EXHIBIT 10.2
PUMPKIN RIDGE JOINT VENTURE
JOINT VENTURE AGREEMENT
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1. Parties.
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This Joint Venture Agreement (the "Agreement") is dated as of September 8,
1997, by and among NATIONAL GOLF OPERATING PARTNERSHIP L.P., a Delaware limited
partnership ("NGP") and PUMPKIN RIDGE PARTNERS, an Oregon Partnership ("PRP").
The parties are sometimes referred to as the "Venturers".
2. Recitals.
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2.1. PRP is an Oregon partnership whose sole partners are Oregon Central
Corporation, a Delaware corporation ("OCC") and Pacific Estates, Ltd., an Oregon
corporation ("PEL").
2.2. PRP is the owner of that certain thirty-six hole golf course facility
located in Cornelius, Oregon situated on the land ("Land") described in the
title report ("Title Report") attached hereto as Exhibit "A".
2.3. The Venturers desire to form a joint venture (the "Venture") for the
purpose of acquiring and leasing the Land and other items constituting the
Property (as defined below).
2.4. Immediately upon acquisition, the Venture will lease the Property to
American Golf Corporation, a California corporation ("AGC") pursuant to a
fifteen-year net lease on terms and conditions acceptable to the Venture and AGC
("Operating Lease").
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3. Definitions.
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The following words, when capitalized in this Agreement, will have the
following meanings:
3.1. "Act" means the Oregon Uniform Partnership Act, being Chapter 68 of
the Oregon Revised Statutes.
3.2. "Affiliate" means any individual, partnership, corporation, limited
liability company, trust, or other entity or association, directly or
indirectly, controlled by or under common control with another. The term
"control" means with respect to a corporation or limited liability company the
right to exercise, directly or indirectly, more than fifty percent (50%) of the
voting rights attributable to the controlled corporation or limited liability
company, and, with respect to any individual, partnership, trust, other entity
or association, the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of the controlled entity.
3.3. "AGC" means American Golf Corporation, a California corporation.
3.4. "Agreement" means this Joint Venture Agreement, together with any
future written amendments.
3.5. "Appurtenances" means all appurtenances, easements, reversionary
rights and all other rights, privileges, and entitlements belonging to or
running with the Land, all awards for damage to the Land or the Improvements or
for the taking by
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eminent domain, and all zoning and land use entitlements and development rights
pertaining to the Land.
3.6. "Arbitrator" means a real estate appraiser who is a member of the
American Institute of Real Estate Appraisers and who is qualified, knowledgeable
and has at least ten (10) years' prior experience in the appraisal of golf
properties in the United States.
3.7. "Bankruptcy" means:
3.7. (a) The voluntary filing by a Venturer of a petition under the
Federal Bankruptcy Code, or any other applicable Federal or state bankruptcy,
insolvency or similar law, or the consent by a Venturer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar person) of it or any substantial part of its
assets, or the making by it of any assignment for the benefit of creditors, or
its written admission of its inability to meet its debts as such debts become
due; or
3.7.(b) The entry of a decree or order for relief by a court having
jurisdiction in respect of a Venturer in an involuntary case under the Federal
bankruptcy laws, or any other applicable Federal or state bankruptcy, insolvency
or other similar laws, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar person) of the Venturer or
for any substantial part of its assets, or ordering the winding-up or
liquidation of its affairs, and the continuance
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of any such decree or order unstayed and in effect for a period of sixty (60)
consecutive days.
3.8. "Capital Account" shall mean the account of a Venturer that is
maintained in accordance with the provisions of Section 7.5.
3.9. "Capital Contributions" means all contributions by the Venturers to
the capital of the Venture.
3.10. "Claims" has the meaning set forth in Section 18.1.
3.11. "Closing" shall mean the closing of the Venture's acquisition of
the Property and the execution and delivery of the Operating Lease. The Closing
is subject to certain conditions described in Section 8.3.
3.12. "Closing Date" shall mean September 8, 1997, or such other date
as the parties may mutually agree, which shall be the date upon which the
Venturers make their initial Capital Contributions and the Closing occurs.
3.13. "Closing Documents" shall mean those documents scheduled in
Exhibit "D" hereto which will be recorded and delivered at Closing.
3.14. "Code" means the Internal Revenue Code of 1986, as amended, and
any successor thereto. Any references herein to specific sections of the Code
shall be deemed to include a reference to any corresponding provisions of future
law.
3.15. "Contracts" are the Contracts scheduled in Exhibit "C."
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3.16. "Credits" means investment tax credits and other tax credits
available to the Venturers in connection with the Venture.
3.17. "Default Loan" means an advance made by a Venturer pursuant to
Section 15.2.
3.18. "Default Notice" means a notice delivered by a Venturer to the
other Venturers pursuant to Section 15.1.
3.19. "Defaulting Venture" means any Venturer or its Successor who has
committed an uncured Event of Default.
3.20. "Depreciation" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
fiscal year or other period, except that if the Gross Asset Value of an asset
differs from its adjusted basis for federal income tax purposes at the beginning
of such fiscal year or other period, Depreciation shall be an amount that bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such fiscal year
or other period, bears to such beginning adjusted tax basis; provided that if
the adjusted basis for federal income tax purposes of an asset at the beginning
of such fiscal year or other period, is zero, Depreciation shall be determined
with reference to such beginning Gross Asset Value using any reasonable method
selected by the Managing Venturer.
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3.21. "Distributable Cash" means all cash of the Venture from all sources,
excluding:
3.21. (a) all amounts necessary for payment of any Liabilities of the
Venture then due;
3.21. (b) such additional amounts as the Managing Venturer may
reasonably determine to be necessary or desirable as a reserve for any future
Liabilities of the Venture; and
3.21. (c) Any recovery under the Title Policy.
3.22. "Escrow" means the escrow established by Escrow Holder whereby
the Venture will acquire the Property.
3.23. "Escrow Holder" means First American Title Insurance Company of
Oregon (attn. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇).
3.24. "Event of Default" means any of the events, acts or omissions
specified in Section 15.1.
3.25. "Exercise Notice" has the meaning set forth in Section 14.1.
3.26. "Fair Market Value" means the price a ready, willing and able
purchaser would pay for the assets of the Venture, taking into account the
maturity of the Property, the terms of the Operating Lease, and NGP's then
current standard investment criteria for purchasing golf course properties
(e.g., NGP's then customary rate of return, cash flow projections, and related
factors) as well as all Liabilities and restrictions against the Venture's
assets, if those assets were available for sale on the open market for a
reasonable period of time. In determining Fair Market Value, the assets shall
be valued based
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on their then current use as income-producing assets (and not highest and best
use), and the replacement cost of such assets shall not be considered.
3.27. "Golf Course" means that certain thirty-six hole golf course located
on the Land, including driving range and practice areas.
3.28. "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
3.28. (a) The initial Gross Asset Value of any asset contributed by a
Venturer to the Venture shall be the gross fair market value of such asset, as
determined by the contributing Venturer and the other Venturers;
3.28. (b) The Gross Asset Values of all Venture assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the Managing Venturer, as of the following times: (i) the
acquisition of an interest or an additional interest in the Venture by any new
or existing Venturer in exchange for more than a de minimis capital
contribution; (ii) the distribution by the Venture to a Venturer of more than a
de minimis amount of property or money as consideration for an interest in the
Venture; and (iii) the liquidation of the Venture within the meaning of Treasury
Regulations (S) 1.704-1(b) (2) (ii) (g); provided, however, that adjustments
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pursuant to clauses (i) and (ii) above shall be made only if the Managing
Venturer reasonably determines that such
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adjustments are necessary or appropriate to reflect the relative economic
interests of the Venturers;
3.28. (c) The Gross Asset Values of Venture assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts, pursuant to Treasury Regulations (S) 1.704-1(b)(2)(iv)(m); provided,
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however, that Gross Asset Values shall not be adjusted pursuant to this
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paragraph (c) to the extent the Managing Venturer determines that an adjustment
pursuant to paragraph (b) hereof is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant to this
paragraph (c); and
3.28.(d) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to paragraphs (a), (b), or (c), such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Net Income and Net Loss.
3.29. "Improvements" means all buildings, structures and other improvements
located upon the Land, including, without limitation, two clubhouse buildings, a
maintenance facility, the Golf Course, landscaping improvements, manmade lakes
and water retention ponds, irrigation system, parking facilities, and all other
improvements of any nature or description located on the Land.
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3.30. "Intangible Personal Property" means all of PRP's right, title,
and interest in the intangible property that is appurtenant to the ownership,
operation and use of the Real Property and the Personal Property, including,
without limitation: (a) all governmental permits, approvals, licenses, and
certificates of occupancy; (b) all architectural and engineering drawings; (c)
any proprietary rights PRP may have with respect to the name "Pumpkin Ridge Golf
Club"; (d) tradenames, trademarks, service marks and logos; (e) all product and
service warranties and guaranties; and (f) all rights to the recovery of
judgments with respect to claims first arising after Closing, books and records,
and telephone numbers. Intangible Personal Property will exclude, however, the
Member Notes (as defined in the Shortfall Agreement).
