PARTNERSHIP AGREEMENT
FOR GSAC PARTNERS
This Partnership Agreement ("Agreement") is being executed this 18th day
of November, 1996, but made effective as of the 31st day of May, 1996, by and
between PAVILION PARTNERS, a Delaware general partnership, and EXIT 116
REVISITED, INC., a New Jersey corporation. For and in consideration of the
mutual covenants herein contained, the parties to this Agreement hereby form and
create a general partnership, under and pursuant to the Partnership Act for the
purposes and upon the terms, provisions, and conditions as hereinafter set
forth:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the respective
meanings indicated:
Affiliate: With respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and under "common control with") when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The provisions of Section 13.05 hereof
supplement and amend this definition.
Amphitheater: The existing outdoor entertainment facility located in
Holmdel, New Jersey and commonly known as the Garden State Arts Center.
Amphitheater Fiscal Year: The fiscal year of the Partnership for financial
accounting purposes. The first Amphitheater Fiscal Year shall end on October 31,
1996. Subsequent Amphitheater Fiscal Years shall end on each subsequent October
31st thereafter.
Amphitheater Season: The portion of each calendar year which is included
between the period of time from May 1 to September 30 of such calendar year,
being the contemplated portion of each calendar year during which the
Amphitheater will be open for the presentation of events, performances and
shows. The first Amphitheater Season for purposes of this Agreement shall
commence May 1, 1996 and end on September 30, 1996.
Ardee: Exit 116 Revisited, Inc., a New Jersey corporation.
Artist Agreement: Any agreement or contract (written or oral) between the
Partnership and an artist, entertainer or performer by which such artist,
entertainer or performer agrees to appear and perform at a live concert or other
performance at the Amphitheater.
Available Cash: After payment of any and all outstanding Deficit Loans,
the remaining cash (if any) held by the Partnership at the end of any
Amphitheater Season which, in the reasonable judgment of the Managing Partner,
is not required or reasonably expected to be required for the payment of
Operating Expenses between the end of such Amphitheater Season and the
commencement of the next succeeding Amphitheater Season.
Capital Account: The tax capital account maintained by the Partnership for
each Partner in accordance with and as required by the provisions of Section
8.05 of this Agreement.
Club Show: Any live entertainment event presented in an enclosed venue
with a maximum capacity for 3500 people or less.
Code: The Internal Revenue Code of 1986, as amended.
CPI Index: Consumer Price Index for All Urban Consumers (all U.S. cities),
1982-84 equals 100 Base, published monthly by the U.S. Department of Labor's
Bureau of Labor Statistics, or any successor publication.
Defensive NY Amphitheater: Any Fully Restricted Facility which is being
proposed for development or construction in the Restricted NY Area which meets
both of the following criteria:
(a) the proposal to develop or construct such Fully Restricted
Facility is made by a third party ("Developer"), including a governmental
authority issuing a request for proposal, who is not affiliated with or
related to either Partner or any Affiliate of either Partner; and
(b) neither Partner (nor any of its Affiliates) at any time after
the date hereof encouraged, supported, instigated or assisted in any
manner the Developer's decision to announce the proposal to (i) construct
or develop such Fully Restricted Facility or (ii) seek bids from third
parties for the construction, development or management of such Fully
Restricted Facility.
Deficit Loan: A loan extended by the Partners to the Partnership pursuant
to the provisions of Section 6.02 hereof.
Development Costs: All costs and other expenses incurred by the
Partnership, or by the Partners before formation of the Partnership, in
connection with the design, planning, preparation, commencement, carrying out
and completion of the Renovation Work, including each and all of the following:
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(a) All costs directly associated with or attributable to the actual
construction work related to the Renovation Work including (i) all costs
associated with obtaining materials and services related to the Renovation
Work and (ii) all fees and other sums payable to any contractor or
construction manager relating to or in connection with the Renovation
Work.
(b) All costs which are directly associated with or attributable to
the research, development or design of the Renovation Work such as (i)
predevelopment costs incurred in connection with the Renovation Work, (ii)
all fees and payments made to architects, land planners, engineers and
other consultants which are directly attributable to the design of the
Renovation Work, (iii) all attorneys' fees and other consultants' fees
incurred in connection with and directly attributable to the planning,
developing and designing of the Renovation Work and (iv) all fees, costs
and expenses paid or incurred in connection with the obtaining of all
necessary development, construction and use permits.
(c) The reasonable and necessary costs incurred in connection with
responding to NJHA's Request for Proposal related to the privatization of
the Amphitheater such as (i) travel and lodging expenses for personnel
involved in the negotiation of the Lease Agreement and the Memorandum of
Understanding and (ii) legal expenses incurred in connection with the
negotiation of the Lease Agreement and Memorandum of Understanding.
(d) The types and categories of costs included in the construction
budget attached hereto as Exhibit "B".
Notwithstanding any provision of the Lease Agreement to the contrary, for
purposes of this Agreement, the term "Development Costs" shall include, subject
to the provisions of Section 12.11 hereof, costs related to the negotiation,
documentation and finalization of the contractual and business arrangement
between the Partnership and NJHA as finally culminated in the Lease Agreement
(including, without limitation, legal fees and travel and lodging costs).
Development Cost Amount: The total amount of Development Costs actually
paid, incurred or expended.
Development Cost Notice: Shall have the meaning assigned to such term
pursuant to Section 5.02(a) hereof.
Xxxxxxx Stadium: The entertainment facility located on Xxxxxxx'x Island
under the Triborough Bridge and commonly called Xxxxxxx Stadium, in its current
condition and configuration.
Final Budgeted Amount for Construction: The final budgeted amount for the
Development Cost Amount which the Managing Partner determines (and provides
notice of to Ardee) pursuant to the provisions of Section 12.11 hereof, as such
final budgeted amount may
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be revised as a result of an agreement with NJHA to revise or modify the design
for the Renovation Work as contemplated in Section 12.11(b)(ii) hereof.
Fully Restricted Facility: Any amphitheater, bowl, greenfield or other
outdoor or open-air venue primarily designed for the presentation of live
entertainment events other than sports stadiums with a capacity for 45,000
persons or more.
Lease Agreement: That certain Lease Agreement to be hereafter executed as
contemplated by the provisions of the Memorandum of Understanding and by which
NJHA, as landlord, shall lease and demise to the Partnership, as tenant, the
Amphitheater, as such Lease Agreement may be amended from time to time.
Major Actions: Any acts taken, sums expended or obligations incurred on
behalf of the Partnership for any of the following activities:
(a) incurring any indebtedness or borrowing any sums of money on
behalf of the Partnership other than (i) Deficit Loans and (ii) trade
payables and other accounts payable incurred in the ordinary course of the
business of the Partnership and consistent with the then effective
Operating Budget;
(b) acquiring, on behalf of the Partnership, any of the following:
(i) any interest in real property other than the leasehold
estate created by the Lease Agreement; and
(ii) any personal property which is either (i) not related to
the ownership, use, operation or maintenance of the Amphitheater or
(ii) not capable of being purchased or leased in a manner consistent
with expenditures contemplated in the then effective Operating
Budget.
(c) agreeing to modify, alter or otherwise amend any of the
provisions of the Lease Agreement or any Major Operational Agreement,
other than waivers or modifications made in the ordinary course of
business;
(d) executing or delivering a Mortgage;
(e) expending any funds of the Partnership for Operating Expenses in
amounts which exceed the amounts permitted to be expended in the
Partnership's then effective Operating Budget; provided, however, Ardee's
consent shall not be unreasonably withheld to any request made by the
Managing Partner for the expending of funds of the Partnership for
Operating Expenses in amounts which exceed the amounts permitted to be
expended in the Partnership's then effective Operating Budget;
(f) executing or otherwise entering into any Major Operational
Agreement;
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(g) executing a construction contract for any part of the Renovation
Work; provided, however, (i) if Ardee fails to provide comments to, or
reasons for refusing its approval of, any proposed construction contract
presented to it by the Managing Partner within five (5) business days,
then Ardee shall be deemed to have approved such construction contract and
(ii) Ardee shall not unreasonably withhold its consent to any proposed
construction contract presented to it by the Managing Partner;
(h) subject to the provisions of Section 12.04 hereof, adopting or
modifying an Annual Operating Budget for any Amphitheater Fiscal Year;
(i) selling, or agreeing to sell, the Amphitheater or any material
portion thereof;
(j) entering into any contractual or business arrangement with a
Partner or the Affiliate of any Partner; and
(k) engaging in any other business venture or entrepreneurial
activity other than that directly related to the Partnership Purposes.
Major Operational Action: Any Major Action which involves day-to-day
decisions affecting the use, operation and maintenance of the Amphitheater
including, without limitation, (i) executing, entering into or amending any
Major Operational Agreement, (ii) expending funds of the Partnership for
Operating Expenses in amounts which exceed amounts permitted to be expended in
the Partnership's then effective Operating Budget, (iii) executing a
construction contract for any part of the Renovation Work, and (iv) adopting or
modifying any Annual Operating Budget for any Amphitheater Fiscal Year.
Major Operational Agreement: Any material agreement relating to the
operation, use or maintenance of the Amphitheater such as, by way of example,
(i) food and beverage concession agreements, (ii) merchandise concession
agreements, (iii) sponsorship agreements, (iv) Artist Agreements, (v) employment
agreements with any of the Amphitheater's personnel and (vi) material service
contracts such as agreements for the provision of security services at the
Amphitheater or operation of the parking lots.
Managing Partner: Pavilion.
Memorandum of Understanding: That certain Agreement Concerning Outdoor
Entertainment Facility dated ___________________, 1995 and entered into by and
among (i) Delsener Xxxxxx Enterprises, Ltd., an Affiliate of Ardee, (ii)
Pavilion and (iii) NJHA.
Mortgage: Any mortgage, deed of trust or other instrument creating a lien
on the Partnership's interest in the Amphitheater as security for repayment of
any liability or indebtedness.
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Most Favorable Offer: Shall have the meaning assigned to such term
pursuant to the provisions of Section 12.02(c)(1) hereof.
NJHA: New Jersey Highway Authority, a body corporate and politic created
and existing under and by virtue of the New Jersey Highway Authority Act, as
amended.
Non-Artist Operating Agreements: All Major Operational Agreements other
than Artist Agreements.
Non-Expanded Amphitheater Season: Any Amphitheater Season which ends prior
to substantial completion of the Renovation Work.
Offensive NY Amphitheater: Any Fully Restricted Facility which is being
proposed for construction or development in the Restricted NY Area other than
Defensive NY Amphitheaters.
Operating Budget: The budget of Operating Expenses of the Partnership to
be prepared each year in accordance with and pursuant to the provisions of
Section 12.04 hereof.
Operating Expenses: The overhead and operating expenses of the Partnership
which relate to the day-to-day operation of the Amphitheater such as salaries
for employees and staff for the Amphitheater, rent and other payments due to
NJHA or others pursuant to the Lease Agreement, utility costs for the
Amphitheater, insurance costs relating to the maintenance of casualty and
liability insurance for the Amphitheater, interest and required principal
amortization on the Partnership's indebtedness, costs relating to maintenance,
repair and upkeep of the Amphitheater and the personal property and equipment
used in connection with the operation of the Amphitheater and costs for the
purchase of office supplies and equipment. Notwithstanding anything to the
contrary implied by the immediately preceding sentence, none of the following
types of expenditures or expenses shall be "Operating Expenses" for purposes of
this Agreement:
(a) the costs directly attributable to or associated with the
booking, production, presentation or promotion of any performance or event
at the Amphitheater such as artist costs, advertising costs and costs of
staging; and
(b) costs or expenses which must be incurred as the result of any
emergency, casualty or other unforeseeable occurrence at the Amphitheater.
Partially Restricted Facility: Any arena, auditorium, building, hall,
stadium or other venue primarily designed for the presentation of live
entertainment events other than Fully Restricted Facilities.
Partners: Pavilion and Ardee. The term "Partners" shall not include any
assignee of a Partner's Partnership Interest, unless (i) the other Partner
agrees to admit such assignee to the Partnership or (ii) such assignee acquired
such Partnership Interest in accordance with, pursuant to and in compliance with
the provisions of Sections 18.04 or 18.05 hereof.
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Partnership: The Partnership created by this Agreement.
Partnership Act: The Delaware Uniform Partnership Act, Title VI, Chapter
15 of the Delaware Code (1974 revision), as amended from time to time.
Partnership Interest: All of the interest of any Partner in the
Partnership, including its (i) right to a distributive share of the profits and
losses of the Partnership, (ii) right to a distributive share of the assets of
the Partnership, and (iii) right to participate in the management of the affairs
of the Partnership.
Partnership Purposes: The purposes for which the Partnership is formed as
set forth in Section 3.01 of this Agreement.
