EXHIBIT 10.4
EXECUTION COPY
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UNIT EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This UNIT EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
("AGREEMENT"), dated as of July 22, 2002, between American International Golf,
Inc., a Delaware corporation ("NEWCO") and National Golf Properties, Inc., a
Maryland corporation ("NGP"), on the one hand, and Xxxxx X. Xxxxx, individually
("XXXXX X. XXXXX")and as the Xxxxx X. Xxxxx Trust (dated March 5, 1998 (as
amended)) ("DGP TRUST")on the other hand.
WHEREAS, Xxxxx Xxxxx and the DGP Trust own shares of common stock,
par value $.01 per share ("NGP COMMON STOCK") of NGP and common limited
partnership units ("UNITS") of National Golf Operating Partnership, L.P., a
Delaware limited partnership ("NGOP");
WHEREAS, pursuant to the terms of the Third Amended and Restated
Partnership Agreement of NGOP dated as of July 28, 1999, by and among NGP as the
general partner of NGOP, and the limited partners listed on Exhibit A thereto
(as amended, the "NGOP AGREEMENT") each Unit is exchangeable for a share of NGP
Common Stock;
WHEREAS, pursuant to an Agreement and Plan of Merger and
Reorganization, dated as of March 29, 2002 (as it may be amended, from time to
time, the "REORGANIZATION AGREEMENT"), by and among Newco, NGP, NGOP, American
Golf Corporation, a California corporation, Golf Enterprises, Inc., a Kansas
corporation, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx, the DGP Trust, the Dallas P. Price
Trust, the AGC Contributors (as defined therein) and the Transferred Entity
Contributors (as defined therein), (x) a wholly owned subsidiary of Newco will
merge with and into NGP (the "NGP MERGER"), and pursuant thereto each
outstanding share of NGP Common Stock will be converted into the right to
receive one fully paid and nonassessable share of common stock, par value $.01,
of Newco ("NEWCO COMMON STOCK"), (y) a wholly owned subsidiary of Newco will
merge with and into NGOP (the "NGOP MERGER"), and pursuant thereto each Unit
(with certain exceptions set forth in the Reorganization Agreement) will be
converted into the right to receive one share of Newco Common Stock;
WHEREAS, in furtherance of (i) consummating the transactions
contemplated by the Reorganization Agreement and (ii) inducing Bank of America,
N.A. ("BOFA") the holders of the 9.35% Senior Secured Notes due July 1, 2004
issued by AGC (the "AGC NOTEHOLDERS") to enter into that Restructuring Agreement
and Limited Waiver dated as of July 1, 2002 by and among BofA, the AGC
Noteholders and AGC (the "RESTRUCTURING AGREEMENT"), Xxxxx Xxxxx and the DGP
Trust have pledged (i) 354,938 shares of NGP Common Stock (the "PLEDGED STOCK")
and (ii) 3,244,626 Units (the "PLEDGED UNITS"), each pursuant to that certain
Stock and Partnership Interest Pledge Agreement dated as of July 19, 2002 (the
"DGP PLEDGE AGREEMENT") by and between Xxxxx Xxxxx, DGP Trust and BNY Midwest
Trust Company, as Collateral Agent;
WHEREAS, Xxxxx Xxxxx has requested, in connection with the DGP
Pledge Agreement, that Xxxxx Xxxxx shall be entitled to effect an Exchange of
Pledged Units for shares of NGP Common Stock, without regard to certain of the
limitations or restrictions on such
Exchange that are set forth in the NGOP Agreement, but only to the extent that
such shares of NGP Common Stock are pledged for the benefit of the Cash
Collateral Lender (as defined below) or the net proceeds of such Exchange are
used to furnish the AGC Collateral Agent (directly as cash or indirectly as cash
securing one or more letters of credit) the Alternate Pledge Collateral or the
Alternate Mountaingate Collateral (as each such term is defined in the
Restructuring Agreement); and
WHEREAS, Xxxxx Xxxxx has requested with respect therewith certain
registration rights in connection with the Pledged Stock and shares of NGP
Common Stock issuable upon an Exchange of the Pledged Units, and in the event
that such Pledged Securities are converted into shares of Newco Common Stock as
provided in the Reorganization Agreement, and for so long as the Pledge
Agreement is still in effect and not otherwise terminated, certain registration
rights with respect to such shares of Newco Common Stock into which such shares
of NGP Common Stock and Pledged Units shall be converted, but in each case only
to the extent that the Pledged Securities are pledged for the benefit of the
Cash Collateral Lender (as defined below), or the net proceeds of such Exchange
and resale are used to furnish to the AGC Collateral Agent (directly as cash or
indirectly as cash securing one or more letters of credit) the Alternate Pledge
Collateral or the Alternate Mountaingate Collateral (as each such term is
defined in the Restructuring Agreement).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Capitalized terms used herein but not otherwise defined herein
shall have the same meaning as in the Reorganization Agreement.
