EXHIBIT 99.3
EXECUTION VERSION
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
THIS COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this "AGREEMENT") is
made and dated as of July 19, 2002, by and among American Golf Corporation, a
California corporation (together with its successors and permitted assigns, the
"COMPANY"), BNY Midwest Trust Company, an Illinois corporation, not individually
but as collateral agent for the Secured Creditors (as defined below) (in such
capacity, the "COLLATERAL AGENT"), Bank of America, N.A. (the "BANK"), the
Purchasers (as defined below), and National Golf Operating Partnership, L.P., a
Delaware limited partnership ("NGOP"). Capitalized terms used herein have the
respective meanings ascribed thereto in Article I hereof.
RECITALS
A . WHEREAS, pursuant to that certain Credit Agreement dated as of July 30,
1996 (as amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"), between the Company and the Bank, the Bank agreed to provide
revolving credit and standby letter of credit facilities not to exceed at any
one time an aggregate principal amount equal to $48,134,000 (the "BANK LOANS").
B . WHEREAS, pursuant to that certain Note Purchase Agreement dated as of
July 30, 1996 (as amended, modified or supplemented from time to time, the "NOTE
PURCHASE AGREEMENT") between the Company and the purchasers party thereto (the
"PURCHASERS"), the Company issued and the Purchasers purchased $41,500,000
original aggregate principal amount of the Company's 9.35% Senior Secured Notes
due July 1, 2004 (the "NOTES") and the Notes have an aggregate outstanding
principal amount equal to $30,374,031 as of the date hereof;
C . WHEREAS, pursuant to certain leases and agreements between the Company
and NGOP (the "NGOP LEASES"), NGOP agreed to lease certain real property to the
Company for the purpose of operating golf courses;
D . WHEREAS, pursuant to a Forbearance Agreement dated as of March 8, 2002
(the "MARCH FORBEARANCE AGREEMENT") between the Company and the Bank, the Bank
agreed to forbear from exercising its remedies under the Loan Documents so long
as no "NEW EVENTS OF DEFAULT" (as defined in Paragraph VIII of the March
Forbearance Agreement) occur;
E . WHEREAS, by that certain Restructuring Agreement and Limited Waiver
dated as of July 1, 2002 by and between the Bank, the Purchasers and the Company
(the "RESTRUCTURING AGREEMENT"), (i) the maturity date of the Bank Loans has
been extended, the Credit Agreement has been amended and certain defaults
thereunder have been waived until March 31, 2003; and (ii) the Note Purchase
Agreement and the Notes have been amended and certain defaults thereunder have
been waived until March 31, 2003;
F . WHEREAS, by that certain Rent Deferral Agreement (the "RENT DEFERRAL
AGREEMENT") dated as of even date herewith by and among NGOP, the Company, Golf
Enterprises, Inc., a Kansas corporation ("GOLF ENTERPRISES"), American
International Golf, Inc., Xxxxx X. Xxxxx and The Xxxxx X. Xxxxx
Trust, NGOP agreed to forbear from enforcing payment of certain of the Secured
Lease Obligations (as defined below) to the extent and on the terms set forth
therein;
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G . WHEREAS, pursuant to the respective terms of the Restructuring
Agreement and the Rent Deferral Agreement, and as a condition to the respective
forbearance by the Bank, the Purchasers and NGOP (collectively, the "SECURED
CREDITORS") thereunder, the Company has agreed to secure the obligations owed to
the Secured Creditors under their respective Debt Documents by executing and
delivering the Security Instruments and providing collateral in the form of (i)
first priority leasehold mortgages or deeds of trust for the benefit of the
Secured Creditors encumbering real property leased by the Company and listed on
SCHEDULE 1, attached hereto and made a part hereof, and (ii) first priority
security interests and pledges of certain stock or membership interests held by
the Company as described below;
H . WHEREAS, the Secured Creditors wish to appoint the Collateral Agent as
collateral agent under this Agreement and to define their respective rights and
obligations with respect to the Collateral, and the Collateral Agent wishes to
set forth the terms on which it shall accept such appointment and shall
undertake to perform certain duties on behalf of the Secured Creditors with
respect to this Agreement and the Collateral;
NOW, THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. DEFINITIONS.
"AFFILIATE": shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if the
controlling Person owns 50% or more of any class of voting securities (or other
ownership interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"AGC COLLATERAL": shall mean the collateral granted to the Collateral Agent
for the ratable benefit of the Bank and the Purchasers pursuant to the terms of
the AGC Collateral Agency Agreement.
"AGC COLLATERAL AGENCY AGREEMENT": shall mean the Collateral Agency and
Intercreditor Agreement dated as of even date herewith, among the Company, the
Bank, the Purchasers, Xxxxx X. Xxxxx, The Xxxxx X. Xxxxx Trust, Golf
Enterprises, Mountaingate Land, L.P., a California limited partnership, Xxx
Xxxxxxx Golf, Inc., a Nevada corporation and the Collateral Agent for the
benefit of the Bank and the Purchasers.
"AGC DISTRIBUTION": shall mean any and all Distributions made by the
Collateral Agent pursuant to the terms of the AGC Collateral Agency Agreement.
"BANK LOANS": shall have the meaning assigned thereto in recital paragraph
A hereof.
"BANKRUPTCY CODE": shall mean the Bankruptcy Code, Xxxxx 00, Xxxxxx Xxxxxx
Code.
"BANKRUPTCY PROCEEDING": shall mean, with respect to any Person, a general
assignment of such Person for the benefit of its creditors, or the institution
by or against such Person of any
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proceeding seeking relief as debtor, or seeking to adjudicate such Person as
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or
composition of such Person or its debts, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for such Person or for
any substantial part of its property, including without limitation any case
involving such Person as a debtor under the Bankruptcy Code.
"BUSINESS DAY": shall mean a day (other than a Saturday or Sunday) on which
banks are generally open for business in Los Angeles, California, Chicago,
Illinois and New York, New York for the conduct of substantially all of their
commercial lending activities.
"CASUALTY": shall mean any fire, explosion, flood, collapse or other
casualty affecting any of the Real Property Collateral.
"COLLATERAL": shall mean (i) the Real Property Collateral, (ii) the
Personal Property Collateral, and (iii) all assets (including, without
limitation, real property, personal property and fixtures) of the Company, both
tangible and intangible, upon which the Company is required pursuant to the
terms of the Debt Documents to grant to the Collateral Agent for the benefit of
the Secured Creditors a Lien, in each case, to the extent of any right, title
and interest of the Company therein, but subject in each case to the rights of
the Company hereunder and under the other Debt Documents and excluding in each
case (x) any property or assets constituting Excluded Assets and (y) the AGC
Collateral.
"COLLATERAL AGENT": shall have the meaning assigned thereto in the
introductory paragraph hereof.
"COLLATERAL AGENT'S FEE": shall mean collectively, all fees payable to the
Collateral Agent from time to time pursuant to the fee agreement attached as
ANNEX 1 hereto and made a part hereof.
"COLLATERAL PAYMENTS": shall have the meaning assigned thereto in SECTION
10(A) hereof.
"COLLATERAL PROCEEDS": shall mean and include the proceeds of any sale or
disposition of any of the Collateral in connection with (i) the Enforcement of
the Liens granted pursuant to the Security Instruments or (ii) any other
exercise of the rights of the Collateral Agent on behalf of the Secured
Creditors, or by any Secured Creditor, pursuant to the Security Instruments and
this Agreement.
"COLLATERAL PROCEEDS ACCOUNT": shall have the meaning assigned thereto in
SECTION 14(e).
"COMPANY": shall have the meaning assigned thereto in the introductory
paragraph hereof.
"CONDEMNATION": shall mean the taking or voluntary conveyance of all or a
part of the Real Property Collateral, or any interest therein or right accruing
thereto or use thereof, as the result of, or in settlement of, any condemnations
or other eminent domain proceeding by any Governmental Authority.
"COURSE": shall mean the golf courses operated by the Company on property
leased from NGOP.
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"COURSE LEASE": shall have the meaning assigned thereto in the definition
of "Real Property Collateral" hereof.
"CREDIT AGREEMENT": shall have the meaning assigned thereto in recital
paragraph A hereof.
"CURRENT RATE": shall have the meaning assigned thereto in the
Restructuring Agreement.
"DEBT DOCUMENTS": shall mean (1) the Credit Agreement, (2) the Note
Purchase Agreement, (3) the Notes, (4) the NGOP Leases, (5) the Restructuring
Agreement, (6) the Security Instruments, (7) all other documents now or
hereafter executed by the Company, or any other person or entity to evidence or
secure the payment of the Secured Obligations and (8) all modifications,
restatements, extensions, renewals and replacements of the foregoing.
"DEFAULT NOTICE": shall have the meaning assigned thereto in SECTION 11(b).
"DIRECTING CREDITORS": shall mean (i) the Bank, (ii) the Required
Purchasers or (iii) NGOP.
"DISALLOWED OBLIGATION": shall have the meaning assigned thereto in SECTION
27(a).
"DISTRIBUTION": shall mean any and all payments or distributions (direct or
indirect) of any kind or character (whether such payments or distributions are
attributable to Collateral or to assets or property other than Collateral and
whether in the form of cash or any other property) in respect of any of the
Secured Obligations, including, without limitation:
(i) any voluntary payment or distribution, including any prepayment
(whether optional or otherwise) or any purchase of any of the Secured
Obligations by the Company or any Affiliate of the Company (including any
debt or equity refinancing from any source);
(ii) any setoff or assertion of a banker's lien or similar right
(including, without limitation, any secured Lien arising therefrom under
the Bankruptcy Code);
(iii) any distribution of proceeds from any exercise of rights or
remedies by any Secured Creditor (including, without limitation, any
Collateral Proceeds);
(iv) any payments or other distributions (including, without
limitation, payments made through setoff of deposit balances or otherwise
or payments or recoveries from any security interest granted to any Secured
Creditor) made pursuant to the terms of any Security Instrument or the
exercise of any rights (statutory or otherwise) with respect to the
Collateral or any Obligation; and
(v) any payment or other distribution from the estate of the Company
or any Subsidiary of the Company in any Bankruptcy Proceeding;
PROVIDED, HOWEVER, that "Distributions" as used herein shall exclude any (i)
amortized principal payments, (ii) interest payments, (iii) Costs and Expenses
(as defined in the Restructuring Agreement and provided that no Major Default
shall have occurred), (iv) Waiver Fee (as defined in the Restructuring
Agreement), (in the case of (i) through (iv), made to the Bank and the
Purchasers pursuant to the terms of the Restructuring Agreement), (v) rent,
lease termination fees (provided that no lease termination fees owing to NGOP or
NGP may be paid in cash or offset during the Amendment Period (as defined in the
Rent Deferral Agreement) but may accrue so long as any
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lease termination fees due to the Company are not paid in cash or offset) and
other amounts payable to NGOP or NGP pursuant to the terms of the NGOP Leases,
(vi) any AGC Distribution pursuant to the terms of the AGC Collateral Agency
Agreement and (vii) any Mandatory Payment (as defined in the Restructuring
Agreement) pursuant to the Restructuring Agreement.
"EBITDA": shall mean with respect to any given Course Lease, the
corresponding amount set forth under the column titled "EBITDA + 50% Admin. Fee"
on SCHEDULE 8 attached hereto.
"EBITDAR" shall mean with respect to each of the Positive EBITDA Leases,
the corresponding amount set forth under the column titled "EBITDAR + 50% Admin.
Fee" on SCHEDULE 8 attached hereto.
"ELIGIBLE INVESTMENTS": shall mean any and all of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Collateral Agent or its agent
acting in their respective commercial capacities) incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, PROVIDED
that each such investment has an original maturity of no more than 180
days, and (B) any other demand or time deposit or deposit which is fully
insured by the Federal Deposit Insurance Corporation;
(iii) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which has a long-term unsecured debt rating in the
highest available rating by Moody's at the time of such investment;
(iv) commercial paper having, or demand notes constituting an
investment vehicle in commercial paper having, an original maturity of less
than 180 days and issued by an institution having a short-term unsecured
debt rating in the highest available rating category of Moody's at the time
of such investment (the issuer of any demand notes under this paragraph
(iv) must also be an institution that satisfies the unsecured debt rating
test specified in this paragraph (iv));
(v) a guaranteed investment contract issued by an insurance company or
other corporation having a long-term unsecured debt rating or a
claims-paying ability rated in the highest available rating category of
Moody's at the time of such investment; and
(vi) money market funds having ratings in the highest available rating
category of Moody's at the time of such investment (any such money market
funds which provide for demand withdrawals being conclusively deemed to
satisfy any maturity requirements for Eligible Investments set forth
herein), including money market funds of the Collateral Agent at the time
of such investment and any such funds that are managed by the Collateral
Agent or any of its Affiliates or for which the Collateral Agent or any
Affiliate of the Collateral Agent acts as advisor.