Pavilion: Pavilion Partners, a Delaware general partnership whose sole
general partners are SM/PACE, Inc. and Amphitheater Entertainment Partnership.
Percentage Interest: The respective Partnership Interest of each Partner
in the Partnership expressed as a percentage of the Partnership Interests owned
by all Partners. The Percentage Interest of Pavilion is sixty-six and two-thirds
percent (66-2/3%) and the Percentage Interest of Ardee is thirty-three and
one-third percent (33-1/3%).
Permitted Rate: The lesser of (a) two percent (2%) per annum over the
Prime Rate or (b) the maximum non-usurious interest rate permitted by applicable
law from time to time in effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other form of entity.
Prime Rate: The prime rate of interest per annum announced, from time to
time, by major U.S. money center banks as published daily in the "Money Rates"
column of The Wall Street Journal; provided, however, that if The Wall Street
Journal should ever cease, for any reason, to publish such rate on a daily
basis, then the Prime Rate shall be the rate of interest designated, and in
effect from time to time, by Citibank, N.A., in New York, New York as its prime
rate or base rate charged on commercial loans.
Qualified Liabilities: Shall have the meaning assigned to such term
pursuant to Section 6.01(c) hereof.
Qualified Operational Shortfall: Shall have the meaning assigned to such
term pursuant to Section 6.01(b) hereof.
Qualified Shortfall Notice: Shall have the meaning assigned to such term
pursuant to Section 6.01(a) hereof.
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Renovation Work: Such renovation, rehabilitation, construction and upgrade
activities at the Amphitheater necessary to increase the Amphitheater's covered
seating capacity to approximately 7,000 and lawn seating capacity to
approximately 10,500 and to otherwise upgrade the Amphitheater's concession
plazas and the Parking Facilities as more fully described on Exhibit "C"
attached hereto.
Restricted Area: The geographical area encompassed by the Restricted NJ
Area and the Restricted NY Area.
Restricted NJ Area: The geographical area located in the State of New
Jersey described on Exhibit "A-1" attached hereto.
Restricted NY Area: The geographical area located in the State of New York
described on Exhibit "A-2" attached hereto. The Partners hereby acknowledge that
Xxxxx Beach Amphitheater, is not located in the Restricted NY Area.
Restricted Facility: Any Partially Restricted Facility or Fully Restricted
Facility.
Tax Year: The fiscal year of the Partnership for federal income tax
purposes.
Upfront Advances: All concessionaire grants or advances received or
receivable by the Partnership prior to the first event, performance or
presentation held at the Amphitheater after completion of the Renovation Work.
Any amounts received from a concessionaire which are properly attributable to
operations during any Non-Expanded Amphitheater Season shall not be included as
a part of Upfront Advances but shall instead be included in the Partnership's
income from operations during such Non-Expanded Amphitheater Season.
Waterloo: The premises located in Stanhope, New Jersey at which live
concerts and other entertainment events are presented from time to time and
which is commonly referred to as "Waterloo Village".
ARTICLE II
Name of Business; Offices
2.01 Partnership Name. The name of the Partnership shall be GSAC Partners.
In addition to the foregoing name, the activities and business of the
Partnership may be conducted, in the Managing Partner's discretion, under such
other names as may be designated from time to time by the Managing Partner;
provided, however, the Managing Partner may not use, without the prior consent
of Ardee, any assumed name for the Partnership which includes within it the name
of Ardee, Pavilion, the partners of Pavilion or any of their respective
Affiliates. The Partners shall execute and file such certificates, if any, as
are required by the provisions of any
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assumed name law or statute in any jurisdiction in which the Partnership
conducts business, as may be required to reflect the Partnership's operation
under such names.
2.02 Partnership Offices. The principal place of business of the
Partnership shall be at 000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000. The
Partnership shall also maintain an office at the Amphitheater during the
Amphitheater Season which will be staffed by the employees of the Partnership
who will manage, operate and maintain the Amphitheater.
ARTICLE III
Purpose and Power of the Partnership
3.01 Purposes. The character and purposes of the specific business to be
conducted by the Partnership are (i) to lease, operate, use and maintain the
Amphitheater (including the booking, promotion, production and presentation of
live entertainment events at the Amphitheater), (ii) to perform and fulfill all
obligations and duties of the "Tenant" under the terms and provisions to be
contained in the Lease Agreement and (iii) to take any and all other actions
which may be incidental to or otherwise reasonably related to the foregoing
business and purposes.
3.02 Powers. The Partnership shall have the power, in fulfilling the
purposes set forth in Section 3.01, to conduct any business or take any action
which is lawful and which is not prohibited by the Partnership Act.
ARTICLE IV
Term of Partnership
The Partnership shall begin on the date first set forth above and shall
continue for a term of twenty-two (22) years from such date unless sooner
dissolved pursuant to Section 17.01 hereof or by operation of law.
Notwithstanding the foregoing, if the term of the Lease Agreement should be
extended, for any reason whatsoever, beyond the twenty-two (22) year term
referred to in the immediately preceding sentence, then the term of the
Partnership shall be automatically extended to expire upon such extended term of
the Lease Agreement.
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ARTICLE V
Initial Contributions and Contributions for Development Costs
5.01 Initial Contribution.
(a) Upon execution of this Agreement, Pavilion shall convey, and
does hereby convey, to the Partnership all of its rights, titles and
interests in, under or created by the Memorandum of Understanding.
(b) Upon execution of this Agreement, Ardee shall convey, and does
hereby convey, or shall cause Delsener Xxxxxx Enterprises, Ltd. to convey,
to the Partnership, all of Delsener Xxxxxx Enterprises, Ltd.'s rights,
titles and interests in, under or created by the Memorandum of
Understanding.
(c) It is hereby specifically agreed by and between the Partners
that the fair market value of the assets being conveyed to the Partnership
pursuant to Section 5.01 is equal to $0.00. As a result, the initial
balance of the Capital Account of Pavilion and Ardee, following completion
of the initial contribution required pursuant to the provisions of this
Section 5.01 shall each be $0.00.
5.02 Development Costs. Except as otherwise provided herein, Pavilion and
Ardee shall be obligated from time to time to contribute to the capital of the
Partnership, in proportion to their respective Percentage Interests, a
sufficient amount of funds to provide to the Partnership enough cash to pay and
discharge all Development Costs as and when payable. In furtherance of the
foregoing, the following provisions shall apply:
(a) If the Partnership does not have adequate funds available to it
to pay any Development Costs when due, then the Managing Partner shall
deliver a notice ("Development Cost Notice") to the Partners specifying
the amount of funds needed to pay such Development Costs and stating that
each Partner is obligated to contribute to the Partnership its Percentage
Interest of the amount of funds needed to pay such Development Costs.
(b) Following delivery of a Development Cost Notice to the Partners
by the Managing Partner, each Partner shall be obligated to contribute to
the capital of the Partnership, within fifteen (15) days following receipt
of such Development Cost Notice, its respective Percentage Interest of the
total amount of Development Costs identified in such Development Cost
Notice.
Without the prior consent of both Partners, no construction contract for the
Renovation Work may be executed on behalf of the Partnership which does not
satisfy the criteria specified in clause (g) of the definition of "Major Action"
in Article I hereof.
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5.03 Upfront Advances. The Partnership shall use any and all Upfront
Advances exclusively for the payment of Development Costs. To the extent that
any of the Upfront Advances have not been used to pay Development Costs after
all Development Costs have been fully paid and discharged, then, notwithstanding
the provisions of Article VII hereof, that remaining portion of the Upfront
Advances shall be distributed to the Partners in proportion to their respective
Percentage Interests.
5.04 Prior Development Costs.
(a) Pavilion hereby represents and warrants to Ardee that attached
hereto as Exhibit "D-1" is a true, correct, complete and accurate schedule
of all Development Costs paid by Pavilion through September 30, 1996.
Ardee hereby represents and warrants to Pavilion that attached hereto as
Exhibit "D-2" is a true, correct, complete and accurate schedule of all
Development Costs which have been paid by Ardee through September 30,
1996.
(b) All amounts paid for Development Costs prior to the execution
hereof shall be deemed to have been contributed to the capital of the
Partnership by the Partner that paid such amounts and shall be added to
the balance of such Partner's Capital Account.
(c) In order that the Partners' contributions for Development Costs
paid prior to the execution of this Agreement will be in proportion to
their respective Percentage Interests, the following provisions shall
apply:
(1) Upon execution hereof, but subject to the provisions of
clause (d) of this Section 5.04, Ardee shall contribute to the
capital of the Partnership immediately available funds in the amount
by which one-half of the Development Costs paid by Pavilion through
September 30, 1996 (as reflected on Exhibit "D-1" attached hereto)
exceeds all of the Development Costs paid by Ardee through September
30, 1996 (as reflected on Exhibit "D-2" attached hereto).
(2) Upon final determination by the Partners of the amount of
Development Costs paid by each between September 30, 1996 and the
execution of this Agreement ("Pending Costs"), Ardee shall
contribute to the capital of the Partnership immediately available
funds in the amount by which one-half of Pavilion's Pending Costs
exceeds all of Ardee's Pending Costs.
Amounts contributed to the capital of the Partnership by Ardee pursuant to
this Section 5.04(c) shall be fully utilized by the Partnership to pay and
discharge Development Costs before any Development Cost Notice is provided
pursuant to Section 5.02(a) hereof.
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(d) Each Partner shall have the right to review the books, records,
invoices and other supporting documentation relating to the Development
Costs paid by the other Partner through September 30, 1996 for a period of
ninety (90) days following the execution of this Agreement (such ninety
(90) day period being herein called the "Review Period"). If, as a result
of the review of such books, records, invoices and other documentation
during the Review Period, one of the Partners disputes the other Partner's
determination of the amount of Development Costs paid by the other Partner
through September 30, 1996, then such Partner shall have the right to
require that such dispute be settled in accordance with the provisions of
Article XVI hereof so long as notice of such dispute is provided to the
other Partner prior to the expiration of the Review Period. If the amount
of Development Costs actually paid by either of the Partners through
September 30, 1996 should be changed as a result of any such dispute, then
upon final settlement of such dispute, the amount of the capital
contribution required to be made by Ardee pursuant to Section 5.04(c)(1)
hereof shall be appropriately increased or decreased with a distribution
to, or contribution by, Ardee, as necessary. If neither Partner provides
notice of a dispute pursuant to this Section 5.04(d) prior to the
expiration of the Review Period, then such Partner shall be deemed to have
accepted the amounts specified in Exhibits "D-1" and "D-2" attached hereto
as the amount of Development Costs paid by each Partner through September
30, 1996.
5.05 Development Cost Draw Requests. Copies of each draw request from the
Partnership's contractor for the Renovation Work, together with all back-up
information and written comments or approvals from the Partnership's architect,
shall be provided to Ardee immediately upon receipt by the Managing Partner.
Ardee shall have the right to review and comment upon each such draw request and
require the Managing Partner to assert or reserve any claims, on behalf of the
Partnership, which Ardee believes are available as a result of its review of any
such draw request and other support documentation. However, none of the
provisions contained in this Section 5.05 shall be read to negate, limit, lessen
or otherwise affect either Partner's obligation to make all capital
contributions otherwise required to be made pursuant to the provisions of this
Article V.
5.06 Security for Ardee's Development Cost Contribution Obligation. As
security for the performance of its obligations to make contributions to the
Partnership required by the provisions of Section 5.02 of this Agreement, Ardee
does hereby grant to the Partnership a security interest (the "Security
Interest") in the Pledged Account (as hereinafter defined). As used herein, the
term "Pledged Account" shall mean Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx
Incorporated Account No. 546-07B79 (formerly Account No. 546-07A11) maintained
in the name of Ardee, as well as the Cash Securities Account and any other
account of Ardee maintained with respect thereto. The following provisions shall
apply with respect to the Security Interest:
(a) Attached hereto as Exhibit "E" is (i) a true, correct and
complete copy of the most recent Account Statement received by Ardee with
respect to the Pledged Account and (ii) a letter issued by Xxxxxxx Xxxxx
confirming the assets held in the Pledged Account as of November 12, 1996
(such Account Statement and letter being herein collectively
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called the "Xxxxxxx Xxxxx Statement"). The securities listed in the
Xxxxxxx Xxxxx Statement continue to be held in the Pledged Account as of
the date hereof and none of such securities have been removed from the
Pledged Account since November 12, 1996 (except as required to fund the
payment required to be made to the Partnership pursuant to the provisions
of Section 5.04(c)(1) hereof). Ardee agrees that, for so long as this
Agreement shall remain in effect, the Pledged Account will contain nothing
but cash or obligations backed by the full faith and credit of the
government of the United States of America. Notwithstanding anything to
the contrary contained herein, Ardee may withdraw from the Pledged Account
(i) interest received from time to time on account of the assets held in
the Pledged Account and (ii) such funds as may be required to fund
directly to the Partnership capital contributions to be made by Ardee
pursuant to the provisions of Sections 5.02 or 5.04 hereof.
