--------------------------------------------------------------------------------
LEASE AGREEMENT, EASEMENT AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
by and between
NEW JERSEY HIGHWAY AUTHORITY
and
GSAC PARTNERS
--------------------------------------------------------------------------------
Dated as of May 1, 1996
ARTICLE 1 - DEFINITIONS AND USAGE ........................................ 1
Section 1.1 Defined Terms ...................................... 1
Section 1.2 Number and Gender; Captions; References ............ 18
ARTICLE 2 - GRANT OF LEASE RIGHTS AND
EASEMENT RIGHTS .............................................. 18
Section 2.1 Premises Leased .................................... 18
Section 2.2 Parking Facilities ................................. 18
Section 2.3 Access Easement .................................... 18
Section 2.4 Utility Easement ................................... 19
Section 2.5 Habendum ........................................... 20
Section 2.6 Retained Personal Property ......................... 20
ARTICLE 3 - TERM OF LEASE ................................................ 21
Section 3.1 Term of Lease ...................................... 21
Section 3.2 Landlord's Early Termination Option ................ 21
Section 3.3 Arbitration for Validity of Exercise of
Special Termination Option ......................... 22
Section 3.4 Determination of Buyout Amount ..................... 24
Section 3.5 Parent Approval .................................... 27
ARTICLE 4 - RENT AND IMPOSITIONS ......................................... 28
Section 4.1 Payment of Rent .................................... 28
Section 4.2 Rent for First Two Lease Years ..................... 29
Section 4.3 Rent for all Subsequent Lease Years ................ 31
Section 4.4 Other Rental Payments .............................. 31
Section 4.5 Adjustment to Rental Amount (Reopenings) ........... 31
Section 4.6 Payment of Impositions Attributable to
the Tenant's Use of Amphitheater Tract
and the Parking Tracts ............................. 33
Section 4.7 Payment of Impositions Attributable to the
Landlord Land ...................................... 33
Section 4.8 Tax Contests ....................................... 33
Section 4.9 Right to Perform Obligation as to Impositions ...... 34
Section 4.10 Accounting Books and Records ....................... 34
Section 4.11 Annual Reports ..................................... 36
Section 4.12 Reports Related to a Reopening Notice .............. 36
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ARTICLE 5 - CONSTRUCTION, USE AND MAINTENANCE OF AMPHITHEATER ............ 36
Section 5.1 Renovation of Amphitheater ......................... 36
Section 5.2 Permits and Costs .................................. 41
Section 5.3 Access Improvements ................................ 42
Section 5.4 Depreciation and Removables ........................ 42
Section 5.5 Continuing Right of Tenant to Make Changes,
Alterations and Additions .......................... 42
Section 5.6 Tenant's Indemnity ................................. 42
Section 5.7 Use of Amphitheater ................................ 43
Section 5.8 Compliance with Laws ............................... 43
Section 5.9 Triple Net Lease ................................... 44
Section 5.10 Operational Matters ................................ 45
Section 5.11 Non-Compete Covenants .............................. 51
Section 5.12 Emission of Sound .................................. 53
Section 5.13 Landlord Upgrades and Improvements ................. 53
ARTICLE 6 - OTHER LANDLORD BENEFITS ...................................... 54
Section 6.1 Landlord Events .................................... 54
Section 6.2 Landlord's Tickets to Tenant Events ................ 59
Section 6.3 Garden State Arts Center Foundation ................ 60
Section 6.4 Charitable Projects ................................ 63
Section 6.5 Landlord's Special Rights to Use of
Certain Personal Property .......................... 63
Section 6.6 Agreement to Barter ................................ 63
Section 6.7 Space for Landlord on the Sponsor Towers
and in Program Book ................................ 63
ARTICLE 7 - RESTRICTIVE COVENANTS ........................................ 63
Section 7.1 Restrictive Covenants .............................. 63
Section 7.2 Restriction on Use of Parking Facilities ........... 64
Section 7.3 Enforceability of Restrictive Covenants ............ 64
Section 7.4 Concessions ........................................ 64
Section 7.5 Continuation of Existing Uses ...................... 65
ARTICLE 8 - PROVISIONS CONCERNING PARKING FACILITIES ..................... 65
Section 8.1 Joint Use of Existing Parking Facilities ........... 66
Section 8.2 Maintenance of Existing Parking Facilities ......... 67
Section 8.3 Electrical Costs and Clean-Up of Parking Facilities 67
Section 8.4 Use and Maintenance of the New Parking Facilities .. 68
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ARTICLE 9 - INSURANCE AND INDEMNITY ...................................... 69
Section 9.1 Property Insurance ................................ 69
Section 9.2 Builder's Risk Insurance .......................... 69
Section 9.3 Liability Insurance ............................... 70
Section 9.7 Indemnity ......................................... 71
Section 9.8 Commercially Unavailable Insurance ................ 71
ARTICLE 10 - ASSIGNMENT, SUBLETTING AND ENCUMBERING
BY TENANT; MORTGAGEE MATTERS; GRANTING OF EASEMENTS ......... 72
Section 10.1 Assignment, Subletting and Encumbering by Tenant .. 72
Section 10.2 [Intentionally Deleted.] .......................... 75
Section 10.3 Qualified Mortgagee's Right to Perform Tenant's
Obligations ....................................... 75
Section 10.4 Acquisition of Tenant's Interest in the Leasehold
Estate ............................................ 75
Section 10.5 Further Assurances; Estoppel Certificate .......... 76
Section 10.6 Granting of Easements ............................. 77
Section 10.7 [Intentionally Deleted.] .......................... 77
Section 10.8 Qualified Mortgagee's Right to a New Lease ........ 77
Section 10.9 Concurrent Exercise of Rights ..................... 78
Section 10.10 Limitation on Modification of Lease ............... 79
ARTICLE 11 - LANDLORD'S REPRESENTATIONS, WARRANTIES AND
COVENANTS ................................................... 79
Section 11.1 Peaceful Possession ............................... 79
Section 11.2 Organization ...................................... 79
Section 11.3 Binding Obligation ................................ 79
Section 11.4 Mortgage of Fee Estate ............................ 79
Section 11.5 Impositions ....................................... 80
Section 11.6 Financial Information ............................. 80
Section 11.7 Sale of Alcoholic Beverages ....................... 80
Section 11.8 Gift Certificates and Invite Backs ................ 80
Section 11.9 Indemnification ................................... 81
Section 11.10 Environmental Indemnity ........................... 81
ARTICLE 12- TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS ........... 81
Section 12.1 Tenant's Representations, Warranties and Covenants 81
Section 12.2 Representations, Warranties and Covenants of
Pavilion and Ardee ................................ 87
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ARTICLE 13 - DEFAULT AND REMEDIES ........................................ 90
Section 13.1 Event of Tenant Default ............................ 90
Section 13.2 Landlord Remedies .................................. 90
Section 13.3 Failure to Perform other Obligations by Tenant...... 91
Section 13.4 Event of Landlord Default .......................... 92
Section 13.5 Tenant's Remedies .................................. 93
ARTICLE 14 - CASUALTY AND CONDEMNATION
Section 14.1 Casualty and Reconstruction ........................ 93
Section 14.2 Total and Partial Taking ........................... 95
Section 14.3 Temporary Taking ................................... 95
Section 14.4 No Waiver .......................................... 95
ARTICLE 15 - MISCELLANEOUS .............................................. 96
Section 15.1 Notices .......................................... 96
Section 15.2 Modifications and Non-Waiver ..................... 98
Section 15.3 New Jersey Law ................................... 98
Section 15.4 Unavoidable Delay ................................ 98
Section 15.5 Severability ..................................... 99
Section 15.6 Attorneys Fees ................................... 99
Section 15.7 Surrender of Premises; Holding Over .............. 99
Section 15.8 Relation of Parties .............................. 99
Section 15.9 Non-Merger ....................................... 100
Section 15.10 Entireties ....................................... 100
Section 15.11 Successors and Assigns ........................... 100
Section 15.12 Memorandum of Lease Agreement .................... 100
Section 15.13 Arbitration for Small Financial Disputes ......... 100
Section 15.14. [Intentionally Deleted] .......................... 103
Section 15.15. Brokerage Indemnity .............................. 103
Section 15.16. Business Day ..................................... 103
Section 15.17. Interim Management Agreement ..................... 103
Section 15.18. Survival of Representations, Warranties
and Covenants .................................... 104
EXHIBITS:
A-1 Entire Tract
A-2 Amphitheater Tract
A-3 Parking Tracts
B Permitted Encumbrances
C Description of Renovation Work
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D Description of Final Plan
E Description of Access Improvements
F [Intentionally Deleted]
G [Intentionally Deleted]
H-1 List of Retained Items from the Master List
H-2 List of Personal Property Assigned to other Departments
H-3 Retained Items from Exhibit H-2
H-4 List of Unnumbered Items of Personal Property
H-5 Retained Items from Exhibit H-4
I Schedule of Dollar Amounts in Definition of Contingent Rental
Amount as Adjusted for each Lease Year
J Tenant's Rules and Regulations for Third Party Promoters
K List of Invite Backs
L Form of Memorandum of Lease
M [Intentionally Deleted]
N Examples for Surcharge Revenue Provisions
0 Two Year Statement of Revenues and Expenses
P Agreed-Upon Procedures
Q Alcohol Control Program
R [Intentionally Deleted]
S Indirect Cost Amount
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LEASE AGREEMENT, EASEMENT AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This LEASE AGREEMENT, EASEMENT AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS ("Lease") is being executed this 10th day of January, 1997, but is
entered into effective as of the 1st day of May, 1996 by and between NEW JERSEY
HIGHWAY AUTHORITY and GSAC PARTNERS. For and in consideration of the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
ARTICLE 1
DEFINITIONS AND USAGE
Section 1.1 Defined Terms.
(a) As used in this Lease, the following terms shall have the
respective meanings indicated:
(1) "Access Easement" shall mean the non-exclusive easement
created in favor of Tenant pursuant to the provisions of Section 2.3
hereof for the purpose of providing vehicular and pedestrian ingress
and egress to, from, between and among the (i) Amphitheater Tract,
(ii) the public rights of way abutting the boundaries of the Entire
Tract and (iii) the Parking Facilities.
(2) "Access Improvements" shall mean any and all improvements,
upgrades, alterations or other changes to xxxxxxx xxxxx, xxxxxxx,
xxxxxxxx, exit ramps or other accessways serving the Amphitheater
Tract as described on Exhibit "E" attached hereto or as may
hereafter be required by any Governmental Authority as a condition
to the issuance of any Required Permit.
(3) "Affiliate" shall mean, 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. The term "control", (including
with correlative meanings, the terms controlled by" and "under
common control with") as used in the immediately preceding sentence,
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.
(4) "Amphitheater" shall mean the outdoor entertainment
facility located on the Amphitheater Tract. Specifically, the term
"Amphitheater" shall include within its definition all buildings,
fixtures, personal property (other than the Retained Personal
Property) and other improvements which are currently located on the
Amphitheater Tract and which may hereafter be constructed or placed
on the Amphitheater Tract as a part of or related to such outdoor
entertainment facility.
(5) "Amphitheater Season" shall mean the portion of each
calendar year during the Term 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.
(6) "Amphitheater Tract" shall mean that portion of the Entire
Tract on which the Amphitheater is located. The Amphitheater Tract
is depicted on the plat attached hereto as Exhibit "A-2".
(7) "Ardee" shall mean Exit 116 Revisited, Inc., a New Jersey
corporation, one of Tenant's general partners.
(8) "Artist Costs" shall mean, with respect to any Tenant
Event, the total amount of appearance fees payable to the artists,
entertainers or other performers appearing at such Tenant Event
including, without limitation, (i) any minimum guaranteed fee
payable to such artists, entertainers or performers, (ii) any fee
payable pursuant to a "percentage" arrangement by which such artist,
entertainer or performer is entitled to receive amounts in addition
to the minimum guaranteed fee and (iii) any production expenses of
the artists, entertainers or performers which are paid by Tenant,
not subject to reimbursement and customarily shown on the "face
page" of the artist contract.
(9) "Artist Share" shall mean, during any period of time, a
fraction (stated as a percentage), the numerator of which shall be
the total amount of Mist Costs for the Tenant Events presented
during such period of time and the denominator of which shall be the
total amount of Ticket Revenues for the Tenant Events presented
during such period of time.
(10) "Buyout Amount" shall mean the monetary sum determined
pursuant to the provisions of Section 3.4 hereof.
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(11) "Civic/Charitable Event" shall mean any event, show,
convocation, assembly or performance held or presented at the
Amphitheater which is promoted or sponsored by, or held for the
benefit of, a civic, community, educational, charitable, artistic or
similar organization.
(12) "Club Show" shall mean any live entertainment event
presented in an enclosed venue with a maximum capacity for 3500
people or less.
(13) "Commencement Date" shall mean the effective date of this
Lease as indicated in the opening paragraph of this Lease.
(14) "Construction Budget" shall mean that certain budget of
the Renovation Costs prepared by Tenant, dated November 19, 1996 and
previously provided to Landlord.
(15) "Contingent Rental Amount" shall mean, for any Lease Year
after the second Lease Year, the amount specified in the one
subclause below which is applicable for such Lease Year based upon
the specific amount of Gross Revenues received during such Lease
Year:
(i) If the amount of Gross Revenues for such Lease Year
is less than or equal to $18,700,000, then the Contingent
Rental Amount for such Lease Year shall be $0.00.
(ii) If the amount of Gross Revenues for such Lease Year
is greater than $18,700,000 but less than or equal to
$21,300,000, then the Contingent Rental Amount for such Lease
Year shall be equal to fifteen percent (15%) of the amount by
which Gross Revenues for such Lease Year exceeds $18,700,000.
(iii) If the amount of Gross Revenues for such Lease
Year is greater than $21,300,000 but less than or equal to
$23,900,000, then the Contingent Rental Amount for such Lease
Year shall be equal to the sum of (A) five percent (5%) of the
amount by which Gross Revenues for such Lease Year exceeds
$21,300,000 plus (B) $390,000.
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(iv) If the amount of Gross Revenues for such Lease Year
exceeds $23,900,000. then the Contingent Rental Amount for
such Lease Year shall be equal to the sum of (A) ten percent
(10%) of the amount by which Gross Revenues for such Lease
Year exceeds $23,900,000 plus (B) $520,000.
The dollar amounts included above in the definition of Contingent
Rental Amount shall each be increased annually by two percent (2%)
(compounded) commencing with the fourth Lease Year, as reflected on
Exhibit "I" attached hereto.
(16) "Employee" shall mean, (A) when used in conjunction with
the Amphitheater, (i) any and all executive personnel, of Tenant or
Tenant's general partners, (ii) all employees, agents, contractors,
concessionaires and all other employees and personnel under the
direction of Tenant, and (iii) Tenant's contractors or Tenant's
concessionaires who perform duties or services related to the
development, construction, use, management, operation or maintenance
of the Amphitheater (including artists, entertainers and performers
appearing at the Amphitheater and their staff) and all employees,
agents or other personnel under the direction of such contractors or
concessionaires and (B) when used in conjunction with the Park
Operations, any and all executive personnel of Landlord and all
employees, agents, contractors, concessionaires and all other
employees and personnel under the direction of Landlord, Landlord's
contractors or Landlord's concessionaires who perform duties or
services related to the use, management, operation or maintenance of
the Park Operations.
(17) "Entire Tract" shall collectively mean the Park Tract,
the Amphitheater Tract and the Parking Tracts. The Entire Tract is
depicted on the plat attached hereto as Exhibit "A-1".
(18) "Event of Landlord Default" shall mean the happening or
occurrence of any event or circumstance described in Section 13.4
hereof.
(19) "Event of Tenant Default" shall mean the happening or
occurrence of any event or circumstance described in Section 13.1
hereof.
(20) "Existing Parking Facilities" shall mean that portion of
the Parking Facilities which are in existence as of the Commencement
Date.
(21) "Final Plan" shall mean the documents listed on Exhibit
"0" attached hereto, as such list may hereafter be supplemented or
amended by agreement between Landlord and Tenant in accordance with,
and as contemplated by, the provisions thereof.
4
(22) "Fully Restricted Facility" shall mean any amphitheater,
bowl, Greenfield or other outdoor or open-air venue at which live
entertainment events may be presented (other than sports stadiums
with a capacity for 45,000 persons or more).
(23) "Governmental Authority" shall mean any and all courts,
boards, agencies, commissions, offices or authorities of any nature
whatsoever for any governmental xxxx (xxxxxxx, xxxxx, xxxxxx,
xxxxxxxx, xxxxxxxxx, xxxx or otherwise) whether now or hereafter in
existence.
(24) "Greenfield" shall mean any open-air venue at which live
entertainment events may be presented and which does not have fixed
seating, a permanent stagehouse or other substantial improvements or
fixtures of any type.
(25) "Gross Revenues" shall mean all revenues of any kind
earned or received by, or otherwise belonging to, Tenant or Tenant's
contractors, concessionaires (including concessionaires of
subtenants, licensees or sublicensees), agents, subtenants,
licensees, sublicensees or assigns (as determined on an accrual
basis consistently applied) from customers, guests, licensees,
invitees, sponsors, ticketing companies or other persons arising out
of or derived from the use, occupancy or operation of the
Amphitheater (or any part thereof) or the Parking Tracts pursuant to
this Lease, including, without limitation, and by way of example,
ticket sales, ticket rebates from ticketing agents, parking revenue,
merchandising revenue, food and beverage revenue, sponsorship
revenue, playbill revenue and media revenue. Gross Revenues shall
not be reduced by any amounts or fees payable to credit card
companies. Gross Revenue shall not include any of the following
items:
(i) revenues received or collected on account of
New Jersey State sales tax or any other tax on sales;
(ii) revenues belonging to Landlord which are
attributable to or derived from Landlord Events;
(iii) the value of free tickets issued to Landlord
pursuant to Section 6.2(a) hereof or otherwise;
(iv) any revenues contributed to the GSACF
pursuant to the provisions of Section 6.3 hereof;
5
(v) proceeds of loans, borrowings, financings, or
other similar arrangements which require subsequent repayment
of such proceeds;
(vi) (except as provided to the contrary in
Section 5.10(f) hereof) sublease rental revenue received by
Tenant in connection with a sublease of the Amphitheater to a
subtenant presenting an event at the Amphitheater for which a
cost of admission is charged to the Patrons attending such
event (it being agreed that the revenues and receipts of such
subtenant and such subtenant's concessionaires with respect to
its event at the Amphitheater shall be included in "Gross
Revenues" for purposes of this Lease);
(vii) reimbursement of operating expenses from a
subtenant presenting an event at the Amphitheater;
(viii) grants, advances, commissions, royalties,
fees or other amounts paid to, or for the benefit of, Tenant
by any concessionaire, licensee or sublicensee in exchange for
the right to operate a concession business at the Amphitheater
or on the Parking Tracts (it being agreed that, since the
gross revenues and receipts of such concessionaire, licensee
or sublicensee from the operation of any such concession or
licensed business are included in "Gross Revenues", such gross
revenues and receipts shall be the measure of "Gross Revenues"
for purposes of this Lease with respect to such concession or
licensed business);
(ix) sponsorship fees attributable to the
commercial right to name the Amphitheater (provided that
Landlord has received a portion of such sponsorship fees
pursuant to an arrangement acceptable to it);
(x) insurance proceeds, condemnation proceeds and
casualty and condemnation loss settlements;
(xi) refunds, abatements or adjustments of
Impositions (provided that, to the extent such Impositions
were based on income or revenue, such income or revenue was
previously included in Gross Revenues for the years to which
such Impositions relate);
(xii) receipts attributable to returned tickets,
merchandise or other items to the extent of the amount
refunded
6
(provided that revenues attributable to the resale of any such
returned tickets, merchandise or other items shall be included
within "Gross Revenues" for purposes of this Lease);
(xiii) the value of complimentary tickets for
which no good, service or other benefit (other than the mere
benefit of an additional attendee) is received in return (with
the specific understanding that (A) tickets given to radio
stations for "promotional give-aways" shall be deemed to be
complimentary tickets for which no good, service or other
benefit is received in return and (B) Tenant shall provide
prior notice to Landlord before "papering" a Tenant Event);
(xiv) the value of complimentary tickets issued to
sponsors in connection with, or as a part of, the overall
sponsorship arrangement with such sponsor (provided that the
value of all goods, services and other benefits received from
the sponsor as a part of any sponsorship arrangement shall be
included in "Gross Revenues" for purposes of this Lease); and
(xv) service charges or similar charges added to
the price of tickets by the Tenant's computerized ticketing
agent to the extent that the revenue attributable to such
charge is retained by such computerized ticketing agent.
Any up-front, lump sum payment received from a sponsor (except as
provided in clause (ix) of the immediately preceding sentence) which
relates to a multi-year agreement shall be deemed received in equal
annual parts over the term of such agreement for purposes of
calculating the amount of Gross Revenues for each Lease Year during
the term of such agreement. If any amount is included in Gross
Revenues during any Lease Year by reason of it having "accrued"
during that Lease Year and if that amount is not subsequently
received as originally expected, then Tenant may take a deduction
against Gross Revenues in that amount in the Lease Year that it is
determined that such amount will not be received.
(26) "GSACF" shall mean the Garden State Arts Center
Foundation.
(27) "Hazardous Substances" shall mean any hazardous or toxic
substance or contaminated material including, without limitation,
asbestos, oil and petroleum products and those substances within the
scope of all federal, state and local environmental laws and
ordinances, including the Resource Conservation and Recovery Act, as
amended, the Comprehen-
7
sive Environmental Response, Compensation and Liability Act, as
amended and the Superfund Amendment and Reauthorization Act of 1986,
as amended.
(28) "Hard Date" shall have the meaning assigned to it
pursuant to the provisions of Section 3.2(c) hereof.
(29) "Impositions" shall mean all real estate taxes,
assessments, excises and levies, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever, which shall or may during the Term be assessed, levied,
charged, confirmed or imposed by any public authority from time to
time during the Term (together with any interest and penalties
thereon).
(30) "Insolvent" shall mean the occurrence or happening of any
one or more of the following events with respect to Tenant:
(i) the commencement of a voluntary case under Title 11
of the United States Code ("Title 11") as from time to time in
effect, or Tenant authorizing, by appropriate proceedings of
trustees or other governing body, the commencement of such a
voluntary case;
(ii) Tenant filing an answer or other pleading admitting
or failing to deny the material allegations of a petition
filed against it commencing an involuntary case under Title
11, or seeking, consenting to or acquiescing in the relief
therein provided, or by its failing to controvert, in a timely
manner, the material allegations of any such petition;
(iii) the filing of an action for relief in any
involuntary case under Title 11 against Tenant, which action
is neither stayed nor dismissed within sixty (60) days after
its filing;
(iv) Tenant seeking relief as a debtor under any
applicable law, other than Title 11, in any jurisdiction,
which law relates to the liquidation or reorganization of
debtors or to the modification or alteration of the rights of
creditors, or by its consenting to or acquiescing in such
relief;
(v) the entry of an order by a court of competent
jurisdiction (1) finding Tenant to be bankrupt or insolvent,
(2) ordering or approving Tenant's liquidation, reorganization
or any modification or alteration of the rights of its
creditors, or (3) assuming custody of, or
8
appointing a receiver or other custodian for, all or a
substantial part of Tenant's property; or
(vi) Tenant making an assignment for the benefit of, or
entering into a composition with, its creditors, or appointing
or consenting to the appointment of a receiver or other
custodian for all or a substantial part of its property; or
(vii) The suspension or discontinuance of the business
of Tenant.
(31) "Landlord" shall mean 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, and any
successor thereto.
(32) "Landlord Land" shall collectively mean the Park Tract
and the Parking Tracts.
(33) "Landlord Events" shall mean the events, shows, festivals
or performances presented by Landlord at the Amphitheater pursuant
to the rights and provisions contained in Section 6.1 hereof.
(34) "Lease Year" shall mean any one of the fiscal years
during the Term. The first Lease Year shall begin on the
Commencement Date and end on October 31, 1996. The second Lease Year
shall begin on November 1, 1996 and shall end on October 31, 1997.
Each subsequent Lease Year shall begin and end on the same dates as
the second Lease Year but in subsequent calendar years.
(35) "Legal Requirements" shall mean (i) any and all present
and future judicial decisions, statutes, rulings, rules,
regulations, permits, certificates or ordinances of any Governmental
Authority in any way applicable to the Entire Tract or any business
or activity operated on any part thereof, including the
construction, ownership, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of the
Amphitheater and (ii) any and all terms, provisions, agreements or
restrictions created or imposed pursuant to any lease, contract,
instrument or restrictive covenants or other documents applicable to
and enforceable against the Entire Tract or the owner or operator of
any business or activity conducted on any part thereof.
(36) "Master List" shall have the meaning assigned to it
pursuant to the provisions of Section 2.6(a) hereof.
9
(37) "Minimum Capacity Requirements" shall mean seating
capacity at the Amphitheater which satisfies both of the following:
(i) Covered seating for no less than 6,400 persons; and
(ii) A total seating capacity (including lawn seating
without cover) for no less than 17,100 persons.
(38) "Minimum Fixed Rental Amount" shall mean $1,650,000. If
the total paid attendance at Tenant Events exceeds 1,620,000
cumulatively during the third, fourth and fifth Lease Years, then
the Minimum Fixed Rental Amount shall be increased to $1,700,000
commencing in the sixth Lease Year.
(39) "Minimum Percentage Rental Amount" shall mean, for any
Lease Year, 8.376% of the amount of Gross Revenues for such Lease
Year.
(40) "Minimum Rental Amount" shall mean, for any Lease Year,
the greater of (i) the Minimum Fixed Rental Amount or (ii) the
Minimum Percentage Rental Amount for such Lease Year.
(41) "Mortgage" shall mean any enforceable deed of trust,
mortgage, security agreement, collateral assignment or other lien
that Tenant may hereafter affix or impose, during the Term, against
all or any portion of the rights, interests and estates created
hereunder in favor of Tenant, including, without limitation, the
leasehold estate created by this Lease to secure the payment and
performance of any valid and legally binding obligation to the
Mortgagee or other secured party under such deed of trust, mortgage,
security agreement or collateral assignment.
(42) "Mortgagee" shall mean the owner of any indebtedness or
obligation secured by any Mortgage.
(43) "New Lease Notice" shall have the meaning assigned to it
pursuant to the provisions of Section 10.8 hereof.
(44) "New Parking Facilities" shall mean that portion of the
Parking Facilities which are constructed by Tenant after the
Commencement Date.
(45) "Non-Termination Event of Default" shall have the meaning
assigned to it pursuant to the provisions of Section 13.3 hereof.
10
(46) "Obligations" shall mean, when used with respect to a
party hereto, any and all of the covenants, warranties,
representations and other obligations made or undertaken by such
party to the other party hereto pursuant to the provisions hereof.
(47) "Opening Date" shall mean the date upon which the first
public performance is presented at the Amphitheater after completion
of the Renovation Work.
(48) "Park Operations" shall collectively refer to the
operations and businesses conducted on the Park Tract including,
without limitation, (i) the operation and use of the Meyner
Reception Center and Celebrity House, (ii) the operation and use of
the New Jersey Vietnam Veterans' Memorial and the New Jersey Vietnam
Veterans Memorial Education Center and (iii) the operation and use
of the Telegraph Hill Nature Area.
(49) "Park Tract" shall mean all of the Entire Tract other
than the Amphitheater Tract and the Parking Tracts.
(50) "Parking Facilities" shall mean the parking facilities,
roadways, walkways and other accessways currently located, or
hereafter constructed in accordance with the provisions of this
Lease, on the Parking Tracts.
(51) "Parking License" shall mean the non-exclusive easements,
rights and licenses granted to Tenant in and to the Parking
Facilities pursuant to the provisions of Section 2.2 hereof.
(52) "Parking Tracts" shall mean (i) those tracts or parcels
of land which are a part of the Entire Tract and which are depicted
on the plat attached hereto as Exhibit "A-3", (ii) any other tract
or parcel of land located within the Entire Tract on which any
Parking Facilities may hereafter be constructed by Tenant with the
prior consent of Landlord in order to provide sufficient on-site
Parking Facilities for the use and operation of the Amphitheater and
(iii) the roadways, walkways and other accessways which provide
vehicular or pedestrian access to, from and between the parking
lots, the Amphitheater and public rights of way (including, without
limitation, the circular road around the perimeter of the
Amphitheater and the parking lot adjacent to the Amphitheater).
(53) "Partially Restricted Facility" shall mean any arena,
auditorium, building, hall, stadium or other enclosed venue at which
live entertainment events may be presented (other than Fully
Restricted Facilities).
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(54) "Patron" shall mean, (i) when used in conjunction with
the Amphitheater, any person holding a ticket for a particular
performance or show to be held or presented at the Amphitheater on
the date of such performance or show and (ii) when used in
conjunction with the Park Operations, any person who may, at any
time, be present on the Park Tract to engage in any activity
permitted on the Park Tract.
(55) "Pavilion" shall mean Pavilion Partners, a Delaware
general partnership, one of Tenant's general partners.
(56) "Permitted Encumbrances" shall mean the outstanding
liens, easements, building lines, restrictions, security interests
and other matters (if any) as reflected on Exhibit "B" attached
hereto.
