PARTNERSHIP AGREEMENT
FOR
CORAL SKY AMPHITHEATER PARTNERSHIP
This Partnership Agreement ("Agreement") is made and entered into this
11th day of June, 1997 but made effective as of the 15th day of May, 1996, by
and between PAVILION PARTNERS, a Delaware general partnership, and CDC/SMT,
INC., a Florida corporation. For and in consideration of the mutual covenants
herein contained, the parties to this Agreement hereby form and create a general
partnership, under and pursuant to the Partnership Act for the purposes and upon
the terms, provisions, and conditions as hereinafter set forth:
ARTICLE I
Definitions
Capitalized terms used in this Agreement shall have the respective
meanings indicated in the glossary of terms attached hereto as Exhibit "A".
ARTICLE II
Name of Business; Offices
2.01 Partnership Name. The name of the Partnership shall be Coral Sky
Amphitheater Partnership. In addition to the foregoing name, the activities and
business of the Partnership may be conducted, in the Managing Partner's
reasonable discretion, under such name or names as may be designated from time
to time by the Managing Partner. The Partners shall execute and file such
certificates, if any, as are required by the provisions of any assumed name law
or statute in any jurisdiction in which the Partnership conducts business, as
may be required to reflect the Partnership's operation under such names.
2.02 Partnership Offices. The principal place of business of the
Partnership shall be at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. The
Partnership shall also maintain an office at the Amphitheater.
ARTICLE III
Purpose and Power of the Partnership
3.01 Purposes. The character and purposes of the specific business to be
conducted by the Partnership are (i) to lease, operate, use and maintain the
Amphitheater and (ii) to perform
and fulfill all obligations and duties of the "Tenant" under the terms and
provisions contained in the Lease Agreement and (iii) to take any and all other
actions which may be incidental to or otherwise reasonably related to the
foregoing business and purposes.
3.02 Powers. The Partnership shall have the power, in fulfilling the
purposes set forth in Section 3.01, to conduct any business or take any action
which is lawful and which is not prohibited by the Partnership Act.
ARTICLE IV
Term of Partnership
The Partnership shall begin on the date first set forth above and shall
continue for a term of sixty (60) years from such date unless sooner dissolved
pursuant to Section 17.01 or by operation of law.
ARTICLE V
Contributions to Partnership
5.01 Pavilion's Initial Contribution.
(a) Upon execution of this Agreement, Pavilion shall convey, and
does hereby convey, to the Partnership all of its rights, titles and
interests in and to the Amphitheater including, without limitation, the
leasehold estate created pursuant to the Lease Agreement and all of the
rights, privileges and appurtenances appertaining thereto, subject to the
following provisions:
(1) The conveyance of Pavilion's interest in and to the
Amphitheater is being made subject to the following provisions:
(A) Except for the express representations set forth
below, the conveyance of the Amphitheater to the Partnership
is being made on an "AS IS, WHERE IS" basis with no
representations or warranties from Pavilion of any kind, type
or nature, express or implied.
(B) Subject to clause (1)(C), the conveyance of the
Amphitheater to the Partnership is being made subject to (i)
all of the Permitted Encumbrances and (ii) any claims of third
parties, known or unknown, which may have arisen as a part of
the process of developing and constructing the Amphitheater.
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(C) Notwithstanding the foregoing, Pavilion represents
and warrants to Cellar Door that it has not previously
executed or entered into a written agreement with any other
party granting an ownership or possessory interest in the
Amphitheater, other than (i) the sublease rights granted to
Fine Host Corporation for the purpose of operating a food and
beverage concession business at the Amphitheater, (ii) event
rentals in the ordinary course of business, (iii) the creation
of certain signage rights in favor of sponsors in the ordinary
course of business and (iv) similar operational agreements
made in the ordinary course of business.
(2) In regard to the foregoing, Cellar Door does hereby
acknowledge, stipulate and agree that it (A) has been given an
opportunity, in regard to the development and construction of the
Amphitheater, to review, at the expense of the Partnership, the
files and records of Pavilion to its satisfaction and has been
provided copies of all documents, instruments and records which it
has requested from Pavilion, (B) is a sophisticated and experienced
owner, operator and manager of entertainment facilities similar to
the Amphitheater and therefore capable of assessing the risks and
benefits of making this investment in the Partnership and (C) is
willing to accept its Percentage Interest of all of the risks, known
and unknown, which are or may be attendant to the development,
construction and subsequent operation of the Amphitheater.
(3) In connection with the conveyance of Pavilion's interest
in and to the Amphitheater to the Partnership, Pavilion does hereby
represent and warrant as follows:
(A) To the Current Actual Knowledge of Pavilion, there
are no Hazardous Substances which have been disposed of, or
otherwise released, on or under the real property on which the
Amphitheater is located.
(B) To the Current Actual Knowledge of Pavilion, neither
Pavilion 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 Pavilion's ownership interest in and to the
Amphitheater.
(C) To the Current Actual Knowledge of Pavilion, the
terms and provisions of this Agreement will not (i) 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 all or any
portion of the Amphitheater pursuant to, any indenture,
mortgage, deed of trust, agreement, license or other
instrument to which Pavilion is a party or by which it may be
bound, (ii) violate any of the provisions of its
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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
Pavilion or (iii) require any consent, approval or
authorization of, or any declaration or filing with, any
governmental authority.
(D) Except for those contracts listed on Exhibit "D"
attached hereto, to the Current Actual Knowledge of Pavilion
there are no material contracts or agreements (other than
event related agreements and contracts) with a term greater
than one (1) year which relate to or affect the ownership,
operation, use, maintenance or other exploitation of the
Amphitheater.
Upon execution hereof, Pavilion shall (i) execute such further deeds,
bills of sale, assignment of leases and other conveyancing documents as
may be required by Cellar Door to more fully effect and complete the
assignment made pursuant to the provisions of this Section 5.01(a) in a
manner consistent with the provisions contained herein and (ii) acquire,
at the cost of the Partnership, a new Leasehold Owner's Title Policy in
the name of the Partnership in substantially the same form as the Title
Policy attached hereto as Exhibit "E".
(b) It is hereby specifically agreed by and between the Partners
that the fair market value of the assets being conveyed by Pavilion to the
Partnership pursuant to Section 5.01(a) is equal to $10,858,577
("Pavilion's Gross Contribution Amount"), being calculated as (i)
$11,458,577 (the Total Project Cost) minus (ii) $600,000 (the portion of
the Total Project Cost attributable to the food service equipment
purchased by the Amphitheater's food and beverage concessionaire).
(c) Following completion of the contribution required to be made by
Pavilion pursuant to the provisions of Section 5.01(a), (i) Pavilion shall
be deemed to have made a capital contribution to the Partnership in an
amount equal to Pavilion's Initial Balance and (ii) the initial balance of
Pavilion's Capital Account shall be equal to Pavilion's Initial Balance.
As used herein, the term "Pavilion's Initial Balance" shall mean the
amount by which Pavilion's Gross Contribution Amount exceeds the sum of
(i) $7,701,501, the principal balance of the Senior Debt as of the date of
this Agreement, (ii) $538,289, the principal balance of the Pavilion Loan
as of the date of this Agreement and (iii) $900,000, the principal balance
of the loan payable to the Amphitheater's food and beverage
concessionaire. Pavilion's Initial Balance therefore is the pecuniary sum
of $1,718,787.
5.02 Cellar Door's Initial Contribution and Distribution to Pavilion.
(a) Upon execution hereof, but subject to the provisions of clause
(d) of this Section 5.02, Cellar Door shall contribute to the capital of
the Partnership a cash amount of $429,697 which is equal to twenty-five
percent (25%) of Pavilion's Initial Balance.
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(b) Upon receipt of such sum from Cellar Door pursuant to clause (a)
of this Section 5.02, the Partnership shall immediately make a cash
distribution to Pavilion in the same amount.
(c) The Partners hereby agree that, pursuant to Section 707 of the
Code, the transactions effected pursuant to this Section 5.02 shall be
characterized, for federal income tax purposes, as a sale of an undivided
25% interest in the Amphitheater by Pavilion to Cellar Door.
(d) Cellar Door shall have the right through and until August 31,
1997 (the period of time expiring on August 31, 1997 being herein called
the "Review Period") to review the books, records, invoices and other
supporting documentation relating to the determination of the amount of
the Total Project Cost. If, as a result of the review of such books,
records, invoices and other documentation during the Review Period, Cellar
Door disputes the amount of the Total Project Cost designated in this
Agreement, then Cellar Door shall have the right to require that such
dispute be resolved by a binding arbitration proceeding (the "Cost
Arbitration") as more fully described below so long as a detailed notice
of such dispute is provided to Pavilion prior to the expiration of the
Review Period. If the amount of the Total Project Cost should be changed
as a result of any such dispute, then upon final settlement of such
dispute, the amount of the capital contribution required to be made by
Cellar Door pursuant to Section 5.02(a) and the amount of the distribution
required to be made to Pavilion pursuant to Section 5.02(b) shall be
appropriately modified such that the initial balances of the Capital
Accounts of the Partners will be in proportion to their respective
Percentage Interests. If Cellar Door fails to provide notice of a dispute
pursuant to this Section 5.02(d) prior to the expiration of the Review
Period, then Cellar Door shall be deemed to have accepted the amount of
the Total Project Cost as specified herein. The Cost Arbitration shall be
a proceeding conducted in West Palm Beach, Florida in accordance with the
rules as then in effect of the American Arbitration Association. If the
Partners cannot agree on an arbitrator, then an arbitrator who is familiar
with the construction industry shall be selected for the Partners by the
American Arbitration Association upon the request of either Partner. The
decision of the arbitrator as to the actual amount of the Total Project
Cost shall be final and binding upon both parties hereto. The costs
(including, without limitation, reasonable fees and expenses of counsel
and experts for the Partners) of such arbitration shall be borne by the
non-prevailing party.
5.03 Capitalization of the Total Project Cost. Reference is made to the
fact that the Total Project Cost has been funded as follows:
(a) $7,701,501 of the Total Project Cost has been funded with sums
advanced under the Senior Debt.
(b) $538,239 of the Total Project Cost has been funded with sums
advanced under the Pavilion Loan.
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(c) $1,500,000 of the Total Project Cost has been funded with sums
advanced from the Amphitheater's food and beverage concessionaire.
(d) The balance of the Total Project Cost has been funded with
capital contributions made pursuant to this Article V.
5.04 Operational Shortfalls.
(a) If a Qualified Operational Shortfall (herein defined) occurs at
any time, then the Managing Partner shall have the express right to
deliver a notice ("Operating Expense Notice") to the Partners specifying
the amount of funds needed to cover such Qualified Operational Shortfall
and stating that each Partner is obligated to contribute to the capital of
the Partnership its Percentage Interest of the amount of funds needed to
cover such Qualified Operational Shortfall. Following delivery of an
Operating Expense Notice to the Partners by the Managing Partner, each
Partner shall be obligated to contribute to the capital of the Partnership
its respective Percentage Interest of the amount of funds needed to cover
the Qualified Operational Shortfall as set forth in such Operating Expense
Notice on or before the due date determined in accordance with the
following provisions:
(1) The due date for all of Pavilion's required contributions
pursuant to an Operating Expense Notice shall be twenty (20) days
following receipt of such Operating Expense Notice.
(2) Except as provided in clause (3), the due date for all of
Cellar Door's required contributions pursuant to an Operating
Expense Notice shall be twenty (20) days following receipt of such
Operating Expense Notice.
(3) To the extent, but only to the extent, that the aggregate
capital contributions required to be made by Cellar Door pursuant to
this Section 5.04(a) with respect to any Amphitheater Fiscal Year
exceed $250,000, the due date for such contributions to the
Partnership shall be one hundred twenty (120) days following receipt
of the corresponding Operating Expense Notice.
(b) As used herein, the term "Qualified Operational Shortfall" shall
mean the occurrence or happening, at any time, in the Managing Partner's
reasonable discretion, of the circumstance of the Partnership having an
insufficient amount of cash to pay or cover the Qualified Liabilities
(herein defined) of the Partnership as they become due.
(c) As used herein, the term "Qualified Liabilities" shall mean any
and all debts, liabilities, expenses, charges or other obligations of the
Partnership which relate to matters other than the construction,
development or commencement of operations of the Amphitheater. Qualified
Liabilities shall include, without limitation, the obligations of
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the Partnership in respect of the Senior Debt, the Pavilion Loan and any
Deficit Loans and in respect of any obligations payable to contractors,
suppliers or other vendors.
ARTICLE VI
Senior Debt, Pavilion Loan and Deficit Loans
6.01 Senior Debt and Lease Agreement. The Partnership hereby contractually
assumes, for the benefit of Pavilion, (i) the obligation to pay all of the
Senior Debt and (ii) all of Pavilion's responsibilities, obligations and
liabilities under the Lease Agreement. As between the Partners, each shall be
liable for its respective Percentage Interest of the Senior Debt and the
tenant's obligations under the Lease Agreement.
6.02 Pavilion Loan. The Partners hereby agree that $538,289 of the gross
amount contributed to the Partnership by Pavilion pursuant to Section 5.01(a)
shall be deemed to be, and shall be characterized as, a loan ("Pavilion Loan")
by Pavilion to the Partnership in the total amount of $538,289. The Partnership
shall execute a promissory note to Pavilion upon execution hereof in a form
reasonably satisfactory to Pavilion which will evidence the Partnership's
obligation to repay the Pavilion Loan in accordance with the following
provisions:
(a) Interest shall accrue on principal amounts outstanding under the
Pavilion Loan from the effective date hereof at a per annum rate equal to
the Permitted Rate.