3.31. "Initial Capital" means the initial Capital Contributions to be
made by the Venturers pursuant to Section 7.1.
3.32. "Interest" means all of the right, title and interest of a
Venturer in the Venture, the Property, and any assets of the Venture.
3.33. "Interest Value" means an amount equal to the amount that a
Venturer would receive if all of the Venture's assets were sold for their Fair
Market Value, all the Venture's Liabilities (to the extent not taken into
account in determining Fair Market Value) were paid in full, the Venture then
was dissolved, Net Income and Net Loss allocated, and the proceeds
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distributed among the Venturers in accordance with Section 16.3. For purposes
of determining Interest Value, there will be no discount for a minority
Interest.
3.34. "Inventory" means all professional shop merchandise and inventory
and food and beverage consummables.
3.35. "Land" means the land described in the Title Report.
3.36. "Liabilities" means all claims, demands, debts, obligations,
duties, costs, expenses, losses and damages, including, without limitation,
attorneys' fees and costs.
3.37. "Managing Venturer" has the meaning set forth in Section 9.1.
3.38. "Membership Agreement" means that certain "Agreement in Respect
of Memberships" by and among PRP, AGC, and the Venture.
3.39. "Negotiation Period" has the meaning set forth in Section 14.2.
3.40. "Net Income" or "Net Loss" means, for each fiscal year or other
period, an amount equal to the Venture's taxable income or loss for such fiscal
year or period (for this purpose, all items of income, gain, loss, or deduction
required to be stated separately pursuant to Code Section 703 (a) (1) shall be
included in taxable income or loss) with the following adjustments:
3.40.(a) Any income of the Venture that is exempt from federal
income tax and not otherwise taken into account in
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computing Net Income or Net Loss pursuant to this definition shall be added to
such taxable income or loss;
3.40.(b) Any expenditures of the Venture described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Treasury Regulations (S) 1.704-1(b) (2) (iv) (i), and not otherwise taken into
account in computing Net Income or Net Loss pursuant to this definition, shall
be subtracted from such taxable income or loss;
3.40.(c) Gain or loss resulting from any disposition of Venture
property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the property
disposed of;
3.40.(d) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period; and
3.40.(e) Any items which are specially allocated pursuant to Section
11.8 hereof, any profit from the Title Policy specially allocated to NGP
pursuant to Section 11.1 or any loss or deduction relating to the Shortfall
Account (referenced in the Shortfall Agreement) and specially allocated to PRP
pursuant to Section 11.1 shall not be taken into account in computing Net Income
or Net Loss.
3.40.(f) The amounts of the items of Venture income, gain, loss, or
deduction available to be specifically allocated pursuant to Section 11.8
hereof, any profit from the Title Policy
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specially allocated to NGP pursuant to Section. 11.1 or any loss or deduction
relating to the Shortfall Account (referenced in the Shortfall Agreement) and
specially allocated to PRP pursuant to Section 11.1 shall be determined by
applying rules analogous to those set forth in subparagraphs (a) through (d) of
this definition.
3.41. "Non-defaulting Venturer" means any Venturer or its Successor
who has not committed an Event of Default that at the time in question is
uncured.
3.42. "Non-Recourse Deductions" has the meaning set forth in Treasury
Regulations (S) 1.704-2(b)(1).
3.43. "Operating Lease" means the lease referenced in Section 2.4 of
this Agreement. Whenever this Agreement refers to any provision of the
Operating Lease, the reference shall be a reference to the Detailed Lease
Provisions of the Operating Lease unless otherwise indicated.
3.44. "Permitted Title Exceptions" means exceptions 2 through 13,
appearing in the Title Report.
3.45. "Permitted Transfer" means any of the Transfers described in
Section 13.3.
3.46. "Personal Property" means all items of personal property
described in Exhibit "B" hereto, but shall not in any event include any
Inventory.
3.47. "Prime Rate" means the base rate charged by banks for loans to
corporate customers of highest credit standing as announced in the Wall Street
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Journal.
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3.48. "Property" means collectively the following: the Land, the
Improvements, the Water and Mineral Rights, the Appurtenances, the Personal
Property, and the Intangible Property.
3.49. "PRP" means Pumpkin Ridge Partners, an Oregon partnership.
3.50. "Put" has the meaning set forth in Section 14.1.
3.51. "Real Property" means collectively the following:
the Land, the Improvements, the Water and Mineral Rights, and the Appurtenances.
3.52. "Shortfall Agreement" means that certain Shortfall Agreement
executed, or to be executed, by and between PRP and/or OCC and PEL and AGC.
3.53. "Successor" means a Venturer's heirs, executors, trustees,
receivers, administrators, representatives, liquidators, sequestrators,
custodians, successors or assigns.
3.54. "Title Company" means the title company which issued the Title
Report.
3.55. "Title Policy" has the meaning set forth in Section 8.4(b).
3.56. "Title Report" means the title report or commitment attached
hereto as Exhibit "A".
3.57. "Transfer" means a transfer by sale, lease, assignment,
attachment, pledge, hypothecation, encumbrance, grant of security interest,
will, intestate succession, gift or otherwise, whether voluntary, involuntary or
by operation of law.
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3.58. "Transfer Offer" means a written notice delivered by one
Venturer to the other Venturer pursuant to Section 13.2.
3.59. "Treasury Regulations" means regulations adopted by the Treasury
Department of the United States governing application and enforcement of the
Code. Any reference to a section or provision of the Treasury Regulations shall
be deemed to refer also to such section or provision as amended or superseded.
3.60. "Venture" means the joint venture formed by the Venturers and
governed by this Agreement.
3.61. "Venture Closing Costs" has the meaning set forth in Section
8.4(c).
3.62. "Venture Minimum Gain" shall mean the same as "partnership
minimum gain" as set forth in Treasury Regulations (S)(S) 1.704-2(b)(2) and
1.704-2(d).
3.63. "Venture Percentages" means each Venturer's respective
percentage interest in the Venture as set forth in Section 7.3, subject to the
possible adjustment provided in Section 7.4.
3.64. "Venture Voting Percentages" means each Venturer's percentage
vote regarding any matter on which the vote of the Venturers is required
hereunder or by applicable law. Each Venturer's Voting Percentage will be equal
to its Venture Percentage except that so long as PRP (or any entity of which OCC
and PEL are joint owners) is a Venturer, the voting rights of PRP or such entity
will be exercised by OCC, PEL, and their permitted
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transferees under Section 13.3 in accordance with their percentage interests in
PRP or such entity so that each of OCC and PEL will initially have a Venture
Voting Percentage of twenty-five percent (25%).
3.65. "Venturer Nonrecourse Debt" shall have the meaning set forth in
Treasury Regulations (S) 1.704-2(b) (4) for "partner nonrecourse debt."
3.66. "Venturer Nonrecourse Debt Minimum Gain" shall mean an amount,
with respect to each Venturer Nonrecourse Debt, equal to the Venture Minimum
Gain that would result if such Venturer Nonrecourse Debt were treated as a
nonrecourse liability, determined in accordance with Treasury Regulations
(S) 1.704-2(i)(3).
3.67. "Venturer Nonrecourse Deductions" shall with respect to any
Venturer Nonrecourse Debt, have the meaning set forth in Treasury Regulations
(S)(S) 1.704-2(i)(1) and 1.704-2(i)(2) for "partner nonrecourse deductions."
3.68. "Venturers" means the parties hereto and such other persons as
may be admitted to the Venture as substituted or additional joint venturers.
3.69. "Water Documents" means all documents, agreements, and permits
(together with all amendments or modifications thereto) evidencing PRP's
entitlement to a water supply for the operation and maintenance of the Golf
Course.
3.70. "Water and Mineral Rights" means all water rights, riparian
rights, appropriative rights, water allocations and
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water stock, including, without limitation, all of PRP's rights and interests
under the Water Documents, and all minerals, oil, gas and other hydrocarbons
located in or beneath the Land, along with all rights to surface and subsurface
entry.
4. Organization.
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4.1. Formation. The Venturers hereby associate themseljves as an Oregon
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general partnership formed pursuant to the Act and the other laws of the State
of Oregon. The rights and obligations of the Venturers shall be as provided
under the Act unless otherwise provided in this Agreement.
4.2. Name. The name of the Venture is "Pumpkin Ridge Joint Venture" and
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the principal place of business of the Venture is 12930 NW ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as Managing Venturer
may establish from time to time.
4.3. Filing and Recording The Venturers each agree to execute and perform
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all filing, recording, publishing and other acts necessary to form and operate a
general partnership in all jurisdictions where the Venture may conduct business.
5. Purpose.
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The purpose of the Venture is to acquire, own, and provide for the
operation of the Property, and to perform all other acts necessary or incidental
thereto.
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6. Term.
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The term of the Venture will commence on the date hereof and will dissolve
on the earliest to occur of the following:
(a) December 31, 2050;
(b) the mutual written agreement of Venturers whose Venture Voting
Percentages total at least sixty-six and two-thirds percent (66 2/3%);
or
(c) the occurrence of events, acts or omissions resulting in dissolution as
otherwise provided in this Agreement or by law.