(57) "Permitted Rate" shall mean the lesser of (i) the prime
rate of interest charged from time to time by large U.S. money
center banks plus two percent (2%) per annum or (ii) the maximum
non-usurious interest rate permitted by applicable law from time to
time in effect.
(58) "Person" shall mean any individual, corporation,
partnership, business trust, business association, governmental
entity, governmental authority or other legal entity.
(59) "Pre-Approved D/S Parties" shall mean Xxx Xxxxxxxx and
Xxxxx Xxxxxx.
(60) "Pre-Approved Manager" shall mean any one or more of (a)
PACE Entertainment Corporation or any of its direct or indirect
wholly-owned subsidiaries, (b) any Pre-Approved D/S Party or any
direct or indirect wholly-owned subsidiary of a Pre-Approved D/S
Party or (c). any corporation, partnership, limited liability
company or other entity with respect to which one or both of PACE
Entertainment Corporation and a Pre-Approved D/S Party possesses,
directly or indirectly, no less than 50% of (x) the power to direct
or cause the direction of the management or policies of such
corporation, partnership, limited liability company or other entity
as it relates to the operation and management of the Amphitheater
(whether through the ownership of voting equity, by contract or
otherwise) and (y) the authority to oversee, and the responsibility
for overseeing, the day-to-day business operations of such
corporation, partnership, limited liability company or other entity.
(61) "Pre-Approved Mortgagee" shall mean anyone or more of the
Pre-Approved Parents or any direct or indirect wholly-owned
subsidiary of any of the Pre-Approved Parents.
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(62) "Pre-Approved Parents" shall mean PACE Entertainment
Corporation, Viacom Inc. and Sony Corporation. If any of the
Pre-Approved Parents, other than PACE Entertainment Corporation,
should, at any time hereafter, transfer (by stock or asset sale,
merger or otherwise) a significant operating subsidiary or division
(which includes within 1t such Pre-Approved Parent's indirect
interest in the Tenant) to a Person ("Acquiring Person") not
controlled by such Pre-Approved Parent, then the ultimate parent
entity of the Acquiring Person shall be a Pre-Approved Parent for
purposes hereof if the transferring Pre-Approved Parent's indirect
interest in the Tenant represents less than ten percent (10%) of the
total value of the operating subsidiary or division being
transferred.
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(63) "Premises" shall mean the rights, properties and
interests of Landlord being leased and demised hereby as more fully
described in Section 2.1 hereof, subject to the rights, properties
and interests granted to or reserved by Landlord pursuant to the
terms hereof.
(64) "Qualified Mortgage" shall mean a Mortgage in favor of a
Pre-Approved Mortgagee which contains (A) a requirement that the
mortgagee must provide to Landlord notice of the institution of a
foreclosure proceeding and the opportunity during the period
expiring thirty (30) days after the delivery of said notice to
purchase and acquire said Mortgage and the indebtedness secured by
said Mortgage at par value plus all accrued unpaid interest and
uncollected fees and other amounts due and payable pursuant to such
Mortgage, or at such lesser amount as may be mutually agreed by the
parties, as a condition precedent to the right of such mortgagee
conducting a public foreclosure sale under such Mortgage (although
institution of the foreclosure proceeding, as opposed to the
conducting of the actual foreclosure sale, may take place during
such thirty day period), (B) an express agreement by the Mortgagee
that insurance proceeds payable under, or in respect of, any policy
of insurance covering losses to property (real or personal) shall be
adjusted, paid and applied in accordance with Articles 9 and 14 of
this Lease. (C) a provision that the indebtedness secured by such
Mortgage may not be assigned to a Person other than a Pre-Approved
Mortgagee without Landlord's consent (such consent not to be
unreasonably withheld, conditioned or delayed) and (D) a provision
that the indebtedness secured by such Mortgage shall be limited
solely and exclusively to (i) loans ("Renovation Loans") extended
for the sole purpose of funding Renovation Costs (and any renewals,
extensions, replacements or consolidations, but not enlargements or
other increases, of such loans) or (ii) indemnity obligations in
favor of guarantors of a Renovation Loan; provided, however, (x) in
no event may a Qualified Mortgage secure principal indebtedness in
an amount that is greater than an amount which will cause the total
amount of principal indebtedness secured by all then existing
Qualified Mortgages, including such Qualified Mortgage, to exceed
the lesser of the aggregate amount of Renovation Costs financed with
Renovation Loans or $9,275,000 without the prior written consent of
Landlord and (y) the Renovation Loan related to such Qualified
Mortgage must provide, by its own terms, that interest accruing
thereon is payable no less frequently than annually. A Qualified
Mortgage may not contain any provision or requirement that creates
or, with the giving of notice or passage of time (or both), would
create an Event of Tenant Default or a Non-Termination Event of
Default under this Lease.
(65) "Qualified Mortgagee" shall mean the mortgagee or
mortgagees under or pursuant to a Qualified Mortgage.
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(66) "Renovation Costs" shall mean all of the costs and other
expenses incurred by Tenant in connection with the design, planning,
preparation, commencement, carrying out and completion of the
Renovation Work which costs and other expenses are of the type set
forth in the Construction Budget and, where specific items are
identified in the Construction Budget, are for such items or
functionally equivalent items; provided, however, costs related to
the negotiation, documentation or finalization of (x) the
contractual and business arrangement between Landlord and Tenant
(including, without limitation, costs associated with Tenant's
proposal to enter into this Lease, to the extent such costs would
not otherwise have been necessary or required to perform the
Renovation Work) or (y) the contractual and business arrangement
between Ardee and Pavilion shall not be included as "Renovation
Costs".
(67) "Renovation Work" shall mean such renovation,
rehabilitation, construction and upgrade activities at the
Amphitheater as more fully described on Exhibit "C" attached hereto,
to be performed in accordance with the Final Plan, as such Final
Plan may hereafter be modified pursuant to the requirements of any
Governmental Authority as a condition to the issuance of any
Required Permit.
(68) "Rent" shall mean all amounts of any kind required to be
paid by Tenant under the terms of this Lease including, without
limitation, the Minimum Rental Amount, the Contingent Rental Amount,
all amounts reimbursable to Landlord as a result of the payment or
performance by Landlord of any of Tenant's Obligations, attorneys'
fees and other costs and expenses incurred by Landlord arising out
of the enforcement of the provisions of this Lease to the extent
reimbursable by Tenant pursuant to the provisions of this Lease,
late payment fees and interest that accrues on any of the foregoing.
(69) "Required Permits" shall mean all permits and
authorizations which are required to be obtained pursuant to any
applicable Legal Requirement for proper authorization to (i)
commence and complete the Renovation Work and (ii) thereafter use
the Amphitheater. Required Permits shall include all required
building permits, grading permits, indirect source permits, special
use permits, New Jersey Highway Authority Construction Permits,
zoning or variance orders and necessary agreements from Governmental
Authorities.
(70) "Restricted Area" shall mean all of the State of New
Jersey except for (i) the Counties of Camden, Gloucester, Salem and
Cumberland and (ii) the portion of Burlington County which lies west
of Highway 206.
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(71) "Restrictive Covenants" shall mean the restrictive
covenants imposed on the activities of owners or operators of the
Landlord Land pursuant to the provisions of Article 7 hereof.
(72) "Retained Personal Property" shall have the meaning
assigned to it pursuant to the provisions of Section 2.6(b) hereof.
(73) "Show Hours" shall mean, on the days for which a
performance or event is scheduled to be held or presented at the
Amphitheater, those hours of the day beginning four hours prior to
the scheduled time for commencement of such performance or event and
ending four hours after the conclusion of such performance or event
(74) "Tenant" shall mean GSAC Partners, a Delaware general
partnership whose sole general partners are Pavilion and Ardee.
(75) "Tenant Events" shall mean all events, performances or
shows presented at the Amphitheater other than Landlord Events.
(76) "Tenant Revenues" shall mean that portion of Gross
Revenues which is actually received by Tenant The portion of Gross
Revenues which is received by any of Tenant's contractors.
concessionaires (including concessionaires of subtenants, licensees
or sublicensees), agents, subtenants, licensees, sublicensees or
assigns shall not be included within the term "Tenant Revenues".
(77) "Term" shall mean the term of this Lease as described in
Section 3.1 hereof.
(78) "Ticket Revenues" shall mean, with respect to any Tenant
Event, the gross proceeds received from the sale of tickets to such
Tenant Event, net of any sales or similar taxes. Ticket Revenues
shall not include any of the following items:
(i) the Value of complimentary tickets for which no
good, service or other benefit is received in return (with the
specific understanding that (A) tickets given to radio
stations for "promotional give-aways" shall be deemed to be
complimentary tickets for which no good, service or other
benefit is received in return and (B) Tenant shall provide
prior notice to Landlord before "papering" a Tenant Event);
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(ii) the value of complimentary tickets issued to
sponsors in connection with, or as a part of, the overall
sponsorship arrangement with such sponsor;
(iii) service charges or similar charges added to the
price of tickets by the Tenant's computerized ticketing agent
to the extent that the revenue attributable to such charge is
retained by such computerized ticketing agent;
(iv) the amounts included in the price of a ticket which
the artists, entertainers or other performers appearing at
Tenant Events do not include in "revenues" for purposes of
determining whether such artists, entertainers or other
performers are entitled to their respective "percentage" fee
(such as, the facility fee, parking charges, and
service/handling charges); and
(v) the revenues received from the sale of the 160 box
seats at the Facility (other than the Foundation Seats) to the
extent that the tickets for such seats are not "manifested".
Except as expressly indicated in clause (v) above, revenues received
from the sale of all other "non-manifested" tickets shall be
included in "Ticket Revenues" for purposes of this definition. In
addition, to avoid any ambiguity, uncertainty or doubt, the
provisions of this definition shall not impact, alter, amend or
modify any of the provisions of the defined term "Gross Revenues" as
defined elsewhere herein.
(79) "Total Renovation Cost" shall mean the total amount of
Renovation Costs incurred and paid by Tenant, including amounts paid
and incurred pursuant to Section 5.1 (a)(3) hereof but excluding any
amounts which may be reimbursed to Tenant by Landlord pursuant to
any provision of this Lease.
(80) "Touring Act" shall mean, as of any time, a performer,
entertainer, musician, comedian, actor or any group of the foregoing
which have been, during the immediately preceding 24 month period,
or are currently, for the next 12 month period, booked or scheduled
to appear or perform five or more dates or shows as a "headliner at
performance facilities with capacities for 8,000 or more people.
(81) "Utility Easement" shall mean the non-exclusive easement
granted to Tenant pursuant to the provisions of Section 2.4 hereof
for purposes of installing, constructing, laying, operating,
maintaining,
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repairing, removing, demolishing and reconstructing Utility Lines
across the Landlord Land in order to provide utility services to the
Amphitheater Tract.
(82) "Utility Lines" shall mean all such pipes, wires,
conduits, equipment, apparatus and facilities as shall be necessary
or appropriate for the provision of utility services to the
Amphitheater Tract.
(b) All financial or accounting terms used in this Lease, which are
not otherwise defined herein, such as "net income", "net loss",
"revenues", "depreciation" and "amortization", shall have the meanings
given to them pursuant to generally accepted accounting principles
("GAAP").
Section 1.2 Number and Gender Captions; References. Pronouns, wherever
used herein, and of whatever gender, shall include natural persons and
corporations and associations of every kind and character, and the singular
shall include the plural wherever and as often as may be appropriate. Article
and section headings in this Lease are for convenience of reference and shall
not affect the construction or interpretation of this Lease. Whenever the terms
"hereof', "hereby", "herein", or words of similar import are used in this Lease,
they shall be construed as referring to this Lease in its entirety rather than
to a particular section or provision, unless the context specifically indicates
to the contrary. Any reference to a particular "Article" or "Section" shall be
construed as referring to the indicated article or section of this Lease.
ARTICLE 2
GRANT OF LEASE RIGHTS AND
EASEMENT RIGHTS
Section 2.1 Premises Leased. On and subject to the terms hereof, Landlord
does hereby lease unto Tenant, and Tenant does hereby rent and lease from
Landlord, the following described property:
(a) all of the Amphitheater Tract;
(b) all improvements now or hereafter located on the Amphitheater
Tract, including the Amphitheater; and
(c) all vertical and subterranean rights, presently existing or
hereafter arising, appurtenant to the Amphitheater Tract, and all
interests in and to the streets or alleyways in or contiguous thereto
owned or claimed by Landlord or in which Landlord has any right, title or
interest.
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Section 2.2 Parking Facilities. On and subject to the terms hereof,
Landlord does hereby GRANT and CONVEY unto Tenant a non-exclusive easement,
right and license ("Parking License") during the Term to use the Parking Tracts
for purposes of parking the vehicles of all Employees and Patrons of the
Amphitheater.
Section 2.3 Access Easement On and subject to the terms hereof, Landlord
does hereby GRANT and CONVEY unto Tenant a non-exclusive easement during the
Term on, over and across the Landlord Land ("Access Easement") for the purpose
of providing vehicular and pedestrian ingress and egress to, from, between and
among the (i) Amphitheater Tract, (ii) the public rights of way abutting the
boundaries of the Entire Tract and (iii) the Parking Facilities, on and subject
to the following terms, provisions and conditions:
(a) Use of the Access Easement shall be limited to the current
location of the existing roads, ramps, drives, stairways, bridges,
curb-cuts, walkways and passages as are currently constructed and located
on the Landlord Land.
(b) The Access Easement shall be usable by all Employees and Patrons
of the Amphitheater.
(c) Except as contemplated in connection with the installation or
construction of the Access Improvements, Landlord may not relocate, remove
or otherwise alter any existing road, ramp, drive, stairway, bridge,
curb-cut, walkway or passage currently located on the Landlord Land unless
and until substitute access facilities have been constructed and provided
for the use of the Patrons and Employees of the Amphitheater which provide
pedestrian and vehicular access to. from, between and among the (i) the
Amphitheater Tract, (ii) the public rights of way abutting the boundaries
of the Entire Tract and (iii) the Parking Facilities in substantially the
same manner, scope, location and quality as is currently provided.
Section 2.4 Utility Easement. On and subject to the terms hereof, Landlord
does hereby GRANT and CONVEY unto Tenant during the Term a non-exclusive
easement over, across, on and under the Landlord Land ("Utility Easement") for
the purpose of establishing, installing, constructing, laying, operating,
maintaining, repairing, removing, demolishing and reconstructing all such pipes,
wires, conduits, equipment, apparatus and facilities (collectively, "Utility
Lines") as shall be necessary or appropriate for the provision of utility
services to the Amphitheater Tract or any portion thereof, including, but not
limited to, water, electricity, natural gas, telephone, sanitary sewer and storm
sewer. The Utility Easement shall be governed by the following terms, conditions
and provisions:
(a) Tenant shall utilize the Utility Easement 1n such locations and
places over, across, on and under the Landlord Land so as to reasonably
(i) minimize
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interference with the current use of the Landlord Land and (ii) maintain
the existing aesthetic values associated with the Landlord Land and the
Amphitheater Tract.
(b) Except in the case of an emergency repair, prior to installing,
constructing, laying or repairing any Utility Lines on, over, across or
under the Landlord Land, Tenant shall provide thirty (30) days prior
written notice thereof to Landlord. Landlord shall have the right to
review the plans for the proposed installation or repair and consent or
withhold consent based on such review; provided, however, that such
consent shall not be unreasonably withheld or delayed.
(c) The location of the Utility Easement shall be limited to the (i)
specific location at which the existing Utility Lines serving the
Amphitheater run on, over, under or across the Landlord Land and (ii)
during the period of any installation, maintenance, repair, removal or
reconstruction of any Utility Lines only, such space immediately adjacent
to such existing Utility Lines as may be necessary for Tenant to install,
construct, lay, maintain, repair, remove, demolish or reconstruct such
Utility Lines.
(d) During the Term, the Utility Easement, or any portion thereof,
shall be assignable by Tenant separate and apart from the other rights,
easements, licenses, interests and estates created pursuant to this Lease,
to any third party utility provider.
Section 2.5 Habendum. TO HAVE AND TO HOLD the Premises, the Parking
License, the Access Easement and the Utility Easement together with all and
singular the rights, privileges, and appurtenances thereunto attaching or in
anywise belonging, unto Tenant and its successors and assigns, for the Term.
Section 2.6 Retained Personal Property. In regard to the personal property
currently located at the Amphitheater as of the Commencement Date, the parties
agree as follows:
(a) A complete and accurate list of the existing personal property
located at the Amphitheater as of the Commencement Date is contained in
(i) a computer generated list ("Master List") dated January 24, 1996 and
entitled "Property Control - NJHA" which is not attached to this Lease but
a copy of which has been provided to Tenant, (ii) Exhibit "H-2" attached
to this Lease which contains a list of items located at the Amphitheater
but which have been previously assigned to other departments/divisions and
(iii) Exhibit "H-4" which contains a listing of unnumbered items located
at the Amphitheater.
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(b) Of the personal property located at the Amphitheater as of the
Commencement Date, as referenced in Section 2.6(a) hereof, the parties
hereby agree, recognize, stipulate and acknowledge that Landlord retains
ownership, control and possession of the following items of personal
property ("Retained Personal Property"):
(1) The items listed on Exhibit "H-1" attached hereto which
contains a list of those items being retained from the Master List.
(2) Those items listed on Exhibit "H-3" attached hereto which
contains a list of those items being retained from the items listed
on Exhibit "H-2" attached hereto.
(3) Those items listed on Exhibit "H-5" attached hereto which
contains a list of those items being retained from the items listed
on Exhibit "H-4" attached hereto.
ARTICLE 3
TERM OF LEASE
Section 3.1 Term of Lease. The term of this Lease shall begin on the
Commencement Date and end on October 31, 2017, the last day of the twenty-second
Lease Year, or such earlier date as may be provided for herein as a result of an
earlier termination of this Lease pursuant to the terms and provisions hereof
(the "Term").
Section 3.2 Landlord's Early Termination Option. The Landlord shall have
the right and option (the "Special Termination Option") to terminate this Lease
in accordance with, and subject to, the following terms, provisions and
conditions:
(a) Notice of Exercise. In order to validly exercise the Special
Termination Option, the Landlord must provide written notice to the Tenant
of its exercise of the Special Termination Option at least thirty (30)
days before, but no more than ninety (90) days before, the end of the
fifth Lease Year or the tenth Lease Year.
(b) Standard for Valid Exercise. Landlord shall not have the right
to exercise the Special Termination Option for financial or economic
purposes. To validly exercise the Special Termination Option, Landlord
shall be required to demonstrate that during the portion of the Term
through the date on which the Special Termination Option is being
exercised, there has been a pattern of Non-Termination Events of Default
which were under the control of Tenant and which were, by their nature,
curable. If, following an exercise of Special Termination
21
Option by Landlord, Tenant does not believe that Landlord has the right to
validly exercise the Special Termination Option in accordance with the
standard set forth in the immediately preceding sentence, then Tenant may
commence an arbitration proceeding to be conducted in accordance with the
provisions of Section 3.3 hereof for a binding determination as to whether
Landlord has the right to validly exercise the Special Termination Option
by providing written notice to Landlord of Tenant's election to commence
such arbitration proceeding within thirty (30) days after receipt of a
notice provided pursuant to Section 3.2(a) hereof from Landlord purporting
to exercise the Special Termination Option.
(c) Obligation to Pay Buyout Amount. If the Landlord validly elects
to terminate this Lease pursuant to the Special Termination Option, then,
subject to the subsequent provisions hereof, the Landlord shall be
obligated to pay to the Tenant, in immediately available funds, a lump sum
cash payment in an amount equal to the Buyout Amount on the later to occur
of (i) ninety (90) days after the date on which the Buyout Amount for such
exercise of the Special Termination Option is fully and finally determined
in accordance with the provisions of Section 3.4 hereof or (ii) the
effective date of the termination of this Lease pursuant to such exercise
of the Special Termination Option (as determined pursuant to Section
3.2(d) hereof). Notwithstanding the foregoing, Landlord shall have the
right and option, exercisable in its sole discretion, to withdraw its
exercise of the Special Termination Option by providing written notice of
such withdrawal of the exercise of the Special Termination Option to
Tenant on or before the date ("Hard Date") which is thirty (30) days after
the date on which the Buyout Amount for such exercise of the Special
Option is fully and finally determined pursuant to the provisions of
Section 3.4 hereof. If Landlord should withdraw its exercise of the
Special Termination Option pursuant to the right created in the
immediately preceding sentence, then Landlord shall be obligated,
notwithstanding any contrary provision contained herein, to pay and
reimburse the out-of-pocket costs incurred or paid by Tenant in connection
with the disputes and proceedings arising out of or relating to the
exercise of the Special Termination Option or the determination of the
Buyout Amount following the exercise of such Special Termination Option
(including, without limitation, attorneys' fees, court costs and
arbitration costs paid or incurred by Tenant).
(d) Effective Date of Termination. The effective date of the
termination of this Lease pursuant to a valid exercise of the Special
Termination Option shall be determined in accordance with the following
provisions:
(1) If the Hard Date with respect to such exercise of the
Special Termination Option occurs within ninety (90) days following
the end of a Lease Year, then the effective date of the termination
of this Lease as a result of the exercise of such Special
Termination Option shall be deemed to be the last day of such Lease
Year.
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(2) If the Hard Date with respect to such exercise of the
Special Termination Option occurs at any other time, then the
effective date of the termination of this Lease as a result of the
exercise of such Special Termination Option shall be the last day of
the Lease Year in which such Hard Date occurs.
Section 3.3 Arbitration for Validity of Exercise of Special Termination
Option. If Tenant provides a written notice to Landlord pursuant to Section
3.2(b) that it wishes to challenge the validity of an exercise of the Special
Termination Option, then a binding arbitration procedure shall be commenced for
the purpose of determining whether the standards specified in Section 3.2(b)
have been met to permit a valid exercise of the Special Termination Option by
Landlord in accordance with the following provisions:
(a) Within thirty (30) days after the provision of Tenant's notice
to Landlord pursuant to Section 3.2(b) hereof of its decision to implement
such arbitration procedure, each of Landlord and Tenant shall select a
Qualified Retired Judge (herein defined) to serve as one of the three
arbitrators in such arbitration proceeding and provide written notice to
the other of the identity of such Qualified Retired Judge so selected.
(b) The first two Qualified Retired Judges so selected shall then
endeavor to mutually agree upon and approve a third Qualified Retired
Judge to serve as third arbitrator in such arbitration proceeding. If the
first and second Qualified Retired Judges are unable to mutually select
the third Qualified Retired Judge, then the third Qualified Retired Judge
shall be selected in accordance with the following provisions:
(i) The first two Qualified Retired Judges shall submit a list
to Landlord and Tenant containing the names of six (6) Qualified
Retired Judges, three (3) of whom shall have been designated by each
of the first two Qualified Retired Judges. The ordering of the six
(6) names on such list shall be set by mutual agreement between the
first two Qualified Retired Judges or, failing mutual agreement, by
random drawing. There shall be no indication on the list as to the
names which were selected by either of the first two Qualified
Retired Judges.
(ii) Within fifteen (15) days after receipt of such list of
names referred to above, Landlord and Tenant shall each return to
the first two Qualified Retired Judges such list of names with no
more than two (2) of the names deleted. The highest name remaining
on the list returned by the parties hereto which was not deleted by
either party shall be the third Qualified Retired Judge to serve as
an arbitrator in such arbitration proceeding.
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(c) Within thirty (30) days after the selection of the third
Qualified Retired Judge to serve as the arbitrator in connection with such
proceeding, each of the parties hereto shall submit to the three
arbitrators (with copies to the other party) a written document
("Arbitration Paper") which contains a discussion and analysis as to
whether the Special Termination Option may be validly exercised in
accordance with the provisions of this Lease. Each party shall have
fifteen (15) days after receipt of the other party's Arbitration Paper to
file a supplemental Arbitration Paper containing only information
responsive to the other party's Arbitration Paper.
(d) Within sixty (60) days after the selection of the third
Qualified Retired Judge, a meeting shall be convened in a conference room
in a hotel located at the Newark, New Jersey airport on a date and time
selected by the third Qualified Retired Judge. Each party and its
representative shall be entitled to attend such meeting and be given an
opportunity to present testimony, other evidence and oral arguments to the
three Qualified Retired Judges in favor of its position in connection with
the determination as to whether the Special Termination Option was validly
exercised. The third Qualified Retired Judge shall serve as the chairman
of such meeting and will set forth reasonable rules and procedures to be
followed.
(e) Within thirty (30) days after the holding of such meeting, the
three Qualified Retired Judges shall issue a written statement to the
Landlord and the Tenant setting forth the final decision of the panel of
Qualified Retired Judges as to whether the Landlord had the right to
validly exercise the Special Termination Option in accordance with the
provisions of this Lease. The decision of the panel of Qualified Retired
Judges may be made by majority decision of two out of three of the
Qualified Retired Judges serving on such panel. The decision of the panel
of Qualified Retired Judges as to whether the Special Termination Option
was validly exercised and shall be the final and binding determination on
such issue for all purposes hereof and each party hereto agrees (subject
to the rights and recourses expressly provided for in the New Jersey
Arbitration Act) not to institute any litigation concerning the decision
of the panel of Qualified Retired Judges (except that errors of law shall
be subject to appeal).
(f) All costs paid or incurred in connection with the conducting of
such arbitration proceeding shall be paid by the party incurring same. The
costs and fees payable to the panel of three Qualified Retired Judges and
their expenses shall be paid fifty percent (50%) by Tenant and fifty
percent (50%) by Landlord.
(g) As used herein, the term "Qualified Retired Judge" shall mean a
former or retired United States District Court Judge who regularly
provides his services as a private arbitrator in connection with civil
disputes.
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Section 3.4 Determination of Buyout Amount.
(a) Definition. The term "Buyout Amount" shall mean, with respect to
any exercise by Landlord of the Special Termination Option, the sum of the
following amounts:
(1) The fair market value ("Value Amount") of Tenant's
leasehold estate created hereunder taking into account what a
willing buyer would pay a willing seller in cash for such leasehold
estate, neither being under a compulsion to buy or sell and both
being knowledgeable of all facts necessary to make an informed
decision as to the value of such leasehold estate; plus
(2) A monetary sum ("Premium Amount"), in addition to the
Value Amount, in an amount sufficient to amply compensate Tenant for
the loss of the unique and irreplaceable "franchise" of owning the
exclusive right to use, operate and exploit the Amphitheater.
Notwithstanding anything to the contrary contained herein, in no event,
under any set of circumstances, shall the Buyout Amount ever be less than
the absolute minimum amount of the then unamortized portion of the Total
Renovation Cost (with the express understanding that the Total Renovation
Cost shall be amortized for these purposes on a straight-line basis over
240 months commencing on the Opening Date).
(b) Attempted Mutual Agreement. For no fewer than thirty (30) days
following the delivery of a notice by Landlord to Tenant pursuant to the
provisions of Section 3.2(a) hereof exercising the Special Termination
Option or, if Tenant challenges the validity of the exercise of the
Special Termination Option pursuant to an arbitration proceeding pursuant
to Section 3.3 hereof, for no fewer than thirty (30) days after a final
and binding determination that such exercise of the Special Termination
Option was validly made, Landlord and Tenant shall each meet with the
other at such times and at such places as may be reasonably requested by
the other party in an effort to mutually agree upon and determine the
Buyout Amount for such exercise of the Special Termination Option.
(c) Binding Arbitration. If Landlord and Tenant are unable to
mutually agree upon and determine the Buyout Amount for such exercise of
the Special Termination Option, then either party (the "Triggering Party")
shall have the right, after expiration of the thirty (30) day period
referred to in Section 3.3(b) hereof, to refer the determination of the
Buyout Amount to a binding arbitration procedure to be conducted 1n
accordance with the following provisions:
25
(1) The Triggering Party shall provide written notice to the
other party ("Receiving Party") that the Buyout Amount shall be
determined by binding arbitration. Such notice shall contain the
name of a Qualified Individual (herein defined) who shall serve as
one of the three arbitrators to determine the Buyout Amount (herein
called the "first arbitrator").
(2) Within fifteen (15) days after receipt of the written
notice provided pursuant to clause (1), the Receiving Party shall
provide written notice to the Triggering Party of the identity of a
Qualified Individual who will serve as one of the arbitrators to
determine the Buyout Amount (herein called the "second arbitrator").
(3) The first and second arbitrators shall then endeavor to
mutually agree upon and approve a third Qualified Individual to
serve as one of the three arbitrators to determine the Buyout Amount
(herein called the "third arbitrator"). If the first and second
arbitrators are unable to mutually select the third arbitrator, then
the third arbitrator shall be selected in accordance with the
following provisions:
(i) The first and second arbitrators shall submit
a list to Landlord and Tenant containing the names of six (6)
Qualified Individuals, three (3) of whom shall have been
designated by the first arbitrator and three (3) of whom shall
have been designated by the second arbitrator. The ordering of
the six (6) names on such list shall be set by mutual
agreement between the first and second arbitrators or, failing
mutual agreement, by random drawing. There shall be no
indication on the list as to which of the names were selected
by the first arbitrator and which were selected by the second
arbitrator.
(ii) Within fifteen (15) days after receipt of
such list of names referred to above, Landlord and Tenant
shall each return to the first and second arbitrators such
list of names with no more than two (2) of the names deleted.
