EXHIBIT 99.5
EXECUTION VERSION
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WHOLLY-OWNED SUBSIDIARIES PLEDGE AGREEMENT
between
AMERICAN GOLF CORPORATION, Debtor and Pledgor,
and
BNY MIDWEST TRUST COMPANY, as Collateral Agent
Dated as of July 19, 2002
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WHOLLY-OWNED SUBSIDIARIES PLEDGE AGREEMENT
This WHOLLY-OWNED SUBSIDIARIES PLEDGE AGREEMENT (this "Pledge
Agreement"), dated as of July 19, 2002, is entered into between AMERICAN GOLF
CORPORATION, a California corporation (the "Pledgor") and BNY MIDWEST TRUST
COMPANY, an Illinois corporation, not individually but as collateral agent (the
"Collateral Agent") for Bank of America, N.A., a national banking association
(the "Bank"), the purchasers of 9.35% Senior Secured Notes due July 1, 2004 of
the Pledgor (the "Purchasers") and National Golf Operating Partnership, L.P., a
California limited partnership ("NGOP," and collectively with the Bank and the
Purchasers, the "Creditors").
RECITALS
A. The Pledgor is indebted to the Bank (the "Bank Obligations")
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").
The Bank agreed to temporarily forbear from exercising its remedies under the
Credit Agreement pursuant to a Forbearance Agreement dated as of March 8, 2002
(collectively with the Credit Agreement, the "Credit Documents").
B. The Pledgor is indebted to the Purchasers (the "Purchaser
Obligations") pursuant to a Note Purchase Agreement dated as of July 30, 1996
(as amended, restated or modified from time to time, the "Note Purchase
Agreement") and any agreements, instruments, certificates or other documents
entered into in connection therewith (collectively with the Note Purchase
Agreement, the "Note Purchase Documents").
C. The Pledgor is indebted to NGOP (the "NGOP Obligations") pursuant to
the lease agreements (as amended, restated or modified from time to time, the
"Lease Agreements") listed on Exhibit A to the Restructuring Agreement (as
hereinafter defined), and any agreements, instruments, certificates or other
documents entered into in connection therewith (collectively, the "Lease
Documents"). The Credit Documents, the Note Purchase Documents, and the Lease
Documents are hereinafter collectively referred to as the "Debt Documents". The
Bank Obligations, the Purchaser Obligations and the NGOP Obligations are
hereinafter collectively referred to as the "Obligations".
D. The Pledgor has requested that (i) the Bank and the Purchasers
further forbear in the exercise of their remedies by entering into a
Restructuring Agreement and Limited Waiver dated as of July 1, 2001, and certain
agreements, instruments, certificates and other documents in connection
therewith (collectively, the "Restructuring Agreement") and (ii) NGOP enter into
a Rent Deferral Agreement dated of even date herewith (the "Rent Deferral
Agreement"). Terms defined in the Restructuring Agreement and not otherwise
defined herein have the same meanings when used herein.
E. The Bank and the Purchasers are willing to enter into the
Restructuring Agreement and NGOP is willing to enter into the Rent Deferral
Agreement, in each case subject to the terms and conditions thereof.
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F. It is a condition precedent to the closing under the Restructuring
Agreement that the Pledgor execute and deliver this Pledge Agreement, and grant
to the Collateral Agent for the ratable benefit of the Creditors (each, a
Secured Party and collectively, the "Secured Parties") a continuing security
interest in and Lien upon the Collateral to secure the Obligations.
G. The Pledgor, the Creditors and the Collateral Agent are entering
into a Collateral Agency and Intercreditor Agreement of even date herewith (the
"AGC/NGOP Collateral Agency Agreement") which sets forth the rights and duties
of the Collateral Agent with respect to the Collateral for the ratable benefit
of the Creditors.
H. In the event of a conflict between the terms of this Pledge
Agreement and the terms of the AGC/NGOP Collateral Agency Agreement, the terms
of the AGC/NGOP Collateral Agency Agreement shall govern.
NOW, THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
1. Grant of Security Interest. The Pledgor hereby pledges and grants to
the Collateral Agent for the ratable benefit of the Secured Parties a
first-priority security interest in the property described in Section 2 below
(collectively and severally, the "Collateral") and assigns, transfers and
delivers to the Collateral Agent the Pledged Securities (defined below),
together with the certificates evidencing the same, which certificates have been
duly endorsed in blank and accompanied by stock, membership and other equity
interest powers duly executed in blank, to secure prompt payment and performance
in full when due, whether at stated maturity, by acceleration or otherwise of
all Obligations.