7. Capital Contributions and Venture Percentages.
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7.1. Initial Capital. The Venturers will contribute the following Initial
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Capital to the Venture:
7.1. (a) NGP will contribute Eight Million Dollars ($8,000,000) cash
to the Venture. NGP will deposit into Escrow such contribution (together with
closing costs and net prorations owing by NGP) one (1) day prior to the Closing
Date provided that all conditions to Closing have timely been satisfied in full.
7.1.(b) PRP will convey fee title to the Property to the Venture
free and clear of all liens and encumbrances of whatever nature except for the
Permitted Title Exceptions.
7.2. Additional Capital. The Venturers agree to contribute a total of up
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to Seventy-Five Thousand Dollars ($75,000) as and when required by the Managing
Venturer in order to fund the Venture's obligations under Paragraph 22 of the
Basic Lease
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Provisions of the Operating Lease. Each Venturer's obligation will be equal to
its Venture Percentage multiplied by the total amount required (not to exceed
$75,000). Except for the foregoing, the Venturers do not anticipate that any
additional capital will be required for the operation of the Venture. However,
if due to unforeseen circumstances additional capital is required, the Venture
will, to the maximum extent possible, attempt to borrow such funds as are
required from third party lenders at commercially reasonable rates; provided
that any Venturer may match such rate and terms and make the loan itself. If the
Venture is unable to borrow such funds, then any Venturer may lend sufficient
funds to the Venture to satisfy its capital requirements in which case the sums
so advanced will be treated as a loan by such Venturer bearing interest at the
Prime Rate (as the Prime Rate may vary from time to time) plus 4%. Interest and
principal then due and payable in respect of all such loans will be payable
prior to any distributions to Venturers. If more than one Venturer desires to
advance funds pursuant to this Section 7.2, each such Venturer will loan funds
to the Venture in relative proportion of each lending Venturer's Venture
Percentage, or as they otherwise agree in writing.
7.3. Initial Venture Percentages. The Venture Percentages for each Venturer
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will be as follows:
(a) NGP - 50%
(b) PRP - 50%
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7.4. Adjustment to Venture Percentage. Should the total of "Annual Base
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Rent" and "Additional Rent" (as such terms are defined in the Operating Lease)
payable to the Venture under the Operating Lease exceed Two Million Five Hundred
Thousand Dollars ($2,500,000) for each of any three (3) consecutive calendar
years during the Initial Term of the Operating Lease, then commencing on January
1 of the calendar year immediately succeeding the third consecutive calendar
year and continuing thereafter, the Venture Percentages for each Venturer will
be as follows:
(a) NGP - 44.44%
(b) PRP - 55.56%
By way of example, if total Annual Base Rent and Additional Rent for
each of 1999, 2000, and 2001 paid to the Venture under the Operating Lease
exceeds $2,500,000, then commencing January 1, 2002, the Venture Percentages
will be adjusted as set forth in this Section 7.4. In connection with an
adjustment to the Venture Percentages pursuant to this Section 7.4, PRP's
Capital Account shall be increased as of the effective date of such adjustment
so that its Capital Account is 1.250225 times NGP's Capital Account as of such
date.
7.5. Capital Accounts.
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7.5. (a) A capital account (each, a "Capital Account") shall be
established on the books of the Venture for each Venturer. Each Venturer's
Capital Account shall be increased by: (i) the amount of cash contributed to the
Venture by such Venturer, (ii) the fair value of any non-cash assets contributed
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by such Venturer, as fixed by agreement at the time of contribution, less the
amount of any liabilities assumed by the Venture incidental to such contribution
or to which the contributed assets are subject, (iii) such Venturer's share of
Net Income, as allocated in Section 11.1, and any items in the nature of income,
or gain specially allocated pursuant to Section 11.8 hereof and any profit from
the Title Policy specially allocated to NGP pursuant to Section 11.1 hereof, and
(iv) the amount of any Venture Liabilities that are assumed by such Venturer
(other than Liabilities that are secured by any Venture property distributed to
such Venturer). Each Venturer's Capital Account shall be decreased by: (i) the
amount of cash and the fair market value of any property distributed by the
Venture to such Venturer (net of Liabilities secured by any distributed property
that such Venturer is consider to assume or take subject to), (ii) such
Venturer's share of Net Loss, as allocated in Section 11.1, and any items in the
nature of expenses or losses specially allocated to such Venturer pursuant to
Section 11.8 hereof, and any loss or deduction relating to the Shortfall Account
specially allocated to PRP pursuant to Section 11.1 hereof, and (iii) the amount
of any Liabilities of such Venturer that are assumed by the Venture (other than
Liabilities that are secured by any property contributed by such Venturer to the
Venture). If non-cash Venture assets are distributed in kind, Capital Accounts
shall be adjusted as if the assets had been sold
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for fair market value (and gain or loss therefrom had been included in Net
Income or Net Loss) on the date of distribution.
7.5.(b) In the event any interest in the Venture is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor (to the extent related to the transferred
interest).
7.5.(c) In the event the Gross Asset Values of the Venture assets
are adjusted pursuant to subparagraphs (b) or (c) of the definition of Gross
Asset Value, the Capital Accounts of the Venturers shall be adjusted
simultaneously to reflect the manner in which unrealized income, gain, loss, and
deduction, inherent in the Venture's property (that has not been previously
reflected in the Venturers' Capital Accounts) would be allocated pursuant to
Sections 11.1 and 11.8 if there were a disposition of such property at fair
market value.
7.5.(d) The foregoing provisions of this Section 7.5 are intended
to comply with Treasury Regulations (S)(S) 1.704-1(b) and 1.704-2, and shall be
interpreted and applied in a manner consistent therewith.
7.5.(e) In the event AGC withdraws funds from the Shortfall Account
(as defined in Section 11.1), the amount of such withdrawal shall in each
instance be treated as a contribution to capital by PRP at the time of such
withdrawal.
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8. Conveyance of the Property.
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8.1. PRP's Obligation. PRP will convey fee title to the Property to the
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Venture on the Closing Date free and clear of all title exceptions save and
except for the Permitted Title Exceptions. The closing of such conveyance will
be accomplished through the Escrow which will be established with Escrow Holder.
Concurrently herewith, the parties will take such steps (including execution of
instructions) as are necessary to open the Escrow. Escrow Holder will confirm
the date of opening of Escrow by written notification to the parties delivered
on such date.
8.2. Membership Arrangements; Contracts. Effective upon the Closing, the
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obligations to members as described in Paragraph 15 of Exhibit "G" and in
Exhibit "C" to the Membership Agreement will be allocated pursuant to the
Membership Agreement. In addition, PRP will assign the Contracts to AGC and the
Venture will cause AGC to assume the same.
8.3. Preclosing Covenants and Closing Conditions. Prior to the Closing
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Date, PR? shall comply fully with the covenants set forth in Exhibit "F". Each
of the following are conditions precedent to NGP's obligations under this
Agreement:
8.3. (a) Performance of Covenants. The timely performance by PRP in
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full of all covenants and duties to be performed by them under this Agreement on
or prior to the Closing.
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8.3.(b) Representations are True. The representations and
------------------------
warranties made by PRP to NGP in this Agreement shall be true and correct on the
Closing Date with the same force and effect as though those representations and
warranties had been made on the Closing Date. If requested by NGP, PRP shall
execute and deliver to NGP prior to the Closing a certificate updating the
representations and warranties of such parties through Closing and disclosing
any new matters relating to the Property.
8.3.(c) Funding Pursuant to Shortfall Agreement. At or prior to
---------------------------------------
Closing, PRP will deposit, or cause to be deposited, the sum of Three Hundred
Thousand Dollars ($300,000) into the Security Account (as defined in the
Shortfall Agreement) pursuant to the Shortfall Agreement.
8.3(d) Board Approval. Prior to the Closing Date, the Board of
--------------
Directors of NGP's general partner shall have approved the transaction
contemplated hereby.
8.3.(e) Operating Lease. Immediately prior to the Closing, the
---------------
Venture and AGC shall have executed and delivered the Operating Lease which
Operating Lease shall be effective on Closing.
If any of such conditions fail to occur, then unless waived in writing
by NGP, the Escrow and the transaction contemplated hereby will terminate and no
party will have any further obligation to any other party hereunder or otherwise
with respect to the Property, including the Operating Lease.
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8.4. Closing Obligations.
-------------------
8.4. (a) Prior to the Closing Date, PRP shall deliver each of the
Closing Documents to NGP or Escrow Holder duly executed and acknowledged and in
recordable form where necessary and otherwise in form and content satisfactory
to NGP.
8.4. (b) On the Closing Date, Escrow Holder will record the Deed (as
defined in Exhibit "D"), deliver the originals of all other Closing Documents to
the Venture in care of NGP, and issue to the Venture in care of NGP its owner's
policy of title insurance ("Title Policy") in the amount of Eight Million
Dollars ($8,000,000) subject only to the Permitted Title Exceptions and
containing such customary endorsements as NGP requests, including, without
limitation, a non-imputation endorsement.
