Exhibit 2.1
AGREEMENT
THIS AGREEMENT
(the “Agreement”) is entered into as of October 1,
2004 by and between NEW DELOS PARTNERS, L.P., a Delaware limited
partnership (“New Delos”), OAKLAWN COUNTRY CLUB, LLC, a
Delaware limited liability company (“Oaklawn”),
MEADOWBROOK FARM, L.P., a Delaware limited partnership
(“Meadowbrook”), BIG SKY COUNTRY CLUB, LLC, a Delaware
limited liability company (“Big Sky”), LOST CANYONS,
LLC, a Delaware limited liability company (“Lost
Canyons”), DPMG, INC., a Delaware corporation
(“DPMG”) and SOUTH PADRE ISLAND DEVELOPMENT, L.P., a
Delaware limited partnership (“South
Padre”).
WITNESSETH
WHEREAS,
(a) each of Big Sky and Meadowbrook entered into a golf
operating agreement with DPMG dated January 1, 1999 (the
“Big Sky GOA” and the “Meadowbrook GOA”,
respectively); (b) Oaklawn entered into a golf operating
agreement with DPMG dated January 1, 2001 (the “Oaklawn
GOA”); and (c) Big Sky entered into a property
management agreement with DPMG dated January 1, 1999 (the
“Big Sky PMA”). The Big Sky PMA, together with the Big
Sky GOA, Oaklawn GOA and Meadowbrook GOA, as the same may have been
modified or amended, are herein collectively referred to as the
“Management Agreements”.
WHEREAS,
(a) New Delos entered in a joint venture agreement with DPMG
dated effective as of December 31, 2000 with regard to certain
real property comprised of approximately 1,211.71 acres in Prince
Georges County, Maryland (the “Maryland Contract”);
(b) Oaklawn may have a claim(s) or cause(s) of action against
Joel Ray Gann (“Gann”) arising from the alleged
misappropriation by Gann from Oaklawn of cash and/or receivables
(the “Gann Claim”); (c) New Delos, as an assignee,
has a right or claim in and to certain monies in the Escrow Fund as
defined in that agreement dated December 31, 1999 by and
between DPMG and KRA Doonbeg, LLC (the “Ireland
Deposit”); and (d) New Delos has certain obligations to
Barton Theatre Company described as the BTC Payables in the Asset
Purchase Agreement and related documents dated January 2, 1996
by and between Delos Partners, Inc., Gerald G. Barton, the
Executives (as defined in the Asset Purchase Agreement and related
documents) and New Delos (the “BTC
Obligation”).
WHEREAS, New Delos
(a) owns 100% of the outstanding shares of SPID, Inc., a
Delaware corporation (“SPID, Inc.”), which owns 100% of
the general partnership interests in South Padre, and (b) owns
100% of the limited partnership interests in South Padre (the
“South Padre LP Interest”); and (c) may own a
beneficial interest in and to the member interests of SPIBS, LLC, a
Texas limited liability company (the “SPIBS
Interest”).
WHEREAS, South
Padre owns a golf course and related improvements and personal
property, together with certain other unencumbered real property
more fully described on Exhibit A attached hereto and made a
part hereof (the “Unencumbered Property”).
WHEREAS, DPMG and
GGB Corporation, a South Carolina corporation (“GGB”)
own approximately 99% of the Class B limited partnership
interests and a .5% general partnership interest, respectively, in
New Delos (collectively, the “New Delos Partnership
Interest”).
WHEREAS, Gerald G.
Barton executed a Limited Guaranty and Indemnity Agreement dated
August 2, 1999 in favor of NationsCredit Commercial
Corporation (the “Barton Guaranty”), which Barton
Guaranty benefited Big Sky because NationsCredit Commercial
Corporation would not have made its loan to Big Sky but for such
Barton Guaranty.
WHEREAS, the
parties hereto desire to enter into this Agreement for the purpose
of closing the following transactions:
(a) an
assignment by Oaklawn, Meadowbrook, Big Sky and Lost Canyons to New
Delos of all payment obligations of Oaklawn, Meadowbrook, Big Sky
and Lost Canyons to DPMG under the Management Agreements and the
assumption by New Delos, as a capital contribution by New Delos to
each respective entity of such payment obligations;
(b) an
assignment by New Delos to South Padre of the Maryland Contract,
the Ireland Deposit, the SPIBS Interest and the BTC Obligation and
the assumption by South Padre of such BTC Obligation;
(c) an
assignment by Oaklawn to New Delos and from New Delos to South
Padre of the Gann Claim;
(d) a
sale by South Padre to DPMG (for a purchase price evidenced by a
note and deed of trust) of the Unencumbered Property;
(e) a
transfer by South Padre to New Delos, as a distribution by a
partnership to a partner, of the note and deed of trust taken by
South Padre as the purchase price of the Unencumbered
Property;
(f) a
sale by New Delos to DPMG of 100% of the outstanding shares of
SPID, Inc. and 100% of the South Padre LP Interest;
(g) an
assignment by DPMG and GGB to New Delos of the New Delos
Partnership Interest;
(h) the
release of Gerald G. Barton from his obligations under the Barton
Guaranty;
(i) the
termination of the Management Agreements and the execution of new
golf operating agreements by Oaklawn, Meadowbrook and Big Sky, as
owners, and DPMG, as manager; and
(j) the
mutual release by the parties hereto of certain claims and
obligations which exist as of the closing date.
NOW
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
Section A.
Pre-Closing Partnership Election and Closing . On the final
federal tax return for the period January 1, 2004 through
closing, SPID, Inc., as the tax partner of South Padre, shall make
an election to have the asset basis of the South Padre
assets
2
adjusted pursuant to Internal
Revenue Code section 754. This Agreement is executed immediately
prior to the execution and delivery of the documents and agreements
below, with the closing date (the “Closing Date”) and
all Closing Documents (as hereinafter defined) to be dated
effective as of 12:01 a.m., October 1, 2004. Recording,
escrow and any other closing costs shall be borne equally by New
Delos and DPMG. The transactions contemplated hereunder shall be
closed through the execution by the parties of the following
documents (the “Closing Documents”). The Closing
Documents shall be deemed to be executed, and the transaction
contemplated under each Closing Document shall be deemed to be
closed, in the specific order set forth below.
1. The
assignment by Oaklawn, Meadowbrook, Big Sky and Lost Canyons to New
Delos of all payment obligations under the Management Agreements
and the assumption by New Delos of such obligations as a capital
contribution to each respective entity, shall be evidenced by the
due execution by the signatories to the Assignment and Assumption
attached hereto as Exhibit 1.
2. The
transfer by Oaklawn to New Delos of the Gann Claim as a
distribution from a limited liability company to its sole member
and the subsequent transfer by New Delos to South Padre (as a
capital contribution by New Delos to South Padre) of the Maryland
Contract, the Gann Claim, the Ireland Deposit and the SPIBS
Interest
