1
EXHIBIT 10.1
OPRY XXXXX LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
This LIMITED PARTNERSHIP AGREEMENT, executed as of March 31, 1998 (as
amended, restated, modified or supplemented from time to time, the "Partnership
Agreement" or this "Agreement"), is made between and among OPRY XXXXX, L.L.C., a
Delaware limited liability company ("Xxxxx"), THE XXXXX LIMITED PARTNERSHIP, a
Delaware Limited Partnership ("TMLP"), and OPRYLAND ATTRACTIONS, INC., a
Delaware corporation ("OAI").
RECITALS:
R-1. Xxxxx, TMLP and OAI hereby form Opry Xxxxx Limited Partnership
(the "Partnership") as a Delaware limited partnership to acquire interests in
certain Land (as hereinafter defined) situated in the City of Nashville, County
of Davidson, State of Tennessee, and to develop, finance, manage and lease
improvements upon such Land. The Land is a portion of a larger tract owned by
OAI, on which OAI has developed and currently is operating the Opryland Hotel
and Convention Center, an entertainment facility known as the "Xxxxx Xxx Xxxx"
and certain other commercial and entertainment facilities.
R-2. The Partnership intends to develop on the Land an enclosed super
regional shopping and entertainment facility consisting of approximately
1,100,000 gross leasable square feet of retail and entertainment space when
fully developed.
R-3. The parties hereto desire to execute this Agreement to govern the
affairs of the Partnership and set forth their rights, obligations and
understandings with respect to the Partnership.
AGREEMENTS:
IN CONSIDERATION of the mutual promises and covenants herein made,
Xxxxx, TMLP and OAI hereby agree as follows:
ARTICLE I - DEFINED TERMS
Capitalized terms used herein without further definition, and
variations thereof, have the meaning set forth below unless the context
otherwise clearly requires:
ACT: The Delaware Revised Uniform Limited Partnership Act,
ss.ss.17-101 to 17-1109 of the Delaware Code Annotated, Title 6, as the
same may be amended from time to time.
ACTUAL NET PROJECT COST: The total costs incurred by the
Partnership in developing the Project, less any Proceeds actually
received by the Partnership with respect to sales of parcels to
Anchors, sales of peripheral parcels (including, without limitation,
sales of all or any portion of "Tract II," as hereinafter defined),
construction recoveries from tenants, the amount of any TIF Proceeds
actually received by the Partnership, and the present value of any
PILOT Proceeds. Upon the Completion of the Project, the Managing
General Partner shall provide such documentation to the General
Partners as may be reasonably necessary or appropriate to substantiate
the Actual Net Project Cost. Actual Net Project Cost will
2
be considered in calculating the amount of Special Distribution payable
to Xxxxx or TMLP with respect to any fiscal year.
ADJUSTED NET ORDINARY CASH FLOW: The Net Ordinary Cash Flow
earned by the Partnership during any applicable fiscal year, less the
amount of PILOT Proceeds received during such fiscal year. Adjusted Net
Ordinary Cash Flow will be considered in calculating the amount of
Special Distribution payable to Xxxxx or TMLP with respect to any
fiscal year.
AFFILIATE: With respect to any Person, a Person who, directly
or indirectly, controls, is under common control with, or is controlled
by, that Person. For purposes of this definition, "control" (including,
with correlative meaning, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person. By way of
illustration of the foregoing, but not by way of limitation, as of the
date of this Agreement, MillsServices Corp., a Delaware corporation,
would be deemed an Affiliate of Xxxxx, but Bass Pro, L.P. would not be
deemed an Affiliate of OAI.
AGREEMENT: This Limited Partnership Agreement, together with
all exhibits attached hereto and all amendments hereto. Words such as
"herein," "hereinafter," "hereof," "hereto," "hereby" and "hereunder"
when used with reference to this Agreement, refer to this Agreement as
a whole, as the same may be amended from time to time.
ANCHOR(S): Any tenant (a) which occupies more than twenty
thousand (20,000) square feet of gross leasable area, or (b) which
occupies a particular space designated as Anchor space by the General
Partners.
BANKRUPTCY: As to a referenced Person:
(i) its filing a petition commencing a case as a
debtor under the Federal Bankruptcy Code or a similar provision of
State law (collectively, as now or in the future amended, the
"Bankruptcy Code");
(ii) the commencement of an involuntary case against
it under the Bankruptcy Code and the earlier of (A) the entry of an
order for relief, or (B) the appointment of an interim trustee to take
possession of its estate and/or to operate any of its business;
(iii) its making a general assignment for the benefit
of its creditors;
(iv) its consenting to the appointment of a receiver
for all or a substantial part of its property;
(v) the entry of a court order appointing a
receiver or trustee for all or a substantial part of its property; or
(vi) the assumption of custody or sequestration by a
court of competent jurisdiction of all or substantially all of its
property.
BONA FIDE OFFER: As defined in Section 11.2(d) hereof.
BUSINESS DAY: Any day on which commercial banks located in New
York City are not authorized to close and which is not a Saturday or a
Sunday. In the
2
3
event any act is required by this Agreement to be taken or to occur on
a specified date and the specified date is not a Business Day,
performance of such act shall be deemed timely if it is taken or occurs
on the first Business Day following the specified date.
CAPITAL ACCOUNT: With respect to each Partner, the separate
"book" account maintained by the Partnership for such Partner
established and adjusted in accordance with Section 6.7 hereof.
CAPITAL CONTRIBUTION: The total amount of cash and the fair
market value of all other assets contributed (or deemed contributed
under Regulation Section 1.704-1(b)(2)(iv)(d)) to the capital of the
Partnership by a Partner, net of liabilities assumed by the Partnership
or to which such assets are subject.
CARRYING VALUE: With respect to any Partnership asset, the
asset's adjusted basis for federal income tax purposes, except as
follows:
(i) the initial Carrying Value of any asset contributed
(or deemed contributed) to the capital of the Partnership
shall be such asset's gross fair market value at the time of
such contribution, as specifically agreed to between the
Partnership and the Partner making (or deemed to make) such
contribution;
(ii) the Carrying Value of each Partnership asset shall
be adjusted to equal its respective gross fair market value as
of the following times: (A) the acquisition of an additional
Partnership interest by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (B)
the distribution by the Partnership to a Partner of more than
a de minimis amount of Partnership Property other than money,
unless all Partners receive simultaneous distributions of
undivided interests in the distributed Partnership Property in
proportion to their Partnership interests; and (C) such other
times as required under applicable Regulations;
(iii) the Carrying Value of each Partnership asset shall
be increased (or decreased) to reflect any adjustments to the
adjusted basis of such asset pursuant to Code Section 734(b)
or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section
1.704-l(b)(2)(iv)(m) and Section 6.7 hereof; provided,
however, that the Carrying Value shall not be adjusted
pursuant to this clause (iii) to the extent an adjustment is
made pursuant to clause (ii) above in connection with a
transaction that would otherwise result in an adjustment
pursuant to this clause (iii); and
(iv) if the Carrying Value of an asset has been
determined pursuant to clause (i), (ii) or (iii) above, such
Carrying Value shall thereafter be adjusted in the same manner
as the asset's adjusted basis for federal income tax purposes
except that Depreciation deductions shall be computed based
upon the Carrying Values of the Partnership's assets rather
than upon the assets' adjusted bases for federal income tax
purposes.
CERTIFICATE: The Certificate of Limited Partnership of the
Partnership filed with the Office of the Secretary of State of the
State of Delaware on March __, 1998, as such Certificate may be amended
and in effect from time to time.
CODE: The Internal Revenue Code of 1986, as amended from time
to time.
3
4
COMPLETION OF THE PROJECT: The substantial physical completion
of construction of the Project and correction or completion of all
punch list items and closing of a Permanent Loan.
CONSENT: The prior written consent or approval of a Person to
take action, or the act of granting consent or approval to take such
action, as the context may require. Except as expressly provided
otherwise herein, reference to a requirement for the Consent of a
Partner shall require the commercially reasonable judgment of such
Partner.
CONSTRUCTION LENDER: Collectively, the lender which provides
the Construction Loan and any co-agents, co-lenders and/or participants
in such loan.
CONSTRUCTION LOAN: The construction loan to be obtained by the
Partnership for the purpose of financing a portion of the construction
of the Project improvements and approved by the General Partners.
CONSTRUCTION LOAN CLOSING: The execution and delivery by the
Partnership to the Construction Lender of the documents evidencing and
securing the Construction Loan and the advance by the Construction
Lender of the initial draw under the Construction Loan.
CONSTRUCTION PERIOD PREFERENCE: The cumulative annual
preference to be paid quarterly by the Partnership pursuant to Section
7.7 hereof in an amount equal to nine percent (9%) per annum on Xxxxx'
and TMLP's Unreturned Capital Contributions Account from and after the
date of this Agreement through Grand Opening. The Construction Period
Preference shall be included as a line item in the Project Development
Budget.
CONSUMER PRICE INDEX: The Consumer Price Index for All Urban
Consumers (1982-84 = 100), U.S. City Average, All Items, published by
the United States Department of Labor, Bureau of Labor Statistics (or
such comparable index as may be utilized in substitution for or as the
successor to the stated Consumer Price Index). If such Consumer Price
Index is not published by the Bureau of Labor Statistics or by another
similar governmental agency at any time during the term of this
Agreement, then the most closely comparable statistics on the
purchasing power of the consumer dollar as published by a responsible
financial authority and selected by the Managing General Partner shall
be utilized in lieu of such Consumer Price Index.
XXXXX: That certain Construction, Operation and Reciprocal
Easement Agreement to be entered into by and between the Partnership
and OAI (in its capacity as the owner of adjacent properties) by which,
among other things, the parties thereto grant reciprocal easements for
ingress, egress, parking, utilities and signage on their respective
properties. The easements to be granted pursuant to the XXXXX shall be
compatible with OAI's current plans for the future development of the
adjacent premises to be retained by OAI.
DEBT SERVICE: Principal, interest and other payments of every
kind on or in connection with any outstanding indebtedness of the
Partnership.
DEFAULT: Any occurrence which is or, with Notice or the lapse
of time or both, would constitute a breach by any Partner in the
performance of its obligations under this Agreement; provided, however,
that no such breach shall be deemed to constitute a Default unless the
applicable Partner shall fail to cure or remedy such breach within
thirty (30) days following the giving of Notice of such breach.
4
5
DEFAULTING PARTNER: As defined in Section 6.3(a).
DEPRECIATION: For each fiscal year of the Partnership or other
period, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or
other period, except that if the Carrying Value of an asset differs
from its adjusted basis for federal income tax purposes at the
beginning of such year or other period, Depreciation shall be an amount
which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization or other cost recovery
deduction for such year or other period bears to such beginning
adjusted tax basis.
DOLLARS or $: Lawful money of the United States of America.
EQUITY PARTNER(S): One or more Persons hereafter admitted to
the Partnership pursuant to Section 5.2 as an additional General
Partner or Limited Partner or both, in consideration for such Persons'
execution of this Agreement and for such Person's covenant to
contribute additional funds required to develop or operate the Project.
EXCESS SPONSORSHIP REVENUES: Net Sponsorship Revenues received
by the Partnership in any fiscal year, to the extent such Net
Sponsorship Revenues exceed $800,000 per year.
EXCESS NEGATIVE BALANCE: As to any Partner, the excess, if
any, of (i) the negative balance in a Partner's Capital Account
(determined before taking into account any Capital Account adjustments
for the Partnership taxable year during which the determination is
made) after reducing such balance by the net adjustments, allocations
and distributions described in Regulation Sections 1.704-l(b)(2)(ii)(d)
(4), (5) and (6) which, as of the end the Partnership's taxable year
are reasonably expected to be made to such Partner, over (ii) the sum
of (A) the amount, if any, which the Partner is required to restore to
the Partnership upon liquidation of such Partner's Partnership Interest
(or which is so treated pursuant to Regulation Section 1.704-
l(b)(2)(ii)(c)), (B) the Partner's share (as determined under
Regulation Section 1.704-2(g)(1)) of the Minimum Gain computed solely
with respect to Nonrecourse Debt other than Partner Nonrecourse Debt,
and (C) the Partner's share (as determined under Regulation Section
1.704- 2(i)(5)) of the Partner Minimum Gain computed solely with
respect to any Partner Nonrecourse Debt.
FOREIGN PERSON: As defined in Section 13.1 hereof.
XXXXXXX: Xxxxxxx Entertainment Company, a Delaware
corporation.
GENERAL PARTNER: Any Person named as such in Exhibit A
attached hereto and any other Person who becomes a successor or
additional General Partner of the Partnership pursuant to the terms of
this Agreement, and who is a General Partner at the time of reference
thereto, in such Person's capacity as a General Partner of the
Partnership.
GRAND OPENING: The date on which the Project opens for
business as publicly announced. The Partners currently contemplate that
the Grand Opening will occur not later than the Fall of the year 2000.
GROUND LEASE: That certain ground lease to be entered into by
and between OAI as ground lessor and the Partnership as ground lessee
by which OAI will lease to the Partnership a leasehold estate in the
Retail Complex.
5
6
LAND: Two tracts of land situated in the City of Nashville,
County of Davidson and State of Tennessee, which Land is graphically
depicted on the site plan attached hereto as Exhibit B. The Land
consists of two tracts, the first of which ("Tract I") contains
approximately 35--40 acres adjacent to the Opryland Hotel and
Convention Center, and the second of which ("Tract II") contains
approximately 27 acres in the northeast quadrant of Xxxxxx Parkway and
XxXxxxxx Pike. The Partners contemplate that the Land will be
subdivided into a "Retail Complex" and one or more "Land Parcels" (as
hereinafter defined) for the purposes described in this Partnership
Agreement.
LAND PARCELS: The parcel or parcels of Land to be contributed
in fee by OAI to the Partnership. The Partners contemplate that the
Land Parcels will be sold by the Partnership to third parties for
development.
LIMITED PARTNER: Any Partner who is designated as a Limited
Partner on Exhibit A to this Agreement at the time of reference
thereto, in such Partner's capacity as a Limited Partner of the
Partnership, including substituted Limited Partners admitted in
accordance with the terms of this Agreement.
LOAN GUARANTY: Any guaranty or other recourse obligation given
by one or more of the Partners or their respective Affiliates to the
Construction Lender or the Permanent Lender. To the extent a Loan
Guaranty is required for any Construction Loan or Permanent Loan, the
Partners agree to seek to limit their individual liability thereunder
to a "several" but not a "Joint" basis. In no event shall OAI be
required to deliver any Loan Guarantee.
MAJOR CAPITAL EVENT: Any of the following: (1) the sale of all
or substantially all of the Partnership's leasehold interest in the
Land, or any material item of the personal property of the Partnership;
(2) the condemnation of all or any part of (i) the Project or the use
thereof, or (ii) the Land or the use thereof, or (iii) purchases or
processes in lieu thereof, except for temporary easements and the like;
(3) receipt of net recoveries of damage awards and insurance proceeds
(other than rental interruption insurance proceeds); or (4) receipt of
the net proceeds (net of reserves reasonably determined by the Managing
General Partner) from any mortgages on Partnership Property or any
other loans or borrowings of the Partnership, including without
limitation, loans from any Partner.
MAJOR DECISION: As defined in Section 9.1(d)(i) hereof.
MANAGEMENT AGREEMENT: The Management Agreement to be entered
into by and between the Partnership and an Affiliate of the Managing
General Partner, in the form approved by the Partners.
MANAGING GENERAL PARTNER: Xxxxx, or such successor Managing
General Partner as shall be designated and appointed in accordance with
the provisions of Section 11.5 of this Agreement.
XXXXX: Opry Xxxxx, L.L.C., a Delaware limited liability
company, a General Partner of the Partnership.
XXXXX CORP.: The Xxxxx Corporation, an Affiliate of TMLP.
MINIMUM GAIN: The meaning set forth in Regulation Section
1.704-2(d). Minimum Gain shall be computed separately for each Partner
in a manner consistent with the Regulations under Code Section 704(b).
6
7
NEGATIVE CAPITAL ACCOUNT: A Capital Account with a balance of
less than zero.
NET ORDINARY CASH FLOW: With respect to a particular fiscal
year, all net income less expenses of the Partnership determined in
accordance with generally accepted accounting principles for such
fiscal year (except net income arising from a Major Capital Event) and
shall be determined by adjusting such net income and expenses as
follows:
(i) Depreciation of buildings, improvements and
personal property shall not be considered an expense.
(ii) Amortization of any financing or refinancing
fee, organization cost, leasing fee, capitalized interest,
start-up expense or other capital-type item shall not be
considered an expense.
(iii) Amortization or other payment of the principal
of any mortgage or other loan or indebtedness of the
Partnership shall be considered an expense. To the extent that
proceeds from a Major Capital Event are used to pay any such
loan, the amount of such payments shall not be treated as an
expense for purposes hereof.