8.4. (c) PRP will be responsible for the payment of survey costs,
excise taxes, sales taxes, and title insurance premiums. Transfer taxes and
escrow fees will be paid one-half by NGP and one-half by PRP. The costs and
fees required to be paid by PRP pursuant to the preceding two sentences are the
"Venture Closing Costs". NGP shall pay the cost of preparing own Phase I
environmental report and its own building and mechanical report. Each party
shall pay its own legal fees and incidental expenses in connection with the
transaction contemplated herein. Except for the amounts required to be paid by
the Venture pursuant to Section 8.5(b) and except to the extent such items are
separately prorated between PRP and AGC,
-24-
real property taxes and all other relevant items of income and expense relative
to the Property scheduled in Exhibit "E" will be prorated between PRP and AGC as
of the Closing Date. At Closing, the Member Notes (as defined in the Shortfall
Agreement) with respect to the sale of memberships shall be delivered to AGC who
will collect and disburse the same in accordance with the Shortfall Agreement.
8.4. (d) Upon the close of Escrow, PRP will deliver possession of
the Property to AGC under the Operating Lease.
8.5. Post-Closing Obligations. At the Closing, NGP will instruct Escrow
------------------------
Holder to use the Initial Capital to pay the following amounts immediately after
Closing:
8.5. (a) The Venture Closing Costs and any net prorations owing by
PRP.
8.5. (b) All of the debts, obligations and trade payables of PRP
listed in Exhibit "I" (including the trust deed obligations referenced in the
Title Report) up to the maximum amounts set forth therein with respect to each
such debt and obligation; provided that the obligation of the Venture to pay
such debts and obligations will not exceed the difference between Eight Million
Dollars ($8,000,000) and the total amount expended by the Venture pursuant to
Section 8.5(a). If the total of such debts and obligations exceed such maximum,
PRP will be solely liable for the excess and will pay the same immediately
through Escrow.
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9. Management.
----------
9.1. Managing Venturer. The day-to-day business of the Venture will be
-----------------
managed by a Managing Venturer who will initially be NGP. Subject to the
restrictions of Section 9.2, the Managing Venturer will without compensation or
reimbursement for its internal overhead provide proper management of the affairs
of the Venture and shall have the management and control of the day-to-day
activities of the Venture and the authority and responsibility to represent it.
Without limiting the generality of the foregoing, the Managing Venturer shall
maintain or cause to be maintained the books and records of the Venture, prepare
or cause to be prepared the Venture's income tax returns and act as the "tax
matters partner" for the Venture as provided in Section 6221 of the Code,
subject to the limitations set forth in Section 9.2(1). The Venture will be
responsible to pay all reasonable and necessary third party costs incurred by
the Managing Venturer in good faith in connection with the discharge of its
management duties, such as fees and costs of attorneys, accountants and other
consultants. The Managing Venturer shall deposit all Venture funds in an
interest bearing bank account in the name of the Venture at Bank of America or
any other bank with at least $1 billion in assets and shall not commingle the
Venture's funds with any other funds. The Managing Venturer will make
distributions monthly to the Venturers in accordance with Section 11.6. The
Managing Venturer shall at all times enforce in good faith the Venture's rights
under the Operating Lease. In the
-26-
event of any dispute between the Venturers regarding whether the Managing
Venturer has enforced the Venture's rights under the Operating Lease in good
faith, such dispute will be submitted to binding arbitration before a single
arbitrator in the Los Angeles office of the American Arbitration Association
under its Commercial Arbitration Rules. The arbitrator's role will be limited
to deciding whether the Managing Venturer has enforced the Venture's rights
under the Operating Lease in good faith. In no event shall the arbitrator
substitute his or her business judgment for that of the Managing Venturer. If
the arbitrator finds that the Managing Venturer has acted in good faith in
enforcing the Venture's rights under the Operating Lease, then the Venturer(s)
who contested the Managing Venturer's good faith will be responsible for all
costs and fees incurred in connection with the arbitration including, without
limitation, the attorneys' fees incurred by the Managing Venturer. If the
arbitrator finds that the Managing Venturer has not acted in good faith in
enforcing the Venture's rights under the Operating Lease, then the Managing
Venturer will be responsible for all costs and fees incurred in connection with
the arbitration, including, without limitation, attorneys' fees incurred by the
contesting Venturer(s). In such case, the Managing Venturer will also comply
with any directives established by arbitrator.
9.2. Restrictions. The following actions may be taken only with the
------------
concurrence of Venturers whose Venture Voting
-27-
Percentages total sixty-six and two-thirds percent (66 2/3%) or more:
9.2. (a) The sale or conveyance of the Property (or any portion
thereof) or any other assets of the Venture, or the granting of any easements.
9.2. (b) Any capital call or borrowing or lending by the Venture
(including, without limitation, capital deficit loans described in Section 7.2),
the granting of any liens, encumbrances or security interests in the Venture,
the Property (or any portion thereof), or any other assets of the Venture.
9.2. (c) Except as provided in Section 11.7, the filing, release,
settlement or compromise of any claim, debt, demand, suit or judgment in
connection with the Property or the Venture or the confession of any judgment
against the Venture.
9.2. (d) The amendment, modification or termination of the Operating
Lease, the making of major decisions or approvals required to be made by the
Venture thereunder, or the taking of measures to insure AGC's compliance with
its operating and maintenance obligations thereunder. Major decisions under the
Operating Lease consist of the following: (i) conversion of Ghost Creek to a
private club or Witch Hollow to a public course, (ii) any change in operating or
maintenance standards or use of the Property pursuant to Section 7.1 of the
Operating Lease, (iii) agreements with the United States Golf Association and
related activities, (iv) approval of selection of general manager, director of
golf, superintendent of golf, and food and
-28-
beverage manager, (v) termination of the Operating Lease, (vi) approval of any
marketing material required to be approved by Landlord under Section 3.7 of the
Operating Lease, (vii) approval of the first year's membership plan under
Section 7.3 of the Operating Lease, (viii) taking any action requested by AGC
under Section 7.4 of the Operating Lease, (ix) the granting of any consent or
approval under Section 10.1 of the Operating Lease, (x) the decision to conduct
an audit of AGC's books and records pursuant to Section 3.3.5 of the Operating
Lease (provided that if the Venturers disagree regarding whether to conduct such
an audit, PRP may at its sole expense conduct such an audit, but not more
frequently than one time in any twelve (12) month period, (xi) any decision to
purchase any of AGC's personal property under Section 6.4 of the Operating
Lease, and (xii) the granting of consent to a proposed assignment or subletting
pursuant to Section 22.1 of the Operating Lease.
9.2. (e) Except for the Operating Lease and as permitted thereunder,
the Venture's leasing of the Property, or any portion thereof.
9.2. (f) The admission of another person as an additional or
substituted Venturer.
9.2. (g) The acquisition of any asset by the Venture other than
those constituting the Property and other than in the ordinary course of
business.
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9.2. (h) The making or execution of any agreements binding on the
Venture outside of Venture's ordinary course of business.
9.2. (i) The incurring of capital improvement costs in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in any twelve (12) month period or
approving any such expenditure in excess of $250,000 pursuant to the Operating
Lease.
9.2. (j) Procurement of any insurance apart from insurance, if any,
required to be procured by the Venture under the Operating Lease.
9.2. (k) The filing of any bankruptcy or reorganization proceedings
on behalf of the Venture, the making of any assignment for the benefit of
creditors, or the request of an appointment of a receiver for any of the
Venture's assets.
9.2. (1) Taking any action as tax matters partner under Code Section
6222 through 6232.
Each Venturer will designate an individual to render all decisions and
approvals required or requested under this Section 9.2. The initial
representatives of the Venturers are as follows:
NGP: ▇▇▇▇ ▇. Major
PRP: Gay ▇▇▇▇▇, except that, for the exercise of voting
rights (including, without limitation, the giving of
any approvals or consents on behalf of PRP required
under this Agreement), the initial representatives of
PRP shall be the following, in each case to the
extent of the Venture Voting Percentage then
exercisable on behalf of OCC or PEL pursuant to
Section 3.64:
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on behalf of OCC: ▇▇▇▇▇▇▇ ▇▇▇
on behalf of PEL: Gay ▇▇▇▇▇
A Venturer may change such representative (or any successor representative) only
by written notice to the other Venturers. Until the representative is so
changed, the other Venturers shall be entitled to rely on the authority of the
incumbent representative.
9.3. Prohibition. Except for obligations that the Managing Venturer is
-----------
permitted to incur in the ordinary course pursuant to Section 9.1, as limited by
Section 9.2, no Venturer will at any time incur any Liability on behalf of the
Venture or enter into any agreement which purports to bind the Venture without
the prior written approval of Venturers whose combined Venture Voting
Percentages are at least sixty-six and two-thirds percent (66 2/3%).
9.4. Replacement of Managing Venturer. The other Venturer(s) acting
--------------------------------
unanimously may remove the Managing Venturer and appoint a new Managing Venturer
if, and only if, in performing its duties hereunder, the Managing Venturer
engages in gross negligence, wilful misconduct, or a knowing violation of the
law and such action results in material uncured damage to the Venture or any
other Venturer.
