EXHIBIT 3.36
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______________________________________________________________________________
AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
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(WHISPERING PALMS)
BY AND BETWEEN
GOLF INNS OF AMERICA, INC.,
a California corporation
("Golf Inns")
AND
OCEAN VISTA LAND COMPANY,
a California corporation
("Ocean Vista")
______________________________________________________________________________
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TABLE OF CONTENTS
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Article Page
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INTRODUCTION / WITNESSETH 1
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1. DEFINITIONS
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Definitions ........................................... 2
2. FORMATION OF THE PARTNERSHIP
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Formation ............................................. 2
Name .................................................. 2
Principal Office ...................................... 2
Purpose of the Joint Venture .......................... 2
Partnership Act; Ownership; No Partition .............. 2
No Individual Authority ............................... 3
No Restrictions ....................................... 3
Not Responsible for Other's Commitments ............... 3
Legal Obligations ..................................... 3
3. TERM
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Term .................................................. 4
4. CONTRIBUTIONS TO THE JOINT VENTURE
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Initial Capital Contributions ......................... 4
Capital Contributions and Obligations ................. 4
5. INTEREST OF THE VENTURERS
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Percentage Interest ................................... 5
Profits, Losses and
Distributive Shares of Tax Items .................... 6
Deficit Capital Makeup ................................ 6
6. MANAGEMENT OF THE JOINT VENTURE
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Management Committee .................................. 6
Meetings of the Management Committee .................. 7
Action by the Management Committee .................... 7
Managing Partner ...................................... 8
Accounting Records .................................... 10
Costs and Expenses; No Compensation ................... 10
Replacement ........................................... 10
7. BUDGETS
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Budgets ............................................... 10
8. DISTRIBUTION OF POSITIVE NET CASH FLOW
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Positive Net Cash Flow ................................ 11
9. GOLF INNS' COVENANTS AND REPRESENTATIONS 12
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10. OCEAN VISTA'S COVENANTS AND REPRESENTATIONS 13
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11. PROHIBITED TRANSACTIONS
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Prohibited Transactions ............................... 14
12. BOOKS, RECORDS, AUDITS, TAXES, ETC.
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Books; Statements ..................................... 15
Where Maintained; Availability ........................ 16
Audits ................................................ 16
Independent Audit ..................................... 16
Other Information ..................................... 16
Banking ............................................... 16
Tax Returns; Review ................................... 16
13. DISSOLUTION AND LIQUIDATION OF THE JOINT VENTURE
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Dissolution Events .................................... 17
Method of Liquidation ................................. 17
Date of Termination ................................... 18
14. TRANSFER OF JOINT VENTURE INTEREST 19
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15. BUY-SELL PROVISIONS
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Mandatory Buy-Sell .................................... 19
16. DEFAULT BY A VENTURER
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Events of Default ..................................... 20
Effect of Default ..................................... 22
Failure to Make a Capital Contribution ................ 23
17. PROCEDURE FOR APPRAISEMENT
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Selection of Appraisers ............................... 24
Determination of Fair Market Value .................... 24
Fees and Expenses ..................................... 25
18. MISCELLANEOUS
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Affiliated Corporations ............................... 25
Exhibits .............................................. 25
Notices ............................................... 25
Independent Corporation ............................... 26
Affiliates ............................................ 27
Golf Inns' Inquiry .................................... 27
Assignment ............................................ 28
Public Announcements .................................. 28
Severability .......................................... 28
Approvals ............................................. 28
Integrated Agreement .................................. 28
Construction of Agreement ............................. 28
Amendment and Waiver .................................. 28
Successors and Assigns ................................ 29
Unavoidable Delay ..................................... 29
Documentation ......................................... 29
EXECUTION / ATTESTATION 30
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EXHIBITS TO AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
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BY AND BETWEEN
GOLF INNS OF AMERICA, INC.
AND
OCEAN VISTA LAND COMPANY
A3477.2.142.9A
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DEFINITIONS ..................... "A"
EXISTING DEBT ................... "B"
REAL PROPERTY ................... "C"
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DEFINITIONS
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(Whispering Palms Joint Venture)
All capitalized terms referenced or used in the Joint Venture Agreement
(the "Agreement") and not specifically defined therein shall have the meaning
set forth below in this Exhibit "A", which is attached to and made a part of the
Agreement for all purposes. The section, paragraph and exhibit references herein
refer to the Sections, Paragraphs and Exhibits in and to the Agreement.
1.1. Act. The term "Act" shall mean the California Uniform Partnership Act,
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as from time to time amended.
1.2. Annual Operations Budget. The term "Annual Operations Budget" shall be
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defined as the annual operations budget of the Joint Venture to be prepared
pursuant to Paragraph 7.1.1.
1.3. Capital Contributions. The term "Capital Contribu-tions" shall and/or
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capital contribution pursuant to the provisions of Section 4.2 hereof to fund a
Venturer's Percentage Interest or a lesser portion of any (i) Negative Net Cash
Flow, or (ii) Deficit Capital Costs incurred by the Joint Venture.
1.4. Capital Costs. The term "Capital Costs" shall mean the amount
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investment required to be expended by the Joint Venture to fund any capital
improvements or replacements, if any, to the Improvements, as provided for in
the Capital Expenditures Budget.
1.5. Capital Expenditures Budget. The term "Capital Expenditures Budget"
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shall be defined as the budget for capital expenditures of the Club as set forth
in Paragraph 7.1.2.
1.6. Capital Reserve. The term "Capital Reserve" shall mean those amounts
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periodically established by the Management Committee, as defined herein, but not
less than five percent (5%) of Gross Receipts on a Fiscal Year basis, and
allocated to an account for capital replacements, repairs and improvements
within and to the Club.
1.7. Closing Date. The term "Closing Date" shall be defined as the date
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upon which the Acquired Shares are transferred by Theodore L. Vallas to OVLC
Management Corp. pursuant to that certain Stock Purchase Agreement dated
September 4, 1992, and as amended by that certain Assignment, Release and
Amendment of Stock Purchase and Option Agreement, entered into on April 1, 1993,
by and between Theodore L. Vallas, Ocean Vista Acquisition Corp. and OVLC
Management Corp..
1.8. Club. The term "Club" shall be defined as the club facilities known as
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"Whispering Palms Lodge and Country Club" located on the Real Property.
1.9. Club Facilities. The term "Club Facilities" shall be defined as the
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27-hole golf course, 100-room lodge, clubhouse facility, including men's and
women's locker rooms, pro shop, grill, main dining room, private meeting rooms,
administrative office, and other
Exhibition "A" page 1
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clubhouse facilities, tennis courts, swimming pool facilities, cabana area,
clubhouse grounds, parking lots, and golf course maintenance building, located
on the Real Property.
1.10. Club Management Agreement. The term "Club Management Agreement"
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shall mean the Club Management Agreement of dated September 4, 1992, by and
between the Joint Venture and the Club Manager, as amended by that certain
Assignment, Release and Amendment of Management Contracts, dated April 1, 1993,
by and between Ocean Vista Management Corp. and OVLC Management Corp., pursuant
to which the Club Manager is retained to manage the Club.
1.11. Club Manager. The term "Club Manager" shall mean OVLC Management
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Corp., a California corporation, an affiliate of Ocean Vista, which is
contemporaneously herewith entering into the Club Management Agreement with the
Joint Venture.
1.12. Defaulting Loan. The term "Defaulting Loan" shall have the meaning
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set forth in Paragraph 16.3.1.
1.13. Deficit Capital Costs. The term "Deficit Capital Costs" shall mean
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the amount of a projected or actual deficit in the amount of Positive Net Cash
Flow, as determined by the Management Committee, necessary to fund the required
Capital Costs of the Joint Venture.
1.14. Equity Interest. The term "Equity Interest" shall have the meaning
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set forth in Section 4.2.
1.15. Equity Loan. The term "Equity Loan" shall have the meaning set
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forth in Section 4.2.
1.16. Expenses. The term "Expenses" shall mean the following reasonable
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expenses and cash outlays incurred and payable on an accrual basis, utilizing
generally accepted accounting principles, by the Joint Venture, pursuant to the
approved Annual Operations Budget, subsequent to the execution date of the
Agreement in connection with the development, management and operation of the
Club, including, but not limited to, the following:
1.16.1. Salaries, wages, commissions, employee benefits (including
reasonable profit sharing programs) and payroll expenses of all employees
employed by the Joint Venture in the direct operation of the Club;
1.16.2. Actual construction and development costs incurred to
construct any additional Improvements to the Club;
1.16.3. All management fees, out-of-pocket expenses, and other sums
paid to the Club Manager pursuant to the terms and conditions of the Club
Management Agreement;
1.16.4. Principal and interest and all other amounts due on (i) the
Existing Debt, (ii) any subsequent refinancing of the Existing Debt, or
(iii) any
Exhibit "A" page 2
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additional loans to the Joint Venture with respect to the Club, approved by
the Management Committee;
1.16.5. Accounting and computer fees payable by the Joint Venture for
accounting and computer services;
1.16.6. A credit to a reserve for insurance and property taxes each
Fiscal Month in an amount or at a rate that is sufficient to pay such
insurance premiums and property taxes when they become due and payable;
1.16.7. Insurance premiums and property taxes, to the extent not paid
from the reserve established therefor, which shall be adjusted to reflect
any new assignments and rates due to the sale as if the new rate or
assignment had been effective during the preceding 12-month calendar period
(Purchaser agrees to use reasonable efforts, at no cost to Purchaser, to
attempt to preclude reassignment of the Property);
1.16.8. Office supplies, postage, printing, and routine operating
expenses incurred in the operation of the Club;
1.16.9. A deposit or credit to the Capital Reserve, as permitted
herein;
1.16.10. Maintenance and repairs to the Club and the Improvements, to
the extent not paid from the Capital Reserve established therefor. All
expenditures resulting in the acquisition or construction of equipment or
other property with a useful life of one (1) year or more or which would,
under generally accepted accounting principles, be classified as a capital
expenditure (allowing, however, an exception for materiality of FIVE
HUNDRED DOLLARS ($500.00) or less for any given item), shall be paid from
and charged against the Capital Reserve and shall not be separately
deducted hereunder;
1.16.11. All legal fees incurred in the develop-ment and operation of
the Club;
1.16.12. Marketing, advertising and promotional costs and expenses;
1.16.13. State income taxes;
1.16.14. Principal and interest payments due on any Third Party Equity
Loan or Equity Loan;
1.16.15. Fees, costs, and other charges associated with financing
commitments and the Existing Debt;
1.16.16. Equipment lease and rental payments paid by the Joint Venture
concerning the operation of the Club;
Exhibit "A" page 3
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1.16.17. Maintenance of level of Working Capital required for the
operation of the Club, as permitted herein;
1.16.18. Reasonable travel expenses of employees of the Club incurred
directly in connection with the Club's business;
1.16.19. Accounts receivable previously included within Gross
Receipts, to the extent they remain unpaid ninety (90) days after the first
billing;
1.16.20. The costs of utilities, including, but not limited to, gas,
water, electricity and telephone in connection with the operation of the
Club;
1.16.21. Replacement of inventories of mainte-nance parts and
supplies, food stores and bar supplies;
1.16.22. Replacement of broken, lost or damaged equipment, golf
maintenance, flags, furniture, fixtures, silver, chinaware, glassware,
cooking utensils, and other items of equipment used in the operation of the
Club;
1.16.23. The costs of entertainment at any of the restaurant or
private club facilities included in the Club, including vocalists and
bands;
1.16.24. Any financial management and accounting fees paid to OVLC
Management Corp., or other entities for similar services;
1.16.25. Any Negative Net Cash Flow from any previous Fiscal Month, to
the extent such Negative Net Cash Flow has not been previously deducted as
an Expense; and
1.16.26. All other customary and reasonable expenses incurred in the
operation of the Club and the Improvements.
