EXHIBIT 10.45
$22,963,535.49
LOAN AGREEMENT
BETWEEN
THE BADLANDS GOLF CLUB, INC.
AS BORROWER
AND
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
AS LENDER
DATED AS OF AUGUST 18, 1998
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.................................. 2
SECTION 1.01. Certain Defined TERMS...................................... 2
SECTION 1.02. Computation of Time Periods................................10
SECTION 1.03. Accounting Terms...........................................10
SECTION 1.04. Other Definitional Provisions..............................10
ARTICLE II. AMOUNTS AND TERMS OF THE LOANS...................................10
SECTION 2.01 The Loan.....................................................10
(a) The Initial Loan...................................................10
(b) The Capital Improvements Advance...................................11
SECTION 2.02 Repayment....................................................11
(a) Principal..........................................................11
(b) Appreciation.......................................................11
SECTION 2.03. Prepayments.................................................11
(a) Voluntary Prepayments..............................................11
(b) Mandatory Prepayment...............................................11
SECTION 2.04. Interest....................................................11
(a) Interest...........................................................12
(b) Additional Interest................................................12
(c) Overdue Interest...................................................12
SECTION 2.05. Payments And Computations...................................12
(a) Payments by Borrower...............................................12
(b) Computations.......................................................12
(c) Payments on Business Days..........................................12
(d) Certain Terms......................................................13
SECTION 2.06. Taxes.......................................................13
(a) Withholding Taxes..................................................13
(b) Other Taxes........................................................13
(c) Indemnification....................................................13
(d) Evidence of Payment................................................14
(e) Survival...........................................................14
SECTION 2.07. Use of Proceeds.............................................14
ARTICLE III. CONDITIONS OF LENDING...........................................14
SECTION 3.01. Conditions Precedent to Initial Borrowing...................14
SECTION 3.02. Conditions Precedent to Capital Improvements Advance........19
SECTION 3.03. Conditions Precedent to Second Closing......................19
ARTICLE IV. REPRESENTATIONS AND WARRANTIES...................................19
SECTION 4.01. Representations and Warranties of Borrower..................19
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Page
(a) Incorporation, Qualification, Corporate Power and Authority........19
(b) Authorization; No Conflict or Violation; Compliance with Laws......20
(c) Approvals and Consents.............................................20
(d) Enforceability.....................................................21
(e) Merger Agreement...................................................21
(f) Use of Proceeds....................................................21
(g) Solvency...........................................................21
(h) Real Property......................................................21
(i) Single Purpose Entity..............................................21
(j) Environmental Matters..............................................21
ARTICLE V. COVENANTS OF BORROWER.............................................23
SECTION 5.01. Affirmative Covenants.......................................23
(a) Compliance with Laws, Etc..........................................23
(b) Payment of Taxes, Etc..............................................23
(c) Preservation of Corporate Existence, Etc...........................23
(d) Visitation Rights..................................................23
(e) Keeping of Books...................................................23
(f) Second Closing.....................................................23
(g) Performance of Material Contracts..................................24
(h) Transactions with Affiliates.......................................24
(i) Debt Coverage......................................................24
(j) Refinance Third Party Loan.........................................24
SECTION 5.02. Negative Covenants..........................................24
(a) Liens, Etc.........................................................24
(b) Debt...............................................................25
(c) Lease Obligations..................................................25
(d) Mergers, Etc.......................................................25
(e) Transfer of the Course.............................................25
(f) Subsidiaries, Etc..................................................26
(g) Conduct of Business................................................26
(h) Charter Amendments.................................................26
(i) Amendment, Etc. of Material Contracts..............................26
(j) Negative Pledge....................................................26
SECTION 5.03. Reporting Requirements......................................26
(a) Default Notice.....................................................27
(b) Quarterly Financials...............................................27
(c) Annual Financials..................................................27
(d) ERISA Events.......................................................27
(e) Plan Terminations..................................................27
(f) Plan Annual Reports................................................27
(g) Multiemployer Plan Notices.........................................28
(h) Litigation.........................................................28
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Page
(i) Creditor Reports...................................................28
(j) Agreement Notices..................................................28
(k) Environmental Conditions...........................................28
(1) Other Information..................................................28
ARTICLE VI. EVENTS OF DEFAULT................................................30
SECTION 6.01. Events of Default...........................................30
ARTICLE VII. TRANSFER OF THE COURSE..........................................32
SECTION 7.01. Transfer Of The Course......................................32
ARTICLE VIII. MISCELLANEOUS..................................................33
SECTION 8.01. Amendments, Etc.............................................33
SECTION 8.02. Notices, Etc................................................34
SECTION 8.03. No Waiver; Remedies.........................................34
SECTION 8.04. Costs and Expenses..........................................34
SECTION 8.05. General Indemnity...........................................35
SECTION 8.06. No Partnership..............................................35
SECTION 8.07. Binding Effect..............................................36
SECTION 8.08. Assignments.................................................36
SECTION 8.09. Governing Law...............................................36
SECTION 8.10. Venue.......................................................36
SECTION 8.11. Waiver of Jury Trial........................................36
SECTION 8.12. Execution In Counterparts...................................36
SECTION 8.13. Severability................................................37
SECTION 8.14. Integration.................................................37
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SCHEDULES AND EXHIBITS
SCHEDULES
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Schedule 3.0 1(h) Surviving Debt
EXHIBITS
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Exhibit A Form of Secured Participating Note
Exhibit B Form of Deed of Trust
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of August 18, 1998 (the "Agreement"), is made
and entered into by and between THE BADLANDS GOLF CLUB, INC., a Nevada
corporation ("Borrower"), and NATIONAL GOLF OPERATING PARTNERSHIP, L.P., a
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Delaware limited partnership ("Lender").
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RECITALS
A. Borrower is a wholly owned subsidiary of Senior Tour Players
Development Inc., a Nevada corporation ("Senior Tour"). Borrower owns a twenty-
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seven (27) hole golf course known as Badlands Golf Club, located in Las Vegas,
Nevada (the "Course").
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B. Borrower is the tenant under two ground leases for the land on which
the Course is located. The first such lease was made and entered into on April
28, 1993, by and between the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1982 Trust, a Nevada trust, and
▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Family Ltd. Partnership, a Nevada limited
partnership and Senior Tour Players, Inc., a Massachusetts corporation, as
amended and assigned (the "18-Hole Lease"). The second such lease was entered
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into on June 4, 1996, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ Peccole Family
Limited Partnership, a Nevada limited partnership, the Peccole 1982 Trust,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ Peccole 1971 Trust, ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇ 1991 Trust, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1976 Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 1976
Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Goorjian 1976 Trust, each a Nevada trust, and STPD
(defined below), as assigned (the "9-Hole Lease," and together with the 18-Hole
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Lease the "Ground Leases").
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C. Pursuant to that certain Agreement and Plan of Merger (the "Merger
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Agreement") entered into as of May 6, 1998 among Golf Club Partners L.L.C., an
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Oklahoma limited liability company ("GCP"), STPD Acquisition Company, an
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Oklahoma corporation ("STPD"), and Senior Tour, Senior Tour will merge with and
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into STPD, and STPD shall be the surviving entity, whereupon GCP will own 100%
of the issued and outstanding capital stock of Senior Tour (the "Merger").
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Following the Merger, Borrower will be a wholly-owned subsidiary of STPD.
D. Consideration for the Merger will consist of (i) $22,648,535.49 to be
funded by Lender pursuant to this Agreement in the form of a participating loan
(the "Initial Loan" and together with the Capital Improvements Advance (defined
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below) the "Loan") and (ii) $3,351,464.51 to be provided by GCP in the form of
equity.
E. As a condition to the Loan, Borrower will execute a Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing for the benefit of
the Loan to secure Borrower's obligations thereunder (the "Deed of Trust").
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F. Following the Merger, Borrower intends to make certain capital
improvements to the Course (the "Initial Capital Improvements"). Up to the
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lesser of (i) 50% of the cost of the Initial Capital Improvements or (ii)
$315,000 will be funded by a loan from Lender (the "Capital
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Improvements Advance"), which loan shall be secured by the Deed of Trust. As
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provided below, Borrower will provide funds for the remaining 50% of the funds
needed to complete the Initial Capital Improvements as a condition to the
Capital Improvements Advance, in addition to the funds GCP will contribute
towards the merger consideration.