9.5. Mutual Indemnity. Each Venturer shall indemnify, protect, defend, and
----------------
hold harmless the Venture, and each of the other Venturers and their respective
owners, lessees, guarantors, officers, directors, partners, employees, and
agents from and
-31-
against any and all claims, demands, lawsuits, actions, proceedings,
liabilities, damages, losses, and expenses, including reasonable attorneys' fees
relating to any action taken by the indemnifying Venturer in violation of this
Agreement or arising out of the indemnifying Venturer's gross negligence, wilful
misconduct, or knowing violation of the law.
9.6. Competition. Each Venturer may, without liability to the others,
-----------
engage in any other activities for its own benefit or advantage, including
without limitation any golf course development, investment or related activity,
whether or not such activity is competitive with the business of the Venture, so
long as such activity does not involve the direct use of any tangible Venture
assets. Subject to the foregoing statement, no Venturer will have any
obligation to offer to the Venture any opportunity which may be presented to it
even though the opportunity is presented to the Venturer because it is a
Venturer.
10. Books and Records.
-----------------
10.1. Access. Each Venturer and its duly authorized representatives
------
will at all reasonable times have access to inspect and copy any books and
records of the Venture maintained by the Venture upon reasonable prior written
notice to Managing Venturer. The Venture will pay the costs of ordinary and
reasonable photocopying. The requesting Venturer will be responsible for any
extraordinary photocopying costs.
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10.2. Tax Returns. On or before April 15th of each calendar year, the
-----------
Managing Venturer will prepare and deliver to the Venturers financial statements
for the Venture for the preceding fiscal year. The Managing Venturer will use
all reasonable efforts to prepare and deliver to the Venturers within ninety
(90) days after the close of each taxable year the tax information return for
the Venture for the preceding fiscal year, showing each Venturer's distributive
share of each item of profit, loss, credit, income, gain, or deduction, which a
Venturer is required to take into account separately on its individual Federal
income tax return.
10.3. Manner of Maintenance. The books, records, financial statements
---------------------
and tax returns of the Venture will be maintained and prepared at the Venture's
expense and in such manner as the Managing Venturer reasonably establishes.
10.4. Fiscal Year. The fiscal year of the Venture will be the calendar
-----------
year.
10.5. Bank Accounts. All funds of the Venture will be deposited in
-------------
such bank accounts as are so designated by Managing Venturer in accordance with
Section 9.1 and all withdrawals and disbursements of Venture funds will be made
by checks or drafts signed by those persons authorized to do so by the Managing
Venturer.
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11. Profits and Losses and Distributions.
------------------------------------
11.1. Allocation. Except as otherwise provided herein, in each fiscal
----------
year of the Venture, Net Income, Net Loss and Credits will be allocated among
the Venturers in accordance with their Venture Percentages for such year except
that (i) any profit resulting from any claim on the Title Policy will be
allocated entirely to NGP and (ii) any loss or deduction relating to withdrawals
from the Shortfall Account (as defined in the Shortfall Agreement) shall be
allocated entirely to PRP.
11.2. Initial Capital Accounts. As a result of NGP's contribution of
------------------------
the Initial Capital, NGP's Capital Account shall be credited in the amount of
Eight Million Dollars ($8,000,000). As a result of PRP's contribution of the
Property (subject to the debts and obligations referenced in Sections 8.4 and
8.5), PRP shall be entitled to a credit to its Capital Account of Eight Million
Dollars ($8,000,000).
11.3. Depreciation Recognition. Notwithstanding Section
------------------------
11.1, if taxable gain to be allocated pursuant to Section 11.1 includes income
treated as ordinary income for income tax purposes because it is attributable to
the recapture of depreciation, such gain so treated as ordinary income will be
allocated to and reported by the Venturers in proportion to their accumulated
allocations of the depreciation to be so recaptured, and the Venture will keep
and maintain records of such allocations.
-34-
11.4. Section 754 Election. If there is a Transfer of an Interest in
--------------------
accordance with this Agreement, the Venture will, at the written request of the
transferee, file an election on behalf of the Venture pursuant to Section 754 of
the Code.
11.5. Allocation Between Transferor and Transferee. If there is a
--------------------------------------------
Transfer of an Interest in accordance with this Agreement, Net Income, Net Loss,
and Credits allocable to the Interest transferred will, to the extent
transferred, be allocated between the transferor and the transferee in
proportion to the number of days during that fiscal year that the Interest was
owned by each of them.
11.6. Distributable Cash. In each fiscal year of the Venture,
------------------
distributions of Distributable Cash will be made monthly among the Venturers in
accordance with their respective Venture Percentages.
11.7. Title Policy Allocation. The Venturers have agreed that
-----------------------
notwithstanding the fact that the Title Policy in the amount of Eight Million
Dollars ($8,000,000) will be issued to the Venture, NGP shall alone be entitled
to the benefits of such policy. Consequently, should the Venture have or assert
any claim under the Title Policy, the proceeds of such claim shall belong
exclusively to NGP and NGP, acting alone, shall be entitled to prosecute and
assert such claim.
11.8. Special Allocations. The following special allocations shall be
-------------------
made in the following order:
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11.8. (a) Minimum Gain Chargeback. Except as otherwise provided in
-----------------------
Treasury Regulations (S) 1.704-2(f), notwithstanding any other provision of this
Agreement, if there is a net decrease in Venture Minimum Gain during a fiscal
year, each Venturer shall be specially allocated items of Venture income and
gain for such fiscal year (and, if necessary, subsequent fiscal years) in an
amount equal to such Venturer's share of the net decrease in Venture Minimum
Gain, determined in accordance with Treasury Regulation 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Venturer pursuant thereto. The items
to be so allocated shall be determined in accordance with Treasury Regulations
(S)(S) 1.704-2(f)(6) and 1.704-2(j)(2). This Section 11.8(a) is intended to
comply with the minimum gain chargeback requirement in Treasury Regulations (S)
1.704-2(f) and shall be interpreted consistently therewith.
11.8. (b) Venturer Minimum Gain Chargeback. Except as otherwise
--------------------------------
provided in Treasury Regulations (S) 1.704-2(i)(4), notwithstanding any other
provision of this Agreement, if there is a net decrease in Venturer Nonrecourse
Debt Minimum Gain attributable to a Venturer Nonrecourse Debt during any fiscal
year, each Venturer that has a share of the Venturer Nonrecourse Debt Minimum
Gain attributable to such Venturer Nonrecourse Debt, determined in accordance
with Treasury Regulation (S) 1.704-2(i)(5), shall be specifically allocated to
items of Venture income and gain for such fiscal year (and, if necessary,
-36-
subsequent fiscal years) in an amount equal to such Venturer's share of the net
decrease in Venturer Nonrecourse Debt Minimum Gain attributable to such Venturer
Nonrecourse Debt, determined in accordance with Treasury Regulations (S) 1.704-
2(i)(4). Allocations pursuant to the preceding sentence shall be made in
proportion to the respective amounts required to be allocated to each Venturer
pursuant thereto. The items to be so allocated shall be determined in
accordance with Treasury Regulations (S)(S) 1.704-2(i)(4) and 1.704-2(j)(2).
This Section 11.8(b) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulations (S) 1.704-2(i)(4) and shall be interpreted
consistently therewith.
11.8. (c) Nonrecourse Deductions. Nonrecourse Deductions for any
----------------------
fiscal year shall be specially allocated to the Venturers in accordance with
their Venture Percentages.
11.8. (d) Venturer Nonrecourse Deductions. Any Venturer Nonrecourse
-------------------------------
Deductions for any fiscal year shall be specially allocated to the Venturer that
bears economic risk of loss with respect to the Venturer Nonrecourse Debt to
which such Venturer Nonrecourse Deductions are attributable in accordance with
Treasury Regulations (S) 1.704-2(i)(1)
11.8. (e) Curative Allocations. The allocations set forth in Section
--------------------
11.8(a), (b), (c) and (d) ("Regulatory Allocations") are intended to comply with
certain requirements of federal tax regulations. It is the intent of the
Venturers that, to the extent possible, all Regulatory Allocations shall be
-37-
offset either with other Regulatory Allocations or with special allocations of
other items of Venture income, gain, loss or deduction pursuant to this Section
11.8. Therefore, notwithstanding any other provisions of this Agreement, (other
than the Regulatory Allocations), the Managing Venturer shall make such
offsetting special allocations of Venture income, gain, loss or deductions in
whatever manner the Managing Venturer determines appropriate so that, after such
offsetting allocations are made, each Venturer's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Venturer would
have had if the Regulatory Allocations were not a part of this Agreement and all
Venture items were allocated pursuant to Section 11.1. In exercising discretion
under this Section 11.8(e), the Managing Venturer shall take into account future
Regulatory Allocations under Section 11.8(a) and (b) that, although not yet
made, are likely to offset other Regulatory Allocations previously made under
Section 11.8(c) and (d).
