As filed with the Securities and Exchange Commission on March 18, 2020

File No. 001-39245

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 1

to

Form 10

 

 

General Form for Registration of Securities

Pursuant to Section 12(b) or (g) of

The Securities Exchange Act of 1934

 

 

MSG Entertainment Spinco, Inc.^*

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware		84-3755666
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)
Two Pennsylvania Plaza New York, NY		10121
(Address of Principal Executive Offices)		(Zip Code)

(212) 465-6000

(Registrant’s telephone number, including area code)

 

 

Securities to be Registered Pursuant to Section 12(b) of the Act:

 

Title of Each Class to be so Registered		Name of Each Exchange on Which Each Class is to be Registered
Class A Common Stock, par value $0.01 per share		New York Stock Exchange

Securities to be Registered Pursuant to Section 12(g) of the Act:

None

 

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer		☐		Accelerated Filer		☐
Non-Accelerated Filer		☐		Smaller Reporting Company		☐
				Emerging Growth Company		☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act:  ☒

 

 

 

 

*	The Registrant is currently named MSG Entertainment Spinco, Inc. The Registrant plans to change its name following the effective date of this registration statement.

INFORMATION REQUIRED IN REGISTRATION STATEMENT

CROSS-REFERENCE SHEET BETWEEN ITEMS OF FORM 10

AND THE ATTACHED INFORMATION STATEMENT.

The information required by the following Form 10 Registration Statement items is contained in the Information Statement sections identified below, each of which is incorporated in this report by reference:

 

Item 1.

Business

The information required by this item is contained under the sections “Summary,” “Business,” “Available Information” and “Combined Financial Statements” of this information statement. Those sections are incorporated herein by reference.

 

Item 1A.

Risk Factors

The information required by this item is contained under the section “Risk Factors.” That section is incorporated herein by reference.

 

Item 2.

Financial Information

The information required by this item is contained under the sections “Summary,” “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this information statement. Those sections are incorporated herein by reference.

 

Item 3.

Properties

The information required by this item is contained under the section “Business — Properties” of this information statement. That section is incorporated herein by reference.

 

Item 4.

Security Ownership of Certain Beneficial Owners and Management

The information required by this item is contained under the sections “Summary” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this information statement. Those sections are incorporated herein by reference.

 

Item 5.

Directors and Executive Officers

The information required by this item is contained under the section “Corporate Governance and Management” of this information statement. That section is incorporated herein by reference.

 

Item 6.

Executive Compensation

The information required by this item is contained under the section “Executive Compensation” of this information statement. That section is incorporated herein by reference.

 

Item 7.

Certain Relationships and Related Transactions

The information required by this item is contained under the sections “Certain Relationships and Related Party Transactions” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this information statement. Those sections are incorporated herein by reference.

 

Item 8.

Legal Proceedings

The information required by this item is contained under the section “Business — Legal Proceedings” of this information statement. That section is incorporated herein by reference.

Item 9.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

The information required by this item is contained under the sections “Risk Factors,” “The Distribution,” “Dividend Policy,” “Business,” “Corporate Governance and Management,” “Shares Eligible for Future Sale” and “Description of Capital Stock” of this information statement. Those sections are incorporated herein by reference.

 

Item 10.

Recent Sales of Unregistered Securities

On November 21, 2019, MSG Entertainment Spinco, Inc. was incorporated in the State of Delaware. On November 21, 2019, The Madison Square Garden Company acquired 100 uncertificated shares of common stock of MSG Entertainment Spinco, Inc. for $100.

 

Item 11.

Description of Registrant’s Securities to be Registered

The information required by this item is contained under the sections “The Distribution” and “Description of Capital Stock” of this information statement. Those sections are incorporated herein by reference.

 

Item 12.

Indemnification of Directors and Officers

The information required by this item is contained under the section “Indemnification of Directors and Officers” of this information statement. That section is incorporated herein by reference.

 

Item 13.

Financial Statements and Supplementary Data

The information required by this item is contained under the sections “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Combined Financial Statements” of this information statement. Those sections are incorporated herein by reference.

 

Item 14.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

 

Item 15.

Financial Statements and Exhibits

(a)    Financial Statements

The information required by this item is contained under the section “Combined Financial Statements” beginning on page F-1 of this information statement. That section is incorporated herein by reference.

(b)    Exhibits

The following documents are filed as exhibits hereto:

 

Exhibit		Description
2.1		Form of Distribution Agreement between The Madison Square Garden Company and MSG Entertainment Spinco, Inc.
2.2		Form of Contribution Agreement between The Madison Square Garden Company and MSG Entertainment Spinco, Inc.
3.1		Certificate of Incorporation of MSG Entertainment Spinco, Inc.
3.2		Form of Amended and Restated Certificate of Incorporation (as in effect immediately prior to Distribution) of MSG Entertainment Spinco, Inc. i
3.3		By-laws of MSG Entertainment Spinco, Inc.
3.4		Form of Amended By-laws (as in effect immediately prior to Distribution) of MSG Entertainment Spinco, Inc. i
4.1		Form of Registration Rights Agreement by and among MSG Entertainment Spinco, Inc. and The Charles F. Dolan Children Trusts. i
4.2		Form of Registration Rights Agreement by and among MSG Entertainment Spinco, Inc. and The Dolan Family Affiliates. i
8.1		Form of Tax Opinion of Sullivan & Cromwell LLP. i
10.1		Form of Transition Services Agreement between MSG Sports & Entertainment, LLC and MSG Sports, LLC. i
10.2		Form of Tax Disaffiliation Agreement between The Madison Square Garden Company and MSG Entertainment Spinco, Inc. i
10.3		Form of Employee Matters Agreement between The Madison Square Garden Company and MSG Entertainment Spinco, Inc. i
10.4		Form of Arena License Agreement between MSG Arena, LLC and New York Knicks, LLC. +
10.5		Form of Arena License Agreement between MSG Arena, LLC and New York Rangers, LLC. +
10.6		Form of MSG Entertainment Spinco, Inc. 2020 Employee Stock Plan.
10.7		Form of MSG Entertainment Spinco, Inc. 2020 Stock Plan for Non-Employee Directors.
10.8		Form of Standstill Agreement between MSG Entertainment Spinco, Inc. and the Dolan Family Group. i
10.9		Form of Indemnification Agreement between MSG Entertainment Spinco, Inc. and its Directors and Officers. i
10.10		Form of MSG Entertainment Spinco, Inc. Non-Employee Director Award Agreement.
10.11		Form of MSG Entertainment Spinco, Inc. Restricted Stock Units Agreement.
10.12		Form of MSG Entertainment Spinco, Inc. Performance Restricted Stock Units Agreement.
10.13		Form of MSG Entertainment Spinco, Inc. Option Agreement.
10.14		Form of MSG Entertainment Spinco, Inc. Performance Option Agreement.
10.15		Form of MSG Entertainment Spinco, Inc. Restricted Stock Units Agreement in respect of The Madison Square Garden Company Restricted Stock Units. i
10.16		Form of MSG Entertainment Spinco, Inc. Option Agreement in respect of The Madison Square Garden Company Options. i
10.17		Form of MSG Entertainment Spinco, Inc. Performance Restricted Stock Units in respect of The Madison Square Garden Company Performance Restricted Stock Units. i

Exhibit		Description
10.18		Construction Agreement, dated as of May 31, 2019, by and between MSG Las Vegas, LLC and Hunt Construction Group Inc. +
10.19		Ground Lease Agreement, dated July 16, 2018, by and among Sands Arena Landlord LLC, Venetian Casino Resort, LLC, MSG Las Vegas, LLC, and MSG Sports & Entertainment, LLC. +
10.20		First Amendment to Ground Lease, dated November 24, 2018, by and among Sands Arena Landlord LLC, Venetian Casino Resort, LLC, MSG Las Vegas, LLC, and MSG Sports & Entertainment, LLC.
10.21		Lease Agreement, between RCPI Trust and Radio City Productions LLC, relating to Radio City Music Hall, dated December 4, 1997. +
10.22		First Amendment to Lease Agreement, dated December 4, 1997, between RCPI Trust and Radio City Productions LLC, dated February 19, 1999.
10.23		Second Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated November 6, 2002. +
10.24		Third Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated August 14, 2008. +
10.25		Fourth Amendment to Lease Agreement, dated December 4, 1997, between RCPI Landmark Properties, L.L.C. and Radio City Productions LLC, dated January 24, 2011. +
10.26		Guaranty of Lease, dated September 28, 2015, between MSG Sports & Entertainment, LLC and RCPI Landmark Properties, L.L.C. +
10.27		Summary of Office Space Arrangement, between MSG Sports & Entertainment, LLC and the Knickerbocker Group LLC.
10.28		Aircraft Support Services Agreement, effective July 1, 2018, between MSG Sports & Entertainment, LLC and JDSS (for the G450).
10.29		Time Sharing Agreement, effective July 1, 2018, between MSG Sports & Entertainment, LLC and Charles F. Dolan (for the G550).
10.30		Time Sharing Agreement, effective July 1, 2018, between MSG Sports & Entertainment, LLC and Quart 2C, LLC (for the G550).
10.31		Dry Lease Agreement, dated December 17, 2018, between Sterling2K LLC and MSG Sports & Entertainment, LLC (for the DFO G550).
10.32		Dry Lease Agreement, effective July 1, 2018, between Quart 2C, LLC and MSG Sports & Entertainment, LLC (for the G450).
10.33		Aircraft Support Services Agreement, dated December 17, 2018, between MSG Sports & Entertainment, LLC and the Dolan Family Members (for the DFO G550).
10.34		Dry Lease Agreement, dated May 6, 2019, between Brighid Air, LLC and MSG Sports & Entertainment, LLC (for the Challenger).
10.35		Flight Crew Services Agreement, dated May 6, 2019, between DFO and MSG Sports & Entertainment, LLC (for the Challenger).
10.36		Time Sharing Agreement, dated May 6, 2019, between MSG Sports & Entertainment, LLC and Andrew Lustgarten (for the Challenger).
10.37		Time Sharing Agreement, dated December 15, 2017, between MSG Sports & Entertainment, LLC and Andrew Lustgarten (for the G450).
10.38		Time Sharing Agreement, dated December 15, 2017, between MSG Sports & Entertainment, LLC and Andrew Lustgarten (for the G550).
10.39		Time Sharing Agreement, dated December 17, 2018, between MSG Sports & Entertainment, LLC and Andrew Lustgarten (for the DFO G550).

Exhibit		Description
10.40		Form of Time Sharing Agreement between MSG Sports & Entertainment, LLC and MSG Sports, LLC (for the G450).
10.41		Transaction Agreement, dated as of January  31, 2017, between MSG TG, LLC, TG Merger Sub, LLC, TG Rollover Holdco LLC, TAO Group Holdings LLC, TAO Group Intermediate Holdings LLC, TAO Group Operating LLC, TAO Group Management LLC, TG Member Representative LLC, certain other parties thereto, and solely with respect to specific provisions MSG Entertainment Holdings, LLC and The Madison Square Garden Company.
10.42		Second Amended and Restated Limited Liability Company Agreement of TAO Group Holdings LLC, dated as of January 31, 2017.
10.43		Amendment No. 1 to Second Amended and Restated Limited Liability Company Agreement of TAO Group Holdings LLC, dated as of May 23, 2019.
10.44		Credit Agreement, dated as of May 23, 2019, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, the various lenders thereto, and JPMorgan Chase Bank, N.A., as administrative agent.
10.45		Security Agreement, dated as of May  23, 2019, among TAO Group Operating LLC, TAO Group Intermediate Holdings LLC, certain subsidiaries of TAO Group Intermediate Holdings LLC and JPMorgan Chase Bank, N.A., as administrative and collateral agent.
10.46		Form of Time Sharing Agreement between MSG Sports & Entertainment, LLC and MSG Sports, LLC (for the G550).
10.47		Form of Employment Agreement between MSG Entertainment Spinco, Inc. and James L. Dolan.
10.48		Form of Employment Agreement between MSG Entertainment Spinco, Inc. and Andrew Lustgarten.
10.49		Employment Agreement, dated October 25, 2018, between The Madison Square Garden Company and Philip D’Ambrosio, as assigned to MSG Entertainment Spinco, Inc. i
10.50		Employment Agreement, dated January 23, 2020, between The Madison Square Garden Company and Joseph Yospe, as assigned to MSG Entertainment Spinco, Inc. i
10.51		Form of Amendment to Employment Agreement to Employment Agreement between The Madison Square Garden Company and Joseph Yospe, as assigned to MSG Entertainment Spinco, Inc.
10.52		Form of NBA Transaction Agreement.
10.53		Form of NHL Transaction Agreement.
21.1		Subsidiaries of the Registrant.
99.1		Preliminary Information Statement dated March 18, 2020.

 

i	Previously filed on March 6, 2020.

+	Certain confidential information — identified by bracketed asterisks “[*****]” — has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) would be competitively harmful to the Registrant if publicly disclosed.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: March 18, 2020

Exhibit 2.1

DISTRIBUTION AGREEMENT

BY AND BETWEEN

THE MADISON SQUARE GARDEN COMPANY

(TO BE RENAMED MADISON SQUARE GARDEN SPORTS CORP.)

AND

MSG ENTERTAINMENT SPINCO, INC.

(TO BE RENAMED MADISON SQUARE GARDEN ENTERTAINMENT CORP.)

Dated as of [●], 2020

TABLE OF CONTENTS

 

				Page
		ARTICLE I
		DEFINITIONS
Section 1.1		General			1
Section 1.2		Reference; Interpretation			6
		ARTICLE II
		DISTRIBUTION AND
		CERTAIN COVENANTS
Section 2.1		Distribution			7
Section 2.2		MSG Determination			7
Section 2.3		Charter; Bylaws			7
Section 2.4		Directors			8
Section 2.5		Election of Officers			8
Section 2.6		Certain Licenses and Permits			8
Section 2.7		State Securities Laws			8
Section 2.8		Listing Application; Notice to Stock Exchange			8
Section 2.9		Assignment of Agreements			8
Section 2.10		Removal of Certain Guarantees; Releases from Liabilities			9
Section 2.11		Corporate Names; Trademarks			10
Section 2.12		Ancillary Agreements			10
Section 2.13		Acknowledgment by Spinco			10
Section 2.14		Release			10
Section 2.15		Discharge of Liabilities			10
Section 2.16		Further Assurances			12
		ARTICLE III
		INDEMNIFICATION
Section 3.1		Indemnification by MSG			12
Section 3.2		Indemnification by Spinco			13
Section 3.3		Procedures for Indemnification			13
Section 3.4		Indemnification Payments			15
		ARTICLE IV
		ACCESS TO INFORMATION
Section 4.1		Provision of Corporate Records			15
Section 4.2		Access to Information			16
Section 4.3		Witnesses; Documents and Cooperation in Actions			16
Section 4.4		Confidentiality			16
Section 4.5		Privileged Matters			17
Section 4.6		Ownership of Information			18
Section 4.7		Cost of Providing Records and Information			18
Section 4.8		Retention of Records			18
Section 4.9		Other Agreements Providing for Exchange of Information			19
Section 4.10		Policies and Best Practices			19
Section 4.11		Compliance with Laws and Agreements			19

 

- i -

				Page
		ARTICLE V
		MISCELLANEOUS
Section 5.1		Complete Agreement; Construction			19
Section 5.2		Ancillary Agreements			19
Section 5.3		Counterparts			19
Section 5.4		Survival of Agreements			19
Section 5.5		Distribution Expenses			19
Section 5.6		Notices			19
Section 5.7		Waivers			20
Section 5.8		Amendments			20
Section 5.9		Assignment			20
Section 5.10		Successors and Assigns			20
Section 5.11		Termination			20
Section 5.12		Subsidiaries			20
Section 5.13		Third-Party Beneficiaries			20
Section 5.14		Title and Headings			21
Section 5.15		Schedules			21
Section 5.16		Governing Law			21
Section 5.17		Waiver of Jury Trial			21
Section 5.18		Specific Performance			21
Section 5.19		Severability			21

 

Schedule A-1 List of Spinco Subsidiaries			A-1
Schedule A-2 List of MSG Minority-Ownership Subsidiaries			A-2
Schedule B-1 Retained Claims Liabilities			B-1
Schedule B-2 Spinco Retained Claims Liabilities			B-2
Schedule C-1 MSG Group Guarantees			C-1
Schedule C-2 Spinco Group Guarantees			C-2
Schedule D Ancillary Agreements			D-1

 

- ii -

DISTRIBUTION AGREEMENT

This Distribution Agreement (this “Agreement”), is dated as of [●], 2020, by and between The Madison Square Garden Company (to be renamed Madison Square Garden Sports Corp. after the Effective Time (as defined herein)), a Delaware corporation (“MSG”), and MSG Entertainment Spinco, Inc. (to be renamed Madison Square Garden Entertainment Corp. after the Effective Time), a Delaware corporation and an indirect wholly-owned subsidiary of MSG (“Spinco” and, together with MSG, the “Parties”).

WHEREAS, the Board of Directors of MSG determined that it is in the best interests of MSG and its stockholders to separate the business of Spinco, as more fully described in Spinco’s registration statement on Form 10 (collectively, the “Spinco Business”), from MSG’s other businesses on the terms and conditions set forth herein;

WHEREAS, the Board of Directors of MSG has authorized the distribution to the holders of the issued and outstanding shares of MSG Common Stock (as of the record date for the distribution) of all of the issued and outstanding shares of Spinco Common Stock, on the basis of one share of Spinco Class A Common Stock for every [●] share[s] of MSG Class A Common Stock and one share of Spinco Class B Common Stock for every [●] share[s] of MSG Class B Common Stock (the “Distribution”);

WHEREAS, the Boards of Directors of MSG and Spinco have each determined that the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements are in furtherance of and consistent with the Corporate Business Purposes and, as such, are in the best interests of their respective companies and stockholders or sole member, as applicable, and have approved this Agreement and each of the Ancillary Agreements; and

WHEREAS, the Parties have determined to set forth the principal corporate and other transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters prior to and following the Distribution.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 General. Unless otherwise defined herein or unless the context otherwise requires, as used in this Agreement, the following terms shall have the following meanings:

“Action” shall mean any demand, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.

“Affiliate” shall mean, when used with respect to any specified Person, a Person that directly or indirectly controls, is controlled by, or is under common control with such specified Person. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise. Unless explicitly provided herein to the contrary, for purposes of this Agreement none of MSG, MSG Networks Inc. or AMC Networks Inc., nor any of their respective Subsidiaries, shall be deemed to be an Affiliate of Spinco or any of its Subsidiaries, and none of Spinco, MSG Networks Inc. or AMC Networks Inc., nor any of their respective Subsidiaries, shall be deemed to be an Affiliate of MSG or any of its Subsidiaries. For the avoidance of doubt, the term “Affiliate” as it applies to Spinco shall include all of the Spinco Subsidiaries.

“Agent” shall have the meaning set forth in Section 2.1(a) of this Agreement.

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

“Ancillary Agreements” shall mean all of the written agreements, instruments, understandings, assignments or other arrangements (other than this Agreement) entered into by the Parties or any other member of their respective Groups in connection with the transactions contemplated hereby, including the agreements set forth on Schedule D.

“Applicable Rate” shall mean the rate of interest per annum announced from time to time by JPMorgan Chase Bank, National Association, as its prime lending rate.

“Arena Indebtedness” shall have the meaning set forth in the NBA Debt Policies.

“Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banking institutions located in The City of New York are authorized or obligated by law or executive order to close.

“Commission” shall mean the Securities and Exchange Commission.

“Contribution Agreement” shall mean the Contribution Agreement among MSG, MSG Sports & Entertainment, LLC (to be renamed MSG Entertainment Group, LLC) and Spinco, which has been or shall be entered into prior to the Distribution Date.

“Corporate Business Purposes” shall have the meaning set forth in the Tax Disaffiliation Agreement.

“Distribution” shall have the meaning set forth in the recitals to this Agreement.

“Distribution Date” shall mean such date as may be determined by the Board of Directors of MSG, or a committee of such Board of Directors, as the date as of which the Distribution shall be effected.

“Distribution Record Date” shall mean such date as may be determined by the Board of Directors of MSG, or a committee of such Board of Directors, as the record date for the Distribution.

“Effective Time” shall mean 11:59 p.m., New York City time, on the Distribution Date.

“Enterprise Indebtedness” shall have the meaning set forth in the NBA Debt Policies.

“Environmental Laws” shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, principles of common law, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions or requirements (including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq.), whether now or hereafter in existence, relating to the environment, natural resources, human health or safety, endangered or threatened species of fish, wildlife and plants, or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation indoor or outdoor air, surface water, groundwater and surface or subsurface soils), or otherwise relating to the manufacture, processing, distribution, use, presence, treatment, storage, disposal, transport or handling of, or exposure to, pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the investigation, cleanup or other remediation thereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Governmental Authority” shall mean any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official, NYSE or other regulatory, administrative or governmental authority.

“Group” shall mean the MSG Group or the Spinco Group.

“Indemnifiable Losses” shall mean any and all Liabilities, costs or expenses (including reasonable out-of-pocket attorneys’ fees and any and all out-of-pocket expenses) reasonably incurred in investigating, preparing for or defending against any Actions or potential Actions or in settling any Action or potential Action or in satisfying any judgment, fine or penalty rendered in or resulting from any Action.

“Indemnifying Party” shall have the meaning set forth in Section 3.3(a) of this Agreement.

“Indemnitee” shall mean a Spinco Indemnitee or a MSG Indemnitee.

 

- 2 -

“Information Statement” shall mean the Information Statement filed with the Commission as part of the Registration Statement and mailed to the holders of shares of MSG Common Stock in connection with the Distribution, including any amendments or supplements thereto.

“Law” shall mean all laws, statutes and ordinances and all regulations, rules and other pronouncements of Governmental Authorities having the effect of law of the United States, any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof.

“Liabilities” shall mean any and all debts, liabilities, obligations, responsibilities, Losses, damages (whether compensatory, punitive or treble), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including without limitation those arising under or in connection with any Law (including any Environmental Law), Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or Party to this Agreement, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursement and expense of counsel, expert and consulting fees and costs related thereto or to the investigation, response, defense or settlement thereof.

“Losses” shall mean all losses, damages, claims, demands, judgments or settlements of any nature or kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, suffered by an Indemnitee.

“MSG” shall have the meaning set forth in the preamble to this Agreement.

“MSG Assignee” shall have the meaning set forth in Section 2.9(a) of this Agreement.

“MSG Assignor” shall have the meaning set forth in Section 2.9(a) of this Agreement.

“MSG Assumed Contract Liabilities” shall have the meaning set forth in Section 2.9(b) of this Agreement.

“MSG Business” shall mean each and every business conducted at any time by MSG or any Subsidiary controlled by MSG, except the Spinco Business.

“MSG Class A Common Stock” shall mean the Class A common stock, par value $0.01 per share, of MSG.

“MSG Class B Common Stock” shall mean the Class B common stock, par value $0.01 per share, of MSG.

“MSG Common Stock” shall mean the MSG Class A Common Stock, together with the MSG Class B Common Stock.

“MSG Group” shall mean MSG and each Person (other than any member of the Spinco Group) that is a Subsidiary of MSG immediately after the Distribution Date.

“MSG Indemnitee” shall mean:

(i) MSG and each Affiliate thereof after giving effect to the Distribution; and

(ii) each of the respective Representatives of any of the entities described in the immediately preceding clause (i) and each of the heirs, executors, successors and assigns of any of such Representatives, except in the case of clauses (i) and (ii), the Spinco Indemnitees; provided, however, that a Person who was a Representative of MSG or an Affiliate thereof may be a MSG Indemnitee in that capacity notwithstanding that such Person may also be a Spinco Indemnitee.

“MSG Liabilities” shall mean:

(i) any and all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not

 

- 3 -

expressly made subject to this Agreement by the express terms of the Ancillary Agreement) that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by MSG or any member of the MSG Group, and all Liabilities of any member of the MSG Group under this Agreement;

(ii) all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of the Ancillary Agreement), if and to the extent relating to, arising out of or resulting from:

(A) the ownership or operation of the MSG Business (including any discontinued business or any business which has been sold or transferred), as conducted at any time prior to, on or after the Distribution Date; or

(B) the ownership or operation of any business conducted by MSG or any MSG Subsidiary at any time after the Distribution Date; and

(iii) any Retained Claims Liabilities;

(iv) all MSG Retained Contract Liabilities; and

(v) all MSG Assumed Contract Liabilities.

Notwithstanding the foregoing, the MSG Liabilities shall not include: (x) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be retained or assumed by Spinco or any member of the Spinco Group; or (y) any agreements and obligations of any member of the Spinco Group under this Agreement or any of the Ancillary Agreements.

“MSG Releasee” shall have the meaning set forth in Section 2.15(b) of this Agreement.

“MSG Releasor” shall have the meaning set forth in Section 2.15(b) of this Agreement.

“MSG Retained Contract Liability” shall have the meaning set forth in Section 2.9(a) of this Agreement.

“MSG Subsidiaries” shall mean all of the Subsidiaries of MSG other than Spinco and the Spinco Subsidiaries.

“NBA” shall mean the National Basketball Association.

“NBA Agreements” shall mean (a) the Agreement and Undertaking, dated as of September 28, 2015, by and among the NBA, MSG, certain subsidiaries of MSG and certain other entities, (b) the Transfer Consent Agreement, dated as of September 28, 2015, by and among the NBA, MSG, certain subsidiaries of MSG and certain other entities, and (c) the Transaction Agreement, dated as of the date hereof, by and among the NBA, MSG, certain subsidiaries of MSG, Spinco and certain other entities.

“NHL” shall mean the National Hockey League.

“NHL Agreements” shall mean (a) the Transaction Approval Agreement, dated as of September 28, 2015, by and among the NHL, MSG and certain subsidiaries of MSG, (b) the Transfer Consent Agreement, dated as of September 28, 2015, by and among the NHL, MSG and certain subsidiaries of MSG, and (c) the Transaction Agreement, dated as of the date hereof, by and among the NHL, MSG, certain subsidiaries of MSG, Spinco and certain other entities.

“NYSE” shall mean the New York Stock Exchange LLC.

“Outside Notice Date” shall have the meaning set forth in Section 3.3(a).

 

- 4 -

“Parties” shall have the meaning set forth in the preamble to this Agreement.

“Person” shall mean any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

“Records” shall have the meaning set forth in Section 4.1(a) of this Agreement.

“Registration Statement” shall mean the registration statement on Form 10 filed with the Commission to effect the registration of the Spinco Class A Common Shares pursuant to the Exchange Act.

“Representative” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

“Retained Claims Liabilities” shall mean the Liabilities, if any, described in Schedule B-1.

“Spinco” shall have the meaning set forth in the preamble to this Agreement.

“Spinco Assignee” shall have the meaning set forth in Section 2.9(b) of this Agreement.

“Spinco Assignor” shall have the meaning set forth in Section 2.9(b) of this Agreement.

“Spinco Assumed Contract Liabilities” shall have the meaning set forth in Section 2.9(a) of this Agreement.

“Spinco Business” shall have the meaning set forth in the recitals to this Agreement. For the avoidance of doubt, Spinco Business includes businesses that are in development such as the MSG Spheres in Las Vegas and London.

“Spinco Class A Common Shares” shall mean the shares of Spinco Class A Common Stock to be distributed in the Distribution.

“Spinco Class A Common Stock” shall mean the Class A common stock, par value $0.01 per share, of Spinco.

“Spinco Class B Common Shares” shall mean the shares of Class B Common Stock to be distributed in the Distribution.

“Spinco Class B Common Stock” shall mean the Class B common stock, par value $0.01 per share, of Spinco.

“Spinco Common Stock” shall mean the Spinco Class A Common Stock, together with the Spinco Class B Common Stock.

“Spinco Group” shall mean Spinco and each Person that is a Spinco Subsidiary immediately after the Distribution Date.

“Spinco Indemnitees” shall mean:

(i) Spinco and each Affiliate thereof after giving effect to the Distribution; and

(ii) each of the respective Representatives of any of the entities described in the immediately preceding clause (i) and each of the heirs, executors, successors and assigns of any of such Representatives.

“Spinco Liabilities” shall mean:

(i) any and all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of any the Ancillary Agreement) that are expressly contemplated by this Agreement or any Ancillary Agreements (or the Schedules hereto or thereto) as Liabilities to be assumed by Spinco or any member of the Spinco Group, and all Liabilities of any member of the Spinco Group under this Agreement;

(ii) all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made

 

- 5 -

subject to this Agreement by the express terms of the Ancillary Agreement), if and to the extent relating to, arising out of or resulting from:

(A) the ownership or operation of the Spinco Business (including any discontinued business or any business which has been sold or transferred), as conducted at any time prior to, on or after the Distribution Date, including any Liability incurred by MSG Group under the indemnification provisions of the 2015 Distribution Agreement which relate to the ownership or operation of the Spinco Business (a “2015 Liability”); or

(B) the ownership or operation of any business conducted by Spinco or any Spinco Subsidiary at any time after the Distribution Date, including any 2015 Liability;

(iii) all 2015 Liabilities and any Spinco Retained Claims Liabilities;

(iv) all Spinco Assumed Contract Liabilities; and

(v) all Spinco Retained Contract Liabilities.

Notwithstanding the foregoing, the Spinco Liabilities shall not include: (x) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be retained or assumed by MSG or any member of the MSG Group; (y) any agreements and obligations of any member of the MSG Group under this Agreement or any of the Ancillary Agreements and (z) any Retained Claims Liabilities.

“Spinco Releasee” shall have the meaning set forth in Section 2.14(a) of this Agreement.

“Spinco Releasor” shall have the meaning set forth in Section 2.14(a) of this Agreement.

“Spinco Retained Claims Liabilities” shall mean the Liabilities described in Schedule B-2.

“Spinco Retained Contract Liabilities” shall have the meaning set forth in Section 2.9(b) of this Agreement.

“Spinco Share” shall mean each Spinco Class A Common Share and Spinco Class B Common Share, on an individual basis.

“Spinco Subsidiaries” shall mean all of the Subsidiaries listed on Schedule A-1.

“Subsidiary” shall mean with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the stock or other equity interests entitled to vote on the election of members to the board of directors or similar governing body or, in the case of a Person with no governing body, more than 50% of the equity interests. As to Spinco, the term “Subsidiary” shall also include the 50% or less owned entities listed on Schedule A-2.

“Tax” shall have the meaning set forth in the Tax Disaffiliation Agreement.

“Tax Disaffiliation Agreement” shall mean the Tax Disaffiliation Agreement by and between MSG and Spinco, which agreement shall be entered into prior to or on the Distribution Date.

“Third Party” shall mean any Person who is not a Party to this Agreement.

“Third-Party Claim” shall have the meaning set forth in Section 3.3(a) of this Agreement.

“Transfers” shall mean the direct and indirect transfers of assets and assignment of agreements from MSG to Spinco which resulted in Spinco owning, directly or indirectly, the Spinco Business.

“2015 Distribution Agreement” shall mean the Distribution Agreement, dated as of September 15, 2015 between MSG and MSG Networks Inc.

Section 1.2 Reference; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include,”

 

- 6 -

“includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. Neither this Agreement nor any Ancillary Agreement shall be construed against either Party as the principal draftsperson hereof or thereof.

ARTICLE II

DISTRIBUTION AND

CERTAIN COVENANTS

Section 2.1 Distribution. (a) On or prior to the Distribution Date, MSG shall instruct MSG’s stock transfer agent (the “Agent”) to effect the Distribution by distributing, on or as soon as practicable following the Distribution Date, the Spinco Class A Common Shares and the Spinco Class B Common Shares to the holders of record as of the Distribution Record Date of MSG Class A Common Stock and MSG Class B Common Stock, respectively, and to credit the appropriate class and number of such Spinco Shares to book entry accounts or issue properly endorsed stock certificates, as applicable, for each such holder of MSG Common Stock, all as further contemplated by the Information Statement and hereby. Spinco shall provide any share certificates that the Agent shall require in order to effect the Distribution. The Distribution shall be effective at 11:59 P.M., New York City time, on the Distribution Date.

(b) The Spinco Shares distributed in the Distribution are generally intended to be distributed pursuant to a book entry system. MSG shall instruct the Agent to deliver the Spinco Shares previously delivered to the Agent to a depositary and to mail to each holder of record of MSG Common Stock on the Distribution Record Date, a statement of the Spinco Shares credited to such holder’s account. If prior to or following the Distribution a holder of Spinco Shares requests physical certificates instead of participating in the book entry system, the Agent shall issue certificates for such shares. In lieu of fractional shares, cash shall be given to holders otherwise entitled to such fractional Spinco Shares on the Distribution Date. As soon as practicable following the Distribution Date, the Agent shall (i) aggregate all fractional Spinco Class A Common Shares into whole Spinco Class A Common Shares and (ii) aggregate all fractional Spinco Class B Common Shares into whole Spinco Class B Common Shares, and convert the whole Spinco Class B Common Shares into whole Spinco Class A Common Shares, and (iii) sell the whole Spinco Class A Common Shares in the open market at then prevailing prices and shall distribute to each such holder such holder’s ratable share of the proceeds of such sale, net of brokerage fees incurred in such sales and after deducting any Taxes required to be withheld and applicable transfer Taxes.

Section 2.2 MSG Determination. MSG shall have the sole and absolute discretion to determine whether to proceed with all or part of the Distribution and all terms of the Distribution, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing of and conditions to the consummation of the Distribution. Spinco shall cooperate with MSG in all respects to accomplish the Distribution and shall, at MSG’s direction, promptly take any and all actions necessary or desirable to effect the Distribution. In its sole and absolute discretion, MSG shall select any investment banker(s) and manager(s) in connection with the Distribution, as well as any financial printer, solicitation and/or exchange agent and outside counsel for MSG, which shall include Sullivan & Cromwell LLP. Each of MSG and Spinco acknowledges that it has been afforded the opportunity to seek the advice and assistance of its own separate counsel in connection with the negotiation and preparation of this Agreement and the Ancillary Agreements.

Section 2.3 Charter; Bylaws. On or prior to the Distribution Date, Spinco and MSG shall have taken all necessary actions to provide for the adoption of the form of Amended and Restated Certificate of Incorporation and Amended By-laws in substantially the form filed by Spinco with the Commission as exhibits to the Registration Statement.

 

- 7 -

Section 2.4 Directors. On or prior to the Distribution Date, MSG and Spinco shall have taken all necessary action to cause the Board of Directors of Spinco to consist of the individuals identified in the Information Statement as directors of Spinco as of the Effective Time.

Section 2.5 Election of Officers. On or prior to the Distribution Date, Spinco shall take all actions necessary and desirable so that as of the Distribution Date the officers of Spinco will be as set forth in the Information Statement.

Section 2.6 Certain Licenses and Permits. On or prior to the Distribution Date or as soon as reasonably practicable thereafter, MSG shall use its commercially reasonable efforts to transfer or cause to be transferred any transferable licenses, permits and authorizations issued by any Governmental Authority which relate solely to the Spinco Business but which are held in the name of any member of the MSG Group, or in the name of any employee, officer, director, stockholder or agent of any such member, or otherwise, on behalf of a member of the Spinco Group to the appropriate member of the Spinco Group.

Section 2.7 State Securities Laws. Prior to the Distribution Date, MSG and Spinco shall take all such action as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States in order to effect the Distribution.

Section 2.8 Listing Application; Notice to Stock Exchange. (a) Prior to the Distribution Date, MSG and Spinco shall prepare and file with NYSE a listing application and related documents and shall take all such other actions with respect thereto as shall be necessary or desirable in order to cause NYSE to list on or prior to the Distribution Date, subject to official notice of issuance, the Spinco Class A Common Shares.

(b) Prior to the Distribution, MSG shall give NYSE not less than ten days’ advance notice of the Distribution Record Date in compliance with Rule 10b-17 under the Exchange Act and Section 204.12 of the NYSE Listed Company Manual.

Section 2.9 Assignment of Agreements.

(a) In connection with the Transfers, MSG and/or its Affiliates shall enter into assignment agreements pursuant to which certain rights and obligations of MSG and/or its Affiliates (in each case, an “MSG Assignor”) will be assigned to, and accepted and assumed by, Spinco and/or its Affiliates (in each case a “Spinco Assignee”), in each case effective at or prior to the Effective Time. Unless otherwise agreed in the relevant assignment agreement, the relevant MSG Assignor shall be entitled to the benefits of and be responsible for all Liabilities under each such agreement that relate to all periods of time prior to the Effective Time (each such Liability, an “MSG Retained Contract Liability”) and the relevant Spinco Assignee shall be entitled to the benefits of and be responsible for all Liabilities relating to all periods of time after the Effective Time (each such Liability, a “Spinco Assumed Contract Liability”).

(b) In connection with the Transfers, Spinco and/or its Affiliates shall enter into assignment agreements pursuant to which rights and obligations of Spinco and/or its Affiliates (in each case, an “Spinco Assignor”) will be assigned to, and accepted and assumed by, MSG and/or its Affiliates (in each case an “MSG Assignee”), in each case effective as of the Effective Time. Unless otherwise agreed in the relevant assignment agreement, the relevant Spinco Assignor shall be entitled to the benefits of and be responsible for all Liabilities under each such agreement that relate to all periods of time prior to the Effective Time (each such Liability, a “Spinco Retained Contract Liability”) and the relevant MSG Assignee shall be entitled to the benefits and responsible for all Liabilities relating to all periods of time after the Effective Time (each such Liability, an “MSG Assumed Contract Liability”).

 

- 8 -

Section 2.10 Removal of Certain Guarantees; Releases from Liabilities.

(a) Except as otherwise specified in any Ancillary Agreement, (i) Spinco shall use its commercially reasonable efforts to have, on or prior to the Distribution Date, or as soon as practicable thereafter, all members of the MSG Group removed as guarantors of or obligors for any Liability of Spinco, including in respect of those guarantees, if any, set forth on Schedule C-1 of this Agreement, and (ii) MSG shall use its commercially reasonable efforts to have, on or prior to the Distribution Date, or as soon as practicable thereafter, all members of the Spinco Group removed as guarantors of or obligors for any Liability of MSG, including in respect of those guarantees, if any, set forth on Schedule C-2 of this Agreement.

(b) If Spinco or MSG, as the case may be, is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), the applicable guarantor or obligor shall continue to be bound as such and, unless not permitted by Law or the terms thereof, the relevant beneficiary shall or shall cause one of its Subsidiaries, as agent or subcontractor for such guarantor or obligor, to pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder from and after the Effective Time.