G. Upon closing of the Loan, Borrower will use $9,648,535.49 of the
proceeds of the Loan to repay all of its outstanding indebtedness owed to
NationsCredit Commercial Corporation ("NationsCredit").
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H. Upon the closing of the Loan, Borrower will lease the Course to
American Golf Corporation, a California corporation, pursuant to a long term
lease relating to the operation of the Course as a golf course and club, the
substance and terms of which must be acceptable to Lender (the "Operating
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Lease").
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I. As soon as possible after closing of the Loan, but in no event later
than November 15, 1998, Borrower will obtain a loan in the principal amount of
$10.4 million (the "Third Party Loan") from Debis Financial Services, a
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subsidiary of Mercedes-Benz Credit Corporation ("Debis"), or another third party
lender ("Third Party Lender"). In connection with the closing of the Third Party
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Loan, Borrower (i) will make a payment to Lender in the principal amount of
$9,648,535.49 as a partial prepayment of the Loan; (ii) will enter into a deed
of trust, assignment of rents, security agreement and fixture filing ("Senior
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Deed of Trust") in favor of a collateral agent (the "Collateral Agent") for the
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benefit of Lender, up to $10.4 million, and Debis, on a 50%-50% pari passu basis
as between Lender and Debis, until Debis has been paid in full, whereafter
Lender can look to the entire value of the collateral; (iii) will enter into a
separate deed of trust, assignment of rents, security agreement and fixture
filing in favor of NGP as beneficiary to secure the remaining $2.6 million of
the Loan, the lien of which will be subordinate to the Senior Deed of Trust (the
"Junior Deed of Trust"); and (iv) may make a payment to GCP in the form of an
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intercompany loan or dividend in an amount of up to $751,464.51.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Additional Interest" has the meaning specified in the Note.
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2
"Affiliate" means, as to any Person, any other Person, directly or
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indirectly, controlling, controlled by or under common control with, that
Person.
"Agreements Regarding Ground Leases" has the meaning specified in Section
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3.01 (n)(viii).
"Agreement Regarding Operating Lease" has the meaning specified in Section
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3.01(n)(ix).
"Annual Base Interest Rate" has the meaning specified in the Note.
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"Appreciation Participation" has the meaning specified in Section 2.02(b).
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"Borrower" has the meaning specified in the recital of parties to this
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Agreement.
"Business Day" means a day of the year on which banks are not required or
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authorized by law to close in Las Vegas, Nevada or Los Angeles, California.
"Capital Improvements Advance" has the meaning specified in the Recitals
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hereto.
"Capitalized Leases" has the meaning specified in clause (e) of the
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definition of Debt.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
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Liability Act of 1980, as amended or supplemented from time to time, and the
regulations promulgated pursuant thereto.
"Closing Date" means the date on which each of the conditions in Section
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3.01 is satisfied or waived.
"Collateral" means all "Collateral" referred to in the Deed of Trust and
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all other property that is subject to any Lien in favor of Lender.
"Collateral Agent" means such person as may be obligated to distribute
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payments made in satisfaction of the Obligations created by the Loan Documents
pursuant to the terms of the Collateral Trust and Intercreditor Agreement.
"Collateral Trust and Intercreditor Agreement" means a collateral trust and
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intercreditor agreement to be executed by Lender, Third Party Lender, Borrower
and Collateral Agent in form and substance satisfactory to Lender in its
Reasonable discretion.
"Course" has the meaning specified in the Recitals hereto.
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"Debt" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such Person's
business), (c) all Obligations of such Person evidenced by notes, bonds,
3
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under leases that are required, in accordance with GAAP,
to be recorded as capital leases ("Capitalized Leases"), (f) all Obligations,
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contingent or otherwise, of such Person under acceptance, letter of credit or
similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, (h) the notional
amount of all Obligations of such Person in respect of hedge agreements, (i) all
Debt of others referred to in clauses (a) through (h) above guaranteed directly
or indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (1) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such Debt, (2) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (3) to supply funds
to or in any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is received or
such services are rendered) or (4) otherwise to assure a creditor against loss,
and (j) all Debt referred to in clauses (a) through (h) above secured by (or for
which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt (it being understood that, for
purposes of this clause (j), the principal amount of such Debt attributed to
such Person shall be the fair market value of such property).
"Deed of Trust" has the meaning specified in the Recitals and will be
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substantially the form attached hereto as Exhibit B.
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"Default" means any Event of Default or any event that would constitute an
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Event of Default but for the requirement that notice be given or time elapse or
both.
"18-Hole Lease" has the meaning set forth in the Recitals.
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"Environmental Action" means any administrative, regulatory or judicial
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action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
including, without limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any Environmental Law and (b) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
4
"Environmental Law" means any federal, state or local law, rule,
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regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health, safety or Hazardous Materials, including,
without limitation, CERCLA, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide Act and
the Occupational Safety and Health Act.
"Environmental Permit" means any permit, approval, identification number,
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license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for purposes of
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Title IV of ERISA is a member of such Person's controlled group, or under common
control with such Person, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of a
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reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
4041 (a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to administer,
such Plan.
"Events of Default" has the meaning specified in Section 6.01.
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"GAAP" has the meaning specified in Section 1.03.
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"GCP" has the meaning set forth in the Recitals.
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"Ground Leases" has the meaning set forth in the Recitals.
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5
"Hazardous Materials" means (a) petroleum or petroleum products, natural or
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synthetic gas, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation and radon gas, (b) any substances defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"Indemnified Party" has the meaning specified in Section 8.05.
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"Initial Capital Improvements" has the meaning set forth in the Recitals.
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"Initial Loan" has the meaning set forth in the Recitals.
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"Insufficiency" means, with respect to any Plan, the amount, if any, of its
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unfunded benefit liabilities, as defined in Section 4001 (a)(18) of ERISA.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
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from time to time, and the regulations promulgated and rulings issued
thereunder.
"Lender" has the meaning specified in the preamble to this Agreement.
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"Lien" means any lien, security interest or other charge or encumbrance of
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any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan" has the meaning specified in the Recitals.
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"Loan Documents" means this Agreement, the Note, the Deed of Trust, the
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Agreement Regarding Ground Leases, the Agreement Regarding Operating Lease, and
any additional documents executed in connection with the Loan concurrently
herewith or hereafter; and provided that after the Second Closing, the Loan
Documents shall also include the Collateral Trust and Intercreditor Agreement,
the Junior Deed of Trust and the Senior Deed of Trust.
"Material Adverse Effect" means a material adverse effect on (a) the
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business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower, (b) the rights and remedies of Lender under
any Loan Document or (c) the ability of Borrower to perform its Obligations
under any Loan Document to which it is or is to be a party.
"Material Contract" means the 18-Hole Lease, the 9-Hole Lease and the
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Operating Lease.
"Maturity Date" means the earlier of (i) August 31, 2013 or (ii) the date
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upon which Borrower's obligations hereunder are accelerated in accordance with
Article II hereof.
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"Merger" has the meaning specified in the Recitals.
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"Merger Agreement" has the meaning specified in the Recitals.
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"Multiemployer Plan" of any Person means a multiemployer plan, as defined
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in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Multiple Employer Plan" of any Person means a single employer plan, as
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defined in Section 400l(a)(l5) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"9-Hole Lease" has the meaning specified in the Recitals.
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"Note" means a Secured Participating Note in substantially the form
attached hereto as Exhibit A, evidencing the aggregate indebtedness of Borrower
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to Lender resulting from the Loan.
"Obligation" means, with respect to any Person, any obligation of such
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Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(h). Without limiting the generality of
the foregoing, the Obligations of Borrower under the Loan Documents include (a)
the obligation to pay principal, interest, charges, expenses, fees, attorneys'
fees and disbursements, indemnities and other amounts payable by Borrower under
any Loan Document and (b) the obligation to reimburse any amount in respect of
any of the foregoing that Lender, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"Offered Interest" has the meaning specified in Section 7.01(a).
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"Operating Lease" has the meaning specified in the Recitals.
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"Other Party" has the meaning specified in Section 7.01(a).
