EXHIBIT 10.5
GUARANTY
This Guaranty ("Guaranty") is made as of March 31, 1999, by National Golf
Properties, Inc., a Maryland corporation (the "Guarantor"), to and for the
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benefit of The First National Bank of Chicago, individually ("FNBC") and as
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administrative agent (the "Agent") for itself and the lenders under the
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Revolving Credit Agreement (as defined below) and their respective successors
and assigns (collectively, the "Lenders").
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RECITALS
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A. National Golf Operating Partnership, L.P., a Delaware limited
partnership ("the Borrower"), and the Guarantor have requested that the Lenders
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make a revolving credit facility available to the Borrower in an aggregate
principal amount of $300,000,000 (the "Facility").
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B. The Lenders have agreed to make available the Facility to the Borrower
pursuant to the terms and conditions set forth in a Revolving Credit Agreement
of even date herewith between the Borrower, the Guarantor, FNBC, individually,
as an Arranger and as Administrative Agent, Xxxxxxx Xxxxx Capital Corporation,
individually and as Syndication Agent, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,
Incorporated, as an Arranger, and the Lenders named therein (as amended,
modified or restated from time to time, the "Revolving Credit Agreement"). All
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capitalized terms used herein and not otherwise defined shill have the meanings
ascribed to such terms in the Revolving Credit Agreement.
C. The Borrower has executed and delivered or will execute and deliver to
the Lenders promissory notes in the principal amount of each Lender's Commitment
as evidence of its indebtedness to each such Lender with respect to the Facility
(the promissory notes described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Revolving Credit Agreement, are
collectively referred to herein as the "Notes").
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D. The Guarantor is the sole general partner of the Borrower and,
therefore, the Guarantor will derive financial benefit from the Facility
evidenced by the Notes, the Revolving Credit Agreement and the other Loan
Documents. The execution and delivery of this Guaranty is a condition precedent
to the performance by the Lenders of their obligations under the Revolving
Credit Agreement.
AGREEMENTS
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NOW, THEREFORE, the Guarantor, in consideration of the matters described
in the foregoing Recitals, which Recitals are incorporated herein and made a
part hereof, and for other good and valuable consideration, hereby agrees as
follows:
1. The Guarantor absolutely, unconditionally, and irrevocably guarantees
to each of the Lenders:
(a) the full and prompt payment of the principal of and interest on
the Notes when due, whether at stated maturity, upon acceleration or
otherwise, and at all times
thereafter, and the prompt payment of all sums which may now be or may
hereafter become due and owing under the Notes, the Revolving Credit
Agreement, and the other Loan Documents, including without limitation, the
Facility Letter of Credit Obligations;
(b) the payment of all Enforcement Costs (as hereinafter defined in
Paragraph 7 hereof); and
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(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements
of the Borrower under the Revolving Credit Agreement and the Loan
Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to herein as the
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"Facility Indebtedness." All obligations described in subparagraph (c) of this
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Paragraph 1 are referred to herein as the "Obligations."
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2. Upon the occurrence of an Event of Default, the Guarantor agrees, on
demand by the Agent or the holder of a Note, to pay all the Facility
Indebtedness and to perform all the Obligations as are then or thereafter become
due and owing or are to be performed under the terms of the Notes, the Revolving
Credit Agreement, and the other Loan Documents.
3. The Guarantor does hereby waive (i) notice of acceptance of this
Guaranty by the Agent and the Lenders and any and all notices and demands of
every kind which may be required to be given by any statute, rule or law, (ii)
any defense, right of set-off or other claim which the Guarantor may have
against the Borrower or which the Guarantor or the Borrower may have against the
Agent or the Lenders or the holder of a Note, (iii) presentment for payment,
demand for payment (other than as provided for in Paragraph 2 above), notice of
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nonpayment (other than as provided for in Paragraph 2 above) or dishonor,
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protest and notice of protest diligence in collection and any and all
formalities which otherwise might be legally required to charge the Guarantor
with liability, (iv) any failure by the Agent and the Lenders to inform the
Guarantor of any facts the Agent and the Lenders may now or hereafter know about
the Borrower, the Facility, or the transactions contemplated by the Revolving
Credit Agreement, it being understood and agreed that the Agent and the Lenders
have no duty so to inform and that the Guarantor is fully responsible for being
and remaining informed by the Borrower of all circumstances bearing on the
existence or creation, or the risk of nonpayment of the Facility Indebtedness or
the risk of nonperformance of the Obligations, and (v) any and all right to
cause a marshalling of assets of the Borrower or any other action by any court
or governmental body with respect thereto, or to cause the Agent and the Lenders
to proceed against any other security given to a Lender in connection with the
Facility Indebtedness or the Obligations. Credit may be granted or continued
from time to time by the Lenders to the Borrower without notice to or
authorization from the Guarantor, regardless of the financial or other condition
of the Borrower at the time of any such grant or continuation. The Agent and the
Lenders shall have no obligation to disclose or discuss with the Guarantor their
assessment of the financial condition of the Borrower. The Guarantor
acknowledges that no representations of any kind whatsoever have been made by
the Agent and the Lenders to the Guarantor. No modification or waiver of any of
the provisions of this Guaranty shall be binding upon the Agent and the Lenders
except as expressly set forth in a writing duly signed and delivered on behalf
of the Agent and the Lenders. The Guarantor further agrees that any exculpatory
language contained in the Revolving Credit
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Agreement, the Notes, and the other Loan Documents shall in no event apply to
this Guaranty, and will not prevent the Agent and the Lenders from proceeding
against the Guarantor to enforce this Guaranty.
