EXHIBIT 99.5
AMENDED AND RESTATED
CREDIT ENHANCEMENT AGREEMENT
This AMENDED AND RESTATED CREDIT ENHANCEMENT AGREEMENT (this "Agreement")
is entered into as of this 5th day of November, 2002, by and between AMERICAN
GOLF CORPORATION, a California corporation (the "Company"), and Xxxxx X. Xxxxx,
an individual and the Xxxxx X. Xxxxx Trust dated as of March 5, 1998 (as
amended) (collectively "Xxxxx Xxxxx"), Xxxxxx X. Xxxxx, individually and the
Dallas P. Price Trust dated as of May 14, 1998 (as amended) (collectively
"Dallas Price" and collectively with Xxxxx Xxxxx, the "Prices") and MOUNTAINGATE
LAND COMPANY, L.P., a California limited partnership ("Mountaingate", and
collectively with the Prices, the "Credit Enhancers").
RECITALS
A. The Company is indebted to Bank of America, N.A., a national banking
association (the "Bank"), pursuant to a Credit Agreement dated as of July 30,
1996, as amended, restated or modified from time to time, and any agreements,
instruments, certificates or other documents entered into in connection
therewith (the "Credit Agreement"). Certain defaults have occurred under the
Credit Agreement. The Bank has agreed to forbear, for a specified period, from
exercising its remedies under the Credit Agreement pursuant to a Forbearance
Agreement dated as of March 5, 2002 (the "Forbearance Agreement" and
collectively with the Credit Agreement, the "Credit Documents").
B. The Company is indebted to the purchasers of the Company's 9.35% Senior
Secured Notes due July 1, 2004 (the "Purchasers," and together with the Bank,
the "Creditors") pursuant to that certain 9.35% Senior Secured Note Purchase
Agreement dated as of July 30, 1996, as amended, restated or modified from time
to time, and any agreements, instruments, certificates or other documents
entered into in connection therewith (the "Note Purchase Agreement"). Certain
defaults have occurred under the Purchase Agreement.
C. The Company and the Creditors entered into a Restructuring Agreement and
Limited Waiver dated of July 1, 2002 (the "Restructuring Agreement"), and
certain agreements, instruments, certificates and other documents in connection
therewith (collectively with the Restructuring Agreement, the "Restructuring
Documents").
D. The Company, Xxxxx Xxxxx and Mountaingate are parties to that certain
Credit Enhancement Agreement dated as of July 19, 2002 (the "Credit Enhancement
Agreement").
E. The parties hereto wish to amend and restate the Credit Enhancement
Agreement to include Dallas Price.
F. The Company has requested that the Creditors further waive the exercise
of their respective remedies by entering into an Extension and Amendment
Agreement Relating to the Delivery of Alternate Collateral dated as of the date
hereof (the "Extension Agreement").
G. In connection with the Company entering into the Extension Agreement and
pursuant to the existing Restructuring Documents and the related documents
thereto, the Company has requested that the Credit Enhancers provide certain
credit enhancement for the obligations of the Company under the Credit Agreement
and the Note Purchase Agreement in the form of the following (collectively, the
"Credit Enhancement Collateral"): (i) a second priority deed of trust on certain
real property owned by Mountaingate (the "Mountaingate Collateral"); (ii) the
pledge by Xxxxx Xxxxx of 354,938 shares in National Golf Properties, Inc., a
Maryland corporation ("NGP"), and 1,107,620 common limited partnership units in
National Golf Operating Partnership, L.P., a California limited partnership
("NGOP"), (iii) the pledge by Dallas Price of 336,737 shares of NGP and 68,333
common limited partnership units of NGOP (collectively with the shares and units
listed in (ii), the "Pledged Securities"); and (iv) delivery by the Credit
Enhancers of one or more letters of credit (each a "Letter of Credit") or cash
collateral in the aggregate amount of $16,481,116, comprised of $6,481,116 for
the Pledged Securities to be provided on March 31, 2003 and $10,000,000 for the
Mountaingate Collateral to be provided no later than February 28, 2003, and (iv)
the pledge by Xxxxx Xxxxx of $9,518,884 to the Collateral Agent for the sole
benefit of the Bank.
