SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 2000
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International Thoroughbred Breeders, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-9624 22-2332039
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Route 70 and Haddonfield Road
Cherry Hill, New Jersey 08034
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 856-488-3838
Item 5. Other Events
RESTRUCTURING AGREEMENT WITH CSFB
On January 21, 2000 after obtaining the written consent of a majority of
the outstanding shares of stock of the Company entitled to vote thereon, the
Company entered into a restructuring agreement (the "Restructure Agreement")
with its primary lender, Credit Suisse First Boston Mortgage Capital LLC,
("CSFB"). Prior to this agreement, the Company had been in a maturity default
with CSFB for its loan due on June 1, 1999 (the "CSFB Loan") in the principal
amount of $30,500,000 plus unpaid interest since June 1, 1999.
The Restructure Agreement returns the loan to a good standing position and
extends the maturity date of the CSFB Loan to June 1, 2000. As part of the
Restructure Agreement, the Company agreed that as of January 21, 2000, the
restructured principal balance due on the CSFB Loan was $33,103,189, which
consisted of: (i) the principal amount of $30,500,000 remaining on the CSFB
Loan; (ii) accrued interest advanced by CSFB from June 1, 1999 to January 21,
2000 in the amount of $2,523,189; and (iii) an advance of a portion of CSFB's
legal fees incurred in connection with the Restructure Agreement in the amount
of $80,000. CSFB has agreed, pursuant to the Restructure Agreement, to advance
the monthly interest payments due by the Company under the CSFB Loan until the
maturity date of June 1, 2000. Such amounts shall, to the extent not paid when
due by the Company, became part of the outstanding principal balance of the CSFB
Loan on the date such interest becomes due.
In connection with the Restructure Agreement, the Chapter 11 Bankruptcy
Trustee (the "Trustee") for the estate of Robert E. Brennan, to whom the Company
and its subsidiaries Garden State Race Track, Inc. and Orion Casino Corporation
are indebted to in the original principal amount of $3,363,032, as evidenced by
a note dated January 28, 1999 (the "Trustee Note"), entered into an agreement
with the Company wherein: (i) the amounts due under the Trustee Note are due at
the earlier of (a) June 1, 2000 or (b) the date on which the later of the Garden
State Park or El Rancho property is sold, provided that the sale of the later
will satisfy the remaining balance on the CSFB Loan and the Trustee Note; (ii)
all interest due under the Trustee Note will be accrued and deferred until the
maturity date of the Note; and (iii) the Company shall reimburse the Trustee for
legal and accounting fees up to $20,000, which amount will be advanced by the
Trustee and added to the outstanding principal balance of the Trustee Note.
Pursuant to the Restructure Agreement, the Company paid at closing: (i)
legal fees in the amount of $146,000 which were incurred by CSFB in connection
with the Restructure Agreement; (ii) real estate transfer taxes in the amount of
$56,275 on behalf of Garden State Race Track, Inc. in connection with the
transfer discussed below; and (iii) loan servicing fees in the amount of $7,174.
CSFB released to the Company $167,476 of funds held in various escrow accounts
in connection with the CSFB Loan which will be used by the Company for working
capital purposes.
Pursuant to the Restructure Agreement, Garden State Race Track, Inc.
transferred title to the Garden State Race Track to GSRT, LLC ("GSRT"), a
Delaware limited liability company in which Garden State Race Track, Inc. is the
sole member the result of which effects no change in real ownership. Pursuant to
the limited liability company agreement of GSRT entered into in connection with
the Restructure Agreement, Garden State Race Track, Inc. may cause GSRT to enter
into an arm's-length sale or joint venture of the Garden State Property under
certain enumerated circumstances and conditions, including that the purchase
price for such sale or joint venture be at least equal to fifty-percent of the
combined outstanding principal balance of the CSFB Loan and the Trustee Note,
which amount must be paid to CSFB, and the contract for such sale or joint
venture be entered into on or prior to January 25, 2000 (the "GSRT Option").
On January 25, 2000, the Company and Garden State Race Track, Inc., the
owner of Garden State Park, entered into an agreement for the sale of all of the
Garden State Park property, excluding a ten-acre parcel of land previously
committed to GS Park Racing, L.P., to Turnbury/Cherry Hill, LLC. The terms of
the sale meet all the conditions required by CSFB to be a valid GSRT Option,
according to a letter received from CSFB (see Agreement of Sale of Garden State
Race Track). The Restructure Agreement further provides that (i) if the proceeds
from the sale of the Garden State Park property are insufficient to pay the
outstanding amounts due to CSFB under the CSFB Loan, or (ii) after the sale or
joint venture of the Garden State property, the total amount outstanding under
the CSFB Loan is equal to or greater than $5,000,000 and the Company shall not
have received a binding commitment for a loan or purchase of the El Rancho
Property, then, Orion Casino Corporation must convey the El Rancho property to a
new Delaware limited liability company ("New LLC") having substantially same
ownership structure and limited liability company agreement as GSRT. Once the El
Rancho property is conveyed to New LLC in accordance with and upon the happening
of the circumstances and conditions provided in the Restructure Agreement, Orion
Casino Corporation, as the sole member of New LLC, will have the right to cause
New LLC to sell or refinance the El Rancho property so long as the outstanding
obligations due under the CSFB Loan are paid in full by such sale or refinancing
and such sale or refinancing closes on or before June 1, 2000.
AGREEMENT OF SALE OF EL RANCHO
On January 25, 2000, the Company entered into a binding term sheet for the
sale of the El Rancho property in Las Vegas, Nevada with Turnberry/Las Vegas
Boulevard, LLC. It is expected that a formal contract will be signed in the near
future incorporating the same terms as outlined on the binding term sheet with
certain mutually acceptable changes made during the course of negotiations of
the definitive agreements . The purchase price is $45,000,000. The purchase
price will be paid by: (i) a $100,000 deposit at the signing of the Purchase and
Sale Agreement; (ii) a $400,000 additional deposit due on March 15, 2000, which
amount will be non-refundable, and (iii) the balance of the purchase price due
at the closing, will be payable in cash.
The closing is scheduled to occur by March 31, 2000, however, the closing
date may be extended to June 1, 2000 provided: (i) the initial $500,000 deposits
are delivered to the Company by March 31, 2000; (ii) the buyer pays an
additional deposit of $2,000,000 to the Company by March 31, 2000; (iii) the
buyer pays the interest due to Credit Suisse First Boston Mortgage Capital, LLC
on a principal amount of $19,000,000 at 12% for the months of April and May
2000; and (iv) the buyer demonstrates it has the financial ability to close.
The sale of the property is subject to buyer's satisfactory due diligence
examination of title, survey, physical and environmental conditions and the
buyer may terminate by written notice to the seller before March 15, 2000,
provided however, that such termination would not be effective if the seller
resolves the issue to the reasonable satisfaction of the buyer on or before the
scheduled closing date.
The Company may commit to purchasing a promissory note of the buyer in the
amount of $23,000,000 which will be convertible at the Company's option into a
30% equity interest in the buyer.
The note would accrue interest at a 22% per annum rate, which will be
adjusted from time to time since the interest actually payable will be dependent
upon, and payable solely out of, the buyer's net cash flow available for
distribution to its equity owners ("Distributable Cash"). After the equity
investors in the buyer have received total distributions equal to their capital
contributions plus an agreed upon return on their invested capital, the next $23
million of Distributable Cash will be paid to the company. The company will
thereafter receive payments under the note equal to 30% of all Distributable
Cash until the maturity date, which occurs on the 30th anniversary of the
company's purchase of the note. The company may convert the promissory note, at
its option, into a 30% equity interest in the buyer during a six month period
beginning at the 15th anniversary of the issuance of the note. If not then
converted, the note will convert into a 30% equity interest in the buyer at the
30th anniversary of its issuance.
The sale of the El Rancho property to Turnbury/Las Vegas Boulevard LLC or
to any other buyer cannot be assumed at this time.
AGREEMENT OF SALE OF GARDEN STATE RACE TRACK
On January 25, 2000, the Company entered into an agreement of sale with
Turnbury/Cherry Hill LLC, for the sale of the Garden State Park real estate.
Commencing on the date of the Agreement and continuing until March 1, 2000
(the "Contingency Date"), the Buyer may, at its sole cost and expense, inspect,
examine, survey, study and appraise the Premises to determine the boundaries,
acreage, zoning status, municipal code compliance, physical and environmental
condition of the Premises. If the condition of the Premises, as revealed in the
Due Diligence Investigation, is not reasonably acceptable to the Buyer, at any
time prior to the Contingency Date, the Buyer may terminate this Agreement by
providing written notice to the Seller on or before the Contingency Date
specifying in reasonable detail the reason for the Buyer's termination of this
Agreement, in which event the parties shall have no further rights or
obligations under the Agreement, and the Deposit shall be refunded to the Buyer.
Notwithstanding the foregoing, the termination of this Agreement by the Buyer
pursuant to this provision shall be ineffective if the Seller causes to be
remediated or repaired on or before March 31, 2000 the condition identified in
the Buyer's notice of termination.
The buyer has made a $100,000 initial good faith deposit and an additional
$400,000 is scheduled to be made March 1, 2000. On March 2, 2000, the $500,000
in deposits will be made available to the seller. The closing is scheduled to be
held on or before April 15, 2000.
Discussions have occurred during the due diligence period concerning
material changes in the contract. Once the due diligence period has ended and
these discussions have concluded the Company will provide detailed information
concerning the specific terms of the sale.
The sale of the Garden State Race Track property to Turnbury/Cherry Hill,
LLC or any other buyer cannot be assured at this time and if for any reason the
potential buyer of the property is not able to close this transaction by April
15, 2000, the property may be marketed and possibly sold by the Company's
lender, Credit Suisse First Boston Mortgage, LLC.
Unless the proceeds from the March 1, 2000 scheduled release of escrow
funds in the amount of $500,000 is forthcoming, the Company must look to other
sources of funds for working capital purposes subsequent to that date. The
Company does not have any committed source of such working capital.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
The following exhibits are filed as part of this Report:
10.1 Restructure Agreement
10.2 Limited Liability Company Agreement of GSRT, LLC
10.3 Letter approving Garden State joint venture transaction
10.4 Letter regarding possible El Rancho transaction
10.5 Modification of Mortgage, Deed of Trust and
Other Loan Documents
10.6 Indemnification Agreement
SIGNATURE
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.
Dated: February 14, 2000 INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By:William H. Warner
Name: William H. Warner
Title:Treasurer and Chief Financial Officer
EXHIBIT 10.1
RESTRUCTURE AGREEMENT
THIS RESTRUCTURE AGREEMENT (this "Agreement") is dated January __, 2000 by
and among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, a Delaware limited
liability company ("Lender"), and INTERNATIONAL THOROUGHBRED BREEDERS, INC., a
Delaware corporation ("ITB"), GARDEN STATE RACE TRACK, INC., a New Jersey
corporation ("GSRT"), HOLDFREE, INC. (formerly known as Freehold Racing
Association), a New Jersey corporation ("FRA"), INTERNATIONAL THOROUGHBRED
GAMING DEVELOPMENT CORPORATION, a New Jersey corporation ("ITGDC"), and ORION
CASINO CORPORATION, a Nevada corporation ("Orion"; and ITB, GSRT, FRA, ITGDC and
Orion being collectively referred to herein as "Borrowers").
RECITALS
A. On May 23, 1997, Lender made a loan to Borrowers in the original
principal amount of $55,000,000.00 (the "Loan"), which Loan was (i) made
pursuant to the terms of a certain Loan Agreement dated May 23, 1997 by and
among Borrowers and CSFB, as the same was amended pursuant to that certain
Amendment to Loan Agreement dated as of May 24, 1997 by and among Borrowers and
CSFB, and as the same was further amended pursuant to the Approval Agreement (as
hereinafter defined) (the foregoing, as previously amended and as hereafter may
be amended, modified or extended, the "Loan Agreement"), (ii) evidenced by a
certain Convertible Promissory Note dated May 23, 1997 made by Borrowers in
favor of Lender in the original principal amount of $55,000,000.00 (as
heretofore and hereafter amended, modified or extended, including pursuant to
the Approval Agreement, the "Note"), and (iii) secured by the following
mortgages: (a) a certain First Mortgage, Assignment of Rents and Security
Agreement dated May 23, 1997 made by GSRT in favor of Lender and encumbering the
property (the "Garden State Property") owned by GSRT and known as Garden State
Race Track, located in Camden County, New Jersey and more particularly described
therein (as heretofore and hereafter amended, modified or extended, including
pursuant to the Approval Agreement, the "Garden State Mortgage"), (b) a certain
Third Mortgage, Assignment of Rents and Security Agreement dated May 23, 1997
made by FRA in favor of Lender and encumbering the property (the "Freehold
Property") owned by FRA and known as Freehold Raceway, located in Monmouth
County, New Jersey and more particularly described therein (the "Freehold
Mortgage"), and (c) a certain First Deed of Trust, Assignment of Rents, Fixture
Filing and Security Agreement dated May 23, 1997 made by Orion for the benefit
of Lender and encumbering the property (the "El Rancho Property") owned by Orion
and known as the El Rancho Hotel and Casino, located in Clark County, Nevada and
more particularly described therein (as heretofore and hereafter amended,
modified or extended, including pursuant to the Approval Agreement, the "El
Rancho Mortgage").
B. All capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to such terms in the Loan Agreement.
C. As a result of (i) the filing of several lawsuits by and against ITB,
the other Borrowers, various officers, directors and shareholders of ITB and the
other Borrowers, and various third parties (collectively, the "Lawsuits"), (ii)
FRA's desire to sell the Freehold Property, (iii) GSRT's desire to net lease the
Garden State Property, and (iv) Borrowers' desire to make certain amendments to
the Loan Documents, CSFB and Borrowers entered into a certain Approval Agreement
dated January 28, 1999 (the "Approval Agreement"), pursuant to which, inter
alia, CSFB agreed to the terms of a stipulation settling the Lawsuits, the sale
of the Freehold Property, the net leasing of the Garden State Property and
various amendments to the Loan Documents.
D. As contemplated by the Approval Agreement, the Freehold Property was
sold and the Freehold Mortgage was released, in return for which CSFB received a
payment of $25,000,000.00 from Borrowers, $24,500,000.00 of which was applied in
reduction of the Outstanding Principal Balance and $500,000.00 of which was
applied in partial payment of the Exit Fee.
E. The Loan matured on June 1, 1999 and Borrowers have failed to repay the
Obligations in full as required under the Loan Documents (the "Maturity
Default").
F. Borrowers have requested that Lender waive the Maturity Default and
extend the term of the Loan as hereinafter provided.
G. Subject to the satisfaction of the terms and conditions of this
Agreement and the other documents contemplated hereby (the "Other Restructure
Documents"), Lender is willing to waive the Maturity Default and extend the term
of the Loan as hereinafter provided.
NOW, THEREFORE, in consideration for the mutual promises contained herein
and in the Other Restructure Documents, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender and Borrowers hereby agree as follows:
1. AFFIRMATION OF INDEBTEDNESS. Borrowers hereby represent, warrant,
acknowledge and agree that:
(a) As of the date hereof, the Outstanding Principal Balance due and
owing to Lender under the Loan Documents is $33,103,189.10, consisting of
(i) $30,500,000.00 remaining from the original principal amount advanced
under the Loan Documents, (ii) $1,762,890.59 of unpaid interest on the Loan
at the Interest Rate, which accrued from June 1, 1999 to and including
November 17, 1999, which was added to the Outstanding Principal Balance as
of November 17, 1999, (iii) $760,298.51 of unpaid interest on the Loan at
the Interest Rate, which accrued from November 18, 1999 to and including
the date hereof, which has been added to the Outstanding Principal Balance
as of the date hereof, and (iv) $80,000.00 advanced by Lender on behalf of
Borrowers on account of a portion of Lender's Legal Fees (as hereinafter
defined) as contemplated under this Agreement, which has been added to the
Outstanding Principal Balance as of the date hereof.
(b) As of the date hereof, there is $600,000.00 remaining unpaid on
the Exit Fee, subject, however, to the provisions of Paragraph 5(h) of the
Approval Agreement.
(c) The Loan Agreement, the Note, the Garden State Mortgage, the El
Rancho Mortgage, the other Loan Documents and the Approval Agreement (each
as modified as set forth in the Recitals hereto and as modified by this
Agreement and the Other Restructure Documents) are in full force and
effect.
(d) The outstanding Obligations (including the amounts added to the
Outstanding Principal Balance as set forth in Section 1(a) hereof),
together with all other obligations of Borrowers to Lender under this
Agreement and the Other Restructure Documents (collectively with the
Obligations, the "ITB Obligations"), constitute the valid and binding
obligations of Borrowers in accordance with the terms of the Loan
Documents, the Approval Agreement, this Agreement and the Other Restructure
Documents, without any offset, defense, claim or counterclaim of any nature
whatsoever.
(e) The Loan is in default by virtue of, without limitation, the
Maturity Default; as a result of the Maturity Default Lender is entitled to
exercise all rights and remedies with respect thereto available to Lender
under the Loan Documents, at law and in equity; and in consideration for
the benefits granted to Lender hereunder and under the Other Restructure
Documents, and in reliance thereon, Lender has agreed to waive the Maturity
Default and extend the term of the Loan as hereinafter provided.
2. CONDITIONS TO LENDER'S OBLIGATIONS. All of the following are conditions
precedent to Lender's obligations under this Agreement and the Other Restructure
Documents, all of which conditions shall have been satisfied on or prior to the
date hereof, and the satisfaction of which shall have been proven by evidence
reasonably satisfactory to Lender:
(a) GSRT (in such capacity, the "ITB Member") shall have entered into
a limited liability company agreement creating GSRT, LLC, a Delaware
limited liability company ("Newco"), as the sole member thereunder, which
limited liability company agreement shall be in the form annexed hereto as
Exhibit A (the "Newco LLC Agreement").
(b) Borrowers shall have caused to be filed with the Secretary
of State for the State of Delaware a Certificate of Formation for Newco in the
form annexed hereto as Exhibit B (the "Newco Certificate of Formation").
(c) Borrowers shall have caused Newco to qualify for all necessary
authority to transact business in all jurisdictions in which the nature of
the business contemplated to be transacted by Newco under the Newco LLC
Agreement makes such qualification necessary.
(d) Borrowers shall have obtained a federal employer identification
number for Newco.
(e) GSRT shall have executed and delivered to Newco (i) a deed with
covenant against grantor's acts (the "Garden State Deed") conveying fee
simple title to the Garden State Property to Newco, free and clear of all
liens, claims and encumbrances, other than (A) the Garden State Mortgage,
(B) the Bankruptcy Trustee Mortgage (as defined in the Approval Agreement)
encumbering the Garden State Property, (C) the exceptions to title shown in
Lender's title policy insuring the Garden State Mortgage, (D) the
exceptions to title previously approved by Lender under the Approval
Agreement and/or in connection with that certain Lease Agreement dated
January 28, 1999 between GSRT, as landlord, and GS Park Racing, L.P., as
tenant, covering the entire Garden State Property (the "Garden State
Lease"), (E) that certain Memorandum of Conveyance Obligation dated January
28, 1999 between GSRT and GS Park Racing, L.P., relating to the 10 Acre
Parcel (as defined therein) and the obligation to convey the 10 Acre Parcel
to GS Park Racing, L.P., and (F) any other liens, claims or encumbrances
approved by Lender in its sole discretion (the foregoing clauses (A)-(F),
collectively, the "Garden State Permitted Exceptions"); (ii) an assignment
of the Garden State Lease, and (iii) a FIRPTA affidavit.
(f) GSRT shall have executed and delivered to the title company
recording the Garden State Deed a State of New Jersey Affidavit of
Consideration or Exemption relating to such conveyance of the Garden State
Property to Newco.
(g) Borrowers shall have delivered to Lender an operating budget
covering Borrowers' anticipated expenditures and financial needs in the
period from December 1, 1999 through June 1, 2000, which budget shall be
satisfactory to Lender in its sole discretion (the "Approved Budget").
(h) Borrowers shall have executed and delivered to Lender, REPG Garden
State Corporation ("REPG") and Newco an Indemnification Agreement in the
form annexed hereto as Exhibit C (the "Indemnification").
(i) Borrowers shall have executed and delivered to Lender a
Modification of Note, Mortgage, Deed of Trust and Other Loan Documents in
the form annexed hereto as Exhibit D (the "Modification").
(j) Borrowers shall have obtained the approval of the holders of a
majority of the outstanding stock of ITB entitled to vote to that certain
Term Sheet executed by Lender on November 5, 1999, executed by Borrowers on
November 2, 1999 and delivered by Lender to Borrowers on or about November
17, 1999 (the "Term Sheet"), and the transactions contemplated thereby.
(k) Borrowers shall have obtained the approval of the Bankruptcy
Trustee (as defined in the Approval Agreement) to the transactions
contemplated by the Term Sheet, which approval shall be in form and content
satisfactory to Lender.
(l) ITB shall have performed its obligations under Paragraph 5(m) of
the Approval Agreement.
(m) Subject to the provisions of Section 8 of this Agreement,
Borrowers shall have paid all costs and expenses incurred by Borrowers,
Newco, the ITB Member, REPG and/or Lender in connection with the
transactions contemplated under this Agreement and the Other Restructure
Documents, including, without limitation, (i) all unpaid legal fees and
expenses incurred by Lender in connection with the Loan, (ii) all unpaid
legal fees and expenses incurred by Lender, on behalf of itself or REPG, in
connection with the preparation, negotiation and execution of the Term
Sheet, this Agreement and the Other Restructure Documents (the foregoing
clauses (i) and (ii), collectively, "Lender's Legal Fees"), (iii) all real
estate transfer taxes due on the date hereof in connection with the
transfer of the Garden State Property to Newco, (iv) all costs required to
be expended in order to remove from title on the Garden State Property any
liens, claims or encumbrances which are not Garden State Permitted
Exceptions, and (v) all recording charges in connection with the Garden
State Deed and the Modification.
(n) Borrowers, Newco and/or the ITB Member, as applicable, shall have
executed and delivered such other documents, and taken such other actions,
as Lender shall have reasonably requested in order to fully effectuate the
transactions contemplated hereunder and under the Other Restructure
Documents.
3. BORROWERS' COVENANTS REGARDING NEWCO. In connection with the conveyance
of the Garden State Property by GSRT to Newco, the operation and management of
Newco by the ITB Member and the transactions contemplated under the Newco LLC
Agreement, Borrowers hereby covenant and agree as follows:
(a) Borrowers shall cause the ITB Member to perform each and every
obligation on the part of the ITB Member, for itself or as the sole member
of Newco, to be performed under the Newco LLC Agreement, including, without
limitation, making the distributions required under Section 4.03 thereof.
(b) For so long as any of the ITB Obligations remain outstanding, the
ITB Member shall not, and Borrowers shall not, and Borrowers shall not
cause or permit the ITB Member to, sell, assign, transfer, give,
hypothecate or encumber the ITB Member's membership interest in Newco (or
any part thereof) or any direct or indirect ownership interest in the ITB
Member, without the prior written consent of Lender, which consent may be
granted, withheld or conditioned in Lender's sole discretion.