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Any Eligible Investments may be purchased by or through the Collateral
Agent or any of its Affiliates.
"ENFORCEMENT": shall mean taking any action, seeking remedies with respect
to the Collateral or pursuing enforcement (judicial or otherwise) with respect
to any of the Liens granted under the Security Instruments. For the avoidance of
doubt, "ENFORCEMENT" shall not include (i) filing any involuntary petition of
bankruptcy or similar action with respect to the Company or (ii) any action
permitted by SECTION 13.
"ENFORCEMENT DIRECTIVE": shall have the meaning assigned thereto in SECTION
2(b)(i).
"ENVIRONMENTAL LAWS": shall mean any and all applicable foreign, federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
requirements of law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect, in each case to
the extent the foregoing are applicable to the Properties, the Company or any of
the Company's subsidiaries or any of the Company's assets.
"EXCLUDED ASSETS": shall mean any property or assets in which the Company
is prohibited from granting any security interests by the terms of any
contractual obligation, or as to which the granting of a security interest
would, under the terms of such contractual obligation, constitute a breach or
violation by the Company or occasion the loss of any material rights or
interests of the Company thereunder, or the incurrence of any material
obligation by the Company.
"EXISTING PLEDGE AGREEMENT": shall have the meaning assigned thereto in the
Restructuring Agreement.
"FIXTURES": shall have the meaning assigned thereto under the definition of
Real Property Collateral.
"GOLF ENTERPRISES": shall have the meaning assigned thereto in recital
paragraph F hereof.
"GOVERNMENTAL AUTHORITY": shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"INDEBTEDNESS": shall have the meaning assigned thereto in the
Restructuring Agreement.
"IMPROVEMENTS": shall have the meaning assigned thereto under the
definition of Real Property Collateral.
"LAND": shall have the meaning assigned thereto under the definition of
Real Property Collateral.
"LEASES": shall have the meaning assigned thereto under the definition of
Real Property Collateral.
"LEASE TERMINATION FEES": shall mean the lease termination fees that may
now or hereafter be due and owing from the Company to NGOP as a result of the
termination of the NGOP Leases.
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"LIEN": shall mean any interest in property securing any obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes.
"LOAN OBLIGATIONS": shall mean the obligations of the Company to the Bank
under the Credit Agreement.
"LOSS PROCEEDS ACCOUNT": shall have the meaning assigned thereto in SECTION
7(a) hereof.
"MAJOR DEFAULT": shall have the meaning assigned thereto in the
Restructuring Agreement.
"MAKE-WHOLE AMOUNTS": shall have the meaning assigned thereto in Section
8.7 of the Note Purchase Agreement.
"MATERIAL ADVERSE EFFECT": shall mean a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Company and its subsidiaries taken as a whole, (ii) the
ability of the Company to perform its material obligations under the Debt
Documents, or (iii) the validity or enforceability of any of the Debt Documents
or the material rights or remedies of the Bank, the Purchasers or NGOP
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MORTGAGES": shall mean those certain leasehold mortgages, deeds of trust,
memoranda of lease and deeds to secure debt encumbering the Real Property
Collateral, executed by the Company in favor of the Collateral Agent for the
benefit of the Secured Creditors, each as amended, modified or supplemented from
time to time in accordance with SECTION 21 of this Agreement.
"NGP": shall mean National Golf Properties, Inc., a Maryland corporation,
the sole general partner of NGOP, and its successors and assigns.
"NGOP": shall have the meaning assigned thereto in the introductory
paragraph hereof.
"NGOP LEASES": shall have the meaning assigned thereto in recital paragraph
C hereof.
"NON-RETURNING SECURED CREDITOR": shall have the meaning assigned thereto
in SECTION 15(c).
"NOTE PURCHASE AGREEMENT": shall have the meaning assigned thereto in
recital paragraph B hereof.
"NOTES": shall have the meaning assigned thereto in recital paragraph B
hereof.
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"PERMITTED ENCUMBRANCES": shall mean:
(i) all Liens and other matters specifically disclosed on Schedule B
of the title insurance commitments delivered to the Collateral Agent on or
prior to the date hereof or, in connection with the Course Leases in which
NGOP is not the landlord, after the date hereof which matters are subject
to the reasonable approval of the Required Creditors;
(ii) Liens, if any, for taxes and other impositions not yet
delinquent;
(iii) mechanics', materialmen's or similar Liens, if any, and Liens
for delinquent taxes or impositions, in each case only if being contested
by the Company in good faith and by appropriate proceedings;
(iv) rights of (a) existing tenants as tenants only pursuant to
written Leases, and (b) future tenants as tenants only pursuant to written
Leases entered into in conformity with the provisions of this Agreement and
the other Debt Documents; and
(v) (a) zoning restrictions, building codes, land use laws and other
legal requirements regulating the use or occupancy of the Property, and (b)
easements, rights-of-way, covenants, conditions, restrictions on use of
real property and other similar matters affecting the Property in addition
to those described in subparagraph (i) above, which matters described in
this clause (b) do not have a material adverse effect on the value of the
Property or its fitness for its intended use.
"PERSON": shall mean any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PERSONALTY": shall have the meaning assigned thereto under the definition
of Real Property Collateral (as defined herein).
"PERSONAL PROPERTY COLLATERAL": shall mean the shares and membership
interests in certain Subsidiaries of the Company pledged by the Company to the
Collateral Agent pursuant to the Stock Pledge Agreements.
"PLANS": shall have the meaning assigned thereto under the definition of
Real Property Collateral.
"POLICIES": shall have the meaning assigned thereto in SECTION 5(f) hereof.
"PROPERTY" or "PROPERTIES": shall mean, with respect to any Person, any and
all property, whether real, personal, tangible, intangible or mixed, of such
Person.
"PURCHASERS": shall have the meaning assigned thereto in recital paragraph
B hereof.
"PURCHASER OBLIGATIONS": shall mean the obligations of the Company under
the Note Purchase Agreement and the Notes.
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"REAL PROPERTY COLLATERAL": shall mean all of the following assets, to the
extent of any right, title or interest of the Company therein, excluding in each
case any property or assets constituting Excluded Assets:
(i) those certain Leases and management contracts described in Exhibit
A to each of the Mortgages and the leasehold estates created thereby
(collectively, the "COURSE LEASE") together with any greater estate therein
as hereafter may be acquired by the Company (collectively, the "LAND"),
(ii) all buildings, structures and other improvements, now or at any
time situated, placed or constructed upon the Land (the "IMPROVEMENTS"),
(iii) all building or construction materials, all machinery, supplies,
equipment, fixtures, apparatus and other items of personal property now
owned or hereafter acquired by the Company and now or hereafter attached
to, installed in or used in connection with any of the Improvements or the
Land, including, without limitation, any and all partitions, window screens
and shades, drapes, rugs and other floor coverings, awnings, motors,
engines, boilers, furnaces, pipes, plumbing, cleaning, call and sprinkler
systems, fire extinguishing apparatus and equipment, water tanks, swimming
pools, heating, ventilating, plumbing, lighting, communications and
elevator fixtures, laundry, incinerating, air conditioning and air cooling
equipment and systems, gas and electric machinery and equipment, disposals,
dishwashers, furniture, refrigerators and ranges, securities systems, art
work, recreational and pool equipment and facilities of all kinds, water,
gas, electrical, storm and sanitary sewer facilities of all kinds, and all
other utilities whether or not situated in easements together with all
accessions, replacements, betterments and substitutions for any of the
foregoing (the "FIXTURES"),
(iv) all right, title and interest of the Company in and to all goods,
accounts, general intangibles, instruments, documents, accounts receivable,
chattel paper and all other personal property of any kind or character,
including such items of personal property as defined in the Uniform
Commercial Code in the state where each property is located, now owned or
hereafter acquired by the Company and now or hereafter affixed to, placed
upon, used in connection with, arising from or otherwise related to the
Land and/or the Improvements or which may be used in or relating to the
planning, development, financing or operation of the Land and/or the
Improvements, including, without limitation, furniture, furnishings,
equipment, machinery, money, insurance proceeds, condemnation awards,
accounts, contract rights, trademarks, goodwill, chattel paper, documents,
trade names, licenses and/or franchise agreements, rights of the Company
under leases of Fixtures or other personal property or equipment,
inventory, all refundable, returnable or reimbursable fees, deposits or
other funds or evidences of credit or indebtedness deposited by or on
behalf of the Company with any Governmental Authorities, boards,
corporations, providers of utility services, public or private, including
specifically, but without limitation, all refundable, returnable or
reimbursable tap fees, utility deposits, commitment fees and development
costs and all refunds, rebates or credits in connection with a reduction in
real estate taxes and assessments against any the Course Lease, the Land
and/or Improvements as a result of tax certiorari or any applications or
proceedings for reduction (the "PERSONALTY"),
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(v) all right, title and interest of the Company in and to all plans,
specifications, shop drawings and other technical descriptions prepared for
construction, repair or alteration of the Improvements, and all amendments
and modifications thereof (the "PLANS"),
(vi) all leasehold estates, leases, subleases, sub-subleases,
licenses, concessions, occupancy agreements or other agreements (written or
oral, now or at any time in effect and every modification, amendment or
other agreement relating thereto, including every guarantee of the
performance and observance of the covenants, conditions and agreements to
be performed and observed by the other party thereto) which grant a
possessory interest in, or the right to use or occupy, all or any part of
the Land and/or Improvements, together with all related security and other
deposits (the "LEASES"),
(vii) all right, title and interest of the Company in and to all of
the rents, revenues, income, proceeds, issues, profits (including all oil
or gas or other mineral royalties and bonuses), security and other types of
deposits, and other benefits paid or payable and to become due or payable
by parties to the Leases other than the Company for using, leasing,
licensing, possessing, occupying, operating from, residing in, selling or
otherwise enjoying any portion or portions of any Course Lease, Land and/or
Improvements (the "RENTS"),
(viii) all right, title and interest of the Company in and to all
other agreements, such as construction contracts, architects' agreements,
engineers' contracts, utility contracts, maintenance agreements, management
agreements, service contracts, permits, licenses, certificates and
entitlements in any way relating to the development, construction, use,
occupancy, operation, maintenance, enjoyment, acquisition or ownership of
the Course Lease, Land and/or Improvements or the sale of goods or services
produced in or relating to the Land and/or Improvements (the "PROPERTY
AGREEMENTS"),
(ix) all right, title and interest of the Company in and to all
rights, privileges, titles, interests, liberties, tenements, hereditaments,
rights-of-way, easements, sewer rights, water, water courses, water rights
and powers, air rights and development rights, licenses, permits and
construction and equipment warranties, appendages and appurtenances
appertaining to the foregoing, and all right, title and interest, if any,
of the Company in and to any streets, ways, alleys, passages, strips or
gores of land adjoining the Land or any part thereof,
(x) all accessions, replacements, renewals, additions and
substitutions for any of the foregoing and all proceeds thereof,
(xi) all insurance policies, unearned premiums therefor and proceeds
from such policies, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments or settlements made in lieu
thereof, covering any of the above property now or hereafter acquired by
the Company,
(xii) all right, title and interest of the Company in and to all
mineral, riparian, littoral, water, oil and gas rights now or hereafter
acquired and relating to all or any part of the Collateral Projects,
(xiii) all of the Company's right, title and interest in and to any
awards, remunerations, reimbursements, settlements or compensation
heretofore made or hereafter to
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be made by any Governmental Authority pertaining to the Course Lease,
the Land, Improvements, Fixtures or Personalty, and
(xiv) all of the Company's right, title and interest to extend or
renew the Course Lease or to acquire fee title to the Land or any portion
thereof and all right, title and interest at any time of the Company in fee
title to the Land or any portion thereof.
"RENT DEFERRAL AGREEMENT": shall have the meaning assigned thereto in
recital paragraph F hereof.
"RENTS": shall have the meaning assigned thereto under the definition of
Real Property Collateral (as defined herein).
"REQUIRED CREDITORS": shall mean (i) the Bank, plus (ii) NGOP, plus (iii)
the Required Purchasers.
