EXHIBIT 10.4
USGA AGREEMENT
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1. Identification and Parties.
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This USGA Agreement ("Agreement") is made and entered into this 8th day of
September, 1997 by and between PUMPKIN RIDGE JOINT VENTURE, an Oregon
partnership ("Landlord") and AMERICAN GOLF CORPORATION, a California corporation
("Tenant").
2. Recitals.
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2.1. Landlord is the owner of a certain thirty-six hole golf course
facility ("Facility") located in Cornelius, Oregon which Landlord leases to
Tenant pursuant to a lease ("Lease"). Concurrently with execution of the Lease,
certain partners of Landlord and Tenant entered into a Shortfall Agreement
("Shortfall Agreement").
2.2. The parties desire to undertake activities which may lead to the
selection of the Facility by the United States Golf Association ("USGA") as a
site for a future U.S. Open and/or for other USGA events. The parties believe
that selection of the Facility for such purposes will be beneficial to the
Facility.
2.3. It is the desires of the parties to reflect their agreement relative
to the use of the Facility for USGA events and to allocate (i) their respective
responsibilities, (ii) the associated costs, and (iii) distribution of proceeds.
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NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree the follows:
3. General Responsibilities of the Parties.
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3.1. Landlord will designate three (3) representatives, who, together with
two representatives of Tenant, will take responsibility for negotiations and
discussions with USGA relative to the matters described in Section 2.2.
Landlord's initial representatives will be ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
▇▇▇▇ ▇▇▇▇▇. Tenant's initial representatives will be ▇▇▇▇▇ ▇▇▇▇▇▇ and the
General Manager of the Facility. Either party may change any of its
representatives by written notice to the other.
3.2. Landlord and Tenant agree to make the Facility available for any USGA
event ("USGA Agreement") upon reasonable advance notice. The specific terms of
any agreement regarding such use must be in writing and will require the prior
consent of both Landlord and Tenant. In considering such matters, each party
agrees to act promptly and reasonably.
4. USGA Related Costs
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4.1. Definition. As used herein, the term "USGA Related Costs" shall
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include each of the following:
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4.1. (a) All out-of-pocket costs reasonably incurred by the parties in
connection with the activities described in Section 2.2.
4.1. (b) Any out-of-pocket costs reasonably incurred by Landlord or
Tenant pursuant to a USGA Agreement, or otherwise in preparation for any USGA
event to which the parties have committed pursuant to a USGA Agreement, to the
extent that such costs would not have otherwise been incurred (e.g., costs
related to a change in golf course design, layout, or maintenance mandated by
USGA).
4.1. (c) Any reduction in Net Cash Flow (as defined in the Shortfall
Agreement) experienced by Tenant by reason of holding any USGA event (including,
without limitation, any non-revenue producing event). Any such reduction in Net
Cash Flow will be calculated in a fair and reasonable manner. If any reduction
in Net Cash Flow results from the Facility being fully or partially closed or
operations curtailed on a temporary basis, then the reduction in Net Cash Flow
shall be calculated based on the Net Cash Flow realized during the same calendar
months in the immediately preceding three years with an appropriate adjustment
for any weather conditions.
4.2. Responsibility for USGA Related Costs. Tenant will pay all USGA
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related Costs up to an aggregate maximum of $150,000 ("Base Costs"). If either
party desires to incur USGA related Costs in excess of Base Costs ("Excess
Costs"), it may do so upon
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written notice to the other party which notice shall be accompanied by a
detailed summary of all such Excess Costs.
5. Allocation of USGA Related Revenue.
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5.1. Definition. As used herein, the term "USGA Related Revenue" means
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all revenue derived directly from operation of the Facility during an event held
at the Facility pursuant to a USGA Agreement. USGA Related Revenue will include
all revenues that would not have been realized had there been no USGA Agreement.
5.2. Allocation. USGA Related Revenues will be allocated between the
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parties in the following order of priority:
5.2.(a) First, to the parties pro rata in proportion to their
respective contributions of USGA related Costs, an amount sufficient to repay
such contributions in full.
5.2.(b) Second, the balance seventy percent (70%) to Landlord and
thirty percent (30%) to Tenant.
6. Obligation to Keep Separate Books.
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Tenant shall at all times keep accurate books of account and records
related to USGA Related Costs and USGA Related Revenues. Such books and records
shall be maintained separate and apart from any other books or records
concerning the operation of the Facility. All USGA Related Costs and USGA
Related Revenues will be accounted for and disbursed pursuant to this Agreement
and not the Lease. Tenant will maintain books and records related to the normal
operation of the Facility pursuant to the Lease as if this
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Agreement did not exist and as if there were no possibility of USGA events at
the Facility.
7. Miscellaneous.
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7.1. Cooperation. The parties agree to take all reasonable steps consistent
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with the limitations set forth herein, to secure selection of the Facility as a
U.S. Open site. Without limiting the generality of the foregoing, if the U.S.
Open is awarded to the Facility, the parties will take all reasonable actions
necessary to comply with USGA requirements.
7.2. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, oral or written, express or implied, and all
understandings, negotiations or discussions of the parties, whether oral or
written, and there are no warranties, representations or agreements between the
parties in connection with the subject matter hereof except as are set forth
herein.
7.3. Unenforceability. If any provision of this Agreement is held to be
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invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the remainder of such provision or any other
provisions hereof.
7.4. Amendment, Modifications. This Agreement may not be altered, amended,
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changed, waived, terminated or modified in any respect or particular unless the
same shall be in writing and signed by or on behalf of the parties hereto.
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7.5. Successors. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and to their respective successors and assigns.
7.6. Governing Law This Agreement shall be construed and enforced in
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accordance with the laws of the State of Oregon.
7.7. Headings. All article and paragraph titles or captions are for
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convenience only and shall not be deemed a part of this Agreement .
7.8. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but which when taken together shall
constitute one and the same instrument .
7.9. Notices. Any notice, demand or document which either party is
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required or may desire to give, deliver or make to the other party shall be in
writing, and may be personally delivered or given or made by United States
registered or certified mail, return receipt requested, by overnight delivery
service (e.g., Federal Express), or by telecopied transmission addressed as
follows:
To Landlord: National Golf Properties
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Pacific Estates, Ltd.
▇/▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇.
Stoel Rives LLP
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: Pumpkin Ridge Golf Course
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. French
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Tenant: American Golf Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Fields
Claman & Machtinger LLP
1900 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may designate a different address for itself by notice similarly
given. Any notice, demand or document shall be deemed to have been given upon
actual delivery.
"Landlord"
PUMPKIN RIDGE JOINT VENTURE,
an Oregon partnership
By: NATIONAL GOLF OPERATING
PARTNERSHIP, L.P., a
Delaware limited partnership
BY: NATIONAL GOLF PROPERTIES,
INC., a Maryland
corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Print Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
[Signatures Continued]
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By: PUMPKIN RIDGE PARTNERS, an
Oregon partnership
By: OREGON CENTRAL
CORPORATION, a Delaware
corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By: PACIFIC ESTATES, LTD., an
Oregon corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
"Tenant"
AMERICAN GOLF CORPORATION,
a California corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Print Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President/General Counsel
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