2. Collateral. The Collateral shall consist of the following:
(a) Pledged Securities. All equity securities, including all shares,
membership interests and equity interests of the subsidiaries of the Pledgor
listed on Exhibit 1 hereto (collectively, the "Issuers"), now owned or hereafter
acquired by the Pledgor, all such securities being listed on Exhibit 2 hereto,
and all new, substituted and additional documents, instruments, and general
intangibles issued with respect thereto or in exchange therefor (collectively,
the "Pledged Securities"), and the certificates representing such Pledged
Securities, if any, and all now existing and hereafter arising rights of the
holder of such Pledged Securities, including, without limitation, all voting
rights and rights to and interest in all cash and noncash dividends and/or
distribution of any kind and nature and all other property now or hereafter
distributable on account of or received or receivable with respect to any of the
foregoing; provided however that with respect to Foreign Subsidiaries (as
hereinafter defined) and the capital stock of any subsidiary directly or
indirectly owned by a Foreign Subsidiary, the Pledgor shall only be required to
pledge 65% (or such other maximum amount as may be pledged under Section 956 of
the Internal Revenue Code (as the same may be amended after the date hereof, the
"Code") without causing a material adverse tax consequence) of each class of the
voting capital stock of such Foreign Subsidiary or subsidiary of a Foreign
Subsidiary. For purposes hereof, the term "Foreign Subsidiary" means any
"controlled foreign corporation" within the meaning of
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Section 957(a) of the Code, as to which the Pledgor is a "United States
shareholder" as defined in Section 951(b) of the Code.
(b) Proceeds. All proceeds of the foregoing Collateral. For purposes
of this Pledge Agreement, the term "proceeds" includes whatever is receivable or
received when the Collateral or proceeds are sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary.
3. Representations and Warranties. In addition to any representations
and warranties of the Pledgor set forth in the Debt Documents and the
Restructure Documents, which are incorporated herein by this reference, the
Pledgor hereby represents and warrants, on the date hereof and at the time of
delivery of any of the Collateral hereunder, that:
(a) Authority. The Pledgor has full corporate power, authority, and
legal right and has completed all corporate proceedings and obtained all
approvals and consents necessary, to execute, deliver and perform this Pledge
Agreement and the transactions contemplated hereby.
(b) Consents. The Pledgor has obtained all consents, approvals and
waivers from third parties (including governmental entities, if any) relating to
the Pledged Securities necessary to execute and deliver this Pledge Agreement
and to perform its obligations hereunder and the transactions contemplated
hereby.
(c) No Default or Lien. Subject to subsection (f) below, such
execution, delivery and performance will not contravene, or constitute a default
under or result in a Lien, except pursuant hereto, upon the Pledged Securities
pursuant to any applicable law or regulation, or any contract, agreement,
judgment, other decree, or other instrument binding upon or affecting the
Pledgor except for any of the foregoing as would not reasonably be expected to
result in a Material Adverse Effect.
(d) Enforceability of Pledge Agreement. This Pledge Agreement
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms, and this Pledge Agreement
grants to the Collateral Agent for the ratable benefit of each Secured Party a
valid, first-priority, and upon the delivery of the Collateral to the Collateral
Agent (to the extent such security interests in the Collateral may be perfected
by delivery of the Collateral to the Collateral Agent), perfected and
enforceable Lien on the Collateral.
(e) Ownership of Collateral. The Pledgor is the sole owner of and
has good and marketable title to the Collateral (or, in the case of
after-acquired Collateral, at the time the Pledgor acquires rights in the
Collateral, will be the sole owner thereof) and is (or will be in the case of
after-acquired Collateral) the record, legal and beneficial owner of all the
Pledged Securities, and will at all times be the sole beneficial owner of the
Pledged Securities.
(f) Priority. Except for security interests in favor of the Secured
Parties granted in connection herewith, no person has (or, in the case of
after-acquired Collateral, at the time the Pledgor acquires rights therein, will
have) any right, title, claim or interest (by way of security interest or other
Lien or charge) in, against or to the Collateral.