(b) All accrued and unpaid interest on the Pavilion Loan shall be
due and payable on October 31 of each calendar year commencing upon
October 31, 1996 and continuing until October 31, 2004.
(c) The entire unpaid principal balance of the Pavilion Loan,
together with all accrued unpaid interest thereon, shall be due and
payable on October 31, 2005.
(d) The Partnership shall have the right to make prepayments on the
Pavilion Loan without penalty; provided, however, that no such prepayment
may be made without the express written consent of Cellar Door.
6.03 Deficit Loan. If the Partnership incurs a cash deficit of any kind,
then any Partner shall have the right, but not the obligation, to extend a loan
("Deficit Loan") to the Partnership in the amount of such cash deficit. If any
such cash deficit should occur, the Managing Partner shall provide notice
thereof to both Partners as to the amount of such cash deficit. If both Partners
elect to extend a Deficit Loan to the Partnership, then each shall fund its
Percentage Interest of such cash deficit. If one of the Partners elects not to
extend a Deficit Loan in the amount of its Percentage Interest of such cash
deficit, then the other Partner shall have the right to extend a Deficit Loan up
to the full amount of such cash deficit. Each Deficit Loan shall bear interest
at a variable rate of interest per annum equal to the Permitted Rate and shall
be repayable
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as soon as the Partnership has funds available therefor. No distributions shall
be made to the Partners pursuant to Section 9.01 hereof at any time during which
any Deficit Loan remains outstanding. The provisions of this Section 6.03 shall
not negate, affect, limit, alter or otherwise change the obligations of the
Partners to make capital contributions for Qualified Operational Shortfalls in
accordance with the provisions of Section 5.04 hereof.
6.04 Return of Concessionaire Advances. Each Partner hereby specifically
recognizes, acknowledges and agrees that should the Partnership be required to
return to any concessionaire the advance made to the Partnership by such
concessionaire as a result of an early termination of such concessionaire's
concession agreement with the Partnership, or for any other reason whatsoever,
then each Partner shall be obligated to extend a Deficit Loan to the Partnership
in an amount equal to the product of (i) the amount being so returned to such
concessionaire and (ii) such Partner's Percentage Interest. Any Deficit Loan
made by a Partner pursuant to the immediately preceding sentence shall be
payable out of future loans, advances or lump sum payments received by the
Partnership from other concessionaires.
ARTICLE VII
Tax Allocations and
Maintenance of Capital Accounts
7.01 Generally. For each taxable year of the Partnership, the income,
gains, losses, credits and deductions of the Partnership shall be allocated
between the Partners in accordance with each Partner's Percentage Interest.
7.02 Section 704(c). Income, gain, loss and deduction with respect to any
item of property contributed to the Partnership shall, solely for federal income
tax purposes, be allocated between the Partners so as to take into account any
difference between the Gross Asset Value of such item of property and its
adjusted basis for federal income tax purposes on the date of such contribution,
in accordance with the requirements of Section 704(c) of the Code. All
allocations under this Section 7.02 shall be made in such a manner as the
Managing Partner shall determine reasonably reflects the requirements of Section
704(c) of the Code. No allocations pursuant to this Section 7.02 shall be
reflected as an adjustment to any Partner's Capital Account.
7.03 Maintenance of Capital Accounts. A Capital Account shall be
established and maintained for each Partner in accordance with the following
provisions:
(a) Increases in Capital Accounts. Each Partner's Capital Account
shall be increased by (i) the amount of cash and the fair market value of
all property contributed by such Partner to the Partnership (net of
liabilities assumed by the Partnership or to which the contributed
property is subject) and (ii) that Partner's allocable share of income and
gain for federal income tax purposes (excluding any allocations made
pursuant to Section 7.02 hereof).
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(b) Decreases in Capital Accounts. Each Partner's Capital Account
shall be decreased by (i) the amount of cash and the fair market value of
all property distributed to such Partner (net of liabilities assumed by
the Partner or to which the property is subject) and (ii) that Partner's
allocable share of losses and other items of deduction for federal income
tax purposes (excluding any allocations made pursuant to Section 7.02
hereof).
(c) Use of Gross Asset Value. For purposes of computing the amount
of any item of income, gain, loss, or deduction to be reflected in the
Partners' Capital Accounts, the determination, recognition and
classification of such items shall be the same as their determination,
recognition and classification for federal income tax purposes, except
that (i) gain or loss resulting from any disposition of Partnership
property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed with reference to the Gross Asset
Value of the property disposed of, rather than its adjusted basis, and
(ii) depreciation, amortization, or other cost recovery deductions with
respect to an item of Partnership property shall be computed with
reference to the Gross Asset Value of such property rather than its
adjusted basis.
(d) Compliance with Treasury Regulations. The foregoing provisions
and the other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with the Treasury Regulations
issued pursuant to Section 704(b) of the Code, and shall be interpreted
and applied in a manner consistent with such regulations. If the Partners
shall determine that it is prudent to modify the manner in which the
Capital Accounts are computed or maintained in order to comply with such
regulations, the Partners may make such modification.
(e) Capital Account Make-Up Provision. If a Partner's Capital
Account has a deficit balance following liquidation (as defined in
Treasury Regulation Section 1.704-1(b)(2)(ii)(g)) of the Partner's
Partnership Interest in the Partnership (after taking into account all
Capital Account adjustments for the taxable year of the Partnership in
which liquidation occurs), the Partner shall, by the end of such taxable
year (or, if later, within 90 days after the date of such liquidation),
contribute to the Partnership an amount necessary to increase the balance
in its Capital Account to zero. Any amount so contributed shall be
distributed as provided in Section 17.03 hereof.
ARTICLE VIII
Fees
Neither Partner shall be entitled to receive any fees from the Partnership
without the express prior written approval of both Partners.
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ARTICLE IX
Cash Distributions
All Available Cash of the Partnership, as of the end of each Amphitheater
Fiscal Year, shall be distributed by the Partnership to the Partners in
proportion to each Partner's respective Percentage Interest within forty-five
(45) days after the end of such Amphitheater Fiscal Year.
ARTICLE X
Ownership of Partnership Property
All real or personal property acquired by the Partnership shall be owned
by the Partnership, such ownership being subject to the other terms and
provisions of this Agreement. Each Partner hereby expressly waives the right to
require partition of any Partnership property or any part thereof.
ARTICLE XI
Fiscal Matters
11.01 Fiscal Year. The fiscal year of the Partnership for tax purposes
shall end on October 31 of each calendar year or such other fiscal year as may
be required pursuant to the application of the provisions of the Code or the
U.S. Treasury Regulations promulgated thereunder. The fiscal year of the
Partnership for accounting purposes shall end on the date selected by the
Managing Partner.
11.02 Books and Records and Audit Rights.
(a) Proper books and records shall be kept by the Managing Partner
with reference to all Partnership transactions, and each Partner shall at
all reasonable times during business hours have access thereto. All items
of income and deductions recognized during a fiscal year shall be
allocated as of the end of each fiscal year, based on the facts and
circumstances existing as of the end of that year. Interim monthly reports
may be based on the facts and circumstances existing at the time of these
reports subject to year-end adjustments. Year end financial statements
shall be prepared, or caused to be prepared, by the Managing Partner as of
the end of each fiscal year of the Partnership and a copy thereof provided
to the Partners within 120 days after the end of each such fiscal year.
(b) Without limiting the generality of the provisions contained in
clause (a) of this Section 11.02, it is specifically understood, agreed
and acknowledged that each Partner shall have the right to go to the
principal office of the Partnership where the
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books and records are maintained for the purpose of auditing such books
and records and shall have access, in connection with any such audit, to
all workpapers and other documents and information then in existence which
relate to, or were used in connection with the generation of, the
Partnership's books and records.
(c) If Cellar Door engages the services of a firm of certified
public accountants to conduct an audit of the financial books and records
of the Partnership with respect to any fiscal year of the Partnership,
then, upon delivery of a photocopy of the invoice from such firm of
certified public accountants reflecting the cost of the services rendered
in connection with such audit (the "Cost of the Audit"), Pavilion shall
pay to Cellar Door the lesser of (i) the Audit Reimbursement Amount for
such fiscal year or (ii) the Cost of the Audit for such fiscal year. As
used herein, (A) the term "Audit Reimbursement Amount" shall mean, with
respect to any fiscal year, the sum of (i) $5000.00 and (ii) the Audit
Carryforward Amount for such fiscal year and (B) the term "Audit
Carryforward Amount" shall mean, with respect to any fiscal year, (i)
$0.00 if Pavilion was required to reimburse amounts to Cellar Door
pursuant to this clause (c) for each of the immediately two preceding
fiscal years, (ii) $5000.00 if Pavilion was required to reimburse amounts
to Cellar Door pursuant to this clause (c) for only one of the immediately
two preceding fiscal years, and (iii) $10,000 if Pavilion was not required
to reimburse amounts to Cellar Door pursuant to this clause (c) for either
of the immediately two preceding fiscal years. Notwithstanding the
foregoing provisions, (x) the Audit Carryforward Amount for the first
fiscal year of the Partnership shall be $0.00 and (ii) the Audit
Carryforward Amount for the second fiscal year of the Partnership shall be
(I) $5000.00 if Pavilion was not required to reimburse amounts to Cellar
Door pursuant to this clause (c) for the first fiscal year of the
Partnership and (II) $0.00 if Pavilion was required to reimburse amounts
to Cellar Door pursuant to this clause (c) for the first fiscal year of
the Partnership.
(d) If, as a result of any audit conducted by Cellar Door pursuant
to the provisions of clause (c) above, the amount of cash held by the
Partnership as of the end of the fiscal year to which such audit relates
is adjusted by $25,000 or more from the amount originally reflected in the
year end financial statements prepared and delivered by the Managing
Partner for such fiscal year pursuant to the provisions of Section
11.02(a) hereof, then Pavilion shall be obligated to pay to Cellar Door a
monetary sum equal to the Cost of the Audit for such fiscal year less the
amounts previously paid by Pavilion to Cellar Door pursuant to Section
11.02(c) with respect to the audit for such fiscal year.
(e) Pavilion shall not be permitted to charge to the Partnership any
portion of Pavilion's cost of obtaining an audit of Pavilion's business
operations. Cellar Door shall have no right to receive or review
Pavilion's audit or the workpapers generated in connection with the
preparation thereof.
11.03 Partnership Bank Accounts. All funds of the Partnership shall be
deposited in its name in an account or accounts maintained at a national or
state bank. Checks shall be drawn
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upon the Partnership and may be signed by such persons as may be designated from
time to time by the Managing Partner.
11.04 Tax Matters and Reports. Any provision hereof to the contrary
notwithstanding, solely for federal income tax purposes, each of the Partners
hereby recognizes that the Partnership will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, the
filing of U.S. Partnership Returns of Income shall not be construed to extend
the purposes of the Partnership or expand the obligations or liabilities of the
Partners. The Managing Partner shall be the "Tax Matters Partner" for all
purposes related to federal, state and local income tax laws; provided, however,
that the Tax Matters Partner shall not take any action which adversely affects
the other Partner without such other Partner's prior written consent.
11.05 Tax Returns. The Managing Partner shall cause to be prepared and
filed all tax returns and statements, if any, which must be filed on behalf of
the Partnership with any taxing authority, and shall submit copies of all such
returns and statements to the Partners in time for the Partners to prepare and
file their respective tax returns and statements on a timely basis. All fees,
charges and other expenses payable to third party professionals such as
attorneys or accountants relating to the preparation and filing of tax returns
and statements or otherwise reporting of financial results of the Partnership,
shall be properly chargeable as expenses of the Partnership.
11.06 Section 754 Election. In the case of distribution of Partnership
property within the provisions of Section 734 of the Code or in the case of a
transfer of a Partnership interest permitted by this Agreement made within the
provisions of Section 743 of the Code, the Partnership shall file an election
under Section 754 of the Code in accordance with the procedures set forth in the
applicable Treasury Regulations upon the request of any Partner if such
requesting Partner agrees to pay all costs incurred by the Partnership in
connection with the making of such election.
11.07 No Interest. No Partner shall be entitled to be paid interest in
respect of either his Capital Account or any contributions made by him to the
Partnership.
ARTICLE XII
Management of Partnership Affairs
12.01 Major Actions. No Major Action may be taken by the Partnership or by
any Partner on behalf of the Partnership without first obtaining written
approval from all of the Partners.
12.02 Management Vested in the Managing Partner.
(a) Except as provided below in clause (b) and except for the taking
of Major Actions, all responsibility and authority relating to the
operations and management of the
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Partnership shall be vested in the Managing Partner. The Managing Partner
is hereby authorized to take any and all actions (other than Major
Actions) reasonably necessary or required to carry out the Partnership
Purposes, including, without limitation, the hiring and retaining of such
employees and other personnel as may be reasonably necessary, in the
discretion of the Managing Partner, to efficiently and effectively use,
operate and maintain the Amphitheater and otherwise fulfill the
Partnership Purposes.
