HomeMy WebLinkAboutResolution - 2003-R0235 - Estoppel Agreement Certificate - Fore Star Golf, Inc. - 06_12_2003Resolution No. 2003—RO235
June 12, 2003
Item No. 57
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock is hereby authorized and directed to
execute for and on behalf of the City of Lubbock an Estoppel Agreement Certificate and
Agreement and any associated documents between the City of Lubbock, Fore Star Golf,
Inc., General Electric Capital Corporation, a copy of which Agreement is attached hereto
and which shall be spread upon the minutes of this Council and as spread upon the
minutes of this Council shall constitute and be a part hereof as if fully copied herein in
detail.
Passed by the City Council this 12th day c
ATTEST:
Rebecca Garza, City Secretary
APPROVED ILONTENT:
14 e5�
Randy Truesdell, Cormnity Sery ices Director
''a � • •Iir"
City
Attorney
DDres/FourStarCollAassignRes
May 23, 2003
.k
Resolution No. 2003-RO235
June 12, 2003
Item No. 57
ESTOPPEL CERTIFICATE AND AGREEMENT
THE STATE OF TEXAS §
COUNTY OF LUBBOCK §
THIS ESTOPPEL CERTIFICATE AND AGREEMENT (this "Agreement") is entered
into as of the 12th day of June , 2003, among the CITY OF LUBBOCK, TEXAS, a home -
rule city of the State of Texas duly organized and existing pursuant to its charter and the laws of
the State of Texas (the "City"), FORE STAR GOLF OF LUBBOCK, LLC, a Texas limited
liability company ("Manager"), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("Lender").
Recitals
A. The City is the owner of two public golf courses located in Lubbock County,
Texas, which are referred to in the Management Agreement (as defined below) as the
"Meadowbrook Golf Course" and the "Squirrel Hollow Golf Course" and are now commonly
known as the "Meadowbrook Golf Complex - Canyon Course and Creek Course" (the "Golf
Course").
B. The City and Manager (as successor to Fore Star Golf, Inc.) are parties to a
Management Agreement dated as of October 14, 1994 (the "Management Agreement") and an
Amendment thereto dated May 10, 2001, pursuant to which Manager has agreed to manage the
Golf Courses for the City.
C. Manager and one or more affiliated entities desire to obtain a loan from Lender in
the principal amount of $10,250,000 (the "Loan"), to be secured by, among other things, all of
Manager's rights under the Management Agreement. A draft copy of the Collateral Assignment
of the Management Agreement from Manager to Lender is attached hereto as Exhibit A (the
"Collateral Assignment").
D. It is a condition to Lender's willingness to make the Loan, that the City consent to
the assignment of the Management Agreement to Lender, and that the City confirm certain facts
and make certain agreements for the benefit of the Lender. By execution of this Agreement the
City agrees to said Collateral Assignment, so long as said agreement is finally executed in
substantially similar terms to the draft agreement attached hereto as Exhibit A.
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Incorporation of Recitals. The Recitals set forth above are hereby incorporated
into and made a part of this Agreement.
2. Estoppel Certificate. The City hereby confirms the following:
(a) the Golf Courses are owned by the City, and the City has not made any
assignment or transfer of, or created any options, purchase rights or other interests in, the
Golf Courses, with the exception of the Management Agreement, and no consent or
approval of any other person or entity is required is order for the city to enter into, or as a
condition to the effectiveness of, this Agreement;
(b) The Management Agreement has been amended by an Amendment
executed by the parties, dated May 10, 2001, and it has not otherwise been amended or
modified in any respect;
(c) to the best of the City's knowledge, Manager has performed and observed
all of its covenants and conditions under the Management Agreement, and is not in
default under the Management Agreement in any respect;
(d) the (i) "Phase I Capital Improvements" required by Section 2.2 of the
Management Agreement; (ii) "Capital Improvements by Fore Star" required by Section
2A.1 of the Management Agreement; and (iii) "Phase II Capital Improvements" have all
been completed to the satisfaction of the City;
(e) the "Capital Improvements by City" required by Section 2A.2 of the
Management Agreement have been completed; and
(f) Manager has furnished all bonds, letters of credit and other security
instruments required under terms of the Management Agreement.