(b) Upon execution of this Agreement, Ardee shall (i) execute and
deliver to the Managing Partner one or more counterparts of a UCC-1
describing the Pledged Account in a form reasonably acceptable to the
Managing Partner and (ii) execute and cause Xxxxxxx Xxxxx Xxxxxx Xxxxxx &
Xxxxx Incorporated to execute and deliver to the Managing Partner a
Pledged Collateral Account Agreement pertaining to the Pledged Account in
a form reasonably acceptable to the Managing Partner.
(c) Upon full and final satisfaction and discharge of Ardee's
obligations to make contributions to the Partnership required by the
provisions of Section 5.02 of this Agreement, the Partnership shall
release the Security Interest by executing a UCC-3 and simultaneously
authorizing Xxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxx Incorporated to release to
Ardee, the funds then remaining in the Pledged Account.
(d) If Ardee discharges all or any portion of its obligations
required by the provisions of Section 5.02 of this Agreement by applying
thereto funds other than those included in the Pledged Account, then the
Partnership shall release from the Security Interest a portion of the
amount deposited in the Pledged Account in an amount not more than the
amount so discharged by Ardee with funds not included in the Pledged
Account.
(e) Notwithstanding the provisions of Section 19.02 hereof or any
other provision to the contrary herein, THE LAW OF THE STATE OF TEXAS
SHALL GOVERN AND CONTROL THE CREATION, PERFECTION AND ENFORCEMENT OF THE
SECURITY INTEREST AND THE OTHER PROVISIONS CONTAINED IN THIS SECTION 5.06.
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ARTICLE VI
Operational Cash Shortfalls and Deficit Loans
6.01 Operational Shortfalls. Subject to the provisions of Section 6.02
hereof, the following provisions shall apply:
(a) If a Qualified Operational Shortfall occurs at any time, then
the Managing Partner shall deliver a notice ("Qualified Shortfall Notice")
to the Partners specifying the amount of funds needed to cover such
Qualified Operational Shortfall and stating that each Partner is obligated
to contribute to the capital of the Partnership its Percentage Interest of
the amount of funds needed to cover such Qualified Operational Shortfall.
Following delivery of a Qualified Shortfall Notice to the Partners by the
Managing Partner, each Partner shall be obligated to contribute to the
capital of the Partnership, within fifteen (15) days following receipt of
such Qualified Shortfall Notice, its respective Percentage Interest of the
amount of funds needed to cover the Qualified Operational Shortfall as set
forth in such Qualified Shortfall Notice.
(b) As used herein, the term "Qualified Operational Shortfall" shall
mean the occurrence or happening, at any time, in the Managing Partner's
reasonable discretion, of the circumstance of the Partnership having an
insufficient amount of cash to pay or cover the Qualified Liabilities
(herein defined) of the Partnership as they become due.
(c) As used herein, the term "Qualified Liabilities" shall mean any
and all debts, liabilities, expenses, charges or other obligations of the
Partnership other than Development Costs. The term "Qualified Liabilities"
shall include, without limitation, costs associated with the engagement of
performers at the Amphitheater, advertising costs, promotion costs,
employee costs and rental obligations under the Lease.
6.02 Deficit Loan for the Non-Expanded Amphitheater Seasons.
(a) Obligation During the Non-Expanded Amphitheater Seasons Only.
Notwithstanding the provisions of Section 6.01 hereof, if a Qualified
Operational Shortfall occurs at any time during any Non-Expanded
Amphitheater Season, then Pavilion and Ardee shall each extend a loan
("Deficit Loan") to the Partnership in an amount equal to fifty percent
(50%) of such cash deficit within fifteen (15) days following receipt of
written notice of the existence of such cash deficit from the Managing
Partner.
(b) Deficit Loan Terms. No distributions shall be made to the
Partners pursuant to Article VII hereof at any time during which any
Deficit Loan remains unpaid and outstanding. Each Deficit Loan shall bear
interest at a variable rate of interest per annum equal to the Permitted
Rate and shall be repayable as soon as the Partnership has funds available
therefor. Each payment made by the Partnership on the Deficit Loans
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shall be applied and apportioned between the Deficit Loans in proportion
to the principal balance of each Deficit Loan.
ARTICLE VII
Cash Distributions
7.01 Distribution of Available Cash. Except as provided in Section 7.02 or
Section 7.03 hereof, all Available Cash shall be distributed by the Partnership
within 60 days after the end of each Amphitheater Season to the Partners in
proportion to their respective Percentage Interests.
7.02 Distribution for Non-Expanded Amphitheater Seasons Only.
Notwithstanding the provisions of Section 7.01 hereof, with respect to each
Non-Expanded Amphitheater Season only, cash in an amount equal to the net income
from operations of the Partnership (as determined pursuant to generally accepted
accounting principles) during the Amphitheater Fiscal Year in which such
Non-Expanded Amphitheater Season occurs shall be distributed by the Partnership,
within sixty (60) days after the end of such Non-Expanded Amphitheater Season,
to the Partners, fifty percent (50%) to Pavilion and fifty percent (50%) to
Ardee.
7.03 Distributions Following Sale of Amphitheater: Following a sale or
other disposition of all or substantially all of the Partnership's interest in
the Amphitheater, no further distributions shall be made pursuant to Sections
7.01 or 7.02 hereof. Instead, all distributions thereafter shall be governed by
the provisions of Section 17.03 hereof.
7.04 Non-Cash Receipts. All non-cash goods, benefits or services received
in kind by the Partnership as a result of the operation and exploitation of the
Amphitheater shall be Partnership assets to be either (i) used by the
Partnership for valid business purposes consistent with the then effective
Annual Operating Budget or (ii) distributed to the Partners pursuant to the
provisions of this Agreement in the same manner as if such non-cash goods,
benefits or services were cash in an amount equal to their respective fair
market values. The determination of the fair market value of any such non-cash
item shall be made jointly by the Partners prior to the distribution of such
item to the Partners.
ARTICLE VIII
Tax Allocations
8.01 General Provisions. Except as provided to the contrary elsewhere in
this Article VIII, all of the Partnership's income, gains, losses and deductions
for each Tax Year shall be allocated between the Partners in accordance with the
following provisions:
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(a) Until each Partner has been allocated an amount of the
Partnership's income pursuant to this Section 8.01(a), net of any losses
or deductions allocated pursuant to this Section 8.01(a), in an amount
equal to the aggregate cash distributions made to such Partner pursuant to
Section 7.02 hereof with respect to the Non-Expanded Amphitheater Seasons,
the Partnership's income, gains, losses and deductions shall be allocated
fifty percent (50%) to Pavilion and fifty percent (50%) to Ardee.
(b) All income, gains, losses and deductions of the Partnership not
allocated pursuant to Section 8.01(a) hereof, shall be allocated between
the Partners in proportion to their respective Percentage Interests.
8.02 Gain or Loss Upon Sale of the Amphitheater. Notwithstanding the
provisions of Section 8.01 hereof, but subject to the provisions of Section 8.03
of this Agreement, the following provisions shall apply:
(a) The gain, if any, recognized by the Partnership upon any
disposition of all or substantially all of the Partnership's interest in
the Amphitheater shall be allocated as follows:
(1) First, to the Partners whose Capital Accounts have a
negative balance, in proportion to and to the extent of such
negative balances;
(2) Second, to the Partners in the minimum amounts necessary
to cause the balances of their respective Capital Accounts to be in
the ratios of their respective Percentage Interests; and
(3) Any remaining gains shall be allocated between the
Partners in proportion to their respective Percentage Interests.
(b) The loss, if any, recognized by the Partnership, upon the
disposition of all or substantially all of its interest in the
Amphitheater shall be allocated as follows:
(1) First, to the Partners in the minimum amounts necessary to
cause the balances in their respective Capital Accounts to be in the
ratios of their respective Percentage Interests.
(2) Second, any remaining amount shall be allocated between
the Partners in proportion to their respective Percentage Interests.
(c) The allocation of any gain or loss from the disposition of all
or substantially all of the Partnership's interest in the Amphitheater
pursuant to this Section 8.02 shall be made after the allocations required
to be made pursuant to Section 8.01 hereof for the Tax Year in which such
disposition occurred.
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8.03 Section 704(c) Allocations. Income, gain, loss and deduction with
respect to any item of property contributed to the Partnership shall, solely for
federal income tax purposes, be allocated between the Partners so as to take
into account any difference between the fair market value of such item of
property and its adjusted basis for federal income tax purposes on the date of
such contribution, in accordance with the requirements of Section 704(c) of the
Code. All allocations under this Section 8.03 shall be made in such a manner as
the Managing Partner shall determine reasonably reflects the requirements of
Section 704(c) of the Code. No allocations pursuant to this Section 8.03 shall
be reflected as an adjustment to any Partner's Capital Account.
8.04 Transferor/Transferee Allocations. If a Partnership Interest is
transferred during any Tax Year, the income, gains, losses and deductions
allocable in respect of that Partnership Interest shall be prorated between the
Transferor and the Transferee on the basis of the number of days in the year
that each was the holder of that Partnership Interest without regard to the
results of the Partnership operations during the period before and after the
transfer, unless either the transferor or the transferee elects to use an
allocation based on the results as of the record date of transfer, to the extent
permitted by the Code, and agrees to reimburse the Partnership for the cost of
making and recording such allocation. A transferee of a Partnership Interest
shall succeed to the Capital Account of the transferor.
8.05 Capital Accounts. The Partnership shall maintain a capital account
for each Partner, the initial balance of each of which shall be zero. Each
Partner's capital account shall be increased (i) by any income and gains
allocated to that Partner for federal income tax purposes pursuant to Article
VIII hereof, and (ii) by the amount of cash and the fair market value of any
property contributed to the Partnership by that Partner (net of liabilities
secured by such contributed property that the Partnership is considered to
assume or take subject to under Section 752 of the Code). Each Partner's capital
account shall be decreased (i) by any deductions and losses allocated to that
Partner for federal income tax purposes pursuant to Article VIII hereof, and
(ii) by the amount of cash and the fair market value of any property distributed
by the Partnership to that Partner (net of liabilities secured by such
distributed property that such Partner is considered to assume or take subject
to under Section 752 of the Code). The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with the U.S. Treasury Regulations issued pursuant to Section
704(b) of the Code, and shall be interpreted and applied in a manner consistent
with such regulations. If a Partner's Capital Account has a deficit balance
following liquidation (as defined in Section 1.704-1(b)(2)(ii)(g) of the U.S.
Treasury Regulations promulgated under Section 704 of the Code) of the Partner's
interest in the Partnership (after taking into account all Capital Account
adjustments for the Tax Year in which liquidation occurs), such Partner shall,
by the end of such Tax Year (or, if later, within ninety (90) days after the
date of such liquidation), contribute to the Partnership an amount necessary to
increase the balance in its Capital Account to $0.00.
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ARTICLE IX
Ownership of Partnership Property
All real or personal property acquired by the Partnership shall be owned
by the Partnership, such ownership being subject to the other terms and
provisions of this Agreement. Each Partner hereby expressly waives the right to
require partition of any Partnership property or any part thereof.
ARTICLE X
Voluntary Withdrawal
No Partner shall have the right to, and each Partner agrees that it will
not, withdraw voluntarily from the Partnership. In the event any Partner
withdraws from the Partnership in contravention of this Agreement, such
withdrawing Partner shall be liable to the other Partner for all damages
attributable to its breach of this Agreement. The withdrawal of a Partner in
contravention of this Article X shall not cause the Partnership to be dissolved,
and such withdrawing Partner shall be deemed to be an assignee of a Partner's
Partnership Interest and shall have only the rights provided a Partner's
assignee under the provisions of the Partnership Act.
ARTICLE XI
Fiscal Matters
11.01 Fiscal Year. The fiscal year of the Partnership for federal income
tax purposes shall end on October 31 of each calendar year or such other fiscal
year as may be required pursuant to the application of the provisions of the
Code or the U.S. Treasury Regulations promulgated thereunder. The fiscal year of
the Partnership for financial accounting purposes shall end on October 31 of
each calendar year or such other fiscal year as may be selected by the Managing
Partner from time to time.
11.02 Books and Records. Proper books and records shall be kept by the
Managing Partner with reference to all Partnership transactions, and each
Partner shall at all reasonable times during business hours have access thereto.
