ADDENDUM
TO OPERATOR LEASE AGREEMENT
CITY CONTRACT NO. 49975
The City of Phoenix, Arizona (the "City") and Pavilion Partners, a
Delaware General Partnership (the "Operator"), parties to that certain Operator
Lease Agreement amended and restated as of September 26, 1989 (the "Agreement"),
hereby enter into this Addendum for the purposes of clarifying the terms of the
Agreement in light of circumstances unforeseen at the time the Agreement was
executed. Capitalized terms shall have the meanings set forth in the Agreement.
WHEREAS, The Westside Amphitheatre Corp. ("WS") has assigned the Agreement to
the Operator, and the City has consented to such assignment;
WHEREAS, as a result of such assignment, Xxx Xxxxxx would not have control of
the Operator as originally contemplated by the Agreement;
WHEREAS, with regard to calculation of Gross Revenues under the Agreement, it
has been the intent of the City, WS and the Operator that all ticket sales
revenue be included in Gross Revenues, regardless of whether the Operator acts
as an event promoter or contracts with or subleases to a third party promoter
except for certain events which may be excluded from time to time, on a
case-by-case basis, from that requirement with the City's consent; and
WHEREAS, the City and the Operator have agreed that payment of Basic Rent under
the Agreement shall be made in arrears; and
WHEREAS, the City and the Operator have agreed that the auditors certificate
required to be given pursuant to Section 3.2 of the Agreement within 60 days
after the close of each Rental Year may instead be given 60 days after the close
of Operator's fiscal year;
NOW THEREFORE, the City and the Operator hereby agree as follows:
1. That the requirement in Section 2.6 that the Operator provide key-man
life insurance on Xxx Xxxxxx or his successor during the eighth (8th) full
Rental Year and continuing through the tenth (10th) full Rental Year is
waived;
2. That the definition of Gross Revenues in Section 3.1(c) of the
Agreement shall not construed to exclude any ticket sales revenues or
receipts from Gross Revenues for purposes of calculating Percentage Rent
whether the ticket sales revenues were generated by the Operator or by a
third party promoter pursuant to contract or lease. However,
notwithstanding the foregoing, in order to allow Operator limited
flexibility to pursue a more diversified line-up of attractions the City
hereby agrees that it will not unreasonably withhold its consent to
exempting, on a case-by-case basis, not to exceed
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eight (8) events presented by third party operators in any Lease Year from
the requirement that such third party operators' ticket proceeds be
included in Gross Revenues. The City's Parks, Recreation and Library
Department shall exercise the authority of City in determining which
events may be exempted from the Gross Receipts requirement as to ticket
proceeds on a case-by-case basis. For each event which Operator desires to
exempt from the Gross Receipts requirement as to ticket proceeds, Operator
shall provide written notice thereof to the City's Parks, Recreation and
Library Department advising of the (i) date and time of the proposed
event, (ii) the name by which the proposed event will be known or
marketed, (iii) the name of the promotor of such event and (iv) a
statement that the Operator will have no interest, directly or indirectly,
in the ticket revenues attributable to such event. City agrees that it
will provide a response within 14 days for each requested exemption made
by the Operator pursuant to the foregoing provisions; and
3. That payment of Basic Rent under the Agreement shall be on an arrearage
basis, such that payments of Basic Rent shall be due on January 1 and July
1 of each Rental Year and shall relate to the preceding six month period.
4. The Certificate required to be given to City by the Operator's
certified public accountant pursuant to the provisions of Section 3.2 of
the Agreement, may at all times hereafter be delivered within sixty (60)
days after the close of Operator's fiscal year instead of within sixty
(60) days after the close of each Rental Year. PP's fiscal year currently
ends on September 30 of each year. The Certificate shall be supported by a
Review completed in accordance with the Statement on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants.
This Addendum is intended not as an amendment of the Agreement but as an
interpretative statement by the parties regarding certain terms of the
Agreement. This Addendum is incorporated for all purposes into the Agreement as
if executed on September 26, 1989.
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IN WITNESS WHEREOF, the parties have caused this Addendum to be executed
by their duly authorized representatives this 26th day of August, 1997.
CITY OF PHOENIX, a municipal
corporation
XXXXX XXXXXXXXX, City Manager
By: /s/ Xxxxx Xxxxxxx
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Its COMMUNITY AND ECONOMIC
DEVELOPMENT DIRECTOR
----------------------------
Attest:
/s/ [Illegible]
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Acting City Clerk
Approved As To Form:
/s/ [Illegible]
----------------------
Acting City Attorney
PAVILION PARTNERS, a Delaware
General Partnership
By: SM/PACE, Inc., its managing
general partner
By /s/ [Illegible]
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Its Vice President
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