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"Other Taxes" has the meaning specified in Section 2.06(b).
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"Overdue Rate" has the meaning specified in Section 2.04(c).
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"PBGC" means the Pension Benefit Guaranty Corporation.
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"Permitted Liens" means such of the following as to which no enforcement,
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collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.02(a) hereof; (b) Liens imposed
by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's
Liens and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 30 days; (c)
pledges or deposits to secure obligations under workers' compensation laws or
similar legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real property that
do not render title to the property encumbered thereby unmarketable or
materially adversely affect the use of such property for its intended purposes.
"Person" means an individual, partnership, limited liability company,
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corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
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"Reasonable" means, with respect to the Third Party Loan, a loan in the
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principal amount of not more than $10.4 million and for a term of seven years,
and Borrower and Lender acknowledge that a loan on the terms set forth in the
term sheet delivered by Debis to Borrower and dated July 27, 1998 would be
Reasonable, provided, however, that the provisions thereof regarding the "soft"
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second, choice of governing law, and lack of third party collateral agent would
not be Reasonable, and, with respect to the Collateral Trust and Intercreditor
Agreement, Borrower acknowledges that the draft of Collateral Trust and
Intercreditor Agreement delivered to it by Lender and dated August 17, 1998
would be Reasonable.
"Right of First Refusal" has the meaning specified in Section 7.01(a).
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"Right of First Refusal Notice" has the meaning specified in Section
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7.01(a).
"Second Closing" means the (i) completion of the Third Party Loan in the
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principal amount of $10.4 million, for a term of 7 years, and on such other
terms as are satisfactory to Lender, in its Reasonable discretion, (ii) payment
to Lender in the principal amount of $9,648,535.49 in partial prepayment of the
Loan, and (iii) execution and delivery of (A) the Senior Deed of Trust, (B) the
Junior Deed of Trust, (C) the Collateral Trust Agreement, (D) the Intercreditor
Agreement, (E) the consent of lessee under the Operating Lease, and (F) the
consent of lessors under the Ground Lease, as soon as possible following the
closing of the Loan, but in no event later than November l5, 1998.
"Selling Party" has the meaning specified in Section 7.01(a).
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"Senior Tour" has the meaning specified in the Recitals.
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"Single Employer Plan" of any Person means a single employer plan, as
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defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its
8
ERISA Affiliates and no Person other than such Person and its ERISA Affiliates
or (b) was so maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
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particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"STPD" has the meaning specified in the Recitals.
----
"Subsidiary" of any Person means any corporation, partnership, limited
----------
liability company, joint venture, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
limited liability company or joint venture or (c) the beneficial interest in
such trust or estate, is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Surviving Debt" has the meaning specified in Section 3.01(h).
--------------
"Taxes" has the meaning specified in Section 2.06(a).
-----
"Third Party Loan" has the meaning specified in the Recitals.
----------------
"Third Party Loan Documents" means all documents, agreements or other
--------------------------
writings executed in connection with the Third Party Loan.
"Transfer of the Course" means any sale, transfer, conveyance, long-term
----------------------
lease (not including the Operating Lease) or other disposition, directly or
indirectly, whether by gift, contract for deed or other mechanism, of the
beneficial interest in (i) the Course or any part thereof or interest therein
or (ii) the Borrower, provided, however, that (x) with respect to Section
7.01, Transfer of the Course shall not include the transfer of less than 20%
of the non-voting stock of the Borrower to a third party (including the
affiliates of such party) whether in
9
one transaction, or a series of transactions in the aggregate, and (y) with
respect to Section 7.01, Transfer of the Course shall not include a transfer to
an Affiliate of Borrower.
"Transfer of the Loan" means any sale, transfer, conveyance or other
--------------------
disposition of Lender's interest, to a third party other than an Affiliate of
Lender, in whole or in part, in the Loan.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of ERISA.
--------------
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of
--------------------
Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 5.03 ("GAAP").
SECTION 1.04. Other Definitional Provisions. References to Sections
-----------------------------
and subsections shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specified. The term "including" means including
without limitation.
ARTICLE II.
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Loan.
--------
(a) The Initial Loan. Lender agrees, on the terms and conditions
----------------
hereinafter set forth, to make a single loan to Borrower on the Closing Date in
an amount equal to the Initial Loan, but not to exceed $22,648,535.49 on such
Business Day. Amounts borrowed under this Section 2.01(a) may not be reborrowed.
The borrowing hereunder shall be made on the Closing Date or the Business Day
immediately preceding the Closing Date.
(b) The Capital Improvements Advance. Lender agrees, on the terms and
--------------------------------
conditions hereinafter set forth to make a loan to Borrower on or after the
Closing Date, but in no case after December 31, 1999, equal to the Capital
Improvements Advance, but not to exceed $315,000. Amounts borrowed under this
Section 2.01(b) may not be reborrowed.
SECTION 2.02. Repayment.
---------
10
(a) Principal. Borrower shall repay to Lender (in accordance with the
---------
provisions of Section 2.05) the aggregate principal amount of the Loan owing to
Lender on the Maturity Date.
(b) Appreciation. Subject to the right of Lender to waive the
------------
requirements set forth in this Section 2.02(b), upon the occurrence of any of
(a) a Transfer of the Course, including a transfer to Lender, or (b) the
Maturity of the Loan, Borrower shall pay to Lender, in addition to, and not in
lieu of, the payments of the interest and principal payable by Borrower
hereunder and all other sums payable by Borrower to Lender in connection with
the Loan, the Appreciation Participation (as defined in the Note).
SECTION 2.03. Prepayments.
-----------
(a) Voluntary Prepayments. Borrower may not, except with the consent
---------------------
of Lender, prepay, in whole or in part, the outstanding principal of the Loan;
provided, however, that in connection with the Second Closing, Borrower may
repay Lender $9,648,535.49 in principal amount with the proceeds of the Third
Party Loan if and only if the Second Closing takes place on or before November
15, 1998. Prepayments shall be subject to a Prepayment Premium (as defined in
the Note) in accordance with Section 2.4 of the Note.
(b) Mandatory Prepayment. If Lender fails to exercise its Right of
--------------------
First Refusal set forth in Section 7.01, and Borrower proceeds with a Transfer
of the Course, Borrower shall immediately repay in full the principal amount of
the Loan and all interest and other expenses accrued thereon; provided, however,
that Lender may elect not to require such repayment, in which case the Loan
shall continue to be outstanding on the same terms as otherwise apply.
SECTION 2.04. Interest. Borrower shall pay interest on the full
--------
principal amount of the Loan from the date hereof until such principal is paid
in full at the applicable rate set forth below.
(a) Interest. Borrower shall pay interest on the principal amount of
--------
the Loan, from the date hereof until such principal amount is paid in full,
payable monthly in arrears and on the last Business Day of each month,
commencing August 31, 1998, in each case at an interest rate per annum equal to
the sum of the applicable percent of the Loan specified in Annual Base Interest
Rate.
(b) Additional Interest. Borrower shall pay Lender interest from the
-------------------
date hereof until the principal amount of the Loan is paid in full in an amount
equal to the Additional Interest in addition to, and not in lieu of, the
interest payable pursuant to Section 2.04(a).
(c) Overdue Interest. Upon the occurrence and during the continuance
----------------
of an Event of Default, Borrower shall, at the dates set forth herein for the
payment of interest and upon demand, pay interest on the Loan and any other
amounts owing hereunder not paid when
11
due at a rate per annum (the "Overdue Rate") equal at all times to the rate
otherwise applicable plus 2.00% per annum.
----
SECTION 2.05. Payments And Computations.
-------------------------
(a) Payments by Borrower. All payments of principal and interest
--------------------
hereunder shall be made without defense, setoff and counter-claim and in same
day funds and delivered to Bank of America NT&SA, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telephone number (310) 785-
6084) not later than 1:00 p.m., Pacific time, on the due date for the account of
Lender, such account number to be provided to Borrower by Lender in writing;
funds received by Lender's bank after that time shall be deemed to have been
paid by Borrower on the next succeeding Business Day.
(b) Computations. All computations of interest shall be made by Lender
------------
on the basis of a year of 360 days in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable.