(iv) After the Grand Opening, annual contributions
may be made to fund reasonable reserves established by the
Partnership in accordance with Section 9.1 and 9.2 hereof, to
provide for working capital needs, funds for releasing costs,
capital improvements or replacements and for any other
contingencies of the Partnership. The contributions to such
reserves shall be considered as expenses. Any expense paid for
by funds in such reserves shall not be considered an expense.
Interest on such reserves shall be credited to reserves, but
shall not be considered income for purposes of this definition
of Net Ordinary Cash Flow.
(v) Accruals for free or stepped rent shall not be
considered as income and the related amortized amounts shall
not be considered as expenses.
(vi) Any amounts paid by the Partnership for the
acquisition of Partnership Property, releasing costs,
expansion costs and/or for capital improvements and/or
replacements shall be considered as expenses, except to the
extent the same are financed through proceeds from a Major
Capital Event, Capital Contributions, or funds in reserves
expensed in the current or previous fiscal years. Any item
that would otherwise be an expense shall not be considered an
expense if it is paid from proceeds from a Major Capital Event
or Capital Contributions.
(vii) Net Ordinary Cash Flow shall also be deemed to
include any other funds available at any time and from any
source (other than Major Capital Events) including without
limitation, amounts previously set aside as reserves and
expensed in the current or previous fiscal years, determined
by the Managing General Partner to be no longer reasonably
necessary for the efficient conduct of the business of the
Partnership.
NET PROFITS AND NET LOSSES: The taxable income or loss, as the
case may be, for a period (or from a transaction) as determined in
accordance with Code Section 703(a) (for this purpose, all items of
income, gain, loss, or deduction required
7
8
to be separately stated pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss) computed with the following
adjustments:
(i) Items of gain, loss and deduction shall be
computed based upon the Carrying Values of the Partnership
assets rather than upon the assets' adjusted bases for federal
income tax purposes;
(ii) Any tax-exempt income received by the
Partnership shall be included as an item of gross income;
(iii) The amount of any adjustments to the Carrying
Values of any Partnership assets pursuant to Code Section 743
shall not be taken into account; and
(iv) Any expenditure of the Partnership described in
Code Section 705(a)(2)(B) (including any expenditures treated
as being described in Code Section 705(a)(2)(B) pursuant to
the Regulations) shall be treated as deductible expense.
NET SPONSORSHIP REVENUES: All sponsorship revenues received by
the Partnership during a fiscal year, net of all fees and commissions
payable with respect to such revenues, whether such commissions or fees
shall be payable to a Partner, an Affiliate of a Partner, or to a third
party (such as the Sponsorship Management Fee contemplated by Section
9.10 hereof).
NON-DEFAULTING PARTNER: The Partners, exclusive of any
Defaulting Partner.
NONRECOURSE DEBT: Any liability of the Partnership to the
extent no Partner or related person bears the economic risk of loss for
that liability within the meaning of Regulation Section 1.752-2. It is
the intention of the Partners that OAI shall not be required to assume
any recourse liability in connection with the Construction Loan for the
Project.
NOTICE: A writing containing the information required by this
Agreement to be communicated to any Person, sent by registered or
certified mail, postage prepaid, or given by personal delivery, or sent
by confirmed air courier to such Person at the last known address of
such Person, or by facsimile, the date of registry thereof or the date
of the certification of receipt therefor as evidenced by postal,
facsimile or air courier records or the date of personal delivery (or
refusal thereof during normal business hours) being deemed the date of
receipt of Notice; provided, however, that any communication sent to
such Person and actually received by such a Person shall constitute
Notice for all purposes of this Agreement.
OAI: Opryland Attractions, Inc., a Delaware limited
partnership, which is both a General Partner and a Limited Partner
hereunder. OAI is a wholly owned subsidiary of Xxxxxxx.
OAI LAND CONTRIBUTION RETURN: The cumulative annual preference
in the distributions of Net Ordinary Cash Flow and net proceeds from a
Major Capital Event of the Partnership payable under the terms and
conditions set forth in Section 7.8 and 7.9 hereof, in an amount equal
to the product of nine percent (9%) per annum, multiplied by
$25,000,000 (which represents the aggregate agreed-upon value of the
leasehold interest in Tract I and the fee interest in Tract II). The
OAI Land Contribution Return shall begin to accrue on the first to
occur of (a) the Grand Opening of the Project, and (b) the date on
which tenants occupying at least 25% of
8
9
the Specialty Store space shall have opened for business and shall have
commenced paying rent. The OAI Land Contribution Return shall continue
to accrue through and until the date that Xxxxx, TMLP and their
Affiliates shall have been released from all liabilities under the Loan
Guarantees, and thereafter, no further OAI Land Contribution Return
shall accrue, cumulate or become payable hereunder.
PARTNER: Any General Partner or Limited Partner.
PARTNER LOANS: As defined in Section 6.2(b) hereof.
PARTNER MINIMUM GAIN: An amount, with respect to each Partner
Nonrecourse Debt, equal to the Minimum Gain that would result if such
Partner Nonrecourse Debt were treated as a Nonrecourse Debt, determined
in accordance with Regulation Section 1.704-2(i)(3).
PARTNER NONRECOURSE DEBT: Any indebtedness of the Partnership
that is a "partner nonrecourse debt" with the meaning of Regulation
Section 1.704-2(b)(4).
PARTNERSHIP: The limited partnership herein formed as Opry
Xxxxx Limited Partnership, as said Partnership may from time to time be
constituted.
PARTNERSHIP INTEREST: The entire ownership interest (which may
be expressed as a percentage) of a Partner in the Partnership at any
particular time, including the right of such Partner to any and all
benefits to which a Partner may be entitled pursuant to this Agreement
and under the Act, together with all obligations of such Partner to
comply with the terms and provisions of this Agreement and the Act. The
percentage of Partnership Interest of each Partner is set forth on
Exhibit A hereto, as the same may be amended from time to time.
Whenever any reference is made herein to "Partnership Interest" in the
context of an allocation or other similar determination being made pro
rata, in proportion to or in accordance with the Partners' respective
Partnership Interests, such references shall mean and refer to the
then-applicable percentage of Partnership Interest of each Partner.
PARTNERSHIP PROPERTY: All interests in real and personal
property now owned or hereafter acquired by the Partnership and any and
all improvements thereto, and shall include the Partnership's interest
in the Land, the Project and both tangible and intangible property.
PERMANENT LENDER: Collectively, the lender which provides any
Permanent Loan and any co-agents, co-lenders or participants in such
loan.
PERMANENT LOAN: The financing to be obtained by the
Partnership to replace the Construction Loan.
PERSON: An individual, partnership, firm, corporation, trust,
estate or other entity.
PILOT PROCEEDS: The annual amount of financial consideration
received by the Partnership, whether by way of tax credits, cash
payments or otherwise, as part of any "payment in lieu of taxes"
arrangement by and between the Partnership and applicable governmental
agencies.
PLANS: The plans and specifications for the Project as such
plans and specifications may be approved by the Partners from time to
time, and the plans and specifications developed for construction of
the Project Improvements and all amendments thereto, as the same are
described in the Project Development Budget.
9
10
POSITIVE CAPITAL ACCOUNT: A Capital Account with a balance
greater than zero.
PRIME OR PRIME RATE: The prime rate as the same may be
published and modified from time to time in The Wall Street Journal. If
at any time there is more than one such published prime rate, the
average of the range of the prime rates shall be used.
PRIORITY RETURN: The cumulative annual preference in the
distributions of Net Ordinary Cash Flow and net proceeds from a Major
Capital Event of the Partnership payable under the terms and conditions
set forth in Sections 7.8 and 7.9 hereof, equal to nine percent (9%)
per annum of each of the Partners' respective Unreturned Capital
Contributions Account as the same may vary from time to time. The
Priority Return shall begin to accrue upon the date of the Grand
Opening. Upon the date that Xxxxx, TMLP and their respective Affiliates
shall have been released from all liabilities under the Loan
Guarantees, no further Priority Return shall accrue, cumulate or become
payable hereunder.
PROCEEDS: (i) all rental income and recoveries received by the
Partnership from leases of Project Land (including, without limitation,
any improvements built on such leased Land) or from the purchasers
thereof prior to the closing of the Permanent Loan, and (ii) all TIF
Proceeds.
PROJECT: The enclosed super regional shopping and
entertainment facility proposed to be constructed on the Land in
accordance with the Project Development Budget, together with related
parking facilities and other improvements, all appurtenances thereto
and all fixtures, equipment and personal property owned or acquired by
the Partnership in connection with the operation of the Project, as
defined by the Project Development Budget.
PROJECT COMMENCEMENT DATE: The date on which all of the
following conditions shall have been satisfied: (a) the General
Partners shall have approved the Project Development Budget in writing;
(b) all contingencies to the approval of the Project Development Budget
shall have been satisfied or waived in writing; and (c) the Partnership
shall have acquired a leasehold estate in the Retail Complex and the
Land Parcels shall have been conveyed to the Partnership.
PROJECT COMPLETION DATE: The date on which the Completion of
the Project shall have been achieved by the Partnership.
PROJECT DEVELOPMENT BUDGET: The budget, which has been or will
be approved by the General Partners, defining the scope and details of
and setting forth all costs of the Project, including without
limitation the costs of the Project Improvements.
PROJECT IMPROVEMENTS: The improvements to be constructed
pursuant to the Plans.
REGULATIONS: The income tax regulations, including any
temporary regulations, from time to time promulgated under the Code.
RETAIL COMPLEX: That portion of the Land that is intended to
be demised to the Partnership pursuant to the Ground Lease.
10
11
SPECIAL DISTRIBUTION: A special distribution of Net Ordinary
Cash Flow, payable to Xxxxx and TMLP in proportion to their respective
Partnership Interests, and which shall be payable only to the extent
the Partnership shall have received Excess Sponsorship Revenues for the
applicable fiscal year. The Special Distribution shall be paid by the
Partnership until the first to occur of (a) such time as the aggregate
amounts of all Special Distributions paid to Xxxxx and TMLP shall equal
$3,500,000; and (b) the total Adjusted Net Ordinary Cash Flow to be
distributed by the Partnership pursuant to Section 7.8(a)(vii), when
divided by the Actual Net Project Cost, exceeds 11%. The Managing
General Partner shall give OAI such documentation as may reasonably be
necessary or appropriate to support the calculation of the Special
Distribution. The Special Distribution shall be treated as a return of
capital and shall reduce the applicable Partners' Unreturned Capital
Contributions Account.
TAX MATTERS PARTNER: The Managing General Partner.
TIF: Any tax increment financing, sales tax rebate or similar
financial assistance provided by governmental jurisdictions to the
Partnership in connection with the Project.
TIF PROCEEDS: Proceeds received by the Partnership in cash
from any TIF.
TMLP: The Xxxxx Limited Partnership, a Delaware limited
partnership, which is an Affiliate of Xxxxx and a Limited Partner of
the Partnership.
TRANSFER: Any sale, assignment transfer, mortgage,
hypothecation, encumbrance or transfer, whether directly or indirectly,
of a Partnership Interest.
UNITED STATES PERSON: As defined in Section 13.1 hereof.
UNALLOCATED PREFERRED RETURN: An amount determined for any
Partner as of the date of any allocation of Net Profits pursuant to
Section 7.1(a)(iii) hereof, equal to such Partner's Construction Period
Preference (if any), OAI Land Contribution Return and Priority Return
since the inception of the Partnership reduced (but not below zero) by
the sum of (i) all Net Profit previously allocated to such Partner
pursuant to Section 7.1(a)(iii) hereof; and (ii) any Net Profit
allocated to such Partner pursuant to Section 7.1(a)(i) or Section
7.1(a)(ii) that is attributable to prior or current distributions to
such Partner in satisfaction of such Partner's Construction Period
Preference, Land Contribution Return or Priority Return.
UNRETURNED CAPITAL CONTRIBUTIONS ACCOUNT: As to any Partner,
an account maintained for internal bookkeeping purposes by the
Partnership for each Partner, which account, as of any date, except as
expressly provided herein, shall equal the sum of all Capital
Contributions by such Partner pursuant to Sections 6.1 and 6.3(a)
hereof, reduced (but not below zero) by all Partnership distributions
to such Partner pursuant to Sections 7.8(a)(vi) or 7.9(a)(iv) hereof.
11
12
ARTICLE II - FORMATION AND NAME; FILINGS; ASSUMED NAMES
2.1 FORMATION AND NAME.
The Partners hereby form the Partnership, under the name Opry Xxxxx
Limited Partnership, as a limited partnership pursuant to the provisions of the
Act and this Agreement.
2.2 FILINGS.
The Managing General Partner shall do all other acts and things
requisite to perfect and maintain the Partnership as a limited partnership under
the Act and under the laws of all other jurisdictions in which the Partnership
may elect to do business, including filing the Certificate (or an amendment
thereto) with the Secretary of State of the State of Delaware and qualifying the
Partnership as a foreign limited partnership in any jurisdiction in which such
filing may be required, as determined by the Managing General Partner.
2.3 ASSUMED NAMES.
The business of the Partnership shall be conducted under its name
designated above or under such variations of this name as the General Partners
deem appropriate to comply with the laws of any state in which the Partnership
does business, or under any assumed or fictitious name the General Partners deem
appropriate for that purpose. The Managing General Partner shall execute and
file in the proper offices such certificates as may be required by any assumed
or fictitious name act or similar law in effect in the states, counties and
other governmental jurisdictions in which the Partnership may elect to conduct
its business. The Managing General Partner shall be required promptly to send
Notice to each Partner of any assumed or fictitious name which the Partnership
elects to use.
ARTICLE III - PRINCIPAL OFFICE; ADDITIONAL OFFICES; RESIDENT AGENT
3.1 PRINCIPAL OFFICE; PLACE OF BUSINESS.
The principal office of the Partnership (at which all Partnership
records required by the Act shall be kept) shall be located at 0000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000. All correspondence shall be
sent to the Managing General Partner at such office. The Managing General
Partner, in its sole discretion, is authorized to change or relocate the
principal office of the Partnership provided the Managing General Partner gives
to all Partners prompt Notice of such change or relocation. The Partnership
shall have such other or additional offices as the Managing General Partner, in
its sole discretion, shall deem advisable.
3.2 RESIDENT AGENT.
The name and address of the Partnership's resident agent in the State
of Delaware is The Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000. The Managing General Partner shall have the right to change the
resident agent of the Partnership at any time in compliance with the Act and the
laws of all other jurisdictions in which the Partnership may elect to conduct
business.
12
13
ARTICLE IV - BUSINESS OF PARTNERSHIP
4.1 BUSINESS AND PURPOSE OF PARTNERSHIP.
The business and purposes of the Partnership shall consist of (i)
acquiring a leasehold estate in the Land; (ii) owning, developing, constructing
and operating the Project on the Land as an investment and for income producing
purposes and developing, mortgaging, managing, operating, leasing, refinancing
and, if necessary or appropriate, selling the Partnership's interest in the Land
and/or the Project or any part thereof; (iii) investing excess funds of the
Partnership as the Managing General Partner deems appropriate and prudent; and
(iv) carrying on any and all activities related thereto (all of which
enterprises and activities may be carried on either by the Partnership in its
own name or a trading name or by or through such agents, employees and/or
independent contractors and in such name(s) as the Managing General Partner may
determine to be in the best interests of the Partnership).
ARTICLE V - PARTNERS AND PERCENTAGES OF PARTNERSHIP INTEREST
5.1 PARTNERS; PERCENTAGE INTERESTS.
The name, address and percentage of Partnership Interest of each
Partner is shown on the attached Exhibit A (subject to adjustment in accordance
with Section 6.3(a) hereof). To the extent substitute Partners are admitted to
the Partnership, or percentages of Partnership Interest change, all in
accordance with the terms hereof, this Agreement and Exhibit A hereto shall be
deemed to be automatically amended to reflect the admission or substitution of
such Partners whether or not the actual physical change has been made. Unless
the context clearly indicates otherwise, (i) the terms "Partner" and "Partners"
shall include the General Partners and the Limited Partners, and (ii) the terms
"Partnership Interest" and "Partnership Interests" shall include both the
General Partner Partnership Interests and Limited Partner Partnership Interests.
5.2 EQUITY PARTNER.
5.2(a) In addition to the rights of Xxxxx and TMLP to transfer
portions of their Partnership Interests pursuant to Article XI hereof, Xxxxx and
TMLP also shall have the right to transfer all or portions of their respective
Partnership Interests, up to a maximum of fifty percent (50%) of their combined
Partnership Interests (i.e., up to a maximum 33.33% Partnership Interest) to one
or more equity partners (an "Initial Equity Partner"). Any such Initial Equity
Partner shall have the option to acquire its Partnership Interest as a General
Partner, a Limited Partner, or both. OAI shall have the right to Consent, in
advance, to the Initial Equity Partner selected by Xxxxx; upon the granting of
such Consent, Xxxxx shall have the right to conclude such a transaction with the
approved Initial Equity Partner under such terms and conditions as may be
consistent with this Agreement.