(c) If (i) Spinco is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), or (ii) Spinco Liabilities arise from and after the Effective Time but before a member of the MSG Group which is a guarantor or obligor with reference to any such Spinco Liability is removed pursuant to Section 2.10(a), then such guarantor or obligor shall be indemnified by Spinco for all Liabilities incurred by it in its capacity as guarantor or obligor. Without limiting the foregoing, Spinco shall, or shall cause a member of the Spinco Group to, reimburse any such member of the MSG Group which is a guarantor or obligor as soon as practicable (but in no event later than 30 days) following delivery by MSG to Spinco of notice of a payment made pursuant to this Section 2.10 in respect of Spinco Liabilities.

(d) If (i) MSG is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), or (ii) MSG Liabilities arise from and after the Effective Time but before a member of the Spinco Group which is a guarantor or obligor with reference to any such MSG Liability is removed pursuant to Section 2.10(a), then such guarantor or obligor shall be indemnified by MSG for all Liabilities incurred by it in its capacity as guarantor or obligor. Without limiting the foregoing, MSG, shall, or shall cause a member of the MSG Group to, reimburse any such member of the Spinco Group which is a guarantor or obligor as soon as practicable (but in no event later than 30 days) following delivery by Spinco to MSG of notice of a payment made pursuant to this Section 2.10 in respect of MSG Liabilities.

(e) In the event that at any time before or after the Distribution Date MSG identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the Spinco Business but for which a member of the MSG Group has contingent, secondary, joint, several or other Liability of any nature whatsoever, Spinco shall, at its expense, take such actions and enter into such agreements and arrangements as MSG may reasonably request to effect the release or substitution of MSG (or a member of the MSG Group).

(f) In the event that at any time before or after the Distribution Date Spinco identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the MSG Business but for which a member of the Spinco Group has contingent, secondary, joint, several or other Liability of any nature whatsoever, MSG shall, at its expense, take such actions and enter into such agreements and arrangements as Spinco may reasonably request to effect the release or substitution of Spinco (or a member of the Spinco Group).

(g) The Parties shall use commercially reasonable efforts to obtain, or cause to be obtained, any consent, substitution or amendment required to novate or assign all MSG Liabilities and Spinco Liabilities of any nature

 

- 9 -

whatsoever transferred under this Agreement or an Ancillary Agreement, or to obtain in writing the unconditional release of the assignor so that in each such case, MSG (or an appropriate member of the MSG Group) shall be solely responsible for the MSG Liabilities and Spinco (or an appropriate member of the Spinco Group) shall be solely responsible for the Spinco Liabilities; provided, however, that no Party shall be obligated to pay any consideration therefore (except for filing fees or other similar charges) to any Third Party from whom such consent, substitution, amendment or release is requested. Whether or not any such consent, substitution, amendment or release is obtained, nothing in this Section 2.10 shall in any way limit the obligations of the parties under Article  III.

Section 2.11 Corporate Names; Trademarks. All agreements between the Parties and their respective Affiliates relating to intellectual property matters are set forth in a separate MSG Trademark Agreement between the Parties, dated the date hereof, and this Agreement shall in no way modify or supersede the MSG Trademark Agreement.

Section 2.12 Ancillary Agreements. Prior to the Distribution Date, each of MSG and Spinco shall enter into, and/or (where applicable) shall cause members of their respective Groups to enter into, the Ancillary Agreements and any other agreements in respect of the Distribution reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.

Section 2.13 Acknowledgment by Spinco. Spinco, on behalf of itself and all members of the Spinco Group, acknowledges, understands and agrees that, except as may be expressly set forth herein or in any Ancillary Agreement, (a) no member of the MSG Group or any other Person has, in this Agreement or in any other agreement or document, or otherwise made any representation or warranty of any kind whatsoever, express or implied, to Spinco or any member of the Spinco Group or to any director, officer, employee or agent thereof in any way with respect to any of the transactions contemplated hereby or the business, assets, agreements, condition or prospects (financial or otherwise) of, or any other matter involving, the assets, agreements, Liabilities or businesses of MSG, any member of the MSG Group, Spinco or any member of the Spinco Group, any assets that are transferred, any agreements that are assigned, any Spinco Liabilities or the Spinco Business, (b) Spinco and each member of the Spinco Group has taken all of the assets that are transferred, any agreements that are assigned, the Spinco Business and Spinco Liabilities on an “as is, where is” basis, and all implied warranties of merchantability, fitness for a specific purpose or otherwise have been and are hereby expressly disclaimed, and (c) none of MSG or any members of the MSG Group or any other person has made or makes any representation or warranty with respect to the Distribution or the entering into of this Agreement or the Ancillary Agreements or the transactions contemplated hereby and thereby, and, in each case, Spinco has not relied on any such representation or warranty. Except as expressly set forth herein or in any other Ancillary Agreement, Spinco and each member of the Spinco Group shall bear the economic and legal risk that the Spinco Assets shall prove to be insufficient or that the title of any member of the Spinco Group to any Spinco Assets shall be other than good and marketable and free from encumbrances. The provisions of the Contribution Agreement and any related assignment agreement or other related documents are expressly subject to this Section 2.13 and to Section 2.14 hereof.

Section 2.14 Release.

(a) Spinco agrees that for itself and for its predecessors, Subsidiaries, departments, divisions and sections and for their successors, Affiliates, heirs, assigns, executors, administrators, partners, members, officers, directors, shareholders, employees, attorneys and agents (individually, each a “Spinco Releasor” and collectively, the “Spinco Releasors”), in consideration of the making by MSG of the Transfers, the Spinco Releasors shall

 

- 10 -

release, waive and forever discharge MSG and its predecessors, Subsidiaries, departments, divisions, sections, successors, Affiliates, heirs, assigns, partners, members, officers, directors, shareholders, employees, attorneys and agents (individually, each a “ Spinco Releasee” and collectively, the “Spinco Releasees”) from, and shall, in addition to other obligations under Article III, indemnify and hold harmless all such persons against and from, all Liabilities of every name and nature, in law or equity, known or unknown, which against any Spinco Releasee, a Spinco Releasor ever had, now has or hereafter can, shall or may have by reason of any matter, act, omission, conduct, transaction or occurrence from the beginning of the world up to and including the Distribution Date for, upon, by reason of, asserted in or arising out of, or related to:

 

•

The management of the business and affairs of Spinco (and its predecessors, Subsidiaries and Affiliates) and the Spinco Business on or prior to the Distribution Date;

 

•

The terms of this Agreement, the Ancillary Agreements, the Distribution, the Amended and Restated Certificate of Incorporation or the Amended By-Laws of Spinco; and

 

•

Any other decision that may have been made, or any action taken, relating to Spinco (and its predecessors, Subsidiaries and Affiliates), the Spinco Business or the Distribution.

The term “Spinco Releasee” is expressly intended to include any person who served as an incorporator, director, officer, employee, agent or attorney of Spinco on or prior to the Distribution Date at the request of MSG. Each Spinco Releasor expressly covenants and agrees never to institute, or participate (including as a member of a class) in, any Action against any Spinco Releasee, in any court or forum, directly or indirectly, regarding or relating to the matters released through this Release, and further covenants and agrees that this Release is a bar to any such Action. For the avoidance of doubt, the purpose of this Section 2.14(a) is to make clear the intent of the Parties that, following the Distribution Date, the only Liability that any Spinco Releasee shall have to any Spinco Releasor shall be its obligation to perform its obligations under and pursuant to the terms of this Agreement, the Ancillary Agreements and any other agreements to which the Spinco Releasee and the Spinco Releasor are parties and there shall be no Liability in respect of any event, occurrence, action or inaction on or prior to the Distribution Date. This Release shall not extend to any Liabilities owed by a Spinco Releasee to a Spinco Releasor in the Spinco Releasor’s capacity as a director, officer, employee or other Representative or shareholder of the Spinco Releasee nor shall it release any Liabilities or obligations under this Agreement or any Ancillary Agreements or any other agreements to which the Spinco Releasee and the Spinco Releasor are parties.

(b) MSG agrees that for itself and for its predecessors, Subsidiaries, departments, divisions and sections and for their successors, Affiliates, heirs, assigns, executors, administrators, partners, members, officers, directors, shareholders, employees, attorneys and agents (individually, each an “MSG Releasor” and collectively, the “MSG Releasors”), in consideration of the entry by Spinco into this Agreement and the Ancillary Agreements, the MSG Releasors shall release, waive and forever discharge Spinco and its predecessors, Subsidiaries, departments, divisions, sections, successors, Affiliates, heirs, assigns, partners, members, officers, directors, shareholders, employees, attorneys and agents (individually, each an “MSG Releasee” and collectively, the “MSG Releasees”) from, and shall, in addition to other obligations under Article III, indemnify and hold harmless all such persons against and from, all Liabilities of every name and nature, in law or equity, known or unknown, which against any MSG Releasee, an MSG Releasor ever had, now has or hereafter can, shall or may have by reason of any matter, act, omission, conduct, transaction or occurrence from the beginning of the world up to and including the Distribution Date for, upon, by reason of, asserted in or arising out of, or related to:

 

•

The management of the business and affairs of MSG (and its predecessors, Subsidiaries and Affiliates) and the MSG Business on or prior to the Distribution Date;

 

•

The terms of this Agreement, the Ancillary Agreements, the Distribution the Certificate of Incorporation or the By-Laws of MSG; and

 

•

Any other decision that may have been made, or any action taken, relating to MSG (and its predecessors, Subsidiaries and Affiliates), the MSG Business or the Distribution.

 

- 11 -

The term “MSG Releasee” is expressly intended to include any person who served as an incorporator, director, officer, employee, agent or attorney of MSG on or prior to the Distribution Date. Each MSG Releasor expressly covenants and agrees never to institute, or participate (including as a member of a class) in, any Action against any MSG Releasee, in any court or forum, directly or indirectly, regarding or relating to the matters released through this Release, and further covenants and agrees that this Release is a bar to any such Action. For the avoidance of doubt, the purpose of this Section 2.14(b) is to make clear the intent of the Parties that, following the Distribution Date, the only Liability that any MSG Releasee shall have to any MSG Releasor shall be its obligation to perform its obligations under and pursuant to the terms of this Agreement, the Ancillary Agreements and any other agreements to which the MSG Releasee and the MSG Releasor are parties and there shall be no Liability in respect of any event, occurrence, action or inaction on or prior to the Distribution Date. This Release shall not extend to any Liabilities owed by an MSG Releasee to an MSG Releasor in the MSG Releasor’s capacity as a director, officer, employee or other Representative or shareholder of the MSG Releasee nor shall it release any Liabilities or obligations under this Agreement or any Ancillary Agreements or any other agreements to which the MSG Releasee and the MSG Releasor are parties.

Section 2.15 Discharge of Liabilities. Except as otherwise expressly provided herein or in any of the Ancillary Agreements:

(a) From and after the Effective Time, (i) MSG shall, and shall cause each member of the MSG Group to, assume, pay, perform and discharge all MSG Liabilities in the ordinary course of business, consistent with past practice, and (ii) Spinco shall, and shall cause each member of the Spinco Group, to assume, pay, perform and discharge all Spinco Liabilities in the ordinary course of business, consistent with past practice. The agreements in this Section 2.16 are made by each Party for the sole and exclusive benefit of the other Party. To the extent reasonably requested to do so by the other Party, each Party agrees to execute and deliver such documents, in a form reasonably satisfactory to such Party, as may be reasonably necessary to evidence the assumption of any Liabilities hereunder.

(b) All intercompany trade, accounts receivable and accounts payable between any member of one Group and any member of another Group in existence at the Effective Time shall be paid and performed in accordance with their terms.

Section 2.16 Indebtedness.

(a) As of the Distribution Date, Spinco represents it will not have any Arena Indebtedness or Enterprise Indebtedness.

(b) Spinco shall not incur any Arena Indebtedness or Enterprise Indebtedness without the prior written consent of MSG.

Section 2.17 Further Assurances.

(a) If at any time after the Effective Time any further action is reasonably necessary or desirable to carry out the purposes of this Agreement and the Ancillary Agreements, the proper officers of each Party shall take all such necessary action. Without limiting the foregoing, each Party shall use its commercially reasonable efforts promptly to obtain all consents and approvals, to enter into all agreements and to make all filings and applications that may be required for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, including all applicable filings with, and approvals from, any Governmental Authority.

(b) Without limiting any provision of this Section 2.17, MSG shall, at any time requested by Spinco, at the expense of Spinco, either submit a request or cooperate in the submission of a joint request or separate requests to the Commission to extend the confidential treatment previously granted to MSG by the Commission with respect to (i) the lease documentation for Radio City Music Hall pursuant to orders CF#32736, dated November 14, 2019, and CF#32736, dated September 15, 2015, and (ii) the ground lease agreement for the MSG Sphere in Las Vegas, Nevada pursuant to order CF#36703, dated September 20, 2018.

 

- 12 -

ARTICLE III

INDEMNIFICATION

Section 3.1 Indemnification by MSG. Except as otherwise specifically set forth in any provision of this Agreement from and after the Distribution Date, MSG shall indemnify, defend and hold harmless the Spinco Indemnitees from and against any and all Indemnifiable Losses of the Spinco Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the MSG Liabilities or alleged MSG Liabilities; (ii) any breach by any member of the MSG Group of this Agreement (including any provision of this Section 3.1); (iii) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or the Information Statement or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent relating to the MSG Group; and (iv) any indemnification or other obligation that any member of the Spinco Group may have (x) to the NBA or its affiliated entities pursuant to the NBA Agreements or to the NHL or its affiliated entities pursuant to the NHL Agreements, in each case regardless of whether any such obligation arose prior to or following the Distribution and regardless of the party deemed to be responsible for such obligation pursuant to the terms of the relevant NBA Agreement or NHL Agreement, as applicable, (y) for any Losses to the NBA, the NHL or their respective affiliated entities, in each case as a result of any act or omission by any member of the MSG Group and (z) for any Losses to the NBA, the NHL or their respective affiliated entities, in each case as a result of any obligation of any member of the Spinco Group to cause or otherwise direct any act or omission of any member of the MSG Group. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.

Section 3.2 Indemnification by Spinco. Except as otherwise specifically set forth in any provision of this Agreement, from and after the Distribution Date, Spinco shall indemnify, defend and hold harmless the MSG Indemnitees from and against any and all Indemnifiable Losses of the MSG Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the Spinco Liabilities or alleged Spinco Liabilities; (ii) any breach by any member of the Spinco Group of this Agreement (including any provision of this Section 3.2); (iii) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or the Information Statement or in any registration statement, prospectus or listing application with a securities exchange filed by Spinco in connection with the Distribution, or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this clause (iii) shall not apply to any Liability that is covered by Section 3.1(iii); and (iv) any indemnification or other obligation that any member of the MSG Group may have for (x) any Losses to the NBA, the NHL or their respective affiliated entities, in each case as a result of any act or omission by any member of the Spinco Group and (y) for any Losses to the NBA, the NHL or their respective affiliated entities, in each case as a result of any obligation of any member of the MSG Group to cause or otherwise direct any act or omission of any member of the Spinco Group. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.

Section 3.3 Procedures for Indemnification.

(a) If a claim or demand is made by a Third Party against an Indemnitee (a “Third-Party Claim”) as to which such Indemnitee is entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to Section 3.1 or Section 3.2 hereof to make such indemnification (the “Indemnifying Party”) in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event by the date (the “Outside Notice Date”) that is the 15th Business Day) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure (except that the Indemnifying Party shall not be liable for any expenses incurred during the period beginning immediately after the Outside Notice Date and ending on the date the Indemnitee gives the required notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party,

 

- 13 -

promptly (and in any event within 10 Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notice under this Section 3.3 shall be provided in accordance with Section 5.6. For the avoidance of doubt, knowledge of a Third-Party Claim by a Person who is an officer or director of both MSG and Spinco shall not constitute notice for purposes of this Section 3.3.

If a Third-Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges in writing its obligation to indemnify the Indemnitee therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided, however, that such counsel is not reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the nature of the Third-Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee’s reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such parties by one counsel inappropriate, and in such event the fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, subject to the proviso of the preceding sentence, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnitee shall have given notice of the Third-Party Claim as provided above). If the Indemnifying Party so elects to assume the defense of any Third-Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party in the defense or prosecution thereof, including by providing or causing to be provided Records and witnesses as soon as reasonably practicable after receiving any request therefor from or on behalf of the Indemnifying Party.

If the Indemnifying Party acknowledges in writing responsibility under this Section 3.3 for a Third-Party Claim, then in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third-Party Claim without the Indemnifying Party’s prior written consent; provided, however, that the Indemnitee shall have the right to settle, compromise or discharge such Third-Party Claim without the consent of the Indemnifying Party if the Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with respect to such Third-Party Claim and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing liability for a Third-Party Claim, the Indemnitee will agree to any settlement, compromise or discharge of a Third-Party Claim that the Indemnifying Party may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third-Party Claim and releases the Indemnitee completely in connection with such Third-Party Claim and that would not otherwise adversely affect the Indemnitee. If an Indemnifying Party elects not to assume the defense of a Third-Party Claim, or fails to notify an Indemnitee of its election to do so as provided herein, such Indemnitee may compromise, settle or defend such Third-Party Claim.

Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages.

(b)    In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to

 

- 14 -

any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim.

(c) Spinco shall, and shall cause the other Spinco Indemnitees to, and MSG shall, and shall cause the other MSG Indemnitees to, cooperate as may reasonably be required in connection with the investigation, defense and settlement of any Third-Party Claim. In furtherance of this obligation, the Parties agree that if an Indemnifying Party chooses to defend or to compromise or settle any Third-Party Claim, MSG or Spinco, as the case may be, shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former and then current directors, officers, employees and agents of the members of its respective Group as witnesses and any Records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such Person, Records or other documents may reasonably be required in connection with such defense, settlement or compromise. At the request of an Indemnifying Party, an Indemnitee shall enter into a reasonably acceptable joint defense agreement.

(d) The remedies provided in this Article III shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

Section 3.4 Indemnification Payments. (a) Indemnification required by this Article III shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss is incurred. If the Indemnifying Party fails to make an indemnification payment required by this Article III within 30 days after receipt of a bill therefor or notice that an Indemnifiable Loss has been incurred, the Indemnifying Party shall also be required to pay interest on the amount of such indemnification payment, from the date of receipt of the bill or notice of the Indemnified Loss to but not including the date of payment, at the Applicable Rate.

(b) The amount of any claim by an Indemnitee under this Agreement (i) shall be reduced to reflect any actual Tax savings or insurance proceeds received by any Indemnitee that result from the Indemnifiable Losses that gave rise to such indemnity and (ii) shall be increased by an amount equal to any Tax cost incurred by any Indemnitee that results from receipt of payments under this Article III.

(c) For all Tax purposes and to the extent permitted by applicable Law, the Parties hereto shall treat (a) any payment (other than payments representing interest) made pursuant to this Article III as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution and (b) any payment of interest as taxable or deductible, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise required by applicable Law.

ARTICLE IV

ACCESS TO INFORMATION

Section 4.1 Provision of Corporate Records.

(a) Except as specifically provided in Article III (in which event the provisions of such Article will govern), after the Distribution Date, upon the prior written request by Spinco for specific and identified agreements, documents, books, records or files including accounting and financial records (collectively, “Records”) which relate to Spinco or the conduct of the Spinco Business up to the Effective Time, or which Spinco determines are necessary or advisable in order for Spinco to prepare its financial statements and any reports or filings to be made with any Governmental Authority, MSG shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if Spinco has a reasonable need for such originals) in the possession or control of MSG or any of the MSG Subsidiaries, but only to the extent such items are not already in the possession or control of the requesting Party.

 

- 15 -

(b) Except as specifically provided in Article III (in which event the provisions of such Article will govern), after the Distribution Date, upon the prior written request by MSG for specific and identified Records which relate to MSG or the conduct of the MSG Business up to the Effective Time, or which MSG determines are necessary or advisable in order for MSG to prepare its financial statements and any reports or filings to be made with any Governmental Authority, Spinco shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if MSG has a reasonable need for such originals) in the possession or control of Spinco or any of the Spinco Subsidiaries, but only to the extent such items are not already in the possession or control of the requesting Party.

Section 4.2 Access to Information. Except as specifically provided in Article III (in which event the provisions of such Article will govern), from and after the Distribution Date, each of MSG and Spinco shall afford to the other and its authorized Representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information, to the personnel, properties, and Records of such Party and its Subsidiaries insofar as such access is reasonably required by the other Party and relates to such other Party or the conduct of its business prior to the Effective Time.

Section 4.3 Witnesses; Documents and Cooperation in Actions. (a) At all times from and after the Distribution Date, each of MSG and Spinco shall use their commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ former and then current Representatives as witnesses and any Records within its control or which it otherwise has the ability to make available, to the extent that such Persons or Records may reasonably be required in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved. The requesting Party shall promptly reimburse the other party (and any person it makes available hereunder) for all reasonable out-of-pocket costs and expenses incurred in connection therewith. This provision shall not apply to any Action brought by one Party against another Party (as to which production of documents and witnesses shall be governed by applicable discovery rules).

(b) Without limiting any provision of this Section 4.3, the Parties shall cooperate and consult, and shall cause each member of their respective Groups to cooperate and consult, to the extent reasonably necessary with respect to any Actions.

(c) In connection with any matter contemplated by this Section 4.3, the Parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.

Section 4.4 Confidentiality. (a) MSG and the MSG Subsidiaries and Spinco and the Spinco Subsidiaries shall not use or permit the use of and shall keep, and shall cause its consultants and advisors to keep, confidential all information concerning the other Party in its possession, its custody or under its control to the extent such information (w) relates to or was acquired during the period up to the Effective Time, (x) relates to any Ancillary Agreement, (y) is obtained in the course of performing services for the other Party pursuant to any Ancillary Agreement, or (z) is based upon or is derived from information described in the preceding clauses (w), (x) or (y), and each Party shall not (without the prior written consent of the other) otherwise release or disclose such information to any other Person, except such Party’s auditors, attorneys, consultants and advisors, unless compelled to disclose such information by judicial or administrative process or unless such disclosure is required by Law and such Party has used commercially reasonable efforts to consult with the other affected Party or Parties prior to such disclosure. Each Party shall be deemed to have satisfied its obligation to hold confidential any information concerning or owned by the other Party or its Group if it exercises the same care as it takes to preserve confidentiality for its own similar information. The covenants in this Section 4.4 shall survive the transactions contemplated by this Agreement and shall continue indefinitely; provided, however, that the covenants in this Section 4.4 shall terminate with respect to any information not constituting a trade secret under applicable law on the third anniversary of the later of the Distribution Date or the date on which the Party subject to such covenants with respect to such information receives it (but any such termination shall not terminate or

 

- 16 -

otherwise limit any other covenant or restriction regarding the disclosure or use of such information under any Ancillary Agreement or other agreement, instrument or legal obligation). This Section 4.4 shall not apply to information (A) that has been in the public domain through no fault of such Party or (B) that has been later lawfully acquired from other sources by such Party, (C) the use or disclosure of which is permitted by this Agreement or any other Ancillary Agreement or any other agreement entered into pursuant hereto, (D) that is immaterial and its disclosure is required as part of the conduct of that Party’s business and would not reasonably be expected to be detrimental to the interests of the other Party or (E) that the other Party has agreed in writing may be so used or disclosed.

(b) If any Party or any member of its Group either determines that it is required to disclose pursuant to applicable Law, or receives any demand under lawful process or from any Governmental Authority to disclose or provide, information of the other Party (or any member of the other Party’s Group) that is subject to the confidentiality provisions of Section 4.4(a) such Party shall notify the other Party prior to disclosing or providing such information and shall cooperate at the expense of the requesting Party in seeking any reasonable protective arrangements requested by such other Party. Subject to the foregoing, the Person that received such request may thereafter disclose or provide such information if and to the extent required by such Law or by lawful process or such Governmental Authority; provided, however, that the Person shall only disclose such portion of the information as required to be disclosed or provided.

Section 4.5 Privileged Matters. Except as may be otherwise provided in an Ancillary Agreement, the Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution Date have been and will be rendered for the benefit of each of the members of the MSG Group, and each of the members of the Spinco Group, and that each of the members of the MSG Group, and each of the members of the Spinco Group, should be deemed to be the client for the purposes of asserting all privileges which may be asserted under applicable Law. To allocate the interests of each Party in the information as to which any Party is entitled to assert a privilege, the Parties agree as follows:

(a) MSG shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the MSG Business (other than with respect to Liabilities as to which Spinco is required to provide indemnification under Article III), whether or not the privileged information is in the possession of or under the control of MSG or Spinco. MSG shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting MSG Liabilities (including Retained Claims Liabilities), or other Liabilities as to which it is required to provide indemnification under Article III, now pending or which may be asserted in the future, whether or not the privileged information is in the possession of or under the control of MSG or Spinco.

(b) Spinco shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the Spinco Business (other than with respect to matters or claims that are Retained Claims Liabilities or other Liabilities as to which MSG is required to provide indemnification under Article III), whether or not the privileged information is in the possession of or under the control of MSG or Spinco. Spinco shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Spinco Liabilities, or other liabilities as to which it is required to provide indemnification under Article III, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by Spinco, whether or not the privileged information is in the possession of Spinco or under the control of MSG or Spinco.

(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 4.5, with respect to all privileges not allocated pursuant to the terms of Sections 4.5(a) and (b).

 

- 17 -

(d) No Party may waive any privilege which could be asserted under any applicable Law, and in which the other Party has a shared privilege, without the written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except to the extent reasonably required in connection with any Third-Party Claims or as provided in subsection (e) below.

(e) In the event of any litigation or dispute between or among the Parties, any Party and a Subsidiary of the other Party, or a Subsidiary of one Party and a Subsidiary of the other Party, either such Party may waive a privilege in which the other Party has a shared privilege, without obtaining the consent of the other Party; provided, however, that such waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between the Parties and/or their Subsidiaries, and shall not operate as a waiver of the shared privilege with respect to any Third-Party Claims.

(f) If a dispute arises between or among the Parties or their respective Subsidiaries regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for a waiver by the other Party. Each Party hereto specifically agrees that it will not withhold consent to a waiver for any purpose except to protect its own legitimate interests.

(g) Upon receipt by any Party or by any Subsidiary thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any of its Subsidiaries’ current or former Representatives have received any subpoena, discovery or other request which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 4.5 or otherwise to prevent the production or disclosure of such privileged information.

(h) The transfer of all Records and other information pursuant to this Agreement is made in reliance on the agreement of MSG and Spinco, as set forth in Sections 4.2, 4.3, 4.4 and this Section 4.5, to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. The access to information being granted pursuant to Sections 4.1, 4.2, and 4.3 hereof, the agreement to provide witnesses and individuals pursuant to Sections 4.2 and 4.3 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 4.3 hereof, and the transfer of privileged information between and among the Parties and their respective Subsidiaries, Affiliates and Representatives pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

Section 4.6 Ownership of Information. Any information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to Article III or this Article IV shall be deemed to remain the property of the providing Person. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.

Section 4.7 Cost of Providing Records and Information. A Party requesting Records, information or access to personnel, witnesses or properties, under Article III or this Article IV, agrees to reimburse the other Party and its Subsidiaries for the reasonable out-of-pocket costs, if any, incurred in seeking to satisfy the request of the requesting Party.

Section 4.8 Retention of Records. Except (a) as provided in the Tax Disaffiliation Agreement or (b) when a longer retention period is otherwise required by Law or agreed to in writing, the MSG Group and the Spinco Group shall retain all Records relating to the MSG Business and the Spinco Business as of the Effective Time for the periods of time provided in each Party’s record retention policy (with respect to the documents of such party and without regard to the Distribution or its effects) as in effect on the Distribution Date. Notwithstanding the

 

- 18 -

foregoing, in lieu of retaining any specific Records, MSG or Spinco may offer in writing to deliver such Records to the other and, if such offer is not accepted within 90 days, the offered Records may be destroyed or otherwise disposed of at any time. If a recipient of such offer shall request in writing prior to the scheduled date for such destruction or disposal that any of Records proposed to be destroyed or disposed of be delivered to such requesting Party, the Party proposing the destruction or disposal shall promptly arrange for delivery of such of the Records as was requested (at the cost of the requesting Party).

Section 4.9 Other Agreements Providing for Exchange of Information. The rights and obligations granted under this Article IV are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information set forth in any Ancillary Agreement or in any other agreement to which a member of the MSG Group and a member of the Spinco Group is a party.

Section 4.10 Policies and Best Practices. Without representation or warranty, Spinco and MSG shall continue to be permitted to share, on a confidential basis, “best practices” information and materials (such as policies, workflow templates and standard form contracts).

Section 4.11 Compliance with Laws and Agreements. Nothing in this Article IV shall be deemed to require any Person to provide any information if doing so would, in the opinion of counsel to such Person, be inconsistent with any legal or constitutional obligation applicable to such Person.

ARTICLE V

MISCELLANEOUS

Section 5.1 Complete Agreement; Construction. This Agreement, including the Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Schedule, the Schedule shall prevail.

Section 5.2 Ancillary Agreements. Except as may be expressly stated herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

Section 5.3 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party.

Section 5.4 Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.

Section 5.5 Distribution Expenses. Except as otherwise set forth in this Agreement or any Ancillary Agreement, all costs and expenses incurred on or prior to the Distribution Date (whether or not paid on or prior to the Distribution Date) in connection with the preparation, execution, delivery, printing and implementation of this Agreement and any Ancillary Agreement, the Information Statement and the Registration Statement, and the Distribution and the consummation of the transactions contemplated thereby, shall be charged to and paid by MSG. Such expenses shall be deemed to be MSG Liabilities. Except as otherwise set forth in this Agreement or any Ancillary Agreement, each Party shall bear its own costs and expenses incurred after the Distribution Date. Any amount or expense to be paid or reimbursed by any Party to any other Party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.

Section 5.6 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the

 

- 19 -

Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

To MSG:

The Madison Square Garden Company (or, after the applicable name change,

Madison Square Garden Sports Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

To Spinco:

MSG Entertainment Spinco, Inc. (or, after the applicable name change,

Madison Square Garden Entertainment Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

Section 5.7 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.

Section 5.8 Amendments. Subject to the terms of Sections 5.11 hereof, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.

Section 5.9 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that either Party may assign this Agreement to a purchaser (by merger, sale of assets or otherwise) of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed. Any assignment in violation of the provisions of this Section 5.9 shall be void.

Section 5.10 Successors and Assigns. The provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

Section 5.11 Termination. This Agreement (including Article III hereof) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by and in the sole discretion of MSG without the approval of Spinco or the stockholders of MSG. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties; provided, however, that Article III shall not be terminated or amended after the Distribution in respect of a Third Party beneficiary thereto without the consent of such Person.

Section 5.12 Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.

Section 5.13 Third-Party Beneficiaries. Except as provided in Article III relating to Indemnitees, this Agreement is solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

 

- 20 -

Section 5.14 Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

Section 5.15     Schedules. The Schedules shall be construed with and as an integral part of this Agreement to the same extent (except as set forth in the last sentence of Section 5.1) as if the same had been set forth verbatim herein.

Section 5.16 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

Section 5.17 Waiver of Jury Trial. The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

Section 5.18 Specific Performance. From and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.

Section 5.19 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

[Signature page follows]

 

- 21 -

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.

 

Exhibit 2.2

CONTRIBUTION AGREEMENT

BY AND AMONG

THE MADISON SQUARE GARDEN COMPANY

(TO BE RENAMED MADISON SQUARE GARDEN SPORTS CORP.),

MSG SPORTS & ENTERTAINMENT, LLC

(TO BE RENAMED MSG ENTERTAINMENT GROUP, LLC)

AND

MSG ENTERTAINMENT SPINCO, INC.

(TO BE RENAMED MADISON SQUARE GARDEN ENTERTAINMENT CORP.)

Dated as of [●], 2020

CONTRIBUTION AGREEMENT (this “Agreement”), dated as of [●], 2020, by and among THE MADISON SQUARE GARDEN COMPANY (to be renamed Madison Square Garden Sports Corp. after the Effective Time (as defined herein)), a Delaware corporation (“MSG”), MSG Sports & Entertainment, LLC (to be renamed MSG Entertainment Group, LLC), a Delaware limited liability company and a direct wholly-owned subsidiary of MSG (“MSG Entertainment”), and MSG ENTERTAINMENT SPINCO, INC. (to be renamed Madison Square Garden Entertainment Corp. after the Effective Time), a Delaware corporation (“Spinco”).

RECITALS

WHEREAS, MSG and Spinco are parties to a Distribution Agreement, dated as of [●], 2020 (the “Distribution Agreement”);

WHEREAS, pursuant to the Distribution Agreement, MSG intends to distribute to its stockholders all of Spinco’s common stock (the “Distribution”);

WHEREAS, pursuant to the Distribution Agreement, the parties wish to cause the transactions described on Annex I (the “Reorganization Transactions”) to be completed including, without limitation, (a) the assignment by MSG Entertainment or its subsidiaries to MSG or its subsidiaries of all of the issued and outstanding common stock, partnership interests and membership interests of the entities and assets and liabilities as reflected in Section A of Annex I (such assignments are referred to herein as the “Sports Assignments”) and (b) the assignment by MSG to Spinco or its subsidiaries of all of the issued and outstanding common stock, partnership interests and membership interests of the entities and assets and liabilities as reflected in Section B of Annex I (such assignments are referred to herein as the “Entertainment Assignments” and, together with the Sports Assignments, the “Assignments”);

WHEREAS, in consideration of the Entertainment Assignments, Spinco wishes to issue to MSG, and MSG wishes to receive, 900 shares of newly issued Common Stock, par value $0.01 per share, of Spinco (the “Spinco Stock”);

WHEREAS, MSG, in its capacity as the sole stockholder of Spinco, has approved such issuance of Spinco Stock for purposes of exempting such acquisition under Rule 16b-3(d) under the Securities Exchange Act of 1934, as amended;

WHEREAS, the parties hereto intend for Spinco to own, immediately following the Distribution, the business and assets described in Spinco’s registration statement on Form 10 (the “Form 10”) filed with the Securities and Exchange Commission as being owned, directly or indirectly, by Spinco (the “Spinco Assets”);

WHEREAS, the parties hereto intend for Spinco to assume and be responsible for, directly or indirectly, the liabilities described in the Form 10 as being liabilities, directly or indirectly, of Spinco (the “Spinco Liabilities”);

WHEREAS, in order to complete the Reorganization Transactions and the Distribution, the parties desire to enter into this Agreement; and

WHEREAS, terms used but not defined herein have the meanings assigned thereto in the Distribution Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged by this Agreement, the parties agree as follows:

1.    Assignments. Subject to the terms of the Distribution Agreement, MSG hereby agrees to transfer and assign to Spinco, or to cause its applicable subsidiaries or affiliates to transfer and assign to Spinco, or its applicable subsidiaries or affiliates, all of the Spinco Assets, and Spinco agrees to assume, or to cause its applicable subsidiaries or affiliates to assume, the Spinco Liabilities. These transfers, assignments and assumptions are effective at or prior to the Effective Time. In furtherance of the foregoing, MSG, MSG Entertainment and Spinco shall take all actions necessary to cause the completion of the Reorganization Transactions to which it or any of its subsidiaries is a party. In furtherance thereof, effective as of the date of this Agreement, (a) MSG Entertainment shall make the Sports Assignments to MSG or its subsidiaries, and MSG or its subsidiaries shall accept such Sports Assignments from MSG Entertainment, and (b) MSG shall make the Entertainment Assignments to Spinco or its subsidiaries, and Spinco or its subsidiaries shall accept such Entertainment Assignments from MSG.

2.    Stock Issuance. Spinco hereby agrees to issue to MSG, effective as of the date of this Agreement, the Spinco Stock, in uncertificated form, pursuant to the Assignment Agreement and Stock Power, dated the date of this Agreement, between MSG and Spinco. MSG acknowledges and agrees that the uncertificated Spinco Stock shall be subject to the terms of the legends set forth on Annex II hereto.

3.    Disclosure. Except as expressly provided in the Distribution Agreement or in any Ancillary Agreement, (i) none of the parties is making any representation to any other party in connection with the Reorganization Transactions, the Assignments or the Spinco Stock issuance, and (ii) Spinco is not directly assuming any liabilities under the Reorganization Transactions or the Entertainment Assignments.

4.    Further Assurances. Each party hereto agrees to take such further actions as may be reasonably necessary to effect the transactions contemplated by this Agreement. Without limiting the foregoing sentence, the parties will take any such steps as are necessary to complete the transfer to Spinco, or its applicable subsidiaries or affiliates, of the Spinco Assets and the assumption by Spinco, or its applicable subsidiaries or affiliates, of the Spinco Liabilities.

5.    Complete Agreement; Construction. This Agreement, including the Annexes hereto, shall constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Annex, the Annex shall prevail.

 

-2-

6.    Ancillary Agreements. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Distribution Agreement or the Ancillary Agreements. Without limiting the foregoing sentence, the provisions of Sections 2.13 and 2.14 of the Distribution Agreement shall apply to the Reorganization Transaction and the Assignments.

7.    Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

8.    Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement shall survive the Distribution Date.

9.    Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:

To MSG:

The Madison Square Garden Company (or, after the applicable name change, Madison Square Garden Sports Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

To Spinco and MSG Entertainment:

MSG Entertainment Spinco, Inc. (or, after the applicable name change, Madison Square Garden Entertainment Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

10.    Waivers. The failure of any party to require strict performance by any other party of any provision in this Agreement will not waive or diminish that party’s right to demand strict performance thereafter of that or any other provision hereof.

11.    Amendments. Subject to the terms of Section 14 hereof, this Agreement may not be modified or amended except by an agreement in writing signed by each of the parties.

 

-3-

12.    Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any party without the prior written consent of the other parties, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that any party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such party (whether by sale, merger or otherwise) so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning parties, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning party to be performed or observed.

13.    Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.

14.    Termination. This Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of MSG without the approval of MSG Entertainment, Spinco or the stockholders of MSG. In the event of such termination, no party shall have any liability of any kind to any other party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the parties.

15.    Third-Party Beneficiaries. This Agreement is solely for the benefit of the parties and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

16.    Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

17.    Annexes. The Annexes shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein.

18.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

19.    Waiver of Jury Trial. The parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

20.    Specific Performance. From and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the parties agree that the party to this Agreement who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that, from and after the Distribution, the remedies at law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.

 

-4-

21.    Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of illegal or unenforceable provisions.

 

-5-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

MSG ENTERTAINMENT SPINCO, INC.

FIRST. The name of the corporation (hereinafter called the “Corporation”) is MSG Entertainment Spinco, Inc.

SECOND. The name and address, including street, number, city and county, of the registered office and registered agent for service of process of the Corporation in the State of Delaware is Corporation Service Company, 251 Little Falls Drive, City of Wilmington, County of New Castle, 19808.