11.9. Other Allocation Rules.
----------------------
11.9. (a) Partnership Items. Except as otherwise provided in this
-----------------
Agreement, all items of Venture income, gain, loss, deduction and any other
allocations not otherwise specifically provided for shall be divided among the
Venturers in the same proportions as they share Net Income or Net Loss, as the
case may be, for the period of such allocation.
11.9. (b) Excess Nonrecourse Liabilities. Solely for purposes of
------------------------------
determining a Venturer's proportionate share of the
-38-
"excess nonrecourse liabilities" of the Venture within the meaning of Treasury
Regulations (S) 1.752-3(a)(3), the Venturers' interests in Profits are in
proportion to their Venture Interests.
11.10. Tax Allocations: Code (S) 704(c). In accordance with Code (S)
---------------------------------
704(c) and the Treasury Regulations thereunder, income, gain, loss and
deductions with respect to any property contributed to the capital of the
Venture shall, solely for tax purposes, be allocated among the Venturers so as
to take account of any variation between the adjusted basis of such property to
the Venture for federal income tax purposes and its initial Gross Asset Value
(computed in accordance with clause (a) of the definition of Gross Asset Value)
in accordance with the traditional method as set forth in Treasury Regulation
(S) 1.704-3(b). If the Gross Asset Value of any Venture asset is adjusted
pursuant to clause (b) or (c) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the hands of the
Venture in the same manner as under Code Section 704(c) and Treasury Regulations
thereunder. Allocations pursuant to the Section 11.10 are solely for income tax
purposes and shall not affect, or in any way be taken into account in computing,
any Venture Capital Account or share of Net Income, Net Loss, other items or
distributions pursuant to this Agreement.
-39-
12. Partition.
---------
No Venturer will have the right to partition the Property, or any part
thereof, or any other assets of the Venture, nor may any Venturer make
application to any court or authority having jurisdiction in the matter nor
commence or prosecute any action or proceeding for partition or sale thereof.
If a Venturer breaches the provisions of this Article, the other Venturer(s), in
addition to any and all rights and remedies it or they may have hereunder or at
law or in equity, will be entitled to a decree or order restraining and
enjoining such application, action or proceeding.
13. Transfers of Interests in the Venture.
-------------------------------------
13.1. Certain Transfers Prohibited. Except for Permitted Transfers, no
----------------------------
Venturer may Transfer all or any portion of its Interest unless it first obtains
the prior written consent of other Venturers and unless it first complies with
the requirements of Section 13.2. Except for Permitted Transfers, no
shareholder shall Transfer any interest in OCC or PEL unless it first obtains
the prior written consent of NGP. Any Transfer or attempted Transfer in
violation of this Agreement automatically will be null and void and constitute
an Event of Default on the part of the responsible Venturer.
13.2. Right of First Offer. Prior to any Transfer (other than a
--------------------
Permitted Transfer), the transferring Venturer or its Successor shall
concurrently deliver to each of the other
-40-
Venturers a written notice stating the name, address and telephone number of the
proposed transferee and all of the terms of the proposed or impending Transfer
(the "Transfer Offer"). Failure to so deliver the Transfer Offer will be an
Event of Default. The Transfer Offer will constitute an offer by such Venturer,
or its Successor, to Transfer its Interest to the other Venturers in accordance
with the terms of the Transfer Offer. Any or all of the other Venturers may
accept the Transfer Offer by delivering written notice of acceptance within
thirty (30) days after the Transfer Offer is received. If the Transfer Offer is
accepted, the offering Venturer's Interest will be transferred to the Venturer
or Venturers who timely elect to purchase in accordance with the terms of the
Transfer Offer and pay the purchase price therefor. If more than one Venturer
elects to purchase, the Interest shall be transferred and the consideration paid
pro rata in accordance with the respective Venture Percentages of the purchasing
Venturers. If the Transfer Offer is not timely accepted by any Venturer, the
offering Venturer or its Successor may Transfer its Interest for a period of one
hundred twenty (120) days after delivery of the Transfer Offer, but only in
accordance with the terms of the Transfer Offer. If such Transfer to such other
person is not completed within one hundred twenty (120) days after delivery of
the Transfer Offer, the selling Venturer or its Successor may not complete that
Transfer or any other Transfer of its Interest without again complying with the
foregoing procedures, and will not have the
-41-
right to initiate the foregoing procedures more than twice in any twelve (12)
month period.
13.3. Permitted Transfers. Each of the following Transfers are
-------------------
Permitted Transfers and are not subject to any restrictions hereunder or under
Sections 13.1 and 13.2:
13.3. (a) A Transfer of an Interest to an existing Venturer.
13.3. (b) A Transfer to an Affiliate of the transferor.
13.3. (c) In the case of NGP, a Transfer in connection with a merger,
corporate reorganization, restructure, financing, or sale of a substantial
portion of NGP's assets or similar transaction.
13.3. (d) In the case of PRP, any transfers to OCC and/or PEL.
13.3. (e) In the case of PEL and OCC, a Transfer of an Interest to a
presently existing shareholder of PEL or OCC in liquidation of such
shareholder's interest in PEL or OCC.
13.3. (f) In the case of PEL and OCC, Transfers of shares among
persons who are existing shareholders of either OCC or PEL (or members of a
shareholder's family) pursuant to currently existing buy/sell arrangements among
such persons.
13.3. (g) In the case of PEL and OCC, a Transfer of a shareholder's
interest or an Interest to one or more members of such shareholder's family.
For purposes of Sections 13.2(e) and (f), members of a shareholder's family
shall be limited to the shareholder's spouse, parents, children, and
grandchildren.
-42-
13.3. (h) A Transfer pursuant to Article 14.
13.4. Substituted Venturers. Except as provided below, no person may
---------------------
become a substituted Venturer until such person:
13.4. (a) Elects to become a substituted Venturer by delivering
written notice of such election to the nontransferring Venturers.
13.4. (b) Obtains written consent from Venturers owning at least
sixty-six and two-thirds percent (66 2/3%) of the Venture Voting Percentages.
13.4. (c) Executes and acknowledges such agreements as the Managing
Venturer reasonably deems necessary or advisable to effect the admission of such
person as a substituted Venturer, including, without limitation, the written
acceptance by such person of this Agreement and any other agreements that bind
the Venture.
13.4. (d) Pays a transfer fee to the Venture sufficient to pay all
reasonable expenses in connection with the Transfer and the admission of such
person as a substituted Venturer, including, without limitation, the costs of
preparing and recording an amendment to this Agreement and reasonable attorneys'
fees.
The restrictions contained in this Section 13.4 and in Section 13.5
shall not apply (i) to any Transfer of an Interest to an existing Venturer,
whether pursuant to Section 13.3(a), Article 14 or otherwise, or (ii) to a
Transfer pursuant to Section 13.3(d), Section 13.3(e), or Section 13.3(f). In
such
-43-
case, the existing Venturer will also be considered a substitute Venturer to the
extent of the Interest transferred.
13.5. Limitation on Transferee's Rights. No transferee of an Interest
---------------------------------
(except for an existing Venturer) will have the right to exercise any rights
(other than to receive Profits, Losses, Credits and Distributable Cash to the
extent transferred), vote, require any information or an accounting from the
Venture, inspect the Venture's books and records, manage the Venture's business
or perform any duties in connection with the Property or the Venture, make or
approve any decisions, execute any agreements or otherwise bind the Venture or
any other Venturer, unless such person becomes a substituted Venturer in
accordance with Section 13.4.
13.6. No Dissolution. The Transfer of an Interest pursuant to a
--------------
Permitted Transfer or otherwise in accordance with this Agreement will not
dissolve the Venture. In such case, the Venture will continue, and the
allocation of Net Income, Net Loss, and Credits and proceeds attributable to the
Interest transferred will be prorated between the transferor and transferee as
provided in Section 11.5.
14. Certain Put Rights.
------------------
14.1. PRP Put. At any time after January 1, 2003, any one or more of
-------
the Non-Defaulting Venturers or their Successors (other than NGP) may by written
notice ("Exercise Notice") delivered to NGP require NGP to purchase its or their
entire
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Interest (the "Put"). If exercised, the purchase will close six (6) months after
delivery of the Exercise Notice or earlier at the option of NGP. Without
limiting the generality of the foregoing, a Successor who acquires an Interest
pursuant to Section 13.3(d), Section 13.3(e), or Section 13.3(f) may exercise
the Put.
14.2. Purchase Price. If the Put is exercised, the purchase price for
--------------
the Interest(s) which are the subject of the Put shall equal the Interest Value
of the Interest of each selling Venturer on the date of delivery of the Exercise
Notice. For a period of thirty (30) days after delivery of the Exercise Notice
("Negotiation Period"), NGP and the selling Venturer(s) will meet and confer in
an effort to agree on the Interest Value for the Interest of each selling
Venturer. If they are unable to agree during the Negotiation Period, such
Interest Value will be determined by arbitration under Section 14.3, et seq.