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(g) Delivery of Documents, Etc. The Pledgor has delivered to the
Collateral Agent certificates representing each Pledged Security and all
instruments, documents, chattel paper (as said terms are used in the Uniform
Commercial Code) and other items of Collateral in which a security interest is
or may be perfected by possession, together with such additional writings,
including, without limitation, assignments and duly signed undated stock,
membership or other equity interest powers as the Pledgor must provide to the
Collateral Agent to perform its duties hereunder, and any additional documents
with respect thereto as the Required Creditors (as defined in the AGC/NGOP
Collateral Agency Agreement) shall reasonably request, such documents to be
delivered to the Collateral Agent no later than the Effective Date. With respect
to any Collateral consisting of any uncertificated Pledged Securities, the
Pledgor shall effect transfer thereof to the Collateral Agent by registration
thereof on the books and records of the Pledgor in the name of the Collateral
Agent.
(h) Pledged Securities. The Pledged Securities in the aggregate
constitute all of the issued and outstanding shares, membership interests and
other equity interests of the Issuers thereof, and have been duly and validly
issued and are fully paid and nonassessable. There are no outstanding options,
warrants or other agreements with respect to the Pledged Securities. All
information set forth herein relating to the Pledged Securities is accurate and
complete in all material respects. The Pledged Securities are not restricted by
any legend restricting transfer, stop order or stop transfer restrictions.
(i) Litigation. Except as disclosed in the Litigation Certificate as
provided on July 8, 2002, there are no actions, suits, proceedings, claims or
disputes pending, at law, in equity, in arbitration or before any governmental
authority, against the Pledgor or its subsidiaries or any of their respective
properties (or to the knowledge of the Pledgor, threatened or contemplated by
any governmental authority against the Pledgor or its subsidiaries or any of
their respective properties) which (i) purport to affect or pertain to this
Pledge Agreement or any of the transactions contemplated hereby; or (ii) is
reasonably likely to result in a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other governmental authority purporting to enjoin or restrain the
execution, delivery and performance of this Pledge Agreement or directing that
the transactions provided for herein not be consummated as herein provided.
(j) Regulations T, U or X. The Pledge of the Pledged
Securities pursuant to this Pledge Agreement does not violate Regulation T, U or
X of the Federal Reserve Board.
4. Covenants and Agreements of Pledgor. In addition to all covenants
and agreements of the Pledgor set forth in the Debt Documents and the
Restructure Documents, which are incorporated herein by this reference, the
Pledgor hereby agrees:
(a) Preservation of Collateral. To do all acts that may be
reasonably necessary to maintain, preserve and protect the Collateral and to
preserve the Pledgor as sole owner of the Collateral;
(b) Payment of Taxes, Etc. To pay promptly when due all material
taxes, assessments, charges, encumbrances and Liens now or hereafter imposed
upon or affecting any Collateral;
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(c) Defense of Litigation. To appear in and defend any action or
proceeding which may materially and adversely affect the Pledgor's title to or
each Secured Party's interest in the Collateral;
(d) Transfer and Other Liens. (i) Not to sell or contract to sell or
otherwise dispose of, or grant any option or warrant with respect to, the
Collateral, (ii) to keep the Collateral free of all levies and security
interests or other Liens or charges except those approved in writing by the
Required Creditors in accordance with the Debt Documents and the Restructure
Documents, and (iii) not to consent to the issuance of any stock or other
securities in addition to or in substitution for the Pledged Securities except
to the Pledgor which shall become Pledged Securities hereunder;
(e) Delivery of Collateral. To account fully for and promptly
deliver to the Collateral Agent, in the form received, all documents, chattel
paper, instruments and agreements and share certificates (as defined in the
Uniform Commercial Code) constituting the Collateral hereunder and subject to
the provisions of paragraph (k) below, all proceeds of the Collateral received,
all endorsed in blank, and, in the case of share certificates or other
certificates representing an equity interest, accompanied by such stock or
equity interest powers as appropriate, and until so delivered, all such
documents, instruments, agreements and proceeds to be held by the Pledgor in
trust for the Collateral Agent, separate from all other property of the Pledgor
and shall be identified as the property of the Collateral Agent on behalf of the
Secured Parties;
(f) Maintenance of Records. To keep separate, accurate and complete
records of the Collateral and to provide the Collateral Agent with such records
and such other reports and information relating to the Collateral as the
Collateral Agent may reasonably request from time to time;
(g) Further Assurances. To procure, execute and deliver from time to
time any endorsements, notifications, registrations, assignments, financing
statements, and other writings deemed reasonably necessary by the Required
Creditors to perfect, maintain and protect the Secured Parties' security
interest in the Collateral and the priority thereof; and to take such other
actions as the Required Creditors may reasonably request or as is otherwise
reasonably necessary to protect the value of the Collateral and of the Secured
Parties' security interest in the Collateral, including, without limitation,