THIRD. The nature of the business and of the purposes to be conducted and promoted by the Corporation are to conduct any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH. The aggregate number of shares of capital stock which the Corporation shall have authority to issue shall be 1,000 shares of Common Stock and the par value of each of such shares is $0.01.

FIFTH. The management of the business and the conduct of the affairs of the Corporation, including the election of the Executive Chairman, the Chief Executive Officer, the President, the Treasurer, the Secretary, and other principal officers of the Corporation, shall be vested in its Board of Directors. The number of directors of the Corporation shall be fixed by the by-laws of the Corporation and may be altered from time to time as provided therein. A director shall be elected to hold office until the expiration of the term for which such person is elected, and until such person’s successor shall be duly elected and qualified.

SIXTH. The name and mailing address of the incorporator are as follows:

Mark C. Cresitello

Two Pennsylvania Plaza

New York, NY 10121

SEVENTH. Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of the General Corporation Law of the State of Delaware or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the General Corporation Law of the State of Delaware order a meeting of the creditors or class of creditors, and/or the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

EIGHTH. The power to make, alter, or repeal the by-laws, and to adopt any new by-law, shall be vested in the Board of Directors and the stockholders entitled to vote in the election of directors.

NINTH. The Corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, or by any successor thereto, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section. Such right to indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. The indemnification provided for herein shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise. No amendment, modification or repeal of this Article NINTH shall adversely affect any right or protection of a person that exists at the time of such amendment, modification or repeal.

TENTH. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except that this paragraph shall not eliminate or limit the liability of a director (A) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (B) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (C) under Section 174 of the General Corporation Law of the State of Delaware, or (D) for any transaction from which the director derived an improper personal benefit. No amendment, modification or repeal of this Article TENTH shall adversely affect any right or protection of a director that exists at the time of such amendment, modification or repeal.

ELEVENTH. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because such director’s or officer’s votes are counted for such purpose, if:

(a) The material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

(b) The material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(c) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof, or the stockholders.

Common or interested directors may be counted in the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

2

IN WITNESS WHEREOF, I have signed this certificate of incorporation on this 21st day of November, 2019.

 

 

3

Exhibit 3.3

BY-LAWS

OF

MSG ENTERTAINMENT SPINCO, INC.

ARTICLE I

Stockholders

Section 1.1 Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting.

Section 1.2 Special Meetings. Special meetings of stockholders may be called at any time by the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President, if any, or the Board of Directors, to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting.

Section 1.3 Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage paid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

Section 1.4 Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting, at which the adjournment is taken. At the adjournment meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or, if after the adjournment, a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 1.5 Quorum. At each meeting of stockholders, except where otherwise provided by law or the certificate of incorporation or these by-laws, the holders of a majority of the outstanding shares of each class of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. For purposes of the foregoing, two or more classes or series of stock shall be considered a single class if the holders thereof are entitled to vote together as a single class at the meeting. In the absence of a quorum the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided by Section 1.4 of these by-laws until a quorum shall attend. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to, its own stock, held by it in a fiduciary capacity.

Section 1.6 Organization. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board, by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board, by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, or in the absence of the Secretary, by an Assistant Secretary, or in their absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

Section 1.7 Voting; Proxies. Unless otherwise provided in the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting shall so determine. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect the directors. With respect to other matters, unless otherwise provided by law or by the certificate of incorporation or these by-laws, the affirmative vote of the holders of a majority of the shares of all classes of stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, provided that (except as otherwise required by law or by the certificate of incorporation) the Board of Directors may require a larger vote upon any such matter. Where a separate vote by class is required, the affirmative vote of the holders of a majority of the shares of each class present in person or represented by proxy at the meeting shall be the act of such class, except as otherwise provided by law or by the certificate of incorporation or these by-laws.

Section 1.8 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any right in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which the meeting is held; (2) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed; and (3) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

Section 1.9 List of Stockholders Entitled to Vote. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present.

Section 1.10 Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the certificate of incorporation, any action required by law to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II

Board of Directors

Section 2.1 Powers; Numbers; Qualifications. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the certificate of incorporation. The Board shall consist of one or more members, the number thereof to be determined from time to time by the Board. Directors need not be stockholders.

 

2

Section 2.2 Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the annual meeting of stockholders next succeeding his or her election and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any director may resign at any time upon written notice to the Board of Directors or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. Any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Unless otherwise provided in the certificate of incorporation or these by-laws, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by the sole remaining director.

Section 2.3 Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given.

Section 2.4 Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, if any, by the Vice Chairman of the Board, if any, by the President or by any two directors. Reasonable notice thereof shall be given by the person or persons calling the meeting.

Section 2.5 Participation in Meetings by Conference Telephone Permitted. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participating in a meeting pursuant to this Section 2.5 of the by-laws shall constitute presence in person at such meeting.

Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board of Directors, one-third of the entire Board shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the certificate of incorporation or these by-laws shall require a vote of a greater number. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall attend.

Section 2.7 Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in their absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 2.8 Action by Directors Without a Meeting. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

Section 2.9 Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors.

ARTICLE III

Committees

Section 3.1 Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, except as limited by the Delaware General Corporation Law.

 

3

Section 3.2 Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these by-laws.

ARTICLE IV

Officers

Section 4.1 Officers; Election. As soon as practicable after the annual meeting of stockholders in each year, the Board of Directors shall elect an Executive Chairman, a Chief Executive Officer, a President and a Secretary, and it may, if it so determines, elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board may also elect one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considered desirable. Any number of offices may be held by the same person. References herein to the “Chairman of the Board” shall be deemed to refer to the “Executive Chairman”, if any, and the Chairman of the Board, if any.

Section 4.2 Term of Office; Resignation; Removal; Vacancies. Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of stockholders next succeeding his or her election, and until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer within or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, may be filled for the unexpired portion of the term of the Board at any regular or special meeting.

Section 4.3 Authorities and Duties. All officers, as between themselves and the Corporation, shall have such authority and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by these by-laws, or, to the extent not so provided, by the Board of Directors. The Board may delegate to the Executive Chairman, if any, or to the Chief Executive Officer or President the power and authority to define the authority and duties of any or all of the other officers of the Corporation.

ARTICLE V

Stock

Section 5.1 Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by such holder in the Corporation. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

4

ARTICLE VI

Miscellaneous

Section 6.1 Fiscal Year. The fiscal year of the Corporation shall be the period of twelve calendar months ending on June 30 of each year unless otherwise determined by the Board of Directors.

Section 6.2 Seal. The Corporation may have a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

Section 6.3 Waiver of Notice of Meetings of Stockholders, Directors and Committees. Whenever notice is required to be given by law or under any provisions of the certificate of incorporation or these by-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation or these by-laws.

Section 6.4 Indemnification of Directors, Officers and Employees. (a) The corporation shall indemnify each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was an incorporator, a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, incorporator or agent or alleged action in any other capacity while serving as a director, officer, employee, incorporator or agent, to the maximum extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment), against all expense, liability and loss (including attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection with such proceeding. Such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided that, if the Delaware General Corporation Law so requires, the payment of such expenses incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon receipt by the corporation of an undertaking by or on behalf of such person to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this Section 6.4 or otherwise.

(b) The right to indemnification and advancement of expenses conferred on any person by this Section 6.4 shall not limit the corporation from providing any other indemnification permitted by law nor shall it be deemed exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise.

(c) The corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

 

5

Section 6.5 Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because such director’s or officer’s votes are counted for such purpose, if: (1) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

Section 6.6 Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records in accordance with law.

Section 6.7 Amendment of By-Laws. These by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors, but the stockholders entitled to vote may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them.

 

6

Exhibit 10.4

ARENA LICENSE AGREEMENT

between

MSG ARENA, LLC

and

NEW YORK KNICKS, LLC

Dated as of             , 2020

TABLE OF CONTENTS

 

				Page
ARTICLE I DEFINITIONS					1
ARTICLE II TERM					6
Section 2.01		Term; Commencement Date			6
ARTICLE III LICENSE FEE					6
Section 3.01		License Fee			6
Section 3.02		Payment of License Fee			7
ARTICLE IV USE OF ARENA					7
Section 4.01		Arena Areas			7
Section 4.02		Knicks Use			7
Section 4.03		Licensor’s Right of Entry			8
Section 4.04		Scheduling			8
Section 4.05		Alterations			9
Section 4.06		Manner of the Knicks’ Use			10
Section 4.07		Knicks Misuse			11
Section 4.08		Surrender			11
ARTICLE V TICKETS, SUITES AND CLUBS					12
Section 5.01		Prices			12
Section 5.02		Ticket Revenues			12
Section 5.03		Suites; Madison Club; The Loft			12
Section 5.04		Future Ticket and Premium Products			17
Section 5.05		Box Office; Ticket Printing; In-Arena Ticket Sales			17
Section 5.06		Ticket Agent			18
Section 5.07		Ticket Settlement Process			19
Section 5.08		Access to Tickets			19
Section 5.09		Credentials and Passes			19
Section 5.10		Admission to Arena			19
ARTICLE VI CONCESSIONS					20
Section 6.01		F&B Concessions and Catering			20
Section 6.02		Team Merchandise			20
Section 6.03		Non-Team Merchandise			21

 

i

Section 6.04		Third-Party Contracts			21
Section 6.05		Operation on a Fair Basis; Standard of Service			22
Section 6.06		Settlement			22
ARTICLE VII SIGNAGE AND SPONSORSHIPS					22
Section 7.01		Definitions			22
Section 7.02		Team Sponsorship Assets			24
Section 7.03		Arena Game Shared Sponsorship Assets			25
Section 7.04		Non-Team Sponsorship Assets			25
Section 7.05		Arena Naming Rights			26
Section 7.06		Other Revenue			26
Section 7.07		Signage and Sponsorship Settlement Process			26
ARTICLE VIII BROADCASTING					26
Section 8.01		Broadcast Rights and Facilities			26
Section 8.02		Broadcast Renovations			27
ARTICLE IX LICENSOR SERVICES					27
Section 9.01		General Services			27
Section 9.02		Game Day Services			28
Section 9.03		Delta Club and JP Morgan Club			29
Section 9.04		Staffing Levels for Certain Services			29
Section 9.05		Budgeting and Estimates			29
Section 9.06		Settlement			30
Section 9.07		Provision of Licensor Services			31
ARTICLE X PROMOTION; TRADEMARKS; DATA OWNERSHIP					32
Section 10.01		Promotional Outlets			32
Section 10.02		Trademark Licenses			32
Section 10.03		Customer Data			33
ARTICLE XI EXCLUSIVITY COVENANT					34
Section 11.01		Covenant			34
ARTICLE XII CASUALTY AND CONDEMNATION					34
Section 12.01		Termination or Restoration Due to Condemnation			34
Section 12.02		Termination or Restoration Due to Casualty			37
Section 12.03		Condemnation Proceeding and Awards			40
Section 12.04		Temporary Taking			41

 

ii

Section 12.05		Inability to Timely Restore; Estimate of Time and Cost to Restore			41
Section 12.06		Replacement Arena			43
Section 12.07		Intention of the Parties			43
ARTICLE XIII INDEMNIFICATION					44
Section 13.01		General Indemnification			44
Section 13.02		Notice of Claims and Rights to Defend and Settle Claims			44
ARTICLE XIV INSURANCE AND SUBROGATION					45
Section 14.01		Knicks Insurance Coverage			45
Section 14.02		Knicks Insurance Requirements			46
Section 14.03		Knicks Certificates of Insurance			46
Section 14.04		Knicks Waiver of Subrogation			46
Section 14.05		Licensor Insurance Coverage			46
Section 14.06		Licensor Insurance Requirements			47
Section 14.07		Licensor Certificates of Insurance			47
Section 14.08		Licensor Waiver of Subrogation			48
ARTICLE XV WORK STOPPAGE					48
Section 15.01		Impact on License Fee			48
Section 15.02		Treatment of Refunds or Credits			48
Section 15.03		Scheduling			48
ARTICLE XVI CERTAIN TAXES					48
Section 16.01		Property Taxes			48
Section 16.02		Commercial Rent Tax			49
ARTICLE XVII KNICKS DEFAULT; LICENSOR’S RIGHTS AND REMEDIES					49
Section 17.01		Knicks Default			49
Section 17.02		Remedies of Licensor			50
Section 17.03		Remedies of Licensor for an Exclusivity Breach			50
Section 17.04		League’s Right to Notice of and Cure Knicks Defaults			51
ARTICLE XVIII LICENSOR DEFAULT; KNICKS’ RIGHTS AND REMEDIES; RIGHTS IN THE EVENT OF REPEAL OF PROPERTY TAX EXEMPTION					51
Section 18.01		Licensor Default			51
Section 18.02		Remedies of the Knicks			52
Section 18.03		Rights in the Event of Repeal of Property Tax Exemption			52

 

iii

ARTICLE XIX ASSIGNMENT					52
Section 19.01		Licensor Assignment			52
Section 19.02		Knicks Assignment			53
Section 19.03		No Other Assignment			53
ARTICLE XX MISCELLANEOUS					53
Section 20.01		Force Majeure			53
Section 20.02		Consents and Approvals			53
Section 20.03		Entire Agreement			53
Section 20.04		Notices			54
Section 20.05		Successors Bound			54
Section 20.06		Governing Law; Disputes			54
Section 20.07		Captions and Headings; Certain Rules of Construction			56
Section 20.08		Counterparts			56
Section 20.09		Confidentiality			56
Section 20.10		League Rules			57
Section 20.11		Superior Interests			57
Section 20.12		Severability			57
Section 20.13		Waiver			57
Section 20.14		Further Assurances			58
Section 20.15		No Third-Party Beneficiary; Enforcement of Third-Party Agreements			58
Section 20.16		Books and Records			58
Section 20.17		Audit Rights			58
Section 20.18		Access to Financial Information			59

SCHEDULES

 

iv

ARENA LICENSE AGREEMENT

This ARENA LICENSE AGREEMENT (this “Agreement”) is made as of             , 2020 (the “Effective Date”) between MSG Arena, LLC, a Delaware limited liability company (“Licensor”), and New York Knicks, LLC, a Delaware limited liability company (the “Knicks”). Licensor and the Knicks are each referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

 

A.

Licensor owns and operates the arena commonly known as Madison Square Garden, which is located at 4 Pennsylvania Plaza, New York, New York 10001 that contains approximately 18,800 seats for basketball games, and is suitable for the exhibition of basketball games and for other purposes (the “Arena”).

 

B.

New York Knicks, LLC owns and operates the professional basketball team known as the New York Knicks (the “Team”) in the National Basketball Association (the “NBA” or the “League”).

 

C.

Licensor wishes to grant the Knicks, on behalf of the Team, certain rights to use specified parts of the Arena at specified times, and the Knicks desire to so use the Arena at such times, upon the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

[*****]

“Advertising” means, collectively, all advertising, sponsorship and promotional activity, signage, messages and displays of every kind and nature at or regarding the Arena, whether audio or visual and whether now existing or developed in the future, including the following: (i) the right to name the Arena or any portion thereof, including identifying such name on the Arena concourses, the entrances to the Arena, premium seating areas or any other areas at the Arena; (ii) permanent, non-permanent and transitory signage or advertising displayed on permanent (e.g., fixed panel) or non permanent (e.g., rotating) advertising panels or on the interior or exterior of the Arena (including Arena marquee boards and other exterior signage); (iii) advertising appearing on fixtures or equipment (such as scoreboard advertising and canopy advertising); (iv) audio or video public address advertising and message board advertising; (iv) electronic insertion, fascia boards, liquid electronic displays, ribbon boards and other forms of electronic signage (“LED Signage”); (v) print and display advertising, including advertising on or in game programs, schedules, tickets and yearbooks; (vii) promotional events or activities sponsored by corporate partners; (viii) the exhibition and promotion of products and services at the Arena (e.g., kiosks and special areas in the concourse); (ix) advertising worn or carried by concessionaire personnel or

other personnel engaged in the operation of any Arena event; (x) advertising affixed to or included with cups, napkins, utensils, plates or other similar items used to consume Concessions at the Arena (“Concession Items”); (xi) advertising at concession areas; and (xii) promotional or premium item give-aways.

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person, or which is a director, officer, employee, or partner (limited or general) of such specified Person, but with respect to either Party specifically excluding the other Party and the other Party’s publicly owned parent and such parent entity’s direct and indirect subsidiaries. For the purpose of this definition, “control”, when used with respect to any specified Person, means the power to direct or cause, directly or indirectly, the direction of the management and policies of such Person whether through the voting of securities, by contract or otherwise. The terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” has the meaning set forth in the preamble.

“Arena” has the meaning set forth in Recital A.

“Arena Agency Agreements” has the meaning set forth in Section 7.02(b).

“Attendance Based Allocation” has the meaning set forth in Schedule 6.01.

“Auditing Party” has the meaning set forth in Section 20.17.

“Books and Records” has the meaning set forth in Section 20.16.

“Casualty” shall mean any damage, destruction or other property casualty of any kind or nature, ordinary or extraordinary, foreseen or unforeseen resulting from any cause, including any Force Majeure event.

“Catering Services” and “Catering Gross Receipts” have the meanings set forth in Schedule 6.01.

“Commencement Date” has the meaning set forth in Section 2.01.

“Common Areas” has the meaning set forth in Schedule 4.01.

“Concessions” means F&B Concessions, Team Merchandise sold or provided at the Arena, and Non-Team Merchandise.

“Condemnation” means a taking by eminent domain, condemnation or appropriation by any governmental authority or other Person with the power of eminent domain for any public or private use or purpose.

“Condemnation Award” means all sums, amounts or other compensation for the Arena payable to the Knicks or Licensor as a result of or in connection with any Condemnation.

 

2

“Convenience Fees” has the meaning set forth in Section 5.06(a).

“Contract Year” means, other than the Initial Contract Year, each period of the Term from July 1 through the immediately following June 30.

“Courtside Advertising” has the meaning set forth in Section 7.01.

“Customer Data” has the meaning set forth in Section 10.03(a).

“Effective Date” has the meaning set forth in the preamble.

“Exclusivity Breach” has the meaning set forth in Section 17.01(e).

“Exhibition and Regular Season Home Games” means games played by the Team during the exhibition season or regular season of the League where the Team (and not the opposing team) has the right to designate the location of such game or which is considered one of the Team’s home games by the League for purposes of League Rules, standings or scheduling.

“F&B Concessions” and “F&B Concessions Gross Receipts” have the meanings set forth in Schedule 6.01.

“Facility Ticket Fee” has the meaning set forth in Section 5.02(c).

“First Full Contract Year” means July 1, 2020 through June 30, 2021.

“Force Majeure” has the meaning set forth in Section 20.01.

“Game Day Services” has the meaning set forth in Section 9.02.

“General Services” has the meaning set forth in Section 9.01.

“Gross Receipts” has the meaning set forth in Schedule 6.01.

“Home Date” means each date on which a Home Game is scheduled.

“Home Games” means collectively, Exhibition and Regular Season Home Games and Playoff Home Games.

“Initial Contract Year” means the period beginning on the Commencement Date through June 30, 2020.

“Joint Sponsors” has the meaning set forth in Section 7.02(b).

“Knicks” has the meaning set forth in the preamble.

“Knicks Default” has the meaning set forth in Section 17.01.

“Knicks Event” means Home Games and Other Knicks Events.

 

3

“Knicks Misuse” has the meaning set forth in Section 4.07.

“Knicks’ Personnel and Guests” means the personnel, guests and invitees of the Knicks (including holders of tickets of admission to the Arena, holders of press and media credentials, and visiting team personnel).

“League” has the meaning set forth in Recital B.

“League Rules” means (a) all of the mandates, rules, regulations, policies, bulletins, directives, memoranda, resolutions and agreements of the NBA (or its members generally), the other NBA Entities, their respective governing bodies (including the NBA Board of Governors and the committees thereof), and the NBA Commissioner generally applicable to members of the NBA and (b) all agreements and arrangements to which the Knicks or the Team is (or after the date of this Agreement may become) subject or by which the Knicks or the Team or their assets are (or may become) bound with or in favor of any of the NBA Entities, including without limitation the Transaction Agreement dated as of the date hereof, in each case, as they presently exist or as they may, from time to time, be entered into, created or amended, including the Constitution and By-Laws of the NBA, the operations manual of the NBA, any collective bargaining agreement to which the NBA is a party, trademark and other intellectual property license agreements and all current and future television, radio, and other agreements involving the broadcast of NBA games.

“License Fee” has the meaning set forth in Section 3.01.

“Licensor” has the meaning set forth in the preamble.

“Licensor Default” has the meaning set forth in Section 18.01.

“Licensor Promotion” has the meaning set forth in Section 10.01(a).

“Licensor Services” means, collectively, General Services and Game Day Services.

“Madison Club” has the meaning set forth in Section 5.03(d).

“Maximum Credit or Refund” has the meaning set forth in Section 15.02.

“MSG Sports” means MSG Sports, LLC, the parent company of the Knicks and the Rangers.

“NBA” has the meaning set forth in Recital B.

“NBA Entities” means the NBA, NBA Properties, Inc., NBA Media Ventures, LLC, NBA Development League Holdings, LLC, WNBA Holdings, LLC, any other entity formed generally by the NBA members and each direct and indirect subsidiary of any of the foregoing, and each of their respective successors and assigns.

“Net Profits” has the meaning set forth in Schedule 6.01.

 

4

“No Fault Occurrence” has the meaning set forth in Section 18.03.

“Non-Auditing Party” has the meaning set forth in Section 20.17.

“Non-Team Merchandise” means all programs, other publications, and merchandise other than Team Merchandise.

“Other Arena Event” has the meaning set forth in Section 4.04(c).

“Other Knicks Event” has the meaning set forth in Section 4.04(b).

“Party” or “Parties” has the meaning set forth in the preamble.

“Person” means any individual, corporation, company, voluntary association, partnership, incorporated organization, trust, limited liability company, or any other entity or organization.

“Playoff Home Games” means games played after the end of the League’s regular season as part of its championship tournament, for which the Team must qualify based on its regular season record, where the Team (and not the opposing team) has the right to designate the location of such game or which is considered one of the Team’s home games by the League for purposes of League Rules or scheduling.

“Property Tax Exemption” has the meaning set forth in Section 16.01.

“Property Tax Exemption Agreement” has the meaning set forth in Section 16.01.

“Rangers” has the meaning set forth in Section 4.04(a).

“Rangers Games” has the meaning set forth in Section 4.04(a).

“Representatives” has the meaning set forth in Section 20.09.

“Standard” means, with respect to the applicable requirement, obligation or matter, (a) in compliance with applicable law, (b) in compliance with League Rules (including the NBA Arena Standards) and (c) at a first-class level equal to or better than that at which NBA arenas in major U.S. markets are then operated, maintained and improved for NBA games (in the case of improvements, taking into reasonable consideration the age and location of the Arena and its existing structural limitations), and in no event less than the highest standard of quality and manner in which the Arena (i) was operated, maintained and improved historically (post 2011-2013 transformation) with respect to Home Games and (ii) will be operated, maintained and improved for Other Arena Events.

“Suite 200” has the meaning set forth in Section 5.03(h).

“Suites” shall mean the premium locations within the Arena currently designated as “Event Level Suites,” “Madison Level Suites” and “Signature Level Suites” as more specifically described in Schedule 4.01, and any replacement suites in those locations.

“Team” has the meaning set forth in Recital B.

 

5

“Team Areas” has the meaning set forth in Schedule 4.01.

“Team Merchandise” means merchandise (including programs and other publications) that bears the Team’s name, logo(s), or other intellectual property relating to the Team, or any other League intellectual property, including any merchandise relating to or depicting (as the case may be) the League and/or any of its teams, players, and/or events (e.g., the NBA All-Star Game, the NBA Playoffs,), or the logo(s) of any of the foregoing.

“Team Merchandise Allocation” has the meaning set forth in Section 6.02(d).

“Term” has the meaning set forth in Section 2.01.

“The Loft” has the meaning set forth in Section 5.03(d).

“Ticket” or “Tickets” has the meaning set forth in Section 5.01.

“Ticket Agent” has the meaning set forth in Section 5.06(a).

“Ticket Agent Agreement” has the meaning set forth in Section 5.06(a).

“Untenantable Condition” means a condition of the Arena that occurs on account of a Casualty or Condemnation and, as a result of which League Rules or applicable law prohibit the playing of Home Games at the Arena or would entail denial of access to or loss of a material portion of (i) the general seating areas of the Arena or (ii) revenues of the Knicks derived from the Arena.

“VIP Club Services” has the meaning set forth in Section 9.03.

“VIP Clubs” has the meaning set forth in Section 9.03.

“Work Stoppage” has the meaning set forth in Section 15.01.

ARTICLE II

TERM

Section 2.01    Term; Commencement Date. The term of this Agreement shall commence on             , 2020 (the “Commencement Date”) and, unless earlier terminated in accordance with the terms of this Agreement, shall end on June 30, 2055 (the “Term”).

ARTICLE III

LICENSE FEE

Section 3.01    License Fee. The Knicks shall pay to Licensor a license fee, without any right of offset, reduction or abatement (except as expressly provided in this Agreement), as follows: (a) for the Initial Contract Year, a prorated amount equal to $21,800,000 divided by forty-

 

6

four (44), multiplied by the number of Exhibition and Regular Season Home games scheduled to be played in the Arena in the Initial Contract Year; (b) for the First Full Contract Year, $22,454,000; and (c) for each subsequent Contract Year, 103% of the license fee for the immediately preceding Contract Year (the “License Fee”).

Section 3.02    Payment of License Fee. For each Contract Year, the Knicks shall pay the License Fee in twelve (12) equal installments on the first business day of each month during the Contract Year, except that the License Fee for the Initial Contract Year shall be paid in equal monthly installments on the first business day of the month following the Commencement Date and the first business day of each remaining month in the Initial Contract Year.

ARTICLE IV

USE OF ARENA

Section 4.01    Arena Areas. The Arena includes the areas identified on Schedule 4.01 attached hereto. The Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment thereto. The Parties acknowledge and agree that the precise locations, square footage, appearance and amenities of the Common Areas and Team Areas set forth therein shall be subject to change from time to time during the Term in accordance with Section 4.05.

Section 4.02    Knicks Use. Licensor hereby grants to the Knicks and Knicks’ Personnel and Guests, and the Knicks hereby accept from Licensor, for itself and the Knicks’ Personnel and Guests, a license to use the Arena as follows:

(a)    Common Areas and Team Areas. Subject to League Rules, on each Home Date, beginning at approximately the earlier of 10:00 a.m. or three (3) hours prior to the start of any Home Game, until two (2) hours after the completion of such Home Game, the Knicks shall have the exclusive right and license to use the Common Areas and the Team Areas for the purpose of playing of Home Games and conducting related activities, and the presentation thereof by any and all means, live and over radio and television and all other means of communication now existing and hereafter developed, and such other uses expressly permitted in this Agreement or as may be agreed to by the Parties. Notwithstanding the foregoing start time, Licensor may schedule Other Arena Events (as defined below) on Home Dates (each, a “Shared Date”) in accordance with Section 4.04(c); provided that in no event shall the Knicks have exclusive access to the Common Areas and Team Areas any later than approximately three (3) hours prior to the start of any Home Game (or as otherwise required by League Rules). Licensor shall reimburse the Knicks for any costs incurred by the Knicks solely as a result of a Home Game occurring on a Shared Date (e.g., visiting team relocating a shootaround). In addition, the Knicks shall have reasonable access, on a non-exclusive basis, to the Common Areas and the Team Areas for purposes related to the business or basketball operations of the Knicks at reasonable times on days that are not Home Dates and during periods on Home Dates other than those specified above (but in no case during ticketed Other Arena Events (as defined in Section 4.04(c) below)), provided the Knicks’ use of the Common Areas may not unreasonably interfere with any use by Licensor or authorized use by its other licensees (including the Rangers).

 

7

(b)    Access. All rights and licenses set forth in this Section 4.02 include in favor of the Knicks and the Knicks’ Personnel and Guests (including holders of tickets of admission to the Arena, holders of press and media credentials, and visiting team personnel), subject to the Arena’s safety and security protocols as provided in Section 4.06(b), (i) rights and licenses of entry, ingress and egress over and across all applicable portions of the Arena, and (ii) the right and license to bring onto the Arena (and to permit the Knicks’ Personnel and Guests to bring into the Arena), and retain ownership and control of, items of personal property and equipment.

(c)    Grant of License. This Agreement is intended to, and shall be construed as, a grant of a license by Licensor to the Knicks and the Knicks’ Personnel and Guests, and shall not operate to vest in the Knicks any ownership or leasehold interest, or other real estate interest, in the Arena or the property of Licensor, whether real or personal, tangible or intangible, or any use or possessory rights other than those rights expressly granted by the license hereunder (and then subject to and in accordance with all of the provisions of this Agreement).

Section 4.03    Licensor’s Right of Entry. Notwithstanding the provisions of Section 4.02, but subject to League Rules, Licensor and its agents and representatives shall have the right to enter into and upon any and all parts of the Arena, including the Team Areas and the Common Areas, as necessary for the purpose of carrying out its obligations under this Agreement, to operate the Arena, to perform necessary safety, security and maintenance activities and for other purposes that do not unreasonably interfere with the Knicks’ rights hereunder.

Section 4.04    Scheduling.

(a)    Team Games. The scheduling procedure for Home Games shall continue in a manner consistent with past practice, subject to, and at all times in accordance with, League Rules (including, without limitation, with respect to playoff scheduling). It is understood between the Parties that Licensor is entering into a simultaneous license with New York Rangers, LLC (the “Rangers”), on behalf of the professional hockey team known as the New York Rangers, to host hockey games (“Rangers Games”) in the Arena. The Parties will continue to cooperate with each other in good faith recognizing that Licensor has obligations to the Rangers. Consistent with past practice, Licensor will jointly coordinate with the League and the National Hockey League in scheduling Home Games and Rangers Games. In addition, each Party shall (i) use reasonable efforts to avoid material business impacts on the other Party where such Party has the ability to do so and (ii) reasonably cooperate and honor requests for changes to previously scheduled or held dates. For the avoidance of doubt, in the event of any conflict between any of the foregoing and League Rules, League Rules shall control and govern.

(b)    Other Knicks Events and Usage.

(i)    Subject to the terms of this subsection, the Knicks shall be entitled to license the Arena without payment of an incremental license fee on up to two (2) occasions per Contract Year, to present certain Team-related events other than Home Games (e.g., open practices, try-outs; scrimmages; camps, clinics and youth academies; marketing, promotion or other related purposes; press gatherings; Knicks charity events (which may be ticketed); luncheons, meetings, parties ticket sales events, season subscriber events and similar functions as mutually agreed) (each, an “Other Knicks Event”). Dates

 

8

for Other Knicks Events may be reserved no earlier than sixty (60) in advance of the proposed event and such reservations shall be subject to any dates previously booked by Licensor for Other Arena Events.

(ii)    The Knicks may use such Team Areas and Common Areas, and Licensor shall provide such Licensor Services (for which Game-Day Services the Knicks shall pay or reimburse Licensor as provided herein), as are reasonably requested by the Knicks for such Other Knicks Events. Other Knicks Events shall be subject to any other terms and conditions to be negotiated by the Parties. Unless the Parties agree otherwise with respect to a particular event, all terms of this Agreement applicable to Home Games will apply to Other Knicks Events.

(iii)    At the Knicks’ request, Licensor may, in its discretion, license the Arena and/or other Licensor-owned venues (e.g., Beacon Theater, Radio City, Tao) to the Knicks to the extent available and without payment of an incremental license fee (the Knicks shall pay any expenses). Such events may be in addition to Other Knicks Events.

(c)    Other Arena Events. Subject to Section 4.04(a), Licensor shall be entitled to schedule Rangers Games, other sporting events, concerts, and any other types of events in the Arena (each, an “Other Arena Event”), including, for the avoidance of doubt, on the same day as a Home Game; provided that: (i) no Other Arena Event shall relieve Licensor of its obligations hereunder, including to deliver the Common Areas and Team Areas to the Knicks in the condition required by ARTICLE IX by or before the times required in Section 4.02(a), (ii) no Other Arena Event shall be scheduled if it could reasonably be expected to materially interfere with the presentation, use or operation of the Arena for any previously scheduled Knicks Events (or the revenues derived by the Knicks therefrom) , and (iii) [*****]

Section 4.05    Alterations.

(a)    Knicks Alterations.

(i)    During the Term, and subject to any existing union jurisdictional arrangement relating to the Arena, the Knicks may make non-structural alterations to the Team Areas, subject to Licensor’s approval thereof, which approval shall not be unreasonably withheld, conditioned or delayed (it being understood that Licensor may deny its approval if such alterations would reasonably be expected to adversely impact in a material way Licensor or any third party who regularly uses the space (e.g. the Rangers)). Licensor shall reimburse the Knicks for the cost of such alterations to the extent necessary to comply with its obligations under this Agreement, provided that any such cost must be preapproved in writing by Licensor, which approval shall not be unreasonably withheld, conditioned or delayed. To the extent those alterations are not necessary for Licensor to comply with its obligations under this Agreement, those alterations shall be made at the Knicks’ sole cost and expense.

(ii)    During the Term, the Knicks may also request that Licensor make alterations to the Team Areas or Common Areas. Licensor shall make those alterations to the extent necessary to comply with its obligations under this Agreement, at Licensor’s

 

9

sole cost and expense. To the extent those alterations are not necessary for Licensor to comply with its obligations under this Agreement, those alterations shall be subject to the approval of Licensor, such approval not to be unreasonably withheld, conditioned or delayed, and shall be made at the Knicks’ sole cost and expense (subject to the Knicks’ approval of Licensor’s plans and costs); it being understood that Licensor may deny its approval if such alterations would reasonably be expected to adversely impact in a material way Licensor or any third party who regularly uses the space (e.g. the Rangers).

(b)    Licensor Alterations.

(i)    Licensor shall have the right to make alterations or other changes to the Arena, in its sole discretion and at its sole cost and expense; provided that Licensor shall be required to obtain the prior written consent (not to be unreasonably withheld, conditioned or delayed) of the Knicks to the extent that any such alterations or changes could reasonably be expected to impact the Knicks’ rights or obligations hereunder, or the presentation, set-up, use or operation of the Arena for any Knicks Event.

(ii)    Without limiting ARTICLE IX, Licensor shall be responsible for making alterations, upgrades, modifications and improvements to the Arena (and the components thereof) at Licensor’s sole cost and expense (subject to Section 4.05(c)), as may be required from time to time in order to maintain the Arena in accordance with the Standard.

(iii)    Alterations intended to generate additional premium seating revenues for both Licensor and the Knicks shall be governed by the terms of Section 5.04.

(c)     Alterations Pursuant to League Rules. Notwithstanding anything to the contrary contained in this Agreement, any alterations, upgrades, modifications or improvements to the Arena that are made solely to comply with any new or amended League Rules that are enacted after the Commencement Date shall be made at the Knicks’ sole expense.

(d)    The Parties shall cooperate in good faith to agree on the plans and specifications for alterations made under Sections 4.05(a) - (c) and the time period during which such alterations are expected to be made. All such alterations shall (i) be made by Licensor or its contractors (except for alterations made pursuant to Section 4.05(a)(i)), (ii) comply with all applicable laws, ordinances, orders, regulations and League Rules, (iii) be completed in a good and workmanlike manner, using new materials or their equivalent, without unreasonable delay, (iv) not interfere with gameplay in accordance with League Rules and (v) not materially interfere with the presentation, set-up, use or operation of the Arena for any Knicks Event (or the revenues derived by the Knicks therefrom), without the Knicks’ prior written approval.

Section 4.06    Manner of the Knicks’ Use. At all times during the Term:

(a)    The Knicks shall use the Arena in accordance with all League Rules and applicable laws, ordinances, and regulations. Licensor shall operate the Arena in accordance with all League Rules, applicable laws, ordinances, and regulations. [*****]

 

10

(b)    The Knicks and their guests, invitees, patrons, and designees shall be subject to any reasonable and nondiscriminatory rules and regulations and security procedures that Licensor imposes on the use of the Arena, so long as the same (i) are not inconsistent with the other provisions of this Agreement (including Licensor’s requirement to maintain and operate the Arena in accordance with the Standard) or League Rules, and (ii) are uniformly applied to all other occupants and users of the Arena except to the extent necessitated by differing particular event types.

(c)    Each Party shall, at any time and from time to time, upon not less than ten (10) days prior written request from the other Party, execute, acknowledge and deliver to the requesting Party, in a form reasonably satisfactory to the requesting Party and, if applicable, its existing or prospective direct or indirect lender or purchaser, a written estoppel statement certifying, (i) that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), (ii) if true (or, if not entirely true, listing any exceptions), that the requesting Party is not in default hereunder, (iii) the date to which the License Fee and other charges have been paid in advance, if any, and (iv) such other accurate certifications as may reasonably be required by the requesting Party or its existing or prospective direct or indirect lender or purchaser, and agreeing to give copies to the requesting Party’s existing or prospective direct or indirect lender or purchaser of all material notices by the stating Party to the requesting Party, and agreeing to afford the requesting Party’s existing or prospective direct or indirect lender or purchaser an opportunity to cure any default of the stating Party within the applicable cure period afforded to the requesting Party hereunder. It is intended that any such statement delivered pursuant to this subsection may be relied upon by any prospective direct or indirect lender to or purchaser of the Knicks or of the Arena and their respective successors and assigns.

Section 4.07    Knicks Misuse. The Knicks shall promptly reimburse Licensor for costs of cleaning, repairs or replacements, net of insurance proceeds received under Article XIV, necessitated by (a) uses by the Knicks not permitted under this Agreement, or (b) grossly negligent, reckless or willful acts of the Knicks or visiting NBA teams for Knicks Events that cause such damage (collectively, “Knicks Misuse”).

Section 4.08    Surrender. Upon the expiration of the Term or earlier termination of this Agreement, the Knicks shall promptly vacate the Arena under the direction of and in the manner reasonably approved by Licensor, and shall surrender all of its keys, access cards, and other credentials and access items for the Arena to Licensor, and shall inform Licensor of all combinations on all of its locks, safes, and vaults, if any, in the Arena. Without limiting the foregoing, the Knicks shall not remove any alterations, improvements, or other property (other than personal property not affixed or attached to the Arena or any elements thereof) from the Arena unless permitted to do so by Licensor, and the Knicks shall promptly reimburse Licensor for the cost of repairing any damage caused by such removal. Any personal property of the Knicks which remains in the Arena after the expiration of the Term or earlier termination of this Agreement may, at the option of Licensor, be deemed to have been abandoned, and, in Licensor’s sole discretion, (a) may be retained by Licensor as its property, (b) shall be disposed of by the Knicks at the request of Licensor, or (c) may be disposed of by Licensor.