Section 1.02. As used herein, the following terms shall have the following
meanings:
"AGC NOTEHOLDERS" has the meaning set forth in the recitals.
"BOFA" has the meaning set forth in the recitals.
"BUSINESS DAY" shall mean any day that the New York Stock Exchange
is formally open for trading and that is not a day on which banks in the City of
Los Angeles or the City of New York are authorized or required to close for
regular banking business.
"CASH COLLATERAL LENDER" shall mean the lender or lenders who
provide loans substantially all of which (net of fees and transaction costs) are
used either to (i) furnish directly to the AGC Collateral Agent as cash all or a
portion of the Alternate Pledge Collateral or the Alternate Mountaingate
Collateral or (ii) secure the reimbursement obligation under one or more letters
of credit that are given to the AGC Collateral Agent as all or a portion of the
Alternate Pledge Collateral or the Alternate Mountaingate Collateral.
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"COMPANY" shall mean NGP, prior to consummation of the
transactions contemplated by the Reorganization Agreement, or Newco,
concurrently with or subsequent to the consummation of the transactions
contemplated by the Reorganization Agreement.
"XXXXX XXXXX" has the meaning set forth in the recitals.
"EXCHANGE" has the meaning attributable to it in the NGOP
Agreement.
"FACILITATION AGREEMENT" means that certain letter agreement and
limited waiver, dated as of July 22, 2002, among NGP, Newco, NGOP, AGC, GEI,
Xxxxx Xxxxx and the Xxxxx X. Xxxxx Trust dated March 5, 1998 (as amended).
"HOLDER" means Xxxxx Xxxxx, the Cash Collateral Lender (if such
person becomes a holder of the Registrable Securities) or any other person or
persons who become a Holder of the Registrable Securities in accordance with
Section 5.05 hereof, in each case for so long as such person holds Registrable
Securities or until this agreement is terminated with respect to such Holder in
accordance with Section 5.09.
"LENDER UNIT EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" shall
mean the certain Unit Exchange and Registration Rights Agreement, dated as of
July 19, 2002, among NGP, Newco, NGOP, BofA and the AGC Noteholders.
"NASD" has the meaning set forth in Section 3.07(c) of this
Agreement.
"NEWCO" has the meaning set forth in the preamble.
"NGOP" has the meaning set forth in the recitals.
"NGOP Agreement" has the meaning set forth in the recitals.
"NGP" has the meaning set forth in the preamble.
"NGP CHARTER" shall mean the Amended Articles of Incorporation of
NGP as they may be amended from time to time.
"NGP COMMON STOCK" has the meaning set forth in the recitals.
"OTHER HOLDER" has the meaning set forth in Section 3.03(b) of
this Agreement.
"PIGGY-BACK REQUEST" has the meaning set forth in Section 3.03 of
this Agreement.
"PLEDGE AGREEMENT" means the DGP Pledge Agreement and any other
pledge, security or other agreement entered into with any Holder hereunder
providing for the pledge by Xxxxx Xxxxx of any Registrable Securities as
collateral to secure an obligation of Xxxxx Xxxxx with respect to providing the
Alternate Pledge Collateral or the Alternate Mountaingate Collateral.
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"REGISTRABLE SECURITIES" shall mean (without duplication): (A) the
Pledged Stock, (B) the shares of Newco Common Stock or NGP Common Stock Holder
may acquire in an Exchange for the Pledged Units, (C) any shares of Newco Common
Stock and/or NGP Common Stock issued or issuable with respect to any securities
referred to in subdivision (A) or (B) by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, (D) any other shares of NGP
Common Stock or Newco Common Stock for which the net proceeds from any sale of
such shares are committed at the time of such sale to be used to fund the
Alternate Pledged Collateral or the Alternate Mountaingate Collateral and (E)
any shares of NGP Common Stock or Units that are pledged to the Cash Collateral
Lender. As to any particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when (x) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT") and such securities shall have been disposed
of in accordance with such registration statement, (y) such securities shall
have been transferred pursuant to Rule 144 or Rule 145 (or any successor
provision) under the Securities Act or (z) such securities shall have ceased to
be outstanding.