provision of assurances from third parties regarding the Collateral Agent's (i)
access to the Collateral, (ii) right to foreclose and sell the Collateral and
(iii) right to realize the practical benefits of such foreclosure or sale;
(h) Payment of Costs and Expenses. To reimburse the Collateral Agent
within 30 days of written demand for any reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees (including the
allocated cost of inside counsel), the Collateral Agent may incur while
exercising any right, power or remedy provided by this Pledge Agreement or by
law, all of which costs and expenses are included in the Obligations secured
hereby. The Pledgor covenants and agrees to pay (i) the collateral agent fees of
the Collateral Agent as set forth in the AGC/NGOP Collateral Agency Agreement,
(ii) the reasonable fees and expenses of counsel to the Bank in connection with
the negotiation, preparation, development
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and review of this Pledge Agreement and (iii) the reasonable fees and expenses
of counsel to the Purchasers in connection with the negotiation and review of
this Pledge Agreement;
(i) Payments on Collateral; Voting. Upon the occurrence of a Major
Default, to account fully for and promptly deliver to the Collateral Agent, in
the form received, any dividend or any other distribution on account of the
Pledged Securities whether in securities or property by way of stock-split,
spin-off, split-up, reclassification, combination of shares or the like, or in
case of any reorganization, consolidation or merger. Subject to the terms of the
AGC/NGOP Collateral Agency Agreement and the Restructure Documents, the
Collateral Agent shall be entitled to retain the cash proceeds received from any
disposition of the Pledged Securities and to retain any dividends or any other
distribution lawfully paid by any Issuer on account of the Pledged Securities
and shall have the exclusive right to vote the Pledged Securities and to execute
consents with respect thereto. Any and all stock dividends or instruments and
other property (other than cash) received, receivable or otherwise distributed
in exchange for, any Pledged Securities shall be held in trust for the benefit
of and pending delivery to the Collateral Agent, be segregated from the other
property of the Pledgor, and be forthwith delivered to the Collateral Agent as
pledged Collateral in the same form as received (with any necessary
endorsement);
(j) Notices of Changes. To give the Collateral Agent 30 days prior
written notice of any change in the Pledgor's chief place of business, state of
incorporation or organization, legal name, trade name or trade style;
(k) Location of Records. To keep the records concerning the
Collateral at the address set forth below the Pledgor's signature hereof and not
to remove such records from such locations without 30 days prior written notice
to the Collateral Agent;
(l) Authorized Action by Collateral Agent. The Pledgor hereby agrees
that from time to time, without presentment, notice or demand, and without
affecting or impairing in any way the rights of any Secured Party with respect
to the Collateral, the obligations of the Pledgor hereunder or the Obligations,
the Collateral Agent shall (at the direction of the Required Creditors or any
Directing Creditor (as defined in the AGC/NGOP Collateral Agency Agreement), as
applicable), but shall incur no liability to the Pledgor or any third party for
failure to, take any action which the Pledgor is obligated by this Pledge
Agreement to do. Any expenses incurred by the Collateral Agent in taking such
action shall be payable by the Pledgor. After the occurrence and during the
continuance of a Major Default, the Pledgor hereby irrevocably appoints the
Collateral Agent as its attorney-in-fact to exercise such rights and powers,
including without limitation: (i) to collect by legal proceedings or otherwise
and endorse, receive and acknowledge receipt for all dividends, interest,
payments, proceeds, and other sums and property now or hereafter payable on or
on account of the Collateral; (ii) to vote or consent with respect to the
Pledged Securities; (iii) to enter any extension, reorganization, deposit,
merger, consolidation or other agreement pertaining to, or deposit, surrender,
accept, hold or apply other property in exchange for the Collateral and (iv) to
make any compromise or settlement, to pay or discharge taxes, Liens, security
interests or other encumbrances and take any action it deems advisable, with
respect to the Collateral. To permit the Collateral Agent to exercise such
voting and consensual rights, to collect, endorse and receive such dividends,
interest, payments, proceeds and other sums and property, the Pledgor shall, if
necessary, upon written request of the
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Collateral Agent (at the direction of the Required Creditors or any Directing
Creditor, as applicable), from time to time, deliver (or cause to be executed
and delivered) to the Collateral Agent all such proxies, dividend payment orders
and other instruments as the Collateral Agent (at the direction of the Required
Creditors or any Directing Creditor, as applicable) may reasonably require; and
(m) Direction by Required Creditors or Directing Creditors. The
Pledgor acknowledges and agrees that the Collateral Agent shall not be required
to take any action or make any decision hereunder unless it has received written
direction (i) prior to a Major Default from the Required Creditors and (ii)
after a Major Default from the Directing Creditors hereunder with respect to
such action or decision, and the Collateral Agent shall not be responsible for
the timeliness by the Required Creditors or the Directing Creditors, as
applicable, delivering any such direction (or their failure to deliver such
direction).