 

11

ARTICLE V

TICKETS, SUITES AND CLUBS

Section 5.01    Prices. As between Licensor and the Knicks, (a) the Knicks shall have sole discretion to control the manifest and determine the prices and fees (subject to Section 5.06(a)) for all tickets and other indicia authorizing admission (each a “Ticket”) for general admission seating, standing room and other general admission spectator positions in the Arena for all Knicks Events, and (b) except as provided below, Licensor shall have sole discretion to control the manifest and determine the license fees to be paid for the Suites, The Loft, the Madison Club and similar premium spaces developed in accordance with Section 5.03 and Section 5.04 during the Term. There shall be no limit on the number of complimentary Tickets the Knicks may issue.

Section 5.02    Ticket Revenues.

(a)    Ticket Sales. The Knicks shall have the exclusive right to sell and resell all Tickets and retain all revenues from all Ticket sales and resales, including the Facility Ticket Fee (as defined in Section 5.02(c)), the Knicks’ share of any Convenience Fee (as defined in Section 5.06(a)), and any personal seat licenses the Knicks may elect to sell, provided, that the Knicks right to sell personal seat licenses shall be limited to Knicks Events only (and no Other Arena Events) and provided further, that any “form” agreement for the sale or licensing of personal seat licenses shall be subject to Licensor’s prior approval, not to be unreasonably withheld, conditioned or delayed and the Knicks shall not make any material alterations to such form agreement that adversely impact Licensor without Licensor’s prior written approval, not to be unreasonably withheld, conditioned or delayed.

(b)    Loaded-Value Tickets. To the extent that the Knicks offer a ticket product where the ticketholder is entitled to gratis Concessions in addition to seating to a Home Game, Licensor shall provide such Concessions and the Knicks shall remit to Licensor the actual retail value of any Concessions redeemed by each such ticketholder, which revenue will be included in Team Merchandise revenue (to the extent that the sale/redemption relates to Team Merchandise) or F&B Concessions Gross Receipts, as applicable. To the extent that the sale/redemption relates to Non-Team Merchandise, Licensor shall retain all such redeemed amounts. For purposes of clarity, any revenue associated with loaded-value tickets that is not redeemed for Concessions shall remain the property of the Knicks.

(c)    Facility Ticket Fee. [*****] shall charge to all initial Home Game Ticket purchasers a per-Ticket facility fee (the “Facility Ticket Fee”), in an amount determined from time to time by Licensor following consultation with the Knicks. [*****]

Section 5.03    Suites; Madison Club; The Loft

(a)    Suites. Subject to other provisions of this Section 5.03, Licensor shall have the exclusive right to license Suites to third parties for all or a portion of Knicks Events and Other Arena Events and collect license fees for the privilege of using the Suites and related amenities. Licensor shall be responsible for all costs of licensing, operating, servicing and maintaining the Suites in accordance with the Standard. Revenues generated from the licensing of Suites shall be

 

12

allocated as set forth in Section 5.03(b). All of the terms and conditions of such licenses and appurtenant Arena admission tickets and other rights and obligations related to the occupancy of Suites, shall be governed by separate agreements (each, a “Suite Agreement”) entered into between Licensor and the licensees of Suites. Licensor’s “form” Suite Agreements shall be subject to the prior written approval of the Knicks (not to be unreasonably withheld, conditioned or delayed) and Licensor shall not make any material alterations to the form Suite Agreements or any executed Suite Agreement that adversely impact the Knicks without the Knicks’ prior written approval, not to be unreasonably withheld, conditioned or delayed.

(b)    Suites Revenue.

(i)    All-Event Suites. For Suites licensed for all or substantially all Arena events including Home Games (other than certain major Other Arena Events, including All-Star Games, awards shows, major college championship events, etc.), including those sold on a half-share, quarter-share or other fractional portion basis, the Knicks shall receive [*****]% of all revenues collected or received by Licensor from the sale of such Suites (the “Knicks Suites Revenue Share”), net of contracted catering credits (if any), taxes and credit card fees, and Licensor shall retain the remaining amounts, except as provided in Section 5.03(g) and 6.01(a) [*****]. In the event of a No Fault Occurrence, the Knicks Suites Revenue Share shall be increased to [*****]%.

(ii)    Team-Only and Single Game Suites. The Knicks shall receive all revenues collected or received by Licensor from the sale of Suites licensed only for individual or packages of Home Games and/or other Knicks Events, net of the retail value of food and beverage packages included in the license fee (“Included F&B Packages”), contracted catering credits (if any), taxes and credit card fees, less a Licensor commission of [*****]% of such net revenue (provided that, in the event of a No Fault Occurrence, the Parties will agree on an appropriate reduction to such commission to account for any reduction in the additional amount that would have been payable to the Knicks under the last sentence of Section 5.03(b)(i) if all Suites were sold for all Arena events).

(iii)    Custom Team and Non-Team Suite Packages. For customized Suite packages (i.e., a pre-determined mix of events that include Knicks Events and Other Arena Events), revenues shall be proportionally allocated to each event included in such package based on the then-applicable rate card for the included events. The Knicks shall receive all revenues collected or received by Licensor attributable to the Knicks Events included in such package, net of Included F&B Packages, contracted catering credits (if any), taxes and credit card fees, to the extent used during Knicks Events, less a Licensor commission of [*****]% of such net revenue as so allocated (provided that, in the event of a No Fault Occurrence, the Parties will agree on an appropriate reduction to such commission to account for any reduction in the additional amount that would have been payable to the Knicks under the last sentence of Section 5.03(b)(i) if all Suites were sold for all Arena events).

(iv)    Suite Passes for Knicks Events. Notwithstanding the foregoing, all revenues from the sale or license of passes for incremental admission to Suites for Knicks Events (commonly known as “suite passes”), net of taxes and credit card fees, shall be retained by the Knicks. The parties shall agree on the terms and pricing of such suite passes, which shall be sold by Licensor.

 

13

(v)    Catering Credits. Any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of a Suite license shall be included in Catering Gross Receipts as and to the extent used during Knicks Events. Any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of a (x) single-game or Team-only package or (y) customized Suite package including Knicks Events and Other Arena Events (as described in Section 5.03(b)(iii)) shall be subject to the prior written approval of the Knicks, such approval not to be unreasonably withheld, conditioned or delayed. With respect to any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of any suite package containing a mix of Team and non-Team events, Licensor shall ensure that such contracted catering credits or Included F&B Packages have the same terms and conditions, at the Suite licensee’s discretion, at both Knicks Events and Other Arena Events.

(c)    Suite 16. The Knicks acknowledge that Suite 16 on the tenth floor of the Arena is currently licensed to the TAO Group, in which Licensor’s parent company has a majority ownership interest. The Knicks agree that notwithstanding Licensor’s ownership interest in the TAO Group, the Knicks’ share of the license revenue for this suite shall be calculated based on the fees paid or payable to Licensor by the TAO Group, and not with respect to any membership or other revenue or income generated by the TAO Group, provided that such fees are established and maintained on an arms-length basis (it being acknowledged that the fee payable by the TAO Group to Licensor for the twelve-month period ended June 30, 2019 is arms-length for purposes of this Section 5.03(c)).

(d)    The Madison Club and The Loft.

(i)    Certain clients will pay Licensor membership fees that entitle them to access (a) the 170-seat defined hospitality and seating space on the west side of the Arena currently known as the “Madison Club” during all Home Games and all Rangers Games, boxing, tennis, and NCAA college basketball events at the Arena (the “Madison Club”); and/or (b) the 48-seat defined hospitality and seating space on the east side of the Arena currently known as “The Loft at Madison Square Garden” during all Arena events including Home Games (other than certain major Other Arena Events, including All-Star Games, awards shows, major college championship events, etc.) (“The Loft”). Licensor shall not sell more than 170 or 48 tickets of admission or memberships to the Madison Club or The Loft, respectively, for any Knicks Events without the prior written consent of the Knicks, not to be unreasonably withheld, conditioned or delayed.

(ii)    Licensor shall be responsible for selling and servicing Madison Club and Loft memberships and operating, maintaining and servicing the Madison Club and The Loft in accordance with the Standard. The Knicks shall receive [*****]% of all revenues collected or received by Licensor from the sale of memberships to the Madison Club and The Loft, net of taxes and credit card fees (the “Knicks Hospitality Share”). The Knicks shall reimburse Licensor for (a) the direct cost of providing complimentary food and beverage, and (b) the cost of other direct event variable labor (e.g., concierge, coat check,

 

14

etc.), other than labor related to Concessions that are sold, attributable to the Madison Club and The Loft for Home Games, in each case under (a) and (b), which costs shall be consistent for all events and on a basis as determined in consultation with the Knicks. Schedule 5.03(d) sets forth the staffing levels for the Madison Club and The Loft as of the 2019-20 Season (which takes into account the services provided for the Madison Club and The Loft as of the 2019-20 Season). For all Home Games and similar (based on factors including expected attendance) Other Arena Events, Licensor shall maintain substantially similar levels of service and staffing (as set forth on Schedule 5.03(d)), provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing and accommodate the other’s reasonable requests for adjustment thereto. In the event of a No Fault Occurrence, the Knicks Hospitality Share shall be increased to [*****]%.

(iii)    To the extent that Licensor sells specialized packages that are different from those referenced in Sections 5.03(d)(i)-(ii) above, the parties shall coordinate and agree on appropriate pricing, revenue share and/or commissions. To the extent that Licensor provides members of the Madison Club and/or The Loft with limited amount of gratis Concessions (e.g., through a loaded ticket) (“Gratis Concessions”), the Parties shall coordinate and mutually agree on appropriate terms, costs and revenue allocations for such Gratis Concessions.

(iv)    All of the terms and conditions of the sale of such memberships shall be governed by separate agreements (the “Hospitality Agreements”) entered into between Licensor and the members of the Madison Club and The Loft. Licensor’s “form” Hospitality Agreements shall be subject to the prior written approval of the Knicks (not to be unreasonably withheld, conditioned or delayed) and Licensor shall not make any alterations to such form Hospitality Agreement or any executed Hospitality Agreement that materially adversely impact the Knicks without the Knicks’ prior written approval, not to be unreasonably delayed or withheld.

(e)    Sales by the Knicks. Licensor may from time to time authorize the Knicks to attempt to license or sell on Licensor’s behalf the Suites or memberships referred to in this Section 5.03. For purposes of clarity, the Parties agree that the revenue sharing referred to in this Section 5.03 shall apply whether the license or sale is consummated by Licensor, Knicks or MSG Sports’ employees; provided that, if the license or sale is of Team-only or single game Suites (as described in Section 5.03(b)(ii)) or custom Team and non-Team Suite packages (as described in Section 5.03(b)(iii)) and is consummated by the Knicks or MSG Sports, Licensor’s commission on such license or sale shall be [*****]% of the applicable net revenue.

(f)    Settlement. Licensor shall remit to the Knicks on a monthly basis a cash payment equal to the Knicks’ share of revenues collected or received for the Suites, the Madison Club, The Loft (and any similar premium spaces developed during the Term in accordance with Section 5.04 ), in each case, in accordance with Section 9.06. To the extent that Licensor receives value in kind as payment for the sale of licenses or memberships to the Suites, the Madison Club or The Lofts, Licensor shall pay to the Knicks an amount based on the rate card value of such license or membership (e.g., if Licensor receives value in kind as full payment for an all-Event Suite, Licensor shall pay the Knicks the Knicks Hospitality Share of the rate card value of such Suite license). Licensor shall be responsible for the payment of all taxes and credit card fees with respect to all sales made by Licensor or its agents pursuant to this Agreement.

 

15

(g)    Complimentary Suites and Usage.

(i)    The Knicks shall have the exclusive right to use without payment of a fee or other consideration one (1) Event Level Suite and associated tickets for each Knicks Event. Such suite shall be what is currently designated Event Level Suite 20, or another Event Level Suite as designated by Licensor, subject to Team’s approval, not to be unreasonably withheld, conditioned or delayed.

(ii)    The Knicks may not license to third parties the Suite or associated tickets referred to in subsection (i), provided that it may request Licensor to attempt to license or sell such Suite or associated tickets for a particular Home Game or Home Games and/or Other Knicks Events. Any resulting revenue, net of Included F&B Packages, contracted catering credits (if any), taxes and credit card fees, will be shared by Licensor and the Knicks as if it were a single-game suite license pursuant to Section 5.03(b)(ii). Licensor may use or license such Suite or associated tickets for Other Arena Events without payment to the Knicks of the revenue share otherwise attributable to the license of Suites set forth in Section 5.03(b).

(iii)    Upon request by the Knicks, and subject to availability, Licensor shall make available, at no cost, one (1) Madison-level or Signature-level Suite on a Home Game by Home Game basis solely for use by visiting team owners and executives and their guests.

(iv)    Licensor shall have the right to use one (1) Event Level Suite for all Knicks Events and Other Arena Events without payment to the Knicks of the revenue share otherwise attributable to the license of Suites set forth in Section 5.03(b). Notwithstanding the foregoing, to the extent Licensor decides to license such Event Level Suite in whole or in part to a third party and receives a license fee therefor, the Knicks shall receive their applicable revenue share (if any) as provided in Section 5.03(b). Such suite shall be the Suite currently designated Event Level Suite 19, or another Event Level Suite as designated by Licensor, subject to Team’s approval, not to be unreasonably withheld, conditioned or delayed.

(v)    Unsold Suite, Madison Club and Loft Inventory. Suites and associated tickets related to the Suites, the Madison Club and the Loft that are not licensed or sold for Home Games may be used by Licensor for prospecting for Suite, Madison Club and Loft licensees. Additional unsold Suite, Madison Club and Loft inventory may be used to provide for complimentary attendance by employees of the Knicks, Licensor and their respective Affiliates or for other business relationships in accordance with each company’s complimentary ticket program. The Parties shall mutually determine how to allocate unsold suite inventory between the Parties, provided, that if the Parties cannot agree, [*****] of such inventory shall be available to the Knicks for such purposes and [*****] of such inventory shall be retained by Licensor for such purposes. In no event may the unused Suites or associated tickets related to Suites, Madison Club or Loft allocated under

 

16

this Section 5.03(g)(v) be licensed or sold by either Party, without the consent of the other Party (not to be unreasonably withheld, conditioned or delayed), in which case the Knicks shall receive their applicable revenue share as provided in Sections 5.03(b) or 5.03(d).

(h)    Suite 200. Licensor shall maintain the executive lounge currently designated “Suite 200” (or a private hospitality area of substantially similar size offering substantially similar amenities, in the same or a different location in the Arena) for the use of senior executives and their invited guests (“Suite 200”). The Knicks shall have access to Suite 200 during Home Games in a manner consistent with past practice and shall bear or reimburse Licensor for all out-of-pocket costs associated with operating Suite 200 for Home Games. Any annual increase to the aggregate costs charged to the Knicks for operating Suite 200 shall not exceed [*****]% without the Knicks prior written approval, not to be unreasonably withheld, conditioned or delayed. The Knicks agree that senior executives of Licensor and their invited guests shall have complimentary access to Suite 200 during Home Games on the same basis as senior executives of the Knicks and their invited guests.

Section 5.04    Future Ticket and Premium Products

(a)    Licensor, after consultation with and receipt of prior written approval from the Knicks, such approval not to be unreasonably withheld, conditioned or delayed, may develop new seating products where the ticket purchaser has the option to purchase seats for multiple event types (e.g., Home Games and Other Arena Events). If the Knicks approve such new seating products, the Knicks shall provide the required ticket inventory, and Licensor shall provide applicable amenities, at prices and other economic terms and splits to be negotiated and agreed upon by the Parties.

(b)    Licensor, after consultation with and receipt of prior written approval from the Knicks, such approval not to be unreasonably withheld, conditioned or delayed, may develop new suites and/or seating products (e.g., new or altered premium spaces) where amenities additional to admission are provided to the ticket purchaser, licensor or member. If the Knicks approve such new seating products, allocation of capital and operating expenses, revenues and obligations shall be determined in a manner to be agreed upon.

Section 5.05    Box Office; Ticket Printing; In-Arena Ticket Sales

(a)    Box Office Operations. If Licensor generally operates a box office (including will call support) for Other Arena Events, Licensor will also operate a box office (including will call support) during reasonable business hours, and for all Knicks Events commencing at the earlier of (i) noon and (ii) the opening of the Arena doors for the applicable Knicks Events and ending no earlier than the commencement of the third quarter of the Knicks Events, and shall provide substantially equivalent service and staffing, with respect to the sale of tickets for Home Games and Other Knicks Events to Other Arena Events all in a manner consistent with past practice, provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing and accommodate the other’s reasonable requests for adjustment thereto. At the Knicks’ request, Licensor shall share with the Knicks all Customer Data (as defined in Section 10.03) relating to the Knicks generated through box office operations.

 

17

(b)    Full and Partial Season Ticket Packages. If requested by the Knicks and for so long as Licensor is generally printing tickets for Other Arena Events, Licensor shall coordinate, at the Knicks’ reasonable direction, cost and expense, the printing of Tickets for full and partial season packages. The Knicks shall sell, invoice and collect all revenues from such Ticket packages in its sole discretion. The Knicks shall be responsible for all credit card fees and other similar charges in connection with the sale of such Tickets. The Knicks shall develop any and all creative content to be included on such Tickets printed by Licensor at the Knicks’ request.

(c)    Group Ticket Packages. If requested by the Knicks and for so long as Licensor is generally printing tickets for Other Arena Events, Licensor shall coordinate, at the Knicks’ reasonable direction, cost and expense, the printing of Tickets for group packages. The Knicks shall sell, invoice and collect all revenues from such Ticket packages in its sole discretion. The Knicks shall be responsible for all credit card fees and other similar charges in connection with the sale of such Tickets. The Knicks shall develop any and all creative content to be included on such Tickets printed by Licensor at the Knicks’ request.

(d)    In-Arena Ticket Sales. During Knicks Events, the Knicks shall be permitted to have tables and kiosks on the concourse for the sole purpose of selling season (including partial) ticket and group ticket packages for the Knicks and its Affiliates. The placement of such tables and kiosks shall be reasonably determined by Licensor consistent with past practice.

Section 5.06    Ticket Agent

(a)    Ticket Agent Agreements. The Knicks shall be required to utilize and comply with the current primary and secondary ticket provider agreement(s) with Licensor’s ticket agent (the “Ticket Agent”), and any amendment, modification or replacement of the same in accordance with Section 5.06(b), (the “Ticket Agent Agreements”) for applicable Ticket transactions for Home Games and any Other Knicks Events to which tickets are sold. It is understood that a portion of any upfront or annual fees received by Licensor from the Ticket Agent during the Term shall be allocated to the Knicks on a pro rata basis on equitable terms (e.g., based on projected ticket sales for the businesses covered by the Ticket Agent Agreements). [*****]

(b)    Amended or Replacement Ticket Agent Agreements. Licensor shall have the right to negotiate and administer any amendments to the current Ticket Agent Agreements or any replacement ticket provider agreement with a third party, provided that, (i) any portion of such amendment or replacement agreement that relates to the Knicks or Knicks Events or (ii) any renewal or extension of the current Ticket Agent Agreements or any replacement ticket provider agreement, in each case, shall be subject to the prior written approval of the Knicks. If the Knicks do not grant such approval, the Knicks may enter into its own ticket provider agreement(s), provided that the Knicks or such other ticket provider shall pay all costs needed to implement such other ticketing systems at the Arena.

(c)    Access to Systems and Data. Licensor shall use commercially reasonable efforts to (i) include in its Ticket Agent Agreements an obligation to provide the Knicks with substantially similar access to relevant information about the Knicks’ customers and sales activity that resides in the Ticket Agent’s database and other system components as is provided under Licensor’s current agreement with Ticketmaster; (ii) enforce such obligation on behalf of the

 

18

Knicks at the Knicks’ expense and (iii) enforce any other terms of any Ticket Agent Agreements that affect the Knicks at the Knicks’ expense; it being understood that, with respect to any agreements where the Knicks are an express party or a third party beneficiary, Licensor shall have no obligations under clauses (ii) or (iii), above.

Section 5.07    Ticket Settlement Process. Licensor shall (with respect to box office sales), and shall cause Ticket Agent to, remit to the Knicks all amounts collected in connection with the sale of Tickets on a weekly basis, together with an itemized statement indicating the number and price of each Ticket sold and related fees collected.

Section 5.08    Access to Tickets.

(a)    Complimentary Licensor Tickets for Home Games. Licensor shall be afforded access to a pool of complimentary tickets for Home Games throughout the Term, on the following terms:

(i)    The pool shall include [*****], or other sections as the Parties may otherwise agree, it being understood that the Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment to the number and location of the “additional” complimentary tickets described in clause (y).

(ii)    Complimentary tickets may be used by Licensor for its and its Affiliates’ employees or other business purposes but may not be resold. If such complimentary tickets will not be used, such tickets may be sold by the Knicks and the Knicks may retain all revenue therefrom.

(b)    Pools of Tickets for Purchase. In addition, the Knicks shall be afforded access to purchase tickets from a pool of tickets for Other Arena Events and Licensor shall be afforded access to purchase tickets from a pool of tickets for Home Games, in each case subject to availability. Such tickets may be used by the Knicks or Licensor (as applicable) for their Affiliates, employees or other business purposes but may not be resold. Each ticket pool shall also be subject to such other procedures, restraints and limitations as determined by the Party offering access. In both cases, the Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment to the number and location of the tickets in the pool.

Section 5.09    Credentials and Passes. The Knicks may issue a reasonable number of passes to photo, press and media, staff, visiting teams, performers (e.g., dance teams and halftime performers), League personnel and any other Person, pursuant to the directions of the Knicks from time to time, permitting such selected persons free access to the Arena for Knicks Events and to specified areas of the Arena normally closed to the public; provided, however, any such issuance is in accordance with League Rules, including, without limitation, the then-prevailing NBA Arena Security Standards (including, as of the Commencement Date, Section V(A) therein) and Licensor’s Arena safety and security protocols.

Section 5.10    Admission to Arena. Licensor shall not grant any spectator admission to the Arena for any Knicks Event unless such spectator has acquired and displays a Ticket or other indicia of admission (e.g., a press or related pass) to such Knicks Event issued by Licensor or the Knicks (or, if applicable, the League) in accordance with this Agreement.

 

19

ARTICLE VI

CONCESSIONS

Section 6.01    F&B Concessions and Catering.

(a)    Licensor shall have the exclusive right and obligation to operate and manage the sale of F&B Concessions and Catering Services during all Knicks Events in a manner reasonably calculated to maximize profits but subject to providing a positive customer experience in accordance with the Standard and subject to Schedule 6.01. The Knicks shall receive [*****]% of the Net Profits (as defined in Schedule 6.01) from the sale of F&B Concessions and Catering Services attributable to Knicks Events (the “Knicks F&B Concessions and Catering Share”). To the extent Licensor directly manages and conducts the sale of such F&B Concessions and Catering Services, such sales shall be provided in accordance with Schedule 6.01. In the event of a No Fault Occurrence, the Knicks F&B Concessions and Catering Share shall be increased to [*****]%.

(b)    In the event Licensor retains a third party to provide F&B Concessions and/or Catering Services or enters into a lease, license or operating agreement for food and beverage space, in each case, in accordance with Section 6.04 the Knicks shall receive [*****]% of all amounts received by Licensor (including any annual payments, up-front payments, advances, back-end payments, earn-outs, guarantees, allowances, rebates, refunds, discounts or any other payments or revenues retained by Licensor or its Affiliate) attributable to Knicks Events from any such arrangement or agreement (the “Third Party F&B Share”); provided that, with respect to amounts received that cannot be specifically traced to a Knicks Event as opposed to an Other Arena Event, Licensor shall reasonably and fairly estimate the portion of the total amount that is attributable to Knicks Events (which estimate shall be subject to the review and approval of the Knicks, not to be unreasonably withheld, conditioned or delayed) and shall remit to the Knicks the Third Party F&B Share of the portion of such amount. In the event of a No Fault Occurrence, the Third Party F&B Share shall be increased to [*****]%.

Section 6.02    Team Merchandise.

(a)    Licensor shall have the exclusive right and obligation, at its sole cost and expense, to operate and manage the sale of Team Merchandise at the Arena (excluding collectibles and game-used items) in a manner reasonably calculated to maximize revenues, but subject to providing a positive customer experience in accordance with the Standard. Schedule 6.02 sets forth the service and staffing for the sale of Team Merchandise for Regular Season Home Games as of the 2019-20 Season. Licensor shall maintain at least substantially similar levels of service and staffing for all Home Games provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing and accommodate the other’s reasonable requests for adjustment thereto. Notwithstanding anything herein to the contrary, as between the Parties, the Knicks shall have the exclusive right to sell and control the sale of Team Merchandise online and anywhere else (other than at the Arena) and retain all revenue therefrom.

(b)    The Knicks shall source, purchase and own all Team Merchandise it designates for sale at the Arena and consign it to Licensor for sale. Licensor shall be responsible

 

20

for reasonable storage and inventory control for Team Merchandise. The Knicks shall set the pricing of Team Merchandise. Licensor, at its sole cost, shall offer and sell Team Merchandise, and provide appropriate sales staff and supervision, at points of sale in existing and replacement in-Arena stores and other locations designated or approved by the Knicks (such approval not to be unreasonably withheld, conditioned or delayed), on Home Dates and at other times pursuant to Section 6.02(d).

(c)    Licensor shall retain [*****]% of revenues, net of taxes and credit card fees, collected by Licensor from the sale of Team Merchandise sold at the Arena by or on behalf of Licensor and remit the remainder to the Knicks, provided that the Knicks shall retain all revenue from any collectibles or game-used items received pursuant to any third-party agreement (e.g., Fanatics). Licensor shall be responsible for the payment of all taxes and credit card fees with respect to all such sales.

(d)    Licensor shall dedicate to Team Merchandise designated by the Knicks a minimum of [*****]% of the display space designated by Licensor in consultation with the Knicks (the “Team Merchandise Allocation”) in the Madison Square Garden Store located in Chase Square and other subsequent stores located within the Arena that do not require an individual to have a ticket to access such store. It is understood and agreed that the Knicks and the Rangers (to the extent that they remain affiliated entities) may allocate display space to each other on an event-by-event and day-by-day basis; for the avoidance of doubt, Licensor shall not have access to more than [*****]% of the display space in the Madison Square Garden Store, except as provided in subsection (e), below.

(e)    Licensor and the Knicks agree that no Team Merchandise shall be required to be offered in such stores (or elsewhere in the Arena) while the Arena is being used for Other Arena Events.

(f)    The Parties shall regularly coordinate and discuss with one another the appropriate relative levels and locations of display space and accommodate the other’s reasonable requests for adjustment thereto.

Section 6.03    Non-Team Merchandise. Subject to Section 6.02, Licensor shall have the exclusive right to control the operation and sale of Non-Team Merchandise at the Arena at any time. Licensor shall retain all revenue from the sale of all Non-Team Merchandise. Licensor may use up to [*****]% of the display space in concourses and other ticketed areas during Home Games for the sale of Non-Team Merchandise, provided that such merchandise and the locations in which it is displayed and sold shall require the approval of the Knicks, not to be unreasonably withheld, conditioned or delayed. The Parties shall regularly coordinate and discuss with one another the appropriate relative levels and locations of display space and accommodate the other’s reasonable requests for adjustment thereto.

Section 6.04    Third-Party Contracts. Licensor shall have the right to enter into a contract or contracts with one or more third parties pursuant to which such third parties shall conduct and manage the sale of some or all Concessions and/or Catering Services, provided that Licensor shall be required to obtain the prior written approval of the Knicks, not to be unreasonably withheld, conditioned or delayed, for service providers that (i) do not or will not provide similar

 

21

services during Other Arena Events or (ii) will conduct or manage the sale of a majority of F&B Concessions or Team Merchandise. Notwithstanding the foregoing, Licensor shall reasonably consult with the Knicks regarding the terms of any proposed agreement with any third party that shall conduct or manage the sale of a majority of F&B Concessions or Team Merchandise.

Section 6.05    Operation on a Fair Basis; Standard of Service. Licensor shall operate, or contract with a third party for the operation of, Concessions and/or Catering Services on a basis that is fair to both Licensor and the Knicks and equivalent for Knicks Events and Other Arena Events. The quality of the service provided for Knicks Events shall be consistent with the Standard.

Section 6.06    Settlement. Licensor shall, or shall cause any third party conducting and managing the sale of Concessions and/or Catering Services to, remit to the Knicks all amounts from the sale of Concessions and/or Catering Services that the Knicks are entitled to under this ARTICLE VI in accordance with Section 9.06.

ARTICLE VII

SIGNAGE AND SPONSORSHIPS

Section 7.01    Definitions.

“Arena Game Shared Sponsorship Assets” means Advertising (including digital and fixed signage) visible or audible inside the Arena during Home Games and Other Arena Events, but expressly excluding Team Sponsorship Assets and Arena Naming Rights, which includes, without limitation, (a) bridge signage and entitlements, (b) vomitorium signage, (c) GardenVision underbelly and other fixed signage and Advertising on fixtures and equipment, (d) Advertising at concession areas and on Concession Items, (e) Advertising worn or carried by concessionaire personnel or other personnel engaged in the operation of Arena events and (f) naming rights and other entitlements of the lobby, concourses, suite levels, clubs and all other spaces in the Arena. For avoidance of doubt, Arena Game Shared Sponsorship Assets shall not include any Advertising (i) outside of the building entrances to the Arena (e.g., marquee spots or signage, outdoor digital board Advertising, breezeway signage or banners, Arena rooftop signage, etc.) which is not visible or audible inside the Arena bowl and sold to be visible or audible by seated Arena patrons, which Licensor shall have the exclusive right to sell and retain all revenue from or (ii) that is a Team Sponsorship Asset, which the Knicks shall have the exclusive right to sell and retain all revenue from in accordance with Section 7.02, whether or not such Advertising may also be visible or audible inside the Arena during Other Arena Events.

“Arena Naming Rights” means the right of a sponsor to have its brand integrated into the name of the Arena, e.g., the “[*****] Madison Square Garden”.

“Courtside Advertising” means electronic, virtual, and static Advertising and other signage displayed at Knicks Events that appears inside the Arena spectator bowl on: (a) seat back sleeves and other signage within the teams’ bench areas (e.g., sports drink-branded coolers, cups, squeeze bottles, and towels); (b) the basketball playing floor (both “in-bounds” and “out-of-bounds” surface areas); (c) the basketball stanchions; (d) the backboard; (e) the backboard spine

 

22

and base; (f) any moving or movable items (e.g., an indoor blimp/drone, t-shirt machines); (g) the scorer’s, press, or other tables immediately surrounding the basketball playing floor (e.g., courtside and baseline signage devices); (h) entitlement of “Celebrity Row”; (i) team bench kickplates; (j) presentation of the “Seventh Avenue Squad” and Knicks City Dancers (or other pep squad); (k) seat back sleeves in stands that are present for Home Games or Other Knicks Events only; and (l) any other equipment, fixtures and items used by the Knicks in the vicinity of the basketball playing floor not already covered in the definition of Team Sponsorship Assets (but excluding any Arena Game Shared Sponsorship Assets).

“In-Bowl Variable Advertising” means Advertising and other visual signage appearing on, and other audio airing through or in connection with, (a) in-Arena electronic scoreboards, telescreens and any other message boards, (b) in-Arena LED Signage, (c) any part of the Arena spectator bowl through projection technology, augmented reality and/or virtual reality, and (d) Arena audio or visual public address Advertising.

“Non-Team Sponsorship Assets” means Advertising controlled by Licensor to the extent that it creates no direct association with the Team, other than Team Sponsorship Assets, Arena Naming Rights and Arena Game Shared Sponsorship Assets.

“Sponsorship Sales and Service Representation Agreement” means the agreement between Licensor’s affiliate, MSG Entertainment, Group LLC (formerly MSG Sports & (( LLC) (“MSGE”) and the Knicks’ parent entity, Knicks Holding, LLC (“Knicks Holding”), entered into approximately contemporaneously herewith, whereby Knicks Holding authorizes MSGE to enter into sponsorship agreements that include Team Sponsorship Assets.

“Team Sponsorship Allocation Agreement” means the agreement between MSGE and MSG Sports, entered into approximately contemporaneously herewith, whereby MSG Sports agrees to deliver certain Team Sponsorship Assets in connection with certain current sponsorship agreements, and MSGE agrees to allocate and pay to Knicks Holding certain amounts with respect to such agreements.

“Team Sponsorship Assets” means, with respect to the Knicks or Knicks Events only (in each case, including within three (3) hours before, during and within two (2) hours after each Knicks Event), (a) Courtside Advertising; (b) In-Bowl Variable Advertising; (c) Advertising on Team programs, schedules, yearbooks and tickets; (d) GardenVision underbelly and other fixed signage and Advertising on fixtures and equipment; (e) Advertising relating to the player introduction tunnel (connecting locker room area to court); (f) Advertising relating to Team game day contests and promotions (e.g., bobblehead night, hat night, etc.); (g) Advertising that has been sold specifically with respect to only the Team (e.g., temporary Arena bowl stair signage present only for Knicks Events); (h) concourse activations; (i) Advertising relating to the Team and Knicks Event visiting team player locker rooms, training rooms and interview rooms; (j) the exhibition and promotion of products and services at the Arena (e.g., kiosks and special areas in the concourse) during Knicks Events or on any date in which a Knicks Event is scheduled to the extent pertaining to any Knicks Event (but excluding food and beverage and merchandise otherwise covered by this Agreement); (k) promotional or premium item give-aways at Knicks Events; (l) such other Advertising and sponsorship assets as currently exist or may later be developed that are Team- or Knicks Event-specific; and (m) for the avoidance of doubt, all other advertising, sponsorship and promotional activities relating to the Team that is not related to the Arena (including advertising on Team uniforms, broadcasts, websites, mobile application and social media platforms).

 

23

Section 7.02    Team Sponsorship Assets

(a)    Subject to subsections (b)-(c) of this Section 7.02, the Knicks shall have the exclusive right to sell and retain all revenue from, and shall be responsible for all direct out of pocket costs and expenses related to, the operation and sale of Team Sponsorship Assets, including the right to enter into category-exclusive sponsorship agreements with respect to Team Sponsorship Assets. Notwithstanding the foregoing, Licensor shall have the right to (i) alter digital signage platforms at any time (e.g., elimination of LED ring) at Licensor’s sole cost and expense, subject to reasonable advance consultation with the Knicks and provided that if such alterations would eliminate or materially alter any Team Sponsorship Assets contained in any agreement under which the Knicks provide or are committed to provide Team Sponsorship Assets as of the date of such alteration, Licensor will provide to the Knicks a replacement asset of equal or greater value (A) reasonably acceptable to the Knicks and (B) if such replacement is not permitted under such agreement, acceptable to the sponsor party to such agreement, and (ii) (x) approve, in its sole discretion, any permanent affixed signage in the Arena by the Knicks or (y) approve, such approval not to be unreasonably withheld, conditioned or delayed, any temporary affixed signage by the Knicks on [*****] (clauses (1), (2) and (3) collectively, the “Restricted Signage Areas”); provided that (A) [*****] and (B) [*****]. For the avoidance of doubt, any concourse, lobby or similar activations shall be subject to Sections 4.06(a) and 4.06(b). Licensor shall provide and maintain the in-Arena signage, assets and other elements associated with Team Sponsorship Assets (to the extent in the control of Licensor) in accordance with the Standard.

(b)    The Parties acknowledge and agree that their rights and obligations under this Section 7.02 shall be subject and subordinate to the Sponsorship Sales and Service Representation Agreement and the Team Sponsorship Allocation Agreement (collectively, the “Arena Agency Agreements”), as of the Effective Date and throughout the respective terms of such agreements. Pursuant to such Arena Agency Agreements, the Knicks shall be (i) required to provide Team Sponsorship Assets inventory committed to, and to comply with promotional category exclusivities granted to, certain Licensor sponsors (“Joint Sponsors”) in accordance with such Joint Sponsors’ respective agreements (each a “Joint Sponsorship Agreement”) with Licensor and (ii) entitled to certain allocations of revenue received by Licensor pursuant to such agreements; each of (i) and (ii) as set forth in more detail in the Team Sponsorship Allocation Agreement.

(c)    Subject to League Rules, the name and logo of any Arena Naming Rights partner or “Marquee”-level sponsor shall be exhibited on Team’s home playing surface near Team’s mid-court logo at the Arena (with [*****]% of the allocable revenue therefrom delivered to the Knicks).

(d)    The Parties shall meet and confer regularly (contemplated to be no less frequently than once per calendar quarter) to discuss in good faith opportunities to maximize the collective value of their sponsorships by combining the sales of Team Sponsorship Assets, Arena Game Shared Sponsorship Assets and/or Non-Team Sponsorship Assets.

 

24

(e)    Notwithstanding anything to the contrary contained herein, in no event shall the Knicks cover or interfere with any Arena Game Sponsorship Assets with any temporary, virtual or any other type of signage. Notwithstanding anything to the contrary contained herein, in no event shall Licensor cover or interfere with any Team Sponsorship Assets with any temporary, virtual or any other type of signage.

Section 7.03    Arena Game Shared Sponsorship Assets

Licensor shall have the exclusive right to sell all Arena Game Shared Sponsorship Assets, provided that Licensor shall not, without the Knicks’ prior written approval, (a) enter into any agreement that includes any Team Sponsorship Assets or (b) enter into any agreement or modify any arena inventory or signage existing as of the date hereof if such agreement or modification would reasonably be expected to (i) cause a breach under any agreement that includes Team Sponsorship Assets, (ii) eliminate, or substantially impair (i.e. effectively eliminate all or most of the value of) any physical Team Sponsorship Assets inventory in the Arena or (iii) limit or restrict the Knicks’ ability to include Team Sponsorship Assets in any exclusive or non-exclusive advertising or sponsorship agreements, in each case under clauses (i), (ii) or (iii), unless Licensor provides to the Knicks a replacement asset of equal or greater value (A) reasonably acceptable to the Knicks and (B) if such replacement is not permitted under such agreement, acceptable to the sponsor party to such agreement. The Knicks shall not enter into any agreement (and has not as of the Effective Date) that contains Arena Game Shared Sponsorship Assets or would cause a breach under any agreement that includes Arena Game Shared Sponsorship Assets without Licensor’s prior written approval. The Knicks shall be entitled to [*****]% of net revenue from the sale of Arena Game Shared Sponsorship Assets (the “Knicks Arena Game Shared Sponsorships Share”), i.e., gross revenue therefrom less any of the following paid by Licensor: taxes and applicable fees; and actual out-of-pocket costs for signage fabrication, installation and removal costs; provided that, if (a) an Arena Game Shared Sponsorship Asset is not visible, audible or otherwise present during substantially all Other Arena Events, (b) an Arena Game Shared Sponsorship Asset is not visible, audible or otherwise present for a similar length of time during Other Arena Events and Knicks Events, or (c) such Arena Game Shared Sponsorship Assets does not include substantially all Knicks Events, then, in each instance, the revenues shall be proportionally allocated to each event included in such agreement, in a reasonable manner and as mutually agreed by Licensor and the Knicks, and the Knicks shall receive the appropriate proportional amount of revenues attributable to the Knicks Events (e.g., treatment of the JP Morgan Club, as currently operated). In the event of a No Fault Occurrence, the Knicks Arena Game Shared Sponsorships Share shall be increased to [*****]% (and in the case of any proportional allocation of revenues pursuant to the proviso in the foregoing sentence, the Parties will agree on an appropriate increase in favor of the Knicks to such allocation).