"REQUIRED PURCHASERS": shall mean, as of any date, the then current holders
of at least 50.1% of the outstanding principal amount of the Notes (exclusive of
any Notes owned, directly or indirectly, by any one or more of the Company or
any Subsidiary or Affiliate of the Company, or any officer or director thereof),
PROVIDED, that, if there is then no principal amount of the Notes outstanding
(exclusive of any Notes owned, directly or indirectly, by any one or more of the
Company or any Subsidiary or Affiliate of the Company, or any officer or
director thereof), but accrued Make-Whole Amounts are still outstanding with
respect to such Notes, Required Purchasers shall mean the holders entitled to at
least 50.1% of the accrued Make-Whole Amounts that are outstanding with respect
to such Notes (exclusive of any Make-Whole Amounts accrued with respect to any
such Notes owned, directly or indirectly by any one or more of the Company or
any Subsidiary or Affiliate of the Company, or any officer or director thereof).
"RESTRUCTURING AGREEMENT": shall have the meaning assigned thereto in
recital paragraph E hereof.
"RESTRUCTURE DOCUMENTS": shall have the meaning assigned thereto in the
Restructuring Agreement.
"RETURNED AMOUNT SHARE": shall have the meaning assigned thereto in SECTION
14(c).
"RETURNED AMOUNTS": shall have the meaning assigned thereto in SECTION
14(c).
"SALE MULTIPLE" shall mean for each Positive EBITDA Lease, the amount equal
to the quotient of (x) the purchase price paid at closing to NGOP in connection
with the sale of the real property associated with such Course Lease by NGOP
(net of ordinary and reasonable closing costs and adjustments), and (y) the
EBITDAR related to such Course. In the event of a termination of multiple Course
Leases concurrently with the termination of any Positive EBITDA Lease, the
aggregate purchase price shall be allocated to each Course Lease in proportion
to the EBITDAR for each such Course Lease terminated at such time.
"SECURED CREDITORS": shall mean the Bank, the Purchasers, NGOP, and their
respective successors and permitted assigns.
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"SECURED LEASE OBLIGATIONS": shall mean all amounts which may be now or
hereafter due from the Company and Golf Enterprises to NGP and/or NGOP under,
arising from or relating to the NGOP Leases, which amounts shall be deemed the
outstanding principal amount in respect of the Secured Lease Obligations for
purposes of SECTION 14, as follows (without duplication): (i) accrued and unpaid
rent, (ii) lease termination fees calculated pursuant to the formula set forth
in that certain letter agreement between the Company and NGOP dated as of
January 10, 2002, and (iii) lease rejection damages for all the terminated and
rejected NGOP Leases calculated pursuant to Section 502(b)(6) under the
Bankruptcy Code (subject to mitigation obligations under Section 502(b) of the
Bankruptcy Code) assuming that AGC or Golf Enterprises, as applicable, is a
debtor in a Bankruptcy Proceeding. For the avoidance of doubt, the method of
calculation set forth in (iii) shall apply irrespective of whether a Bankruptcy
Proceeding in respect of the Company exists and whether an order for relief in
bankruptcy in respect of the Company shall have been entered. Notwithstanding
the foregoing, in no event shall the Bank or the Purchasers be deemed to have
waived their rights, if any, to challenge, reduce or seek subordination of the
Secured Lease Obligations or any portion thereof.
"SECURED OBLIGATIONS": shall mean (i) all of the Loan Obligations; (ii) all
of the Noteholder Obligations; (iii) all of the Secured Lease Obligations; and
(iv) all obligations of the Company arising under this Agreement and the
Security Instruments.
"SECURITY INSTRUMENTS": shall mean, collectively, this Agreement, the
Mortgages, the Stock Pledge Agreements and all other agreements including
control agreements, instruments, mortgages and other documents, whether now
existing or hereafter in effect, pursuant to which the Company or any Subsidiary
thereof shall grant or convey to the Collateral Agent or any Secured Creditor a
Lien in, or any other Person shall acknowledge any such Lien in, property as
security for all or any portion of the obligations or liabilities arising under
the Debt Documents, as any of them may be amended, modified or supplemented from
time to time in accordance with SECTION 21 of this Agreement.
"SECURITY TERMINATION DATE": shall mean the earlier of (i) the date on
which all of the Secured Obligations shall have been paid in full; and (ii) the
date all of the Secured Creditors agree in writing to the termination of this
Agreement.
"STOCK PLEDGE AGREEMENTS": shall have the respective meaning assigned to
(i) the Wholly Owned Subsidiaries Pledge Agreement and (ii) the Majority Owned
Subsidiaries Pledge Agreement in the Restructuring Agreement.
"THIRD-PARTY MANAGEMENT CONTRACT": shall have the meaning assigned thereto
in the Restructuring Agreement.
2. APPOINTMENT OF THE COLLATERAL AGENT.
(a) APPOINTMENT AND AUTHORIZATION. The Secured Creditors hereby appoint the
Collateral Agent to act as secured party, agent, bailee and custodian for the
exclusive benefit of the Secured Creditors pursuant to the terms hereof. The
Collateral Agent hereby accepts such appointment and agrees to maintain and hold
all Collateral at any time delivered to it as secured party, agent, bailee and
custodian for the exclusive benefit of the Secured Creditors. The Collateral
Agent and the Company agree that the Collateral Agent is acting and will act
with respect to the Collateral for the exclusive benefit of the Secured
Creditors and is not, and shall not at any time in
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the future be, subject, with respect to the Collateral, in any manner or to any
extent, to the direction or control of the Company except as expressly permitted
hereunder and under any of the other Debt Documents. The Collateral Agent agrees
to serve as Collateral Agent and to act in accordance with this Agreement and in
accordance with any written instructions properly delivered pursuant hereto. The
Collateral Agent is hereby expressly authorized in such capacity on behalf of
the Secured Creditors, and without hereby limiting the foregoing, and subject
to, and in accordance with, the terms and conditions of this Agreement:
(i) to implement the sharing of Distributions as contemplated by this
Agreement and to receive on behalf of each of the Secured Creditors any
payment of monies paid thereto in accordance with the Security Instruments,
and to distribute to each Secured Creditor its respective share of all
payments (including the Distributions) so received in accordance with the
terms of this Agreement;
(ii) to receive all documents and items to be furnished under the
Security Instruments and to keep and maintain accurate records;
(iii) to maintain physical possession of any of the Collateral as
contemplated by any of the Security Instruments;
(iv) to act on behalf of each Secured Creditor in and under the
Security Instruments and this Agreement;
(v) to execute and deliver to the Company requests, demands, notices,
approvals, consents and other communications received from any Secured
Creditor in connection with the Security Instruments subject to the terms
and conditions set forth herein;
(vi) to deliver copies of any notice, document or communication from
the Company or any third party to the Secured Creditors promptly upon
receipt;
(vii) to the extent permitted by this Agreement and the Security
Instruments, to exercise for its own benefit and the benefit of each
Secured Creditor all remedies of the Secured Creditors under any of the
Security Instruments as directed in writing by the Directing Creditors or
Required Creditors, as applicable, subject, however, to the right to take
action described in SECTION 2(b)(iii) so long as consistent with the terms
of the Security Instruments;
(viii) to execute and deliver releases as provided in the Security
Instruments and this Agreement; and
(ix) to take such other actions, other than as specified in SECTIONS
2(b)(i) and 2(b)(iii) hereof, as may be requested in writing by the
Directing Creditors or the Required Creditors, as applicable.
(b) DUTIES.
(i) Upon the Collateral Agent's receipt of (A) a Default Notice from
any Secured Creditor giving notice of a Major Default and (B) written
notice from the Directing Creditors directing the Collateral Agent to take
specific collection or foreclosure action under any Security Instrument for
the benefit of the Secured Creditors (an "ENFORCEMENT
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DIRECTIVE"), the Collateral Agent shall undertake to proceed as directed as
soon as possible and in no event later than two (2) Business Days after
receipt of both such notices. All Enforcement actions undertaken by the
Collateral Agent, whether or not directed by the Directing Creditors, shall
be in accordance with applicable law. The Collateral Agent shall deliver a
copy of any Default Notice and any Enforcement Directive to each Secured
Creditor not signatory thereto within two (2) Business Days of its receipt
by the Collateral Agent. The Collateral Agent shall be entitled to rely and
act upon advice of counsel (including, without limitation, counsel to any
Secured Creditor), independent accountants and other experts selected by
the Collateral Agent with reasonable care concerning all matters pertaining
to any duties hereunder. The Company promptly after the execution hereof
shall provide the Collateral Agent with a list of the Purchasers and their
contact information, and shall promptly inform the Collateral Agent in
writing of any changes to the identities of or contact information for the
Purchasers.
(ii) If an Enforcement Directive shall have been given by any
Directing Creditors, such Enforcement Directive cannot be rescinded except
by (a) written notice of the Directing Creditors initially providing such
Enforcement Directive or (b) order of a court of competent jurisdiction.
(iii) The Collateral Agent shall have no obligation to, nor liability
for failure to, independently verify the existence or occurrence of any
events set forth in any Default Notice it shall receive pursuant to SECTION
2(b)(i) hereof, and the Collateral Agent may rely thereon as to each matter
stated therein as more fully set forth in SECTION 2(e) hereof.
(iv) The Collateral Agent shall not release, substitute, exercise any
right or remedy, or take any other action with respect to any Collateral
without the prior written consent of the Required Creditors, except in
connection with an Enforcement Directive from the Directing Creditors. The
Collateral Agent shall give notice to each Secured Creditor of any
substantial or material action taken by the Collateral Agent pursuant to
this SECTION 2(b)(iii) promptly after taking such action.
(v) The Collateral Agent undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement, it being
expressly understood by the Secured Creditors and the Company that there
are no implied duties or obligations under this Agreement.
(vi) In connection with the pledge of the Real Property Collateral to
the Collateral Agent, the Course Leases with respect to each Mortgage will
be delivered to the Collateral Agent as soon after the date hereof as is
reasonably practicable. Within two Business Days following receipt of the
Course Leases the Collateral Agent shall review each such Course Lease to
ascertain that such Course Lease relates to a property identified on
SCHEDULE 1. In so doing, the Collateral Agent may rely on the purported due
execution and genuineness of any signature thereon. If, within such two day
period, the Collateral Agent finds any Course Lease not to have been
executed or received or to be unrelated to the properties listed on
SCHEDULE 1, the Collateral Agent shall, promptly upon the conclusion of its
review, notify the Company and the Secured Parties. The Company shall
deliver promptly to the Collateral Agent any Course Leases that were not
delivered to the Collateral Agent in accordance with this section. Anything
to the contrary herein notwithstanding, the Collateral Agent shall not be
liable for any acts or omissions caused by or related to the failure of the
Company to
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deliver to the Collateral Agent any Collateral including, but not limited
to, the Course Leases and related documents, in accordance with the terms
hereof.
(vii) The Collateral Agent shall have no responsibility for reviewing
any Course Lease except as expressly provided in this SECTION 2(b)(vii). In
reviewing any Course Lease pursuant to this SECTION 2(b)(vii), the
Collateral Agent shall have, without limitation, no responsibility for
determining whether any document is valid and binding, whether the text of
any assignment or endorsement is in proper or recordable form (except, if
applicable, to determine if the Collateral Agent is the assignee or
endorsee thereof), whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction, whether a blanket
assignment is permitted in any applicable jurisdiction, whether any Person
executing any document is authorized to do so or whether any signature
thereon is genuine, but shall only be required to determine whether a
document has been executed and that it appears to be what it purports to
be.
(viii) It is understood and agreed upon by all of the parties hereto
that the Collateral Agent shall, other than as set forth in Sections
2(b)(vi) and (vii), have no duty other than to receive or possess a pledge
of the Collateral and shall have no duty to examine or investigate such
Collateral for any defects under the terms of this Agreement.
(ix) Pursuant to the terms of this Agreement and the Security
Instruments, upon request of the Required Creditors prior to a Major
Default or upon request of any two Directing Creditors following a Major
Default, and the delivery to the Collateral Agent of two copies of a
Request for Release in the form of either EXHIBIT A or EXHIBIT B hereto
from either the Required Creditors or any two Directing Creditors, as
applicable, the Collateral Agent shall release or cause to be released such
Collateral that is the subject of the Request for Release to the designee
of the Company, prior to a Major Default, or the designee of the Collateral
Agent, following a Major Default.
(c) AGENTS AND ATTORNEYS-IN-FACT. The Collateral Agent may execute any of
its duties under the Security Instruments or this Agreement by or through its
agents or attorneys-in-fact, selected by the Collateral Agent with reasonable
care.
(d) LIMITATION ON LIABILITY. Neither the Collateral Agent nor any of its
officers, directors, employees or agents shall be liable, directly or
indirectly, to the Secured Creditors or the Company for any action lawfully
taken or omitted to be taken by it or them under or in connection with the
Security Instruments or this Agreement except for its or their own gross
negligence or willful misconduct. The Collateral Agent shall not be responsible
to any Secured Creditor for any recitals, statements, representations or
warranties not made by the Collateral Agent contained herein or in any other
Debt Document; or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, accuracy, completeness or sufficiency of this
Agreement or any other Debt Document or instruments executed and delivered, or
which could have been executed or delivered, in connection with this Agreement
or the other Debt Documents, including, without limitation, the attachment,
creation, effectiveness or perfection of the security interests granted or
purported to be granted hereunder in and to the Collateral.