Expenses shall not include (i) depreciation, or (ii) any amounts expended
from a reserve account. Any provision aforesaid resulting in a double deduction
from Expenses shall be allowed only once.
1.17. Existing Debt. The term "Existing Debt" shall be defined as the
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existing debt of the Joint Venture described in Exhibit "B".
1.18. Financial Statements. The term "Financial State-ments" shall mean a
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balance sheet of the Joint Venture as of the close of a fiscal period and a
statement of income and expense (including Gross Receipts and Expenses and
Positive or Negative Net Cash Flow) for that portion of the Fiscal Year then
ended, prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding period, or containing
disclosures of either the effect on the financial position or the results to
operations from any such change in the application of generally accepted
accounting principles during the period, and certified as accurate by an
executive officer of the Club Manager.
Exhibit "A" page 4
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1.19. Fiscal Month. The term "Fiscal Month" shall mean a consecutive 28-day
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period, or a portion thereof, during a Fiscal Year commencing on the first day
following the termination of the prior Fiscal Month, provided that the last
Fiscal Month in each Fiscal Year shall end on the last day of such Fiscal Year.
The first Fiscal Month of each Fiscal Year shall commence on the first day of
each Fiscal Year; provided, however, that for purposes hereof, the first Fiscal
Month may be a short period commencing on the execution date of the Agreement
and ending on that date which would have been the ending date for such Fiscal
Month if such Fiscal Month had been part of a Fiscal Year commencing on the
Thursday following the last Wednesday in the December immediately preceding the
execution date of the Agreement.
1.20. Fiscal Quarter. The term "Fiscal Quarter" shall mean a division of a
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Fiscal Year, as hereinafter defined. There shall be four (4) Fiscal Quarters in
each Fiscal Year, the first three of which shall consist of three (3) Fiscal
Months and the last of which shall consist of four (4) Fiscal Months. The first
Fiscal Quarter of each Fiscal Year shall commence on the first day of each
Fiscal Year and the last Fiscal Quarter shall end on the last day of the Fiscal
Year.
1.21. Fiscal Year. The term "Fiscal Year" shall mean a period commencing on
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the Thursday following the last Wednesday in December during each calendar year
and ending on the last Wednesday of the next following December; provided,
however, that for purposes hereof, the first Fiscal Year shall be a short period
commencing on the execution date hereof and ending on the last Wednesday of the
following December.
1.22. Gross Receipts. The term "Gross Receipts" shall mean all receipts of
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the Joint Venture, computed on an accrual basis, recognized during or after the
first Fiscal Month beginning on or after the date hereof from all business
conducted upon, related to, or from the Property by the Joint Venture, and shall
include, but not be limited to, all proceeds from the sale of any portion of the
Real Property, all Capital Contributions made by the Joint Venturers, any other
refinancing or additional loans approved by the Management Committee, and
insurance and condemnation proceeds. Gross Receipts shall also include all
receipts related to or derived from the operation of the Club, computed on an
accrual basis, from cash or credit transactions, recognized during or after the
first Fiscal Month beginning on or after the Closing Date, and shall include,
but shall not be limited to, guest fees, income derived from the investment of
Gross Receipts, the amount of all sales (wholesale or retail) of food,
beverages, goods, wares or merchandise on, at, or from the Property, or for
services of any nature performed on, at, or from the Property, determined in
accordance with generally accepted accounting principles applied on a consistent
basis. Gross Receipts shall be reduced by any refunds, rebates, discounts and
credits of a similar nature given, paid or returned in the course of obtaining
such Gross Receipts. Gross Receipts shall not include applicable gross receipts,
admission, cabaret, excise, sales and use taxes, or similar governmental charges
collected directly from members or their guests or as a part of the sales price
of any goods or services.
1.23. Improvements. The term "Improvements" shall be defined as all
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improvements, structures and fixtures placed, constructed or installed, or to be
placed, constructed or installed, on the Real Property for the Club.
Exhibit "A" page 5
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1.24. Intangible Personal Property. The term "Intangible Personal Property"
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shall be defined as all intangible personal property of any nature owned by the
Joint Venture in connection with the operation of the Club, including, but not
limited to, all permits, security deposits, contract rights, water rights,
utility permits, logos, service marks, and the use of the name "Whispering Palms
Country Club" and any derivative thereof.
1.25. Management Committee. The term "Management Committee" shall have the
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meaning set forth in Section 6.1 hereof.
1.26. Managing Partner. The term "Managing Partner" shall have the meaning
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set forth in Section 6.4 hereof.
1.27. Negative Net Cash Flow. The term "Negative Net Cash Flow" shall mean
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that amount by which Expenses exceed Gross Receipts for the period in question.
1.28. Olympic Resort Capital Call. The term "Olympic Resort Capital Call"
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shall mean any amount owed by Golf Inns or Theodore L. Vallas under the terms
and conditions of the Olympic Resort Joint Venture.
1.29. Olympic Resort Joint Venture. The term "Olympic Resort Joint Venture"
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shall mean the joint venture between Seller and Whispering Palms Joint Venture
concerning the property operated as the "Olympic Resort."
1.30. Option Period. The term "Option Period" shall have the meaning set
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forth in that certain option agreement between Theodore L. Vallas and Ocean
Vista Acquisition Corp. dated September 4, 1992.
1.31. Percentage Interest. The term "Percentage Interest" shall have the
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meaning set forth in Section 5.1.
1.32. Personal Property. The term "Personal Property" shall mean all
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equipment, machinery, fixtures, furnishings, accessories, and other tangible
personal property placed or installed, or to be placed or installed, on or about
the Real Property and used as a part of or in connection with the operation of
the Improvements and the Club.
1.33. Positive Net Cash Flow. The term "Positive Net Cash Flow" shall mean
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the amount by which Gross Receipts exceed Expenses for the period in question.
1.34. Property. The term "Property" shall be defined as (i) the Real
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Property, (ii) the Improvements, (iii) the Personal Property, (iv) the
Intangible Personal Property, and (v) any other properties, assets and revenues
of the Joint Venture, tangible or intangible, real or personal.
1.35. Real Property. The term "Real Property" shall mean that certain tract
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of land specifically described in Exhibit "C".
1.36. Third Party Equity Loan. The term "Third Party Equity Loan" shall
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have the meaning set forth in Section 4.2.
Exhibit "A" - A3477.2.80.59A.wpd page 6
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1.37. Third Party Lender. The term "Third Party Lender" shall have the
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meaning set forth in Section 4.2.
1.38. Unavoidable Delay. The term "Unavoidable Delay" shall have the
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meaning set forth in Section 18.15.
1.39. Working Capital. The term "Working Capital" shall mean the sum of
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working capital reasonably required for the operation of the Club and the
Property, which sum shall be periodically designated by the Management Committee
to meet the requirements of the operation of the Club.
Exhibit "A" page 7
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EXHIBIT "C"
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REAL PROPERTY
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Title recorded in the names of the venture partners. Legal description as set
forth in Preliminary Title Report issued by Chicago Title Company dated March
23, 1993 and supplement dated May __, 1993.
See Lease Agreement dated May 16, 1984, between Golf Inns of America, Inc. and
California Cotton Sales Co. re: leasehold for maintenance facilities and one
hole of the course.
AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
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(WHISPERING PALMS)
THIS AGREEMENT is made and entered into this _____ day of May, 1993, by and
between GOLF INNS OF AMERICA, INC., a California corporation (hereinafter
referred to as "Golf Inns"), and OCEAN VISTA LAND COMPANY, a California
corporation (hereinafter referred to as "Ocean Vista"). The foregoing parties
shall hereinafter collectively be referred to as the "Venturers."
W I T N E S S E T H
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WHEREAS, Golf Inns and Ocean Vista own a fifty percent (50%) interest each
in the property known as "Whispering Palms Lodge and Country Club," located on a
tract of real property in the City of Rancho Santa Fe, California (the
"Project"); and
WHEREAS, Golf Inns and Ocean Vista have previously entered into that
certain Joint Venture Agreement (the "Original Agreement") dated February 1,
1971, and now desire to restate and amend in its entirety the Original Agreement
to form this Joint Venture to acquire the Real Property for the Club from Golf
Inns and Ocean Vista and to develop and operate the Club pursuant to the terms
and conditions recited herein; and
WHEREAS, the Joint Venture and Ocean Vista Management Corp., a California
corporation (hereinafter referred to as the "Club Manager"), have entered into a
club management agreement (the "Club Management Agreement") concerning the
management of the Club,
WHEREAS, Club Manager and OVLC Management Corp., a California corporation
(hereinafter referred to as "New Club Manager"), have entered into an
Assignment, Release and Amendment of Management Contracts dated April 1, 1993,
thereby transferring the Club Management Agreement to New Club Manager,
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby restate the joint venture for the purposes and upon the
terms, provisions and conditions hereinafter set forth.