The highest name remaining on the list returned by the parties
hereto which was not deleted by either party shall be the
third arbitrator.
(4) Within thirty (30) days after the selection of the third
arbitrator, each of the parties hereto shall submit to the three
arbitrators (with copies to the other party) a written document
("Position Paper) which contains the specific amount that (i) such
party believes is the appropriate amount for the Buyout Amount
(including separate calculations of the Value Amount and the Premium
Amount) and (ii) such written information as may be necessary to
support such party's determination of the Buyout
26
Amount. Each party shall have fifteen (15) days after receipt of the
other party's Position Paper to file a supplemental Position Paper
containing only information responsive to the other party's Position
Paper.
(5) Within sixty (60) days after the selection of the third
arbitrator a meeting shall be convened in a conference room in the
hotel located at the Newark, New Jersey airport at a date and time
selected by the third arbitrator. Each party and its representatives
shall be entitled to attend such meeting and be given an opportunity
to present testimony, other evidence and oral arguments to the
arbitrators in favor of its position in connection with the
determination of the Buyout Amount. The third arbitrator shall
serve as the chairman of such meeting and will set forth reasonable
rules and procedures to be followed.
(6) Within thirty (30) days after the holding of such meeting,
the arbitrators shall issue a written statement to the Landlord and
Tenant setting forth the final decision of the arbitrators as to the
Buyout Amount The arbitrators shall agree upon a Buyout Amount by a
unanimous vote. The amount selected by the arbitrators for the
Buyout Amount shall be the final and binding determination of the
Buyout Amount for all purposes hereof and each party hereto agrees
(subject to the rights and recourses expressly provided for in the
New Jersey Arbitration Act) not to institute any litigation
concerning the decision of the arbitrators (except that errors of
law shall be subject to appeal).
(7) All costs paid or incurred in connection with the process
of determining the Buyout Amount shall be paid by the party
incurring same. The costs and fees payable to the arbitrators and
their expenses shall be paid fifty percent (50%) by Tenant and fifty
percent (50%) by Landlord.
(8) As used herein, the term "Qualified Individual" shall mean
(i) with respect to each of the first and second arbitrators, a
professional real estate appraiser with at least ten (10) years
experience in appraising commercial real estate properties and (ii)
with respect to the third arbitrator, a person with at least ten
(10) years experience in the live entertainment business.
(d) Effect of Delay in Terminating this Lease. If (i) the final
determination of the Buyout Amount was determined with the underlying
assumption that the Lease would be terminated prior to a specific Lease
Year and (ii) the Lease is not, pursuant to the provisions hereof,
actually terminated prior to such Lease Year, then the Buyout Amount shall
be appropriately adjusted to reflect the change in the Buyout Amount
necessitated by the additional Lease Years being included within the Term.
If Landlord and Tenant are unable to
27
mutually agree upon the adjustment required pursuant to the immediately
preceding provision, then such adjustment shall be determined pursuant to
a binding arbitration proceeding conducted pursuant to Section 3.4(c)
hereof.
Section 3.5 Parent Approval. On or before the execution of this Lease,
Tenant shall deliver or cause to be delivered to Landlord such documents or
other instruments as may be necessary to evidence the following:
(a) that each of PACE Entertainment Corporation, Sony Music
Entertainment Inc. and Viacom Inc. have severally committed to provide, or
cause to be provided, two-ninths (2/9ths) of the Total Renovation Cost;
and
(b) that Ardee has posted an irrevocable letter of credit,
certificate of deposit or some other reasonably equivalent security for
the benefit of the Tenant, to be used towards application of the funding
of Renovation Cost, in an amount equal to (i) $2,000,000 minus (ii) the
actual amount contributed to the capital of the Tenant by Ardee prior to
the execution of this Lease and used exclusively for the payment or
reimbursement of Renovation Costs.
If Landlord elects to execute this Lease prior to the obtaining of the
above-described documents or other instruments, then Landlord shall be deemed to
have forever released and waived Tenant's obligations set forth in this Section
3.5.
ARTICLE 4
RENT AND IMPOSITIONS
Section 4.1 Payment of Rent. All Rent payable hereunder by Tenant to or
for the account of Landlord is and shall be payable by wire transfer of
immediately available funds to the following account:
CoreStates New Jersey National Bank
ABA No. 0312-00730
New Jersey Highway Authority Revenue Fund
Account No. 000-000-000
Advise: Xxxx X. Xxxxx, Comptroller - New Jersey Highway Authority
Landlord shall have the express right to designate a new account for its wiring
instructions at any time, and from time to time, by providing at least fifteen
(15) days prior written notice thereof to Tenant. Notwithstanding anything in
this Lease to the contrary, all rental payments due from Tenant to Landlord
shall be made without any reduction or deduction whatsoever, including any
reduction or deduction for any setoff, recoupment or counterclaim. Any rental
payment that is not paid when due shall accrue
28
interest from that date until paid at the Permitted Rate. If any rental payment
due hereunder shall be more than fifteen (15) days past due, then a late fee
shall be payable by Tenant to Landlord in an amount equal to two percent (2%) of
the amount of the installment of Rent which is so past due. If any rental
payment due hereunder shall be more than thirty (30) days past due, then a late
fee shall be payable by Tenant to Landlord, in addition to the late fee payable
pursuant to the immediately preceding sentence, in an amount equal to two
percent (2%) of the amount of the installment of Rent which is so past due.
Section 4.2 Rent for First Two Lease Years. For the first two Lease Years
only, Tenant shall pay to Landlord the following amounts as Rent:
(a) First Lease Year. Rent for the first Lease Year shall be
determined in accordance with the following provisions:
(1) Base Rent. Tenant shall pay to Landlord the aggregate sum
of $1,500,000, all of which has been previously paid.
(2) Profit Participation. If Tenant's net income from
operation and use of the Amphitheater during the first Lease Year
exceeds $1,000,000, then Tenant shall pay to Landlord on or before
November 29, 1996. 100% of the amount by which Tenant's net income
so exceeds the amount of $1,000,000. The calculation of Tenant's net
income from the operation and use of the Amphitheater during the
first Lease Year shall be subject to the following conditions:
(i) Notwithstanding any treatment otherwise
allowed by generally accepted accounting principles, in no
event shall any deduction be taken in the calculation of
Tenant's net income in the first Lease Year for any Renovation
Costs.
(ii) Notwithstanding any treatment otherwise
allowed by generally accepted accounting principles, the
salaries and wages of only those employees (full time and
part-time) hired by Tenant to work exclusively at the
Amphitheater may be deducted as an operating expense in
determining Tenant's net income. Accordingly, no portion of
the salaries and wages of personnel who either office at a
location other than the Amphitheater or who provide services
in connection with business operations other than the
Amphitheater shall be deducted as a general and administrative
expense or other operating expense of any kind in determining
Tenant's net income. In no event shall allocations of
corporate or other overhead of any general partner, parent
entity or Affiliate of Tenant or of any other party, be
deducted as a general or administrative cost or other
29
operating expense of any kind in determining Tenants net
income; provided, however, the travel and lodging costs of
executive or administrative personnel may be charged to the
Amphitheater and deducted for purposes of calculating Tenant's
net income to the extent that such costs are properly and
reasonably allocable to the provision of necessary services
related to the ownership, operation, maintenance or use of the
Amphitheater.
(iii) Notwithstanding any treatment otherwise
allowed by generally accepted accounting principles, and to
the extent not otherwise covered by Section 4.2(a)(2)(i)
above, in the event that the Tenant permits any subtenant,
licensee, sublicensee, contractor, concessionaire or other
similar party to reduce the commissions, royalties, rent or
other payments otherwise payable by such party to Tenant by an
amount equal to all or any portion of the amount paid by such
party for additional capital improvements, additional
equipment, smallwares or other similar expenditures in respect
of, or relating to, the Amphitheater, the amount of any such
reduction in payments shall nonetheless be included in
Tenant's income for the purpose of determining Tenant's net
income.
(iv) Notwithstanding any treatment otherwise
allowed by generally accepted accounting principles, the value
of all goods, services and other benefits (excluding media
time provided in conjunction with "promotional" ticket
give-aways) received from a sponsor in connection with any
sponsorship arrangement shall be included in Tenant's income
for the purpose of determining Tenant's net income.
(v) Notwithstanding any treatment otherwise
allowed by generally accepted accounting principles, in the
event that any general partner, parent entity or other
Affiliate of Tenant provides goods or services to Tenant
(including, without limitation, the costs of administering
insurance claims which are built into the cost of premiums
charged to the Tenant for liability insurance provided by
Affiliates of the Tenant), the expense associated with any
such good or service shall not be deducted by Tenant as a
general or administrative cost or other operating expense of
any kind to the extent that such expense exceeds the fair
market value for such good or service (assuming, for purposes
of determining the fair market value, that the cost of such
good or service is negotiated by unrelated and unaffiliated
parties on an arms-length basis); provided, however, that the
cost of liability insurance charged to the Tenant of
30
$0.40 per attendee is hereby approved and accepted by Landlord
as an "arms-length" and fair charge.
(b) Second Lease Year. Tenant shall pay to Landlord for the Second
Lease Year the aggregate sum of $1,650,000, $650,000 of which shall be
payable on March 31, 1991, $500,000 of which shall be payable on June 30,
1997 and $500,000 of which shall be payable on September 30, 1997. Unlike
the first Lease Year, Landlord shall not be entitled to any profit
participation with respect to the operation of the Amphitheater during the
second Lease Year.
Section 4.3 Rent for all Subsequent Lease Years. For the third Lease Year
and each of the remaining Lease Years thereafter included within the Term,
Tenant shall pay to Landlord the following amounts as Rent
(a) Minimum Rent. Tenant shall pay to Landlord the Minimum Rental
Amount during each such Lease Year in the following installments:
(1) $650,000 shall be due on March 30 of such Lease Year;
(2) $500,000 shall be due on June 30 of such Lease Year;
(3) $500,000 shall be due on September 30 of such Lease Year;
and
(4) the remaining portion of the Minimum Rental Amount for
such Lease Year, if any, shall be due on November 30 of the next
succeeding Lease Year.
If the Minimum Fixed Rental Amount should hereafter increase to $1,700,000
pursuant to the provisions of Section 1.1(a)(38) hereof, then the
installment of rent payable on March 30 of each Lease Year for which the
increase in the Minimum Fixed Rental Amount applies shall be increased
from $650,000 to $700,000.
(b) Contingent Rent. Tenant shall pay to Landlord the Contingent
Rental Amount for each such Lease Year in a single installment on November
30 of the next succeeding Lease Year.
Section 4.4 Other Rental Payments.
(a) If the total paid attendance at Tenant Events exceeds 1,620,000
cumulatively during the third, fourth and fifth Lease Years, then, in
addition to the increase in the Minimum Fixed Rental Amount for all
subsequent Lease Years as required by the provisions of Section 1.1(a)(38)
hereof, a one-time bonus rental
31
payment of $150,000 shall be payable by the Tenant to the Landlord on or
before November 30, 2000.
(b) As a reimbursement to Landlord for the cost of the Access
Improvements and certain costs directly or indirectly related thereto and
to the Renovation Work, Tenant shall pay to Landlord, commencing on
November 30, 2004 and continuing on each November 30 thereafter through
and until November 30, 2013, a fixed annual amount equal to $300,000.
Section 4.5 Adjustment to Rental Amount (Reopenings). If the Artist Share
exceeds sixty-seven and one-half percent (67-1/2%) ("Maximum Expected Artist
Share") during one or both of (i) the period of time covered by the third,
fourth and fifth Lease Years and (ii) the period of time covered by the sixth,
seventh, eighth, ninth and tenth Lease Years, then (A) Tenant shall provide
written notice thereof to Landlord ("Reopening Notice") within 15 days after the
last day of the fifth or tenth Lease Year, as applicable, and (B) the following
provisions shall apply:
(a) Landlord shall be obligated for at least sixty (60) days
following receipt of the Reopening Notice to negotiate with Tenant, in
good faith, appropriate modifications to this Lease for the remaining
Term.
(b) If, within sixty (60) days after Tenant has provided a Reopening
Notice to Landlord for either of the relevant periods of time specified
above, the parties hereto have been unable to mutually agree upon an
acceptable modification to the terms of this Lease as contemplated by
clause (a), then Tenant shall have the right to terminate this Lease by
written notice to Landlord at anytime on or before January 31 of the sixth
or eleventh Lease Year, as applicable. If Tenant exercises the right to
terminate the Lease pursuant to the provisions of the immediately
preceding sentence, then Landlord shall be obligated to pay and deliver to
Tenant within ninety (90) days after receipt of such termination notice
the then unamortized portion of the Total Renovation Cost (with the
express understanding that the Total Renovation Cost shall be amortized
for these purposes on a straight line basis over 240 months commencing on
the Opening Date). Notwithstanding anything to the contrary contained
herein, if any Qualified Mortgage exists at any time during which Tenant
wishes to terminate this Lease pursuant to the provisions of this Section
4.5(b), then Tenant may not terminate this Lease unless all of the
beneficiaries under all then existing Qualified Mortgages have consented,
in writing, to the termination hereof.
(c) Reference is made to the fact that (i) Tenant, Tenant's partners
and the Affiliates of Tenant's Partners own, operate and manage other
outdoor entertainment facilities in other locations which are similar to
the Amphitheater (collectively, "Amphitheater Network") and (ii) some of
the artists, entertainers or other performers appearing at the
Amphitheater from time to time will also appear
32
during the same Lease Year at one or more of the other entertainment
facilities in the Amphitheater Network (the "Multi-Amphitheater Artists").
If Tenant intentionally and artificially manipulates contractual
relationships with any Multi-Amphitheater Artist in order to increase the
Artist Costs at the Amphitheater which otherwise would have been incurred
in connection with the operation of the Amphitheater in exchange for
reduced artist costs with such Multi-Amphitheater Artists at one or more
of the other entertainment facilities in the Amphitheater Network, then
the amount of the Artist Cost for each such Multi-Amphitheater Artist
shall be restated for purposes of calculating the Artist Share upon
arms-length terms which would have been available to Tenant had no such
intentional and artificial manipulation occurred. For purposes of the
foregoing provisions, Tenant has advised Landlord, and Landlord
acknowledges, that the economic terms with Multi-Amphitheater Artists will
vary from entertainment facility to entertainment facility based upon a
variety of factors including, without limitation, (i) the size of the
entertainment facility involved, (ii) the size of the metropolitan area in
which the entertainment facility is located, and (iii) the degree of
competition from other entertainment facilities in the market in which the
entertainment facility is located. Accordingly, the mere existence of
differing economic terms with a Multi-Amphitheater Artist between various
entertainment facilities within the Amphitheater Network may not, by
itself, be conclusive evidence of any intentional and artificial
manipulation of contractual relationships resulting in an increase of the
Artist Costs in connection with the operation of the Amphitheater in
exchange for lower artist costs at another entertainment facility in the
Amphitheater Network.
Section 4.6 Payment of Impositions Attributable to the Tenant's Use of
Amphitheater Tract and the Parking Tracts. Tenant will pay as and when the same
shall become due all Impositions attributable to (i) the Amphitheater Tract and
(ii) the use of the Parking Tracts by Tenant pursuant to the Parking License.
Where any Imposition that Tenant is obligated to pay may be paid pursuant to law
in installments, Tenant may pay such imposition in installments as and when such
installments become due. Landlord shall furnish to Tenant, promptly upon receipt
thereof, copies of all notices of Impositions attributable to the Amphitheater
Tract which may be received by Landlord. Upon the payment by Tenant of any
Impositions, Tenant shall deliver to Landlord evidence of such payment.
Section 4.7 Payment of Impositions Attributable to the Landlord Land.
Landlord will pay as and when the same shall become due all Impositions
attributable to the Landlord Land except to the extent that any such Imposition
is attributable to the use by Tenant of the Amphitheater Tract pursuant to this
Lease, the Parking Tracts pursuant to the Parking License or the Access and
Utility Easements over, across, on or under the Landlord Land, in which
instances the Impositions shall be paid by Tenant to the extent thereof. Where
any Imposition that Landlord is obligated to pay may be paid pursuant to law in
installments, Landlord may pay such Imposition in installments as and
33
when such installments become due. Tenant shall furnish to Landlord, promptly
upon receipt thereof, copies of all notices of Impositions attributable to the
Landlord Land which may be received by Tenant. Upon payment by Landlord of any
Impositions, Landlord shall deliver to Tenant evidence of such payment.
Section 4.8 Tax Contests.
(a) Each party (the "Contesting Party") shall have the right, at its
own expense, to contest the amount or validity, in whole or in part, of
any Imposition for which such party is responsible pursuant to the
provisions of this Lease by appropriate proceedings diligently conducted
in good faith. Upon the termination of any proceedings, it shall be the
obligation of the Contesting Party to pay the amount of such Imposition or
part thereof as finally determined in such proceedings, the payment of
which may have been deferred during the prosecution of such proceedings,
together with any costs, fees, interests, penalties or other liabilities
in connection therewith. Nothing herein contained, however, shall be so
construed as to allow such Imposition to remain unpaid for such length of
time as shall permit the Entire Tract, or any part thereof, to be sold,
taken or otherwise adversely affected by any Governmental Authority for
the non-payment of the same. The Contesting Party shall promptly furnish
the other party (the "Non-Contesting Party") with copies of all
proceedings and documents with regard to any such contest, and the
Non-Contesting Party shall have the right, at its expense, to participate
therein.
(b) The Non-Contesting Party will, at the request of the Contesting
Party, reasonably cooperate with the Contesting Party in connection with
the Contesting Party's good faith contesting of the amount or validity, in
whole or in part, of any Imposition. In that connection, the
Non-Contesting Party shall execute, within fifteen (15) days after receipt
of written request therefor, any and all documents reasonably requested by
the Contesting Party in connection with the foregoing. The Contesting
Party shall reimburse the Non-Contesting Party for all out-of-pocket
expenses incurred by the Non-Contesting Party (including reasonable
attorney's fees) in performing its obligations under this Section 4.8.
Section 4.9 Right to Perform Obligation as to Impositions. If either party
hereto fails to timely pay any Imposition for which it is responsible hereunder
and if such party is not contesting the validity or amount of such Imposition
pursuant to the provisions of Section 4.8 hereof, then the other party hereto
may, at its election (but without obligation), pay such Imposition with any
interest and penalties due thereon, and the amount so paid shall be repayable by
such party to the other party, on demand, together with interest thereon at the
Permitted Rate from the date of such payment until repaid. Before either party
may pay any Imposition on behalf of the other party, such party shall give the
other party fifteen (15) days' prior written notice thereof.
34
Section 4.10 Accounting Books and Records.
(a) Maintenance of Records. Tenant shall keep and maintain complete,
true and accurate records, books and accounts, at the Amphitheater, in
accordance with generally accepted accounting principles, and such records
shall contain full, true, complete and correct entries of all dealings and
transactions in relation to the business of Tenant and shall include, but
not be limited to, records of its Gross Revenues and other transactions
and financial matters relating to the obligations of Tenant under this
Lease, including, but not limited to, operating expenses, ticket revenues,
parking receipts, concession revenues, Artist Costs and sponsorship
revenues. Tenant shall keep all of these records for a minimum of seven
(7) years. If Tenant should ever become involved in any businesses other
than the operation and management of the Amphitheater, then Tenant
covenants and agrees with Landlord that such businesses will be accounted
for with separate and distinct books and records from the books and
records for the business of operating and managing the Amphitheater.
(b) Audit and Review Rights. Landlord (and its agents, including
independent auditors engaged by Landlord) shall have the right, from time
to time during regular business hours and upon reasonable advance notice
to Tenant, to examine and inspect the books and records of Tenant,
including, without limitation, (A) any tax reports and returns of Tenant,
(B) all records and information pertaining to the Renovation Work
(including all of the Renovation Costs), (C) all records and information
pertaining to Gross Revenues, (D) all records and information pertaining
to operating expenses during the first Lease Year and (E) if Tenant
exercises its rights pursuant to Section 4.5 hereof for any Lease Years,
(i) all records and information pertaining to Ticket Revenues and Artists
Costs for all Tenant Events during such Lease Years and (ii) such records
and information as may be necessary or reasonably required by Landlord to
determine the Artist Costs with respect to each of the Multi-Amphitheater
Artists at each of the outdoor entertainment facilities located in the
Amphitheater Network and (iii) such additional financial information and
records as may be reasonably required by Landlord in connection with good
faith negotiations of appropriate modifications to the Lease. In
addition, to the extent legally available, Tenant does hereby grant to
Landlord (and its agents, including independent auditors engaged by
Landlord) the right, from time to time during regular business hours and
upon reasonable advance notice, to examine and inspect the books and
records of Tenant's concessionaires, licensees, subconcessionaires,
sublicensees and other persons who may receive any items of Gross
Revenues.
(c) Costs of Review or Audit. If, as a result of any review or audit
of the books and records of Tenant by Landlord pursuant to the rights
contained in clause (b) above, the final amount of Rent payable for any
Lease Year is increased by $25,000 or more above the amount paid by Tenant
for such Lease
35
Year, then Tenant shall be obligated to reimburse to Landlord all of the
reasonable costs and expenses incurred in connection with the review or
audit which ultimately resulted in such increase.
(d) Interim Reports. During the course of each Amphitheater Season,
Tenant shall provide on a monthly basis to Landlord interim reports
generated in the ordinary course of business by Tenant providing
information concerning Gross Revenues on a show-by-show basis during such
Amphitheater Season such as, without limitation, the amounts of ticket
sales, food and beverage sales, merchandise sales and per capita revenue
per performance.
Section 4.11 Annual Reports. Within sixty (60) days after the completion
of each Lease Year, Tenant shall provide to Landlord the following:
(a) Gross Revenue Report. (i) A complete report prepared by Tenant
of the amount of Gross Revenues for such Lease Year together with
supporting calculations and (ii) a separate report signed by an
independent certified public accountant stating that no inaccuracies or
inconsistencies in the amount of Tenant Revenues included in such report
were discovered during such accountant's audit of the books of Pavilion
(or, if for whatever reason, the books of Pavilion should no longer be
audited at any time hereafter, the books of PACE Entertainment
Corporation).
(b) Financial Statements. An unaudited balance sheet, statement of
income, statement of cash flows and statement of partners equity for
Tenant as at the end of such Lease Year and for the Lease Year just
closed, setting forth the corresponding figures for the previous Lease
Year in comparative form, all in reasonable detail and all prepared in
accordance with GAAP.
(c) Artist Share. A report prepared by Tenant of the Artist Share
for such Lease Year together with supporting calculations.
Section 4.12 Reports Related to a Reopening Notice. If Tenant provides a
Reopening Notice to Landlord pursuant to Section 4.5 hereof, then Tenant shall
be required to provide to Landlord, simultaneously with such Reopening Notice,
(i) a complete report prepared by Tenant of (x) the total amount of Artist Costs
for all Tenant Events during the relevant period of time to which the Reopening
Notice relates and (y) the total amount of Ticket Revenues for all Tenant Events
during the relevant period of time to which the Reopening Notice relates
together with supporting calculations and (ii) a separate agreed upon procedures
letter signed by an independent certified public accountant confirming the
amount of Artist Costs and Ticket Revenues so reported based upon the procedures
listed in Exhibit "P" attached hereto.
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ARTICLE 5
CONSTRUCTION, USE AND MAINTENANCE
OF AMPHITHEATER
Section 5.1 Renovation of Amphitheater.
(a) Generally. Subject to the provisions contained in Section 5.2
and Section 15.4 of this Lease, Tenant shall (i) commence within sixty
(60) days after the last event, show or performance presented at the
Amphitheater during the second Lease Year and (ii) thereafter prosecute
diligently and continuously until completed and cause to be completed on
or before June 30, 1998, at its sole cost and expense, the Renovation
Work. Tenant hereby agrees and covenants with Landlord as follows:
(1) The Total Renovation Cost shall not be less than
$8,750,000 in the aggregate.
(2) Upon the request of Landlord, Tenant shall provide to
Landlord reasonably requested support and back-up demonstrating the
Total Renovation Cost.
(3) If, upon completion of the Renovation Work contemplated by
the Final Plan, the Total Renovation Cost should prove to be less
than $8,750,000, then the following provisions shall apply:
(i) Landlord may, at its option, require Tenant to
reimburse to Landlord any amounts paid by Landlord to Tenant
pursuant to the provisions of Section 5.1(k) hereof; provided,
however, (i) such amounts so reimbursed by Tenant to Landlord
shall be treated as Renovation Costs and included in the Total
Renovation Cost for all purposes hereof and (ii) in no event
shall Tenant be obligated to reimburse to Landlord pursuant to
this provision more than the amount which would result in the
Total Renovation Cost being equal to $8,750,000.
(ii) If, after the application of clause (i), the Total
Renovation Cost continues to be less than $8,750,000, then
Tenant agrees to meet with Landlord and reach a mutually
acceptable decision as to additional renovation activities at
the Amphitheater which will be implemented with the remaining
funds required to be expended to cause the Total Renovation
Cost to equal $8,750,000. All such additional amounts shall be
required to be expended by Tenant within twelve (12) months
after completion of the Renovation
37
Work, if practicable, unless Landlord and Tenant mutually
agree otherwise.
(4) In order to minimize disruption to the operation of the
Amphitheater during the 1997 operating season, insure the
availability during proposed Tenant Events and Landlord Events for
1997 of essential facilities and resources at the Amphitheater,
minimize the adverse impact on the appearance of the surroundings
during such Tenant Events and Landlord Events and at other times,
and lessen the degree of interference with the dewinterization and
winterization processes for the second Lease Year, only those major
elements of the Renovation Work identified on the construction
schedule included in Exhibit D hereto shall be performed on or after
the date hereof through and including November 15, 1997 (the
"Limitation Period"). No item set forth on the construction schedule
shall be performed before the date identified for such item on the
schedule; provided, however, that Tenant may perform any item of
Renovation Work (including items identified on the construction
schedule) on any date after the Limitation Period and in any
sequence it determines to be appropriate, subject to its obligations
in Section 5.1 (a)(i) and (ii) above and its compliance with the
Final Plan. To the extent either party wishes to (i) modify the
existing construction schedule in a way that affects the Renovation
Work to be performed during the Limitation Period, or (ii) perform
any other item of Renovation Work that would cause during the
Limitation Period any one or more of the disruptive or adverse
effects identified above, the party seeking to do so shall notify
the other party and, thereafter, the parties shall promptly meet and
endeavor in good faith to reach a mutually acceptable resolution of
the issue.
(b) Landlord's Oversight Rights. Landlord shall have the right to
participate in the review and oversight process relating to the planning
and construction of the Renovation Work in accordance with the following
provisions:
(1) Landlord has participated in the planning of the
Renovation Work and hereby approves and accepts the Final Plan as
the description of the Renovation Work; provided, however, with
respect to the portions of the Final Plan that have not yet been
finalized and any changes hereafter made to the Final Plan, the
Landlord shall continue to have rights of plan approval (including
approval as to aesthetic issues, conceptual representations and the
development of a critical path), such right of plan approval not to
be unreasonably withheld or delayed.
(2) Landlord shall have the right to be present at the
construction site at all times during the performance of the
Renovation Work for purposes of verifying that the Renovation Work
is being completed in
38
compliance with the Final Plan and that the Renovation Costs are
being expended in a manner consistent with the requirements of this
Lease. Accordingly, Landlord shall have the right to monitor the
Renovation Work to verify (i) the conformity of the Renovation Work
to the Final Plan and (ii) the expenditure of not less than
$8,750,000 of Renovation Costs. In exercising its rights hereunder,
Landlord may designate an agent (the "Construction Consultant") to
act on its behalf. Tenant agrees to cooperate with Landlord or
Landlord's Construction Consultant (and to cause its contractors,
subcontractors and other agents to likewise cooperate) in the
exercise of Landlord's rights hereunder. Accordingly, Tenant will
(and will cause its contractors, subcontractors and other agents) to
(i) include Landlord or its Construction Consultant in all job
meetings (whenever held) and (ii) provide Landlord or its
Construction Consultant with all progress reports relating to the
Renovation Work. In addition, Tenant and its agents will (x) provide
all estimates and payment documents to Landlord or its Construction
Consultant (including all additional back-up or supporting material
reasonably requested to evidence that all payments were made and
that the services and/or materials to which such payments relate
were provided and used exclusively with respect to the Renovation
Work) for review and (y) permit Landlord or its Construction
Consultant to review shop drawings, product data, samples and other
submittals. To the extent that Landlord or its Construction
Consultant identifies (i) work that does not conform with the Final
Plan or any of the other requirements of this Lease or (ii) the
payment of expenditures that are not of the type set forth in the
Construction Budget or, where specific items are identified in the
Construction Budget, are not for such items or functionally
equivalent items, it will promptly notify Tenant or its agent of
same. In determining the Total Renovation Cost, only those
expenditures in respect of the Renovation Work that constitute
Renovation Costs shall be included. If Landlord and Tenant should
disagree as to whether one or more expenditures constitute
Renovation Costs, then Landlord and Tenant shall meet promptly after
such disagreement is known and endeavor in good faith to resolve
their differences. If Landlord and Tenant are not able to resolve
any such disagreement, then Landlord and Tenant shall be entitled to
exercise the rights, and pursue the remedies, available to them in
this Lease.