(n) Additional Collateral. The Pledgor shall pledge to the
Collateral Agent hereunder, immediately upon the acquisition (directly or
indirectly) thereof, any and all shares of stock, membership interests and
equity interests of the Issuers or any of their affiliates hereafter acquired by
the Pledgor. The Pledgor shall promptly deliver such Collateral to the
Collateral Agent, together with in the case of securities, a duly executed
Pledge Agreement Supplement substantially in the form of Exhibit 3 hereto
identifying such additional shares, membership interests or other equity
interests which are being pledged, together with certificates representing such
additional shares, membership interests or equity interests and such additional
writings, including without limitation assignments and duly signed undated stock
or equity interests powers as the Pledgor must provide to the Collateral Agent
to perform its duties hereunder and any additional documents with respect
thereto as the Collateral Agent (at the direction of the Required Creditors)
shall request. The Pledgor hereby authorizes the Collateral Agent to attach each
Pledge Agreement Supplement to this Pledge Agreement and agrees that all shares,
membership interests and equity interests listed on any Pledge Agreement
Supplement delivered to the Collateral Agent shall for all purposes hereunder
constitute Pledged Securities. In connection therewith, the Pledgor agrees to
deliver promptly to the Collateral Agent a revised Exhibit 1 listing the Issuers
subject thereto, and a revised Exhibit 2 listing the securities of such
additional subsidiary subject thereto. In addition, for the convenience of the
parties, the Pledgor shall, upon any change in the nature, amount or description
of the Pledged Securities in accordance with the provisions of this Pledge
Agreement, promptly deliver to the Collateral Agent a revised Exhibit 1 or
Exhibit 2, as the case may be, listing the Pledged Securities subject hereto.
Exhibit 1 and Exhibit 2 hereto shall be deemed amended and restated by such
revised exhibit; provided, however, that the failure of the Pledgor to deliver
such revised exhibits or of the Collateral Agent to distribute or attach any
such revised exhibits shall not affect the security interest purported to be
granted hereby.
(o) Merger. Not to permit any of the Issuers to merge with or
consolidate into another entity, or sell, transfer, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets, other than pursuant to the Merger Agreement.
(p) Sale of Assets. Not to permit any of the Issuers to sell, lease,
transfer, assign or otherwise dispose of, or part with control of (whether in
one transaction or a series of
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transactions) any assets, including without limitation, the Third Party Leases,
Third-Party Management Contracts and any shares of stock or equity interests in
any subsidiary or other person, other than pursuant to the Merger Agreement;
provided, however, that sales in the ordinary course of business, the
disposition of leases in accordance with ordinary course sales by landlord, or
in accordance with the provisions of the AGC/NGOP Collateral Agency Agreement
shall not be deemed a breach of this Section 4(p).