14.3. Arbitration. Within fifteen (15) days after expiration of the
-----------
Negotiation Period, NGP shall appoint one Arbitrator and the selling Venturer(s)
collectively shall appoint one Arbitrator. Each will notify the other within
such fifteen (15) day period of the identity of the Arbitrator it has appointed.
The Arbitrators will then each independently make a written determination of the
relevant Interest Value(s) within sixty (60) days after their appointment. Upon
completion of their determinations, the Arbitrators will promptly exchange their
findings and thereafter will meet and confer in an attempt
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to resolve any differences. If they cannot resolve their differences within
thirty (30) days after exchange of their findings and determinations, they will
jointly appoint a neutral third Arbitrator. The neutral Arbitrator's function
will be limited to determining which of the two written determinations prepared
by the parties' Arbitrators is most accurate. Such determination will be
conclusive and binding as to the relevant Interest Value(s). If the parties'
Arbitrators cannot agree on the third Arbitrator, he or she will be appointed by
the President of the American Institute of Real Estate Appraisers on the
application of any party. All Arbitrators (including the third or neutral
Arbitrator) will meet the qualifications set forth in Section 3.6.
14.4. Fees. NGP will pay the fees and expenses of the Arbitrator it
----
appoints and the selling Venturer(s) will pay the fees and expenses of the
Arbitrator it or they appoint. The fees and expenses of the third Arbitrator
will be divided equally between NGP and the selling Venturer(s).
14.5. Failure to Act. If either NGP or the selling Venturer(s) fail(s)
--------------
to appoint its (or their) Arbitrator timely or if one of the two Arbitrators
appointed by the parties fails to act in a timely manner, the determination of
relevant Interest Value(s) made by the Arbitrator appointed by the other will be
conclusive and binding on the parties.
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15. Default and Remedies.
--------------------
15.1. Event of Default. Any of the following events, acts or omissions
----------------
will be deemed a default (an "Event of Default") under this Agreement by the
responsible Venturer:
15.1. (a) The failure of a Venturer timely to contribute its share of
Initial Capital.
15.1. (b) The Bankruptcy of a Venturer.
15.1. (c) Transfer of an Interest in violation of this Agreement.
15.1. (d) Any material breach of any representation or warranty
contained in Section 17.1 or 17.2 which has not been cured in the manner set
forth in Section 15.1(e); provided that in the case of breaches contained in
Section 17.2, this provision will apply only if NGP has asserted a written claim
within the eighteen (18) month period described in Section 17.2 and the breach
involves damages in excess of $25,000.
15.1. (e) The failure by a Venturer to comply with any of the other
terms or conditions of this Agreement if such failure is not cured within thirty
(30) days after delivery of written notice of such failure (the "Default
Notice") from any other Venturer, unless such failure is monetary and cannot
reasonably be cured within such period and the defaulting Venturer immediately
takes action necessary to cure such failure and diligently proceeds to cure such
failure within seventy-five (75) days after delivery of the Default Notice. If
such failure
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is not susceptible of being cured, such failure will be deemed to be an Event of
Default upon the delivery of the Default Notice.
15.2. Remedies. If an Event of Default occurs, any Nondefaulting
--------
Venturer will have the right, but not the obligation, to exercise any one or
more or combination of the following rights and remedies (in addition to any
other rights and remedies available hereunder or at law or in equity) by
delivering written notice to the Defaulting Venturer(s) within one hundred
twenty (120) days after the Event of Default or the date that the Non-defaulting
Venturer becomes aware of the Event of Default, whichever is later:
15.2. (a) To attempt to remedy the failure which constitutes the
Event of Default, in which event any or all amounts paid or Liabilities incurred
by a Non-defaulting Venturer in connection therewith may, at the option of such
Non-defaulting Venturer, be deemed a loan by the Non-defaulting Venturer to the
Defaulting Venturer(s) (the "Default Loan"), which will bear interest on the
outstanding balance from the date advanced or incurred at a rate per annum equal
to five percent (5%) in excess of the Prime Rate. The Default Loan will be a
demand loan and, after demand, in addition to its right to immediate payment,
the Non-defaulting Venturer(s) who make the Default Loan irrevocably will be
entitled to receive all Distributable Cash and other proceeds which otherwise
would be distributed or paid to the Defaulting Venturer to repay fully the
Default Loan and any interest thereon. Each Defaulting Venturer hereby grants
and
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conveys to each Non-defaulting Venturer who makes a Default Loan to it a
security interest in its Interest to secure the repayment of a Default Loan and
any interest thereon.
15.2. (b) To bring any proceedings for equitable relief, including,
without limitation, specific performance and injunction.
15.2. (c) To pursue a claim for damages, subject to the limitation
contained in Section 18.1.
15.2. (d) If approved by Venturers collectively owning at least sixty-
six and two-thirds percent (66 2/3%) of the Venture Voting Percentages of all
Non-defaulting Venturers, to dissolve the Venture.
16. Dissolution.
-----------
16.1. No Dissolution in Certain Circumstances. None of the following
---------------------------------------
events will cause a dissolution of the Venture unless Venturers holding at least
sixty-six and two-thirds percent (66 2/3%) of the Venture Voting Percentages of
the remaining or unaffected Venturers so elect, in writing:
16.1. (a) The Bankruptcy or, except in connection with a Permitted
Transfer, dissolution of a Venturer.
16.1. (b) The Transfer of a Venturer's Interest in violation of this
Agreement.
16.1. (c) The withdrawal or expulsion of a Venturer.
16.2. Waiver of Right to Withdraw. During the term of this Agreement,
---------------------------
each Venturer waives any and all rights it may
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have to withdraw from the Venture or cause a voluntary dissolution of the
Venture, except specifically in accordance with this Agreement.
16.3. Liquidation. Upon the dissolution of the Venture, the Managing
-----------
Venturer (unless its action caused the dissolution under Section 16.1) will
liquidate the Venture's assets. If the Managing Venturer caused the
dissolution, then the other Venturers will so liquidate. The proceeds from any
such liquidation will be distributed as follows:
16.3. (a) First, to the payment of Liabilities of the Venture other
than those owing to the Venturers.
16.3. (b) Second, to the payment of Liabilities of the Venture owing
to the Venturers.
16.3. (c) Third, to the setting up of any reserves reasonably
necessary for future Liabilities of the Venture during the winding-up period.
16.3. (d) Fourth, to the Venturers, pro rata, to repay any positive
balances in their capital accounts after the allocation of Net Income and Net
Loss.
16.3. (e) Fifth, in accordance with Section 11.6. Such payments shall
be made at the end of such taxable year, or if later, within ninety (90) days
after the date of such liquidation.
16.4. Allocations. The Venture will continue to allocate Profits,
-----------
Losses, Credits and, except as set forth
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herein, Distributable Cash, during the windinq-up period in the manner in which
such allocations were made prior to dissolution.
16.5. Winding-Up. After the dissolution of the Venture, the business
----------
of the Venture may be continued but only to the extent necessary to allow an
orderly winding-up of the Venture's business and the liquidation of its assets.
16.6. Negative Capital Accounts. If any Venturer has a deficit balance
-------------------------
in his Capital Account following the liquidation of his interest in the Venture,
as determined after taking into account all Capital Account adjustments for the
Venture's taxable year during which the liquidation occurs, the Venturer shall
be unconditionally obligated to restore the amount of such deficit balance to
the Venture by the end of such taxable year or, if later, within 90 days after
the date of such liquidation.
16.7. Notices. Upon dissolution, the Venturers will take all steps
-------
necessary to accomplish the dissolution, including without limitation, the
publication, filing and delivery of notices required by law.
16.8. Distributions In Kind. After all of the Liabilities of the
---------------------
Venture have been paid, the Venturer who is liquidating the Venture's Assets
pursuant to Section 16.3 may elect to distribute some or all of the assets of
the Venture in kind. In this case, the assets to be distributed will be valued
at their Fair Market Value at the time of distribution, the assets will be
treated on books of the Venture as having been sold for an amount equal to their
Fair Market Value, and
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distribution then will proceed as if cash equal to the Fair Market Value of
those assets was distributed. If the Venturers cannot agree on the Fair Market
Value of any such asset, its fair market value will be determined in accordance
with the arbitration formula set forth in Section 14.3.
16.9. Venturers May Bid. Any Venturer will be permitted to bid for any
-----------------
asset of the Venture upon dissolution.
17. Representations and Warranties.
------------------------------
17.1. Mutual Representations. Each Venturer represents and warrants
----------------------
that it has full right and authority to enter into this Agreement without
obtaining any consents or approvals; its execution of this Agreement and the
performance of the terms and conditions hereof will not violate any other
agreement to which it is a party or pursuant to which it is bound; that it has
been represented by counsel of its own choice; and this Agreement is binding
upon it and its execution of this Agreement and its performance of the terms and
conditions of this Agreement are duly authorized.
17.2. PEL and OCC Representations. PRP hereby makes each of the
---------------------------
representations and warranties set forth in Exhibit "G", each of which are
incorporated herein by this reference and shall survive the Closing Date. PRP
confirms its awareness that based on the representations and warranties
contained in Exhibit "G", the Venture will make certain representations and
warranties to AGC in the Operating Lease. Nothing contained in this Section
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17.2 will be deemed to create any third party beneficiary rights in AGC, but in
case of any action by AGC under the Lease, the Venture, and PRP shall have
available, and may assert, any defense or counterclaim available to the Venture.