(c) Payments on Business Days. Whenever any payment hereunder or under
-------------------------
any other Loan Document shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest and commitment and other fees.
(d) Certain Terms. The terms "pay," "paid" or "payment" under this
-------------
Agreement shall include prepay, prepaid or prepayment, respectively, under this
Agreement, and the term "due" under this Agreement shall include due by reason
of a mandatory prepayment (including upon an actual or deemed entry of an order
for relief with respect to Borrower or any Guarantor under the Federal
Bankruptcy Code or upon acceleration).
SECTION 2.06. Taxes.
-----
(a) Withholding Taxes. Any and all payments by Borrower hereunder and
-----------------
under the Note shall be made, in accordance with Section 2.05, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, net income taxes that are imposed on Lender by the United States
---------
and franchise taxes and net income taxes that are imposed on Lender by the state
or foreign jurisdiction under the laws of which Lender is organized or any
political subdivision thereof and franchise taxes and net income taxes that are
imposed on Lender by the state or foreign jurisdiction of Lender's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under the
Note, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.06) Lender receives an amount equal to the sum
it would have received had no such
12
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) Other Taxes. In addition, Borrower shall pay any present or future
-----------
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Note (hereinafter referred to as "Other Taxes").
(c) Indemnification. Borrower shall indemnify Lender for the full
---------------
amount of Taxes and Other Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 2.06, paid by Lender and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date Lender makes written demand therefor.
(d) Evidence of Payment. Within 30 days after the date of any payment
-------------------
of Taxes, Borrower shall furnish to Lender, at its address referred to in
Section 8.02, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Note by Borrower
through an account or branch outside the United States or on behalf of Borrower
by a payor that is not a United States person, if Borrower determines that no
Taxes are payable in respect thereof, Borrower shall furnish, or shall cause
such payor to furnish, to Lender, at such address, an opinion of counsel
acceptable to Lender stating that such payment is exempt from Taxes. For
purposes of this subsection (d), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Survival. Without prejudice to the survival of any other agreement
--------
of Borrower hereunder, the agreements and obligations of Borrower contained in
this Section 2.06 shall survive the payment in full of principal and interest
hereunder and under the Note.
SECTION 2.07. Use of Proceeds. The proceeds of the Loan shall be
---------------
available (and Borrower agrees that it shall use such proceeds) solely to (i)
repay its outstanding indebtedness to NationsCredit and (ii) to make a dividend
or intercompany loan to Senior Tour, provided, however, that Borrower may use
the proceeds of the Capital Improvements Advance to finance up to 50% of the
cost of the Initial Capital Improvements.
ARTICLE III.
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Borrowing. The
-----------------------------------------
obligation of Lender to make the Initial Loan funds available to Borrower in
accordance with this agreement is subject to the following conditions precedent:
(a) Lender shall have received evidence reasonably satisfactory to it
from Borrower that all conditions under the Merger Agreement have been satisfied
and the Merger
13
shall be consummated in accordance with the terms of the Merger Agreement,
without any material waiver or amendment not consented to by Lender of any term,
provision or condition set forth therein, and in compliance with all applicable
laws.
(b) Lender shall have received evidence reasonably satisfactory to it
from GCP and Borrower that GCP shall have sufficient funds to complete the
Merger in accordance with the terms of the Merger Agreement, including all
expenses for which GCP or Borrower is responsible.
(c) Lender shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to
GCP, in form and substance satisfactory to Lender, a reliance letter with
respect to any written opinion given by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ in connection
with the Merger.
(d) Lender shall have received evidence reasonably satisfactory to it
that Borrower is solvent.
(e) Lender shall be satisfied with the corporate and legal structure
and capitalization of Borrower, including the terms and conditions of the
charter, bylaws and each class of capital stock of Borrower and of each
agreement or instrument relating to such structure or capitalization.
(t) [Intentionally deleted.]
(g) Borrower shall have been provided by GCP with at least
$3,351,464.51 in equity.
(h) Lender shall be satisfied that all existing Debt of Borrower
(including, without limitation, all Debt owed to NationsCredit), other than the
Debt identified on Schedule 3.01(h) (the "Surviving Debt"), has been, or will be
--------------
concurrently with and with the proceeds of the Loan hereunder, prepaid, redeemed
or defeased in full or otherwise satisfied and extinguished, and all liens
securing the same have been released.
(i) Borrower shall demonstrate to Lender that minimum rent payments
under the Operating Lease are sufficient to (i) pay all debt service under the
Third Party Loan during the entire term thereof, (ii) pay all debt service under
the Loan for the entire term thereof and (iii) satisfactorily protect Borrower
from the risks of interest rate increases or refinancings, provided, however,
that Lender recognizes and accepts that the Third Party Loan will be of a term
of only 7 years, and therefore, unless Borrower refinances such loan, minimum
rent payments under the Operating Lease will not be sufficient to repay such
loan in full at its maturity.
(j) There shall have occurred no material adverse change in Borrower's
financial condition or the operation of the Course or any material damage or
destruction to the improvements on the subject land. Borrower shall provide
Lender with a signed affidavit
14
indicating that there has been no material adverse change in the financial
condition of Borrower or the Course.
(k) There shall exist no action, suit, investigation, litigation or
proceeding affecting Borrower pending or threatened before any court,
governmental agency or arbitrator that (i) could have a material adverse effect
on the business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower or Senior Tour or (ii) purports to affect
the legality, validity or enforceability of the Merger, this Agreement, the
Note, the Deed of Trust, any other Loan Document or the consummation of the
transactions contemplated hereby. Provided, however, that with respect to the
White/▇▇▇▇▇▇ litigation as disclosed to Lender, Borrower shall provide Lender
with evidence that it has either (i) established a reserve fund reasonably
sufficient to make all payments with respect to its potential obligations
arising out of such litigation or (ii) has entered into a valid and binding
settlement agreement with respect thereto.
(l) Lender shall be satisfied Borrower is not a judgment debtor under
any unsatisfied judgment for more than $10,000 or is a defendant in any pending
proceeding to collect secured indebtedness and/or to foreclose a mortgage or
deed of trust lien (or has agreed to grant a deed in lieu of foreclosure).
(m) Lender shall have completed a due diligence investigation of
Borrower in scope, and with results, satisfactory to Lender, and nothing shall
have come to the attention of Lender during the course of such due diligence
investigation to lead it to believe (i) that, following the consummation of the
Merger, Borrower would not have good and marketable title to all material assets
of Borrower reflected in the information previously provided to Lender and (ii)
that the Merger will not have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower without limiting the generality of the foregoing, Lender
shall have been given such access to the management, records, books of account,
contracts and properties of Borrower as they shall have requested.
(n) Lender shall have received on or before the date hereof the
following, each dated such day (unless otherwise specified) and in form and
substance satisfactory to Lender (unless otherwise specified):
(i) The original executed Note to the order of Lender.
(ii) (A) Certified copies of (1) the resolutions of the Board of
Directors of Borrower approving this Agreement, the Note, the Deed of Trust
and each other Loan Document to which it is or is to be a party, and (2)
the resolutions of the Board of Directors of Senior Tour and STPD approving
the Merger, and (B) copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to the
Merger, the Merger Agreement, this Agreement, the Note and each other Loan
Document from Borrower, Senior Tour, GCP and STPD.
15
(iii) A copy of the charter documents of Borrower and each
amendment thereto, certified (as of a date reasonably near the date of the
initial Borrowing) by the Secretary of State of the State of Nevada, as
being a true and correct copy thereof.
(iv) With respect to Borrower, a copy of a certificate of the
Secretary of State of the State of Nevada, dated reasonably near the date
of the date hereof, listing the charter of such Person and each amendment
thereto on file in such office and certifying that (A) such amendments are
the only amendments to such Person's charter on file in such office, (B)
such Person has paid all franchise taxes to the date of such certificate
and (C) such Person is duly incorporated and in good standing under the
laws of such State.