(b) Notwithstanding the foregoing, Cellar Door shall be primarily
responsible for the activities related to booking or otherwise engaging
talent for appearance at the Amphitheater, and Cellar Door hereby agrees
to provide the necessary time and services as may be required to cause the
Amphitheater to be properly and adequately booked and engaged with first
rate national performers; provided, however, it is understood that Cellar
Door has made no guarantee as to the type or number of performances which
will be booked during any Amphitheater Fiscal Year. All final decisions
concerning the booking of performers or other talent into the Amphitheater
shall be subject to the approval of the Managing Partner, provided,
however, (i) if the Managing Partner refuses to book a particular
performer or show into the Amphitheater on behalf of the Partnership which
Cellar Door desires to book, then Cellar Door shall have the right,
subject to availability of the Amphitheater, to rent the Amphitheater from
the Partnership on a Best Commercial Basis (herein defined) for purposes
of presenting such performer or show for its own account or (ii) if the
Managing Partner desires to book a Pavilion Produced Tour Event (herein
defined) into the Amphitheater which Cellar Door does not agree should be
booked into the Amphitheater by the Partnership, then Cellar Door shall
have the right to require that the Managing Partner rent the Amphitheater
from the Partnership on a Best Commercial Basis for purposes of presenting
such Pavilion Produced Tour Event for its own account.
(c) As used in this Section 12.02, the following terms shall have
the meanings indicated:
(i) "Best Commercial Basis" shall mean, at any time, the
lowest and most favorable rental rates then made available by the
Partnership to third party promoters for rental of the Amphitheater
on a nightly basis, excluding rentals to municipalities, other
governmental authorities or non-profit organizations.
(ii) "Pavilion Produced Tour Event" shall mean a performance
or show which is part of a tour being produced nationally by
Pavilion.
12.03 Annual Operating Budgets. On or before October 15 of each calendar
year during the existence of the Partnership, the Managing Partner shall provide
to Cellar Door (i) a proposed Operating Budget for the forthcoming Amphitheater
Fiscal Year setting forth in reasonable detail the various categories of
Operating Expenses and the budgeted amounts for each such category to be
incurred by the Partnership during the forthcoming Amphitheater Fiscal Year and
(ii) such information and materials related to the proposed Operating Budget as
may be requested by
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Cellar Door; provided, however, if such information and materials cannot be
generated in the ordinary course of business by the Managing Partner, then (x)
the Managing Partner shall provide notice thereof to Cellar Door ("Additional
Cost Notice") and (y) Cellar Door shall be required to reimburse to the Managing
Partner the reasonable costs incurred by the Managing Partner in generating such
requested information or materials if Cellar Door renews its request for such
information and materials after receipt of the Additional Cost Notice. To be
adopted, a proposed Operating Budget must be approved unanimously by both
Partners; however, if no Agreement is reached as to an Operating Budget for any
Amphitheater Fiscal Year within forty-five (45) days after the commencement of
such Amphitheater Fiscal Year, then the Operating Budget for such Amphitheater
Fiscal Year shall be deemed to be, until a different Operating Budget is
mutually approved by the Partners, the Operating Budget for the prior
Amphitheater Fiscal Year with each line item increased by the greater of (i) 5%
or (ii) the percentage increase in the CPI Index during the immediately
preceding Amphitheater Fiscal Year.
12.04 Obligations of the Managing Partner.
(a) Subject to the other provisions of this Agreement, the Managing
Partner shall manage, or cause to be managed, the affairs of the
Partnership in a prudent and businesslike manner. The Managing Partner
shall act as a fiduciary hereunder and in good faith in the performance of
its obligations hereunder, but shall have no liability or obligation to
the Partners or the Partnership for any decision made or action taken in
connection with the discharge of its duties hereunder if such decision or
action is (i) not a direct violation of, or in excess of the authority
granted by, the provisions of this Agreement and (ii) made or taken in
good faith and in the best interests of the Partnership, irrespective of
whether the same may be reasonably prudent or whether bad judgment or
negligence (excluding gross negligence) was exercised or involved in
connection therewith.
(b) The Managing Partner and all of its partners, agents, employees,
officers, directors and other representatives shall be indemnified and
held harmless by the Partnership, to the extent of the assets of the
Partnership, from and against any and all claims, demands, liabilities,
costs (including, without limitation, the cost of litigation and
reasonable attorneys' fees), damages and causes of action of any nature
whatsoever arising out of a claim asserted by any third party and relating
to the management of the affairs of the Partnership, except where the
claim at issue is based upon (i) the gross negligence or willful
misconduct of the indemnified party or (ii) an action taken by the
indemnified party in direct violation of, or in excess of the authority
granted by, the provisions of this Agreement. The indemnification rights
herein contained shall be cumulative of, and in addition to, any and all
rights, remedies and recourses to which the indemnified parties described
herein shall be entitled, whether pursuant to some other provision of this
Agreement, at law or in equity.
12.05 Obligations of Cellar Door.
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(a) Cellar Door shall fulfill its obligations specified in Section
12.02(b) hereof in a prudent and businesslike manner. Cellar Door shall
act as a fiduciary hereunder and in good faith in the performance of its
obligations hereunder, but shall have no liability or obligation to the
Partners or the Partnership for any decision made or action taken in
connection with the discharge of its duties hereunder if such decision or
action is (i) not a direct violation of, or in excess of the authority
granted by, the provisions of this Agreement and (ii) made or taken in
good faith and in the best interests of the Partnership, irrespective of
whether the same may be reasonably prudent or whether bad judgment or
negligence (excluding gross negligence) was exercised or involved in
connection therewith.
(b) Cellar Door and all of its partners, agents, employees,
officers, directors and other representatives shall be indemnified and
held harmless by the Partnership, to the extent of the assets of the
Partnership, from and against any and all claims, demands, liabilities,
costs (including, without limitation, the cost of litigation and
reasonable attorneys' fees), damages and causes of action of any nature
whatsoever arising out of a claim asserted by any third party and relating
to the management of the affairs of the Partnership, except where the
claim at issue is based upon (i) the gross negligence or willful
misconduct of the indemnified party or (ii) an action taken by the
indemnified party in direct violation of, or in excess of the authority
granted by, the provisions of this Agreement. The indemnification rights
herein contained shall be cumulative of, and in addition to, any and all
rights, remedies and recourses to which the indemnified parties described
herein shall be entitled, whether pursuant to some other provision of this
Agreement, at law or in equity.
12.06 Action Without Meeting. Any action required by the Partnership Act
or by this Agreement to be taken at a meeting of the Partners, or any action
which may be taken at a meeting of the Partners, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the Partners entitled to participate in the management of the Partnership
pursuant to the terms of the Partnership Act and such consent shall have the
same force and effect as a vote of the Partners.
12.07 Transactions with Partners and Affiliates of Partners. Each Partner
hereby agrees that, with respect to any and all contracts and agreements entered
into by and between the Partnership and any Partner or any Affiliate of a
Partner, (i) the existence thereof shall be disclosed to the other Partner, (ii)
copies thereof shall be made available to such other Partner along with any
details and other information related thereto and (iii) the execution of each
such contract and agreement shall require the consent of the other Partner
(which consent shall not be unreasonably withheld or delayed).
12.08 Loaned Employees. Notwithstanding the provisions of Section 12.07
hereof, but subject to the provisions hereof relating to the Partnership's
Operating Budget, the Managing Partner shall have the express right and
authority to fill the staffing needs of the Partnership by causing employees of
the Managing Partner, the partners of the Managing Partner, Affiliates of
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the partners of the Managing Partner, Cellar Door or Affiliates of Cellar Door
to provide services to the Partnership on a full or part-time basis. Each such
employee who is so loaned to the Partnership shall have all or such appropriate
portion of his or her salary and benefit costs reimbursed by the Partnership to
the actual employer of such employee. Upon request of Cellar Door, the Managing
Partner shall provide a list of all individuals who have been loaned to the
Partnership pursuant to the provisions of this Section 12.08 and the details as
to the compensation arrangement for each such individual.
ARTICLE XIII
Other Activities
13.01 Generally. Subject to the provisions of Sections 13.02 and 13.03
hereof, this Agreement shall not preclude or limit in any respect the right of
any Partner to engage or invest in any business activity of any nature or
description, including those which may be similar to the business of the
Partnership. Neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or any relationships created hereby in or to such other
ventures or activities or to the income or proceeds derived therefrom, unless
otherwise provided by any applicable rule of law.
13.02 Provisions Regarding Booking of Events in South Florida Area.
(a) Prior to the dissolution of the Partnership, neither Partner nor
any of its Affiliates shall (i) present, produce or promote, for its own
account or for the account of others, any Event in the South Florida Area
(other than at the Amphitheater) which is part of an Amphitheater Tour or
(ii) assist or otherwise participate in the booking of any Event in the
South Florida Area (other than at the Amphitheater) which is part of an
Amphitheater Tour unless and except such Partner (or its Affiliate) first
offers to the Partnership the right and option to book any such Event into
the Amphitheater on the same or better terms.
(b) The provisions of clause (a) of this Section 13.02 shall not
apply with respect to any Event for which the headline act has been
presented with a fair and competitive offer to appear at the Amphitheater
but who unilaterally, and with no provocation or encouragement from any
officer, employee, representative, attorney, contractor or agent of a
Partner or any Affiliate of such Partner, refuses to perform at the
Amphitheater; provided, however, if either Partner or any of its
Affiliates proposes to promote, present or produce any such Event in the
South Florida Area during the term of the Partnership pursuant to the
provisions of this Section 13.02(b), then (A) such Partner must provide
oral notice to a designated representative of the other Partner (to be
confirmed by fax) as to its plans for such Event, (B) such Partner must
advise the other Partner as to the terms offered to the headline act for
such Event by such Partner (or any of its Affiliates) for appearance at
another venue in the South Florida Area simultaneously with, or prior to,
the making of each such offer, (C) such Partner shall be obligated to
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make additional and better offers to the headline act appearing in such
Event on behalf of the Partnership upon the direction of the other Partner
and (D) such Partner shall be obligated to offer to the Partnership an
option and right to co-produce, co-promote and co-present such Event on a
50-50 basis with such Partner (or its Affiliate) if such Partner
successfully arranges for the booking of such Event at another venue in
the South Florida Area. As used in the immediately preceding sentence, the
phrase "co-produce, co-promote and co-present such Event on a 50-50 basis"
means sharing on a 50-50 basis (i) in all revenues related in anyway to
such Event and to which such Partner (or its Affiliate) is entitled, (ii)
in all discounts, rebates and other similar expense reductions to which
such Partner (or its Affiliate) may be entitled and (iii) in all costs,
expenses and losses which may be suffered or incurred by such Partner (or
its Affiliate); provided, however, if such Event is being presented at a
venue owned or controlled by such Partner (or any of its Affiliates), then
the amounts paid to such venue for rent and other expenses related to such
Event shall not exceed arms-length amounts consistent with industry
practices.
(c) Any offer required to be made pursuant to the provisions of
Section 13.02(b) by a Partner to the Partnership with respect to any Event
must (i) be made in writing or, if made orally, confirmed in writing by
facsimile within 24 hours after such oral notice, (ii) include such
information concerning the economic terms and conditions of such Event as
the Partnership may reasonably request and (iii) be open for acceptance
for no less than three (3) business days. The decision as to whether the
Partnership shall accept or reject any offer required to be made pursuant
to the provisions of Section 13.02(b) hereof by a Partner shall be made by
the other Partner. If, after the Partnership has declined any offer made
by a Partner pursuant to the provisions of Section 13.02(b) with respect
to any Event, then such Partner (or its Affiliates) shall have the right
to present, produce or promote for its own account, or for the account of
others, such Event in a venue in the South Florida Area; provided,
however, if the economic terms and conditions of such Event should
thereafter change in any material respect, then such Partner shall
re-offer such Event to the Partnership in accordance with the provisions
hereof.
13.03 Competitive Outdoor Facilities. During the term of the Partnership,
each of the Partners and all of their respective Affiliates shall be precluded
from being involved and hereby covenant not to become involved in any manner
whatsoever, directly or indirectly, in the ownership or management of any
Competitive Outdoor Facility.
13.04 Competitive Enclosed Facilities. Neither Partner nor any of its
Affiliates shall become involved in any manner whatsoever, directly or
indirectly, in the ownership or management of any Competitive Enclosed Facility
unless and except such Partner offers to the other Partner the right and option
to acquire, on the same terms, twenty-five percent (25%) of the interest in such
Competitive Enclosed Facility being acquired by such Partner (or its Affiliate).
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ARTICLE XIV
Pavilion's Call Option and Cellar Door's Put Option
14.01 Put and Call Option. On and subject to the provisions set forth
below, (i) Pavilion shall have the right and option ("Call Option") to purchase
Cellar Door's Partnership Interest and (ii) Cellar Door shall have the right and
option ("Put Option") to require Pavilion to purchase Cellar Door's Partnership
Interest (the Call Option and the Put Option being herein collectively called
the "Options" and individually called an "Option"):
(a) Neither of the Options may be exercised by either party at any
time prior to November 1, 2000.
(b) In order to validly exercise its respective Option, a Partner
must provide written notice ("Option Election Notice") of the exercise
thereof to the other Partner within 60 days after the end of an
Amphitheater Fiscal Year.
(c) Upon a valid exercise of an Option by either Partner, Cellar
Door shall be obligated to sell its Partnership Interest to Pavilion and
Pavilion shall be obligated to purchase Cellar Door's Partnership Interest
for a purchase price ("Option Purchase Price") equal to the sum of (A) the
product of(i) the Applicable Multiplier and (ii) Cellar Door's Percentage
Interest of the average Cash Flow Amount for the three Amphitheater Fiscal
Years immediately preceding the delivery of the Option Election Notice
plus (B) the aggregate amount of Cellar Door's capital contributions made
pursuant to Section 5.02 hereof.
(d) As used herein, the term "Applicable Multiplier" shall mean (i)
two (2) if Cellar Door exercised the Put Option and (ii) five (5) if
Pavilion exercised the Call Option.