(e) RELIANCE. The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, without independent investigation, upon any
certification, notice, consent or other communication (including, without
limitation, any thereof delivered by telephone or facsimile)
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reasonably believed by it to be genuine and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements of legal counsel
(including, without limitation, counsel to any Secured Creditor), independent
accountants and other experts selected by the Collateral Agent with reasonable
care. The Collateral Agent shall not be deemed to have any notice of any events
under any of the agreements between the Company and any of the Secured Creditors
unless a corporate trust officer or a vice president of the Collateral Agent
receives written notice or obtains actual knowledge of such event.
(f) EXPENDITURES BY THE COLLATERAL AGENT. The Collateral Agent shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in the exercise of its
rights or powers, if the Collateral Agent believes that repayment of such funds
(repaid in accordance with the terms of this Agreement) or adequate indemnity
against such risk or liability is not reasonably assured to it.
(g) INVESTMENT OF FUNDS. Upon written direction from the Company prior to a
Major Default or the Required Creditors following a Major Default, as
applicable, the Collateral Agent shall invest the funds in any accounts held by
the Collateral Agent only in Eligible Investments. No such Eligible Investment
shall mature later than the business day preceding the next following date of a
Distribution pursuant to SECTION 14 hereof and no Eligible Investment shall be
sold or disposed of prior to its maturity. In the absence of a written
direction, the Collateral Agent shall invest funds in the Collateral Proceeds
Account in Eligible Investments described in clause (vi) of the definition
thereof. Eligible Investments shall be made in the name of the Collateral Agent
for the benefit of the Secured Creditors. The Collateral Agent shall have no
responsibility for verifying that any such investments are Eligible Investments.
Any interest income or other gain from investments in Eligible Investments shall
be credited to the same account as the source of the funds for such investment
and any loss resulting from such investments shall be charged to such account;
PROVIDED, HOWEVER, that the Company shall make or cause to be made no later than
the applicable date of Distribution a deposit to the applicable account to the
extent of any losses therein caused as a result of the investment instructions
provided for herein. The Collateral Agent shall not be liable for any loss
incurred on any funds invested in Eligible Investments pursuant to the
provisions of this SECTION 2(g).
3. COLLATERAL DISPOSITIONS.
(a) Each of the Bank and the Purchasers expressly reserve their rights to
challenge the fairness and enforceability of the lease termination fee formula
(the "LTF FORMULA") entered into between the Company and NGOP pursuant to that
certain letter agreement, dated as of January 10, 2002, including, without
limitation, the right of NGOP to terminate Course Leases and the obligation of
the Company to pay lease termination fees in respect of terminated Course
Leases.
(b) NGOP expressly reserves its rights with respect to the LTF Formula and
any dispute it may have with the Bank and the Purchasers regarding the same.
(c) The Company hereby explicitly consents to the termination of any Course
Leases by NGOP in the circumstances set forth in clauses (i), (ii), (iii), (iv)
or (v) of SECTION 3(d) below, and does not consent to the termination of any
Course Leases other than in accordance with such clauses (i) through (v)
(notwithstanding the letter agreement referred to in SECTION 3(a)).
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(d) Without limiting the express reservation of rights in Sections 3(a) and
(b) among the Banks, the Purchasers and NGOP, each Secured Creditor hereby (x)
consents to the termination of the applicable Course Leases in the circumstances
set forth in any of clauses (i) through (v) below and (y) agrees to the release
of the applicable Course Leases by the Collateral Agent in such circumstances.
The Collateral Agent agrees to release such Course Leases upon receipt of a
Request for Release in the form of either EXHIBIT C or EXHIBIT D from the
Company, certifying that one of the events set forth in clauses (i) through (v)
below shall have occurred, and the Company agrees to deliver such Request for
Release if applicable and if requested to do so by NGOP:
(i) NGOP terminates from time to time any Course Lease with the
Company to the extent that the operation of the relevant Course(s) by the
Company pursuant to such Course Lease results in negative EBITDA to the
Company.
(ii) NGOP terminates from time to time Course Leases associated with
those Courses the operation of which by the Company results in positive
EBITDA; provided, however, such sales shall not exceed a de minimis basket
with an aggregate positive EBITDA of $125,000. The parties hereto
acknowledge and agree that only Courses the operation of which result in a
positive EBITDA are permitted to be included in this $125,000 basket. For
the avoidance of doubt, this basket shall not be net of terminated Course
Leases associated with Courses the operation of which result in a negative
EBITDA.
(iii) NGOP terminates those Course Leases with the Company that are
set forth on SCHEDULE 6 hereto, regardless of whether the operation of such
Courses result in positive EBITDA.
(iv) NGOP terminates the Course Leases associated with the Courses set
forth on SCHEDULE 7 hereto; provided, however, that if the LTF Formula
shall after the date hereof have been invalidated by a court of competent
jurisdiction and any such Course Leases associated with the Courses set
forth on Schedule 7 hereto shall have been terminated, the Company shall
assign to the Collateral Agent for the ratable benefit of the Bank and the
Purchasers the claim the Company shall have against NGOP and/or NGP for
terminating the Course Leases associated with three of the Courses on such
SCHEDULE 8 hereto the operation of which result in positive EBITDA -- Great
Southwest, Thorntree and Diamond Oaks (the "POSITIVE EBITDA LEASES"). The
amount of the claim resulting from NGOP's termination of the Positive
EBITDA Leases, determined without regard to any claim that NGOP might have
resulting from termination of any Course Leases set forth on Schedule 7 the
operation of which result in negative EBITDA to the Company, as to which
all parties reserve all rights, shall be calculated for each such Course as
follows: the product of (x) the Sale Multiple and (y) the EBITDA associated
with each such terminated Positive EBITDA Lease.
(v) NGOP terminates those Course Leases with the Company the
termination of which has been expressly consented to in writing by the
Required Creditors after the date hereof.
(e) Each Secured Creditor hereby agrees to permit the release of the
applicable Real Property Collateral by the Collateral Agent, and the Collateral
Agent agrees to release such applicable Real Property Collateral to a designee
of the Company, upon receipt of a Request for
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Release in the form of either EXHIBIT C or EXHIBIT D from the Company, that one
of the following events shall have occurred:
(i) any Lease with a party other than NGOP shall have been terminated
or cancelled by any party other than the Company;
(ii) sales or dispositions in the ordinary course of business (other
than Leases or Third-Party Management Contracts);
(iii) sales, terminations or dispositions as listed on SCHEDULE 5
hereto; or
(iv) any sales, terminations or dispositions which are approved
pursuant to prior written consent by the Required Creditors.
4. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Collateral Agent and the Secured Creditors that each of the
following representations and warranties is true and correct on and as of the
date hereof:
(a) TITLE. The Company is party to each of the Leases including, without
limitation, the Course Leases, constituting the Real Property Collateral, in
each case free and clear of all Liens whatsoever except the Permitted
Encumbrances. The Company enjoys peaceful and undisturbed possession under all
of the Course Leases under which it operates, and all such Course Leases are
valid and subsisting and in full force and effect, binding upon and enforceable
against the lessors and lessees thereunder, and the Company is not in default in
any material respect in the performance and observance of its respective
obligations under any thereof. The Mortgages, when properly recorded in the
appropriate records together with any UCC financing statements required to be
filed in connection therewith, will create (i) valid, perfected liens on the
Real Property Collateral subject only to Permitted Encumbrances, and (ii)
perfected security interests in and to, and perfected collateral assignments of,
all material personalty, included within the Real Property Collateral including
any leases, all in accordance with the terms thereof, in each case subject only
to any applicable Permitted Encumbrances. NOTHING IN THIS PARAGRAPH MAY BE
RELIED ON BY ANY TITLE INSURANCE COMPANY ISSUING A TITLE INSURANCE POLICY. No
Person other than the Company owns any interest in any payments due under any
Leases affecting the Real Property Collateral that is superior to or of equal
priority with the Collateral Agent's interest therein.
(b) ENVIRONMENTAL MATTERS. Except as could not reasonably be expected to
result in a Material Adverse Effect,
(i) the Real Property Collateral does not contain, and has not
previously contained, any Materials of Environmental Concern in amounts or
concentrations which constitute or constituted a violation of, or could
reasonably be expected to give rise to liability under, Environmental Laws;
(ii) the Real Property Collateral and all operations at the Real
Property Collateral are in compliance, and have been in compliance, with
all applicable Environmental Laws, and there is no contamination at, under
or about the Real Property Collateral, or violation of any Environmental
Law with respect to the Real Property Collateral;
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(iii) the Company has not received any written notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Real Property Collateral, nor does it have knowledge
or reason to believe that any such notice will be received or is being
threatened;
(iv) Materials of Environmental Concern have not been transported or
disposed of from the Real Property Collateral in violation of, or in a
manner or to a location which could reasonably be expected to give rise to
liability under, Environmental Laws, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on
or under any of the Real Property Collateral in violation of, or in a
manner that could reasonably be expected to give rise to liability under,
any applicable Environmental Laws;
(v) no judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Company, threatened, under any
Environmental Law to which the Company or any of its subsidiaries is or
will be named as a party with respect to the Real Property Collateral, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Real Property Collateral; and
(vi) there has been no release or threat of release of Materials of
Environmental Concern at or from the Real Property Collateral, or arising
from or related to the operations of the Company or its subtenants in
connection with the Real Property Collateral in violation of or in amounts
or in a manner that could reasonably be expected to give rise to liability
under Environmental Laws.
(c) LEASES. The Leases are valid and subsisting and in full force and
effect, binding upon and enforceable against the lessors and lessess thereunder
and, except for defaults by the Company thereunder, the Company is not aware of
any default or event of default pursuant to the terms of any of the Leases.
5. AFFIRMATIVE COVENANTS OF THE COMPANY.
(a) IMPOSITIONS AND OTHER CLAIMS. The Company shall pay and discharge (or
require to be paid and discharged), prior to their becoming delinquent, all
taxes, assessments, insurance premiums, charges, encumbrances and liens now or
hereafter imposed upon or affecting any Collateral to the extent that failure to
do so could result in a Material Adverse Effect.
(b) LITIGATION. The Company shall give prompt written notice to the
Collateral Agent of any litigation or governmental proceedings pending or
threatened in writing against the Company or any Collateral which is reasonably
likely to have a Material Adverse Effect.
(c) COOPERATE IN LEGAL PROCEEDINGS. Except with respect to any claim by the
Company against the Collateral Agent or the Secured Creditors, the Company shall
cooperate fully with the Collateral Agent and the Secured Creditors with respect
to any proceedings before any Governmental Authority which may in any material
way affect the rights of the Collateral Agent and the Secured Creditors
hereunder or under any of the Debt Documents and, in connection therewith, the
Collateral Agent and the Secured Creditors may, at their election, participate
or designate a representative to participate in any such proceedings.
-19-
(d) LEASES. Any bond or other instrument which the Company is permitted to
hold in lieu of cash security deposits under any applicable laws shall (to the
extent permitted under the terms of such bond or instrument) be pledged to the
Collateral Agent as security for the Secured Obligations. The Company shall,
upon the Collateral Agent's request (made at the direction of the Required
Creditors), provide the Collateral Agent with evidence reasonably satisfactory
to the Required Creditors of the Company's compliance with the foregoing. During
the continuance of any Major Default, the Company shall, upon the Collateral
Agent's request (made at the direction of any Directing Creditor), if not
prohibited by any applicable laws, remit to the Collateral Agent an amount equal
to the aggregate security deposits (if any) held by the Company (including any
interest theretofore earned thereon) with respect to all of the Real Property
Collateral or such portion of the Real Property Collateral as the Collateral
Agent shall specify, to be held by the Collateral Agent subject to the terms of
the Leases and the rights of the depositors thereof.