All items of income and deductions recognized during a Tax Year shall be
allocated as of the end of each Tax Year, based on the facts and circumstances
existing as of the end of that year. Interim reports may be based on the facts
and circumstances existing at the time of these reports subject to year-end
adjustments. Monthly reports of operating expenses and income shall be prepared,
or cause to be prepared, by the Managing Partner as of the end of each calendar
month and a copy thereof provided to the Partners within thirty (30) days after
the end of each such calendar month. Year end financial
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statements shall be prepared, or caused to be prepared, by the Managing Partner
as of the end of each financial fiscal year of the Partnership and a copy
thereof provided to the Partners within 120 days after the end of each such
financial fiscal year.
11.03 Partnership Bank Accounts. All funds of the Partnership shall be
deposited in its name in an account or accounts maintained at a national or
state bank. Checks shall be drawn upon the Partnership and may be signed by such
persons as may be designated from time to time by the Managing Partner;
provided, however, any single check (other than amounts payable in connection
with the settlement of a show) in an amount greater than $10,000 may not be
signed or issued on behalf of the Partnership by the Managing Partner unless and
until Ardee has provided written approval by facsimile, which approval may not
be unreasonably withheld. In furtherance of the foregoing, the Managing Partner
shall promulgate a one page "check request approval form" for purposes of
describing any check which requires the approval of Ardee which will describe
the payee and the purpose of the check and provide a signature line for an
authorized representative of Ardee to provide approval.
11.04 Tax Matters and Reports. Any provision hereof to the contrary
notwithstanding, solely for federal income tax purposes, each of the Partners
hereby recognizes that the Partnership will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, the
filing of U.S. Partnership Returns of Income shall not be construed to extend
the purposes of the Partnership or expand the obligations or liabilities of the
Partners. The Managing Partner shall be the "tax matters partner" for all
purposes related to federal, state and local income tax laws.
11.05 Tax Returns. The Managing Partner shall cause to be prepared and
filed all tax returns and statements, if any, which must be filed on behalf of
the Partnership with any taxing authority, and shall submit copies of all such
returns and statements to the Partners. All fees, charges and other expenses
payable to third party professionals such as attorneys or accountants relating
to the preparation and filing of tax returns and statements or otherwise
reporting of financial results of the Partnership, shall be properly chargeable
as expenses of the Partnership.
11.06 Deduction of Expenses. The Partnership shall treat as an expense for
federal income tax purposes all amounts which may be considered as ordinary and
necessary business expenses deductible under applicable rules of the Code and
the regulations promulgated thereunder. Notwithstanding the foregoing, the
Managing Partner may, from time to time, elect on behalf of the Partnership to
capitalize certain expenditures which might otherwise be considered ordinary and
necessary business expenses for federal income tax purposes, and such elections
shall be binding on all Partners.
11.07 Section 754 Election. In the case of distribution of Partnership
property within the provisions of Section 734 of the Code or in the case of a
transfer of a Partnership interest permitted by this Agreement made within the
provisions of Section 743 of the Code, the Partnership shall file an election
under Section 754 of the Code in accordance with the procedures set forth in the
applicable Treasury Regulation upon the request of any Partner if such
requesting
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Partner agrees to pay all costs incurred by the Partnership in connection with
the making of such an election.
11.08 Reimbursement of Expenses. Provided that any such costs and expenses
are within the limits contained in the then effective Operating Budget, the
Partnership shall be obligated to reimburse the Partners and their respective
Affiliates and employees for any and all out-of-pocket costs and expenses for
items such as delivery charges, travel costs, long distance telephone and fax
charges and postage expenses to the extent that such costs and expenses relate
to the business of the Partnership. Notwithstanding the foregoing, it is
specifically understood and acknowledged that nothing contained in this Section
11.08 shall obligate the Partnership to reimburse any Partner or any of its
Affiliates for any salaries or overhead expenses.
ARTICLE XII
Management of Partnership Affairs
12.01 Major Actions.
(a) Except as provided in clause (b) of this Section 12.01, no Major
Action may be taken by the Partnership or by any Partner on behalf of the
Partnership without first obtaining prior written approval from both of the
Partners. The terms and conditions to be contained in the Lease Agreement must
also be mutually approved by the Partners.
(b) Notwithstanding the provisions of clause (a) of this Section 12.01,
capital expenditures paid or incurred to satisfy any legal requirements
(including requirements imposed pursuant to the provisions of the Lease
Agreement) or which may be necessary to cure or correct any health or safety
danger to patrons or employees of the Amphitheater may be authorized by the
Managing Partner without the consent and approval of Ardee.
12.02 Management Vested in the Managing Partner.
(a) All responsibility and authority relating to the operations, business
and management of the Partnership, except for the taking of Major Actions, shall
be exclusively vested in the Managing Partner. The Managing Partner is hereby
exclusively authorized to take any and all actions reasonably necessary or
required to carry out the Partnership Purposes, including, without limitation,
the hiring and retaining of such employees and other personnel (subject to the
provisions of clause (c) of this Section 12.02) as may be reasonably necessary,
in the discretion of the Managing Partner, to efficiently and effectively use,
operate and maintain the Amphitheater and otherwise fulfill the Partnership
Purposes. Notwithstanding the foregoing, the Managing Partner agrees to
generally consult with Ardee, and reasonably consider any comments provided by
Ardee, in connection with the management of the business of the Partnership in a
reasonable manner and at reasonable times upon the request of Ardee.
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(b) The following provisions shall apply with respect to Non-Artist
Operating Agreements:
(1) If there are two or more competing offers for any Non-Artist
Operating Agreement and Pavilion and Ardee cannot mutually agree upon
which of such offers shall be accepted, then the offer ("Most Favorable
Offer") containing the most favorable economic and financial terms,
considered as a whole, to the Partnership shall be selected by the
Partnership.
(2) If Pavilion proposes that the Partnership accept an offer for a
specific Non-Artist Operating Agreement for which there is not a competing
offer and Ardee has not, within thirty (30) days after formal written
notice of the proposal to accept such offer on behalf of the Partnership,
either (i) approved such offer for such Non-Artist Operating Agreement or
(ii) procured a competing offer for such Non-Artist Operating Agreement,
then Pavilion shall have the authority to execute and enter into the
originally proposed Non-Artist Operating Agreement with no further action
or approval from Ardee.
(c) Notwithstanding the provisions of Section 12.02(a) hereof, it is
understood and agreed that decisions related to the filling of the following
positions shall require approval of both Partners: the general manager, the
marketing director, the head of security (if any) and the controller; provided,
however, Ardee agrees not to unreasonably withhold its consent to individuals
proposed to be hired in those positions by the Managing Partner.
(d) Pavilion shall not be entitled to (i) any fee for its services to be
rendered pursuant to this Section 12.02 or (ii) allocate or otherwise charge to
the Partnership any of its general and administrative expenses or other internal
overhead costs.
12.03 Booking and Promotional Responsibility.
(a) Ardee shall be primarily responsible for the activities related
to (i) booking (or otherwise engaging) talent for appearance at the
Amphitheater and (ii) advertising, marketing and promoting concerts and
performances at the Amphitheater.
(b) Ardee hereby agrees to provide the necessary time and services
as may be required to cause (i) the Amphitheater to be properly and
adequately booked and engaged consistent with past practices at the
Amphitheater and (ii) each event or performance at the Amphitheater to be
appropriately advertised, promoted and marketed consistent with past
practices at the Amphitheater.
(c) For purposes of clause (b), it is hereby expressly acknowledged
and agreed that the phrase "consistent with past practices" shall not
refer to or mean that (i) the total number of performances booked at the
Amphitheater will, in all years, be equal to or in excess of the number of
performances booked in prior years, since the total number of performances
booked is often subject to the total number of performers on tour during
any
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particular Amphitheater Season or (ii) the quality of performers booked at
the Amphitheater will, in all years, be comparable to the quality of
performers booked in prior years, since the quality of performances booked
is often subject to the quality of the performers on tour during any
particular Amphitheater Season.
(d) Ardee shall not be entitled to (i) any fees for its services to
be rendered pursuant to this Section 12.03 or (ii) allocate or otherwise
charge to the Partnership any of its general and administrative expenses
or other internal overhead costs.
(e) An advertising or marketing budget for each event to be
presented at the Amphitheater shall be proposed by Ardee and subject to
the approval of the Managing Partner. Upon adoption of such marketing or
advertising budget for each such event, Ardee may thereafter implement all
decisions in connection with the marketing and promotion of such event
subject to the restrictions contained in the mutually approved budget.
(f) So long as Ardee, or any Affiliate of Ardee, is involved in the
booking or promotion of live entertainment events at Xxxxx Beach
Amphitheater, Ardee hereby covenants and agrees with Pavilion and the
Partnership as follows:
(1) Ardee shall provide oral notice to Pavilion of each offer
made to performers for appearance at the Xxxxx Beach Amphitheater
promptly following the making of each such offer.
(2) Pavilion shall have the right, upon the conclusion of each
Amphitheater Season, to review and inspect at Ardee's offices all
artist contracts and other related documentation for the
performances presented at the Xxxxx Beach Amphitheater during such
Amphitheater Season.
Pavilion covenants and agrees that it will not make use of any of the
information provided to it by Ardee pursuant to the provisions of this
Section 12.03(f) in connection with decisions related to the making of
booking offers at facilities (other than the Amphitheater) which are under
the control of Pavilion or any of its Affiliates.
12.04 Annual Operating Budgets. On or before November 30 of each calendar
year during the existence of the Partnership, commencing on November 30, 1996,
the Managing Partner shall provide to Ardee (i) a proposed Operating Budget for
the next Amphitheater Fiscal Year setting forth in reasonable detail the various
categories of Operating Expenses and the budgeted amounts for each such category
to be incurred by the Partnership during such Amphitheater Fiscal Year and (ii)
such reasonable information and materials related to the proposed Operating
Budget as may be reasonably requested by Ardee. If a final Operating Budget for
any Amphitheater Fiscal Year is not adopted by mutual agreement between the
Partners within thirty (30) days after submission by the Managing Partner of a
proposed Operating Budget for such Amphitheater Fiscal Year, then, so long as no
such final Operating
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Budget has been mutually approved, the Operating Budget for such Amphitheater
Fiscal Year shall be deemed to include all line items as to which unanimous
agreement between the Partners has been reached and, with respect to each other
line item, the Operating Budget for such Amphitheater Fiscal Year shall be
deemed to be the greater of (i) the smallest amount for such line item approved
by the Partners, (ii) the amount for the same line items specified in the
Operating Budget for the immediately preceding Amphitheater Fiscal Year with
such line item increased in the same proportion and amount by which the CPI
Index most recently reported prior to the first day of such Amphitheater Fiscal
Year exceeds the CPI Index most recently reported prior to the first day of the
immediately preceding Amphitheater Fiscal Year or (iii) if such Operating Budget
relates to the first Amphitheater Fiscal Year following the last Non-Expanded
Amphitheater Season, the amount for the same line item specified in the
Operating Budget for the immediately preceding Amphitheater Fiscal Year with
such line item increased in such amount as is necessary to address increased
operational or logistical requirements attributable to the expansion of the
Amphitheater's capacity as a result of the Renovation Work. For purposes hereof,
the Operating Budget for the first Amphitheater Fiscal Year shall be deemed to
be a budget of Operating Expenses containing the actual amount of Operating
Expenses paid and incurred by the Partnership during the first Amphitheater
Fiscal Year.
12.05 Responsibilities of the Partners. Subject to the other provisions of
this Agreement, the following provisions shall govern the services to be
rendered by each Partner pursuant to the terms of this Agreement:
(a) The Managing Partner shall manage, or cause to be managed, the
affairs of the Partnership in a prudent and businesslike manner. The
Managing Partner shall act as a fiduciary hereunder and in good faith in
the performance of its obligations hereunder, but shall have no liability
or obligation to the Partners or the Partnership for any decision made or
action taken in connection with the discharge of its duties hereunder if
such decision or action is (i) not a direct violation of, or in excess of
the authority granted by, the provisions of this Agreement and (ii) made
or taken in good faith and in the best interests of the Partnership,
irrespective of whether the same may be reasonably prudent or whether bad
judgment or negligence (excluding gross negligence) was exercised or
involved in connection therewith.
(b) Ardee shall fulfill its obligations specified in Section 12.03
hereof in a prudent and businesslike manner. Ardee shall act as a
fiduciary hereunder and in good faith in the performance of its
obligations hereunder, but shall have no liability or obligation to the
Partners or the Partnership for any decision made or action taken in
connection with the discharge of its duties hereunder if such decision is
(i) not a direct violation of, or in excess of the authority granted by,
the provisions of this Agreement and (ii) made or taken in good faith and
in the best interests of the Partnership, irrespective of whether the same
may be reasonably prudent or whether bad judgment or negligence (excluding
gross negligence) was exercised or involved in connection therewith.