(e) The closing ("Closing") of the sale of Cellar Door's Partnership
Interest following a valid delivery of an Option Election Notice shall
occur on a date mutually selected by Pavilion and Cellar Door but in no
event later than the date which is forty-five (45) days after delivery of
the Option Election Notice. The Closing shall occur at such place in
Florida as may be designated by Pavilion. At the Closing, each of the
Partners shall be obligated to do the following:
(i) Pavilion shall cause the Option Purchase Price to be paid
to Cellar Door in immediately available funds at the Closing.
(ii) Cellar Door shall execute and deliver such instruments
of assignment as may be reasonably required by Pavilion containing
warranties that its Partnership Interest is being conveyed to
Pavilion (or any designee of Pavilion) free and clear of all liens,
claims, charges and encumbrances.
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(iii) Cellar Door shall execute, such reasonable documents as
may be required by Pavilion to evidence the agreement of Cellar Door
to be bound by the non-compete covenants contained in Section 14.02
hereof following the Closing of the Put Option.
(iv) Pavilion shall execute such instruments or documents as
may be necessary to (x) release Cellar Door from all future accruing
obligations under this Agreement (other than those created in
Section 14.02 hereof) and (y) indemnify Cellar Door with respect to
all debts, liabilities and obligations of the Partnership to third
parties, whether then existing or thereafter to be created.
14.02 Termination of Non-Compete. Following the closing of the sale of
Cellar Door's Partnership Interest pursuant to an exercise of the Call Option or
the Put Option, neither Partner (nor any of its Affiliates) shall be subject to
any continuing restriction on its business activities pursuant to the provisions
of this Agreement.
14.03 Specific Performance. It is expressly agreed that the remedy at law
for breach of the obligation to sell or buy Cellar Door's Partnership Interest
following an exercise of one of the Options is inadequate in view of (i) the
complexities and uncertainties in measuring the actual damages that would be
sustained by reason of such breach and (ii) the uniqueness of the Partnership
business and the Partnership relationship. Accordingly, it is agreed that the
obligation to buy and sell Cellar Door's Partnership Interest following an
exercise of one of the Options shall be enforceable by an equitable order of
specific performance.
ARTICLE XV
Defaults and Remedies
15.01 Default by Partner. If any Partner ("Defaulting Partner") fails to
timely perform any of its obligations contained in this Agreement, or materially
violates the terms of this Agreement, then the other Partner ("Non-Defaulting
Partner") shall have the right to give the Defaulting Partner a notice ("Default
Notice") specifically setting forth the nature of such failure or violation and
stating that the Defaulting Partner shall have a period of ten (10) days to pay
any sums of money specified therein as due and owing to the Partnership or to
any Partner or, if the failure or violation is a non-monetary default and is
capable of being cured, thirty (30) days to cure such default specified therein.
If the monies specified in the Default Notice are not paid within such ten (10)
day period, or if such non-monetary failures or violations are not capable of
being cured or, if capable of being cured, such Defaulting Partner has not cured
such non-monetary failures or violations within such thirty (30) day period,
then a "Partner Default" shall be deemed to have occurred with respect to such
Defaulting Partner. If a Defaulting Partner cures in all material respects all
of its failures or violations which are capable of being cured within the
aforesaid notice and cure periods, then such defaults shall be deemed no longer
to exist and such Partner shall be deemed no longer to constitute a Defaulting
Partner.
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15.02 Rights and Remedies. Upon the occurrence of a Partner Default, the
Non-Defaulting Partner and the Partnership shall each have the following
rights, options and remedies which shall be cumulative and may be exercised
concurrently or independently in the sole and absolute discretion of the
Non-Defaulting Partner:
(a) The right to bring an action at law by or on behalf of the
Partnership or the Non-Defaulting Partner in order to recover the amounts
owed, if any, and any incidental or consequential damages arising from
such default (including, without limitation, reasonable attorneys' fees
and disbursements incurred or paid by the Partnership or the
Non-Defaulting Partner, as the case may be, in prosecuting any such
action).
(b) The right to bring any proceeding in the nature of injunction,
specific performance or other equitable remedy, it being acknowledged by
each of the Partners that damages at law may be an inadequate remedy for
such default.
(c) If a sum of money is owed to the Partnership, the Non-Defaulting
Partner may advance the sum of money owed to the Partnership by the
Defaulting Partner with the following results:
(i) The sum thus advanced shall be deemed to be a loan from
the Non-Defaulting Partner to the Defaulting Partner;
(ii) The principal balance of such deemed loan shall be due
and payable in whole upon written demand from the Non-Defaulting
Partner to the Defaulting Partner;
(iii) The principal balance of such deemed loan shall bear
interest at the Permitted Rate compounded monthly; and
(iv) All distributions from the Partnership that would
otherwise be made to the Defaulting Partner (whether before or after
dissolution of the Partnership) shall, instead, be paid to the
Non-Defaulting Partner until such loan and all interest accrued
thereon has been repaid in full.
(d) If a sum of money is owed by the Defaulting Partner to the
Non-Defaulting Partner, the Non-Defaulting Partner may require that all
distributions that would otherwise be made to the Defaulting Partner
(whether before or after dissolution of the Partnership) shall, instead,
be paid to the Non-Defaulting Partner until all such amounts owed have
been repaid in full.
(e) For purposes of voting or giving any consents or approvals under
any provisions of this Agreement, the right to deny the Defaulting Partner
any of its voting, consent or approval rights under this Agreement.
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(f) The option to purchase the Partnership Interest of the
Defaulting Partner at a purchase price equal to seventy-five percent (75%)
of the then balance in its Capital Account, which purchase price shall be
payable in five (5) equal annual installments of principal, together with
interest at the rate of eight percent (8%) per annum. The option set forth
in this clause (f) is being provided in view of the fact that the
prospects for the Partnership and the Partnership Interest of the
Non-Defaulting Partner will be placed in jeopardy upon the occurrence of a
Partner Default by a Defaulting Partner, all with potential damages to the
Non-Defaulting Partner and the Partnership which cannot be foreseen or
reasonably ascertained. Any Defaulting Partner whose Partnership Interest
is purchased under the provisions of this clause (f) shall (i) remain
liable for its Percentage Interest of the Partnership's liabilities in
existence at the time of the closing of such purchase and (ii) remain
subject to the restrictions on competitive activities set forth in Article
XIII hereof for a period of three (3) Amphitheater Fiscal Years following
completion of the purchase of its interest pursuant to this clause (f).
The Non-Defaulting Partner may, at its option, designate any third party
of its choosing to exercise the option granted to it in this clause (f).
ARTICLE XVI
Voluntary Withdrawal
No Partner shall have the right to, and each Partner agrees that it will
not, withdraw voluntarily from the Partnership. In the event any Partner
withdraws from the Partnership in contravention of this Agreement, such
withdrawing Partner shall remain liable for its Percentage Interest of the
Partnership liabilities in existence at the, time of its withdrawal and shall,
in addition, be liable for all damages attributable to its breach of this
Agreement. The withdrawal of a Partner in contravention of this Article XVI
shall not cause the Partnership to be dissolved, and such withdrawing Partner
shall be deemed to be an assignee of a Partner's Partnership Interest and shall
have only the rights provided a Partner's assignee under the provisions of the
Partnership Act.
ARTICLE XVII
Dissolution and Termination
17.01 Dissolution. The Partnership shall be dissolved upon the occurrence
of any of the following:
(a) The unanimous agreement of the Partners;
(b) The dissolution of the Partnership pursuant to Article IV; or
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(c) The sale, transfer, assignment or termination of all or
substantially all of the Partnership's ownership interest in the
Amphitheater.
The dissolution shall be effective on the day on which the event occurs
causing dissolution ("Effective Date of Dissolution"), but the Partnership shall
not terminate until the assets have been distributed in accordance with the
provisions of this Agreement.
17.02 Nondissolution Events. None of the following events shall constitute
or cause the dissolution of the Partnership, with the result that, upon the
happening of any one or more of these events, no one shall have the right to
compel the termination and liquidation of the Partnership:
(a) the bankruptcy, dissolution or liquidation of a Partner; or
(b) the withdrawal of a Partner.
Each Partner waives its right and power either to dissolve the Partnership, or
to seek a court decree of dissolution.
17.03 Distributions Upon Dissolution. On dissolution of the Partnership,
the Partners shall proceed diligently to wind up the affairs of the Partnership
and distribute its assets. The Managing Partner shall decide which Partnership
assets are to be sold for cash and which are to be distributed in kind. The
Partnership's assets, or the proceeds of their sale, shall be applied or
distributed (after all adjustments to the Capital Accounts of the Partners which
are required (i) following any sale of Partnership property or (ii) by the
Treasury Regulations upon a distribution of an item of Partnership property in
kind) in the following order of priority:
(a) In payment of all liabilities of the Partnership to creditors
other than Partners. If any liability is contingent or uncertain in
amount, a reserve equal to the maximum amount for which the Partnership
could be reasonably held liable shall be established. Upon the
satisfaction or other discharge of that contingency, the amount of the
reserve not required, if any, will be treated as income to the extent
previously treated as a deduction.
(b) In payment of any loans owed by the Partnership to any Partner.
(c) To the Partners in proportion to and to the extent of the
balance in their respective Capital Accounts.
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ARTICLE XVIII
Transfer Restrictions
18.01 Partner Interest. Except for a transfer of a Partnership Interest
made pursuant to the provisions of Article XIV of this Agreement, neither
Partner shall have the right to sell, assign, convey, transfer, pledge or
hypothecate, by operation of law or otherwise, all or any portion of its
Partnership Interest without the prior consent of the other Partner, it being
agreed and acknowledged that such consent may be withheld in such other
Partner's sole discretion for any reason whatsoever. Any purported sale,
assignment, conveyance, transfer, pledge or hypothecation of any Partner's
Partnership Interest in violation of the provisions of this Section 18.01 shall
be voidable at the option of the other Partner.
18.02 Cellar Door's Stock.
(a) No capital stock of Cellar Door may, at any time, be issued to,
sold, conveyed or otherwise transferred to any Person other than to a
Qualified Cellar Door Shareholder. However, as a condition to the
issuance, sale, conveyance or transfer of any Cellar Door capital stock to
any Qualified Cellar Door Shareholder, the Qualified Cellar Door
Shareholder acquiring ownership of such capital stock shall be required to
deliver a written instrument to the Partnership and to Pavilion in which
it agrees to be bound by the transfer restrictions contained in this
Section 18.02 with respect to the capital stock of Cellar Door.
(b) Notwithstanding the transfer restrictions contained in Section
18.02(a) hereof, capital stock of Cellar Door may be issued, sold,
conveyed or otherwise transferred to a Person which is not a Qualified
Cellar Door Shareholder so long as all of the following conditions are
fulfilled:
(i) A majority of each class of capital stock of Cellar Door
shall be owned by Qualified Cellar Door Shareholders immediately
following such proposed issuance, sale, conveyance or transfer;
(ii) Cellar Door shall have provided at least thirty (30) days
prior to such proposed issuance, sale, conveyance or other transfer
(x) a notice ("Minority Sale Notice") to Pavilion containing the
name, address and business of the Person to whom the capital stock
of Cellar Door is proposed to be issued, sold, conveyed or otherwise
transferred and the specific economic terms and conditions of such
proposed issuance, sale, conveyance or other transfer and (y) an
offer in favor of Pavilion to acquire the capital stock of Cellar
Door which is proposed to be issued, sold, conveyed or otherwise
transferred on the same economic terms and conditions described in
the Minority Sale Notice. To avoid uncertainty, ambiguity or doubt,
it is hereby expressly stipulated and acknowledged that the
provisions of this Section 18.02(b)(ii) shall apply solely and
exclusively to the
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capital stock of Cellar Door only and not to the capital stock of
any of its Affiliates.
(iii) The closing of such issuance, sale, conveyance or other
transfer of the capital stock of Cellar Door shall have occurred (x)
between 30 and 120 days following receipt of the Minority Sale
Notice by Pavilion and (y) upon the same economic terms and
conditions as are described in the Minority Sale Notice.
If Pavilion elects to acquire any capital stock of Cellar Door pursuant to
an offer contained in a Minority Sale Notice, then it must provide Cellar
Door notice thereof within thirty (30) days following receipt of the
Minority Sale Notice and must close on such acquisition within sixty (60)
days following receipt of the Minority Sale Notice. If the proposed
issuance, sale, conveyance or other transfer of the capital stock of
Cellar Door is a part of a transaction which involves the acquisition by a
Person which is not a Qualified Cellar Door Shareholder of a minority
interest in substantially all of the Cellar Door affiliated group of
companies, then the allocation of price to the capital stock of Cellar
Door to be included in the Minority Sale Notice shall be made by Cellar
Door in good faith giving due consideration to the relative values of the
Partnership Interest of Cellar Door in the Partnership and the balance of
the assets being transferred to such person.
(c) Cellar Door shall cause ▇▇▇▇ ▇. ▇▇▇▇▇ to execute, of even date
herewith, a certificate or other instrument in form reasonably acceptable
to Pavilion confirming that (i) he is the owner of all of the issued and
outstanding capital stock of Cellar Door, (ii) his stock ownership
interest in Cellar Door will be burdened by and encumbered with the
transfer restrictions contained in this Section 18.02 and (iii) all share
certificates evidencing the capital stock in Cellar Door will include an
appropriate legend which references the transfer restrictions contained in
this Section 18.02. A default by ▇▇▇▇ ▇. ▇▇▇▇▇ under such certificate
shall be deemed a default by Cellar Door under this Agreement.
