Document:

Exhibit 10.5

 

FIRST
AMENDMENT TO

REDEVELOPMENT
AGREEMENT

 

THIS FIRST AMENDMENT TO REDEVELOPMENT
AGREEMENT (this “First  Amendment”) is
made as of October 5, 2004 (the “First Amendment Effective Date”),
by and between the NEW JERSEY SPORTS AND
EXPOSITION AUTHORITY, a public body corporate and politic with
corporate succession and having an address at Meadowlands Sports Complex, 50
State Route 120, East Rutherford, New Jersey 07073 (the “Authority”),
and MEADOWLANDS MILLS/MACK-CALI LIMITED
PARTNERSHIP, a Delaware limited partnership, having an address at
c/o The Mills Corporation, 1300 Wilson Boulevard, Suite 400, Arlington,
Virginia 22209, and its permitted successors and assigns (the “Developer”).  The Developer and the Authority are referred
to herein individually as a “Party” and collectively as the “Parties”.

 

W I T N E
S S E T H:

 

WHEREAS,
the Authority and the Developer are parties to that Redevelopment Agreement
dated as of December 3, 2003 (the “Original Redevelopment Agreement”);
and

 

WHEREAS,
the Parties wish to amend the Original Redevelopment Agreement to modify
certain terms and conditions thereof.

 

NOW, THEREFORE, in
consideration of the promises and mutual obligations of the Parties hereto and
such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties intending to be legally bound, do
hereby covenant and agree with each other as follows:

 

SECTION 1.                       Definitions; Effect of
Amendment. 

 

(a)                             Capitalized terms used but not
otherwise defined herein shall have the meaning given to such terms in the
Original Redevelopment Agreement.

 

(b)                            This First Amendment is an
amendment to the Original Redevelopment Agreement.  Unless the context of this First Amendment
otherwise requires, the Original Redevelopment Agreement and this First
Amendment shall be read together and shall have effect as if the provisions of
the Original Redevelopment Agreement and this First Amendment were contained in
one agreement. In the event of a conflict between the Original Redevelopment
Agreement and this First Amendment, the First Amendment shall control absent a
manifest intent to the contrary. After the First Amendment Effective Date, all
references in the Original Redevelopment Agreement to the “Original
Redevelopment Agreement”, “this Agreement”, “hereto”, “hereof”, “hereunder” or
words of like import referring to the Original Redevelopment Agreement shall
mean the Original Redevelopment Agreement as amended by this First Amendment.

 

 

SECTION 2.                            Empire
Tract; Wetlands Mitigation Bank. 
The understanding of the Parties with respect to the Empire Tract and
the Wetlands Mitigation Bank is memorialized in that certain Agreement of even
date by and between the Authority and the Developer, a copy of which is
attached hereto as Exhibit ”A” (the “WMB Agreement”).  From and after the date of execution of the
WMB Agreement, all rights, duties and obligations of the Developer to the
Authority relating to the Empire Tract and the Wetlands Mitigation Bank shall
be governed by the terms and conditions of the WMB Agreement.

 

SECTION 3.                            Exhibit H-1;
Existing Sports Complex Agreements.

 

(a)                             Exhibit ”H-1”.  As contemplated by Section 3.7(c) of
the Original Redevelopment Agreement, the Parties acknowledge and agree that Exhibit ”B”
attached hereto shall be Exhibit ”H-1”, and it is further
acknowledged and agreed to be the final list of documents and agreements that
shall constitute the “Existing Sports Complex Agreements.”  It is understood and agreed upon by the
parties hereto that subject to the terms of Section 3.7(e) of the
Original Redevelopment Agreement and subject to Section 6
below, that Developer recognizes (i) those Existing Sports Complex
Agreements identified on Exhibit ”H-1” as Items 1-8 (Giants, Jets,
Devils, Nets and Metrostars) (the “Franchise Team Agreements”); (ii) those
Existing Sports Complex Agreements identified on Exhibit ”H-1” as
Items 19-21 (Interstate Developers), Items 33-35 (Continental Airlines), Items
53-54 (Pepsi) and Items 47-49 (Mrs. Fields) (the “Vendor Agreements”),
and (iii) the remaining Existing Sports Complex Agreements listed on Exhibit ”H-1”,
subject to the following terms and conditions:

 

(A)                              Authority
Representation. Section 16.2 of the Original Redevelopment
Agreement is amended to add the following additional representations and
warranties by the Authority:

 

(vii) Except for the
Franchise Team Agreements, Vendor Agreements and those agreements noted in Section 16.2(viii) below,
all of the remaining Existing Sports Complex Agreements listed on Exhibit ”H-1”
expire or terminate by their terms (without further rights to renew or extend)
prior to December 20, 2007.