Section 7.04    Non-Team Sponsorship Assets

(a)    The Knicks shall have no rights whatsoever with respect to Non-Team Sponsorship Assets.

 

25

Section 7.05    Arena Naming Rights

(a)     The Knicks shall be entitled to [*****]% of revenue from the sale of any Arena Naming Rights, excluding any amounts already allocable to the Knicks pursuant to the terms of this Agreement or otherwise.

Section 7.06    Other Revenue

(a)    The Parties shall discuss in good faith the allocation of other Advertising income, revenues and fees derived from operations at the Arena that are not otherwise provided herein, to the extent attributable to Knicks Events.

Section 7.07    Signage and Sponsorship Settlement Process

Licensor shall remit to the Knicks a cash payment equal to all amounts collected or received from the sale of Arena Game Shared Sponsorship Assets and Arena Naming Rights that the Knicks are entitled to under this ARTICLE VII in accordance with Section 9.06.

ARTICLE VIII

BROADCASTING

Section 8.01    Broadcast Rights and Facilities.

(a)    As between the Parties, the Knicks shall own and control all rights with respect to the broadcasts and telecasts of each Knicks Event by any means whatsoever (including, without limitation, radio; over the air, pay-per-view, and basic and pay cable television; and streaming and other forms of electronic and digital media now known or hereafter created) (the “Broadcast Rights”) and shall retain all revenues in connection with such Broadcast Rights. Subject to League Rules, the Knicks may not authorize or purport to authorize their media rightsholder to include in telecasts or broadcasts of Home Games any “virtual signage” in the Restricted Signage Areas without the prior written consent of Licensor, which consent shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, the foregoing sentence shall not apply to any League telecasts or broadcasts (including, without limitation, any national and international telecasts or broadcasts) or any visiting team telecasts or broadcasts, with respect to which the Knicks and Licensor each reserve all rights.

(b)    Licensor shall ensure that the press areas, broadcast areas, playing surfaces, Team Areas and Common Areas continue to be wired or otherwise equipped throughout the Term for the production of such broadcasts and telecasts in accordance with League Rules.

(c)    Licensor shall cooperate with the Knicks and provide access for the producers of such broadcasts and telecasts to such truck loading docks, camera positions, and other Arena facilities reasonably required for the production of such broadcasts and telecasts in accordance with League Rules, at the Knicks’ or its broadcaster’s expense. Subject to League Rules, Licensor shall cooperate with and provide access for broadcast and telecast producers acting on behalf of all other duly authorized parties (e.g., opposing teams and the NBA) at such games.

 

26

(d)     Notwithstanding the foregoing, Licensor retains the right to assign and reassign facilities, locations and spaces for the conduct of broadcasting in a manner consistent with League Rules; provided that Licensor will consult with the Knicks prior to any proposed changes to the locations and spaces for the conduct of broadcasting during Home Games. For example, and without limiting the previous sentence, Licensor is not obligated to continue to provide the courtside studio, or the studio facilities on the bridge level, in their current locations.

Section 8.02    Broadcast Renovations. At the Knicks’ written request, Licensor shall make such alterations to the Arena’s broadcast facilities and equipment as are reasonably necessary to comply with League Rules, and any broadcast agreements between the Knicks and/or the League and a broadcaster, provided that the Knicks shall be responsible for any upfront and continuing costs related to such alterations.

ARTICLE IX

LICENSOR SERVICES

Section 9.01    General Services. During the Term, Licensor, at its sole cost and expense (except as otherwise expressly provided herein), shall provide the following services, to and for the benefit of the Knicks (and the Arena generally), each in accordance with the Standard (“General Services”), provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels and quality of staffing, equipment and service and accommodate the other’s reasonable requests for adjustment thereto.

(a)    Heating, ventilation, and air-conditioning.

(b)    Subject to unavailability due to causes beyond Licensor’s reasonable control, utilities, including electricity, gas, steam, chilled water, hot and cold water, lighting, sewer, Wi-Fi (or comparable data delivery pipeline or service) service accessible to Knicks employees and patrons during Knicks Events, telephone and intercommunications equipment, elevators, and escalators.

(c)    Lighting equipment and apparatus, including as may be required by League Rules.

(d)    Maintenance and repair of the Arena and all of its components in compliance with all applicable governmental laws, ordinances, and regulations and in clean and good condition, subject to ordinary wear and tear, subject to the Knicks’ obligation to pay for maintenance and repairs necessitated by Knicks Misuse.

(e)    Twenty-four (24) hour per day, year-round protection and security of the Arena and all its facilities (including Team Areas), and all property of the Knicks and Knicks personnel located in the Arena.

(f)    Reasonable grounds maintenance and snow and ice removal, including, but not limited to, keeping sidewalks and other areas immediately surrounding the Arena in compliance with all applicable governmental laws, ordinances, and regulations and reasonably free of snow, ice, debris, dirt, litter, and trash.

 

27

(g)    Box office services in accordance with Section 5.05(a).

(h)    Repair and maintenance, in each case, in accordance with League Rules, of the playing surfaces and related equipment (including the court, baskets and basket stanchions), and all back-up equipment and to the Knicks’ reasonable satisfaction in accordance with League Rules, all such costs to be borne or reimbursed by the Knicks, except to the extent repair or replacement is necessitated by the negligence of Licensor or its agents or other parties permitted by Licensor to use the foregoing (e.g., college teams using basketball court), or required by League Rules.

(i)    All other services and functions needed to operate, repair and maintain the Arena in accordance with the Standard, including pest control and obtaining and maintaining all necessary licenses and permits.

(j)    Without limiting any of the foregoing, Licensor shall operate, maintain and improve the Arena in accordance with the Standard at all times throughout the Term.

Section 9.02    Game Day Services. In addition to the General Services provided pursuant to Section 9.01, Licensor shall provide to and for the benefit of the Knicks, the following day-of-game services on the dates of all Knicks Events, each in accordance with the Standard (“Game Day Services”), for which the Knicks shall reimburse Licensor’s actual out-of-pocket operating cost (except as otherwise provided in this Agreement (e.g., operation of Suites, Advertising, Concessions and General Services)) without markup or overhead, as the same may be adjusted pursuant to Section 9.04:

(a)    Set-up of playing surfaces for the Knicks’ use on Home Dates (and for Other Knicks Events), by or before the time required in Section 4.02(a), in accordance with League Rules, and subject to the Knicks’ reasonable satisfaction.

(b)    Operating in house broadcast production facilities in the Arena in accordance with Article VIII (currently known as “GardenVision”) at a level consistent with past practice, it being understood that the Knicks maintain exclusive rights and remain responsible for providing the direction and production of all game presentation elements.

(c)    Operating the Arena during and cleaning up the Arena after, Home Games and Other Knicks Events, including the following event-specific personnel and their successors in name or function: security personnel, building security personnel, street patrol personnel (including supervisors), paid NYPD detail, anti-bomb canines and handlers, ushers, ticket takers, concourse “Directors,” elevator operators, restroom attendants, event office administrators, guest experience representatives, guest service supervisors, security supervisors, concourse supervisors, concourse managers, laborers/utility workers, carpenters, electricians, custodial porters, telecommunications technicians, spotlight operators and stagehands (as required based on the production elements for such Home Game or Other Knicks Event), and other necessary labor and third-party services, including overnight labor and supervisors, medical and emergency services staff or contractors and rubbish removal, all in a manner consistent with past practice, but not including game officials, referees, or timekeepers. The Knicks shall only be responsible for the costs relating to the foregoing personnel to the extent allocable to Home Games or Other Knicks Events.

 

28

(d)    If requested by the Knicks, Game Day box office personnel incremental to the staffing provided as General Services pursuant to Section 9.01(g) in a manner consistent with past practice.

(e)    Any additional services reasonably requested by the Knicks in writing and approved by Licensor, which approval shall not be unreasonably withheld, conditioned or delayed.

(f)    With respect to all Game Day Services, all costs charged to the Knicks shall be nondiscriminatory and consistent with rates incurred by Licensor for all other events at the Arena.

Section 9.03    Delta Club and JP Morgan Club. During Knicks Events, the Knicks shall be permitted to provide certain ticketholders (subject to physical capacity constraints) with access to (a) the club currently known as the Delta Sky 360 Club and (b) the club currently known as the JP Morgan Club (collectively, the “VIP Clubs”). Ticketholders who have access to the VIP Clubs shall be entitled to a certain amount of complimentary food and beverage. The Knicks shall have the sole discretion in determining the price charged to ticketholders for access to, as well as the menu offered in, the VIP Clubs, and shall retain all revenues therefrom. Licensor shall operate the VIP Clubs in accordance with the Standard (the “VIP Club Services”), for which the Knicks shall reimburse Licensor’s actual cost, without markup or overhead, attributable to such Knicks Events.

Section 9.04    Staffing Levels for Certain Services.

(a)    Schedule 9.04 sets forth the staffing levels for Game Day Services, VIP Club Services and Suite 200 for Home Games as of the 2019-20 Season. Licensor shall maintain substantially similar levels of staffing for all Home Games, provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of staffing and accommodate the other’s reasonable requests for adjustment thereto. Licensor shall be responsible for retaining, managing and supervising all personnel in Licensor’s provision of the General Services, Game Day Services VIP Club Services and Suite 200. Licensor shall use reasonable efforts to accommodate the Knicks reasonable requests with respect to the provision of all Game Day Services.

(b)    Licensor shall not do or fail to do anything that will result in or will cause the Arena not being reasonably fit or otherwise available for use for Home Games in accordance with the League Rules as and when required to enable the Knicks to comply with its obligations under this Agreement.

Section 9.05    Budgeting and Estimates.

(a)    Following reasonable consultation with the Knicks, Licensor shall provide the Knicks with reasonably detailed annual estimates of revenues and expenses by month and Home Game (the “Annual Budget”) related to Game Day Services, VIP Club Services, Suite 200 and any other revenues to be recouped and expenses to be paid by the Knicks under this Agreement (such costs and expenses, collectively, the “Knicks Costs”). The Annual Budget shall be provided

 

29

at such times as may be reasonably required by the Knicks in accordance with the Knicks’ reasonable budgeting and forecasting processes. Upon receipt of the Annual Budget, the Knicks shall have a period of fifteen (15) days to review each estimate and forecast, and identify any objections it has to the Annual Budget. The Knicks and Licensor will then negotiate for a period of fifteen (15) days regarding any disagreements in respect of the Annual Budget. Subject to Section 9.05(b) below, if the Knicks and Licensor are unable to agree with respect to a particular cost within an Annual Budget within such period, the corresponding line item from the most recent approved Annual Budget will control with respect to such line item until such time, if any, that the Knicks and Licensor agree on such proposed line item; provided, that: (1) if such line item in the Annual Budget did not appear in the corresponding most recent approved Annual Budget, then Licensor shall not be entitled to payment or reimbursement for expenses in such line item and Licensor shall have no obligation to provide such product or service until the proposed line item is approved by the Knicks (not to be unreasonably withheld, conditioned or delayed); and (2) if such line item appeared in the prior Annual Budget, then Licensor shall be entitled to payment or reimbursement in an amount not to exceed the applicable line item of the prior approved Annual Budget multiplied by 104 %. The Annual Budget for the 2019-20 Contract Year is attached hereto.

(b)     [*****]

(c)    The Knicks Costs shall be consistent with the costs incurred for Other Arena Events, it being understood that costs will differ based on the nature and need of the events and circumstances outside of the reasonable control of Licensor (e.g., Force Majeure). The amount payable by the Knicks to Licensor for Game Day Services and VIP Club Services shall be determined on a monthly basis in accordance with Section 9.06. The Knicks’ consent shall be required for any deviation from the approved Annual Budget and, without such approval, the Knicks shall not be responsible for any costs or expenses in excess of such line items in the approved Annual Budget.

Section 9.06    Settlement.

(a)    Not later than the fifteenth (15th) day of each calendar month, Licensor shall provide the Knicks a report (“Monthly Report”) calculating (i) each item of revenue (including any deductions therefrom) that is shared with or allocated or payable to the Knicks in accordance with this Agreement with respect to the immediately preceding calendar month and (ii) each item of cost or expense incurred by Licensor during the immediately preceding calendar month for which Licensor is entitled to payment or reimbursement (in whole or in part) from the Knicks in accordance with this Agreement (clauses (i) and (ii) collectively, the “Applicable Amounts”). Each Monthly Report shall include a reasonable amount of detail describing each of the Applicable Amounts and copies of ledgers, invoices or other reasonable evidence of each of the Applicable Amounts. Each Monthly Report delivered by Licensor to the Knicks shall set forth for each Joint Sponsorship Agreement during such Monthly Period, (x) the Revenues under such Joint Sponsorship Agreement allocated to the Knicks, on the one hand, and Licensor, on the other hand and (y) the Team entitlements (including Team Sponsorship Assets, Tickets, ticket banks, etc. provided to such Joint Sponsor) and Arena entitlements (including Non-Team Sponsorship Assets, Arena Game Shared Sponsorship Assets, Suites, etc. provided to such Joint Sponsor) contributed and their respective rate card values or fair market value (as applicable) under such Joint Sponsorship Agreement. Licensor shall pay the Knicks the net amount payable under each Monthly Report on or prior to the fifteenth (15^th) day of each calendar month (i.e., the date in which the related Monthly Report is required to be provided to the Knicks).

 

30

(b)    Notwithstanding payment of the net amount under a Monthly Report, the Knicks may reasonably request additional information regarding such Monthly Report and the Licensor agrees to provide such additional information. The Knicks may dispute any amount in any Monthly Report, except for the License Fee and the percentage of the Knicks’ Tax Share (e.g., 50%). The Parties shall promptly confer to resolve any such areas of disagreement, and each Party shall be entitled to refer any disagreement that cannot be resolved to the Accounting Firm in accordance with Section 9.06(c). Notwithstanding the foregoing, the acceptance of a Monthly Report (or any portion thereof) and the payment of any amounts in accordance therewith shall be without prejudice to the Knicks’ rights to subsequently dispute any Applicable Amounts (including pursuant to Section 9.06(c) and Section 20.17). Licensor shall pay the Knicks any disputed amounts that it is determined to owe in a Monthly Report within five (5) business days after the dispute is resolved by the Parties or by the Accounting Firm in accordance with Section 9.06(c).

(c)    Notwithstanding Section 20.06, in the event of a dispute between the Parties with respect to the determination of any Applicable Amounts, the Parties shall refer such disputed matters set forth in Sections 9.06(a) and 9.06(b) to a mutually agreed upon national independent accounting firm (the “Accounting Firm”), and the Parties shall cooperate with the Accounting Firm to enable such Accounting Firm to resolve the dispute as promptly as practicable. The Accounting Firm shall address only those items in dispute and may not assign a value greater than the greatest value for such item claimed by either Party or smaller than the smallest value for such item claimed by either Party. In the absence of manifest error, the resolution of disputed items by the Accounting Firm shall constitute an arbitral award that is final, binding and non-appealable. The costs and expenses of the Accounting Firm incurred pursuant to this Section 9.06 shall be borne by the Knicks, on the one hand, and the Licensor, on the other hand, in proportion to the allocation by the Accounting Firm of the net dollar amount of disputed matters, such that the prevailing party (or parties) pay a lesser proportion (or none, as applicable) of such costs and expenses.

(d)    Licensor will use commercially reasonable efforts to maximize any revenues that are contractually payable to the Knicks hereunder, including using commercially reasonable efforts to collect such revenues. Notwithstanding anything herein to the contrary, if any revenue payable to a Party by an Affiliate of such Party is subject to sharing with the other Party hereunder (including, for example, pursuant to Section 5.03(c)), such revenue shall be deemed “collected” by the Party to whom it is payable on the earlier of (i) the date on which such revenue is actually collected and (ii) the date on which such revenue is payable pursuant to the terms of the applicable contract or other arrangement.

Section 9.07    Provision of Licensor Services.

(a)    Licensor shall have the right to delegate, subcontract, or sublicense to a third party, including Licensor’s Affiliates, the provision of Licensor Services and no such delegation, subcontract or sublicense shall relieve Licensor of any of its obligations hereunder; provided that, Licensor shall be required to obtain consent of the Knicks (not to be unreasonably withheld, conditioned or delayed) in connection with the delegation, subcontracting, or sublicensing of

 

31

Licensor Services to any third party service providers that (i) do not or will not provide similar services during Other Arena Events or (ii) will provide, conduct or manage the majority of a particular material Licensor Service. Subject to the preceding sentence, Licensor shall make the final decision regarding the selection of any such third party.

(b)    Licensor shall make reasonable efforts to minimize interference with the Knicks’ use of the Arena, and in no event shall Licensor materially interfere with the Knicks’ ability to conduct or broadcast Knicks Events or materially reduce or interfere with the Knicks’ permitted use of the Arena or ingress thereto or egress therefrom, subject to Licensor’s Arena safety and security protocols in accordance with Section 4.06(b).

(c)    For clarity, as between Licensor and the Knicks, the Knicks shall have the right to fully control all Home Game entertainment and basketball operations (including scoreboard and audio operations), with assistance from Licensor’s production staff through the applicable General Services and/or Game Day Services.

ARTICLE X

PROMOTION; TRADEMARKS; DATA OWNERSHIP

Section 10.01    Promotional Outlets.

(a)    [*****]

(b)    [*****]

(c)    [*****]

(d)    At the commencement of the Term, Licensor’s use of the Knicks’ in-game and broadcast promotional outlets set forth in subparagraphs (a) and (b), and the Knicks’ use of the Licensor promotional outlets set forth in subparagraph (c), shall each be generally consistent with the allocations set forth on Schedule 10.01, provided that the Parties shall regularly coordinate and discuss with one another their desired promotional efforts, inventory availability and needs and shall accommodate the other’s reasonable requests for adjustment to the number and type of assets (including newly-developed assets) to which the other shall have access, and the manner in which they are used. It is understood and agreed that, to the extent that they remain affiliated entities, the Knicks and the Rangers may share the promotional assets granted to them pursuant to their respective license agreements with Licensor.

Section 10.02    Trademark Licenses.

(a)    The Knicks hereby grant to Licensor for the Term non-exclusive royalty-free licenses by the Knicks and Team of all intellectual property owned or licensed by the Knicks or the Team, including but not limited to images, likenesses, service marks, tradenames and trademarks, for the exclusive purposes of promoting the Arena as the home arena of the Team, operating the Arena and providing the Licensor Services. Licensor’s use of such licenses shall be in accordance with and subject to League Rules and subject to the Knicks prior written approval. Licensor shall not have any right to sublicense, or seek or receive any payments from third parties

 

32

specifically for the use of, the Knicks’ intellectual property, except in accordance with ARTICLE VII, it being understood that Licensor may exercise the right to promote the Arena as the home arena of the Team in places and in a manner that may also incorporate in an incidental manner promotion of Licensor’s marketing partners and sponsors (including, without limitation, use in connection with the Knicks’ intellectual property any overall Arena marketing partner(s) “lock-up logo” or naming rights, sponsored Licensor web pages and upcoming events promotions, etc.).

(b)    The Knicks shall be permitted to reference the Arena as their home venue on all material promoting the Team and ticket sales (and the Ticket Agent). In connection therewith, Licensor and its Affiliates hereby grant to the Knicks a non-exclusive royalty-free license to use the trademarks “MADISON SQUARE GARDEN,” “MSG,” “THE WORLD’S MOST FAMOUS ARENA” and related logos solely for such promotional purposes. The Knicks’ use of such licenses shall be subject to the Licensor’s prior written approval, not to be unreasonably withheld, conditioned or delayed. The Knicks shall not have any right to sublicense, or seek or receive any payments from third parties specifically for the use of, Licensor’s intellectual property.

Section 10.03    Customer Data. [*****]

(a)    [*****]

(b)    [*****]

(c)    [*****]

(d)    Data Use and Sharing. Each Party shall, to the fullest extent permitted by law, share their owned Customer Data with the other Party for use by the other Party and their affiliates, subject to the prior approval in each case by the Customer Data-owning Party, such approval not to be unreasonably withheld or delayed, provided, that any sale, licensing or disclosure to a third party of Customer Data owned by the other Party is subject to the prior written consent of the Customer Data-owning Party in their sole discretion. Each Party shall use commercially reasonable efforts to ensure that all Customer Data is collected in such a manner that it may be shared with the other Party under this Section 10.03 and applicable law. For purposes of clarity, the Party that is the owner of Customer Data pursuant to this Section 10.03 or otherwise may use such data for any and all purposes, including the sale, licensing or disclosure of such data to third parties.

(e)    Confidentiality and Data Protection. The Parties agree to establish appropriate safeguards to protect the confidentiality of shared Customer Data and to prevent unauthorized use or access. Specifically, each Party shall implement and maintain an information security management policy with standards that are no less rigorous than accepted industry practices, comply with all applicable laws to protect the Customer Data from unauthorized access, destruction, use, modification, or disclosure, as well as comply with the provisions of this Agreement. At a minimum, each Party shall implement physical, technical, and administrative information safeguards that provide for: (a) protection of business facilities, paper files, servers, computing equipment, including all mobile devices and other equipment with information storage capability, and backup systems containing Customer Data; (b) network, application (including databases), and platform security; (c) business systems designed to optimize security; (d) secure,

 

33

encrypted transmission and secure, encrypted storage of Customer Data; (e) a minimum of two factor authentication and access control mechanisms; and (f) personnel security, including background checks on all such personnel, use of unique, robust passwords, and annual training on how to comply with a Party’s physical, technical, and administrative information security safeguards. Each Party shall regularly test and monitor the effectiveness of their security practices and procedures relating to the Customer Data, and will evaluate and adjust their information security program in light of the results of the testing and monitoring, any material changes to their operations or business arrangements, or any other circumstances that a Party knows or reasonably should know may have a material effect on their information security program.

(f)    The Parties shall also share with each other the results of fan and guest surveys, focus groups, etc. to the extent the information relates to guests’ experiences in connection with Home Games (including customer service, quality of Concessions, cleanliness, game presentation, arriving and departing, etc.).

ARTICLE XI

EXCLUSIVITY COVENANT

Section 11.01    Covenant. Notwithstanding anything to the contrary contained in this Agreement, including Section 20.10 with respect to League Rules, the Knicks hereby agree that during the Term, the Team shall not play any Home Games in any location other than the Arena, except as provided in ARTICLE XII or Section 20.01; provided that if the Property Tax Exemption is no longer in effect, the Knicks may play up to two (2) Home Games each season at other locations outside of the New York metropolitan area in accordance with League Rules. Notwithstanding anything to the contrary contained in this Agreement, the Knicks agree to fully comply with the obligations undertaken by its predecessor Madison Square Garden Center, Inc. under the Property Tax Exemption Agreement as the owner of the Team. Licensor agrees to fully comply and cause full compliance with all other obligations undertaken by its predecessor Madison Square Garden Center, Inc. under the Property Tax Exemption Agreement.

ARTICLE XII

CASUALTY AND CONDEMNATION

Section 12.01    Termination or Restoration Due to Condemnation.

(a)    In the event that title to all or substantially all of the Arena or the right of Licensor to occupy or possess all or substantially all of the Arena shall be taken by Condemnation (a “Total Taking”), Licensor shall provide prompt notice of such Total Taking to the Knicks, and, except in the case of a Temporary Taking, this Agreement shall terminate and be of no further force upon the earlier of (i) the date when the possession of all or such substantial portion of the Arena or right so taken shall be required for such use or purpose or (b) the effective date of the Total Taking.

(b)    In the event of a Condemnation other than a Total Taking, this Agreement shall continue in full force and effect; provided, however, that if any such Condemnation results

 

34

in an Untenantable Condition (including for this purpose a Temporary Taking that results in an Untenantable Condition for a period in excess of (i) [*****], or (ii) in the case of any such Temporary Taking that occurs during the last five (5) Contract Years of the Term, [*****]) then each Party shall have the right, in its sole discretion, to terminate this Agreement by notice to the other given within 30 days after the date of the Knicks’ receipt of the Estimate (as defined in Section 12.05(a)) with respect to such Condemnation, without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination; provided further, however, that neither Party shall have such termination right if (x) the then applicable legal requirements, zoning laws, building regulations and other governmental or quasi-governmental ordinances, rules or regulations (collectively, “Governmental Rules”) do not prohibit or materially restrict the performance of the Condemnation Restoration Work (as defined in Section 12.01(c)), (y) the Estimated Date (as defined in Section 12.05(a)) with respect to such Condemnation shall be a date that occurs on or before the date that is (i) [*****] after the date of such Condemnation, or (ii) in the case of any such Condemnation that occurs during the last five (5) Contract Years of the Term, [*****] after the date of such Condemnation and (z) the remaining portions of the Arena can be restored in a manner as shall satisfy the requirements of the definition of Condemnation Restoration Work. Further, and notwithstanding anything to the contrary contained in the foregoing, if the Estimated Restoration Cost with respect to such Condemnation exceeds [*****]% of the full replacement value of the portions of the Arena that are not subject to such Condemnation, then Licensor shall have the right, in its sole discretion, to terminate this Agreement by notice to the Knicks given within 90 days after the date of the Knicks’ receipt of the Estimate with respect to such Condemnation, without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. If either Party terminates this Agreement as provided in this Section 12.01(b), then such termination shall be effective on the date specified in such Party’s notice of termination, but no earlier than thirty (30) days after the date of such notice and no later than one hundred eighty (180) days after the date of such notice, as if said date were the date fixed for the expiration of the Term

(c)    If neither party has the right to terminate this Agreement, or if neither party shall timely elect to terminate this Agreement, as provided in paragraph (b) above, Licensor shall, at its sole cost and expense, commence as soon as reasonably practicable and with reasonable diligence proceed to perform the work (the “Condemnation Restoration Work”) to and repair and restore the part of the Arena not taken to an architecturally complete unit and, to the extent commercially practicable, to substantially its former condition, as and to the extent necessary to remedy the Untenantable Condition, using materials, equipment and construction techniques which are common at the time of such Condemnation and with such changes as may be required by then applicable Governmental Rules or that Licensor may otherwise deem appropriate in each case, in a manner consistent with and as necessary to maintain the Standard; it being agreed, however, that Licensor shall be required to obtain the prior written consent of the Knicks to any changes that are not required by then applicable Governmental Rules and that could materially adversely impact the Knicks’ rights or obligations under this Agreement. Licensor shall (i) keep the Knicks reasonably apprised of the progress and the estimated date of completion of the Condemnation Restoration Work, and (ii) provide such information as may be reasonably requested by the Knicks from time to time with respect to the progress of such Condemnation Restoration Work. Licensor shall use commercially reasonable efforts (which shall not require Licensor to employ overtime labor or otherwise incur overtime charges) to substantially complete

 

35

such Condemnation Restoration Work as soon as commercially practicable, but in all events, on or before the Condemnation Outside Date (as defined in Section 12.01(d)) applicable to such Condemnation (it being agreed that the Knicks’ sole remedy on account of Licensor’s failure to substantially complete such Condemnation Restoration Work shall be the rights of the Knicks to terminate this Agreement as provided in paragraphs 12.01(d) and 12.05(b)(iv) below). The Condemnation Restoration Work shall not include the repair and restoration of any of the trade fixtures, personal property or equipment of the Knicks (all of which the Knicks shall repair and restore at its sole cost and expense).

(d)    Notwithstanding anything to the contrary contained herein, the Knicks shall have the right to terminate this Agreement (without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination) if the Condemnation Restoration Work required as a result of such Condemnation is not substantially completed by the Condemnation Outside Date applicable to such Condemnation (as such Condemnation Outside Date is postponed pursuant to the below provisions of this Section 12.01(d)), which right may be exercised by the Knicks upon written notice to Licensor given within thirty (30) days after such applicable Condemnation Outside Date but before the substantial completion of the Condemnation Restoration Work; provided, however, that if a Final Revised Estimated Date for such Condemnation shall have been determined pursuant to Section 12.05(b) below, then the Knicks shall have the right to terminate this Agreement pursuant to this Section 12.01(d) (without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination) only if the Condemnation Restoration Work is not substantially completed by the later to occur of the Condemnation Outside Date applicable to such Condemnation (as such Condemnation Outside Date is postponed pursuant to the below provisions of this Section 12.01(d)) and such Final Revised Estimated Date, which right may be exercised by the Knicks upon written notice to Licensor given within thirty (30) days after the later to occur of such Condemnation Outside Date and such Final Revised Estimated Date, but before the substantial completion of the Condemnation Restoration Work. If Licensor has not completed the Condemnation Restoration Work prior to the date that is [*****] after the giving of such notice by the Knicks (which date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Condemnation Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such date shall be postponed due to events of Force Majeure is an additional [*****])), then this Agreement shall be terminated automatically effective as of such date, without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. For all purposes hereof, the “Condemnation Outside Date” applicable to any Condemnation shall be determined as follows:

(w)    If the Estimate with respect to the Condemnation Restoration Work required as a result of such Condemnation provides for an Estimated Date that will occur on or prior to the [*****] after the date of such Condemnation, then the “Condemnation Outside Date” applicable to such Condemnation shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Condemnation Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Condemnation Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

 

36

(x)    If the Estimate with respect to the Condemnation Restoration Work required as a result of such Condemnation provides for an Estimated Date that will occur during the period commencing on the [*****] after the date of such Condemnation and ending on the [*****] after the date of such Condemnation, then the “Condemnation Outside Date” applicable to such Condemnation shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Condemnation Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Condemnation Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

(y)    If the Estimate with respect to the Condemnation Restoration Work required as a result of such Condemnation provides for an Estimated Date that will occur during the period commencing on the [*****] after the date of such Condemnation and ending on the [*****] after the date of such Condemnation, then the “Condemnation Outside Date” applicable to such Condemnation shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Condemnation Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Condemnation Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

(z)    If the Estimate with respect to the Condemnation Restoration Work required as a result of such Condemnation provides for an Estimated Date that will occur on or after the [*****] following the date of such Condemnation, then the “Condemnation Outside Date” applicable to such Condemnation shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Condemnation Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Condemnation Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

Section 12.02    Termination or Restoration Due to Casualty.

(a)    If all or any material portion of the Arena is damaged or destroyed by Casualty such that an Untenantable Condition exists (each, a “Total Casualty”), and the Estimate with respect to such Casualty delivered pursuant to Section 12.05 below indicates that the Casualty Restoration Work (defined below) would not reasonably be expected to be substantially completed (i) within 24 months after the occurrence of such Casualty, or (ii) in the case of any Casualty that occurs during the last five (5) Contract Years of the Term, within 12 months after the occurrence of such Casualty, then the Knicks shall have the right to terminate this Agreement without any

 

37

further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. If the Knicks wish to exercise such right of termination, it shall do so by notice to Licensor given not later than the date that is thirty (30) days after the date of the Estimate with respect to such Casualty under Section 12.05.

(b)    In the event there shall occur a Total Casualty and (i) Licensor is prohibited or materially restricted by then applicable Governmental Rules from performing the Casualty Restoration Work, or (ii) the Estimate with respect to such Casualty indicates that the Casualty Restoration Work would not reasonably be expected to be substantially completed (x) within [*****] after the occurrence of such Casualty, or (y) in the case of any Casualty that occurs during the last five (5) Contract Years of the Term, within [*****] after the occurrence of such Casualty, or (iii) the Estimated Restoration Cost with respect to such Casualty exceeds [*****]% of the full replacement value of the Arena immediately prior to such Casualty, then, and in any of such events, Licensor shall have the right, in its sole discretion, to terminate this Agreement without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. If Licensor wishes to exercise such right of termination, it shall do so by notice to the Knicks given not later than the date that is thirty (30) days after the date of the Estimate with respect to such Casualty under Section 12.05. If either Party terminates this Agreement as provided in this Section 12.02(b) or in Section 12.02(a) above, then such termination shall be effective on the date specified in such Party’s notice of termination, but no earlier than thirty (30) days after the date of such notice and no later than one hundred eighty (180) days after the date of such notice, as if said date were the date fixed for the expiration of the Term

(c)    In the event of a Casualty with respect to which neither party has the right to terminate this Agreement, or neither party timely elects to terminate this Agreement, pursuant to paragraphs (a) or (b) above, Licensor shall, at its sole cost and expense, commence as soon as reasonably practicable and with reasonable diligence proceed to perform the work (the “Casualty Restoration Work”) to repair and restore the Arena to substantially its former condition, as and to the extent necessary to remedy the Untenantable Condition, using materials, equipment and construction techniques which are common at the time of such Casualty and with such changes as may be required by then applicable Governmental Rules or that Licensor may deem appropriate, in each case, in a manner consistent with and as necessary to maintain the Standard; it being agreed, however, that Licensor shall be required to obtain the prior written consent of the Knicks to any changes that are not required by then applicable Governmental Rules and that could materially adversely impact the Knicks’ rights or obligations under this Agreement. Licensor shall (i) keep the Knicks reasonably apprised of the progress and the estimated date of completion of the Casualty Restoration Work, and (ii) provide such information as may be reasonably requested by the Knicks from time to time with respect to the progress of the Casualty Restoration Work. Licensor shall use commercially reasonable efforts (which shall not require Licensor to employ overtime labor or otherwise incur overtime charges) to substantially complete such Casualty Restoration Work as soon as commercially practicable, but in all events, on or before the Casualty Outside Date (as defined in Section 12.02(d)) applicable to such Casualty (it being agreed that the Knicks’ sole remedy on account of Licensor’s failure to substantially complete such Casualty Restoration Work shall be the rights of the Knicks to terminate this Agreement as provided in Section 12.02(d) and 12.05(b)(iv) below). The Casualty Restoration Work shall not include the repair and restoration of any of the trade fixtures, personal property or equipment of the Knicks (all of which the Knicks shall repair and restore at its sole cost and expense).

 

38

(d)    Notwithstanding anything to the contrary contained herein, the Knicks shall have the right to terminate this Agreement (without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination) if the Casualty Restoration Work required as a result of such Casualty shall not be substantially completed by the Casualty Outside Date applicable to such Casualty (as such Casualty Outside Date is postponed pursuant to the below provisions of this Section 12.02(d)), which right may be exercised by the Knicks upon written notice to Licensor given within thirty (30) days after such applicable Casualty Outside Date but before the substantial completion of the Casualty Restoration Work; provided, however, that if a Final Revised Estimated Date for such Casualty shall have been determined pursuant to Section 12.05(b) below, then the Knicks shall have the right to terminate this Agreement pursuant to this Section 12.02(d) (without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination) only if the Casualty Restoration Work is not substantially completed by the later to occur of the Casualty Outside Date applicable to such Casualty (as such Casualty Outside Date is postponed pursuant to the below provisions of this Section 12.02(d)) and such Final Revised Estimated Date for such Casualty, which right may be exercised by the Knicks upon written notice to Licensor given within thirty (30) days after the later to occur of such Casualty Outside Date and such Final Revised Estimated Date but before the substantial completion of the Casualty Restoration Work. If Licensor has not completed the Casualty Restoration Work prior to the date that is [*****] after the giving of such notice by the Knicks (which date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Casualty Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such date shall be postponed due to events of Force Majeure is an additional [*****])), then this Agreement shall be terminated automatically effective as of such date, without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. For all purposes hereof, the “Casualty Outside Date” applicable to any Casualty shall be determined as follows:

(w)    If the Estimate with respect to the Casualty Restoration Work required as a result of such Casualty provides for an Estimated Date that will occur on or prior to the [*****] after the date of such Casualty, then the “Casualty Outside Date” applicable to such Casualty shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Casualty Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Casualty Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

(x)    If the Estimate with respect to the Casualty Restoration Work required as a result of such Casualty provides for an Estimated Date that will occur during the period commencing on the [*****] after the date of such Casualty and ending on the [*****] after the date of such Casualty, then the “Casualty Outside Date” applicable to such Casualty shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be

 

39

postponed by one day for each day that Licensor is actually delayed in substantially completing the Casualty Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Casualty Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

(y)    If the Estimate with respect to the Casualty Restoration Work required as a result of such Casualty provides for an Estimated Date that will occur during the period commencing on the [*****] after the date of such Casualty and ending on the [*****] after the date of such Casualty, then the “Casualty Outside Date” applicable to such Casualty shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Casualty Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Casualty Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

(z)    If the Estimate with respect to the Casualty Restoration Work required as a result of such Casualty provides for an Estimated Date that will occur on or after the [*****] following the date of such Casualty, then the “Casualty Outside Date” applicable to such Casualty shall be the date that is [*****] following such Estimated Date; provided, however, that such date shall be postponed by one day for each day that Licensor is actually delayed in substantially completing the Casualty Restoration Work by (i) any acts or omissions of the Knicks, the League or their respective agents, employees or contractors or (ii) any one or more events of Force Majeure (provided that the maximum period such Casualty Outside Date shall be postponed due to events of Force Majeure is an additional [*****]).

Section 12.03    Condemnation Proceeding and Awards. Upon commencement of any Condemnation action or proceeding, Licensor and the Knicks shall cooperate with each other, and provide each other with such information and assistance, as each shall reasonably request in connection therewith. Licensor and the Knicks each shall have the right, at its own expense, to appear and to participate in any and all hearings, trials and appeals relating thereto even if this Agreement has been terminated. Subject to the other provisions of this Section 12.03, in any Condemnation (x) the Knicks shall have the right to assert a claim against the condemning authority for, and receive from the condemning authority, all Condemnation Awards for, (i) any damage to the Knicks’ business or any loss in value of any of the rights granted to the Knicks under this Agreement (if applicable, as if this Agreement had not been terminated), (ii) the value of any of the Knicks’ personal property (tangible or intangible) taken or damaged as result of the Condemnation, (iii) any relocation costs of the Knicks’ business, and (iv) any other damages to which the Knicks may be entitled under any applicable law, ordinance, order or regulation, and (y) Licensor shall have the right to assert a claim against the condemning authority for, and receive from the condemning authority, all Condemnation Awards for, (i) the loss in value of its ownership

 

40

of and rights in and to the Arena and its other property (tangible and intangible), (ii) any damage to, or relocation costs of, Licensor’s business, and (iii) any other damages to which Licensor may be entitled under any applicable law, ordinance, order or regulation. The Parties shall request that all Condemnation Awards be specifically allocated by the applicable condemning authority (it being agreed that Licensor may direct that any such awards allocated to Licensor be paid to any Superior Interest Holder designated by Licensor for such purpose). If any Condemnation Award is not specifically allocated between the Parties by the applicable condemning authority, the Condemnation Award shall be equitably allocated and distributed to Licensor and the Knicks in such manner as the Parties shall mutually agree.