18.03 Pavilion's Partnership Interests. Without the prior written consent
of Cellar Door, no partnership interest in Pavilion may, at any time, be issued
to, sold, conveyed or otherwise transferred to any Person, if as a result of
such issuance, sale, conveyance or transfer, 50% or more of the partnership
interests in Pavilion will be controlled by one or more Persons other than PACE,
Sony and Viacom and Affiliates of PACE, Sony or Viacom. By executing this
Agreement in its capacity as a general partner of Pavilion, each of the partners
of Pavilion, in their individual capacity, hereby (i) represent and warrant that
they are the sole general partners of Pavilion, (ii) covenant and agree that
their respective partnership interests in Pavilion shall be burdened by and
encumbered with the transfer restrictions contained in this Section 18.03 and
(iii) agree that all certificates (if any) evidencing their partnership interest
in Pavilion shall include an appropriate legend which references the transfer
restrictions contained in this Section
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18.03. A default by any of the Partners of Pavilion with respect to the
obligations undertaken in this Section 18.03 shall be deemed to be a default by
Pavilion under this Agreement.
ARTICLE XIX
Miscellaneous Provisions
19.01 Notices. All notices, offers, approvals, elections, consents,
acceptances, waivers, reports, requests and other communications required or
permitted to be given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing and shall be deemed to have
been duly given if delivered personally with receipt acknowledged or sent by
registered or certified mail or equivalent, if available, return receipt
requested, or by facsimile, telex or cablegram (which shall be confirmed by a
writing sent by registered or certified mail or equivalent on the same day that
such facsimile, telex or cablegram is sent), or by recognized overnight courier
for next day delivery, addressed or sent to the parties at the following
addresses and facsimile numbers or to such other additional address or facsimile
number as any party shall hereafter specify by Communication to the other
parties:
Pavilion: c/o SM/PACE, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Cellar Door: Cellar Door
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Greenberg, Traurig, Hoffman, Lipoff, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
19.02 Delaware Law to Apply. This Agreement shall be construed under and
in accordance with laws of the State of Delaware without giving any effect to
the choice of law principles in the State of Delaware.
25
19.03 Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the Partnership
created by this Agreement.
19.04. Amendment. This Agreement may be amended or modified by the
Partners from time to time but only upon approval by all of the Partners
contained in a written instrument.
19.05 Headings. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.
19.06 Parties Bound. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where permitted
by this Agreement.
19.07 Legal Construction. In case any one or more of the provisions
contained in this Partnership Agreement shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision hereof and this
Partnership Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
19.08 Counterparts. This Partnership Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original.
19.09 Gender. Wherever the context shall so require, all words herein in
the male gender shall be deemed to include the female or neuter gender, all
singular words shall include the plural, and all plural words shall include the
singular.
19.10. Affiliate Liability. Notwithstanding anything to the contrary
contained herein, or implied hereby, in no event shall any Person, except for
the Partners and the general partners of Pavilion, be liable for the
responsibilities, obligations or liabilities of either of the Partners
hereunder. In that connection, it is specifically agreed and acknowledged that,
except for the general partners of Pavilion and except for the obligations
undertaken ▇▇▇▇ ▇. ▇▇▇▇▇ pursuant to the execution of separate documents
referenced herein, no officer, shareholder, director or other Affiliate of a
Partner shall be liable for any of the responsibilities, liabilities or
obligations of any Partner hereunder.
19.11 Prior Agreements Superseded. This Agreement supersedes any prior
understandings or written' or oral agreements between the parties respecting the
within subject matter.
19.12 Attorneys Fees. The prevailing party in any dispute, litigation or
other proceeding between the parties hereto involving the subject matter of this
Agreement shall be entitled to be
26
reimbursed by the other party for all of its reasonable attorneys' fees incurred
or paid in connection with the pursuit of such dispute, litigation or other
proceeding.
19.13 Effective Date. Although this Agreement has been executed on June
11, 1997, it is agreed and understood that it shall be effective as of May 15,
1996. Accordingly, although Pavilion held title to the Amphitheater through and
until the date of the execution hereof, it is agreed that the books and records
related to the operation of the Amphitheater shall be kept and maintained as if
the Partnership owned and operated the Amphitheater since May 15, 1996.
EXECUTED as of the day and year first written above.
CDC/SMT, INC.
a Florida corporation
By: /s/ ▇.▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
----------------------------
Title: Executive Vice President
----------------------------
"CELLAR DOOR"
PAVILION PARTNERS, a
Delaware general partnership
By: SM/PACE, Inc., a Texas corporation
and its managing partner
By: /s/▇▇▇▇▇▇ ▇. [ILLEGIBLE]
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. [ILLEGIBLE]
----------------------------
Title: Vice President
----------------------------
"PAVILION"
27
Exhibit "A"
GLOSSARY OF TERMS
Affiliate: With respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and under "common control with") when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
Applicable Multiplier: Shall have the meaning assigned to it pursuant to
Section 14.01(d) hereof.
Applicable Outdoor Facilities: Any outdoor entertainment facility other
than (i) sports stadiums with a capacity of more than 40,000 persons and (ii)
small outdoor facilities with a capacity of less than 4000 persons
Amphitheater: The outdoor entertainment facility currently being
constructed by Pavilion on the Amphitheater Site.
Amphitheater Tour: Any Tour which includes within it performances at (A)
two or more Applicable Outdoor Facilities which are owned, managed, booked or
operated by (i) Pavilion, (ii) Cellar Door, (iii) any Affiliate of Pavilion or
the partners of Pavilion or (iv) any Affiliate of Cellar Door or (B) any four or
more Applicable Outdoor Facilities.
Amphitheater Fiscal Year: Each twelve month period commencing on November
1 of a calendar year and ending on October 31 of the subsequent calendar year.
Amphitheater Site: That certain tract of property located in Palm Beach
County, Florida being more fully described on Exhibit "B" attached hereto.
Available Cash: After repayment of all outstanding Deficit Loans, cash
held by the Partnership at the end of any Amphitheater Fiscal Year which, in the
reasonable judgment of the Managing Partner, is not required for a necessary
working capital reserve for the obligations or business needs of the Partnership
during the next succeeding Amphitheater Fiscal Year.
Call Option: Shall have the meaning assigned to it pursuant to Section
14.01 hereof.
Capital Account: The tax capital account maintained by the Partnership for
each Partner in accordance with, and as required by, the provisions of Section
7.03 of this Agreement.
1
Cash Flow Amount: For any Amphitheater Fiscal Year, the amount of the
Partnership's net income (as determined in accordance with generally accepted
accounting principles) during such Amphitheater Fiscal Year plus the amount of
depreciation and amortization deductions taken by the Partnership during such
Amphitheater Fiscal Year in calculating the Partnership's earnings minus the
amount of all regularly scheduled principal payments paid during such
Amphitheater Fiscal Year on the Senior Debt and minus the amount of all sums
expended by the Partnership (other than Development Costs) during such
Amphitheater Fiscal Year for repairs, capital improvements and other items which
are required to be capitalized pursuant to generally accepted accounting
principles.
Cellar Door: CDC/SMT, Inc., a Florida corporation.
Closing: Shall have the meaning assigned to it pursuant to Section
14.01(c) hereof.
Code: The Internal Revenue Code of 1986, as amended.
Competitive Enclosed Facility: Any Competitive Facility other than a
Competitive Outdoor Facility.
Competitive Facility: Any building, arena, amphitheater, bowl, stadium,
hall, auditorium or other venue located in the South Florida Area (other than
the Amphitheater) in which Events can be presented with a capacity for more than
2,100 people, other than (i) Sunrise and (ii) a venue designed and used
primarily for the presentation of performing arts events such as symphony,
opera, ballet and theatrical performances.
Competitive Outdoor Facility: Any open-air and unenclosed Competitive
Facility.
CPI Index: Consumer Price Index for All Urban Consumers (all U.S. cities),
1982 - 84 equals 100 Base, published monthly by the U.S. Department of Labor's
Bureau of Labor Statistics, or any successor publication.
Current Actual Knowledge: When used with respect to Pavilion, the current
actual conscious knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
Default Notice: Shall have the meaning assigned to it pursuant to Section
15.01 hereof.
Defaulting Partner: Shall have the meaning assigned to it pursuant to
Section 15.01 hereof.
Deficit Loan: A loan extended by a Partner to the Partnership pursuant to
the provisions of Section 6.03 hereof.
Exhibit "A"
Page 2 of 8
Development Costs: The (i) Old Development Costs and (ii) costs and
expenses incurred in connection with the development or construction of the
Amphitheater, including the following:
(a) Costs incurred in connection with land planning, engineering and
designing such as fees to architects, engineers, land planners,
environmental consultants and other similar professionals.
(b) Legal fees and accounting fees incurred in connection with (i)
negotiating, preparing and executing the Lease Agreement and all other
agreements or contracts necessary for the operation and use of the
Amphitheater (such as a food and beverage concession agreement) and (ii)
regulatory matters related to land planning and use.
(c) Premiums, costs and charges related to the obtaining of title
commitments and title insurance for the leasehold estate and the liens
created pursuant to the Senior Mortgage.
(d) Costs and fees incurred in connection with obtaining surveys and
plats of the Amphitheater site and surrounding land.
(e) Direct costs of construction, including costs of materials and
labor and fees payable to contractors and construction managers or
consultants.
(f) Costs of acquiring rights-of-way, easements or similar rights
necessary for the construction or subsequent operation of the
Amphitheater.
(g) The start-up costs related to the opening of the Amphitheater in
its first year of operation, to the extent that such start-up costs are
capitalized by Pavilion in accordance with its past practices.
Development Cost Notice: Shall have the meaning assigned to it pursuant to
Section 5.02(b) hereof.
Effective Date of Dissolution: Shall have the meaning assigned to it
pursuant to Section 17.01 hereof.
Event: Any live performance or concert featuring professional musicians,
performers or artists, but excluding "free" performances or concerts for which
no patron or spectator is required to pay an admission price.
Gross Asset Value: Subject to the adjustments described in the next
succeeding sentence, the fair market value of each item of Partnership property
at the time of contribution to the capital of the partnership. The Gross Asset
Value of each item of Partnership property shall be
Exhibit "A"
Page 3 of 8
adjusted by depreciation, amortization or other cost recovery deductions
determined pursuant to Section 7.03(c)(ii) of this Agreement.
Hazardous Substances: Any hazardous, toxic or contaminated substance or
material within the scope of any federal, state or local environmental law or
ordinance.
Initial Gross Contribution Amount: Shall have the meaning assigned to it
pursuant to Section 5.01(b) hereof.
Lease Agreement: That certain Lease Agreement dated effective as of
January 4, 1995 and entered into by and between South Florida Fair and Palm
Beach County Expositions, Inc. ("Landlord"), as lessor, and Pavilion, as lessee,
and covering the Amphitheater, as amended pursuant to that certain First
Amendment to Lease dated June 5, 1995 and that certain Second Amendment to
Lease dated July 31, 1995. A Memorandum of the Lease Agreement was filed in
Official Records Book 8871, Page 826 of the Public Records of Palm Beach County,
Florida.
Major Actions: Any acts taken, sums expended or obligations incurred on
behalf of the Partnership for any of the following activities:
(a) borrowing any sums of money on behalf of the Partnership or
modifying the terms of any existing indebtedness of the Partnership other
than (i) Routine Renewals of the Senior Debt, (ii) loans received from any
Partner as contemplated in Sections 6.02, 6.03, or 6.04 hereof and (iii)
trade payables and other accounts payable incurred in the ordinary course
of the business of the Partnership;
(b) acquiring any property on behalf of the Partnership which does
not relate to the ownership, use, operation or maintenance of the
Amphitheater;
(c) expending any funds of the Partnership for Operating Expenses in
amounts which (i) exceed by 10% or more the amounts permitted to be
expended in any single line item of the Partnership's then effective
Operating Budget or (ii) would result in the total amount of Operating
Expenses actually expended for any Amphitheater Fiscal Year to exceed the
total budgeted amount of Operating Expenses set forth in the Operating
Budget for such Amphitheater Fiscal Year;
(d) granting a right of possession or management rights to any
Person at the Amphitheater by lease, license, sublease or other
arrangement for a term of two years or more;
(e) commencing any item of litigation involving an amount in dispute
of $100,000 or more;
Exhibit "A"
Page 4 of 8
(f) commencing, or permitting to commence, any bankruptcy proceeding
against the Partnership;
(g) engaging in any other business venture or entrepreneurial
activity other than that directly related to the Partnership Purposes;
(h) selling or otherwise transferring all or substantially all of
the Partnership's interest in the Amphitheater;
(i) except as expressly contemplated to the contrary in Section
12.03 hereof, approving or amending any Operating Budget;
(j) entering into any new line of business; and
(k) selling or otherwise transferring any item of property which
does not relate to the ownership, use, operation or maintenance of the
Amphitheater.
Managing Partner: Pavilion.
Minority Sale Notice: Shall have the meaning assigned to it pursuant to
Section 18.02(b)(ii) hereof.
Non-Defaulting Partner: Shall have the meaning assigned to it pursuant to
Section 15.01 hereof.
Old Development Costs: $421,590 of costs previously incurred and paid by
PACE Music Group, Inc. in connection with and related to the pursuit of
potential amphitheater developments in the South Florida Area which were never
constructed. The Old Development Costs are detailed on Exhibit "C" attached
hereto.
Operating Budget: The budget of Operating Expenses of the Partnership to
be prepared for each Amphitheater Fiscal Year in accordance with and pursuant to
the provisions of Section 12.03 hereof.
