by mail, addressed to such party at the address or telecopier number set forth
below or at such other address or telecopier number as may hereafter be
designated in writing by the addressee to the addressor listing all parties:
(a) if to the Payee: GSRT, LLC
Garden State Park
Route 70 and Haddonfield Road
Cherry Hill, NJ 08034
Attention: Mr. Francis W. Murray
Fax No. (856) 488-7585
with a copy to: David S. Petkun, Esquire
Cozen and O'Connor
1900 Market Street
Philadelphia, PA 19103
Attention: David S. Petkun, Esq.;
Fax No.: (215) 665-2013
(b) if any other holder of a Security: to it at its address listed on the
books for the registration and registration of transfer of the Note to be
maintained by the Company, and
(c) if to the Company: Realen-Turnberry/Cherry
Hill, LLC c/o Realen Garden State Park
Associates
1000 Chesterbrook Blvd., Suite 100
Berwyn, PA 19312
Attention: Mr. Dennis Maloomian, and
c/o Soffer/Cherry Hill Partners, Limited
Partnership
19501 Biscayne Boulevard, Suite 500
Aventura, FL 33180
Attention: Mr. Jeffrey Soffer
with copies to: Soffer/Cherry Hill, LLC
19501 Biscayne Boulevard, Suite 400
Aventura, FL 33180
Attention: Legal Department
Fax No.: (305) 933-5535, and
Jack D. Weiner, Esquire
Askot & Weiner
The Belgravia
1811 Chestnut Street, Suite 701
Philadelphia, PA 19103
Fax No.: (215) 972-0838
Whenever pursuant to this Agreement, notice is required to be given to any or
all of the holders of the Note, such requirement shall be satisfied if such
notice is given in the manner prescribed to the Persons last known by the
Company to be Noteholders, entitled to such notice, at the addresses of such
Persons last known to the Company.
7.8 Survival. All representations, warranties and covenants made by the
Company in this Agreement or any certificate or other instrument delivered to
the Payee pursuant to this Agreement shall be considered to have been relied
upon by the Payee and shall survive the closing, the delivery to the Payee of
the Note, any payment or prepayment of the Note, regardless of any investigation
made by the Payee or on the Payee's behalf.
7.9 Successors and Assigns; Transfer of the Note. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns, and
shall inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns permitted hereunder.
7.10 Amendment and Waiver.
(a) The provisions of this Agreement and, when executed, the Note, may be
amended or supplemented, and the observance of any term hereof or thereof may be
waived, with the written consent of the Company and (i) on or prior to the
Closing Date, the Payee, and (ii) after the Closing Date, the holders of eighty
percent (80%) of the aggregate outstanding principal amount of the Note(s);
provided, however, that no such amendment, supplement or waiver shall, without
the written consent of all of the holders of the Note(s) then outstanding, (x)
change, with respect to any Note, the amount or time of any required payment of
principal or premium or the rate, amount or time of payment of interest, or
change the funds in which any payment on any Note is required to be made; (y)
amend, supplement or waive any provision of the Note or of Section 6.1 hereof;
or (z) amend, supplement or waive this Section 7.10(a).
(b) The Company shall not solicit, request or negotiate for or with respect
to any proposed waiver or amendment of any of the provisions of this Agreement
or the Note unless each holder of the Note (irrespective of the amount of Note
then owned by it) shall be informed thereof by the Company and shall be afforded
the opportunity of considering the same and shall be supplied by the Company
with such information with respect thereto as such holder shall reasonably
request. Executed or true and correct copies of any waiver effected pursuant to
the provisions of this Section 7.10 shall be delivered
by the Company to the holder(s) of the Note(s) forthwith following the date on
which the same shall have been executed and delivered by the holder or holders
of the requisite percentage of outstanding Note(s). The Company will not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, to any holder(s) of
the Note(s) as consideration for or as an inducement to the entering into by any
holder(s) of the Note(s) of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to the holders of all of the Notes then outstanding.
(c) The Company shall not be required to pay to the Payee any fee in
connection with the waiver by such holder of any provisions of this Agreement or
the Note other than reimbursement for the actual and reasonably incurred
out-of-pocket expenses of such holder in connection with such waiver.