(3) Landlord acknowledges and agrees that it has no
supervisory authority over Tenant's contractors and subcontractors,
and all such supervisory responsibility lies with Tenant in
addition, Landlord shall have no administrative rights or
obligations with respect to the performance of the Renovation Work.
Tenant acknowledges and agrees that the presence of Landlord or its
Construction Consultant during the performance of the Renovation
Work does not relieve Tenant of its duties to perform the work
39
in conformity with the Final Plan and the other requirements of this
Lease, unless changes to such Final Plan or such other requirements
of this Lease have been agreed to in writing and signed by both
Landlord and Tenant.
(c) Minimum Capacity Requirements. The seating capacities at the
Amphitheater upon completion of the Renovation Work shall satisfy the
Minimum Capacity Requirements; provided, however, if a third party
successfully institutes litigation or other proceedings which has the
effect of preventing or precluding Tenant from completing the Renovation
Work in a manner which satisfies the Minimum Capacity Requirements, then
(i) Tenant shall not be obligated to complete the Renovation Work in a
manner which satisfies the Minimum Capacity Requirements and (ii) each of
Landlord and Tenant shall be obligated to negotiate in good faith such
appropriate and necessary changes to the terms of this Lease as may be
necessary to reflect the changed economic conditions resulting from the
decreased maximum capacity.
(d) General Contractor. At least fifteen (15) days prior to
commencement of the Renovation Work, Tenant shall deliver to the Landlord
a true and correct copy of the contract with the general contractor, which
contract shall give the Landlord the right, but not the obligation, to
assume the Tenant's obligations and rights under such contract if the
Tenant should default. Unless Tenant's general contractor has a net worth
of $18,000,000 or more or is otherwise reasonably acceptable to Landlord,
then Tenant shall be required to obtain and deliver to the Landlord not
less than ten (10) days prior to the anticipated commencement of
construction of the Renovation Work, a performance and payment bond issued
by a surety meeting the qualifications required by Landlord and naming
Landlord as an additional insured thereunder or as a permitted assignee
thereof. At Tenant's option, the obligation to deliver a performance and
payment bond pursuant to the provisions of the immediately preceding
sentence may be met by causing performance and payment bonds to be issued
by sureties meeting the qualifications required by Landlord and naming the
general contractor and the Tenant as insureds and Landlord as an
additional insured thereunder or as a permitted assignee thereof with
respect to each of the material subcontractors effecting the Renovation
Work.
(e) Deliveries to Landlord upon Completion. Immediately upon
completion of construction of the Renovation Work, the Tenant shall, at
its sole cost, deliver to the Landlord (i) a detailed "as built" set of
plans and survey which shows in detail the Improvements constituting the
Renovation Work including, without limitation, the expansion of the
Amphitheater, the additional on-site parking, the utilities, easements,
landscaping, roads, location of ingress and egress, curbs, gutters,
lighting and location of permanent signs, (ii) copies of all warranties,
service and maintenance agreements and equipment manuals related
40
to the Amphitheater that are in the possession of Tenant and (iii) a
certificate signed by an authorized financial representative of Tenant
certifying to the Total Renovation Cost, with reasonable detail as to the
amounts of Renovation Costs spent and incurred.
(f) Construction Standards. All construction work shall be done in a
good and workmanlike manner and in compliance with all applicable laws,
ordinances, rules, regulations and requirements, and in accordance with
the standard, if any, of the Board of Fire Underwriters, or other
organizations exercising the functions of a board of fire underwriters
whose jurisdiction includes the Amphitheater.
(g) Materials and Workmanship. All materials and workmanship shall
be of good quality, and upon completion of construction, the Renovation
Work will be structurally safe and sound, and all parts thereof and all
mechanical equipment therein and all utilities serving the Amphitheater
and the Parking Facilities will be in good and working order and will have
been properly installed, tested and paid for, and in case of repairs,
restoration, changes, additions, alterations and improvements, shall be at
least equal to the original.
(h) Landlord's Disclaimer. The Landlord makes no warranties or
representations and accepts no liabilities or responsibilities with
respect to or for the adequacy, sufficiency or suitability of or defects
in or with respect to the design, construction, renovation or installation
of the Renovation Work.
(i) No Deferral of Rent. If the acquisition, construction,
renovation and installation of any Renovation Work is delayed for any
reason, there shall be no diminution or postponement of the amounts which
are due and payable by Tenant to Landlord under the terms of this Lease.
(j) Viability of Construction Deadlines. Tenant represents and
warrants to Landlord that the requirement of completing the Renovation
Work on or before June 30, 1998 is commercially reasonable and reasonably
performable by Tenant
(k) Costs of Certain Repairs.
(1) Reference is made to that certain report dated April of
1996 prepared by X. X. Xxx International (in association with Alvi
Associates, Inc.) ("Property Condition Report") recently
commissioned by Landlord, a copy of which has been provided to
Tenant. Tenant hereby agrees to assume responsibility for completing
all of the repairs listed in the Property Condition Report Tenant
agrees to cause the repairs identified as "high priority" and
"medium priority" in the Property Condition Report to be
41
completed while conducting the Renovation Work. In consideration for
Tenant's agreement contained in the immediately preceding sentence,
Landlord does hereby agree to pay to Tenant, as a reimbursement for
the cost of such repair work, the actual cost of the repairs
identified as "high priority" and "medium priority" repairs in the
Property Condition Report promptly after Tenant completes such
repairs. Tenant shall invoice Landlord for the cost of all such
repair work and shall provide reasonable support and back-up as to
the costs incurred in connection with completing such repairs.
Reference is made to the fact that the Property Condition Report
estimated that the "high priority" and "medium priority" repair
items would cost $16,800.00.
(2) Reference is made to that certain Study and Report for
Fire Alarm, Sprinkler and Security Systems recently commissioned by
Landlord, prepared by Xxxxxxxxx Engineering Corporation and dated
September 12, 1996 ("Fire/Safety Report"), a copy of which has been
provided to Tenant. Tenant hereby agrees to assume responsibility
for completing all of the Mandatory Work (herein defined) listed in
the Fire/Safety Report while conducting the Renovation Work. In
consideration for Tenant's agreement contained in the immediately
preceding sentence, Landlord does hereby agree to pay to Tenant, as
a reimbursement for the cost of the Mandatory Work, the actual cost
of all the Mandatory Work listed in the Fire/Safety Report promptly
after Tenant completes such Mandatory Work. Tenant shall invoice
Landlord for the cost of all such Mandatory Work and shall provide
reasonable support and back-up as to the costs incurred in
connection with completing such Mandatory Work. As used herein, the
term "Mandatory Work" shall mean only those six (6) items discussed
in the Fire/Safety Report in the Section entitled "Arts Center -
Amphitheater - Building #600" and further identified on page 58 of
such report in Subsection E entitled "Recommendations" which are
required to be completed or implemented to satisfy governmental
requirements or to obtain necessary governmental permits.
(l) Assignment of Final Plans. Tenant does hereby assign, transfer
and convey to Landlord all rights, title and interest in and to the Final
Plan which Tenant may have therein. Landlord hereby grants to Tenant the
right to utilize the Final Plan in connection with the Renovation Work and
any subsequent repair, alteration or renovation work to be conducted at
the Amphitheater during the term of this Lease, as permitted hereunder,
such grant being subject to, and limited by, the extent of Landlord's
rights in the Final Plan as assigned to it by Tenant.
(m) Sewer Capacity. Acknowledging the current uncertainty as to
whether the existing sewer capacity at the Amphitheater will be sufficient
to handle the sewer requirements following completion of the Renovation
Work, the
42
parties agree that (i) Tenant will install meters at all relevant
locations to monitor sewer flow during the second Lease Year and complete
engineering work to determine whether the Renovation Work and resulting
expanded seating capacity at the Amphitheater will result in sewer flow
that exceeds the capacity of the existing sewer facilities at the
Amphitheater and (ii) if the present sewer capacity is determined, as a
result of the information obtained from such meters, to be insufficient to
handle the maximum loads required following completion of the Renovation
Work, then Tenant shall install, as a part of the Renovation Work, three
standard 10,000 gallon holding tanks as a part of the sewage treatment
system to meet excess flow requirements.
(n) Parking Capacity. Reference is made to the fact that Landlord
and Tenant, as a result of differing assumptions on the ratio of parked
cars to number of Patrons attending events at the Amphitheater, disagree
as to whether the number of parking spaces to be located in the Parking
Facilities will be sufficient for heavily attended events following
completion of the Renovation Work. As a result, Tenant shall hereafter
prepare and submit to Landlord a contingency parking plan (which Tenant
reserves the right to amend or modify from time to time by providing
notice thereof to Landlord) to address potential shortages of onsite
parking which will be available for implementation should there be actual
shortages of onsite parking following completion of the Renovation Work.
In no event shall such parking contingency plan place the location of any
satellite lots in such a manner that will necessitate, by design,
additional traffic in the Township of Holmdel, New Jersey or utilize or
require parking in the Township of Holmdel without the prior consent of
the Township of Holmdel.
Section 5.2 Permits and Costs.
(a) Required Permits. Tenant's obligation to commence and complete
the Renovation Work pursuant to this Lease shall be conditioned upon
Tenant having obtained all of the Required Permits. From and after the
execution of this Lease, Tenant shall take all such reasonable actions as
may be necessary to obtain all of the Required Permits. Landlord shall
cooperate with Tenant as may be reasonably requested by Tenant in
connection with the obtaining of all of the Required Permits.
(b) Renovation Costs. For purposes of clarification and in order to
avoid uncertainty or ambiguity, it is hereby expressly stipulated,
understood and acknowledged that Tenant shall be required to perform this
Lease including without limitation all of its Obligations and, in
connection therewith, shall be solely responsible for causing the
Renovation Work to be completed in accordance with the provisions hereof
and shall bear, at its sole cost, expense and risk, all of the Renovation
Costs incurred in connection with the completion of the Renovation
43
Work, including any construction or other cost overruns of any kind which
exceed budgeted amounts.
Section 5.3 Access Improvements. Subject to the provisions of Section 15.4
of this Lease, Landlord shall substantially complete on or before May 31, 1998,
at its sole cost and expense (subject to the right of reimbursement described in
Section 4.4(b) hereof), the construction and installation of all of the Access
Improvements.
Section 5.4 Depreciation and Removables. Any and all depreciation,
amortization and investment tax credits for state or federal income tax purposes
generated or available in connection with the Renovation Work, shall belong to,
and accrue to the benefit of Tenant during the Term. Upon the expiration or
termination of this Lease, (i) all personal property and equipment located at,
or affixed to the Amphitheater as of the effective date hereof or added as part
of the Renovation Work (including, without limitation, all personal property and
equipment contemplated by the Construction Budget or otherwise added as a part
of the Renovation Work, other than the computer equipment, phone system and
two-way radios included therein), and all replacements of any portion thereof
during the term of this Lease, shall be the property of Landlord and may not be
removed by Tenant and (ii) all other personal property and equipment of Tenant
installed or located at the Amphitheater at the expense of Tenant (including the
computer, phone system and two-way radios included in the Construction Budget)
shall remain the property of Tenant and may be removed by Tenant prior to the
expiration of the term of this Lease. Any personal property and equipment which
Tenant has the right to remove pursuant to clause (ii) of the immediately
preceding sentence which has not been removed prior to the expiration of the
Term, shall be considered abandoned property and Landlord shall have the right,
if it wishes, to claim such property. All improvements and fixtures (as opposed
to personal property and equipment which shall be governed by the preceding
provisions of this Section 5.4) placed in or on the Amphitheater Tract or the
Landlord Land by Tenant during the term of this Lease as a part of the
Renovation Work (or otherwise) shall be the property of Landlord upon the
expiration of the Term and may not be removed by Tenant. Upon the expiration or
termination of this Lease, Tenant shall use its best efforts, without any
obligation to expend any funds, to enable Landlord or its designee, without
interruption, to become the licensee under all licenses and permits for the
purchase, storage and sale of alcoholic beverages at the Amphitheater, such
efforts to include the execution of such documents and instruments by Tenant
(and its food and beverage concessionaire, if necessary) as may be reasonably
requested by Landlord which purport to assign all of such permits and licenses
to Landlord.
Section 5.5 Continuing Right of Tenant to Make Changes, Alterations and
Additions. After the completion of the Renovation Work, Tenant shall have the
right at any time and from time to time during the Term to make such changes,
alterations, and additions thereto so often and as many times as Tenant may
desire, subject only to
44
receipt of Landlord's prior written approval and consent to any such changes,
alterations or additions (such approval and consent not to be unreasonably
withheld or delayed).
Section 5.6 Tenant's Indemnity. Tenant has no right to, and shall not
obligate, or endeavor to obligate, Landlord or Landlord's fee simple interest in
and to the Entire Tract (or any portion thereof) for the claims of any
contractor, subcontractor, laborer or person furnishing materials, supplies or
services in connection with any construction, demolition or repair by Tenant on
any portion of the Entire Tract. Tenant shall obtain the requisite waivers of
liens and releases of liens from all such contractors, subcontractors, laborers
and materialmen and shall file them in the appropriate recording offices and at
the appropriate times to prevent any encumbrance or obligation in respect of
Landlord's fee simple interest in and to the Amphitheater Tract. Tenant
covenants and agrees to indemnify, defend, protect and save harmless Landlord
from and against any and all liabilities, penalties, damages, claims, costs,
charges and expenses including, without limitation, court costs and reasonable
attorneys' fees, which may be imposed upon, incurred by or asserted against
Landlord or Landlord's interest in the Amphitheater, the Amphitheater Tract or
the Landlord Land in connection with any such claims made by any such party.
Section 5.7 Use of Amphitheater. Subject only to Landlord's right to use
the Amphitheater as specifically set out in Section 6.1 hereof, Tenant shall
have the sole and exclusive right to use, occupy and enjoy the Amphitheater
Tract during the Term for the following activities:
(a) for producing and presenting entertainment events or shows,
including, without limitation, commercial concerts of musical performers
or comedians, artistic performances of symphonic music, ballet or opera,
theatrical performances and cinemagraphic films, pre-recorded or simulcast
video and audio productions;
(b) for the holding or conducting of fairs and festivals;
(c) as a center or location for educational conferences, seminars,
corporate meetings, shareholder meetings, civic events, graduations or
political fundraisers;
(d) as a place for selling food, beverages (including alcoholic
beverages as expressly provided for in Section 5.10(d) hereof) and other
merchandise; and
(e) for any and all other lawful purposes which are directly-related
to the foregoing uses and purposes.
Without limiting the generality of the foregoing provisions, Landlord agrees and
acknowledges that the Amphitheater may be used for performing with or without
amplified sound, popular and contemporary music, rock and roll, pyrotechnic
shows, and other substantially similar sound-intensive and light-intensive
activities.
45
Section 5.8 Compliance with Laws. Tenant shall obey and comply with all
present and future laws, ordinances, rules and regulations of all Governmental
Authorities which, in any way, affect, apply to or otherwise relate to the
Amphitheater, the Amphitheater Tract, the Landlord Land and/or the operation of
the business of Tenant at the Amphitheater and on the Parking Tracts pursuant to
the provisions of this Lease. Tenant shall have the right, at its sole cost and
expense, to contest the validity of any of the foregoing in good faith. If
necessary, Landlord shall cooperate with Tenant in connection with any such good
faith protest or contest; provided, however, that the cost thereof, including
Landlord's reasonable attorney's fees shall be borne by Tenant. Tenant hereby
agrees to indemnify, defend, protect and save harmless Landlord from all losses,
damages, deficiencies, liabilities, costs, expenses, actions, demands, suits,
claims, fines, judgments and assessments whatsoever, including Landlord's court
costs and reasonable attorney's fees, which may be imposed upon, incurred by or
asserted against Landlord from any cause or in any manner whatsoever relating to
or arising out of Tenant's failure to abide by any such laws, ordinances, rules
and regulations.
Section 5.9 Triple Net Lease. Except for the costs of organizing,
promoting, producing and presenting each of the Landlord Events (which shall be
the obligation of Landlord as specified in Section 6.1(a) hereof), Tenant shall
be responsible, at its sole cost and expense throughout the Term, to pay and
discharge all costs and expenses incurred in, relating to or arising out of the
use, ownership, operation, maintenance and repair of the Amphitheater and the
Amphitheater Tract. In connection with the foregoing, but without limiting its
generality, the parties agree as follows:
(a) In addition to Tenant's obligations in respect of the Parking
Facilities as specified in Section 8.2 hereof, Tenant shall, during the
Term keep and maintain the Amphitheater and the Amphitheater Tract in good
and sanitary order, condition and repair, ordinary wear and tear excepted.
(b) In addition to Tenant's obligations to pay the costs of
electrical lighting for the Parking Facilities to the extent provided for
in Section 8.2 hereof, Tenant shall, during the Term, pay for all
utilities (including, without limitation, gas, electricity, water, sewage
and fuel) to the extent used in or on the Amphitheater Tract, and
Landlord, in its capacity as Landlord under this Lease (not in its
capacity as a third party), shall have no responsibility for any
interruptions in the supply of such utilities. Tenant shall have the
express right and authority, at its sole cost and expense, to provide
separate metering for all utilities supplied to the Amphitheater Tract and
the Parking Tracts as opposed to the utilities supplied to the Park Tract.
In addition to the foregoing, Tenant shall be obligated to purchase and
install its own telephone system on the Amphitheater Tract and to pay for
the cost of installation, operation and maintenance of such phone system.
(c) Tenant shall pay all fees, costs and similar charges in
connection with the obtaining and subsequent renewing of any and all
Required Permits and complying with all Legal Requirements.
46
(d) As required pursuant to the provisions of Section 4.6 hereof,
Tenant will pay as and when the same shall become due Impositions
attributable to (i) the Amphitheater Tract and (ii) the use of the Parking
Tracts by Tenant pursuant to the Parking License.
Section 5.10 Operational Matters.
(a) Operational Input. Tenant shall use recognized modern business
practices to provide efficient and high quality services to the public in
connection with the operation and maintenance of the Amphitheater. Tenant
shall, in all respects, conduct its operation in a first class manner by
offering services and productions comparable or superior to similar
privately operated amphitheaters. Tenant understands and acknowledges that
the Amphitheater is a significant community asset to be operated in a
reputable manner. In furtherance of the foregoing, Tenant hereby agrees to
submit to the Landlord (i) on a weekly basis a photocopy of Tenant's then
effective scheduling calendar which indicates the names and dates of all
artists which are then "on hold" and which are then "confirmed" and (ii)
prior notice of the identity of all major concessionaires, sponsors and
key management personnel before entering into contractual arrangements
with any such persons. Landlord shall have the right to review and comment
upon (A) the identity of performers and entertainers proposed to appear at
the Amphitheater, (B) the identity of sponsors, (C) the identity and
performance of concessionaires and key management personnel, (D) general
ticketing and pricing policies and (E) promotional and advertising
policies and procedures. Tenant's obligation in regard to the foregoing
shall be to (1) reasonably and in good faith consider (i) comments
received from Landlord pursuant to the rights created in the immediately
preceding sentence and (ii) concerns raised by Landlord with respect to
potential violence or use of controlled substances or other illegal
actions at concerts that Landlord has reason to believe may occur at one
or more of Tenant's proposed events and (2) address such comments and
concerns in the manner that Tenant, in its best judgment, believes they
should be addressed after taking into account the relevant facts and
circumstances. Tenant will endeavor in good faith to address Landlord's
comments and concerns in a manner satisfactory to Landlord if, in Tenant's
best judgment, it is appropriate to do so; provided, however, Landlord
acknowledges and agrees that the ultimate decision as to what action, if
any, should be taken rests solely with Tenant. Regardless of whether
Tenant decides to take any action in response to a comment or concern
raised by Landlord. Tenant will advise Landlord within a reasonable period
of time following receipt of such comment or concern as to what it plans
to do. If Tenant determines that no action should be taken, it will advise
Landlord as to the reason for its determination.
(b) Amphitheater's Name. The name of the Amphitheater shall be
"Garden State Arts Center" throughout the Term unless both Landlord and
Tenant mutually agree otherwise. If Landlord and Tenant should at any time
thereafter mutually approve the granting of a commercial right to name the
Amphitheater to
47
a sponsor, then the sponsorship fees attributable to that right to name
shall be split between Landlord and Tenant in a manner mutually approved
by Landlord and Tenant.
(c) Existing Employees. When making decisions in connection with the
staffing of the Amphitheater, Tenant shall interview for job openings at
the Amphitheater any existing full-time and seasonal employees identified
to Tenant by Landlord. Tenant agrees to use good faith efforts to employ
such individuals, but Tenant shall be under no obligation to do so.
(d) Alcoholic Beverages. Tenant agrees to implement an alcohol
control program to insure the responsible consumption of alcoholic
beverages by the Patrons of the Amphitheater. The alcohol control program
(i) will be substantially similar to the program described in Exhibit "Q"
attached hereto and (ii) may not be materially modified without the prior
consent of Landlord. If a modification to the alcohol control program
should ever be proposed, then Tenant shall provide a copy of such proposed
modification to Landlord before the implementation thereof. A copy of the
"TIPS" manual used in connection with the training contemplated by Exhibit
"Q" has been provided by Tenant to Landlord prior to the execution of this
Lease. Tenant also agrees that it will not permit, at any time during the
Term, any alcoholic beverages other than beer and wine to be sold anywhere
on the Amphitheater Tract other than in private hospitality and VIP areas.
(e) Signs.
(1) Landlord and Tenant shall have the joint right throughout
the Term to make use of the two electronic Arts Center billboard
signs located on the Park Tract and being visible from the
northbound and southbound lanes of the Garden State Parkway.
Tenant's use of such Arts Center billboard signs shall be limited to
identification of sponsors and advertising upcoming Tenant Events.
Landlord reserves the right to utilize the Arts Center billboard
signs for all other purposes of Landlord including, without
limitation, public service messages, GSACF purposes, recognition of
public donors and alerting the public to emergency situations or
occurrences; provided, however, Landlord shall not display the name
of any commercial enterprise on such Arts Center billboard signs
which are directly competitive with or otherwise in conflict with
any of the then five (5) largest sponsors of Tenant at the
Amphitheater. The allocation of the usage of such Arts Center
billboard signs between Landlord and Tenant shall be consistent with
the past practices of such allocation of usage between the
advertising of commercial concerts and the sponsors for such
commercial concerts at the Amphitheater, on the one hand, and the
other uses of Landlord, on the other hand.
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(2) Due to legal restrictions imposed upon Landlord, Tenant
shall not have the right to make use of variable message signs on
the Garden State Parkway; provided, however, if, at any time during
the Term, Landlord should make such variable message signs available
for advertisement by commercial enterprises, then Tenant shall be
granted a first right and option to place messages thereon
advertising events to be presented at the Amphitheater at the most
favorable rates available to any other commercial enterprises.
Landlord and Tenant will each negotiate in good faith a mutually
acceptable arrangement with respect to Tenant's use of the toll
booth placards on the Garden State Parkway.
(3) Tenant acknowledges and understands that, because of the
proximity of the Garden State Parkway to the Amphitheater, Landlord
has a strong interest in preventing distractions to motorists and in
maintaining the aesthetic values of the Entire Tract. Accordingly,
Tenant shall not construct, build, erect or otherwise make use of
any billboard, sign or similar display anywhere on the Amphitheater
Tract or the Parking Tracts which will be visible to vehicles
traveling on the Garden State Parkway without the prior consent of
Landlord.
(f) Civic/Charitable Event. In order to encourage the Tenant to
pursue a more diversified line-up of attractions, Landlord agrees that it
will consider, on a case by case basis, permitting the application of the
following provisions with respect to Civic/Charitable Events to be
presented at the Amphitheater by third party promoters notwithstanding the
contrary provisions contained in the definition of the term "Gross
Revenues":
(1) The proceeds from the sale of tickets for any such
approved Civic/Charitable Event shall not be included in Gross
Revenues for purposes of this Lease.
(2) Any sublease revenues received by Tenant from, or in
respect of, any such approved Civic/Charitable Event shall be
included in the Gross Revenues for purposes of this Lease.
For each Civic/Charitable Event which Tenant desires to have the
provisions described above apply, Tenant shall provide thirty (30) days
prior written notice thereof to the Landlord advising of (i) the date and
time of the proposed Civic/Charitable Event, (ii) the entertainers (if
any) to appear at such proposed Civic/Charitable Event, (iii) the name of
the promotor of such proposed Civic/Charitable Event, (iv) the amount of
sublease rent (if any) to be received by Tenant in respect of such
proposed Civic/Charitable Event and (v) a statement that the Tenant will
have no interest in the ticket revenues attributable to such proposed
Civic/Charitable Event. Landlord agrees that it will provide a response
49
within five (5) working days from the date all required information has
been received by Landlord for each request made by the Tenant pursuant to
the foregoing provisions.
(g) Limitation on Uses. Tenant shall use and occupy the
Amphitheater, the Amphitheater Tract and the Parking Tracts pursuant to
the provisions of this Lease solely for the purposes listed in Section 5.7
hereof. The Amphitheater and the Amphitheater Tract shall not be otherwise
occupied without the prior written consent of Landlord.
(h) Handicapped Accessibility. Tenant shall operate the Amphitheater
and the Parking Facilities in such a manner as to assure that it complies
fully with all state, federal and local standards for handicapped
accessibility including, without limitation, the Americans With
Disabilities Act.
(i) Non-Discrimination. Tenant shall not discriminate in employment
or contracting or subcontracting in connection with the Renovation Work or
the operations of the Amphitheater on the basis of race, color, religion,
sex or national origin. Tenant shall comply with all applicable statutes,
ordinances, rules and regulations concerning affirmative action and shall
require such compliance therewith by all contractors and subcontractors.
(j) Balanced Programming. Tenant and Landlord shall use their
reasonable best efforts to cause the programming at the Amphitheater to be
balanced so as to assure a reasonably proportioned blend of cultural
experiences, recognizing and accepting the fact that some (e.g. so-called
"high arts") may not be as profitable as others (e.g. "rock-n-roll"). For
purposes of this Lease, "balanced" shall mean a reasonable assortment of
varied tastes of the general population including, without limitation,
popular, rock-n-roll, blues, soul, jazz, folk, classical, and country and
western music, and comedy and theater. The parties acknowledge that the
examples contained in this subsection may not be indicative of general
taste during the entire Term. It is the intent of the parties throughout
the Term to appeal to the varied entertainment tastes of the general
public as such tastes may change over time. Landlord shall have the right
to provide notice to Tenant at any time following the end of any Lease
Year of any specific suggestions that it may have with respect to future
programming in order to comply with the intent and purposes of this
subsection; provided, however, in no event shall the provisions of this
Section 5.10(j) ever be made the basis for declaring Tenant to be in
default under this Lease because of the inherently subjective nature of
these provisions.
(k) Crowd Control and Cleanup. Tenant at its expense, shall be
responsible for cleanup of the Amphitheater, the Amphitheater Tract and
the Parking Tracts, crowd control, security and traffic control on those
days and nights
50
on which a Tenant Event is held. In addition, upon the provision of 20
days advance request from Landlord, Tenant shall be similarly responsible
for such services, at Landlord's expense, on those days and nights on
which Landlord Events are held. Tenant agrees that all cleanup of the
Parking Tracts shall be completed before 5:00 a.m. on the morning after
the presentation of an event for which Tenant is responsible for cleanup
in accordance with the foregoing provisions.
(l) Trash Collection and Security. Tenant shall provide adequate
trash collection and cleaning service to assure that the refuse of the
Patrons of the Amphitheater do no litter any property adjoining the
Amphitheater Tract or the Parking Tracts including, without limitation,
the Park Tract. Tenant shall be responsible for providing such temporary
barriers and sufficient security personnel as are reasonably necessary to
prevent Patrons of the Amphitheater from parking on, walking on or
otherwise trespassing upon such adjoining properties. Tenant shall be
responsible for providing security in accordance with industry standards
for first class outdoor entertainment facilities similar to the
Amphitheater (i) at the Amphitheater and on the Amphitheater Tract on a
year-round basis throughout the Term and (ii) on the Parking Tracts during
Show Hours only. In connection with security services to be provided by
Tenant, Tenant (with input from the New Jersey State Police) shall use its
expertise to develop a detailed security plan to address the special
circumstances that exist at the Amphitheater. Upon Landlord's prior
request, Tenant shall meet with Landlord to review its security plan prior
to the start of each Amphitheater Season and promptly following the
conclusion of each Amphitheater Season. Landlord will cooperate with
Tenant in coordinating support from the New Jersey State Police, the
police agency responsible for protection of life and property within the
confines of the New Jersey Highway Authority, to the extent that Tenant
and the New Jersey State Police deem such support appropriate. Tenant
agrees to provide Landlord not less than twenty (20) days prior written
notice of a need for New Jersey State Police support at any Tenant Event.
Tenant agrees to reimburse the Landlord for the cost of the use of the
troopers assigned to details at the Amphitheater.
(m) Coordination with Meyner Center. Tenant shall use good faith
efforts to coordinate its operations at the Amphitheater with the
operations of the private operator of the Meyner Reception Center and
Celebrity House, consistent with past practices.
(n) Curfew. The performance of each Tenant Event may not end later
than 12:00 midnight and may not begin earlier than 9:00 a.m.