(v) A certificate of Borrower, signed on behalf of Borrower
by its President or a Vice President and its Secretary or any Assistant
Secretary, dated the date hereof (the statements made in which certificate
shall be true on and as of the date hereof), certifying as to (A) the
absence of any amendments to the charter of Borrower since the date of the
Secretary of State's certificate referred to in Section 3.0l(o)(iv), (B) a
true and correct copy of the bylaws of Borrower as in effect on the date
hereof, (C) the due incorporation and good standing of Borrower as a
corporation organized under the laws of the State of its jurisdiction of
incorporation, and the absence of any proceeding for the dissolution or
liquidation of Borrower, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on and as of the
date hereof and (E) the absence of any event occurring and continuing, or
resulting from the Loan, that constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary
of Borrower certifying the names and true signatures of the officers of
Borrower authorized to sign this Agreement, the Note and each other Loan
Document to which they are or are to be parties and the other documents to
be delivered hereunder and thereunder.
(vii) A Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing, duly executed by Borrower, together with:
(A) executed financing statements, in appropriate form
for filing under the Uniform Commercial Code of all jurisdictions
that Lender may deem necessary or desirable in order to perfect
and protect the Liens created by the Deed of Trust, covering the
Collateral described in the Deed of Trust,
(B) evidence of the completion of all other recordings
and filings of or with respect to the Deed of Trust that Lender
may deem necessary or desirable in order to perfect and protect
the Liens created thereby,
16
(C) evidence of the insurance required by the terms of
the Deed of Trust, and
(D) evidence that all other action that Lender may deem
necessary or desirable in order to perfect and protect the Liens
created by the Deed of Trust has been taken.
(viii) An acknowledgment and agreement covering such matters
with regard to the assignment of each of the Ground Leases as Lender may
reasonably require (the "Agreements Regarding Ground Leases").
------------------------------------
(ix) An acknowledgment and agreement covering such matters
relating to the assignment of Borrower's interest in the lease payments
under the Operating Lease to Lender as Lender may require (the "Agreement
---------
Regarding Operating Lease").
---------------------------
(x) An ALTA lender's title insurance policy in an amount
greater than or equal to the principal amount of the Loan, issued by a
title company and in form and content satisfactory to Lender.
(xi) Such financial, business and other information regarding
Borrower as Lender shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under ERISA and Welfare Plans,
collective bargaining agreements and other arrangements with employees,
annual financial statements of the Company dated December 31, 1997, interim
financial statements dated the end of the most recent fiscal quarter for
which financial statements are available and forecasts prepared by
management of Borrower, in form and substance satisfactory to Lender, of
income statements for the five fiscal years following the day of the Loan
and on an annual basis for each year thereafter until the Maturity Date.
(xii) Certified copies of the Merger Agreement, and all
Material Contracts of Borrower, and to the extent not covered above, copies
of all documents delivered in connection with the Merger Agreement.
(xiii) The written opinion of (A) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
Oklahoma counsel to Borrower and GCP regarding Borrower's due organization,
standing, power and authority to execute and perform the terms and
conditions contained in the Loan Documents, status of litigation and claims,
enforceability of the Loan Documents, and addressing such other matters as
Lender may reasonably require, and (B) Nevada counsel to Borrower regarding
Borrower's due organization, standing, power and authority to execute and
perform the terms and conditions contained in the Loan Documents, status of
litigation and claims, enforceability of the Loan Documents, non usurious
nature of the Loan and addressing such other matters as Lender may
reasonably require.
(o) Borrower shall also be reasonably satisfied with regard to the
Course:
17
(i) that the Course has been developed and is used in a
manner that is consistent with its zoning, and that such current use of the
Course does not violate any governmental ordinances, regulations or
agreements.
(ii) that (A) there are no Hazardous Materials present on or
under the Course or in any groundwater on or under the surface of the
Course, (B) the Course is not threatened by the off-premises presence of
Hazardous Materials and (C) no release or spill of any Hazardous Materials
has occurred onto or into the Course, or from the Course onto adjacent
lands.
SECTION 3.02. Conditions Precedent to Capital Improvements Advance.
----------------------------------------------------
The obligation of Lender to make the Capital Improvements Advance funds
available to Borrower in accordance with this agreement is subject to the
following conditions precedent:
(a) Lender shall have received evidence reasonably satisfactory to it
from Borrower that Borrower shall have access to additional funds to be used to
fund 50% of the cost of the Initial Capital Improvements, up to $315,000.
SECTION 3.03. Conditions Precedent to Second Closing. The obligation
--------------------------------------
of Lender to accept prepayment of $9,648,535.49 of the principal amount of the
Loan in connection with the Second Closing is subject to the following
conditions precedent:
(a) Borrower shall execute or cause to be executed each of the
following: (i) the Senior Deed of Trust, (ii) the Junior Deed of Trust, (iii)
the Collateral Trust and Intercreditor Agreement, (iv) the consent of lessee
under the Operating Lease, (v) the consent of lessors under the Ground Leases,
and (vi) amendments to the Loan Documents as reasonably requested by Lender.
(b) Borrower shall demonstrate to Lender that minimum rent payments
under the Operating Lease are sufficient to (i) pay all debt service under the
Third Party Loan during the entire term thereof, (ii) pay all debt service under
the Loan for the entire term thereof and (iii) satisfactorily protect Borrower
from the risks of interest rate increases or refinancings, provided, however,
that Lender recognizes and accepts that the Third Party Loan will be of a term
of only 7 years, and, therefore, unless Borrower refinances such loan, minimum
rent payments under the Operating Lease will not be sufficient to repay such
loan in full at its maturity.
(c) The funding of the Third Party Loan on such terms as are
satisfactory to Lender, in its Reasonable discretion.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Borrower. Borrower
------------------------------------------
hereby represents and warrants as follows:
18
(a) Incorporation, Qualification, Corporate Power and Authority.
-----------------------------------------------------------
Borrower (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse Effect and (iii) has
all requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.
(b) Authorization; No Conflict or Violation; Compliance with Laws. The
-------------------------------------------------------------
execution, delivery and performance by Borrower of this Agreement, the Note,
each other Loan Document to which it is or is to be a party, and the
consummation of the Merger, the Operating Lease and the other transactions
contemplated hereby, are within Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene
Borrower's charter or by-laws, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934 and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
Borrower, any of its properties or (iv) except for the Liens created by the
Collateral Documents, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of Borrower. Borrower is not
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which could have a Material Adverse Effect.
(c) Approvals and Consents. No authorization or approval or other
----------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by Borrower of this Agreement, the
Note, the Deed of Trust, any other Loan Document to which it is or is to be a
party, or for the consummation of the Merger or the other transactions
contemplated hereby, (ii) the grant by Borrower of the Liens granted by it
pursuant to the Deed of Trust, (iii) the perfection or maintenance of the Liens
created by the Deed of Trust (including the first priority nature thereof) or
(iv) the exercise by Lender of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant to the Deed of Trust, except for
(A) authorizations, approvals, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect, (B) the consent
of lessors which may be required in connection with the Ground Leases, and (C)
the filing of the financing statements referred to in the Deed of Trust and the
recordation thereof with the appropriate recording offices. All applicable
waiting periods in connection with the Merger and the other transactions
contemplated hereby have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially adverse
conditions upon the Merger or the rights
19
of Borrower freely to transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them.
(d) Enforceability. This Agreement has been, and the Note, the Deed of
--------------
Trust and each other Loan Document when delivered hereunder will have been, duly
executed and delivered by each party thereto. This Agreement is, and the Note,
the Deed of Trust and each other Loan Document when delivered hereunder will be,
the legal, valid and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms.
(e) Merger Agreement. The representations and warranties of GCP and
----------------
STPD set forth in the Merger Agreement are true and correct as of the date
hereof, and to the best of Borrower's knowledge the representations of Senior
Tour set forth in the Merger Agreement are true and correct as of the date
hereof.
(f) Use of Proceeds. The proceeds of the Loan will be used to (i)
---------------
repay all of Borrower's outstanding indebtedness to NationsCredit and (ii) make
an intercompany loan to Senior Tour.
(g) Solvency. As of the Closing Date, Borrower is Solvent.
--------
(h) Real Property. As of the Closing Date, Borrower is a party to the
-------------
Ground Leases, each of which is a valid and binding obligation of the parties
thereto.
(i) Single Purpose Entity. As of the Closing Date, Borrower is
---------------------
organized as a single purpose entity. The sole purpose of the corporation is to
own, lease and manage the Course, and to carry out activities directly related
thereto. Borrower has no Subsidiaries.