3. Consent to Collateral Assignment. The City hereby consents to the assignment of
Manager's rights under the Management Agreement to Lender, as security for the Loan so long
as said Collateral Assignment is finally executed in substantially similar terms to the draft
Collateral Assignment attached hereto as Exhibit A.
4. Amendments to Management Agreement. Until such time as the Loan has been
repaid in full, (a) no modifications or amendments to the Management Agreement may be
entered into or approved by Manager without Lender's prior written consent, which shall not be
unreasonably withheld, (b) no consensual termination, of the Management Agreement, and no
termination of the Management Agreement by Manager pursuant to Section 1.13(b) or 1.13(c) of
the Management Agreement, shall be effective without Lender's prior written consent, and (c) no
exercise by Manager of the purchase option contained in Section 7.1 of the Management
Agreement (and no notice delivered by Manager pursuant to Section 7.1(a) of the Management
Agreement) shall be effective without Lender's prior written consent.
5. Qperation of Other Golf Facilities. City agrees that, notwithstanding Section 5.4
of the Management Agreement, affiliates of Manager shall be permitted to own or operate
Lakeridge Country Club and any other course located in Lubbock, Texas.
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6. Notice and Cure Rights. Prior to terminating the Management Agreement or
exercising any other right or remedy thereunder as a result of a default by Manager, the City
shall give Lender written notice of the pertinent default by Manager. Lender shall have the right
to remedy such default for a period of ten (10) days as to monetary defaults and thirty (30) days
as to other covenants, agreements and obligations after receipt of notice; provided, however, (a)
if any non -monetary defaults are of a nature that they cannot be completely corrected within such
thirty (30) day period, then such defaults shall be deemed to have been remedied if Lender
commences the cure thereof within such thirty (30) day period and proceeds to complete such
cure with reasonable diligence thereafter; and (b) Lender shall have such longer period to correct
any such non -monetary defaults as may be required to complete any remedial actions which
Lender elects to pursue in order to become the manager under the Management Agreement,
including, but not limited to any delays which Lender may encounter as a result of a bankruptcy
proceeding instituted by or on behalf of Manager or by a creditor of Manager, so long as during
such longer period Lender performs the covenants of the manager under the Management to the
extent the same can be performed without having completed such remedial actions. However,
any non -monetary defaults which cannot reasonably be cured by Lender even after completion of
Lender's remedial actions against Manager shall be considered excused, provided that Lender,
upon completing its remedial actions and becoming the manager under the Management
Agreement, shall assume all of the obligations of the manager under the Management Agreement
for so long as Lender is the manager thereunder.
7. Right to Become Manager. Notwithstanding anything to the contrary in the
Management Agreement, the City agrees that in the event of a default by Manager under the
Loan, Lender or its affiliate may become the manager under the Management Agreement by
foreclosing or otherwise realizing upon its rights under the documents governing the Loan. In the
event that Lender or its affiliate becomes the manager under the Management Agreement in such
fashion, (a) Lender or its affiliate shall be deemed to have assumed the obligations of the
manager under the Management Agreement during the period that it is the manager thereunder;
(b) Lender or its affiliate may discharge its duties under the Management Agreement by
engaging one or more management companies or other persons or entities to carry out the actual
management and operation of the Golf Courses; it being understand that Lender is not itself in
the golf course management business; (c) Lender or its affiliate shall have the right to further
assign the obligations of the manager under the Management Agreement to a third -party
management company with the prior written consent of the City, which shall be granted if the
City reasonably determines that the proposed assignee is experienced in the business of
managing golf courses and is otherwise capable of performing the duties of the manager under
the Management Agreement; and (d) upon any such assignment, Lender or its affiliate shall be
relieved of any further obligations or liabilities under the Management Agreement.
8. New Agreement. If the Management Agreement is ever terminated as a result of a
default by Manager, the City agrees that it will enter into a new management agreement (the
"New Agreement") for the Golf Courses with Lender or an affiliate of Lender (the "New
Manager") for the remainder of the term of the Management Agreement, effective as of the date
of such termination, upon the same terms and conditions contained in the Management
Agreement; provided however, that: (a) the New Manager shall make written request for the
New Agreement within thirty (30) days after the date it is notified of the termination of the
Management Agreement; (b) the New Manager shall cure all defaults under the Management
3
Agreement which remain uncured as of such date to the extent the same can be reasonably cured;
and (c) the New Manager shall pay or cause to be paid to the City all expenses, including
reasonable attorneys' fees, incurred by the City in connection with any such default and
termination as well as in connection with the execution and delivery of the New Agreement.