(e) FURTHER ASSURANCES. The Company shall, at the Company's sole cost and
expense, (other than in connection with the replacement of the Collateral Agent
in the event the Collateral Agent is replaced by the Required Creditors without
cause, which shall be at the sole cost and expense of the Secured Creditors)
from time to time as reasonably requested by the Collateral Agent, execute,
acknowledge, record, register, file and/or deliver to the Collateral Agent such
other instruments, agreements, certificates and documents (including UCC
financing statements, fixture filings, memoranda of lease and amended or
replacement mortgages or deeds of trust) as the Collateral Agent may reasonably
request (at the direction of either the Bank, NGOP or the Required Purchasers)
to evidence, confirm, perfect and maintain the Liens securing or intended to
secure the Secured Obligations or to facilitate a replacement of the Collateral
Agent if requested by the Secured Creditors, and do and execute all such further
lawful and reasonable acts, conveyances and assurances for the better and more
effective carrying out of the intents and purposes of this Agreement, the
Mortgages and the other Debt Documents as any Secured Creditor shall reasonably
require from time to time. The Company hereby authorizes and appoints the
Collateral Agent as its attorney-in-fact to execute, acknowledge, record,
register and/or file such instruments, agreements, certificates and documents,
and to do and execute such acts, conveyances and assurances, should the Company
fail to do so itself in violation of this Agreement following written request
from the Collateral Agent, in each case without the signature of the Company.
The foregoing grant of authority is a power of attorney coupled with an interest
and such appointment shall be irrevocable for the term of this Agreement. The
Company hereby ratifies all actions that such attorney shall lawfully take or
cause to be taken in accordance with this SECTION 5(e).
(f) INSURANCE.
(i) The Company shall obtain and maintain with respect to the Real
Property Collateral for the mutual benefit of the Company and the
Collateral Agent at all times, policies of insurance in accordance with
SCHEDULE 2, attached hereto and made a part hereof, except for those future
changes in insurance determined in the ordinary course of business to be
necessary by the Company in its commercially reasonable judgment and
provided that such changes will have no Material Adverse Effect.
(ii) All policies of insurance (the "POLICIES") required pursuant to
this SECTION 5(f);
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A. shall be maintained so long as any of the Secured
Obligations remain outstanding without cost to the Collateral
Agent or any Secured Creditor;
B. with respect to property policies, shall contain a
standard mortgagee clause (to the extent applicable), and shall
name the Collateral Agent and its successors and assigns, as
first mortgagee and loss payee (to the extent applicable);
C. with respect to liability policies, shall name the
Collateral Agent, and its successors and assigns, and the Secured
Creditors as additional insureds;
D. shall not contain a co-insurer clause, and that the
Collateral Agent shall receive at least 10 days' prior written
notice of any change in coverage and/or cancellation;
E. shall contain an endorsement providing that no act or
negligence of the Company or of a tenant or other occupant of the
Real Property Collateral shall affect the validity or
enforceability of the insurance insofar as a mortgagee is
concerned; and
F. shall contain a waiver of subrogation against the
Collateral Agent and the Secured Creditors.
(iii) The Company shall pay or cause to be paid the premiums for all
policies as the same become due and payable. Certificates of such policies
shall be delivered to the Collateral Agent promptly upon request by any
Secured Creditor (and, promptly after request following the occurrence of a
Casualty the proceeds of which are expected to exceed $5,000,000 copies of
any policies related to the Casualty loss in question, certified as true
and correct by the Company, shall be delivered to the Collateral Agent).
Not later than 30 days prior to the date on which coverage would be
cancelled in the absence of payment of the applicable premiums, the Company
shall deliver to the Collateral Agent evidence, reasonably satisfactory to
the Required Creditors, of its renewal.
(g) CASUALTY AND CONDEMNATION.
(i) In the event of any Casualty or Condemnation, the Company shall
give prompt notice thereof to the Collateral Agent. The Collateral Agent
(at the direction of the Required Creditors and, after a Major Default, any
Directing Creditor) and any Directing Creditors may, after the occurrence
and during the continuation of a Major Default, settle and adjust any
claims without the consent or cooperation of the Company. The reasonable
expenses incurred by the Collateral Agent in the adjustment and such
proceeds of a Casualty or Condemnation shall become part of the Secured
Obligations and shall be reimbursed by the Company to the Collateral Agent
or the Secured Creditors upon demand therefor.
(ii) All proceeds from any Casualty or Condemnation in excess of
$5,000,000 (or if a Major Default has occurred and is continuing, all
proceeds from any Casualty or Condemnation) with respect to any one event
or occurrence shall be immediately deposited
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into the Loss Proceeds Account. All other proceeds from any Casualty or
Condemnation shall be paid to the Company to restore the affected Real
Property Collateral. Provided that no Major Default shall have occurred and
be then continuing, the proceeds of any Casualty or Condemnation shall be
disbursed by the Collateral Agent from the Loss Proceeds Account to the
Company from time to time to fund the replacement or restoration of the
affected property upon the Collateral Agent's being furnished with (a)
evidence reasonably satisfactory to the Required Creditors of the estimated
cost of completion of the restoration or replacement of the affected Course
Lease, Land and/or Improvements, (b) funds, or assurances reasonably
satisfactory to the Required Creditors that such funds are available and
sufficient in addition to the remaining proceeds of any Casualty or
Condemnation, to complete the proposed restoration or replacement, and (c)
such architect's certificates, waivers of lien, contractor's sworn
statements, title insurance endorsements, bonds, plats of survey and such
other evidences of cost, payment and performance as the Required Creditors
may reasonably require and as are customarily provided to mortgage lenders
in the applicable region as a condition to disbursing property insurance
proceeds for restoration or replacement. With respect to disbursements made
pursuant to clause (b) above, (1) no payment shall exceed 90% of the value
of the work performed from time to time until such time as 50% of the
restoration (calculated based on anticipated aggregate cost of the work)
has been completed, and amounts retained prior to completion of 50% of the
restoration shall not be paid prior to the final completion of the
restoration, and (2) funds other than proceeds of any Casualty or
Condemnation shall be disbursed prior to disbursement of such proceeds, and
at all times the undisbursed balance of such proceeds remaining in the Loss
Proceeds Account, together with any additional funds irrevocably and
unconditionally deposited therein or irrevocably and unconditionally
committed for that purpose, shall be at least sufficient in the reasonable
judgment of the Required Creditors to pay for the cost of completion of the
restoration free and clear of all liens or claims for lien.
(iii) The Company shall cooperate with the Collateral Agent in
obtaining for the Collateral Agent the benefits of any such proceeds
payable to the Collateral Agent in connection with the affected Real
Property Collateral under the terms hereof and the other Debt Documents.
The Collateral Agent shall be reimbursed for any actual expenses reasonably
incurred in connection therewith (including reasonable attorneys' fees and
disbursements, and, if reasonably necessary to collect such proceeds, the
expense of an appraisal on behalf of the Collateral Agent) out of such
proceeds, to the extent that the Company is not duly and diligently seeking
payment of such proceeds.
(h) In the event of any Casualty or Condemnation affecting Real Property
Collateral in respect of which the proceeds therefrom are not applied toward
restoration or replacement, such proceeds shall be paid by the Collateral Agent
to the Secured Creditors to be applied toward repayment of the Secured
Obligations in accordance with SECTION 14 of this Agreement.
(i) [Intentionally deleted.]
(j) ENVIRONMENTAL MATTERS. The Company will and will cause each of its
subsidiaries to:
(i) comply with, and use its best efforts to ensure compliance by all
tenants and subtenants, if any, with all applicable Environmental Laws and
obtain and comply with and maintain, and use its best efforts to ensure
that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits
-22-
required by applicable Environmental Laws, except to the extent that
failure to do so could not be reasonably expected to have a Material
Adverse Effect;
(ii) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that (a) the same are being
contested in good faith by appropriate proceedings and the pendency of such
proceedings could not be reasonably expected to have a Material Adverse
Effect, or (b) the Company has determined in good faith that contesting the
same is not in the best interests of the Company and its Subsidiaries and
the failure to contest the same could not be reasonably expected to have a
Material Adverse Effect; and
(iii) defend, indemnify and hold harmless the Collateral Agent, each
Secured Creditor and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any
way relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Company, its
subsidiaries or the Real Property Collateral, or any orders, requirements
or demands of Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. This
indemnity shall continue in full force and effect regardless of the
termination of this Agreement.
(k) RIGHT OF ENTRY AND DISCLOSURE OF ENVIRONMENTAL REPORTS. The Company
hereby grants to the Collateral Agent, the Secured Creditors and their
respective agents, employees, consultants and contractors, authorization to
enter upon and inspect the Real Property Collateral at reasonable times and upon
reasonable advance notice, and conduct such environmental audits and tests,
including, without limitation, subsurface testing, soils and groundwater
testing, and other tests which may physically invade the Real Property
Collateral, which the Required Creditors, in their sole and absolute discretion,
determine are necessary or desirable. With respect to invasive testing, such as
soil borings, the Collateral Agent and/or the Secured Creditors shall consult
with the Company in advance of such tests, and any such tests shall be conducted
in a manner that minimizes interference with the Company's (or any tenant's)
operations at the Real Property Collateral. Notwithstanding anything to the
contrary contained in this SECTION 5(k), each of the Collateral Agent and the
Secured Creditors agree, that it shall not conduct any such audits, inspections
or tests unless a Major Default exists or such Person has reason to believe that
such audit, inspection or test is likely to disclose the presence or release of
Materials of Environmental Concern in violation of Environmental Laws, or unless
an environmental audit deems further testing necessary. All reasonable
out-of-pocket costs and expenses incurred by the Collateral Agent and/or the
Secured Creditors in connection with any inspection, audit or testing conducted
in accordance with this SECTION 5(k) shall be paid by the Company. The results
of all investigations and reports prepared by the Collateral Agent and the
Secured Creditors shall be and at all times remain the property of such
Person(s) and under no circumstances shall the Collateral Agent and the Secured
Creditors have any obligation whatsoever to disclose or otherwise make available
to the Company or any other party such results or any other information obtained
by it in connection with such investigations and reports; PROVIDED, HOWEVER,
that if there exists no Major Default, if requested by
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the Company, the Collateral Agent and/or the Secured Creditors shall provide to
the Company a copy of the written report with respect to any inspection, audit
or testing for which the Company has paid hereunder. The Collateral Agent hereby
reserves the right, and the Company hereby expressly authorizes the Collateral
Agent to make available to any party in connection with a sale of any Real
Property Collateral by the Collateral Agent at a foreclosure sale or subsequent
to foreclosure, any and all such environmental reports whether prepared by the
Collateral Agent, the Secured Creditors or by the Company which the Collateral
Agent may have with respect to the Real Property Collateral. The Company further
agrees that the Collateral Agent and the Secured Creditors may disclose such
environmental reports to any governmental agency or authority if they are
required to disclose any matter contained therein to such agency or authority;
provided that such Person(s) shall give the Company at least 48 hours prior
written notice before so doing. The Company acknowledges that neither the
Collateral Agent nor the Secured Creditors can control or otherwise assure the
truthfulness or accuracy of such environmental reports, and that the release of
such environmental reports, or any information contained therein, to prospective
bidders at any foreclosure sale of the Real Property Collateral may have a
material and adverse effect upon the amount which a party may bid at such sale.
The Company agrees that neither the Collateral Agent nor the Secured Creditors
shall have any liability whatsoever as a result of delivering any or all of such
reports or any information contained therein to any third party, and the Company
hereby releases and forever discharges the Collateral Agent and the Secured
Creditors from any and all claims, damages, or causes of action arising out of
connected with or incidental to such reports or the delivery thereof in
compliance with the terms of this SECTION 5(k).
6. NEGATIVE COVENANTS OF THE COMPANY.
(a) LIENS. The Company shall not permit the existence of any Lien on any of
the Collateral, other than Permitted Encumbrances.
(b) TRANSFER. The Company shall not transfer any of the Collateral (other
than the replacement or other disposition of obsolete or non-useful personal
property and fixtures in the ordinary course of business) other than in
compliance with the Debt Documents.
(c) ZONING AND USES. Without the consent of the Required Creditors, the
Company shall not initiate or support any limiting change in the permitted uses
of any Real Property Collateral (or to the extent applicable, zoning
reclassification of any Real Property Collateral or any portion thereof, seek
any variance under existing land use restrictions, laws, rules or regulations
(or, to the extent applicable, zoning ordinances) applicable to any Real
Property Collateral, or use any Property in a manner that would have a Material
Adverse Effect;
(d) WASTE. The Company shall not commit or permit any material waste on any
Real Property Collateral, nor take any actions that might invalidate any
insurance carried on any Real Property Collateral.