Section 12.04    Temporary Taking. If the whole or any part of the Arena or the right of Licensor to occupy or possess the whole or any part of the Arena shall be taken in any Condemnation for a temporary use or occupancy not to exceed an aggregate of [*****], or in the case of any such Condemnation that occurs during the last five (5) Contract Years of the Term, [*****] (a “Temporary Taking”), the Term shall not be reduced, extended or affected in any way, and neither Licensor nor the Knicks shall be relieved of its obligations under this Agreement, except that (a) the Knicks shall have the right to make a claim against the condemning authority for, and receive from the condemning authority and retain, an award of any damages sustained by the Knicks as a result of such Temporary Taking, and (b) the Knicks’ obligation to pay the License Fee shall be abated during periods that the Arena is unavailable to the Knicks for the playing of Home Games in accordance with the terms and conditions of this Agreement.

Section 12.05    Inability to Timely Restore; Estimate of Time and Cost to Restore.

(a)    The determination of the estimated time and costs that are reasonably expected to be necessary to perform and substantially complete any Condemnation Restoration Work or any Casualty Restoration Work shall be made by an independent architect or construction manager that is experienced in arena construction projects, well-regarded in the industry and selected by Licensor and reasonably approved by the Knicks. In the event of any Condemnation or Casualty resulting in an Untenantable Condition, Licensor shall furnish to the Knicks an estimate (the “Estimate”), prepared and certified by such independent architect or construction manager (the “Estimator”) of (i) the estimated date (the “Estimated Date”) by which the Condemnation Restoration Work or Casualty Restoration Work, as the case may be, will be substantially completed and (ii) the estimated cost (the “Estimated Restoration Cost”) to perform the Condemnation Restoration Work or Casualty Restoration Work, as the case may be. Licensor shall use commercially reasonable efforts to cause such independent architect or construction manager to make its determination as soon as reasonably practicable (and, in the case of a Casualty, no later than [*****] after the date of such Casualty) and will deliver the Estimate to the Knicks promptly upon Licensor’s receipt thereof.

(b)    (i) If, during the performance of the Condemnation Restoration Work or the Casualty Restoration Work required as a result of any Condemnation or Casualty, the Knicks reasonably believe that the substantial completion of such Condemnation Restoration Work or such Casualty Restoration Work, as the case may be, will not, absent extraordinary efforts that Licensor does not agree (if not already obligated to take pursuant to this Agreement), be achieved by the applicable Condemnation Outside Date or applicable Casualty Outside Date therefor (as such Condemnation Outside Date or such Casualty Outside Date may have theretofore been

 

41

postponed pursuant to the provisions of Section 12.01(d) or Section 12.02(d) above, respectively), then the Knicks, by notice given to Licensor and the Estimator, shall have the right (not to be exercised more than once in any six (6) month period) with respect to such Condemnation or such Casualty to request that the Estimator determine the estimated date (the “Revised Estimated Date”) by which such Condemnation Restoration Work or such Casualty Restoration Work, as the case may be, is then reasonably expected to be substantially completed.

(ii)    If the Knicks give such notice pursuant to Section 12.05(b)(i) above, then Licensor, within ten (10) business days after its receipt of such notice, shall have the right to submit to the Knicks and to the Estimator a notice that (x) sets forth any information that Licensor reasonably believes is relevant to the determination of the Revised Estimated Date and/or (y) indicates the measures that Licensor intends and agrees to implement in an effort to cause the substantial completion of such Condemnation Restoration Work or such Casualty Restoration Work, as the case may be, to be achieved by the applicable Condemnation Outside Date or the applicable Casualty Outside Date (as such Condemnation Outside Date or such Casualty Outside Date may have theretofore been postponed pursuant to the provisions of Section 12.01(d) or Section 12.02(d) above, respectively). Within ten (10) business days after the Knicks’ receipt of Licensor’s notice (or, if Licensor does not give such notice, within twenty (20) business days after Licensor’s receipt of the Knicks notice given pursuant to Section 12.05(b)(i) above), the Knicks shall have the right to submit to Licensor and the Estimator a notice that sets forth any information that the Knicks reasonably believes is relevant to the determination of the Revised Estimated Date. In determining the Revised Estimated Date, the Estimator shall take into consideration all information and measures set forth in any notices provided by the Parties pursuant to the two immediately preceding sentences, as well as all other relevant factors. Licensor shall use commercially reasonable efforts to cause the Estimator to make its determination of the Revised Estimated Date as soon as reasonably practicable after receipt of the Knicks’ notice given pursuant to Section 12.05(b)(i) above and the notices which each Party is entitled to deliver pursuant to this Section 12.05(b)(ii), and Licensor shall deliver such determination of the Revised Estimated Date to the Knicks promptly upon Licensor’s receipt thereof.

(iii)    Each Party shall have the option (the “Review Option”), exercised by notice given to the other within ten (10) business days after Licensor delivers to the Knicks the Estimator’s determination of the Revised Estimated Date, to require that the Estimator’s determination of the Revised Estimated Date be reviewed by another independent architect or construction manager that is experienced in arena construction projects, well-regarded in the industry and mutually selected by the Parties (the “Second Estimator”). If the Parties are unable to mutually select the Second Estimator within ten (10) business days after the giving of a notice exercising the Review Option, then either Licensor or the Knicks, by giving ten (10) days’ notice to the other, shall have the right to request that the presiding judge of the lowest level court of general jurisdiction for the district in which the Arena is located select the Second Estimator. Licensor shall use commercially reasonable efforts to cause the Second Estimator, as soon as reasonably practicable after the selection thereof, to (x) review the Estimator’s determination of the Revised Estimated Date, (y) make its own determination of the Revised Estimated Date (which determination shall be made in accordance with the provisions of Section 12.05 (b)(ii) above) and (z) deliver to Licensor written notice indicating whether the Second Estimator agrees with the determination of the Estimator and, if not, setting forth the Second Estimator’s determination of the Revised Estimated Date. For all purposes of this Agreement, the “Final Revised Estimated

 

42

Date” shall mean either (a) the Revised Estimated Date determined by the Estimator, if neither Party timely exercises the Review Option or if a Party exercises the Review Option and the Second Estimator agrees with the Estimator’s determination of the Revised Estimated Date; or (b) the Revised Estimated Date determined by the Second Estimator, if a Party exercises the Review Option and the Second Estimator disagrees with the Estimator’s determination of the Revised Estimated Date and therefore issues its own determination of the Revised Estimated Date. Licensor shall deliver the Second Estimator’s written notice to the Knicks promptly upon Licensor’s receipt thereof. The fees and expenses of the Estimator and the Second Estimator for the exercise set forth in this Section 12.05(b)(iii) and in Section 12.05(b)(ii) above shall be borne equally by Licensor and the Knicks.

(iv)    If the Final Revised Estimated Date with respect to any Condemnation or Casualty is later than the date that is 365 days after the applicable Condemnation Outside Date or applicable Casualty Outside Date therefor (each of which, for purposes of this paragraph (iv), shall be deemed to be such applicable Condemnation Outside Date or such applicable Casualty Outside as postponed by the maximum number of days by which same may be postponed due to events of Force Majeure pursuant to Section 12.01(d) or Section 12.02(d) above, respectively), then the Knicks shall have the right to terminate this Agreement without any further liability hereunder, except for any liability hereunder which, by the specific terms of this Agreement survives termination. If the Knicks wish to exercise such right of termination, then it shall do so by notice to Licensor given not later than the date that is sixty (60) days after the date on which the Final Revised Estimated Date is determined (it being agreed that the Final Revised Estimated Date shall be deemed determined either as of the date on which the Parties’ right to exercise the Review Option shall have lapsed or, if a Party timely exercises the Review Option, as of the date on which the Second Estimator’s notice of determination is given to the Knicks). If the Knicks terminate this Agreement as provided in this Section 12.05(b)(iv), then such termination shall be effective on the date specified in the Knick’s notice of termination, but no earlier than thirty (30) days after the date of such notice and no later than one hundred eighty (180) days after the date of such notice, as if said date were the date fixed for the expiration of the Term.

Section 12.06    Replacement Arena; Rent Abatement. In the event of the occurrence of a Condemnation or Casualty that results in an Untenantable Condition but does not result in termination of this Agreement, the Knicks, during the continuance of such Untenantable Condition, shall have the right to use an alternate site for Knicks Events while the Arena is being restored, provided such use fully complies with the requirements of Paragraph 6 of the Property Tax Exemption Agreement, and the Knicks’ obligation to pay the License Fee shall be abated during such periods in accordance with Section 20.01.

Section 12.07    Intention of the Parties. The provisions of this Article XII shall be deemed an express agreement governing any case of the Arena or any portion thereof becoming untenantable or unfit for occupancy, and Section 227 of the Real Property Law of the State of New York, providing for such contingency in the absence of an express agreement, and any other legal requirements of like import, now or hereafter in force, shall have no application in such case and are expressly waived by the Parties.

 

43

ARTICLE XIII

INDEMNIFICATION

Section 13.01     General Indemnification

(a)    To the extent permitted by applicable law, and subject to any valid and collectible insurance, Licensor and the Knicks shall indemnify, defend and hold harmless the other and its current and future Affiliates, and each of their respective directors, officers, employees, agents, successors and assigns from and against any and all claims, liability, loss, damages (whether actual, incidental, consequential, punitive or otherwise), judgments, settlement expenses, cost and expenses whatsoever, including court costs, reasonable attorneys’ fees and related disbursements, with regard to any action, cause of action or claim of any nature (each, a “Loss”), in any way arising out of or related to (i) the indemnifying Party’s acts or omissions in or about the Arena (except to the extent caused by the indemnified Party’s negligence or misconduct); (ii) the indemnifying Party’s failure to fulfill any duty or obligation hereunder or to comply with applicable law or the obligations applicable to the indemnifying Party in the [*****]; or (iii) the indemnifying Party’s breach of any representations, warranties or covenants contained in this Agreement. Each Party’s indemnity hereunder shall include the acts and omissions of its contractors, licensees, agents and employees.

(b)    Without limiting the provisions of Subparagraph 13.01(a), Licensor and the Knicks indemnify the other party for any damage to the property (whether in or about the Arena) of the other party caused by the acts or omissions of the indemnifying party’s contractors, licensees, agents, employees and invitees, limited however (for purposes of clarity), in the case of the Knicks, to Knicks Misuse. All repairs to the damaged property of Licensor shall be made by firm(s) designated by Licensor.

(c)    Notwithstanding the foregoing, for so long as Licensor and the Knicks are under common control, the Parties intend for all Losses to be covered, consistent with past practice and the terms and conditions of the applicable insurance policies, by the NBA’s master insurance program for the benefit of teams, whether such Loss was caused by Licensor, the Knicks or any third party (including any ticketholders).

Section 13.02     Notice of Claims and Rights to Defend and Settle Claims. The indemnified Party agrees to serve the indemnifying Party with prompt written notice of any claims which could give rise to the indemnifying Party’s indemnity hereunder, and the indemnifying Party and its insurance carrier(s) shall have the right to defend such claims with counsel of their choosing. The indemnified Party shall not settle any claim without the indemnifying Party’s (or its insurer’s) prior written consent, not to be unreasonably withheld or delayed.

 

44

ARTICLE XIV

INSURANCE AND SUBROGATION

Section 14.01     Knicks Insurance Coverage. The Knicks shall, from and after the Commencement Date, maintain at its expense in force the following minimum insurance:

(a)    Property insurance for the full one hundred percent (100%) of replacement cost of all of the Knicks’ equipment, improvements, and betterments owned by the Knicks, literary or musical material, and all other properties and materials owned, rented or brought onto the premises by the Knicks. Coverage shall be on an All Risk of physical loss or damage basis and shall include business interruption coverage in reasonable and customary amounts with customary deductibles and coinsurance against physical loss or damage or destruction from such perils;

(b)    Commercial general liability insurance covering against bodily injury and property damage having a limit of not less than $[*****] for each occurrence and a limit of not less than $[*****] in the aggregate for each occurrence. Coverages shall be in accordance with the ISO form or equivalent, for response to any occurrence in and about the Arena in connection with any Knicks Event and covering the Knicks’ contractual liability for indemnification under this Agreement, including but not limited to Section 4.07 and Article XIII herein. Such insurance shall include, but not be limited to, premises operations, products and completed operations, personal injury, advertising injury and independent contractors and containing provisions for separation of insureds or severability of interests. Coverage under the Knicks policy shall be on a primary and non-contributory basis with any insurance available to Licensor for claims arising in connection with Knicks’ operations. The Knicks GL Policy shall be in such amount and with such policy limits so that the coverage and limits are adequate to maintain the Knicks Excess/Umbrella Policy without gaps in coverage between the Knicks GL Policy and the Knicks Excess/Umbrella Policy;

(c)    Liquor liability insurance coverage having limits of not less than $[*****] for each common cause and in the aggregate;

(d)    Automobile liability insurance coverage with a combined single limit of no less than $[*****];

(e)    Employer’s liability insurance with the following minimum limits: bodily injury by accident – $[*****] each accident; bodily injury by disease – $[*****] policy limit and $[*****] each employee;

(f)    Umbrella or excess liability coverage, following the terms, conditions, and extensions of coverages, to apply over and above the primary coverages in subsections (b), (c) and (d) and (e), in an amount not less than $[*****] in the aggregate;

(g)    Statutory worker’s compensation coverage;

(h)    Employment practices liability insurance with minimum limits of $[*****];

(i)    Broad-form Media liability insurance with limits of no less than $[*****] per claim/$[*****] aggregate; and

(j)    Disability insurance as required by the State of New York.

(k)    The insurance referred to in this Section 14.01, with the exception of property insurance, worker’s compensation and employer’s liability coverage, shall name Licensor and its Affiliates and mortgagees, and each of their respective directors, officers, employees, agents, successors and assigns, and any other parties designated by Licensor, as additional

 

45

insureds. Licensor shall also have the right to require the Knicks, from time to time, to increase the scope and limits of any insurance coverage required to be carried herein, so long as such increase is commercially reasonable under the circumstances.

Section 14.02     Knicks Insurance Requirements.

(a)    The Knicks shall, at its own expense, obtain and maintain during the Term and for three (3) years thereafter, policies of insurance as required herein written by an insurance carrier(s) reasonably acceptable to Licensor that is/are authorized to do business in the State of New York, rated A VII or better in the most current edition of A.M. Best’s Insurance Report (or if such report shall cease to be published, such comparable rating system as reasonably determined by Licensor), and with deductible and self-insurance retention amounts that are not in excess of amounts which are commercially reasonable under the circumstances (except that in the event that any maximum deductible or self-insurance retention amounts are mandated either by law, such mandated maximum amounts shall not be exceeded regardless of whether higher amounts may be commercially reasonable under the circumstances).

(b)    In the event of cancellation of any policies, the applicable carrier shall provide at least thirty (30) days advance written notice of same to the additional insureds described in Section 14.01. If the policies cannot be amended to provide for such cancellation, the Knicks agree to provide written notice of cancellation as described herein.

(c)    In the event that Licensor is in receipt of such notice of non-payment and/or cancellation, Licensor shall have the right, but not the obligation, to pay for any commercially reasonable costs and expenses which shall be required to maintain or reinstate such insurance, and to charge the Knicks for any and all expenses incurred in connection therewith.

Section 14.03     Knicks Certificates of Insurance. The Knicks shall provide Licensor with appropriate evidence of insurance setting forth the required coverages not later than ten (10) days prior to the date on which such coverage is required to be obtained hereunder. For each consecutive year, the Knicks shall provide appropriate evidence of insurance no later than ten (10) days before the policies are required to be renewed. At the request of Licensor, the Knicks shall obtain, release, and forward duplicate original copies of any policy or policies for review by Licensor or its agent to determine if all insurance requirements have been met.

Section 14.04     Knicks Waiver of Subrogation. The Knicks shall require each of their carriers to include a waiver of the insurance carriers’ claims and rights of subrogation against Licensor.

Section 14.05     Licensor Insurance Coverage. Licensor shall, from and after the Commencement Date, maintain at its expense in force the following minimum insurance:

(a)    Property insurance for the full one hundred percent (100%) of replacement cost of the Arena, including all improvements, and betterments and personal property owned by Licensor. Coverage shall be on an All Risk of physical loss or damage basis, including losses arising out of a terrorism event, and shall include business interruption and loss of rental income coverages in reasonable and customary amounts with customary deductibles;

 

46

(b)    Commercial general liability insurance covering against bodily injury and property damage having a limit of not less than $[*****] for each occurrence and a limit of not less than $[*****] in the aggregate for each occurrence. Coverages shall be in accordance with the ISO form or equivalent, for response to any occurrence in and about the Arena.. Such insurance shall include, but not be limited to, premises operations, products and completed operations, personal injury, advertising injury and independent contractors and containing provisions for separation of insureds or severability of interests. For so long as Licensor and the Knicks are under common control, coverage under the Licensor’s policy shall be in excess to any insurance required of the Knicks. The Licensor’s GL Policy shall be in such amount and with such policy limits so that the coverage and limits are adequate to maintain the Licensor’s Excess/Umbrella Policy without gaps in coverage between the Licensor’s GL Policy and the Licensor’s Excess/Umbrella Policy;

(c)    Umbrella or excess liability coverage, following the terms, conditions, and extensions of coverages, to apply over and above the primary coverages in subsection (b), and the employer’s liability coverage in subsection (d), in an amount not less than $[*****] in the aggregate;

(d)    Employer’s liability insurance with the following minimum limits: bodily injury by accident – $[*****] each accident; bodily injury by disease – $[*****] policy limit and $[*****] each employee;

(e)    Statutory worker’s compensation coverage;

(f)    Disability insurance as required by the State of New York.

Section 14.06     Licensor Insurance Requirements. Licensor shall, at its own expense, obtain and maintain during the Term and for three (3) years thereafter, policies of insurance as required herein written by an insurance carrier(s) reasonably acceptable to the Knicks that is authorized to do business in the State of New York, rated A VII or better in the most current edition of A.M. Best’s Insurance Report (or if such report shall cease to be published, such comparable rating system as reasonably determined by the Knicks), and with deductible and self-insurance retention amounts that are not in excess of amounts which are commercially reasonable under the circumstances (except that in the event that any maximum deductible or self-insurance retention amounts are mandated either by law, such mandated maximum amounts shall not be exceeded regardless of whether higher amounts may be commercially reasonable under the circumstances). The insurance referred to in Section 14.05, with the exception of property insurance, worker’s compensation and employer’s liability coverage, shall name Knicks and its Affiliates, and each of their respective directors, officers, employees, agents, successors and assigns, and any other parties designated by Knicks, as additional insureds.

Section 14.07     Licensor Certificates of Insurance. Licensor shall provide the Knicks with appropriate evidence of insurance setting forth the required coverages not later than ten (10) days prior to the date on which such coverage is required to be obtained hereunder. For each consecutive year, Licensor shall provide appropriate evidence of insurance no later than ten (10) days before the policies are required to be renewed. At the request of the Knicks, Licensor shall obtain, release, and forward duplicate original copies of any policy or policies for review by Licensor or its agent to determine if all insurance requirements have been met.

 

47

Section 14.08    Licensor Waiver of Subrogation. Licensor shall include in each of its policies, a waiver of the insurance carriers’ rights of subrogation against the Knicks.

ARTICLE XV

WORK STOPPAGE

Section 15.01    Impact on License Fee. If, during any NBA season, any previously scheduled Home Game is cancelled as a result of a strike, work stoppage, lockout, or other suspension or cancellation of NBA play arising out of a labor dispute involving NBA players or referees, or any other League-related labor or other dispute (each a “Work Stoppage”), there shall be no reduction in the License Fee, provided, however, that, upon any such cancellation, Licensor shall use commercially reasonable efforts to hold the Arena out for relicense on such Home Date, and in the event that Licensor relicenses the Arena on such Home Date during the time of the previously scheduled Home Game, Licensor will refund to the Knicks the lesser of (i) [*****] of any net contribution attributable to the relicense of the Arena and (ii) the pro rata portion of the annual License Fee attributable to such Home Date (i.e. 1/44^th of the License Fee if there had been 41 home games and 3 preseason games scheduled) (the “Work Stoppage Abatement”). If, during any season in which the Knicks receive a Work Stoppage Abatement, any previously scheduled Home Games are cancelled as a result of a Work Stoppage and subsequently rescheduled, any Work Stoppage Abatement received by the Knicks shall be reduced by an amount equal to the Work Stoppage Abatement, divided by the number of Home Games that were cancelled and multiplied by the number of Home Games that were subsequently rescheduled.

Section 15.02    Treatment of Refunds or Credits. Any refunds or credits granted to Licensor’s suite or other licensees, sponsors, advertisers or other third parties (including any concessionaire or service provider) that relates to the Work Stoppage shall be determined in Licensor’s reasonable discretion, but may not exceed the Team’s allocable share of such revenue for a full-season work stoppage (pro rata for a partial-season work stoppage) (“Maximum Credit or Refund”). Licensor shall retain [*****]% of the difference, if any, between the Maximum Credit or Refund and the actual credit or refund attributable to such assets. Any refunds or credits shall be deducted from the Knicks’ share of revenue under this Agreement for the applicable Arena assets.

Section 15.03     Scheduling. If a Work Stoppage results in the partial cancellation of a season, the Parties shall mutually agree in good faith on the rescheduling of Home Games.

ARTICLE XVI

CERTAIN TAXES

Section 16.01     Property Taxes.

(a)    The Knicks shall be responsible for the payment, without demand, counter-claim or offset, of fifty percent (50%) (the “Knicks’ Tax Share”) of any real property or similar taxes

 

48

applicable to the Arena (“Arena Property Tax”). Licensor may notify any jurisdiction imposing (or proposing to impose) any Arena Property Tax that the Knicks have full responsibility for the payment of 50% of any such Arena Property Tax and, to the extent permitted by applicable law, rule or regulation, Licensor shall arrange for such Arena Property Tax to be billed directly to the Knicks. Licensor shall promptly provide to the Knicks copies of all materials relating to any Arena Property Tax that it receives from any government authority.

(b)     Licensor and the Knicks acknowledge that, as of the Commencement Date, Licensor is exempt, pursuant to the laws of the State of New York and that certain agreement between the Mayor of the City of New York, acting as Chief Executive Officer of, and for, the City of New York, and Licensor’s and the Knicks’ predecessor-in-interest Madison Square Garden Center, Inc., dated July 15, 1982 (the “Property Tax Exemption Agreement”), from paying any Arena Property Tax in connection with the Arena (the “Property Tax Exemption”). Licensor and the Knicks shall each use all commercially reasonable efforts to cause the Property Tax Exemption to remain in effect at all times during the term of this Agreement.

Section 16.02     Commercial Rent Tax. The Knicks shall be responsible for paying directly, and shall timely pay, to the City of New York the “Commercial Rent Or Occupancy Tax” imposed pursuant to Chapter 7 of Title 11 of the New York City Administrative Code, or successor or similar tax assessed or imposed on a tenant as a consequence of the Knicks’ status as a licensee under this Agreement.

ARTICLE XVII

KNICKS DEFAULT; LICENSOR’S RIGHTS AND REMEDIES

Section 17.01     Knicks Default. The occurrence of any one or more of the following events shall constitute a default by the Knicks under this Agreement (each, a “Knicks Default”):

(a)    Failure by the Knicks to timely pay any amount owed by the Knicks to Licensor pursuant to this Agreement if such failure shall continue for thirty (30) days after notice thereof is received by the Knicks from Licensor;

(b)    Failure by the Knicks to maintain the Team’s membership in the NBA;

(c)    The levy upon or other execution or the attachment by legal process of the interest of the Knicks in the Arena herein, or the filing or creation of a lien in respect of such interest, which levy, attachment or lien shall not be released, discharged or bonded against within sixty (60) days from the date of such filing;

(d)    The making by the Knicks of an assignment for the benefit of creditors; an adjudication that the Knicks are bankrupt, insolvent or unable to pay its debts as they mature; the filing by or against the Knicks of a petition to have the Knicks adjudged bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy unless, in the case of a petition filed against the Knicks, the case is dismissed within sixty (60) days after the filing thereof; the appointment of a trustee or receiver to take possession of substantially all of the Knicks’ assets or the Knicks’ interests in this Agreement unless the appointment is revoked within sixty (60) days

 

49

after the appointment thereof; or an attachment, execution or levy against substantially all of the Knicks’ interests in this Agreement unless the attachment, execution or levy is revoked within sixty (60) days after the attachment, execution or levy;

(e)    Breach by the Knicks of ARTICLE XI (an “Exclusivity Breach”); and

(f)    Failure by the Knicks to observe or perform in any material respect any covenant, agreement, condition, or provision of this Agreement not otherwise specified in this ARTICLE XVII if such failure shall continue for sixty (60) days after notice thereof from Licensor to the Knicks; provided that the Knicks shall not be in a Knicks Default with respect to matters that cannot reasonably be cured within sixty (60) days so long as within sixty (60) days after such notice the Knicks commence such cure and diligently and continuously proceed to complete the same, but in any event, the Knicks shall not have more than ninety (90) days from its receipt of such notice to cure such failure.

Section 17.02     Remedies of Licensor. If a Knicks Default occurs, Licensor shall have the following rights and remedies which shall be distinct, separate, and, to the extent not mutually exclusive, cumulative:

(a)    In addition to any other legal or equitable damages as may be available to Licensor and subject to clause (b) below, Licensor may enforce this Agreement by seeking specific performance of any Knicks covenant or agreement contained herein or the enforcement of any other appropriate legal or equitable remedy, including self-help (following notice, expiration of any applicable cure period, and failure to cure) and recoupment from the Knicks of the reasonable cost of curing any default on the Knicks’ behalf (and the right to offset such cost from any amounts due from Licensor pursuant to this Agreement);

(b)    Licensor shall be entitled to all reasonable costs, charges, expenses, and attorneys’ fees incurred by the Licensor in connection with a Knicks Default; and

(c)    Notwithstanding anything in this Agreement to the contrary, Licensor shall not, under any circumstances, have the right to terminate this Agreement, except as set forth in ARTCLE XII.

Section 17.03     Remedies of Licensor for an Exclusivity Breach. The Knicks hereby acknowledge that Licensor and its Affiliates will be irreparably and continually harmed by any Exclusivity Breach or the threat thereof and that damages for an Exclusivity Breach cannot be estimated with any degree of certainty and that monetary damages cannot fairly or adequately compensate Licensor for an Exclusivity Breach. The Knicks further acknowledge that Licensor does not have an adequate remedy at law for an Exclusivity Breach. Accordingly, the Knicks hereby acknowledge that, in the event of an Exclusivity Breach, Licensor shall, in addition to any other applicable available rights and remedies, be entitled to seek and obtain, and the Knicks hereby consent to the entry of, a temporary restraining order, together with temporary, preliminary and permanent injunctive or other equitable relief, from any court of competent jurisdiction to enjoin any violation or threatened violation of ARTICLE XI and to compel the Knicks to comply with or restrain or cease from breaching or violating the covenants of ARTICLE XI. The Knicks hereby waive any requirement that Licensor post a bond or other security in connection with injunctive or other equitable relief.

 

50

Section 17.04     League’s Right to Notice of and Cure Knicks Defaults. Licensor shall simultaneously serve the League, at the addresses set forth in Section 20.04, with copies of all notices of Knicks Defaults served upon the Knicks. Licensor shall accept a cure of a Knicks Default by the League within the applicable cure period.

ARTICLE XVIII

LICENSOR DEFAULT; KNICKS’ RIGHTS AND REMEDIES; RIGHTS IN THE

EVENT OF REPEAL OF PROPERTY TAX EXEMPTION

Section 18.01     Licensor Default. The occurrence of any one or more of the following shall constitute a default by Licensor under this Agreement (each, a “Licensor Default”):

(a)    Failure by Licensor to timely pay any amount owed by Licensor to the Knicks pursuant to this Agreement if such failure shall continue for thirty (30) days after notice thereof is received by Licensor;

(b)    The making by Licensor of an assignment for the benefit of creditors; an adjudication that Licensor is bankrupt, insolvent or unable to pay its debts as they mature; the filing by or against Licensor of a petition to have Licensor adjudged bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy unless, in the case of a petition filed against the Licensor, the case is dismissed within sixty (60) days after the filing thereof; the appointment of a trustee or receiver to take possession of substantially all of Licensor’s assets or Licensor’s interests in this Agreement; or an attachment, execution or levy against substantially all of Licensor’s interests in this Agreement;

(c)    Failure by Licensor to provide the Knicks with any of the Knicks’ rights hereunder that interferes with the playing of Home Games in the Arena;

(d)    Failure by Licensor to cause the Arena to be maintained and operated in accordance with, or otherwise to meet and observe, the Standard, and such failure shall continue for fifteen (15) days after notice thereof from the Knicks to Licensor; provided that if such failure cannot reasonably be cured within such fifteen (15) days, then Licensor shall have up to an additional fifteen (15) days to cure such failure as long as, within fifteen (15) days after such notice, it diligently undertakes and pursues such cure and provides the Knicks with reasonable evidence that it is diligently undertaking and pursuing such cure, but in any event, Licensor shall not have more thirty (30) days from its receipt of notice of such failure from the Knicks to cure such failure; and

(e)    Failure by Licensor to observe or perform in any material respect any covenant, agreement, condition, or provision of this Agreement not otherwise specified in this ARTICLE XVIII if such failure shall continue for sixty (60) days after notice thereof from the Knicks to Licensor; provided that Licensor shall not be in a Licensor Default with respect to matters that cannot reasonably be cured within sixty (60) days so long as within sixty (60) days after such notice Licensor commences such cure and diligently and continuously proceeds to complete the same, but in any event, Licensor shall not have more than ninety (90) days from its receipt of such notice to cure such failure.

 

51

Section 18.02     Remedies of the Knicks. If a Licensor Default occurs, the Knicks shall have the following rights and remedies, which shall be distinct, separate, and, to the extent not mutually exclusive, cumulative:

(a)    In addition to any other legal or equitable remedies as may be available to the Knicks and subject to clause (b) below, the Knicks may enforce the provisions of this Agreement and may enforce and protect the rights of the Knicks herein by seeking specific performance of any covenant or agreement contained herein, or the enforcement of any other appropriate legal or equitable remedy, including self-help (following notice, expiration of applicable cure period, and failure to cure) and recoupment from Licensor of the reasonable cost of curing any default on Licensor’s behalf (and the right to offset such cost, or any amounts due from Licensor pursuant to this Agreement, against any amount then owed by the Knicks to Licensor pursuant to this Agreement), and recovery of all monies due or to become due from Licensor under any provisions of this Agreement;

(b)    The Knicks shall be entitled to all reasonable costs, charges, expenses, and attorneys’ fees incurred by the Knicks in connection with a Licensor Default; and

(c)    Notwithstanding anything in this Agreement to the contrary, the Knicks shall not, under any circumstances, have the right to terminate this Agreement, except as set forth in ARTICLE XII.

Section 18.03     Rights in the Event of Repeal of Property Tax Exemption

(a)    In the event the Property Tax Exemption is no longer in effect [*****] (a “No Fault Occurrence”), the Knicks shall remain responsible for fifty percent (50%) of the Arena Property Tax for the remainder of the Term, unless the Parties agree to extend this provision.

(b)    In the event the Property Tax Exemption is no longer in effect due to a breach of the Property Tax Exemption Agreement by the Knicks that leads to the loss of the Property Tax Exemption, the Knicks shall be responsible for 100% of any Arena Property Tax for the remainder of the Term.

(c)    Notwithstanding anything to the contrary in Sections 16.01 or 18.03(a), in the event of a loss of the Property Tax Exemption [*****].

(d)    [*****]

ARTICLE XIX

ASSIGNMENT

Section 19.01     Licensor Assignment. Licensor shall have the right to assign this Agreement upon written notice to the Knicks to any Person that acquires the Arena, provided the assignee agrees in writing to assume all of Licensor’s obligations under this Agreement.

 

52

Section 19.02     Knicks Assignment. The Knicks shall have the right to assign this Agreement upon written notice to Licensor to any Person that acquires the Team in accordance with League Rules, provided the assignee agrees in writing to assume all of the Knicks’ obligations under this Agreement. The Knicks shall further have the rights to collaterally assign this Agreement to secure indebtedness of the Knicks incurred in accordance with League Rules.

Section 19.03     No Other Assignment. Except as set forth in this ARTICLE XIX, neither Party shall be permitted to assign this Agreement without the prior written consent of the other Party. A change in ownership of either Party shall not be deemed an assignment under this Section 19.

ARTICLE XX

MISCELLANEOUS

Section 20.01     Force Majeure. Should any fire or other casualty, act of God, earthquake, flood, epidemic, landslide, enemy act, war, riot, act or threat of terrorism, civil commotion, general unavailability of certain materials; a strike, slowdown, boycott or labor dispute (other than a strike, slowdown, boycott or labor dispute involving the League), or any other similar event beyond the reasonable control of the subject Party (each, a “Force Majeure”) prevent performance of this Agreement by such Party in accordance with its provisions, performance of this Agreement (other than the payment of any sum of money owed hereunder, subject to the final two sentences of this Section 20.01) by such Party shall be suspended or excused to the extent commensurate with such interfering occurrence. In the event of a Force Majeure, the Knicks shall be permitted to schedule and play Home Games at an alternate location, provided that playing games in such location fully complies with the requirements of Paragraph 6 of the Property Tax Exemption Agreement. In the event of a Force Majeure (including a governmental action) that results in (a) attendance at Arena events being limited to 1000 attendees or less per event for any period (a “Restricted Attendance Period”), the Knicks shall be permitted to schedule and play Home Games at the Arena during the Restricted Attendance Period; the pro rata License Fee attributable to any Home Games played at the Arena during any Restricted Attendance Period shall be reduced by 80% or (b) attendance at Arena events being materially limited (but greater than 1000 attendees), the parties will negotiate in good faith to agree on an appropriate reduction to the License Fee. Notwithstanding anything herein to the contrary, the Knicks’ obligation to pay the License Fee for periods for which the Arena is unavailable for Home Games due to a Force Majeure event (including a governmental action or the occurrence of any Untenantable Condition) shall be abated during such periods.

Section 20.02     Consents and Approvals. Any consents or approvals permitted or required to be given by Licensor or the Knicks under this Agreement shall not be valid unless such consent or approval is in writing, signed by the Party by or on whose behalf such consent or approval is executed.

Section 20.03     Entire Agreement. This Agreement, including the schedules and exhibits attached hereto, which are incorporated herein, constitutes the entire agreement between and among the Parties, and supersedes any previous oral or written agreements, representations and covenants, regarding the subject matter hereof and is a binding and enforceable agreement between and among the Parties and their respective successors and permitted assigns. This Agreement may not be amended, modified, supplemented or terminated unless in writing executed by the Parties and, in each case, unless approved in advance in writing by the NBA. Notwithstanding anything herein to the contrary, any agreement, consent, waiver or modification to the terms of this Agreement, whether or not contemplated herein, that would constitute a material modification to the terms of this Agreement that would remain in effect after the Parties are no longer affiliated, shall require the prior written approval of the NBA. Subject to the foregoing obligations to obtain NBA approval, in the event of any proposed change of control or ownership of either Party, the Parties may mutually agree to amend, modify or supplement this Agreement in order to facilitate such change of control or ownership transaction.

 

53

Section 20.04     Notices. All notices, demands, consents, approvals, statements, requests, and reports to be given under this Agreement shall be in writing, signed by the Party or an officer, agent, or attorney of the Party giving the notice and shall be deemed to be given upon receipt if delivered personally by nationally recognized overnight courier providing a receipt for delivery, by certified or registered mail, postage prepaid with return receipt requested, or by personal delivery at the applicable address set forth below or to such other address as that Party may designate in writing.

 

		For the Knicks:		MSG Sports, LLC
				Two Pennsylvania Plaza
				New York, New York 10121
				Attention: President
		With copies to:		MSG Sports, LLC
				Two Pennsylvania Plaza
				New York, New York 10121
				Attention: General Counsel
				For the NBA:            National Basketball Association
				645 Fifth Avenue
				New York, New York 10022
				Attention: General Counsel
		For Licensor:		MSG Arena, LLC
				c/o MSG Entertainment Group, LLC
				Two Pennsylvania Plaza
				New York, New York 10121
				Attention: President
		With a copy to:		MSG Arena, LLC
				c/o MSG Entertainment Group, LLC
				Two Pennsylvania Plaza
				New York, New York 10121
				Attention: General Counsel

Section 20.05    Successors Bound. The covenants, terms, provisions, and conditions of this Agreement shall be binding upon Licensor and the Knicks and their respective successors and permitted assigns and inure to the benefit of Licensor and the Knicks and their respective successors and, to the extent permitted herein, assigns.

Section 20.06    Governing Law; Disputes.

(a)    This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its choice of law provisions.

 

54

(b)    Any disputes arising under this Agreement, shall be submitted to, and resolved exclusively and finally through, the following arbitration process (“Arbitration”). Except as set forth below, the Arbitration process shall be administered by the American Arbitration Association (“AAA”) under the Commercial Arbitration Rules in effect at the time the Dispute or Controversy is submitted to the AAA for Arbitration. The panel (the “Arbitration Panel”) will consist of three (3) neutral arbitrators (each, an “Arbitrator”) selected in accordance with applicable AAA procedures. In proposing a list of candidates for Arbitrators, AAA will take into account the Parties’ desire to obtain potential Arbitrators with significant experience in the operation of comparable sports or entertainment facilities or in the entertainment and sports business generally, or with specific experience regarding the nature of the dispute. Barring extraordinary circumstances, an initial conference with the Arbitration Panel shall be scheduled to take place in New York, New York within thirty (30) days after the appointment of the third Arbitrator. At such conference, a schedule shall be established for such discovery, if any, as a majority of the Arbitration Panel deems appropriate in light of the nature of the dispute and the Parties’ desire to resolve disputes in a prompt and cost-effective manner, and the date of the Arbitration hearing shall be established by vote of a majority of the Arbitration Panel. Barring extraordinary circumstances, the award will be rendered no later than fourteen (14) days from the date of the conclusion of the hearing. Unless the Parties otherwise agree, the Arbitration shall take place in New York, New York. Each Party irrevocably consents to the delivery of service of process with respect to any Arbitration in any manner permitted for the giving of notices under Section 20.04. The Arbitration Panel shall not have the authority to alter, change, amend, modify, waive, add to or delete from any provision of this Agreement. If the Parties initiate multiple arbitration proceedings, the subject matters of which are related by common questions of law or fact and that could result in conflicting awards or obligations, such proceedings shall be consolidated into a single arbitral proceeding. Notwithstanding anything contained in the AAA rules to the contrary, subject to Article XIII, unless the Arbitration Panel finds that one or more claims or defenses were frivolous or knowingly false when made, each Party shall bear the cost of its own legal representation and expert witness fees, as well as its share of the fees and costs payable to the AAA and the Arbitrators, in any Arbitration under this Agreement. If the Arbitration Panel finds that one or more claims or defenses were frivolous or knowingly false when made, the Arbitration Panel shall be entitled to require the Party that made such frivolous or knowingly false claims or defenses to bear all or a portion of the other Party’s legal fees and expert witness fees incurred in connection with such frivolous claims or defenses. All provisions of this Agreement applicable to disputes generally shall apply to the Arbitration. All decisions by the Arbitration Panel shall be (i) decided by majority vote and (ii) final and binding on the Parties and may be enforced by any court of competent jurisdiction.