(c) For so long as any of the ITB Obligations remain outstanding, the
ITB Member shall comply, and Borrowers shall cause the ITB Member to
comply, with all of the following:
(i) the ITB Member shall not enter into any transaction of
acquisition, merger, consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution),
create any subsidiaries, or acquire by purchase or otherwise all or
substantially all the business or assets of, or stock or other
evidences of beneficial ownership of, or make any investment in, any
Person, or make any material change in its present method of
conducting business or amend the terms of its Organizational
Documents;
(ii) the ITB Member will not guarantee or otherwise hold out its
credit as being available to satisfy the obligations of any other
Person;
(iii) the ITB Member will not engage in any business unrelated to
acting as the sole member of Newco;
(iv) the ITB Member will not enter into any contract or agreement
with any member, partner, principal, shareholder or Affiliate of any
Borrower, Newco or the ITB Member;
(v) the ITB Member will not incur any indebtedness, secured or
unsecured, direct or contingent (including guaranteeing any
obligation), except that the ITB Member shall be permitted to borrow
funds from any Borrower, on an unsecured, subordinated basis, as may
be necessary to maintain the Garden State Property;
(vi) the ITB Member will not make any loans or advances to any
Person nor pledge its assets for the benefit of any Person, except
Lender;
(vii) the ITB Member will maintain its own separate books and
records and bank accounts, in each case which are and will be separate
and apart from those of any other Person;
(viii) the ITB Member will be, and at all times will hold itself
out to the public as, a legal entity separate and distinct from any
other entity (including any Affiliate thereof), shall maintain and
utilize separate stationery, invoices and checks, shall otherwise
conduct its business and own its assets in its own name, and shall, to
the best of its ability, correct any known misunderstanding regarding
its separate identity;
(ix) the ITB Member will maintain separate financial statements
and will file its own tax returns;
(x) the ITB Member will not seek the dissolution or winding up,
in whole or in part, of Newco;
(xi) the ITB Member will not commingle its funds or other assets
with those of any other Person;
(xii) the ITB Member will maintain its assets in such a manner
that it is not costly or difficult to segregate, ascertain or identify
its individual assets from those of any other Person;
(xiii) the ITB Member will maintain a reasonable number of
employees in light of its contemplated business operations and shall
pay the salaries of its employees, and will not do any act which would
make it impossible to carry on the ordinary business of itself or
Newco;
(xiv) the ITB Member will observe all corporate formalities;
(xv) the ITB Member will not acquire the obligations or
securities of any of its partners, members or shareholders, as
applicable; and
(xvi) the ITB Member shall allocate fairly and reasonably any
overhead for any office space which such entity shares with any other
entity.
(d) With respect to any rent payments under the Garden State Lease
distributed to the ITB Member in accordance with Section 4.03(a) of the
Newco LLC Agreement, Borrowers shall cause such rent payments to be paid
over by the ITB Member to Borrowers and Borrowers shall use such rent
payments solely for working capital purposes to the extent set forth on the
Approved Budget.
(e) As a condition to any release of the Garden State Mortgage in
connection with a Repurchase Joint Venture or Repurchase Refinancing (as
such terms are defined in the Newco LLC Agreement), as contemplated under
Section 9.02 of the Newco LLC Agreement, Borrowers shall cause the ITB
Member to pledge its membership interest in Newco to Lender, as additional
security for the ITB Obligations, which pledge shall be in the form annexed
hereto as Exhibit E. Additionally, in connection with any such pledge,
Borrowers shall cause (i) Newco to execute and deliver an acknowledgment of
such pledge in the form included in said Exhibit E, and (ii) the ITB Member
to execute and deliver such Uniform Commercial Code Financing Statements as
Lender shall reasonably require.
(f) Notwithstanding the conveyance of the Garden State Property by
GSRT to Newco, Borrowers shall remain liable for the performance of all of
Borrowers' obligations and covenants under the Loan Documents, including
those relating to the Garden State Property.
(g) Borrowers expressly acknowledge and agree that notwithstanding the
conveyance of the Garden State Property by GSRT to Newco, Borrowers shall
be and remain solely liable for (i) the repayment of the ITB Obligations in
full, including, without limitation, the payment of the Monthly Interest
Payments as and when due, subject, however, to Section 8(c) hereof, (ii)
any and all administrative and general overhead expenses relating to the
formation, operation and administration of Newco and the business thereof,
including, without limitation, all attorneys fees', accountants' fees and
state and federal taxes with respect thereto, and (iii) any and all
expenses, damages, claims, judgments, liabilities and other costs relating
to or arising from the Garden State Property, it being expressly understood
and agreed by Borrowers that the conveyance of the Garden State Property to
Newco shall not constitute or be deemed to constitute an assumption of any
of the foregoing liabilities by Newco.
4. LENDER'S COVENANTS REGARDING NEWCO. In connection with the conveyance of
the Garden State Property by GSRT to Newco and the transactions contemplated
under the Newco LLC Agreement, Lender hereby covenants and agrees as follows:
(a) In connection with the occurrence of any Repurchase Transaction
(as defined in the Newco LLC Agreement), simultaneously with the
satisfaction of all of the conditions with respect to such Repurchase
Transaction set forth in Section 9.02(a), 9.02(b) or 9.02(c) of the Newco
LLC Agreement, as applicable, Lender shall release the Garden State
Mortgage.
(b) Upon Lender's receipt of any Operating Receipts or Distributable
Proceeds (as such terms are defined in the Newco LLC Agreement), Lender
shall apply the same in the order of priority set forth in Section 4.03(a),
4.03(b) or 4.03(c) of the Newco LLC Agreement, as applicable.
(c) Lender hereby consents to the occurrence of any of the Repurchase
Transactions in accordance with the terms of the Newco LLC Agreement, and
Lender agrees that the occurrence of a Repurchase Transaction in accordance
with the terms of the Newco LLC Agreement shall not constitute a violation
of, or an Event of Default under, any of the Loan Documents.
(d) Simultaneously with the release by the Bankruptcy Trustee of the
Bankruptcy Trustee Mortgage encumbering the Garden State Property as
contemplated under Section 9.02(b) or 9.02(c) of the Newco LLC Agreement,
Borrowers shall have the right to cause the ITB Member to grant a
subordinate pledge to the Bankruptcy Trustee of its membership interest in
Newco, as additional security for the loan secured by such Bankruptcy
Trustee Mortgage encumbering the Garden State Property, provided that such
pledge to the Bankruptcy Trustee is subordinated to the pledge of the ITB
Member's membership interest in Newco granted to Lender pursuant to Section
3(e) hereof, to the same extent, and on substantially the same terms, as
the Bankruptcy Trustee Mortgage encumbering the Garden State Property is
currently subordinated to the El Rancho Mortgage in favor of Lender,
pursuant to subordination documents reasonably satisfactory to Lender and
the Bankruptcy Trustee.
5. EL RANCHO PROPERTY. In connection with the El Rancho Property, Borrowers
hereby covenant and agree as follows:
(a) Unless (i) both of the El Rancho Conditions (as hereinafter
defined) are satisfied, or (ii) the ITB Obligations are paid in full,
simultaneously with the closing of any Repurchase Transaction or any other
sale of the Garden State Property in accordance with the provisions of the
Newco LLC Agreement, Orion shall convey, by a deed with covenant against
grantor's acts (the "El Rancho Deed"), the El Rancho Property to a new
Delaware limited liability company having substantially the same ownership
and management structure as Newco ("Newco II"), such conveyance to be free
and clear of all liens, claims and encumbrances, other than (A) the El
Rancho Mortgage, (B) the Bankruptcy Trustee Mortgage encumbering the El
Rancho Property, (C) the exceptions to title shown in Lender's title policy
insuring the El Rancho Mortgage, (D) the exceptions to title previously
approved by Lender under the Approval Agreement, and (E) any other liens,
claims or encumbrances approved by Lender in its sole discretion (the
foregoing clauses (A)-(E), collectively, the "El Rancho Permitted
Exceptions"). In furtherance of the foregoing, and subject to the further
provisions of this Agreement, including, without limitation, Section 8(e)
hereof, Borrowers shall pay all costs incurred by Borrowers, Newco II, the
sole member of Newco II (who shall be Orion or another wholly-owned
subsidiary of ITB or any other Borrower and shall have an identical
structure to the ITB Member) (the "ITB Member II"), the entity serving in
the same capacity with respect to Newco II as REPG (who shall be an
Affiliate of Lender) ("REPG II") and/or Lender, in connection with the
formation of Newco II, the ITB Member II and REPG II and such conveyance of
the El Rancho Property to Newco II, including, without limitation, (w) all
legal fees and expenses incurred by Lender (whether on behalf of itself or
REPG II), (x) all real estate transfer taxes due in connection with such
conveyance, (y) all costs required to be expended in order to remove from
title on the El Rancho Property any liens, claims or encumbrances which are
not El Rancho Permitted Exceptions, and (z) all recording charges in
connection with the El Rancho Deed.
(b) As used herein, the "El Rancho Conditions" shall mean that :
(i) as applicable, either (A) following the consummation of a
Repurchase Transaction and the payment of the proceeds thereof to
Lender to the extent required or permitted under the applicable
provisions of Section 9.02 of the Newco LLC Agreement, the total
amount of ITB Obligations outstanding is less than $5,000,000.00, or
(B) following any other sale of the Garden State Property permitted
under the Newco LLC Agreement and the payment of the proceeds thereof
to Lender, the total amount of ITB Obligations outstanding is less
than $5,000,000.00; and
(ii) as of the date of the consummation of such Repurchase
Transaction or other sale of the Garden State Property permitted under
the Newco LLC Agreement, Borrowers have furnished to Lender evidence
reasonably satisfactory to Lender that Borrowers have received a
binding commitment for a loan secured by, or a purchase of, the El
Rancho Property, which loan or purchase, as applicable, (A) will close
on or before the Extended Maturity Date (as hereinafter defined), and
(B) will result in loan or sale proceeds, net of Transfer Expenses and
Transfer Taxes (as such terms are defined in the Newco LLC Agreement),
sufficient to satisfy the outstanding ITB Obligations on or before the
Extended Maturity Date.
(c) Newco II shall be created and governed pursuant to a limited
liability company agreement substantially similar, in form and substance,
to the Newco LLC Agreement (the "Newco II LLC Agreement"), except that
Sections 9.01 through 9.06 of the Newco LLC Agreement (and all definitions
therein and references thereto) shall not be applicable, and in lieu
thereof, the Newco II LLC Agreement shall provide that:
(i) Until the Extended Maturity Date, the ITB Member II shall
have the sole right and authority, but not the obligation, including,
without limitation, the right and authority to negotiate, execute and
deliver all documents with respect thereto on behalf of Newco II, to
cause Newco II to sell the entire fee interest in the Property or
refinance the El Rancho Mortgage, provided that (A) such sale or
refinancing will and does close on or before the Extended Maturity
Date, (B) such sale or refinancing will and does result in sale or
loan proceeds, as applicable, net of Transfer Expenses and Transfer
Taxes, sufficient to satisfy the outstanding ITB Obligations on or
before the Extended Maturity Date, and (C) any documents entered into
with respect to such sale or refinancing, as applicable, exculpate
Lender, REPG II and their respective Affiliates from any liability
relating to such sale or refinancing and the El Rancho Property; and
provided, further, however, that the foregoing in no event shall be
deemed to, or shall, impair, vitiate, modify or terminate, in any
manner, any consent or other rights that REPG II shall have under the
Newco II LLC Agreement; and
(ii) Immediately following the Extended Maturity Date, unless the
ITB Obligations have been paid in full, Newco II will engage a
nationally recognized real estate brokerage company (chosen in the
same manner as set forth in Section 9.01 of the Newco LLC Agreement)
("Newco II's Broker") to sell the El Rancho Property, and from and
after the Extended Maturity Date, (A) REPG II shall have the sole
right and authority, including, without limitation, the right and
authority to negotiate, execute and deliver all documents with respect
thereto on behalf of Newco II, to cause Newco II to sell the El Rancho
Property pursuant to any sales contract proposed by Newco II's Broker,
taking into account, however, the Sale Goals (as defined in the Newco
LLC Agreement), and (B) all proceeds of any such sale of the El Rancho
Property shall be applied in the same manner set forth in Section
4.03(c) of the Newco LLC Agreement.
(d) In connection with the creation of Newco II and the conveyance of
the El Rancho Property by Orion to Newco II as contemplated under this
Section 5, in addition to the execution and delivery of the Newco II LLC
Agreement by the ITB Member II and the execution and delivery of the El
Rancho Deed by Orion to Newco II, the following shall also occur: (i)
Borrowers shall cause to be filed with the Secretary of State for the State
of Delaware a Certificate of Formation for Newco II in substantially the
same form as the Newco Certificate of Formation, (ii) Borrowers shall cause
Newco II to qualify for all necessary authority to transact business in all
jurisdictions in which the nature of the business contemplated to be
transacted by Newco II under the Newco II LLC Agreement makes such
qualification necessary, (iii) Borrowers shall obtain a federal employer
identification number for Newco II, (iv) Orion shall execute and deliver to
Newco II a FIRPTA affidavit, (v) Orion shall execute and deliver to the
appropriate party(ies) any forms required in connection with any real
property transfer taxes due with respect to such conveyance, (vi) Borrowers
shall execute and deliver to Lender, REPG II and Newco II an
indemnification agreement in substantially the same form as the
Indemnification, (vii) Borrowers shall cause their legal counsel and Newco
II's and the ITB Member II's legal counsel to deliver opinions to Lender in
substantially the same form as those delivered to Lender on the date
hereof, and (viii) Borrowers shall execute and/or deliver such other
documents, and take such other actions, and Borrowers shall cause Newco II
and/or the ITB Member II to execute and/or deliver such other documents,
and take such other actions, as Lender shall reasonably request in order to
fully effectuate the transactions contemplated hereunder and under the
other Restructure Documents.
(e) Following the conveyance, if ever, of the El Rancho Property to
Newco II as contemplated in this Section 5, Borrowers shall cause the ITB
Member II to perform each and every obligation on the part of the ITB
Member II, for itself or as the sole member of Newco II, to be performed
under the Newco II LLC Agreement.
(f) Following the conveyance, if ever, of the El Rancho Property to
Newco II as contemplated in this Section 5, for so long as any of the ITB
Obligations remain outstanding, the ITB Member II shall not, and Borrowers
shall not, and Borrowers shall not cause or permit the ITB Member II to,
sell, assign, transfer, give, hypothecate or encumber the ITB Member II's
membership interest in Newco II (or any part thereof) or any direct or
indirect ownership interest in the ITB Member II.
(g) Following the conveyance, if ever, of the El Rancho Property to
Newco II as contemplated in this Section 5, for so long as any of the ITB
Obligations remain outstanding, the ITB Member II shall comply, and
Borrowers shall cause the ITB Member II to comply, with the provisions of
Section 3(c) hereof (with the references therein to the ITB Member to be
deemed to be references to the ITB Member II, with the references therein
to Newco to be deemed to be references to Newco II and with the references
therein to the Garden State Property to be deemed to be references to the
El Rancho Property).
(h) Notwithstanding the conveyance of the El Rancho Property by Orion
to Newco II, if the same shall occur pursuant to this Section 5, Borrowers
shall remain liable for the performance of all of Borrowers' obligations
and covenants under the Loan Documents, including those relating to the El
Rancho Property.
(i) Borrowers expressly acknowledge and agree that notwithstanding the
conveyance of the El Rancho Property by Orion to Newco II, if the same
shall occur pursuant to this Section 5, Borrowers shall be and remain
solely liable for (i) the repayment of the ITB Obligations in full,
including, without limitation, the payment of the Monthly Interest Payments
as and when due, subject, however, to Section 8(c) hereof, (ii) if
applicable in accordance with this Section 5, any and all administrative
and general overhead expenses relating to the formation, operation and
administration of Newco II and the business thereof, including, without
limitation, all attorneys fees', accountants' fees and state and federal
taxes with respect thereto, and (iii) any and all expenses, damages,
claims, judgments, liabilities and other costs relating to or arising from
the El Rancho Property, whether or not conveyed to Newco II in accordance
with this Section 5, it being expressly understood and agreed by Borrowers
that the conveyance of the El Rancho Property to Newco II, if applicable,
shall not constitute or be deemed to constitute an assumption of any of the
foregoing liabilities by Newco II.
(j) Borrowers agree that so long as Lender has a mortgage encumbering
the El Rancho Property, whether the El Rancho Property is owned by any
Borrower or by Newco II, the El Rancho Property shall not be operated for
gaming or gambling purposes or for any other purpose which would require
that Lender, REPG II, any other Lender Affiliate (as hereinafter defined)
or Newco II be licensed by, or make any filings with or disclosures to, any
gaming or gambling authority. Additionally, the Newco II LLC Agreement, if
and when executed and delivered pursuant to Section 5 hereof, shall also
include the foregoing prohibition.
6. SALE GOALS. The Newco LLC Agreement provides that in those circumstances
in which REPG has the sole right and authority to cause Newco to enter into a
sales contract with respect to the Garden State Property or any other Company
Asset (as defined in the Newco LLC Agreement), REPG shall take into account the
Sale Goals in selecting any such sales contract. Additionally, Section 5(c)(ii)
hereof provides that, following the conveyance, if ever, of the El Rancho
Property to Newco II as contemplated in Section 5 hereof, in those circumstances
in which REPG II has the sole right and authority to cause Newco II to enter
into a sales contract with respect to the El Rancho Property, REPG II shall take
into account the Sale Goals in selecting any such sales contract. In connection
with the Sale Goals, Borrowers, on behalf of themselves and their respective
Affiliates, and the respective officers, directors, shareholders, partners,
members, representatives and agents of any of the foregoing (collectively,
"Borrower Affiliates") hereby expressly acknowledge and agree to the following:
(a) The Sale Goals, as a whole, represent a frame-work within which to
evaluate proposed sales transactions caused by REPG under the Newco LLC
Agreement and, if applicable, proposed sales transactions caused by REPG II
under the Newco II LLC Agreement, but do not require a focus on any
particular Sale Goal as opposed to any other Sale Goal.
(b) No decision made by REPG to cause Newco to accept any particular
sales contract for any Company Asset, as contemplated under the Newco LLC
Agreement, and no decision made by REPG II to cause Newco II to accept any
particular sales contract for the El Rancho Property, as contemplated under
the Newco II LLC Agreement, can be the basis of any type of claim or action
by Borrowers, any Borrower Affiliate or any other Person against Lender,
any Affiliate of Lender, REPG, REPG II or any officer, director,
shareholder, partner, member, representative or agent of any of the
foregoing (collectively, "Lender Affiliates"), unless REPG or REPG II, as
applicable, fully disregards the Sale Goals, in which event the same could
be the basis of a claim against REPG or REPG II, for which REPG or REPG II,
as applicable, and Lender will be jointly and severally liable, in
accordance with Section 6(f) hereof, but not against any other Lender
Affiliate.
(c) No decision made by REPG to cause Newco to accept any particular
sales contract for any Company Asset, as contemplated under the Newco LLC
Agreement, and no decision made by REPG II to cause Newco II to accept any
particular sales contract for the El Rancho Property, as contemplated under
the Newco II LLC Agreement, can be the basis of any type of injunctive
relief to prevent or delay the sale by Newco of any Company Asset or the
sale by Newco II of the El Rancho Property, and REPG and/or REPG II, as
applicable, shall be entitled to injunctive relief with respect to any
breach of the foregoing. (d) Borrowers, on behalf of themselves and each
Borrower Affiliate, hereby waive and release Lender, each Lender Affiliate
and REPG and REPG II from any liability arising from any decision made by
REPG to cause Newco to accept any particular sales contract for any Company
Asset, as contemplated under the Newco LLC Agreement, and from any decision
made by REPG II to cause Newco II to accept any particular sales contract
for the El Rancho Property, as contemplated under the Newco II LLC
Agreement, unless REPG or REPG II, as applicable, fully disregards the Sale
Goals, in which event such waiver and release shall not apply only to REPG
or REPG II, as applicable, and Lender, but subject to Section 6(f) hereof,
but shall continue to apply to each other Lender Affiliate. (e) If,
notwithstanding the provisions of Sections 6(b) and 6(d) hereof, Borrowers,
any Borrower Affiliate, Newco, Newco II, the ITB Member, the ITB Member II
and/or any other Person shall bring a successful action against Lender, any
Lender Affiliate or REPG or REPG II based on the allegation that REPG or
REPG II, as applicable, did not comply with the Sale Goals (except if such
action is based on an allegation that REPG or REPG II, as applicable, fully
disregarded the Sale Goals), the damages in such action (and in all such
actions, in the aggregate), for which REPG or REPG II, as applicable, and
Lender shall be jointly and severally liable, shall be limited to
$500,000.00 and Borrowers and/or the ITB Member and/or the ITB Member II,
as applicable, shall be responsible for all legal fees and expenses
incurred by Borrowers, any Borrower Affiliates, the ITB Member and/or the
ITB Member II in connection with such proceeding.
(f) If Borrowers, any Borrower Affiliate, Newco, Newco II, the ITB
Member and/or the ITB Member II shall bring a successful action against
REPG or REPG II based on the allegation that REPG or REPG II, as
applicable, fully disregarded the Sale Goals, (i) the damages in such
action shall be limited to the actual damages incurred by the claimant(s)
in such action as a result of such full disregard of the Sale Goals and not
any consequential or punitive damages, (ii) REPG or REPG II, as applicable,
and Lender shall be jointly and severally liable with respect to such
damages, and (iii) REPG or REPG II, as applicable, and Lender shall be
liable for the reasonable legal fees and expenses of such claimant(s);
provided, however, that only one such action may be brought against REPG
and/or Lender by Borrowers, any Borrower Affiliate, Newco and/or the ITB
Member, whether brought hereunder or under the Newco LLC Agreement, and/or
only one such action may be brought against REPG II and/or Lender by
Borrowers, any Borrower Affiliate, Newco II and/or the ITB Member II,
whether brought hereunder or under the Newco II LLC Agreement, and all of
such claimants in any such action shall be deemed to have suffered one and
the same actual loss, to be divided among such claimants as they determine
in their sole discretion.
7. WAIVER OF MATURITY DEFAULT; EXTENDED MATURITY DATE. In consideration of
Borrowers agreements contained herein and in the Other Restructure Documents,
and in reliance thereon, Lender hereby (a) waives the Maturity Default, and (b)
agrees that the Maturity Date is hereby extended to June 1, 2000 (the "Extended
Maturity Date"), time being of the essence with respect to such date.
8. INTEREST PAYMENTS; TRANSFER TAXES; LENDER'S LEGAL FEES.
(a) Borrowers acknowledge and agree that pursuant to the Term Sheet,
as of November 17, 1999, the date on which a fully-executed original of the
Term Sheet was delivered to Borrowers, $1,762,890.59 of accrued but unpaid
interest on the Loan, representing such unpaid interest at the Interest
Rate from and after June 1, 1999 through and including November 17, 1999,
was added to the Outstanding Principal Balance.
(b) Borrowers acknowledge and agree that pursuant to the Term Sheet,
on the date hereof, $760,298.51 of accrued but unpaid interest on the Loan,
representing such unpaid interest at the Interest Rate from and after
November 18, 1999 through and including the date hereof, is being added to
the Outstanding Principal Balance.
(c) Borrowers and Lender acknowledge and agree that from and after the
date hereof, on each Payment Date through and including the Extended
Maturity Date, the amount of the Monthly Interest Payment then due and
payable shall accrue and shall be capitalized as an addition to the
Outstanding Principal Balance as of such Payment Date; provided, however,
that no such accrual shall be permitted by Lender on any Payment Date if
(i) as of such Payment Date there exist Additional Joint Venture Funds (as
defined in the Newco LLC Agreement) in an amount in excess of the amounts
reserved and not yet distributed under clauses (A), (B) and (C) of Section
9.02(b)(iv) of the Newco LLC Agreement, or (ii) as of such Payment Date
there exist Additional Refinance Funds (as defined in the Newco LLC
Agreement) in an amount in excess of the amounts reserved and not yet
distributed under clauses (A) and (B) of Section 9.02(c)(iv) of the Newco
LLC Agreement, or (iii) on or prior to such Payment Date, Borrowers shall
have paid the Monthly Interest Payment to Lender from other sources, it
being expressly acknowledged and agreed by Borrowers, however, that
Borrowers' failure to make a Monthly Interest Payment to Lender on any
Payment Date on which the circumstances in the foregoing clauses (i) or
(ii) of this Section 8(c) exist, shall constitute an additional Event of
Default under the Loan Documents.
(d) Borrowers acknowledge and agree that Lender's Legal Fees have been
paid as follows:
(i) first, on the date hereof, Borrowers were permitted to apply
$146,000.00 of funds on deposit in the Working Capital Account toward
payment of Lender's Legal Fees; and
(ii) second, on the date hereof, Lender advanced on behalf of
Borrowers $80,000.00, representing the balance of Lender's Legal Fees,
which advance is being added to the Outstanding Principal Balance on
the date hereof.
(e) Borrowers and Lender acknowledge and agree that on the date, if
ever, that the El Rancho Property is conveyed by Orion to Newco II, as
contemplated in Section 5 hereof, at Borrowers' request, Lender shall
advance on behalf of Borrowers the Transfer Taxes due in connection with
such conveyance, which advance shall be added to the Outstanding Principal
Balance as of the date of such advance.