 

(viii) Those Items
identified on Exhibit H-1 as Items 70, 71 and 73 (Aramark); Items
26 – 27 (Hess), Item 59 (Star Ledger) and Item 56 (The Record) may extend or be
extended beyond December 20, 2007, but (i) do not have a Material
Adverse Effect on the Developer or the Project, (ii) do not result in
Authority Interference, (iii) breach the non-competition and other
restrictive covenants provided in this Agreement and/or (iv) do not result
in a breach by the Authority of the Project Agreements.

 

(B)                                Continuing
Covenant.  The following shall be
added to the Original Redevelopment Agreement as the last sentence of Section 3.7(e):
“In addition to the foregoing, the Authority covenants and agrees to add the
following language to any amendment, modification, extension, or renewal of any
Existing Sports Complex Agreements and/or New Sports Complex Agreements entered
into from and after the date hereof except those New Sports 

 

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Complex Agreements relating to
naming rights to the Arena or existing advertising inventory at the Sports
Complex: “Notwithstanding anything to the contrary set forth in this [name of
contract, license, agreement etc.] the rights granted to the [contracting
party] shall not extend to any portion of the Meadowlands Sports Complex
located east of New Jersey Route 120 [other than as expressly permitted under
the Original Redevelopment Agreement with respect to the interior space of the
Arena].”

 

(C)                                Indemnification.
Section 17.7 shall apply to the provisions of this Section 3.

 

(D)                               Recognition
and Priority.  Subject to the
foregoing and in reliance on Section 6 of this First Amendment with
respect to the Franchise Team Agreements, Developer reaffirms that Developer
recognizes the Existing Sports Complex Agreements and acknowledges that,
subject to the terms and conditions of the Original Redevelopment Agreement as
amended hereby, the rights granted to Developer and the obligations assumed by
Developer are in all respects subordinate to the rights and obligations of
parties to the Existing Sports Complex Agreements.

 

SECTION 4.                       Development Rights Fee.  Section 5.2 is hereby amended as
follows:

 

(a)                             Section 5.2(a)(i) of
the Original Redevelopment Agreement is amended so that the phrase “on the Ground Lease Closing
Date” is deleted and the phrase: “Development Rights Fee Funding Date (as
hereinafter defined)” is substituted therefor.

 

(b)                            Section 5.2 of the Original
Redevelopment Agreement
is hereby amended to add a new Section 5.2 (e) which will
supercede the Parties’ understanding with respect to the timing for the payment
of the Development Rights Fee as well as the conditions for execution and
delivery of the Ground Lease. New Section 5.2(e) shall be
inserted immediately following the end of Section 5.2(d) of the
Original Redevelopment Agreement as follows:

 

Section 5.2(e). Certain Modifications;
Development Rights Fee Funding Date.

 

(i)                                     Amendments to Certain Defined
Terms.  For purposes of this Agreement, the Ground
Lease Closing Date shall be comprised of two events namely, a Ground Lease
Execution Date which shall occur contemporaneously with the execution of this
First Amendment and a Development Rights Fee Funding Date which the Parties
have agreed shall occur on December 20, 2004, subject to adjustment as
provided below (the “Development Rights Fee Funding Date”). The
conditions precedent to the Ground Lease Execution Date shall be governed by
the terms and conditions of Section 5.2 (e)(ii) below and
deemed satisfied upon execution and delivery of the documents and agreements
identified in Section 5.2(e)(ii) below. The payment of the
Development Rights Fee shall be governed by the terms of Section 5.2(e)(iii) below.
The conditions precedent to the Development Rights Fee Funding Date (including
without limitation, the Material Conditions) shall be governed by the terms of
the Original Redevelopment Agreement, as amended hereby. At such time as the
Ground

 

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Lease Execution Date
has occurred, except as expressly modified by the terms and conditions of this
First Amendment or those Project Agreements executed on the Ground Lease
Execution Date, thereafter, the Development Rights Fee Funding Date shall be
used interchangeably with the defined terms used in the Original Redevelopment
Agreement for the “Ground Lease Closing” and/or “Ground Lease Closing Date”
(hereinafter sometimes collectively, the “Ground Lease Closing Date”).