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12.06 Indemnification. Each Partner and all of such Partner's partners,
agents, employees, officers, directors, shareholders and other representatives
shall be indemnified and held harmless by the Partnership, to the extent of the
assets of the Partnership, from and against any and all claims, demands,
liabilities, costs (including, without limitation, the cost of litigation and
reasonable attorneys' fees), damages and causes of action of any nature
whatsoever arising out of a claim asserted by any third party and relating to
the management of the affairs of the Partnership, except where the claim at
issue is based upon (i) the proven gross negligence or willful misconduct of the
indemnified party or (ii) an action taken by the indemnified party in direct
violation of, or in excess of the authority granted by, the provisions of this
Agreement. The indemnification rights herein contained shall be cumulative of,
and in addition to, any and all rights, remedies and recourses to which the
indemnified parties described herein shall be entitled, whether pursuant to some
other provision of this Agreement, at law or in equity.
12.07 Artist Agreements. Subject to the right of a Partner to require that
competitive bids be made on behalf of the Partnership for the booking of certain
live concerts at the Amphitheater in accordance with, and pursuant to, the
provisions of Section 13.02(b)(2)(B)(ii)(y) hereof or Section 13.02(d)(3)(ii)
hereof, the entering into of any Artist Agreement, as with other Major Actions,
shall be subject to the unanimous approval of the Partners. If either Partner
refuses to approve the engagement of a particular performer or show at the
Amphitheater on behalf of the Partnership which the other Partner ("Promoting
Partner") desires to engage for performance at the Amphitheater, then the
Promoting Partner shall have the right, subject to availability of the
Amphitheater, to rent the Amphitheater from the Partnership on a Cost Only Basis
(herein defined) for purposes of presenting such performer or show for its own
account. As used herein, the term "Cost Only Basis" shall mean, with respect to
any concert or event, the right to rent the Amphitheater from the Partnership
(subject to the Partnership's right to operate, through its concessionaires, all
concession operations at the Amphitheater) in exchange for reimbursing to the
Partnership (i) all of the Partnership's night of show expenses and (ii) the
portion of the Partnership's annual overhead costs which are appropriately
allocable to such concert or event (including rental obligations to NJHA,
insurance costs, utility costs and house staff costs).
12.08 Action Without Meeting. Any action required by the Partnership Act
or by this Agreement to be taken at a meeting of the Partners, or any action
which may be taken at a meeting of the Partners, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the Partners entitled to participate in the management of the Partnership
pursuant to the terms of the Partnership Act and such consent shall have the
same force and effect as a vote of the Partners.
12.09 Transactions with Partners and Affiliates of Partners. Except as may
be expressly contemplated or permitted by the provisions of this Agreement, the
Partnership shall not enter into any contracts, agreements or other business
relationships with either of the Partners or any of the Affiliates of either of
the Partners unless and except (i) all of the terms, provisions and conditions
of such contract, agreement or business arrangement have been fully described
and revealed to the other Partner and (ii) the other Partner has expressly
consented in writing to such
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contract, agreement or other business relationship. To the extent that either of
the Partners or any of the Affiliates of either of the Partners should hereafter
enter into any contract, agreement or other business arrangement with the
Partnership which satisfies the provisions of the immediately preceding
sentence, all rights accruing to such Partner or such Affiliate under such
contract, agreement or other business arrangement shall be the sole and
exclusive property of such contracting party and neither the Partnership nor the
other Partner or its Affiliates shall have any participation rights therein or
thereto.
12.10 Loaned Employees. Notwithstanding the provisions of Section 12.09
hereof, but subject to the provisions hereof relating to the Partnership's
Operating Budget, the Managing Partner shall have the express right and
authority to fill the staffing needs of the Partnership by causing employees of
(i) the Managing Partner, (ii) the partners of the Managing Partner, (iii)
Affiliates of the partners of the Managing Partner, (iv) Ardee or (v) Affiliates
of Ardee to provide services to the Partnership on a full- or part-time basis.
Each such employee who is so loaned to the Partnership shall have all or such
appropriate portion of his or her salary and benefit costs reimbursed by the
Partnership to the actual employer of such employee. The Managing Partner shall
include in the proposed Operating Budget submitted pursuant to the provisions of
Section 12.04 hereof for each Amphitheater Fiscal Year a list identifying each
employee that is then being loan to the Partnership pursuant to the provisions
of this Section 12.10 and the details as to the portion of his or her salary and
benefit costs being reimbursed by the Partnership to the actual employer of such
employee.
12.11 Employee/Travel Related Development Costs. To the extent that any
Development Costs consist of (i) the wages, benefits or other related costs of
an employee of either Partner (or the Affiliate of either Partner) performing
duties related to the designing, planning or construction of the Renovation Work
or (ii) the travel and lodging expenses of any such employee incurred in
connection with the designing, planning or construction of the Renovation Work,
it is expressly stipulated, agreed and acknowledged that only that portion of
such wages, benefits, costs and expenses which are appropriately and properly
allocable to the planning, designing and construction of the Renovation Work
shall be included as Development Costs for purposes of this Agreement.
12.12 Special Provisions for Termination of Lease for Excess Artist Share.
Reference is made to the fact that it is currently anticipated that the Lease
will contain provisions creating in favor of the Partnership a right ("Economic
Termination Option") to terminate the Lease in the event that (i) artist costs
at the Amphitheater exceed a specified percentage of gross ticket revenues at
the Amphitheater and (ii) the Partnership and NJHA are unable to mutually agree
to modifications to the rental obligations under the Lease. The following
provisions shall apply with respect to the Economic Termination Option:
(A) Within forty-five (45) days following the conclusion of each
Applicable Time Period (herein defined), the Managing Partner shall
provide to Ardee the Managing Partner's calculation of the Artist Share
(as such term is defined in the Lease Agreement) for such Applicable Time
Period. As used herein, the term "Applicable Time Period"
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shall mean any one or more relevant periods of time during which the
Artist Share is to be measured pursuant to the provisions of the Lease for
purposes of determining whether the Economic Termination Option is
available for exercise by the Partnership.
(B) If one of the Partners ("Terminating Partner") should desire to
exercise the Economic Termination Option at a time when it is available
for exercise, such Partner must provide written notice thereof at least
thirty (30) days prior to the deadline for the exercise of the Economic
Termination Option. If, at any time after delivery of a notice pursuant to
the provisions of the immediately preceding sentence by a Terminating
Partner, NJHA and the Partnership should mutually agree to modifications
to the rental obligations under the Lease to the satisfaction of both
Partners, then such notice shall automatically, and with no further action
required by any party, be revoked and of no further force or effect.
(C) If the other Partner ("Non-Terminating Partner") does not wish
to terminate the Lease pursuant to the Economic Termination Option, then
the Non-Terminating Partner must provide written notice thereof to the
Terminating Partner and agree to purchase the Terminating Partner's
interest in the Partnership for an amount equal to (i) the Terminating
Partner's Percentage Interest multiplied by (ii) the Partnership's then
unamortized Development Costs (with the express understanding that the
Partnership's Development Costs shall be amortized for these purposes on a
straight-line basis over 240 months commencing on the first public
performance at the Facility following completion of the Renovation Work).
(D) If the Non-Terminating Partner fails to provide notice of its
decision to purchase the Terminating Partner's interest in the Partnership
on or before the date which is ten (10) days before the deadline to
exercise the Economic Termination Option, then the Managing Partner shall
be obligated to exercise, on behalf of the Partnership, the Economic
Termination Option in a timely manner.
ARTICLE XIII
Other Activities
13.01 Generally. Subject to the provisions of Section 13.02 hereof, this
Agreement shall not preclude or limit in any respect the right of any Partner to
engage or invest in any business activity of any nature or description,
including those which may be similar to the business of the Partnership. Neither
the Partnership nor any Partner shall have any right by virtue of this Agreement
or any relationships created hereby in or to such other ventures or activities
or to the income or proceeds derived therefrom.
13.02 Restrictions on Competition. Notwithstanding any of the other
provisions contained in this Agreement, the Partners hereby agree, stipulate and
acknowledge as follows:
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(a) Fully Restricted Facilities in the Restricted NJ Area. Subject
to the specific exceptions contained in this Section 13.02, the
relationship created by this Agreement shall be an exclusive arrangement
between the Partners (and their Affiliates) for the booking, production,
presentation and promotion of live concerts featuring musical or comedic
entertainers at Fully Restricted Facilities in the Restricted NJ Area.
Accordingly, each Partner hereby covenants and agrees with the Partnership
that neither it nor any of its Affiliates shall, directly or indirectly,
become engaged or involved in any manner whatsoever with respect to the
booking, production, presentation or promotion of any live musical or
comedic concert (other than concerts presented at the Amphitheater) to be
presented at a Fully Restricted Facility in the Restricted NJ Area.
(b) Limited Exception for Waterloo. Notwithstanding the provisions
of clause (a) of this Section 13.02, each Partner (and its respective
Affiliates) shall have a limited right to book, present, promote and
produce live concerts featuring musical or comedic entertainers at
Waterloo which satisfy any one or more of the following conditions:
(1) an identical live concert featuring the same musical or
comedic entertainers will also be presented at the Amphitheater
during the same Amphitheater Season;
(2) such live concert (A) cannot be booked for presentation at
the Amphitheater, despite the best efforts of such Partner to so
book such live concert at the Amphitheater, because the featured
musical or comedic entertainers are not willing to perform at the
Amphitheater and (B) such Partner shall have (i) provided notice to
the other Partner that, notwithstanding the exercise of its best
efforts to the contrary, such Partner has been unable to book such
live concert for appearance at the Amphitheater and that such
Partner (or its Affiliate) intends to attempt to book such live
concert at Waterloo and (ii) agreed to (x) notify the other Partner
of the terms of any offer made for the booking of such live concert
at Waterloo simultaneously with the making of such offer and (y)
make competitive bids on behalf of the Partnership for the booking
of such live concert at the Amphitheater as may be directed by the
other Partner; or
(3) such live concert cannot be booked for presentation at the
Amphitheater, despite the best efforts of such Partner to so book
such live concert at the Amphitheater, because there is no available
date on the Amphitheater's calendar which reasonably coincides with
the touring schedule of the musical or comedic entertainers featured
in such live concert.
If either Partner (or any of its Affiliates) intends to book, present,
promote or produce any live concert at Waterloo pursuant to the provisions
of this Section 13.02(b), then such Partner shall be required, as a
condition precedent to the rights created in this Section 13.02, to
provide written notice thereof to the other Partner with a specific
description of the concert involved and the reasons that the provisions of
Section 13.02(b)
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apply to such concert. If Waterloo should, at any time during the term of
this Partnership, be significantly, materially or substantially improved
or upgraded in any manner which would cause Waterloo to be a facility more
comparable to the Amphitheater, then either Partner may, by written notice
to the other, terminate the provisions contained in this Section 13.02(b).
(c) Limited Exception for Xxxxxxx Stadium. Notwithstanding the
provisions of clause (d) of this Section 13.02, each Partner (and its
respective Affiliates) shall have a limited right to book, present,
promote and produce live concerts featuring musical or comedic
entertainers at Xxxxxxx Stadium without being required to comply with the
requirements set forth in clauses (1) through (3) of Section 13.02(d)
hereof. If Xxxxxxx Stadium should, at any time during the term of this
Partnership, be significantly, substantially or materially improved or
upgraded in any manner, then either partner may, by written notice to the
other, terminate the provisions contained in this Section 13.02(c).
(d) Partially Restricted Facilities in the Restricted NJ Area and
Fully Restricted Facilities in the Restricted NY Area. Each Partner hereby
covenants and agrees with the Partnership that neither it nor any of its
Affiliates shall, directly or indirectly, become engaged or involved in
any manner whatsoever with respect to the booking, production,
presentation or promotion of any live musical or comedic concert (other
than Club Shows) to be presented during any Amphitheater Season in a
Partially Restricted Facility in the Restricted NJ Area or in a Fully
Restricted Facility in the Restricted NY Area unless and except such
Partner has first complied with all of the following requirements:
(1) such Partner shall have exercised its best efforts to book
such live concert for presentation at the Amphitheater;
(2) such Partner shall have provided notice to the other
Partner that, notwithstanding the exercise of its best efforts to
the contrary, such Partner has been unable to book such live concert
for appearance at the Amphitheater and that such Partner (or its
Affiliate) intends to attempt to book such live concert at a
Partially Restricted Facility in the Restricted NJ Area or at a
Fully Restricted Facility in the Restricted NY Area; and
(3) such Partner shall have agreed to (i) notify the other
Partner of the terms of any offer made for the booking of such live
concert at any Partially Restricted Facility in the Restricted NJ
Area or at any Fully Restricted Facility in the Restricted NY Area
simultaneously with the making of such offer and (ii) make
competitive bids on behalf of the Partnership for the booking of
such live concert at the Amphitheater as may be directed by the
other Partner.