5. Remedies. Upon the occurrence of any Major Default, the Collateral
Agent shall, upon written direction of any Directing Creditors, upon at least 10
days' written notice to the Pledgor (which the Pledgor agrees is reasonable
notice) and in addition to all rights and remedies available to any Secured
Party under any other agreement, do any one or more of the following:
(a) General Enforcement. Foreclose or otherwise enforce the Secured
Parties' security interest in any manner permitted by law, or provided for in
this Pledge Agreement;
(b) Sale Etc. Sell or otherwise dispose of any Collateral at one or
more public or private sales at the Collateral Agent's place of business or any
other place or places, including, without limitation, any brokers' board or
securities exchange, for cash or credit or other property, for immediate or
future delivery, and at such price and on such terms and in such manner as the
Collateral Agent, at the written direction of the Directing Creditors, may
determine;
(c) Costs of Remedies. Recover from the Pledgor all reasonable costs
and expenses, including, without limitation, reasonable attorneys' fees
(including the allocated costs of inside counsel), incurred or paid by the
Collateral Agent or any Secured Party in exercising any right, power or remedy
provided by this Pledge Agreement or by law;
(d) Vote of Pledged Securities. Vote or consent, and in connection
therewith the Pledgor grants to the Collateral Agent a proxy to vote or to
consent, with respect to the Pledged Securities;
(e) Manner of Sale of Collateral.
(i) Restrict the prospective bidders or purchasers of the
Pledged Securities to persons or entities who (x) will represent and
agree that they are purchasing for their own account, for
investment, and not with a view to the distribution or sale of any
of the Pledged Securities; and (y) satisfy the offeree and purchaser
requirements for a valid private placement transaction under Section
4(2) of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations of the Securities and Exchange Commission
applicable thereto, or under any similar statute, rule or
regulation. The Pledgor agrees that disposition of the Pledged
Securities pursuant to any private sale made as provided above may
be at prices and on other terms less favorable than if the Pledged
Securities were sold at public sale, and that the Collateral Agent
has no obligation to delay the sale of any Pledged Securities for
public sale under the Act. The Pledgor agrees that a private sale or
sales made under the foregoing circumstances shall be deemed to have
been made in a commercially reasonable manner and the Pledgor hereby
waives, to the full extent permitted by applicable law, any claims
against
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the Collateral Agent or any Secured Party arising by reason of the
fact that the price at which the Collateral may have been sold at a
private sale was less than the price that might have been obtained
at a public sale or was less than the aggregate amount of the
Obligations; and
(ii) The Pledgor further agrees to do or to use its reasonable
efforts to cause to be done all such other acts and things as may be
reasonably necessary to make any sales of any portion or all of the
Pledged Securities pursuant to clause (i) of this Section 5(e),
including sales under the Act, valid and binding and in compliance
with any and all applicable laws (including, without limitation, the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission applicable
thereto), regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any
such sale or sales, all at the Pledgor's expense. The Pledgor
further agrees that a breach of any of the covenants contained in
this Section 5 will cause irreparable injury to the Secured Parties,
that the Collateral Agent and the Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this Section 5
shall be specifically enforceable against the Pledgor, and the
Pledgor hereby waives and agrees not to assert any defenses against
any action for specific performance of such covenants except for a
defense that no Major Default has occurred resulting in the
Obligations becoming due and payable prior to their stated
maturities;
(f) Delivery to and Rights of Purchaser. Upon any sale or other
disposition pursuant to this Pledge Agreement, the Collateral Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral or portion thereof so sold or disposed of. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at a public sale and, to
the extent permitted by law, at a private sale. Each purchaser at any such sale
or other disposition (including a Secured Party) shall hold the Collateral free
from any claim or right of whatever kind, including any equity or right of
redemption of the Pledgor, and the Pledgor specifically waives (to the extent
permitted by law) all rights of redemption, stay or appraisal which it has or
may have under any rule of law or statute now existing or hereafter adopted. The
Collateral Agent shall not be required to marshal any Collateral with respect
thereto in any particular order, and the Pledgor hereby waives any and all
rights thereof; and
(g) Reliance on Experts. In exercising any remedies hereunder
relating to the sale of the Collateral, the Collateral Agent may utilize and
rely on the services and advice of one or more broker-dealers or other agents
selected by the Collateral Agent and shall be fully protected in so doing.
