Exhibit 10.3
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of November 29, 2000, by and among
Realen-Turnberry/Cherry Hill, LLC, a Delaware limited liability company (the
"Company"), the members of the Company parties to this Agreement (said members
being collectively called the "Pledgors"), and GSRT, LLC, a Delaware limited
liability company (the "Seller"),
W I T N E S S E T H
Background. As evidenced by that certain promissory note of the Company of
even date herewith payable to the order of the Seller (the "Note"), the Company
is indebted to the Seller under the terms and conditions of the Note and the
accompanying Note Agreement of even date herewith between the Company and the
Seller (such agreement, as amended or modified from time to time as permitted by
the terms thereof, being hereinafter called the "Note Agreement"). Section 3.11
of the Note Agreement requires the Pledgors to enter into this Security
Agreement in order to secure the Company's obligations under the Note.
NOW, THEREFORE, in consideration of the foregoing and to induce the Seller
to accept the Note from the Company in payment of a portion of the purchase
price of the Cherry Hill Property (as defined in the Note Agreement), the
parties hereto, intending to be legally bound, agree as follows:
1. The term "Collateral" shall mean (i) all right, title and interest of
the Pledgors in all Distributable Cash, as defined in the Note, whether now
owned or hereafter acquired by the Pledgors,(ii) all rights of the Pledgors to
receive, and all interests of the Pledgors in, all distributions from time to
time made or to be made by the Company, whether pursuant to the operating
agreement of the Company or otherwise, whether now owned or hereafter acquired
by the Pledgors, and (iii) all proceeds of all of the foregoing.
2. (a)
(a) As security for the prompt satisfaction of the Company's obligations
under the Note and the Note Agreement, whether now existing or hereafter arising
(the "Obligations"), the Pledgors hereby pledge to the Seller the Collateral and
grant the Seller a lien on and security interest therein.
(b) If a Pledgor shall become entitled to receive or shall receive, in
connection with any of the Collateral, any:
(i) Distribution payable in property, other than cash; or
(ii) Distributions or payments of any sort, then, except as otherwise
provided with respect to cash distributions in paragraph 2(c) below: the Pledgor
shall accept the same as the Seller's agent, in trust for the Seller, and shall
deliver them forthwith to the Seller in the exact form received with, as
applicable, the Pledgor's endorsement when necessary, to be received and applied
by the Seller, subject to the terms hereof, as part of the Collateral.
(c) Unless an Event of Default (as defined in the Note) shall have
occurred and be continuing: the Pledgors shall be entitled to receive for their
own use (and not as agent of the Seller) distributions from the Company of
Distributable Cash except to the extent distributions are prohibited by the
Note. Upon the occurrence and during the continuation of an Event of Default,
the Company shall deliver to the Seller all Distributable Cash from time to time
held by it, and the Pledgors shall deliver to the Seller all distributions
received by them before such Event of Default to the extent such distributions
were prohibited by the Note, and all distributions from time to time received by
them during the continuance of the Event of Default, for application towards the
costs and expenses referred to in paragraph 2(d)(i) and then to the Obligations,
until all Obligations then due, and all Obligations which become due upon
distribution of Collateral to the Pledgors under paragraph 2(d)(iv) below, have
been paid in full.
(d) Collateral shall be applied as follows:
(i) First, to the costs and expenses of enforcement of the rights of
the Seller hereunder and under the other Note Documents (as defined in the
Note), including reasonable attorneys' fees and legal expenses;
(ii) Second, to the satisfaction of the Obligations to the extent then
due and payable;
(iii) Third, to the payment of any other amounts required by
applicable law (including, without limitation, Section 9-504(l)(c) of the
Uniform Commercial Code or its successor provision, if any); and
(iv) Fourth, to the Pledgors to the extent of any surplus proceeds,
provided, however, that any application of Collateral or surplus proceeds to the
Pledgors (or any of them) under this paragraph 2(d)(iv) or for the benefit of
the Pledgors (or any of them) under paragraph 2(d)(iii) which would constitute a
distribution to the Pledgors (or any of them) from the Company will cause a
payment under the Note to become due simultaneously therewith, and the Seller is
hereby authorized to withhold from the Collateral or surplus proceeds all
amounts becoming so due under the Note and to apply the same towards payment of
such amounts.
(e) Each Pledgor agrees to pay to the Seller, to the extent necessary to
pay Obligations then due, an amount equal to any distribution previously made to
such Pledgor by the Company in violation of the prohibition against such
distribution contained in Section 1.1(a)(ii), Section 1.1(b)(i) or (ii), or 1.2
of the Note.
3. The Pledgors represent and warrant to the Seller that the execution and
delivery of this Agreement and the performance of its terms will not result in
any violation of or constitute a default under the terms of any agreement,
indenture or other instrument, license, judgment, decree, order, law, statute,
ordinance or other governmental rule or regulation, applicable to the Pledgors
or any of them. The Pledgors further represent and warrant to the Seller that,
at the date hereof, all members of the Seller and their percentage ownership
interests therein are set forth in Section 2.2 of the Note Agreement.