"REGISTRATION EXPENSES" means all expenses incident to Newco's or
NGP's performance of or compliance with any registration of Registrable
Securities pursuant to this Agreement, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for Newco, NGP and of their independent
public accountants, including the expenses of any special audits or "comfort"
letters required by or incident to such performance and compliance, premiums and
other costs of policies of insurance obtained by Newco and/or NGP against
liabilities arising out of the public offering of Registrable Securities being
registered and any fees and disbursements of underwriters customarily paid by
issuers, but excluding fees and disbursements of counsel retained by Holder,
premiums and other costs of policies of insurance obtained by Holder or its
agents or underwriter against liabilities arising out of the public offering of
the Registrable Securities being registered, any fees and disbursements of
underwriters customarily paid by sellers of securities who are not the issuers
of such securities and all underwriting discounts and commissions and transfer
taxes, if any, relating to Registrable Securities.
"REORGANIZATION AGREEMENT" has the meaning set forth in the
recitals.
"REQUEST" has the meaning set forth in Section 3.01.
"RESTRUCTURING AGREEMENT" has the meaning set forth in the
recitals.
"RULE 415 OFFERING" means any offering involving registration of
securities on a "shelf" registration statement pursuant to Section 415 under the
Securities Act (or any successor provisions of such Acts) or any other
registration of securities on a continuous or delayed basis.
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"SECURITIES ACT" has the meaning set forth in the definition of
Registrable Securities.
"SHELF REGISTRATION" has the meaning set forth in Section 3.01.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 3.01.
"UNITS" has the meaning set forth in the recitals.
ARTICLE II
Section 2.01. Waiver by NGP of Selected Provisions of the NGOP
Agreement. In connection with each Exchange of Pledged Units by a Holder as
contemplated by Section 8.6 of the NGOP Agreement, NGP, in its capacity as the
general partner of NGOP, hereby waives each of the following provisions of the
NGOP Agreement with respect to such Exchange of Pledged Units by a Holder (and
in the event of any proposed Exchange by Xxxxx Xxxxx, subject to Section 3.12
hereof); provided however that it shall be a condition to such waiver that a
Holder represent to NGP that, after giving effect to the Exchange of the Units
for which the waiver is given, Holder's ownership of NGP Common Stock shall not
violate Article IV.C.3.b.i of the NGP Charter (with such representation to be
based on an outstanding share number provided by the Company):
(i) clauses (2) and (4) in the first sentence of
Section 8.6G of the NGOP Agreement;
(ii) the limitation on the number of Units that may be
subject to an Exchange contained in clauses (x) and (y) of the
second sentence of Section 8.6G of the NGOP Agreement'
(iii) the provision that the rights of Lending Institution
Transferees (as such term is defined in the NGOP Agreement) be
limited to those of the Common Limited Partner (as Exchange
contained in clause (iii) of the third sentence of Section 8.6.G
of the NGOP Agreement, but only to the extent necessary to give
effect to the waivers granted pursuant to this Section 2.01;
(v) Section 11.6.C of the NGOP Agreement; and
(vi) Section 11.3A (but only with respect to NGP's option
to deliver a note as payment), (c), (d) and (e) of the NGOP
Agreement
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ARTICLE III
REGISTRATION RIGHTS
Section 3.01. Registration on Request.
(a) The Company shall prepare and file a "shelf" registration
statement (the "SHELF REGISTRATION STATEMENT") with respect to the Registrable
Securities covering the issuance, as applicable, and resale thereof by the
Holders on an appropriate form for an offering to be made on a continuous or
delayed basis pursuant to Rule 415 (the "SHELF REGISTRATION") within 15 Business
Days of a written request (the "REQUEST") by the Holder or Holders, which
request may be made by the Holder only following the filing by NGP of a proxy
statement relating to the transactions contemplated by the Reorganization
Agreement. The Company shall use its best efforts to cause the Shelf
Registration Statement to be declared effective within 60 days of the filing of
the Shelf Registration Statement. The Company shall use its best efforts to keep
such Shelf Registration Statement continuously effective until the earliest of
(A) the termination of this Agreement pursuant to Section 5.09 and (B) the date
on which the Registrable Securities may be sold without volume restrictions in
accordance with Rule 144.