(o) Use of Mall Area. Tenant Events may be presented on the
Amphitheater Tract only. Tenant Events may not be presented anywhere on
the Landlord Land including, without limitation, the mall area adjacent to
the
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Amphitheater, without the prior written consent of the Landlord. However,
in conjunction with the operation of Tenant Events at the Amphitheater and
with prior written notice to Landlord, Tenant may set up booths in the
aforementioned mall area for the purpose of generating additional
revenues; provided, that (i) no amplified sound is generated from the mall
area in connection with such activities and (ii) such use of the mall area
does not give rise to reasonable complaints from citizens in surrounding
communities.
(p) Amphitheater's General Manager. Tenant shall not hire a new
general manager of the Amphitheater at any time during the term of this
Lease without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. To avoid uncertainty, ambiguity
or doubt, it is hereby expressly agreed, stipulated and acknowledged that
the general manager of the Amphitheater as of the date of the execution of
this Lease has been previously approved by Landlord. Prior to hiring any
new general manager of the Amphitheater, Tenant shall provide prior notice
thereof to Landlord with such reasonable information concerning the
individual proposed to be hired as may be requested by Landlord. As used
in this Section 5.10(p), the term "general manager" shall mean the highest
ranking employee of Tenant who physically offices at the Amphitheater and
is responsible for overseeing and directing the day-to-day operation of
the Amphitheater. The rights granted to the Landlord under this Section
5.10(p) are in addition to, and not to the exclusion of, the Landlord's
right to comment on the identity and performance of "key management
personnel" as provided in Section 5.10(a) hereof.
(q) Turnstiles. Tenant shall, as a part of the Renovation Work,
reinstall at the Amphitheater's point(s) of entry the turnstiles currently
located at the Amphitheater. If, at some time during the term of this
Lease, Tenant should wish to install a different type of entry system
which would provide the same or better verification of the number of
Patrons attending the Tenant Events at the Amphitheater, then Landlord
shall not unreasonably withhold its consent to the installation of such
entry devices in place of the originally installed turnstiles.
(r) Furnishing of the Hospitality Room. Tenant shall provide
furniture and similar furnishings for the concession area hospitality room
located at the Amphitheater.
(s) Third Party Agreements. Tenant hereby agrees that it will honor
the existing license arrangement previously entered into by Landlord with
local garages for purposes of providing "wrecker/repair" services for
vehicles of Patrons in need of assistance, provided that Landlord causes
such licensing arrangements to be amended in such a manner that results in
Tenant being a direct beneficiary of all indemnity provisions and
insurance provisions set forth therein. In addition, Tenant acknowledges
that Landlord shall have the right to continue to allow its
52
third party provider to have pay telephones located at the Amphitheater in
a manner consistent with past practices at the Amphitheater with no
additional consideration payable to Tenant, so long as (i) the third party
provider services the pay telephones located thereon in the manner
required by its agreement with the Landlord and (ii) Landlord reasonably
cooperates with Tenant, and supports Tenant's efforts, in connection with
any request made to such third party provider by Tenant to increase the
number of pay telephones located at the Amphitheater.
Section 5.11 Non-Compete Covenants. Notwithstanding any of the other
provisions contained in this Lease, the parties hereto agree, and covenant with
one another throughout the Term as follows:
(a) Fully Restricted Facilities. Subject to the specific exceptions
contained in this Section 5.11, neither Landlord nor Tenant (or 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 Area.
(b) Limited Exception for Greenfields. Notwithstanding the
provisions of clause (a) of this Section 5.11, the Tenant (and its
Affiliates) shall have a limited right to book, present, promote and
produce live concerts featuring musical or comedic entertainers at
Greenfields in the Restricted Area if such concert satisfies 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; or
(2) such live concert cannot be booked for presentation at the
Amphitheater, despite the best efforts of the Tenant to so book such
live concert at the Amphitheater.
If the Tenant (or any of its Affiliates) intends to book, present, promote
or produce any live concert at a Greenfield pursuant to the provisions of
this Section 5.11(b), then the Tenant shall be required, as a condition
precedent to the rights created in this Section 5.11(b), to provide
written notice thereof to the Landlord with a specific description of (i)
the concert involved, (ii) the reasons that the provisions of Section
5.11(b) apply to such concert and (iii) the efforts made to book such
concert at the Amphitheater.
(c) Partially Restricted Facilities. Neither Landlord nor Tenant (or
its Affiliates) shall, directly or indirectly, become engaged or involved
in any manner whatsoever with respect to the booking, production,
presentation or promotion of
53
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 Area unless and except such party has first
complied with all of the following requirements:
(1) such party shall have exercised its best efforts to book
such live concert for presentation at the Amphitheater; and
(2) such party shall have provided written notice to the other
party hereto providing a specific description of (i) the concert
involved and the identity of the Partially Restricted Facility in
which such concert is proposed to be booked and (ii) the efforts
made to book such concert at the Amphitheater.
(d) Ownership or Management of Fully Restricted Facilities in the
Restricted Area. Neither Landlord nor Tenant (or its Affiliates) shall,
directly or indirectly, become engaged or involved in any manner
whatsoever with respect to the ownership or management of any Fully
Restricted Facility in the Restricted Area.
(e) Access to Acts. If Tenant should, at any time during the Term,
propose to present a live concert at a Greenfield pursuant to Section
5.11(b)(2) hereof or at a Partially Restricted Facility during any
Amphitheater Season in the Restricted Area pursuant to Section 5.11(c)
hereof, then Tenant shall, if requested by Landlord, exercise reasonable
efforts to provide a representative of Landlord access to the agent of the
headline act appearing at such live concert (or, if the act has no agent,
such other appropriate representative) for the purpose of verifying that
such act was unwilling to appear at the Amphitheater.
(f) Modification of Affiliate Definition. For purposes of this
Section 5.11 only, the following provisions shall supplement and amend the
definition of the term "Affiliate":
(1) Irrespective of whether Xxx Xxxxxxxx owns any interest in
Tenant, direct or indirect, Xxx Xxxxxxxx shall be deemed to be an
Affiliate of Tenant until January 3, 2002 or, if later, the date on
which Xxx Xxxxxxxx'x employment with Ardee and all of its Affiliates
is terminated.
(2) At all times during the Term of this Lease, Xxxxx Xxxxxx
shall be an Affiliate of Tenant. The provisions of this clause (2)
shall apply irrespective of whether Xxxxx Xxxxxx owns any interest
in Tenant, direct or indirect.
54
(3) Irrespective of whether Xxxxx Xxxxxx owns any interest in
Tenant, direct or indirect, Xxxxx Xxxxxx shall be deemed to be an
Affiliate of Tenant until January 3, 2002 or, if later, the date on
which Xxxxx Xxxxxx'x employment with Ardee and all of its Affiliates
is terminated.
(4) Irrespective of whether Xxxxx Xxxxxxx owns any interest in
Tenant, direct or indirect, Xxxxx Xxxxxxx shall be deemed to be an
Affiliate of Tenant until the date which is three (3) years after
the date on which Xxxxx Xxxxxxx'x employment with PACE Entertainment
Corporation and all of its Affiliates is terminated.
(g) Remedies and Enforceability. If the provisions of Section 5.11
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 this Section 5.11 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 this Section 5.11 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 Lease or permitted at law or in equity.
Section 5.12 Emission of Sound. In connection with its use and operation
of the Amphitheater and its presentation of Tenant Events, Tenant shall comport
with generally accepted industry standards and operate consistent with past
practices at the Amphitheater in regard to the emission of sound.
Section 5.13 Landlord Upgrades and Improvements. If (i) Landlord, at any
time during the Term, wishes to make any improvements or upgrades at the
Amphitheater and (ii) Tenant approves, in its sole and absolute discretion, of
such proposed upgrades or improvements, then Tenant shall install, construct or
otherwise put in place such upgrades and improvements at the sole cost and
expense of Landlord. Landlord shall reimburse to Tenant any and all costs and
expenses incurred or paid in connection with causing any such improvements or
upgrades selected by Landlord to be installed, constructed or otherwise put in
place.
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ARTICLE 6
OTHER LANDLORD BENEFITS
Section 6.1 Landlord Events. As additional consideration for the
agreements contained herein in favor of Tenant, Tenant does hereby grant to
Landlord the right to use the Amphitheater (excluding Tenant's executive offices
except as contemplated pursuant to Section 6.1(j) hereof), in a manner
consistent with past practices, for the presentation and holding during each
Lease Year of (i) up to ten ethnic heritage festivals of a similar nature, and
at the same general times, as have been presented or held at the Amphitheater
and/or in the mall and plaza area in years preceding the first Lease Year, (ii)
up to twenty events, performances or shows for which the Patrons attending are
not required to pay any fee or other charge for admission, and (in) a non-gated
winter holiday celebration and display in the mall and plaza area during the
months of November and December. If Landlord wishes, at any time during the
Term, to increase the number of Landlord Events and Tenant has available dates
for such events, the parties will discuss in good faith the scheduling of such
additional events; provided, however, that Landlord acknowledges, understands
and agrees that due to the nature of the types of events which will be presented
by Tenant at the Amphitheater, the scheduling and booking of such events often
has a very short lead time which will result in very short notice as to whether
Tenant has available dates for additional Landlord Events. The Landlord's use of
the Amphitheater pursuant to this Section 6.1 shall be governed by the following
provisions:
(a) Landlord Event Costs. Landlord shall be responsible for paying
all costs of organizing, promoting, producing and presenting each of the
Landlord Events and, in that connection, Landlord shall (i) reimburse to
Tenant all of Tenant's direct out-of-pocket costs incurred in connection
with the holding, presenting or performing of each of the Landlord Events
at the Amphitheater upon invoice therefor (with the express understanding
that Tenant shall, upon request of Landlord, provide to Landlord a
non-binding good faith written expense estimate prior to each Landlord
Event based upon information provided by Landlord as to the scope of such
Landlord Event, such estimate to be provided to Landlord within three (3)
business days after Tenant's receipt of the foregoing information
concerning the scope of such Landlord Event), (ii) pay to Tenant the
amount specified in Exhibit "S" attached hereto ("Indirect Cost Amount")
for each Landlord Event as reimbursement to Tenant for its indirect costs
and expenses (such as house staff costs, utility costs and insurance
costs) and (iii) pay to Tenant $500.00 for each Landlord Event for which
Landlord requires Tenant to provide the services of Tenant's production
manager pursuant to the provisions of Section 6.1(b)(1) hereof. At the end
of the fifth Lease Year, and at the end of each fifth Lease Year
thereafter during the Term, the amounts reflected in Exhibit "S" attached
hereto for the Indirect Cost Amount shall be increased by the
56
same percentage amount that the CPI Index increased during the same five
year period. "CPI Index" shall mean the Consumer Price Index for All Urban
Consumers (U.S. City Average for all items), 1982 - 84 equals 100 Base,
published monthly by the U.S. Department of Labor's Bureau of Labor of
Statistics, or any successor agency or publication.
(b) Tenant's Services. Tenant shall provide the following services
in connection with the Landlord Events:
(1) In connection with the operation of the Amphitheater
during Landlord Events, Tenant shall make available its production
manager and general operational staff (which includes its security
manager, house staff supervisor, marketing director, an accountant
and, when necessary, its box office manager) at each of the Landlord
Events in a manner consistent with the industry practices of
building management at third party promoted events, at no additional
charge to Landlord. In addition, Tenant shall provide the services
of Tenant's production manager, at each Landlord Event for which
Landlord has requested in writing the services of such production
manager at least five (5) business days prior to such Landlord
Event, to advance all production and operational matters at such
Landlord Event (the services to be rendered by such production
manager in connection with the production and operation of each such
Landlord Event being herein called the "Production Manager
Services").
(2) Tenant will assist Landlord with its mailing list
maintenance, ticket processing and revenue tracking associated with
Landlord Events. In this connection, Tenant will make available to
Landlord computer terminals and on-line access to Tenant's ticketing
service (consistent with the access Landlord has had historically
with respect to its own computerized ticketing service), along with
sufficient blank point of sale ticket stock. Landlord shall
reimburse to Tenant, upon invoice received from Tenant, Tenant's
cost for all blank point of sale ticket stock provided to Landlord
pursuant to the provisions contained in the immediately preceding
sentence. As of the date hereof, Tenant's cost is $.04 per ticket
for blank point of sale ticket stock.
(3) Tenant shall provide or make available to Landlord, so
long as Tenant continues to publish a program book for Tenant
Events, the right to insert a reasonable amount of separately
printed information into such program books in order to advertise
upcoming Landlord Events and GSACF benefits events; provided,
however, if Tenant does not publish a program book, Tenant agrees to
arrange for the distribution of the Landlord's separately printed
information at all Tenant Events. To the extent that Tenant incurs
any out-of-pocket costs or expenses which would
57
not otherwise be incurred by it in connection with either (i)
inserting any of Landlord's separately printed information into
Tenant's program books or (ii) arranging for the distribution of the
Landlord's separately printed information if Tenant does not publish
a program book, such out-of-pocket costs or expenses shall be
reimbursed to Tenant by Landlord upon invoice provided to Landlord.
(c) Prohibition on Touring Acts. It shall be specifically and
expressly prohibited to feature or include any Touring Act at any Landlord
Event unless Landlord first offered to Tenant the right, option and
opportunity to book such Touring Act at the Amphitheater for a Tenant
Event and Tenant declined the opportunity to book such Touring Act at the
Amphitheater. For purposes of the provisions of the immediately sentence,
the determination as to whether a performer, entertainer, musician, actor
or any group of the foregoing shall be characterized as a "Touring Act"
shall be made at the time that Landlord books such performer, entertainer,
musician, comedian, actor or any group of the foregoing for performance in
a Landlord Event at the Amphitheater.
(d) Landlord's Insurance. Landlord shall secure and maintain in
force during each Landlord Event a commercial general liability insurance
policy with limits of not less than $10,000,000 with respect to bodily
injury or death to any number of persons in one accident or occurrence and
with respect to property damage in any one accident or occurrence;
provided, however, that Landlord shall have the right to maintain (but
shall be responsible for payment of) a "self-insured retention" of no more
than $250,000 per occurrence and $850,000 in the aggregate. All insurance
maintained in accordance with the provisions of this Section 6.1(d) shall
be issued by companies reasonably satisfactory to Tenant. Such liability
insurance policy shall name Tenant and its general partners as an
additional insured and shall include contractual liability subject to no
limitations other than those found in a standard commercial general
liability form. Landlord shall furnish Tenant with duplicate originals or
copies certified as being true and correct of the policy of insurance
required pursuant to the provisions of this Section 6.1(d), and shall
furnish to, and maintain with, Tenant at all times as a condition to the
holding presenting or performance of any Landlord Events, a certificate of
the insurance carrier certifying that such insurance shall not be canceled
without at least 15 days advance written notice to Tenant. The insurance
described in this Section 6.1(d) may be obtained by Landlord by
endorsement or equivalent means under any blanket insurance policies
maintained by Landlord, provided that the coverage and other terms of such
insurance comply with the provisions of this Section 6.1(d). The limits of
insurance coverage provided for herein shall be increased by Landlord from
time to time at the request of Tenant, but no more frequently than once
every five (5) years during the Term to such amounts as should be
reasonably carried or
58
provided for the insured perils being covered so long as such increased
amount of coverage can be obtained at a commercially reasonable rate.
(e) Landlord's Indemnity. Landlord covenants and agrees to
indemnify, defend, protect and save harmless Tenant, its general partners
and the Affiliates, partners, officers, directors and employees of its
general partners from and against any and all liabilities, penalties,
damages, claims, costs, charges and expenses including, without
limitation, court costs and reasonable attorneys' fees, which may be
imposed upon, incurred by or asserted against Tenant or Tenant's interest
in the Amphitheater from any cause or in any manner whatsoever (including
Covered Tenant Negligence) relating to or arising out of the operation,
possession or use of the Amphitheater or the Parking Facilities in
connection with any Landlord Event (except for those liabilities,
penalties, damages, claims, costs, charges and expenses caused in whole or
in part by Excluded Tenant Negligence). As used in this Section 6.1(e),
the following terms shall have the meanings indicated below:
(1) "Covered Tenant Negligence" shall mean any negligent acts
or omissions of Tenant which arise out of or relate to any
Production Manager Services provided at a Landlord Event.
(2) "Excluded Tenant Negligence" shall mean any negligent act
or omission or other act of willful misconduct by Tenant which is
not Covered Tenant Negligence.
(f) Ticket Revenues for Landlord Events. Landlord shall be entitled
to receive and retain all ticket revenues associated with the sale of
tickets to each Landlord Event and all such ticket revenues shall be
excluded from "Gross Revenues" for purposes of this Lease. Except as
contemplated by the provisions of Section 6.1(b)(2) hereof, Landlord shall
be responsible for arranging the sale and distribution of tickets to each
of the Landlord Events.
(g) Concession Operations. Subject to the subsequent provisions
hereof relating to Landlord's "festivals", Tenant shall maintain, during
and in respect of all of the Landlord Events, the sole and exclusive right
(but not the obligation) (i) to operate all concession facilities and
operations at the Amphitheater including, without limitation, the sale of
food, beverage, alcohol and merchandise at the Amphitheater and (ii) to
receive and retain all revenues associated with the operation of such
concession facilities and operations at the Amphitheater during the
Landlord Events (which revenue shall constitute "Gross Revenues" for all
purposes of this Lease). Tenant agrees to exercise reasonable efforts to
convince its concessionaires to open for business and operate throughout
all Landlord Events; provided, however, that Tenant shall not be liable or
responsible to Landlord should any of such concessionaires elect not to
open its concession
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business during or as a part of any of the Landlord Events. Upon request
of Landlord, Tenant shall notify Landlord within ten (10) business days
following receipt of such request as to which of Tenant's concessionaires
intend to be open for business during Landlord Events designated in such
request which are scheduled to occur within four (4) months following such
request. If any of Tenant's concessionaires elect not to operate its
ordinary concession facilities and operations at the Amphitheater during
the presentation of any of the Landlord Events, then Landlord shall have
the right and option to arrange for and provide for the sale of the type
of concession ordinarily sold by each such concessionaire at the
Amphitheater by or through concessionaires of its choice; provided,
however, that Landlord shall have no right to use the existing concession
facilities and improvements at the Amphitheater without the prior consent
of Tenant's concessionaires. Notwithstanding the foregoing provisions,
Tenant hereby agrees and acknowledges that, with respect to those Landlord
Events which are "festivals," the service of food and beverages as a part
of, and consistent with past practices at, any such festival shall be
permitted and shall not violate the Tenant's exclusive right to operate
food, beverage and merchandise concessions at the Amphitheater.
(h) Rules and Regulations. Landlord's use of the Amphitheater for
the presentation of Landlord Events shall be conducted on and subject to
the rules and regulations generally imposed from time to time by Tenant on
third party promoters in the ordinary course of business, but only to the
extent that such rules and regulations do not expressly conflict with the
terms and provisions of this Lease. If requested, Landlord shall execute a
separate sublease agreement for each Landlord Event or for each series of
Landlord Events during each Lease Year in substantially the same form as
Tenant uses when subleasing the Amphitheater to third party promoters in
the ordinary course of business; provided, however, any such sublease
agreement shall contain an express provision providing that the provisions
of this Lease shall govern and control over any conflicting provisions
contained in such sublease agreement. Attached hereto as Exhibit "J" is a
copy of a typical sublease agreement which will be used with third party
promoters in the ordinary course of business and which contains within it
the rules and regulations to be imposed by Tenant on third party promoters
in the ordinary course of business. Subject to the terms of this Lease,
Tenant reserves the right to make reasonable changes and modifications to
its rules and regulations with prior notice to Landlord. Tenant
acknowledges that the form of sublease agreement attached hereto as
Exhibit "J" contains certain provisions which are inconsistent or in
conflict with the terms and provisions of this Lease. Accordingly, Tenant
hereby agrees that it will hereafter, upon the request of Landlord,
reasonably work with Landlord to modify the terms of such form of sublease
agreement as may be necessary to eliminate all such inconsistencies or
conflicting provisions.
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(i) Scheduling of Landlord Events. Each of the Landlord Events must
be held and presented at the Amphitheater during the same general period
of time that each of such Landlord Events has been previously presented at
the Amphitheater prior to the first Lease Year provided, however, (x) if
the Renovation Work is commenced prior to September 30, 1997, then Tenant
shall work reasonably with Landlord to reschedule those Landlord Events in
the second Lease Year which have been historically held at the end of each
Amphitheater Season to a mutually acceptable alternative date and (y) if
the Renovation Work is not completed by May 1, 1998, then Tenant shall
work reasonably with Landlord to reschedule those Landlord Events in the
third Lease Year which have been historically held at the beginning of
each Amphitheater Season to a mutually acceptable alternative date.
Reservation of dates for Landlord Events shall be made with the Tenant's
general manager (or executive director) and shall be subject to (i) prior
reservations on the general manager's (or executive director's) scheduling
calendar and (ii) reasonable rules and regulations which may be imposed
from time to time by the general manager (or executive director). In
connection with the provisions contained in the immediately preceding
sentence, Tenant's general manager (or executive director) shall act
reasonably and shall cooperate with Landlord in good faith to resolve any
scheduling conflicts between proposed Tenant Events and proposed Landlord
Events.
(j) Office Space for Landlord. In order to allow Landlord to
coordinate the presentation, production and promotion of the Landlord
Events, Landlord shall have the right to use, at any time and from time to
time during the Term, a specific office located within the confines of
Tenant's executive offices at the Amphitheater to be hereafter designated
by Tenant. The location of such office within the confines of Tenant's
executive offices may be relocated from time to time by Tenant with prior
notice to Landlord.
(k) Use of Mall Area. Landlord has the right to use the "mall area"
adjacent to the Amphitheater in connection with the Landlord Events and
for all other purposes consistent with its agreements in this Lease;
however, Landlord shall not use the mall area in a manner that will give
rise to reasonable complaints from citizens in surrounding communities.
Section 6.2 Landlord's Tickets to Tenant Events. As additional
consideration for the agreements contained herein in favor of Tenant, Tenant
does hereby agree with Landlord as follows:
(a) Tenant shall provide to Landlord, at no cost to Landlord, forty
(40) center section reserved seats and twenty (20) "prime" reserved
parking spaces for each Tenant Event during the Term.
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(b) Landlord shall have the right to purchase, at face value, up to
two hundred (200) additional center section reserved seats for each Tenant
Event during the Term by providing notice of the number to be purchased at
least one week before the tickets for such Tenant Event are placed on sale
to the general public. If Landlord should return to Tenant any of such
additional tickets so purchased at face value, then the following
provisions shall apply:
(i) With respect to such tickets which are (i) returned or
released no fewer than twenty-one (21) days prior to the scheduled
date of the performance to which such tickets relate or (ii) placed
on a "building hold" at Tenant's direction or request for more than
forty-eight (48) hours after release to Tenant by Landlord, Landlord
shall have no financial responsibility for such returned or released
tickets; and
(ii) With respect to all other tickets so returned, Tenant
shall (x) exercise reasonable efforts to resell such returned
tickets and (y) resell such returned tickets before selling other
tickets in the same cost category. To the extent Tenant should
resell any such returned tickets, Tenant shall give a full credit to
Landlord for all such resold tickets.
The location of the prime parking spaces and seats for which tickets are to be
provided to Landlord pursuant to the provisions of this Section 6.2 shall be (i)
during the first and second Lease Years, in the exact same location as those
prime parking spaces and seats used by Landlord for the same purposes prior to
the first Lease Year and (ii) for all subsequent Lease Years, equivalent in
location and quality to those prime parking spaces and seats used by Landlord
for the same purposes prior to the first Lease Year. From time to time during
the Term, Landlord shall have the right to request of Tenant that the number of
tickets which may be purchased by Landlord pursuant to the provisions of this
Section 6.2 for a specific Tenant Event shall be increased in excess of two
hundred (200) center section reserved seats, and Tenant shall not unreasonably
withhold its consent to such request taking into consideration the expected
demand for such tickets by the general public, the number of tickets available
for sale to the general public to satisfy such demand and contractual
limitations which may be imposed by the artist Landlord specifically agrees and
covenants with Tenant that none of the tickets provided or sold to Landlord
pursuant to the provisions of this Section 6.2 shall ever be sold for an amount
greater than the ticket's face value.
Section 6.3 Garden State Arts Center Foundation. Landlord shall be
permitted to raise funds for the GSACF as follows:
(a) Tenant shall have the following rights of oversale:
(1) In addition to the complimentary and purchased tickets and
reserved parking described in Section 6.2 hereof, Landlord shall
have the
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right, for each Tenant Event during the Term, to purchase from
Tenant and thereafter attempt to resell for amounts in excess of
face value (i) approximately 316 seats (the "Foundation Seats")
located in the Qualified Location (as defined in clause (4) below)
and (ii) 200 reserved parking spaces in Tenant's "reserved" or
"V.I.P." parking lot. All proceeds in excess of the face value from
the resale of the Foundation Seats and such reserved parking spaces
must be contributed by Landlord to the GSACF. If requested by
Landlord, Tenant shall provide more than 200 reserved parking spaces
in Tenant's "reserved" or "V.I.P." parking lot for any Tenant Event
for resale pursuant to this Section 6.3(a) if Tenant determines, in
its reasonable opinion, that such excess spaces shall not adversely
impact its operations of its "reserved" or "V.I.P." parking lot.
(2) In addition to the foregoing, Tenant shall cooperate with
Landlord and provide to Landlord the right to offer to persons who
buy the Foundation Seats the right to purchase a limited number of
additional seats, in a manner consistent with past practices,
subject to availability on a first come-first serve basis, for each
of the Tenant Events prior to the tickets to such Tenant Events
being placed on sale to the general public; provided, however, in no
event shall the total number of tickets which will be available for
such preferential offer of sale to the owners of the Foundation
Seats exceed 800 ("Maximum Number of Preferential Tickets") for any
one of the Tenant Events. If requested by Landlord, Tenant shall
permit more than the Maximum Number of Preferential Tickets to be
sold to the owners of the Foundation Seats pursuant to the
preferential offer of sale referenced in the immediately preceding
sentence, if, but only if, Tenant determines, in its sole and
absolute discretion, that such additional preferential tickets shall
not adversely impact upon Tenant's operations, reputation with the
ticket buying public, relations with artists or any other financial
or business interest of Tenant.
(3) Landlord shall have the right, by providing notice thereof
to Tenant no later than June 1, 1997, to require Tenant to cause the
Foundation Seats to be installed during the Renovation Work in
substantially the same location as the location of the seats within
the "white rail" in the current configuration of the Amphitheater as
"box seats" (identical to the box seats being installed at the
Amphitheater by Tenant as a part of the Renovation Work) with the
understanding that the cost associated with the installation of the
Foundation Seats as box seats shall be solely paid and borne by
Landlord and shall be reimbursed to Tenant upon invoice therefor.
Tenant currently estimates that the cost of causing the Foundation
Seats to be installed as box seats shall be approximately
$35,000.00.
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(4) For purposes hereof, seats located in the "Qualified
Location" shall mean (A) during the first and second Lease Years,
seats located within the "white rail" in the current configuration
of the Amphitheater and (B) during all subsequent Lease Years (i)
the box seats installed at Landlord's cost pursuant to clause (3) of
this Section 6.3(a) if Landlord exercises the option to install the
Foundation Seats as box seats or (ii) seats located in substantially
the same location as the seats within the "white rail" in the
current configuration of the Amphitheater if Landlord does not
exercise the option to install the Foundation Seats as box seats.
(b) Tenant shall designate, from time to time during the Term,
certain Tenant Events which will include a "surcharge" on each ticket, the
proceeds of such surcharge to be contributed to the GSACF. If the Average
Contribution Amount (hereinafter defined) as of the end of any Lease Year
is less than $105,000, then Tenant shall contribute to the GSACF within 60
days after such Lease Year ("Make-Up Contributions") the amount necessary
to cause the Average Contribution Amount as of the end of such Lease Year
to equal $105,000. As used in this Section 6.3(b), the following terms
shall have the respective meanings indicated below:
(1) "Potential Surcharge Revenue" shall mean, with respect to
any Tenant Event for which a "surcharge" on each ticket is added
pursuant to the provisions of this Section 6.3(b), (A) the greater
of (i) the reasonable projection by Tenant of the number of tickets
(excluding complimentary tickets) to be sold to such Tenant Event
using ordinary and reasonable methods of projecting ticket sales or
(ii) the actual number of tickets (excluding complimentary tickets)
sold to such Tenant Event multiplied by (B) the amount of the per
ticket "surcharge" for such Tenant Event. With respect to each
Tenant Event for which a "surcharge" on each ticket is to be added
pursuant to the provisions of this Section 6.3(b), Tenant shall
provide written notice to Landlord of Tenant's reasonable projection
of the number of tickets (excluding complimentary tickets) to be
sold to such Tenant Event using ordinary and reasonable methods of
projecting ticket sales. If Tenant fails to provide prior notice to
Landlord of such reasonable projection of the number of tickets to
be sold for any such "surcharge" event, then the reasonable
projection by Tenant of the number of tickets to be sold to such
"surcharge" event shall be deemed to be equal to the number of
tickets (excluding complimentary tickets) actually sold to such
"surcharge" event. If Landlord believes that the projection of the
number of tickets to be sold to any "surcharge" events has not been
made reasonably, then Landlord shall provide notice thereof to
Tenant at any time, but in no event later than thirty (30) days
after the end of the Lease Year in which such "surcharge" event
occurred. If Landlord and Tenant have been unable to mutually
resolve any dispute concerning the amount
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of such projection within forty-five (45) days after the end of the
Lease Year in which such "surcharge" event occurred, then either
party may thereafter refer, but in no event later than ninety (90)
days after the end of such Lease Year, the matter for resolution
pursuant to a binding arbitration procedure to be conducted in
accordance with the provisions of Section 15.13 hereof in the same
manner as if such dispute were a financial dispute involving a
monetary sum of $500,000 or less. If there is a dispute between
Landlord and Tenant as to the amount of projections with respect to
more than one "surcharge" event during any Lease Year, then all of
such disputes shall be resolved in a single binding arbitration
procedure to be conducted in accordance with the provisions of
Section 15.13 hereof.