H. In order to induce the Credit Enhancers to provide the Credit
Enhancement Collateral, the Company desires to enter into this Agreement
providing for the reimbursement to the Credit Enhancers in respect of any Credit
Enhancement Collateral that is foreclosed upon or otherwise applied to satisfy
obligations of the Company under the Credit Agreement and the Note Purchase
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company hereby agrees as follows:
1. Definitions. Capitalized terms used herein without definition shall have
the same meanings herein as set forth in the Restructuring Agreement.
2. Reimbursement; Indemnification; Subordination.
(a) Reimbursement.
(i) The Company shall either pay directly for, or shall reimburse the
Credit Enhancers for, (1) all out-of-pocket costs incurred by the Credit
Enhancers in connection with their obtaining any Credit Enhancement
Collateral, and (2) any amounts paid in connection with any Interest
Shortfall (as such term is defined in the AGC Collateral Agency Agreement).
(ii) If any amounts are drawn under any Letter of Credit (or any
amounts of cash collateral are applied), the Company shall pay to the
Credit Enhancers immediately upon demand without set-off, counterclaim or
any other deduction of any nature whatsoever all such amounts to the
account of the Credit Enhancers as instructed by the Credit Enhancers at
the time of such demand.
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(iii) If foreclosure proceedings shall be commenced with respect to
the Mountaingate Collateral, the Company shall pay to Mountaingate
immediately upon demand without set-off, counterclaim or any other
deduction of any nature whatsoever an amount equal to Mountaingate's
damages and costs associated with the foreclosure (or, at the election of
Mountaingate, the fair market value of the Mountaingate Collateral on the
date such foreclosure proceedings were commenced) to the account of
Mountaingate as instructed by Mountaingate at the time of such demand.
(iv) If foreclosure proceedings shall be commenced with respect to all
or any portion of the Pledged Securities, the Company shall pay to Xxxxx
Xxxxx or Dallas Price, as applicable, immediately upon demand without
set-off, counterclaim or any other deduction of any nature whatsoever an
amount equal to the Price's damages and any costs incurred (or, at the
election of Xxxxx Xxxxx or Dallas Price as applicable, the fair market
value per unit of Pledged Securities that has been foreclosed upon on the
date such foreclosure proceedings were commenced) to the account of the
Prices as instructed by the Prices at the time of such demand.
The parties hereto acknowledge that this Section 2 is subject to the terms
of (i) the Facilitation Agreement by and among American International Golf,
Inc., NGP, NGOP, the Company, Golf Enterprises, Inc., and Xxxxx Xxxxx and (ii)
the Agreement and Plan of Merger, dated as of September 14, 2002, among NGP LLC,
NGP, NGOP and New NGOP LLC.
(b) Indemnification. The Company hereby further agrees to indemnify,
defend and hold the Credit Enhancers harmless from and against any and all
loss, cost or expense suffered or incurred by the Credit Enhancers, as the
case may be, howsoever characterized or arising under or in connection with
the Restructuring Documents, the Credit Enhancement Documents or any of the
transactions contemplated thereby (including, without limitation, any
liability arising as a result of any draw under any Letter of Credit), and
the Company further agrees to reimburse the Credit Enhancers immediately
upon demand for all reasonable costs, charges and expenses paid or incurred
by the Credit Enhancers, as the case may be, in connection with the
preservation and enforcement of its rights hereunder and collection of
amounts due to it hereunder, including without limitation, the reasonable
fees and disbursements of legal counsel to the Credit Enhancers.
(c) Subordination. The Credit Enhancers acknowledge that the rights
and obligations in paragraphs (a) and (b) of this Section 2 are
subordinated to the rights and obligations of the Creditors as set forth in
the Credit Enhancement Documents (as defined below) (collectively, the
"Obligations"). Notwithstanding the foregoing, if any amount is paid to the
Credit Enhancers in connection with any right of subrogation and the
Obligations have not been paid in full, such amount shall be deemed to have
been paid to the Credit Enhancers for the benefit of, and held in trust for
the benefit of, the Creditors and shall be forthwith paid pursuant to the
terms of Credit Enhancement Documents and credited and applied upon the
Obligations, whether matured or unmatured, in accordance with the terms of
the Credit Enhancement Documents. The Credit Enhancers acknowledge that
they will receive direct and indirect benefits from the
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financing arrangements contemplated by the Credit Enhancement Documents and
that the waiver set forth in this Section 2 is knowingly made in
contemplation of such benefits.