4. The Guarantor further agrees that Guarantor's liability as guarantor
shall in no way be impaired by any renewals or extensions which may be made from
time to time, with or without the knowledge or consent of the Guarantor of the
time for payment of interest or principal under a Note or by any forbearance or
delay in collecting interest or principal under a Note, or by any waiver by the
Agent and the Lenders under the Revolving Credit Agreement, or any other Loan
Documents, or by the Agent or the Lenders' failure or election not to pursue any
other remedies they may have against the Borrower, or by any change or
modification in a Note, the Revolving Credit Agreement, or any other Loan
Documents, or by the acceptance by the Agent or the Lenders of any security or
any increase, substitution or change therein, or by the release by the Agent and
the Lenders of any security or any withdrawal thereof or decrease therein, or by
the application of payments received from any source to the payment of any
obligation other than the Facility Indebtedness, even though a Lender might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Guarantor shall remain liable as
principal for payment of the Facility Indebtedness and performance of the
Obligations until all indebtedness has been paid in full and the other terms,
covenants and conditions of the Revolving Credit Agreement, and other Loan
Documents and this Guaranty have been performed, notwithstanding any act or
thing which might otherwise operate as a legal or equitable discharge of a
surety. The Guarantor further understands and agrees that the Agent and the
Lenders may at any rime enter into agreements with the Borrower to amend and
modify a Note, the Revolving Credit Agreement or any of the other Loan
Documents, or any thereat and may waive or release any provision or provisions
of a Note, the Revolving Credit Agreement, or any other Loan Document and, with
reference to such instruments, way make and enter into any such agreement or
agreements as the Agent, the Lenders and the Borrower may deem proper and
desirable, without in any manner impairing this Guaranty or any of the Agent and
the Lenders' rights hereunder or any of the Guarantor's obligations hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. The Guarantor agrees
that this Guaranty may be enforced by the Agent and the Lenders without the
necessity at any time of resorting to or exhausting any security or collateral,
if any, given in connection herewith or with a Note, the Revolving Credit
Agreement, or any of the other Loan Documents or by or resorting to any other
guaranties, and the Guarantor hereby waives the right to require the Agent and
the Lenders to join the Borrower in any action brought hereunder or to commence
any action against or obtain any judgment against the Borrower or to pursue any
other remedy or enforce any other right. The Guarantor further agrees that
nothing contained herein or otherwise shall prevent the Agent and the Lenders
from pursuing concurrently or successively all rights and remedies available to
them at law and/or in equity or under a Note, the Revolving Credit Agreement or
any other Loan Documents, and the exercise of any of their rights or the
completion of any of their remedies shall not constitute a discharge of any of
the Guarantor's obligations hereunder, it being the purpose and intent of the
Guarantor that the obligations of such Guarantor hereunder shall be primary,
absolute, independent and unconditional under any and all circumstances
whatsoever. Neither the Guarantor's obligations under this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by any
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impairment, modification, change, release or limitation of the liability of the
Borrower under a Note, the Revolving Credit Agreement or any other Loan Document
or by reason of the Borrower's bankruptcy or by reason of any creditor or
bankruptcy proceeding instituted by or against the Borrower. This Guaranty shall
continue to be effective and be deemed to have continued in existence or be
reinstated (as the case may be) if at any time payment of all or any pan of any
sum payable pursuant to a Note, the Revolving Credit Agreement or any other Loan
Document is rescinded or otherwise required to be returned by the payee upon the
insolvency, bankruptcy, or reorganization of the payor, all as though such
payment to such Lender had not been made, regardless of whether such Lender
contested the order requiring the return of such payment. The obligations of the
Guarantor pursuant to the preceding sentence shall survive any termination,
cancellation, or release of this Guaranty.
6. This Guaranty shall be assignable by a Lender to any assignee of all or
a portion of such Lender's rights under the Loan Documents.