(f) Borrowers and Lender acknowledge and agree that if, on the date,
if ever, that Newco consummates a Repurchase Transaction there are
insufficient proceeds arising therefrom, after the payment of the Minimum
Amount and all Transfer Expenses, to satisfy the Transfer Taxes due in
connection with such Repurchase Transaction, at Borrowers' request, Lender
shall advance on behalf of Borrowers the Transfer Taxes due in connection
with such Repurchase Transaction, which advance shall be added to the
Outstanding Principal Balance as of the date of such advance.
(g) Notwithstanding anything to the contrary set forth in this
Agreement or in any other Restructure Document, Lender agrees that it will
reasonably cooperate with Borrowers, at Borrower's sole cost and expense,
to legally minimize the real property transfer taxes payable in connection
with the conveyance of the Garden State Property by GSRT to Newco, any
Repurchase Transaction and, if applicable, the conveyance of the El Rancho
Property by Orion to Newco II.
(h) Borrowers acknowledge and agree that immediately upon the addition
of any amount contemplated under this Section 8 to the Outstanding
Principal Balance, such amount shall be treated as a portion of the
Outstanding Principal Balance under the Loan Documents for all purposes,
including, without limitation, bearing interest at the same rate as is
borne by the rest of the Outstanding Principal Balance from time to time.
(i) Borrowers acknowledge and agree that, notwithstanding anything to
the contrary set forth in this Agreement, in any Other Restructure Document
or in the Term Sheet, in no event shall the aggregate amount advanced
and/or added to the Outstanding Principal Balance pursuant to the foregoing
clauses (a), (b), (c), (d)(ii), (e) and/or (f) of this Section 8 exceed
$8,000,000.00.
9. BORROWERS' REPRESENTATIONS, WARRANTIES AND COVENANTS. In consideration
for the agreements made by Lender herein, Borrowers hereby make the following
representations, warranties and covenants, all of which shall remain true,
complete and correct until the repayment in full of the ITB Obligations (unless
a later date is expressly referred to therein):
(a) Each Borrower is duly formed, validly existing and in good
standing under the laws of the State of its formation, and has full power
and authority to execute and deliver to Lender this Agreement and all Other
Restructure Documents to which it is a party and to perform the obligations
and carry out the duties imposed upon it by this Agreement and the Other
Restructure Documents to which it is a party. This Agreement and all of the
Other Restructure Documents to be executed by each Borrower have been duly
authorized, approved, executed and delivered by all necessary parties and
constitute the legal, valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective
terms.
(b) Newco is duly formed, validly existing and in good standing under
the laws of the State of its formation, and has full power and authority to
execute and deliver to Lender the Other Restructure Documents to which it
is a party and to perform the obligations and carry out the duties imposed
upon it by the Other Restructure Documents to which it is a party. The
Other Restructure Documents to be executed by Newco have been duly
authorized, approved, executed and delivered by all necessary parties and
constitute the legal, valid and binding obligations of Newco, enforceable
against Newco in accordance with their respective terms.
(c) The ITB Member is duly formed, validly existing and in good
standing under the laws of the State of its formation, and has full power
and authority to execute and deliver to Lender the Other Restructure
Documents to which it is a party and to perform the obligations and carry
out the duties imposed upon it by the Other Restructure Documents to which
it is a party. The Other Restructure Documents to be executed by the ITB
Member have been duly authorized, approved, executed and delivered by all
necessary parties and constitute the legal, valid and binding obligations
of the ITB Member, enforceable against the ITB Member in accordance with
their respective terms.
(d) If and when formed pursuant to Section 5 hereof, Newco II will be
duly formed, validly existing and in good standing under the laws of the
State of its formation, and will have full power and authority to execute
and deliver to Lender the documents required to effectuate the provisions
of Section 5 hereof to which it will be a party and to perform the
obligations and carry out the duties to be imposed upon it thereunder. If
and when applicable, the documents required to effectuate the provisions of
Section 5 hereof to which Newco II will be a party will be duly authorized,
approved, executed and delivered by all necessary parties and will
constitute the legal, valid and binding obligations of Newco II,
enforceable against Newco II in accordance with their respective terms.
(e) If and when formed pursuant to Section 5 hereof, the ITB Member II
will be duly formed, validly existing and in good standing under the laws
of the State of its formation, and will have full power and authority to
execute and deliver to Lender the documents required to effectuate the
provisions of Section 5 hereof to which it will be a party and to perform
the obligations and carry out the duties to be imposed upon it thereunder.
If and when applicable, the documents required to effectuate the provisions
of Section 5 hereof to which the ITB Member II will be a party will be duly
authorized, approved, executed and delivered by all necessary parties and
will constitute the legal, valid and binding obligations of the ITB Member
II, enforceable against the ITB Member II in accordance with their
respective terms.
(f) Other than with respect to ITB, the direct and indirect owners of
each Borrower are as set forth in the Loan Agreement.
(g) The ITB Member owns a one hundred percent (100%) membership
interest in Newco, free and clear of all liens, claims and encumbrances.
(h) ITB owns all of the capital stock of the ITB Member, free and clear of
all liens, claims and encumbrances.
(i) If and when Newco II is formed pursuant to Section 5 hereof, the
ITB Member II will own a one hundred percent (100%) membership interest in
Newco II, free and clear of all liens, claims and encumbrances.
(j) If and when the ITB Member II is formed pursuant to Section 5
hereof, ITB will own all of the capital stock of the ITB Member II, free
and clear of all liens, claims and encumbrances.
(k) The execution, delivery and performance of this Agreement and the
Other Restructure Documents to which each Borrower is a party, and the
performance by each Borrower of its obligations thereunder, will not, with
or without the giving of notice or the passage of time or both, (i) violate
the provisions of any law, rule or regulation applicable to any Borrower;
(ii) violate the provisions of any Borrower's Organizational Documents;
(iii) violate any judgment, decree, order or award of any court,
governmental body or arbitrator applicable to any Borrower; or (iv)
conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of any Borrower pursuant to, any indenture, mortgage,
deed of trust or other agreement or instrument to which any Borrower or its
properties is a party or by which any Borrower is or may be bound.
(l) The execution, delivery and performance of the Other Restructure
Documents to which Newco is a party, and the performance by Newco of its
obligations thereunder, will not, with or without the giving of notice or
the passage of time or both, (i) violate the provisions of any law, rule or
regulation applicable to Newco; (ii) violate the provisions of any of
Newco's Organizational Documents; (iii) violate any judgment, decree, order
or award of any court, governmental body or arbitrator applicable to Newco;
or (iv) conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of Newco pursuant to, any indenture, mortgage, deed of
trust or other agreement or instrument to which Newco or its properties is
a party or by which Newco is or may be bound.
(m) The execution, delivery and performance of the Other Restructure
Documents to which the ITB Member is a party, and the performance by the
ITB Member of its obligations thereunder, will not, with or without the
giving of notice or the passage of time or both, (i) violate the provisions
of any law, rule or regulation applicable to the ITB Member; (ii) violate
the provisions of any of the ITB Member's Organizational Documents; (iii)
violate any judgment, decree, order or award of any court, governmental
body or arbitrator applicable to the ITB Member; or (iv) conflict with or
result in the breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets
of the ITB Member pursuant to, any indenture, mortgage, deed of trust or
other agreement or instrument to which the ITB Member or its properties is
a party or by which the ITB Member is or may be bound.
(n) If and when Newco II is formed pursuant to Section 5 hereof, the
execution, delivery and performance of the documents required to effectuate
the provisions of Section 5 hereof to which Newco II will be a party, and
the performance by Newco II of its obligations thereunder, will not, with
or without the giving of notice or the passage of time or both, (i) violate
the provisions of any law, rule or regulation then applicable to Newco II;
(ii) violate the provisions of any of Newco II's Organizational Documents;
(iii) violate any judgment, decree, order or award of any court,
governmental body or arbitrator then applicable to Newco II; or (iv)
conflict with or result in the breach or termination of any term or
provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of Newco II pursuant to, any indenture, mortgage, deed
of trust or other agreement or instrument to which Newco II or its
properties is then a party or by which Newco II is or may then be bound.
(o) If and when the ITB Member II is formed pursuant to Section 5
hereof, the execution, delivery and performance of the documents required
to effectuate the provisions of Section 5 hereof to which the ITB Member II
will be a party, and the performance by the ITB Member II of its
obligations thereunder, will not, with or without the giving of notice or
the passage of time or both, (i) violate the provisions of any law, rule or
regulation then applicable to the ITB Member II; (ii) violate the
provisions of any of the ITB Member II's Organizational Documents; (iii)
violate any judgment, decree, order or award of any court, governmental
body or arbitrator then applicable to the ITB Member II; or (iv) conflict
with or result in the breach or termination of any term or provision of, or
constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets
of the ITB Member II pursuant to, any indenture, mortgage, deed of trust or
other agreement or instrument to which the ITB Member II or its properties
is then a party or by which the ITB Member II is or may then be bound.
(p) All consents, approvals, authorizations and other requirements
prescribed by each Borrower's Organizational Documents and by all laws,
rules and regulations binding on each Borrower, that must be obtained or
satisfied in connection with each Borrower's execution, delivery and
performance of the Term Sheet, this Agreement and the Other Restructure
Documents to which it is a party, have been obtained and satisfied.
(q) All consents, approvals, authorizations and other requirements
prescribed by Newco's Organizational Documents and by all laws, rules and
regulations binding on Newco, that must be obtained or satisfied in
connection with Newco's execution, delivery and performance of the Other
Restructure Documents to which Newco is a party, have been obtained and
satisfied.
(r) All consents, approvals, authorizations and other requirements
prescribed by the ITB Member's Organizational Documents and by all laws,
rules and regulations binding on the ITB Member, that must be obtained or
satisfied in connection with the ITB Member's execution, delivery and
performance of the Other Restructure Documents to which the ITB Member is a
party, have been obtained and satisfied.
(s) If and when Newco II is formed pursuant to Section 5 hereof, all
consents, approvals, authorizations and other requirements prescribed by
Newco II's Organizational Documents and by all laws, rules and regulations
then binding on Newco, that must be obtained or satisfied in connection
with Newco II's execution, delivery and performance of the documents
required to effectuate the provisions of Section 5 hereof to which Newco II
will be a party, will be obtained and satisfied.
(t) If and when the ITB Member II is formed pursuant to Section 5
hereof, all consents, approvals, authorizations and other requirements
prescribed by the ITB Member II's Organizational Documents and by all laws,
rules and regulations then binding on the ITB Member II, that must be
obtained or satisfied in connection with the ITB Member II's execution,
delivery and performance of the documents required to effectuate the
provisions of Section 5 hereof to which the ITB Member II will be a party,
will be obtained and satisfied.
(u) As of the date hereof, and giving effect to the provisions of
Section 7 hereof, on a consolidated basis, none of the Borrowers are
insolvent as of the date hereof, for which purpose "insolvent" shall mean
(i) the inability of an entity to pay its debts as they become due, and/or
(ii) that the fair value of such entity's debts is greater than the fair
value of such entity's assets.
(v) None of the Borrowers shall file any voluntary bankruptcy
proceeding, make any assignment for the benefit of creditors, or apply for
or consent to the appointment of, or the taking of possession by, a
receiver, custodian or trustee of itself or of all or substantially all of
its assets, in each case, until at least 367 days following the repayment
in full of the ITB Obligations.
(w) None of the Borrowers shall assist in, or consent to, any
involuntary bankruptcy proceeding against it, any other Borrower, Newco,
the ITB Member, Newco II or the ITB Member II until at least 367 days
following the repayment in full of the ITB Obligations.
(x) In the event that any Borrower does file a voluntary bankruptcy
proceeding (in violation of the foregoing agreements) or in the event that
an involuntary bankruptcy proceeding is filed against any of them, ITB and
the other Borrowers, as applicable, shall not oppose, and shall immediately
consent to, any motion by Lender for relief from any automatic stay in such
bankruptcy proceeding in order to allow Lender to exercise any or all of
its rights and remedies, including, without limitation, to foreclose on the
Garden State Property and/or the El Rancho Property.
(y) Borrowers shall not cause or permit Newco or the ITB Member to
file any voluntary bankruptcy proceeding, make any assignment for the
benefit of creditors, or apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian or trustee of either of them
or of all or substantially all of their respective assets, in each case,
until at least 367 days following the repayment in full of the ITB
Obligations.
(z) Borrowers shall not cause or permit Newco or the ITB Member to
assist in, or consent to, any involuntary bankruptcy proceeding against
Newco or the ITB Member, until at least 367 days following the repayment in
full of the ITB Obligations.
(aa) In the event that Newco or the ITB Member does file a voluntary
bankruptcy proceeding (in violation of the foregoing agreements) or in the
event that an involuntary bankruptcy proceeding is filed against either of
them, Borrowers shall cause Newco and/or the ITB Member, as applicable, not
to oppose, and to immediately consent to, any motion by Lender for relief
from any automatic stay in such bankruptcy proceeding in order to allow
Lender to exercise any or all of its rights and remedies, including,
without limitation, to foreclose on the Garden State Property.
(bb) Following the formation, if ever, of Newco II and the ITB Member
II pursuant to Section 5 hereof, Borrowers shall not cause or permit Newco
II or the ITB Member II to file any voluntary bankruptcy proceeding, make
any assignment for the benefit of creditors, or apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian or
trustee of either of them or of all or substantially all of their
respective assets, in each case, until at least 367 days following the
repayment in full of the ITB Obligations.
(cc) Following the formation, if ever, of Newco II and the ITB Member
II pursuant to Section 5 hereof, Borrowers shall not cause or permit Newco
II or the ITB Member II to assist in, or consent to, any involuntary
bankruptcy proceeding against Newco II or the ITB Member II, until at least
367 days following the repayment in full of the ITB Obligations.
(dd) Following the formation, if ever, of Newco II and the ITB Member
II pursuant to Section 5 hereof, in the event that Newco or the ITB Member
does file a voluntary bankruptcy proceeding (in violation of the foregoing
agreements) or in the event that an involuntary bankruptcy proceeding is
filed against either of them, Borrowers shall cause Newco II and/or the ITB
Member II, as applicable, not to oppose, and to immediately consent to, any
motion by Lender for relief from any automatic stay in such bankruptcy
proceeding in order to allow Lender to exercise any or all of its rights
and remedies, including, without limitation, to foreclose on the El Rancho
Property.
(ee) Prior to the Extended Maturity Date, Borrowers, at their sole
cost and expense, shall cause to be filed with the United States Securities
and Exchange Commission the registration statement(s) contemplated under
Paragraph 5(l) of the Approval Agreement.
(ff) Borrowers acknowledge and agree on behalf of Newco that (i) the
list of proposed real estate brokerage firms (and their proposed brokerage
fees) to be furnished by REPG to Newco pursuant to Section 9.01 of the
Newco LLC Agreement was so furnished to Newco as of January 25, 2000, and
(ii) accordingly, Newco shall have until (and including) February 1, 2000
(i.e., the fifth Business Day after January 25, 2000) to select its choice
from such list as the Company Broker (as defined in the Newco LLC
Agreement), after which date, if no selection has been made by Newco, REPG
shall have the right to make such selection in accordance with said Section
9.1 of the Newco LLC Agreement.
(gg) By not later than January 31, 2000, Borrowers shall dismiss with
prejudice or settle the lawsuit by ITB against Standard Capital Group, Inc.
and SunAmerica Investments, Inc.
10. ADDITIONAL EVENTS OF DEFAULT. Borrowers hereby agree that the following
shall constitute additional Events of Default under the Loan Agreement, without
any notice or grace period applicable thereto:
(a) Any Borrower's breach of any representation, warranty or covenant
contained in this Agreement or any Other Restructure Document;
(b) Any failure by Newco to perform any of its obligations under the
Newco LLC Agreement or any Other Restructure Document to which it is a
party.
(c) Any failure by the ITB Member to perform any of its obligations
under the Newco LLC Agreement or any Other Restructure Document to which it
is a party.
(d) Following the formation, if ever, of Newco II pursuant to Section
5 hereof, any failure by Newco II to perform any of its obligations under
the Newco II LLC Agreement or any other document required to effectuate the
provisions of Section 5 hereof to which Newco II is a party.
(e) Following the formation, if ever, of the ITB Member II pursuant to
Section 5 hereof, any failure by the ITB Member II to perform any of its
obligations under the Newco II LLC Agreement or any other document required
to effectuate the provisions of Section 5 hereof to which the ITB Member II
is a party.
(f) The additional Event of Default set forth in Section 8(c) hereof.
11. RIGHTS UNDER NEWCO LLC AGREEMENT AND NEWCO II LLC AGREEMENT NOT
EXCLUSIVE. Borrowers hereby agree that REPG's rights under the Newco LLC
Agreement and, if applicable, REPG II's rights under the Newco II LLC Agreement
are not exclusive of each other and may be exercised contemporaneously or
sequentially, in each instance, as REPG and REPG II shall determine in their
sole discretion, provided, that in no event shall Lender be entitled to receive
an amount in excess of the then outstanding ITB Obligations.
12. NO OPERATIONAL CONTROL BY REPG AND REPG II. Borrowers hereby
acknowledge and agree that no statement in the Term Sheet, in this Agreement, in
the Newco LLC Agreement or in the Newco II LLC Agreement to the effect that
neither Lender nor REPG shall have any operational control over any of the
activities at the Garden State Property and/or that neither Lender nor REPG II
shall have any operational control over any of the activities at the El Rancho
Property, shall be deemed to, or shall, impair, vitiate, modify or terminate, in
any manner, the provisions of the Loan Documents, including, without limitation,
any negative covenants contained therein and any consents or approvals required
from Lender thereunder prior to the taking of certain actions with respect to
the Garden State Property and/or the El Rancho Property.
13. AMENDMENTS TO LOAN DOCUMENTS; CONFLICTS. Borrowers and Lender hereby
agree as follows:
(a) Without the need for any further documentation, the Loan Documents
are hereby deemed amended to the extent necessary to make them consistent
with the terms of this Agreement and the Other Restructure Documents;
provided, however, that, without limiting the foregoing, Lender and
Borrowers shall, at the sole cost and expense of Borrowers, execute and
deliver such amendments to the Loan Documents as Lender or Borrowers may
reasonably request from time to time in order to reflect the provisions of
this Agreement and the Other Restructure Documents, including, without
limitation, the Modification.
(b) In the event of any conflict between the terms of this Agreement
or any Other Restructure Document, on the one hand, and the terms of any
Loan Document, on the other hand, the terms of this Agreement or the Other
Restructure Document, as applicable, shall govern.
14. WAIVER OF LENDER LIABILITY CLAIMS. Borrowers hereby expressly
acknowledge that (i) the Loan is in default by virtue of the Maturity Default,
(ii) as a result of the Maturity Default, Lender could have commenced
foreclosure proceedings with respect to the Garden State Property and the El
Rancho Property and also exercised its other rights and remedies under the Loan
Documents, (iii) Lender is under no obligation, pursuant to law, contract or
otherwise, to waive the Maturity Default, extend the Maturity Date or
restructure the Loan as set forth in this Agreement and the Other Restructure
Documents, and (iv) Lender has agreed to waive the Maturity Default, extend the
Maturity Date and restructure the Loan as set forth in this Agreement and the
Other Restructure Documents as an accommodation to Borrowers and in
consideration for, and in reliance upon, the agreements made by Borrowers (and
by Newco and the ITB Member and, if applicable, Newco II and the ITB Member II)
in this Agreement, the Other Restructure Documents and the documents necessary
to effectuate the provisions of Section 5 hereof, including the following
agreements made by Borrowers in this Section 14. Accordingly, except (A) as
expressly set forth in Section 9.07, and (B) to the extent that any of the
following may arise from or be attributed to (y) the willful misconduct or gross
negligence of Lender, any Lender Affiliate or REPG, or (B) the breach of any
representation, warranty or obligation of Lender, any Lender Affiliate or REPG
hereunder or under any Other Restructure Document; provided, however, that it is
expressly understood and agreed by Borrowers, that REPG's exercise of its rights
under Article IX of the Newco LLC Agreement shall not, under any circumstances,
give rise to a claim that Lender, any Lender Affiliate or REPG engaged in
willful misconduct or was grossly negligent or breached any representation,
warranty or obligation thereunder or hereunder, as the standards for, and limits
of, liability under said Article IX are expressly set forth therein, in
consideration of the foregoing, Borrowers, on behalf of themselves and all
Borrower Affiliates, hereby irrevocably waive and release Lender and all Lender
Affiliates from all claims, actions, causes of action, liabilities, damages,
costs and expenses, including specifically, but without limitation, any of the
foregoing based on theories of lender liability, arising from, or in any manner
connected with (1) any decision heretofore or hereafter made, or any action
heretofore or hereafter taken or not taken, by Lender or any Lender Affiliate in
connection with the Loan or under the Loan Documents, (2) any decision hereafter
made, or any action hereafter taken or not taken, by Lender or any Lender
Affiliate under this Agreement or any of the Other Restructure Documents, (3)
any decision hereafter made, or any action hereafter taken or not taken, by REPG
in connection with the Garden State Property or any other Company Asset or under
the Newco LLC Agreement, and (4) any decision hereafter made, or any action
hereafter taken or not taken, by REPG II in connection with the El Rancho
Property or under the Newco II LLC Agreement.
15. LENDER'S COSTS AND EXPENSES. Borrowers hereby expressly reaffirm the
provisions of Section 10.1 of the Loan Agreement and agree that the provisions
thereof shall apply with the same force and effect to any Costs incurred by
Lender (on behalf of itself or REPG or REPG II) after the date hereof in
connection with the performance, monitoring and/or enforcement of this Agreement
and the Other Restructure Documents.
16. MISCELLANEOUS.
(a) The agreements set forth herein shall be binding upon, and shall
inure to the benefit of, Lender, each Lender Affiliate and its and their
respective successors, assigns and participants. The agreements set forth
herein shall be binding upon, and shall inure to the benefit of, each
Borrower and each Borrower Affiliate and, to the extent assignment of the
Loan Documents by any Borrower is permitted under the Loan Agreement, their
respective permitted successors and assigns.
(b) This Agreement may be executed in multiple counterparts, each of
which shall constitute an original, and together shall constitute this
Agreement.
(c) This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York pursuant to Section 5-1401
of the New York General Obligations Law.
(d) Lender and Borrowers shall, and Lender shall cause REPG and/or
REPG II to, and Borrowers shall cause Newco, the ITB Member, Newco II
and/or the ITB Member II to, from time to time, upon request of the other
party, at the sole cost and expense of Borrowers, execute and deliver such
other documents and/or instruments, and take such other actions, as may be
reasonably necessary or desirable to fully effectuate the terms and
provisions of this Agreement or any Other Restructure Document.
(e) The recitals at this beginning of this Agreement are hereby made a
part of the substantive provisions hereof.
(f) Neither this Agreement nor any Other Restructure Document shall be
modified or amended, nor shall any provision hereof or thereof be waived,
except in a writing signed by the party against whom such modification,
amendment or waiver is sought to be enforced.
(g) No other Person other than Lender, Borrowers, Newco, the ITB
Member and, if applicable, Newco II and the ITB Member II, shall have any
rights in or under this Agreement or any Other Restructure Document nor be
or be deemed to be a third party beneficiary hereof or thereof.
(h) This Agreement and the Other Restructure Document shall not be
construed more strictly against one party than against the others merely by
virtue of the fact that it may have been prepared by counsel for one of the
parties, it being recognized that both Lender and Borrowers (A) have
contributed substantially and materially to the preparation of this
Agreement and the Other Restructure Documents, and (B) have had ample
opportunity to have this Agreement and the Other Restructure Documents
reviewed and approved by their legal, business and tax advisors.
(i) TIME SHALL BE OF THE ESSENCE WITH RESPECT TO EACH DATE SET FORTH
HEREIN.
(j) EACH BORROWER HEREBY AGREES THAT ANY PROCEEDING BETWEEN ANY
BORROWER(S) AND LENDER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
BREACH OR THREATENED BREACH HEREOF SHALL BE COMMENCED AND PROSECUTED, AT
LENDER'S OPTION, ONLY IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION LOCATED IN THE COUNTY AND STATE OF NEW YORK. EACH BORROWER
HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF
ANY SUCH COURT IN RESPECT OF ANY SUCH PROCEEDING. EACH BORROWER HEREBY
CONSENTS TO SERVICE OF PROCESS UPON IT WITH RESPECT TO ANY SUCH PROCEEDING
BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS PROVIDED IN
SECTION 16(k) HEREOF AND BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAWS
AND RULES. EACH BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING IN ANY SUCH
COURT AND ANY CLAIM THAT IT MAY NOW OR HEREAFTER HAVE THAT ANY SUCH
PROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH BORROWER HEREBY WAIVES TRIAL BY JURY WITH RESPECT TO ANY SUCH
PROCEEDING.