4. (a)
(a) Each Pledgor warrants and will, at the Pledgor's own expense,
defend the Seller's right, title, special property and security interest in and
to the Collateral in which such Pledgor has an interest against the claims of
any person, firm, corporation or other entity.
(b) Each Pledgor promptly shall notify the Seller in writing of any
change in such Pledgor's percentage ownership interest in or allocable share of
profits, losses or distributions of or from the Company, and any termination of
such Pledgor's equity interest in the Company. In no event shall the Company
admit any new member or permit any transfer of a membership interest (in whole
or in part) unless the proposed new member or transferee shall have joined in
and agreed to be bound as a Pledgor hereby.
5. Each Pledgor shall at any time, and from time to time, upon the written
request of the Seller, execute and deliver such further documents (including but
not limited to Uniform Commercial Code financing statements) and do such further
acts and things as the Seller may reasonably request to effectuate the purposes
of this Agreement or to perfect the Seller's security interest hereunder.
6. Upon satisfaction in full of all Obligations and the satisfaction of all
additional costs and expenses of the Seller as provided herein, this Agreement
shall terminate and the Seller shall deliver to each Pledgor, at such Pledgor's
expense, any of the Collateral in the Seller's possession belonging to such
Pledgor as shall not have been applied pursuant to this Agreement.
7. (a)
(a) Beyond the exercise of reasonable care to assure the safe custody of
any Collateral held by it as collateral security hereunder, the Seller shall
have no duty or liability to preserve rights pertaining thereto and shall be
relieved of all responsibility for such Collateral upon surrendering it or
tendering surrender of it to the Company.
(b) No course of dealing between any Pledgor or the Company and the
Seller, nor any failure to exercise, nor any delay in exercising, any right,
power or privilege of the Seller hereunder, under the Note or under the Note
Agreement or any other Note Document (as defined in the Note) shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
(c) The rights and remedies provided herein and in all other agreements,
instruments, and documents delivered pursuant to or in connection with the Note
Agreement, are cumulative and are in addition to and not exclusive of any rights
or remedies provided by law, including, but without limitation, the rights and
remedies of a secured party under the Uniform Commercial Code.
(d) The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision or part thereof in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction or any other
clause or provision in this Agreement in any jurisdiction.
8. All notices or other communications ("Notices") required or permitted
hereunder shall be in writing and shall be deemed given upon receipt thereof if
mailed by registered or certified
mail, return receipt requested, postage prepaid, or if delivered in person or by
courier service, or by telecopier and confirmed by mail, addressed as follows to
the person entitled to receive the same, or addressed to such other address or
telecopier number as may hereafter be designated by such person by notice
hereunder to all other parties.
If to a Pledgor:
to such Pledgor at its address given beneath its signature to this
Agreement.
If to the Seller:
GSRT, LLC
x/x Xxxxxx Xxxxx Xxxx
Xxxxx 00 and Xxxxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
If to the Company, to such address as is provided in Section 7.7 of the
Note Agreement.
9. This Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the parties hereto.
10. This Agreement shall be construed in accordance with the substantive
law of the Commonwealth of Pennsylvania without regard to principles of
conflicts of laws and is intended to take effect as an instrument under seal.
11. This Agreement may be amended only by a written instrument signed by
the Company, each of the Pledgors and the Seller.
12. The Seller and the Company may, at any time or from time to time, in
such manner and upon such terms as it may deem proper, agree to extend or change
the time of payment or the manner or place of payment of, or otherwise modify or
waive any of the terms of, or release, exchange, settle or compromise any or all
of the Obligations or any collateral security therefor, or subordinate payment
of the same, or any part thereof, to the payment of any other indebtedness,
liabilities or obligations of the Company which may at any time be due or owing
to the Seller or anyone, or elect not to enforce any of the Seller's rights with
respect to any or all of the Obligations or any collateral security therefor,
all without notice to, or further assent of any Pledgor and without releasing or
affecting any Pledgor's obligations hereunder.
13. Each Pledgor hereby waives the following:
(a) promptness, diligence, presentment, demand, notice of acceptance and
any other notice with respect to any of the Obligations or any Note Document,
except for such notice as may be expressly required under a Note Document;
(b) any defense or circumstance which might otherwise constitute a legal
or equitable discharge of any guarantor, including, without limitation, any
obligation which the Seller otherwise might have to proceed against the Company
prior to exercising any rights hereunder;
(c) all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof, from
attachment, levy or sale under execution, or providing for any stay of execution
to be issued on any judgment recovered under the Note or any other Note Document
or in any replevin or foreclosure proceedings, or otherwise providing for any
valuation, appraisal or exemption, except as otherwise expressly provided in the
Note Agreement and the Note; and
(d) any and all procedural errors, defects and imperfections in any
action by the Seller in replevin, foreclosure or other court process or in
connection with any other action related to the Note, any Note Document or the
transactions contemplated therein.