ARTICLE 1.
DEFINITIONS
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1.1. Definitions. All capitalized terms referenced or used in this
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Agreement and not specifically defined herein shall have the meaning set forth
in alphabetical listing on Exhibit "A", which is attached hereto and
incorporated by reference.
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 1
ARTICLE 2.
FORMATION OF THE PARTNERSHIP
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2.1. Formation. Golf Inns and Ocean Vista hereby form a general
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partnership (the "Joint Venture") for the limited purposes hereinafter set
forth.
2.2. Name. The name of the Joint Venture shall be "Whispering Palms
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Country Club Joint Venture." The Venturers shall execute all assumed or
fictitious name certificates required by law to be published and filed in
connection with the formation and operation of the Joint Venture.
2.3. Principal Office. The principal office of the Joint Venture shall be
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located on the Real Property, or at such other place as the Management Committee
may from time to time determine.
2.4. Purpose of the Joint Venture. The purpose of the Joint Venture shall
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be limited solely to the following:
2.4.1. To develop, maintain and operate the Club located on the Real
Property by the Joint Venture; and
2.4.2. To engage in any and all general activities related or in any
way incidental thereto, and to do all things necessary for the operation of
such activities.
2.5. Partnership Act; Ownership; No Partition. Except as is
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expressly herein stipulated to the contrary, the rights and obligations of the
Venturers and the administration and termination of the Joint Venture shall be
governed by the Uniform Partnership Act, adopted by the State of California, as
may from time to time be amended (the "Act"). All real or personal property
acquired by the Joint Venture shall be deemed to be owned by the Joint Venture
as an entity, and no Venturer individually shall have any ownership of such
property. Each of the Venturers does hereby agree to, and does hereby
irrevocably waive, for the duration of this Agreement, any right or power any
such Venturer might have to cause the Joint Venture or any of its assets to be
partitioned, to cause the appointment of a receiver for the assets of the Joint
Venture, to compel any sale of all or any portion of the assets of the Joint
Venture pursuant to any applicable law or laws, or to file a complaint or to
institute any proceeding at law or in equity to cause the termination or
dissolution of the Joint Venture, except as expressly provided for herein. Each
of the Venturers hereby acknowledges and agrees that such Venturer has been
induced to enter into this Agreement in reliance upon the mutual waivers set
forth in this Section, and without such waivers, none of the Venturers would
have entered into this Agreement. No Venturer has any interest in specific
Joint Venture property, but the interests of the Venturers in the Joint Venture
are for all purposes personal property. Upon any breach of the provisions of
this Section by any Venturer, the other Venturers, in addition to all other
rights and remedies at law and in equity they may
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 2
have, shall be entitled to a decree or order restraining and enjoining such
application, action or proceeding.
2.6. No Individual Authority. The business of the Joint Venture shall be
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limited strictly to the purposes set forth in Section 2.4, and, except as
otherwise expressly provided in this Agreement, a Venturer acting alone shall
not have any authority to act for, or to assume any obligation or responsibility
on behalf of, the other Venturers or the Joint Venture.
2.7. No Restrictions. Nothing contained in this Agreement shall be
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construed to prohibit, restrict or limit a Venturer or any entity, firm or
corporation controlled by such Venturer, or any parent company, from owning,
operating or investing in any business or activity of any nature, including,
without limitation, the acquisition, development and management of real property
or other club facilities; said activities to be without any accountability,
liability or obligation whatsoever to the Joint Venture or to the other
Venturers, even if such business or activity competes with the business of the
Joint Venture.
2.8. Not Responsible for Other's Commitments. Neither the Venturers
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nor the Joint Venture shall be responsible or liable for any indebtedness or
obligation of a Venturer incurred either before or after the execution of this
Agreement, except as to those joint responsibilities, liabilities, indebtedness
or obligations incurred pursuant to the terms of this Agreement, and each
Venturer agrees to indemnify and hold the other Venturers and the Joint Venture
harmless from such obligations and indebtedness.
2.9. Legal Obligations. If any claim, liability or expense shall be
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asserted against the Joint Venture or a Venturer as a result or consequence of
the Joint Venture or the operation and conduct of the business of the Joint
Venture, and if the assets of the Joint Venture are insufficient to satisfy the
same, each Venturer shall bear a share of any such claim, liability or expense
in accordance with its Joint Venture interest at said time, as set forth in
Article 5. Each Venturer shall cooperate and consult with the other in
defending any such action and in making any settlement or compromise thereof.
If any Venturer is required to pay more than its share of a claim against the
Joint Venture, it shall be entitled to contribution from the other Venturers
and, without limiting the generality of the foregoing, shall have a prior claim
therefor on such other Venturer's interest in the Joint Venture.
Notwithstanding the foregoing, if any claim, liability or expense shall be
asserted against the Joint Venture or a Venturer by reason of the sole
negligence of a Venturer or an act or omission by a Venturer in violation of
this Agreement, then the Venturer committing such negligence or performing such
act shall indemnify and save harmless the Joint Venture and the other Venturers
from and against any and all loss resulting therefrom. The right of
contribution and rights of indemnity contained in this Section shall survive and
remain in full force and effect, notwithstanding any termination of the Joint
Venture and this Agreement. The provisions of this Section are not intended to
and shall not be applicable to any claim or liability with respect to any
mortgages, loans, deeds of trust, or other encumbrances against the Real
Property which are nonrecourse as to the Joint Venture and the Venturers.
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 3
ARTICLE 3.
TERM
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3.1. Term. The Joint Venture shall commence as of the date of this
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Agreement and shall continue until dissolution or termination pursuant to the
expressed provisions hereof.
ARTICLE 4.
CONTRIBUTIONS TO THE JOINT VENTURE
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4.1. Initial Capital Contributions. Golf Inns and Ocean Vista have
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each contributed their fifty percent (50%) undivided interest in the Real
Property to the Joint Venture. The Venturers acknowledge that their Capital
Contributions to the Joint Venture based on their present respective percentage
of ownership as provided in Section 5.1 is as follows:
Golf Inns ......................... $1,000
Golf Inns ......................... $1,000
Ocean Vista ......................... $1,000
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Total ............................... $2,000
4.2. Capital Contributions and Obligations. After the execution date
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hereof, if there is a projected or actual Negative Net Cash Flow or Deficit
Capital Costs (including such borrowing made to prevent the Joint Venture from
being in default of its obligations under the Existing Debt), the Management
Committee shall have the option to first utilize any reserve accounts to fund
the Negative Net Cash Flow or Deficit Capital Costs. If said funds are not
sufficient, then the Management Committee shall (i) utilize any existing bank
line of credit available to the Joint Venture, then (ii) if said amount is not
sufficient, attempt to secure conventional third party financing (without
providing to the lender any equity participation in the Joint Venture).
However, if said conventional financing cannot be obtained, the Management
Committee shall attempt to secure debt financing with an equity component or
equity financing from a third party or an affiliate of any Venturer (the "Third
Party Equity Loan," and such third party or affiliate being called the "Third
Party Lender"). Each Venturer shall have the option, upon receipt of the
proposed terms of the Third Party Equity Loan, to elect to either (i) have its
Percentage Interest diluted pro rata with the other Venturers to provide the
equity participation to the Third Party Lender (the "Equity Interest"), or (ii)
make a Capital Contribution to the Joint Venture on the terms and conditions of
the Third Party Equity Loan in an amount equal to its Percentage Interest, or,
at such Venturer's election, a lesser amount than its Percentage Interest of
(a) the Negative Net Cash Flow, or (b) the Deficit Capital Costs, as applicable.
The portion of any Capital Contribution advanced by a Venturer which constitutes
a loan to the Joint Venture shall be deemed to be an "Equity Loan" and shall be
entitled to the preferential distributions provided herein. The portion, if
any, of such Capital Contribution paid for the Equity Interest shall be
accounted for as a Capital Contribution to the Joint Venture, in respect of such
Equity Interest, and concurrently with payment of the Capital Contribution, the
Venturer shall acquire and receive that portion of the Equity Interest equal to
the ratio its Capital Contribution bears to the aggregate Third Party Equity
Loan (including
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page 4
the Capital Contributions of all other Venturers in respect thereof). In the
event (i) the Joint Venture cannot obtain a Third Party Equity Loan or
conventional financing, or (ii) the Management Committee elects, at its sole
discretion, not to seek said financing, then each Venturer agrees to fund its
Percentage Interest of the Capital Contribution. Each Venturer agrees to advance
to the Joint Venture its Capital Contribution upon the written request of the
Managing Partner, within ten (10) days thereof. If a requested Capital
Contribution is not paid by a Venturer within thirty (30) days after written
notice of such request, then the provisions of Section 16.3 may be elected by
the remaining Venturers. The parties acknowledge that the obligation to fund the
Capital Contributions recited herein does not obligate the Joint Venture to
continue to operate at a Negative Net Cash Flow, as said decision shall be in
the sole and absolute discretion of the Management Committee.
ARTICLE 5.