9. Accounts. The City recognizes that in connection with the Loan, Lender shall take
a security interest in all amounts that Manager is entitled to receive under terms of the
Management Agreement, as well as a security interest in all amounts in any bank accounts
containing funds that Manager is entitled to receive pursuant to the Management Agreement (the
"Accounts"), including without limitation the Deposit Account and the Capital Fund (as such
terms are defined in the Management Agreement). The City consents to such security interests
and agrees that Lender may enter into such agreements with respect to the Accounts as it deems
advisable in order to project its interests in amounts that may be placed therein. Lender agrees
that it shall not seize or otherwise obtain any amounts in the Accounts prior to a default by
Manager under the Loan and Lender's election to assume the obligations of Manager under the
Management Agreement, either itself or through an affiliate. In no event shall Lender have any
interest in funds of the City in the General Account (as defined in the Management Agreement).
10. Termination Payments. If, pursuant to Section 8.6 of the Management
Agreement, or otherwise, Manager is entitled to any payments from the City as a result of the
termination of the Management Agreement, such payments shall be made directly to Lender,
until such time as Lender advises the City that the Loan has been repaid in full.
11. Notices. Any notice which any party hereto may be required or may desire to
give hereunder shall be delivered personally, mailed, postage prepaid, by United States
registered or certified mail, return receipt requested, or sent by overnight express courier,
addressed as follows:
If to the City:
City of Lubbock, Texas
Municipal Building
1625 Thirteenth Street
Lubbock, Texas 79401
Attn: Director of Culture/Leisure and Recreation
If to Manager:
Fore Star Golf of Lubbock, LLC
8802 Vicksburg
Lubbock, Texas 79424
Attn: Steve Yonke
If to Lender:
General Electric Capital Corporation
0
500 West Monroe Street
Chicago, Illinois 60661
Attn:
or at such other addresses or to the attention of such other persons as may from time to time be
designated by the party to be addressed by written notice to the other in the manner herein
provided. Notices, demands and requests given in the manner aforesaid shall be deemed
sufficiently served or given for all purposes hereunder when received or when delivery is refused
or when the same are returned to sender for failure to be called for.
12. Termination Upon Repayment of Loan. This Agreement shall terminate as to
Lender and be of no further force or effect at such time as the Loan has been repaid in full.
13. Amendments and Binding Effect. This Agreement may be modified only by an
agreement in writing signed by the parties hereto. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, together with their permitted successors and assigns.
14. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Texas and the United States of America.
15. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
16. Further Assurances. Each of the parties to this Agreement agrees that it will
without further consideration execute and deliver such other documents and take such other
actions as may reasonably be requested by any other party to this Agreement in order to
consummate more effectively the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
CITY:
CITY OF LUBBOCK,
Marc M�DoxkRal . MAYOR
ATTEST:
Rebecca Garza , City Secretary
MANAGER:
FORE STAR GOLF OF LUBBOCK, LLC, a
Texas limited liability company
Name:
ve, `�'
Title:
LENDER
5
APPROVED AS TO CONTENT: General Electric Capital Corporation
etI'
a Delaware corporation
6
l
By: un �2K By:
Its Aut orized gignatory
Doc9:CHI01(214590-00044)50112917v4;05/16/2003/Time:15:03
Resolution No. 2003—RO235
April 22, 2003
City of Lubbock, Texas
Attn: Tommy Gonzalez
Municipal Building
1625 13'h Street
Lubbock, TX 79401
Re: Management Agreement for Meadowbrook and Squirrel Hollow Golf Courses
Dear Tommy:
I am writing to notify you that Premier Golf Management, Inc. ("Premier") has agreed in
principle to become the new parent company of Fore Star Golf, Inc. ("FSG7% which in turn is the
parent company of Fore Star Golf of Lubbock, LLC ("FSG Lubbock"). In conjunction with this
proposed transaction, FSG will be refinancing our existing credit facilities and our new lender
will be GE Capital. We expect these transactions to close on or about May 15, 2003.
Under our revised ownership structure FSG Lubbock will remain intact and will continue
as Manager under our Management Agreement with the City of Lubbock. I will continue in my
position as President of FSG.