3. No Impairment; Waivers. The Company acknowledges and agrees that the
occurrence of any one or more of the following shall not alter or impair the
obligations or liabilities of the Company hereunder:
(a) any amendment or modification of any provision of any of the
Credit Documents, the Forbearance Documents or any documents or instruments
relating to any Credit Enhancement Collateral (the "Credit Enhancement
Documents") or any renewal or extension of the time of payment of any of
the loans under the Credit Documents or any amounts owing under any Credit
Enhancement Documents or the granting of time in respect of such payment
thereof or of any furnishing or acceptance of any guarantee or any
additional security or any release of any security or guarantee so
furnished or accepted for any of such loans or Credit Enhancement
Documents;
(b) any waiver, consent, extension, granting of time, forbearance,
indulgence or other action or inaction under or in respect of any of the
Credit Documents, the Restructuring Documents or the Credit Enhancement
Documents or any exercise or non-exercise of any right, remedy or power in
respect hereof or thereof;
(c) any bankruptcy, receivership, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or similar proceedings
with respect to the Company or the Credit Enhancers;
(d) the occurrence of any Event of Default or event or circumstance
that with the passage of time, the giving of notice or both would
constitute an Event of Default under, or any misrepresentation in, any of
the Credit Documents. the Restructuring Documents or the Credit Enhancement
Documents;
(e) any lack of genuineness, legality, validity, enforceability or
value of the Credit Agreement, any other Credit Document, any Forbearance
Document or any Credit Enhancement Document; or
(f) any impossibility or impracticality of performance, force majeure,
any act of any government, or any other circumstance which might constitute
a defense available to, or a discharge of, (i) the Company in respect of
the obligations under the Credit Documents or the Restructuring Documents,
or (ii) the Credit Enhancers in respect of the Credit Enhancement
Documents.
4. Notices. All notices, demands and other communications provided for
hereunder shall be in writing (including communication by telecopier) and shall
be mailed, telecopied or delivered to the parties hereto at the address therefor
set forth on the signature pages hereto or at such other address as may be
designated by any such party in a written notice to the other parties complying
with the terms of this section.
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5. Cumulative Remedies. No remedy under this Agreement is intended to be
exclusive of any other remedy, but each and every remedy shall be cumulative and
in addition to any and every other remedy given under this Agreement and those
provided by law. No delay or omission by any party to exercise any right under
this Agreement shall impair any such right nor be construed to be a waiver
thereof. No failure on the part of any party to exercise, and no delay in
exercising, any right under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right.
6. Severability of Provisions. If any provision or obligation of this
Agreement should be found to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
full force and effect to the maximum extent permitted by law.
7. Entire Agreement. This Agreement is intended by the parties hereto as a
final expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof. Acceptance of or acquiescence in
a course of performance rendered under this Agreement shall not be relevant to
determine the meaning of this Agreement even though the accepting or acquiescing
party had knowledge of the nature of the performance and opportunity for
objection.
8. Amendments. This Agreement or any provision hereof may be changed,
waived, or terminated only by a statement in writing signed by the party or
parties against which such change, waiver or termination is sought to be
enforced, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
9. Successors and Assigns. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of such successors and assigns.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
the principles thereof relating to conflicts of law.
11. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.
(Signature page follows)
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Credit Enhancement Agreement as of the date first hereinabove written.
Company: AMERICAN GOLF CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Its:
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Mountaingate: MOUNTAINGATE LAND COMPANY, L.P.
By: Mountaingate Land, Inc.
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Its: General Partner
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By: /s/ Xxxxx X. Xxxxx
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Its:
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Xxxxx X. Xxxxx: XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx Trust Xxxxx X. Xxxxx Trust
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
---------------------------------
Title: Trustee
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Dallas P. Price Dallas P. Price
By: /s/ Dallas P. Price
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Dallas P. Price Trust Dallas P. Price Trust
By: /s/ Dallas P. Price
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Name: Dallas P. Price
---------------------------------
Title: Trustee
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