6. Collection of Collateral Payments.
(a) The Pledgor shall, at its sole cost and expense, take all
reasonably necessary action to obtain payment, when due and payable, of all sums
due or to become due with respect to any Collateral ("Collateral Payments" or a
"Collateral Payment"), including, without limitation, the taking of such action
with respect thereto as the Required Creditors may
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reasonably request, or, in the absence of such request, as the Pledgor may
reasonably deem advisable; provided, however, in the event of a Major Default or
if otherwise prohibited by the Debt Documents and the Restructure Documents, the
Pledgor shall not, without the prior written consent of the Directing Creditors
(which consent shall not be unreasonably withheld), grant or agree to any
rebate, refund, compromise or extension with respect to any Collateral Payment
or accept any prepayment on account thereof. Upon the request of the Directing
Creditors following the occurrence and during the continuance of a Major
Default, the Pledgor 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 Pledgor in care of the Collateral Agent) at such
address as the Collateral Agent may designate. The Pledgor 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) If there shall occur, and be continuing, a Major Default, upon
the request of the Collateral Agent or any Directing Creditors, the Pledgor
will, forthwith upon receipt, transmit and deliver to the Collateral Agent, 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 Pledgor at any
time as payment on account of any Collateral Payment and if such request shall
be made, until delivery to the Collateral Agent, such items will be held in
trust for the Collateral Agent and will not be commingled by the Pledgor with
any of its other funds or property. Thereafter, the Collateral Agent is hereby
authorized and empowered to endorse the names of the Pledgor 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 reasonably believes
such endorsement is necessary or desirable for purposes of collection.
(c) The Pledgor hereby indemnifies and saves harmless the Collateral
Agent, the Secured Parties and their respective agents, officers and employees
from and against all liabilities and reasonable expenses on account of any
adverse claim asserted against the Collateral Agent or the Secured Parties
(except for the Collateral Agent's or the Secured Parties' own gross negligence
or willful misconduct) relating to any moneys received by the Collateral Agent
or the Secured Parties on account of any Collateral Payment following the
occurrence of a Major Default, and such obligation of the Pledgor shall continue
in effect after and notwithstanding the discharge of the Obligations and the
release of the security interest granted in Section 1 above. This indemnity
shall survive the termination of this Pledge Agreement and the resignation or
removal of the Collateral Agent.
7. Cumulative Rights; Indemnity, etc. The rights, powers and remedies
of the Collateral Agent and the Secured Parties under this Pledge Agreement
shall be in addition to all rights, powers and remedies given to the Collateral
Agent and the Secured Parties by virtue of any statute or rule of law, the
AGC/NGOP Collateral Agency Agreement, the Debt Documents and the Restructure
Documents or any other agreement, all of which rights, powers and remedies shall
be cumulative and may be exercised successively or concurrently without
impairing the Collateral Agent's or any Secured Party's security interest in the
Collateral. The Pledgor shall indemnify and save the Collateral Agent and the
Secured Parties harmless from and against any and all liabilities, losses and
damages which they may incur in the lawful and proper exercise or
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performance of any of their rights or powers as authorized herein (except for
such Person's own gross negligence or willful misconduct). This indemnity shall
survive the termination of this Pledge Agreement and the resignation or removal
of the Collateral Agent.
8. Waiver. Any waiver, forbearance or failure or delay by any Secured
Party in exercising any right, power or remedy shall not preclude the further
exercise thereof, and every right, power or remedy of a Secured Party shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing. The Pledgor waives any right to require the
Secured Parties to proceed against any person or to exhaust any Collateral or to
pursue any remedy in any Secured Party's power.
9. Release; Termination of Agreement. This Pledge Agreement shall
terminate upon full and final payment and performance of all the Obligations
(other than contingent indemnification obligations as to which no claim has been
made). At such time, the Collateral Agent shall, at the request and expense of
the Pledgor, reassign and redeliver to the Pledgor all of the Collateral
hereunder which has not been sold, disposed of, retained or applied by the
Collateral Agent in accordance with the terms hereof and any and all proxies and
other materials related thereto. Such reassignment and redelivery shall be
without warranty by or recourse to the Collateral Agent or the Secured Parties,
except as to the absence of any prior assignments by the Collateral Agent of its
interest in the Collateral, and shall be at the expense of the Pledgor.
10. Setoff. The Pledgor agrees that each Secured Party may exercise its
rights of setoff with respect to the Obligations in the same manner as if the
Obligations were unsecured but subject to the terms of the AGC/NGOP Collateral
Agency Agreement, the Debt Documents and the Restructure Documents.