In connection with these proposed transactions, Premier and GE Capital have asked that
we get the City's acknowledgement of the matters set forth below.
1. The Management Agreement dated October 14, 1994 between Fore Star Golf of
Lubbock, LLC (assigned from Fore Star Golf, Inc.) and the City of Lubbock, as amended by an
Amendment dated May 10, 2001 (the "Management Agreement") is currently in full force and
effect and constitutes the entire agreement between the parties to such agreement.
2. The Management Agreement has not been amended, modified or otherwise
changed except for such modifications and amendments as listed above.
3. The two golf courses that are the subject of the Management Agreement (the
"Golf Courses") are owned by the City, and the City has not made any assignment or transfer of,
or created any options, purchase rights or other interests in the Golf Courses.
KC-1048731-2
4. All management fees and other payments due to either FSG Lubbock or the City
pursuant to the Management Agreement have been paid as of the March 31,2003.
5. FSG Lubbock has performed all of its covenants and obligations under the
Management Agreement and no circumstances exist under which FSG Lubbock would be in
default under the Management Agreement upon service of notice, the passage of time or both.
6. FSG Lubbock has completed all capital improvements required by Section 2A.1
of the Management Agreement.
7. The City acknowledges and consents to Premier's investment in the common
stock of FSG and confirms that such transaction will not give rise to any rights of the City to
terminate the Management Agreement. Premier may rely on this letter in completing it's
investment in FSG stock.
8. The City will not attempt to require FSG, FSG Lubbock, or their successors to
remediate or pay for remediation of contamination that may have migrated to the Golf Courses
from any other City owned property. The City acknowledges that any such migrating
contamination is the City's responsibility and will hold FSG and FSG Lubbock harmless from it.
9. The undersigned individual has the authority to execute and deliver this letter on
behalf of the City.
Thank you for your attention to this matter. I look forward to continuing to work with
you in the future.
Very ly yours,
even W. Y e
President
The matters set forth in this letter are hereby acknowledged and agreed to as of the 12th day of
June , 2003.
CITY OF LUBBOCK
By:
Nan
Tith
2
KC-1048731-2
Resolution No. 2003-RO235
EXHIBIT A
COLLATERAL ASSIGNMENT OF MANAGEMENT AGREEMENT
THIS COLLATERAL ASSIGNMENT OF MANAGEMENT AGREEMENT
(this "Assignment") is made by , a , whose
address is ("Assignor"), in favor of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, whose address is 500 West Monroe
Street, Chicago, Illinois 60661 ("Assignee").
Recitals
A. On October 7, 1994, the City of Lubbock, Texas (the "City") and Fore
Star Golf, Inc. ("FSG") entered into a certain Management Agreement, as amended by an
Amendment thereto dated May 10, 2001 (as so amended the "Management Agreement"),
pursuant to which FSG obtained the right and obligation to manage the golf courses and related
facilities located in Lubbock, Texas which are commonly known as the "Meadowbrook Golf
Course" and the "Squirrel Hollow Golf Course" (the "Golf Courses"). The rights and
obligations of FSG under the Management Agreement and any amendments thereto have been
assigned to and assumed by Assignor, and Assignor is presently the manager under the
Management Agreement.
B. Subject to certain conditions, Assignee has agreed to lend
$ (the "Loan") to Assignor, (collectively, the
"Borrowers"). The Loan is governed by a Loan Agreement between the Borrowers and
Assignee (the "Loan Agreement"), and is evidenced by Promissory Notes from the Borrowers to
Assignee. The Loan Agreement, the Promissory Note, this Assignment and all other documents
executed in connection with the Loan are hereinafter collectively referred to as the "Loan
Documents" and all obligations of any of the Borrowers under the Loan Documents are
hereinafter referred to as the "Obligations." Any capitalized terms used but not otherwise
defined in this Assignment shall have the meanings assigned to such terms in the Loan
Agreement.
C. It is a condition to Assignee's willingness to make the Loan that Assignor
execute and deliver this Assignment to Assignee, as security for the full payment and
performance of the Obligations.
Assignment
NOW, THEREFORE, for and valuable consideration, the receipt and sufficiency
of which are hereby acknowledge, Assignor hereby agrees with Assignee as follows:
1. Incorporation of Recitals. The Recitals set forth above are hereby
incorporated into and made a part of this Assignment.