Notwithstanding the foregoing, the Company shall not be obligated
to effect a Shelf Registration pursuant to this Section 3.01 unless the Company
is then eligible to use Form S-3 or other short form registration statement
under the Securities Act. The Company shall use its reasonable best efforts to
be eligible to use Form S-3 or other short form registration statement under the
Securities Act. In the event that the Company is not obligated to effect a Shelf
Registration under this Section 3.01, within 15 Business Days of a written
request (the "REQUEST") by Pledgee that the Company effect a registration of
Registrable Securities (a "DEMAND REGISTRATION"), which request may be made by
Pledgee only following the filing by NGP of a proxy statement relating to the
transactions contemplated by the Reorganization Agreement, the Company shall be
obligated to prepare, file and cause to become effective a registration
statement (a "DEMAND REGISTRATION STATEMENT"). The Company shall use its best
efforts to cause the Demand Registration Statement to be declared effective
within 60 days of the filing of the Demand Registration Statement.
(b) The Company may include in any such registration under this
Section 3.01 other securities for sale for its own account or for the account of
any other Person; provided that if the managing underwriter (if any) for the
offering shall determine that the number of shares proposed to be offered in
such offering would be reasonably likely to adversely affect such offering, then
the securities to be sold by the Holders shall be included in such registration
before any securities proposed to be sold for the account of the Company or any
other Person.
(c) Notwithstanding the foregoing, a Holder desiring to make a
Request shall give each other Holder written notice concurrently with such
Request and shall offer each other Holder the opportunity to participate in the
registration. It is agreed and understood that the Company shall be obligated to
file only one Shelf Registration Statement under this agreement.
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Section 3.02. Piggy-back Registration Rights. In the event that
the Company at any time proposes to register any NGP Common Stock (or Newco
Common Stock, as applicable) under the Securities Act, whether or not for sale
for its own account, in a manner that would permit registration of Registrable
Securities for sale for cash to the public under the Securities Act, the Company
shall in the case of each such proposed registration give prompt written notice
of such proposed filing and of the rights of Holder under this Section 3.02 to
Holder (but in any event not less than ten days before the anticipated filing
date), so as to allow Holder to participate in such registration. Such notice
shall specify, to the extent known by the Company at the time of such notice,
the estimated number of shares of NGP Common Stock (or Newco Common Stock, as
applicable) proposed to be registered, the proposed date of filing such
registration statement, any proposed means of distribution of such shares, any
proposed managing underwriter or underwriters of such shares and an estimate by
the Company of the maximum offering price thereof. The Company shall further
notify Holder of any changes in the estimated number of shares stock so proposed
to be registered. Subject to the terms and conditions hereof, such notice shall
offer Holder the opportunity to include in such registration statement such
number of Registrable Securities as Holder may request. Upon the written request
of Holder made within seven days after receipt of the Company's notice (which
request shall specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof (which request may
not, without the consent of the Company, be a Rule 415 Offering), the written
request of Holder being the "PIGGY-BACK REQUEST"), the Company shall use its
reasonable best efforts to cause the offering of the Registrable Securities so
specified in the Piggy-back Request to be registered as soon as is reasonably
practicable, in connection with the registration of the Company's stock, under
the Securities Act, to the extent required to permit the disposition (in
accordance with such intended methods thereof) of the Registrable Securities so
requested to be registered; PROVIDED, that:
(a) if, at any time after giving such written notice of its
intention to register any NGP Common Stock (or Newco Common Stock, as
applicable) and prior to the effective date of the registration statement filed
in connection with such proposed registration, the Company shall determine for
any reason not to register such stock, the Company may, at its election, give
written notice of such determination to Holder and thereupon the Company shall
be relieved of its obligation to register such Registrable Securities in
connection with the registration of such common stock, without prejudice,
however, to the rights of the Holders to request that such registration may be
effected as a Demand Registration under Section 3.01 above to the extent
permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 3.02 is to be an underwritten registration and the Company is advised in
writing (with a copy to Holder) by the managing underwriter or underwriters
that, in its or their good faith view, the inclusion of all or a part of such
Registrable Securities of Holder in such registration would be reasonably likely
to adversely affect the price, timing or distribution of the offering and sale
of the Registrable Securities then contemplated, then the number of securities
that can, in the good faith view of such managing underwriter or underwriters,
be sold in such offering without so adversely affecting such offering shall be
