EXHIBIT 99.15
EXECUTION VERSION
CREDIT ENHANCEMENT AGREEMENT
This CREDIT ENHANCEMENT AGREEMENT (this "AGREEMENT") is entered into
as of this 19th day of July, 2002, by and between AMERICAN GOLF CORPORATION, a
California corporation (the "COMPANY"), and Xxxxx X. Xxxxx, an individual
("PRICE") and MOUNTAINGATE LAND COMPANY, L.P., a California limited partnership
("MOUNTAINGATE", and collectively with Price, 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 Noted 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 has requested that the Creditors further waive the
exercise of their respective remedies by entering into a Restructuring Agreement
and Limited Waiver dated of even date herewith (the "RESTRUCTURING AGREEMENT"),
and certain agreements, instruments, certificates and other documents in
connection therewith (collectively with the Restructuring Agreement, the
"RESTRUCTURING DOCUMENTS").
D. In connection with the Company entering into the Restructuring
Documents, 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 Price of 354,930 shares in National Golf Properties, Inc., a Maryland
corporation, and 3,244,626 common partnership units in National Golf Operating
Partnership, L.P., a California limited partnership (collectively, the "PLEDGED
SECURITIES"); and (iii) delivery by the Credit Enhancers of one or more letters
of credit (each a "LETTER OF CREDIT") and/or cash collateral in the aggregate
amount of $26,000,000, comprised of $16,000,000 for the Pledged Securities to be
provided no later than October 15, 2002 and $10,000,000 for the Mountaingate
Collateral to be provided no later than September 30, 2002.
E. 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.
(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 Price immediately upon demand without set-off, counterclaim or any
other deduction of any nature whatsoever an amount equal to Price's damages
and any costs incurred (or, at the election of Price, 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 Price as
instructed by Price at the time of such demand.
(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,
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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 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;
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(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.
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
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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.
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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
-----------------------------
Its: CFO
Mountaingate: MOUNTAINGATE LAND COMPANY, L.P.
By: Mountaingate Land, Inc.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
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Its: President
Xxxxx X. Xxxxx: XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxx
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CREDIT ENHANCEMENT AGREEMENT