2. Assignment. Assignor hereby assigns, transfers, sets over, pledges and
grants a security interest to Assignee in (a) all of Assignor's right, title and interest in the
Management Agreement and all Assignor's rights thereunder, including without limitation all
rights to receive Golfing Revenues, revenues from the operation of golf pro shops, restaurants
and concessions, and all other revenues of any type that Assignor is entitled to receive under the
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terms of the Management Agreement, (b) all Assignor's rights in the Deposit Account and the
Capital Fund, together with all amounts at any time placed therein, and (c) all other rights of
Assignor relating in any way to the Management Agreement (collectively, the "Collateral").
3. Rights Prior to Default. Prior to any Event of Default, Assignor may
continue to exercise its rights, interests and benefits under and in accordance with the terms of
the Management Agreement.
4. Rights Following Default; Power of Attorney. Following any Event of
Default, Assignee shall have the right to exercise all rights of a secured party with respect to the
Collateral, including without limitation the right to take possession of any of the Collateral and,
at Assignee's option, to become the manager or designate a manager under the Management
Agreement. Assignor agrees that following any Event of Default, it shall upon request from
Assignee execute an additional assignment of the Management Agreement, in form satisfactory
to Assignee, transferring and assigning the Management Agreement and all rights thereunder to
Assignee or its designee. In furtherance of the foregoing, Assignor hereby appoints Assignee its
true, lawful and irrevocable attorney -in -fact, effective upon the occurrence of an Event of
Default to demand, receive and enforce any rights, interests and benefits accruing to Assignor
under the terms of the Management Agreement or otherwise relating in any way to the
Collateral, and to execute any assignments and other documents necessary to transfer or assign
the Management Agreement or any rights in the Collateral to Assignee or its designee.
5. Performance Under Management Agreement. Assignor covenants and
agrees as follows:
(a) Assignor will promptly and fully perform all its obligations under
the Management Agreement, will permit no default thereunder and will commit no act (or
failure to act) that would or might result in termination of the Management Agreement or
adversely affect Assignor's rights thereunder. Assignor will promptly notify Assignee of
any default or asserted default under the Management Agreement and will provide
Assignee the right and opportunity (but Assignee shall have no obligation) to cure any
such default or asserted default. Any amounts expended by Assignee to cure any defaults
under the Management Agreement shall become part of the Obligations and shall be
immediately due and payable by Assignor to Assignee.
(b) Assignor shall not, without the prior written consent of Assignee,
(i) cancel, terminate or surrender the Management Agreement; (ii) forgive any obligation
thereunder; (iii) modify or amend the Management Agreement; or (iv) assign Assignor's
interest in the Management Agreement.
(c) Assignor shall promptly provide Assignee with copies of all
budgets, financial statements, operating statements and other material communications
provided by Assignor to the City or by the City to Assignor in connection with the
operation of the Golf Courses, including without limitation all capital improvement
budgets that Assignor is required to submit to the City from time to time. Assignor shall
comply with all requirements of the City with respect to such budgets and other financial
statements. In particular, Assignor shall construct capital and other improvements on the
2
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Golf Courses in accordance with capital improvement budgets approved by the City from
time to time.
6. Indemnity. Assignor hereby indemnifies and agrees to hold Assignee
harmless from and against any and all claims, damages, liabilities, costs and expenses incurred
by Assignee as a result of this Assignment or arising out of Assignee's exercise of its rights
under this Assignment following an Event of Default, including any claims, damages, liabilities,
costs and expenses incurred by Assignee in the event that it elects to become the manager of the
Golf Courses, but excluding any claims, damages, liabilities, costs and expenses resulting from
the gross negligence or willful misconduct of Assignee.
7. Further Assurances. Assignor shall execute such other documents, and
take such additional actions, as Assignee may request from time to time, in order more fully to
carry out the purposes of this Assignment or protect or perfect Assignee's interests in the
Management Agreement and the Collateral.
8. Miscellaneous.
(a) This Assignment is irrevocable and shall remain in full force and
effect until the Obligations have been paid and satisfied in full.
(b) This Assignment shall be binding upon Assignor and its successors
and assigns, and shall inure to the benefit of Assignee and its successors and assigns.