Operating Expenses: The overhead and operating expenses of the Partnership
which relate to the day-to-day operation of the Amphitheater such as salaries
for employees and staff for the Amphitheater, utility costs for the
Amphitheater, insurance costs relating to the maintenance of casualty and
liability insurance for the Amphitheater, interest on the Senior Debt, costs
relating to maintenance, repair and upkeep of the Amphitheater and the personal
property and equipment used in connection with the operation of the Amphitheater
and costs for the purchase of office supplies and equipment. Notwithstanding
anything to the contrary implied by the immediately preceding sentence, none of
the following types of expenditures or expenses shall be "Operating Expenses"
for purposes of this Agreement:
Exhibit "A"
Page 5 of 8
(a) the costs directly attributable to or associated with the
booking, production, presentation or promotion of any performance or event
at the Amphitheater such as artist costs, advertising costs and costs of
staging;
(b) costs or expenses which must be incurred as the result of any
emergency, casualty or other unforeseeable occurrence at the Amphitheater;
and
(c) any and all rent and other payments due and payable by the
Partnership under and pursuant to the terms of the Lease Agreement.
Operating Expense Notice: Shall have the meaning assigned to it pursuant
to Section 5.04(a) hereof.
Options: Shall have the meaning assigned to it pursuant to Section 14.01
hereof.
Option Election Notice: Shall have the meaning assigned to it pursuant to
Section 14.01(b) hereof.
Option Purchase Price: Shall have the meaning assigned to it pursuant to
Section 14.01(c) hereof.
PACE: PACE Entertainment Corporation, a Texas corporation.
Partners: Pavilion and Cellar Door. The term "Partners" shall not include
any assignee of a Partner's Partnership Interest, unless the other Partner
agrees to admit such assignee to the Partnership.
Partnership: The Partnership created by this Agreement.
Partnership Act: The Delaware Uniform Partnership Act, Title 6, Chapter 15
of the Delaware Code (1974 Revision), as amended from time to time.
Partnership Interest: All of the interest of any Partner in the
Partnership, including his (i) right to a distributive share of the profits and
losses of the Partnership, (ii) right to a distributive share of the assets of
the Partnership, and (iii) right to participate in the management of the affairs
of the Partnership.
Partnership Purposes: The purposes for which the Partnership is formed as
set forth in Article III of this Agreement.
Pavilion: Pavilion Partners, a Delaware general partnership whose sole
general partners are (i) SM/PACE, Inc., a Texas corporation and indirect
wholly-owned subsidiary of PACE, and
Exhibit "A"
Page 6 of 8
(ii) Amphitheater Entertainment Partnership, a Delaware general partnership
whose sole general partners are wholly-owned subsidiaries of Sony and Viacom.
Pavilion's Initial Balance: Shall have the meaning assigned to it pursuant
to Section 5.01(c) hereof.
Pavilion Loan: Shall have the meaning assigned to it pursuant to Section
6.02 hereof.
Percentage Interest: The respective Partnership Interest of each Partner
in the Partnership expressed as a percentage of the Partnership Interests owned
by all Partners. The Percentage Interest of Pavilion is seventy-five percent
(75%) and the Percentage Interest of Cellar Door is twenty-five (25%).
Permitted Encumbrances: The Senior Mortgage and all of the title
encumbrances included within the definition of "Permitted Encumbrances" as such
term is used in the Lease Agreement.
Permitted Rate: The lesser of (a) two percent (2%) per annum over the
Prime Rate or (b) the maximum non-usurious interest rate permitted by applicable
law from time to time in effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other form of entity.
Prime Rate: The prime rate of interest per annum announced, from time to
time, by major U.S. money center banks as published daily in the "Money Rates"
column of The Wall Street Journal; provided, however, that if The Wall Street
Journal should ever cease, for any reason, to publish such rate on a daily
basis, then the Prime Rate shall be the rate of interest designated, and in
effect from time to time, by Citibank, N.A., in New York, New York as its prime
rate or base rate charged on commercial loans.
Put Option: Shall have the meaning assigned to it pursuant to Section
14.01 hereof.
Qualified Cellar Door Shareholders: Any one or more of (a) the Qualified
Family Members, (b) any trust created for the benefit of any of the Qualified
Family Members, (c) any corporation, partnership or other entity which is owned
and controlled by Qualified Family Members, or (d) such other persons as may be
approved by Pavilion, which approval shall not be unreasonably withheld or
delayed.
Qualified Family Members: Any one or more of ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or
any children of ▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇.
Exhibit "A"
Page 7 of 8
Routine Renewals: With respect to the Senior Debt, any renewal, extension,
modification or other rearrangement of the Senior Debt which does not have the
effect of (a) increasing the principal balance of the Senior Debt, (b)
materially modifying the manner in which the interest rate accruing on the
Senior Debt is calculated or (c) materially accelerating the required principal
amortization of the Senior Debt during any calendar year.
Senior Debt: (a) The obligations and liabilities of Pavilion to repay that
certain loan previously obtained by Pavilion from The Sanwa Bank, Ltd. in the
maximum aggregate principal amount of $8,000,000 and all renewals,
rearrangements and extensions of such loan and (b) the indemnity obligations
previously undertaken by Pavilion for the benefit of Sony and Viacom, the
guarantors of such loan received from The Sanwa Bank, Ltd., under that certain
Indemnity Agreement executed by Pavilion and dated effective as of December 15,
1995, pursuant to which Pavilion agreed to indemnify and hold such guarantors
harmless from and against any loss, cost, expense or other claim arising out of
or otherwise relating to such loan or the guaranty thereof.
Senior Mortgage: The liens and security interests encumbering the
Partnership's leasehold estate in the Amphitheater created (i) in favor of Sony
and Viacom as security for the Senior Debt and (ii) pursuant to that certain
Leasehold Mortgage, Assignment of Rents and Leases and Security Agreement dated
effective as of December 6, 1995 and being recorded in Official Record Book
9044, Pages ▇▇▇▇ - ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Official Records.
Sony: Sony Music Entertainment Inc., a Delaware corporation.
South Florida Area: The geographical area encompassed by Broward, Dade and
Palm Beach Counties.
Sunrise: A concert venue with a maximum capacity for 3968 patrons and
located at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Total Project Cost: $11,458,577, the total amount of Development Costs
actually incurred and paid through final completion of the construction of the
Amphitheater.
Tour: Any series of performances by an entertainer or group of
entertainers in two or more locations with no single break longer than 30 days
in duration.
Treasury Regulations: The Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
Viacom: Viacom Inc., a Delaware corporation.
Exhibit "A"
Page 8 of 8
EXHIBIT "B"
AMPHITHEATER PARCEL
A portion of Tracts 17, 18, 19 and ▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
NO. 3, recorded in Plat Book 2, Pages 45 through 54, Public Records of Palm
Beach County, Florida, being more particularly described as follows:
COMMENCING at the Northwest corner of Tract 29, Block 7, of said PALM BEACH
FARMS COMPANY PLAT NO. 3, thence North 00-55-30 West, a distance of 60.00 feet
to a point 60.00 feet North of as measured at a 90 degree angle to the North
line of said Tract 29; thence South 89-50-54 West, a distance of 16.72 feet to
the POINT OF BEGINNING; thence North 04-33-57 East, a distance of 23.40 feet to
the Point of Curvature of a curve concave to the southwest having a radius of
86.00 feet; thence northwesterly along the arc of said curve through a central
angle of 94-27-03, a distance of 141.77 feet to the Point of Tangency; thence
North 89-53-06 West, a distance of 113.47 feet; thence North 06-43-58 West, a
distance of 59.63 feet; thence North 10-23-49 West, a distance of 376.62 feet;
thence North 00-00-00 West, a distance of 168.46 feet; thence North 89-38-52
East, a distance of 250.67 feet; thence South 87-47-17 East, a distance of
585.09 feet; thence South 26-31-59 East, a distance of 85.04 feet to the Point
of Curvature of a curve concave westerly having a radius of 590.00 feet; thence
southerly along the arc of said curve through a central angle of 63-12-28, a
distance of 650.88 feet to a point on a non-tangent line; thence South 89-50-54
West, a distance of 546.53 feet to the POINT OF BEGINNING.
Containing 13.510 acres, more or less.
EXHIBIT "C"
MIAMI AMPHITHEATRE - 210
CAPITAL CONSTRUCTION SUMMARY
3/31/91
================================================================================
BALANCE CURRENT YEAR BALANCE
DESCRIPTION 6/30/90 MONTH TO DATE 3/31/91
================================================================================
C01 General Construction 0 0 0 0
--------------------------------------------------------------------------------
General Constr. Subtotal 0 0 0 0
THEATRICAL EQUIPMENT
--------------------
C31 Audio 0 0 0 0
C32 Spotlights 0 0 0 0
C33 Rigging 0 0 0 0
--------------------------------------------------------------------------------
Theatrical Equip Sub. 0 0 0 0
EQUIPMENT
---------
C34 Seating 0 0 0 0
C35 Drop Boxes 0 0 0 0
C36 Patio Tables & Chairs 0 0 0 0
C37 Office Furniture & Equip. 0 0 0 0
C38 Dressing Furniture 0 0 0 0
C39 Cleaning & Maintenance 0 0 0 0
C40 Telephone 0 0 0 0
C41 Communication 0 0 0 0
C42 Computer 0 0 0 0
C43 Facility Signage 0 0 0 0
C44 Guard House 0 0 0 0
--------------------------------------------------------------------------------
Equipment Subtotal 0 0 0 0
OVERHEAD
--------
C45 Architectural 4,031 1,314 1,314 5,345
C46 Structural Engineering 0 0 0 0
C47 Geotechnical Engineer 0 0 0 0
C48 Survey (meters & Bounds, Topo) 159 0 0 159
C49 M.E.P. Engineering 0 0 0 0
C50 Civil Engr. (Grading, Drives) 0 0 0 0
C51 Storm & Utilities 0 0 0 0
C52 Erosion & Sedimentation 0 0 0 0
C53 Water Engineering 0 0 0 0
C54 Wastewater Engineering 0 0 0 0
C55 Environment Engineering 30 0 0 30
C56 Landscape Architecture 460 0 0 460
C57 Traffic Engineering 73,884 0 0 73,884
C58 Offsite Roads (Engr) 0 0 0 0
C59 Offsite Roads (Environ.) 0 0 0 0
C60 Acoustical Engineer 0 0 0 0
C60A Project Manager 0 0 0 0
C61 Construction Mgmnt. 0 0 0 0
C62 Arch. & Engr. Contingency 0 0 0 0
Engineering Other 0 0 0 0
--------------------------------------------------------------------------------
Overhead Subtotal 78,564 1,314 1,314 79,878
EXHIBIT "C"
MIAMI AMPHITHEATRE - 210
CAPITAL CONSTRUCTION SUMMARY
3/31/91
================================================================================
BALANCE CURRENT YEAR BALANCE
DESCRIPTION 6/30/90 MONTH TO DATE 3/31/91
================================================================================
START-UP
--------
C63 G & A, Marketing, Etc. 205 0 0 205
C78 Consultant 12,581 0 0 12,581
C79 Market Study 0 0 0 0
C64 Legal 183,054 0 2,393 185,447
C65 Title Insurance 0 0 0 0
C66 Relocation 0 0 0 0
C67 Misc. 3,353 0 0 3,353
C68 Electrical Connection 0 0 0 0
C69 Travel 32,438 0 1,486 33,924
C70 Concession Equipment 0 0 0 0
C71 Consultant 0 0 0 0
C72 Broker 0 0 0 0
C73 Contractor Fee 0 0 0 0
C76 Options Payments 22,500 0 0 22,500
C77 Fees, Licenses, Permits 5,000 0 0 5,000
C63B Postage & Delivery 1,409 0 0 1,409
C63H Public Relations 62,000 0 0 62,000
C63I Telephone 485 0 0 485
C75 Entertainment 487 0 0 487
Printing 80 0 0 80
Productions Fee 0 0 0 0
Professional 7,680 0 0 7,680
Photographer 30 0 0 30
Promotional 0 0 0 0
C63G Office Supplies 21 0 0 21
C63C Office Rent 6,311 0 0 6,311
Taxes 199 0 0 199
--------------------------------------------------------------------------------
Start-Up Subtotal 337,833 0 3,879 341,712
GRAND TOTAL 416,397 1,314 5,193 421,590
================================================================================
Exhibit "D"
List of Material Contracts
Amphitheater Vendors
Vendor Description
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Fine Host Corporation Concessions
Innovative State Concepts Stage Labor
Ranger Construction Industries Parking
The West Palm Beach Auto Auction Parking
The Contemporary Services Company Security
Comar Video Productions Lawn Video
Nutrition, Inc. Catering
Clair Brothers Audio Systems Lawn Sound
Palm Beach County Sheriff Police
Multi-Year Sponsorship Agreements
Sponsor Category
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GMC Truck Trucks
Coca-Cola Beverage
Republic Security Bank Bank
Budweiser Beer
▇▇▇▇ South Mobility Phone Company
Seagrams VIP Club Name
▇▇▇▇▇▇ Second Beer
American Express Official Credit Card
(American Land Title Association Leasehold Owner's Policy - 10-17-92)
(With Florida Modifications)
================================================================================
OWNER'S LEASEHOLD TITLE INSURANCE POLICY
Attorneys' Title Insurance Fund, Inc.