(k) All notices to be sent hereunder shall be sent in accordance with
the provisions of Section 10.9 of the Loan Agreement, as modified by
Paragraph 7(n) of the Approval Agreement.
(l) Borrowers expressly acknowledge and agree that Lender is under no
obligation to further restructure, amend or extend the Loan.
(m) This Agreement and the Other Restructure Documents, including all
exhibits and schedules hereto and thereto, constitute the entire agreement
between Lender (and/or, as applicable, REPG and/or REPG II) and Borrowers
(and/or, as applicable, Newco, the ITB Member, Newco II and/or the ITB
Member II) with respect to the subject matter hereof and thereof, and shall
supersede and take the place of any other agreements (oral or written) or
document(s) purporting to be an agreement between or among any of such
parties relating to the transactions contemplated by this Agreement and/or
any of the Other Restructure Documents, including, without limitation, the
Term Sheet.
(n) Except as deemed amended hereby or as the same may be amended in
order to reflect the terms hereof, (i) the Loan Agreement and the other
Loan Documents remain unmodified and in full force and effect, and (ii)
Borrowers and Lender hereby ratify and confirm all of the provisions
thereof.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, Borrowers and Lender have executed this Restructure
Agreement as of the date first set forth above.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By: _______________________________
Name:
Title:
GARDEN STATE RACE TRACK, INC.
By: _______________________________
Name:
Title:
HOLDFREE, INC.
(formerly known as Freehold Racing Association)
By: _______________________________
Name:
Title:
INTERNATIONAL THOROUGHBRED GAMING
DEVELOPMENT CORPORATION
By: _______________________________
Name:
Title:
ORION CASINO CORPORATION
By: _______________________________
Name:
Title:
[SIGNATURE OF LENDER ON FOLLOWING PAGE]
LENDER
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By: _______________________________
Name:
Title:
EXHIBIT A
NEWCO LLC AGREEMENT
EXHIBIT B
NEWCO CERTIFICATE OF FORMATION
EXHIBIT C
INDEMNIFICATION AGREEMENT
EXHIBIT D
MODIFICATION
EXHIBIT E
FORM OF EQUITY PLEDGE AND SECURITY AGREEMENT
BRMFS1 173099.08
EXHIBIT 10.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
GSRT, LLC
Dated January __, 2000
INDEX
PAGE
ARTICLE I -- GENERAL PROVISIONS. . . . . ...... . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . 1
SECTION 1.02. FORMATION. . . . . . . . . . . . . . . . . . 6
SECTION 1.03. NAME . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.04 EFFECTIVE DATE . . . . . . . . . . . . . . . 6
SECTION 1.05. PRINCIPAL OFFICE . . . . . . . . . . . . . . 6
SECTION 1.06. FILINGS. . . . . . . . . . . . . . . . . . . 6
SECTION 1.07. REGISTERED OFFICE AND REGISTERED AGENT . . . 6
SECTION 1.08. TERM . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.09. PURPOSE. . . . . . . . . . . . . . . . . . . 6
ARTICLE II -- MEMBER'S INTERESTS . . . . . . . ...... . . . . . 7
SECTION 2.01. MEMBER . . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. MEMBERSHIP INTEREST. . . . . . . . . . . . . 7
ARTICLE III -- REPG; MANAGEMENT AND OPERATION OF THE
PROPERTY;. . . . . . . . . . . . . . . . . . . . . . . ...... . 7
SECTION 3.01. REPG; TERM; REMOVAL; RESIGNATION . . . . . . 7
SECTION 3.02. POWERS OF REPG . . . . . . . . . . . . . . . 8
SECTION 3.03. POWERS OF MEMBER . . . . . . . . . . . . . . 8
SECTION 3.04. LIABILITY OF MEMBER AND BORROWERS. . . . . . 9
SECTION 3.05. REMUNERATION OF REPG AND MEMBER. . . . . . . 9
ARTICLE IV -- CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATION...... 9
SECTION 4.01. CAPITAL CONTRIBUTIONS. . . . . . . . . . . .10
SECTION 4.02. CAPITAL ACCOUNTS . . . . . . . . . . . . . .10
SECTION 4.03. AMOUNTS AND PRIORITY OF DISTRIBUTIONS. . . .10
SECTION 4.04. ALLOCATION OF INCOME AND LOSS. . . . . . . .13
ARTICLE V -- LIABILITY; INDEMNIFICATION. . . . . . . ...... . .13
SECTION 5.01. LIABILITY OF REPG COVERED PERSONS. . . . . .13
SECTION 5.02. INDEMNIFICATION OF REPG COVERED PERSONS. . .13
SECTION 6.01. AUDIT AND REPORTS. . . . . . . . . . . . . .14
SECTION 6.02. TAX PARTNER. . . . . . . . . . . . . . . . .15
ARTICLE VII -- TRANSFER; WITHDRAWAL. . . . . . . . . ...... . .15
SECTION 7.01. ADDITIONAL MEMBERS . . . . . . . . . . . . .15
SECTION 7.02. TRANSFER . . . . . . . . . . . . . . . . . .15
SECTION 7.03. WITHDRAWALS. . . . . . . . . . . . . . . . .16
SECTION 7.04. RIGHTS OF NEW MEMBERS. . . . . . . . . . . .16
ARTICLE VIII -- TERMINATION; DISSOLUTION; LIQUIDATION. ...... .16
SECTION 8.01. TERMINATION OF THE COMPANY . . . . . . . . .16
SECTION 8.02. EVENTS OF DISSOLUTION. . . . . . . . . . . .16
SECTION 8.03. LIQUIDATION. . . . . . . . . . . . . . . . .17
ARTICLE IX -- SALE OF THE PROPERTY . . . . . . . ...... . . . .17
SECTION 9.01 SALE OF THE PROPERTY. . . . . . . . . . . . .17
SECTION 9.02 REPURCHASE OPTION. .. . . . . . . . . . . . .18
SECTION 9.03 OCCURRENCE OF REPURCHASE JOINT VENTURE OR
REPURCHASE REFINANCING. . . . . . . . . . . .22
SECTION 9.04 FAILURE OF REPURCHASE TRANSACTION TO OCCUR. .22
SECTION 9.05 FAILURE OF REPURCHASE TRANSACTION TO CLOSE. .23
SECTION 9.06 CONSEQUENCES OF EXTENDED MATURITY DATE. . . .23
SECTION 9.07 SALE GOALS . .. . . . . . . . . . . . . . . .23
SECTION 9.08 SCOPE OF MEMBER'S AND REPG'S RIGHTS AND
AUTHORITY................................... 25
ARTICLE X -- MISCELLANEOUS . . . . ...... . . . . . . . . . . .25
SECTION 10.01. SUCCESSORS AND ASSIGNS. . . . . . . . . . .25
SECTION 10.02. NO WAIVER . . . . . . . . . . . . . . . . .26
SECTION 10.03. NOTICES . . . . . . . . . . . . . . . . . .26
SECTION 10.04. SEVERABILITY. . . . . . . . . . . . . . . .27
SECTION 10.05. AMENDMENTS/WAIVERS. . . . . . . . . . . . .28
SECTION 10.06. COUNTERPARTS. . . . . . . . . . . . . . . .29
SECTION 10.07. HEADINGS, ETC.. . . . . . . . . . . . . . .29
SECTION 10.08. NO RIGHT TO PARTITION . . . . . . . . . . .29
SECTION 10.09. NO THIRD PARTY RIGHTS . . . . . . . . . . .29
SECTION 10.10. APPLICABLE LAW. . . . . . . . . . . . . . .29
SECTION 10.11 PERFORMANCE ON BUSINESS DAYS . . . . . . . .29
SECTION 10.12 SINGLE PURPOSE ENTITY. . . . . . . . . . . .29
SECTION 10.13. TERMS . . . . . . . . . . . . . . . . . . .31
EXHIBITS
EXHIBIT "A": Description of the Property
EXHIBIT "B": Certificate of Formation
LIMITED LIABILITY COMPANY AGREEMENT OF
GSRT, LLC
This Limited Liability Company Agreement (this "AGREEMENT") of GSRT,
LLC, a Delaware limited liability company (the "COMPANY"), dated as of January
__, 2000, is adopted and entered into by GARDEN STATE RACE TRACK, INC., a New
Jersey corporation ("MEMBER"), and the Company, pursuant to the provisions
hereof and in accordance with the Delaware Limited Liability Company Act (6 Del.
C. section 18-101, et seq.), as amended from time to time (the "ACT").
WHEREAS, Member has determined to form and become the sole Member of a
limited liability company in accordance with the Act; and
WHEREAS, Member intends for the Company to own and hold title to the
real property known as Garden State Race Track, located at Route 70 and
Haddonfield Road, Cherry Hill, Camden County, New Jersey, and more particularly
described in EXHIBIT "A" annexed hereto (the "PROPERTY").
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Member, by signing this Agreement
below, hereby agrees as follows:
ARTICLE I -- GENERAL PROVISIONS
SECTION 1.01. DEFINITIONS. For the purpose of this Agreement, the following
terms shall have the following meanings:
"ACT" shall have the meaning set forth in the introductory paragraph
hereof.
"ADDITIONAL JOINT VENTURE FUNDS" shall have the meaning set forth in
Section 9.02(b)(iv).
"ADDITIONAL REFINANCE FUNDS" shall have the meaning set forth in Section
9.02(c)(iv).
"ADDITIONAL REPURCHASE FUNDS" shall have the meaning set forth in Section
9.02(a)(i).
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
the specified Person.
"AGREEMENT" shall mean this Limited Liability Agreement of the Company,
together with the exhibits attached hereto, as amended, restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof.
"APPROVAL AGREEMENT" shall have the meaning set forth in the definition of
"LOAN AGREEMENT" below.
"APPROVED DEVELOPMENT BUDGET" shall have the meaning set forth in Section
9.02(b)(iv).
"BANKRUPTCY TRUSTEE" shall mean Donald F. Conway, Chapter 11 Trustee for
the Bankruptcy Estate of Robert E. Brennan.
"BANKRUPTCY TRUSTEE MORTGAGE" shall mean that certain Second Mortgage and
Security Agreement by Member to the Bankruptcy Trustee in the principal amount
of $3,558,032 encumbering the Property.
"BORROWERS" shall mean, collectively, ITB, Member, Holdfree, Inc. (formerly
known as Freehold Racing Association), International Thoroughbred Gaming
Development Corporation and Orion.
"BUSINESS DAY" shall mean day which is not a day on which banking
institutions in the City of New York are authorized or obligated by law or
executive order to close.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 4.02.
"CAPITAL CONTRIBUTION" shall mean the amount of cash or other property
contributed by Member to the Company from time to time pursuant to Section 4.01.
"CERTIFICATE" shall have the meaning set forth in Section 1.04.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder.
"COMPANY" shall mean GSRT, LLC, a Delaware limited liability company.
"COMPANY ASSET" shall have the meaning set forth in Section 9.07(b).
"COMPANY BROKER" shall have the meaning set forth in Section 9.01.
"DISSOLUTION EVENT" shall have the meaning set forth in Section 8.02.
"DISTRIBUTABLE PROCEEDS" shall mean
(i) all funds received by the Company, directly or indirectly, from (a) the
sale, joint venturing or refinancing of the Property, including, without
limitation, the Minimum Amount, any Additional Repurchase Funds, any Additional
Joint Venture Funds or any Additional Refinance Funds, and/or (b) the sale or
refinance of any Repurchase Note, Joint Venture Interest and/or Post-Repurchase
Asset, and
(ii) all cash held by the Company on the Extended Maturity Date arising
from any of the foregoing (including, without limitation, to the extent not
previously distributed to Member in accordance with the provisions of this
Agreement, any Additional Joint Venture Funds and/or Additional Refinance
Funds).
"EXTENDED MATURITY DATE" shall mean June 1, 2000.
"FAIR MARKET VALUE" shall mean, with respect to any property, the price
that would obtain in an arms' length transaction between informed and willing
parties not under any obligation or compulsion to buy or sell such property.
"FISCAL YEAR" shall mean each fiscal year of the Company (or portion
thereof), which shall end on June 30; provided, however, that upon termination
of the Company, "FISCAL YEAR" shall mean the period from the January 1
immediately preceding such termination to the date of such termination.
"GAAP" shall mean generally accepted accounting principles, consistently
applied.
"INITIAL CAPITAL CONTRIBUTION" shall have the meaning set forth in Section
4.01(a).
"INTEREST" shall mean the one hundred percent (100%) limited liability
company interest in the Company owned by Member.
"INTERMEDIARY" shall have the meaning set forth in Section 7.02.
"ITB" shall mean International Thoroughbred Breeders, Inc., a Delaware
corporation.
"ITB COVERED PERSON" shall have the meaning set forth in Section 5.01(b).
"ITB OBLIGATIONS" shall have the meaning set forth in Section 3.04.
"JOINT VENTURE DOCUMENTS" shall have the meaning set forth in Section
9.02(b)(iv).
"JOINT VENTURE INTEREST" shall have the meaning set forth in Section
9.02(b).
"LENDER" shall mean Credit Suisse First Boston Mortgage Capital LLC or its
successors and/or assigns under the Loan Agreement and the other Loan Documents.
"LENDER AFFILIATES" shall mean each Affiliate of Lender and each officer,
director, shareholder, partner, member, representative and/or agent of Lender
and/or each Affiliate of Lender.
"LOAN" shall mean that certain loan from Lender to Borrowers in the
original principal amount of $55,000,000.00.
"LOAN AGREEMENT" shall mean that certain Loan Agreement dated May 23, 1997
by and among Borrowers and Lender, as the same was amended pursuant to that
certain Amendment to Loan Agreement dated as of May 24, 1997 by and among
Borrowers and Lender, and as the same was further amended pursuant to that
certain Approval Agreement dated January 28, 1999 by and among Borrowers and
Lender (the "APPROVAL AGREEMENT").
"LOAN DOCUMENTS" shall have the meaning set forth in the Loan Agreement.
"MEMBER" shall mean Garden State Race Track, Inc., a New Jersey
corporation.
"MINIMUM AMOUNT" shall have the meaning set forth in Section 9.02(a)(i).
"MORTGAGE" shall mean that certain First Mortgage, Assignment of Rents and
Security Agreement dated May 23, 1997 made by GSRT in favor of the Lender
encumbering the Property and securing the Loan, as the same heretofore may have
been, or hereafter may be, amended or modified.
"NET INCOME" and "NET LOSS" shall mean, for any Fiscal Year (or portion
thereof), the net income or net loss of the Company during such Fiscal Year (or
portion thereof), as determined for federal income tax purposes, plus any income
earned by the Company that is exempt from federal income tax and minus the
amount of any expenditures accrued by the Company that are described in Section
705(a)(2)(B) of the Code or are treated as described in Section 705(a)(2)(B) of
the Code pursuant to Regulation Section 1.704-1(b)(2)(iv)(i).
"NET LEASE" shall have the meaning set forth in Section 4.03(a).
"NON-LIABILITY EXCEPTIONS" shall have the meaning set forth in Section
5.01(a).
"OPERATING RECEIPTS" shall mean all funds received by the Company from time
to time (i) from the operation of the Property, including, without limitation,
all rent payments received by or on behalf of the Company under the Net Lease,
and/or (ii) from any interest payment on, or principal repayment of, any
Repurchase Note.
"ORION" shall mean Orion Casino Corporation, a Nevada corporation.
"PERMITTED TRANSFER" shall have the meaning set forth in Section 7.02.
"PERSON" shall mean an individual, a corporation, a company, a voluntary
association, a partnership, a joint venture, a limited liability company, a
trust, an estate, an unincorporated organization or other entity.
"POST-REPURCHASE ASSETS" shall have the meaning set forth in Section
9.03(b).
"PROPERTY" shall have the meaning set forth in the recitals hereto.
"REGULATIONS" shall mean the regulations promulgated under the Code.
"REPG" shall mean REPG Garden State Corporation, a Delaware corporation, or
any successor thereto.
"REPG COVERED PERSON" shall have the meaning set forth in Section 5.01(a).
"REPURCHASE JOINT VENTURE" shall have the meaning set forth in Section
9.02(b).
"REPURCHASE NOTE" shall have the meaning set forth in Section 9.02(a)(ii).
"REPURCHASE OPTION" shall have the meaning set forth in Section 9.02.
"REPURCHASE OPTION JOINT VENTURE AGREEMENT" shall have the meaning set
forth in Section 9.02(b)(vi).
"REPURCHASE OPTION SALE" shall have the meaning set forth in Section
9.02(a).
"REPURCHASE OPTION SALES CONTRACT" shall have the meaning set forth in
Section 9.02(a)(iii).
"REPURCHASE REFINANCING" shall have the meaning set forth in Section
9.02(c).
"REPURCHASE REFINANCING DOCUMENTS" shall have the meaning set forth in
Section 9.02(c)(iv).
"REPURCHASE TRANSACTION" shall have the meaning set forth in Section 9.02.
"RESTRUCTURE AGREEMENT" shall mean that certain Restructure Agreement dated
of even date herewith by and among the Lender and Borrowers.
"RESTRUCTURE DOCUMENTS" shall mean all of the documents contemplated to be
executed and/or delivered pursuant to the Restructure Agreement.
"SALE GOALS" shall have the meaning set forth in Section 9.04.
"TRANSFER" shall have the meaning set forth in Section 7.02.
"TRANSFER EXPENSES" shall have the meaning set forth in Section
4.03(b)(ii).
"TRANSFER TAXES" shall have the meaning set forth in Section 4.03(b)(iii)
"TRUSTEE LOAN" shall have the meaning set forth in Section 4.03(a)(iv).
SECTION 1.02. FORMATION. Member hereby forms the Company as a limited
liability company under and pursuant to the provisions of the Act. Member and
the Company hereby agree that the Company shall be governed by the terms and
conditions of this Agreement.
SECTION 1.03. NAME The name of the Company is "GSRT, LLC." The Company's
business shall only be conducted under the Company's name.
SECTION 1.04 EFFECTIVE DATE This Agreement shall be effective as of
December 17, 1999, the date on which the Certificate of Formation of the Company
(the "CERTIFICATE") in the form attached hereto as EXHIBIT "B" was filed with
the Secretary of State of the State of Delaware.
SECTION 1.05. PRINCIPAL OFFICE. The principal office of the Company shall
be located at Haddonfield Road and Route 70, Cherry Hill, New Jersey 08034, or
such other place in the United States as may from time to time be designated by
Member with the prior approval of REPG. The Company shall keep its books and
records at its principal office or at such other place in the United States as
may from time to time be designated by Member with the prior approval of REPG.
Following REPG's approval as hereinabove provided, Member shall give prompt
notice to REPG of any change in the location of the Company's principal office
or the location of its books and records.
SECTION 1.06. FILINGS. Member is hereby designated as an "authorized
person" within the meaning of the Act, and as such, shall promptly cause the
execution and delivery of such documents and performance of such acts consistent
with the terms of this Agreement as may be necessary to comply with the
requirements of law for the formation, qualification and operation of a limited
liability company under the laws of each jurisdiction in which the Company shall
conduct business; provided, however, that if Member shall fail to do any of the
foregoing for ten (10) days following notice of such failure by REPG, REPG shall
have the right (but not the obligation) to do the same on behalf of the Company
or Member, as applicable.
SECTION 1.07. REGISTERED OFFICE AND REGISTERED AGENT The street address of
the registered office of the Company in the State of Delaware is at 1209 Orange
Street, Wilmington, Delaware 19801 or such other place in the State of Delaware
as may from time to time be designated by Member in accordance with the Act, and
the Company's registered agent at such address is The Corporation Trust Company.
SECTION 1.08. TERM The term of the Company shall commence on the date
hereof and shall continue in full force and effect until the Company is
dissolved and its affairs wound up in accordance with the Act and Article VIII
of this Agreement.
SECTION 1.09. PURPOSE. The Company is formed to acquire, own, hold,
operate, manage and sell, engage in a joint venture with respect to, refinance,
or otherwise dispose of, the Property (or an interest therein or arising
therefrom) and engage in any lawful business, purpose or activity related
thereto as Member may determine from time to time for which a limited liability
company may be formed under the Act, and subject in all events to the terms of
this Agreement.
ARTICLE II -- MEMBER'S INTERESTS
SECTION 2.01. MEMBER. The mailing address of Member is as set forth in
Section 10.03.
SECTION 2.02. MEMBERSHIP INTEREST. Member shall have a one hundred percent
(100%) limited liability company interest in the profits and losses of the
Company (the "INTEREST").
ARTICLE III -- REPG; MANAGEMENT AND OPERATION OF THE PROPERTY;
LIABILITY OF MEMBER
SECTION 3.01. REPG; TERM; REMOVAL; RESIGNATION. (a) The Company hereby
appoints REPG to act on behalf of, and to advise, the Company solely for the
purposes expressly set forth in, and subject to the terms and conditions of,
this Agreement.
(b) The foregoing appointment of REPG shall continue hereunder until the
earlier of (i) the voluntary resignation of REPG hereunder and the failure of
REPG to designate a successor prior to or simultaneously with such resignation,
or (ii) the payment in full of the ITB Obligations.
(c) REPG may not be removed hereunder, nor may any of REPG's rights or
powers hereunder be terminated or modified, by the Company or Member, and Member
does not have, and shall not have any authority to cause the Company to
terminate or modify any of REPG's rights or powers hereunder.
(d) REPG may resign at any time by giving written notice to the Company.
Any such resignation shall take effect at the time specified in such written
notice or, if the time is not specified therein, upon the receipt of such
written notice. Notwithstanding the foregoing, in the event that REPG shall
desire to resign prior to the payment in full of the ITB Obligations, REPG shall
have the unilateral right to designate a successor and, upon written notice to
the Company of such successor and the occurrence of the effective date of REPG's
resignation, such successor shall be deemed appointed by the Company to act
hereunder in the place and stead of REPG, and shall have all of the rights and
powers of REPG expressly set forth herein, without the need for any further
action on the part of Member or the Company.
SECTION 3.02. POWERS OF REPG. REPG shall have only those rights and
authority as are expressly set forth herein, it being expressly acknowledged and
agreed that REPG shall not exercise any operational control over any of the
activities at the Property.
SECTION 3.03. POWERS OF MEMBER. (a) Except for those rights and authority
expressly reserved and granted to REPG in this Agreement, the business and
affairs of the Company shall be managed and determined exclusively by Member,
which may exercise all such powers of the Company and do all such lawful acts
and things as are not by the Act, the Certificate or this Agreement directed or
required to be exercised or done by REPG or only with REPG's consent. The
foregoing powers of Member shall include Member's responsibility for the
day-to-day operations, management, maintenance and repair of the Property.
(b) Until the ITB Obligations have been repaid in full (except as otherwise
expressly provided below), notwithstanding anything to the contrary set forth
herein, it is agreed that the Company shall not have the right or power, without
the prior written approval of REPG, to do any of the following, and Member shall
not have the right or power, without the prior written approval of REPG, to
cause the Company to do any of the following:
(i) merge with, or consolidate into, any other Person, or otherwise
change its organizational structure;
(ii) except as expressly permitted in Article IX, sell or exchange all
or any substantial portion of the Property or demolish all or any
substantial portion of the improvements located on the Property, or,
following any such demolition or the destruction of all or any substantial
portion of such improvements by fire or other casualty, reconstruct or
rebuild such improvements or such portion thereof;
(iii) acquire any additional real property or, except as expressly
permitted in Article IX, any other additional assets;
(iv) agree to the settlement of any proceeding brought for the taking
of all or any portion of the Property in condemnation or by eminent domain
or to a sale of all or any portion of the Property in lieu of such taking
in condemnation or by eminent domain;
(v) except as expressly permitted in Article IX, borrow any sums from
any Person;
(vi) except as expressly permitted in Article IX, place any mortgage
on the Property or any portion thereof;
(vii) settle any insurance claim;
(viii) enter into any agreement with Member or any Affiliate thereof;
(ix) change the nature of the business of the Company or enter into
any business other than or in addition to that contemplated by this
Agreement;
(x) until the repayment in full of the ITB Obligations and for 367
days thereafter, commence in the name of or relating to the Company any
action or proceeding in bankruptcy or seeking reorganization, liquidation,
dissolution, arrangement or readjustment of the debts of the Company or for
any other relief under any bankruptcy or insolvency or similar act or law
of any jurisdiction, domestic or foreign, or take advantage on behalf of
the Company of any laws for the relief of debtors;
(xi) change the name of the Company;
(xii) issue guaranties of obligations of any other Person;
(xiii) cause the formation of any corporation or other subsidiary
entity owned or controlled by the Company;
(xiv) make investments other than in the ordinary course of business;
or
(xv) enter into any agreement which is not terminable by the Company,
without penalty, on not more than 30 days' notice.