The representations and warranties referenced in this Section 17.2 shall survive
the Closing only for a period of eighteen (18) months and except to the extent
NGP asserts a claim in writing for breach of such representations and warranties
within such time period, such representations and warranties shall thereafter be
considered void.
17.3. Representations to Protect REIT Status. PRP understands that
--------------------------------------
National Golf Properties, Inc., a Maryland corporation, and the general partner
of NGP ("National Golf"), has qualified as a real estate investment trust (REIT)
under the Code and that it intends to maintain such qualification and that, as a
REIT, National Golf is subject to a number of organizational and operational
requirements. PRP further understands that the representations, warranties and
agreements set forth below are intended to assist National Golf in maintaining
its REIT status and that a violation of such representations, warranties and
agreements could have an adverse impact on National Golf's REIT status.
Accordingly, PRP (on behalf of itself and its Successors) represents, warrants
and agrees as follows:
17.3.(a) It does not and agrees that it will not, at any time, own or
"Constructively Own," as defined in Exhibit "H", any stock of National Golf.
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17.3. (b) If, for any reason, PRP, or any Successor violates the
representation and agreement set forth in Section 17.3(a), then (1) to the
extent permitted by National Golf's Certificate of Incorporation, such
acquisition or ownership of National Golf stock will be void (subject to the
terms and conditions of National Golf's Certificate of Incorporation); and (2)
to the extent (i) such Certificate of Incorporation does not operate so as to
immediately void such acquisition or ownership, and (ii) such acquisition or
ownership would cause National Golf to be viewed as the Constructive Owner of an
"Ownership Interest" (as defined in Exhibit "H") of ten percent or more in any
tenant of National Golf or NGP (in either case, so long as National Golf is the
general partner of NGP), or AGC, then immediately upon such event, the Interest
of such Venturer shall be automatically purchased by PRP or its Successors pro
rata (to the extent that such transfer does not violate Section 17.3(a)) for an
amount equal to the amount that PRP would have received had it exercised its Put
rights pursuant to Article 14; provided that if such transfer does not prevent a
violation of Section 17.3(a), then the ownership interest of such Venturer shall
be automatically purchased by National Golf in exchange for an amount equal to
the amount that such Venturer would have received had it exercised its Put
rights pursuant to Article 14. In addition, such Venturer shall immediately
upon demand pay to the purchaser of the Interest all distributions made by the
Venture to it after the date of such purchase but
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prior to its discovery. In such case, the Managing Venturer shall have the
authority to adjust the Venture's books and records (including amending tax
returns if appropriate) to reflect such purchase and all resulting matters.
18. Reciprocal Indemnities.
----------------------
18.1. PRP's Indemnity. PRP shall indemnify, protect, defend and hold
---------------
harmless the Venture, NGP, and AGC and their respective owners, lessees,
guarantors, officers, directors, partners, employees, and agents from and
against all claims, demands, lawsuits, actions, proceedings, liabilities,
damages, losses, and expenses, including reasonably attorneys' fees
(collectively, "Claims") relating to any breach by PRP of this Agreement;
provided that insofar as such indemnity pertains to a breach of any
representation or warranty set forth in Section 17.2, such indemnity shall
survive the Closing only for a period of eighteen (18) months and except to the
extent NGP asserts a claim in writing for indemnity within such time period, the
indemnity insofar as it relates to such representations and warranties shall
thereafter be considered void. Any claim under this Section 18.1 shall not be
applicable unless the damage resulting therefrom exceeds $25,000. The aggregate
of all such claims shall not exceed $8 million.
18.2. NGP's Indemnity. NGP shall indemnify, protect, defend, and hold
---------------
harmless the Venture, PRP, AGC and their respective owners, lessees, guarantors,
officers, directors,
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partners, employees, and agents from and against all Claims relating to any
breach by NGP of this Agreement.
19. Miscellaneous.
-------------
19.1. Notices. Any notice, payment, demand or communication required
-------
or permitted to be given by any provision of this Agreement will be deemed to
have been delivered and given for all purposes: (a) if delivered personally to
the party or to an officer of the party to whom it is directed; or (b) whether
or not it is actually received, if sent by a recognized overnight courier
service, such as Federal Express, addressed as set forth below or to such other
address as a Venturer may from time to time specify by written notice to each
other Venturer. Any such notice, payment, demand or communication will be
deemed to have been delivered and given on the date delivered, if delivered
personally, or on the date of attempted delivery by overnight courier service.
The following addresses are the current addresses of the Venturers:
If to NGP: National Golf Operating Partnership
c/o National Golf Properties, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
General Counsel
If to PRP: c/o ▇▇▇▇▇▇ ▇. French
Pumpkin Ridge Golf Course
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Stoel ▇▇▇▇▇ ▇▇
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19.2. Headings. Article and Paragraph headings in this Agreement are
--------
for reference purposes only and do not describe, interpret, define or limit the
scope, extent or intent of this Agreement or any provision hereof.
19.3. Severability. Every provision of this Agreement is intended to
------------
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity will not affect the validity of
the remainder of such term and this Agreement.
19.4. Amendments. All amendments to this Agreement must be in writing
----------
and signed by all Venturers and any other attempted amendment will be null and
void.
19.5. No Waiver. The failure of any Venturer to insist upon strict
---------
performance of any of the terms or conditions of this Agreement or to exercise
any election, right or remedy will not be construed as a waiver or election. No
waiver will be effective unless it is in writing, specifically describes the
act or omission to be waived and is signed by the party charged with the waiver.
No waiver will be deemed to be a waiver of any prior, concurrent or subsequent
act or omission.
19.6. Legal Fees. In any action for breach of, to enforce the
----------
provisions of, or otherwise involving this Agreement, the court or other
authority having jurisdiction in such action
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shall award a reasonable sum of attorneys' fees and costs to the party in whose
favor judgment is entered. The party in whose favor judgment is entered may, by
its election, submit proof of attorneys' fees and costs as an element of damages
before entry of judgment, or after entry of judgment in any post judgment cost
▇▇▇▇.
19.7. Governing Law. The local, internal laws of Oregon govern the
-------------
validity of the Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties.
19.8. Counterparts. This Agreement may be executed in any number of
------------
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts will be construed together and will constitute one
agreement.
19.9. Rights and Remedies Cumulative. All rights and remedies
------------------------------
available to a party hereunder or at law or in equity are cumulative and not
exclusive and may be exercised successively, concurrently or in any order.
19.10. Binding on Successors. Subject to Article 13, each and all of
---------------------
the covenants, terms, provisions and agreements herein contained will be binding
upon and inure to the benefit of the Venturers and their respective Successors.
19.11. Time. Time is of the essence in the performance of the parties'
----
respective obligations under this Agreement.
19.12. Entire Agreement. This Agreement constitutes the entire
----------------
understanding and agreement among the parties with respect
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to the subject matter hereof, and there are no agreements, understandings,
restrictions, representations or warranties among the parties other than those
set forth herein or herein provided for.
19.13. Further Assurances. Each Venturer agrees to cooperate with the
------------------
other Venturers and to perform any further acts and execute and deliver any
further documents and agreements which may be reasonably necessary to carry out
the provisions of this Agreement and the purposes of the Venture.
19.14. Masculine Includes Feminine, etc.. Where the context so
---------------------------------
requires, the use of the masculine gender includes the feminine and neuter
genders and the singular includes the plural, and vice versa, and the word
"person" includes any individual, corporation, association, partnership or other
entity.
19.15. Exhibits. All Exhibits hereto are incorporated herein by
--------
reference as though set forth in full.
19.16. Confidentiality. The parties shall keep confidential the
---------------
existence and terms of this Agreement, except as to their employees,
consultants, attorneys, accountants and other agents that may be involved in
conducting the due diligence related to the transactions contemplated by this
Agreement. Upon the Closing, NGP shall be permitted to make public
announcements and disclosures regarding the terms of the transaction except that
the initial press release will be subject to the reasonable prior approval of
OCC and PEL.
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19.17. Obligations. The obligations, representations and warranties of
-----------
OCC and PEL hereunder or under any Exhibit shall constitute their several
obligations, representations and warranties. In furtherance and not in
limitation of the foregoing, in any instance in which PRP has liability under
this Agreement and the assets of PRP are not sufficient to discharge such
liability, any recourse against OCC and PEL with respect to such liability shall
be several and not joint, in the case of each in proportion to the then-
interests of OCC and PEL in PRP.
IN WITNESS WHEREOF, this Agreement has been executed as of the date set
forth in Article 1.
"NGP"
NATIONAL GOLF OPERATING PARTNERSHIP L.P..
a Delaware limited partnership
By: NATIONAL GOLF PROPERTIES, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Print Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
"PRP"
PUMPKIN RIDGE PARTNERS,
an Oregon Partnership
By: OREGON CENTRAL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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