included in such registration in the following priority: (i) first, NGP Common
Stock (or Newco Common Stock, as applicable), that the Company proposes to sell
for its own account or, if the registration is in response to a demand
registration right of a party other than Holder (each, an "OTHER HOLDER") whose
registration
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rights require such a priority, such stock of the Other Holder(s)demanding such
registration proposes to sell to the extent of such a priority, and (ii) second,
such shares of NGP Common Stock (or Newco Common Stock, as applicable) as the
Holder and any Other Holders shall have intended to register on a pro rata basis
according to the total number of shares of NGP Common Stock (or Newco Common
Stock, as applicable) intended to be registered by each such person and (iii)
third, such shares of NGP Common Stock (or Newco Common Stock, as applicable) as
the Company (if such registration was not initiated by the Company) shall have
intended to register;
(c) The Company not be required to effect any registration of
Registrable Securities under this Section 3.02 if such registration (1) is
incidental to the registration of any of its securities in connection with any
Rule 415 Offering by the Company or incidental to a registration only for debt
securities, (2) is to be effected on Form S-4 or Form S-8 (or successor forms)
or (3) in connection with mergers or similar transactions, exchange offers,
share dividends, dividend reinvestment plans or stock option or other executive
or employee benefit or compensation plans; and
(d) No registration of Registrable Securities effected under this
Section 3.02 shall relieve the Company of its obligation to effect the a
registration pursuant to (and subject to the terms of) Section 3.01, and Holder
shall be entitled to have its Registrable Securities included in an unlimited
number of piggyback registrations under this Section 3.02.
Section 3.03. Registration Statement Form. In the event of a
Demand Registration, the Company shall effect any registration requested under
this Section 3 by the filing of a registration statement on such form as the
Company may determine; provided that the Company shall not be obligated to
register any securities pursuant to a Rule 415 Offering.
Section 3.04. Expenses. Except as provided herein, the Company
shall pay all Registration Expenses incurred in connection with any registration
made or requested to be made pursuant to this Article 3 whether or not any such
registration statement becomes effective. Notwithstanding the foregoing, Holder
shall be responsible for the fees and expenses of counsel to Holder, any
applicable underwriting discounts or commissions, transfer taxes and its own
internal administrative and similar costs, which shall not constitute
Registration Expenses.
Section 3.05. Selection of Underwriters. The lead managing
underwriter for any registration requested under this Article 3 effected by
means of a firm commitment underwriting shall be selected by the Company and
shall be reasonably acceptable to Holder participating in such registration.
Section 3.06. Cash Payment. Notwithstanding any other provision
set forth herein, upon a Request under Section 3.01 hereof, the Company shall
have the right (but shall not be obligated), in lieu of effecting a registration
with respect to the Registrable Securities, to purchase from Holder all of the
Registrable Securities for cash. In the event that all the Registrable
Securities requested by Holders to be included in a registration are purchased
by the Company pursuant to this Section 3.06, such registration will be deemed
to have been effected. The Company may exercise this right, by written notice to
all Holders of Registrable
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Securities requesting the registration under Section 3.01, at any time after,
but in no event later than the earlier of (i) the filing of the registration
statement and (ii) 10 days after receipt by the Company of the written request
for registration of the Registrable Securities. The purchase price for the
Registrable Securities applicable to the Company's right to purchase under this
Section 3.05 will be 96.0% of the average of the high and low sales prices on
the New York Stock Exchange (or, if such Registrable Securities are not traded
or quoted on the New York Stock Exchange, any national securities exchange or
dealer quotation system on which the Registrable Securities are then traded or
quoted) of the Registrable Securities on each of the 20 trading days immediately
preceding, but not including, the day of delivery of the Company's notice to
Holder to purchase such Registrable Securities. Such notice delivered by the
Company shall be irrevocable and shall specify the number of shares to be
purchased pursuant to this Section 3.05, and shall give rise to a binding
agreement between the Company and Holder with respect to the purchase and sale
of the number of shares specified in such notice with such closing to take place
no later than 5 Business Days thereafter. If in connection with exercising this
right fewer than all the Registrable Securities subject to the registration are
to be purchased by the Company, then such purchase shall be pro rata from all
Holders holding Registrable Securities making the registration in proportion to
the number of Registrable Securities proposed to be included therein by each
such Holder unless the Stockholders otherwise agree among themselves in writing.
Any Registrable Securities requested by the Holders to be included in the
registration that are not so purchased by the Company shall be registered as
provided herein.