SECTION 3.04. LIABILITY OF MEMBER AND BORROWERS Notwithstanding anything
contained in the Act, other applicable law or this Agreement to the contrary,
but subject to the provisions of Section 4.03, Member acknowledges and agrees
that, under all circumstances (i) Member and Borrowers shall be and remain
liable for any and all administrative and general overhead expenses relating to
the formation, operation and administration of the Company and the business
thereof, including, without limitation, all attorneys fees', accountants' fees
and state and federal taxes with respect thereto, (ii) Member and Borrowers
shall be and remain liable for and any and all expenses, damages, claims,
judgments, liabilities and other costs relating to or arising from the Property,
including, without limitation, any of the foregoing relating to or arising from
the ownership, operation, management, maintenance and/or repair thereof, and
(iii) Borrowers, and not the Company, shall be and remain liable for the
repayment of all amounts owed to the Lender (collectively, the "ITB
OBLIGATIONS") under the Loan Documents, the Restructure Agreement and the other
Restructure Documents, including, without limitation, the payment of the Monthly
Interest Payments as and when due under the Loan Documents, none of which
liabilities are assumed by the Company.
SECTION 3.05. REMUNERATION OF REPG AND MEMBER. Except as otherwise
expressly provided herein, neither REPG nor Member shall be entitled to any
fees, commissions or other remuneration for any services under this Agreement.
ARTICLE IV -- CAPITAL ACCOUNTS; DISTRIBUTIONS; ALLOCATIONS
SECTION 4.01. CAPITAL CONTRIBUTIONS. (a) Member agrees to contribute to the
Company all of Member's right, title and interest in and to the Property and the
Net Lease, subject to the Mortgage, the Bankruptcy Trustee Mortgage, the
exceptions to title shown in the Lender's title policy insuring the Mortgage,
the exceptions to title previously approved by the Lender under the Approval
Agreement and/or in connection with the Net Lease, that certain Memorandum of
Conveyance Obligation dated January 28, 1999 between Member and GS Park Racing,
L.P., relating to the 10 Acre Parcel (as defined therein) and the obligation to
convey the 10 Acre Parcel to GS Park Racing, L.P., and any other liens and
encumbrances approved by the Lender in its sole discretion, but otherwise free
and clear of all other liens and encumbrances (such contribution, the "INITIAL
CAPITAL CONTRIBUTION").
(b) Member shall not be obligated to make any further contributions to the
capital of, or make any loans to, the Company in excess of the amounts set forth
in Section 4.01(a) hereof. Member may make such additional Capital Contributions
as it shall elect in its sole discretion, but Member shall not be entitled to
interest on the Initial Capital Contribution or any such additional Capital
Contribution.
SECTION 4.02. CAPITAL ACCOUNTS. The Company shall maintain a "CAPITAL
ACCOUNT" for Member on the books of the Company in accordance with the following
provisions:
(a) Member's Capital Account shall be increased by the amount of Member's
Capital Contributions; by any Net Income or other item of income or gain
allocated to such Member pursuant to Section 4.05; and by the amount of Company
liabilities, if any, assumed by Member or secured, in whole or in part, by any
Company assets that are distributed to Member.
(b) Member's Capital Account shall be decreased by the amount of cash and
the Fair Market Value on the date of distribution of any other Company property
distributed to Member pursuant to Sections 4.03 and 8.03(b); by any Net Loss or
other item of loss or deduction allocated to such Member pursuant to Section
4.05; and by the amount of liabilities, if any, of such Member assumed by the
Company.
SECTION 4.03. AMOUNTS AND PRIORITY OF DISTRIBUTIONS. (a) For so long as any
of the ITB Obligations remain outstanding, within five Business Days after
receipt, all Operating Receipts, without deduction for any expenses of the
Company or any other expenses, shall be distributed and applied by the Company
as follows and in the following order of priority, each of which distributions
shall be deemed a distribution of Operating Receipts to Member:
(i) FIRST, to the payment of accrued but unpaid interest on the Loan;
(ii) SECOND, to the payment of the outstanding principal balance of
the Loan (including any amounts added to the outstanding principal balance
of the Loan in accordance with the terms of the Restructure Agreement or
this Agreement);
(iii) THIRD, to the payment of all other sums payable to the Lender in
respect of the Loan or the other ITB Obligations, including, without
limitation, the Exit Fee (as defined in the Loan Agreement);
(iv) FOURTH, to the payment of accrued but unpaid interest on the loan
secured by the Bankruptcy Trustee Mortgage (the "TRUSTEE LOAN");
(v) FIFTH, to the payment of the outstanding principal balance of the
Trustee Loan;
(vi) SIXTH, to the payment of all other sums payable in respect of the
Trustee Loan; and
(vii) SEVENTH, to Member.
Notwithstanding the foregoing, until the Extended Maturity Date, all rent
payments received by or on behalf of the Company from time to time under that
certain Lease Agreement dated January 28, 1999 between Member, as landlord, and
GS Park Racing, L.P., as tenant, covering the Property, as the same was assigned
by Member to the Company (the "NET LEASE"), shall, within five Business Days
after receipt by the Company, be distributed by the Company to Member to be used
for Borrowers' working capital purposes.
(b) Until the Extended Maturity Date, as received, all Distributable
Proceeds, without deduction for any expenses of the Company or any other
expenses (except as set forth in clauses (ii) and (iii) of this Section
4.03(b)), immediately shall be distributed and applied by the Company as follows
and in the following order of priority, each of which distributions shall be
deemed a distribution of Distributable Proceeds to Member; provided, however,
that in the event that such Distributable Proceeds arise from a Repurchase Joint
Venture or Repurchase Refinancing, after distributing and applying such
Distributable Proceeds as required under clauses (i), (ii) and (iii) of this
Section 4.03(b), the Company shall, at Member's request, reserve and not
distribute or apply from the remaining Distributable Proceeds an amount equal to
the maximum amount of Additional Joint Venture Funds or Additional Refinance
Funds, as applicable, that are permitted to be distributed to Member pursuant to
Section 9.02(b)(iv) or Section 9.02(c)(iv), as applicable, and such reserved
amount shall thereafter be distributed by the Company in accordance with said
Section 9.02(b)(iv) or Section 9.02(c)(iv), as applicable, each of which
subsequent distributions shall be deemed a distribution of Distributable
Proceeds to Member:
(i) FIRST, if the Distributable Proceeds arise as a result of a
Repurchase Transaction, to the payment of the Minimum Amount to the Lender
(which shall be applied by the Lender in the order of priority set forth in
clauses (iv), (v) and (vi) of this Section 4.03(b));
(ii) SECOND, to pay all costs and expenses incurred by the Company in
connection with, as applicable from time to time, any Repurchase
Transaction and/or any other sale of the Property permitted under this
Agreement and/or any sale of a Joint Venture Interest and/or any sale of
any Post-Repurchase Asset, including, without limitation, in each instance,
brokerage commissions and legal fees and expenses, but excluding any real
property transfer taxes due in connection with the transaction giving rise
to the Distributable Proceeds, if any ("TRANSFER EXPENSES");
(iii) THIRD, to pay the real property transfer taxes due in connection
with the transaction giving rise to such Distributable Proceeds, if any
("TRANSFER TAXES")
(iv) FOURTH, to the payment of accrued but unpaid interest on the
Loan;
(v) FIFTH, to the payment of the outstanding principal balance of the
Loan (including any amounts added to the outstanding principal balance of
the Loan in accordance with the terms of the Restructure Agreement or this
Agreement);
(vi) SIXTH, to the payment of all other sums payable to the Lender in
respect of the Loan or the other ITB Obligations, including, without
limitation, the Exit Fee;
(vii) SEVENTH, to the payment of accrued but unpaid interest on the
Trustee Loan;
(viii) EIGHTH, to the payment of the outstanding principal balance of
the Trustee Loan;
(ix) NINTH, to the payment of all other sums payable in respect of the
Trustee Loan; and
(x) TENTH, to Member.
(c) On the day following the Extended Maturity Date, if any of the ITB
Obligations remain outstanding, all Distributable Proceeds then held by the
Company, including, without limitation, any Additional Joint Venture Funds or
Additional Refinance Funds then held by the Company, without deduction for any
expenses of the Company or any other expenses, immediately shall be distributed
and applied by the Company in the order of priority set forth in clauses (iv)
through (x) of Section 4.03(b), each of which distributions shall be deemed a
distribution of Distributable Proceeds to Member. Following the Extended
Maturity Date, immediately upon receipt of any Distributable Proceeds, without
deduction for any expenses of the Company or any other expenses (except as set
forth in clauses (ii) and (iii) of Section 4.03(b)), the same shall be
distributed and applied by the Company in the order of priority set forth in
clauses (ii) through (x) of Section 4.03(b), each of which distributions shall
be deemed a distribution of Distributable Proceeds to Member.
(d) Distributions pursuant to this Section 4.03 to Member shall be made
only in cash.
(e) From and after the repayment in full of the ITB Obligations, the
Company may make any distributions of Operating Receipts and Distributable
Proceeds as the Company, in its sole discretion, subject to applicable law,
deems reasonable, without regard whatsoever to Sections 4.03(a), 4.03(b),
4.03(c) or 4.03(d).
SECTION 4.04. ALLOCATION OF INCOME AND LOSS. All Net Income and Net Loss
for each Fiscal Year (or portion thereof) shall be allocated to Member, which
allocation shall be made prior to charging Member's Capital Account for any
distributions made to or on behalf of Member during such Fiscal Year pursuant to
Section 4.03 or Section 8.03(b).
ARTICLE V -- LIABILITY; INDEMNIFICATION
SECTION 5.01. LIABILITY OF REPG COVERED PERSONS. (a) Under no circumstances
shall REPG have any liability for the obligations or liabilities of the Company,
except (i) as expressly set forth in Section 9.07, or (ii) any liability arising
out of or attributable to (A) the willful misconduct or gross negligence of
REGP, any Affiliate of REGP or any officer director, shareholder, partner,
member, employee representative or agent of any thereof (each, an "REPG COVERED
PERSON"), or (B) the breach of any representation, warranty or obligation of
REPG hereunder, provided, however, that it is expressly understood and agreed by
the Company and Member, that REPG's exercise of its rights under Article IX
shall not, under any circumstances, give rise to a claim that any REPG Covered
Person engaged in willful misconduct or was grossly negligent or breached any
representation, warranty or obligation hereunder, as the standards for, and
limits of, liability under said Article IX are expressly set forth therein (the
foregoing clauses (i) and (ii), including the proviso following the same, are
hereinafter referred to as the "NON-LIABILITY EXCEPTIONS").
(b) Without limiting the generality of the foregoing, and notwithstanding
anything to the contrary in the Act, under other applicable law or set forth in
this Agreement (but subject to the Non-Liability Exceptions), the Company and
Member hereby acknowledge and agree that none of the REPG Covered Persons has,
or in the future shall have, any fiduciary or other duty to the Company, Member,
any Affiliate of the Company, any Affiliate of Member or any officers,
directors, shareholders, partners, members, employees, representatives or agents
of any thereof (each, an "ITB COVERED PERSON") or any other Person arising from
this Agreement, arising from any act or omission by REPG in connection with this
Agreement or for any other reason whatsoever; and, to the extent any such
fiduciary or other duty may nevertheless exist, the Company and Member, on
behalf of themselves and the other ITB Covered Persons, hereby irrevocably waive
and release REPG and the other REPG Covered Persons from the same.
SECTION 5.02. INDEMNIFICATION OF REPG COVERED PERSONS. (a) Except with
respect to a successful action against REPG based on an allegation that REPG
fully disregarded the Sale Goals as permitted in Section 9.07, and subject to
the Non-Liability Exceptions, the Company and Member shall indemnify and hold
harmless any REPG Covered Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
brought by or against any Person, whether civil, criminal, administrative or
investigative, including, without limitation, an action by or in the right of
the Company to procure a judgment in its favor, by reason of the fact that such
REPG Covered Person is or was acting on behalf of, or advising, the Company, or
that such REPG Covered Person is or was serving at the request of the Company or
Member in any capacity, from and against all expenses, including attorneys' fees
and disbursements, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such REPG Covered Person in connection with such action,
suit or proceeding.
(b) In the event that any action shall be commenced with respect to which
any REPG Covered Person is entitled to indemnification under this Section 5.02,
(i) such REPG Covered Person shall, in its sole discretion, defend such action
with counsel chosen by it, and the Company and Member shall reimburse such REPG
Covered Person, on demand, for all legal fees and expenses incurred in
connection therewith; (ii) if such REPG Covered Person elects, in its sole
discretion, to have the Company and/or Member defend such action, (A) the
Company and/or Member shall diligently pursue the defense thereof, (B) if the
Company and/or Member fails to diligently pursue the defense thereof, such REPG
Covered Person shall have the right to take over such defense at the Company's
and Member's expense, (C) the Company and/or Member shall keep such REPG Covered
Person apprised of the progress of such defense, and (D) the Company and/or
Member shall not settle such claim without the written consent of such REPG
Covered Person, which consent may be given or withheld in such REPG Covered
Person's sole discretion; and (iii) immediately following the rendering of any
judgment against such REPG Covered Person in such action, the Company and/or
Member shall pay, or reimburse such REPG Covered Person for, the full amount
thereof.
(c) The indemnification provided by this Section 5.02 shall not be deemed
exclusive of any other rights to indemnification to which those seeking
indemnification may be entitled under any other agreement, under applicable law
or otherwise. The rights to indemnification granted pursuant to this Section
5.02 shall continue as to REPG and the other REPG Covered Persons following the
resignation by REPG hereunder or any termination of REPG's rights and powers
hereunder and shall inure to the benefit of the successors, assigns, executors,
administrators, legatees and distributees of REPG and the other REPG Covered
Persons.
(d) The provisions of this Section 5.02 shall be a contract between the
Company and Member, on the one hand, and each current or future REPG Covered
Person, on the other hand, pursuant to which the Company, Member and each REPG
Covered Person intend to be legally bound. No repeal or modification of this
Section 5.02 shall affect any rights or obligations with respect to any state of
facts then or theretofore existing or thereafter arising or any proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
such state of facts.
ARTICLE VI
SECTION 6.01. AUDIT AND REPORTS. (a) The books and records of the Company
shall be maintained and kept in accordance with GAAP by Member. The books and
records shall be audited as of the end of each Fiscal Year by the same firm of
independent certified public accountants which audits the books and records of
ITB. For so long as any of the ITB Obligations remain outstanding, within 90
days after the end of each Fiscal Year, Member shall cause to be prepared and
mailed to REPG a report of such accountants, setting forth as at the end of such
Fiscal Year:
(i) a balance sheet of the Company;
(ii) a statement of the net income or net loss for such year; and
(iii) a statement of changes in financial position or a cash flow
statement.
Each of the items described in clauses (i) through (iii) above shall be prepared
in accordance with GAAP.
(b) For so long as any of the ITB Obligations remain outstanding, REPG
shall be given reasonable access to the books and records of the Company at
reasonable times during normal business hours, upon two Business Days' notice
(which notice may be given orally).
SECTION 6.02. TAX PARTNER. Member shall cause to be prepared and filed all
federal, state and local tax returns required to be filed by the Company. Unless
otherwise required by law, Member shall be the tax matters partner of the
Company within the meaning of Section 6231(a)(7) of the Code. For so long as any
of the ITB Obligations remain outstanding, prompt notice shall be given to REPG
upon the receipt of advice that the Internal Revenue Service or other taxing,
administrative of judicial authority intends to examine any income tax return or
records or books of the Company. The Company may engage the same firm of
independent certified public accountants which audits the books and records of
ITB to assist the Company during such examination. This provision shall survive
any termination of this Agreement.
ARTICLE VII -- TRANSFER; WITHDRAWAL
SECTION 7.01. ADDITIONAL MEMBERS. For so long as any of the ITB Obligations
remain outstanding, the Company shall not admit any new members to the Company
without the written consent of REPG, which consent may be given, withheld or
conditioned as REPG shall elect in its sole discretion.
SECTION 7.02. TRANSFER. For so long as any of the ITB Obligations remain
outstanding, without the written consent of REPG, which consent may be given,
withheld or conditioned as REPG shall elect in its sole discretion, neither
Member, nor any shareholder (direct or indirect) of Member (if Member is a
corporation), partner (whether general or limited) of Member (if Member is a
partnership (general or limited)) or member of Member (if Member is a limited
liability company), nor any other owner of a beneficial interest, either direct
or indirect, in Member than (any of the foregoing who or which owns or holds an
interest, directly or indirectly, in Member, an "INTERMEDIARY"), may sell,
assign, transfer, give, hypothecate or otherwise encumber (any such sale,
assignment, transfer, gift, hypothecation or encumbrance being hereinafter
referred to as a "TRANSFER"), directly or indirectly, or by operation of law or
otherwise, any interest in the Company, Member or any Intermediary, except as
hereinafter set forth in this Article VII and except for Transfers of the stock
in ITB. Any Transfer of any interest in the Company, Member or any Intermediary
in contravention of this Article VII shall be null and void. Notwithstanding the
foregoing, the following Transfers shall be permitted hereunder (each, a
"PERMITTED TRANSFER"): (i) each and every Transfer of any interest in the
Company, Member and/or any Intermediary to the Lender or any Affiliate thereof,
and (ii) each and every subsequent Transfer of any interest in the Company,
Member and/or any Intermediary by the Lender or any Affiliate thereof.
SECTION 7.03. WITHDRAWALS. Except for Permitted Transfers, prior to the
dissolution and winding up of the Company, for so long as any of the ITB
Obligations remain outstanding, Member may not withdraw from the Company.
Additionally, for so long as any of the ITB Obligations remain outstanding,
withdrawals by Member of its Capital Account or any portion thereof shall not be
permitted.
SECTION 7.04. RIGHTS OF NEW MEMBERS. With respect to any Permitted Transfer
of Member's Interest or an interest in Member or any Intermediary, immediately
following such Permitted Transfer, the transferee, without further action on the
part of the Company or Member, automatically (a) shall be admitted to the
Company as a member, (b) shall be entitled to Member's share of the Company's
Net Income, Net Loss and distributions, and (c) shall have all other rights and
privileges of Member (including, without limitation, the right to inspect the
Company's books and records and the consent and other rights under this
Agreement and under the Act), it being understood that immediately following any
such Permitted Transfer, Member shall cease to be a member of the Company.
ARTICLE VIII -- TERMINATION; DISSOLUTION; LIQUIDATION
SECTION 8.01. TERMINATION OF THE COMPANY. Subject to the provisions of
Section 8.02(a), in the event of the occurrence of a Dissolution Event, the
Company shall be terminated following the completion of the winding up of the
Company.
SECTION 8.02. EVENTS OF DISSOLUTION. The Company shall be dissolved upon
any of the following (each a "DISSOLUTION EVENT"):
(a) the expiration of sixty (60) days after the assignment, transfer or
other disposition of all or substantially all of the assets, properties and
business of the Company;
(b) the vote for the dissolution of the Company by Member and, until the
repayment in full of the ITB Obligations, the consent by REPG to such
dissolution;
(c) from and after January 1, 2020, a determination by Member to dissolve
the Company; or
(d) the entry of a decree of judicial dissolution under section18-802 of
the Act, provided that Member agrees that, until the ITB Obligations are repaid
in full, it shall not make an application for any such dissolution without the
consent of REPG, which consent may be given or withheld in REPG's sole
discretion.
In no event shall any of the following, in and of itself, cause the Company
to dissolve or cause Member to cease to be a member of the Company: (i) the
occurrence of any of the events set forth in section 18-304 of the Act, (ii) any
decision made or act taken by Member in any proceeding by or against Member
seeking reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any state or federal law or regulation, or
(iii) the dissolution of Member.
SECTION 8.03. LIQUIDATION. (a) Upon dissolution of the Company, the
property and business of the Company shall be liquidated in an orderly manner
within a reasonable period of time by Member. Notwithstanding anything in this
Agreement to the contrary, until the repayment in full of the ITB Obligations,
no distribution to Member in accordance with this Section 8.03 shall be made in
kind, unless approved in writing by REPG.
(b) As soon as practicable after the effective date of dissolution of the
Company, whether by expiration of its full term or otherwise, but in any event
within one year after dissolution of the Company, after allocating all Net
Income, Net Loss and other items of income, gain, loss and deduction pursuant to
Section 4.05, the Company's assets shall be applied and distributed in the
following manner and order of priority:
(i) FIRST, to the claims of all creditors of the Company, except to
the extent not permitted by law, shall be paid and discharged other than
liabilities for which reasonable provision for payment has been made, and
reserves that are reasonably necessary for any contingent, conditional or
unmatured liabilities or obligations of the Company shall be established;
and
(ii) SECOND, thereafter, the remaining balance, if any, to Member.
(c) When Member has complied with the liquidation plan described in this
Section 8.03, Member shall execute, acknowledge and cause to be filed an
instrument evidencing the cancellation of the Certificate of Formation of the
Company.