(c)    Notwithstanding any provision of this Agreement to the contrary, each Party may seek injunctive or other equitable relief (but not a declaratory judgment) from a court of law, as described in Section 20.06(d), with respect to any dispute. If a dispute requires emergency relief before the matter may be effectively resolved through arbitration, the Arbitration procedures set forth above will continue to govern the ultimate resolution of the dispute notwithstanding the fact that a court of competent jurisdiction may have entered an order providing for injunctive or other equitable relief.

(d)    Any action that seeks injunctive or other equitable relief or confirmation of an award rendered in an Arbitration may only be brought by suit, action or proceeding before any

 

55

federal or state court located in the Borough of Manhattan, City of New York, each of the Parties voluntarily and irrevocably consents and (without waiving service of process) submits to the personal jurisdiction and venue of the courts located in the Borough of Manhattan, City of New York that have subject matter jurisdiction, waives all objections as to venue and any claim that it is not personally subject to such jurisdiction or to seek a change of venue, agrees not to bring any such action or proceeding in any other forum, and waives the right to a trial by jury.

(e)    This Section 20.06 shall survive any termination or expiration of the Term.

Section 20.07     Captions and Headings; Certain Rules of Construction.

(a)    The captions and headings throughout this Agreement are for convenience and reference only and the words contained therein shall in no way be held or deemed to define, limit, describe, explain, modify, amplify, or add to the interpretation, construction, or meaning of any provisions of this Agreement or the scope or intent thereof, nor in any way affect this Agreement.

(b)    Unless the context, otherwise requires: (i) a term has the meaning assigned to it, (ii) “or” is not exclusive, (iii) words in the singular include the plural and words in the plural include the singular, (iv) “herein,” “hereof ” and other words of similar import refer to this Agreement as a whole and not to any particular article, section or other subdivision, (v) all references to “clauses,” “sections” or “articles” refer to clauses, sections or articles of this Agreement, (vi) “including” means “including, without limitation” and (vii) the masculine, feminine and neuter adjectives and pronouns include one another.

Section 20.08     Counterparts. This Agreement may be executed by facsimile or PDF signature and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 20.09     Confidentiality. Subject to League Rules and the rights of any mortgagees each Party agrees that, commencing on the Commencement Date and continuing for a period of five (5) years after the expiration or earlier termination of this Agreement, the Parties shall keep confidential the terms and conditions of this Agreement; provided that disclosure may be made (a) to their directors, equity holders, officers, Affiliates, employees, agents, advisors, and representatives (collectively, their “Representatives”) (b) if disclosure is required by court order, or applicable law or regulation, including disclosures required by any governmental or regulatory body having the authority to regulate or oversee any aspect of the business of either Party (e.g., the Securities and Exchange Commission) (in which case the Party required to disclose such Confidential Information shall notify the other Party and use commercially reasonable efforts to obtain confidential treatment of any information so required to be disclosed), (c) if disclosure is required to comply with a request or requirement of a governmental or administrative entity or agent thereof, (d) to the League and/or any League Representatives, (e) as required by League Rules, (f) for valid business purposes to existing or prospective lenders, investors and employees of partners and Affiliates, (g) to enforce any of a Party’s rights pursuant to this Agreement, or (h) to governmental authorities, to the extent necessary to perform a Party’s obligations under this Agreement. Each Party shall direct their Representatives to maintain such information in the strictest confidence. No Party shall make any public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other Parties, not to be unreasonably withheld, conditioned or delayed.

 

56

Section 20.10     League Rules. This Agreement is subject to League Rules and Licensor hereby covenants to comply with all League Rules in connection with its performance hereunder and its operation of the Arena for Knicks Events. In the event of any conflict between this Agreement and League Rules with respect to the Parties’ rights and obligations hereunder, League Rules shall control and govern in all respects. Nothing in this Section 20.10 shall affect the Knicks’ obligations under Section 11.01 or Article XIII.

Section 20.11     Superior Interests

(a)    Each mortgagee or similar party named in any mortgage or similar instrument now existing or hereafter made and encumbering an interest in the Arena superior to that of Licensor (each such mortgage and similar instrument being hereinafter collectively referred to as “Superior Interests”, and the holder of the mortgagee’s and similar party’s interest being hereinafter collectively referred to as “Superior Interest Holders”) shall agree in a commercially reasonable form of instrument that, if it succeeds to the interest of Licensor in the Arena by termination of the Superior Interest by any means, it will recognize the rights and interest of the Knicks under this Agreement to use and occupy the Arena if and as long as a Knicks Default has not occurred and is continuing (which agreement may, at such Superior Interest Holder’s option require attornment by the Knicks), in consideration of which the rights and interests of the Knicks to use and occupy the Arena shall be subject and subordinate to the Superior Interest and to any and all advances to be made therein, and to the interest thereon, and all renewals, replacements and extensions thereof. The Superior Interest Holder may elect that, instead of making this Agreement subject and subordinate to its Superior Interest, the rights and interest of the Knicks under this Agreement shall have priority over the lien of the Superior Interest in question. The Knicks agree that it will, within ten (10) days after demand in writing, execute and deliver such reasonable instruments may be required, either to make this Agreement subject and subordinate to such a Superior Interest (subject to the Superior Interest Holder’s agreement as aforesaid to recognize the rights and interest of the Knicks under this Agreement to use and occupy the Arena if and as long as a Knicks Default has not occurred and is continuing), or to give this Agreement priority over the lien of such Superior Interest, whichever alternative may be elected by the respective Superior Interest Holder.

Section 20.12     Severability. If any Article, Section, Subsection, Schedule, Exhibit, term, or provision of this Agreement or the application thereof to any Party or circumstance shall, to any extent, be invalid or unenforceable, the remainder of the Article, Section, Subsection, Schedule, Exhibit, term, or provision of this Agreement or the application of same to Parties or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby and each remaining Article, Section, Subsection, Schedule, Exhibit, term, or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

Section 20.13     Waiver. No waiver of any right, obligation or default shall be implied, but must be in writing, signed by the Party against whom the waiver is sought to be enforced. Any particular waiver of any right, obligation or default shall not be construed as a waiver of any subsequent or other right, obligation or default.

 

57

Section 20.14     Further Assurances. Licensor and the Knicks shall execute, acknowledge, and deliver, after the date hereof, without additional consideration, such further assurances, instruments, and documents, and shall take such further actions, as Licensor or the Knicks shall reasonably request of the other in order to fulfill the intent of this Agreement and the transactions contemplated thereby.

Section 20.15     No Third-Party Beneficiary; Enforcement of Third-Party Agreements.

(a)    The provisions of this Agreement are for the exclusive benefit of the Parties and not for the benefit of any third person, nor shall this Agreement be deemed to have conferred any rights, express or implied, upon any third person unless otherwise expressly provided for herein; provided, that the League is a third party beneficiary of (i) the Knicks cure rights as set forth in Section 17.04, (ii) the obligations of the Parties to obtain the League’s written approval prior to any amendment, modification, waiver, supplementation or termination of this Agreement (as set forth in Section 20.03), and (iii) the enforcement of Section 20.10.

(b)    Licensor shall use commercially reasonable efforts to enforce any agreement between Licensor and any third-party (or third-parties) (including, without limitation, the [*****], Ticket Agent Agreements, Suite Agreements, Hospitality Agreements and Joint Sponsor Agreements) that apply to any of the Knicks rights or obligations under this Agreement.

Section 20.16     Books and Records. Licensor and the Knicks shall each keep full, true, and correct contracts, books and records in accordance with generally accepted accounting principles consistently applied (and shall require all of their agents, contractors, and concessionaires to keep such books and records of their transactions to the extent that such transactions would be the subject of the calculation of any payments due from one Party to the other under this Agreement) setting forth the factual, accounting, and legal bases upon which the calculation of payments herein are made (the “Books and Records”), and in such detail that would reasonably enable a reasonably qualified third party to readily and independently make such calculations and verify the accuracy of statements of same which are furnished by one Party to the other under this Agreement. Each Party’s books and records shall be (a) retained for at least three (3) years following the other Party’s receipt of the respective statement(s) to which they apply, and (b) made available for inspections and copying by the other Party’s duly authorized representatives at all reasonable times at reasonable office locations in the New York, NY metropolitan area. Each Party shall promptly furnish to the other a complete copy of any report of any such examination or inspection.

Section 20.17     Audit Rights. Each Party (the “Auditing Party”) shall be entitled to audit the relevant Books and Records of the other Party (the “Non-Auditing Party”) for the sole purpose, and only to the extent, of determining the Non-Auditing Party’s compliance with the financial terms of this Agreement. Such audit right shall be exercisable by the Auditing Party by providing the Non-Auditing Party with not less than five (5) business days written notice. Except as otherwise set forth below, all costs and expenses of any such audit shall be paid by the Auditing Party. If the audit discloses that the Non-Auditing Party has failed to pay any amounts due under this Agreement, the Non-Auditing Party shall remit the underpayment to the Auditing Party within thirty (30) days following the Auditing Party’s delivery of notice and evidence of underpayment

 

58

to the Non- Auditing Party. If the audit reveals an underpayment to the Auditing Party of greater than 5%, then the Non- Auditing Party shall pay all costs and expenses associated with such audit, provided that the auditor is an independent certified public accounting firm paid on an hourly (and not contingency) basis.

Section 20.18    Access to Financial Information. Licensor acknowledges that existing League Rules on financial reporting under the League’s collective bargaining agreements and revenue sharing plans requires the Team, annually and from time to time, to provide the League and auditors for the League and its players’ association detailed financial information, including information that is in the possession of Licensor. Licensor agrees to provide the information requested by the League and/or the auditors for these purposes and to use commercially reasonable efforts to provide the staff and other support necessary to comply with these requests and the related process.

[signatures on next page]

 

59

IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first above written.

 

Exhibit 10.5

ARENA LICENSE AGREEMENT

between

MSG ARENA, LLC

and

NEW YORK RANGERS, LLC

Dated as of             , 2020

ARENA LICENSE AGREEMENT

This ARENA LICENSE AGREEMENT (this “Agreement”) is made as of             , 2020 (the “Effective Date”) between MSG Arena, LLC, a Delaware limited liability company (“Licensor”), and New York Rangers, LLC, a Delaware limited liability company (the “Rangers”). Licensor and the Rangers are each referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

A.    Licensor owns and operates the arena commonly known as Madison Square Garden, which is located at 4 Pennsylvania Plaza, New York, New York 10001 that contains approximately 17,000 seats for hockey games, and is suitable for the exhibition of ice hockey games and for other purposes (the “Arena”).

B.    New York Rangers, LLC owns and operates the professional hockey team known as the New York Rangers (the “Team”) in the National Hockey League (the “NHL” or the “League”).

C.    Licensor wishes to grant the Rangers, on behalf of the Team, certain rights to use specified parts of the Arena at specified times, and the Rangers desire to so use the Arena at such times, upon the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

[*****]

“Advertising” means, collectively, all advertising, sponsorship and promotional activity, signage, messages and displays of every kind and nature at or regarding the Arena, whether audio or visual and whether now existing or developed in the future, including the following: (i) the right to name the Arena or any portion thereof, including identifying such name on the Arena concourses, the entrances to the Arena, premium seating areas or any other areas at the Arena; (ii) permanent, non-permanent and transitory signage or advertising displayed on permanent (e.g., fixed panel) or non-permanent (e.g., rotating) advertising panels or on the interior or exterior of the Arena (including Arena marquee boards and other exterior signage); (iii) advertising appearing on fixtures or equipment (such as scoreboard advertising and canopy advertising); (iv) audio or video public address advertising and message board advertising; (v) electronic insertion, fascia boards, liquid electronic displays, ribbon boards and other forms of electronic signage (“LED Signage”); (vi) print and display advertising, including advertising on or in game programs, schedules, tickets and yearbooks; (vii) promotional events or activities sponsored by corporate partners; (viii) the exhibition and promotion of products and services at the Arena (e.g., kiosks and special areas in the concourse); (ix) advertising worn or carried by concessionaire personnel or

 

2

other personnel engaged in the operation of any Arena event; (x) advertising affixed to or included with cups, napkins, utensils, plates or other similar items used to consume Concessions at the Arena (“Concession Items”); (xi) advertising at concession areas; and (xii) promotional or premium item give-aways.

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person, or which is a director, officer, employee, or partner (limited or general) of such specified Person, but with respect to either Party specifically excluding the other Party and the other Party’s publicly owned parent and such parent entity’s direct and indirect subsidiaries. For the purpose of this definition, “control”, when used with respect to any specified Person, means the power to direct or cause, directly or indirectly, the direction of the management and policies of such Person whether through the voting of securities, by contract or otherwise. The terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” has the meaning set forth in the preamble.

“Arena” has the meaning set forth in Recital A.

“Arena Agency Agreements” has the meaning set forth in Section 7.02(b).

“Attendance Based Allocation” has the meaning set forth in Schedule 6.01.

“Auditing Party” has the meaning set forth in Section 20.17.

“Books and Records” has the meaning set forth in Section 20.16.

“Casualty” shall mean any damage, destruction or other property casualty of any kind or nature, ordinary or extraordinary, foreseen or unforeseen resulting from any cause, including any Force Majeure event.

“Catering Services” and “Catering Gross Receipts” have the meanings set forth in Schedule 6.01.

“Commencement Date” has the meaning set forth in Section 2.01.

“Common Areas” has the meaning set forth in Schedule 4.01.

“Concessions” means F&B Concessions, Team Merchandise sold or provided at the Arena, and Non-Team Merchandise.

“Condemnation” means a taking by eminent domain, condemnation or appropriation by any governmental authority or other Person with the power of eminent domain for any public or private use or purpose.

“Condemnation Award” means all sums, amounts or other compensation for the Arena payable to the Rangers or Licensor as a result of or in connection with any Condemnation.

 

3

“Convenience Fees” has the meaning set forth in Section 5.06(a).

“Contract Year” means, other than the Initial Contract Year, each period of the Term from July 1 through the immediately following June 30.

“Customer Data” has the meaning set forth in Section 10.03(a).

“Effective Date” has the meaning set forth in the preamble.

“Exclusivity Breach” has the meaning set forth in Section 17.01(e).

“Exhibition and Regular Season Home Games” means games played by the Team during the exhibition season or regular season of the League where the Team (and not the opposing team) has the right to designate the location of such game or which is considered one of the Team’s home games by the League for purposes of League Rules, standings or scheduling.

“F&B Concessions” and “F&B Concessions Gross Receipts” have the meanings set forth in Schedule 6.01.

“Facility Ticket Fee” has the meaning set forth in Section 5.02(c).

“First Full Contract Year” means July 1, 2020 through June 30, 2021.

“Force Majeure” has the meaning set forth in Section 20.01.

“Game Day Services” has the meaning set forth in Section 9.02.

“General Services” has the meaning set forth in Section 9.01.

“Gross Receipts” has the meaning set forth in Schedule 6.01.

“Home Date” means each date on which a Home Game is scheduled.

“Home Games” means collectively, Exhibition and Regular Season Home Games and Playoff Home Games.

“Initial Contract Year” means the period beginning on the Commencement Date through June 30, 2020.

“Joint Sponsors” has the meaning set forth in Section 7.02(b).

“Knicks” has the meaning set forth in Section 4.04(a).

“Knicks Games” has the meaning set forth in Section 4.04(a).

“League” has the meaning set forth in Recital B.

 

4

“League Rules” means (a) the NHL Constitution, (b) the NHL By-laws, (c) the governing documents of each of the NHL Entities, (d) all other existing or future rules, regulations, interpretations, memoranda, procedures, directives, policies, guidelines, positions, and resolutions of, including, without limitation, positions taken with, and agreements, covenants, representations and warranties made to, any court or governmental or quasi-governmental agency by, each of the NHL Entities, the NHL Board of Governors and the NHL Commissioner, (e) the Transaction Agreement, dated as of the date hereof, among the NHL, the Rangers and certain other parties thereto (the “Transaction Agreement”) and each Prior Consent Agreement (as defined in Transaction Agreement), (f) the Settlement Documents as defined in the Settlement Agreement dated March 23, 2009, (g) the Lender Letter Agreement (as defined in the Transaction Agreement), (h) the current and future Collective Bargaining Agreements between the NHL and the National Hockey League Players’ Association and between the NHL and the National Hockey League Officials’ Association and all other agreements, consent agreements, decrees, cooperation agreements and settlement agreements presently or hereafter in effect or entered into between or among any NHL Entity or Entities, on the one hand, and the NHL member clubs generally, on the other hand, or any NHL Entity or Entities and/or the NHL member clubs generally, on the one hand, and other persons, on the other hand, in furtherance of the NHL’s (or any other NHL Entity’s) business or interests or as otherwise authorized, directly or indirectly, by the NHL Board of Governors, the NHL Commissioner, the applicable NHL Entity, the NHL Constitution or the NHL By-laws and (i) the NHL Commissioner’s interpretation of, opinions concerning, and the custom and practice under, any of the foregoing, all as may be amended from time to time.

“License Fee” has the meaning set forth in Section 3.01.

“Licensor” has the meaning set forth in the preamble.

“Licensor Default” has the meaning set forth in Section 18.01.

“Licensor Promotion” has the meaning set forth in Section 10.01(a).

“Licensor Services” means, collectively, General Services and Game Day Services.

“Madison Club” has the meaning set forth in Section 5.03(d).

“Maximum Credit or Refund” has the meaning set forth in Section 15.02.

“MSG Sports” means MSG Sports, LLC, the parent company of the Rangers and the Knicks.

“NHL” has the meaning set forth in Recital B.

“NHL Entities” means the NHL, NHL Enterprises, L.P., NHL Enterprises Canada, L.P., NHL Enterprises, Inc., National Hockey League Enterprises Canada, Inc., NHL Enterprises B.V., Intra-Continental Ensurers, Limited, NHL Interactive CyberEnterprises, LLC, NHL Network US, L.P., NHL Network US, Inc., NHL WCH 16, LP, NHL WCH 16, Inc., NHL WCH 16 Canada Holdco, Inc., NHL WCH 16 US, LP, NHL WCH 16 US GP, LLC, NHL WCH 16 US Holdco, LLC, NHL China Holdings, LLC, any entity that may be formed by the NHL member clubs generally after the date of this Agreement (but excluding the NHL member clubs), and each of their respective subsidiaries and other present or future affiliates.

 

5

“Net Profits” has the meaning set forth in Schedule 6.01.

“No Fault Occurrence” has the meaning set forth in Section 18.03.

“Non-Auditing Party” has the meaning set forth in Section 20.17.

“Non-Team Merchandise” means all programs, other publications, and merchandise other than Team Merchandise.

“Other Arena Event” has the meaning set forth in Section 4.04(c).

“Other Rangers Event” has the meaning set forth in Section 4.04(b).

“Party” or “Parties” has the meaning set forth in the preamble.

“Person” means any individual, corporation, company, voluntary association, partnership, incorporated organization, trust, limited liability company, or any other entity or organization.

“Playoff Home Games” means games played after the end of the League’s regular season as part of its championship tournament, for which the Team must qualify based on its regular season record, where the Team (and not the opposing team) has the right to designate the location of such game or which is considered one of the Team’s home games by the League for purposes of League Rules or scheduling.

“Property Tax Exemption” has the meaning set forth in Section 16.01.

“Property Tax Exemption Agreement” has the meaning set forth in Section 16.01.

“Rangers” has the meaning set forth in the preamble.

“Rangers Default” has the meaning set forth in Section 17.01.

“Rangers Event” means Home Games and Other Rangers Events.

“Rangers Misuse” has the meaning set forth in Section 4.07.

“Rangers’ Personnel and Guests” means the personnel, guests and invitees of the Rangers (including holders of tickets of admission to the Arena, holders of press and media credentials, and visiting team personnel).

“Rangers’ Promotional Use” has the meaning set forth in Section 10.01(d).

“Representatives” has the meaning set forth in Section 20.09.

“Rinkside Advertising” has the meaning set forth in Section 7.01.

“Standard” means, with respect to the applicable requirement, obligation or matter, (a) in compliance with applicable law, (b) in compliance with League Rules and (c) at a first-class level equal to or better than that at which NHL arenas in major U.S. markets are then operated,

 

6

maintained and improved for NHL games (in the case of improvements, taking into reasonable consideration the age and location of the Arena and its existing structural limitations), and in no event less than the highest standard of quality and manner in which the Arena (i) was operated, maintained and improved historically (post 2011 - 2013 transformation) with respect to Home Games and (ii) will be operated, maintained and improved for Other Arena Events.

“Suite 200” has the meaning set forth in Section 5.03(h).

“Suites” shall mean the premium locations within the Arena currently designated as “Event Level Suites,” “Madison Level Suites” and “Signature Level Suites” as more specifically described in Schedule 4.01, and any replacement suites in those locations.

“Team” has the meaning set forth in Recital B.

“Team Areas” has the meaning set forth in Schedule 4.01.

“Team Merchandise” means merchandise (including programs and other publications) that bears the Team’s name, logo(s), or other intellectual property relating to the Team, or any other League intellectual property, including any merchandise relating to or depicting (as the case may be) the League and/or any of its teams, players, and/or events (e.g., the NHL All-Star Game, the Stanley Cup Playoffs, the NHL Winter Classic), or the logo(s) of any of the foregoing.

“Team Merchandise Allocation” has the meaning set forth in Section 6.02(d).

“Term” has the meaning set forth in Section 2.01.

“The Loft” has the meaning set forth in Section 5.03(d).

“Ticket” or “Tickets” has the meaning set forth in Section 5.01.

“Ticket Agent” has the meaning set forth in Section 5.06(a).

“Ticket Agent Agreement” has the meaning set forth in Section 5.06(a).

“Untenantable Condition” means a condition of the Arena that occurs on account of a Casualty or Condemnation and, as a result of which League Rules or applicable law prohibit the playing of Home Games at the Arena or would entail denial of access to or loss of a material portion of (i) the general seating areas of the Arena or (ii) revenues of the Rangers derived from the Arena.

“VIP Club Services” has the meaning set forth in Section 9.03.

“VIP Clubs” has the meaning set forth in Section 9.03.

“Work Stoppage” has the meaning set forth in Section 15.01.

 

7

ARTICLE II

TERM

Section 2.01    Term; Commencement Date. The term of this Agreement shall commence on             , 2020 (the “Commencement Date”) and, unless earlier terminated in accordance with the terms of this Agreement, shall end on June 30, 2055 (the “Term”).

ARTICLE III

LICENSE FEE

Section 3.01    License Fee. The Rangers shall pay to Licensor a license fee, without any right of offset, reduction or abatement (except as expressly provided in this Agreement), as follows: (a) for the Initial Contract Year, a prorated amount equal to $16,200,000 divided by forty-four (44), multiplied by the number of Exhibition and Regular Season Home games scheduled to be played in the Arena in the Initial Contract Year; (b) for the First Full Contract Year, $16,686,000; and (c) for each subsequent Contract Year, 103% of the license fee for the immediately preceding Contract Year (the “License Fee”).

Section 3.02    Payment of License Fee. For each Contract Year, the Rangers shall pay the License Fee in twelve (12) equal installments on the first business day of each month during the Contract Year, except that the License Fee for the Initial Contract Year shall be paid in equal monthly installments on the first business day of the month following the Commencement Date and the first business day of each remaining month in the Initial Contract Year.

ARTICLE IV

USE OF ARENA

Section 4.01    Arena Areas. The Arena includes the areas identified on Schedule 4.01 attached hereto. The Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment thereto. The Parties acknowledge and agree that the precise locations, square footage, appearance and amenities of the Common Areas and Team Areas set forth therein shall be subject to change from time to time during the Term in accordance with Section 4.05.

Section 4.02    Rangers Use. Licensor hereby grants to the Rangers and the Rangers’ Personnel and Guests, and the Rangers hereby accept from Licensor, for itself and the Rangers’ Personnel and Guests, a license to use the Arena as follows:

(a)    Common Areas and Team Areas. Subject to League Rules, on each Home Date, beginning at approximately 10:00 a.m., until two (2) hours after the completion of such Home Game, the Rangers shall have the exclusive right and license to use the Common Areas and the Team Areas for the purpose of playing of Home Games and conducting related activities, and the presentation thereof by any and all means, live and over radio and television and all other means of communication now existing and hereafter developed, and such other uses expressly

 

8

permitted in this Agreement or as may be agreed to by the Parties. Notwithstanding the foregoing start time, Licensor may schedule Other Arena Events (as defined below) on Home Dates (each, a “Shared Date”) in accordance with Section 4.04(c); provided that in no event shall the Rangers have exclusive access to the Common Areas and Team Areas any later than three (3) hours prior to the start of any Home Game. Licensor shall reimburse the Rangers for any costs incurred by the Rangers solely as a result of a Home Game occurring on a Shared Date (e.g., visiting team relocating a morning skate).    In addition, the Rangers shall have reasonable access, on a non-exclusive basis, to the Common Areas and the Team Areas for purposes related to the business or hockey operations of the Rangers at reasonable times on days that are not Home Dates and during periods on Home Dates other than those specified above (but in no case during ticketed Other Arena Events (as defined in Section 4.04(c) below)), provided the Rangers’ use of the Common Areas may not unreasonably interfere with any use by Licensor or authorized use by its other licensees (including the Knicks).

(b)    Access. All rights and licenses set forth in this Section 4.02 include in favor of the Rangers and the Rangers Personnel and Guests (including holders of tickets of admission to the Arena, holders of press and media credentials, and visiting team personnel), subject to the Arena’s safety and security protocols as provided in Section 4.06(b), (i) rights and licenses of entry, ingress and egress over and across all applicable portions of the Arena, and (ii) the right and license to bring into the Arena (and to permit the Rangers Personnel and Guests into the Arena), and retain ownership and control of, items of personal property and equipment.

(c)    Grant of License. This Agreement is intended to, and shall be construed as, a grant of a license by Licensor to the Rangers and the Rangers Personnel and Guests, and shall not operate to vest in the Rangers any ownership or leasehold interest, or other real estate interest, in the Arena or the property of Licensor, whether real or personal, tangible or intangible, or any use or possessory rights other than those rights expressly granted by the license hereunder (and then subject to and in accordance with all of the provisions of this Agreement).

Section 4.03    Licensor’s Right of Entry. Notwithstanding the provisions of Section 4.02, but subject to League Rules, Licensor and its agents and representatives shall have the right to enter into and upon any and all parts of the Arena, including the Team Areas and the Common Areas, as necessary for the purpose of carrying out its obligations under this Agreement, to operate the Arena, to perform necessary safety, security and maintenance activities and for other purposes that do not unreasonably interfere with the Rangers’ rights hereunder.

Section 4.04    Scheduling.

(a)    Team Games. The scheduling procedure for Home Games shall continue in a manner consistent with past practice, subject to, and at all times in accordance with, League Rules. It is understood between the Parties that Licensor is entering into a simultaneous license with New York Knicks, LLC (the “Knicks”), on behalf of the professional basketball team known as the New York Knicks, to host basketball games (“Knicks Games”) in the Arena. The Parties will continue to cooperate with each other in good faith recognizing that Licensor has obligations to the Knicks. Consistent with past practice, Licensor will jointly coordinate with the League and the National Basketball Association in scheduling Home Games and Knicks Games. In addition, each Party shall (i) use reasonable efforts to avoid material business impacts on the other Party

 

9

where such Party has the ability to do so and (ii) reasonably cooperate and honor requests for changes to previously scheduled or held dates. For the avoidance of doubt, in the event of any conflict between any of the foregoing and League Rules, League Rules shall control and govern.

(b)    Other Rangers Events and Usage.

(i) Subject to the terms of this subsection, the Rangers shall be entitled to license the Arena without payment of an incremental license fee on up to two (2) occasions per Contract Year, to present certain Team-related events other than Home Games (e.g., open practices, ticket sales events, season subscriber events and similar functions as mutually agreed) (each, an “Other Rangers Event”). Dates for Other Rangers Events may be reserved no earlier than forty-five (45) days in advance of the proposed event and such reservations shall be subject to any dates previously booked by Licensor for Other Arena Events.

(ii) The Rangers may use such Team Areas and Common Areas, and Licensor shall provide such Licensor Services (for which Game-Day Services the Rangers shall pay or reimburse Licensor as provided herein), as are reasonably necessary or requested by the Rangers for such Other Rangers Events. Other Rangers Events shall be subject to other terms and conditions to be negotiated by the Parties. Unless the Parties agree otherwise with respect to a particular event, all terms of this Agreement applicable to Home Games will apply to Other Rangers Events.

(iii) At the Rangers’ request, Licensor may, in its discretion, license the Arena and/or other Licensor-owned venues (e.g., Beacon Theater, Radio City, Tao) to the Rangers to the extent available and without payment of an incremental license fee (the Rangers shall pay any expenses). Such events may be in addition to Other Rangers Events.

(c)    Other Arena Events. Subject to Section 4.04(a), Licensor shall be entitled to schedule Knicks Games, other sporting events, concerts, and any other types of events in the Arena (each, an “Other Arena Event”), including, for the avoidance of doubt, on the same day as a Home Game; provided that: (i) no Other Arena Event shall relieve Licensor of its obligations hereunder, including to deliver the Common Areas and Team Areas to the Rangers in the condition required by ARTICLE IX by or before the times required in Section 4.02(a), and (ii) no Other Arena Event shall be scheduled if it could reasonably be expected to materially interfere with the presentation, use or operation of the Arena for any previously scheduled Rangers Events (or the revenues derived by the Rangers therefrom).

Section 4.05    Alterations.

(a)    Rangers Alterations. During the Term, the Rangers may request that Licensor make alterations to the Team Areas and/or Common Areas. Licensor shall make those alterations to the extent necessary to comply with its obligations under this Agreement, at Licensor’s sole cost and expense. To the extent those alterations are not necessary for Licensor to comply with its obligations under this Agreement, those alterations shall be subject to the approval of Licensor, such approval not to be unreasonably withheld, conditioned or delayed, and shall be made at the Rangers’ sole cost and expense (subject to the Rangers’ approval of Licensor’s plans and costs);

 

10

it being understood that Licensor may deny its approval if it reasonably determines that such alterations would materially adversely impact Licensor or any third party who regularly uses the space (e.g., the Knicks).

(b)    Licensor Alterations.

 

(i)

Licensor shall have the right to make alterations or other changes to the Arena, in its sole discretion and at its sole cost and expense; provided that Licensor shall be required to obtain the prior written consent (not to be unreasonably withheld, conditioned or delayed) of the Rangers to the extent that any such alterations or changes could reasonably be expected to impact the Rangers’ rights or obligations hereunder, or the presentation, set-up, use or operation of the Arena for any Rangers Event.

 

(ii)

Without limiting ARTICLE IX, Licensor shall be responsible for making alterations, upgrades, modifications and improvements to the Arena (and the components thereof) at Licensor’s sole cost and expense (subject to Section 4.05(c)), as may be required from time to time in order to maintain the Arena in accordance with the Standard.

 

(iii)

Alterations intended to generate additional premium seating revenues for both Licensor and the Rangers shall be governed by the terms of Section 5.04.

(c)    Alterations Pursuant to League Rules. Notwithstanding anything to the contrary contained in this Agreement, any alterations, upgrades, modifications or improvements to the Arena that are made solely to comply with any new or amended League Rules that are enacted after the Commencement Date shall be made at the Rangers’ sole expense.

The Parties shall cooperate in good faith to agree on the plans and specifications for alterations made under Sections 4.05(a) – (c) and the time period during which such alterations are expected to be made. All such alterations shall (i) be made by Licensor or its contractors, (ii) comply with all applicable laws, ordinances, orders, regulations and League Rules, (iii) be completed in a good and workmanlike manner, using new materials or their equivalent, without unreasonable delay, (iv) not interfere with gameplay in accordance with League Rules and (v) not materially interfere with the presentation, set-up, use or operation of the Arena for any Rangers Event (or the revenues derived by the Rangers therefrom), without the Rangers’ prior written approval.

Section 4.06    Manner of the Rangers’ Use. At all times during the Term:

(a)    The Rangers shall use the Arena in accordance with all League Rules and applicable laws, ordinances, and regulations. Licensor shall operate the Arena in accordance with all League Rules, applicable laws, ordinances, and regulations. [*****]

(b)    The Rangers and their guests, invitees, patrons, and designees shall be subject to any reasonable and nondiscriminatory rules and regulations and security procedures that Licensor imposes on the use of the Arena, so long as the same (i) are not inconsistent with the other

 

11

provisions of this Agreement (including Licensor’s requirement to maintain and operate the Arena in accordance with the Standard) or League Rules, and (ii) are uniformly applied to all other occupants and users of the Arena except to the extent necessitated by differing particular event types.

(c)    Each Party shall, at any time and from time to time, upon not less than ten (10) days prior written request from the other Party, execute, acknowledge and deliver to the requesting Party, in a form reasonably satisfactory to the requesting Party and, if applicable, its existing or prospective direct or indirect lender or purchaser, a written estoppel statement certifying, (i) that this Agreement is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications), (ii) if true (or, if not entirely true, listing any exceptions), that the requesting Party is not in default hereunder, (iii) the date to which the License Fee and other charges have been paid in advance, if any, and (iv) such other accurate certifications as may reasonably be required by the requesting Party or its existing or prospective direct or indirect lender or purchaser, and agreeing to give copies to the requesting Party’s existing or prospective direct or indirect lender or purchaser of all material notices by the stating Party to the requesting Party, and agreeing to afford the requesting Party’s existing or prospective direct or indirect lender or purchaser an opportunity to cure any default of the stating Party within the applicable cure period afforded to the requesting Party hereunder. It is intended that any such statement delivered pursuant to this subsection may be relied upon by any prospective direct or indirect lender to or purchaser of the Rangers or of the Arena and their respective successors and assigns.

Section 4.07    Rangers Misuse. The Rangers shall promptly reimburse Licensor for costs of cleaning, repairs or replacements, net of insurance proceeds received under Article XIV, necessitated by (a) uses by the Rangers not permitted under this Agreement, or (b) grossly negligent, reckless or willful acts of the Rangers or visiting NHL teams for Rangers Events that cause such damage (collectively, “Rangers Misuse”).

Section 4.08    Surrender. Upon the expiration of the Term or earlier termination of this Agreement, the Rangers shall promptly vacate the Arena under the direction of and in the manner reasonably approved by Licensor, and shall surrender all of its keys, access cards, and other credentials and access items for the Arena to Licensor, and shall inform Licensor of all combinations on all of its locks, safes, and vaults, if any, in the Arena. Without limiting the foregoing, the Rangers shall not remove any alterations, improvements, or other property (other than personal property not affixed or attached to the Arena or any elements thereof) from the Arena unless permitted to do so by Licensor, and the Rangers shall promptly reimburse Licensor for the cost of repairing any damage caused by such removal. Any personal property of the Rangers which remains in the Arena after the expiration of the Term or earlier termination of this Agreement may, at the option of Licensor, be deemed to have been abandoned, and, in Licensor’s sole discretion, (a) may be retained by Licensor as its property, (b) shall be disposed of by the Rangers at the request of Licensor, or (c) may be disposed of by Licensor.

 

12

ARTICLE V

TICKETS, SUITES AND CLUBS

Section 5.01    Prices. As between Licensor and the Rangers, (a) the Rangers shall have sole discretion to control the manifest and determine the prices and fees (subject to Section 5.06(a)) for all tickets and other indicia authorizing admission (each a “Ticket”) for general admission seating, standing room and other general admission spectator positions in the Arena for all Rangers Events, and (b) except as provided below, Licensor shall have sole discretion to control the manifest and determine the license fees to be paid for the Suites, The Loft, the Madison Club and similar premium spaces developed in accordance with Section 5.03 and Section 5.04 during the Term. There shall be no limit on the number of complimentary Tickets the Rangers may issue.

Section 5.02    Ticket Revenues.

(a)    Ticket Sales. The Rangers shall have the exclusive right to sell and resell all Tickets and retain all revenues from all Ticket sales and resales, including the Facility Ticket Fee (as defined in Section 5.02(c)), the Rangers’ share of any Convenience Fee (as defined in Section 5.06(a)), and any personal seat licenses the Rangers may elect to sell, provided, that the Rangers right to sell personal seat licenses shall be limited to Rangers Events only (and no Other Arena Events) and provided further, that any “form” agreement for the sale or licensing of personal seat licenses shall be subject to Licensor’s prior approval, not to be unreasonably withheld, conditioned or delayed, and the Rangers shall not make any material alterations to such form agreement that adversely impact Licensor without Licensor’s prior written approval, not to be unreasonably withheld, conditioned or delayed.

(b)    Loaded-Value Tickets. To the extent that the Rangers offer a ticket product with which the ticketholder is entitled to gratis Concessions in addition to seating to a Home Game, Licensor shall provide such Concessions and the Rangers shall remit to Licensor the actual retail value of any Concessions redeemed by each such ticketholder, which revenue will be included in Team Merchandise revenue (to the extent that the sale/redemption relates to Team Merchandise) or F&B Concessions Gross Receipts, as applicable. To the extent that the sale/redemption relates to Non-Team Merchandise, Licensor shall retain all such redeemed amounts. For purposes of clarity, any revenue associated with loaded-value tickets that is not redeemed for Concessions shall remain the property of the Rangers.

(c)    Facility Ticket Fee. [*****] shall charge to all primary Home Game Ticket purchasers a per-Ticket facility fee (the “Facility Ticket Fee”), in an amount determined from time to time by Licensor following consultation with the Rangers. [*****]

Section 5.03    Suites; Madison Club; The Loft.