(e) Venue Ownership in New Jersey. The relationship created by this
Agreement shall be an exclusive arrangement between the Partners (and
their Affiliates) for the ownership and management of Restricted
Facilities in the Restricted NJ Area.
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Accordingly, each of the Partners (and all of their respective Affiliates)
shall be precluded from being involved and hereby covenants not to become
involved in any manner whatsoever, directly or indirectly, in the
ownership or management of any Restricted Facility in the Restricted NJ
Area.
(f) Venue Ownership in New York. Each Partner hereby covenants and
agrees with the Partnership as follows:
(1) Neither Partner (nor its Affiliates) shall become involved
in any manner whatsoever, directly or indirectly, in the ownership
or management of any Defensive NY Amphitheater unless (i) such
ownership or management interest is owned through a partnership with
the other Partner on mutually agreeable terms or (ii) the other
Partner has elected to refrain from participating in the ownership
or management of such Defensive NY Amphitheater.
(2) Neither Partner (nor its Affiliates) shall become involved
in any manner whatsoever, directly or indirectly, in the ownership
or management of any Offensive NY Amphitheater unless (A) such
Partner (or its Affiliate) shall have complied with the provisions
of Section 13.04 hereof with respect to such Partner's (or its
Affiliate's) interest in such Offensive NY Amphitheater and (B)
either (i) the other Partner voluntarily agrees that such Offensive
NY Amphitheater will not have a negative impact on the profitability
of the operation and ownership of the Amphitheater or (ii) an
arbitration proceeding conducted in accordance with the provisions
of Section 13.02(g) hereof results in a final decision that such
Offensive NY Amphitheater will not have a negative impact on the
profitability of the ownership and operation of the Amphitheater.
If either Partner or any of its Affiliates shall acquire any ownership or
management interest with respect to a Defensive NY Amphitheater or an
Offensive NY Amphitheater pursuant to the foregoing provisions, then, so
long as such Partner (or its Affiliate) continues to be involved in the
ownership or management thereof, the restrictions contained in Section
13.02(a) hereof shall not apply with respect to such Defensive NY
Amphitheater or Offensive NY Amphitheater, as applicable.
(g) Arbitration Proceeding for an Offensive NY Amphitheater. If
either Partner (or any of its Affiliates) proposes to become involved in
the ownership or management of any Offensive NY Amphitheater, then such
Partner shall have the right to commence an arbitration proceeding
pursuant to the provisions of this Section 13.02(g) for the sole purpose
of determining whether such Offensive NY Amphitheater will have a negative
impact on the profitability of the ownership and operation of the
Amphitheater. The following provisions shall govern the commencement and
conduct of any such arbitration proceeding:
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(1) The Partner ("Requesting Partner") initiating such
arbitration proceeding shall provide written notice ("Notice
Request") to the other Partner of the Requesting Partner's desire to
commence such arbitration proceeding. The Notice Request shall
include a description of the location, seating capacity (both fixed
and lawn) and general design of the proposed Offensive NY
Amphitheater which will be the subject of such arbitration
proceeding.
(2) If the parties are unable to mutually select and designate
a person to serve as the arbitrator in such arbitration proceeding
within thirty (30) days after delivery of the Request Notice, then
the American Arbitration Association will select the person who will
serve as the arbitrator. If possible, the arbitrator will be a
person involved in the live entertainment business, either as a
promoter or facility operator.
(3) Once the arbitrator has been selected, each Partner shall
have forty-five (45) days to prepare and present to the arbitrator
and the other Partner a written statement ("Position Paper")
supporting its position as to whether or not the Offensive NY
Amphitheater in question will have a negative impact on the
profitability of the ownership and operation of the Amphitheater. In
addition, each Partner shall have fifteen (15) days following
receipt of the other Partner's Position Paper to prepare and present
to the arbitrator and the other Partner a written statement
("Response Paper") responding to the other Partner's Position Paper.
(4) As soon as reasonably practicable following the deadline
for the provision of each Partner's Position Paper and Response
Paper, the arbitrator will arrange for a meeting ("Final Hearing")
with both Partners at which each Partner will be given the
opportunity to present an oral presentation in the presence of the
other Partner and the arbitrator in support of its position. The
arbitrator will set the rules for the conducting of the Final
Hearing.
(5) Within fifteen (15) days of the Final Hearing, the
arbitrator will provide notice to each Partner of his determination
as to whether the Offensive NY Amphitheater in question will have a
negative impact on the profitability of the ownership and operation
of the Amphitheater. The determination of the arbitrator will be
final and binding on both parties for all purposes hereof.
(6) For all purposes of this Section 13.02, an Offensive NY
Amphitheater will only be deemed to "have a negative impact on the
profitability of the ownership and operation of the Amphitheater" if
the construction, development and subsequent use and operation of
such Offensive NY Amphitheater is more likely than not to result in,
all else being equal, a seven and one-half percent (7-1/2%) or more
reduction in the gross revenues derived by the Partnership from the
use and operation of the Amphitheater.
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(7) The Partners acknowledge that the mere designation and
creation of the Restricted NY Area in this Agreement shall not
constitute an admission by either Partner that the construction of a
Fully Restricted Facility in the Restricted NY Area will
automatically result in a negative impact on the profitability of
the ownership and operation of the Amphitheater.
(h) Effect of Affiliate Violation. If an Affiliate of either Partner
should engage in any activity prohibited by, or otherwise violate the
restrictions contained in, this Section 13.02, then, as between the
Partners, such Partner shall be deemed to have violated the provisions of
this Section 13.02.
(i) Covenant as to Use of Certain Information. Each Partner
covenants and agrees with the other that it will not make use of any of
the Applicable Booking Information in connection with decisions related to
the making of booking offers at facilities (other than the Amphitheater)
in which such Partner or any of the Affiliates of such Partner have any
financial or ownership interest. As used in the immediately preceding
sentence, the term "Applicable Booking Information" shall mean information
provided by one Partner to the other Partner concerning the terms of any
offer made for the booking of a live concert at a facility other than the
Amphitheater pursuant to the provisions contained in Section
13.02(b)(2)(B)(ii)(x) hereof or Section 13.02(d)(3)(i) hereof.
13.03 Remedies and Enforceability. If the provisions of Section 13.02
should be held to be unenforceable because of the scope, duration or area of its
applicability, the tribunal making such determination shall have the power to
modify such scope, duration or area or all of them, and such provisions shall
then be applicable in such modified form. Since a violation of the provisions of
Section 13.02 will result in irreparable harm, the non-defaulting party shall be
entitled to an injunction restraining the commission or continuation of any
violation of the provisions of Section 13.02 or any other appropriate decree of
specific performance. Such remedies shall not be exclusive and shall be in
addition to any other remedy expressly provided for under the terms of this
Agreement or permitted at law or in equity.
13.04 Terms of Offer. If either Partner (or any of its Affiliates)
("Developing Partner") desires to become involved in any manner whatsoever,
directly or indirectly, in the ownership or management of any Offensive NY
Amphitheater, then the Developing Partner shall extend an offer to the Other
Partner ("Passive Partner") to acquire one-third (1/3rd) of the Developing
Partner's interest in such Offensive NY Amphitheater in accordance with the
following terms, provisions and requirements:
(a) The Developing Partner shall provide prompt written notice to
the Passive Partner upon the commencement of negotiation concerning the
Developing Partner's involvement in any proposed Offensive NY
Amphitheater.
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(b) Upon request of the Passive Partner at any time following the
notice given pursuant to clause (a), the Developing Partner shall provide
an oral report as to the current status of the proposed development of
such Offensive NY Amphitheater.
(c) The Developing Partner shall provide to the Passive Partner
copies of all written drafts, letters, budgets or other documentation
pertaining to the development of such proposed Offensive NY Amphitheater.
(d) Within five (5) days following the execution of a binding
agreement ("Development Agreement") pursuant to which the Developing
Partner agrees to become involved in any manner whatsoever, directly or
indirectly, in the ownership or management of such proposed Offensive NY
Amphitheater, the Developing Partner shall provide a true, correct,
complete and accurate copy thereof to the Passive Partner.
(e) Following receipt of such Development Agreement, the Passive
Partner shall have the right and option ("Qualified Option"), exercisable
in its sole discretion, to acquire one-third of the Developing Partner's
interest in and to such proposed Offensive NY Amphitheater under and
pursuant to the terms of the Development Agreement in exchange for the
payment by the Passive Partner to the Developing Partner of one-third of
its costs incurred to date, and the assumption of one-third of the
Developing Partner's ongoing financial obligations, in connection with
such proposed Offensive NY Amphitheater.
(f) The Qualified Option may be exercised by the Passive Partner at
any time within thirty (30) days after receipt of such Development
Agreement by providing written notice thereof to the Developing Partner.
(g) If, at any time after delivery of such Development Agreement to
the Passive Partner, whether before or after the deadline for the Passive
Partner's decision to exercise the Qualified Option, (i) any of the terms
or provisions contained in the Development Agreement should be modified or
(ii) the design, size or scope of such proposed Offensive NY Amphitheater
should be materially, significantly or substantially modified, then the
Developing Partner shall provide prompt written notice of such
modification to the Passive Partner, and the Qualified Option shall be
extended until the date which is thirty (30) days after the provision of
such notice.
13.05 Modification of Affiliate Definition. For all purposes of this
Agreement, the following provisions shall supplement and amend the definition of
the term "Affiliate":
(a) Irrespective of whether Xxx Xxxxxxxx owns any capital stock of
Ardee, Xxx Xxxxxxxx shall be deemed to be an Affiliate of Ardee for all
purposes hereof until the date which is five (5) years after completion of
a transfer by sale of a controlling ownership interest in Ardee to a third
party purchaser that is not related to or affiliated with Xxx Xxxxxxxx or
Xxxxx Xxxxxx or, if later, the date on which Xxx Xxxxxxxx'x employment
with
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Ardee and all of its Affiliates is terminated. Notwithstanding the
foregoing, for purposes of Section 12.03(f) only, Xxx Xxxxxxxx shall not
be deemed to be an Affiliate of Ardee at any time after the completion of
a transfer by sale of a controlling ownership interest in Ardee to a third
party purchaser that is not related to or affiliated with Xxx Xxxxxxxx or
Xxxxx Xxxxxx or, if later, the date on which Xxx Xxxxxxxx'x employment
with Ardee and all of its Affiliates is terminated.
(b) At all times during the term of this Partnership, Xxxxx Xxxxxx
shall be an Affiliate of Pavilion. The provisions of this clause (b) shall
apply irrespective of whether Xxxxx Xxxxxx controls Pavilion.
(c) Irrespective of whether Xxxxx Xxxxxx owns any capital stock of
Ardee, Xxxxx Xxxxxx shall be deemed to be an Affiliate of Ardee for all
purposes hereof until the date which is five (5) years after completion of
a transfer by sale of a controlling ownership interest in Ardee to a third
party purchaser that is not related to or affiliated with Xxx Xxxxxxxx or
Xxxxx Xxxxxx or, if later, the date on which Xxxxx Xxxxxx'x employment
with Ardee and all of its Affiliates is terminated. Notwithstanding the
foregoing, for purposes of Section 12.03(f) only, Xxxxx Xxxxxx shall not
be deemed to be an Affiliate of Ardee at any time after the date on which
Xxxxx Xxxxxx'x employment with Ardee and all of its Affiliates is
terminated.
(d) Irrespective of whether Xxxxx Xxxxxxx owns any capital stock of
PACE Entertainment Corporation ("PACE"), Xxxxx Xxxxxxx shall be deemed to
be an Affiliate of Pavilion for all purposes hereof until the date which
is three (3) years after the date on which Xxxxx Xxxxxxx'x employment with
PACE and all of its Affiliates is terminated.
ARTICLE XIV
[Intentionally Left Blank]
ARTICLE XV
Defaults and Remedies
15.01 Default by Partner. If any Partner ("Defaulting Partner") fails to
timely perform any of its obligations contained in this Agreement, or materially
violates the terms of this Agreement, then the other Partner ("Non-Defaulting
Partner") shall have the right to give the Defaulting Partner a notice ("Default
Notice") specifically setting forth the nature of such failure or violation and
stating that the Defaulting Partner shall have a period often (10) days to pay
any sums of money specified therein as due and owing to the Partnership or to
any Partner or, if the failure or violation is a non-monetary default and is
capable of being cured, thirty (30) days to cure such default specified therein.