INTEREST OF THE VENTURERS
-------------------------
5.1. Percentage Interest. Except as may be otherwise expressly
-------------------
stipulated herein, including the allocations of Positive Net Cash Flow set forth
in Paragraph 8.1.1 and Section 5.2 below, the interests of the respective
Venturers in the assets, liabilities, profits and losses of the Joint Venture
shall be as follows (the "Percentage Interest"):
Venturer Percentage
-------- ----------
Ocean Vista ................. 50%
Golf Inns .................... 50%
5.2. Profits, Losses and Distributive Shares of Tax Items. The
----------------------------------------------------
Venturers' net profit or net loss, as the case may be, for each Fiscal Year of
the Joint Venture shall be allocated to the Venturers for both financial
accounting and income tax purposes in proportion to their respective Percentage
Interest in the Joint Venture, or any other different allocation agreed to in
writing by the Venturers. Notwithstanding the foregoing, any gain or loss on
Joint Venture assets occurring in connection with the liquidation of the Joint
Venture shall be credited or charged to the Venturers first in a manner, as
nearly as can be, to cause the capital account of the respective Venturers to
stand in the same ratios as their respective Percentage Interest in the Joint
Venture, and thereafter any gain or loss remaining shall be credited or charged
to the Venturers in accordance with their respective Percentage Interest in the
Joint Venture.
5.3. Deficit Capital Makeup. Upon the liquidation of any Venturer's
----------------------
interest in the Joint Venture, said Venturer shall be required to pay a sum to
the Joint Venture equal to the deficit balance of said Venturer's capital
account, if any, on or before (i) the end of the taxable year in which the
liquidation occurs, or (ii) ninety (90) days after the effective date of said
liquidation, whichever occurs first.
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ARTICLE 6.
MANAGEMENT OF THE JOINT VENTURE
-------------------------------
6.1. Management Committee. The major policy decisions of the Joint
--------------------
Venture shall be controlled by a management committee consisting of three (3)
members, two being selected by Ocean Vista and one by Golf Inns, or such
additional representatives as may be determined by the agreement of all
Venturers (the "Management Committee"). The Venturers shall designate the
members to represent them on the Management Committee (the "Members") in
connection with the operation of the Joint Venture. Each Venturer hereby agrees
that its Members shall have the full and complete power and authority to act on
its behalf, to execute documents in its name, and to bind it in all matters
relating to the Joint Venture and its business. The Venturers may also
designate "Alternate Members" for each of its Members. Members and Alternate
Members shall serve at the will of the Venturer whom they represent, and such
service may be terminated by notice from such Venturer to the other Venturers.
In the event of the death, incapacity or termination of any Member of a
Venturer, its Alternate Member shall serve in its stead until its successor has
been appointed by the Venturer whom it represents and the other Venturer has
received notice thereof. Each Venturer shall, by notice to the other,
immediately designate a successor to any Member or Alternate Member who has
ceased to serve by reason of its death, incapacity or termination.
6.2. Meetings of the Management Committee. Regular meet-ings of the
------------------------------------
Management Committee shall be held monthly, but in no event less frequently than
quarterly, on such day and at such time as may be agreed upon by the Members.
Special meetings of the Management Committee may be called at any time by any
Member of the Management Committee upon not less than two (2) days notice.
Notwithstanding anything to the contrary, it shall require two (2) meetings of
the Management Committee to remove and replace the Managing Partner. Waiver of
notice of such special meeting may be made in the same manner as required for
Management Committee action as hereinafter set forth. Regular and special
meetings shall be held at any place designated from time to time by the
Management Committee, and in the absence of such designation, shall be held at
the principal offices of the Joint Venture. Any Member unable to participate in
a meeting of the Management Committee may designate its Alternate to serve in
its place at such meeting, and all references herein to "Members of the
Management Committee" shall include such Alternates when so serving. No regular
or special meeting of the Management Committee may be validly held unless sixty-
five percent (65%) of the Members thereof are in attendance. The Management
Committee shall appoint a secretary who shall prepare minutes of its meetings
and place same in a permanent minute book, copies of which minutes shall be
distributed to the Venturers within seven (7) days thereafter. An agenda and
drafts of all resolutions proposed for approval shall be disseminated to each
party's representative at least two (2) business days prior to the scheduled
meeting.
6.3. Action by the Management Committee. Each Member of the Management
----------------------------------
Committee shall be entitled to one (1) vote, and a vote of fifty-one percent
(51%) or more (a "Majority Vote") shall be binding on all actions to be taken
taken by the Management Committee.
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page 6
6.3.1. Unanimous Written Consent. Any action may be taken by the
-------------------------
Management Committee by obtaining written consent, signed by all of its
Members, specifying the action so taken without the necessity of a meeting.
6.3.2. Deficit Capital Costs. Notwithstanding anything to the
---------------------
contrary, the parties agree that if funding is desired for additional
improvements or expansion of existing facilities (the "Additional
Facilities"), that if Golf Inns does not vote for the Additional
Facilities, that the costs of the Additional Facilities shall be funded by
(i) a Third Party Lender, or (ii) a Third Party Equity Loan, or (iii) an
Equity Loan by Ocean Vista, and shall not be funded by a Capital
Contribution to fund Deficit Capital Costs. Further, the parties agree
that if the costs of the Additional Facilities exceed FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00), that both parties shall have an equal vote as to (i)
approval of the Additional Facilities and (ii) approval of the financing
plan necessary to fund the Additional Facilities.
6.4. Managing Partner. The supervision, management, direction and
----------------
control of the day-to-day business and activities of the Joint Venture shall be
handled by Ocean Vista as the managing partner of the Joint Venture (the
"Managing Partner"), subject to the budgets, policies, guidelines, restrictions
and procedures set forth herein and established by the Management Committee and
to be carried out by the Club Manager pursuant to the terms of the Club
Management Agreement. The Venturers acknowledge and agree that the obligations
and duties recited herein may be assigned by the Managing Partner to the Club
Manager as provided in the terms of the Club Management Agreement. The Managing
Partner shall perform the following specific duties:
6.4.1. Business Plans. Prepare or cause the Club Manager to prepare
--------------
annual business plans to be submitted to the Management Committee for the
development of the Club, which shall include marketing, construction, sales
programs, staffing requirements, cash flow projections, utility
requirements, and all other aspects of the development and marketing of the
Club as a first class country club;
6.4.2. Golf Course Improvements. Prepare and review golf course
------------------------
improvement proposals, construction specifications and physical
construction and coordinate golf course improvements construction,
including preparation of construction timetables, budgets, coordination of
construction specifications, contract award and construction oversight.
6.4.3. Budgets. Prepare or cause to be prepared the budgets provided
-------
for in Article 7 to be submitted to the Management Committee for approval;
6.4.4. Day-to-Day Operations. Oversee and handle the day-to-day
---------------------
operation of the Joint Venture in conjunction with the Club Manager,
subject to the specific policies, procedures, budgets and restrictions
provided for herein;
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page 7
6.4.5. Coordination. Coordinate all actions of the Joint Venture and
------------
to protect and preserve the title and interest of the Joint Venture with
respect to the Property and all contract rights owned by the Joint Venture;
6.4.6. Supervision. Supervise the performance of all obligations of
-----------
the Joint Venture under all contracts and management agreements approved by
the Management Committee;
6.4.7. Employees. Retain, employ and coordinate the services of all
---------
employees, supervisors, architects, engineers, accountants, attorneys, and
other persons necessary or appropriate to carry out the business of the
Joint Venture, subject to the restrictions of the Annual Operations Budget.
The Management Committee reserves the right to approve the hiring and
salary levels of all key employees and may require the dismissal of any
employee;
6.4.8. Debts. Pay all debts and other obliga-tions of the Joint
-----
Venture, including servicing the Existing Club Debt, to the extent that
funds of the Joint Venture are available therefor;
6.4.9. Laws. Use its best efforts to cause the Joint Venture to
----
comply with all applicable laws or regulations, whether presently in force
or passed in the future;
6.4.10. Estimates. Prepare, estimate and submit to each Venturer, at
---------
least fifteen (15) days prior to the beginning of each calendar month, the
amount of any estimated Negative Net Cash Flow or Deficit Capital Cost for
such calendar month;
6.4.11. Tax Returns. Prepare and submit to the Venturers for their
-----------
review, at least thirty (30) days prior to the due date, a draft of the tax
returns required of the Joint Venture. Notwithstanding the foregoing,
Ocean Vista shall be designated as the "Tax Matters Partner" pursuant to
Section 6223 of the Internal Revenue Code;
6.4.12. Insurance. Cause the Joint Venture to carry and maintain
---------
comprehensive general liability insurance with (i) bodily injury limits of
ONE MILLION DOLLARS ($1,000,000.00) for injury or death to any one person
and TWO MILLION DOLLARS ($2,000,000.00) for any one occurrence, (ii)
property damage limits of ONE MILLION DOLLARS ($1,000,000.00) for any one
occurrence and TWO MILLION DOLLARS ($2,000,000.00) in the aggregate, and
(iii) property insurance on all applicable assets owned by the Joint
Venture in amounts not less than ninety percent (90%) of the full
replacement value; and
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page 8
6.4.13. Implementation. Implement any and all decisions of the
--------------
Management Committee and Venturers and coordinate them with the Club
Manager as necessary.
6.5. Accounting Records. The Joint Venture shall contract with OVLC
------------------
MANAGEMENT CORP., or any of its affiliated entities, for the maintenance of
accounting records and bookkeeping for the Joint Venture. Such services shall
be at a rate which is reasonable and comparable to those rates charged for
similar services by comparable accounting firms in the San Diego, California.
6.6. Costs and Expenses; No Compensation. Neither the Venturers, the
-----------------------------------
Members of the Management Committee, nor the Managing Partner shall be entitled
to any compensation for discharging their obligations under this Agreement or
otherwise acting on behalf of the Joint Venture, except as otherwise provided
for in management fees and compensation to the Club Manager in the Club
Management Agreement.
6.7. Replacement. The parties acknowledge that the Managing Partner
-----------
may be removed and replaced with another party at any time upon written notice
to the Managing Partner by a two-thirds (2/3) majority vote of the Management
Committee.
ARTICLE 7.
BUDGETS
-------
7.1. Budgets. All budgets for the Joint Venture shall include a
-------
projection of (i) Gross Receipts and Expenses, (ii) Positive Net Cash Flow or
Negative Net Cash Flow, as the case may be, (iii) Capital Costs, and (iv)
Capital Contributions, if so projected, and the estimated timing thereof. The
budgets described in Paragraphs 7.1.1 and 7.1.2 shall be presented on a Fiscal
Month basis in reasonable detail and in a format similar to the Financial
Statements.