5.2(b) In the event additional Equity Partners are deemed
necessary for the development of the Project, or in the event such Equity
Partners require, as a condition to contributing equity in excess of the amount
contemplated by the Project Development Budget, that such Equity Partner acquire
a Partnership Interest in excess of 33.33% (in either case, an "Additional
Equity Partner"), then the Partnership Interests held by Xxxxx, TMLP and OAI
shall be diluted proportionately in order to provide such additional interest to
the Additional Equity Partner. The decision to provide such additional
Partnership Interest
13
14
to an Additional Equity Partner shall be deemed a Major Decision that shall
require the Consent of the General Partners.
5.3(c) Upon the admission of such an Initial Equity Partner or
an Additional Equity Partner to the Partnership, the Partners shall execute
appropriate amendments to this Agreement and to the Certificate to evidence such
admission of the Equity Partner and to incorporate such modifications to this
Agreement as may be reasonably requested by the Equity Partner.
ARTICLE VI - CAPITALIZATION AND LOANS
6.1 PARTNERSHIP INTERESTS AND CAPITAL CONTRIBUTIONS.
6.1(a) XXXXX' PERCENTAGE INTERESTS. On the date of this
Agreement, Xxxxx shall own a one percent (1%) Partnership Interest (subject to
adjustment pursuant to Section 6.3(a) hereof), as a General Partner.
6.1(b) OAI'S PERCENTAGE INTERESTS. On the date of this
Agreement, OAI shall own, in the aggregate, a thirty-three and 33/100ths percent
(33.33%) Partnership Interest (subject to adjustment pursuant to Section 6.3(a)
hereof) of which 1.00% will be held as a General Partner and 32.33% will be held
as a Limited Partner.
6.1(c) TMLP'S PERCENTAGE INTERESTS. On the date of this
Agreement, TMLP shall own a sixty-five and 67/100ths percent (65.67%)
Partnership Interest (subject to adjustment pursuant to Section 6.3(a) hereof)
as a Limited Partner.
6.1(d) CAPITAL CONTRIBUTIONS.
6.1(d)(1) Xxxxx and TMLP shall be obligated to
contribute, in proportion to their respective Partnership Interests,
the amount of "Project Equity" set forth in the approved Project
Development Budget. In no event shall OAI have any obligation with
respect to such Project Equity. Contributions of such Project Equity
shall be made from time to time and as reasonably determined by the
Managing General Partner, and may be used by the Partnership to pay all
costs of the work to be undertaken and/or completed in connection with
the development of the Project. The Partners currently anticipate that
approximately $50,000,000 in Project Equity will be contemplated by the
Project Development Budget.
6.1(d)(2) No Partner shall have any obligation to
contribute Capital Contributions in excess of the amounts set forth in
Section 6.1(d)(1) except with the prior written Consent of such
Partner. If any General Partner determines that additional Capital
Contributions are necessary to enable the Partnership to conduct its
business, such General Partner shall give notice to the other General
Partner in the manner provided in Section 14.12, which notice shall
specify in reasonable detail the amount and purpose of any such
additional Capital Contributions. The Partners shall meet and confer
promptly upon the issuance of such notice in an effort to reach
decisions concerning the future conduct of the Partnership's business,
the sources of capital required to conduct such business, and the
method for funding such additional capital requirements (whether by
financing, capital contributions or other means).
6.1(d)(3) [INTENTIONALLY DELETED.]
14
15
6.1(d)(4) If all Partners agree to contribute capital
under this Agreement or by any subsequent agreement of the Partners,
the Partners shall make such Capital Contributions in proportion to
their respective Percentage Interests and in such amounts which are
sufficient to provide such funds. Each Partner shall receive credit to
its Unreturned Capital Contributions Account and earn a Priority Return
with respect to such additional Capital Contribution, but shall not
receive an additional Partnership Interest as a result of such Capital
Contribution.
6.1(d)(5) The Partners agree that the combined fair
market value of the interests in the Land (i.e., a leasehold estate as
to Tract I and fee simple title as to Tract II) to be contributed by
OAI to the Partnership is equal to $25,000,000. Upon the execution and
delivery of the Ground Lease and the contribution of the Land Parcels
to the Partnership, OAI shall receive a credit to its capital account
equal to $25,000,000.
6.2 ADDITIONAL FINANCING; LOANS; ADDITIONAL CONTRIBUTIONS. It is
acknowledged that following Completion of the Project, additional funds may be
required in connection with the development and construction of the Project, and
possibly in connection with the operation of the Project, including the funding
of operating deficits, or in respect of any other obligations, liabilities,
expenses or expenditures related to the Partnership's business. Subject to the
prior approval of the General Partners, the Managing General Partner may obtain
such additional funds as follows:
6.2(a) COMMERCIAL LENDING. The Managing General Partner, with
the approval of the General Partners, acting for and on behalf of the
Partnership and in the name of the Partnership, may (but shall not be required
to), obtain financing, on a recourse or nonrecourse basis from commercial banks,
savings and loan associations and other lending institutions, or other Persons,
including without limitation, public or private securitized financing. The
interest on such financing shall be at then-prevailing market rates and such
interest may be payable on a current or deferred basis. Such financing may
consist of participating loans whereby the lender(s) would have certain rights
to receipts or cash flow of the Partnership and/or to proceeds of sales and
refinancings of the Partnership Property.
6.2(b) PARTNER LOANS. Upon the Consent of the General
Partners, any Partner may (but shall not be required to) loan to the Partnership
funds in the amount of the required additional funds, which loans (the "Partner
Loans") shall bear interest at a rate equal to the cost to such Partner of
borrowing such funds (which rate shall be competitive and reasonable) if such
Partner borrows money to make such Partner Loans, or at a reasonable and
competitive rate of interest if such Partner does not borrow money to make such
Partner Loans. Such Partner Loans shall be repaid to the Partner(s) making such
Partner Loans, with interest as aforesaid, prior to any distribution of Net
Ordinary Cash Flow to any Partner and prior to the return of any Unreturned
Capital Contributions Account to any Partner, but shall not be secured by any
Partnership Property.
6.3 DEFAULT CAPITAL CONTRIBUTIONS.
6.3(a) If a Partner is obligated to make any Capital
Contributions under the terms and conditions of this Agreement and such Partner
fails to make such contributions for a period of thirty (30) days following
Notice of such default (such defaulting Partner being referred to herein as the
"Defaulting Partner"), then the remaining Partners ("Non-Defaulting Partners")
shall be entitled to fund all or any portion of such Capital Contribution
required of the Defaulting Partner. If the Non-Defaulting Partners make such
Capital Contributions ("Default Capital Contributions"), the Partnership
Interest of each Partner shall thereupon be recalculated as follows: (1) the
Partnership Interest of the Defaulting Partner shall be reduced by a percentage
amount (the "Dilution Percentage") calculated by
15
16
dividing (a) the amount of the Default Capital Contributions made by the
Non-Defaulting Partners by (b) the aggregate amount of all Capital Contributions
that such Defaulting Partner made or was required to have made as of the date of
such default, less all Partnership distributions made to such Partner pursuant
to Section 7.9(a)(iv) hereof; and (2) the Partnership Interests of the
Non-Defaulting Partners shall be increased by the same Dilution Percentage
(allocable between the Non-Defaulting Partners in proportion to the amounts of
their respective Default Capital Contributions). The adjusted Partnership
Interests shall be expressed as a decimal rounded to the fourth digit.
6.3(b) In the event of a transfer of a portion of the
Partnership Interest of any Partner, all of the calculations necessary at any
time or from time to time under this Section 6.3 shall be made without regard to
any such partial transfer. Any dilution pursuant to this Section 6.3 shall be
made effective against the aggregate Partnership Interest of the transferor and,
if necessary, any transferee.
6.3(c) If due to the operation of this Section 6.3 a
Defaulting Partner's Partnership Interest is diluted, the Non-Defaulting
Partners shall have the right and option for a period of 60 days after such
dilution occurs to purchase the Defaulting Partner's interest in the Partnership
at a price equal to the total amount of cash Capital Contributions which had
been contributed to the Partnership by the Defaulting Partner at the time of
such default, less the amount of any distributions of Net Ordinary Cash Flow or
proceeds from a Major Capital Event previously made to the Defaulting Partner.
6.3(d) In order to elect to purchase the interest in the
Partnership of a Defaulting Partner pursuant to Section 6.3(c), the
Non-Defaulting Partner desiring to purchase such Partnership Interest shall send
written notice of election to the Defaulting Partner prior to expiration of such
60-day period. In the event a Non-Defaulting Partner elects to purchase a
Defaulting Partner's interest, such election pursuant to this Section 6.3(d)
shall create a binding contract for the purchase and sale of the Defaulting
Partner's interest in the Partnership. The closing of such purchase and sale
shall take place at the office where the principal place of business of the
Partnership is located on the date specified by the Non-Defaulting Partner in
its election notice which date shall not be less than 20 days nor more than 60
days following the date of such notice, unless the Partners agree to a different
mutually acceptable date. The form and substance of the closing documents shall
be reasonably satisfactory to the Non-Defaulting Partner and shall consist of an
assignment and xxxx of sale (both with covenants against grantor's acts) from
the Non-Defaulting Partner to the Defaulting Partner (or its nominee or
designee), together with such other instruments and documents as may be
reasonably necessary or desirable to effectuate the sale. The purchase price
shall be payable by federal wire transfer of immediately available funds to an
account designated by the Non-Defaulting Partner, against delivery of all the
closing documents. At either Partner's request, the Partnership's Bank or the
title Company which issued the owner's title policy to the Partnership may be
appointed as escrow agent to receive all closing documents and the purchase
price in escrow in order to make simultaneous delivery of closing documents and
disbursement of funds at the closing or the next business day thereafter. The
instruments and documents shall be legally sufficient to convey all of the
Defaulting Partner's interest in the Partnership (and the Project) to the
Non-Defaulting Partner (or its nominee of designee), free and clear of all deeds
of trust, security interests, liens, charges and encumbrances. The provisions of
this Section 6.3(c) and (d) shall be enforceable by a decree of specific
performance and neither Partner shall assert in defense thereto that there
exists an adequate remedy at law.
6.3(e) Notwithstanding any other provision of this Agreement
to the contrary, a Defaulting Partner shall thereafter have no further approval
rights, right to make decisions or role in management of the Partnership until
such funding or contribution default has been cured and the Non-Defaulting
Partners shall be reasonably satisfied that no further defaults are likely to
occur. Without limitation of the foregoing, in such event (i) if
16
17
the Defaulting Partner is the Managing General Partner, the Non-Defaulting
Partners shall have the right to remove the Defaulting Partner as the Managing
General Partners and to select a new Managing General Partner in accordance with
Section 11.5 hereof and to terminate the Management Agreement and any other
agreements between the Partnership and any Affiliate of the Defaulting Partner),
(ii) the Non-Defaulting Partners shall have the right to apply any fees payable
to the Defaulting Partner or its Affiliate in accordance with this Agreement to
any amounts owed by the Defaulting Partner, (iii) no Defaulting Partner shall
have the right to initiate the buy-sell procedure pursuant to Section 11.3
hereof and (iv) the Non-Defaulting Partners shall have the right to make all
decisions of the Partnership and the Partners.
6.4 LIABILITY OF LIMITED PARTNERS.
Except as otherwise provided for herein, no Limited Partner (in its
capacity as a Limited Partner) shall be required under any circumstance to
contribute to the capital of the Partnership any amount beyond that sum required
of the Limited Partner pursuant to this Article VI, nor shall any Limited
Partner be obligated to lend any funds to the Partnership.
6.5 NO INTEREST ON CAPITAL CONTRIBUTION.
Except as otherwise provided for herein, no interest shall accrue or be
payable to any Partner by reason of its Capital Contribution or its Capital
Account.
6.6 WITHDRAWAL OF CAPITAL CONTRIBUTIONS.
A Partner shall not be entitled to withdraw any part of its Capital
Account or to receive any distributions (property or cash) except as
specifically provided in this Agreement, and in no event will any Partner have
the right to receive property other than cash in return for any contributions to
the capital of the Partnership. The General Partners shall not have any personal
liability whatsoever with respect to the return to any Partner of its Capital
Account.
6.7 MAINTENANCE OF CAPITAL ACCOUNTS.
The Capital Accounts of the Partners shall be maintained in a manner
consistent with applicable Regulations and shall be adjusted as follows:
6.7(a) There shall be credited to each Partner's Capital
Account (i) the amount of any cash (which shall not include imputed or actual
interest on any deferred contributions) actually contributed by such Partner to
the capital of the Partnership, (ii) the fair market value of any property
contributed by such Partner to the capital of the Partnership (net of any
liabilities secured by such property that the Partnership is considered to
assume or take subject to under Code Section 752), and (iii) such Partner's
share of the Net Profits of the Partnership and of any items in the nature of
income or gain separately allocated to the Partners; and there shall be charged
against each Partner's Capital Account (x) the amount of all cash distributions
to such Partner by the Partnership, (y) the fair market value of any property
distributed to such Partner by the Partnership (net of any liability secured by
such property that the Partner is considered to assume or take subject to under
Code Section 752), and (z) such Partner's share of the Net Losses of the
Partnership and of any items in the nature of losses or deductions separately
allocated to the Partners.
6.7(b) If the Partnership at any time distributes any of its
assets in kind to any Partner, the Capital Account of each Partner shall be
adjusted to account for such Partner's allocable share of the Net Profits or Net
Losses that would have been realized by
17
18
the Partnership had it sold the assets that were distributed at their respective
fair market values immediately prior to the distribution.
6.7(c) In the event that the Partnership makes an election
under Code Section 754, the amounts of any adjustments to the bases (or Carrying
Values) of the assets of the Partnership made pursuant to Code Section 743 shall
not be reflected in the Capital Accounts of the Partners, but the amounts of any
adjustments to the bases (or Carrying Values) of the assets of the Partnership
made pursuant to Code Section 734 as a result of the distribution of property by
the Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner prescribed in the
Regulations.
6.7(d) The Partners shall elect, upon the occurrence of any of
the following events, that the Capital Account balance of each Partner shall be
adjusted to reflect the Partner's allocable share of the Net Profits or Net
Losses that would be realized by the Partnership if it sold all of its property
at its fair market value on the day of the adjustment:
(i) any increase in any new or existing Partner's Partnership
Interest resulting from a more than de minimis contribution of cash or
property by such Partner to the Partnership; and
(ii) any reduction in a Partner's Partnership Interest
resulting from a more than de minimis distribution to such Partner in
redemption of all or a portion of such Partner's Partnership Interest.
6.7(e) In the event any Partnership Interest is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
Partnership Interest.
6.7(f) In the event the Regulations fail to provide guidance
for the maintenance of the Capital Accounts of Partners in particular instances,
then the Capital Accounts shall be adjusted by the Partners, with the review and
concurrence of the Partnership's tax advisors, in a manner that (i) maintains
equality between the aggregate Capital Accounts of the Partners and the amount
of Partnership capital reflected on the Partnership's financial books and
records, (ii) is consistent with the underlying economic arrangement among the
Partners and (iii) is based, whenever practicable, upon federal tax accounting
principles.
6.8 NO THIRD PARTY BENEFIT.
No provision set forth in this Article VI shall be construed to be for
the benefit of any third party, including without limitation, any creditor of
the Partnership, and no such third party or creditor shall be entitled to
enforce any such provision.
ARTICLE VII - ALLOCATIONS AND DISTRIBUTIONS
7.1 GENERAL ALLOCATION OF NET PROFITS AND NET LOSSES.
Except as provided in Section 7.2 hereof, all Net Profits, Net Losses
and items of income, gain, loss, deduction and credit of the Partnership for any
taxable year shall be allocated among the Partners and credited or charged to
their respective Capital Accounts in accordance with the following provisions:
18
19
7.1(a) Net Profits shall be allocated as follows:
(i) First, Net Profits (in an amount not to exceed
the distributions of Net Ordinary Cash Flow and net proceeds from a
Major Capital Event made pursuant to Sections 7.8 and 7.9,
respectively, for such taxable year) shall be allocated among the
Partners pro rata in proportion to their respective allocations of Net
Ordinary Cash Flow or Net Proceeds from a Major Capital Event.
(ii) Second, Net Profits for such taxable year in
excess of those allocated pursuant to Section 7.1(a)(i) shall be
allocated among the Partners who have Negative Capital Accounts
(determined after current year contributions, distributions and any
allocation of Net Profits pursuant to Section 7.1(a)(i) for such year),
to the extent thereof, pro rata in proportion to their respective
Negative Capital Accounts.
(iii) Third, any remaining Net Profits shall be
allocated among the Partners who have an Unallocated Preferred Return,
to the extent thereof, pro rata in proportion to their respective
Unallocated Preferred Return balances.
(iv) Fourth, any remaining Net Profits shall be
allocated among the Partners whose Unreturned Capital Contribution
Account exceeds their respective Positive Capital Accounts, to the
extent of such aggregate differences, pro rata in proportion to the
amount of such excess.
(v) Fifth, any remaining Net Profits shall be
allocated among the Partners pro rata in proportion to their respective
Partnership Interests.