If the monies specified in the Default Notice are not paid
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within such ten (10) day period, or if such non-monetary failures or violations
are not capable of being cured or, if capable of being cured, such Defaulting
Partner has not cured such non-monetary failures or violations within such
thirty (30) day period (if such non-monetary default is not capable of being
cured within thirty (30) days and if efforts to cure such non-monetary default
have commenced and are continuing, then within a ninety (90) day period), then a
"Partner Default" shall be deemed to have occurred with respect to such
Defaulting Partner. If a Defaulting Partner cures in all material respects all
of its failures or violations which are capable of being cured within the
aforesaid notice and cure periods, then such defaults shall be deemed no longer
to exist and such Partner shall be deemed no longer to constitute a Defaulting
Partner.
15.02 Rights and Remedies. Upon the occurrence of a Partner Default, the
Non-Defaulting Partner and the Partnership shall each have the following rights,
options and remedies which shall be cumulative and may be exercised concurrently
or independently in the sole and absolute discretion of the Non-Defaulting
Partner:
(a) The right to bring an action at law by or on behalf of the
Partnership or the Non-Defaulting Partner in order to recover the amounts
owed, if any, and any incidental or consequential damages arising from
such default (including, without limitation, reasonable attorneys' fees
and disbursements incurred by the Partnership or the Non-Defaulting
Partner, as the case may be, in prosecuting any such action).
(b) The right to bring any proceeding in the nature of injunction,
specific performance or other equitable remedy, it being acknowledged by
each of the Partners that damages at law may be an inadequate remedy for
such default.
(c) If a sum of money is owed to the Partnership, the Non-Defaulting
Partner may advance the sum of money owed to the Partnership by the
Defaulting Partner with the following results:
(i) The sum thus advanced shall be deemed to be a loan from
the Non-Defaulting Partner to the Defaulting Partner;
(ii) The principal balance of such deemed loan shall be due
and payable in whole upon written demand from the Non-Defaulting
Partner to the Defaulting Partner;
(iii) The principal balance of such deemed loan shall bear
interest at the Permitted Rate compounded monthly; and
(iv) All distributions from the Partnership that would
otherwise be made to the Defaulting Partner (whether before or after
dissolution of the Partnership) shall, instead, be paid to the
Non-Defaulting Partner until such loan and all interest accrued
thereon has been repaid in full.
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(d) If a sum of money is owed to the Non-Defaulting Partner, the
Non-Defaulting Partner may require that all distributions that would
otherwise be made to the Defaulting Partner (whether before or after
dissolution of the Partnership) shall, instead, be paid to the
Non-Defaulting Partner until all such amounts owed have been repaid in
full.
(e) If a Partner Default should occur with respect to Pavilion by
reason of a failure to perform or fulfill any monetary obligation created
pursuant to the terms of this Agreement, and if Ardee has advanced the sum
of money necessary to cure such failure, then Ardee, as the Non-Defaulting
Partner, shall have the express right and authority, by notice to
Pavilion, to remove Pavilion as the Managing Partner and substitute Ardee
as the Managing Partner for all purposes under this Agreement in
consideration for a reasonable fee to be thereafter paid by the
Partnership.
(f) If a Partner Default should occur with respect to Ardee, then
Pavilion shall have the right, as the Non-Defaulting Partner, by notice to
Ardee, to (i) terminate Ardee as the party primarily responsible for
booking or otherwise engaging talent for appearance at the Amphitheater as
specified in Section 12.03 hereof and (ii) either (A) assume the
responsibility for the activities related to booking or otherwise engaging
talent for appearance at the Amphitheater in consideration for a
reasonable fee to be thereafter paid by the Partnership or (B) engage a
third party to perform and fulfill the responsibility related to booking
or otherwise engaging talent for appearance at the Amphitheater upon terms
reasonably acceptable to Pavilion.
ARTICLE XVI
Dispute Resolution and Confidentiality
16.01 Generally. Except for disagreements involving the taking of a
proposed Major Operational Action, which shall be governed by the provisions of
Section 12.07 hereof, in the event of any dispute, difference or question
("Dispute") between any of the Partners or assignees of the Partners or the
Partnership ("Disputing Parties"), which cannot be otherwise informally resolved
by the Disputing Parties themselves, the Disputing Parties will utilize the
procedures specified in this Article XVI (the "Procedure") to resolve the
Dispute. The Disputing Party seeking to initiate the Procedure (the "Initiating
Party") shall give written notice to the other Partners, assignees of the
Partners and the Partnership, describing in general terms the nature of the
Dispute, the Initiating Party's claim for relief and identifying one or more
individuals with authority to settle the Dispute on such Party's behalf. The
Disputing Parties receiving such notice (the "Responding Party", whether one or
more) shall have ten (10) business days within which to designate by written
notice to the Initiating Party, one or more individuals with authority to settle
the Dispute on such Party's behalf. The individuals so designated shall be known
as the "Authorized Individuals."
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16.02 Negotiations. The Authorized Individuals shall be entitled to make
such investigation of the Dispute as they deem appropriate, but agree to
promptly, and in no event later than thirty (30) days from the date of the
Initiating Party's written notice, meet to discuss resolution of the Dispute.
The Authorized Individuals shall meet at such times and places and with such
frequency as they may agree. The Disputing Parties agree to participate in good
faith in the direct negotiations to resolve the Dispute. If the Dispute has not
been resolved within thirty (30) days from the date of their initial meeting,
the Disputing Parties shall cease direct negotiations and shall submit the
Dispute to arbitration in accordance with the following procedure.
16.03 Arbitration. All Disputes will be settled by arbitration by an
arbitrator mutually acceptable to the Disputing Parties in an arbitration
proceeding conducted in (i) Houston, Texas (if Ardee is the Initiating Party) or
(ii) in New York, New York (if Pavilion is the Initiating Party), in accordance
with the rules as then in effect of the American Arbitration Association. If the
Disputing Parties hereto cannot agree on an arbitrator within ten (10) business
days of the initiation of the arbitration proceeding, an arbitrator shall be
selected for the Disputing Parties by the American Arbitration Association. The
decision of such arbitrator shall be final (except that errors of law shall be
subject to appeal), and judgment upon the award rendered by the arbitration may
be entered in any court having jurisdiction thereof. The costs (including,
without limitation, reasonable fees and expenses of counsel and experts for the
Disputing Parties) of such arbitration (including the costs to enforce or
preserve the rights awarded in the arbitration) shall be borne by the Disputing
Parties in the amounts and proportions specified by the arbitrator in his final
decision.
Section 16.04 Confidentiality. No Partner (or assignee) shall, directly or
indirectly, disclose or provide to any other person (other than the partners,
Affiliates, attorneys, employees, agents and representatives of such Partner)
any nonpublic information of a confidential nature concerning the business or
operations of the Partnership (including, without limitation, any and all
Partnership business records, data, or other information regarding the business
of the Partnership or the Partnership assets), except as is required by law or
statute (including federal securities laws) or in governmental filings or
judicial, administrative or arbitration proceedings or as authorized by the
Managing Partner in furtherance of the Partnership Purposes. In the event that
any Partner is required in connection with judicial, administrative or
arbitration proceedings (by oral questions, interrogatories, requests for
information or document subpoena, civil investigative demand or similar process)
to disclose any such information, that Partner shall provide the other Partner
with prompt prior notice of such request so that the other Partner may seek an
appropriate protective order to take other appropriate action. Each Partner (and
assignee) agrees that any unauthorized disclosure of such information would not
be adequately compensable in damages and, thus, agrees that, in the event of any
such disclosure, the Partnership shall, in addition to any claim for damages for
breach of this Agreement, be entitled to seek and obtain equitable relief by way
of injunction or otherwise in a court of competent jurisdiction. This
confidentiality provision may be enforced by specific performance.
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ARTICLE XVII
Dissolution and Termination
17.01 Dissolution. The Partnership shall be dissolved upon the occurrence
of any of the following:
(a) The unanimous agreement of the Partners;
(b) The expiration of the Partnership's term as specified pursuant
to Article IV hereof;
(c) The sale, transfer, assignment or termination of all or
substantially all of the Partnership's ownership interest in the
Amphitheater including, without limitation, termination of the Lease
Agreement upon expiration of its term or otherwise; or
(d) If the Lease Agreement has not been executed and entered into by
and between the Partnership and NJHA on or before January 31, 1997, then
upon the election of either Partner at any time thereafter and before
execution of the Lease Agreement, such election to be made by notice to
the other Partner.
The dissolution shall be effective on the day on which the event occurs causing
dissolution ("Effective Date of Dissolution"), but the Partnership shall not
terminate until the assets have been distributed in accordance with the
provisions of this Agreement.
17.02 Nondissolution Events. None of the following events shall constitute
or cause the dissolution of the Partnership, with the result that, upon the
happening of any one or more of these events, no one shall have the right to
compel the termination and liquidation of the Partnership:
(i) the bankruptcy, dissolution or liquidation of a Partner; or
(ii) the withdrawal of a Partner.
Each Partner waives its right and power either to dissolve the Partnership, or
to seek a court decree of dissolution.
17.03 Distributions Upon Dissolution. On dissolution of the Partnership,
the Partners shall proceed diligently to wind up the affairs of the Partnership
and distribute its assets. The Managing Partner shall decide which Partnership
assets are to be sold for cash and which are to be distributed in kind. The
Partnership's assets, or the proceeds of their sale, shall be applied or
distributed in the following order of priority:
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(a) In payment of all liabilities of the Partnership to creditors
other than Partners. If any liability is contingent or uncertain in
amount, a reserve equal to the maximum amount for which the Partnership
could be reasonably held liable shall be established. Upon the
satisfaction or other discharge of that contingency, the amount of the
reserve not required, if any, will be treated as income to the extent
previously treated as a deduction.
(b) In payment of any loans owed by the Partnership to any Partner.
(c) After all adjustments required to be made to the Capital
Accounts of the Partners pursuant to the provisions hereof as a result of
the allocation of all of the Partnership's income, gains, losses and
deductions through the Partnership's final Tax Year have been completed,
to the Partners in proportion to and to the extent of the balances in
their respective Capital Accounts.
ARTICLE XVIII
Transfer Restrictions
18.01 Partner Interest. Except for a transfer of a Partnership Interest as
permitted in strict accordance with the provisions of Sections 18.04 or 18.05
hereof, neither Partner shall have the right to sell, assign, convey, transfer,
pledge, mortgage or hypothecate, by operation of law or otherwise, all or any
portion of its Partnership Interest without the prior consent of the other
Partner, it being agreed and acknowledged that such consent may be withheld in
such other Partner's sole discretion for any reason whatsoever. Any purported
sale, assignment, mortgage, conveyance, transfer, pledge or hypothecation of any
Partner's Partnership Interest in violation of the provisions of this Section
18.01 shall be voidable at the option of the other Partner.
18.02 Ardee's Stock.
(a) No capital stock of Ardee may, at any time, be issued to, sold,
conveyed or otherwise transferred to any Person other than to Xxx
Xxxxxxxx, Xxxxx Xxxxxx or any person taking under either such individual's
Last Will and Testament upon his death except in accordance with the
following provisions:
(1) Issued and outstanding shares of capital stock of Ardee
may be sold to a third party purchaser provided that prior notice
thereof ("Ardee Stock Sale Notice") is provided to Pavilion. To be
validly provided, an Ardee Stock Sale Notice must include the
identity of the purchaser, the number of shares being sold, the
resulting ownership of the issued and outstanding capital stock upon
completion of the sale and a copy of any employment contracts to be
entered into upon completion of the sale between Ardee, as employer,
and Xxx Xxxxxxxx or Xxxxx Xxxxxx, as employees. Copies of any
employment contracts to be provided
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to Pavilion pursuant to the provisions of the immediately preceding
sentence may, at the option of Ardee, be modified to eliminate
references to the terms of compensation payable to the employees
thereunder and shall, in any event, be subject to the
confidentiality provisions set forth in Section 16.04 hereof.
(2) If, at any time following completion of a sale of capital
stock of Ardee permitted by the provisions of clause (1) of this
Section 18.02(a), one or both of Xxx Xxxxxxxx and Xxxxx Xxxxxx do
not control the operation of Ardee, by contract, voting control or
otherwise, then Pavilion shall have the right and option, by notice
to Ardee, to terminate all management rights, powers and authorities
granted to Ardee pursuant to the provisions of this Agreement,
including (without limitation) (i) the right to approve Major
Actions pursuant to Section 12.01 hereof, (ii) the right to act as
the party primarily responsible for booking talent at the
Amphitheater and for advertising concerts at the Amphitheater
pursuant to Section 12.03 hereof and (iii) the right to approve the
adoption of Annual Operating Budgets pursuant to Section 12.04
hereof. In order to avoid ambiguity, uncertainty or doubt, it is
hereby expressly stipulated and acknowledged by the Partners that an
exercise of Pavilion's right created pursuant to the provisions of
the immediately preceding sentence to terminate all management
rights, powers and authorities granted to Ardee pursuant to the
provisions of this Agreement shall not have the effect of modifying
the provisions contained herein relating to the financial rights or
obligations of Ardee under this Agreement (such as, by way of
example, capital contribution obligations and rights to receive
distributions) or in any way alter the requirements of Section 19.04
that amendments to this Agreement shall require the approval of all
of the Partners.
(b) Simultaneously with the execution of this Agreement, Ardee shall
cause (A) Xxx Xxxxxxxx to execute a certificate or other instrument in
form reasonably acceptable to Pavilion in which he confirms that (i) he is
the owner of all of the issued and outstanding capital stock of Ardee
(subject to that certain Stock Purchase Agreement ("SFX Stock Agreement")
dated October 11, 1996 and entered into with SFX Broadcasting, Inc., a
copy of which has been previously provided to Pavilion), (ii) his stock
ownership interest in Ardee will be burdened by and encumbered with the
transfer restrictions contained in this Section 18.02 and (iii) all share
certificates evidencing the capital stock in Ardee will include an
appropriate legend which references the transfer restrictions contained in
this Section 18.02 and (B) SFX Broadcasting, Inc. to execute a certificate
or other instrument in form reasonably acceptable to Pavilion confirming
that the execution of this Agreement is approved by SFX Broadcasting, Inc.
and is not a violation of any term, provision or covenant contained in the
SFX Stock Agreement.
18.03 Ownership Interests in Pavilion. No ownership interest in Pavilion
may, at any time, be issued to, sold, conveyed or otherwise transferred to any
Person other than to PACE Entertainment Corporation, a Texas corporation, Sony
Music Entertainment, Inc., a Delaware
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corporation, Viacom Inc., a Delaware corporation, or any Affiliate of any such
party without the prior written consent of Ardee.
18.04 Sale of Partnership Interest. If (i) one Partner ("Selling Partner")
receives a written offer from a third party ("Proposed Purchaser") to purchase
all or substantially all of the Partnership's interest in the Amphitheater which
the Selling Partner desires to accept on behalf of the Partnership and (ii) the
other Partner ("Non-Selling Partner") is unwilling to consent to the sale of the
Amphitheater to the Proposed Purchaser upon the terms and conditions contained
in such offer, then the Selling Partner shall have the right, subject to the
provisions of Section 18.06 hereof, to sell all, but not less than all, of its
Partnership Interest if, but only if, the Selling Partner complies with all of
the following provisions:
(a) The Selling Partner shall provide prompt written notice to the
Non-Selling Partner upon the commencement of negotiation concerning any
proposed sale of the Selling Partner's Partnership Interest to the
Proposed Purchaser.
(b) Upon request of the Non-Selling Partner at any time following
the notice given pursuant to clause (a), the Selling Partner shall provide
an oral report as to the status of the negotiations for the proposed sale
of the Selling Partner's Partnership Interest to the Proposed Purchaser.
(c) The Selling Partner shall provide to the Non-Selling Partner
copies of all written drafts, letters or other documentation pertaining to
such proposed sale of the Selling Partner's Partnership Interest to the
Proposed Purchaser.
(d) Within five (5) days following the execution of a definitive
agreement ("Purchase Agreement") pursuant to which the Selling Partner
agrees to sell its Partnership Interest to the Proposed Purchaser, the
performance of each party thereto being conditioned expressly upon the
provisions of this Section 18.04, the Selling Partner shall provide a
true, correct, complete and accurate copy thereof to the Non-Selling
Partner.
(e) Following receipt of a Purchase Agreement, the Non-Selling
Partner shall have the right and option ("Purchase Option"), exercisable
in its sole discretion, to purchase the Selling Partner's Partnership
Interest upon the same terms, provisions and conditions contained in such
Purchase Agreement.
(f) The Purchase Option may be exercised by the Non-Selling Partner
at any time within thirty (30) days after receipt of a Purchase Agreement
by providing written notice thereof to the Selling Partner. If the
Non-Selling Partner should exercise the Purchase Option in a timely
manner, then the Selling Partner shall be required, at the closing of the
sale of the Selling Partner's Partnership Interest to the Non-Selling
Partner, to execute such reasonable documentation as may be requested or
required by the Non-Selling Partner to indicate the Selling Partner's
agreement that it and its Affiliates will continue to be bound by the
restrictions, limitations and covenants contained in the
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Article XIII of this Agreement for a period commencing on the date of the
closing of such sale to the Non-Selling Partner and continuing through and
until the third (3rd) anniversary date of the closing of such sale. The
closing of the sale of a Selling Partner's Partnership Interest to a
Non-Selling Partner pursuant to a timely exercise of the Purchase Option
shall occur on or before the later of (i) sixty (60) days following the
exercise of the Purchase Option or (ii) the outside date for closing the
transaction contemplated by the Purchase Agreement which was the subject
of the Purchase Option.
(g) If, at any time after delivery of a Purchase Agreement to the
Non-Selling Partner, whether before or after the deadline for the
Non-Selling Partner's decision to exercise the Purchase Option, any of the
terms or provisions contained in such Purchase Agreement should be amended
by agreement between the Selling Partner and the Proposed Purchaser, then
the Selling Partner shall provide prompt written notice of such
modification to the Non-Selling Partner, and the Purchase Option shall be
extended until the date which is thirty (30) days after the provision of
such notice of such amendment.
(h) If the Non-Selling Partner does not exercise the Purchase Option
within thirty (30) days after receipt of a Purchase Agreement (or, if
applicable, after receipt of notification pursuant to clause (g) of an
amendment to a Purchase Agreement), then the Selling Partner may
thereafter complete the proposed sale of its Partnership Interest to the
Proposed Purchaser upon the same terms, conditions and provisions
contained in the Purchase Agreement previously provided to the Non-Selling
Partner in accordance with the provisions thereof, provided that the
following provisions are complied with at the closing of the sale:
(1) The Proposed Purchaser must execute such reasonable
documentation as may be requested or required by the Non-Selling
Partner to indicate the Proposed Purchaser's agreement to be bound
by all of the terms, provisions, agreements, covenants and
restrictions contained herein to the same extent, and in the same
manner as if, the Proposed Purchaser had been an original party
hereto.
(2) The Selling Partner must execute such reasonable
documentation as may be requested or required by the Non-Selling
Partner to indicate the Selling Partner's agreement that it and its
Affiliates will continue to be bound by the restrictions,
limitations and covenants contained in Article XIII of this
Agreement for a period commencing on the date of the closing of such
sale to the Proposed Purchaser and continuing through and until the
third (3rd) anniversary date of the closing of such sale.
Upon completion of such sale of the Selling Partner's Partnership Interest
to the Proposed Purchaser in accordance with the foregoing provisions, the
Proposed Purchaser shall be admitted as a new Partner in the Partnership
in place of the Selling Partner.
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18.05 Transfers/Pledges to Owners. The following limited exceptions shall
apply to the restrictions created in Section 18.01 hereof:
(a) Pavilion, with prior notice to Ardee, may transfer or pledge its
Partnership Interest to any one or more of PACE Entertainment Corporation,
Sony Music Entertainment Inc., Viacom Inc. or a Person wholly-owned by one
or more of such corporations.
(b) Ardee, with prior notice to Pavilion, may transfer or pledge its
Partnership Interest to any one or more of Xxx Xxxxxxxx, Xxxxx Xxxxxx or a
Person wholly-owned by one or both of such individuals.
Upon (i) completion of any transfer of a Partner's Partnership Interest
(including a foreclosure of a pledge previously made pursuant to the provisions
of this Section 18.05) permitted by the foregoing provisions of this Section
18.05 and (ii) the acquiring party executing such reasonable documentation as
may be required by the other Partner to indicate the acquiring party's agreement
to be bound by all of the terms, provisions, agreements, covenants and
restrictions contained herein to the same extent, and in the same manner as if,
such acquiring party had been an original party hereto, the acquiring party
shall be admitted as a new Partner in the Partnership in place of the
transferring Partner.
18.06 No Violation of Lease Agreement. Notwithstanding anything to the
contrary contained in this Article XVIII, neither Partner shall have the right
to transfer its Partnership Interest to a third party, or permit a transfer of
any ownership interest, direct or indirect, in such Partner in a manner which
could result in a violation of any restriction, covenant or provision contained
in the Lease Agreement or could otherwise cause the Tenant to be in default
under any provision of the Lease Agreement. Any purported transfer of a
Partnership Interest by either Partner or of any ownership interest, direct or
indirect, in either Partner which violates the provisions contained in the
immediately preceding sentence shall (i) be null and void, ab initio and (ii) be
deemed to be the occurrence of a Partner Default with respect to such Partner.
ARTICLE XIX
Miscellaneous Provisions
19.01 Notices. All notices, offers, approvals, elections, consents,
acceptances, waivers, reports, requests and other communications required or
permitted to be given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing and shall be deemed to have
been duly given if delivered personally with receipt acknowledged or sent by
registered or certified mail or equivalent, if available, return receipt
requested, or by facsimile, telex or cablegram (which shall be confirmed by a
writing sent by registered or certified mail or equivalent on the same day that
such facsimile, telex or cablegram is sent), or by recognized overnight courier
for next day delivery, addressed or sent to the parties at the
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following addresses and facsimile numbers or to such other additional address or
facsimile number as any party shall hereafter specify by Communication to the
other parties:
Pavilion: c/o SM/PACE, Inc.
000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
ATTN: Xx. Xxxxxx X. Xxxxx
with a copy to: Xxxxxxx X. Xxxxxx
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
and
Sony Music Entertainment Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
and
Sony Music Entertainment Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
Ardee: Exit 116 Revisited, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxx Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxxx Xxxx & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
ATTN: Xx. Xxxx X. Xxxx
19.02 Delaware Law to Apply. This Agreement shall be construed under and
in accordance with laws of the State of Delaware.
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19.03 Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the Partnership
created by this Agreement.
19.04 Amendment. This Agreement may be amended or modified by the Partners
from time to time but only upon approval by all of the Partners contained in a
written instrument.
19.05 Headings. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.
19.06 Parties Bound. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where permitted
by this Agreement.
19.07 Legal Construction. In case any one or more of the provisions
contained in this Partnership Agreement shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision thereof and this
Partnership Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
19.08 Counterparts. This Partnership Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original.
19.09 Gender. Wherever the context shall so require, all words herein in
the male gender shall be deemed to include the female or neuter gender, all
singular words shall include the plural, and all plural words shall include the
singular.
19.10 Affiliate Liability. Notwithstanding anything to the contrary
contained herein, or implied hereby, in no event shall any Person, except for
the Partners and the general partners of Pavilion, be liable for the
responsibilities, obligations or liabilities of either of the Partners
hereunder. In that connection, it is specifically agreed and acknowledged that,
except for the general partners of Pavilion, no officer, shareholder, director
or other Affiliate of a Partner shall be liable for any of the responsibilities,
liabilities or obligations of any Partner hereunder.
19.11 Prior Agreements Superseded. This Agreement (i) is an amendment and
restatement of the Partnership Agreement dated May 31, 1996 and entered into by
and between the Partners and (ii) supersedes any prior understandings or written
or oral agreements between the parties respecting the within subject matter.
19.12 Failure to Execute Lease Agreement.
(a) Except as expressly provided in clause (b) of this Section
19.12, neither Partner (nor any of its Affiliates) shall execute at any
time a Lease Agreement with NJHA
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providing for the use, operation and possession of the Amphitheater during
the 1997 Amphitheater Season unless such Lease Agreement is in favor of
the Partnership and approved for execution by both of the Partners. The
provisions of this Section 19.12 shall (i) survive dissolution and
termination of the Partnership and (ii) not preclude Ardee and its
Affiliates from booking the Amphitheater consistent with past practices
after dissolution and termination of the Partnership.
(b) If, upon final completion of negotiations with NJHA of the terms
to be included in the Lease Agreement, one of the Partners refuses to
approve the execution of the final negotiated form of the Lease Agreement
("Final Lease Form"), then the other Partner shall have the right,
notwithstanding the provisions of clause (a) of this Section 19.12, to
thereafter execute and enter into, on its own behalf or together with
other partners, a Lease Agreement with NJHA upon the same terms and
provisions contained in the Final Lease Form.
[The remainder of this page is intentionally blank.]
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EXECUTED as of the day and year first written above.
PAVILION PARTNERS, a
Delaware general partnership
By: SM/PACE, Inc., a Texas corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: XXXXX X. XXXXXX
---------------------------
Title: CHIEF EXECUTIVE OFFICER
--------------------------
EXIT 116 REVISITED, INC.,
a New Jersey corporation
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxxx Xxxxxx
---------------------------
Title: President
--------------------------