Section 3.07. Registration Procedures. If the Company is required
to seek to effect the registration of Registrable Securities under Section 3.01,
the Company will use its reasonable best efforts to effect the registration of
such Registrable Securities in accordance with the intended method of
disposition thereof as quickly as practicable (and in any event within the
periods referred to in Section 3.01), and in connection with any such request:
(a) The Company will furnish to the counsel selected by Holder
copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel before any such filing is made, and the
Company will comply with any reasonable request made by such counsel to make
changes in any information contained in such documents relating to the Holder.
The Company shall furnish to Holder such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus contained
in such registration statements and any supplements thereto and any other
prospectus filed under the Securities Act, and such other documents, including
documents incorporated by reference, as the Holder may reasonably request.
(b) The Company will notify Holder and counsel for Holder promptly
in writing (i) when a registration statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for post-effective
amendments and supplements to a registration statement that has become
effective, (iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a registration statement or the
initiation of any proceedings for that purpose, (iv) if, during the period a
registration statement is effective, the representations and warranties of the
Company
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contained in any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to such offering cease to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (vi) of any determination by
the Company that a post-effective amendment to a registration statement would be
appropriate.
(c) The Company will use its reasonable best efforts to (i)
register or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States (where an exemption is
not available) as Holder or managing Underwriter or Underwriters, if any,
reasonably (in light of Holder's intended plan of distribution) requests by the
time the registration statement relating thereto is declared effective by the
SEC and (ii) cause such Registrable Securities to be registered with or approved
by such other governmental agencies or authorities, including the National
Association of Securities Dealers ("NASD"), as may be necessary by virtue
of the business and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable Holder to
consummate the disposition of the Registrable Securities; provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (c), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction except as may be
required by the Securities Act.
(d) The Company will use reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Holder to consummate the disposition of such Registrable
Securities;
(e) If such registration includes an underwritten public offering,
the Company will furnish to Holder a signed counterpart of (x) an opinion of
counsel for the Company, dated the date of the closing under the underwriting
agreement, and (y) a "comfort letter," dated the effective date of such
registration statement (and a supplement to such "comfort letter" dated the date
of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial statements
included in such registration statement, covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities and, in the case of
the accountants' letter, such other financial matters, as the Holder (or the
underwriters, if any) may reasonably request;
(f) The Company shall notify the Holder at any time when the
Company is aware that a prospectus relating to Registrable Securities is
required to be delivered under the Securities Act, promptly upon becoming aware
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect,
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includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made,
and at the request of the Holder as promptly as reasonably practicable prepare
and furnish to the Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made;
(g) The Company shall otherwise use its reasonable best efforts to
comply with the Securities Act and the Exchange Act and with all applicable
rules and regulations of the SEC, and not file any amendment or supplement to
such registration statement or prospectus to which the Holder shall have
reasonably objected on the grounds that such amendment or supplement does not
comply in all material respects with the requirements of the Securities Act;
(h) The Company shall provide a transfer agent and registrar for
all Registrable Securities covered by such registration statement not later than
the effective date of such registration statement; and
(i) The Company shall use its reasonable best efforts to list all
NGP Common Stock or Newco Common Stock, as applicable, covered by such
registration statement on any securities exchange on which any of the NGP Common
Stock or Newco Common Stock is then listed.
The Company may require Holder to furnish such information
regarding Holder and the distribution of such securities as the Company may from
time to time reasonably request in writing for the purpose of registering the
Registrable Securities hereunder, and such information must be provided by
Holder no fewer than five Business Days prior to the filing of the applicable
registration statement, supplement or amendment thereto. In the event that such
information is not provided at least five Business Days prior to such filing,
the Company's obligation to file such registration statement, supplement or
amendment shall be extended until five Business Days after the date such
information is provided.
The Holder agrees by acquisition of the Registrable Securities
that upon receipt of any notice from the Company of the happening of any event
of the kind described in subdivision (f) of this Section 3.06, the Holder will
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (f) of this Section 3.06 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies then
in the Holder's possession, other than permanent file copies, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
Section 3.08. Requested Underwritten Offerings. If requested by
the underwriters for any underwritten offering of Registrable Securities by
Holder under a
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registration pursuant to Section 3.01 or 3.02, the Company and Holder will enter
into a customary underwriting agreement with such underwriters for such
offering, to contain such representations and warranties and such other terms as
are customarily contained in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in Article 4.