(e) RIGHT TO CONTEST. Notwithstanding anything to the contrary in this
Agreement, after prior written notice to the Collateral Agent, the Company, at
its expense may contest, or cause to be contested, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any taxes or other impositions,
legal requirement or insurance requirement, or any Lien referred to in SECTION
6(a), provided, that (i) in the case of an unpaid imposition, lien, encumbrance
or charge, such proceedings shall suspend the collection thereof from the
Company, the Collateral Agent, the Collateral and any rent or other
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income therefrom and shall not interfere with the payment of any such rent or
income, (ii) neither the Collateral nor any rent or other income therefrom nor
any part thereof or interest therein would be in any material danger of being
sold, forfeited, lost or interfered with, (iii) in the case of a legal
requirement, neither the Company nor the Collateral Agent would be in any
material danger of any civil or criminal liability for failure to comply
therewith, (iv) the Company shall have furnished such security, if any, as may
be required in the proceedings or as may reasonably be requested by the Required
Creditors, (v) the nonpayment of the whole or any part of any such tax,
assessment or charge will not result in the delivery of a tax deed to the Real
Property Collateral or any part thereof because of such non-payment, (vi) the
payment of any sums required to be paid in respect of the Secured Obligations
(other than any unpaid imposition, lien, encumbrance or charge at the time being
contested in accordance with this SECTION 6(e)) shall not be interfered with or
otherwise affected, and (vii) in the case of any insurance requirement, the
failure of the Company to comply therewith shall not affect the validity of any
insurance required to be maintained by the Company under SECTION 5(f).
7. LOSS PROCEEDS ACCOUNT.
(a) Promptly after the occurrence of a Casualty or Condemnation, the
Company shall, to the extent required under SECTION 5(g) of this Agreement,
establish and thereafter maintain with the Collateral Agent a segregated trust
account for the purpose of depositing any proceeds from such Casualty or
Condemnation (the "LOSS PROCEEDS ACCOUNT").
(b) Provided no Major Default is continuing, funds in the Loss Proceeds
Account shall be applied in accordance with SECTION 5(g) of this Agreement.
(c) During the continuation of a Major Default, the Collateral Agent shall,
at the direction of the Directing Creditors, withdraw funds in the Loss Proceeds
Account and pay the same to the Secured Creditors for application toward the
reduction or discharge of the Secured Obligations, as set forth in SECTION 14
below.
8. FEES AND EXPENSES. The Company agrees to pay to the Collateral Agent,
from time to time upon demand, all reasonable fees (including the Collateral
Agent's Fee), costs and expenses of the Collateral Agent and each of the other
Secured Creditors (including the reasonable fees and charges of counsel and
business advisors to each Secured Creditor (including Pillsbury Winthrop LLP,
Xxxxx, Xxxxxxxx & White LLC, Akin Gump, Strauss, Xxxxx & Xxxx L.L.P. and
Nightingale & Associates, LLC) (i) arising in connection with the administration
or enforcement of any of the provisions of this Agreement or the Security
Instruments (including the expenses of the Collateral Agent in furnishing any
reports and information requested by the Secured Creditors), (ii) incurred or
required to be advanced in connection with the administration of the Collateral,
the sale or other disposition of the Collateral pursuant to any Security
Instruments and the preservation, protection or defense of the Collateral
Agent's rights under this Agreement and the Security Instruments, or (iii)
incurred by the Collateral Agent in connection with the resignation of the
Collateral Agent pursuant to SECTION 17.
9. ADDITIONAL COVENANTS OF THE COMPANY.
(a) The Company hereby agrees: (i) to procure, execute and deliver from
time to time any endorsements, assignments, financing statements and other
writings reasonably deemed necessary or appropriate by the Required Creditors to
perfect, maintain and protect its security
-25-
interest hereunder and the priority thereof and to deliver promptly to the
Collateral Agent all originals of any documents evidencing proceeds of the
Collateral consisting of chattel paper or instruments; (ii) not to surrender
possession of, sell, encumber (other than to the Collateral Agent), or otherwise
dispose of or transfer, any Collateral or right or interest therein other than
as permitted under this Agreement (including without limitation pursuant to
SECTION 9(b) below) or the other Debt Documents; (iii) after the occurrence and
during the continuance of a Major Default (and at all other times expressly
provided for in this Agreement) to account fully for and promptly to deliver to
the Collateral Agent, in the form received, all proceeds of Collateral received,
endorsed to the Collateral Agent as appropriate and accompanied by such
assignments and powers, duly executed, as the Required Creditors shall
reasonably request, and until so delivered all Collateral and proceeds thereof
shall be held in trust for the Collateral Agent for the benefit of the Secured
Creditors; (iv) at any reasonable time, upon demand by the Collateral Agent, to
exhibit to and allow inspection by the Required Creditors (or Persons designated
by the Collateral Agent or the Required Creditors, as applicable) of the
Collateral and the records concerning the Collateral; (v) to keep the records
concerning the Collateral at the location(s) set forth in SECTION 23 below and
not to remove such records from such location(s) without thirty (30) days prior
written notice to the Collateral Agent; (vi) not knowingly to use any Collateral
or permit any Collateral to be used unlawfully or in violation of any provision
of this Agreement or the other Debt Documents or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(vii) to notify the Collateral Agent and the Secured Creditors before any such
change shall occur of any change in the Company's name, identity or structure
through merger, consolidation or otherwise; (viii) to appear in and defend, at
the Company's cost and expense, any action or proceeding which may affect its
title to or the Collateral Agent's interest for the benefit of the Secured
Creditors in the Collateral unless the failure to do so would not have a
Material Adverse Effect; and (ix) to keep accurate and complete records of the
Collateral and to provide the Collateral Agent with such records and such
reports and information relating to the Collateral as the Collateral Agent may
reasonably request from time to time.
10. COLLECTION OF COLLATERAL PAYMENTS.
(a) The Company shall, at its sole cost and expense, endeavor to obtain
payment directly, when due and payable, of all sums due or to become due with
respect to any Collateral ("COLLATERAL PAYMENTS" or a "COLLATERAL PAYMENT"),
consistent with all requirements of law and contractual obligations binding upon
the Company, but subject to the Company's reasonable business judgment and right
to contest as set forth in SECTION 6(e) above. Upon the request of the Directing
Creditors following the occurrence of a Major Default (and subject to the
requirements of applicable law), the Company will notify and direct any party
who is or might become obligated to make any Collateral Payment to make payment
thereof to the Collateral Agent (or to the Company in care of the Collateral
Agent) at such address as the Collateral Agent may designate which payment will
promptly be deposited into the Collateral Proceeds Account. The Company will
reimburse the Collateral Agent promptly upon demand for all reasonable
out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by the Collateral Agent in seeking to collect any
Collateral Payment.
(b) Following the occurrence of a Major Default, the Company will transmit
and deliver to the Collateral Agent, forthwith upon receipt and in the form
received, all cash, checks, drafts and other instruments for the payment of
money (properly endorsed where required so that such items may be collected by
the Collateral Agent) which may be received by the Company at any time as
payment on account of any Collateral Payment and if such request shall be made,
until delivery to
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the Collateral Agent, such items will be held in trust for the Collateral Agent
for the benefit of the Secured Creditors and will not be commingled by the
Company with any of its other funds or property. Thereafter, the Collateral
Agent is hereby authorized and empowered to endorse the name of the Company on
any check, draft or other instrument for the payment of money received by the
Collateral Agent on account of any Collateral Payment if the Collateral Agent
believes such endorsement is necessary or desirable for purposes of collection.
The Collateral Agent shall, promptly upon receipt of any payment of money,
deposit such sum into the Collateral Proceeds Account.
(c) The Company hereby agrees to indemnify, defend and save harmless the
Collateral Agent, the Secured Creditors and their respective agents, officers,
employees and representatives from and against all liabilities and reasonable
expenses on account of any adverse claim asserted against the Collateral Agent
or any Secured Creditor relating to any moneys received by the Collateral Agent
or any Secured Creditor on account of any Collateral Payment (other than as a
direct result of the gross negligence or willful misconduct of the Collateral
Agent or any Secured Creditor) and such obligation of the Company shall continue
in effect after and notwithstanding the discharge of the Secured Obligations
and/or the release of the security interest granted in SECTION 3 above.
11. ENFORCEMENT AND PRIORITY.
(a) ENFORCEMENT WITH RESPECT TO COLLATERAL. Each and every Secured Creditor
shall have the right to deliver a Default Notice to the Collateral Agent to the
extent a Major Default shall have occurred. Upon and after the delivery to the
Collateral Agent of (i) a Default Notice by any Secured Creditor and (ii) an
Enforcement Directive from the Directing Creditors, the Collateral Agent shall
undertake Enforcement pursuant to this SECTION 11(a), and proceed to protect and
enforce rights or remedies granted under the Security Instruments as directed in
the Enforcement Directive, either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, agreement or other
provision contained herein or in the Security Instruments, or to enforce any
other legal or equitable right or remedy provided herein or therein. Each
Secured Creditor that is a party hereto hereby agrees that it shall not take any
action of Enforcement in respect of or affecting any Collateral except through
the delivery of an Enforcement Directive from the Directing Creditors to the
Collateral Agent.
(b) COOPERATION OF THE SECURED CREDITORS. Each Secured Creditor that is a
party hereto hereby agrees and covenants with each other Secured Creditor that:
(i) promptly (but not more than 2 Business Days) after having actual
knowledge of the occurrence of a Major Default, such Secured Creditor will
deliver to the Collateral Agent and the Collateral Agent will deliver
promptly (but not more than 2 Business Days) to the other Secured Creditors
upon receipt written notice of such Major Default, clearly identified as a
Default Notice (a "DEFAULT NOTICE") identifying the nature of such Major
Default; PROVIDED, HOWEVER, that no Default Notice shall be required to be
given if (A) such Major Default is waived or cured prior to the time a
Default Notice is delivered, or (B) notice of such Major Default has
previously been delivered to the Collateral Agent; PROVIDED FURTHER, that
the failure to give such notice shall not impair any rights hereunder or
under any of the Security Instruments or the other Debt Documents;
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(ii) it will from time to time at the request of the Collateral Agent
provide such information that is available to it to the Collateral Agent as
may be necessary to enable the Collateral Agent to make any calculation
hereunder or otherwise reasonably required and requested for any other
purpose hereof;
(iii) it will from time to time consult with the Collateral Agent and
the other Secured Creditors in good faith regarding the Enforcement of its
rights with a view to recovering amounts due under any of the Debt
Documents; and
(iv) in connection with any Enforcement, the Secured Creditors shall
act in good faith and in a manner so as to maximize realization on and
valuation of the Collateral, including, by way of example, with respect to
California's anti-deficiency laws and California's security-first and
one-action rules.
(c) PRIORITY OF INTERESTS; PARI PASSU NATURE OF SECURED OBLIGATIONS.
Notwithstanding any agreements or arrangements in existence prior to the date
hereof or hereafter arising or the existence or priority of any Lien in any of
the Collateral held by a Secured Creditor or any other Person on behalf of a
Secured Creditor on the date hereof or hereafter arising without giving effect
to this Agreement, the rights and interests of such Secured Creditor in the
Collateral, and any Lien therein, shall be subject to this Agreement and treated
as among the Secured Creditors as having such priority as set forth herein and
shall be shared at all times among the Secured Creditors in accordance herewith,
and the proceeds of any sale, transfer or other disposition of the Collateral
for any reasons whatsoever shall be distributed in accordance with this
Agreement; PROVIDED that the foregoing shall not apply to the AGC Collateral
with respect to which the AGC Collateral Agency Agreement shall govern. Each
Secured Creditor acknowledges and agrees that the portions of each of the
Secured Obligations share the benefit and Lien priority of and to the Security
Instruments, the Collateral and the Collateral Proceeds and the Distributions on
the basis specified in SECTION 14(b).
(d) REMEDIES OF THE COLLATERAL AGENT. Upon the occurrence of a Major
Default, the Collateral Agent shall have the rights and remedies set forth
herein and in the Mortgages and other Security Instruments, including without
limitation, the right, upon receipt of a Default Notice from any Secured
Creditor and an Enforcement Directive from the Directing Creditors, to foreclose
upon and sell any or all of the Collateral. Whether or not the Collateral Agent
exercises any such right, upon the occurrence of any Major Default and following
the acceleration of any part of the Secured Obligations, the Collateral Agent on
behalf of the Secured Creditors shall have as to any Collateral, all other
rights and remedies provided for herein and in the Security Instruments, and all
rights and remedies of a secured party under the California Uniform Commercial
Code and, in addition thereto and not in lieu thereof, all other rights or
remedies at law or in equity existing or conferred upon the Collateral Agent on
behalf of the Secured Creditors by other jurisdictions or other applicable law
or given to the Collateral Agent on behalf of the Secured Creditors pursuant to
the Security Instruments, including any security agreement or other instrument
or agreement heretofore, now, or hereafter given as security for the Secured
Obligations. For the avoidance of doubt, all the rights and remedies set forth
herein are cumulative and may be exercised successively or concurrently.