(c) This Assignment shall be governed by and construed in accordance
with the laws of the State of Illinois.
IN WITNESS WHEREOF, Assignor has executed and delivered this Assignment
as of the date first above written.
a
By: ,
its
By:
Nam/
Title:
Doe #:CM01 (214590-00044) 50112976d2;05/15/2003/Time:19:51
STATE OF )
ss:
COUNTY OF )
On this, the [I day of [ �, 2003, before me, the undersigned
officer, personally appeared [ ], who acknowledged himself
to be the [ 1 of a , as
of a and that he, as such
, being authorized so to do, executed the foregoing
Assignment of Management Agreement for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission expires:
Notary Public
4
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I
THIS COLLATERAL ASSIGNMENT OF MANAGEMENT AGREEMENT
(this "Assi ng_ment") is made by FORE STAR GOLF OF LUBBOCK. LLC, a Texas limited
liability company, whose address is 8802 Vicksburg, Lubbock, Texas 79424 ("Assignor's, in
favor of GENERAL ELECTRIC I CAPITAL CORPORATION, a Delaware corporation,
whose address is 500 West Monroe Street, Chicago, Illinois 60661 ("Assi
Recitals
A. On October 7, 1994, the City of Lubbock, Texas (the "OW) and Fore
Star Golf, Inc. ("Fff") entered into a certain Management Agreement, as amended by an
Amendment thereto dated May 10, 2001 (as so amended the "Management Agreement,%
pursuant to which FSG obtained the right and obligation to manage the golf courses and related
facilities located in Lubbock, Texas which are commonly known as the "Meadowbrook Golf
Course" and the "Squirrel Hollow Golf Course" (the "Golf Courses"). The rights and
obligations of FSG under the Management Agreement and any amendments thereto have been
assigned to and assumed by Assignor, and Assignor is presently the manager under the
Management Agreement.
B. Subject to certain conditions, Assignee has agreed to lend $ 10,300,000.00
(the "Loan") to Assignor and certain affiliates of Assignor (collectively, the "Borrowers'). The
Loan is governed by a Loan Agreement between the Borrowers and Assignee (the "Loan
Agreement"), and is evidenced by Promissory Notes from the Borrowers to Assignee. The Loan
Agreement, the Promissory Note, this Assignment and all other documents executed_ in
connection with the Loan are hereinafter collectively referred to as the "Loan Documents" and
all obligations of any of the Borrowers under the Loan Documents are hereinafter referred to as
the "Obligations." Any capitalized terms used but not otherwise defined in this Assignment shall
have the meanings assigned to such terms in the Loan Agreement.
C. It is a condition to Assignee's willingness to make the Loan that Assignor
execute and deliver this Assignment to Assignee, as security for the full payment and
performance of the Obligations.
Assignment
NOW, THEREFORE, for and valuable consideration, the receipt .and sufficiency
of which are hereby acknowledge, Assignor hereby agrees with Assignee as follows:
1. Incorporation of Recitals. The Recitals set forth above are hereby
incorporated into and made a part of this Assignment.
2. Assignmem. Assignor hereby assigns, transfers, sets over, pledges and
grants a security interest to Assignee in (a) all of Assignor's right, title and interest in the
Management Agreement and all Assignor's rights thereunder, including without limitation all
rights to receive Golfing Revenues, revenues from the operation of golf pro shops, restaurants
and concessions, and all other revenues of any type that Assignor is entitled to receive under the
terms of the Management Agreement, (b) all Assignor's rights in the Deposit Account and the
Doe WHIM (214590-000") 501129'/60;06/30/2003Time:10:19
Capital Fund, together with all amounts at any time placed therein, and (c) all other rights of
Assignor relating in any way to the Management Agreement (collectively, the "C
vlateW").
3. Rights Prior to Default. Prior to any Event of Default, Assignor may
continue to exercise its rights, interests and benefits under and in accordance with the terms of
the Management Agreement.