Section 3.09. Covenants Relating to Rule 144/145. Company will
prepare and file in a timely manner, information, documents and reports in
compliance with the Exchange Act so as to comply with the requirements of such
Act and the rules and regulations thereunder. If at any time Company is not
required to file reports in compliance with either Section 13 or Section 15(d)
of the Exchange Act, the Company at its expense will forthwith, upon the written
request of the Holder, make available adequate current public information with
respect to the Company within the meaning of paragraph (c)(2) of Rule 144 under
the Securities Act.
Section 3.10. Limitations on Sales. If any registration pursuant
to this Article 3 shall be in connection with an underwritten public offering of
equity Registrable Securities or equity securities to be offered by the Company,
each selling Holder agrees not to effect any sale or distribution, including any
sale under Rule 144, of any equity security of the Company (otherwise than
through the registered public offering then being made), within 7 days prior to
or 180 days (or such lesser period as the lead or managing underwriters may
permit) after the effective date of the registration statement (or the
commencement of the offering to the public of such Registrable Securities in the
event that the Company consents to Rule 415 Offerings). For each such
registration, the Company shall provide each selling Holder with notice of the
applicable dates during which the foregoing restriction will be in effect.
Section 3.11. Postponement and Suspension. Notwithstanding
anything herein to the contrary, the Company may postpone any registration which
is requested pursuant to Section 3.01 or delivery of a prospectus or supplement
or amendment pursuant to Section 3.07(f) if it determines in its sole discretion
that in view of the advisability of deferring public disclosure of material
corporate developments or other information, the disclosures required to be made
pursuant thereto would not be in the best interests of the Company at that time.
In the event the Company makes any such election, Holder agrees to keep
confidential the fact of such election and any information provided by the
Company in connection therewith. No single postponement pursuant to this Section
3.11 of any registration which is requested pursuant to Section 3.01 or delivery
of a prospectus or supplement or amendment pursuant to Section 3.07(g) shall
exceed 90 days and there shall be no more than two such postponements in any
twelve-month period.
Section 3.12. Covenant of Xxxxx Xxxxx and the DGP Trust. Xxxxx
Xxxxx and the DGP Trust each agrees that so long as such person is a Holder,
each shall only effect an Exchange pursuant to the waivers granted in Article II
hereof, and will only effect a sale of any of the Registrable Securities to the
extent that the net proceeds from any resale of Registrable Securities shall be
used to fund Xxxxx Xxxxx'x obligation to provide the Alternate Pledge Collateral
or the Alternate Mountaingate Collateral under the DGP Pledge Agreement or any
other cash collateral requirement under any Pledge Agreement. Notwithstanding
anything herein to the contrary, neither Xxxxx Xxxxx nor the DGP Trust shall
sell or otherwise dispose of
12
any Registrable Securities, or effect an Exchange of Units for shares of NGP
Common Stock, unless and until the conditions in the second to last sentence of
paragraph 2 of the Facilitation Agreement are satisfied.
ARTICLE IV
INDEMNIFICATION
Section 4.01. Indemnification by The Company. In the event of any
registration of any Registrable Securities of the Company under the Securities
Act, the Company will indemnify and hold harmless the Holder, each other Person
who participates as an underwriter, if any, in the offering or sale of such
securities and each other Person who controls any such underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which Holder or any such underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and Company will reimburse the Holder and
each such underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceedings; provided that Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon (i) an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to Company by
the Holder for use in the preparation thereof, (ii) the use of any prospectus
after such time as the obligation of Company to keep the same effective and
current has expired, or (iii) the use of any prospectus after such time as
Company has advised the Holder that the filing of a post-effective amendment or
supplement thereto is required, except such prospectus as so amended or
supplemented, and provided further that Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within the
meaning of the Securities Act in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of the matters described in (i), (ii) or (iii) above or such Person's
failure to send or give a copy of the final prospectus or supplement to the
Persons asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus or supplement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holder or any such underwriter or controlling person and shall survive the
transfer of such securities by the Holder.
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Section 4.02. Indemnification by the Stockholders. Company may
require, as a condition to including any Registrable Securities of the Holder in
any registration statement filed pursuant to Section 3.01, that Company shall
have received an undertaking reasonably satisfactory to it from the Holder to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Article 4) Company each director and officer of
Company and each other Person, if any, who controls Company within the meaning
of the Securities Act, with respect to any untrue statement or alleged untrue
statement of a material fact in or omission or alleged omission to state a
material fact from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information with respect to the Holder furnished to Newco by the Holder
as required for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however, that the Holder shall not be liable to the extent
that the losses, liabilities or expenses arise out of or are based upon (i) the
use by Company of any prospectus after such time as the obligation of Company to
keep the same effective and current has expired or (ii) the use by Company of
any prospectus after such time as the Holder has advised Company that the filing
of a post-effective amendment or supplement thereto is required with respect to
any information contained in such prospectus concerning the Holder, except such
prospectus as so amended or supplemented. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of Company
or any such director, officer, or controlling person and shall survive the
transfer of such securities by the Holder.