7.1(b) Net Losses shall be allocated as follows:
(i) First, Net Losses shall be allocated to any
Partner receiving aggregate allocations of Net Profit in excess of
aggregate distributions received by such Partner for any taxable year,
pro rata among the Partners receiving such excess allocations of Net
Profit, in proportion to the excess allocations of Net Profit received.
For purposes of this Section 7.1(b)(i), Net Profits, Net Losses and
aggregate distributions shall all be calculated on a cumulative basis
from the date of this Agreement through the date of calculation.
(ii) Second, among the Partners who have Positive
Capital Accounts in proportion to the balances of their respective
Positive Capital Accounts (determined after current year contributions,
distributions and any allocations of Net Losses pursuant to Section
7.1(b)(i) for such year), until such Capital Accounts have a zero
balance; and
(iii) Third, the balance of any such Net Losses shall
be allocated among the Partners in proportion to their respective
Partnership Interests.
7.2 OVERRIDING ALLOCATIONS OF NET PROFITS AND NET LOSSES.
The following allocations of Net Profits and Net Losses and items
thereof shall be made before applying Section 7.1 hereof:
7.2(a) If in any year there is a net decrease in the amount of
the Minimum Gain computed solely with respect to Nonrecourse Debt other than
Partner Nonrecourse Debt, then each Partner shall be allocated items of income
and gain (consisting first of gains recognized from the disposition of
Partnership Property subject to one or more Nonrecourse Debts other than Partner
Nonrecourse Debts and then, if necessary, a pro rata portion of the
19
20
Partnership's other items of income and gain for that year) for that year (and,
if necessary, subsequent years) in an amount equal to that Partner's share of
the net decrease in Partnership Minimum Gain within the meaning of Regulation
Section 1.704-2(g)(2). It is the intent of the parties that any allocations
pursuant to this Section 7.2(a) shall constitute a "Minimum Gain Chargeback"
under Regulation Section 1.704-2(f) and shall be interpreted consistently
thereunder.
7.2(b) If in any year there is a net decrease in the amount of
the Partner Minimum Gain computed solely with respect to Partner Nonrecourse
Debt, then each Partner shall be allocated items of income and gain (consisting
first of gain from the disposition of Partnership Property subject to Partner
Nonrecourse Debt and then, if necessary, a pro rata portion of the Partnership's
other items of income and gain for that year) for that year (and, if necessary,
subsequent years) in an amount and in a manner consistent with the provisions of
Regulation Section 1.704-2(i)(4). It is the intent of the parties that any
allocations pursuant to this Section 7.2(b) shall constitute "Chargeback of
Partner Nonrecourse Debt Minimum Gain" under Regulation Section 1.704-2(i)(4)
and shall be interpreted consistently thereunder.
7.2(c) If, during any year, a Partner unexpectedly receives
any adjustment, allocation or distribution described in Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), and as a result of such adjustment,
allocation or distribution, such Partner's Capital Account has an Excess
Negative Balance, then items of gross income (computed with the adjustments set
forth in clauses (i), (ii) and (iii) of the definition of Net Profits and Net
Losses) for such year (and, if necessary, subsequent years) shall first be
allocated to such Partner in an amount equal to such Partner's Excess Negative
Balance. It is the intent of the parties that any allocations pursuant to this
Section 7.2(c) shall constitute a "qualified income offset" provision under
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
thereunder.
7.2(d) In no event shall Net Losses of the Partnership be
allocated to a Partner if such allocation would cause or increase an Excess
Negative Balance in such Partner's Capital Account. Any such Net Losses shall be
allocated to the Partners who bear the economic risk of such Net Losses.
7.2(e) In the event that Net Profits, Net Losses or items
thereof are allocated to one or more Partners pursuant to Sections 7.2(c) and
7.2(d) above, subsequent Net Profits and Net Losses shall first be allocated
(subject to the provisions of Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) hereof)
to the Partners in a manner designed to result in each Partner having a Capital
Account balance equal to what it would have been had the original allocation of
Net Profits, Net Losses or items thereof pursuant to Sections 7.2(c) and 7.2(d)
hereof not occurred.
7.2(f) Except as otherwise provided herein, for tax purposes,
all items of income, gain, loss, deduction or credit shall be allocated to the
Partners in the same manner as are Net Profits and Net Losses; provided,
however, that if the Carrying Value of any property of the Partnership differs
from its adjusted basis for tax purposes, then items of income, gain, loss,
deduction or credit related to such property for tax purposes shall be allocated
among the Partners so as to take account of the variation between the adjusted
basis of the property for tax purposes and its Carrying Value in the manner
provided for under Code Section 704(c).
7.2(g) Solely for purposes of determining a Partner's
proportionate share of the "excess nonrecourse liabilities" of the Partnership
within the meaning of regulation Section 1.752-3(a)(3), the Partners' interests
in the Partnership profits shall be in proportion to their respective
Partnership Interests, unless otherwise agreed by the Partners.
20
21
7.3 SECTION 754 AND OTHER ELECTIONS.
In the event of a transfer of all or part of a Partnership Interest
pursuant to this Agreement, the Partnership shall elect at the request of any
existing Partner or any person being admitted as a Partner, or the executor,
administrator or other legal representative of a deceased Partner, to adjust the
basis of the Partnership's assets pursuant to Code Section 754 or the
corresponding provision of subsequent law. In the case of a new Partner, the
election shall be filed by the Partnership as constituted prior to such
admission. The Managing General Partner reserves the right to cause the
Partnership to file such further election(s) if it determines in its reasonable
discretion that there are good and substantial reasons to do so.
7.4 PARTIAL TAXABLE YEAR.
In the event of the transfer of all or any part of a Partnership
Interest in accordance with the provisions of this Agreement at any time other
than the end of a Partnership fiscal year, the distributive share of the various
Partnership items in respect of the Partnership Interest so transferred shall
(unless otherwise determined in writing by the transferor and transferee) be
allocated between the transferor and transferee (i) in the same ratio as the
number of days in such Partnership fiscal year before and after such transfer or
adjustment, except that the provisions of this sentence shall not be applicable
to a gain or loss on the sale or other disposition of all or substantially all
of the Partnership Property or to other extraordinary nonrecurring items, or
(ii) as otherwise required under the Code.
7.5 INTENT.
The provisions of this Article VII governing the allocation of income
and losses shall be construed and implemented in a manner which is consistent
with Code Sections 704(b)(2) and 704(c) and the Regulations promulgated
thereunder.
7.6 USE OF PROCEEDS.
From and after the date of this Agreement until the Grand Opening, all
Proceeds shall be used by the Partnership to (i) pay development and operating
costs of the Project, including without limitation, the Construction Period
Preference, (ii) pay the costs set forth in the Project Development Budget, and
(iii) reduce the principal amount of, or reduce the need to draw upon, the
Construction Loan.
7.7 CONSTRUCTION PERIOD PREFERENCE DISTRIBUTION.
7.7(a) To the extent permitted by the documents evidencing the
Construction Loan, the Construction Period Preference shall be paid to Xxxxx and
TMLP out of the proceeds of the Construction Loan within three (3) Business Days
following the end of each calendar quarter from and after the date of this
Agreement until the Project Completion Date. To the extent such a distribution
to Xxxxx and TMLP is not permitted under the terms of the Construction Loan,
then the Construction Period Preference payable to Xxxxx and TMLP shall be
deemed to have been contributed by Xxxxx and TMLP as part of their Capital
Contribution pursuant to Section 6.1(d)(1) and the Unreturned Capital
Contributions Accounts of Xxxxx and TMLP shall be increased by such amount.
7.7(b) To the extent the Construction Period Preference is not
timely accrued or distributed pursuant to Sections 7.7(a) hereof, the unpaid
portion thereof shall bear interest cumulatively at the rate of nine percent
(9%) per annum.
21
22
7.8 DISTRIBUTION OF NET ORDINARY CASH FLOW.
7.8(a) Net Ordinary Cash Flow shall be allocated and
distributed among the Partners as follows:
(i) First, to Xxxxx and TMLP, the amount of all
unpaid balances of the Construction Period Preference, together with
any interest accruing thereon pursuant to Section 7.7(b), in proportion
to such balances;
(ii) Second, to Xxxxx and TMLP, the amount of all
cumulated unpaid balances of the Priority Return for prior fiscal
periods, in proportion to such balances;
(iii) Third, to the Partners, the amount of the
Priority Return for the current fiscal period in proportion to the
relative amounts thereof;
(iv) Fourth, to OAI, the amount of all cumulated
unpaid balances of the OAI Land Contribution Return;
(v) Fifth, to OAI, the amount of any OAI Land
Contribution Return for the current fiscal period;
(vi) Sixth, to Xxxxx and TMLP, the amount of any
Special Distribution that shall have accrued for such fiscal year; and
(vii) Seventh, to the Partners, in proportion to the
Partners' respective Partnership Interests.
An example showing the implementation of this Section 7.8(a) is set forth in
Exhibit C.
7.8(b) Amounts distributed pursuant to Sections 7.8(a)(i)
through 7.8(a)(v) hereof, inclusive, shall be paid on a quarterly basis, within
fifteen (15) days of the end of each calendar quarter, if Net Ordinary Cash Flow
is available and the balance, if any, shall be paid within ninety (90) days
subsequent to the end of each calendar year. The final allocation and
distribution of Net Ordinary Cash Flow for each calendar year shall be made
based upon the audited financial statements of the Partnership provided for in
Section 10.3 hereof for such year.
7.9 DISTRIBUTIONS UPON MAJOR CAPITAL EVENT.
7.9(a) Net proceeds derived from or in connection with a Major
Capital Event shall be allocated and distributed among the Partners, on a
cumulative basis, as follows:
(i) First, to Xxxxx and TMLP, in proportion to such
balances, the amount of all cumulated unpaid balances of the
Construction Period Preference, together with interest thereon
to the extent applicable;
(ii) Second, to Xxxxx and TMLP, in proportion to
such balances, the amount of all cumulated unpaid balances of
the Priority Return;
(iii) Third, to OAI, the amount of all cumulated
unpaid balances of the OAI Land Contribution Return;
(iv) Fourth, to the Partners, in proportion to the
relative amounts thereof, the balances remaining in the
Unreturned Capital Contributions
22
23
Account of each Partner, until such balances shall have been
reduced to zero; and
(v) Fifth, to the Partners, in proportion to the
Partners' respective Partnership Interests.
7.9(b) [Intentionally Omitted.]
ARTICLE VIII - LEGAL TITLE TO PARTNERSHIP PROPERTY
8.1 LEGAL TITLE.
Legal title to the Partnership's interest in the Project, the Land and
other Partnership Property shall be taken and at all times held in the name of
the Partnership, except as otherwise approved by the General Partners.
8.2 MATTERS AFFECTING LEGAL TITLE.
Except as otherwise provided for herein and subject to the provisions
of Section 9.1 hereof, the Managing General Partner, shall have the right, power
and authority, acting for and on behalf on the Partnership, to enter into and
execute any lease, contract, agreement, deed, covenants, proffers, applications
for zoning, grading, building, occupancy and other permits and licenses,
mortgage or other instrument or document required or otherwise appropriate to
develop, construct, lease, sell, mortgage, convey or refinance the Partnership
Property (or any part thereof), to borrow money and execute promissory notes, to
secure the same by mortgage or deed of trust, to renew or extend any and all
such loans or notes, and to convey the Partnership Property by deed, lease,
sublease, mortgage or otherwise. In no event shall any Person dealing with the
Managing General Partner be obligated to see to the application of any purchase
money, rent or money borrowed by the Partnership, or be obligated to see that
the terms of this Agreement have been complied with, or be obligated to inquire
into the necessity or expediency of any act or action of the Managing General
Partner. Every contract, agreement, deed, mortgage, lease, promissory note or
other instrument or document executed by the Managing General Partner with
respect to any of the Partnership Property shall be conclusive evidence in favor
of any and every Person relying thereon or claiming thereunder that (a) at the
time or times of the execution and/or delivery thereof, the Partnership was in
full force and effect, (b) such instrument or document was duly executed and
authorized and is binding upon the Partnership and all of the Partners thereof,
and (c) the Managing General Partner was duly authorized and empowered to
execute and deliver any and every such instrument or document for and on behalf
of the Partnership. In no event, however, shall the terms of this Section 8.2
shall be deemed to supersede other provisions of this Agreement limiting the
authority of the Managing General Partner.
8.3 MANNER OF HOLDING LEGAL TITLE.
It is expressly understood and agreed that the manner of holding title
to the Partnership Property (or any part thereof) and any other assets of the
Partnership is solely for the convenience of the Partnership. Accordingly, the
spouse, heirs, executors or administrators, beneficiaries, distributees,
successors or assigns of any Partner shall have no right, title or interest in
or to any of the Partnership Property, and any Partnership assets shall be
subject to the terms of this Agreement.
23
24
8.4 USE OF "XXXXX" AND "OPRY" NAMES.
8.4(a) The Partners acknowledge that TMLP and/or its
Affiliates hold the following trademarks and/or service marks (collectively, the
"Xxxxx Marks"): Trademark registration No. 1,940,408 for the xxxx THE XXXXX for
retail outlet malls featuring general consumer goods and services, registered in
the United States Patent and Trademark Office ("USPTO") on December 12, 1995;
and Trademark registration No. 1,868,590 for the xxxx THE XXXXX for shopping
center services and the leasing of shopping mall space, registered in the USPTO
on December 20, 1994. TMLP hereby grants to the Partnership the non-exclusive
license to use the Xxxxx Marks as part of the name of the Partnership and the
trade name "Opry Xxxxx" for so long as TMLP or its Affiliates remain a Partner,
subject to the following conditions:
(i) The Partnership shall not use the Xxxxx Marks
without the prior approval of TMLP unless the Partnership's use of the
Xxxxx Marks is in strict compliance with TMLP's guidelines regarding
the use of the Xxxxx Marks, as such guidelines may be issued from time
to time;
(ii) The Partnership shall not use the Xxxxx Marks
in any manner that reflects negatively on the Xxxxx Marks or TMLP or
its Affiliates;
(iii) The Partnership shall furnish to TMLP from
time, upon request by TMLP, samples of the use of the Xxxxx Marks;
(iv) Upon the giving of Notice by TMLP that the
Partnership's use of the Xxxxx Marks is in violation of this Section,
the Partnership shall have thirty (30) days in with to correct such
failure. If the Partnership fails to correct such failure within such
thirty (30) day period, then TMLP may terminate the license granted by
this Section. Upon the termination of this license, the Partnership
promptly shall discontinue the use of the Xxxxx Marks.
8.4(b) The Partners acknowledge that OAI and/or its Affiliates
hold the following trademarks and/or service marks (collectively, the "Opry
Marks"): [LIST OPRY MARKS HELD BY OAI; PROVIDE FOR THE ASSIGNMENT BY OAI TO THE
PARTNERSHIP OF ALL "OPRY XXXXX MARKS" FOR WHICH OAI FILED AN APPLICATION IN
NOVEMBER, 1997.] OAI hereby grants to the Partnership the non-exclusive license
to use the Opry Marks as part of the name of the Partnership and the trade name
"Opry Xxxxx" for so long as OAI or its Affiliates remain a Partner, subject to
the following conditions:
(i) The Partnership shall not use the Opry Marks
without the prior approval of OAI unless the Partnership's use of the
Opry Marks is in strict compliance with OAI's guidelines regarding the
use of the Opry Marks, as such guidelines may be issued from time to
time;
(ii) The Partnership shall not use the Opry Marks in
any manner that reflects negatively on the Opry Marks or OAI or its
Affiliates;
(iii) The Partnership shall furnish to OAI from time,
upon request by OAI, samples of the use of the Opry Marks;
(iv) Upon the giving of Notice by OAI that the
Partnership's use of the Opry Marks is in violation of this Section,
the Partnership shall have thirty (30) days in with to correct such
failure. If the Partnership fails to correct such failure within such
thirty (30) day period, then OAI may terminate the license granted by
this Section. Upon the termination of this license, the Partnership
promptly shall discontinue the use of the Opry Marks.
24
25
8.4(c) The Partners agree that in the event either (i) TMLP or
its Affiliates are no longer a Partner of the Partnership, or (ii) OAI or its
Affiliates are not longer a Partner of the Partnership, or (iii) the Project (or
all or substantially all of the interests therein) are sold or transferred to a
third-party, then, subject to any necessary third-party consents (which the
Partners agree to use commercially reasonable efforts to obtain), either the
Partnership (in the case of clause (i) or (ii) of this subsection) or such
third-party transferee (in the case of clause (iii) of this subsection), shall
be required to cease further use of the Xxxxx Marks or the Opry Marks, as the
case may be, and the Xxxxx or Opry name in connection with the Project and the
Partnership. It is understood and agreed that "commercially reasonable efforts"
shall not require the expenditure of funds or the institution of legal action by
any of the Partners or their Affiliates. Until such time as any necessary
third-party consents are obtained, the owner of the Project may continue using
the applicable marks and name in connection with the Project and the Partnership
pending receipt of such third-party consents, provided, however, that the
Project owner shall covenant and agree to operate the Project substantially in
accordance with past practices in order to assure that the Marks are not used
for a shopping center that is of a materially lesser quality than that of the
Project immediately prior to the events described in clauses (c)(i) and/or
(c)(ii) of this Section.