ORLANDO, FLORIDA
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED
IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, ATTORNEYS' TITLE INSURANCE
FUND, INC., a Florida corporation, herein called The Fund, insures, as of Date
of Policy shown in Schedule A, against loss or damage, not exceeding the Amount
of Insurance stated in Schedule A, sustained or incurred by the insured by
reason of:
1. Title to the estate or interest described in Schedule A being vested
other than as stated therein;
2. Any defect in or lien or encumbrance on the title;
3. Unmarketability of the title;
4. Lack of a right of access to and from the land.
The Fund will also pay the costs, attorneys' fees and expenses incurred in
defense of the title, as insured, but only to the extent provided in the
Conditions and Stipulations.
In Witness Whereof, ATTORNEYS' TITLE INSURANCE FUND, INC. has caused this policy
to be signed and sealed as of Date of Policy shown in Schedule A, the policy to
become valid when countersigned by an authorized signatory.
Attorneys' Title Insurance Fund, Inc.
[Corporate Seal]
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
SERIAL
OPL- 67874
================================================================================
FUND FORM OPL (rev 2/93)
EXHIBIT "E"
EXHIBIT "A"
AMPHITHEATER PARCEL
A portion of Tracts 17, 18, 19 and ▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
NO. 3, recorded in Plat Book 2, Pages 45 through 54, Public Records of Palm
Beach County, Florida, being more particularly described as follows:
COMMENCING at the Northwest corner of Tract 29, Block 7, of said PALM BEACH
FARMS COMPANY PLAT NO. 3, thence North 00-55-30 West, a distance of 60.00 feet
to a point 60.00 feet North of as measured at a 90 degree angle to the North
line of said Tract 29; thence South 89-50-54 West, a distance of 16.72 feet to
the POINT OF BEGINNING; thence North 04-33-57 East, a distance of 23.40 feet to
the Point of Curvature of a curve concave to the southwest having a radius of
86.00 feet; thence northwesterly along the arc of said curve through a central
angle of 94-27-03, a distance of 141.77 feet to the Point of Tangency; thence
North 89-53-06 West, a distance of 113.47 feet; thence North 06-43-58 West, a
distance of 59.63 feet; thence North 10-23-49 West, a distance of 376.62 feet;
thence North 00-00-00 West, a distance of 168.46 feet; thence North 89-38-52
East, a distance of 250.67 feet; thence South 87-47-17 East, a distance of
585.09 feet; thence South 26-31-59 East, a distance of 85.04 feet to the Point
of Curvature of a curve concave westerly having a radius of 590.00 feet; thence
southerly along the arc of said curve through a central angle of 63-12-28, a
distance of 650.88 feet to a point on a non-tangent line; thence South 89-50-54
West, a distance of 546.53 feet to the POINT OF BEGINNING.
Containing 13.510 acres, more or less.
EXHIBIT "E"
FUND OWNER'S FORM
SCHEDULE B
Policy No.: OPL-67874
This policy does not insure against loss or damage by reason of the following:
1. All matters as shown on ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇ No. 3 recorded in
Plat Book 2, Pages 45-54, inclusive, except and excluding herefrom the 25
feet road right-of-way running east-west and the 50 feet road right-of-way
running north-south on the Entire Tract as defined in the Lease Agreement
dated January 4, 1995.
2. Resolutions fixing set back lines along ▇▇▇▇▇ ▇▇▇▇ ▇▇ as recorded in Deed
Book 1148, page 51 and Deed Book 1148, page 62.
3. Restrictions and conditions as contained in the County Deed dated June 20,
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ FAIR AND PALM BEACH
COUNTY EXPOSTIONS, INC., recorded July 13, 1995 in Official Record Book
8830, Page 1728. Said restrictions include a right of reversion.
4. Removal Agreements for Future Right of Way with Palm Beach County and
recorded in Official Record Book 3225, page 210 and Official Record Book
6699, page 1569.
5. Blanket Easement contained in document recorded Jan. 24, 1975, in Official
Records Book 2386, Page 356. (Southern ▇▇▇▇ Tel. & Tel. Co.)
6. Agreement recorded June 14, 1982 in Official Records Book 3740, Page 1476.
(Developers Agreement with Palm Beach County re: utilities)
7. Right-of-way for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇/▇/▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇, as now laid out
and in use and as granted by those Right-of-Way Deeds recorded in Deed
Book 986, page 576; Deed Book 1018, page 506; Deed Book 1018, page 510;
and as conveyed from the County of Palm Beach to the State of Florida by
that Quit Claim Deed recorded in Deed Bk 1024, pg. 142.
8. Mortgage from ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ EXPOSITIONS, INC.
to SOUTHEAST BANK, N. A. (now known as FIRST UNION NATIONAL BANK OF
FLORIDA), recorded in Official Record Book 5986, page 598, and modified in
Official Record Book 8188, page 1776.
9. Assignment of Rents, Leases, Profits and Contracts recorded March 3, 1989,
in Official Record Book 5986, page 637, and amended in Official Record
Book 8188, page 1790.
10. UCC-1 Financing Statement recorded March 3, 1989 in Official Record Book
5986, page 644.
11. The encroachments as shown on the plat of survey dated July 28, 1995,
prepared by Mock, ▇▇▇▇ the power line encroachment along the south
property line and the encroachment of the adjoining property owner to the
south with pallet and trailer storage over
See Continuation Sheet
EXHIBIT "E"
CONTINUATION SHEET
(SCHEDULE B CONTINUED)
Commitment or Policy No.: OPL-67874
the line running along that westerly portion of Tracts 31 and 42.
NOTE: All of the above book and page references are to the public records of
Palm Beach County, Florida, and any reference to Tracts and Blocks are to The
Palm Beach Farms Company Plat No. 3.
NOTE: The exceptions set forth in Items 8, 9, and 10 above shall be affirmative
insured over by endorsement upon recording of an acceptable Subordination,
Nondisturbance and Attornment Agreement.
EXHIBIT "E"
Exclusions from Coverage
The following matters are expressly excluded from the coverage of this policy
and The Fund will not pay loss or damage, costs, attorneys' fees or expenses
which arise by reason of:
1.(a) Any law, ordinance or governmental regulation (including but not
limited to building and zoning laws, ordinances, or regulations)
restricting, regulating, prohibiting or relating to (i) the occupancy,
use, or enjoyment of the land; (ii) the character, dimensions or location
of any improvement now or hereafter erected on the land; (iii) a
separation in ownership or a change in the dimensions or area of the land
or any parcel of which the land is or was a part; or (iv) environmental
protection, or the effect of any violation of these laws, ordinances or
governmental regulations, except to the extent that a notice of the
enforcement thereof or a notice of a defect, lien or encumbrance resulting
from a violation or alleged violation affecting the land has been recorded
in the public records at Date of Policy.
(b) Any governmental police power not excluded by (a) above, except to the
extent that a notice of the exercise thereof or a notice of a defect, lien
or encumbrance resulting from a violation or alleged violation affecting
the land has been recorded in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been
recorded in the public records at Date of Policy, but not excluding from
coverage any taking which has occurred prior to Date of Policy which would
be binding on the rights of a purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to The Fund, not recorded in the public records at Date of
Policy, but known to the insured claimant and not disclosed in writing to
The Fund by the insured claimant prior to the date the insured claimant
became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss or damage which would not have been sustained if the
insured claimant had paid value for the estate or interest insured by this
policy.
4. Any claim, which arises out of the transaction vesting in the insured the
estate or interest insured by this policy, by reason of the operation of
federal bankruptcy, state insolvency, or similar creditors' rights laws,
that is based on:
(a) the transaction creating the estate or interest insured by this policy
being deemed a fraudulent conveyance or fraudulent transfer; or
(b) the transaction creating the estate or interest insured by this policy
being deemed a preferential transfer except where the preferential
transfer results from the failure:
(i) to timely record the instrument of transfer; or
(ii) of such recordation to impart notice to a purchaser for value or a
judgment or lien creditor.
Conditions and Stipulations (below insert)
EXHIBIT "E"
Conditions and Stipulations
1. Definition of Terms
The following terms when used in this policy mean:
(a) "insured": the insured named in Schedule A, and, subject to any rights
or defenses The Fund would have had against the named insured, those who succeed
to the interest of the named insured by operation of law as distinguished from
purchase including, but not limited to, heirs, distributees, devisees,
survivors, personal representatives, next of kin, or corporate or fiduciary
successors.
(b) "insured claimant": an insured claiming loss or damage.
(c) "knowledge" or "known": actual knowledge, not constructive knowledge
or notice which may be imputed to an insured by reason of the public records as
defined in this policy or any other records which impart constructive notice of
matters affecting the land.
(d) "land": the land described or referred to in Schedule A, and
improvements affixed thereto which by law constitute real property. The term
"land" does not include any property beyond the lines of the area described or
referred to in Schedule A, nor any right, title, interest, estate or easement in
abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing
herein shall modify or limit the extent to which a right of access to and from
the land is insured by this policy.
(e) "mortgage": mortgage, deed of trust, trust deed, or other security
instrument.
(f) "public records": records established under state statutes at Date of
Policy for the purpose of imparting constructive notice of matters relating to
real property to purchasers for value and without knowledge. With respect to
Section 1(a)(iv) of the Exclusions from Coverage, "public records" shall also
include environmental protection liens filed in the records of the clerk of the
United States district court for the district in which the land is located.
(g) "unmarketability of the title": an alleged or apparent matter
affecting the title to the land, not excluded or excepted from coverage, which
would entitle a purchaser of the estate or interest described in Schedule A to
be released from the obligation to purchase by virtue of a contractual condition
requiring the delivery of marketable title.
(h) "leasehold estate": the right of possession for the term or terms
described in Schedule A hereof subject to any provisions contained in the Lease
which limit the right of possession.
2. Continuation of Insurance After Conveyance of Title
The coverage of this policy shall continue in force as of Date of Policy
in favor of an insured only so long as the insured retains an estate or interest
in the land, or holds an indebtedness secured by a purchase money mortgage given
by a purchaser from the insured, or only so long as the insured shall have
liability by reason of covenants of warranty made by the insured in any transfer
or conveyance of the estate or interest. This policy shall not continue in force
in favor of any purchaser from the insured of either (i) an estate or interest
in the land, or (ii) an indebtedness secured by a purchase money mortgage given
to the insured.
3. Notice of Claim To Be Given by Insured Claimant
The insured shall notify The Fund promptly in writing (i) in case of any
litigation as set forth in Section 4(a) below, (ii) in case knowledge shall come
to an insured hereunder of any claim of title or interest which is adverse to
the title to the estate or interest, as insured, and which might cause loss or
damage for which The Fund may be liable by virtue of this policy, or (iii) if
title to the estate or interest, as insured, is rejected as unmarketable. If
prompt notice shall not be given to The Fund, then as to the insured all
liability of The Fund shall terminate with regard to the matter or matters for
which prompt notice is required; provided, however, that failure to notify The
Fund shall in no case prejudice the rights of any insured under this policy
unless The Fund shall be prejudiced by the failure and then only to the extent
of the prejudice.
4. Defense and Prosecution of Actions; Duty of Insured Claimant To Cooperate
(a) Upon written request by the insured and subject to the options
contained in Section 6 of these Conditions and Stipulations, The Fund, at its
own cost and without unreasonable delay, shall provide for the defense of an
insured in litigation in which any third party asserts a claim adverse to the
title or interest as insured, but only as to those stated causes of action
alleging a defect, lien or encumbrance or other matter insured against by this
policy. The Fund shall have the right to select counsel of its choice (subject
to the right of the insured to object for reasonable cause) to represent the
insured as to those stated causes of action and shall not be liable for and will
not pay the fees of any other counsel. The Fund will not pay any fees, costs or
expenses incurred by the insured in the defense of those causes of action which
allege matters not insured against by this policy.
(b) The Fund shall have the right, at its own cost, to institute and
prosecute any action or proceeding or to do any other act which in its opinion
may be necessary or desirable to establish the title to the estate or interest,
as insured, or to prevent or reduce loss or damage to the insured. The Fund may
take any appropriate action under the terms of this policy, whether or not it
shall be liable hereunder, and shall not thereby concede liability or waive any
provision of this policy. If The Fund shall exercise its rights under this
paragraph, it shall do so diligently.
(c) Whenever The Fund shall have brought an action or interposed a defense
as required or permitted by the provisions of this policy, The Fund may pursue
any litigation to final determination by a court of competent jurisdiction and
expressly reserves the right, in its sole discretion, to appeal from any adverse
judgment or order.
(d) In all cases where this policy permits or requires The Fund to
prosecute or provide for the defense of any action or proceeding, the insured
shall secure to The Fund the right to so prosecute or provide defense in the
action or proceeding, and all appeals therein, and permit The Fund to use, at
its option, the name of the insured for this purpose. Whenever requested by The
Fund, the insured, at The Fund's expense, shall give The Fund all reasonable aid
(i) in any action or proceeding, securing evidence, obtaining witnesses,
prosecuting or defending the action or proceeding, or effecting settlement, and
(ii) in any other lawful act which in the opinion of The Fund may be necessary
or desirable to establish the title to the estate or interest as insured. If The
Fund is prejudiced by the failure of the insured to furnish the required
cooperation, The Fund's obligations to the insured under the policy shall
terminate, including any liability or obligation to defend, prosecute, or
continue any litigation, with regard to the matter or matters requiring such
cooperation.
5. Proof of Loss or Damage
In addition to and after the notices required under Section 3 of these
Conditions and Stipulations have been provided The Fund, a proof of loss or
damage signed and sworn to by the insured claimant shall be furnished to The
Fund within 90 days after the insured claimant shall ascertain the facts giving
rise to the loss or damage. The proof of loss or damage shall describe the
defect in, or lien or encumbrance on the title, or other matter insured against
by this policy which constitutes the basis of loss or damage and shall state, to
the extent possible, the basis of calculating the amount of the loss or damage.