11. No Responsibility for Loss; No Duty of Collateral Agent and Secured
Parties. The Collateral Agent and the Secured Parties are hereby released from
all responsibility for any depreciation in or loss of value of the Pledged
Securities (except for their own gross negligence or willful misconduct). The
rights and remedies of the Collateral Agent and the Secured Parties hereunder
are solely to protect the Secured Parties' interest in the Collateral and shall
not impose any duty upon the Collateral Agent or the Secured Parties to exercise
any such powers.
12. Binding on Successors and Assigns. All rights and obligations of
each party hereto shall inure to the benefit of their respective successors and
assigns.
13. Amendment. This Pledge Agreement may not be amended or modified
except by a writing signed by the Pledgor and the Collateral Agent.
14. Notices. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission) and mailed, faxed or delivered or to the address and
facsimile number specified for notices in Section 25 of the AGC/NGOP Collateral
Agency Agreement; or, in the case of the Pledgor or the Collateral Agent, to
such other address as shall be designated by such party in a written notice to
the other parties, and in the case of any other party, to such other address as
shall be designated by such party in a written notice to the Pledgor and the
Collateral Agent. All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (i) actual
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receipt by the intended recipient and (ii) (A) if delivered by hand or by
courier, when signed for by the intended recipient; (B) if delivered by mail,
upon receipt by the recipient; and (C) if delivered by facsimile, when sent and
receipt has been confirmed in writing.
If to BNY Midwest Trust Company:
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Structured Finance Services
with a copy to:
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
If to American Golf Corporation:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
The Collateral Agent shall be entitled to rely on the authority of any
person purporting to be a person authorized by the Pledgor to give such notice
and reasonably believed by the Collateral Agent to be genuine and correct, and
the Collateral Agent shall not have any liability to Pledgor or other person on
account of any action taken or not taken by the Collateral Agent or the Secured
Parties in reliance upon such notice.
15. Counterparts. This Pledge Agreement may be executed by one or more
of the parties to this Pledge Agreement in any number of separate counterparts,
each of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. Delivery by telecopier of an executed
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counterpart of a signature page to this Pledge Agreement shall be effective as
delivery of an originally executed counterpart of this Pledge Agreement.
16. Severability. The illegality or unenforceability of any provision
of this Pledge Agreement or any instrument or agreement required hereunder shall
not in any way affect or impair the legality or enforceability of the remaining
provisions of this Pledge Agreement or any instrument or agreement required
hereunder.
17. Governing Law and Jurisdiction.
(a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS PLEDGE
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE
UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS PLEDGE AGREEMENT, THE PARTIES HERETO, FOR THEMSELVES AND IN
RESPECT OF THEIR PROPERTY, SUBMIT TO THE JURISDICTION OF THOSE COURTS. THE
PARTIES HERETO IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS PLEDGE AGREEMENT OR ANY DOCUMENT RELATED HERETO.
THE PARTIES HERETO WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, AND SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
(c) THE PARTIES HERETO WAIVE THEIR RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT. IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES HERETO AGAINST THE OTHER, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE, THE PLEDGOR AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHTS TO
A TRIAL BY JURY ARE WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS PLEDGE AGREEMENT. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
PLEDGE AGREEMENT.
18. Entire Agreement. Together with the Restructure Documents, the Debt
Documents and the AGC/NGOP Collateral Agency Agreement, this Pledge Agreement
embodies the entire agreement of the parties hereto with respect to the subject
matter hereof and
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supersedes all prior or contemporaneous agreement and understanding of such
parties, verbal or written.
19. Conflicting Provisions. In the event of a conflict between the
terms of this Pledge Agreement and the terms of the AGC/NGOP Collateral Agency
Agreement in respect of the rights and obligations of the Secured Parties, the
terms of the AGC/NGOP Collateral Agency Agreement shall govern.
20. Reinstatement. This Pledge Agreement and the security interest
created hereunder shall automatically be reinstated if and to the extent that
for any reason any payment by or on behalf of the Pledgor in respect of the
Obligations is rescinded or must otherwise be restored by any holder of the
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Pledgor shall indemnify the Secured Parties
on demand for all reasonable costs and expenses (including, without limitation,
fees of counsel) incurred by the Secured Parties in connection with such
rescission or restoration.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
AMERICAN GOLF CORPORATION,
Debtor and Pledgor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CFO
BNY MIDWEST TRUST COMPANY,
Collateral Agent for the Secured Parties
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Treasurer