14. Each Pledgor hereby expressly agrees that it shall not exercise,
against the Company or any other Pledgor or transferee thereof, or any
guarantor, grantor of collateral, endorser or Person, any: (a) right which such
Pledgor may now have or hereafter acquire by way of subrogation under this
Agreement, by law or otherwise or by way of reimbursement, indemnity,
exoneration, or contribution; (b) right to assert defenses as the primary
obligor of the Obligations; or (c) right to enforce any remedy which the Seller
may now have or hereafter acquire against the Company or any other Pledgor, or
any other guarantor, maker, endorser or Person; in any case, whether any of the
foregoing rights may arise in equity, under contract, by payment, statute,
common law or otherwise until all Obligations have been indefeasibly paid in
full in cash. Without limiting the foregoing, it is expressly agreed that a
Pledgor will not have or be entitled to assert any subrogation right against the
Company unless and until the Note shall have been paid in full in cash such that
the conversion right contained in Section 6.1 of the Note Agreement shall have
expired without being exercised. If in violation of the foregoing any amount
shall be paid to any Pledgor on account of any such rights at any time, such
amount shall be held in trust for the benefit of the Seller and shall forthwith
be paid to the Seller to be credited and applied against the Obligations,
whether matured or unmatured, in accordance with the terms of the Note and the
Note Agreement.
15. Each Pledgor hereby consents that any action or proceeding against it
may be commenced and maintained in any court within the State of New Jersey or
Delaware or in any United States District Court located within either such
State; and each Pledgor agrees that the courts of the States of New Jersey and
Delaware and any United States District Court located within either such State
shall have in personam jurisdiction with respect to each Pledgor and the
Collateral. Notwithstanding the foregoing, the Seller, in its absolute
discretion, may also initiate proceedings in the courts of any other
jurisdiction in which a Pledgor may be found or in which any of its properties
or Collateral may be located.
16. This Agreement may be signed in any number of counterpart copies, each
of which shall be an original and all of which shall constitute one and the same
instrument. Each Person (as defined in the Note Agreement) who becomes a member
of the Company or a transferee of a member of the Company after the date hereof
shall join in and agree to be bound as a Pledgor hereunder by executing and
delivering to the Seller a counterpart Pledgor/Transferee Signature Page in the
form attached hereto.
17. Subject to paragraph 2(e) hereof: each Pledgor shall not be personally
liable in respect of the Obligations; and the Seller shall look solely to the
Collateral and not to any Pledgor personally for satisfaction of the
Obligations.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
GSRT, LLC
By: Garden State Race Track, Inc.,
its Sole Member
By: s/ Xxxxxxx X. Xxxxxx
---------------------
Authorized Officer
REALEN-TURNBERRY/CHERRY HILL, LLC
By: REALEN-TURNBERRY/CHERRY HILL
ASSOCIATES, a Delaware general
partnership, its Sole Member
By: REALEN GARDEN STATE PARK
ASSOCIATES, L.P., a Pennsylvania
limited partnership, General Partner
By: REALEN GSGP, INC., a
Pennsylvania corporation,
its sole General Partner
By: s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx,
President
By: XXXXXX/CHERRY HILL
PARTNERS, LIMITED
PARTNERSHIP, a Florida
limited partnership, General Partner
By: XXXXXX/CHERRY HILL,
LLC, a Florida limited
liability company,
its sole General Partner
By: s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx, Managing
Member
PLEDGOR AND TRANSFEREE SIGNATURES APPEAR ON ATTACHED
PLEDGOR/TRANSFEREE SIGNATURE PAGES
PLEDGOR/TRANSFEREE SIGNATURE PAGE
The undersigned, being a member or transferee of a member of Realen-
Turnberry/Cherry Hill, LLC, a Delaware limited liability company (the
"Company"), or a successor thereto, hereby joins in and agrees to be bound as a
Pledgor under the Security Agreement dated November 29, 2000, among the Company,
its members, and GSRT, LLC.
REALEN-TURNBERRY/CHERRY HILL
ASSOCIATES, a Delaware general partnership
By: REALEN GARDEN STATE PARK
ASSOCIATES, L.P., a Pennsylvania
limited partnership, General Partner
By: REALEN GSGP, INC., a
Pennsylvania corporation,
its sole General Partner
By: s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx,
President
By: XXXXXX/CHERRY HILL
PARTNERS, LIMITED
PARTNERSHIP, a Florida
limited partnership,
General Partner
By: XXXXXX/CHERRY HILL,
LLC, a Florida limited
liability company,
its sole General Partner
By: s/ Xxxxxxx Xxxxxx
------------------
Xxxxxxx Xxxxxx, Managing
Member
Addresses of Member's general partner:
Soffer/Cherry Hill Partners, Limited
Partnership
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000,
Attention: Xx. Xxxxxxx Xxxxxx, and
Realen Garden State Park
Associates, L.P.
0000 Xxxxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxxxx
