EXHIBIT 10.1
EXECUTION COPY
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AMERICAN INTERNATIONAL GOLF, INC.
NATIONAL GOLF PROPERTIES, INC.
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
0000 00XX XXXXXX, XXXXX 0000
XXXXX XXXXXX, XX 00000-0000
July 22, 2002
The Parties Listed on
the Signature Pages Hereto
Re: Facilitation Agreement
Ladies and Gentlemen:
Reference is hereby made to that certain Agreement and Plan of
Merger and Reorganization (as it may be amended or supplemented from time to
time, the "REORGANIZATION AGREEMENT"), dated as of March 29, 2002, among
American International Golf, Inc. ("NEWCO"), National Golf Properties, Inc.
("NGP"), National Golf Operating Partnership, L.P. ("NGOP"), American Golf
Corporation ("AGC"), Golf Enterprises, Inc. ("GEI"), Xxxxx X. Xxxxx and
Xxxxxx X. Xxxxx, the Xxxxx X. Xxxxx Trust and the Dallas P. Price Trust, the
AGC Contributors and the Transferred Entity Contributors, and that certain
Voting Agreement, dated as of March 29, 2002, among Newco, NGP, NGOP, Xxxxx
X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx Trust and Dallas P. Price Trust
(the "VOTING AGREEMENT"). Capitalized terms used but not defined herein
shall have the meanings as set forth in the Reorganization Agreement. For
purposes of this letter agreement, references to "Xxxxx X. Xxxxx" include
Xxxxx X. Xxxxx individually and in his capacity as trustee of the Xxxxx X.
Xxxxx Trust.
On the date hereof, AGC intends to enter into a Restructuring
Agreement and Limited Waiver with the Bank of America, N.A. ("BANK OF America")
and the holders of the 9.35% Senior Secured Notes due July 1, 2004 issued by AGC
(the "NOTEHOLDERS") in the form attached hereto as EXHIBIT A (the "RESTRUCTURING
AGREEMENT") relating to (x) the Credit Facility, dated as of July 30, 1996,
between Bank of America and AGC (the "BOFA CREDIT Facility")and (y) the Note
Purchase Agreement, dated as of July 30, 1996, between AGC and the Noteholders
(the "NOTE PURCHASE AGREEMENT"). It is a condition to the effectiveness of the
Restructuring Agreement that NGP consent to such Restructuring Agreement, the
agreements related thereto and the transactions contemplated thereby. Pursuant
to the Restructuring Agreement, AGC has agreed to make certain specified
principal amortization payments to Bank of America and the Noteholders that may
require deferral of rent due to NGOP. In connection with the Restructuring
Agreement, Xxxxx X. Xxxxx, although not obligated under the BofA Credit Facility
or the Note Purchase Agreement, has agreed to enter into a limited recourse
guarantee and pledge agreement and to cause Mountaingate Land Company, L.P.
("MOUNTAINGATE COMPANY") to provide collateral to Bank of America and the
Noteholders and take certain other actions as set forth in the Restructuring
Agreement. In accordance with such intention, the parties to this letter
agreement hereby covenant and agree to the conditional waiver of certain rights
and obligations under the Reorganization Agreement and to the performance of
certain
additional obligations, in each case subject to the terms and conditions set
forth below.
1. Newco, NGP and NGOP hereby consent, as required by the Reorganization
Agreement, to AGC entering into this Agreement, the Restructuring Agreement and
the other Restructure Documents and taking all such other actions as are
required by such agreements. Capitalized terms used in this paragraph but not
defined herein or in the Reorganization Agreement shall have the meaning set
forth in the Restructuring Agreement.
2. In addition to the matters set forth in paragraph 1 above, each of Newco, NGP
and NGOP consent under the Voting Agreement to each of the following actions:
(i) the pledge by Xxxxx X. Xxxxx or the Xxxxx X. Xxxxx Trust of NGOP Common
Units and NGP Common Stock as provided in paragraph 1 above, (ii) the pledge by
Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx or the Trusts of NGOP Common Units or NGP Common
Stock for the benefit of the Cash Collateral Lender (as defined below) and (iii)
any foreclosure upon the NGOP Common Units and NGP Common Stock pursuant to the
pledges described in clauses (i) and (ii). The "CASH COLLATERAL LENDER" means
the lender or lenders who provide loans the entire proceeds of which (net of
fees and transactions 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 (each as defined in the AGC Collateral
Agency Agreement) or (ii) secure the reimbursement obligation under one or more
letters of credit that are given to the AGC Collateral Agent to secure all or a
portion of the Alternate Pledge Collateral or the Alternate Mountaingate
Collateral. It shall be a condition to the pledge of any NGP Common Stock or
NGOP Common Units under this paragraph 2 that each pledgee agrees to vote (to
the extent of any voting rights thereunder) all such shares of NGP Common Stock
and NGOP Common Units pledged or sold to such person in favor of (x) the
transactions contemplated by the Reorganization Agreement and (y) any purchase
by a third-party investor of all or a substantial portion of the outstanding NGP
Common Stock. Until the termination of the Voting Agreement, none of Xxxxx X.
Xxxxx, Dallas P. Price or the Trusts may pledge their NGP Common Stock or NGOP
Common Units unless such pledge complies with the prior sentence. Newco, NGP and
NGOP hereby consent under the Voting Agreement to the sale or other disposition
by Xxxxx Xxxxx, Dallas Price or the Trusts of shares of NGOP Common Stock and
NGOP Common Units, provided that (v) the net proceeds of such sale or
disposition are used solely to furnish to the AGC Collateral Agent (either
directly as cash or indirectly as cash securing one or more letters of credit)
the Alternate Pledge Collateral or the Alternate Mountaingate Collateral (each
as defined in the AGC Collateral Agency Agreement), (w) none of Xxxxx X. Xxxxx,
Dallas P. Price or the Trusts may sell or otherwise dispose of their NGP Common
Stock or NGOP Common Units except in compliance with applicable law, (x) none of
Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx or the Trusts may sell any shares of NGP Common
Stock or NGOP Common Units to any person listed on EXHIBIT E hereto without the
prior written consent of the Independent Committee (other than through an Open-
Market Sale), (y) it shall be a condition to any such sale or other disposition
(other than an Open-Market Sale) that the purchaser of the NGP Common Stock
and/or NGOP Common Units agrees to (A) vote such shares and units in favor of
(i) the transactions contemplated by the Reorganization Agreement and (ii) any
purchase by a third-party investor of all or a substantial portion of the
outstanding NGP Common Stock and (B) require any subsequent purchaser of any
such shares or units (other than a purchaser in an Open-Market Sale) to agree to
be bound by the provisions of this clause (y) with respect to any sales or other
dispositions of such stock or units by such subsequent purchaser and (z) each of
Xxxxx X. Xxxxx, Dallas P. Price and the Trusts shall give NGP written notice of
any sale or disposition of NGP Common Stock or NGOP Common Units owned by
such person at least ten Business Days prior thereto (provided, however, that
after October 1, 2002, such notice shall be given as soon as reasonably
practicable but in no event less than three Business Days prior to such sale or
disposition). For purposes of this paragraph 2, an "OPEN MARKET TRANSACTION" is
a purchase or sale of NGP Common Stock (x) on the New York Stock Exchange or
other national securities exchange where the NGP Common Stock is traded, where
the identity of the buyer is not known to the seller, and vice versa, or
(y) through an underwritten, registered offering. Capitalized terms used in
this paragraph but not defined herein or in the Reorganization Agreement shall
have the meaning set forth in the Restructuring Agreement.
3. Xxxxx X. Xxxxx agrees to vote all of the outstanding shares of capital stock
of NGP and equity interests in NGOP owned by him and the Xxxxx X. Xxxxx Trust
and with respect to which such he or such trust has the right to vote in favor
of any merger, consolidation, tender or exchange offer, business combination or
similar transaction involving all or a substantial portion of the
then-outstanding equity interests in NGP and/or NGOP (a "SALE TRANSACTION");
provided that (t) the consideration for NGP Common Stock and NGOP Common Units
in the Sale Transaction is cash, (u) Xxxxx X. Xxxxx and the Xxxxx X. Xxxxx Trust
receive with respect to their NGP Common Stock and NGOP Common Units the same
consideration per share of NGP Common Stock or per NGOP Common Unit, as the case
may be, as is offered to the public stockholders of NGP with respect to shares
of NGP Common Stock, (v) no agreement governing the Sale Transaction shall
discriminate among the officers or directors of NGP in terms of preservation and
continuation of existing insurance and indemnification arrangements (provided
however that this provision shall not require than any indemnification be
available to Xxxxx X. Xxxxx or the Xxxxx X. Xxxxx Trust with respect to any
matters for which such Person provided an indemnity under Article 15 of the
Reorganization Agreement), (w) such Sale Transaction has been approved by the
Independent Committee, (x) Lazard Freres & Co., LLC, or another investment
banking firm of national reputation, has delivered a fairness opinion in
customary form to the Independent Committee with respect to the Sale
Transaction, (y) the Class C Preferred Stock (or warrants described in clause
(z) (ii), if applicable) that the Xxxxx X. Xxxxx Trust and the other parties to
the Reorganization Agreement will receive in the transactions contemplated by
the Reorganization Agreement or a substantially equivalent security shall be
outstanding after the consummation of the Sale Transaction and the transactions
contemplated by the Reorganization Agreement and such Class C Preferred Stock
(or warrants described in clause (z) (ii), if applicable) will have tag-along
rights in customary form and (z) each of Xxxxx X. Xxxxx and the other
parties to the Reorganization Agreement entitled to receive Class C Preferred
Stock pursuant to the Reorganization Agreement will be entitled at the option of
each such person to elect to receive either (i) the shares of Class C Preferred
Stock such person is entitled to receive under the Reorganization Agreement or
(ii) warrants with economic terms substantially similar to the conversion
privilege of such shares of Class C Preferred Stock but with no liquidation
preference or voting rights. Xxxxx X. Xxxxx agrees to support a Sale Transaction
described in the immediately preceding sentence and to take such action as
reasonably necessary for such Sale Transaction to be consummated. Newco, NGP and
NGOP waive any breach of the Voting Agreement that may result from the
foregoing, and waive any breach of the Voting Agreement that would result from
Dallas P. Price or the Dallas P. Price Trust voting equity interests in NGP and
NGOP owned by such person as set forth in the first sentence of this paragraph.
4. Newco, NGP and NGOP agree to enter into the Rent Deferral Agreement with AGC
on the date hereof in the form attached as EXHIBIT B hereto and waive the
provision of Section 10.8 of the Reorganization Agreement to the extent set
forth in that agreement.
5. Newco, NGP and NGOP agree to enter into the Unit Exchange and Registration
Rights Agreement on the date hereof in the form attached as EXHIBIT C-1 hereto
(the "REGISTRATION RIGHTS AGREEMENT") with Bank of America and the Noteholders
and to perform their respective obligations thereunder. Newco, NGP and NGOP
agree to enter into a Unit Exchange and Registration Rights Agreement in the
form attached hereto as EXHIBIT C-2 with Xxxxx X. Xxxxx (the "LENDER
REGISTRATION RIGHTS AGREEMENT"). Xxxxx X. Xxxxx agrees that neither he nor the
Xxxxx X. Xxxxx Trust will exercise any registration or exchange rights such
Person currently has with respect to NGP Common Stock or NGOP Common Units while
either the Registration Rights Agreement or the Lender Registration Rights
Agreement is in effect (except for rights granted to him under the Lender
Registration Rights Agreement). It is agreed and understood that neither of the
Registration Rights Agreement and/or the Lender Registration Rights Agreement
shall be in effect after the Closing or after the closing of a Sale Transaction.
6. At the request of NGP, Newco or NGOP, made prior to the Closing, Xxxxx X.
Xxxxx shall cause Mountaingate Company to, and AGC agrees to, enter into an
amendment to that certain lease, dated March 1, 1988, between AGC, as lessee,
and Mountaingate Company, as lessor (as the same may have been amended, the
"MOUNTAINGATE LEASE") pursuant to which (x) the term of the Mountaingate Lease
as set forth in Section 2.01 thereof shall be extended to February 28, 2015, (y)
the annual guaranteed basic rental, as previously adjusted pursuant to Section
3.02 of the Mountaingate Lease, shall be increased by 15% at the commencement of
the extended term and, commencing on the first anniversary of the extended term
the guaranteed basic rental shall increase annually thereafter through the
remainder of the extended term as provided in Section 3.02 of the Mountaingate
Lease and (z) the base year of March 1988 referenced in Section 3.02 of the
Mountaingate Lease shall be amended for the extended term to the date of such
lease amendment. Notwithstanding any provision to the contrary in the
Reorganization Agreement, the parties agree that all rent owed by AGC pursuant
to the lease agreements set forth on EXHIBIT F hereto shall be due and payable
in full upon the consummation of the transactions contemplated by the
Reorganization Agreement. In addition, in connection with Xxxxx X. Xxxxx
providing the Alternate Mountaingate Collateral, (A) upon execution of a second
deed of trust on the Mountaingate real property, AGC shall be permitted to pay
lease payments pursuant to the Mountaingate Lease sufficient to service the debt
obligations of Mountaingate Company relating to the Mountaingate real property
including the debt obligations resulting from such second deed of trust and (B)
upon the sale of Mountaingate Company or Mountaingate Country Club, Mountaingate
Company shall have the right to terminate the Mountaingate Lease and in return
must pay to AGC an amount calculated by applying the lease termination formula
as set forth in that certain letter agreement, dated as of January 10, 2002, by
and between AGC and NGP.