(e) WAIVERS OF RIGHTS. Except as otherwise expressly set forth herein,
until the occurrence of the Security Termination Date, each of the Secured
Creditors hereby waives any and all rights each may individually (i.e., other
than through the Collateral Agent) now or hereafter have to exercise any
Enforcement action. Each of the Secured Creditors hereby agrees not to take any
action whatsoever to enforce any term or provision of the Security Instruments
or to enforce any
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right with respect to the Collateral in conflict with the provisions of this
Agreement or the terms and provisions of the Security Instruments. Nothing set
forth above or otherwise contained in this Agreement shall be interpreted as a
waiver of any rights of setoff (by contract, law or otherwise) of any Secured
Creditor (except that any right of setoff with respect to amounts owing in
respect of any Secured Obligation shall be subject to the sharing provisions set
forth herein).
(f) ADDITIONAL COLLATERAL. Each Secured Creditor hereby (i) represents and
warrants that as of the date hereof such Secured Creditor has not taken,
accepted or obtained, as security for such Secured Creditor's Secured
Obligations, any Lien upon any assets of any of the Company or any Subsidiary or
Affiliate thereof, other than as set forth herein and (ii) covenants and agrees
that after the date hereof until the termination of this Agreement such Secured
Creditor will not take, accept or obtain, as security for such Secured
Creditor's Secured Obligations, any Lien upon any assets of any of the Company
or any Subsidiary or Affiliate thereof, except as set forth in the Security
Instruments. Notwithstanding the foregoing, for the avoidance of doubt, the Bank
and the Purchasers may take, accept or obtain as security for their Secured
Obligations, the AGC Collateral as set forth in the AGC Collateral Agency
Agreement and the Existing Pledge Agreement, and such AGC Collateral shall not
constitute Collateral hereunder.
(g) PAYMENTS TO THE SECURED CREDITORS. All payments to be made by the
Collateral Agent to the Purchasers pursuant to the terms and provisions of this
Agreement shall be made in the manner set forth in Schedule 3 hereto, or at such
other place within the United States and in such other manner as each Noteholder
shall instruct the Collateral Agent in writing. All payments to be made by the
Collateral Agent to the Bank pursuant to the terms and provisions of this
Agreement shall be made in the manner set forth in Schedule 4 hereto or to such
other bank account as the Bank shall instruct the Collateral Agent in writing.
All payments to be made by the Collateral Agent to NGOP pursuant to the terms
and provisions of this Agreement shall be made in the manner set forth in
Schedule 5 hereto or to such other place within the United States and in such
other manner as XXXX shall instruct the Collateral Agent in writing.
(h) ACTIONS BY THE COLLATERAL AGENT UNDER THE SECURITY INSTRUMENTS. The
Collateral Agent shall only take such actions under the Security Instruments as
are authorized by the Required Creditors or any Directing Creditor in accordance
with this Agreement and subject to any written notice requirement under the
Security Instruments (to which the Collateral Agent is a party or of which the
Collateral Agent has been given a copy) or herein, and the Required Creditors
hereby authorize and direct the Collateral Agent, and the Collateral Agent
agrees, to perform and observe each and every covenant or obligation contained
in the Security Instruments and required to be performed or observed by the
Collateral Agent under the Security Instruments.
13. INDEPENDENT ACTIONS BY SECURED CREDITORS.
(a) Any Secured Creditor may, without instruction from the Collateral
Agent, but in no event shall be required to, take action permitted by applicable
law or in accordance with the terms of the Debt Documents to preserve (but not
enforce) its rights and Liens in any item of Collateral securing the payment and
performance of the Secured Obligations, including, but not limited to, curing
any default or alleged default under any contract entered into by the Company,
paying any tax, fee or expense on behalf of the Company, exercising any offset
or recoupment rights and paying insurance premiums on behalf of the Company so
long as such action shall not impair the rights of the Collateral Agent or of
any other Secured Creditor or otherwise be contrary to the terms of this
Agreement or any Debt Document.
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(b) Nothing contained in this Agreement shall prohibit the Bank, NGOP or
the Required Purchasers, upon and during the continuance of a Major Default,
from accelerating the maturity of, or demanding payment from the Company on, any
Secured Obligation of the Company to such Secured Creditor or from instituting
legal action against the Company to obtain a judgment or other legal process in
respect of such Secured Obligation, but any funds received from the Company in
connection with any recovery therefrom shall constitute Distributions and shall
be subject to the terms of this Agreement.
(c) The Company, the Bank and the Purchasers acknowledge that NGOP is both
a Secured Creditor under this Agreement and the landlord under the NGOP Leases.
Notwithstanding anything to the contrary in this Agreement, neither the
execution and delivery by the parties of this Agreement, nor any terms or
conditions of this Agreement, shall constitute a waiver of, or impair, modify or
otherwise affect, (i) the rights, claims and remedies of NGOP as a landlord
under the NGOP Leases, or (ii) any right of the Bank or the Purchasers to
challenge the validity of the NGOP Leases or any rights, claims or remedies of
NGOP hereunder.
14. DISTRIBUTIONS.
(a) SHARING / DISTRIBUTIONS.
(i) Each Secured Creditor agrees to share with the other Secured
Creditors all Distributions at all times and to apply all Distributions
received by such Secured Creditor (in each case whether or not a Major
Default shall have occurred and be continuing and whether or not any
Bankruptcy Proceeding shall have commenced or be continuing) according to
the priorities and in the manner provided in this SECTION 14. In
furtherance of the foregoing, any and all payments and other Distributions
required to be made by the Company in respect of the Secured Obligations
shall at all times be paid by the Company to the Collateral Agent for
distribution in accordance with paragraph (b) of this SECTION 14. Each
Secured Creditor agrees that if it shall receive any Distributions
(including payments received by setoff of deposit balances or automatic
debits otherwise or payments or recoveries from any security interest
granted to any Secured Creditor) other than from a Distribution by the
Collateral Agent pursuant to paragraph (b) of this SECTION 14, such Secured
Creditor shall promptly (in no event later than five (5) Business Days
after receipt thereof) pay the same over to the Collateral Agent in the
same form as received (with such endorsements as may be necessary), and
that until such Secured Creditor shall have made such payment it will hold
such Distributions in trust for all the Secured Creditors.
(ii) Promptly following receipt of any Distributions, the Collateral
Agent shall (a) provide notice to the Secured Creditors of receipt of such
Distributions and deposit such Distributions into the Collateral Proceeds
Account and (b) upon the written direction of the Required Creditors,
distribute to each Secured Creditor such Secured Creditor's share of the
Distributions so received in accordance with paragraph (b) of this SECTION
14. Until such Distributions are so applied, the Collateral Agent shall
hold such amounts in its custody in accordance with its regular procedures
for handling deposited funds.
(iii) Promptly after making any Distributions on any date under clause
THIRD, or any clause beneath clause THIRD, of any of the "waterfall"
provisions set forth in SECTION 14(b) below, the Collateral Agent shall
give notice to each of the Secured Creditors and the Company of all such
Distributions.
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(b) ORDER OF APPLICATION.
(i) From the date hereof through and including the Security
Termination Date, all Distributions received by the Collateral Agent shall
be applied promptly, but no later than the next Business Day after receipt
of such written distribution instructions, by the Collateral Agent in the
following order as of any date of Distribution:
FIRST: to:
A. payment of the Collateral Agent's Fee and any reasonable
expenses incurred by the Collateral Agent in connection with
enforcing the rights and remedies of the Secured Creditors
hereunder and under the Security Instruments and with any or all
of the retaking, holding, preserving, processing, advertising,
maintaining, preparing for or consummating any sale, lease or
other disposition of any Collateral, including trustee's fees and
commissions, court costs and reasonable attorney's fees and legal
expenses pertaining thereto; and then
B. the ratable payment, or ratable reimbursement of each
Secured Creditor for, the reasonable fees and expenses of
in-house or outside counsel and other advisors to the Bank,
counsel and other advisors to the Purchasers, and counsel and
other advisors to NGOP;
SECOND: to the ratable payment in respect of all accrued and unpaid
interest then due and payable by the Company in respect of the Secured
Obligations;
THIRD: to the ratable payment in respect of all outstanding principal
(whether or not then due and payable) in respect of the Secured Obligations
(excluding any Make-Whole Amounts);
FOURTH: to the ratable payment in respect of any costs, fees or
expenses then due and payable by the Company to each Secured Creditor in
respect of the Secured Obligations not provided for above or below;
FIFTH: to the payment of all Make-Whole Amounts to the Purchasers
(whether or not then due and payable); and
SIXTH: to the Company or as otherwise required by applicable law.
As used in this SECTION 14(b)(i), "ratable" shall mean with respect to
each Secured Creditor, a ratio equal to (x) the total amount owing
(whether or not then due and payable and excluding any Make-Whole
Amounts) to such Secured Creditor under such clause (y) to the total
amount owing (whether or not then due and payable and excluding any
Make-Whole Amounts) to all of the Secured Creditors under such clause.
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(ii) Notwithstanding anything in the Agreement to the contrary:
A. the Collateral Agent shall not be obligated to make a
payment pursuant to this SECTION 14(b) until it shall have
received a threshold amount of at least $100,000 of Distributions
that are to be distributed at such time pursuant to this SECTION
14, unless such lesser amount would be the final amount to be
paid to satisfy the Secured Obligations or the Collateral Agent's
failure to make such payment would result in a Major Default; and
B. any amounts withheld, pursuant to SECTION 14(c), by the
Collateral Agent from a Distribution to be otherwise made to a
Non-Returning Secured Creditor shall be deemed to have been paid
to such Non-Returning Secured Creditor for purposes of
determining each Secured Creditor's ratable share of any
Distribution hereunder.
(c) RETURNED AMOUNTS. If at any time the Collateral Agent or any Secured
Creditor shall be required to restore or return, or if such party (with the
consent of the Required Creditors) restores or returns in good faith settlement
of pending or threatened avoidance claims, to the Company or any other Person
other than to another Secured Creditor any Distributions made on or after the
Effective Date or any portion thereof, whether by reason of the insolvency,
reorganization or other similar event in respect of the Company or such Person
or otherwise (a "RETURNED AMOUNT"), then, (i) the Collateral Agent shall
promptly give notice of the Returned Amount to each Secured Creditor, and (ii)
each of the Secured Creditors shall promptly transfer to the Collateral Agent
(for reimbursement to the Collateral Agent or such Secured Creditor, as the case
may be) such amounts as are necessary such that each Secured Creditor shall have
received and retained the amount it would have received under SECTION 14(b) had
the Returned Amount not previously been distributed (its "RETURNED AMOUNT
SHARE"). If any Secured Creditor (a "NON-RETURNING SECURED CREDITOR") fails to
tender payment of its Returned Amount Share, then the Collateral Agent is hereby
expressly granted the right thereafter to, and shall, withhold from any
Distributions (including, without limitation, Collateral Proceeds) otherwise
payable to such Non-Returning Secured Creditor an amount equal to its Returned
Amount Share remaining unpaid at such time of receipt of such Distributions
(including, without limitation, Collateral Proceeds) and apply such amount
withheld in satisfaction of such Returned Amount Share. The Collateral Agent
shall also have the right to collect from such Non-Returning Secured Creditor,
and/or withhold from any Distributions to otherwise be made to such
Non-Returning Secured Creditor, the Collateral Agent's reasonable costs and
expenses incurred in collecting such Non-Returning Secured Creditor's Returned
Amount Share, plus interest on any unpaid portion of such Returned Amount Share
at the federal judgment rate from the date the Collateral Agent first requested
payment of such Returned Amount Share. The agreements in this SECTION 14(c)
shall survive the payment of the Bank Loans, Secured Lease Obligations and Notes
and the termination of the Security Instruments, the Debt Documents and this
Agreement.
(d) NO WAIVER OF DEFAULT. The Company acknowledges and agrees that if any
payment default exists in respect of the Secured Obligations after the making of
any Distribution hereunder, nothing set forth herein shall constitute a waiver
of such payment default.
(e) COLLATERAL PROCEEDS ACCOUNT. Promptly after the date hereof, the
Company shall establish and thereafter maintain with the Collateral Agent a
segregated trust account for the purpose of depositing any proceeds from any
disposition of Collateral pursuant to the terms of this
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Agreement or the Security Instruments (the "COLLATERAL PROCEEDS ACCOUNT").
During the continuation of a Major Default, the Collateral Agent shall, at the
direction of the Directing Creditors, withdraw funds in the Collateral Proceeds
Account and pay the same to the Secured Creditors for application toward the
reduction or discharge of the Secured Obligations, as set forth in this SECTION
14.
15. INTEREST RATE. All amounts due to the Bank and the Purchasers
hereunder and under the Security Instruments and not paid when due shall bear
interest from and after the due date thereof at the Current Rate.