(j) Environmental Matters. With respect to the Course:
---------------------
(i) Operations. Except as has been disclosed in writing to
Lender prior to the date hereof, and to the best knowledge of Borrower, the
Course is presently operated in compliance in all material respects with
all Environmental Laws by Borrower or lessee under the Operating Lease.
(ii) Remediation. Except as has been disclosed in writing to
Lender prior to the date hereof, and to the best knowledge of Borrower,
there are no Environmental Laws requiring any material remediation,
cleanup, repairs or construction (other than normal maintenance) with
respect to the Course.
(iii) Violations; Orders. Except as has been disclosed in
writing to Lender prior to the date hereof, and to the best knowledge of
Borrower (i) no notices of any violation or alleged violation of any
Environmental Laws relating to the Course or its uses have been received by
Borrower or lessee under the Operating Lease, or, to the best knowledge of
Borrower, by any prior owner, operator or occupant of the Course and (ii)
there are no writs, injunctions, decrees, orders or judgments outstanding,
or any actions,
20
suits, claims, proceedings or investigations pending or threatened,
relating to the ownership, use, maintenance or operation of the Course.
(iv) Permits. Except as has been disclosed in writing to
Lender prior to the date hereof, and to the best knowledge of Borrower, all
material permits and licenses required under any Environmental Laws in
respect of the operations of the Course have been obtained or are in the
process of being obtained, and Borrower shall be in compliance, in all
material respects, with the terms and conditions of such permits and
licenses.
(v) Reports. All material reports of environmental surveys,
audits, investigations and assessments relating to the Course in the
possession or control of Borrower, lessee under the Operating Lease or
their Affiliates have been disclosed to Lender.
(vi) Remediation. Except as provided in the Operating Lease,
if Borrower becomes aware of the presence of any Hazardous Material in a
quantity sufficient to require remediation or reporting under any
Environmental Law in, on or under the Course or if Borrower, Lender or the
Course becomes subject to any order of any federal, state or local agency
to investigate, remove, remediate, repair, close, detoxify, decontaminate
or otherwise clean up the Course, Borrower shall at its sole expense, carry
out and complete, or shall cause to be carried out and completed, any
required investigation, removal, remediation, repair, closure,
detoxification, decontamination or otherwise cleanup of the Course. If
Borrower fails to implement and diligently pursue any such repair, closure,
detoxification, decontamination or other cleanup of the Course in a timely
manner, Lender shall have the right, but not the obligation, to carry out
such action and to recover all of the costs and expenses incurred by Lender
in good faith from Borrower.
ARTICLE V.
COVENANTS OF BORROWER
SECTION 5.01. Affirmative Covenants. So long as the Loan or any
---------------------
portion thereof shall remain unpaid, Borrower will, unless Lender shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, in all material respects,
-------------------------
with all applicable laws, rules, regulations and orders.
(b) Payment of Taxes, Etc. Pay and discharge, before the same shall
---------------------
become delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided, however, that Borrower
--------- -------
shall not be required to pay or discharge any such tax, assessment, charge or
claim that is being contested in good faith and by proper proceedings
21
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Preservation of Corporate Existence, Etc. Preserve and maintain
----------------------------------------
its corporate existence, rights (charter and statutory) and franchises.
(d) Visitation Rights. At any reasonable time and from time to time,
-----------------
permit Lender or any agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, Borrower, and to discuss the affairs, finances and accounts of
Borrower with any of its officers or directors and with their independent
certified public accountants.
(e) Keeping of Books. Keep proper books of record and account, in
----------------
which full and correct entries shall be made of all financial transactions and
the assets and business of Borrower in accordance with generally accepted
accounting principles in effect from time to time.
(f) Second Closing. Use its best efforts to cause the Second Closing
--------------
to occur in accordance with the provisions of this Agreement.
(g) Performance of Material Contracts. Perform and observe all the
---------------------------------
terms and provisions of each Material Contract to be performed or observed by
it, maintain each such Material Contract in full force and effect and not allow
any such Material Contract to lapse (except in accordance with its terms) or be
terminated (except in accordance with its terms) or any rights to renew such
Material Contracts to be forfeited or canceled, to exercise in a timely manner
any and all rights to renew or extend such Material Contracts and, in any event,
notify Lender of any default by any party with respect to such Material
Contracts and cooperate with Lender in all respects to cure any such default.
(h) Transactions with Affiliates. Conduct all transactions otherwise
----------------------------
permitted under the Loan Documents with any of its Affiliates on terms that are
fair and reasonable and no less favorable to Borrower than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
(i) Debt Coverage. Demonstrate to Lender in connection with any
-------------
refinance or repayment of the Third Party Loan that minimum rent payments under
the Operating Lease are sufficient to (i) pay all debt service under the Third
Party Loan during the entire term thereof, (ii) pay all debt service under the
Loan for the entire term thereof and (iii) satisfactorily protect Borrower from
the risks of interest rate increases or refinancings, provided, however that
Lender recognizes and accepts that the Third Party Loan will be of a term of
only 7 years, and therefore, unless Borrower refinances such loan, minimum rent
payments under the operating lease will not be sufficient to repay such loan in
full at its maturity.
(j) Refinance Third Party Loan. Refinance the Third Party Loan when
--------------------------
such loan shall be paid in full, provided, however that such refinancing shall
be in accordance
22
with the terms of this Agreement, shall in no case exceed $10.4 million in
principal amount, and, if secured by a deed of trust, such deed of trust shall
be on a pari passu basis as between Lender and such other lender based upon
their respective principal amounts outstanding, as measured from time to time.
SECTION 5.02. Negative Covenants. So long as the Loan shall remain
------------------
unpaid, Borrower will not, at any time, without the written consent of Lender:
(a) Liens, Etc. Create, incur, assume or suffer to exist any Lien on
-----------
or with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file
under the Uniform Commercial Code of any jurisdiction, a financing statement
that names Borrower as debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any
accounts or other right to receive income, excluding, however, from the
---------
operation of the foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) the Operating Lease;
(iii) Permitted Liens;
(iv) the Liens described on Schedule 5.02(a); and
(v) financing statements with respect to Capital Leases as
permitted in Section 5.02(c).
(b) Debt. Create, incur, assume or suffer to exist any Debt other
----
than:
(i) Debt under the Loan Documents,
(ii) Debt in respect of the Third Party Loan, and
(iii) other Debt in an aggregate principal amount outstanding at
any time outstanding not to exceed $500,000.
(c) Lease Obligations. Create, incur, assume or suffer to exist any
-----------------
obligations as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction, or (ii) for the rental or
hire of other personal property of any kind under leases or agreements to lease
including Capitalized Leases having an original term of one year or more that
would cause the direct and contingent liabilities of Borrower in respect of all
such obligations to exceed $500,000 payable in any period of 12 consecutive
months.
(d) Mergers, Etc. Merge into or consolidate with any Person or
------------
permit any Person to merge into it.
23
(e) Transfer of the Course. Hold the mortgaged property for the
----------------------
purpose of selling it or any portion thereof in the ordinary course of its
business, cause a transfer of the Course without first giving Lender a right of
first refusal with respect thereto in accordance with the provisions of Section
7.01 hereof, cause a Transfer of the Course to occur unless the amounts, if any,
paid by Borrower to Lender as a result of such Transfer of Course would fall
within the safe-harbor (the "SAFE-HARBOR") from "prohibited transaction"
-----------
treatment set forth in Section 856(b)(6)(C) of the Internal Revenue Code of
1986, as amended, or take no other action with respect to the Collateral which
could cause amounts paid by Borrower to Lender at maturity or otherwise pursuant
to the Loan to fail to qualify for the Safe-Harbor.
(f) Subsidiaries, Etc. Create or sustain a Subsidiary, or to
------------------
otherwise become a general partner of any general or limited partnership or
member of any limited liability company.
(g) Conduct of Business. Make any material change in the nature of its
-------------------
business as carried on at the date hereof or undertake any business other than
the ownership and leasing of the Property and any activities related or
incidental thereto.
(h) Charter Amendments. Amend its certificate of incorporation or
------------------
bylaws in any manner that could be adverse to Lender.