ARTICLE IX - MANAGEMENT OF BUSINESS
9.1 DUTIES, RIGHTS AND POWERS OF THE MANAGING GENERAL PARTNER;
FEES AND COSTS; INDEMNIFICATION.
9.1(a) Except as otherwise expressly provided herein,
management decisions of the Partnership shall be made by the Managing General
Partner, which shall be responsible for the conduct of Partnership business
subject to the provisions of this Agreement and applicable law. The Managing
General Partner shall devote to the management of the Partnership business so
much of its time as it, in its sole discretion, deems reasonably necessary for
the efficient operation of the Partnership business.
9.1(b) Except as otherwise provided for herein, if any
activities of the Partnership require, in the reasonable judgment of the
Managing General Partner, that Affiliates be engaged to provide services or to
sell products to the Partnership, such services and products shall be provided
in accordance with the fees specified by Sections 9.3 through 9.10 hereof for
such services as identified thereby and, in all other cases, shall be in
accordance with Section 9.12 hereof.
9.1(c) [Intentionally Omitted.]
9.1(d)(i) In addition to Consents to Partnership action
required elsewhere in this Agreement, but subject to the provisions of Section
6.3(e) hereof, the Consent of both General Partners shall be required prior to
the implementation by the Managing General Manager of any of the following
decisions (each such decision, a "Major Decision"):
(1) Amending the Management Agreement or any other
agreement between the Partnership and TMLP or an Affiliate of TMLP;
provided, however, that if the proposed amendment is of a non-monetary
nature, the Consent of OAI and TMLP shall not be unreasonably withheld.
25
26
(2) Obtaining any financing or refinancing of the
Project, but only to the extent not specifically provided for in this
Agreement or in an annual operating budget approved by OAI and TMLP
pursuant to Section 9.2 hereof. It will be the objective of the
Partnership to procure a Permanent Loan for the Project as soon as
practicable, in an amount not to exceed the amount contemplated
therefor in the approved Project Development Budget. Notwithstanding
the foregoing, the Consent of OAI and TMLP shall not be required for a
Construction Loan or Permanent Loan provided that such loans are in
conformity with the parameters for such loans which have been approved
by OAI and TMLP in writing. Furthermore, the Consent of OAI shall not
be required in connection with any refinancing of Partnership
indebtedness that is undertaken by the Partnership in order to procure
the release of Xxxxx, TMLP or their respective Affiliates from recourse
liability for such loans or from liability under any Loan Guarantees
given with respect to such indebtedness so long as such loan complies
with the applicable loan parameters which have been approved by OAI and
TMLP in writing.
(3) Entering into any swap agreements, cap agreements
or other interest rate protection agreements (collectively referred to
as a "Derivative Agreement"), except that no Consent of OAI shall be
required under this Section 9.1(d)(i)(3) if (a) the applicable
Derivative Agreement complied with the terms of any loan parameters
that were Approved by the General Partners, or (b) the applicable
Derivative Agreements complied with the terms of an approved operating
budget.
(4) Selling or otherwise disposing of, or placing any
encumbrance or lien upon any part of the Project or any other
Partnership assets (exclusive of personal property of insubstantial
value), except to the extent provided in any annual operating budget
approved by OAI and TMLP pursuant to Section 9.2 hereof and except for
a Construction Loan or Permanent Loan which has been approved as
provided herein or is otherwise permitted under the terms of Section
9.1(d)(i)(3) hereof.
(5) Entering into any contract, agreement or other
relationship with any General Partner, or any Affiliate thereof, to
provide goods or services to the Partnership; provided, however, that
OAI and TMLP acknowledge and agree that Affiliates of OAI and TMLP will
provide certain leasing, financing, consulting, property management,
advertising, promotional and construction services to the Partnership
in accordance with and subject to the provisions of Sections 9.3
through 9.10 hereof and of the Management Agreement.
(6) Except to the extent provided for in the approved
Project Development Budget or any annual operating budget approved by
OAI and TMLP pursuant to Section 9.2 hereof, (a) entering into any
lease affecting the Project real estate of more than twenty thousand
(20,000) square feet, or (b) entering into any lease affecting the
Project real estate of less than twenty thousand (20,000) square feet
with leasing terms not in substantial and material conformity with the
leasing parameters set forth in the then-current annual operating
budget.
(7) Selling any Project real estate to a tenant (a)
not shown as being sold in the Project Development Budget, or (b) if
shown as being sold in the Project Development Budget, for a price less
than ninety-five percent (95%) of the price per square foot shown in
the Project Development Budget.
(8) Entering into any contract, agreement, joint
venture, partnership, arrangement or other relationship in which the
Partnership takes an ownership interest in, or makes a loan to, another
business.
26
27
(9) Except to the extent provided for in an annual
operating budget approved by OAI and TMLP pursuant to Section 9.2
hereof, creating reserves.
(10) Except to the extent provided for in an annual
operating budget approved pursuant to Section 9.2 hereof, amending any
agreement entered into by or on behalf of the Partnership described in
Sections 9.3 through 9.10 hereof, inclusive, or altering or increasing
(however insubstantially) any fee of any kind payable to TMLP or to an
Affiliate of TMLP in connection therewith.
(11) Initiating or settling any litigation outside
the ordinary course of business of the Partnership; provided, however,
the Managing General Partner may settle any litigation without the
Consent of OAI and TMLP if the amount to be paid by the Partnership
pursuant to such settlement, exclusive of any reimbursements or
recoveries from the proceeds of insurance or from other third parties,
does not exceed One Hundred Thousand Dollars ($100,000).
(12) Approving the initial Project Development Budget
for the Project, or increasing or decreasing the approved Project
Development Budget; provided, however, that the Consent of OAI and TMLP
shall not be unreasonably withheld. No Consent of OAI shall be required
for the reallocation of line items within the approved Project
Development Budget. At such time that OAI and TMLP approve the initial
Project Development Budget, the Partners agree to revise, to the extent
required, any collateral documents which were executed in connection
with this Agreement in a manner which is consistent with the underlying
economic arrangement among the Partners.
(13) Approving the Plans for the Project and any
material modifications thereto.
(14) Issuing any calls for Capital Contributions in
excess of the sums required to be contributed pursuant to Section
6.1(d)(1) of this Agreement.
(15) Incurring any operating expenditure on behalf of
the Partnership in excess of amounts set forth in an approved annual
operating budget, except as expressly permitted under the terms and
conditions of Section 9.2 hereof.
9.1(d)(ii) The Managing General Partner shall provide OAI and
TMLP with a Notice of any action the Managing General Partner desires to take
which constitutes a Major Decision. Such Notice shall provide OAI and TMLP with
sufficient documentation and information to enable OAI and TMLP to make an
informed decision with respect to such proposed action, and shall request OAI's
and TMLP's Consent to such action. OAI and TMLP shall exercise their respective
right to Consent or not to Consent to a Major Decision, in a Notice to the
Managing General Partner, within thirty (30) days following the respective dates
of their actual receipt of the Notice and the documents or agreements relevant
to said Consent. OAI and TMLP may, at any time during the applicable thirty
(30)- day period, request in writing additional relevant information from the
Managing General Partner in order to make a fully informed decision. If such
additional information is timely requested, the thirty (30)-day response period
shall not commence until all such reasonably requested information has been
received by the Partner requesting such information. Notwithstanding the
foregoing, there shall be no time limitation with respect to any Consent,
decision or approval respecting the sale of the entire Project or any
substantial amount thereof. If either OAI or TMLP take no action within the
applicable time period above set forth, then such Partner's Consent to the Major
Decision in question shall be deemed to have been given.
9.1(e) No Limited Partner (in its capacity as a Limited
Partner) shall have or exercise any rights in connection with the management of
the Partnership business.
27
28
9.2 BUDGETS.
9.2(a) The Managing General Partner shall prepare and
formulate proposed annual Operating Budgets for the Project for the period after
Grand Opening, setting forth estimated revenues and expenses, capital
expenditures, reserves, contingencies, sources and applications of funds, and
loans contemplated, if any (the "Proposed Budget"). Any Proposed Budget shall be
substantially in the form approved by the Partners pursuant to a separate
agreement of even date and shall be submitted to the General Partners for their
approval not less than sixty (60) calendar days prior to the first day of the
fiscal year covered by such Proposed Budget. If any General Partner has any
questions regarding, or objections to, items in the Proposed Budget, such
General Partner shall send Notice thereof to the other General Partner.
9.2(b) If the General Partners have not agreed upon the annual
operating budget for any year prior to the commencement of the fiscal year to be
covered by such budget, then, until (i) the first Operating Budget is approved
by the General Partners, the General Partners agree to operate the Project in
accordance with the Project Development Budget, and (ii) the annual Operating
Budget for any subsequent year is approved by the General Partners, the General
Partners agree to operate the Project in accordance with the most recently
approved annual Operating Budget, with the following modifications:
(i) Real estate taxes, insurance premiums and
similar items will be increased or decreased to reflect known changes
in the costs for such items;
(ii) Base rent and additional rent, if any, shall be
increased to reflect contractual increases in such rents, and shall be
further adjusted to reflect signed leases to the extent the space in
the Project has been occupied by tenants;
(iii) All other items of expense shall be escalated
by the year-to-year change in the Consumer Price Index; and
(iv) All extraordinary and non-recurring capital
expenditures which were part of the approved budget and actually
expended shall be deleted.
9.2(c) The Partners acknowledge and agree that increases in
expenditures for any line item in the annual Operating Budget which do not
exceed five percent (5%) of the original amount of such line item shall only
require the Consent of the Managing General Partner.
9.2(d) Notwithstanding the provisions of Section 9.2(b)
hereof, the Partners acknowledge and agree that (i) in the event the General
Partners approve any loan pursuant to Section 9.1(d)(i)(2) hereof, then Debt
Service, amounts to be paid under any Derivative Agreement (as defined in
Section 9.1(d)(i)(3) hereof) required pursuant to such loan, and other expenses
relating to such loan shall be deemed approved to the extent required to obtain,
or prevent a default under, such loan; and (ii) in the event the General
Partners approve any lease pursuant to Section 9.1(d)(i)(6) hereof, then any
expenditures for tenant improvements required in connection with such lease
shall be deemed approved to the extent required to obtain, or prevent a default
under, such lease.
9.2(e) Without the Consent of OAI and TMLP, the Managing
General Partner shall not make any expenditures from any reserve account, other
than those expressly permitted in an approved annual operating budget or as
otherwise permitted in this Agreement.
28
29
9.3 MANAGEMENT FEES.
The Partnership will pay to an Affiliate of TMLP management fees for
managing the Project in an amount equal to four percent (4%) of the "Gross
Rental Revenues" received by the Partnership during any applicable fiscal
period. "Gross Rental Revenues" shall mean all sums received by the Partnership
during any fiscal period in the nature of minimum rent, percentage rent and
miscellaneous income, but exclusive of expenses reimbursable by tenants, such as
real estate taxes, common area maintenance, etc. and exclusive of sponsorship
revenue. The terms and conditions governing the payment of such Management Fees
shall be set forth in the Management Agreement.
9.4 DEVELOPMENT MANAGEMENT FEE.
9.4(a) The Partnership shall pay to an Affiliate of TMLP, a
development fee for development services in amounts to be set forth in the
Project Development Budget, payable fifty percent (50%) on the date of the
Construction Loan Closing, and the balance in twenty-four (24) equal monthly
installments thereafter; provided, however, if any portion of such fee remains
unpaid at the time of the Grand Opening, such unpaid portion shall become due
and payable not later than thirty (30) days following such date. Except as
provided in Sections 9.8 and 9.12 herein, such fee shall cover, without
limitation by way of enumeration, all costs of administering the Project,
including, for example, salaries, overhead, travel, and all other out-of-pocket
costs. The terms and conditions applicable to such development fee shall be set
forth in a Development Agreement to be entered into between the Partnership and
the applicable Affiliate of TMLP, which Development Agreement shall be subject
to the prior Consent of OAI.
9.4(b) The Partnership shall pay to OAI or an Affiliate
designated by OAI a development fee in the amount of $10 million, which fee
shall be payable in quarterly installments of $1,250,000. Such quarterly
installments shall begin to accrue beginning with the first quarter of 1998 but
shall not be due and payable until thirty days following the end of the quarter
in which the Project Commencement Date occurs. Subsequent quarterly installments
shall be due and payable within 30 days following the end of each successive
quarter until such fee shall have been paid in full. The development fee to be
paid to OAI pursuant to this Section shall be included as a line item in the
Project Development Budget. The balance, if any, remaining unpaid as of the date
of the Grand Opening shall become due and payable not later than thirty (30)
days following such date.
9.4(c) The Partners contemplate that OAI may perform certain
additional services on behalf of the Partnership in connection with, among other
things, the negotiation of agreements with applicable governmental agencies with
respect to TIF arrangements. In such event, the Partnership shall pay to OAI
certain consulting fees in amount to be agreed upon by the Partners and to be
set forth in the Project Development Budget. The Partnership shall enter into a
separate Consulting Agreement to confirm the terms and conditions governing such
additional services and the additional fees to be paid for such additional
services.
29
30
9.5 LEASE-UP FEES.
To cover the costs of the initial leasing of space in the Project, the
Partnership shall pay to an Affiliate of TMLP a leasing fee in an amount to be
set forth in the Project Development Budget. In addition, the Partnership shall
pay to such Affiliate a leasing expense allowance in an amount to be set forth
in the Project Development Budget, the purpose of such allowance being to
reimburse such Affiliate for non-third party overhead expenses incurred in
connection with the leasing (i. e., main office expenses, travel and
entertainment, and other general and administrative expenses). Said allowance
shall not cover third party marketing or other expenses related to leasing
(i.e., brochures, advertising, conventions, design, plans and other preparation
charges, special events and outside legal services), all of which third party
expenses shall be Project Costs, paid directly by the Partnership, or reimbursed
to such Affiliates if such Affiliates paid such expenses. If legal services for
leasing space are rendered by in-house counsel for such Affiliates, the
Partnership shall reimburse such Affiliate for said services at rates to be set
forth in the Project Development Budget. The lease-up fees to be paid pursuant
to this section shall be intended to cover the costs of all leasing services and
costs relating to initial lease-up of the Project, excluding fees paid to
outside brokers. In the event that a third party broker is involved in any such
leasing, the Partnership shall pay fees to such third party broker in an amount
not to exceed market fees for such leasing services and the fees and expenses
payable to such Affiliates in an amount up to fifty percent (50%) of such fees
and expenses shall be reduced by the amount of the fees paid to such broker. In
the event an Affiliate of TMLP receives fees pursuant to this Section 9.5 and
the tenant under the lease with respect to which such fees were paid fails to
take occupancy and commence the payment of rent, all fees previously paid to
such Affiliate with respect to such lease shall be credited against any amounts
next becoming due to such Affiliate pursuant to this Section 9.5.
9.6 POST-LEASE-UP FEES.
Fees to be paid by the Partnership for leasing of space in the Project
other than the first lease of any such space and for renewals or extensions of
any lease shall be as set forth in the Management Agreement and shall be
included as a line item in the annual operating budget described in Section 9.2.
9.7 FINANCING FEES.
9.7(a) The Partnership shall pay to Affiliates of the Partner
responsible for procuring construction financing for the Project a construction
financing fee in an amount to be set forth in the Project Development Budget.
9.7(b) The Partnership shall pay to Affiliates of the Partner
responsible for procuring the permanent financing for the Project a permanent
financing fee in an amount to be set forth in the Project Development Budget.
9.7(c) If TMLP or its Affiliates shall execute a joint and
several guarantee of the Construction Loan, TMLP shall be paid a guaranty fee
equal to fifty (50) basis points per annum on the outstanding loan balance
covered by such guaranty, so long as such guaranty is in effect.
9.8 REIMBURSEMENT OF PROJECT SUPERVISION COSTS. The Partnership shall
reimburse TMLP and its Affiliates for all actual costs and expenses incurred by
such entities in providing on-site personnel supervising the construction of the
Project. A line item for such costs and expenses shall be included in the
Project Development Budget. Notwithstanding the foregoing, the construction
management firm engaged by the Partnership for management of the Project
construction shall be paid separately by the Partnership.
30
31
9.9 COMMISSIONS ON GROUND LEASES OF OUTPARCELS AND THE SALE OF THE
PROJECT.
9.9(a) For so long as an Affiliate of Xxxxx provides
managerial services to the Partnership, except as set forth below, the
Partnership shall pay to such Affiliate a fee equal to six percent (6%) of the
value of the interest in any pad site subleased by the Partnership to a third
party pursuant to a ground lease. In the event that the sale or joint venture is
brokered by a third party, the fees payable to such Affiliates shall be reduced
by fifty percent (50%), and the Partnership shall pay fees to such third party
in an amount not to exceed market fees for such brokerage services.