 

(ii)                                  Ground Lease Execution Date. The additional conditions
precedent to the Ground Lease Execution Date shall be the following (which when
taken together with the execution of the Ground Lease shall constitute
satisfaction of the conditions precedent to the Ground Lease Execution Date):

 

(A)                              Delivery
by Authority of the fully executed and authorized Second Addendum to Settlement
Agreement by and between the Authority and East Rutherford (the “Second
Addendum”); and

 

(B)                                Delivery
by Authority and Developer of the fully executed and authorized WMB Agreement.

 

The Authority shall continue to hold the
Deposit Letter of Credit until the Development Rights Fee Funding Date.

 

(iii)                               Development Rights Fee Funding
Date.  On or prior to the Development Rights Fee
Funding Date, the Material Conditions shall have been satisfied, and the
Parties shall execute and deliver those documents and agreements contemplated
pursuant to the Approved Master Plan and this Agreement.  If prior to December 20, 2004 either an
Unwind Event and/or an Intervening Event, as such terms are defined in Exhibit ”C”
attached hereto, has occurred and/or is continuing, the Developer shall have
the right to postpone the Development Rights Fee Funding Date until the earlier
to occur of (A) thirty (30) days following final resolution of the Unwind
Event or Intervening Event, as the case may, or (B) some earlier date
designated by Developer upon thirty (30) days prior written notice, but in no
event later than the Material Conditions Termination Date (i.e. March 31,
2005).  If the Development Rights Fee
Funding Date has not occurred and Developer has commenced construction activity
on the Project Site, the Developer shall stop construction activity on the
Project Site during the period of any postponement (other than that reasonably
necessary to secure the site to avoid waste or injury). If an Intervening Event
and/or Unwind Event exists on the Material Conditions Termination Date (March 31,
2005), Developer shall have the right to either (x) exercise the Unwind Rights
described in Section 5.5 hereinbelow or (y) proceed to the
Development Rights Fee Funding Date, subject to the Development Rights Funding
Date requirements provided herein, but reserving Developer’s rights to exercise
Unwind Rights at any time thereafter through the Final Unwind Date (as defined
below) or extend the subsequent Tranche Dates as provided hereinbelow. The
period of any

 

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postponement of the
Development Rights Fee Funding Date shall adjust all dates provided herein
day-for-day including but not limited to the subsequent Tranche Payment Dates
and Final Unwind Date described below.

 

On the Development Rights Fee Funding Date, the Development Rights Fee
shall be paid by Developer in accordance with the terms of this Agreement; provided,
however, that in the event that (A) the Project Litigation as
described on Exhibit ”D” attached hereto shall not have been
settled or otherwise resolved to the satisfaction of the Developer or (B) all
of the Development Approvals shall not have been issued by the applicable
Governmental Body on or prior to the Development Rights Fee Funding Date, the
Developer may at the election of Developer deposit the entire Development
Rights Fee into escrow as provided hereinbelow. 
In the event that Developer elects to deposit the Development Rights Fee
into escrow, the Development Rights Fee shall be maintained and disbursed as
follows:

 

(A)                              On
the Development Rights Fee Funding Date, Developer shall (1) deposit the
full Development Rights Fee in immediately available funds into escrow pursuant
to a commercially reasonable and customary escrow agreement prepared by the
Title Company and mutually satisfactory to the Parties (the “Fee Escrow”),
(2) authorize release from the Fee Escrow a payment to the Authority in an
amount equal to the monies that the Authority shall become obligated to pay by
reason of any required redemption or defeasance of bonds, notes or other
obligations of the Authority under applicable federal tax law as determined by
bond counsel to the Authority and evidenced to Developer, and, in the case of
the Authority’s State Contract Bonds, 2002 Series B-1 and B-2, the
termination of a pro-rata portion of the Authority’s Interest Rate Exchange
Agreement with Merrill Lynch Capital Services, Inc., resulting from the
execution and delivery of the Component Leases currently estimated to be
approximately Thirty Six Million Dollars ($36,000,000) based on current
interest rates as of October 1, 2004 (the “Defeasance Payment”);
and (3) authorize the release from the Fee Escrow a payment in the amount
of Twenty Six Million Eight Hundred Thousand Dollars ($26,800,000)(the “WMB
Payment”).  On the Development Rights
Fee Funding Date, the Authority shall (X) make payment to the Developer in the
amount provided in the WMB Agreement, subject to the Developer’s concurrent
performance of its obligations under the WMB Agreement; (Y) defease bonds in an
amount equal to the Defeasance Payment, and (Z) return the Deposit Letter of
Credit to the Developer.  The balance
remaining in the Fee Escrow following the disbursement of the Defeasance
Payment and the WMB Payment (the Defeasance Payment and the WMB Payment,
collectively, the “First Tranche Payment”) shall be disbursed subject to
the terms and conditions hereof in three (3) equal installments (together
with interest earned thereon through the date of the applicable Tranche
Payment) which shall each be referred to herein as a “Tranche Payment”.