(i) Amendment, Etc. of Material Contracts. Cancel or terminate any
-------------------------------------
Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any material default under or breach of any
Material Contract, agree in any manner to any other material amendment,
modification or change of any term or condition of any Material Contract or take
any other action in connection with any Material Contract that would impair in
any material respect the value of the interest or rights of Borrower thereunder
or that would impair the interest or rights of Lender.
(j) Negative Pledge. Enter into or suffer to exist any agreement
---------------
prohibiting or conditioning the creation or assumption of any Lien upon any of
its property or assets other than (i) in favor of Lender, (ii) as provided in
the Ground Leases, and (iii) in connection with any Lien permitted by Section
5.02(a) hereof (so long as the applicable prohibition extends only to the
property subject to such Lien).
SECTION 5.03. Reporting Requirements. During the term of the Loan,
----------------------
Borrower will, unless Lender shall otherwise consent in writing, furnish to
Lender:
(a) Default Notice. As soon as possible and in any event within two
--------------
Business Days after the occurrence of each Default continuing on the date of
such statement, a statement of the chief financial officer of Borrower setting
forth details of such Default and the action that Borrower has taken and
proposes to take with respect thereto.
24
(b) Quarterly Financials. As soon as available and in any event within
--------------------
45 days after the end of each of the first three quarters of each fiscal year of
Borrower, such quarterly reports as Borrower shall be entitled to receive from
Lessee pursuant to the Operating Lease, including all Officers' Certificates and
signed statements required to be attached thereto.
(c) Annual Financials. As soon as available and in any event within 90
-----------------
days after the end of each fiscal year of Borrower, a copy of the unaudited
financial statements for such year for Borrower, including therein balance
sheets of Borrower as of the end of such fiscal year and statements of income
and cash flows of Borrower for such fiscal year, in each case accompanied by the
chief financial officer of Borrower (or its parent entity as the case may be) as
having been prepared in accordance with GAAP, together with (i) a certificate of
said officer stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature thereof and
the action that Borrower has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to Lender of the computations used by
Borrower in determining compliance with the covenants contained in Sections 5.01
and 5.02.
(d) ERISA Events. Promptly and in any event within 15 Business Days
------------
after Borrower or any of its ERISA Affiliates knows or has reason to know that
any ERISA Event with respect to Borrower or any of its ERISA Affiliates has
occurred, a statement of the chief financial officer of Borrower describing such
ERISA Event and the action, if any, that Borrower or such ERISA Affiliate has
taken and proposes to take with respect thereto.
(e) Plan Terminations. Promptly and in any event within 5 Business
-----------------
Days after receipt thereof by Borrower or any of its ERISA Affiliates, copies of
each notice from the PBGC stating its intention to terminate any Plan of
Borrower or any of its ERISA Affiliates or to have a trustee appointed to
administer any such Plan.
(f) Plan Annual Reports. Promptly and in any event within 15 Business
-------------------
Days after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of Borrower or any of its ERISA Affiliates.
(g) Multiemployer Plan Notices. Promptly and in any event within 15
--------------------------
Business Days after receipt thereof by Borrower or any of its ERISA Affiliates
from the sponsor of a Multiemployer Plan of Borrower or any of its ERISA
Affiliates, copies of each notice concerning (i) the imposition of Withdrawal
Liability on Borrower or any of its ERISA Affiliates by any such Multiemployer
Plan, (ii) the reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (iii) the amount of liability incurred,
or that may be incurred, by such Loan Party or any of its ERISA Affiliates in
connection with any event described in clause (i) or (ii).
(h) Litigation. Promptly after the commencement thereof, notice
----------
of all actions, suits, investigations, litigation and proceedings before any
court or governmental
25
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting Borrower.
(i) Creditor Reports. Promptly after the furnishing thereof, copies of
----------------
any default notice or other material statement or report furnished to Third
Party Lender pursuant to the terms of any document with respect to the Third
Party Loan and not otherwise required to be furnished to Lender pursuant to any
other clause of this Section 5.03.
(j) Agreement Notices. Promptly upon receipt thereof, copies of all
-----------------
default notices and other material notices, and requests and other material
documents received by Borrower under or pursuant to the Merger Agreement, any
Material Contract or the Third Party Loan and, from time to time upon request by
Lender, such information and reports regarding the Merger Agreement, the
Material Contracts and the Third Party Loan as Lender may reasonably request.
(k) Environmental Conditions. Promptly after the occurrence thereof,
------------------------
notice of any condition or occurrence on any property of Borrower that results
in a material noncompliance by Borrower with any Environmental Law or
Environmental Permit or could (i) form the basis of an Environmental Action
against Borrower or such property that could have a Material Adverse Effect or
(ii) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(i) Other Information. Such other information respecting the business,
-----------------
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower as Lender may from time to time reasonably request.
26
ARTICLE VI.
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
-----------------
(a) Borrower shall fail to pay any principal of the Loan when the same
becomes due and payable or Borrower shall fail to pay any interest on the Loan
or Borrower shall fail to make any other payment under any Loan Document within
3 days after the same becomes due and payable; or
(b) any representation or warranty made by Borrower (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or
(c) a defined "Event of Default" shall occur under any other Loan
Document; or
(d) Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 5.02, and such failure or default is not cured
within 5 days; or
(d) Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 30 days after written notice
thereof shall have been given to Borrower by Lender; or
(e) Borrower shall fail to pay or cause to be paid any sum due and
payable pursuant to the Ground Leases, or shall otherwise default with respect
to its obligations thereunder, and such failure or default is not cured within
10 days after the same becomes due and payable; or
(f) Borrower shall fail to pay any principal of, premium or interest
on or any other amount payable in respect of any Debt that is outstanding in a
principal or notional amount of at least $500,000 in the aggregate (but
excluding Debt outstanding hereunder) of such Borrower (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem,
27
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(g) Borrower shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against Borrower seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith, either
such proceeding shall remain undismissed or unstayed for a period of 30 days or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or Borrower shall take any corporate action to authorize
any of the actions set forth above in this subsection (g); or
(h) any judgment or order for the payment of money in excess of
$100,000 shall be rendered against Borrower and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) except with respect to any such judgment or order as to which
insurance coverage for all amounts in excess of $100,000 has been acknowledged
in writing by the applicable third party insurer, there shall be any period of
10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(i) any non-monetary judgment or order shall be rendered against
Borrower that could have a Material Adverse Effect, and there shall be any
period of 20 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(j) any material provision of any Loan Document after delivery thereof
pursuant to Section 4.01 or otherwise shall for any reason cease to be valid and
binding on or enforceable against Borrower party to it, or any such Loan Party
shall so state in writing; or
(k) any Collateral Document after delivery thereof pursuant to Section
4.01 or 6.01 shall for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority Lien on the Collateral
purported to be covered thereby; or
(l) any ERISA Event shall have occurred with respect to a Plan of
Borrower or any of its ERISA Affiliates and the sum (determined as of the date
of occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans of Borrower and their ERISA Affiliates
with respect to which an ERISA Event shall have
28
occurred and then exist (or the liability of Borrower and their ERISA Affiliates
related to such ERISA Event) exceeds $50,000; or
(m) Borrower or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of Borrower or any of its ERISA
Affiliates that it has incurred Withdrawal Liability to such Multiemployer Plan
in an amount that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by Borrower and their ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds $50,000 or
requires payments exceeding $25,000 per annum; or
(n) Borrower or any of its ERISA Affiliates shall have been notified
by the sponsor of a Multiemployer Plan of Borrower or any of its ERISA
Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of Borrower and
their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $50,000;
then, and in any such event, Lender (i) may by notice to Borrower declare the
obligation to make the Loan to be terminated, whereupon the same shall forthwith
terminate, and (ii) may, by notice to Borrower, declare the Note, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Note and all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by Borrower; provided, however, that in the event of
--------- -------
an actual or deemed entry of an order for relief with respect to Borrower under
the Federal Bankruptcy Code, (x) the obligation of Lender to make advances shall
automatically be terminated and (y) the Note, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by Borrower.
ARTICLE VII.
TRANSFER OF THE COURSE
SECTION 7.01. Transfer Of The Course. Any proposed Transfer of the
----------------------
Course shall be subject to the following rights of Lender set forth below.