Section 4.03. Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Article 4,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Article 4, except to the extent that
the indemnifying party is actually and materially prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless a conflict of interest between such indemnified and indemnifying parties
exists in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this agreement (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding
14
or claim, (ii) is accompanied or preceded by reimbursement of expenses of each
such indemnified party and (iii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
Section 4.04. Contribution. If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold harmless an indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of the expense, loss, damage or
liability, (i) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and the indemnified party on the
other (determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or provides a lesser sum
to the indemnified party than the amount hereinafter calculated, in the
proportion as is appropriate to reflect not only the relative fault of the
indemnifying party and the indemnified party, but also the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
Section 5.01. Notices, etc. All notices, requests, demands or
other communications required by or otherwise with respect to this Agreement
shall be in writing and shall be deemed to have been duly given to any party
when delivered personally (by courier service or otherwise), when delivered by
telecopy if receipt is confirmed by return telecopy, or five days after being
mailed by registered or certified mail, return receipt requested, in each case
to the applicable addresses set forth below:
If to Newco or NGP:
0000 00xx Xxxxxx
Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
Xxxxx X. Xxxx, Esq.
15
If to Xxxxx Xxxxx:
Xxxxx X. Xxxxx
0000 00xx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
J. Xxxxx Xxxxxxxx, Esq.
or to such other address as such party shall have designated by
notice so given to each other party.
Section 5.02. Amendments, Waivers, etc. This Agreement may not be
amended, supplemented, waived or otherwise modified except by an instrument in
writing signed by the party against whom enforcement is sought. The failure of
any party to exercise any right, power or remedy provided under this Agreement
or otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
Section 5.03. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
Section 5.04. Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such term to the other parties or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by applicable law.
Section 5.05. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. This Agreement may be assigned in
whole or in part by any Holder, subject to Section 3.01(c) hereof; provided that
prior to any Person being deemed a "Holder" hereunder, such Person shall have
delivered to the Company, Xxxxx Xxxxx and any other Holder hereunder an
instrument of assignment, including in such instrument the name and address of
the assignee and the number of shares of NGP Common Stock and Units held by such
16
assignee; and PROVIDED FURTHER that there shall be no more than 10 Holders under
this Agreement.
Section 5.06. Governing Law. This Agreement and all disputes
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without regard to any applicable conflicts of law
provisions thereof that may require the application of the laws of another
jurisdiction (except to the extent that mandatory provisions of the federal law
apply).
Section 5.07. Name, Captions. The name assigned this Agreement and
the section captions used herein are for convenience of reference only and shall
not affect the interpretation or construction hereof.
Section 5.08. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by less than all, but together signed by all,
the parties hereto.
Section 5.09. Termination. This Agreement shall terminate and be
of no further force and effect upon the earliest of the date upon which (i) all
Registrable Securities held by the Holder have been sold pursuant to a
registration statement hereunder or have otherwise ceased to be Registrable
Securities, (ii) with respect to Xxxxx Xxxxx and the DGP Trust only, the
transactions contemplated by the Reorganization Agreement shall have been
completed, (iii) neither the DGP Pledge Agreement or any Pledge Agreement is in
effect and the Alternate Mountaingate Collateral and the Alternate Pledge
Collateral shall have been released and (iv) with respect to any Holder, (x) all
Registrable Securities held by such Holder have been sold pursuant to a
registration statement hereunder or have otherwise ceased to be Registrable
Securities or (y) such Holder may sell all Registrable Securities held by it
without any volume limitations under Rule 144; provided that, notwithstanding
this Section 5.09, the provisions of Article 4 shall survive the termination of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
AMERICAN INTERNATIONAL GOLF, INC.
By:/s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL GOLF PROPERTIES, INC.
By:/s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO and Secretary
XXXXX X. XXXXX, as an individual and as
trustee under the Xxxxx X. Xxxxx Trust
dated March 5, 1998 (as amended)
By:/s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Individual and Trustee