 

(B)                                Ninety
(90) days after the Development Rights Fee

 

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Funding Date (as same may have been adjusted
as provided herein) (the “Second Tranche Date”), Developer shall
authorize release from the Fee Escrow to the Authority a second Tranche
Payment. If an Unwind Event or Intervening Event exists on the Second Tranche
Date, Developer shall have the right to postpone the Second Tranche Date until
the earlier to occur of (1) final resolution of the Unwind Event or
Intervening Event, as the case may, or (2) ninety (90) days from the
Second Tranche Date. If Developer elects to postpone the Second Tranche Date,
the Developer shall stop construction activity during the period of any
postponement (other than that commercially necessary to secure the site to
avoid waste or injury). If the Intervening Event and/or Unwind Event has not
been resolved within said 90-day period, Developer shall have the right to
exercise the Unwind Rights described below in Section 5.5 hereinbelow
or proceed with the release of the Second Tranche, reserving Developer’s rights
to exercise Unwind Rights at any time thereafter through the date of the Final
Unwind Date defined below. As provided above, the period of any postponement of
the Ground Lease Closing Date shall adjust all contractual dates day for day
including but not limited to the subsequent Tranche Payment dates described
below and the Final Unwind Date.

 

(C)                                Ninety
(90) days after the Second Tranche Date as the same may have been adjusted (the
“Third Tranche Date”), Developer shall authorize release from the Fee
Escrow to the Authority a third Tranche Payment.  If an Unwind Event and/or Intervening Event
exists on the Third Tranche Date, Developer shall have the same rights and obligations
described above applicable to the second Tranche Payment and Second Tranche
Date.

 

(D)                               Ninety
(90) days after the Third Tranche Date as may have been adjusted (“Final
Tranche Date”), Developer shall authorize release from the Fee Escrow to
the Authority the final Tranche Payment, together with any accrued but unpaid
interest in the Fee Escrow.  If an Unwind
Event and/or Intervening Event exists on the Final Tranche Date, Developer
shall have the same rights and obligations noted above applicable to the second
Tranche Payment and third Tranche Payment and Second Tranche Date and Third
Tranche Date.

 

(E)                                 Notwithstanding
anything to the contrary in this Section 5.2(e), after the First
Amendment Effective Date, upon the occurrence of an Unwind Event, Developer
shall have the right at any time thereafter through the Final Unwind Date (as
defined in Section 5.5 below) to exercise the Unwind Rights in
accordance with Section 5.5 below.

 

(iv)                              Except to the extent expressly
provided in this Section 5.2(e), the times for performance provided
in this Section 5.2(e) shall not be subject to extension by
reason of the occurrence of those events described in subsections (iii), (iv) and
(vi) in the definition of “Force Majeure Events” provided herein.

 

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SECTION 5.                       Unwind Right. Article 5
is further amended to add a new Section 5.5 as follows:

 

Section 5.5 Unwind Right. 
(a)  The Authority and Developer have agreed that that Developer
shall have the right to “unwind” the transaction and terminate the Ground Lease
and the then current Project Agreements (collectively, the “Unwind Rights”)
in accordance with Section 5.2(e) within twelve (12) months
from the Development Rights Fee Funding Date (“Final Unwind Date”).  Developer shall exercise these Unwind Rights
pursuant to a written notice to the Authority delivered on or before the Final
Unwind Date. In addition, the Authority and Developer agree that if an Unwind
Event occurs and/or is continuing beyond the Final Unwind Date, the Developer
shall have the rights set forth in Section 5.5(e) hereinbelow,
but shall have no right to a refund or disgorgement of the Development Rights
Fee.  Except as provided in Section 5.5(e),
Developer shall not have the right to exercise the Unwind Rights after the
Final Unwind Date.