7. If: (i) this Guaranty, a Note, or any of the Loan Documents are placed
in the hands of an attorney for collection or are collected through any legal
proceeding; (ii) an attorney is retained to represent the Agent or any Lender in
any bankruptcy, reorganization, receivership, or other proceedings affecting
creditors' rights and involving a claim under this Guaranty, a Note, the
Revolving Credit Agreement, or any Loan Document; (iii) an attorney is retained
to enforce any of the other Loan Documents or to provide advice or other
representation with respect to the Loan Documents in connection with an
enforcement action or potential enforcement action; or (iv) an attorney is
retained to represent the Agent or any Lender in any other legal proceedings
whatsoever in connection with this Guaranty, a Note, the Revolving Credit
Agreement, any of the Loan Documents, or any property subject thereto (other
than any action or proceeding brought by any Lender or participant against the
Agent alleging a breach by the Agent of its duties under the Loan Documents),
then the Guarantor shall pay to the Agent or such Lender upon demand all
reasonable attorney's fees, costs and expenses, including, without limitation,
court costs, filing fees and all other costs and expenses incurred in connection
therewith (all of which are referred to herein as "Enforcement Costs"), in
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addition to all other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or
provisions, in this Guaranty is found by a court of law to be in violation of
any applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Guaranty to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of all parties
hereto that such portion, provision or provisions shall be given force to the
fullest possible extent that they are legal, valid and enforceable, that the
remainder of this Guaranty shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion, provision or provisions were nor
contained therein, and that the rights, obligations and interest of the Agent
and the Lender or the holder of a Note under the remainder of this Guaranty
shall continue in full force and effect.
9. Any indebtedness of the Borrower to the Guarantor now or hereafter
existing is hereby subordinated to the Facility Indebtedness. The Guarantor
agrees that until the entire Facility
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Indebtedness has been paid in full, (i) the Guarantor will not seek, accept, or
retain for the Guarantor's own account, any payment from the Borrower on account
of such subordinated debt, and (ii) any such payments to the Guarantor on
account of such subordinated debt shall be collected and received by the
Guarantor in trust for the Lenders and shall be paid over to the Agent on behalf
of the Lenders on account of the Facility Indebtedness without impairing or
releasing the obligations of the Guarantor hereunder.
10. The Guarantor waives and releases any claim (within the meaning of 11
U.S.C. (S) 101) which the Guarantor may have against the Borrower arising
from a payment made by the Guarantor under this Guaranty and agrees not to
assert or take advantage of any subrogation rights of the Guarantor or the
Lenders or any right of the Guarantor or the Lenders to proceed against (i) the
Borrower for reimbursement, or (ii) any other guarantor or any collateral
security or guaranty or right of offset held by the Lenders for the payment of
the Facility Indebtedness and performance of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other guarantor in respect of payments made by the Guarantor
hereunder. It is expressly understood that the waivers and agreements of the
Guarantor set forth above constitute additional and cumulative benefits given to
the Lenders for their security and as an inducement for their extension of
credit to the Borrower. Nothing contained in this Paragraph 10 is intended to
prohibit the Guarantor from making all distributions to its constituent
shareholders which are required by law from time to time in order for the
Guarantor to maintain its status as a real estate investment trust in compliance
with all applicable provisions of the Code.
11. Any amounts received by a Lender from any source on account of any
indebtedness may be applied by such Lender toward the payment of such
indebtedness, and in such order of application, as a Lender may from time to
time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. The Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Xxxx County, Illinois, or the United States District Court for
the Northern District of Illinois, in any action, suit, or proceeding which the
Agent or a Lender may at any time wish to file in connection with this Guaranty
or any related matter. The Guarantor hereby agrees that an action, suit, or
proceeding to enforce this Guaranty may be brought in any state or federal court
in the State of Illinois and hereby waives any objection which the Guarantor may
have to the laying of the venue of any such action, suit, or proceeding in any
such court; provided, however, that the provisions of this Paragraph shall not
be deemed to preclude the Agent or a Lender from filing any such action, suit,
or proceeding in any other appropriate forum.
13. All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be sent in the manner
provided in the Revolving Credit Agreement.
14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of the Guarantor and shall
inure to the benefit of the Agent and the Lenders' successors and assigns.
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15. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
16. THE GUARANTOR, THE AGENT AND THE LENDERS, BY THEIR ACCEPTANCE HEREOF,
EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR
RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT
OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
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IN WITNESS WHEREOF, the Guarantor has delivered this Guaranty in the
State of Illinois as of the date first written above.
NATIONAL GOLF PROPERTIES, INC.
a Maryland corporation
By: /s/ Xxxxx X. Xxxxxxx
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Its: President
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