7.1.1. Annual Operations Budget. The parties acknowledge that they
------------------------
have agreed to a proforma estimated operations budget for Gross Receipts,
balance sheet, and cash flow statements for the period from the Closing
Date through December 31, 1992 (the "1992 Budget"), and January 1, 1993,
through December 31, 1993 (the "Initial Annual Operations Budget"), which
may be amended by the Management Committee. For each Fiscal Year
thereafter, not later than forty-five (45) days prior to the beginning of
each Fiscal Year, the Managing Partner shall cause the Club Manager to
prepare and deliver to the Management Committee for its review and approval
a budget for Gross Receipts, a balance sheet, and cash flow statements for
said Fiscal Year (the "Annual Operations Budget").
7.1.2. Capital Expenditures Budget. Not later than forty-five (45)
---------------------------
days prior to the beginning of each Fiscal Year after the initial Fiscal
Year, the Managing Partner shall cause the Club Manager to prepare and
deliver to the
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Management Committee for its review and approval a budget for Capital Costs for
such Fiscal Year (the "Capital Expenditures Budget").
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page 9
ARTICLE 8.
DISTRIBUTION OF POSITIVE NET CASH FLOW
--------------------------------------
8.1. Positive Net Cash Flow. The Venturers agree that a conservative
----------------------
financial approach will be utilized in the disbursements of Positive Net Cash
Flow, and that Positive Net Cash Flow shall be distributed only on the basis of
prudent business judgment if said funds are not required for the ongoing
development and operation of the Project, as determined by the Management
Committee. In the event Positive Net Cash Flow is available for distribution
within thirty (30) days following the close of each Fiscal Quarter, the amount
of Positive Net Cash Flow generated by the Joint Venture, on a consolidated
basis, shall be distributed as follows:
8.1.1. Payment of Defaulting Loans. If either Venturer fails to make
---------------------------
a required Capital Contribution or any other contribution and the other
Venturer advances such amount as provided herein, then said Venturer's
Percentage Interest of Positive Net Cash Flow to be distributed as provided
below shall be distributed to the Venturer making such advance to the
extent necessary to repay said Defaulting Loan, including interest as
provided herein.
8.1.2. Payment of Equity Loans. Any remaining Positive Net Cash
-----------------------
Flow shall be applied to the outstanding balance of any Equity Loan until
paid in full, including any accrued interest thereon.
8.1.3. Distribution. Any remaining Positive Net Cash Flow after
------------
payment of the items referenced above shall be distributed to the Venturers
in accordance with their respective Percentage Interest at the time of the
distribution. Notwithstanding anything to the contrary recited herein,
Golf Inns hereby acknowledges and agrees that in the event at the time of
distribution there is any outstanding Olympic Resort Capital Call owed by
Golf Inns or Theodore L. Vallas, that the distribution of Golf Inns'
Percentage Interest in the Positive Net Cash Flow shall be payable directly
to the Managing Partner of the Olympic Resort Joint Venture, to be applied
against any outstanding Olympic Resort Capital Call until said amount is
paid in full. The parties acknowledge that any distributions made to the
Olympic Resort Venture, as provided above, shall be treated in all respects
as a distribution to Golf Inns, for all purposes hereof.
ARTICLE 9.
GOLF INNS' COVENANTS AND REPRESENTATIONS
----------------------------------------
9.1. Golf Inns makes the following representations to the other
Venturers, which representations shall, unless otherwise stated herein, survive
the execution and delivery of this Agreement:
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page 10
9.1.1. Corporate Status. Golf Inns is a corporation duly organized,
----------------
validly existing, and in good standing under the laws of California, with
full corporate power to enter into this Agreement and execute all documents
required hereunder, evidence of which shall include, but shall not be
limited to, a good standing certificate, which shall be furnished to the
other Venturers.
9.1.2. Authorization. The making, execution, delivery and
-------------
performance of this Agreement by Golf Inns has been duly authorized and
approved by all requisite action of the Board of Directors of Golf Inns,
and this Agreement has been duly executed and delivered by Golf Inns and
constitutes a valid and binding obligation of Golf Inns, enforceable in
accordance with its terms.
9.1.3. Violation of Representations. From and after the date hereof
----------------------------
and until the termination of this Agreement, neither Golf Inns nor any of
its affiliates shall take any action, or omit to take any action, which
action or omission would have the effect of violating any of the material
covenants, representations and warranties of Golf Inns contained in this
Agreement.
9.1.4. Violation of Agreement. Neither the execution and delivery of
----------------------
this Agreement by Golf Inns or its affiliates or Golf Inns' performance of
its obligations hereunder will result in a violation or breach of any
material term or provision, or constitute a material default, or accelerate
the performance required under any other material agreement or document to
which Golf Inns or its affiliates are a party or are otherwise bound, and
will not, to the best of Golf Inns' or its affiliates' knowledge,
constitute a violation of any law, ruling, regulation or order to which
Golf Inns or its affiliates are subject.
9.1.5. Documentation. If necessary to carry out the intent of this
-------------
Agreement, Golf Inns agrees to execute and provide to the Venturers any and
all other instruments, documents, conveyances, assignments and agreements
which the Venturers may reasonably request in connection with the duties
and obligations set forth herein.
ARTICLE 10.
OCEAN VISTA'S COVENANTS AND REPRESENTATIONS
-------------------------------------------
10.1. Ocean Vista makes the following representations to the other
Venturers, which representations shall, unless otherwise stated herein, survive
the execution and delivery of this Agreement:
10.1.1. Corporate Status. Ocean Vista is a corporation duly
----------------
organized, validly existing, and in good standing under the laws of
California, with full corporate power to enter into this Agreement and
execute all documents required hereunder, evidence of which shall include,
but shall not be limited to, a good standing certificate, which shall be
furnished to the other Venturers.
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page 11
10.1.2. Authorization. The making, execution, delivery and
-------------
performance of this Agreement by Ocean Vista has been duly authorized and
approved by all requisite action of the Board of Directors of Ocean Vista,
and this Agreement has been duly executed and delivered by Ocean Vista and
constitutes a valid and binding obligation of Ocean Vista, enforceable in
accordance with its terms.
10.1.3. Violation of Representations. From and after the date hereof
----------------------------
and until the termination of this Agreement, neither Ocean Vista nor any of
its affiliates shall take any action, or omit to take any action, which
action or omission would have the effect of violating any of the material
covenants, representations and warranties of Ocean Vista contained in this
Agreement.
10.1.4. Violation of Agreement. Neither the execution and delivery
----------------------
of this Agreement by Ocean Vista or its affiliates or Ocean Vista's
performance of its obligations hereunder will result in a violation or
breach of any material term or provision, or constitute a material default,
or accelerate the performance required under any other material agreement
or document to which Ocean Vista or its affiliates are a party or are
otherwise bound, and will not, to the best of Ocean Vista's or its
affiliates' knowledge, constitute a violation of any law, ruling,
regulation or order to which Ocean Vista or its affiliates are subject.
10.1.5. Documentation. If necessary to carry out the intent of this
-------------
Agreement, Ocean Vista agrees to execute and provide to the Venturers any
and all other instruments, documents, conveyances, assignments and
agreements which the Venturers may reasonably request in connection with
the duties and obligations set forth herein.
ARTICLE 11.
PROHIBITED TRANSACTIONS
-----------------------
11.1. Prohibited Transactions. During the time of the organization
-----------------------
or continuance of the Joint Venture, no Venturer shall (except to the extent
otherwise provided herein) do any of the following:
11.1.1. Use the name of the Joint Venture (or any substantially
similar name) or any trademark or trade name adopted by the Joint Venture
except in the ordinary course of the Joint Venture's business;
11.1.2. Disclose to any outside person any of the Joint Venture's
business practices, trade secrets, or any other information not generally
known to the business community;
11.1.3. Do any other act or deed with the intention of harming the
operations of the Joint Venture;
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page 12
11.1.4. Do any act contrary to this Agreement except with the prior
express approval of all the Venturers;
11.1.5. Do any act which would make it impossible to carry on the
intended or ordinary business of the Joint Venture;
11.1.6. Confess a judgment against the Joint Venture;
11.1.7. Possess Joint Venture property or assign the right of the
Joint Venture or the Venturers in specific Joint Venture property for other
than a Joint Venture purpose;
11.1.8. Make, execute or deliver any general assignments for the
benefit of creditors, or any bond, guaranty, indemnity bond or surety bond;
11.1.9. Assign, transfer, pledge, compromise or release any claim of
the Joint Venture, except for full payment or arbitrate, or consent to the
arbitration of any of its disputes or controversies;
11.1.10. Create any personal liability for a Venturer other than that
personal liability to which a Venturer may have agreed to in writing; or
11.1.11. Admit another person or entity as a Venturer.
ARTICLE 12.
BOOKS, RECORDS, AUDITS, TAXES, ETC.
-----------------------------------
12.1. Books; Statements. The Managing Partner shall keep, or cause to be
-----------------
kept, accurate, full and complete records, books and accounts, on an accrual
basis, showing exclusively the Joint Venture's assets and liabilities,
operations, transactions and financial condition. The Financial Statements shall
be accurate in all material respects, shall present fairly the financial
position and results of operation of the Joint Venture, and shall be prepared in
accordance with generally accepted accounting principles consistently applied
over the periods reflected thereby. The Managing Partner shall furnish the
Financial Statements, including income statements and a balance sheet, to the
Joint Venture within twenty (20) days following the close of each Fiscal Month
and each Fiscal Quarter. Except as specifically provided in this Agreement, the
Management Committee shall determine which accounting firm shall maintain the
accounting records, the methods to be used in the preparation of the Financial
Statements, and the federal, state and municipal income and franchise tax
returns for the Joint Venture in connection with all items of income and
expense, including, but not limited to, valuation of assets, the methods of
depreciation, elections, credits and accounting procedures. Provided, however,
(i) all construction period real estate taxes and interest of the Joint Venture
shall be capitalized as required by Section 263A of the Internal Revenue Code
(the "Code"), (ii) depreciation shall be deducted on the accelerated basis, and
(iii) in the case of a distribution of a property which is made in the manner
provided in Section 743 of the
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page 13
Code, or in the case of a transfer of Joint Venture interest which is permitted
by this Agreement and which is made in the manner provided in Section 743 of the
Code, then, upon the request for the distribution of such property by the
transferee of such Joint Venture interest, the Joint Venture shall file an
election under Section 754 of the Code in accordance with the procedures set
forth in the Treasury regulations applicable thereto. The Joint Venture will not
be responsible for the booking or reporting of any basis adjustments on behalf
of the Venturers who are affected by an election under Section 754 of the Code.