9.9(b) For so long as an Affiliate of Xxxxx provides
managerial services to the Partnership, the Partnership shall pay a fee to such
Affiliate equal to one and one-half percent (1 1/2%) of the sales price of the
entire Project, said fee to be payable at the time of closing of the sale from
which fee shall be deducted any amounts, up to fifty percent (50%) of said fee,
paid by the Partnership to any Person as brokers' fees or commissions with
respect to such sale. Any fees payable pursuant to this Section 9.9(b) shall be
allocated equally between such Affiliates.
9.10 SPONSORSHIP FEES.
9.10(a) The Partnership shall pay to an Affiliate of TMLP a
Sponsorship Management Fee equal to 40% of the gross sponsorship revenues
received by the Partnership in any fiscal year, pursuant to a separate
Sponsorship Management Agreement to be entered into between the Partnership and
such Affiliate. The Sponsorship Management Agreement shall be subject to the
Consent of OAI, and shall obligate the applicable Affiliate of TMLP to pay out
of the proceeds of such Sponsorship Management Fee any commissions payable to
third parties with respect to such sponsorship revenues.
9.10(b) The Affiliate of TMLP that is party to the Sponsorship
Management Agreement shall enter into a separate Sponsorship Consulting
Agreement with an Affiliate of OAI, by which such Affiliate of OAI shall be
engaged as the exclusive agent for the purpose of negotiating and procuring
sponsorship arrangements during the term of such Agreement with certain
companies to be specified therein. The Sponsorship Consulting Agreement shall
obligate the applicable Affiliate of TMLP to pay to the Affiliate of OAI a
Sponsorship Consulting Fee with respect to sponsorship transactions procured by
such Affiliate pursuant to the Agreement in an amount equal to 15% of the gross
revenues received by the Partnership in such transactions. The Sponsorship
Consulting Fees payable pursuant to the Sponsorship Consulting Agreement shall
be deemed a third-party commission for the purposes of Section 9.10(a).
9.11 THIRD PARTY SERVICES.
The General Partners may employ any third parties to perform services
on behalf of the Partnership, including, without limitation, Affiliates of any
Partner, provided only that the costs to be paid by the Partnership for such
services are competitive with the costs of independent contractors performing
the same services.
9.12 COSTS.
The Partnership shall pay third-party fees and expenses, including
reasonable fees and expenses incurred by the General Partners in connection with
negotiating, performing due diligence, documenting or closing any transaction
relating to their investment and continued participation in the Partnership and
any transaction requiring the involvement or Consent of such General Partners
(including without limitation, fees and expenses for attorneys, engineers,
appraisers, accountants, inspectors and environmental and other
31
32
consultants), including without limitation, this Agreement and the transactions
and documents referenced herein. In addition, the Partnership shall reimburse
TMLP and its Affiliates for reasonable costs and expenses associated with the
use of Xxxxx Corp.'s in-house legal staff in connection with the business and
affairs of the Partnership. All costs and fees reasonably incurred by the
General Partners or either of them in connection with the Construction Loan or
Permanent Loan or any matter related to the foregoing shall be paid by the
Partnership.
9.13 LIABILITY OF LIMITED PARTNERS.
Except as otherwise specifically set forth herein, to the extent a
Limited Partner is not a General Partner and does not take part in the control
of the Partnership's business within the meaning of the Act, the liability of a
Limited Partner for the obligations or losses of the Partnership shall in no
event exceed such Limited Partner's Unreturned Capital Contributions Account.
9.14 INDEMNIFICATION OF GENERAL PARTNERS.
9.14(a) The General Partners shall be indemnified and held
harmless, absolutely, unconditionally and irrevocably, by the Partnership from
and against any and all claims, demands, liabilities, costs, damages and causes
of action, of any nature whatsoever, arising out of or incidental to the General
Partners' management of the Project and/or the Partnership affairs, except where
the claim at issue is based upon the fraud, gross negligence or willful
misconduct of the applicable General Partner.
9.14(b) The indemnification authorized by this Section 9.14
shall include, but not be limited to, payment of (i) reasonable attorneys' fees
or other expenses incurred in connection with settlement or in any
finally-adjudicated legal proceeding, and (ii) the removal of any liens
affecting any property of the indemnitee.
9.14(c) The indemnification rights contained in this Section
9.14 shall be cumulative of, and in addition to, any and all rights, remedies
and recourses to which a General Partner shall be entitled, whether pursuant to
the provisions of this Agreement, at law or in equity.
9.14(d) The rights and obligations hereunder with respect to
indemnification shall survive an event of withdrawal of a General Partner.
ARTICLE X - FISCAL YEAR; BANK ACCOUNTS; BOOKS AND RECORDS; TAX MATTERS
10.1 FISCAL YEAR.
The fiscal year of the Partnership shall be the calendar year.
10.2 BANK ACCOUNTS.
The funds of the Partnership shall be deposited in such separate
Partnership bank account or accounts as are approved by the Managing General
Partner, and the Managing General Partner shall arrange for the appropriate
conduct of such account or accounts.
32
33
10.3 BOOKS AND RECORDS.
10.3(a) There shall be kept at the principal business office
of the Partnership, as set forth in Section 3.1 hereof (or at such other office
in the United States as the Managing General Partner may designate), full and
accurate books and records respecting the Project showing all receipts and
expenditures, assets and liabilities, profits, losses and distributions and all
other information necessary for recording the business and affairs of the
Partnership.
10.3(b) The books shall be kept on an accrual method and shall
show at all times all items of income and expense. In all events, the books of
account of the Partnership shall be maintained in accordance with federal tax
accounting principles as determined by the Code, and the applicable regulations
promulgated thereunder and as in effect from time to time.
10.3(c) Audited financial statements shall be prepared (on an
"opinion audit" basis) as of the end of each fiscal year by such certified
public accounting firm(s) as the Managing General Partner may select and shall
be paid for by the Partnership. Each Partner shall be entitled to a copy of such
audited financial statements.
10.3(d) In addition, the Managing General Partner shall
provide the Partners with such monthly financial statements as shall be prepared
by the Partnership on an unaudited basis, not later than ___ days following the
last day of each month. On or before March 31 following each Partnership fiscal
year, each Partner will be furnished with a copy of such annual reports or
financial statements, together with such additional information as is relevant
to such Partner for its individual federal, state and local income tax purposes,
with respect to the calendar year most recently ended.
10.3(e) Any Partner shall have the right to a private
examination and audit of the books and records of the Partnership, provided such
examination is made at the expense of the Partner desiring it, is made during
normal business hours at reasonable times after due Notice, and is made at the
offices at which the books and records of the Partnership are then kept.
10.4 RECORDS REQUIRED UNDER THE ACT.
In addition to the foregoing books of account, the Partnership shall
keep at its business office, c/o The Xxxxx Corporation, 0000 Xxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, the records required under the Act. Such
records, and all records described in Section 10.3 hereof, shall be made
available for inspection and copying at the reasonable request, and at the
expense, of any Partner during normal business hours.
10.5 TAX MATTERS PARTNER.
Pursuant to Section 6231 of the Code, the Managing General Partner
shall be the Tax Matters Partner and shall prepare or cause to be prepared, by
March 31 of each year, all tax returns required of the Partnership at the
Partnership's expense. The Tax Matters Partner shall have all powers and
authority contemplated by the Code and the regulations promulgated thereunder.
Without limitation of the foregoing, the Tax Matters Partner shall have the
authority: after approval by the General Partners, to sign all tax returns on
behalf of the Partnership; to select the jurisdiction or venue for cases or
controversies with respect to tax matters; to sign and file extensions of
reporting periods; to extend the date of the relevant statute of limitations
with respect to the Partnership's tax matters; and, after approval by the
General Partners, to make all other tax elections for the Partnership.
33
34
ARTICLE XI - TRANSFERS
11.1 LIMITATION ON ASSIGNMENT BY GENERAL PARTNERS.
11.1(a) Except as permitted under Sections 5.2, 11.1(b),
11.1(c), 11.2 or 11.3 hereof, no General Partner, other than for the limited
purpose of securing any financing which is approved pursuant to Article IX
hereof, may Transfer all or any part of its Partnership Interest. For purposes
of this Article 11, (i) a Transfer by TMLP and its Affiliates of their
respective ownership interests in Xxxxx shall be deemed to constitute a Transfer
of a portion of Xxxxx' Partnership Interest; and (ii) the Transfer by OAI
Entertainment Company or its Affiliates of their respective ownership interests
in OAI shall be deemed to constitute a Transfer of OAI's Partnership Interest.
11.1(b) Notwithstanding Sections 11.1(a) and 11.2 hereof, each
of Xxxxx and OAI may, at any time (and without any requirement to offer its
Partnership Interest to any other Partner), assign its respective Partnership
Interest as a General Partner to an Affiliate. Any assignment pursuant to this
Section 11.1(b) shall relieve the assigning Partner of its financial obligations
under this Agreement only to the extent such obligations are actually paid by
the assignee.
11.1(c) Notwithstanding Sections 11.1(a) and 11.2 hereof, any
General Partner may, at any time, assign its Partnership Interest as a General
Partner as security to a lender in order to obtain funds which are to be
contributed or loaned to the Partnership pursuant to Article VI hereof, and any
such assignment documents may provide that in the event of a foreclosure or
other realization on such security, such lender or its assignee shall be
admitted to the Partnership as a successor General Partner in place of the
assigning General Partner; provided, however, that upon such foreclosure or
other realization on security, (i) the assigning General Partner as Managing
General Partner may not assign any part of its Partnership Interest to a lender
or its assignee or enter into any agreement the result of which such lender or
its assignee as successor General Partner shall become the Managing General
Partner or (ii) prior to the admission of any such lender or assignee as a
successor General Partner the other General Partners shall have the right to
purchase such pledged General Partner Partnership Interest at a price determined
in accordance with Section 11.3 of this Agreement. Upon any foreclosure of Xxxxx
Partnership Interest, OAI shall be appointed and designated as the successor
Managing General Partner.
11.2 THIRD PARTY OFFERS TO OAI, XXXXX OR TMLP.
11.2(a) From and after the Completion of the Project, if any
of OAI, Xxxxx or TMLP (the "Recipient") receives a Bona Fide Offer (hereinafter
defined) from a third party (i.e., a Person who is not a Partner or an Affiliate
of any Partner) (an "Outside Offeror") to purchase all or any part of its Entire
Interest (hereinafter defined), which the Recipient is willing to accept, the
Recipient shall promptly send Notice to the other Partners ("Non-Recipients") in
writing, which Notice shall be accompanied by a copy of the Bona Fide Offer.
11.2(b) The Non-Recipients thereafter shall have a period of
thirty (30) days from the giving of such Notice within which to elect to
purchase the Recipient's Entire Interest (i) at a price equal to that, and on
the same terms as are, contained in the Bona Fide Offer if the Bona Fide Offer
is an offer to purchase all of the Recipient's Entire Interest, or (ii) if the
Bona Fide Offer is an offer to purchase only a portion of the Entire Interest,
at a
34
35
price equal to the price contained in the Bona Fide Offer, adjusted to reflect
the purchase of the Recipient's Entire Interest.
11.2(c) If the Non-Recipients do not elect to purchase the
Recipient's Entire Interest within either thirty (30) day period provided under
Sections 11.2(a) or 11.2(b) hereof, as the case may be, then the Recipient shall
be at liberty, within a period of one hundred eighty (180) days after the last
date upon which the Non-Recipients could have elected to buy the Entire Interest
of the Recipient as above provided, to consummate the sale to the Outside
Offeror at a price and upon terms not more advantageous to the Outside Offeror
than the price and terms stated in the original Bona Fide Offer. If, however,
such sale to the Outside Offeror is not consummated within such one hundred
eighty (180) day period, then any subsequent sale to any Outside Offeror shall
again be subject to all of the requirements of this Section 11.2. Any Outside
Offeror who hereafter acquires a Partnership Interest shall acquire such
Partnership Interest subject to the provisions of Section 11.3 hereof applicable
to the Recipient from whom the Partnership Interest was acquired.
11.2(d) For purposes of this Article XI, (i) in order to be a
"Bona Fide Offer," an offer must be made by one or more Persons meeting the
requirements of the first sentence of Section 11.2(a) hereof and financially
capable of carrying out the terms of the offer, must be in form legally
enforceable against the Outside Offeror, must be for cash and/or a promissory
note, and must obligate the Offer to deliver, not later than ten (10) days
following acceptance thereof, a good faith deposit (to the Recipient or a bona
fide escrow agent) equal to at least five percent (5 %) of the proposed purchase
price; and (ii) the term "Entire Interests" shall mean (x) with respect to Xxxxx
and TMLP, the combined Partnership Interests of Xxxxx, TMLP and their respective
successors in interest, both as a General Partner and a Limited Partner; and (y)
with respect to OAI, the Partnership Interest of OAI, and its successors in
interest, both as a General Partner and as a Limited Partner.
11.2(e) Before any portions of Tract II shall be offered for
sale to third parties for development or resale, the Partnership shall first
offer to sell such premises to OAI for a purchase price and under such other
terms and conditions as may be set forth in such offer. OAI shall have the first
right to acquire such premises under the terms and conditions proposed in the
offer. If OAI fails to accept such offer within a thirty day period (the "Offer
Period") following notice of the offer, the Partnership shall have the right to
market such premises to third parties under terms and conditions set forth in
the offer and for a purchase price not less than 95% of the purchase price set
forth in the offer. If the Partnership shall have failed for any reason to
execute a binding agreement for the sale of such premises within twelve months
following the expiration of the Offer Period, then any subsequent proposal to
sell such premises to a third party shall require the submission of a new offer
to OAI pursuant to this Section.
11.3 BUY-SELL.
11.3(a) At any time following the Grand Opening, if a good
faith dispute shall exist between the Partners regarding a Major Decision and
the Partners are unable to agree upon the action to be taken by the Partnership
(hereinafter, a "deadlock"), and at any time following the date which is ten
(10) years after the Grand Opening, whether or not such a deadlock shall exist
between the Partners, any Partner (the "Offeror"), provided such Partner is not
then a Defaulting Partner, may by giving the other Partners (the "Offerees")
written notice (the "Sale Notice") implement the sale procedures which are set
forth in this Section 11.3.
11.3(b) No Partner may give a Sale Notice described in Section
11.3(a) until after the Grand Opening.
35
36
11.3(c) Upon receipt of the Sale Notice given and delivered
pursuant to Section 11.3(a), the Offerees shall be obligated to elect, in
accordance with the provisions of this Section 11.3, either to purchase the
Offeror's entire interest in the Partnership or to sell their entire interest in
the Partnership to the Offeror for cash at the closing described in Section
11.3(i).
11.3(d) The purchase price (the "Purchase Price") for any
purchase and sale of a Partnership Interest under this Section 11.3 shall be
equal to the Fair Market Value of the Project, as adjusted for the respective
Partnership Interests offered for sale, as determined in accordance with Section
11.3(e).
11.3(e) Within ten (10) days of the date of the giving of the
Sale Notice, the Offeror and the Offeree shall attempt to agree on the Fair
Market Value of the Project. Failing such agreement, the Fair Market Value of
the Project shall be determined in the following manner:
(i) Within twenty (20) days of the date the Sale
Notice was given, a single appraiser (a "Single Appraiser") shall be
jointly selected by OAI and Xxxxx, who shall then render an appraisal
and the value so determined shall be the Fair Market Value of the
Project.
(ii) If the Partners are unable to agree timely on a
Single Appraiser, then within thirty (30) days of the date the Sale
Notice was given, each Partner shall select an appraiser, and the two
so chosen shall select a third appraiser (or, if the two so chosen
cannot agree on a third appraiser, the third appraiser shall be
designated by the American Society of Appraisers). Each of such three
appraisers shall render an appraisal, and the Appraised Value shall be
determined by the average of the two appraisals which are closest to
each other in dollar amount.
(iii) If a Single Appraiser is chosen, the expenses
of the appraisal shall be equally divided between OAI and Xxxxx. OAI
and Xxxxx each shall bear the expenses of the appraiser selected by it,
and the expenses of the third appraiser shall be equally divided
between OAI and Xxxxx.
(iv) All appraisers shall be members of the
Appraisal Institute of the American Society of Appraisers.
(v) Each Partner shall be obligated, promptly after
receipt of the valuation report prepared by such Partner's appraiser,
to deliver a copy of such valuation report to the other Partner in the
manner provided elsewhere in this Agreement for the giving of notices.
At the time of appointment, the third appraiser shall be directed to
promptly deliver copies of such appraiser's valuation report to the
Partners. Time is of the essence in the compliance with the appraisal
procedures set forth herein. All appraisers must deliver their
appraisal reports within ninety (90) days of the date of delivery of
the Sale Notice. Notwithstanding anything herein to the contrary, any
appraisals delivered after that date shall not be taken into account
and appraisals that are timely obtained are the only appraisals that
shall be taken into account.