If The Fund is prejudiced by the failure of the insured claimant to provide the
required proof or loss or damage, The Fund's obligations to the insured under
the policy shall terminate, including any liability or obligation to defend,
prosecute, or continue any litigation, with regard to the matter or matters
requiring such proof of loss or damage.
In addition, the insured claimant may reasonably be required to submit to
examination under oath by any authorized representative of The Fund and shall
produce for examination, inspection and copying, at such reasonable times and
places as may be designated by any authorized representative of The Fund, all
records, books, ledgers, checks, correspondence and memoranda, whether bearing a
date before or after Date of Policy, which reasonably pertain to the loss or
damage. Further, if requested by any authorized representative of The Fund, the
insured claimant shall grant its permission, in writing, for any authorized
representative of The Fund to examine, inspect and copy all records, books,
ledgers, checks, correspondence and memoranda in the custody or control of a
third party, which reasonably pertain to the loss or damage. All information
designated as confidential by the insured claimant provided to The Fund pursuant
to this Section shall not be disclosed to others unless, in the reasonable
judgment of The Fund, it is necessary in the
Conditions and Stipulations (continued on following page)
EXHIBIT "E"
Conditions and Stipulations (continued)
administration of the claim. Failure of the insured claimant to submit for
examination under oath, produce other reasonably requested information or grant
permission to secure reasonably necessary information from third parties as
required in this paragraph shall terminate any liability of The Fund under this
policy as to that claim.
6. Options To Pay or Otherwise Settle Claims; Termination of Liability
In case of a claim under this policy, The Fund shall have the following
additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the amount of insurance under this policy
together with any costs, attorneys' fees and expenses incurred by the insured
claimant, which were authorized by The Fund, up to the time of payment or tender
of payment and which The Fund is obligated to pay.
Upon the exercise by The Fund of this option, all liability and
obligations to the insured under this policy, other than to make the payment
required, shall terminate, including any liability or obligation to defend,
prosecute, or continue any litigation, and the policy shall be surrendered to
The Fund for cancellation.
(b) To Pay or Otherwise Settle With Parties Other than the Insured or With
the Insured Claimant.
(i) to pay or otherwise settle with other parties for or in the name
of an insured claimant any claim insured against under this policy, together
with any costs, attorney's fees and expenses incurred by the insured claimant
which were authorized by The Fund up to the time of payment and which The Fund
is obligated to pay; or
(ii) to pay or otherwise settle with the insured claimant the loss
or damage provided for under this policy, together with any costs, attorneys'
fees and expenses incurred by the insured claimant which were authorized by The
Fund up to the time of payment and which The Fund is obligated to pay.
Upon the exercise by The Fund of either of the options provided for in
paragraphs (b)(i) or (ii), The Fund's obligations to the insured under this
policy for the claimed loss or damage, other than the payments required to be
made, shall terminate, including any liability or obligation to defend,
prosecute or continue any litigation.
7. Determination, Extent of Liability and Coinsurance
This policy is a contract of indemnity against actual monetary loss or
damage sustained or incurred by the insured claimant who has suffered loss or
damage by reason of matters insured against by this policy and only to the
extent herein described.
(a) The liability of The Fund under this policy shall not exceed the least
of:
(i) the Amount of Insurance stated in Schedule A; or,
(ii) the difference between the value of the insured estate or
interest as insured and the value of the insured estate or interest subject to
the defect, lien or encumbrance insured against by this policy.
(b) (This paragraph dealing with Coinsurance was removed from Florida
policies.)
(c) The Fund will pay only those costs, attorneys' fees and expenses
incurred in accordance with Section 4 of these Conditions and Stipulations.
8. Apportionment
If the land described in Schedule A consists of two or more parcels which
are not used as a single site, and a loss is established affecting one or more
of the parcels but not all, the loss shall be computed and settled on a pro rata
basis as if the amount of insurance under this policy was divided pro rata as to
the value on Date of Policy of each separate parcel to the whole, exclusive of
any improvements made subsequent to Date of Policy, unless a liability or value
has otherwise been agreed upon as to each parcel by The Fund and the insured at
the time of the issuance of this policy and shown by an express statement or by
an endorsement attached to this policy.
9. Limitation of Liability
(a) If The Fund establishes the title, or removes the alleged defect, lien
or encumbrance, or cures the lack of a right of access to or from the land, or
cures the claim of unmarketability of title, all as insured, in a reasonably
diligent manner by any method, including litigation and the completion of any
appeals therefrom, it shall have fully performed its obligations with respect to
that matter and shall not be liable for any loss or damage caused thereby.
(b) In the event of any litigation, including litigation by The Fund or
with The Fund's consent, The Fund shall have no liability for loss or damage
until there has been a final determination by a court of competent jurisdiction,
and disposition of all appeals therefrom, adverse to the title as insured.
(c) The Fund shall not be liable for loss or damage to any insured for
liability voluntarily assumed by the insured in settling any claim or suit
without the prior written consent of The Fund.
10. Reduction of Insurance; Reduction or Termination of Liability
All payments under this policy, except payments made for costs, attorneys'
fees and expenses, shall reduce the amount of the insurance pro tanto.
11. Liability Noncumulative
It is expressly understood that the amount of insurance under this policy
shall be reduced by any amount The Fund may pay under any policy insuring a
mortgage to which exception is taken in Schedule B or to which the insured has
agreed, assumed, or taken subject, or which is hereafter executed by an insured
and which is a charge or lien on the estate or interest described or referred to
in Schedule A, and the amount so paid shall be deemed a payment under this
policy to the insured owner.
12. Payment of Loss
(a) No payment shall be made without producing this policy for endorsement
of the payment unless the policy has been lost or destroyed, in which case proof
of loss or destruction shall be furnished to the satisfaction of The Fund.
(b) When liability and the extent of loss or damage has been definitely
fixed in accordance with these Conditions and Stipulations, the loss or damage
shall be payable within 30 days thereafter.
13. Subrogation Upon Payment or Settlement
(a) The Fund's Right of Subrogation.
Whenever The Fund shall have settled and paid a claim under this policy,
all right of subrogation shall vest in The Fund unaffected by any act of the
insured claimant.
The Fund shall be subrogated to and be entitled to all rights and remedies
which the insured claimant would have had against any person or property in
respect to the claim had this policy not been issued. If requested by The Fund,
the insured claimant shall transfer to The Fund all rights and remedies against
any person or property necessary in order to perfect this right of subrogation.
The insured claimant shall permit The Fund to ▇▇▇, compromise or settle in the
name of the insured claimant and to use the name of the insured claimant in any
transaction or litigation involving these rights or remedies.
If a payment on account of a claim does not fully cover the loss of the
insured claimant, The Fund shall be subrogated to these rights and remedies in
the proportion which The Fund's payment bears
Conditions and Stipulations (continued on reverse page)
EXHIBIT "E"
Conditions and Stipulations (continued)
to the whole amount of the loss.
If loss should result from any act of the insured claimant, as stated
above, that act shall not void this policy, but The Fund, in that event, shall
be required to pay only that part of any losses insured against by this policy
which shall exceed the amount, if any, lost to The Fund by reason of the
impairment by the insured claimant of The Fund's right of subrogation.
(b) The Fund's Rights Against Non-insured Obligors.
The Fund's right of subrogation against non-insured obligors shall exist
and shall include, without limitation, the rights of the insured to indemnities,
guaranties, other policies of insurance or bonds, notwithstanding any terms or
conditions contained in those instruments which provide for subrogation rights
by reason of this policy.
14. Valuation of Estate or Interest Insured
If, in computing loss or damage incurred by the insured, it becomes
necessary to determine the value of the estate or interest insured by this
policy, the value shall consist of the then present worth of the excess, if any,
of the fair market rental value of the estate or interest, undiminished by any
matters for which claim is made, for that part of the term stated in Schedule A
then remaining plus any renewal or extended term for which a valid option to
renew or extend is contained in the Lease, over the value of the rent and other
consideration required to be paid under the Lease for the same period.
15. Miscellaneous Items of Loss
In the event the insured is evicted from possession of all or a part of
the land by reason of any matters insured against by this policy, the following,
if applicable, shall be included in computing loss or damage incurred by the
insured, but not to the extent that the same are included in the valuation of
the estate or interest insured by this policy.
(a) The reasonable cost of removing and relocating any personal property
which the insured has the right to remove and relocate, situated on the land at
the time of eviction, the cost of transportation of that personal property for
the initial twenty-five miles incurred in connection with the relocation, and
the reasonable cost of repairing the personal property damaged by reason of the
removal and relocation. The costs referred to above shall not exceed in the
aggregate the value of the personal property prior to its removal and
relocation.
"Personal property," above referred to, shall mean chattels and property
which because of its character and manner of affixation to the land, can be
severed therefrom without causing appreciable damage to the property severed or
to the land to which the property is affixed.
(b) Rent or damages for use and occupancy of the land prior to the
eviction which the insured as owner of the leasehold estate may be obligated to
pay to any person having paramount title to that of the lessor in the Lease.
(c) The amount of rent which, by the terms of the Lease, the insured must
continue to pay to the lessor after eviction from the land, or part thereof,
from which the insured has been evicted.
(d) The fair market value, at the time of the eviction, of the estate or
interest of the insured in any sublease of all or part of the land existing at
the date of the eviction.
(e) Damages which the insured may be obligated to pay to any sublessee on
account of the breach of any sublease of all or part of the land caused by the
eviction.
16. Arbitration
Unless prohibited by applicable law, arbitration pursuant to the Title
Insurance Arbitration Rules of the American Arbitration Association may be
demanded if agreed to by both The Fund and the insured. Arbitrable matters may
include, but are not limited to, any controversy or claim between The Fund and
the insured arising out of or relating to this policy, and service of The Fund
in connection with its issuance or the breach of a policy provision or other
obligation. Arbitration pursuant to this policy and under the Rules in effect on
the date the demand for arbitration is made or, at the option of the insured,
the Rules in effect at Date of Policy shall be binding upon the parties. The
award may include attorneys' fees only if the laws of the state in which the
land is located permit a court to award attorneys' fees to a prevailing party.
Judgment upon the award rendered by the Arbitrator(s) may be entered in any
court having jurisdiction thereof.
The law of the situs of the land shall apply to an arbitration under the
Title Insurance Arbitration Rules.
A copy of the Rules may be obtained from The Fund upon request.
17. Liability Limited to this Policy; Policy Entire Contract
(a) This policy together with all endorsements, if any, attached hereto by
The Fund is the entire policy and contract between the insured and The Fund. In
interpreting any provision of this policy, this policy shall be construed as a
whole.
(b) Any claim of loss or damage, whether or not based on negligence, and
which arises out of the status of the title to the estate or interest covered
hereby or by any action asserting such claim, shall be restricted to this
policy.
(c) No amendment of or endorsement to this policy can be made except by a
writing endorsed hereon or attached hereto signed by either the President, a
Vice President, or Agent of The Fund.
18. Severability
In the event any provision of the policy is held invalid or unenforceable
under applicable law, the policy shall be deemed not to include that provision
and all other provisions shall remain in full force and effect.
19. Notices, Where Sent
All notices required to be given The Fund and any statement in writing
required to be furnished The Fund shall include the number of this policy and
shall be addressed to The Fund at its principal ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
EXHIBIT "E"
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OWNER'S
LEASEHOLD
TITLE INSURANCE
POLICY
Attorneys'
Title Insurance Fund,
Inc.
ORLANDO, FLORIDA
======
The
Fund
======
For information about coverage or assistance in
resolving complaints, call ▇▇▇-▇▇▇-▇▇▇▇.
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EXHIBIT "E"
CERTIFICATE OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
[▇▇▇▇ ▇. ▇▇▇▇▇]
By executing this Certificate in the space provided below, ▇▇▇▇ ▇. ▇▇▇▇▇
hereby represents, warrants and certifies to Pavilion Partners ("Pavilion"), a
Delaware general partnership, as follows:
(a) He is currently the owner of all of the issued and outstanding
capital stock of CDC/SMT, Inc. ("CDC/SMT"), a Florida corporation. Said
shares are fully paid and non-assessable and subject to no liens,
encumbrances, rights to purchase or other interests.
(b) His stock ownership interest in CDC/SMT shall be burdened by and
encumbered with the transfer restrictions contained in Section 18.02 of
that certain Partnership Agreement ("Partnership Agreement") dated
effective as of May 15, 1996 and entered into by and between Pavilion and
CDC/SMT regarding the formation of a general partnership between Pavilion
and CDC/SMT to be known as Coral Sky Amphitheater Partnership.
(c) Simultaneously herewith, all share certificates evidencing the
capital stock in CDC/SMT are being altered so as to include an appropriate
legend which references the transfer restrictions contained in Section
18.02 of the Partnership Agreement.
The undersigned additionally understands, agrees and acknowledges that (i)
Pavilion has relied upon the execution and delivery of this Certificate in
connection with its decision to enter into the Partnership Agreement with
CDC/SMT, (ii) Pavilion would not have entered into the Partnership Agreement but
for the agreement of the undersigned to execute and deliver this Certificate and
(iii) he shall indemnify, defend and hold Pavilion harmless from and against any
loss, cost, damage or claim which may be suffered by Pavilion arising out of or
relating to any of the representations and warranties contained herein being
untrue or any of the covenants set forth herein being breached.
DATED: May 15, 1996.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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