(2) "Average Contribution Amount" shall mean, as of the end of
any Lease Year, (A) the sum of (i) the aggregate amount of Potential
Surcharge Revenue for all Tenant Events since the Commencement Date
for which a "surcharge" on each ticket is added pursuant to the
provisions of this Section 6.3(b) and (ii) the amount of all Make-Up
Contributions made to the GSACF by Tenant pursuant to provisions of
Section 6.3(b) since the Commencement Date divided by (B) the number
of Lease Years which have elapsed during the Term through and
including such Lease Year.
Tenant will use its reasonable efforts to (i) work with Landlord to select
and book performers for GSACF "surcharge" events that are acceptable to
Landlord and that will make benefit events a success and (H) generate
$105,000 of surcharge revenue during each Lease Year; provided, however,
that such requirement to use its reasonable efforts shall never be made
the basis for declaring Tenant to be in default under this Lease. To
assist in the application of the provisions of this Section 6.3(b),
various examples are included for illustrative purposes in Exhibit "N"
attached hereto.
Section 6.4 Charitable Projects. If Tenant should, at any time during the
Term, elect to implement any project involving the services of volunteers from
any charitable organization which would result in the generation of revenue for
such charitable organization (including without limitation, causing Tenant's
program books for the Tenant Events to be distributed by charitable volunteers
on a commission basis), then Tenant agrees that it will not delegate the
responsibilities for such project to any charitable organization without having
first offered to the Garden State Arts Center Foundation a right of first
refusal with respect to such project on the most favorable basis offered by any
other charitable organization.
Section 6.5 Landlord's Special Rights to Use of Certain Personal Property.
Tenant hereby agrees that Landlord shall have the right to use each of the
tables, chairs,
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peg boards and barricades identified by an asterisk in the Master List or on the
list of personal property items attached as Exhibits "H-2" and "H-4" attached
hereto in connection with the presentation and production of each Landlord Event
upon prior request given to Tenant with no set-up or breakdown costs or other
rental charges.
Section 6.6 Agreement to Barter. With respect to any monetary sums owed by
Landlord to Tenant pursuant to the provisions of this Article VI, Tenant agrees
that it will accept payment of any such sums from Landlord by the transfer to
Tenant of any goods, services or other in kind benefits at values mutually
agreed upon by the parties.
Section 6.7 Space for Landlord on the Sponsor Towers and in Program Book.
For each of the first five Lease Years, Tenant shall make available for
Landlord's use, at no cost to Landlord, four pages in Tenant's program books for
Tenant Events. Tenant shall make available for Landlord's use, at no cost to
Landlord, one panel on each of the four (4) sponsor towers to be hereafter
erected by Tenant for each of the first five (5) Lease Years following
completion of the erection of such sponsor towers.
ARTICLE 7
RESTRICTIVE COVENANTS
Section 7.1 Restrictive Covenants. Landlord does hereby covenant and agree
("Restrictive Covenants") that during the Term of this Lease:
(a) Neither Landlord nor any person deriving rights from Landlord
shall engage in any activities on the Landlord Land, at any time during
the Term, which are competitive with the types of activities in which
Tenant will engage on the Amphitheater Tract, including (i) presentment,
promotion and production of live entertainment events, (ii) operation,
management and use of commercial concert, amphitheater and arena
facilities, (iii) organization, presentment and operation of fairs and
festivals and (iv) operation and use of an educational center or
conference center.
(b) Neither Landlord nor any person deriving rights from Landlord
shall engage in any activities on the Landlord Land which materially
interfere with Tenant's conduct of its business or Tenant's use of,
enjoyment of, or operations on, the Amphitheater Tract.
(c) Neither Landlord nor any person deriving rights from Landlord
shall develop or utilize the Landlord Land in such a manner as would cause
Tenant's activities on the Amphitheater Tract to be in violation of any
law, ordinance, regulation or other land use restriction, including
without limitation, any sound emission restriction or ordinance.
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Section 7.2 Restriction on Use of Parking Facilities. Subject to the
provisions of Sections 7.5(a) and 8.1(a) hereof, neither Landlord nor any person
deriving rights from Landlord shall use the Parking Facilities in any manner
which will have a material, adverse effect on the number of parking spaces that
are available to Patrons of the Amphitheater and Employees of the Amphitheater
in the Parking Facilities during Show Hours for any Tenant Event.
Section 7.3 Enforceability of Restrictive Covenants. The Restrictive
Covenants set forth in this Article 7 shall, during the Term only, (a) be
binding upon and enforceable against each purchaser, tenant, grantee and owner
of the Landlord Land or any portion thereof, and the respective heirs, legal
representatives, successors and assigns of each such purchaser, tenant, grantee
and owner and (b) inure to the benefit of and be enforceable by Tenant and its
permitted successors and assigns.
Section 7.4 Concessions.
(a) Reference is made to the fact that an important source of
revenue from Tenant's intended use of the Amphitheater shall be the sale
of licensed merchandise relating to the performers and artists which will
appear at the Amphitheater. Tenant intends to license concessionaires to
sell such licensed merchandise at the Amphitheater immediately before,
during and after performances and shows at the Amphitheater. Landlord
hereby grants to Tenant the right to enter into, and go upon, the Landlord
Land for the limited purpose of implementing reasonable security
procedures to prevent and discourage the sale of unlicensed merchandise on
the Landlord Land.
(b) Another important source of revenue from Tenant's intended use
of the Amphitheater is the sale of food and beverages to the Patrons of
the Amphitheater. In that connection, Landlord hereby covenants and agrees
with Tenant that it will not license the right to a third party to, sell
food or beverages on the Landlord Land in a manner which is generally
calculated to be sold to Patrons of the Amphitheater during the Show Hours
of any Tenant Event. By way of example, a violation of the foregoing
provisions would be the building of a new food or beverage vending stand
on the Landlord Land near the entrance of the Amphitheater.
Section 7.5 Continuation of Existing Uses. Notwithstanding anything to the
contrary herein, the following activities shall not constitute a violation of
any of the provisions or restrictions contained in this Article VII:
(a) presentment, promotion and production of Landlord Events at the
Amphitheater in a manner consistent with past practices, including,
placement of tents on the Parking Tracts in connection with the holding of
certain festivals in a manner consistent with past practices;
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(b) activities at the Meyner Reception Center and Celebrity House in
a manner consistent with past practices;
(c) activities at the New Jersey Vietnam Veterans' Memorial and
Education Center in a manner consistent with past practices;
(d) commuter parking on the Parking Tracts in a manner consistent
with past practices;
(e) the existence of the communication towers on the Landlord Land
as currently situated; and
(f) activities at the Telegraph Hill Nature Area (not otherwise
identified above) in a manner consistent with past practices.
ARTICLE 8
PROVISIONS CONCERNING PARKING FACILITIES
Section 8.1 Joint Use of Existing Parking Facilities. The Existing Parking
Facilities shall be used jointly by Tenant and Landlord in accordance with the
following provisions:
(a) Tenant shall have the primary right to use and possess, at its
sole cost and expense, the Existing Parking Facilities during the Show
Hours of all Tenant Events, subject only to the following uses of the
Existing Parking Facilities consistent with past practices:
(1) commuter parking:
(2) the placement of certain festival tents on a portion of
the Existing Parking Facilities as a part of certain of the Landlord
Events;
(3) parking of vehicles in association with the use of the
Meyner Reception Center and Celebrity House;
(4) parking of vehicles associated with the use of the New
Jersey Vietnam Veterans' Memorial and Education Center; and
(5) parking of vehicles associated with uses of the Telegraph
Hill Nature Area not identified above.
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Other than revenues attributable to the resale of certain reserved parking
spaces provided by Tenant to Landlord for each Tenant Event pursuant to
the provisions of Section 6.3(a) hereof, all revenues attributable to the
use of the Existing Parking Facilities by Tenant pursuant to the right
created in this Section 8.1 shall be the sole and exclusive property of
Tenant and shall be included in "Gross Revenues" for all purposes of this
Lease.
(b) Landlord shall have the sole and exclusive right to use and
possess, at its sole cost and expense, the Existing Parking Facilities
during the Show Hours of all Landlord Events. If Landlord chooses, in its
sole discretion, to charge for parking at any of the Landlord Events, then
all revenues attributable to the use of the Existing Parking Facilities
pursuant to the right created in this Section 8.1(b) shall be the sole and
exclusive property of Landlord and shall not be included in "Gross
Revenues" for purposes of this Lease.
(c) At all other times, the Existing Parking Facilities may be
jointly used by Tenant and Landlord for the purpose of parking the cars of
Employees of the Amphitheater and Employees and Patrons of the Park
Operations.
Section 8.2 Maintenance of Existing Parking Facilities. The
responsibilities for cleanup, maintenance and striping of the Existing Parking
Facilities shall be allocated between Landlord and Tenant in accordance with the
following provisions:
(a) During the months of May through October, inclusive, of each
calendar year during the Term, Tenant shall be solely responsible for all
maintenance activities with respect to the Existing Parking Facilities
(inclusive of the grounds, plants and landscaping included as a part of
the Parking Tracts on which the Existing Parking Facilities are located).
In this connection, Tenant shall be obligated to deliver the Existing
Parking Facilities to Landlord on October 31 of each calendar year in
substantially the same condition as which it existed on May 1 of the same
calendar year.
(b) During the months of November through April, inclusive, of each
calendar year during the Term, Landlord shall be solely responsible for
all maintenance activities with respect to the Existing Parking Facilities
(inclusive of the grounds, plants and landscaping included as a part of
the Parking Tracts on which the Existing Parking Facilities are located).
In this connection, Landlord shall be obligated to deliver the Existing
Parking Facilities to Tenant on April 30 of each calendar year in
substantially the same condition as which it existed on November 1 of the
immediately preceding calendar year.
(c) Tenant shall be responsible for striping and re-striping, as
necessary, those portions of the Existing Parking Facilities which are
located immediately adjacent to the Amphitheater Tract (main lots).
Landlord shall be responsible for
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striping, and re-striping, as necessary, those Existing Parking Facilities
which are not adjacent to the Amphitheater Tract (overflow lots).
Section 8.3 Electrical Costs and Clean-Up of Parking Facilities.
(a) Tenant shall bear the costs associated with providing electrical
lighting to the Existing Parking Facilities during the months of May
through October, inclusive. Landlord shall bear the costs associated with
providing electrical lighting to the Existing Parking Facilities during
the months of November to April, inclusive. Tenant shall bear the costs
associated with providing electrical lighting to the New Parking
Facilities throughout the Term.
(b) As provided for in Section 5.10(k) hereof, (i) Tenant shall
cause, at its sole cost and expenses, substantially all of the trash,
litter and debris on the Parking Tracts and the grounds immediately
adjacent thereto to be picked-up and disposed of following the completion
of each Tenant Event and (ii) upon at least twenty (20) days advance
request from Landlord, Tenant shall cause, at Landlord's sole cost and
expense, substantially all of the trash, litter and debris on the Parking
Tracts and the grounds immediately adjacent thereto to be picked up and
disposed of following the completion of each Landlord Event. If the
Landlord does not timely exercise its right to require Tenant to clean the
Parking Tracts following any Landlord Event pursuant to the provisions of
clause (ii) of the immediately preceding sentence, then Landlord shall
cause, at its sole cost and expense, all of the trash, litter and debris
on the Parking Tracts and the grounds immediately adjacent thereto to be
picked-up and disposed of following the completion of each such Landlord
Event.
(c) The cleanup of the Parking Tracts at all times other than
following the completion of a Landlord Event or a Tenant Event shall be
governed by the following provisions:
(1) Landlord shall be responsible for daily cleanup of trash,
litter and debris on the Parking Tracts (and the grounds immediately
adjacent thereto) which are then being used by Landlord or any of
Landlord's tenants, agents, concessionaires, assignees or other
invitees (other than Tenant).
(2) Tenant shall be responsible for daily cleanup of trash,
litter and debris on the Parking Tracts which are not covered by
clause (1) of this Section 8.3(c), including the New Parking
Facilities.
Section 8.4 Use and Maintenance of the New Parking Facilities. The
following provisions shall apply with respect to the New Parking Facilities:
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(a) Subject only to the provisions of clause (b) below, Tenant shall
have the exclusive right to use and possess, at its sole cost and expense,
the New Parking Facilities. All revenues attributable to the use of the
New Parking Facilities by Tenant in connection with Tenant Events shall be
the sole and exclusive property of Tenant and shall be included in "Gross
Revenues" for all purposes of this Lease.
(b) Landlord shall have the right to use and possess, at its sole
cost and expense, the New Parking Facilities during the Show Hours of all
Landlord Events. Any revenues attributable to the use of the New Parking
Facilities pursuant to the right created in this Section 8.4(b) shall be
the sole and exclusive property of Landlord and shall not be included in
"Gross Revenues" for purposes of this Lease.
(c) Tenant shall be solely responsible for all maintenance
activities with respect to the New Parking Facilities (inclusive of the
grounds, plants and landscaping included as a part of the Parking Tracts
on which the New Parking Facilities are located).
(d) Tenant shall be responsible for striping and restriping, as
necessary, the New Parking Facilities.
ARTICLE 9
INSURANCE AND INDEMNITY
Section 9.1 Property Insurance. From and after the date upon which this
Lease is executed and continuing thereafter throughout the Term, Tenant shall,
at its sole cost and expense, keep and maintain in force policies of insurance
on all improvements (whether currently located or hereafter placed as a result
of the Renovation Work or otherwise) and personal property situated on the
Amphitheater Tract against loss or damage by fire and against loss or damage by
any other risk now and from time to time insured against by an "all risk" policy
generally placed on improvements and personal property of similar type in New
Jersey with limits not less than the full replacement cost of the improvements
and personal property being insured. All such policies shall be issued by
companies reasonably satisfactory to Landlord and shall be carried in the name
of Tenant and Landlord, as their interests may appear. All such policies shall
expressly provide that any loss to property (other than a loss exclusively
involving Tenants personal property located at the Amphitheater) in excess of
$25,000 shall be paid to, and adjusted with Landlord only. Losses to property up
to $25,000 and losses exclusively involving Tenants personal property located at
the Amphitheater shall be paid to, and adjusted with, Tenant and Landlord only,
as their interests appear. All insurance described in this Section 9.1 may be
obtained by Tenant by endorsement or
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equivalent means under any blanket insurance policies maintained by Tenant,
provided that the coverage and other terms of such insurance comply with this
Section 9.1. No Mortgagee shall be named as an additional insured or loss payee
under any policy of insurance maintained pursuant to this Section 9.1 or
otherwise have any right to receive payment of insurance proceeds or participate
in the adjustment of any loss covered thereby.
Section 9.2 Builder's Risk Insurance. During any period of construction on
the Amphitheater Tract, Tenant shall maintain, or cause to be maintained,
Builder's Risk Insurance in an amount not less than the total amount of the
insurable improvements being constructed, with responsible insurance companies
legally authorized to transact business in New Jersey. All such policies shall
expressly provide that any loss shall be paid to, and adjusted with, Landlord
only. No Mortgagee shall be named as an additional insured or loss payee under
any policy of insurance maintained pursuant to this Section 9.2 or otherwise
have any right to receive payment of insurance proceeds or participate in the
adjustment of any loss covered thereby.
Section 9.3 Liability Insurance. From and after the Commencement Date and
continuing thereafter throughout the Term, Tenant shall secure and maintain in
force commercial general liability insurance with (i) per occurrence limits of
not less than $5,000,000 with respect to bodily injury or death to any number of
persons in any one accident or occurrence and with respect to property damage in
any one accident or occurrence and (ii) no aggregate limit; provided, however,
if a commercial general liability insurance policy with no aggregate limits
should, at any time hereafter, no longer be available to Tenant at commercially
reasonable rates, then Tenant may instead provide general liability insurance
with minimum combined liability limits of $50,000,000 with a combination of an
aggregate limit pursuant to the general liability insurance policy and an Excess
or Umbrella Liability Policy so long as the Umbrella Policy contains a standard
clause which advises that such policy will "drop down" and be considered primary
in the event the aggregate primary limits become impaired or exhausted. All
insurance maintained in accordance with the provisions of this Section 9.3 shall
be issued by companies reasonably satisfactory to Landlord. All liability
insurance policies shall name Landlord as an additional insured and shall
include contractual liability endorsements. All insurance described in this
Section 9.3 may be obtained by Tenant by endorsement or equivalent means under
any blanket insurance policies maintained by Tenant, provided that the coverage
and other terms of such insurance comply with this Section 9.3. The limits of
insurance coverage provided for herein shall be increased by Tenant from time to
time at the request of Landlord, but no more frequently than once every five (5)
years, to such amounts as should be reasonably carried or provided, for the
insured perils being covered so long as such increased amount of coverage can be
obtained at a commercially reasonable rate.
Section 9.4 Auto Liability Insurance. Tenant shall, at its sole cost and
expense throughout the Term, keep Business Automobile Liability insurance
covering all owned,
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nonowned and hired vehicles in the protection of Tenant. Said policy or policies
shall be written in comprehensive form and shall comply with N.J.S.A. 39:6b-1 et
seq., and all local regulations and case law with regard to the scope and effect
of the New Jersey Compulsory Motor Vehicle Insurance Statute. Said policy or
policies shall provide coverage in the minimum combined bodily injury and
property damage liability limits of $2,000,000 per occurrence. Such auto
liability insurance may be maintained as part of or in conjunction with any
other liability insurance coverage carried or required to be carried by Tenant.
Section 9.5 Worker's Compensation and Employer's Liability. Tenant shall,
at its own cost and expense throughout the Term, provide Worker's Compensation
Insurance covering all of its own employees in accordance with applicable laws
of the State of New Jersey, to be endorsed to include coverage for any Federal
or other State laws that may be found to have legal jurisdiction.
Section 9.6 General Provisions. All insurance provided for in this Lease
shall be effected under valid and enforceable policies, in such forms and, from
time to time after the Commencement Date, issued by financially sound and
responsible insurance companies authorized to do business in the state of New
Jersey which have been approved by the Landlord (which approval shall not be
unreasonably withheld provided such companies have a Best Policyholder Rating of
not less than A minus or better). Tenant shall furnish Landlord with duplicate
originals or copies certified as being true and correct of all insurance
policies required under this Article 9, and shall furnish and maintain with
Landlord, at all times, a certificate certifying that such insurance shall not
be canceled without at least thirty (30) days advance written notice to
Landlord. If Tenant fails to maintain such insurance, Landlord, at its election
but without obligation to do so, may procure such insurance as may be necessary
to comply with these requirements, and Tenant agrees to repay the cost of same
to Landlord on demand, with interest thereon at the Permitted Rate from the date
of expenditure until paid.
Section 9.7 Indemnity. Tenant covenants and agrees to indemnify, defend,
protect and save harmless Landlord from and against any and all liabilities,
penalties, damages, claims, costs, charges and expenses, including without
limitation, court costs and reasonable attorney's fees, which may be imposed
upon, incurred by or asserted against Landlord or Landlord's Interest in the
Entire Tract from any cause or in any manner whatsoever relating to or arising
out of Tenant's operation, possession or management of the Amphitheater, the
Amphitheater Tract and the Parking Tracts (except for those liabilities,
penalties, damages, claims, costs, charges or expenses (i) caused in whole or in
part by the negligence or willful misconduct of Landlord or Landlord's agents or
employees or by virtue of a breach by Landlord of its representations,
warranties or covenants hereunder or (ii) relating to or arising out of the
operation, possession or use of the Amphitheater or the Parking Facilities in
connection with any Landlord Event except to the extent caused by the negligence
or willful misconduct of Tenant or Tenant's agents or employees).
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Section 9.8 Commercially Unavailable Insurance. If any of the policies of
insurance required to be obtained or maintained by Tenant pursuant to the
provisions of this Article 9 (each, a "Required Policy") should be, at any time
during the Term, commercially unavailable in the amounts or types specified
herein, Tenant shall immediately notify Landlord in writing of that fact and
advise Landlord as to the distinction between the terms of the Required Policy
and those of the commercially available policy which most closely meets the
specified amounts or types of insurance of the Required Policy (the "Available
Policy"). If the terms of the Available Policy are identical or substantially
similar in all material respects to those of the Required Policy, then Tenant's
obligation hereunder shall be reformed and modified, with no further action
required by any party hereto, to require the obtaining and maintaining of the
Available Policy. However, if the terms of the Available Policy are different
from those of the Required Policy in any material respect, then Tenant shall be
obligated to (i) promptly obtain the Available Policy (if it has not already
done so), and (ii) promptly meet with Landlord for the purpose of determining
(a) what additional steps, if any, need be taken by Tenant to protect against
the risk intended to be covered by the Required Policy, and (b) any change or
modification in the obligations of the parties hereunder that are necessary or
appropriate as a result of the unavailability of the Required Policy.
ARTICLE 10
ASSIGNMENT, SUBLETTING AND ENCUMBERING
BY TENANT; MORTGAGEE MATTERS; GRANTING OF EASEMENTS
Section 10.1 Assignment, Subletting and Encumbering by Tenant.
(a) Tenant shall have the right, without the consent of Landlord, at
any time and from time to time during the Term, to (i) sublease the
Amphitheater to other promoters or operators in the ordinary course of
business (i.e., on a daily or weekly basis only), (ii) grant concession
rights to vendors or other concessionaires for the sale of food, candy,
cigarettes, beverages, merchandise or similar items, or (iii) fix a
mechanic's or materialman's lien upon its leasehold estate in the
Amphitheater Tract; provided, however, any exercise of any such rights
shall be subject to all of the provisions of this Lease and shall not
discharge Tenant of any of its obligations hereunder.
(b) (1) Tenant shall also have the right, without the consent of
Landlord, at any time and from time to time during the Term, to (i)
mortgage its leasehold estate created hereby pursuant to a Qualified
Mortgage executed for the benefit of a Pre-Approved Mortgagee and/or (ii)
assign this Lease and the its leasehold estate created hereby to a
Pre-Approved Manager, provided, however, that any exercise of any such
right shall be subject to all of the provisions of this Lease and shall
not discharge Tenant from any of its obligations hereunder. Prior
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to executing a Qualified Mortgage, Tenant shall provide Landlord with a
copy thereof.
(2) Any Qualified Mortgagee (or any wholly-owned subsidiary of
such Qualified Mortgagee who acquires the leasehold estate created hereby
pursuant to any of the provisions of this Section 10.1(b)(2)) shall have
the right, without the consent of Landlord, at any time and from time to
time during the Term, to assign or cause the assignment of this Lease and
the leasehold estate created hereby to any Person acquiring the same
either (i) at a foreclosure sale conducted pursuant to the Qualified
Mortgage held by said Qualified Mortgagee or simultaneously with the
assignment of this Lease in lieu of a foreclosure, or (ii) after such
foreclosure sale or assignment in lieu of foreclosure (A) at any time, if
such Person is an Affiliate of the Qualified Mortgagee or (B) within two
(2) years after such foreclosure sale or such assignment in lieu of
foreclosure if such Person is not an Affiliate of the Qualified Mortgagee.
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(c) Except as expressly permitted by the provisions of clauses (a)
or (b) of this Section 10.1, Tenant may not sell, assign, sublet, rent,
grant, mortgage or otherwise transfer or encumber all or any portion of
the leasehold estate created hereby without first obtaining the consent of
Landlord, which consent may not be unreasonably withheld, conditioned or
delayed. Tenant hereby agrees with Landlord for all purposes hereof that
any stock or asset sale, merger,
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consolidation or other contractual arrangement which results in (i) the
operation, management and booking of the Amphitheater being controlled or
held by any person other than a Pre-Approved Manager or (ii) the leasehold
estate created hereby being owned or controlled by a person other than a
Pre-Approved Manager shall, be deemed to be a sale and assignment of the
leasehold estate created hereby in violation of the restriction contained
in this Section 10.1(c); provided, however, if Landlord believes that
Tenant has violated the provisions of this Section 10.1(c) by reason of
any occurrence other than a direct assignment of the leasehold estate
created hereby, then Landlord shall be required to give notice thereof to
Tenant and provide a period of sixty (60) days to cure such matter before
the same shall constitute a violation by Tenant of the restriction
contained in this Section 10.1(c).
(d) Without limiting the other provisions contained in this Section
10.1, any purported sale, assignment or other transfer (other than a
mortgage, pledge or other encumbering pursuant to a Qualified Mortgage) of
all or substantially all of Tenant's interest in this Lease and the
leasehold estate created hereby shall not be effective unless and until:
(i) all Rent then owing by Tenant has been paid in full, (ii) Tenant has
delivered to Landlord a fully executed and acknowledged counterpart of the
instrument of sale, assignment or transfer which contains an express
assumption by the purchaser, assignee or transferee of this Lease and all
of the obligations hereunder on the part of Tenant to be kept, observed or
performed after the effective date of such sale, assignment or transfer
and which sets forth the mailing address of such purchaser, assignee or
transferee for purposes of this Lease and (iii) Landlord shall have given
its prior written consent to such sale, assignment or other transfer
(unless such consent is not required pursuant to the provisions of clauses
(a) or (b) of this Section 10.1).
(e) Upon an effective sale, assignment or transfer as defined above
(other than a mortgage, pledge or other encumbering pursuant to a
Qualified Mortgage) of all of Tenant's interest in this Lease and the
leasehold estate in the Amphitheater Tract created hereby, other than
pursuant to clause (b)(1) of this Section 10.1, Tenant, with respect to
the payment or performance of any obligation hereunder (including the
obligation to pay Rent) which accrues after the effective date of any such
sale, assignment or transfer, shall be released of liability therefor, and
the purchaser, assignee or transferee of this Lease shall at all times
thereafter be deemed to be the "Tenant" for purposes of this Lease.
Section 10.2 [Intentionally Deleted.)
Section 10.3 Qualified Mortgagee's Right to Perform Tenant's Obligations.
Each Qualified Mortgagee shall have the right to perform any obligation of
Tenant hereunder, including without limitation, the obligation of Tenant to pay
Rent, and Landlord shall accept performance of any such obligation by any
Qualified Mortgagee.
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Any performance by a Qualified Mortgagee of any obligation of Tenant hereunder
shall have the same effect as and shall constitute performance of such
obligation by Tenant.
Section 10.4 Acquisition of Tenant's Interest in the Leasehold Estate.
Upon the acquisition of any ownership interest in and to the leasehold estate
created by this Lease by a Qualified Mortgagee or any other person or entity
permitted by the terms hereof to acquire such an interest (any such Qualified
Mortgagee or other person or entity who acquires such interest herein being
called a "New Tenant," it being understood that a New Tenant is also a Tenant
for all purposes hereunder), regardless of how such acquisition occurs, whether
through foreclosure of liens created by a Mortgage or assignment of such
interest in such leasehold estate in lieu of foreclosure, or otherwise, such New
Tenant shall succeed to the rights and obligations of Tenant with respect to
such interest in such leasehold estate acquired by it, with the same force and
effect as if this Lease had, with respect to such interest in such leasehold
estate, been originally entered into between Landlord, as landlord, and such
Qualified Mortgagee or such person or entity, as tenant, and this Lease shall
remain in full force and effect. Notwithstanding the foregoing, the acquisition
of any such ownership interest in and to the leasehold estate created by this
Lease by New Tenant shall not be effective unless and until: (i) all Rent then
owing by Tenant has been paid and all uncured Events of Tenant Default and
Non-Termination Events of Default which can be cured by the payment of money
have been cured and (ii) Landlord has been delivered a fully executed and
acknowledged counterpart of the instrument evidencing such acquisition which
contains an express assumption by New Tenant of this Lease and of all the
obligations hereunder on the part of Tenant to be kept, observed or performed
after the effective date of such acquisition and which sets forth the mailing
address of the New Tenant for purposes of this Lease. New Tenant shall reimburse
Landlord for all out-of-pocket expenses incurred by Landlord (including
reasonable attorneys' fees) in entering into a new lease with New Tenant
pursuant to the provisions of this Section 10.4.