11.3(f) If the holder of any loan to the Partnership under
which the selling Partner has personal liability, has the right to, and notifies
the Partnership of its intent to accelerate such loan, it shall be a condition
to the closing that the purchasing Partner repay such loan (plus any deferred
and accrued and unpaid interest thereon and any prepayment premium and/or yield
maintenance fees) at the closing, or to have the selling Partner released from
liability for payment of the loan by a written instrument reasonably
satisfactory to the selling Partner, and the failure to do so will cause such
Partner to be a
36
37
Defaulting Partner. The purchasing Partner agrees to indemnify the selling
Partner and its Affiliates and hold each of them harmless from and against any
damage, loss or liability to any of them as a result of the indemnifying party's
failure to repay such loan at the closing in accordance with the provisions
hereof. In addition, the selling Partner may, in its sole and absolute
discretion, and without prejudice to any other legal or equitable remedies it
may have, refuse to proceed with the closing unless simultaneously therewith any
such loan is so repaid.
11.3(g) The notice of Offerees' election shall create a
binding contract for the purchase or sale, as the case may be, of the Offeror's
Partnership Interest on the terms set forth in this Section 11.3. If an Offeree
shall thereafter be in breach of its obligation to close the purchase and sale
in accordance with such election, such Partner shall be a Defaulting Partner and
in addition to all other rights and remedies herein provided, the Offeror shall
have all remedies at law or in equity. In the event the Offeror shall be in
breach of its obligation to close the purchase and sale herein provided, then
such Partner shall be a Defaulting Partner, and in addition to all other rights
and remedies herein provided, the Offeree shall have all remedies available in
law or at equity.
11.3(h) The closing of any sale of a Partnership Interest
pursuant to this Section 11.3 shall be held at the office where the principal
place of business of the Partnership is located on the 180th day after the
election by the Offeree (unless the Partners agree to a different mutually
acceptable date), unless such 180th day is not a business day, in which event
the closing shall take place on the first business day following such 180th day.
Within thirty (30) days prior to such closing, there shall be a preliminary
closing at which the Partners shall act diligently and in good faith to agree
upon the form and substance of all documents necessary to effectuate the
closing.
11.3(i) At the closing, an assignment and, if requested by
either purchasing Partner, a xxxx of sale (both with covenants against grantor's
acts) from the selling Partner to the purchasing Partner of the selling
Partner's Partnership Interest, together with such other instruments and
documents as may be reasonably necessary or desirable to effectuate the sale and
transfer to the purchasing Partner, shall be deposited in escrow under an escrow
agreement and with an escrow agent approved by the Partners, which approval
shall not be unreasonably withheld. If there is any dispute between the
Partners, any title insurance company which issued a fee title policy to the
Partnership or acted as co-insurer or reinsurer may be designated by any Partner
as the escrow agent. The instruments and documents to be deposited in escrow at
the closing shall be legally sufficient to convey all of the selling Partner's
interest in the Partnership to the purchasing Partner, free and clear of all
mortgages, deeds of trust, liens and encumbrances. The purchase price shall be
paid to the selling Partner by federal wire transfer of immediately available
funds to an account designated by the selling Partner.
11.3(j) In the event there are any conveyance, transfer or
similar taxes payable as an incident to the conveyances at the preliminary
closing or the closing, such taxes shall be expenses of the Partnership. In the
event that any title insurance company insuring the title of the Partnership to
the Project shall refuse to endorse its policy of title insurance to reinsure
the Partnership's title to the Project effective immediately after the transfer
to the purchasing Partner without exception other than as set forth in the
original policy of title insurance (other than exceptions for real estate taxes,
rights of tenants in possession, as tenants only, any surviving deeds of trust,
mortgages, liens or charges against the Project, any easements created by the
Partnership and Approved by the Partners, and any other matter Approved by the
Partners at any time or from time to time), then the assignment from the Offeror
to the purchasing Partner shall contain general warranties of its title to its
interest in the Partnership, the Partnership and the Project.
37
38
11.3(k) The purchasing Partner shall have the right, within
its sole and absolute discretion, to cause its nominee or designee to acquire
the selling Partner's interest in the Partnership at the closing but nothing
herein shall relieve the purchasing Partner of its other obligations hereunder.
Any such designee shall, upon closing, become a Partner only if expressly
approved and consented to by the purchasing Partner.
11.3(l) At any closing held pursuant to this Section, the
purchasing Partner shall, by a legally enforceable agreement, assume all
obligations of the selling Partner accruing after closing, including, without
limitation, any indebtedness under any lien on the Project identified in the
Sale Notice to the extent that the Partners have personal liability therefor,
and shall further secure the release of the selling Partner's guaranties, if
any.
11.3(m) If, at the time of the purchase of the selling
Partner's Partnership Interest, the Project is subject to any mortgage, deed of
trust, lien or charge, other than those which were in existence at the time of
the Sale Notice and used to calculate the Purchase Price, the purchasing Partner
shall discharge, assume, or take subject to such mortgage, deed of trust, lien
or charge and reduce the amount of the Purchase Price otherwise payable pursuant
to Section 11.3(d) by the selling Partner's pro rata share of the amount of
money as would be required to discharge such mortgage, deed of trust, lien or
charge (including, without limitation, any and all prepayment premiums or
penalties). In addition, if such an encumbrance shall have been placed by the
selling Partner in contravention of the terms and provisions of this Agreement,
then the purchasing Partner shall also have all of the rights provided in
Section 11.3 with respect to a default by the selling Partner, and the
purchasing Partner shall not be required to close the purchase and sale of the
Partnership Interest of the selling Partner.
11.3(n) Unless the Sale Notice provides otherwise, if the
Project is damaged by fire or other casualty, or if any party possessing the
right of eminent domain or such similar right shall give notice of an intention
to take or acquire a part of the Project, and such damage occurs, or such notice
is given between the date of the Sale Notice and the closing, the following
shall apply:
(i) If the Project is damaged by an insured
casualty (or an uninsured casualty not resulting in significant damage,
which for the purposes of this subsection only shall mean damage the
cost to repair of which would not exceed $1,000,000), or if the taking
or acquisition shall not involve a substantial portion of the Project
resulting in an other than substantial reduction in income, then the
Offeree shall be required to complete the transaction and accept an
assignment of the insurance or condemnation proceeds, in which case the
Purchase Price shall be reduced by a portion of the uninsured casualty,
if any, equal to the amount of the uninsured casualty multiplied by the
selling Partner's Partnership Interest, expressed as a percentage, and
shall be further reduced by the sum of all deductible amounts specified
under the policies of insurance multiplied by the selling Partner's
Percentage Interest, expressed as a percentage.
(ii) If the Project is damaged by an uninsured
casualty resulting in significant damage, or if the taking or
acquisition shall or may result in a substantial reduction in the
income producing capacity of the Project, then the purchasing Partner
shall have the option to either (1) accept the Partnership interest
with the Project in an "as is" condition together with any insurance
proceeds, settlements and awards (in which case the Purchase Price
shall be reduced by the sum of all deductible amounts specified under
policies of insurance multiplied by the selling Partner's Partnership
Interest, expressed as a percentage), or (2) cancel the purchase.
38
39
In the event that the purchase is canceled by the purchasing Partner in
accordance with this Section 11.3(n), the terms of this Agreement shall remain
in effect and continue to be binding on the parties.
11.4 CONTINUATION OF PARTNERSHIP UPON GENERAL PARTNER WITHDRAWAL.
The retirement, withdrawal, Bankruptcy, dissolution, death or
adjudication of incompetence of a General Partner who is not the sole General
Partner ("Affected Partner") shall not cause the dissolution and winding up of
the Partnership. Upon the retirement, withdrawal, Bankruptcy, dissolution, death
or adjudication of incompetence of a sole remaining General Partner, the
Partnership shall be dissolved, unless the Partners elect, by the unanimous
Consent of the Partners (other than the Affected Partner or its successor m
interest), within ninety (90) days of such event, to continue the Partnership
and the Partnership business. If such election to continue is made, then (i) the
Partnership shall not be dissolved; (ii) the Partnership and the Partnership
business shall be continued; (iii) a Successor General Partner shall be
appointed by the Consent of the Partners in accordance with Section 11.5 hereof
and the Partnership Interest of the Bankrupt, retired, deceased, dissolved or
incompetent General Partner shall be converted to a Partnership Interest as a
Limited Partner; and (iv) this Agreement and the Certificate shall be amended to
reflect (a) such continuation of the Partnership, (b) if applicable, the
conversion of such General Partner's Partnership Interest to a Limited Partner's
Partnership Interest, and (c) the admission of the Successor General Partner(s)
designated pursuant to clause (iii) of this Section 11.4.
11.5 ELECTION OF SUCCESSOR GENERAL PARTNER.
11.5(a) A Person shall be admitted as a Successor General
Partner (including a successor Managing General Partner) only if the following
terms and conditions are satisfied:
(i) Except as otherwise provided herein, the
admission of such Person as a General Partner shall have been agreed to
by the Consent of the Partners (other than the Affected Partner or its
successor in interest);
(ii) The Person shall have accepted and agreed to be
bound by all the terms and provisions of this Agreement and the
Certificate, by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to
effect the admission of such Person as a Successor General Partner; and
(iii) An amended Certificate evidencing the admission
of such Person as a General Partner shall have been filed for
recordation under the Act.
11.5(b) Notwithstanding Section 11.5(a) herein, in the event
Xxxxx or OAI or TMLP acquires the Entire Interest of the Managing General
Partner pursuant to Sections 11.2 or 11.3 herein, then such acquiring Partner or
an Affiliate thereof, as the case may be, shall be admitted as a Successor
General Partner (including a successor Managing General Partner) without the
Consent of Partners pursuant to Section 11.5(a)(i) herein.
11.6 LIMITATION ON ASSIGNMENT BY LIMITED PARTNERS.
11.6(a) Except as expressly permitted under this Agreement, no
Limited Partner, other than for the limited purpose of securing any financing
which is approved pursuant to Article IX hereof, may sell, assign, transfer or
mortgage, hypothecate or otherwise encumber or permit or suffer any encumbrance
of all or any part of its Partnership Interest.
39
40
11.6(b) Notwithstanding the provisions of Section 11.6(a)
hereof, (i) Xxxxx may, at any time (and without any requirement to offer its
Partnership Interest to any other Partner), assign its Partnership Interest as a
Limited Partner to a Person directly or indirectly controlling, controlled by,
or under common control with, TMLP, and (ii) OAI may, at any time (and without
any requirement to offer its Partnership Interest to any other Partner), assign
its Partnership Interest as a Limited Partner to a Person directly or indirectly
controlling, controlled by, or under common control with, OAI and (iii) TMLP
may, at any time (and without any requirement to offer its Partnership Interest
to any other Partner), assign its Partnership Interest as a Limited Partner to a
Person directly or indirectly controlling, controlled by, or under common
control with, TMLP.
11.6(c) Each Limited Partner agrees that no part of its
Partnership Interest may be sold, assigned, pledged, encumbered or transferred,
whether voluntarily or by operation of law, except as permitted by this
Agreement. Any sale, assignment, pledge, encumbrance or transfer which is not
permitted or does not comply with the terms hereof shall be invalid, void and
without force or effect.
11.6(d) Except as expressly permitted under this Agreement,
the Partnership Interest of each Limited Partner (including such Partner's right
to receive a share of the profits and a return of its Unreturned Capital
Contributions Account) may be assigned, encumbered, pledged, conveyed or
otherwise transferred, in whole or in part, upon the General Partners' Consent,
which may be withheld in their sole discretion; provided further, in the event
the General Partners do Consent, any assignee shall not become a substituted
Limited Partner of the Partnership, unless all of the following conditions are
satisfied or waived by both General Partners:
(i) The assigning Limited Partner so provides in
the instrument of assignment;
(ii) The assignee agrees in writing to be bound by
the terms of this Agreement;
(iii) The assignee pays to the Partnership a fee
equal to the reasonable costs and expenses of the preparation and
execution of an amendment to this Agreement;
(iv) The assignee provides an opinion of counsel, in
form and substance satisfactory to the Managing General Partner, that
neither the offering nor the assignment of such Partnership Interest
requires registration under applicable federal and state securities
laws nor violates federal or state securities, "blue sky" or similar
law;
(v) Such transfer, together with all other sales or
transfers of Partnership Interests within the preceding twelve (12)
months will not result in a termination of the Partnership pursuant to
Section 708 of the Code; and
(vi) Any such transfer shall not cause the
Partnership to be classified as other than a partnership for federal
income tax purposes.
If all of the foregoing conditions are satisfied, the Managing General Partner
shall prepare (or cause to be prepared) an amendment to Exhibit A to this
Agreement to be signed and sworn to by the General Partners.
11.6(e) Notwithstanding Sections 11.6(a) and 11.2 hereof,
either of Xxxxx and/or OAI may, at any time, assign its Partnership Interest as
a Limited Partner as
40
41
security to a lender in order to obtain funds which are to be contributed or
loaned to the Partnership pursuant to Article VI hereof, and any such assignment
documents may provide that in the event of a foreclosure or other realization on
such security, such lender or its assignee shall be admitted to the Partnership
as a substitute Limited Partner in place of Xxxxx or OAI, as the case may be;
provided, however, that prior to the admission of any such lender or assignee as
a substitute Limited Partner for Xxxxx or OAI upon such foreclosure or other
realization on security, the other Limited Partner shall have the right to
purchase such pledged Limited Partnership Interest at a price equal to the
lesser of (i) the amount of the debt secured by the pledge of Partnership
Interest, or (ii) an amount otherwise determined in accordance with Section 11.3
of this Agreement.
11.7 [INTENTIONALLY DELETED.]
11.8 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
Notwithstanding any other provision under this Agreement, no transferee
of a Limited Partner's Partnership Interest shall become a substituted Limited
Partner unless (i) such transferee shall have executed an instrument
satisfactory in form and substance to the General Partners accepting and
agreeing to be bound by all the terms of this Agreement, (ii) the General
Partners have given their Consent thereto, which may be withheld in their sole
discretion; and (iii) all applicable requirements imposed by this Article XI
(including, without limitation, the conditions set forth in Section 11.6(d)
shall have been satisfied or waived in writing by both General Partners. Absent
such substitution, an assignor of a Limited Partner's Partnership Interest shall
continue to be a Limited Partner with all of the rights and obligations thereof,
except for entitlement to any Partnership distributions or allocations
attributable to such Partnership Interest.
11.9 DEATH, INCOMPETENCE OR DISSOLUTION OF A LIMITED PARTNER.
The adjudication of Bankruptcy or insolvency, dissolution or
termination of any partnership or corporate Limited Partner, or the death or
adjudication of insanity, incompetence, Bankruptcy or insolvency of any
individual Limited Partners (other than a Limited Partner who is also a General
Partner) shall not dissolve the Partnership. In such event, the executors or
administrators of the estate of the deceased Limited Partner, or the committee
or other legal representatives of the estate of the insane, incompetent,
bankrupt or insolvent Limited Partner, shall, for the purposes of settling the
estate, have all of the rights of a Limited Partner and be subject to the
provisions of this Agreement, including this Article XI; provided, however, that
in the event of such a transfer of a Partnership Interest or in the event of a
purported transfer of a Partnership Interest in contravention of this Agreement,
the Partnership, with the Consent of both General Partners (other than a General
Partner Affiliated with the transferring Limited Partner, shall have the right
to purchase such Partnership Interest at a price equal to the lower of (i) the
price determined in accordance with Section 11.3 of this Agreement or (ii) such
Limited Partner's Unreturned Capital Contributions Account.
ARTICLE XII - TERM; DISSOLUTION OF PARTNERSHIP
12.1 TERM.
The Partnership shall continue in effect until December 31, 2050,
unless sooner dissolved and liquidated in accordance with the provisions hereof.
All provisions of this
41
42
Agreement relative to dissolution and liquidation shall be cumulative and the
exercise or use of one of the provisions hereof shall not preclude the exercise
or use of any other provisions.
12.2 EVENTS OF DISSOLUTION.
The Partnership shall be dissolved upon the occurrence of any of the
following events:
(a) Subject to the provisions of Section
11.3 hereof, the adjudication of Bankruptcy or insolvency,
dissolution or termination of any corporate or partnership
General Partner, or the death, retirement, Bankruptcy,
dissolution or adjudication of insanity or incompetence of any
individual General Partner;
(b) The expiration of the term of the
Partnership;
(c) The sale or other disposition (through
condemnation or otherwise) of all or substantially all of the
Land and/or the Project and completion of the purposes of the
Partnership; or
(d) When Partners owning more than
seventy-five percent (75%) of the aggregate Partnership
Interests shall so determine in writing.