(a)    Suites. Subject to other provisions of this Section 5.03, Licensor shall have the exclusive right to license Suites to third parties for all or a portion of Rangers Events and Other Arena Events and collect license fees for the privilege of using the Suites and related amenities. Licensor shall be responsible for all costs of licensing, operating, servicing and maintaining the Suites in accordance with the Standard. Revenues generated from the licensing of Suites shall be

 

13

allocated as set forth in Section 5.03(b). All of the terms and conditions of such licenses and appurtenant Arena admission tickets and other rights and obligations related to the occupancy of Suites shall be governed by separate agreements (each, a “Suite Agreement”) entered into between Licensor and the licensees of Suites. Licensor’s “form” Suite Agreements shall be subject to the prior written approval of the Rangers (not to be unreasonably withheld, conditioned or delayed), and Licensor shall not make any material alterations to the form Suite Agreements or any executed Suite Agreement that adversely impact the Rangers without the Rangers’ prior written approval, not to be unreasonably withheld, conditioned or delayed.

(b)    Suites Revenue.

 

(i)

All-Event Suites. For Suites licensed for all or substantially all Arena events including Home Games (other than certain major Other Arena Events, including All-Star Games, awards shows, major college championship events, etc.), including those sold on a half-share, quarter-share or other fractional portion basis, the Rangers shall receive [*****]% of all revenues collected or received by Licensor from the sale of such Suites (the “Rangers Suites Revenue Share”), net of contracted catering credits (if any), taxes and credit card fees, and Licensor shall retain the remaining amounts, except as provided in Section 5.03(g) and 6.01(a) [*****]. In the event of a No Fault Occurrence, the Rangers Suites Revenue Share shall be increased to [*****]%.

 

(ii)

Team-Only and Single Game Suites. The Rangers shall receive all revenues collected or received by Licensor from the sale of Suites licensed only for individual or packages of Home Games and/or other Rangers Events, net of the retail value of food and beverage packages included in the license fee (“Included F&B Packages”), contracted catering credits (if any), taxes and credit card fees, less a Licensor commission of [*****]% of such net revenue (provided that, in the event of a No Fault Occurrence, the Parties will agree on an appropriate reduction to such commission to account for any reduction in the additional amount that would have been payable to the Rangers under the last sentence of Section 5.03(b)(i) if all Suites were sold for all Arena events).

 

(iii)

Custom Team and Non-Team Suite Packages. For customized Suite packages (i.e., a pre-determined mix of events that include Rangers Events and Other Arena Events), revenues shall be proportionally allocated to each event included in such package based on the then-applicable rate card for the included events. The Rangers shall receive all revenues collected or received by Licensor attributable to the Rangers Events included in such package, net of Included F&B Packages, contracted catering credits (if any), taxes and credit card fees, to the extent used during Rangers Events, less a Licensor commission of [*****]% of such net revenue as so allocated (provided that, in the event of a No Fault Occurrence, the Parties will agree on an appropriate reduction to such commission to account for any reduction in the additional amount that would have been payable to the Rangers under the last sentence of Section 5.03(b)(i) if all Suites were sold for all Arena events).

 

14

(iv)

Suite Passes for Rangers Events. Notwithstanding the foregoing, all revenues from the sale or license of passes for incremental admission to Suites for Rangers Events (commonly known as “suite passes”), net of taxes and credit card fees, shall be retained by the Rangers. The parties shall agree on the terms and pricing of such suite passes, which shall be sold by Licensor.

 

(v)

Catering Credits. Any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of a Suite license shall be included in Catering Gross Receipts as and to the extent used during Rangers Events. Any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of a (x) single-game or Team-only package or (y) customized Suite package including Rangers Events and Other Arena Events (as described in Section 5.03(b)(iii)) shall be subject to the prior written approval of the Rangers, such approval not to be unreasonably withheld, conditioned or delayed. With respect to any contracted catering credits or Included F&B Packages granted to a Suite licensee as part of any suite package containing a mix of Team and non-Team events, Licensor shall ensure that such contracted catering credits or Included F&B Packages have the same terms and conditions, at the Suite licensee’s discretion, at both Team Events and Other Arena Events.

(c)    Suite 16. The Rangers acknowledge that Suite 16 on the tenth floor of the Arena is currently licensed to the TAO Group, in which Licensor’s parent company has a majority ownership interest. The Rangers agree that notwithstanding Licensor’s ownership interest in the TAO Group, the Rangers’ share of the license revenue for this suite shall be calculated based on the fees paid or payable to Licensor by the TAO Group, and not with respect to any membership or other revenue or income generated by the TAO Group, provided that such fees are established and maintained on an arms-length basis (it being acknowledged that the fee payable by the TAO Group to Licensor for the twelve-month period ended June 30, 2019 is arms-length for purposes of this Section 5.03(c)).

(d)    The Madison Club and The Loft.

 

(i)

Certain clients will pay Licensor membership fees that entitle them to access (a) the 170-seat defined hospitality and seating space on the west side of the Arena currently known as the “Madison Club” during all Home Games and all Knicks Games, boxing, tennis, and NCAA college basketball events at the Arena (the “Madison Club”); and/or (b) the 48-seat defined hospitality and seating space on the east side of the Arena currently known as “The Loft at Madison Square Garden” during all Arena events including Home Games (other than certain major Other Arena Events, including All-Star Games, awards shows, major college championship events, etc.) (“The Loft”).

 

15

(ii)

Licensor shall be responsible for selling and servicing Madison Club and Loft memberships and operating, maintaining and servicing the Madison Club and The Loft in accordance with the Standard. The Rangers shall receive [*****]% of all revenues collected or received by Licensor from the sale of memberships to the Madison Club and The Loft, net of taxes and credit card fees (the “Rangers Hospitality Share”). The Rangers shall reimburse Licensor for (a) the direct cost of providing complimentary food and beverage, and (b) the cost of other direct event variable labor (e.g., concierge, coat check, etc.), other than labor related to Concessions that are sold, attributable to the Madison Club and The Loft for Home Games, in each case under (a) and (b), which costs shall be consistent for all events and on a basis as determined in consultation with the Rangers. Schedule 5.03(d) sets forth the staffing levels for the Madison Club and The Loft as of the 2019-20 Season (which takes into account the services provided for the Madison Club and The Loft as of the 2019-20 Season). For all Home Games and similar (based on factors including expected attendance) Other Arena Events, Licensor shall maintain substantially similar levels of service and staffing (as set forth on Schedule 5.03(d)), provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing and accommodate the other’s reasonable requests for adjustment thereto. In the event of a No Fault Occurrence, the Rangers Hospitality Share shall be increased to [*****]%.

 

(iii)

To the extent that Licensor sells specialized packages that are different from those referenced in Sections 5.03(d)(i)-(ii) above, the parties shall coordinate and agree on appropriate pricing, revenue share and/or commissions. To the extent that Licensor provides members of the Madison Club and/or The Loft with limited amount of gratis Concessions (e.g., through a loaded ticket) (“Gratis Concessions”), the Parties shall coordinate and mutually agree on appropriate terms, costs and revenue allocations for such Gratis Concessions.

 

(iv)

All of the terms and conditions of the sale of such memberships shall be governed by separate agreements (the “Hospitality Agreements”) entered into between Licensor and the members of the Madison Club and The Loft. Licensor’s “form” Hospitality Agreements shall be subject to the prior written approval of the Rangers (not to be unreasonably withheld, conditioned or delayed) and Licensor shall not make any alterations to such form Hospitality Agreement or any executed Hospitality Agreement that materially adversely impact the Rangers without the Rangers’ prior written approval, not to be unreasonably delayed or withheld.

(e)     Sales by the Rangers. Licensor may from time to time authorize the Rangers to attempt to license or sell on Licensor’s behalf the Suites or memberships referred to in this Section 5.03. For purposes of clarity, the Parties agree that the revenue sharing referred to in this Section 5.03 shall apply whether the license or sale is consummated by Licensor, Rangers or MSG Sports’ employees; provided that, if the license or sale is of Team-only or single game Suites (as described

 

16

in Section 5.03(b)(ii)) or custom Team and non-Team Suite packages (as described in Section 5.03(b)(iii)) and is consummated by the Rangers or MSG Sports, Licensor’s commission on such license or sale shall be [*****]% of the applicable net revenue.

(f)    Settlement. Licensor shall remit to the Rangers on a monthly basis a cash payment equal to the Rangers’ share of revenues collected or received for the Suites, the Madison Club, The Loft (and any similar premium spaces developed during the Term in accordance with Section 5.04), in each case, in accordance with Section 9.06. To the extent that Licensor receives value in kind as payment for the sale of licenses or memberships to the Suites, the Madison Club or The Lofts, Licensor shall pay to the Rangers an amount based on the rate card value of such license or membership (e.g., if Licensor receives value in kind as full payment for an all-Event Suite, Licensor shall pay the Rangers the Rangers Hospitality Share of the rate card value of such Suite license). Licensor shall be responsible for the payment of all taxes and credit card fees with respect to all sales made by Licensor or its agents pursuant to this Agreement.

(g)    Complimentary Suites and Usage.

 

(i)

The Rangers shall have the right to use without payment of a license fee one (1) Event Level Suite or a comparable suite product for each Rangers Event. Licensor shall determine the location of such Suite based on availability and sales levels and prospects, provided that the Rangers shall initially be permitted to use what is currently designated Event Level Suite 20.

 

(ii)

The Rangers may not license to third parties the Suite or associated tickets referred to in subsection (i), provided that it may request Licensor to attempt to license or sell such Suite or associated tickets for a particular Home Game or Home Games and/or Other Rangers Events. Any resulting revenue, net of Included F&B Packages, contracted catering credits (if any), taxes and credit card fees, will be shared by Licensor and the Rangers as if it were a single-game suite license pursuant to Section 5.03(b)(ii). Licensor may use or license such Suite or associated tickets for Other Arena Events without payment to the Rangers of the revenue share otherwise attributable to the license of Suites set forth in Section 5.03(b).

 

(iii)

Upon request by the Rangers, and subject to availability, Licensor shall make available, at no cost, one (1) Madison-level or Signature-level Suite on a Home Game by Home Game basis solely for use by visiting team owners, executives and their guests.

 

(iv)

Licensor shall have the right to use one (1) Event Level Suite for all Rangers Events and Other Arena Events without payment to the Rangers of the revenue share otherwise attributable to the license of Suites set forth in Section 5.03(b). Notwithstanding the foregoing, to the extent Licensor decides to license such Event Level Suite in whole or in part to a third party and receives a license fee therefor, the Rangers shall receive their applicable revenue share (if any) as provided in Section 5.03(b).

 

17

(v)

Unsold Suite, Madison Club and Loft Inventory. Suites and associated tickets related to the Suites, the Madison Club and the Loft that are not licensed or sold for Home Games may be used by Licensor for prospecting for Suite, Madison Club and Loft licensees. Additional unsold Suite, Madison Club and Loft inventory may be used to provide for complimentary attendance by employees of the Rangers, Licensor and their respective Affiliates or for other business relationships in accordance with each company’s complimentary ticket program. The Parties shall mutually determine how to allocate unsold suite inventory between the Parties, provided, that if the Parties cannot agree, [*****] of such inventory shall be available to the Rangers for such purposes and [*****] of such inventory shall be retained by Licensor for such purposes. In no event may the unused Suites or associated tickets related to Suites, Madison Club or Loft allocated under this Section 5.03(g)(v) be licensed or sold by either Party, without the consent of the other Party (not to be unreasonably withheld, conditioned or delayed), in which case the Rangers shall receive their applicable revenue share as provided in Sections 5.03(b) or 5.03(d).

(h)    Suite 200. Licensor shall maintain the executive lounge currently designated “Suite 200” (or a private hospitality area of substantially similar size offering substantially similar amenities, in the same or a different location in the Arena) for the use of senior executives and their invited guests (“Suite 200”). The Rangers shall have access to Suite 200 during Home Games in a manner consistent with past practice and shall bear or reimburse Licensor for all out-of-pocket costs associated with operating Suite 200 for Home Games. Any annual increase to the aggregate costs charged to the Rangers for operating Suite 200 shall not exceed [*****]% without the Rangers prior written approval, not to be unreasonably withheld, conditioned or delayed. The Rangers agree that senior executives of Licensor and their invited guests shall have complimentary access to Suite 200 during Home Games on the same basis as senior executives of the Rangers and their invited guests.

Section 5.04    Future Ticket and Premium Products.

(a)    Licensor, after consultation with and receipt of prior written approval from the Rangers (such approval not to be unreasonably withheld, conditioned or delayed), may develop after the Commencement Date new seating products where the ticket purchaser has the option to purchase seats for multiple event types (e.g., Home Games and Other Arena Events). If the Rangers approve such new seating products, the Rangers shall provide the required ticket inventory, and Licensor shall provide applicable amenities, at prices and other economic terms and splits to be negotiated and agreed upon by the Parties.

(b)    Licensor, after consultation with and receipt of prior written approval from the Rangers, such approval not to be unreasonably withheld, conditioned or delayed, may develop after the Commencement Date new suites and/or seating products (e.g., new or altered premium spaces) where amenities additional to admission are provided to the ticket purchaser, licensor or member. In such event, allocation of capital and operating expenses, revenues and obligations shall be determined in a manner to be agreed upon.

 

18

Section 5.05    Box Office; Ticket Printing; In-Arena Ticket Sales.

(a)    Box Office Operations. If Licensor generally operates a box office (including will call support) for Other Arena Events, Licensor will also operate a box office (including will call support) during reasonable business hours, and for all Rangers Events commencing at the earlier of (i) noon and (ii) the opening of the Arena doors for the applicable Rangers Events and ending no earlier than the commencement of the third period of the Rangers Events, and shall provide substantially equivalent service and staffing, with respect to the sale of tickets for Home Games and Other Rangers Events as to Other Arena Events all in a manner consistent with past practice, provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing, sales strategies and priorities and accommodate the other’s reasonable requests for adjustment thereto. At the Rangers’ request, Licensor shall share with the Rangers all Customer Data (as defined in Section 10.03) relating to the Rangers that is generated through box office operations.

(b)    Full and Partial Season Ticket Packages. If requested by the Rangers, and for so long as Licensor is generally printing tickets for Other Arena Events, Licensor shall coordinate, at the Rangers’ reasonable direction, cost and expense, the printing of Tickets for full and partial season packages. The Rangers shall sell, invoice and collect all revenues from such Ticket packages, in its sole discretion. The Rangers shall be responsible for all credit card fees and other similar charges in connection with the sale of such Tickets. The Rangers shall develop any and all creative content to be included on such Tickets printed by Licensor at the Rangers’ request.

(c)    Group Ticket Packages. If requested by the Rangers, and for so long as Licensor is generally printing tickets for Other Arena Events, Licensor shall coordinate, at the Rangers’ reasonable direction, cost and expense, the printing of Tickets for group packages. The Rangers shall sell, invoice and collect all revenues from such Ticket packages, in its sole discretion. The Rangers shall be responsible for all credit card fees and other similar charges in connection with the sale of such Tickets. The Rangers shall develop any and all creative content to be included on such Tickets printed by Licensor at the Rangers’ request.

(d)    In-Arena Ticket Sales. During Rangers Events, the Rangers shall be permitted to have tables and kiosks on the concourse for the sole purpose of selling season (including partial) ticket and group ticket packages for the Rangers and its Affiliates. The placement of such tables and kiosks shall be reasonably determined by Licensor consistent with past practice.

Section 5.06    Ticket Agent.

(a)    Ticket Agent Agreements. The Rangers shall be required to utilize and comply with the current primary and secondary ticket provider agreement(s) with Licensor’s ticket agent (the “Ticket Agent”), and any amendment, modification or replacement of the same in accordance with Section 5.06(b), (the “Ticket Agent Agreements”) for applicable Ticket transactions for Home Games and any Other Rangers Events to which tickets are sold. It is understood that a portion of any upfront or annual fees received by Licensor from the Ticket Agent during the Term shall be allocated to the Rangers on a pro rata basis on equitable terms (e.g., based on projected ticket sales for the businesses covered by the Ticket Agent Agreements). [*****]

 

19

(b)    Amended or Replacement Ticket Agent Agreements. Licensor shall have the right to negotiate and administer any amendments to the current Ticket Agent Agreements or any replacement ticket provider agreement with a third party, provided that, (i) any portion of such amendment or replacement agreement that relates to the Rangers or Rangers Events or (ii) any renewal or extension of the current Ticket Agent Agreements or any replacement ticket provider agreement, in each case, shall be subject to the prior written approval of the Rangers. If the Rangers do not grant such approval, the Rangers may enter into its own ticket provider agreement(s), provided that the Rangers or such other ticket provider shall pay all costs needed to implement such other ticketing systems at the Arena.

(c)    Access to Systems and Data. Licensor shall use commercially reasonable efforts to (i) include in its Ticket Agent Agreements an obligation to provide the Rangers with substantially similar access to relevant information about the Rangers’ customers and sales activity that resides in the Ticket Agent’s database and other system components as are provided under Licensor’s current agreement with Ticketmaster, (ii) enforce such obligation on behalf of the Rangers at the Rangers’ expense and (iii) enforce any other terms of any Ticket Agent Agreements that affect the Rangers at the Rangers’ expense; it being understood that, with respect to any agreements where the Rangers are an express party or a third party beneficiary, Licensor shall have no obligations under clauses (ii) or (iii), above.

Section 5.07    Ticket Settlement Process. Licensor shall, or shall cause Ticket Agent to, remit to the Rangers all amounts collected in connection with the sale of Tickets on a weekly basis, together with an itemized statement indicating the number and price of each Ticket sold and related fees collected.

Section 5.08    Access to Tickets.

(a)    Complimentary Tickets for Home Games. Licensor shall be afforded access to a pool of complimentary tickets for Home Games throughout the Term, on the following terms:

 

(i)

The pool shall include [*****] or other sections as the Parties may otherwise agree, it being understood that the Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment to the number and location of the “additional” complimentary tickets described in clause (y).

 

(ii)

Complimentary tickets may be used by Licensor for its and its Affiliates’ employees or other business purposes but may not be resold. If such complimentary tickets will not be used, such tickets may be sold by the Rangers and the Rangers may retain all revenue therefrom.

(b)    Pools of Tickets for Purchase. The Rangers shall be afforded access to purchase tickets from a pool of tickets for Other Arena Events, and Licensor shall be afforded access to purchase tickets from a pool of tickets for Home Games, in each case subject to availability. Such tickets may be used by the Rangers or Licensor (as applicable) for their Affiliates, employees or other business purposes but may not be resold. Each ticket pool shall also be subject to such other procedures, restraints and limitations as may be determined by the Party offering access. In both cases, the Parties shall regularly coordinate and discuss with one another and accommodate the other’s reasonable requests for adjustment to the number and locations of the tickets in the pool.

 

20

Section 5.10    Credentials and Passes. The Rangers may issue a reasonable number of passes to photo, press and media, staff, visiting teams, performers (e.g., dance teams and intermission performers), League personnel and any other Person, pursuant to the directions of the Rangers from time to time, permitting such selected persons free access to the Arena for Rangers Events and to specified areas of the Arena normally closed to the public; provided, however, that any such issuance is in accordance with League Rules, including, without limitation, the then-prevailing NHL Recommendations for Arena Security and Licensor’s Arena safety and security protocols.

Section 5.11    Admission to Arena. Licensor shall not grant any spectator admission to the Arena for any Rangers Event unless such spectator has acquired and displays a Ticket or other indicia of admission (e.g., a press or related pass) to such Rangers Event issued by Licensor or the Rangers (or, if applicable, the League) in accordance with this Agreement.

ARTICLE VI

CONCESSIONS

Section 6.01    F&B Concessions and Catering.

(a)    Licensor shall have the exclusive right and obligation to operate and manage the sale of F&B Concessions and Catering Services during all Rangers Events in a manner reasonably calculated to maximize profits but subject to providing a positive customer experience in accordance with the Standard and subject to Schedule 6.01. The Rangers shall receive [*****]% of the Net Profits (as defined in Schedule 6.01) from the sale of F&B Concessions and Catering Services attributable to Rangers Events (the “Rangers F&B Concessions and Catering Share”). To the extent Licensor directly manages and conducts the sale of such F&B Concessions and Catering Services, such sales shall be provided in accordance with Schedule 6.01. In the event of a No Fault Occurrence, the Rangers F&B Concessions and Catering Share shall be increased to [*****]%.

(b)    In the event Licensor retains a third party to provide F&B Concessions and/or Catering Services or enters into a lease, license or operating agreement for food and beverage space, in each case, in accordance with Section 6.04 the Rangers shall receive [*****]% of all amounts received by Licensor (including any annual payments, up-front payments, advances, back-end payments, earn-outs, guarantees, allowances, rebates, refunds, discounts or any other payments or revenues retained by Licensor or its Affiliate) attributable to Rangers Events from any such arrangement or agreement (the “Third Party F&B Share”); provided that, with respect to amounts received that cannot be specifically traced to a Rangers Event as opposed to an Other Arena Event, Licensor shall reasonably and fairly estimate the portion of the total amount that is attributable to Rangers Events (which estimate shall be subject to the review and approval of the Rangers, not to be unreasonably withheld, conditioned or delayed) and shall remit to the Rangers the Third Party F&B Share of the portion of such amount. In the event of a No Fault Occurrence, the Third Party F&B Share shall be increased to [*****]%.

 

21

Section 6.02    Team Merchandise.

(a)    Licensor shall have the exclusive right and obligation, at its sole cost and expense, to operate and manage the sale of Team Merchandise at the Arena (excluding collectibles and game-used items) in a manner reasonably calculated to maximize revenues, but subject to providing a positive customer experience in accordance with the Standard. Schedule 6.02 sets forth the service and staffing for the sale of Team Merchandise for Regular Season Home Games as of the 2019-20 Season. Licensor shall maintain at least substantially similar levels of service and staffing for all Home Games provided that the Parties shall regularly coordinate and discuss with one another the appropriate levels of service and staffing and accommodate the other’s reasonable requests for adjustment thereto. Notwithstanding anything herein to the contrary, as between the Parties, the Rangers shall have the exclusive right to sell and control the sale of Team Merchandise online and anywhere else (other than at the Arena) and retain all revenue therefrom.

(b)    The Rangers shall source, purchase and own all Team Merchandise it designates for sale at the Arena and consign it to Licensor for sale. Licensor shall be responsible for reasonable storage and inventory control for Team Merchandise. The Rangers shall set the pricing of Team Merchandise. Licensor, at its sole cost, shall offer and sell Team Merchandise, and provide appropriate sales staff and supervision, at points of sale in existing and replacement in-Arena stores and other locations designated or approved by the Rangers (such approval not to be unreasonably withheld, conditioned or delayed), on Home Dates and at other times pursuant to Section 6.02(d).

(c)    Licensor shall retain [*****]% of revenues, net of taxes and credit card fees, collected by Licensor from the sale of Team Merchandise sold at the Arena by or on behalf of Licensor and remit the remainder to the Rangers, provided that the Rangers shall retain all revenue from any collectibles or game-used items received pursuant to any third-party agreement (e.g., Fanatics). Licensor shall be responsible for the payment of all taxes and credit card fees with respect to all such sales.

(d)    Licensor shall dedicate to Team Merchandise designated by the Rangers a minimum of [*****]% of the display space designated by Licensor in consultation with the Rangers (the “Team Merchandise Allocation”) in the Madison Square Garden Store located in Chase Square and other subsequent stores located within the Arena that do not require an individual to have a ticket to access such store. It is understood and agreed that the Rangers and the Knicks (to the extent that they remain affiliated entities) may allocate display space to each other on an event-by-event and day-by-day basis; for the avoidance of doubt, Licensor shall not have access to more than [*****]% of the display space in the Madison Square Garden Store, except as provided in subsection (e), below.

(e)    Licensor and the Rangers agree that no Team Merchandise shall be required to be offered in such stores (or elsewhere in the Arena) while the Arena is being used for Other Arena Events.

 

22

(f)    The Parties shall regularly coordinate and discuss with one another the appropriate relative levels and locations of display space and accommodate the other’s reasonable requests for adjustment thereto.

Section 6.03    Non-Team Merchandise. Subject to Section 6.02, Licensor shall have the exclusive right to control the operation and sale of Non-Team Merchandise at the Arena at any time. Licensor shall retain all revenue from the sale of all Non-Team Merchandise. Licensor may use up to [*****]% of the display space in concourses and other ticketed areas during Home Games for the sale of Non-Team Merchandise, provided that such merchandise and the locations in which it is displayed and sold shall require the approval of the Rangers, not to be unreasonably withheld, conditioned or delayed. The Parties shall regularly coordinate and discuss with one another the appropriate relative levels and locations of display space and accommodate the other’s reasonable requests for adjustment thereto.

Section 6.04    Third-Party Contracts. Licensor shall have the right to enter into a contract or contracts with one or more third parties pursuant to which such third parties shall conduct and manage the sale of some or all Concessions and/or Catering Services, provided that Licensor shall be required to obtain the prior written approval of the Rangers, not to be unreasonably withheld, conditioned or delayed, for service providers that (i) do not or will not provide similar services during Other Arena Events or (ii) will conduct or manage the sale of a majority of F&B Concessions or Team Merchandise. Notwithstanding the foregoing, Licensor shall reasonably consult with the Rangers regarding the terms of any proposed agreement with any third party that shall conduct or manage the sale of a majority of F&B Concessions or Team Merchandise.

Section 6.05    Operation on a Fair Basis; Standard of Service. Licensor shall operate, or contract with a third party for the operation of, Concessions and/or Catering Services on a basis that is fair to both Licensor and the Rangers and equivalent for Rangers Events and Other Arena Events. The quality of the service provided for Rangers Events shall be consistent with the Standard.

Section 6.06    Settlement. Licensor shall, or shall cause any third party conducting and managing the sale of Concessions and/or Catering Services to, remit to the Rangers all amounts from the sale of Concessions and/or Catering Services that the Rangers are entitled to under this ARTICLE VI in accordance with Section 9.06.

ARTICLE VII

SIGNAGE AND SPONSORSHIPS

Section 7.01    Definitions.

“Arena Game Shared Sponsorship Assets” means Advertising (including digital and fixed signage) visible or audible inside the Arena during Home Games and Other Arena Events, but expressly excluding Team Sponsorship Assets, and Arena Naming Rights, which includes, without limitation, (a) bridge signage and entitlements, (b) vomitorium signage, (c) GardenVision

 

23

underbelly and other fixed signage and Advertising on fixtures and equipment, (d) Advertising at concession areas and on Concession Items, (e) Advertising worn or carried by concessionaire personnel or other personnel engaged in the operation of Arena events and (f) naming rights and other entitlements of the lobby, concourses, suite levels, clubs and all other spaces in the Arena. For avoidance of doubt, Arena Game Shared Sponsorship Assets shall not include any Advertising (i) outside of the building entrances to the Arena (e.g., marquee spots or signage, outdoor digital board Advertising, breezeway signage or banners, Arena rooftop signage, etc.) which is not visible or audible inside the Arena bowl and sold to be visible or audible by seated Arena patrons, which Licensor shall have the exclusive right to sell and retain all revenue from or (ii) that is a Team Sponsorship Asset, which the Rangers shall have the exclusive right to sell and retain all revenue from in accordance with Section 7.02, whether or not such Advertising may also be visible or audible inside the Arena during Other Arena Events.

“Arena Naming Rights” means the right of a sponsor to have its brand integrated into the name of the Arena, e.g., the “[*****] Madison Square Garden”.

“In-Bowl Variable Advertising” means Advertising and other visual signage appearing on, and other audio airing through or in connection with, (a) in-Arena electronic scoreboards, telescreens and any other message boards, (b) in-Arena LED Signage, (c) any part of the Arena spectator bowl through projection technology, augmented reality and/or virtual reality, and (d) Arena audio or visual public address Advertising.

“Non-Team Sponsorship Assets” means Advertising controlled by Licensor to the extent that it creates no direct association with the Team, other than Team Sponsorship Assets, Arena Naming Rights and Arena Game Shared Sponsorship Assets.

“Rinkside Advertising” means electronic, virtual, and static Advertising displayed at Rangers Events that appears inside the Arena spectator bowl on: (a) seat back sleeves and other signage within the teams’ bench areas (e.g., sports drink-branded coolers, cups, squeeze bottles, and towels); (b) on or under the ice; (c) on dasherboards and plexiglass surrounding the ice hockey rink; (d) any moving or movable items (e.g., shovels, brooms and other ice-cleaning equipment, an indoor blimp/drone, t-shirt machines, the Zamboni ice machine); (e) within the penalty box; (f) between the team benches; (g) presentation of the “Rangers Blue Crew” (or other pep squad); (h) seat back sleeves in stands that are present for Home Games or Other Rangers Events only; (i) any other Advertising provided under and subject to the NHL’s “Line of Sight Guidelines” and any other applicable League Rules; and (j) any other equipment, fixtures and items used by the Rangers in the vicinity of the ice hockey rink not already covered in the definition of Team Sponsorship Assets.

“Sponsorship Sales and Service Representation Agreement” means the agreement between Licensor’s affiliate, MSG Entertainment Group, LLC (“MSGE”) and the Rangers, entered into approximately contemporaneously herewith, whereby the Rangers authorizes MSGE to enter into sponsorship agreements that include Team Sponsorship Assets.

“Team Sponsorship Allocation Agreement” means the agreement between MSGE and MSG Sports, entered into approximately contemporaneously herewith, whereby MSG Sports agrees to deliver certain Team Sponsorship Assets in connection with certain current sponsorship agreements, and MSGE agrees to allocate and pay to the Rangers certain amounts with respect to such agreements.

 

24

“Team Sponsorship Assets” means, with respect to the Rangers or Rangers Events only (in each case, including within three (3) hours before, during and within two (2) hours after each Rangers Event), (a) Rinkside Advertising; (b) In-Bowl Variable Advertising; (c) Advertising on Team programs, schedules, yearbooks and tickets; (d) GardenVision underbelly and other fixed signage and Advertising on fixtures and equipment; (e) Advertising relating to the player introduction tunnel (connecting locker room area to rink); (f) Advertising relating to Team game day contests and promotions (e.g., bobblehead night, hat night, puck-night, etc.); (g) Advertising that has been sold specifically with respect to only the Team (e.g., temporary Arena bowl stair signage present only for Rangers Events); (h) concourse activations (i) Advertising relating to the Team and visiting team player locker rooms, training rooms and interview rooms; (j) the exhibition and promotion of products and services at the Arena (e.g., kiosks and special areas in the concourse) during Rangers Events or on any date in which a Rangers Event is scheduled to the extent pertaining to any Rangers Event (but excluding food and beverage and merchandise otherwise covered by this Agreement); (k) promotional or premium item give-aways at Rangers Events; (l) such other Advertising and sponsorship assets as currently exist or may later be developed that are Team- or Rangers Event-specific; and (m) for the avoidance of doubt, all other advertising, sponsorship and promotional activity relating to the Team that is not related to the Arena (including advertising on Team uniforms, broadcasts, websites, mobile applications and social media platforms).

Section 7.02    Team Sponsorship Assets.

(a)    Subject to subsections (b)-(e) of this Section 7.02, the Rangers shall have the exclusive right to sell and retain all revenue from, and shall be responsible for all direct out of pocket costs and expenses related to, the operation and sale of Team Sponsorship Assets, including the right to enter into category-exclusive sponsorship agreements with respect to Team Sponsorship Assets. Notwithstanding the foregoing, Licensor shall have the right to (i) alter digital signage platforms at any time (e.g., elimination of LED ring) at Licensor’s sole cost and expense, subject to reasonable advance consultation with the Rangers and provided that if such alterations would eliminate or materially alter any Team Sponsorship Assets contained in any agreement under which the Rangers provide or are committed to provide Team Sponsorship Assets as of the date of such alteration, Licensor will provide to the Rangers a replacement asset of equal or greater value (A) reasonably acceptable to the Rangers and (B) if such replacement is not permitted under such agreement, acceptable to the sponsor party to such agreement and (ii) (x) approve, in its sole discretion, any permanent affixed signage in the Arena by the Rangers or (y) approve, such approval not to be unreasonably withheld, conditioned or delayed, any temporary affixed signage by the Rangers on [*****] (clauses (1), (2) and (3) collectively, the “Restricted Signage Areas”); provided that (A) [*****] and (B) [*****] For the avoidance of doubt, any concourse, lobby or similar activations shall be subject to Sections 4.06(a) and 4.06(b). Licensor shall provide and maintain the in-Arena signage, assets and other elements associated with Team Sponsorship Assets (to the extent in the control of Licensor) in accordance with the Standard.

 

25

(b)    The Parties acknowledge and agree that their rights and obligations under this Section 7.02 shall be subject and subordinate to the Sponsorship Sales and Service Representation Agreement and the Team Sponsorship Allocation Agreement (collectively, the “Arena Agency Agreements”), as of the Effective Date and throughout the respective terms of such agreements. Pursuant to such Arena Agency Agreements, the Rangers shall be (i) required to provide Team Sponsorship Assets inventory committed to, and to comply with promotional category exclusivities granted to, certain Licensor sponsors (“Joint Sponsors”) in accordance with such Joint Sponsors’ respective agreements (each, a “Joint Sponsorship Agreement”) with Licensor and (ii) entitled to certain allocations of revenue received by Licensor pursuant to such agreements; each of (i) and (ii) as set forth in more detail in the Team Sponsorship Allocation Agreement.

(c)    Subject to League Rules, the name and logo of any Arena Naming Rights partner or “Marquee”-level sponsor shall be exhibited on Team’s home playing surface near Team’s center-ice logo at the Arena (with [*****]% of the allocable revenue therefrom delivered to the Rangers).

(d)    The Parties shall meet and confer regularly (contemplated to be no less frequently than once per calendar quarter) to discuss in good faith opportunities to maximize the collective value of their sponsorships by combining the sales of Team Sponsorship Assets, Arena Game Shared Sponsorship Assets and/or Non-Team Sponsorship Assets.

(e)    Notwithstanding anything to the contrary contained herein, in no event shall the Rangers cover or interfere with any Arena Game Sponsorship Assets with any temporary, virtual or any other type of signage. Notwithstanding anything to the contrary contained herein, in no event shall Licensor cover or interfere with any Team Sponsorship Assets with any temporary, virtual or any other type of signage.

Section 7.03     Arena Game Shared Sponsorship Assets. Licensor shall have the exclusive right to sell all Arena Game Shared Sponsorship Assets, provided that Licensor shall not, without the Rangers’ prior written approval, (a) enter into any agreement that includes any Team Sponsorship Assets or (b) enter into any agreement or modify any arena inventory or signage existing as of the date hereof if such agreement or modification would reasonably be expected to (i) cause a breach under any agreement that includes Team Sponsorship Assets, (ii) eliminate, or substantially impair (i.e. effectively eliminate all or most of the value of) any physical Team Sponsorship Assets in the Arena or (iii) limit or restrict the Rangers’ ability to include Team Sponsorship Assets in any exclusive or non-exclusive advertising or sponsorship agreements, in each case under clauses (i), (ii) or (iii), unless Licensor provides to the Rangers a replacement asset of equal or greater value (A) reasonably acceptable to the Rangers and (B) if such replacement is not permitted under such agreement, acceptable to the sponsor party to such agreement. The Rangers shall not enter into any agreement (and has not as of the Effective Date) that contains Arena Game Shared Sponsorship Assets or would cause a breach under any agreement that includes Arena Game Shared Sponsorship Assets without Licensor’s prior written approval. The Rangers shall be entitled to (i) [*****]% of net revenue from the sale of Arena Game Shared Sponsorship Assets (the “Rangers Arena Game Sponsorships Share”), i.e., gross revenue therefrom less any of the following paid by Licensor: taxes and applicable fees; and actual out-of-pocket costs for signage fabrication, installation and removal costs; provided that, if (a) an Arena Game Shared Sponsorship Asset is not visible, audible or otherwise present during substantially all Other Arena Events, (b) an Arena Game Shared Sponsorship Asset is not visible,

 

26

audible or otherwise present for a similar length of time during Other Arena Events and Rangers Events, or (c) such Arena Game Shared Sponsorship Assets does not include substantially all Rangers Events, then, in each instance, the revenues shall be proportionally allocated to each event included in such agreement, in a reasonable manner and as mutually agreed by Licensor and the Rangers, and the Rangers shall receive the appropriate proportional amount of revenues attributable to the Rangers Events (e.g., treatment of the JP Morgan Club, as currently operated). In the event of a No Fault Occurrence, the Rangers Arena Game Shared Sponsorships Share shall be increased to [*****]% (and in the case of any proportional allocation of revenues pursuant to the proviso in the foregoing sentence, the Parties will agree on an appropriate increase in favor of the Rangers to such allocation).

Section 7.04    Non-Team Sponsorship Assets. The Rangers shall have no rights whatsoever with respect to Non-Team Sponsorship Assets.

Section 7.05    Arena Naming Rights. The Rangers shall be entitled to [*****]% of revenue from the sale of any Arena Naming Rights, excluding any amounts already allocable to the Rangers pursuant to the terms of this Agreement or otherwise.

Section 7.06    Other Revenue. The Parties shall discuss in good faith the allocation of other Advertising income, revenues and fees derived from operations at the Arena that are not otherwise provided herein, to the extent attributable to Rangers Events.

Section 7.07    Signage and Sponsorship Settlement Process. Licensor shall remit to the Rangers a cash payment equal to all amounts collected or received from the sale of Arena Game Shared Sponsorship Assets and Arena Naming Rights that the Rangers are entitled to under this ARTICLE VII in accordance with Section 9.06.

ARTICLE VIII

BROADCASTING

Section 8.01    Broadcast Rights and Facilities.

(a)    As between the Parties, the Rangers shall own and control all rights with respect to the broadcasts and telecasts of each Rangers Event by any means whatsoever (including, without limitation, radio; over the air, pay-per-view, and basic and pay cable television; and streaming and other forms of electronic and digital media now known or hereafter created) (the “Broadcast Rights”) and shall retain all revenues in connection with such Broadcast Rights. The Rangers may not authorize or purport to authorize their media rightsholder to include in telecasts or broadcasts of Home Games any “virtual signage” in the Restricted Signage Areas without the prior written consent of Licensor, which consent shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, the foregoing sentence shall not apply to (i) any virtual signage being used as of the 2019-20 Season (i.e., one (1) position on the glass at each end of the ice and one (1) position between the benches) without the prior written consent of Licensor, which consent shall not be unreasonably withheld or delayed or (ii) any League telecasts or broadcasts (including, without limitation, any national and international telecasts or broadcasts) or any visiting team telecasts or broadcasts, with respect to which the Rangers and Licensor each reserve all rights.

 

27