Section 10.5 Further Assurances; Estoppel Certificate. Landlord shall
execute any further documents which may be reasonably required by Tenant, any
New Tenant or any Qualified Mortgagee at any time and from time to time to
effectuate the intent and purposes of this Article 10. In that connection,
Landlord shall execute and deliver to Tenant or any person or entity designated
by Tenant, including without limitation a Qualified Mortgagee, from time to time
and at such time or times as Tenant may request in writing, within thirty (30)
days after receipt of such written request, an estoppel certificate stating:
(a) whether or not this Lease is in full force and effect;
(b) whether or not this Lease has been modified or amended in any
respect, and submitting copies of such modifications or amendments, if
any;
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(c) to the best knowledge and belief of Landlord, whether or not
there are any existing defaults under this Lease and specifying the nature
of such defaults, if any, provided, however, that in no event shall such
statement be deemed to waive any of Landlord's rights or remedies arising
from a then existing default of which Landlord was not aware;
(d) to the best knowledge and belief of Landlord, whether or not any
particular provision of this Lease has been complied with, provided,
however, that in no event shall such statement be deemed to waive any of
Landlord's rights or remedies arising from a then existing non-compliance
of which Landlord was not aware;
(e) Landlord's current address for the purpose of giving notice to
Landlord; and
(f) such other information that may be reasonably requested, as long
as the furnishing of such information by Landlord will not prejudice any
of Landlord's rights or remedies under this Lease or otherwise result in
any adverse effect on Landlord under this Lease.
Tenant shall reimburse Landlord for all out-of-pocket expenses incurred by
Landlord (including reasonable attorney's fees) in performing its obligations
under this Section 10.5.
Section 10.6 Granting of Easements. Landlord acknowledges that easements
over, along and across the Amphitheater Tract will be required from time to time
in connection with Tenant's use and occupancy of the Amphitheater. Subject to
Landlord's right of prior approval, Landlord shall join with Tenant in the
granting of any such easements for the purposes of furnishing utilities or
providing for ingress and egress to the Amphitheater Tract and any improvements
or parts thereof located thereon as Tenant may desire and are prudent and
consistent with the reasonable ownership, development and operation of the
Amphitheater Tract taking into account Landlord's reversionary interest in the
Amphitheater Tract. Tenant shall reimburse Landlord for all out-of-pocket
expenses incurred by Landlord (including reasonable attorney's fees) in
performing its obligations under this Section 10.6.
Section 10.7 [Intentionally Deleted.]
Section 10.8 Qualified Mortgagee's Right to a New Lease. Upon termination
of Tenant's right to possession of the Amphitheater or upon termination of this
Lease pursuant to an exercise of Landlord's remedies following the occurrence of
an Event of Tenant Default as a result of Tenant being insolvent or upon
termination of this Lease for any other reason (other than a termination arising
under Sections 3.2 or 4.5 or Article 14, or as a result of the expiration of the
Term), any Qualified Mortgagee
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shall have the right to receive from Landlord a new lease of the Amphitheater
for the unexpired balance of the Term (assuming for purposes of this Section
10.8 that this Lease has not been terminated and Tenant's right to possession
has not been terminated) on the same terms and conditions set forth in this
Lease by giving Landlord written notice ("New Lease Notice") thereof within
thirty (30) days after the date of any such termination; provided, however,
Landlord shall not have any obligation to execute such new lease with a
Qualified Mortgagee unless such Qualified Mortgagee satisfies each of the
following conditions within thirty (30) days after such Qualified Mortgagee
gives Landlord the New Lease Notice:
(a) Any uncured (i) Event of Tenant Default and (ii) Non-Termination
Event of Default which can be cured by the payment of money is cured. In
addition, the Qualified Mortgagee shall have expressly assumed the
indemnification obligations of Tenant and Pavilion under this Lease and
such assumption shall survive any termination of this Lease in connection
with the execution of a New Lease. All income collected or received by or
for the account of Landlord from the Amphitheater subsequent to the date
of termination of this Lease or termination of Tenant's right to
possession of the Amphitheater, less all expenses incurred by Landlord in
managing and operating the Amphitheater, shall be applied against Rent
which would at the time of the execution and delivery of such new lease be
due under this Lease but for such termination of this Lease or termination
of Tenant's right to possession of the Amphitheater. The balance, if any,
owed in respect of Rent shall be paid.
(b) Such Qualified Mortgagee delivers evidence reasonably
satisfactory to Landlord that such person or entity claiming to be a
Qualified Mortgagee is, in fact, a Qualified Mortgagee and is entitled to
obtain a new lease of the Amphitheater from Landlord pursuant to the
provisions of this Section 10.8.
(c) Such Qualified Mortgagee (i) represents and warrants to Landlord
that it is a Qualified Mortgagee and is entitled to obtain a new lease of
the Amphitheater from Landlord pursuant to the provisions of this Section
10.8 and (ii) agrees to indemnify and hold Landlord harmless from any
claim, loss, cost, damage or expense (including court costs and reasonable
attorney's fees) arising out of any failure of such person or entity
actually being a Qualified Mortgagee hereunder or any failure of such
Qualified Mortgagee actually being entitled to obtain a new lease of the
Amphitheater from Landlord.
Landlord shall enter into such new lease of the Amphitheater with such Qualified
Mortgagee within sixty (60) days after such Qualified Mortgagee gives Landlord
the New Lease Notice and satisfies the above-listed conditions. If Landlord
enters into such new lease with such Qualified Mortgagee as a result of Tenant's
right to possession of the Amphitheater being terminated, then upon the
execution and delivery of such new lease, this Lease shall terminate and be of
no further force and effect. The Qualified
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Mortgagee who obtains the new lease shall reimburse Landlord for all
out-of-pocket expenses incurred by Landlord (including reasonable attorney's
fees) in performing its obligations under this Section 10.8. Any new lease of
the Amphitheater created pursuant to the rights contained in this Section 10.8
shall be of equal priority to this Lease and shall in all events be prior and
superior to any lease, lien or other encumbrance created after the date hereof.
The provisions of this Section 10.8 shall survive the termination of this Lease.
Notwithstanding anything to the contrary contained herein, if Landlord may not
permissibly terminate this Lease upon Tenant becoming insolvent without a court
order due to applicable law, then Landlord shall not be obligated to enter into
a new lease with any party pursuant to the provisions of this Section 10.8
following the occurrence of the Tenant becoming insolvent unless and until
Tenant (or its successor) has validly rejected this Lease or the court with
authority over the affairs of Tenant (or its successor) has entered a final
judgment terminating this Lease.
Section 10.9 Concurrent Exercise of Rights. Tenant, each Qualified
Mortgagee and each permitted New Tenant hereunder may exercise any and all of
its rights under this Article 10 concurrently at any time or times, and from
time to time during the Term, so often and as many times as they may desire.
Section 10.10 Limitation on Modification of Lease. Landlord and Tenant
covenant and agree that this Lease will not be modified, altered or amended in
any way that would prejudice the rights of a Qualified Mortgagee under this
Lease, or have a material adverse effect on the value of the security under a
Qualified Mortgage held by such Qualified Mortgagee without the prior written
consent of such Qualified Mortgagee. Landlord will not accept a voluntary
surrender of the leasehold estate created hereby from Tenant without the prior
written consent of each Qualified Mortgagee.
ARTICLE 11
LANDLORD'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.1 Peaceful Possession. Landlord covenants and warrants that
Tenant shall and may peaceably and quietly have, hold, occupy, use and enjoy,
and shall have the use and enjoyment of, all of the Amphitheater, the
Amphitheater Tract, the Parking License, the Access Easement and the Utility
Easement during the Term on and subject to the terms hereof; and Landlord and
its successors agree to WARRANT AND DEFEND during the Term the title to the
Amphitheater, the Amphitheater Tract, the Parking License, the Access Easement
and the Utility Easement, subject to the Permitted Encumbrances and subject to
and upon the covenants, agreements, terms, provisions and limitations herein set
forth, unto Tenant and its permitted successors and assigns against the claims
of any and all persons.
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Section 11.2 Organization. Landlord hereby represents and warrants to
Tenant that it is a body corporate and politic created and existing under and by
virtue of the New Jersey Highway Authority Act, as amended. Landlord has all
requisite power and authority to enter into this Lease and to engage in the
transaction contemplated hereby, and the joinder, consent or approval of no
other person or entity is required to properly consummate the transactions
herein contemplated.
Section 11.3 Binding Obligation. Landlord hereby represents and warrants
that this Lease is a valid obligation of the Landlord and is binding upon the
Landlord in accordance with the terms hereof. Without limiting the generality of
the foregoing, Landlord represents and warrants to Tenant that it has complied
in all material respects with all applicable laws, rules, statutes and
ordinances relating to or governing Landlord's granting of lease rights similar
to those granted herein.
Section 11.4 Mortgage of Fee Estate. Landlord hereby represents and
warrants to Tenant that there are no mortgages or liens affecting Landlord's fee
simple estate in and to the Entire Tract other than the liens and mortgages
specifically included within the Permitted Encumbrances. Landlord shall have the
right to subsequently encumber its fee simple estate in and to the Landlord Land
after the date hereof, so long as the liens and security interests created
thereby remain in all respects subordinate to this Lease.
Section 11.5 Impositions. Landlord hereby represents and warrants to
Tenant that the Amphitheater and the Amphitheater Tract are not subject to any
Impositions as of the date of this Agreement. Pursuant to the provisions of
N.J.S.A. 27:12B-16, as interpreted pursuant to the decision in Broomfield v.
Division of Tax Appeals, 84 N.J. Super. 19-24 (Superior Court of New Jersey,
Appellate Division 1964), the creation of a leasehold estate in the Amphitheater
and the Amphitheater Tract in favor of Tenant pursuant to the provisions of this
Lease will not result in, under current law, the Amphitheater and the
Amphitheater Tract becoming subject to any Impositions. Landlord covenants and
agrees with Tenant that, in the event that (i) any attempt should ever be made
to modify the laws of the State of New Jersey in any way which would cause the
Amphitheater or the Amphitheater Tract to thereafter become subject to any
Impositions or (ii) any taxing authority should challenge, by litigation or
otherwise, the existing exemption applicable to the Amphitheater and the
Amphitheater Tract, then Landlord shall, upon Tenant's written request, join
with Tenant in attempting to prevent any such change of law to become effective
and join in any challenge or litigation attempting to reinterpret the
availability of the statutory exemption as it applies to the Amphitheater or the
Amphitheater Tract.
Section 11.6 Financial Information. Landlord hereby represents and
warrants that the Statement of Revenues and Expenses attached hereto as Exhibit
"O" (i) are complete, true, accurate and correct and do not omit a material fact
necessary to make the information and data contained therein not misleading,
(ii) relate to and reflect
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during the periods of time covered thereby only the revenues derived from and
the expenses incurred in connection with the commercial use and operation of the
Amphitheater and (iii) do not include for the periods of time covered thereby
the revenues derived from or the expenses incurred in connection with any of the
operations or rights reserved by or granted to Landlord pursuant to this Lease.
In addition, Landlord is aware of no currently existing fact that has, or in the
future may have, a material adverse effect on the Amphitheater or the results of
operations of the Amphitheater.
Section 11.7 Sale of Alcoholic Beverages. Landlord hereby represents and
warrants that, to its knowledge, except for the need to comply in all respects
with the licensing requirements of the State of New Jersey including, without
limitation, the requirement of obtaining necessary liquor permits under New
Jersey law to authorize the sale of alcohol at the Amphitheater, no legal
condition or contractual restriction currently exists which could preclude the
serving of alcohol at the Amphitheater.
Section 11.8 Gift Certificates and Invite Backs. Landlord represents and
warrants that attached hereto as Exhibit "K" is an accurate list of all
currently outstanding "invite backs".
Section 11.9 Indemnification. Landlord will reimburse, indemnify, defend
and hold Tenant harmless from and against:
(a) any all damages, losses, deficiencies, liabilities, costs and
expenses resulting from, relating to or arising out of any false or
misleading representation contained in this Article 11 or the breach of
any covenant or obligation of Landlord contained in this Article 11; and
(b) any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs and other expenses
(including, without limitation, reasonable attorneys' fees) incident to
any of the indemnified claims referred to in clause (a) above or to the
enforcement of the provisions of this Section 11.9.
Section 11.10 Environmental Indemnity. Landlord will reimburse, indemnify,
defend and hold Tenant harmless from and against any and all damages, losses,
deficiencies, liabilities, costs and expenses, including without limitation,
court costs and reasonable attorneys' fees, which may be imposed upon, incurred
by or asserted against Tenant or Tenant's interest in the Amphitheater Tract as
a result of either of the following:
(a) The presence of any Hazardous Substances which were disposed of,
or otherwise released on, to or under the Entire Tract prior to the
Commencement Date regardless as to who may have caused such Hazardous
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Substances to have been disposed of, or otherwise released on, to or under
the Entire Tract.
(b) Any Hazardous Substances being disposed of, or otherwise
released on, to or under the Entire Tract on or after the Commencement
Date by Landlord or any of its agents, representatives or employees or by
any tenants of Landlord on other portions of the Entire Tract.
ARTICLE 12
TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 12.1 Tenant's Representations, Warranties and Covenants. Tenant
hereby represents, warrants and covenants unto Landlord as follows:
(a) Organization. Tenant is a general partnership duly organized
under the laws of the State of Delaware, with full power and authority to
enter into this Lease and to engage in the transactions contemplated
hereby, and no joinder, consent or approval of any other person or entity
(which has not yet been obtained) is required to properly consummate the
transactions herein contemplated.
(b) Binding Obligation. This Lease is a valid obligation of Tenant
and is binding upon it in accordance with the terms hereof.
(c) Hazardous Substances. Tenant shall not cause or permit, at any
time during the term of this Lease, any Hazardous Substances to be
disposed of or otherwise released on, to or under the Entire Tract. Tenant
shall be responsible for insuring that the Renovation Work complies in all
respects with all federal and state environmental laws (including, without
limitation, the cost of complying with all such laws).
(d) Ownership. The only partners of Tenant are Pavilion and Ardee.
Tenant has delivered to Landlord a true, correct and complete copy of
Tenant's Partnership Agreement which accurately reflects Pavilion's and
Ardee's respective ownership interest in Tenant. Other than the
partnership interests of Pavilion and Ardee, there are no outstanding
rights, options, warrants, conversion rights or agreements for the
purchase or acquisition of any partnership interests in Tenant.
(e) Qualification. Tenant is duly qualified and authorized to do
business in each jurisdiction in addition to its jurisdiction of
organization in which the nature of its business or the character or
amount of its property makes such qualification necessary under the laws
thereof.
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(f) No Violations of or Conflict with Other Agreements. The terms
and provisions of this Lease will not result in the breach of any of the
terms, conditions or provisions of, or conflict with or constitute a
default in, or result in the creation of any lien, charge or encumbrance
upon any of the property or assets of the Tenant pursuant to, any
indenture, mortgage, deed of trust, agreement, license or other instrument
to which Tenant is a party or by which it may be bound, or violate any of
the provisions of its partnership agreement, any statute or any applicable
order, writ, injunction, judgment or decree of any court, or any order or
other rule or governmental regulation applicable to such entity, or
require any consent, approval or authorization of, or any declaration or
filing with, any governmental authority.
(g) Judgments; Litigation. There are no judgments presently
outstanding and unsatisfied against Tenant. Neither Tenant nor any of its
property is currently involved in any litigation at law or in equity, or
any proceeding before any court, or by or before any governmental or
administrative agency, federal, state or local, which would have a
material adverse effect on Tenant's ability to fulfill its obligations
hereunder.
(h) Tax Returns. Tenant has filed (and shall file throughout the
Term) all tax returns required by law to be filed, and has paid or made
adequate provision for the payment (and shall pay or make adequate
provision for the payment throughout the Term) of all taxes which have
become (or will become during the Term) due and payable pursuant to said
returns and of all assessments or other governmental charges which have
been (or will be during the Term) levied upon it or upon its properties,
assets, income or franchises, and which are (or will be during the Term)
due and payable.
(i) Books and Records. Tenant will keep its books of account in
accordance with generally accepted accounting principles, consistently
applied.
(j) Consolidation, Merger, Sale of Assets, Etc. Tenant will not,
directly or indirectly, (a) consolidate with or merge into any other
Person or permit another Person to consolidate with or merge into it, or
(b) sell, lease, abandon or otherwise transfer or dispose of all or
substantially all of its assets or property except for a transfer, sale or
assignment of the leasehold estate created hereby which is permitted by
the provisions of Section 10.1 hereof.
(k) Existence. Tenant will at all times preserve and keep in full
force and effect its existence as a partnership.
(l) Legal Requirements. Tenant will comply with all laws, ordinances
or governmental rules and regulations to which it is subject (including,
without limitation, all environmental protection laws) and obtain and keep
in full force and
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effect any licenses, permits, franchises, agreements or governmental
authorizations or approvals necessary to the ownership, acquisition or
disposition of its properties or to the conduct of its business or to
comply with the operating and reporting requirements of any Governmental
Authority or other Person, except where the failure to do any of the
foregoing does not, and could not reasonably be expected to have, a
material adverse effect on the business, operations, properties, financial
condition or prospects of Tenant or on the ability of Tenant to perform
its obligations under the Lease.
(m) Notice of Default, Disputes and Other Matters. Tenant shall give
written notice to Landlord of the following matters forthwith upon
obtaining knowledge thereof:
(1) any citation, order to show cause, or other legal process
or order, or protest or reconsideration affecting a material
license, permit or other contractual right held by Tenant or
directing Tenant to become a party to or to appear at any proceeding
or hearing by or before any Governmental Authority, which, if
adversely determined, would be either individually or in the
aggregate with other matters, materially adverse to the business,
properties, financial condition or prospects of Tenant;
(2) any dispute concerning, or any threatened non-renewal or
modification of, any contract to which Tenant is a party, if an
adverse result with respect to such dispute, threatened non-renewal
or modification either individually or in the aggregate with other
matters would have a materially adverse effect upon the business,
operation, properties, financial condition or prospects of Tenant;
(3) the occurrence of an Event of Tenant Default;
(4) the occurrence of any event which constitutes, or with
notice or lapse of time or both, would constitute, a default or an
event of default under any contractual obligations of Tenant the
ramifications of which would, either individually or in the
aggregate with other defaults, have a material adverse effect on the
business, operations, properties, financial condition or prospects
of Tenant;
(5) any material adverse change in the business, operations,
properties, financial condition or prospects of the Tenant which
will impair Tenant's ability to perform its obligations under this
Lease; and
(6) the occurrence of any assignment, sublease, grant,
mortgage, transfer, stock or asset sale, merger, consolidation or
other contractual
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arrangement which results in a violation of the restrictions
contained in Section 10.1(c) hereof.
In addition to the foregoing, Tenant shall provide notice to Landlord as
to the identity of the Persons who own the equity interests in Tenant and
all of the ultimate parent entities of such Persons within thirty (30)
days of any express written request for such information provided to
Tenant by Landlord.
(n) Required Permits. Tenant will pursue each of the Required
Permits diligently, in good faith, expeditiously, and will endeavor
faithfully and use its reasonable efforts to resolve any issues or
impediments to obtaining each such Required Permit.
(o) Maintenance and Use of the Amphitheater and Personal Property.
(1) The Tenant, at its sole cost and expense, shall take good
care of the Amphitheater and the Amphitheater Tract and all personal
property located thereon (including, without limitation, equipment,
inventory, furniture and fixtures) throughout the Term and shall
keep the same in good order and condition, undertake all necessary
maintenance and make all necessary repairs and replacements and
alterations thereto (it being understood and agreed that all
replacements must be of equal or better quality), interior or
exterior, structural and non-structural (including regular
structural inspection of the Amphitheater not less than every six
years) ordinary and extraordinary, in conjunction with the operation
of the Amphitheater, consistent with the operation of a first-class
amphitheater or as ordered by any Governmental Authority exercising
jurisdiction over the Amphitheater to comply with law, including but
not limited to, repairs to and/or replacements of the roof, exterior
walls, foundations, floors, stage rigging systems, mechanical
systems including the heating, ventilation and air conditioning
systems, electrical systems, sprinkler systems and plumbing
facilities and all personal property (including, without limitation,
equipment, inventory, furniture and fixtures). In the event any
repairs, replacements and/or alterations are made, the Tenant shall
be bound by the representations and warranties set forth this
Section 12.1. In addition, Tenant shall notify Landlord when it
proposes to discard any property as refuse and give Landlord the
opportunity to retrieve such property and process it in accordance
with its procedures or regulations regarding the discard of surplus
property or otherwise, to the extent Landlord determines that such
procedures or regulations are applicable. Upon expiration of this
Lease or its early termination for any reason, Tenant shall deliver
the Amphitheater to the Landlord in the same condition that the
Amphitheater was in on the Commencement Date, excepting ordinary
wear and tear.
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(2) The Tenant shall, at its sole cost and expense: (i)
maintain and repair the improvements upon the Amphitheater Tract
(including the lawns, shrubbery, walkways and back stage area); (ii)
maintain the signs located on the Amphitheater Tract; and (iii) keep
the Amphitheater Tract in a clean and sanitary condition, free of
rubbish, flammable or other objectionable materials.
(3) The Tenant agrees that the Landlord shall have the right
(but not the obligation) to enter upon the Amphitheater Tract at all
times during usual business hours, including Show Hours, for any
lawful purpose, including to observe the operations and condition of
the Amphitheater, provided, however, Landlord's access to (i) the
Amphitheater during Show Hours shall require an admission "pass" for
entry into the gate of the Amphitheater and shall be limited to
proper business purposes and (ii) backstage and other restricted
areas during the Show Hours shall be subject to artist imposed
restrictions and limited to no more than four (4) individuals. In
furtherance of the rights created in the immediately preceding
sentence, Tenant agrees that up to four (4) free passes shall be
made available to Landlord for each Tenant Event which may be used
for proper business purposes in furtherance of the authorization
granted in the immediately preceding sentence and which shall permit
backstage access subject to the restrictions contained in the
immediately preceding sentence. The Tenant further agrees that the
Landlord shall have such rights of access to the Amphitheater Tract
as may be reasonably necessary to inspect the Amphitheater and to
cause the proper maintenance, preservation and keeping in good
repair of the Amphitheater and to cause the proper maintenance,
preservation and keeping in good repair of the Amphitheater in the
event of a failure by the Tenant to perform its obligations
hereunder, which rights of access shall in no way imply any
obligation on the part of the Landlord.
(p) Covenant Against Waste. The Tenant covenants not to do or suffer
or to permit to exist any waste, damage, disfigurement or injury to the
Amphitheater.
(q) No Further Encumbrances. The Tenant shall not, directly or
indirectly, create, incur, assume or suffer to exist any mortgage, pledge,
lien, charge, encumbrance or claim on or with respect to the Amphitheater
Tract other than as permitted by the provisions of Section 10.1 hereof.
(r) National Anthem. Tenant shall cause the national anthem of the
United States of America to be sung or played prior to all Tenant Events.
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(s) Resolution of Operational Issues. In connection with operational
issues or conflicts that may arise from time to time between Tenant and
Landlord with regard to their respective rights to, and use of, the
Amphitheater, Tenant covenants and agrees that representatives of Pavilion
and Ardee along with representatives of Landlord shall participate in the
good faith resolution of such issues.
(t) Recycling. Tenant shall comply with all recycling requirements
of the County of Monmouth, New Jersey, the State of New Jersey and other
applicable Governmental Authorities.
(u) Gift Certificate; Invite Backs. Tenant shall honor all
previously issued gift certificates and "invite backs" of Landlord and
process them in the ordinary course of its operations. Landlord shall
reimburse Tenant at face value for all such redemptions of gift
certificates.
(v) Indemnification. Tenant, Pavilion and Ardee will reimburse,
indemnify, defend and hold Landlord harmless from and against:
(1) Any and all damages, losses, deficiencies, liabilities,
costs and expenses resulting from, relating to or arising out of any
false or misleading representation made by Tenant in this Lease or
the breach of any covenant or obligation of Tenant contained in this
Lease; and
(2) Any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation, reasonable
attorneys' fees) incident to any of the indemnified claims referred
to in clause (1) above or to the enforcement of the provisions of
this Section 12.1(v).
Section 12.2 Representations, Warranties and Covenants of Pavilion and
Ardee. Pavilion and Ardee do each hereby individually make unto Landlord the
following representations, warranties and covenants, to the extent each such
representation, warranty and covenant expressly applies to itself:
(a) Organization. Pavilion is a general partnership duly organized
under the laws of the State of Delaware, with full power and authority to
join in the execution of this Lease in its own capacity and to execute
this Lease in its capacity as the managing partner of Tenant, and no
joinder, consent or approval of any other person or entity (which has not
already been obtained) is required to properly authorize Pavilion to
execute and join this Lease. Ardee is a New Jersey corporation duly
organized, validly existing and in good standing under the laws of the
State of New Jersey, with full power and authority to join in the
execution of this Lease and no joinder, consent or approval of any other
person
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or entity (which has not already been obtained) is required to properly
authorize Ardee to join in the execution of this Lease.
(b) Ownership of Pavilion. Pavilion hereby represents and warrants
unto Landlord as follows:
(1) The sole general partners of Pavilion are SM/PACE, Inc.
("SMP"), a Texas corporation, and Amphitheater Entertainment
Partnership ("AEP"), a Delaware general partnership.
(2) SMP is an indirect wholly-owned subsidiary of PACE
Entertainment Corporation, a Texas corporation whose corporate
headquarters is located at 000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx,
Xxxxx 00000.
(3) The sole general partners of AEP are YM Corp. ("YMC"), a
Delaware corporation, the Westside Amphitheater Corporation ("WAC"),
an Arizona corporation, and Charlotte Amphitheater Corporation
("CAC"), a North Carolina corporation.
(4) YMC is a wholly-owned subsidiary of Sony Music
Entertainment Inc., a Delaware corporation whose corporate
headquarters are located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000.
(5) Both WAC and CAC are indirect wholly-owned subsidiaries of
Viacom Inc., a Delaware corporation whose corporate headquarters are
located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) Ownership of Ardee. Ardee represents and warrants unto Landlord
that (1) 100% of the issued and outstanding capital stock of Ardee is
owned by Delsener/Xxxxxx Enterprises, Inc., a Delaware corporation, and
100% of the the issued and outstanding capital stock of Delsener/Xxxxxx
Enterprises. Inc. is owned by SFX Broadcasting, Inc., a Delaware
corporation; and (2) except for the capital stock owned by Delsener/Xxxxxx
Enterprises, Inc., there are no outstanding rights, options, warrants,
conversion rights or agreements for the purchase or acquisition of any
capital stock of Ardee.
(d) No Conflicts. The execution of this Lease by Tenant will not
result in the breach of any of the terms, conditions or provisions of, or
conflict with or constitute a default in, or result in the creation of any
lien, charge or encumbrance upon any of the property or assets of Pavilion
or Ardee pursuant to any Indenture,
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mortgage, deed of trust, agreement, license or other instrument to which
such entity is a party or by which it may be bound, or violate any of the
provisions of its corporate charter, bylaws, partnership agreement, any
statute or any applicable order, writ, injunction, judgment or decree of
any court, or any order or other rule or governmental regulation
applicable to such entity, or require any consent, approval or
authorization of, or any declaration or filing with, any governmental
authority.
(e) Judgments; Litigation. There are no judgments presently
outstanding and unsatisfied against Pavilion or Ardee. Neither Pavilion
nor Ardee are currently involved in any litigation at law or in equity, or
any proceeding before any court, or by or before any governmental
administrative agency, federal, state or local board which, if adversely
determined, would have a material adverse effect on Tenant's ability to
fulfill its obligations hereunder.
(f) Financial Information. All of the financial information, reports
and data previously provided to Landlord by either Ardee or Pavilion
concerning or relating to the financial performance or operations of
Pavilion or Ardee are complete, true, accurate and correct and do not omit
a material fact necessary to make the information and data contained
therein not misleading.
(g) Changes in Condition. Since October 31, 1995, there has been no
material adverse change in the business, operations, assets or
liabilities, or in the condition, financial or otherwise, of Pavilion or
Ardee.
(h) Taxes. Pavilion and Ardee have each filed (and shall file
throughout the Term) all tax returns required by law to be filed by it,
and have paid or made adequate provision for the payment (and shall pay or
make adequate provision for the payment throughout the Term) of all taxes
which have become (or will become during the Term) due and payable
pursuant to said returns and of all assessments or other governmental
charges which have been (or will be during the Term) levied upon it or
upon its properties, assets, income or franchises, and which are (or will
be during the Term) due and payable.
(i) Financial Reporting. Upon the request of Landlord, Pavilion
shall, within one hundred twenty days (120) days after the end of each
fiscal year of Pavilion, cause a senior financial representative of
Pavilion to come to the offices and headquarters of Landlord for the
purposes of (i) showing to representatives of the Landlord the audited
financial statements of Pavilion (including a balance sheet, statement of
income, statement of cash flows and statement of partners' equity) as at
the end of such fiscal year and (ii) discussing with Landlord the
financial condition and prospects of Pavilion.
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(j) Existence. Pavilion and Ardee will at all times preserve and
keep in full force and effect its existence as a partnership or
corporation, as applicable.
(k) Compliance with Law. Pavilion and Ardee will each comply with
all laws, ordinances or governmental rules and regulations to which it is
subject (including, without limitation all environmental protection laws)
and obtain and keep in full force and effect any licenses, permits,
franchises, agreements or governmental authorizations or approvals
necessary to the ownership, acquisition or disposition of its properties
or the conduct of its business or to comply with the operating and
reporting requirements of any Governmental Authority, except where the
failure to do any of the foregoing does not, and could not reasonably be
expected to have, a material adverse effect on the business, operations,
properties, financial condition or prospects of the appropriate entity.