4. Rights Following Default, Power of Attorney. Following any Event of
Default, Assignee shall have the right to exercise all rights of a secured party with respect to the
Collateral, including without limitation the right to take possession of any of the Collateral and,
at Assignee's option, to become the manager or designate a manager under the Management
Agreement. Assignor agrees that following any Event of Default, it shall upon request from
Assignee execute an additional assignment of the Management Agreement, in form satisfactory
to Assignee, transferring and assigning the Management Agreement and all rights thereunder to
Assignee or its designee. In furtherance of the foregoing, Assignor hereby appoints Assignee its
true, lawful and irrevocable attorney -in -fact, effective upon the occurrence of an Event of
Default to demand, receive and enforce any rights, interests and benefits accruing to Assignor
under the terms of the Management Agreement or otherwise relating in any way to the
Collateral, and to execute any assignments and other documents necessary to transfer or assign
the Management Agreement or any rights in the Collateral to Assignee or its designee.
5. Performance Under Management Agreement. Assignor covenants and
agrees as follows:
(a) Assignor will promptly and fully perform all its obligations under
the Management Agreement, will permit no default thereunder and will commit no act (or
failure to act) that would or might result in termination of the Management Agreement or
adversely affect Assignor's rights thereunder. Assignor will promptly notify Assignee of
any default or asserted default under the Management Agreement and will provide
Assignee the right and opportunity (but Assignee shall have no obligation) to cure any
such default or asserted default. Any amounts expended by Assignee to cure any defaults
under the Management Agreement shall become part of the Obligations and shall be
immediately due and payable by Assignor to Assignee.
(b) Assignor shall not, without the prior written consent of Assignee,
(i) cancel, terminate or surrender the Management Agreement; (H) forgive any obligation
thereunder; (iii) modify or amend the Management Agreement; or (iv) assign Assignor's
interest in the Management Agreement.
(c) Assignor shall promptly provide Assignee with copies of all
budgets, financial statements, operating statements and other material communications
provided by Assignor to the City or by the City to Assignor in connection with the
operation of the Golf Courses, including without limitation all capital improvement
budgets that Assignor is required to submit to the City from time to time. Assignor shall
comply with all requirements of the City with respect to such budgets and other financial
statements. In- particular, Assignor shall construct capital and other improvements on the
Golf Courses in accordance with capital improvement budgets approved by the City from
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time to time.
6. Indemnity. Assignor hereby indemnifies and agrees to hold Assignee
harmless from and against any and all claims, damages, liabilities, costs and expenses incurred
by Assignee as a result of this Assignment or arising out of Assignee's exercise of its rights
under this Assignment following an Event of Default, including any claims, damages, liabilities,
costs and expenses incurred by Assignee in the event that it elects to become the manager of the
Golf Courses, but excluding any claims, damages, liabilities, costs and expenses resulting from
the gross negligence or willful misconduct of Assignee.
7. Further Assurances. Assignor shall execute such other documents, and
take such additional actions, as Assignee may request from time to time, in order more fully to
carry out the purposes of this Assignment or protect or perfect Assignee's interests in the
Management Agreement and the Collateral.
8. Miscellaneous.
(a) This Assignment is irrevocable and shall remain in full force and
effect until the Obligations have been paid and satisfied in full.
(b) This Assignment shall be binding upon Assignor and its successors
and assigns, and shall inure to the benefit of Assignee and its successors and assigns.
(c) This Assignment shall be governed by and construed in accordance
with the laws of the State of Illinois.
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Doc N:CHIDI (214590.)0044) 501129760;06/MD0NTima 10:19
IN WITNESS WHEREOF, Assignor has executed and delivered this Assignment
as of the date first above written.
FORE STAR GOLF OF LUBBOCK, LLC, a Texas
limited liability company
By: Fore Star Golf, Inc.,
its manager
By.
Name: toh y a L. c Aj nEX
Title: V f 5 y
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Doc # CM61 (214590.WM) 501►2976v3;O&rA 2OOYrtrnne:10;19
STATE OF !LLi &.OrS _)
) ss:
COUNTY OF C-o o K )
On this, the 31v �*ay of June, 2003, before me, the undersigned officer, personally
appeared ( W RYNG C CjA,I�NT6 A 1, who acknowledged himself to be the
SCty of Foi(asraA Goc.f itie-a NcVAbA ao/,/ , as of
a and that he, as such
, being authorized so to do, executed the foregoing
Assignment of Management Agreement for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission expires: S f S'/o 1
Notary Public
He3be�sA. GtBa�
NoWy Pd4c, Sale oEl e
Nano
Ooe�Mion �0.700r►
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