ARTICLE IX -- SALE OF THE PROPERTY
SECTION 9.01 SALE OF THE PROPERTY. The Company and Member expressly
acknowledge that the primary purpose of the Company is to sell, joint venture or
refinance the Property in order to satisfy at least the Minimum Amount of the
ITB Obligations. Accordingly, immediately following the transfer of title to the
Property to the Company, the Company will engage a nationally recognized real
estate brokerage company to sell the Property. In order to select the real
estate brokerage company to be retained by the Company, REPG shall submit a list
of five candidates and their proposed brokerage fees to the Company, and the
Company shall have five Business Days to select its choice. In the event the
Company fails to make a choice within said five Business Days, REPG shall make
the choice from the list of candidates furnished to the Company. The real estate
broker chosen in accordance with the provisions of this Section 9.01 is referred
to as the "COMPANY BROKER"
SECTION 9.02. REPURCHASE OPTION. (a) Notwithstanding the provisions of
Section 9.01, Member shall have the exclusive option (the "REPURCHASE OPTION")
to cause the Company to engage in one of the following transactions (each a
"REPURCHASE TRANSACTION"), including, without limitation, the right and
authority to negotiate, execute and deliver all documents with respect thereto
on behalf of the Company:
(a) An arms' length sale by the Company of the entire fee interest in the
Property to a third party who is not a Borrower or any other ITB Covered Person
(a "REPURCHASE OPTION SALE"), provided that the following conditions are
satisfied with respect thereto:
(i) the cash purchase price must be in an amount equal to at least
fifty percent (50%) of the then combined outstanding principal balance of
(A) the ITB Obligations (including all amounts theretofore added to the
outstanding principal balance of the Loan in accordance with the terms of
the Restructure Agreement or this Agreement), plus (B) the loan secured by
the Bankruptcy Trustee Mortgage (the amount determined in accordance with
this clause (i) being referred to herein as the "MINIMUM AMOUNT"), and the
Minimum Amount plus any excess of the cash purchase price over the Minimum
Amount, net of the applicable Transfer Expenses and Transfer Taxes, up to
the entire amount of the outstanding ITB Obligations (the excess of such
purchase price over the Minimum Amount, the "ADDITIONAL REPURCHASE FUNDS"),
must be paid to the Lender (by means of a distribution by the Company on
behalf of Member of the Distributable Proceeds arising from such Repurchase
Option Sale pursuant to Section 4.03(b)), in return for which the Lender
will release the Mortgage;
(ii) in the event that any additional portion of the purchase price is
in the form of a note (a "REPURCHASE NOTE"), (A) such Repurchase Note shall
be made payable to the Company and shall be retained as an asset of the
Company unless and until the Repurchase Note or the ITB Obligations shall
have been repaid in full, and (B) the Company shall pledge such Repurchase
Note (and any related mortgage) to Lender, as additional security for the
ITB Obligations, pursuant to documents reasonably satisfactory to Lender
and Borrowers;
(iii) the sales contract with respect to such Repurchase Option Sale
(the "REPURCHASE OPTION SALES CONTRACT") must be entered into by the
Company and the buyer thereunder by January 25, 2000, time being of the
essence with respect to such date;
(iv) the Repurchase Option Sales Contract must (A) provide for an
initial deposit from the buyer upon execution of at least $100,000, (B)
contain no contingencies other than standard due diligence contingencies
(i.e. title, survey, physical and environmental conditions), all of which
must be approved within 45 days after execution, but in no event later than
March 1, 2000, time being of the essence with respect to such date, (C)
provide for a non-refundable deposit from the buyer following the
expiration of the due diligence period of at least $500,000, and (D)
provide for a closing within 90 days after execution, but in no event later
than April 15, 2000, time being of the essence with respect to such date;
(v) if required under the terms of the Restructure Agreement,
simultaneously with the closing of the Repurchase Option Sale, Orion and
the other Borrowers shall have performed all of their obligations under
Section 5 of the Restructure Agreement; and
(vi) the Bankruptcy Trustee must have released the Bankruptcy Trustee
Mortgage, without any payment to the Bankruptcy Trustee on account of the
loan secured thereby; or
(b) A sale by the Company of a partial interest in the Property by means of
a conveyance of the Property to a new joint venture (whether in the form of a
partnership, limited liability company or other entity) owned partly by the
Company and partly by one or more joint venture partners (a "REPURCHASE JOINT
VENTURE"; and the Company's interest in such Repurchase Joint Venture (whether
in the form of a partnership interest, membership interest or other ownership
interest therein), the "JOINT VENTURE INTEREST"), provided that the following
conditions are satisfied with respect thereto:
(i) the Company (as opposed to Member) must be the owner of the Joint
Venture Interest;
(ii) the entire purchase price must be in cash, the purchase price
must be at least the Minimum Amount, and the Lender must be paid at least
the Minimum Amount (by means of a distribution by the Company on behalf of
Member of the Distributable Proceeds arising from such Repurchase Joint
Venture pursuant to Section 4.03(b)), in return for which the Lender will
release the Mortgage;
(iii) simultaneously with the release of the Mortgage by the Lender,
Member must pledge to the Lender, as additional security for the ITB
Obligations, its entire Interest in the Company, such pledge to be in
accordance with the provisions of Section 3(e) of the Restructure
Agreement, and it being acknowledged and agreed by Member and REPG that
such pledge shall not violate any provision of this Agreement and such
pledge and any subsequent transfer of Member's Interest to the Lender or an
Affiliate thereof upon the Lender's exercise of its rights with respect
thereto shall constitute a Permitted Transfer within Article VII hereof;
(iv) the Company shall retain any portion of the purchase price in
excess of the Minimum Amount, net of the applicable Transfer Expenses and
Transfer Taxes, which Member elects not to have paid to the Lender (such
excess, the "ADDITIONAL JOINT VENTURE FUNDS"), provided, however, that such
Additional Joint Venture Funds shall be distributed by the Company to
Member, as and when requested by Member, to satisfy (in whole or in part)
(A) the Company's share of the Repurchase Joint Venture's soft development
costs relating to any development of the Property, which soft development
costs shall not exceed, in the aggregate and on a line-item basis, the
amounts set forth in a development budget (the "APPROVED DEVELOPMENT
BUDGET") to be reasonably agreed upon by the Lender and the Company prior
to the execution of the documents creating and governing the Repurchase
Joint Venture (the "JOINT VENTURE DOCUMENTS"), provided that in no event
shall the Approved Development Budget include soft development costs in
excess of $5,000,000 in the aggregate, (B) the Company's share of the
interest payable on any financing obtained by the Repurchase Joint Venture
relating to any development of the Property (either currently or by the
establishment of an interest reserve, as required by the loan documents
governing such financing), which interest shall not exceed the amount set
forth in the Approved Development Budget, provided that in no event shall
the Approved Development Budget include interest in excess of $1,500,000,
(C) Borrowers' general overhead costs as set forth on the Approved Budget
(as defined in the Restructure Agreement), and (D) interest on the Loan as
and when due and payable;
(v) the Joint Venture Documents must exculpate Lender, all Lender
Affiliates and REPG from any liability relating to the Repurchase Joint
Venture or the Property;
(vi) the contract relating to the purchase of an interest in the
Property by the joint venture partner(s) (the "REPURCHASE OPTION JOINT
VENTURE AGREEMENT") must be entered into by the Company and such joint
venture partner(s) by January 25, 2000, time being of the essence with
respect to such date;
(vii) the Repurchase Option Joint Venture Agreement must (A) provide
for an initial deposit from the joint venture partner(s) upon execution of
at least $100,000, (B) contain no contingencies other than standard due
diligence contingencies (i.e. title, survey, physical and environmental
conditions), all of which must be approved within 45 days of execution, but
in no event later than March 1, 2000, time being of the essence with
respect to such date, (C) provide for a non-refundable deposit from the
joint venture partner(s) following the expiration of the due diligence
period of at least $500,000, and (D) provide for a closing within 90 days
of execution, but in no event later than April 15, 2000, time being of the
essence with respect to such date;
(viii) if required under the terms of the Restructure Agreement,
simultaneously with the closing of the Repurchase Joint Venture, Orion and
the other Borrowers shall have performed all of their obligations under
Section 5 of the Restructure Agreement; and
(ix) the Bankruptcy Trustee must have released the Bankruptcy Trustee
Mortgage, without any payment to the Bankruptcy Trustee on account of the
loan secured thereby, subject, however, to the provisions of Section 4(d)
of the Restructure Agreement; or
(c) A refinancing of the Mortgage (a "REPURCHASE REFINANCING"), provided
that the following conditions are satisfied with respect thereto:
(i) the Company (as opposed to Member) must retain title to the
Property;
(ii) the Repurchase Refinancing proceeds must be at least the Minimum
Amount, and the Lender must be paid at least the Minimum Amount (by means
of a distribution by the Company on behalf of Member of the Distributable
Proceeds arising from such Repurchase Refinancing pursuant to Section
4.03(b)), in return for which the Lender will release the Mortgage;
(iii) simultaneously with the release of the Mortgage by the Lender,
Member must pledge to the Lender, as additional security for the ITB
Obligations, its entire Interest in the Company, such pledge to be in
accordance with the provisions of Section 3(e) of the Restructure
Agreement, and it being acknowledged and agreed by Member and REPG that
such pledge shall not violate any provision of this Agreement and such
pledge and any subsequent transfer of Member's Interest to the Lender or an
Affiliate thereof upon the Lender's exercise of its rights with respect
thereto shall constitute a Permitted Transfer within Article VII hereof;
(iv) the Company shall retain any portion of the Repurchase
Refinancing proceeds in excess of the Minimum Amount, net of the applicable
Transfer Expenses and Transfer Taxes, which Member elects not to have paid
to the Lender (such excess, the "ADDITIONAL REFINANCE FUNDS"), provided,
however, that such Additional Refinance Funds shall be distributed by the
Company to Member, as and when requested by Member, to satisfy (in whole or
in part) (A) the interest payable on the Repurchase Refinancing (either
currently or by the establishment of an interest reserve, as required by
the loan documents governing the same (the "REPURCHASE REFINANCING
DOCUMENTS"), (B) Borrowers' general overhead costs as set forth on the
Approved Budget, and (C) interest on the Loan as and when due and payable;
(v) the Repurchase Refinancing Documents must exculpate the Lender,
all Lender Affiliates and REPG from any liability relating to the
Repurchase Refinancing or the Property;
(vi) the Repurchase Refinancing must close, and the Lender must be
paid at least the Minimum Amount with respect thereto, on or before January
15, 2000, time being of the essence with respect to such date;
(vii) if required under the terms of the Restructure Agreement,
simultaneously with the closing of the Repurchase Refinancing, Orion and
the other Borrowers shall have performed all of their obligations under
Section 5 of the Restructure Agreement; and
(viii) the Bankruptcy Trustee must have released the Bankruptcy
Trustee Mortgage, without any payment to the Bankruptcy Trustee on account
of the loan secured thereby, subject, however, to the provisions of Section
4(d) of the Restructure Agreement.
(d) The Repurchase Option shall not be recorded and shall automatically
terminate upon the earlier of (i) the sale of the entire fee interest in the
Property to any party other than any Borrower or any Affiliate thereof, or (ii)
January 26, 2000, time being of the essence with respect to such date, unless
prior thereto the Company has either entered into a Repurchase Option Sales
Contract or a Repurchase Option Joint Venture Agreement in accordance with the
requirements of this Section 9.02 or, on or prior to January 15, 2000,
consummated a Repurchase Refinancing (including the payment to the Lender of at
least the Minimum Amount) in accordance with the requirements of this Section
9.02.
SECTION 9.03 OCCURRENCE OF REPURCHASE JOINT VENTURE OR REPURCHASE
REFINANCING. In the event that a Repurchase Joint Venture or a Repurchase
Refinancing shall timely occur in accordance with the requirements set forth in
Section 9.02, unless the proceeds of either such Repurchase Transaction actually
paid to the Lender are sufficient to satisfy the ITB Obligations in full, the
following shall apply until the Extended Maturity Date:
(a) Following the closing of a Repurchase Joint Venture, notwithstanding
anything to the contrary contained in this Agreement, Member, on behalf of the
Company, shall have the sole right and authority to make decisions concerning,
and to direct the activities of, the Joint Venture Interest, including, without
limitation, the right and authority to negotiate, execute and deliver all
documents with respect thereto on behalf of the Company, provided that (i) no
decision made, nor action taken or not taken, nor document executed and/or
delivered, by Member in accordance with the foregoing, shall expose (A) the
Company, the Lender, any Lender Affiliate or REPG to any civil or criminal
liability, or (B) the Lender, any Lender Affiliate or REPG to any liability
whatsoever, and (ii) the foregoing shall in no event be deemed to, or shall,
impair, vitiate, modify or terminate, in any manner, any consent or other rights
of REPG under this Agreement; and
(b) Following the closing of a Repurchase Refinancing, notwithstanding
anything to the contrary contained in this Agreement, Member, on behalf of the
Company, shall have the sole right and authority to direct the Company to engage
in any further sale, joint venture or refinancing transaction relating to the
Property, including, without limitation, the right and authority to negotiate,
execute and deliver all documents with respect thereto on behalf of the Company,
provided that (i) all consideration received from any such subsequent
transaction, whether cash, ownership interests in other entities or otherwise
("POST-REPURCHASE ASSETS"), shall be in the name of, shall be owned by, and
shall be retained by, the Company, subject to the provisions of Section 9.06,
(ii) no such subsequent transaction, nor any decision made, nor action taken or
not taken, nor document executed and/or delivered, by Member on behalf of the
Company in connection therewith, shall expose (A) the Company, the Lender, any
Lender Affiliate or REPG to any civil or criminal liability, or (B) the Lender,
any Lender Affiliate or REPG to any liability whatsoever with respect to such
transaction or the Property, and (iii) the foregoing shall in no event be deemed
to, or shall, impair, vitiate, modify or terminate, in any manner, any consent
or other rights of REPG under this Agreement.
SECTION 9.04 FAILURE OF REPURCHASE TRANSACTION TO OCCUR. In the event that
on or prior to January 25, 2000, time being of the essence with respect to such
date, the Company shall not have either entered into a Repurchase Option Sales
Contract or a Repurchase Option Joint Venture Agreement in accordance with the
requirements of Section 9.02 or, on or prior to January 15, consummated a
Repurchase Refinancing (including the payment to the Lender of at least the
Minimum Amount) in accordance with the requirements of Section 9.02, then from
and after January 26, 2000, time being of the essence with respect to such date,
REPG shall have the sole right and authority, including, without limitation, the
right and authority to negotiate, execute and deliver all documents with respect
thereto on behalf of the Company, to cause the Company to sell the Property
pursuant to any sales contract proposed by the Company Broker, provided, that in
determining whether or not to accept any particular sales contract, or in
choosing between two or more sales contracts, REPG shall take into account
whether, or to what extent, each such contract meets the goal and intention of
the Company, Member, the Lender and Borrowers to sell the Property (i) for the
highest price, (ii) with the least conditions to closing, (iii) with the highest
deposit, (iv) to a bonafide purchaser who is most likely to close, and (v)
within the shortest period of time (the foregoing clauses (i) through (v),
collectively, the "SALE GOALS").
SECTION 9.05 FAILURE OF REPURCHASE TRANSACTION TO CLOSE. In the event that
on or prior to January 25, 2000, time being of the essence with respect to such
date, the Company shall have entered into either a Repurchase Option Sales
Contract or a Repurchase Option Joint Venture Agreement in accordance with the
requirements of Section 9.02, but thereafter the same is terminated or fails to
close (whether as a result of the buyer's or joint venture partner's due
diligence review, default or otherwise), from and after the date of such
termination or failure, REPG shall have the sole right and authority, including,
without limitation, the right and authority to negotiate, execute and deliver
all documents with respect thereto on behalf of the Company, to cause the
Company to sell the Property pursuant to any sales contract proposed by the
Company Broker, taking into account, however, the Sale Goals.
SECTION 9.06 CONSEQUENCES OF EXTENDED MATURITY DATE. In the event that any
portion of the ITB Obligations remains outstanding on the Extended Maturity
Date, thereafter (a) the Company shall distribute all existing Distributable
Proceeds, including, without limitation, any Additional Joint Venture Funds, any
Additional Refinance Funds and/or any Post- Repurchase Assets that are in the
form of cash, in accordance with the provisions of Section 4.03(c), and (b) REPG
shall have the sole right and authority, including, without limitation, the
right and authority to negotiate, execute and deliver all documents with respect
thereto on behalf of the Company, to cause the Company to sell (to the extent
then owned by the Company), through the Company Broker, the Property, any
Repurchase Note, any Joint Venture Interest and/or any Post-Repurchase Assets,
immediately following which the Company shall distribute all Distributable
Proceeds arising therefrom in accordance with the provisions of Section 4.03(c),
provided that in causing the Company to engage in any such sale, REPG shall take
into account the Sale Goals in connection therewith.
SECTION 9.07. SALE GOALS.
(a) The Company, Member and REPG hereby acknowledge and agree that the Sale
Goals, as a whole, represent a frame-work within which to evaluate proposed
sales transactions by REPG hereunder, but do not require a focus on any
particular Sale Goal as opposed to any other Sale Goal.
(b) The Company and Member hereby acknowledge and agree that no decision
made by REPG to cause the Company to accept any particular sales contract for
the Property, any Repurchase Note, any Joint Venture Interest and/or any
Post-Repurchase Asset, as applicable (any of the foregoing, a "COMPANY ASSET"),
as contemplated hereunder, can be the basis of any type of claim or action by
the Company, Member or any other Person (including Borrowers) against the
Lender, any Lender Affiliate or REPG, unless REPG fully disregards the Sale
Goals, in which event the same could be the basis of a claim against REPG, for
which REPG and the Lender will be jointly and severally liable, in accordance
with Section 9.07(f), (but not against any Lender Affiliate).
(c) The Company and Member each hereby acknowledge and agree that no
decision made by REPG to cause the Company to accept any particular sales
contract for any Company Asset, as contemplated hereunder, can be the basis of
any type of injunctive relief to prevent or delay the sale of any Company Asset,
and REPG shall be entitled to injunctive relief with respect to any breach of
the foregoing.
(d) The Company and Member each hereby waive and release the Lender, each
Lender Affiliate and REPG from any liability arising from any decision made by
REPG to cause the Company to accept any particular sales contract for any
Company Asset, as contemplated hereunder, unless REPG fully disregards the Sale
Goals, in which event such waiver and release shall not apply only to REPG and
the Lender, but subject to Section 9.07(f) (but shall continue to apply to each
Lender Affiliate).
(e) The Company and Member each hereby acknowledge and agree that if,
notwithstanding the provisions of Sections 9.07(b) and 9.07(d), the Company,
Member and/or any other Person (including Borrowers) shall bring a successful
action against the Lender, any Lender Affiliate or REPG based on the allegation
that REPG did not comply with the Sale Goals (except if such action is based on
an allegation that REPG fully disregarded the Sale Goals), the damages in such
action (and in all such actions, in the aggregate) , for which REPG and the
Lender shall be jointly and severally liable, shall be limited to $500,000 and
Borrowers and/or Member shall be responsible for all legal fees and expenses
incurred by Borrowers, the Company and/or Member in connection with such
proceeding.
(f) The Company and Member each hereby acknowledge and agree that if the
Company, Member and/or any other Person (including Borrowers) shall bring a
successful action against REPG based on the allegation that REPG fully
disregarded the Sale Goals, (i) the damages in such action shall be limited to
the actual damages incurred by the claimant(s) in such action as a result of
such full disregard of the Sale Goals and not any consequential or punitive
damages, (ii) REPG and the Lender shall be jointly and severally liable with
respect to such damages, and (iii) REPG and the Lender shall be liable for the
reasonable legal fees and expenses of such claimant(s); provided, however, that
only one such action may be brought against REPG and/or the Lender by the
Company, Member and/or Borrowers, whether brought hereunder or under the
Restructure Agreement, and they shall all be deemed to have suffered one and the
same actual loss, to be divided among them as they determine in their sole
discretion. (g) Without limiting the foregoing, in order to ensure that any
decision made by REPG to cause the Company to accept any sales contract is in
conformity with the Sale Goals, in all instances hereunder where (i) a Company
Broker has been retained to sell any Company Asset, as contemplated hereunder,
and (ii) at the time, in accordance with the terms of this Agreement, REPG has
the sole right and authority to cause the Company to accept, execute and deliver
a sales contract with respect to such Company Asset, Member shall have the right
to be actively involved with the Company Broker and any proposed purchasers in
the marketing of the applicable Company Asset and the negotiation of the terms
of sale, provided, however, that under such circumstances, if there is any
dispute between REPG and Member, the choice of REPG and the directions to the
Company Broker from REPG shall prevail.
SECTION 9.08 SCOPE OF MEMBER'S AND REPG'S RIGHTS AND AUTHORITY.
(a) In any instance under Section 9.02 or 9.03 in which Member is given the
sole right and authority to cause the Company to engage in any transaction set
forth therein, such right and authority shall include the right and authority to
negotiate, execute and deliver all documents, and take all actions, with respect
thereto on behalf of the Company, as the sole member of the Company, and/or to
direct the Company to accept, execute and deliver all such documents, and take
all such actions, with respect thereto, in each of the foregoing instances,
without any further act, vote or approval of any other Person, so long as such
documents and actions otherwise comply with, and are expressly permitted under,
the provisions of said Section 9.02 or 9.03.
(b) SCOPE OF REPG'S RIGHTS AND AUTHORITY; POWER OF ATTORNEY. In any
instance under Section 9.04, 9.05 or 9.06 in which REPG is given the sole right
and authority to cause the Company to engage in any transaction set forth
therein, such right and authority shall include the right and authority to
negotiate, execute and deliver all documents, and take all actions, with respect
thereto on behalf of the Company, as an authorized representative of the
Company, and/or to direct the Company to accept, execute and deliver all such
documents, and take all such actions, with respect thereto, in each of the
foregoing instances, without any further act, vote or approval of any other
Person (including Member), so long as such documents and actions otherwise
comply with the provisions of said Section 9.04, 9.05 or 9.06. In furtherance of
the foregoing, (i) the Company hereby designates REPG as an authorized
representative of the Company for the purposes of REPG exercising any of the
foregoing rights and authority, and (ii) the Company hereby irrevocably appoints
REPG as its agent and attorney in fact, which appointment is coupled with an
interest and with full power of substitution, to exercise any of the foregoing
rights and authorities, in the Company's name, place and stead.
ARTICLE X -- MISCELLANEOUS
SECTION 10.01. SUCCESSORS AND ASSIGNS. REPG shall have the right, without
the consent of Member or the Company, to assign its rights, powers and authority
under this Agreement. Member shall not have the right, without the consent of
REPG, to assign any of its rights, powers or authorities under this Agreement.
Without limiting the generality of the foregoing, this Agreement shall inure to
the benefit of, and shall be binding upon, the permitted successors and
permitted assigns of Member and REPG.
SECTION 10.02. NO WAIVER. The failure of the Company, Member or REPG to
seek redress for violation, or to insist on strict performance, of any covenant
or condition of this Agreement, shall not prevent a subsequent act which would
have constituted a violation from having the effect of an original violation.
SECTION 10.03. NOTICES. All notices, demands, consents, approvals, requests
and other communications required or permitted hereby shall be in writing and
shall be deemed to have been duly and sufficiently given only if (a) personally
delivered with proof of delivery thereof (any notice or communication so
delivered being deemed to have been received at the time so delivered), or (b)
sent by Federal Express (or other similar overnight courier) (any notice or
communication so delivered being deemed to have been received only when
delivered), or (c) sent by telecopier or facsimile (any notice or communication
so delivered by telecopier or facsimile being deemed to have been received (i)
on the Business Day so sent, if so sent prior to 4:00 p.m. (based upon the
recipient's time) of the Business Day so sent, or (ii) on the Business Day
following the day so sent, if so sent on other than a Business Day or on or
after 4:00 p.m. (based upon the recipient's time) of the Business Day so sent,
provided that any notice sent by telecopier or facsimile shall be accompanied by
a confirmatory notice sent within 24 hours by one of the other methods for the
giving of notice set forth in this Section 10.03, in any such case addressed to
the respective parties as follows:
(a) If to REPG: REPG Garden State Corporation
c/o Credit Suisse First
Boston Mortgage Capital LLC
11 Madison Avenue
New York, New York 10010-3629
Attention: Asset Management
Re: ITB/Richard Luftig
Telecopier: (212) 325-8164
with copies to: REPG Garden State Corporation
c/o Credit Suisse First
Boston Mortgage Capital LLC
Legal & Compliance Department
11 Madison Avenue
New York, New York 10010-3629
Attention: Colleen Graham, Esq.
Re: ITB/Richard Luftig
Telecopier: (212) 325-8220
and
Brown Raysman Millstein Felder & Steiner LLP
120 West 45th Street
New York, New York 10036
Attention: Rand B. Peppas, Esq.
Telecopier:(212) 840-2429
(b) If to Member:Garden State Race Track, Inc.
Haddonfield Road and Route 70
Cherry Hill, New Jersey 08034
Attention: William H. Warner
Telephone: (856) 488-3838
Telecopier: (856) 488-7585
with a copy to: Richards, Layton & Finger PA
One Rodney Square
10th and King Streets
Wilmington, Delaware 19899
Attention: Kevin G. Abrams, Esq.
Telecopier:(302) 658-6541
(c) If to the Company: GSRT, LLC
Haddonfield Road and Route 70
Cherry Hill, New Jersey 08034
Attention: William H. Warner
Telephone: (856) 488-3838
Telecopier:(856) 488-7585
with a copy to: Richards, Layton & Finger PA
One Rodney Square
10th and King Streets
Wilmington, Delaware 19899
Attention: Kevin G. Abrams, Esq.
Telecopier: (302) 658-6541
Any party may, by notice given as aforesaid, change the person or persons and/or
address or addresses, or designate an additional person or persons or an
additional address or addresses, for its notices, provided, however, that
notices of change of address or addresses shall only be effective upon receipt.
The inability to deliver any notice because of a changed address of which no
notice was given, or rejection or refusal to accept any notice offered for
delivery shall be deemed to be receipt of the notice as of the date of such
inability to deliver or rejection or refusal to accept delivery. Notice by the
Company, Member or REPG may be given by its respective counsel.
SECTION 10.04. SEVERABILITY. In the event that any provision in this
Agreement shall be deemed to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired hereby.
SECTION 10.05. AMENDMENTS/WAIVERS. No provision of this Agreement may be
amended or waived without the prior written consent of Member and REPG.
SECTION 10.06. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
SECTION 10.07. HEADINGS, ETC. The headings in this Agreement are inserted
for convenience of reference only and shall not affect the interpretation of
this Agreement.
SECTION 10.08. NO RIGHT TO PARTITION. Member, on behalf of itself and its
shareholders, partners, members, successors and assigns, if any, hereby
specifically renounces, waives and forfeits all rights, whether arising under
contract or statute or by operation of law, except as otherwise expressly
provided in this Agreement, to seek, bring or maintain any action in any court
of law or equity for partition of the Company or any asset of the Company, or
any interest which is considered to be Company property, regardless of the
manner in which title to such property may be held.