16. WAIVER BY THE COMPANY. Neither the Collateral Agent nor any Secured
Creditor shall incur any liability as a result of the sale of the Collateral, or
any part thereof, at any public or private sales pursuant to the Mortgages or
other Security Instruments. The Company hereby waives (to the extent permitted
by law) any claims it may have against the Collateral Agent or any Secured
Creditor arising by reason of the fact that the price at which the Collateral
may have been sold at any such private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations then outstanding.
17. RESIGNATION AND REMOVAL OF THE COLLATERAL AGENT.
(a) If the Collateral Agent shall resign as Collateral Agent under this
Agreement (or be removed pursuant to SECTION 17(b)), the Collateral Agent shall
deliver notice of resignation promptly to all the Secured Creditors. Such
resignation (or removal) shall be effective upon the appointment of a successor
Collateral Agent and the payment to the outgoing Collateral Agent of all amounts
owed to it hereunder. The Required Creditors may appoint a successor Collateral
Agent for the Secured Creditors, which successor Collateral Agent shall be a
commercial bank, insurance company or trust company organized under the laws of
the United States of America or any state thereof having a combined surplus and
capital of not less than $100,000,000, whereupon such successor Collateral Agent
shall succeed to the rights, powers and duties of the former Collateral Agent
and the obligations of the former Collateral Agent shall be terminated and
canceled, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Agreement; PROVIDED, HOWEVER,
that if the Secured Creditors cannot agree as to a successor Collateral Agent
within fifteen (15) days after notice of such resignation (or removal), then the
resigning (or removed) Collateral Agent may appoint an interim Collateral Agent
(which shall not be the Bank, a Noteholder, NGOP or any Affiliate of any
thereof) meeting the qualifications set forth above to act as Collateral Agent
pending the appointment of a successor Collateral Agent through the procedure
described herein.
(b) The Collateral Agent may be removed without cause at any time by the
vote of any of the Bank, the Required Purchasers or NGOP, and written notice
thereof delivered to the Collateral Agent. If the Collateral Agent is so
removed, the Required Creditors may appoint a successor Collateral Agent in
accordance with SECTION 17(a) hereof.
(c) After the effective date of the resignation or removal of the
Collateral Agent hereunder, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Collateral Agent under the Security Instruments and this Agreement; PROVIDED,
HOWEVER, that any liability of such Collateral Agent arising from the
performance of its obligations hereunder prior to such resignation or removal
shall survive such resignation or removal.
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(d) Each of the parties hereto, including any resigning or removed
Collateral Agent, agrees to execute whatever documents as are necessary or
reasonably requested, including, without limitation, amendments to or
assignments of any of the Security Instruments, to effect the resignation or
removal of the Collateral Agent under this Agreement or any other document
executed pursuant to this Agreement and to continue the perfection of the Liens
on the Collateral.
18. CONFIDENTIALITY. The Collateral Agent agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Company or by any other party
on the Company's behalf in connection with this Agreement or the other Debt
Documents and agrees and undertakes that neither it nor any of its Affiliates
shall disclose to any Person (other than any Secured Creditor) any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by this Agreement or the other Debt Documents. The Collateral
Agent, its Affiliates and their respective employees, officers and directors may
disclose such information (1) at the request of any regulatory authority or in
connection with an examination of such Person by any such authority, (2)
pursuant to subpoena or other court process, (3) when required to do so in
accordance with the provisions of any applicable law, (4) at the express
direction of any other Governmental Authority of any State of the United States
of America or of any other jurisdiction in which such Person conducts its
business, (5) to such Person's independent auditors, attorneys and other
professional advisors who agree to be bound by the terms of this SECTION 18, (6)
if such information has become public other than through disclosure by such
Person, (7) in connection with any litigation involving such Person, so long as
due care is taken by the Collateral Agent, its Affiliates and their respective
officers and directors to comply with the provisions of this SECTION 18,
including, but not limited to, filing any documents containing such information
under seal, and (8) to any Affiliate of such Person who agrees to be bound by
the terms of this SECTION 18. Notwithstanding anything herein to the contrary,
nothing herein shall impose any additional confidentiality restriction on any
Secured Creditor (beyond those confidentiality restrictions to which such
Secured Creditor is already subject pursuant to the other Debt Documents) with
respect to any information provided by the Collateral Agent to such Secured
Creditor.
19. BINDING UPON SUCCESSORS. All rights of the Collateral Agent and the
other Secured Creditors under this Agreement shall inure to the benefit of the
Collateral Agent and the other Secured Creditors and their respective successors
and assigns, and all obligations of the Company shall bind its successors and
assigns.
20. ENTIRE AGREEMENT. This Agreement, the Restructuring Agreement, the Rent
Deferral Agreement, the Mortgages and the other Security Instruments contain the
entire collateral agency and intercreditor agreement with respect to the
Collateral among the Secured Creditors and the Company, and, except as otherwise
provided, this Agreement may not be altered, amended or modified except in a
writing executed in accordance with SECTION 21. All waivers by the Company
provided for in this Agreement have been specifically negotiated by the parties
with full cognizance and understanding of their rights.
21. AMENDMENTS, WAIVERS AND CONSENTS.
(a) All amendments, waivers or consents of any provision of this Agreement
shall be effective only if the same shall be in writing and signed by the
Required Creditors, provided that any amendment, modification, supplement or
waiver of Sections 11(e), 14 or 21 or the definitions of Directing Creditors,
Distribution, Loan Obligations, Purchaser Obligations, Secured Lease
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Obligations, Required Creditors, Required Purchasers, Secured Obligations or
Secured Creditor shall require the unanimous written consent of all the Secured
Creditors. Any amendments, waivers or consents of any provision of this
Agreement affecting the rights or obligations of the Collateral Agent shall also
require the prior written consent of the Collateral Agent.
(b) All amendments or waivers of any provision of or consent pursuant to or
under any Security Instrument shall be effective only if the same shall be in
writing and signed by the Collateral Agent and the Required Creditors.
Notwithstanding the foregoing, the release of all or substantially all of the
Collateral prior to the Security Termination Date shall require the written
consent of each of the Secured Creditors.
(c) Each Secured Creditor hereby agrees and covenants with each other
Secured Creditor that it will not amend or modify any term or provision of any
other Debt Document (i.e., other than this Agreement and any other Security
Instrument covered above in subsections (a) and (b), respectively) without the
prior written consent of the Required Creditors; provided, however, that nothing
in this SECTION 21 shall, or shall be deemed to, affect the voting requirements
set forth in each such agreement for such amendments and modifications.
22. CHOICE OF LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of California without reference to the
principles of conflicts of laws thereof and, except as otherwise defined herein,
terms used herein shall have the meanings given them in the California Uniform
Commercial Code.
23. PLACE OF BUSINESS; RECORDS. The Company represents and warrants that
its chief place of business is at the address set forth beneath its signature
below, and that its books and records concerning the Collateral are kept at its
chief place of business and at other offices of the Company in Santa Monica,
California.
24. NOTICE. Any written notice, consent or other communication provided for
in this Agreement shall be delivered or sent and all notices and other
communications provided to any party hereto under this Agreement, in writing or
by facsimile and addressed or delivered to such party, with copies to each other
party hereto (but failure to provide any such copies shall not invalidate such
notice), in each case at its address set forth below its signature hereto or at
such other address as may be designated by such party in a notice to the other
parties. Any notice shall be deemed given when received.
25. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one Agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. Delivery by telecopier of an executed counterpart of a signature
page to this Agreement shall be effective as delivery of an originally executed
counterpart of this Agreement.
26. SALE OF INTEREST. No Secured Creditor will sell, transfer or otherwise
dispose of any interest in the Secured Obligations to any party unless such
purchaser or transferee shall agree, in writing, to be bound by the terms of
this Agreement.
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27. REPURCHASE IN THE EVENT OF AVOIDANCE ACTIONS; SEVERABILITY.
(a) If for any reason, the allocation of Distributions among the Secured
Creditors in accordance with SECTION 14(b) of this Agreement is finally
determined by a court of competent jurisdiction to be unenforceable in whole or
in part, then the Secured Creditors will purchase and exchange such
participations in the Debt Documents as may be required so that the Secured
Creditors, after giving effect to all such purchases and exchanges, shall have
received and retained cash payments in respect of the amounts distributable
under SECTION 14(B) equal to the amount the Secured Creditors would have
received if the amounts had been applied in accordance with such SECTION 14(b);
PROVIDED, HOWEVER, if in connection with a Bankruptcy Proceeding of the Company,
any portion of the Secured Obligations or the Company's obligations under the
Security Instruments referred to in clauses SECOND, THIRD, FOURTH or FIFTH of
SECTION 14(b)(i) is determined to be unenforceable or is disallowed (such
portion to be hereinafter referred to as a "DISALLOWED OBLIGATION"), then this
SECTION 27(a) shall not be applied or construed in such manner to enable the
holder of any such Disallowed Obligation to receive any Distribution on account
of such Disallowed Obligation. It is the intent of this SECTION 27(a) to
establish an alternative mechanism to preserve as among the parties hereto the
distribution priorities and the sharing calculation formulas set forth in
SECTION 14(b) the same as if this Agreement had been given effect among the
parties hereto and the same as if the Secured Obligations were allowed or
enforced against the Company in accordance with their terms. It is not, however,
the intent of this SECTION 27(a) to enable any party hereto to receive or retain
any Distribution with respect to any Disallowed Obligation to the extent such
Disallowed Obligation has been disallowed or is otherwise determined to be
unenforceable as against the Company.
(b) Except to the extent contemplated by subsection (a) hereof, in case any
one or more of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
28. TERMINATION OF AGREEMENT. This Agreement shall terminate on the
Security Termination Date; PROVIDED, HOWEVER, that such termination shall not
relieve any party of its accrued obligations and liabilities, and all
representations and warranties herein, and any provision expressly stated herein
to survive termination of this Agreement, shall survive such termination.
29. CAPTIONS. The descriptive headings of the various Sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
30. FURTHER ASSURANCES. At any time and from time to time, upon the request
of the Collateral Agent, the Bank, NGOP or the Required Purchasers, the Company
shall execute, deliver and acknowledge or cause to be executed, delivered or
acknowledged, such further documents and instruments and do such other acts and
things as the Collateral Agent, the Bank, NGOP or the Required Purchasers may
reasonably request in order to fully effect the purposes of Restructuring
Agreement and any other agreements, instruments and documents delivered pursuant
to or in connection with the Restructuring Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Collateral Agency
and Intercreditor Agreement to be duly executed and delivered by their proper
and duly authorized officers as of the day and year first above written.
COLLATERAL AGENT: BNY MIDWEST TRUST COMPANY,
as Collateral Agent
By:/s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Print Name: Xxxxxxxx Xxxxxxx
Title: Assistant Treasurer
COMPANY: AMERICAN GOLF CORPORATION
By:/s/ Xxxxxx X. Xxxxx
-----------------------------------
Print Name: Xxxxxx X. Xxxxx
Title: CFO
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SECURED CREDITORS: BANK OF AMERICA, N.A.
By:/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Print Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
TEACHERS INSURANCE AND ANNUITY
PURCHASERS: ASSOCIATION OF AMERICA
By:/s/ Roi X. Xxxxxx
--------------------------------
Print Name: Roi X. Xxxxxx
Title: Director - Special Situations
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THE TRAVELERS INSURANCE COMPANY
By: /s/ Xxxxxx Xxxxxxxxxxxx
------------------------------------
Print Name: Xxxxxx Xxxxxxxxxxxx
Title: Investment Officer
JEFFERSON PILOT LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx, XX
-----------------------------------
Print Name: Xxxxxx X. Xxxxxx, XX
Title: Vice President
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NATIONAL LIFE INSURANCE COMPANY
By:/s/ R. Xxxxx Xxxxxxx
------------------------------------
Print Name: R. Xxxxx Xxxxxxx
Title: Vice President, NL Capital
LIFE INSURANCE COMPANY OF THE SOUTHWEST
By:/s/ R. Xxxxx Xxxxxxx
------------------------------------
Print Name: R. Xxxxx Xxxxxxx
Title: Vice President, NL Capital
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AUSA LIFE INSURANCE COMPANY, INC.
By:/s/ Xxxx Xxxxxx
---------------------------------
Print Name: Xxxx Xxxxxx
Title: Vice President
PFL LIFE INSURANCE COMPANY
By:/s/ Xxxx Xxxxxx
---------------------------------
Print Name: Xxxx Xxxxxx
Title: Vice President
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NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
By: National Golf Properties, Inc., its
general partner
By: /s/ Xxxx X. Xxxxxx
------------------------------
Print Name: Xxxx X. Xxxxxx
Title: CFO and Secretary