 

(b)                                 If the Developer timely elects
to exercise the Unwind Rights prior to the Final Unwind Date:

 

(i)                                     Authority shall pay to Developer
an amount equal to the Development Rights Fee (“Unwind Payment”).  The Authority shall be entitled to a credit
against the Unwind Payment in the amount of $26,800,000 to the extent paid to
the Developer pursuant to the WMB Agreement. The Authority shall be obligated to make the Unwind
Payment within ninety (90) days after delivery of the notice from Developer
exercising the Unwind Rights (the “Outside Payment Date”). The
obligation of the Authority to make the Unwind Payment on the Outside Payment
Date may be tolled for the period reasonably necessary to implement (and
conditioned upon the Authority’s participation in) the provisions of Section 5.5(e) but
in no event longer than 180 days from the date of delivery of the notice from
Developer exercising the Unwind Rights.

 

(ii)                                  Once conveyed to the Trust (as
defined in the WMB Agreement), neither the Authority nor the Developer shall
have the right to terminate or unwind the transaction related to the Empire
Tract and the WMB Agreement. Once conveyed to the Trust, the Developer shall
have no further rights, duties or obligations to the Authority relating to the
Empire Tract except as expressly stated in the WMB Agreement.

 

(iii)                               Except for those duties and
obligations expressly stated to survive the termination of the Redevelopment
Agreement and/or the Project Agreements, Developer shall have no further duties
or obligations to the Authority with respect to the Project Site and/or under
the Project Agreements unless and until there is an agreement accepted by the
parties arising out of Section 5.5(e); provided, however,
that Developer shall have the obligation prior to terminating the Ground Lease
and the Project Agreements then in effect to take

 

7

 

such commercially
reasonably actions as may be required to (1) secure the Project Site for
safety, (2) repair any damage caused by Developer with respect to roads
within the Meadowlands Sports Complex or the existing public roads such that
the roads are in substantially similar condition as existed immediately prior
to commencement of such construction activity by Developer and (3) except
to the extent Developer elects to construct the Garages as provided in Section 5.5(d) hereof,
repair any damage caused by Developer with respect to surface parking areas
within the Meadowlands Sports Complex such that the surface parking areas are
in a condition to accommodate 4,000 parking spaces on the Project Site.

 

(c)                                  The Authority’s obligation to
make the Unwind Payment shall be secured by the following and Authority shall
take such action as Developer may reasonably request to evidence or effect
Authority’s obligations under this Section 5.5(c):

 

(i)                                     Any funds remaining in the Fee
Escrow at the time the Developer exercises the Unwind Rights shall be paid to
the Developer as a credit against the Unwind Payment obligation (interest
remaining in the Fee Escrow shall be payable to Developer and shall not be
applied as a credit against the Authority’s obligation to make the Unwind
Payment to Developer).

 

(ii)                                  If the Authority fails to make
the Unwind Payment by the Outside Payment Date (subject to tolling as
aforesaid), the Authority shall pay to Developer interest on the unpaid portion
of the Unwind Payment at the rate of 3% above the “Prime Rate” as
published in The Wall Street Journal commencing on the Outside Payment
Date until the unpaid portion of the Unwind Payment is paid in full.

 

(iii)                               The Developer shall not be
required or obligated to execute a release any recorded memorandum of Ground
Lease or any recorded document memorializing any of the rights of first refusal
and/or rights of first offer granted to Developer or any tenant under a
Component Lease pursuant to the terms of the Redevelopment Agreement until the
Unwind Payment is made. Authority’s obligations under the Ground Lease and then
current Project Agreements shall not be released or terminated (notwithstanding
Developer’s release of all duties and obligations thereunder) until the Unwind
Payment is made to Developer.  Upon full
payment of the Unwind Payment, the Authority and Developer shall, subject to Section 5.5(e),
execute customary releases of each other with respect to the Ground Lease and
the current Project Agreements.

 

(iv)                              A contractual commitment
evidenced hereby that Developer shall be repaid the Unwind Payment and/or
Garage Payment on a priority basis from any consideration received by the
Authority from the future development of the Project Site or bond proceeds
arising from a future bond issuance.

 

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(v)                                 All revenue from the Garages (as
defined below) shall be collected by Authority and paid to the Developer on a
priority basis to repay the Unwind Payment. 
For purposes hereof, “priority basis” shall mean that all revenue shall
be paid to Developer with a deduction from such revenue only of the amounts
owed under the Franchise Team Agreements, reasonable market operating expenses
and a reasonable market management fee.