Each Venturer must make any adjustments necessary due to such an election on its
individual return.
12.2. Where Maintained; Availability. The books, accounts and records
------------------------------
of the Joint Venture shall be maintained at its principal office, or at such
other place as may be designated from time to time by the Management Committee,
and shall at all reasonable times be available for inspection by the Venturers
and their representatives.
12.3. Audits. Any Venturer may, at its option and at its own expense,
------
conduct internal audits of the books, records and accounts of the Joint Venture.
Audits may be on either a continuous or a periodic basis, or both.
12.4. Independent Audit. The Management Committee reserves the right
-----------------
to require that the Joint Venture conduct an independent audit of its books,
records and accounts on an annual basis. Such independent audit shall, if
requested, be conducted annually, and shall be submitted to the Management
Committee no later than sixty (60) days following the end of each Fiscal Year.
All audit fees incurred by the Joint Venture with respect to the annual
independent audit shall be paid by the Joint Venture, unless said audit fees
exceed TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00), in which event the excess
over the foregoing sum shall be paid by the Venturer or Venturers requesting the
audit.
12.5. Other Information. The Managing Partner may release information
-----------------
concerning the operations of the Joint Venture to such sources as is required by
law or regulation, or by order of any regulatory body. The Managing Partner
shall furnish the Venturers or their representatives any further information in
such form as they may reasonably request relative to any phase of the operations
of the Joint Venture. All Venturers and their representatives shall have free
access during normal business hours to all records relative to the operations of
the Joint Venture. For the term of the Joint Venture, and for a period of four
(4) years thereafter, the Managing Partner shall maintain and preserve all books
of accounts and other relevant documents.
12.6. Banking. The funds of the Joint Venture shall be kept in such
-------
accounts as may be designated by the Management Committee. All withdrawals
therefrom shall be made on such signature or signatures as shall be designated
by the Management Committee. There shall be no commingling of the funds of the
Joint Venture with the funds of any other entity or person.
12.7. Tax Returns; Review. The Joint Venture shall be treated as a
-------------------
partnership for federal, state and municipal income tax and franchise tax
purposes, but this shall not be construed to extend the purposes or business of
the Joint Venture. The Managing Partner shall
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page 14
prepare or cause to be prepared all federal, state and municipal partnership tax
returns required to be filed in accordance with the provisions of this
Agreement.
ARTICLE 13.
DISSOLUTION
AND LIQUIDATION OF THE JOINT VENTURE
------------------------------------
13.1. Dissolution Events. The Joint Venture shall be dissolved in the
------------------
manner hereinafter provided upon the happening of any of the following events:
13.1.1. The sale of the Property owned by the Joint Venture;
13.1.2. The agreement of the Venturers of the Joint Venture to
dissolve the Joint Venture or sell all or substantially all of the assets
of the Joint Venture;
13.1.3. The closing of the buy/sell agreement referenced in Articles
15 or 16 and only one Venturer is remaining in the Joint Venture;
13.1.4. The occurrence of any other event causing the dissolution of
the Joint Venture by operation of law; or
13.1.5. The entry of a final judgment, order or decree of a court of
competent jurisdiction adjudicating the Joint Venture to be bankrupt, and
the expiration without appeal of the period, if any, allowed by applicable
law for appeal.
13.2. Method of Liquidation. Upon the happening of any of the events
---------------------
hereinabove specified, the Venturers shall immediately commence to wind up the
affairs of the Joint Venture and shall liquidate the assets of the Joint Venture
as promptly as possible, unless the Venturers shall determine that an immediate
sale of the Joint Venture's assets would cause undue loss to the Venturers, in
which event (i) the liquidation may be deferred for a reasonable time, and/or
(ii) all or part of the Joint Venture's assets may be distributed in kind. The
Venturers shall continue to share net cash flow, profits and losses during the
period of liquidation in the same proportions as before dissolution. The
proceeds from liquidation of the Joint Venture, including repayment of any debts
of the Venturers to the Joint Venture, shall be applied in the order of priority
as follows:
13.2.1. To the satisfaction of debts of the Joint Venture other than
to the Venturers; provided, however, if the Joint Venture makes
distributions in kind of undivided interests in the Joint Venture's
property which secures mortgage indebtedness, then each of the Venturers
receiving such distribution of property in kind, subject to such mortgage
indebtedness, shall be severally liable (as among each other, but not for
the benefit of third parties) for its proportionate part of such mortgage
indebtedness (which need not be paid or otherwise discharged out of the
proceeds of liquidation) in proportion to its interest in such
Amended and Restated Joint Venture Agreement - Whispering Plams
- ---------------------------------------------------------------
page 15
property so distributed; provided, further, that no Venturer intends hereby
to incur (except as among each other, and then only to the extent of the
value of its interest), nor does it assume, any liability on any such
mortgage indebtedness which it has not previously incurred under the terms
of the instrument creating said mortgage indebtedness; then
13.2.2. To the establishment of any reserves deemed reasonably
necessary or appropriate by the Venturers for any contingent or unforeseen
liabilities or obligations of the Joint Venture. Such reserves established
hereunder shall be held for the purpose of paying any such contingent or
unforeseen liabilities or obligations and, at the expiration of such
period, as the Venturers may reasonably deem advisable, for distributing
the balance of such reserves in the manner provided hereinafter in this
Section; then
13.2.3. To the repayment of any liabilities or debts, other than
capital accounts, of the Joint Venture to any of the Venturers, including
any Equity Loan or Defaulting Loan; then
13.2.4. To the payment of each Venturer of its capital account; and
then
13.2.5. To the Venturers in proportion to their respective Percentage
Interest in the Joint Venture.
13.3. Date of Termination. The Joint Venture shall be terminated and
-------------------
dissolved when all of the cash or property available for application and
distribution under the preceding Section shall have been applied and distributed
in accordance with such Section. The establishment of any reserves in
accordance with the preceding Section shall not have the effect of extending the
term of the Joint Venture, but any such reserve shall be distributed in the
manner provided in such Section upon the expiration of the period of such
reserve.
ARTICLE 14.
TRANSFER OF JOINT VENTURE INTEREST
----------------------------------
14.1. No Venturer shall sell, transfer, assign, mortgage or otherwise
hypothecate all or any part of its interest in the Joint Venture without the
prior written consent of the other
Amended and Restated Joint Venture Agreement - Whispering Plams
- ---------------------------------------------------------------
page 16
Venturers; provided, however, that Ocean Vista shall have the right to transfer
all or any portion of its interest to any of its affiliates, provided the
affiliate has a comparable financial net worth. No Venturer shall have any
authority to transfer, convey, mortgage or otherwise hypothecate any of the
assets of the Joint Venture without the prior written consent of the other
Venturers.
ARTICLE 15.
BUY-SELL PROVISIONS
-------------------
15.1. Mandatory Buy-Sell. Any Venturer (the "Movant"), at any time
------------------
after the expiration of the Option Period, may elect to exercise the following
mandatory buy-sell rights by notifying, in writing, the other Venturers of such
election (the "Buy-Sell Notice"), to buy out from or to sell out to such other
Venturers, at the option of the non-Movant Venturers, as follows:
15.1.1. The Buy-Sell Notice shall contain a statement of the Movant's
valuation in cash (the "Valuation Amount") of the Joint Venture, prepared
by the Movant, and shall indicate that the Movant is willing and offers at
once to buy out from or to sell out to the non-Movant Venturers for a cash
price based upon said Valuation Amount.
15.1.2. The Venturer who receives a Buy-Sell Notice (the
"Respondent") is automatically granted and required to exercise an election
in writing delivered to the Movant within ninety (90) days after receipt of
the Buy-Sell Notice, either to (i) sell out to the Movant all of the
interest of such Respondent in the Joint Venture, or (ii) buy out from the
Movant all of the interest of the Movant in the Joint Venture, for a price
in cash, for the interest to be acquired, corresponding (in proportion to
the interest to be acquired) to the Valuation Amount established by the
Movant.
15.1.3. A Respondent who fails or refuses to exercise such option
either to buy or to sell within ninety (90) days after the receipt of the
Buy-Sell Notice shall be deemed to have exercised the option to sell
provided above.
15.1.4. A Respondent shall buy or sell, as the case may be, the
interest to be acquired hereunder within ninety (90) days after receipt of
such Buy-Sell Notice at a time and place in San Diego, California,
specified by the buyer of such interest (the "Buyer"), and the Movant shall
buy or sell the interest to be acquired hereunder within said 90-day period
at a time and place in San Diego, California, specified by the Buyer. The
foregoing mandatory buy-sell rights and obligations are subject to specific
enforcement. All expenses and fees (excluding legal fees) in connection
with closing and such sale(s) shall be paid equally by the buyer(s) and
seller(s). Each Venturer shall be responsible for their own legal fees
incurred in connection with the sale.
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 17
15.1.5. At the closing of the sale of the Venturer's interest in the
Joint Venture, the following shall occur: (i) the Buyer shall deliver the
purchase price in cash to the seller of said interest (the "Seller"), and
(ii) the Seller shall execute and deliver to the Buyer all documents
necessary to transfer all interest of the Seller in the Joint Venture, free
and clear of any claims, liens or encumbrances, except as provided herein
or those incurred by the Joint Venture.
15.1.6. Upon payment, the Seller shall have no further interest in
the Joint Venture, and the Buyer shall indemnify the Seller against all
obligations, if any (including any indebtedness secured by the Property of
the Joint Venture to third party creditors of the Joint Venture).
