arena lease and management agreement city of glendale, arizona ...

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SUBSTANTIAL FINAL DRAFT 11/27/12 12:35 Agreements, Advertising Agreements, Naming Rights Agreements and vendor contracts) to contain the Exculpatory Language. 8.11.28.12.2 Assignment and Transfer. The Arena Manager shall cause every contract or agreement to which the Arena Manager or the Arena Sub-Manager is a party that (a) pertains to the management, operation and use of the Arena Facility, (b) provides for consideration in excess of $100,000, and (c) has a term of more than one year, including any options to renew or extend (excluding this Agreement, any Related Agreement, any agreement between the Arena Manager and the Arena Sub- Manager, and any employment agreements entered into by the Arena Manager or the Arena Sub- Manager), to provide for the following: (a) The right of the Arena Manager or the Arena Sub-Manager (as applicable), in connection with a replacement of the Arena Manager or the Arena Sub-Manager (as applicable) under this Agreement, to transfer and assign such contract or agreement, or the Arena Manager’s or the Arena Sub-Manager’s (as applicable) interest in such contract or agreement, to an assignee or transferee approved by the Team Owner and the City, provided that (i) such transfer or assignment fully assigns all of the rights and delegates all of the duties of the Arena Manager or the Arena Sub-Manager (as applicable) under such contract or agreement to such assignee or transferee, and (ii) such assignee or transferee assumes the Arena Manager’s or the Arena Sub-Manager’s (as applicable) duties thereunder; and (b) That upon such transfer or assignment, the non-assigning party(ies) shall thereafter look solely to such assignee or transferee for performance of the Arena Manager’s or the Arena Sub-Manager’s (as applicable) duties under such contract or agreement. 8.11.38.12.3 City’s Right to Cure. (a) The Arena Manager shall cause any contract or agreement entered into by the Arena Manager or the Arena Sub-Manager with respect to the management, operation and use of the Arena Facility (other than this Agreement, any Related Agreement, any agreement between the Arena Manager and the Arena Sub-Manager and any employment agreements entered into by the Arena Manager or the Arena Sub-Manager), which agreement or contract provides for consideration in excess of $100,000 and has a non-terminable term of more than one year (including any option to renew or extend), to provide that, if a material default is asserted against the Arena Manager or the Arena Sub-Manager(if any), then the City shall have the right, but not the obligation, to cure such default, as set forth in the immediately following sentence; (b) The City shall not exercise such right if the Arena Manager or the Arena Sub-Manager is taking action to contest or cure the asserted default unless the City reasonably determines that the actions of Arena Manager or Arena Sub-Manager will not effectively or timely cure the default. (c) The Arena Manager shall cause each such contract or agreement entered into after the Closing Date shall provide that (i) any default asserted against the Arena Manager or the Arena Sub-Manager shall require written notice to the Arena Manager or the Arena Sub-Manager and to the Team Owner and the City; and that (ii) the City has 15 days after the expiration of the cure time permitted the Arena Manager or the Arena Sub-Manager to exercise the City’s right to cure any asserted default. 37
SUBSTANTIAL FINAL DRAFT 11/27/12 12:35 waived such right. (d) If the City fails to timely exercise its right to cure, the City shall have (e) If the City elects to cure an asserted default in accordance with this Section, the City shall be entitled to reimbursement by the Arena Manager of all reasonable costs and expenses incurred by the City in curing such default from Operating Revenues without limiting the City’s other remedies against the Arena Manager or Arena Sub-Manager. 8.11.48.12.4 Arena Manager Affiliate Contracts. (a) No Arena Manager Affiliate Contract shall be less favorable to Arena Manager than could be obtained from a Third Party, provided that the foregoing requirement and the City’s right to demand compliance with subsection (b)-(d) below shall not apply with respect to an Arena Manager Affiliate Contract if the Arena Manager certifies that such contract (i) can have no adverse effect on the performance by the Arena Manager of its obligations under this Agreement, (ii) cannot increase Operating Expenses, and (iii) cannot decrease Operating Revenues. The Arena Manager shall maintain a separate and distinct file with complete copies of all Arena Manager Affiliate Contracts available for inspection by the City (or a representative thereof) at the Arena Facility at any time during normal business hours. (b) City and the Team Owner separately shall have 15 Business Days after receipt of such copy to give the Arena Manager (and the other parties) notice that either (i) the party giving notice agrees that the terms and conditions of the Arena Manager Affiliate Contract are no less favorable than could be obtained from a Third Party, or (ii) the party giving notice claims that such terms and conditions are less favorable than could be obtained from a Third Party. (c) Except in the circumstances where a reasonable determination can be made that the terms and conditions are clearly less favorable, if the City or Team Owner does not give such notice within such 15 Business Day period, then the City or Team Owner shall be deemed to have agreed that such terms and conditions are no less favorable than could be obtained from a Third Party. (d) If either the City or the Team Owner notifies the Arena Manager that the notifying party claims that the terms and conditions of an Arena Manager Affiliate Contract do not appear to have been made on a fair market, arms-length equivalent basis, the Arena Manager shall obtain bona fide bids for comparable services from not less than two Third Parties, taking into consideration not only price, but also quality, reliability, experience, expertise, ability to perform and similar factors, and such evidence shall be conclusive as to whether the proposed Affiliate contract is fair and acceptable. 8.128.13 Accounting Procedures.. The Arena Manager shall establish and maintain accounting procedures for the Arena Accounts on an accrual basis, in accordance with Generally Accepted Accounting Principles applied on a consistent basis throughout the periods indicated (commonly referred to as “GAAP”)”). 8.138.14 Annual Budget.. 8.13.18.14.1 Requirement. The Arena Manager shall, not later than May 31 of each year, prepare and submit to the City and the Team Owner for their respective review and approval, a proposed Annual Budget, for the period beginning on the July 1 following the end of the first full Fiscal Year and ending on June 30 of the following year, and for each Fiscal Year thereafter during the Term. 38
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Page 7 and 8: 21.4 Equitable Litigation .........
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