7.11 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court or a governmental agency of competent jurisdiction
to be invalid, void or unenforceable, or to cause any party to be in violation
of any applicable provision of law, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and in no way shall be affected, impaired or invalidated.
7.12 Indemnification Against Claims, etc.
(a) The Company shall indemnify and hold harmless the Payee, the Payee's
directors, officers, employees, agents, and each Person, if any, who controls
the Payee within the meaning of the Securities Act or the Exchange Act, and the
Payee's successors and assigns (any and all of whom are referred to in the
context of this paragraph (a) and paragraph (c) below as the "Indemnified
Party") from and against any and all losses, claims, damages and liabilities,
joint or several (including, without limitation, all reasonable legal fees or
other expenses reasonably incurred by any Indemnified Party in connection with
the preparation for or defense of any pending or threatened claim, action or
proceeding, whether or not resulting in any liability), to which such
Indemnified Party may become subject (whether or not such Indemnified Party is a
party thereto) that are caused by or arise out of any inaccuracy,
misrepresentation, breach of warranty or nonfulfillment of any covenant or
agreement on the part the Company contained in this Agreement or in any
statement or certificate furnished to the Payee by the Company pursuant hereto
or in connection with the transactions contemplated hereby.
(b) The Payee shall indemnify and hold harmless the Company, the Company's
members, directors, officers, employees and agents, and the Company's successors
and assigns (any and all of whom are referred to in the context of this
paragraph (b) and paragraph (c) below as the "Indemnified Party") from and
against any and all claims, damages and liabilities, joint or several
(including, without limitation, all reasonable legal fees and other expenses
reasonably incurred by any Indemnified Party in connection with the preparation
for or defense of any pending or threatened claim, action or proceeding, whether
or not resulting in any liability), to which such Indemnified Party may become
subject (whether or not such Indemnified Party is a party thereto) that are
caused by or arise out of any litigation initiated against the Company or any
Member of the Company on or before the second anniversary of the Closing Date by
a shareholder of the Payee or of its parent company relating to the transactions
contemplated hereby or by the Agreement of Sale.
(c) Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled to
indemnity hereunder, such Indemnified Party will notify the indemnifying party
of such claim or the commencement of such action or proceeding; provided,
however, that the failure of an Indemnified Party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 7.12 with respect to such Indemnified Party, except to the extent that
the indemnifying party is actually and materially prejudiced by such failure.
The indemnifying party will assume the defense of such claim, action or
proceeding and will employ counsel reasonably satisfactory to the Indemnified
Party and will pay the fees and expenses of such counsel. Notwithstanding the
preceding sentence, the Indemnified Party will be entitled, at the expense of
the indemnifying party to employ counsel, reasonably satisfactory to the
indemnifying party, separate from counsel for the indemnifying party and for any
other party in such action if the Indemnified Party reasonably determines that a
conflict of interest or other reasonable basis exists which makes representation
by counsel chosen by the indemnifying party not advisable; provided, however,
that the indemnifying party shall not be obligated to pay for the fees and
expenses of more than one counsel of all Indemnified Parties. In the event an
Indemnified Party appears as a witness in any action or proceeding brought
against the indemnifying party in which an Indemnified Party is not named as a
defendant, the indemnifying party agrees to reimburse such Indemnified Party for
all out-of-pocket expenses incurred by it (including reasonable fees and
expenses of counsel) in connection with its appearing as a witness. The
obligations of the parties under this Section 7.12 shall survive the Closing,
the payment or prepayment of the Note, and the termination of this Agreement.
7.13 Counterparts. This Agreement may be executed and delivered in one or
more counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
7.14 Reproduction of Documents. This Agreement, and all documents relating
hereto (other than the Note), including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by the Payee at the closing of the purchase of the Note and (c) financial
statements, certificates and other information heretofore or hereafter furnished
to the Payee, may be reproduced by the Payee by any photographic or other
similar process and the Payee may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable
law and court or agency rules, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by the Payee in the regular course of business) and that
any enlargement, facsimile or further reproduction of such reproduction shall be
admissible in evidence to the same extent.