ARTICLE 16.
DEFAULT BY A VENTURER
---------------------
16.1. Events of Default. The following events shall be deemed to be
-----------------
events of default by a Venturer ("Events of Default"):
16.1.1. Failure of a Venturer to make, when due, any Capital
Contribution or advance required to be made under Article 4 or under the
terms of this Agreement and the continuance of such failure for a period of
ten (10) days after written notice thereof from a nondefaulting Venturer to
the other Venturers;
16.1.2. If any Venturer shall fail in the performance of or
compliance with any of the covenants, agreements, terms or conditions
contained in this Agreement, other than that referred to in the foregoing
Paragraph and such failure shall continue for a period of thirty (30) days
after written notice thereof from one Venturer to the other Venturers,
specifying in detail the nature of such failure, or in the case such
failure cannot with due diligence be cured within such period of thirty
(30) days, the Venturer fails to proceed promptly and with all due
diligence to cure the same and thereafter to prosecute the curing of such
failure with all due diligence (it being intended that in connection with a
failure not susceptible of being cured with due diligence within thirty
(30) days, that the time within which to cure the same shall be extended
for such period as may be necessary to complete the same with all due
diligence);
16.1.3. If any Venturer shall file a voluntary petition in bankruptcy
or shall be adjudicated a bankrupt or insolvent, or shall file any petition
or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under
the present or future applicable federal bankruptcy act, or any other
present or future applicable federal, state or other statute or law
relative to bankruptcy, insolvency or other relief for debtors, or shall
seek or consent to or acquiesce in the appointment of any trustee,
receiver, conservator or liquidator of said Venturer, or of all or any
substantial
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 18
part of its properties or its interest in the Joint Venture [the term
"acquiesce" includes but is not limited to the failure to file a petition
or motion to vacate or discharge any order, judgment or decree providing
for such appointment within ten (10) days after the appointment];
16.1.4. If a court of competent jurisdiction shall enter an order,
judgment or decree approving a petition filed against any Venturer seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act, or any other present or future applicable federal, state or
other statute of law relating to bankruptcy, insolvency or other relief for
debts and said Venturer shall acquiesce in the entry for such order,
judgment or decree [the term "acquiesce" includes but is not limited to the
failure to file a petition or motion to vacate or discharge such order,
judgment or decree within ten (10) days after the entry of the order,
judgment or decree], or such order, judgment or decree shall remain
unvacated and unstayed for an aggregate of ninety (90) days (whether or not
consecutive) from the date of entry thereof, or any trustee, receiver,
conservator or liquidator of said Venturer, or of all or any substantial
part of its property or its interest in the Joint Venture shall be
appointed without the consent or acquiescence of said Venturer and such
appointment shall remain unvacated and unstayed for an aggregate of sixty
(60) days (whether or not consecutive);
16.1.5. Any Venturer shall admit in writing its inability to pay its
debts as they mature; or
16.1.6. The appointment of a receiver for all or substantially all of
the assets of a Venturer and the failure to have such receiver discharged
within thirty (30) days after appointment.
16.2. Effect of Default. Upon the occurrence of an Event of Default
-----------------
by a Venturer, the other Venturer shall have the right to cause the Joint
Venture to pay the defaulting Venturer the fair market value of its interest in
the Joint Venture, determined pursuant to the provisions of Article 17, based on
the Venturer's Percentage Interest, after deducting all Equity Loans, set out in
Section 4.2, damages sustained by the Joint Venture, and taking into
consideration any outstanding indebtedness, liabilities, liens and obligations
relating to the Property for the purchase and redemption of its interest in the
Joint Venture.
16.2.1. Pursuit of the foregoing remedies shall not preclude pursuit
of any other remedies herein provided or any other remedies provided by
law, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any amount due by a defaulting Venturer hereunder
or of any damages accruing by reason of the violation of any of the terms,
provisions and covenants herein contained. A defaulting Venturer shall be
responsible for the payment of all attorneys' fees reasonably incurred by
the Joint Venture and interest on all amounts by which the defaulting
Venturer is indebted to the Joint Venture hereunder at the highest lawful
rate.
Amended and Restated Joint Venture Agreement - Whispering Plams
- ---------------------------------------------------------------
page 19
16.2.2. No waiver of any violation shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants herein contained and forbearance to enforce one or
more of the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default.
16.2.3. Each Venturer hereby agrees that in the event it shall
default as hereinabove provided, it shall execute and deliver such
conveyances, agreements, notes, instruments, or other documents which may
be necessary to confirm and render fully effective the transfer of the
defaulting Venturer's interest as herein provided. Notwithstanding
anything contained in this Paragraph, any such relinquishment and transfer
as herein provided shall not relieve the defaulting Venturer from any
obligation or liability under this Agreement which may have accrued prior
to the date of such relinquishment and transfer.
16.3. Failure to Make a Capital Contribution. In the event a Venturer
--------------------------------------
fails to make a required Capital Contribution when due, under Section 4.2, and
said default is not cured within the time period provided herein, then the
nondefaulting Venturer shall have the right, but not the obligation, to pursue
any of the remedies provided below, in addition to, and not in lieu of, any
remedies provided in Section 16.2.
16.3.1. Defaulting Loan. The nondefaulting Venturer, at its option,
---------------
may pay to the Joint Venture the Capital Contribution on behalf of the
defaulting Venturer. Any such Capital Contribution made by the
nondefaulting Venturer on behalf of the defaulting Venturer shall be
deemed to be a "Defaulting Loan." Any Defaulting Loan shall bear
interest at the lesser of (i) the highest rate allowed by law, or (ii)
twenty percent (20%).
16.3.2. Dilution of Venturer's Interest. The Venturers further agree
-------------------------------
that the nondefaulting Venturer may elect at any time after six (6) months
following the initial funding of a Defaulting Loan (provided said
Defaulting Loan has not been repaid prior to the date the election is made
by the nondefaulting Venturer) to have the defaulting Venturer's Percentage
Interest in the Joint Venture diluted and adjusted pursuant to the
provisions of Subparagraph 16.3.2.1 hereof, and all Positive Net Cash Flow
distributions shall thereafter be diluted from the date the Defaulting Loan
is advanced for the balance of the term of this Agreement.
16.3.2.1. Adjustment of Percentage Interest. The
nondefaulting Venturer's Percentage Interest shall equal the
following percentage: (a) the sum of (i) all amounts actually
funded by the nondefaulting Venturer, including any initial
capital, Capital Contributions and Defaulting Loans, plus (ii)
the amount of the Defaulting Loan funded by the nondefaulting
Venturer; divided by (b) the sum of (i) all amounts actually
Amended and Restated Joint Venture Agreement - Whispering Plams
- ---------------------------------------------------------------
page 20
funded by the Venturers, including the initial capital, Deficit
Capital Costs or Negative Net Cash Flow Contributions, and
Defaulting Loans, plus (ii) the Venturer's Defaulting Loans. The
Venturer's Interest of the defaulting Venturer equals the
percentage determined by subtracting the percentage determined
above from one hundred percent (100%).
For Example: Assume that the initial capitalization of the
-----------
nondefaulting Venturer is SEVEN THOUSAND FIVE HUNDRED DOLLARS
($7,500.00) and that of the defaulting Venturer is TWO THOUSAND
FIVE HUNDRED DOLLARS ($2,500.00). A request is made for a Deficit
Capital Cost Capital Contributions totaling TEN THOUSAND DOLLARS
($10,000.00) and the nondefaulting Venturer funds SEVEN THOUSAND
FIVE HUNDRED DOLLARS ($7,500.00) and the defaulting Venturer does
not fund its TWO THOUSAND FIVE HUNDRED DOLLAR ($2,500.00) pro
rata share. The nondefaulting Venturer makes a Defaulting Loan of
TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00) on the defaulting
Venturer's behalf, then the nondefaulting Venturer's Percentage
Interest becomes eighty-eight and eighty-nine one hundredths
percent (88.89%), and that of the defaulting Venturer becomes
eleven and eleven one hundredths percent (11.11%).
Nondefaulting Venturer's Interest:
---------------------------------
($7,500 + $7,500 + $2,500) + $2,500 =
---------------------------------------------
($7,500 + $2,500 + $7,500 + $2,500) +($2,500)
$20,000.00
----------
$22,500.00 ................................. = 88.89%
Defaulting Venturer's Percentage Interest:
-----------------------------------------
100% - 88.89% .............................. = 11.11%
ARTICLE 17.
PROCEDURE FOR APPRAISEMENT
--------------------------
17.1. Selection of Appraisers. Within ten (10) days after an appraisal
-----------------------
is required under any provision hereof, each group or individual, as the case
may be, shall select an appraiser. If either party fails to name an appraiser
within the specified time, the other party may select the second appraiser.
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 21
17.2. Determination of Fair Market Value. The two appraisers so selected
----------------------------------
shall proceed to promptly determine the fair market value of the Joint Venture's
interest, including therein a fair market valuation of the interest and equity
in the Joint Venture of the Venturers in question, taking into consideration any
outstanding indebtedness, liabilities, liens and obligations of such fair market
value by the two appraisers, selected as hereinabove provided. The final
determination of the two appraisers shall be final and binding upon all the
parties; provided, however, if the two appraisers so selected are unable to
agree upon such fair market value, said two appraisers shall select a third
appraiser, whose determination as to such fair market value shall be averaged
with the appraisals of the other two appraisers, and the average of the three
appraisals shall be conclusive evidence as to such fair market value and shall
be final and binding upon all parties. The appraisers shall deliver a written
report of their appraisal to the Managing Partner, who shall provide copies
thereof to all interested parties.
17.3. Fees and Expenses. Each party shall pay the fee and expense of the
-----------------
appraiser selected by such party, and if a third appraiser is selected, the fee
of the third appraiser shall be borne equally by the parties appointing the
other two appraisers.
ARTICLE 18.