7. NGP agrees to consent, as required pursuant to Section 10.1 of the
Reorganization Agreement, to allow AGC to reimburse Xxxxx X. Xxxxx for all
reasonable expenses associated with obtaining the Alternate Mountaingate
Collateral or the Alternate Pledged Collateral (each as defined in the AGC
Collateral Agency Agreement (as defined in the Restructuring Agreement)),
provided that (x) the aggregate amount of such reimbursement shall not exceed
$250,000 and (y) no payment shall be made to any affiliate of Xxxxx X. Xxxxx.
8. The parties hereto agree to enter into an amendment of the Reorganization
Agreement to change the term "the nine-month anniversary of the date of this
Agreement" in Section 14.1(d) of the Reorganization Agreement to "March 31,
2003."
9. NGP agrees to waive the breaches of Section 10.1 of the Reorganization
Agreement set forth on EXHIBIT D hereto.
10. Representations and Warranties. Each of NGP, NGOP, Newco, AGC, GEI and
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Xxxxx X. Xxxxx represent as follows:
(a) such entity or person has the requisite corporate or other power and
authority to execute, deliver and perform this letter agreement and to
consummate the transactions contemplated hereby, and the execution and
delivery of this letter agreement by it and the consummation by the
entities of the transaction contemplated by this letter agreement have
been duly authorized by all necessary corporate or other action on the
part of such entity and no additional approval is necessary to approve
this letter agreement or the transactions contemplated hereby;
(b) this letter agreement has been duly executed and delivered by it and
constitutes a valid and binding agreement of it enforceable in accordance
with the terms thereof; and
(c) the execution and delivery of this letter agreement by such entity or
person do not, and the performance of this letter agreement by it will
not, (i) require any consent, approval, authorization or permit of, or
filing with or notification to, any domestic or foreign governmental,
administrative, judicial or regulatory authority or any other person or
(ii) require any consent or approval under, result in any breach of,
any loss of any benefit under or constitute a default (or an event
which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, vesting, amendment,
acceleration or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of such entity or person
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license or permit (other than any such consent, approval,
authorization or permit that has been obtained, or any such filing or
notification that has been made, prior to the date hereof).
11. Miscellaneous.
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(a) Sections 16.4, 16.5, 16.7, 16.9, 16.10 and 16.13 of the Reorganization
Agreement are hereby incorporated herein, and references to "Agreement" therein
shall be deemed to refer to this letter agreement.
(b) This letter agreement may be amended only by an instrument in writing signed
by each of the parties to this letter agreement.
(c) Except as otherwise provided herein, all of the terms and provisions of this
letter agreement shall be binding upon, shall inure to the benefit of and shall
be enforceable by the respective successors of the parties hereto. This letter
agreement shall be binding upon and inure solely to the benefit of each party
hereto and its successor(s), and nothing in this letter
agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason
of this letter agreement.
(d) The parties agree that irreparable damage would occur in the event that any
of the provisions of this letter agreement were not performed in accordance with
their specific terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
(e) Notwithstanding anything to the contrary in the Reorganization Agreement,
this letter agreement shall not be superseded or merged into the Reorganization
Agreement and shall continue as an independent obligation of the parties hereto.
Please indicate your acceptance and agreement to the foregoing by
signing and returning to us one copy of this letter agreement.
Very truly yours,
AMERICAN INTERNATIONAL GOLF, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL GOLF PROPERTIES, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: CFO and Secretary
NATIONAL GOLF OPERATING
PARTNERSHIP, L.P.
By: National Golf Properties, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: CFO and Secretary
Accepted and Agreed as of the date first above written:
AMERICAN GOLF CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: CFO
GOLF ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX TRUST
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Trustee