SECTION 10.09. NO THIRD PARTY RIGHTS. This Agreement is intended solely for
the benefit of the parties hereto and is not intended to confer any benefits
upon, or create any rights in favor of, any Person other than the parties
hereto. The Company and Member expressly acknowledge and agree that REPG shall
have standing to enforce any covenant or agreement on the part of the Company or
Member to be performed hereunder.
SECTION 10.10. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to the conflict of laws principles thereof.
SECTION 10.11 PERFORMANCE ON BUSINESS DAYS. Whenever the date for the
performance of any act that is required to be taken hereunder occurs on a day
that is not a Business Day, the date for the performance of such act shall be
deferred to the next Business Day.
SECTION 10.12 SINGLE PURPOSE ENTITY. Until the payment in full of the ITB
Obligations (except as otherwise expressly provided below), the following shall
apply: (i) except as expressly permitted in Article IX, the Company shall not
incur, assume, or guaranty any indebtedness; (ii) the Company shall not
consolidate or merge with or into any other entity or convey or transfer its
properties and assets substantially as an entirety to any entity; (iii) until
the payment in full of the ITB Obligations and for 367 days thereafter, the
Company shall not voluntarily commence a case with respect to itself, as debtor,
under the Federal Bankruptcy Code or any similar federal or state statute
without the consent of Member and REPG; (iv) no amendment to the Certificate or
this Agreement shall be made without first obtaining the approval of Member and
REPG; (v) any indemnification given by the Company shall be fully subordinated
to the ITB Obligations and shall not constitute a claim against the Company in
the event that cash flow is insufficient to pay such ITB Obligations; and (vi)
in order to preserve and ensure its separate and distinct identity, in addition
to the other provisions set forth in the Certificate and this Agreement, the
Company shall conduct its affairs in accordance with the following provisions:
(i) It shall allocate fairly and reasonably any overhead for shared
office space;
(ii) It shall maintain separate records and books of account from
those of any Affiliate (including Member);
(iii) It shall not commingle assets with those of any Affiliate
(including Member);
(iv) It shall conduct its own business in its own name;
(v) It shall maintain financial statements separate from any Affiliate
(including Member);
(vi) Except as contemplated by this Agreement and the Restructure
Agreement, it shall pay any liabilities out of its own funds, including
salaries of any employees, and not out of funds of any Affiliate (including
Member);
(vii) It shall maintain an arms' length relationship with any
Affiliate (including Member);
(viii) It shall not guarantee or become obligated for the debts of any
other entity, including any Affiliate (including Member), or hold out its
credit as being available to satisfy the obligations of others;
(ix) It shall use stationery, invoices and checks separate from any
Affiliate (including Member);
(x) Other than the Mortgage encumbering the Property, it shall not
pledge its assets for the benefit of any other entity, including any
Affiliate (including Member); and
(xi) It shall hold itself out as an entity separate from any Affiliate
(including Member).
SECTION 10.13. TERMS Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. All pronouns (and any variation) will be deemed to
refer to the masculine, feminine or neuter, as the identity of the Person may
require. The singular or plural includes the other, as the context requires or
permits. The word include (and any variation) is used in an illustrative sense
rather than in a limiting sense. The word day means a calendar day, unless
otherwise specified calendar day, unless otherwise specified. Unless otherwise
indicated herein, the term "Section" refers to sections of this Agreement.
Whenever in this Agreement a Person is permitted or required to make a decision
in its "discretion" or under a grant of similar authority or latitude, such
Person shall be entitled to consider only such interests and factors as it
desires, including its own interests, and shall have no duty (including no
fiduciary duty) or obligation to give any consideration to any interest of or
factors affecting the Company, Member or any other Person.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
GARDEN STATE RACE TRACK, INC., AS MEMBER
By: __________________________
Name:
Title:
GSRT, LLC
By: Garden State Race Track, Inc.,
its sole Member
By: __________________________
Name:
Title:
AGREED AND ACCEPTED AS OF THE
DAY AND YEAR FIRST WRITTEN ABOVE:
REPG GARDEN STATE CORPORATION
By: __________________________
Name:
Title:
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B
CERTIFICATE OF FORMATION OF GSRT, LLC
EXHIBIT 10.3
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
Eleven Madison Avenue
New York, New York 10010
January __, 2000
International Thoroughbred Breeder's, Inc.
Garden State Race Track, Inc.
Holdfree, Inc.
International Thoroughbred Gaming Development Corporation
Orion Casino Corporation
Haddonfield Road and Route 70
Cherry Hill, New Jersey 08034
Gentlemen:
Reference is hereby made to a certain Limited Liability Agreement of GSRT,
LLC dated January ___, 2000 by and among Garden State Race Track, Inc. ("GSRT")
and GSRT, LLC (the "Company"), and accepted and agreed to by REPG Garden State
Corporation (the "LLC Agreement"). Unless otherwise provided, all capitalized
terms used herein shall have the meanings ascribed to such terms in the LLC
Agreement.
1. This letter will evidence confirmation by Credit Suisse First Boston
Mortgage Capital LLC ("CSFB") that the transaction described in the Agreement of
Sale attached hereto as Exhibit A, together with the two (2) sideletters
relating thereto attached hereto as Exhibit B (all of the foregoing,
collectively, the "Garden State Agreement #1"), shall constitute an acceptable
Repurchase Joint Venture, provided that (a) such Garden State Agreement #1, in
the form attached hereto or with such changes thereto as CSFB (or its counsel)
shall have reasonably approved in writing, subject to the provisions of
Paragraph 3 hereof, is executed and delivered by all parties thereto (and a copy
thereof delivered to CSFB) by not later than January 25, 2000, time being of the
essence with respect to such date, (b) the Note and the Note Agreement (as such
terms are defined in the Garden State Agreement #1), as and when executed
pursuant to the terms of the Garden State Agreement #1, shall be in the forms
attached hereto as Exhibit C and Exhibit D, respectively, or with such changes
thereto as CSFB (or its counsel) shall have reasonably approved in writing,
subject to the provisions of Paragraph 3 hereof, (c) without limiting the
generality of the foregoing clause (b), the Note and the Note Agreement shall
provide that, until such time as the ITB Obligations have been paid in full, all
payments to be made to GSRT (or any Affiliate thereof) under the Note and/or the
Note Agreement shall be paid by the maker thereof directly to CSFB, all of which
amounts received by CSFB shall be applied in reduction of the ITB Obligations,
(d) all other documents contemplated to be executed and/or delivered pursuant to
the Garden State Agreement #1 shall be reasonably satisfactory to CSFB, (e) all
of the conditions precedent to the consummation of a Repurchase Joint Venture
set forth in said Section 9.02(b) of the LLC Agreement are satisfied in
accordance with the terms thereof, (f) in addition to the pledge of GSRT's
Interest in the Company to CSFB as contemplated under Section 9.02(b)(iii) of
the LLC Agreement, simultaneously with the closing of the Repurchase Joint
Venture and the release of CSFB's Mortgage, the Company shall pledge the Note
and the Note Agreement, and any and all collateral therefor, to CSFB, as
additional security for the ITB Obligations, pursuant to documents reasonably
satisfactory to CSFB and Borrowers, (g) in the event that, at any time when any
portion of the ITB Obligations remains outstanding, the Company exercises its
right under Section 6.1 of the Note Agreement to convert the principal amount of
the Note then outstanding into the Conversion LLC Interest (as defined in the
Note Agreement), simultaneously therewith the Company shall pledge such
Conversion LLC Interest to CSFB, as additional security for the ITB Obligations,
pursuant to documents reasonably satisfactory to CSFB and Borrowers, and (h)
CSFB's confirmation evidenced hereby shall not be or be deemed to be CSFB's
approval to any possible extension provided for under the Garden State Agreement
#1, including, without limitation, as provided in Section 13 thereof, it being
understood and agreed by Borrowers that all time periods set forth in the LLC
Agreement shall remain of the essence, without extension for any reason.
2. Without limiting the generality of the foregoing paragraph, this letter
will also evidence confirmation by CSFB that, as an alternative to the
transaction described in the Garden State Agreement #1, the transaction
described in the Agreement to Enter Joint Venture Agreement attached hereto as
Exhibit E, together with the sideletter relating thereto attached hereto as
Exhibit F (all of the foregoing, collectively, the "Garden State Agreement #2"),
shall constitute an acceptable Repurchase Joint Venture, provided that (a) such
Garden State Agreement #2, in the form attached hereto or with such changes
thereto as CSFB (or its counsel) shall have reasonably approved in writing,
subject to the provisions of Paragraph 3 hereof, is executed and delivered by
all parties thereto (and a copy thereof delivered to CSFB) by not later than
January 25, 2000, time being of the essence with respect to such date, (b) all
documents contemplated to be executed and/or delivered pursuant to the Garden
State Agreement #2 shall be reasonably satisfactory to CSFB, (c) all of the
conditions precedent to the consummation of a Repurchase Joint Venture set forth
in said Section 9.02(b) of the LLC Agreement are satisfied in accordance with
the terms thereof, and (d) CSFB's confirmation evidenced hereby shall not be or
be deemed to be CSFB's approval to any possible extension provided for under the
Garden State Agreement #2, including, without limitation, as provided in Section
10 thereof, it being understood and agreed by Borrowers that all time periods
set forth in the LLC Agreement shall remain of the essence, without extension
for any reason.
3. Borrowers expressly acknowledge and agree that in any of the foregoing
instances in which CSFB has reasonably agreed to approve changes to any document
the form of which is annexed hereto as an Exhibit (any of the same, an "Attached
Document"), it shall not be unreasonable for CSFB to withhold its approval to
any such change which has the effect of (a) decreasing the cash portion of the
purchase price payable to the Company under the Garden State Agreement #1 or the
Garden State Agreement #2, as applicable, (b) extending any date or time period
under the applicable Attached Document (or any related Attached Document), or
(c) varying in any way the Company's rights, if any, to terminate the applicable
Attached Document (or any related Attached Document) as set forth therein or
varying in any way the provisions, if any, regarding the expiration of the
applicable Attached Document (or any related Attached Document).
If the foregoing is acceptable to you, please evidence your acceptance by
executing this letter where indicated below.
Very truly yours,
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By: _______________________________
Name:
Title:
BORROWERS' ACCEPTANCE OF THE FOREGOING
IS SET FORTH ON THE FOLLOWING PAGE
ACCEPTED AND AGREED:
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By: _______________________________
Name:
Title:
GARDEN STATE RACE TRACK, INC.
By: _______________________________
Name:
Title:
HOLDFREE, INC. (formerly known as Freehold Racing Association)
By: _______________________________
Name:
Title:
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION
By: _______________________________
Name:
Title:
ORION CASINO CORPORATION
By: _______________________________
Name:
Title:
EXHIBIT 10.4
INTERNATIONAL THOROUGHBRED BREEDER'S, INC.
GARDEN STATE RACE TRACK, INC.
HOLDFREE, INC.
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION
ORION CASINO CORPORATION
Haddonfield Road and Route 70
Cherry Hill, New Jersey 08034
January __, 2000
Credit Suisse First Boston Mortgage Capital LLC
Eleven Madison Avenue
New York, New York 10010
Gentlemen:
Reference is hereby made to the following documents dated and being entered
into on the date hereof: (i) a certain Restructure Agreement by and among the
undersigned (collectively, "Borrowers") and Credit Suisse First Boston Mortgage
Capital LLC ("Lender") (the "Restructure Agreement"), and (ii) a certain Limited
Liability Agreement of GSRT, LLC by and among Garden State Race Track, Inc. and
GSRT, LLC, and accepted and agreed to by REPG Garden State Corporation (the "LLC
Agreement"). Unless otherwise provided, all capitalized terms used herein shall
have the meanings ascribed to such terms in the LLC Agreement.
Borrowers are contemplating a conveyance by Orion of the El Rancho Property
to a new limited liability company ("El Rancho Newco"), to be comprised of Orion
or another wholly-owned subsidiary of ITB (the "El Rancho ITB Member"), an
entity controlled by Jeffrey Soffer and members of his family, and a subsidiary
of Lehman Brothers Holdings, Inc. (the "Proposed Transaction"). In the event
that the Proposed Transaction closes prior to the closing of any Repurchase
Transaction, or in the event that no Repurchase Transaction closes by the
respective outside dates therefor set forth in the LLC Agreement and thereafter
the Proposed Transaction closes, and simultaneously with such closing of the
Proposed Transaction (i) Borrowers pay to Lender, in reduction of the ITB
Obligations, an amount equal to fifty percent (50%) of the then combined
outstanding principal balance of (a) the ITB Obligations (including all amounts
theretofore added to the outstanding principal balance of the Loan pursuant to
Section 8 of the Restructure Agreement), plus (b) the loan secured by the
Bankruptcy Trustee Mortgage (the amount determined in accordance with this
clause (i) being referred to herein as the "Release Amount"), (ii) Borrowers
and/or the El Rancho ITB Member and/or any Affiliate of any of the foregoing
pledge to Lender, as additional security for the ITB Obligations, any and all
interests (ownership or otherwise) received, directly or indirectly, by
Borrowers, the El Rancho ITB Member or any Affiliate of any of the foregoing in
El Rancho Newco or in any of the profits thereof (the "El Rancho Remaining
Interest"), pursuant to documents reasonably satisfactory to Lender (the "Pledge
Documents"), and (iii) the Bankruptcy Trustee releases its deed of trust
encumbering the El Rancho Property (the "El Rancho Trustee Mortgage"), Borrowers
would like Lender to agree to the following:
1. Simultaneously with the payment of the Release Amount to Lender and
the execution and delivery of the Pledge Documents to Lender, Lender will
release the El Rancho Mortgage (as defined in the Restructure Agreement).
2. Lender will apply the Release Amount to the ITB Obligations in the
order of priority set forth in clauses (iv), (v) and (vi) of Section
4.03(b) of the LLC Agreement.
3. In the event that any Borrower or any Affiliate thereof receives
any proceeds from the closing of the Proposed Transaction in excess of the
Release Amount (the "Excess Proceeds"), such Excess Proceeds may be used by
Borrowers either for the betterment of the El Rancho Property or for
general working capital purposes pursuant to a budget to be reasonably
agreed upon by Lender prior to the closing of the Proposed Transaction,
provided, however, that in no event shall any of such Excess Proceeds be
used to reduce or satisfy any subordinate mortgage or deed of trust on the
El Rancho Property or the Garden State Property, including the Bankruptcy
Trustee Mortgage and/or the El Rancho Trustee Mortgage.
4. From and after the closing of the Proposed Transaction, Sections
9.02(a)(v), 9.02(b)(viii) and 9.02(c)(vii) of the LLC Agreement shall be
deemed deleted therefrom.
5. From and after the closing of the Proposed Transaction, Sections 5
and 8(e) of the Restructure Agreement will be deleted therefrom, and all
references to Newco II and the ITB Member II in the Restructure Agreement
shall also be deleted therefrom.
6. Simultaneously with the payment of the Release Amount to Lender,
the execution and delivery of the Pledge Documents to Lender and the
release of the El Rancho Trustee Mortgage by the Bankruptcy Trustee,
Borrowers and/or the El Rancho ITB Member and/or any Affiliate of any of
the foregoing may give a subordinate pledge to the Bankruptcy Trustee of
any El Rancho Remaining Interest, as additional security for the loan
secured by the El Rancho Trustee Mortgage, provided that such pledge to the
Bankruptcy Trustee is subordinated to the pledge of the El Rancho Remaining
Interest granted to Lender in accordance with the terms of this Letter, to
the same extent, and on substantially the same terms, as the El Rancho
Trustee Mortgage is currently subordinated to the El Rancho Mortgage (as
defined in the Restructure Agreement) in favor of Lender, pursuant to
subordination documents reasonably satisfactory to Lender and the
Bankruptcy Trustee.
In asking for Lender's approval to the foregoing, Borrowers acknowledge and
agree that (a) the foregoing shall only apply if the Proposed Transaction occurs
prior to the consummation of a Repurchase Transaction or if no Repurchase
Transaction closes by the respective outside dates therefor set forth in the LLC
Agreement and thereafter the Proposed Transaction occurs, provided, however,
that in no event shall the foregoing apply after the Extended Maturity Date, (b)
if the Proposed Transaction does not close prior to the consummation of a
Repurchase Transaction, any transaction relating to the El Rancho Property shall
be governed by the terms of the Restructure Agreement and, if applicable, the
Newco II LLC Agreement (as defined in the Restructure Agreement), (c) under the
circumstances in which no Repurchase Transaction closes by the respective
outside dates therefor set forth in the LLC Agreement, if the Proposed
Transaction does not close prior to the Extended Maturity Date, any transaction
relating to the El Rancho Property shall be governed by the terms of the
Restructure Agreement and, if applicable, the Newco II LLC Agreement, (d)
notwithstanding the closing of the Proposed Transaction, Borrowers shall remain
fully liable for the payment of the ITB Obligations as and when due, subject to
the terms of Section 8(c) of the Restructure Agreement, (e) whether or not the
Proposed Transaction closes, all of the terms and conditions set forth in the
LLC Agreement, the Restructure Agreement and the other Restructure Documents
shall be and remain in full force and effect, except as expressly modified
hereby, and (f) in connection with the closing of the Proposed Transaction and
the effectuation of the terms of this letter, Borrowers, the El Rancho ITB
Member and El Rancho Newco shall execute and deliver such documents, and take
such actions, as Lender shall reasonably require in order to fully effectuate
the benefits intended to be conferred upon Lender hereunder.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
If Lender is in agreement with the terms of this Lender, please indicate
such agreement by signing this letter where indicated below.
Very truly yours,
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By: _______________________________
Name:
Title:
GARDEN STATE RACE TRACK, INC.
By: _______________________________
Name:
Title:
HOLDFREE, INC.
(formerly known as Freehold Racing Association)
By: _______________________________
Name:
Title:
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION
By: _______________________________
Name:
Title:
ORION CASINO CORPORATION
By: _______________________________
Name:
Title:
[LENDER'S ACCEPTANCE ON FOLLOWING PAGE]
ACCEPTED AND AGREED AS OF
THE DATE FIRST SET FORTH ABOVE:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By: _______________________________
Name:
Title:
BRMFS1 175725.03
EXHIBIT 10.5
MODIFICATION OF MORTGAGE, DEED OF TRUST
AND OTHER LOAN DOCUMENTS
THIS MODIFICATION OF MORTGAGE, DEED OF TRUST AND OTHER LOAN DOCUMENTS (this
"Agreement") is made on this __ day of January, 2000 by and among INTERNATIONAL
THOROUGHBRED BREEDERS, INC., a Delaware corporation ("ITB"), GARDEN STATE RACE
TRACK, INC., a New Jersey corporation ("GSRT"), HOLDFREE, INC. (formerly known
as Freehold Racing Association), a New Jersey corporation ("FRA"), INTERNATIONAL
THOROUGHBRED GAMING DEVELOPMENT CORPORATION, a New Jersey corporation ("ITGDC"),
and ORION CASINO CORPORATION, a Nevada corporation ("Orion"; and ITB, GSRT, FRA,
ITGDC and Orion are collectively referred to herein as "Borrowers"), and CREDIT
SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, a Delaware limited liability company
("Lender").
RECITALS
A. On May 23, 1997, Lender made a loan to Borrowers in the original
principal amount of $55,000,000.00 (the "Loan"), which Loan was made pursuant to
the terms of a certain Loan Agreement dated May 23, 1997 by and among Borrowers
and Lender, as the same was amended pursuant to that certain Amendment to Loan
Agreement dated as of May 24, 1997 by and among Borrowers and Lender, and as the
same was further amended pursuant to the Approval Agreement (as hereinafter
defined) (all of the foregoing, as heretofore and hereafter amended, modified or
extended, the "Loan Agreement"), and was evidenced by a certain Convertible
Promissory Note dated May 23, 1997 made by Borrowers in favor of Lender in the
original principal amount of $55,000,000.00 (as heretofore and hereafter
amended, modified or extended, including pursuant to the Approval Agreement, the
"Note").
B. The Loan is secured by, among other things, (i) a certain First
Mortgage, Assignment of Rents and Security Agreement dated May 23, 1997 made by
GSRT in favor of Lender and encumbering the property (the "Garden State
Property") owned by GSRT and known as Garden State Race Track, located in Camden
County, New Jersey and more particularly described on Schedule A hereto, which
was recorded on May 28, 1997 in the Office of the Clerk/Register of Camden
County, New Jersey in Mortgage Book 4694, Page 488 (as heretofore and hereafter
amended, modified or extended, including pursuant to the Approval Agreement, the
"Garden State Mortgage"), and (ii) a certain Assignment of Leases, Rents and
Security Deposits dated May 23, 1997 made by GSRT in favor of Lender and
encumbering the Garden State Property, which was recorded on May 28, 1997 in the
Office of the Clerk/Register of Camden County, New Jersey in Mortgage Book 4694,
Page 581 (as heretofore and hereafter amended, modified or extended, including
pursuant to the Approval Agreement, the "Garden State Assignment").
C. The Loan is also secured by, among other things, (i) a certain First
Deed of Trust, Assignment of Rents, Fixture Filing and Security Agreement dated
May 23, 1997 made by Orion for the benefit of Lender and encumbering the
property (the "El Rancho Property") owned by Orion, located in Clark County,
Nevada and more particularly described on Schedule B hereto, which was recorded
in the Official Records of Clark County, Nevada on May 27, 1997 in Book 970527
as Instrument No. 01329 (as heretofore and hereafter amended, modified or
extended, including pursuant to the Approval Agreement, the "El Rancho Deed of
Trust"), and (ii) a certain Assignment of Leases, Rents and Security Deposits
dated May 23, 1997 made by Orion in favor of Lender and encumbering the El
Rancho Property, which was recorded on May 27, 1997 in Book 970527 as Instrument
No. 01330 (as heretofore and hereafter amended, modified or extended, including
pursuant to the Approval Agreement, the "El Rancho Assignment").
D. The Loan Agreement, the Note, the Garden State Mortgage, the Garden
State Assignment, the El Rancho Deed of Trust, the El Rancho Assignment, the
Approval Agreement and all other documents at any time evidencing, securing or
otherwise relating to the Loan, as heretofore and hereafter amended, modified or
extended, including pursuant to the Approval Agreement, are collectively
referred to herein as the "Loan Documents".
E. All capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to such terms in the Loan Agreement.
F. In connection with the settlement of several lawsuits by and against
ITB, the other Borrowers, various officers, directors and shareholders of ITB
and the other Borrowers, and various third parties, and in order to make certain
amendments to the Loan Documents requested by Borrowers, Lender and Borrowers
entered into a certain Approval Agreement dated January 28, 1999 (the "Approval
Agreement").
G. The Loan matured on June 1, 1999 and Borrowers have failed to repay the
Obligations in full as required under the Loan Documents (the "Maturity
Default").
H. On the date hereof, Lender and Borrowers are entering into a certain
Restructure Agreement dated of even date herewith (the "Restructure Agreement"),
pursuant to which the Maturity Default is being waived, the term of the Loan is
being extended and the Loan is being restructured, all as more particularly set
forth therein.
I. Section 8 of the Restructure Agreement provides for the addition to the
Outstanding Principal Balance of the Loan of (a) accrued but unpaid interest on
the Loan from and after June 1, 1999 through the date hereof, (b) future
interest payable on the Loan as the same becomes due and payable, in accordance
with Section 8(c) of the Restructure Agreement, (c) certain amounts advanced on
the date hereof by Lender on behalf of Borrowers for legal fees and expenses
incurred by Lender in accordance with the terms of the Restructure Agreement
(referred to in the Restructure Agreement as "Lender's Legal Fees"), (d) certain
real property transfer taxes in connection with the possible transfer of the El
Rancho Property which hereafter may be advanced by Lender on behalf of Borrowers
in accordance with the terms of the Restructure Agreement, and (e) certain real
property transfer taxes in connection with the possible subsequent transfer of
the Garden State Property (referred to in the Restructure Agreement as a
"Repurchase Transaction") which hereafter may be advanced by Lender on behalf of
Borrowers in accordance with the terms of the Restructure Agreement (all of the
foregoing, as, when, and to the extent, added to the Outstanding Principal
Balance in accordance with the terms of the Restructure Agreement, collectively,
the "Principal Additions"), provided, however, that in no event shall the
maximum amount of the Principal Additions exceed $8,000,000.00 (the "Principal
Additions Maximum").