(a) Right of First Refusal. Borrower and Lender shall each have a
----------------------
right of first refusal with respect to a Transfer of the Course in the case of
Lender, or a Transfer of the Loan in the case of Borrower (in either case a
Transfer) (the "Offered Interest"). In the event a party proposes to transfer
----------------
such interest (the "Selling Party"), then that party must first give written
-------------
notice (the "Right of First Refusal Notice"), to the other party (the "Other
----------------------------- -----
Party"), specifying as applicable (i) his or her intention to Transfer such
-------
Offered Interest to a third party,
29
(ii) the name and address of the proposed purchaser(s) or recipient(s), (iii)
the nature of Offered Interest, (iv) the proposed price for the Offered
Interest, and (v) all other material terms and conditions of the Transfer.
Within 30 days after receipt of the Right of First Refusal Notice, the
Other Party may elect to purchase all of the Offered Interest at the price and
on the terms and conditions set forth in the Right of First Refusal Notice by
delivery of written notice to the Selling Party (the "Right of First Refusal").
------------------------
Within 60 days after delivery of such notice, the parties shall arrange for the
delivery of payment to the Selling Party at the price as set forth in the Right
of First Refusal Notice, the execution of the appropriate sale documents and the
delivery of the appropriate transfer documents; and shall each use their best
reasonable efforts to consummate the transaction as soon as reasonably possible
thereafter.
The Selling Party shall be entitled to sell or transfer the Offered
Interest not purchased by the Other Party to the purchaser(s) named in the Right
of First Refusal Notice at the price specified in the Right of First Refusal
Notice and on the terms and conditions set forth in the Right of First Refusal
Notice; provided, however that such sale or transfer must be consummated within
90 days after the date of the Right of First Refusal Notice.
(b) Termination of Right of First Refusal. If the Other Party does not
-------------------------------------
exercise its Right of First Refusal and the Offered Interest is not transferred
to the specified third party within the 90 day period set forth above, such
Offered Interest shall not be sold or transferred to any third party unless
first reoffered to the Other Party in accordance herewith. If the offered
interest is sold to the specified third party, the Right of First Refusal with
respect to such Offered Interest will terminate upon transfer thereof provided
that such third party is not an Affiliate of Borrower.
(c) Affiliates Obligated. Any Transfer of the Course or Transfer of
--------------------
the Loan to an Affiliate of the Selling Party as contemplated by this Agreement
shall not be subject to the rights contained in this Section 7.01, but all such
rights under this Section 7.01 shall continue in full force and effect not
withstanding any such Transfer, and be binding on such Affiliate transferee.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
----------------
provision of this Agreement or the Note, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by Lender (and, in the case of any such amendment, Borrower),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 8.02. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable
30
communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered, if to Lender, at its address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇, Attn: General Counsel;
if to Borrower, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇, Attn: ▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ Bank of Oklahoma
Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopier No. (405)
235-7329, Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or, as to each party, at such other address as
shall be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed, telecopied,
telexed or cabled, be effective when deposited in the mails, delivered to the
telegraph company, transmitted by telecopier, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices and
communications to Lender pursuant to Article II, III or IV shall not be
effective until received by Lender.
SECTION 8.03. No Waiver; Remedies. No failure on the part of Lender to
-------------------
exercise, and no delay in exercising, any right hereunder, under any Note or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses.
------------------
(a) Borrower agrees to pay (i) all of its reasonable costs and
expenses in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents and (ii) all
costs and expenses of Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally or otherwise
(including, without limitation, the reasonable fees and expenses of counsel for
Lender with respect thereto).
(b) If Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Borrower by Lender, in its sole discretion and Borrower shall reimburse
Lender on demand for any amounts so paid with interest thereon at the Overdue
Rate from the date of such demand until so reimbursed.
SECTION 8.05. General Indemnity. Borrower agrees to indemnify and hold
-----------------
harmless Lender and its Affiliates and their partners, officers, directors,
employees, agents, attorneys and advisors (each, an "Indemnified Party") from
-----------------
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection with
the preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) this Agreement or any other
Loan Document, the actual or proposed use
31
of the proceeds hereunder or any of the transactions contemplated hereby or by
the other Loan Documents, or (ii) the Merger and any of the other transactions
contemplated hereby, in either case whether or not such investigation,
litigation or proceeding is brought by Borrower, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
Borrower also agrees not to assert any claim against Lender, any of its
affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in any other Loan Document or the actual or proposed use
of the proceeds of the Loan.
SECTION 8.06. No Partnership. Lender and Borrower intend that the
--------------
relationship between them shall be solely that of creditor and debtor. Nothing
contained in this Agreement or in any other Loan Document, including without
limitation Lender's right to receive Additional Interest and Appreciation
Participation, shall be deemed or construed to create, or to be, a partnership,
tenancy-in-common, joint tenancy, joint venture or by or between Lender and
Borrower. Lender in no way shall be responsible or liable for the debts, losses,
obligations or duties of Borrower with respect to the Course or otherwise. All
obligations to pay real property or other taxes, assessments, insurance premiums
and all other fees and charges arising from the ownership, operation or
occupancy of the Course and to perform the Operating Lease, Ground Lease and
other agreements and contracts relating to the Course shall be the sole
responsibility of Borrower. Borrower, at all times consistent with the terms and
provisions of this Agreement and all other Loan Documents, shall be free to
determine and follow its own policies and practices in the conduct of its
business on the Course. However their relationship may be characterized, Lender
and Borrower waive, to the fullest extent permitted by law, any and all
fiduciary or similar duties to the other. If any court or arbiter shall
determine that, notwithstanding this Section 8.06, the relationship between the
parties is other than a borrower-lender relationship, Borrower and Lender intend
that the terms of this Agreement and the other Loan Documents shall govern the
economic relationship of the parties.
SECTION 8.07. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by Borrower and Lender and thereafter shall be
binding upon and inure to the benefit of Borrower, Lender and their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
Lender.
SECTION 8.08. Assignments. Lender may, from time to time, assign all
-----------
or a portion of its rights and obligations under this Agreement (including all
or a portion of the Note held by it) subject to the rights of Borrower with
respect to a Transfer of the Loan as set forth in Section 7.01.
32
SECTION 8.09. Governing Law. This Agreement and the Note shall be
-------------
governed by, and construed in accordance with, the laws of the State of Nevada.
SECTION 8.10. Venue. ANY ACTION OR PROCEEDING AGAINST BORROWER OR ANY
-----
OTHER OBLIGATED PARTY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN ANY NEVADA STATE COURT LOCATED IN THE COUNTY OF
▇▇▇▇▇ OR FEDERAL COURT IN THE CORRESPONDING DISTRICT OF NEVADA. BORROWER
IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM.
SECTION 8.11. Waiver of Jury Trial. EACH OF BORROWER AND LENDER HEREBY
--------------------
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, OR THE ACTIONS OF EITHER PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.12. Execution In Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.13. Severability. Any provision of any Loan Document held by
------------
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of any Loan Document and the effect thereof
shall be confined to the provision held to be invalid or illegal.
SECTION 8.14. Integration. This Agreement, the Note and the Deed of
-----------
Trust and other Loan Documents represent and embody the entire agreement among
the parties hereto and supersede any and all prior commitments, term sheets,
agreements, representations and understandings, whether written or oral,
relating to the subject matter hereof and may not be contradicted or varied by
evidence of prior, contemporaneous, or subsequent oral agreements or discussions
of the parties hereto. There are no unwritten oral agreements among the parties
hereto. There are no unwritten oral agreements among the parties thereto.
SECTION 8.15. Perfection of Water Rights. Within 10 days of the
--------------------------
execution hereof, Borrower shall deliver to the Office of the State Engineer of
the State of
33
Nevada all forms necessary to perfect the interest of Lender in any and all
water rights associated with the Property.
(signature page follows)
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first
above written.
BORROWER
THE BADLANDS GOLF CLUB, INC.
a Nevada corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
LENDER
NATIONAL GOLF OPERATING
PARTNERSHIP, L.P.
a Delaware limited partnership
By: National Golf Properties, Inc.,
a Maryland corporation.
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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