MISCELLANEOUS
-------------
18.1. Affiliated Corporations. The Managing Partner may retain (i) the
-----------------------
financial management and accounting expertise of a subsidiary or affiliated
company which shall provide accounting services, including, but not limited to,
establishment and use of computer programs and billing and accounting systems,
or (ii) the services of any other affiliated corporations, so long as the rates
charged therefor are substantially comparable to the rates charged in the
immediately comparable San Diego, California market for equally comparable
services in said market.
18.2. Exhibits. The Venturers hereby covenant and agree that each Exhibit
--------
attached hereto is incorporated herein as if fully set forth herein, and to the
extent the Exhibits attached to this Agreement are incomplete on the date
hereof, such Exhibits shall be completed and attached to this Agreement as
quickly as possible, using all due diligence. To the extent this Agreement may
be rendered unenforceable by the lack of completion of any of the Exhibits, such
defect in this Agreement shall be cured as such incomplete Exhibits are made
complete in accordance with this Section.
18.3. Notices. Any notices or other communications required or permitted
-------
hereunder shall be sufficiently given if in writing and (i) delivered
personally, (ii) forwarded by prepaid telegram, or (iii) sent by certified mail,
return receipt requested, postage prepaid, addressed as shown below, or to such
other address as the party concerned may substitute by written notice to the
other. All notices personally delivered shall be deemed received on the date of
delivery. All notices forwarded by prepaid telegram shall be deemed received two
(2) days after the date same are sent. All notices forwarded by mail shall be
deemed received on a date seven (7) days (excluding Sundays and legal holidays
when the U.S. mail is not delivered) immediately
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 22
following date of deposit in the U.S. mail; provided, however, the return
receipt indicating the date upon which all notices were received shall be prima
-----
facie evidence that such notices were received on the date on the return
- -----
receipt.
If to Golf Inns: THEODORE L. VALLAS
c/o Golf Inns of America, Inc.
2192 Palomar Airport Road
Carlsbad, California 92008
With copies to:
--------------
Rex B. Beatty, Esq.
Mulvaney, Kahan & Barry
First National Bank Building
17th Floor
401 West A. Street
San Diego, California 92101-7907
If to Ocean Vista: OCEAN VISTA LAND COMPANY
15821 Ventura Boulevard
Suite 550
Encino, California 91436
Attention: President
With a copy to:
--------------
Randolph D. Addison
Page & Addison, P.C.
15770 North Dallas Parkway, 5th Floor
Dallas, Texas 75248
The addresses and addressees may be changed by giving notice of such
change in the manner provided herein for giving notice. Unless and until such
written notice is received, the last address and addressee given shall be deemed
to continue in effect for all purposes.
18.4. Independent Corporation. Golf Inns recognizes and acknowledges
-----------------------
that Ocean Vista is an independent corporation, chartered under the laws of the
State of California, to whom Golf Inns will solely look and who is solely
responsible for the obligations and liabilities of Ocean Vista recited herein,
arising hereunder, or in any manner related to the transactions contemplated
hereby, and Golf Inns further recognizes and acknowledges that no other entity
or entities, including (i) Ocean Vista's parent corporation, (ii) any
individual, (iii) any corporation affiliated with Ocean Vista which may supply
services to or take actions in behalf of or for the benefit of Ocean Vista with
respect to the matter herein contemplated (it being agreed among and between the
parties hereto that the parent of and/or the affiliated corporations of Ocean
Vista may form, organize, provide services to, provide loans and funds to,
negotiate for, provide personnel to, make representations on behalf of, and from
time to time take actions on behalf of or for the benefit of Ocean Vista by
direct dealings with Golf Inns or those acting for it), or (iv) any other
corporation affiliated with Ocean Vista, although
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 23
such corporation may do any thing listed in (iii) above, is in any manner liable
or responsible for the obligations and liabilities of Ocean Vista, whether
recited herein, arising hereunder, or in any manner related to the transactions
contemplated hereby. As used in this Article, the term "Operator" shall mean
OCEAN VISTA LAND COMPANY, INC., a California corporation, and any Affiliate
thereof to whom the rights and obligations of "Ocean Vista" may be assigned
pursuant to the terms hereof.
18.5. Affiliates. It is agreed and understood among and between the
----------
parties hereto that the Affiliates of Ocean Vista may provide services for a fee
to Ocean Vista and that the provision of such services for a fee and the actions
taken in providing such services shall in no manner be construed to constitute
the undertaking by such Affiliate of any obligation, duty, or liability of Ocean
Vista to Golf Inns under the terms of this Agreement or any other relationship
existing between Ocean Vista and Golf Inns, unless specifically set forth in a
document executed by the party to be charged with such obligation, duty, or
liability. Ocean Vista may retain the services of any Affiliate of Ocean
Vista's parent company, so long as the rates charged therefor are substantially
comparable to the rates generally charged for equally comparable services in the
immediate market. Additionally, the fees paid for such services to such
Affiliates shall not be considered to constitute payments to others in detriment
to Golf Inns except as provided by the terms of this Agreement or the laws of
bankruptcy or insolvency which are applicable to Ocean Vista. Golf Inns
covenants that in dealing with representatives of an Affiliate of Ocean Vista,
that such direct dealings taken by such representative shall in no manner be
construed to be the direct action, obligation, duty, liability, or undertaking
of such Affiliate, and Golf Inns agrees that it shall not attempt to pierce the
corporate veil of Ocean Vista in order to impose any such liability.
18.6. Golf Inns' Inquiry. Golf Inns warrants and represents that it
------------------
has made such inquiry and investigation as it deems appropriate as to the
financial ability of Ocean Vista to perform all of its obligations, duties,
liabilities, and undertakings contemplated by the transaction from which this
Agreement arises and that it has no further inquiry it desires to make. Golf
Inns further warrants and represents that it is not relying on any other entity
to contribute to the financial wherewithal to Ocean Vista to carry out its
obligations, duties, liabilities, and undertakings, and no oral representations
have been made as to other financial support of Ocean Vista by any party or
entity. Golf Inns is thus solely relying on the financial ability of Ocean
Vista, and Golf Inns shall not attempt to pierce the corporate veil of Ocean
Vista in order to obtain financial contribution or responsibility.
18.7. Assignment. Except as expressly provided herein, this
----------
Agreement and any documents executed in connection herewith shall not be
assigned by any Venturer without the prior written consent of the other
Venturers.
18.8. Public Announcements. No party hereto shall make any public
--------------------
announcement or press release concerning this Agreement or the transactions
contemplated herein except as may be mutually agreed upon by the parties.
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 24
18.9. Severability. Should any portion of this Agreement be deemed
------------
unenforceable by a court of competent jurisdiction, the remaining portion hereof
shall remain unaffected and be interpreted as if such unenforceable portions
were initially deleted.
18.10. Approvals. Any consent or approval of either party referred
---------
to herein (by whatever words used) shall not be unreasonably withheld or
delayed, and neither party shall seek or obtain any payment in connection
therewith as a condition therefor. Except as otherwise expressly provided
herein, whenever either party has called upon the other to execute and deliver a
consent or approval in accordance with the terms of this Agreement, the failure
of such party to respond to the demand within fifteen (15) days after written
request therefor, or such other period as may be specifically set forth herein,
shall be deemed to be a consent or approval. In the event that either party
refuses to give its consent or approval to any request by the other, such
refusing party shall indicate by notice to the other the reason for such
refusal.
18.11. Integrated Agreement. This Agreement constitutes the entire
--------------------
agreement between the parties hereto and there are no agreements,
understandings, warranties or representations between the parties other then
those set forth herein.
18.12. Construction of Agreement. This Agreement concerns property
-------------------------
situated in the State of California and shall be deemed to be a contract made
under the laws of said state.
18.13. Amendment and Waiver. This Agreement may not be amended or
--------------------
modified in any way except by instrument in writing executed by all parties
hereto; provided, however, any Venturer may, in writing (i) extend in writing
the time for performance of any of the obligations of the other, (ii) waive in
writing any inaccuracies and representations by the other contained in this
Agreement, (iii) waive in writing compliance by the other with any of the
covenants contained in this Agreement, and (iv) waive in writing the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations under this Agreement.
18.14. Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors,
legal representatives and assigns where permitted herein.
18.15. Unavoidable Delay. The provisions of this Section shall be
-----------------
applicable if there shall occur during the term of this Agreement any (i)
strike(s), lockout(s) or labor dispute(s), (ii) inability to obtain labor or
materials, or reasonable substitutes therefor, (iii) acts of God, governmental
restrictions, regulations or controls, enemy or hostile governmental action,
civil commotion, fire, or other casualty, or (iv) other conditions similar to
those enumerated in this Section beyond the reasonable control of the party
obligated to perform. As the result of any of the above-described events, if
the parties hereto shall fail punctually to perform any obligation on its part
to be performed under this Agreement, then, upon written notice to the other,
within ten (10) days of such event, such failure shall be excused and not be a
breach of this Agreement by the party claiming an unavoidable delay, but only to
the extent occasioned by such event. If any right or option of either party to
take any action under or with respect
Amended and Restated Joint Venture Agreement - Whispering Plams
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page 25
to the term of this Agreement is conditioned upon the same being exercised
within any prescribed period of time or at or before a named date, then such
prescribed period of time or such named date shall be deemed to be extended or
delayed, as the case may be, upon written notice, as provided above, for a time
equal to the period of the unavoidable delay. Notwithstanding anything contained
herein to the contrary, the provisions of this Section shall not be applicable
to the parties' obligation to pay any sums, monies, costs, charges or expenses
required to be paid pursuant to the terms of this Agreement.
18.16. Documentation. If necessary to carry out the intent of this
-------------
Agreement, each party agrees to execute and provide to the other party any and
all other instruments, documents, conveyances, assignments and agreements which
may be necessary to effectuate, carry out and perform the terms, provisions and
conditions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
GOLF INNS:
---------
GOLF INNS OF AMERICA, INC.,
Attest: a California corporation
_____________________________ By:___________________________
Title:_______________________ Title:________________________
OCEAN VISTA:
-----------
OCEAN VISTA LAND COMPANY,
Attest: a California corporation
_____________________________ By:___________________________
Title:_______________________ Title:________________________
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