J. It is a condition to, and is additional consideration for, the execution
and delivery by Lender of the Restructure Agreement and the Other Restructure
Documents (as defined in the Restructure Agreement) to which Lender is a party,
and the performance by Lender of its obligations thereunder, that Borrowers
agree to modify the Garden State Mortgage, the Garden State Assignment, the El
Rancho Deed of Trust, the El Rancho Assignment and the other Loan Documents (a)
to provide that all of the foregoing shall hereafter secure the Principal
Additions, up to the Principal Additions Maximum, and (b) to make certain other
amendments thereto as hereinafter set forth.
NOW, THEREFORE, in consideration for the mutual promises contained herein,
in the Restructure Agreement and in the Other Restructure Documents, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrowers and Lender hereby agree as follows:
1. Documents Secure Principal Additions. Borrowers and Lender hereby agree
that from and after the date hereof, the Garden State Mortgage, the Garden State
Assignment, the El Rancho Deed of Trust, the El Rancho Assignment and the other
Loan Documents shall secure the Principal Additions, as, when, and to the
extent, added to the Outstanding Principal Balance in accordance with the terms
of the Restructure Agreement, up to the Principal Additions Maximum.
2. Defined Terms. Borrowers and Lender hereby agree that all references to
the following defined terms contained in the Garden State Mortgage, the Garden
State Assignment, the El Rancho Deed of Trust, the El Rancho Assignment and/or
any of the other Loan Documents are hereby modified as follows:
(a) Garden State Mortgage. All references to "the Garden State
Mortgage" (and to "this Mortgage" or "the Mortgage" in the Garden State
Mortgage, and to "the Mortgage" in the Garden State Assignment) or to other
words intended to refer to the Garden State Mortgage, shall mean the Garden
State Mortgage, as modified hereby and as the same hereafter may be
amended, modified or extended.
(b) Garden State Assignment. All references to "the Garden State
Assignment" (and to "this Assignment" in the Garden State Assignment, and
to "the Assignment" in the Garden State Mortgage) or to other words
intended to refer to the Garden State Assignment, shall mean the Garden
State Assignment, as modified hereby and as the same hereafter may be
amended, modified or extended.
(c) El Rancho Deed of Trust. All references to "the El Rancho Deed of
Trust" (and to "this Deed of Trust" or "the Deed of Trust" in the El Rancho
Deed of Trust, and to "the Deed of Trust" in the El Rancho Assignment) or
to other words intended to refer to the El Rancho Deed of Trust, shall mean
the El Rancho Deed of Trust, as modified hereby and as the same hereafter
may be amended, modified or extended.
(d) El Rancho Assignment. All references to "the El Rancho Assignment"
(and to "this Assignment" in the El Rancho Assignment, and to "the
Assignment" in the El Rancho Deed of Trust) or to other words intended to
refer to the El Rancho Assignment, shall mean the El Rancho Assignment, as
modified hereby and as the same hereafter may be amended, modified or
extended.
(e) Note. All references to "the Note" (and to "this Convertible
Promissory Note" in the Note), shall mean the Note, as modified hereby and
as the same hereafter may be amended, modified or extended.
(f) Loan Agreement. All references to "the Loan Agreement" (and to
"this Agreement" or "the Agreement" in the Loan Agreement), shall mean the
Loan Agreement, as modified hereby and as the same hereafter may be
amended, modified or extended.
(f) Loan Documents. All references to "the Loan Documents", shall mean
the Loan Documents, as modified hereby and as the same hereafter may be
amended, modified or extended.
(g) Other Loan Documents. All references to any other Loan Document,
shall mean such Loan Document, as modified hereby and as the same hereafter
may be amended, modified or extended.
(h) Loan Balance. All references to "the Loan Balance", shall
hereafter be deemed to include the Principal Additions.
(i) Loan Obligations. All references to "the Loan Obligations", shall
hereafter be deemed to include the Principal Additions.
(j) Obligations. All references to "the Obligations", shall hereafter
be deemed to include the Principal Additions.
(k) Outstanding Principal Balance. All references to "the Outstanding
Principal Balance", shall hereafter be deemed to include the Principal
Additions.
(l) Scheduled Maturity Date. All references to "the Scheduled Maturity
Date" or to other words intended to refer to the Scheduled Maturity Date,
shall mean June 1, 2000.
(m) Events of Default. All references to "Events of Default", shall
hereafter be deemed to include the additional Events of Default set forth
in Section 10 of the Restructure Agreement; and such additional Events of
Default set forth in Section 10 of the Restructure Agreement shall
hereafter be deemed added to Section 8.1 of the Loan Agreement.
3. Modifications to Effectuate Restructure Agreement. Without limiting the
foregoing, Borrowers and Lender hereby agree that the Garden State Mortgage, the
Garden State Assignment, the El Rancho Deed of Trust, the El Rancho Assignment
and the other Loan Documents are hereby deemed to be modified to the extent
necessary to make them consistent with the terms of the Restructure Agreement
and the Other Restructure Documents, it being acknowledged and agreed that in
the event of a conflict between the terms of any Loan Document, on the one hand,
and the terms of the Restructure Agreement or any Other Restructure Document, on
the other hand, the terms of the Restructure Agreement or the Other Restructure
Document, as applicable, shall govern.
4. Miscellaneous.
(a) Recitals. The Recitals at the beginning of this Agreement are
hereby incorporated into, and made a part of, the substantive provisions of
this Agreement.
(b) Governing Law. This Agreement, including all matters of
construction, validity and performance, shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made in such State and to be performed entirely
within such State, without giving effect to principles relating to
conflicts of law.
(c) Successors and Assigns. The covenants, conditions and agreements
contained in this Agreement shall be binding upon, and shall inure to the
benefit of, Lender and Borrowers and their respective successors and
assigns, provided, however, that no Borrower shall assign this Agreement
except in accordance with an assignment permitted under Section 10.10 of
the Loan Agreement.
(d) Construction. Borrowers agree that they and their counsel have had
ample opportunity to review this Agreement and 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.
(e) Severability. In the event that any one or more of the provisions
of this Agreement shall be determined to be void or unenforceable by a
court of competent jurisdiction or by law, such determination will not
render this Agreement invalid or unenforceable, and the remaining
provisions hereof shall remain in full force and effect.
(f) Jurisdiction; Trial by Jury. EACH BORROWER HEREBY AGREES THAT ANY
PROCEEDING BETWEEN SUCH BORROWER AND LENDER ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE BREACH OR THREATENED BREACH HEREOF SHALL BE COMMENCED
AND PROSECUTED, AT LENDER'S OPTION, ONLY IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION LOCATED IN THE COUNTY AND STATE OF NEW YORK. EACH
BORROWER HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE PERSONAL
JURISDICTION OF ANY SUCH COURT IN RESPECT OF ANY SUCH PROCEEDING. EACH
BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS UPON IT WITH RESPECT TO ANY
SUCH PROCEEDING BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SET FORTH IN SECTION 10.9 OF THE LOAN AGREEMENT, AS MODIFIED BY
PARAGRAPH 7(n) OF THE APPROVAL AGREEMENT AND BY ANY OTHER MEANS PERMITTED
BY APPLICABLE LAWS AND RULES. EACH BORROWER HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
PROCEEDING IN ANY SUCH COURT AND ANY CLAIM THAT IT MAY NOW O HEREAFTER HAVE
THAT ANY SUCH PROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH BORROWER HEREBY WAIVES TRIAL BY JURY WITH RESPECT
TO ANY SUCH PROCEEDING.
(g) Section Headings. The section headings in this Agreement are for
the convenience of the parties and in no way alter, modify, amend, limit,
or restrict the contractual obligations of the parties.
(h) Amendments; Waivers. This Agreement may not be amended or
modified, and no provision of this Agreement may be waived, except, in each
instance, pursuant to a written instrument signed by the parties against
whom such amendment or waiver is sought to be enforced.
(i) Full Force and Effect. Except as and to the extent modified by
this Agreement, the Garden State Mortgage, the Garden State Assignment, the
El Rancho Deed of Trust, the El Rancho Assignment and the other Loan
Documents remain unmodified and in full force and effect.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Modification of Mortgage, Deed of Trust and Other
Loan Documents has been duly executed and delivered as of the day and year first
written above.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By: _______________________________
Name:
Title:
GARDEN STATE RACE TRACK, INC.
By: _______________________________
Name:
Title:
HOLDFREE, INC. (formerly known as Freehold Racing Association)
By: _______________________________
Name:
Title:
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION
By: _______________________________
Name:
Title:
ORION CASINO CORPORATION
By: _______________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
By: _______________________________
Name:
Title:
SCHEDULE A
Legal Description of Garden State Property
SCHEDULE B
Legal Description of El Rancho Property
BRMFS1 174111.02
THIS DOCUMENT WAS PREPARED BY:
------------------------------
Barry G. Felder
Attorney-At-Law
==============================================================================
MODIFICATION OF MORTGAGE, DEED OF TRUST
AND OTHER LOAN DOCUMENTS
January ___, 2000
==============================================================================
Upon recordation return to:
Brown Raysman Millstein Felder & Steiner LLP
120 West 45th Street
New York, New York 10036
Attention: Rand G. Boyers, Esq.
SCHEDULE B
That portion of the Northeast Quarter (NE1/4) and that portion of the Southeast
Quarter (SE1/4) of Section 9, Township 21 South, Range 61 East, M.D. B. & M.,
more particularly described as Parcel One (1) as shown on Parcel Map in File 37,
Page 44, recorded March 22, 1982, as Document No. 1497782, Book 1538 of Official
Records, Clark County, Nevada.
EXHIBIT 10.6
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made on this __ day of
January, 2000 by INTERNATIONAL THOROUGHBRED BREEDERS, INC., a Delaware
corporation ("ITB"), GARDEN STATE RACE TRACK, INC., a New Jersey corporation
("GSRT"), FREEHOLD RACING ASSOCIATION, a New Jersey corporation ("FRA"),
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION, a New Jersey
corporation ("ITGDC"), and ORION CASINO CORPORATION, a Nevada corporation
("Orion"; and ITB, GSRT, FRA, ITGDC and Orion are collectively referred to
herein as "Indemnitors"), in favor of CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited liability company ("Lender"), REPG GARDEN STATE
CORPORATION, a Delaware corporation ("REPG"), and GSRT, LLC, a Delaware limited
liability company ("Newco"), pursuant to that certain Restructure Agreement
dated the date hereof by and between Lender and Indemnitors (the "Restructure
Agreement").
RECITALS
A. On May 23, 1997, Lender made a loan to Indemnitors in the original
principal amount of $55,000,000.00 (the "Loan"), which Loan was (i) made
pursuant to the terms of a certain Loan Agreement dated May 23, 1997 by and
among Indemnitors and Lender, as the same was amended pursuant to that certain
Amendment to Loan Agreement dated as of May 24, 1997 by and among Indemnitors
and Lender, and as the same was further amended pursuant to the Approval
Agreement (as hereinafter defined) (all of the foregoing, as heretofore and
hereafter amended, modified or extended, the "Loan Agreement"), (ii) evidenced
by a certain Convertible Promissory Note dated May 23, 1997 made by Indemnitors
in favor of Lender in the original principal amount of $55,000,000.00 (as
heretofore and hereafter amended, modified or extended, including pursuant to
the Approval Agreement, the "Note"), and (iii) secured by, among other things, a
certain First Mortgage, Assignment of Rents and Security Agreement dated May 23,
1997 made by GSRT in favor of Lender and encumbering the property (the
"Property") owned by GSRT and known as Garden State Race Track, located in
Camden County, New Jersey and more particularly described therein (as heretofore
and hereafter amended, modified or extended, including pursuant to the Approval
Agreement, the "Mortgage").
B. All capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to such terms in the Loan Agreement.
C. In connection with the settlement of several lawsuits by and against
ITB, the other Indemnitors, various officers, directors and shareholders of ITB
and the other Indemnitors, and various third parties, and in order to make
certain amendments to the Loan Documents requested by Indemnitors, Lender and
Indemnitors entered into a certain Approval Agreement dated January 28, 1999
(the "Approval Agreement").
E. The Loan matured on June 1, 1999 and Indemnitors have failed to repay
the Obligations in full as required under the Loan Documents (the "Maturity
Default").
F. On the date hereof, Lender and Indemnitors are entering into the
Restructure Agreement, pursuant to which the Maturity Default is being waived,
the term of the Loan is being extended and the Loan is being restructured, all
as more particularly set forth therein, including, without limitation, the
conveyance of the Property by GSRT to Newco, a newly formed Delaware limited
liability company in which GSRT (in such capacity, the "ITB Member") is the sole
member, and with respect to which REPG, an Affiliate of Lender, has certain
rights and powers.
G. It is a condition to Lender's execution and delivery of the Restructure
Agreement and the Other Restructure Documents (as defined in the Restructure
Agreement) to which Lender is a party, and the performance by Lender of its
obligations thereunder, that Indemnitors execute and deliver this Agreement.
NOW, THEREFORE, in consideration for the mutual promises contained herein,
in the Restructure Agreement and in the Other Restructure Documents, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Indemnitors hereby agree as follows:
1. Indemnification. Indemnitors, at their sole cost and expense, hereby
agree, jointly and severally, irrevocably and unconditionally, to indemnify,
defend and hold harmless Lender, REPG and Newco, and each of their respective
officers, directors, stockholders, partners, members (other than the ITB
Member), employees, agents, representatives, Affiliates (other than the ITB
Member), successors and assigns (other than Newco's successors and assigns)
(each an "Indemnified Party", and collectively, the "Indemnified Parties"), from
and against any and all claims, actions, causes of action, liabilities (whether
absolute, accrued or contingent), obligations, losses, litigation, proceedings,
assessments, fines, taxes, levies, imposts, duties, deficiencies, demands,
damages (including, but not limited to, actual, punitive or consequential,
foreseen or unforeseen, and known or unknown damages), settlements, judgments,
costs and expenses, including, without limitation, interest, penalties and
attorneys fees and expenses of legal counsel chosen by any Indemnified Party, of
any kind or nature whatsoever, including, but not limited to, any of the
foregoing with respect to environment, health, safety or personal injury,
regardless of when asserted or by whom, asserted against, imposed upon or
incurred by any Indemnified Party, directly or indirectly, by reason or as a
result of any matter or thing related to, arising from, or associated with, the
ownership, operation, management, maintenance, repair, use or possession of the
Property or the formation, administration, operation or conduct of Newco,
whether before, on or after the date hereof, except to the extent any of the
foregoing arise out of or are attributable to (a) the willful misconduct or
gross negligence of an Indemnified Party, or (b) the breach of any
representation, warranty or obligation of any Indemnified Party set forth in the
Loan Agreement, the Restructure Agreement or any Other Restructure Document, it
being understood and agreed by Indemnitors, however, that REPG's exercise of its
rights under Article IX of the Limited Liability Agreement of Newco dated the
date hereof (the, "LLC Agreement") shall not, under any circumstances, give rise
to a claim that any Indemnified Party engaged in willful misconduct or was
grossly negligent or breached any representation, warranty or obligation under
the Loan Agreement, the Restructure Agreement or any Other Restructure Document,
including the LLC Agreement, as the standards for, and limits of liability under
said Article IX of the LLC Agreement are expressly set forth therein
(collectively, "Damages").
2. Notice of Claim. An Indemnified Party will give Indemnitors prompt
notice (hereinafter, the "Indemnification Notice") of any demand, complaint,
summons, citation, notice, directive, order, claim, litigation, investigation,
judicial or administrative proceeding, judgment, letter or other communication
from any governmental agency, department, bureau, office or other authority, or
any third party (collectively, "Claims") asserted against such Indemnified
Party, or the occurrence of any other event (an "Indemnity Event"), in each
instance which could give rise to, or has given rise to, any Damages. Failure to
give such Indemnification Notice shall not relieve Indemnitors of any
obligations which Indemnitors may have to any Indemnified Party under this
Agreement, except to the extent that such failure has materially adversely
prejudiced Indemnitors under the provisions for indemnification contained in
this Agreement.
3. Conditions of Indemnification. The obligations and liabilities of
Indemnitors under Section 1 hereof with respect to the Damages resulting from
any Claim or Indemnity Event shall be subject to the following terms and
conditions:
(a) In the event that any Indemnification Notice notifies Indemnitors
that a Claim or Indemnity Event has occurred and any Indemnified Party has
already suffered or incurred Damages as a result thereof, Indemnitors shall
promptly (i) pay to the appropriate party(ies) any Damages so incurred but
not yet paid by any Indemnified Party (including any late penalties or
interest due thereon), and/or (ii) reimburse any Indemnified Party for any
Damages already paid by such Indemnified Party, together with interest
thereon at the Interest Rate from the date of delivery to Indemnitors of
the applicable Indemnification Notice through the date of reimbursement.
(b) Without limiting the generality of Section 3(a) hereof, following
the delivery to Indemnitors of any Indemnification Notice notifying
Indemnitors that a Claim has occurred, (i) the Indemnified Parties (or any
of them) shall, in their sole discretion, have the right to defend such
Claim (including the settlement or compromise thereof) with counsel chosen
by them, and Indemnitors shall reimburse the Indemnified Parties, from time
to time, on demand, for all legal fees and expenses incurred in connection
therewith, together with interest thereon at the Interest Rate from the
date of demand through the date of reimbursement; (ii) if the Indemnified
Parties elect, in their sole discretion, to have Indemnitors defend such
Claim, (A) Indemnitors shall diligently pursue the defense thereof, (B) if
Indemnitors fail to diligently pursue the defense thereof, the Indemnified
Parties shall have the right to take over such defense (including the
settlement or compromise thereof) at Indemnitors' expense (and the
provisions of clause (i) of this Section 3(b) shall apply thereto), (C)
Indemnitors shall keep the Indemnified Parties apprised of the progress of
such defense, and (D) Indemnitors shall not settle such Claim without the
written consent of the Indemnified Parties, which consent may be given or
withheld in the Indemnified Parties' sole discretion; and (iii) immediately
following the rendering of any judgment against any Indemnified Party under
such Claim and/or any Indemnified Party suffering or incurring any other
Damages as a result of such Claim, Indemnitors shall (1) pay to the
appropriate party(ies) the full amount of such judgment and/or other
Damages so incurred but not yet paid by any Indemnified Party (including
any late penalties or interest due thereon), and/or (2) reimburse any
Indemnified Party for any Damages already paid by such Indemnified Party,
together with interest thereon at the Interest Rate from the date of
delivery to Indemnitors of written notice detailing such Damages through
the date of reimbursement.
(c) Notwithstanding the provisions of Section 3(b) hereof, in the
event that the Indemnified Parties have elected, in their sole discretion,
to have Indemnitors defend any Claim, even if Indemnitors are diligently
pursuing such defense, the Indemnified Parties shall have the right, upon
notice to Indemnitors, to take over such defense (including the settlement
or compromise thereof) at Indemnitors' expense (and the provisions of
clause (i) of Section 3(b) hereof shall apply thereto) in the event that at
any time there arises a reasonable possibility that (i) a conflict of
interest exists in Indemnitors' defense of the Indemnified Parties, or (ii)
any Claim may materially and adversely affect any Indemnified Party other
than as a result of money damages or other money payments.
(d) In the event that the Indemnified Parties have elected, in their
sole discretion, to defend any Claim as provided in this Section 3,
Indemnitors, at the expense of Indemnitors, shall cooperate with all
reasonable requests of the Indemnified Parties in connection with such
defense, and shall make available to the Indemnified Parties any books,
records or other documents within Indemnitors' control that are reasonably
necessary or appropriate for such defense. In the event that the
Indemnified Parties have elected, in their sole discretion, to have
Indemnitors defend any Claim as provided in this Section 3, the Indemnified
Parties, at the expense of Indemnitors, shall cooperate with all reasonable
requests of Indemnitors in connection with such defense, and shall make
available to Indemnitors any books, records or other documents within the
Indemnified Parties' control that are reasonably necessary or appropriate
for such defense.
(e) Nothing contained in this Agreement is intended to (i) create any
right in any Person against any Indemnified Party or Indemnitors that such
Person would not otherwise have, or (ii) prevent Indemnitors from
contesting in good faith any Damages with any third party obligee.
(f) The indemnification contained in this Agreement is not exclusive
of any other rights to indemnification to which any Indemnified Party may
be entitled under any other agreement, under applicable law or otherwise.
4. Miscellaneous.
(a) Further Assurances. Indemnitors hereby agree that they will do,
execute and deliver, or will cause to be done, executed and delivered, all
such further acts and instruments which any Indemnified Party may
reasonably request in order to more fully effectuate the indemnification
provided for in this Agreement.
(b) Governing Law. This Agreement, including all matters of
construction, validity and performance, shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made in such State and to be performed entirely
within such State, without giving effect to principles relating to
conflicts of law.
(c) Successors and Assigns. The covenants, conditions and agreements
contained in this Agreement shall be binding upon, and shall inure to the
benefit of, the Indemnified Parties and Indemnitors and their respective
successors, assigns, personal representatives and heirs (other than the
successors and assigns of Newco), provided, however, that no Indemnitor
shall assign any of its obligations hereunder to any other Person without
the prior written consent of Lender, REPG and Newco, which consent may be
withheld or granted in each such party's sole discretion.
(d) Construction. Indemnitors agrees that they and their counsel have
had ample opportunity to review this Agreement and 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.
(e) Severability. In the event that any one or more of the provisions
of this Agreement shall be determined to be void or unenforceable by a
court of competent jurisdiction or by law, such determination will not
render this Agreement invalid or unenforceable, and the remaining
provisions hereof shall remain in full force and effect.
(f) Survival. The duties and obligations of Indemnitors under this
Agreement shall survive the termination of the Restructure Agreement and/or
any Other Restructure Document and the repayment in full of the Loan.
(g) Jurisdiction; Trial by Jury. EACH INDEMNITOR HEREBY AGREES THAT
ANY PROCEEDING BETWEEN SUCH INDEMNITOR AND ANY INDEMNIFIED PARTY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH OR THREATENED BREACH
HEREOF SHALL BE COMMENCED AND PROSECUTED, AT THE INDEMNIFIED PARTIES'
OPTION, ONLY IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
LOCATED IN THE COUNTY AND STATE OF NEW YORK. EACH INDEMNITOR HEREBY
CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF ANY SUCH
COURT IN RESPECT OF ANY SUCH PROCEEDING. EACH INDEMNITOR HEREBY CONSENTS TO
SERVICE OF PROCESS UPON IT WITH RESPECT TO ANY SUCH PROCEEDING BY
REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SET FORTH IN
SECTION 4(h) HEREOF AND BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAWS AND
RULES. EACH INDEMNITOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING IN ANY SUCH
COURT AND ANY CLAIM THAT IT MAY NOW OR HEREAFTER HAVE THAT ANY SUCH
PROCEEDING IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH INDEMNITOR HEREBY WAIVES TRIAL BY JURY WITH RESPECT TO ANY SUCH
PROCEEDING.
(h) Notices. All notices to be sent hereunder shall be sent in
accordance with the provisions of Section 10.9 of the Loan Agreement, with
all notices to Indemnitors to be sent to the addresses for Borrowers set
forth on Schedule D to the Approval Agreement, and with all notices to the
Indemnified Parties to be sent to the addresses for Lender set forth on
Schedule D to the Approval Agreement.
(i) Section Headings. The section headings in this Agreement are for
the convenience of the parties and in no way alter, modify, amend, limit,
or restrict the contractual obligations of the parties.
(j) Amendments; Waivers. This Agreement may not be amended or
modified, and no provision of this Agreement may be waived, except, in each
instance, pursuant to a written instrument signed by the parties against
whom such amendment or waiver is sought to be enforced.
IN WITNESS WHEREOF, this Indemnification Agreement has been duly
executed and delivered as of the day and year first written above.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
By: _______________________________
Name:
Title:
GARDEN STATE RACE TRACK, INC.
By: _______________________________
Name:
Title:
FREEHOLD RACING ASSOCIATION
By: _______________________________
Name:
Title:
INTERNATIONAL THOROUGHBRED GAMING DEVELOPMENT CORPORATION
By: _______________________________
Name:
Title:
ORION CASINO CORPORATION
By: _______________________________
Name:
Title:
BRMFS1 173623.03