(l) [Intentionally Omitted].
(m) Indemnification by Pavilion. Pavilion will reimburse, indemnify,
defend and hold Landlord harmless from and against:
(1) any and all damages, losses, deficiencies, liabilities,
costs and expenses resulting from, relating to or arising out of any
false or misleading representation made by Pavilion in this Lease or
the breach of any covenant or obligation of Pavilion contained in
this Lease.
(2) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation, reasonable
attorneys' fees) incident to any of the indemnified claims referred
to in clause (1) above or to the enforcement of the provisions of
this Section 12.2(m).
(n) Indemnification by Ardee. Ardee will reimburse, indemnify,
defend and hold Landlord harmless from and against:
(1) any and all damages, losses, deficiencies, liabilities,
costs and expenses resulting from, relating to or arising out of any
false or misleading representation made by Ardee in this Lease or
the breach of any covenant or obligation of Ardee contained in this
Lease; and
(2) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation, reasonable
attorneys' fees) incident to any of the indemnified claims referred
to in clause (1) above or to the enforcement of the provisions of
this Section 12.2(n).
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ARTICLE 13
DEFAULT AND REMEDIES
Section 13.1 Event of Tenant Default. An "Event of Tenant Default" for
purposes of this Lease shall be deemed to have occurred hereunder if (i) any
Rent payable to Landlord under this Lease remains unpaid on the date upon which
the same is due to be paid and continues to be unpaid for ten (10) days after
Tenant has been given a written notice specifying that such Rent remains unpaid,
(ii) Tenant becomes Insolvent, (iii) the restriction contained in Section
10.1(c) hereof is violated or (iv) Tenant fails to maintain any policy of
insurance required pursuant to the provisions of Article 9 of this Lease and
such failure continues for fifteen (15) days after Tenant has been given a
written notice specifying the policy of insurance so required which is not being
maintained.
Section 13.2 Landlord Remedies. If an Event of Tenant Default occurs, then
Landlord, at any time thereafter prior to the curing thereof shall have, as its
sole and exclusive remedy, the right to do any one or more of the following:
(a) Landlord may terminate this Lease by giving Tenant written
notice thereof, in which event this Lease and the leasehold estate hereby
created and all interest of Tenant and all parties claiming by, through,
or under Tenant shall automatically terminate upon the effective date of
such notice with the same force and effect and to the same extent as if
the effective date of such notice were the day originally fixed in Article
3 hereof for the expiration of the Term;
(b) Landlord and its agents or representatives shall have the right,
promptly after giving Tenant fifteen (15) days prior written notice, to
reenter and take possession of the Amphitheater, the Amphitheater Tract
and the Parking Tracts and remove all persons and property therefrom;
(c) Landlord may file such lawsuits against Tenant in any court of
competent jurisdiction as may be necessary to obtain a judgment against
Tenant for payment of any unpaid Rent through the date of termination
hereof and for parent of all costs and expenses (including reasonable
attorneys' fees) expended or incurred by Landlord in connection with
exercising its remedies hereunder, and all such Rent, costs and expenses
shall accrue interest at the Permitted Rate from the date such Rent was
due or the date such costs and expenses were incurred until such amounts
are paid in full; and
(d) Landlord may file such lawsuits against Tenant as may be
necessary to pursue Landlord's rights and remedies provided by law or in
equity against Tenant for damages or mandamus, and claims for reliance
damages, such as lost revenues and recovery for expenditures made by
Landlord pursuant to this Lease
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(including capital expenses related to the Access Improvements) by reason
of the existence of such Event of Tenant Default.
All of Landlord's rights and remedies listed above may be exercised concurrently
or consecutively at Landlord's option. All costs and expenses incurred by
Landlord in the exercise of its remedies set forth above (including attorneys'
fees) shall accrue interest at the Permitted Rate from the date incurred until
such amounts are paid in full. Tenant shall be required to reimburse all such
expenses.
Section 13.3 Failure to Perform other Obligations by Tenant. If any of the
Obligations of Tenant (other than Obligations to pay Rent and to comply with the
provisions of Section 10.1(c) and Article 9 hereof) are not performed and
discharged as and when called for, and (a) the failure, refusal or neglect to
perform and discharge such Obligation continues for a period of thirty (30) days
after Tenant has been given notice thereof or (b) if by reason of the nature of
such Obligation the same cannot be remedied within thirty (30) days, (i)
performance and discharge of such Obligation is not commenced within such thirty
(30) day period, (ii) the performance and discharge of such Obligation is not
diligently and continuously prosecuted or (iii) such Obligation is not fully
performed and discharged within ninety (90) days after Tenant has been given
notice thereof, then a "Non-Termination Event of Default" shall be deemed to
have occurred for all purposes of this Lease. Upon the occurrence of a
Non-Termination Event of Default, Landlord shall have, as its sole and exclusive
remedy, the right to do any one or more of the following:
(a) File such lawsuits against Tenant as may be necessary to pursue
Landlord's rights and remedies provided by law or in equity against Tenant
for damages or mandamus and claims for damages by reason of the existence
of such Non-Termination Event of Default;
(b) Perform the Obligations of Tenant which gave rise to the
existence of such Non-Termination Event of Default, in which event Tenant
shall be obligated to reimburse to Landlord all expenses incurred by
Landlord as the result of Landlord's performance of the Obligations of
Tenant together with interest thereon at the Permitted Rate from the date
of expenditure; and
(c) Attempt to enforce the Obligations of Tenant under this Lease by
an action for specific performance;
provided, however, in no event shall Landlord have, and Landlord hereby
specifically waives, the right to terminate or seek termination of this Lease
and the right to terminate or seek termination of Tenant's right to possession
of the Amphitheater upon the occurrence of a Non-Termination Event of Default.
It being specifically agreed and acknowledged that Landlord may only terminate
this Lease pursuant to the right created in Section 13.2(a) following the
occurrence of an Event of Tenant Default. All of
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Landlord's rights and remedies listed above may be exercised concurrently or
consecutively at Landlord's option. All costs and expenses incurred by Landlord
in the exercise of its remedies set forth above (including attorneys' fees)
shall accrue interest at the Permitted Rate from the date incurred until such
amounts are paid in full. Tenant shall be required to reimburse all such
expenses to Landlord.
Section 13.4 Event of Landlord Default. If any of the Obligations of
Landlord is not performed and discharged as and when called for and (a) the
failure, refusal or neglect to perform and discharge such Obligation continues
for a period of thirty (30) days after Landlord has been given notice thereof or
(ii) if by reason of the nature of such Obligation the same cannot be remedied
within thirty (30) days, (i) performance and discharge of such Obligation is not
commenced within such thirty (30) day period, (ii) the performance and discharge
of such Obligation is not diligently and continuously prosecuted or (iii) such
Obligation is not fully performed and discharged within ninety (90) days after
Landlord has been given notice thereof; then an "Event of Landlord Default"
shall be deemed to have occurred for all purposes of this Lease.
Section 13.5 Tenant's Remedies. If an Event of Landlord Default occurs,
then Tenant, at any time thereafter prior to the curing thereof shall have, as
its sole and exclusive remedy, the right to do any one or more of the following:
(a) file such lawsuits against Landlord as may be necessary to
pursue Tenant's rights and remedies provided by law or in equity against
Landlord for damages or mandamus, and claims for reliance damages, such as
lost revenues and recovery of expenditures made by Tenant pursuant to this
Lease (including capital expenses related to the Renovation Work), by
reason of the existence of such Event of Landlord Default;
(b) perform the Obligations of Landlord which gave rise to the
existence of such Event of Landlord Default, in which event Landlord shall
be obligated to reimburse to Tenant all expenses (including reasonable
attorneys' fees) incurred by Tenant as the result of Tenant's performance
of the Obligations of Landlord together with interest thereon at the
Permitted Rate from the date of expenditure; and
(c) attempt to enforce the Obligations of Landlord under this Lease
by an action for a specific performance;
provided, however, in no event shall Tenant have, and Tenant hereby specifically
waives, the right to terminate or seek termination of this Lease upon the
occurrence of an Event of Landlord Default. All of Tenant's rights and remedies
listed above may be exercised concurrently or consecutively at Tenant's option.
Tenant shall not have, and hereby expressly waives, the right to offset against
future Rent due to Landlord for recovery of any amounts expended by Tenant
pursuant to clause (b) above.
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ARTICLE 14
CASUALTY AND CONDEMNATION
Section 14.1 Casualty and Reconstruction. If the Amphitheater should ever
be wholly or partially destroyed or damaged by fire or any other casualty, then
the following provisions shall apply:
(a) If (i) the Tenant has in place at the time of such fire or other
casualty a policy of insurance which satisfies the requirements of Section
9.1 hereof (without regard to the application of the provisions of Section
9.8 hereof) and (ii) there is no exclusion or exception to coverage under
such policy with respect to such fire or other casualty, then Landlord
shall promptly repair, replace, restore and reconstruct the Amphitheater
in substantially the form in which it existed prior to such casualty, with
at least as good workmanship and quality as the improvements and property
being repaired or replaced.
(b) If (i) the Tenant does not have in place at the time of such
fire or other casualty a policy of insurance which satisfies the
requirements of Section 9.1 hereof (without regard to the application of
the provisions of Section 9.8 hereof) and (ii) the available insurance
proceeds under the policy of insurance maintained by Tenant pursuant to
Section 9.1 hereof (if any) are less than the full replacement cost of the
improvements and property so destroyed or damaged, then (x) Landlord shall
not be obligated to repair, replace, restore and reconstruct the
Amphitheater in substantially the form in which it existed prior to such
fire or other casualty and (y) this Lease shall terminate effective as of
the date of such fire or other casualty and neither party shall have any
further rights, benefits, interests, liabilities, obligations or
responsibilities hereunder unless and except Tenant agrees to contribute
towards the cost of such repair, replacement, restoration and
reconstruction an amount equal to the difference between the available
insurance proceeds and the cost of any such repair, replacement,
restoration and reconstruction work.
(c) If there is an exclusion or exception to coverage under the
policy of insurance maintained by Tenant pursuant to the requirements of
Section 9.1 hereof with respect to such fire or other casualty, then,
unless Landlord or Tenant voluntarily elects by notice to the other within
sixty (60) days after notice is received that such exclusion or exception
to coverage applies, to repair, replace, restore and reconstruct the
Amphitheater in substantially the form in which it existed prior to such
fire or other casualty at its sole cost and expense, this Lease shall
terminate effective as of the date of such fire or other casualty and
neither party shall have any further rights, benefits, interests,
liabilities, obligations or responsibilities hereunder.
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(d) In Furtherance of the foregoing provisions, Tenant does hereby
assign, transfer and deliver unto Landlord all insurance proceeds which
may otherwise be available to Tenant pursuant to any casualty or property
insurance maintained from time to time by Tenant in respect of the
Amphitheater.
(e) If, as a result of any such destruction or damage to the
Amphitheater by reason of fire or any other casualty, Tenant should lose
the ability to use the Amphitheater for any period of time during its
normal period of operation, then, unless this Lease is terminated pursuant
to clause (b) or (c) of this Section 14.1, the Term of this Lease shall be
extended for an additional number of Lease Years equal to the number of
Lease Years which Tenant so lost the ability to use the Amphitheater as a
result of such fire or other casualty.
Section 14.2 Total and Partial Taking. If at any time during the Term, the
whole or substantially all of the Entire Tract shall be taken for or under
threat of public or quasi-public purposes by any lawful power or authority by
the exercise or the threatened exercise of the right of condemnation or eminent
domain, or if a portion of the Entire Tract shall be so taken so as to render
the continued operation of the Amphitheater for the purposes for which it was
used immediately prior to such taking impracticable, then this Lease and the
Term shall terminate on the date of such taking and all Rent which Tenant shall
have paid or become obligated to pay pursuant to the terms hereof shall be
prorated and apportioned as of and paid to the date of such taking. In the event
of such a taking of only a portion of the Entire Tract which does not render
impracticable the continued operation of the Amphitheater for the purpose for
which it was used immediately prior to such taking, then this Lease shall
terminate on the date of such taking only as to the portion of the Entire Tract
so taken, and shall continue as to the part of the Entire Tract not so taken;
and the Rent provided for herein payable by Tenant to Landlord shall not be
reduced as a result of such taking. Neither Landlord nor Tenant shall instigate
or encourage any condemnation or similar proceeding affecting all or any portion
of the Entire Tract.
Section 14.3 Temporary Taking. If the whole or any portion of the
Amphitheater Tract or Parking Tracts shall be taken for temporary use or
occupancy, the Term shall not be reduced or affected and Tenant shall continue
to pay the Rent in full. Except to the extent Tenant is prevented from so doing
pursuant to the terms of the order of the condemning authority, Tenant shall
continue to perform and observe all of the other covenants, agreements, terms,
and provisions of this Lease. In the event of any temporary taking, Tenant shall
be entitled to receive the entire amount of any award therefor unless the period
of temporary use or occupancy shall extend beyond the expiration of the Term, in
which case such award, after payment to Landlord therefrom for the estimated
cost of restoration of the Amphitheater to the extent that any such award is
intended to compensate for damage to the Amphitheater, shall be apportioned
between Tenant and Landlord as of the day of expiration of the Term in the same
ratio
97
that the part of the entire period for such compensation is made falling before
the day of expiration and that part falling after, bear to such entire period.
Section 14.4 No Waiver. Nothing contained herein shall be construed as a
waiver by Tenant or Landlord of any claim which either of them may have against
the condemnor for taking all or any part of the Entire Tract, and Tenant and
Landlord shall each have the right to appear and file its claim for damages in
any such condemnation proceedings, to participate in any and all hearings,
trials and appeals thereon, to be represented by counsel of its choice therein,
and to receive the share of any such awards so adjudicated to be due it.
ARTICLE 15
MISCELLANEOUS
Section 15.1 Notices. Any notice provided for or permitted to be given
hereunder must 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 following addresses and
facsimile numbers or to such other or additional addresses or facsimile number
as any party shall hereafter specify by written notice to the other parties:
Landlord: New Jersey Highway Authority
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
ATTN: Xxxxx X. Xxxxxxxx, III, Executive Director
FACSIMILE: (000) 000-0000
and
DeCotiis, Xxxxxxxxxxx and Xxxxx
00 Xxxx Xxxxx Xxxxxx
Xxx Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
ATTN: Xx. Xxxxx X. Xxxxx
FACSIMILE: (000) 000-0000
98
Tenant: Pavilion Partners
c/o SM/PACE, Inc.
000 Xxxx Xxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
ATTN: Xx. Xxxxxx X. Xxxxx
FACSIMILE: (000) 000-0000
AND
Exit 116 Revisited, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxx Xxxxxxxx
FACSIMILE: (000) 000-0000
AND
Sony Music Entertainment Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Xx. Xxxxx X. Xxxxxxx
FACSIMILE: (000) 000-0000
AND
Sony Music Entertainment Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Xx. Xxxxxx Xxxx
FACSIMILE: (000) 0000000
AND
Sony Corporation
Nine Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xx. Xxxxxxx X. Xxxxx
FACSIMILE: (000)000-0000
AND
99
Blockbuster Entertainment Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
ATTN: Xx. Xxxx X. Xxxxxxxx
FACSIMILE: (000) 000-0000
AND
Viacom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
ATTN: Treasurer
AND
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
ATTN: Xx. Xxxxxxx X. Xxxxxx
AND
Xxxxxxxx Xxxx & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
ATTN: Xx. Xxxx X. Xxxx
AND
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
FACSIMILE: (000) 000-0000
All notices shall be deemed effective when received or, if rejected, on the date
of rejection thereof.
Section 15.2 Modifications and Non-Waiver. No variations, modifications,
or changes herein or hereof shall be binding upon any party hereto unless set
forth in a writing executed by it or by a duly authorized officer or agent. No
waiver by either party of any breach or default of any term, condition, or
provision hereof, including without limitation the acceptance by Landlord of any
Rent at any time or in any manner other than as herein provided, shall be deemed
a waiver of any breaches or defaults of
100
any kind, character, or description under any circumstance. No waiver of any
breach or default of any term, condition, or provision hereof shall be implied
from any action of any party, and any such waiver, to be effective, shall be set
out in a written instrument signed by the waiving party.
Section 15.3 New Jersey Law. This Lease shall be construed and enforced in
accordance with the laws of the State of New Jersey. Any arbitration conducted
hereunder and any arbitration award issued pursuant hereto shall only be
enforced, vacated, amended or remanded in accordance with the provisions of the
New Jersey Arbitration Act (N.J.S.A. 2A:24-1, et seq.).
Section 15.4 Unavoidable Delay. If either party to this Lease shall be
delayed or prevented from the performance of any act required by this Agreement
by reason of acts of God, strikes, lockouts, labor troubles, unforeseeable
restrictive governmental laws or regulations, acts of war or other similar
causes, without fault and beyond the reasonable control of the party obligated,
performance of such act shall be excused for the period of the delay; and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, nothing in this
section shall excuse Tenant from the prompt payment of any Rent payable pursuant
to the provisions of this Lease.
Section 15.5 Severability. If any provision of this Lease or the
application thereof to any person or circumstance shall, at any time or to any
extent, be invalid or unenforceable, and the basis of the bargain between the
parties hereto is not destroyed or rendered ineffective thereby, the remainder
of this Lease, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
Section 15.6 Attorneys Fees. If litigation is ever instituted by either
party hereto to enforce, or to seek damages for the breach of, any provision
hereof, the prevailing party therein shall be promptly reimbursed by the other
party for all attorneys' fees reasonably incurred by the prevailing party.
Section 15.7 Surrender of Premises; Holding Over. Upon termination or the
expiration of this Lease, Tenant shall peaceably quit, deliver up, and surrender
the Amphitheater, the Amphitheater Tract and the Parking Tracts to Landlord free
of all claims and encumbrances other than the Permitted Encumbrances. Upon such
termination or expiration, Landlord may, except as otherwise provided herein,
without further notice, enter upon, reenter, possess, and repossess itself of
the Amphitheater by force, summary proceedings, ejectment, or otherwise, and may
dispossess and remove Tenant from the Amphitheater, the Amphitheater Tract and
the Parking Tracts and may have, hold, and enjoy the Amphitheater, the
Amphitheater Tract and the Parking Tracts and all rental and other income
therefrom, free of any claim by Tenant with respect thereto. If Tenant does not
surrender possession of the Amphitheater, the Amphitheater
101
Tract or the Parking Tracts at the end of the Term, such action shall not extend
the Term, Tenant shall be a tenant at sufferance, and during such time of
occupancy Tenant shall pay to Landlord, as damages, an amount equal to one
hundred fifty percent (150%) of the amount of Rent that was being paid
immediately prior to the end of the Term. Landlord shall not be deemed to have
accepted a surrender of the Amphitheater by Tenant, or to have extended the
Term, other than by execution of a written agreement specifically so stating.
Section 15.8 Relation of Parties. It is the intention of the parties to
hereby create the relationship of landlord and tenant, and no other relationship
whatsoever is hereby created. Nothing in this Lease shall be construed to make
the parties hereto partners or joint venturers or to render either party hereto
liable for any obligation of the other.
Section 15.9 Non-Merger. Notwithstanding the fact that fee title in the
tracts or parcels of land described in Article I hereof and the leasehold estate
hereby created may, at any time, be held by the same party, there shall be no
merger of the leasehold estate hereby created unless the owner thereof executes
and files for record in the Office of the County Clerk of Monmouth County, New
Jersey a document expressly providing for the merger of such estates.
Section 15.10 Entireties. This Lease constitutes the entire agreement of
the parties hereto with respect to its subject matter, and all prior agreements
with respect thereto are merged herein.
Section 15.11 Successors and Assigns. This Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, and permitted successors and assigns. Whenever a reference is
made herein to either party, such reference shall include the party's heirs,
legal representatives, and permitted successors and assigns.
Section 15.12 Memorandum of Lease Agreement. Concurrently with the
execution of this Lease, at the election of Tenant or at such later time as
Tenant may request. Landlord shall execute and deliver to Tenant, for recording
in the Real Property Records of Monmouth County, New Jersey, a Memorandum of
this Lease in the form attached hereto as Exhibit "L." If such Memorandum is
recorded pursuant to the foregoing provisions, and if for any reason Tenant's
rights and obligations under this Lease are terminated, then Tenant shall
execute such documents (including recordable documents) as may be reasonably
requested by Landlord for purposes of establishing that this Lease is no longer
of any force or effect.
Section 15.13 Arbitration for Small Financial Disputes.
102
(a) Binding Arbitration Procedure. If (i) either Landlord or Tenant
("Claiming Party") should ever assert or claim that the other party hereto
("Defending Party") owes a monetary sum of $500,000 or less to the
Claiming Party pursuant to any of the provisions of this Lease ("Small
Monetary Claim") and (ii) the Claiming Party and the Defending Party are
unable to resolve and dispose of such Small Monetary Claim by mutual
agreement, then such Small Monetary Claim shall be subject to resolution
pursuant to a binding arbitration procedure described as follows:
(1) An arbitrator shall be selected in accordance with the
provisions of clause (b) of this Section 15.13 as soon as possible
after the Claiming Party has given notice to the Defending Party
that such Small Monetary Claim must be resolved pursuant to the
provisions of this Section 15.13(a).
(2) Within thirty (30) days after the selection of the
arbitrator referred to in clause (1) above, each of the parties
hereto shall submit to the arbitrator (with copies to the other
party) a written document ("Position Paper") which contains (i) the
specific amount (if any) that such party believes is owed by one
party to the other in connection with such Small Monetary Claim
(after taking into account any counterclaims permitted pursuant to
the next succeeding sentence) and (ii) such written information as
may be necessary to support such party's determination of the amount
(if any) owed by one party to the other in connection with such
Small Monetary Claim. The Defending Party may only assert
counterclaims for offsetting amounts with the arbitrator in the
event that such counterclaims arise out of the same events and
circumstances out of which such Small Monetary Claim arises. If the
Defending Party asserts any counterclaims in its Position Paper,
then the Claiming Party shall have an additional fifteen (15) days
to file a supplemental Position Paper containing only information
relevant to such counterclaims.
(3) Within sixty (60) days after the selection of the
arbitrator referred to in clause (1) above, a meeting shall be
convened in a conference room in the hotel located at the Newark,
New Jersey Airport between and among the arbitrator and
representatives of the parties at which meeting each party shall be
given an opportunity to present arguments to the arbitrator in favor
of such party's position in connection with such Small Monetary
Claim and any counterclaims property raised in the Defending Party's
Position Paper.
(4) Within thirty (30) days after the holding of such meeting,
the arbitrator shall be required to determine which party's
calculation of the amount owed in connection with such Small
Monetary Claim is, in the
103
unfettered discretion of the arbitrator, more correct. The
arbitrator shall be required to select between the two proposed
amounts presented in the Position Papers and shall not, without the
prior consent of both parties, make any compromises between the two
competing positions. The decision of the arbitrator shall be final
and binding and each party agrees (subject to the rights and
recourses expressly provided for in the New Jersey Arbitration Act)
not to institute any litigation concerning the decision of the
arbitrator (except that errors of law shall be subject to appeal).
(5) All costs paid or incurred in connection with the process
of determining the amount owed in connection with such Small
Monetary Claim pursuant to the provisions of this Section 15.13(a)
(including the (i) the fees payable to the arbitrator and (ii) all
attorneys' fees incurred by both parties in connection with the
arbitration proceeding) shall be paid by the non-prevailing party.
To avoid ambiguity or uncertainty, the provisions of this Section 15.13
shall only apply to monetary disputes in which the amount claimed is
$500,000 or less. Monetary disputes involving larger sums shall be subject
to resolution only pursuant to judicial proceedings.
(b) Selection of Arbitrator. The selection of an arbitrator required
pursuant to any provision of this Section 15.13 shall be made in
accordance with the following provisions:
(1) Within fifteen (15) days after a notice is given by one
party to the other that an arbitrator will need to be selected
pursuant to this Section 15.13, the parties shall select a mutually
acceptable individual to serve as the "Neutral Selector" hereunder.
If (i) that individual is unwilling or unable to serve as the
Neutral Selector hereunder for whatever reason or (ii) a mutually
acceptable person cannot be agreed upon within such fifteen (15) day
period, then the American Arbitration Association in Somerset, New
Jersey will serve as the Neutral Selector.
(2) The Neutral Selector shall, as soon as is reasonably
possible, provide to each of the parties an identical list of ten
names, numbered 1 through 10, of individuals who would be willing to
serve as an arbitrator hereunder and who meet the Applicable
Criteria (herein defined). The list shall include each individual's
address, phone number and employer. The parties may contact the
individuals listed solely for the purpose of investigating their
respective employment history and business experience.
(3) Within fifteen (15) days after receipt of the list of
names referred in clause (b) above, each party shall be required to
return to the
104
Neutral Selector such list of names with no more than five of the
names deleted. The highest name remaining on the two lists returned
by the parties which was not deleted on either list shall be the
arbitrator. If there is no name which was not deleted on both lists,
then the Neutral Selector shall issue a new list of ten other names
in the same manner as before and the procedure shall be repeated
until an arbitrator is chosen.
(4) No arbitrator selected in accordance with the foregoing
provisions shall be qualified to serve as an arbitrator hereunder if
it is subsequently determined that such individual is, or was within
the past five (5) years, (i) an officer, employee or director of
either of the parties or any Affiliate of the parties or (ii) a
party, directly or indirectly, as a principal, shareholder or senior
executive officer of any entity, to any contract or arrangement with
either party or any Affiliate of either party in which the aggregate
annual compensation or other amounts payable thereunder exceeded
$300,000.00.
(5) Any fees or costs payable to the Neutral Selector and the
arbitrator selected in accordance with the foregoing provisions
shall be paid by the non-prevailing party in the arbitration
proceeding or as may otherwise be agreed between the parties.
(6) As used herein, the term "Applicable Criteria" shall mean
the following:
(i) An individual who has been an active,
practicing certified public accountant with substantial
experience in the entertainment industry over the past 15
years, at least 10 of which shall have been with a "big 6"
accounting firm (or their predecessors); or
(ii) An individual who has been an active,
practicing attorney for no less than fifteen years with a
private law firm consisting of fifteen lawyers or more in the
state of New Jersey.
Section 15.14. [Intentionally Deleted].
Section 15.15. Brokerage Indemnity. Landlord hereby agrees to indemnify
and hold harmless Tenant and Tenant hereby agrees to indemnify and hold harmless
Landlord, against and in respect of any claims for brokerage, commission,
finders or other fees relative to this Lease and the transactions set forth
herein based in any way on agreements, arrangements or understandings made by
the indemnifying party with any other party or parties.
105
Section 15.16. Business Day. If the date on which any payment or other
action hereunder is scheduled or required to occur as a weekend or holiday
recognized by the State of New Jersey. such payment or other action may occur on
the next business day; provided, however, that interest at the Permitted Rate
payable in respect of any payment shall accrue from the due date through the
date on which such payment is made.
Section 15.17. Interim Management Agreement. Upon execution of this Lease,
(i) Landlord shall comply with the obligation imposed upon it pursuant to the
provisions of Section 4(a)(A) of that certain Interim Management Agreement
("IMA") dated January 15, 1996 and entered into by and among Pavilion, Ardee
Festivals, NJ, Inc. and Landlord, as the same may have been amended, modified or
extended from time to time and (ii) Tenant shall fulfill, discharge and comply
with the obligations imposed upon Pavilion and Ardee Festivals, N.J., Inc.
pursuant to the provisions of Section 4(a)(B) and (C) of the IMA.
Notwithstanding anything to the contrary contained in the IMA, Landlord and
Tenant hereby agree that the total amount required to be reimbursed to Landlord
by Tenant pursuant to Section 4(a)(C)(i) of the IMA for Landlord's overhead
costs shall be $166,349.72, which amount has been previously paid by Tenant to
Landlord.
Section 15.18. Survival of Representations, Warranties and Covenants. The
representations and warranties contained in this Lease shall survive the
execution and performance of this Lease. In addition, all covenants contained in
this Lease shall survive the execution and performance of this Lease in
accordance with their respective terms.
[The remainder of this page is intentionally blank.)
106
EXECUTED this 10th day of January, 1997, but made effective May 1, 1996.
NEW JERSEY HIGHWAY AUTHORITY
By: /s/ Xxxxx X. Xxxxxxxx III
-------------------------------------
Name: Xxxxx X. Xxxxxxxx III
Title: Executive Director
"LANDLORD"
GSAC PARTNERS, a Delaware partnership
By: PAVILION PARTNERS, its managing
general partner
By: SM/PACE, Inc., its general partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
By: EXIT 116 REVISITED, INC., its general
partner
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: President
"TENANT"
For purposes of the representations, warranties and covenants undertaken in
Sections 12.1 and 12.2 of this Lease, each of the undersigned hereby join in the
execution of this Lease to indicate their agreement to be bound by the
provisions thereof:
PAVILION PARTNERS EXIT 116 REVISITED, INC.
By: SM/PACE, Inc.
By: /s/ Xxxxx Xxxxxx
By: /s/ Xxxxxx X. Xxxxxxx -------------------------------------
-------------------------- Name: Xxxxx Xxxxxx
Name: Xxxxxx X. Xxxxxxx Title: President
Title: Treasurer