12.3 WINDING-UP OF PARTNERSHIP.
Upon dissolution of the Partnership, the Managing General Partner or
the General Partners then remaining (or if there is no remaining General
Partner, Limited Partners owning a majority of the total Limited Partners'
Partnership Interests), shall proceed with dispatch and without any unnecessary
delay to wind up the business affairs of the Partnership, to sell or otherwise
liquidate the Partnership assets and Partnership Property, and, after paying or
duly providing for all liabilities to creditors of the Partnership, to
distribute the net proceeds and any other liquid assets of the Partnership among
the Partners in the manner set forth in Section 7.9 hereof.
12.4 TERMINATION OF PARTNERSHIP.
The Partnership shall terminate when (i) all property and assets owned
by the Partnership shall have been disposed of, (ii) the net proceeds therefrom
and any other liquid assets of the Partnership, after payment of or due
provision for all liabilities to creditors of the Partnership, shall have been
distributed to the Partners as provided in Section 7.9 hereof, and (iii) the
Certificate has been amended (terminated) of record to reflect such termination.
With respect to any and all distributions made to Partners (general or limited)
pursuant to Section 7.9 hereof, and with respect to the aforesaid termination of
the Partnership, no Partner shall have any liability or obligation to the
Partnership or to any other Partner to contribute any cash or other property to
the Partnership or to any other Partner, or to defer or forego the receipt of
any cash or other property from the Partnership, by reason of any deficit in
such Partner's Capital Account at such time.
42
43
ARTICLE XIII - ASSIGNMENT TO FOREIGN PERSONS
13.1 ASSIGNMENTS PERMITTED.
Each Partner understands and agrees that it may transfer, convey or
otherwise assign, directly or indirectly, in accordance with and subject to the
terms and conditions of this Agreement, all or any portion of its Partnership
Interest to any Person (a "Foreign Person") who is not a United States Person (a
"United States Person") within the meaning of Section 7701(a)(30) of the Code.
Notwithstanding the foregoing sentence, if, as a result thereof, such Foreign
Person would be deemed to be a Partner of the Partnership for federal income tax
purposes, no such transfer, conveyance or assignment shall be permitted unless
such Foreign Person acknowledges that a withholding tax may be required and
Consents to any such withholding.
13.2 ACKNOWLEDGMENT.
Unless treated as a Tax Payment Loan (as hereinafter defined,) any
amount paid by the Partnership for or with respect to any Foreign Person on
account of any withholding tax or other tax payable with respect to the income,
profits or distributions of the Partnership pursuant to the Code, the
Regulations promulgated thereunder, or any state or local statute, regulation or
ordinance requiring such payment (a "Withholding Tax Act") shall be treated as a
distribution to such Partner for all purposes of this Agreement, consistent with
the character or source of the income, profits or cash which gave rise to the
payment or withholding obligation. To the extent that the amount required to be
remitted by the Partnership under the Withholding Tax Act exceeds the amount
then otherwise distributable to such Partner, the excess shall constitute a loan
from the Partnership to such Partner (a "Tax Payment Loan") which shall be
payable upon demand and shall bear interest, from the date that the Partnership
makes the payment to the relevant taxing authority, at the Prime Rate plus two
(2) percentage points, compounded monthly. So long as any Tax Payment Loan or
the interest thereon remains unpaid, the Partnership shall make future
distributions due to such Partner under this Agreement by applying the amount of
any such distribution first to the payment of any unpaid interest on all Tax
Payment Loans of such Partner and then to the repayment of the principal of all
Tax Payment Loans of such Partner.
The General Partners shall have the authority to take all actions
necessary to enable the Partnership to comply with the provisions of any
Withholding Tax Act applicable to the Partnership and to carry out the
provisions of this Section. Nothing in this Section 13.2 shall create any
obligation on the part of the General Partners to advance funds to the
Partnership or to borrow funds from third parties in order to make any payments
on account of any liability of the Partnership under a Withholding Tax Act.
ARTICLE XIV - MISCELLANEOUS PROVISIONS
14.1 NO AGENCY; NO LIMITATION OF BUSINESS ACTIVITIES BY PARTNERS.
14.1(a) Except as provided in this Agreement, nothing herein
contained shall be construed to constitute any Partner hereof the agent of any
other Partner hereof or to limit the Partners in any manner in the carrying on
of their own respective businesses or activities.
14.1(b) Except as provided in this Agreement, any Partner may
engage in and/or possess any interest in other businesses and real estate
ventures of every nature and description, independently or with others,
including but not limited to, the ownership, financing, leasing, operation,
management, syndication, brokerage and development of real property, and neither
the Partnership nor any Partner hereof shall have any rights in or to any such
independent venture or the income or profits derived therefrom. Without
limitation
43
44
of the foregoing, any Partner or its affiliates may, from time to time, own or
acquire ownership interests ("Tenant Ownership Interests") in tenants or other
parties leasing space in the Project or providing goods and services to a
Partner or its Affiliates or the Project. No Partner shall be to required to
offer the other Partners the right to participate in such Tenant Ownership
Interests so long as the affiliation is disclosed to the other Partners and so
long as the terms and conditions for such lease or other transaction with the
Partnership are under terms and conditions then reasonably attainable in the
applicable market by unaffiliated parties or are in compliance with any budget
or rent schedule approved by such non-affiliated Partners.
14.1(c) Each Partner covenants that during the Term of the
Partnership, neither such Partner nor any Affiliate of such Partner shall
acquire, develop, lease or operate a retail project (an "Alternate Project")
within a twenty (20) mile radius of the Project unless the Alternate Project
shall have been approved by the other General Partners, which approval may be
granted or withheld for reasons within such other General Partners' sole
discretion. In addition to the foregoing restriction, no Partner or Affiliate of
a Partner shall acquire, develop, lease or operate an Alternate Project outside
such twenty (20) mile radius of the Project but within a sixty (60) mile radius
of the Project unless the Acquiring Partner first shall have offered to acquire
or develop such Alternate Project in the name of the Partnership or another
partnership consisting of the same Partners and containing the substantially the
same terms and conditions set forth herein and the other Partners (the
"non-Acquiring Partners") shall have declined such offer (a "Project Offer") or
shall have been unable for any reason to participate. Any Project Offer given
pursuant to this Section shall be in writing, accompanied by such information as
shall be required under Section 14.1(d) hereof. The non-Acquiring Partners shall
have a period of sixty (60) days in which to accept or reject the Project Offer.
If the non-Acquiring Partners shall have failed during such sixty (60) day
period to deliver to the Acquiring Partner written notice of acceptance of such
Project Offer, the non-Acquiring Partners shall be deemed conclusively to have
rejected such Project Offer. Upon the rejection or deemed rejection of a Project
Offer, the Acquiring Partner shall have the right to pursue the development or
acquisition contemplated by the Project Offer, but under terms and conditions
that are not more favorable to the Acquiring Partner than were set forth in the
Project Offer (it being the intention that if such terms and conditions under
which the proposed development or acquisition is to be actually consummated are
more favorable than the terms and conditions set forth in the Project Offer, the
Acquiring Partner shall be required to submit a new Project Offer to the
non-Acquiring Partners before the Project Offer shall be permitted to proceed
with such development or acquisition. An Alternate Project shall not be deemed
to compete with the business of the Partnership (and, accordingly, shall not be
prohibited or restricted by the terms of this Section 14.1(c)) if either (i) no
space in such Alternate Project is leased to or occupied by manufacturers outlet
stores and the total gross leasable area within such Alternate Project does not
exceed 250,000 square feet, or (ii) the Alternate Project is situated outside a
sixty (60) mile radius of the Project. The existing retail operations within the
Opryland Hotel and Convention Center (which consist of up to 20,000 square feet
of gross leasable space) shall not be deemed an Alternate Project for purposes
of this Section 14.1(c).
14.1(d) The Acquiring Partner promptly will deliver to the
non-Acquiring Partners such demographic, development, leasing and financial data
as the Acquiring Partner has in its possession that reasonably may be requested
by the non-Acquiring Partners from time to time in order to permit the
non-Acquiring Partners to evaluate any proposed development or acquisition
contemplated by the applicable Project Offer. Such information shall be deemed
confidential and proprietary information of the Acquiring Partner that may not
be released or disseminated in any manner by the non-Acquiring Partners, or
their respective employees, directors, agents or representatives, except as
required by law, by generally accepted accounting principles, or as otherwise
approved in writing by the Acquiring Partner.
44
45
14.2 PARTNERSHIP INTERESTS TREATED AS PERSONALTY.
The Partnership Interests of all Partners, and the interest of all
Partners in and to the Partnership and the assets and property of the
Partnership, shall be deemed for all purposes to be personal property and not
real property. All real and other property owned by the Partnership shall be
deemed to be owned legally and beneficially solely by the Partnership as a
separate entity, and no Partner, individually, shall have any direct ownership
interest in any such Partnership Property.
14.3 EFFECT OF CONSENT OR WAIVER.
No Consent or waiver, express or implied, by any Partner to or of any
breach or default by any other Partner in the performance by such other Partner
of its obligations hereunder shall be deemed or construed to be a Consent or
waiver to or of any other breach or default by such other Partner in the
performance by such other Partner of the same or any other obligations of such
Partner hereunder. Failure on the part of any Partner to object to or complain
of any act or failure to act of any of the other Partners or to declare any of
the other Partners in default, irrespective of how long such failure continues,
shall not constitute a waiver by any such Partner of its rights hereunder.
14.4 DEFAULT; OTHER REMEDIES.
During the continuance of any Default, so long as such Default shall
not have been cured, the Non-Defaulting Partner, in addition to the rights
specified herein, shall have the right to take all actions now or hereafter
existing at law, in equity, or under this Agreement to enforce their rights and
remedies (including the initiation and prosecution of all judicial,
administrative and other proceedings and the filing of proofs of claim and debt
in connection therewith). Except as otherwise expressly provided in this
Agreement, no remedy set forth in this Agreement shall be exclusive of any other
remedy. No consent or waiver, either expressed or implied, by any Partner to or
of any Default by any other Partner in the performance by such other Partner of
the obligations under this Agreement shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such other Partner of the same or any other obligations of such other Partner
under this Agreement. Failure or delay by any Partner to complain of any breach
by any other Partner, or any failure or delay in issuing any Notice of Default
shall not constitute a waiver by such Partner of the rights and remedies
available under this Agreement or otherwise at law or in equity.
14.5 SECTION HEADINGS AND PRONOUNS.
All headings contained in this Agreement are for convenience of
reference only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provisions hereof.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identification of the
Person or Persons may require.
14.6 SEVERABILITY.
The provisions of this Agreement shall be deemed severable, and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the remainder of this Agreement or any valid clause of any
invalid portion. The Partners shall amend this Agreement to replace any such
invalid or unenforceable provision with a valid and enforceable provision which
comes closest to the intent of the Partners with respect to such invalid or
unenforceable provision.
45
46
14.7 PARTITION.
Each of the parties hereof irrevocably waives during the term of the
Partnership any right, if any, to maintain an action for partition with respect
to Partnership Property and any other Partnership assets.
14.8 NO BENEFIT TO CREDITORS.
No provision of this Agreement is intended to be for the benefit of any
creditor or any other Person (other than a Partner in its capacity as a Partner)
to whom any debts, liabilities or obligations are owed by the Partnership or any
Partner, and no such Person shall be deemed to be a third party beneficiary of
any provision of this Agreement.
14.9 ENTIRE AGREEMENT.
This Agreement, including all exhibits and appendices hereto, which are
incorporated herein by this reference, sets forth all (and is intended by all
parties hereto to be an integration of all) of the promises, agreements,
conditions, understandings, warranties and representations among the parties
hereto with respect to the terms of the Partnership, the conduct of the
Partnership business and the property of the Partnership, through the date
hereof, and there are no promises, agreements, conditions, understandings,
warranties or representations, oral or written, express or implied, with respect
thereto among them, through the date hereof, other than as set forth herein.
14.10 GOVERNING LAW; LITIGATION.
It is the intention of the parties hereto that all questions with
respect to the construction of this Agreement and the rights and liabilities of
the parties hereto shall be determined in accordance with the laws of the State
of Delaware. In the event the Partnership or any Partner (or its Affiliates)
institutes litigation or an administrative action against the Project, Xxxxx
Corp. or any of its Affiliates, OAI or any of its Affiliates, TMLP or any of its
Affiliates, the Partnership or any Partners and their Affiliates pursuant to a
claim arising out of this Agreement or relating to the Project or the
Partnership, the parties hereto agree that the prevailing party in such
litigation or administrative action shall be entitled to recover its
out-of-pocket costs and expenses of defending or maintaining such litigation or
administrative action, including without limitation, attorneys' fees. With
respect to any action initiated by a Partner in the nature of a derivative
action, the Partner initiating the derivative action shall be obligated to
reimburse the Partnership for any obligation incurred by the Partnership
pursuant to this Section 14.9 if such Partner is the losing party in such
litigation or administrative action. For purposes of the foregoing, a Partner
who is an Affiliate of a party which is the losing party in such litigation or
administrative action shall be obligated to reimburse the prevailing party for
the costs and expenses of such litigation or administrative action.
14.11 BINDING EFFECT.
This Agreement is binding upon, and shall inure to the benefit of, the
parties hereto and their respective heirs, executors, administrators, personal
and legal representatives, successors and permitted assigns.
14.12 NOTICES.
Notices required herein shall be sent to the following addresses:
If to Xxxxx: Opry Xxxxx, L.L.C.
x/x Xxx Xxxxx Xxxxxxxxxxx
0000 Xxxxxx Xxxxxxxxx, Suite 400
46
47
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to OAI: Opryland Attractions, Inc.
0 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxx,
Senior Vice President
Fax: (000) 000-0000
with a courtesy copy to: Xxxxxx Xxxxxxxx, Esq.
Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
If to TMLP: The Xxxxx Limited Partnership
c/o The Xxxxx Corporation
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
14.13 MANAGING GENERAL PARTNER AS ATTORNEY-IN-FACT FOR LIMITED
PARTNERS.
14.13(a) Each of the Limited Partners hereby appoints, and
each newly admitted or substitute Limited Partner, by being admitted to the
Partnership, automatically appoints the Managing General Partner or any
substitute successor managing general partner for the Managing General Partner,
as its true and lawful attorney-in-fact to execute such amendments to this
Agreement and the Certificate and other instruments and to do such other acts as
may be required in the conduct of the Partnership business, consistent with the
provisions of this Agreement and authorized by the Managing General Partner to
reflect, among other things, any of the following:
(i) a change in the name of the Partnership or in
the principal office or the resident agent of the Partnership;
(ii) the conversion of a General Partner Partnership
Interest into a Limited Partner Partnership Interest, or the admission
of a General Partner pursuant to any of the provisions of Article XI
hereof;
(iii) the substitution of successor General Partners
or Limited Partners pursuant to the provisions of Article XI hereof, or
by unanimous Consent of all Partners;
(iv) the correction or clarification of any
scrivener's error in this Agreement or the Certificate;
(v) the execution and filing by the Partnership of
any statement, amendment or other document required to be filed for
record under any provision of the Act;
(vi) any amendment to this Agreement or the
Certificate which amendment is approved by the Partners or is required
by the Act or any other
47
48
applicable state or federal law to conform the Agreement and/or the
Certificate to any requirements of the Act or any other applicable
state or federal law; or
(vii) The amendment of Exhibit A hereto pursuant to
the terms and conditions of this Agreement.
14.13(b) The appointment of the attorneys pursuant to this
Section 14.13 shall be irrevocable and coupled with an interest, and shall
survive the disability of any Limited Partner.
14.14 COUNTERPARTS AND EFFECTIVENESS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument and may be executed and delivered by facsimile
transmission with each party executing the agreement (or a counterpart thereto)
and delivering such executed document by facsimile transmission with the
original to follow by actual delivery. The parties hereto intend to be legally
bound and obligated by this Agreement effective immediately upon the delivery of
any such facsimile transmission.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
48
49
IN WITNESS WHEREOF, the parties hereto have hereunto affixed their
signatures as of the day and year first above written.
XXXXX: OPRY XXXXX, L.L.C.
By: The Xxxxx Limited Partnership,
Its Manager
By: The Xxxxx Corporation,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxx
OAI: OPRYLAND ATTRACTIONS, INC.
By: /s/ Xxxxx X. London
------------------------------
Name: Xxxxx X. London
Title: President & Chief Executive
Officer
TMLP: THE XXXXX LIMITED PARTNERSHIP
By: The Xxxxx Corporation
its general partner
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO OPRY XXXXX LIMITED PARTNERSHIP AGREEMENT]
49
50
OPRY XXXXX LIMITED PARTNERSHIP
EXHIBIT A TO
LIMITED PARTNERSHIP AGREEMENT
SCHEDULE OF PARTNERS
NAME AND ADDRESS PARTNERSHIP INTEREST
GENERAL PARTNERS:
Opry Xxxxx, L.L.C. 1.00%
c/o The Xxxxx Corporation
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Opryland Attractions, Inc. 1.00%
0 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
LIMITED PARTNERS:
The Xxxxx Limited Partnership 65.67%
c/o The Xxxxx Corporation
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Opryland Attractions, Inc. 32.33%
0 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
50