7.15 Captions. The descriptive headings of the various paragraphs or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
7.16 No Agency. The Payee shall not be deemed to be an agent, partner or
(until conversion into the Conversion LLC Interest) joint venturer of the
Company or of any other Person, and nothing herein contained shall be construed
to impose any liability upon the Payee by reason of the execution or delivery of
this Agreement or the consummation of the transactions contemplated hereby.
7.17 Entire Agreement. This Agreement (including the schedules and exhibits
hereto) and the Note state the entire agreement reached between the parties
hereto with respect to the transactions contemplated hereby and supersede all
prior or contemporaneous agreements, negotiations, understandings, discussions,
representations and warranties between the parties, whether oral or written
(including, without limitation, the commitment letter).
7.18 No Waiver. No failure to enforce any provision or right hereunder
shall be deemed a waiver thereof, and no waiver of any breach of any term or
covenant herein shall be construed as a waiver of any other breach of the same,
or any other term or covenant herein.
7.19 Expenses. The Company shall pay all costs of collection of the Note
and (if the Payee is the prevailing party) enforcement of the Note Documents
(including reasonable attorneys' fees and court costs).
The obligations of the Company under this Section 7.19 shall survive the
payment or prepayment of the Note or the termination of this Agreement.
7.20 Subordination; Estoppel.
(a) The Payee hereby subordinates any claim, right or interest it may have
in and to the assets of the Company to the prior lien (if any) of the holder of
any and all Indebtedness for Money Borrowed which is incurred or to be incurred
by the Company to finance the acquisition of the Cherry Hill Property and the
development thereof (collectively "Project Financing"). Furthermore, except as
expressly provided in the next sentence, the Payee hereby subordinates its
rights to payment and satisfaction of the Note to the prior indefeasible payment
of all Project Financing. Notwithstanding the foregoing, the Payee shall be
entitled to receive payments on the Note from time to time (i) so long as no
default beyond applicable cure periods exists under the Project Financing and
(ii) if and to the extent distributions by the Company to its Members are not
prohibited by the documents governing the Project Financing, or are made with
the consent of or waiver by the holder of the Project Financing. Within five (5)
business days after any request by the Company, the Payee shall confirm in
writing its subordination to Project Financing as provided herein.
(b) Within five (5) business days after any request by the Company, the
Payee shall execute customary estoppel certificates which confirm the status of
the Indebtedness evidenced by the Note and the absence of an Event of Default
known to the Payee thereunder (or, if such is not the case, specifying the
nature of any known Event of Default).
7.21 Waiver of Certain Claims. The Company assumes responsibility for, and
waives any claim against the Payee based upon or arising out of, Subject Costs
and Expenses and all events, actions, inactions and occurrences giving rise to
Subject Costs and Expenses, it being understood and agreed that Payee has agreed
to permit the Company to pay a 33-1/3% rate of return on Special Adjusted
Capital Contributions (as defined in the Note) in consideration of the Company's
waiver in this Section 7.21. The Payee shall have no liability to the Company in
the event of or by reason of Subject Costs and Expenses or any event, action,
inaction or occurrence giving rise to any thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above by their duly authorized officers or other
representatives.
GSRT, LLC
By: Garden State Race Track, Inc.,
Sole Member
By: s/ Francis W. Murray
--------------------------
Authorized Officer
REALEN-TURNBERRY/CHERRY HILL, LLC,
a Delaware limited liability company
By: REALEN-TURNBERRY/CHERRY HILL
ASSOCIATES, a Delaware general partnership,
its Sole Member
By: REALEN GARDEN STATE PARK
ASSOCIATES, L.P., a Pennsylvania
limited partnership, General Partner
By: REALEN GSGP, INC., a
Pennsylvania corporation,
its sole General Partner
By: s/ Dennis Maloomian
--------------------
Dennis Maloomian,
President
By: SOFFER/CHERRY HILL
PARTNERS, LIMITED
PARTNERSHIP, a Florida
limited partnership, General Partner
By: SOFFER/CHERRY HILL,
LLC, a Florida limited
liability company,
its sole General Partner
By: s/ Jeffrey Soffer
----------------------
Jeffrey Soffer, Managing
Member