 

(vi)                              The Authority shall negotiate
exclusively and in good faith with the Developer with respect to the Proposal
described in Section 5.5(e) below.

 

(d)                                 In the event that, at the time
the Developer exercises the Unwind Rights, the structured parking facilities
that are approved to be constructed on the Project Site (collectively, the “Garages”)
are not otherwise complete, the Developer shall have the right to complete and
place into service all or any architecturally functionally complete portion of
the Garages in accordance with the then-existing Project Agreements.  In addition to and after the payment of the
Unwind Payment, provided that Developer has completed the Garages, the
Authority shall be obligated to reimburse Developer for the hard costs of
constructing the Garages in an amount not to exceed Fifty Million Dollars
($50,000,000.00) (the “Garage Payment”). 
If the Developer completes the Garages, all revenue generated from the
Garages shall first be security for the Unwind Payment, and be paid to
Developer on a priority basis pursuant to Section 5.5(c)(v) above,
and then shall be applied to the Garage Payment, also on a priority basis
pursuant to Sections 5.5(c)(iv) and (v) above.  The liability for the Garage Payment shall be
payable solely as described in the preceding sentence.

 

(e)                                  If the Developer elects to
exercise the Unwind Rights at or prior to the Final Unwind Date or in the event
that an Unwind Event occurs after the Final Unwind Date, the parties agree that
it is in their mutual best interest to work together in a cooperative spirit in
an attempt to salvage an economically viable project. Therefore, if Developer
exercises the Unwind Rights by written notice to the Authority, the Parties
agree within thirty (30) days thereafter to jointly appoint and retain an
investment banking firm of a type similar to Goldman Sachs, Lehman Brothers or
Morgan Stanley and have such investment firm prepare a program proposal which
attempts to comprehensively maximize in a commercially reasonable and
responsible manner the interests of the Developer and Authority and preserve
the economic viability of the Project Site under the Ground Lease taking into
consideration the (i) mandate of the Authority enabling legislation, (ii) nature
of the Unwind Event, (iii) contemplated scope and intent of the project to
be developed under the Project Agreements, (iv) Second Addendum, (v) Franchise
Team Agreements, and (vi) concepts and intent of the existing Project
Agreements including but not limited to the “claw-back” provisions of the
Original Redevelopment Agreement, (vii) economic parameters based on
market conditions including but not limited to appropriate adjustment in
Development Rights Fee payments, and (vii) applicable Legal Requirements
(collectively, the “Proposal”). Upon presentation of the Proposal, the
parties shall 

 

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negotiate in good
faith such modifications to the Project Agreements as may be reasonably
necessary to implement the recommendations set forth in the Proposal. If the
parties are unable to reach a mutually satisfactory agreement within 180 days
after submission of the Proposal, then in that event (i) if the Unwind
Event has occurred prior to the Final Unwind Date, Developer shall have the
right to exercise the Unwind Rights (recognizing that the process outlined
above shall cause a tolling of the Final Unwind Date and the Outside Payment
Date until the end of the 180-day period specified in Section 5.5(b)(i) hereof),
or (ii) if the Unwind Event has occurred after the Final Unwind Date, the
Developer’s remedies shall be those provided in the Project Agreements together
with Authority’s agreement to cooperate in good faith to minimize and mitigate
to the extent commercially and legally practicable the impacts on the Developer
caused by the Unwind Event. In the event that the parties are unable to agree
on an investment firm within said thirty (30) day period, the parties agree to
arbitrate the selection in accordance with the provisions of the Redevelopment
Agreement.

 

SECTION 6.                       Franchise
Team Indemnity; Authority Indemnification.  (a) Indemnification by Authority.  Authority covenants and agrees to indemnify,
protect, defend, and hold the Developer Indemnified Parties (which shall also
include any Component Entity which has executed a Component Lease and Component
Agreement) harmless from and against all direct and actual (but not arising out
of the negligence or misconduct of the Developer or any Developer Indemnified
Party), liability, losses, damages, demands, costs, claims, actions or expenses
(including attorneys’ fees and court costs) arising out of, directly resulting
from the Franchise Team Agreements (each, a “Team Indemnified Claim”); provided
however that a Team Indemnified Claim shall in no event include any
loss, cost, damage, expense or claim arising from the failure of any Developer
Indemnified Party to comply with the Approved Master Plan or any scope of work
approved by the Authority pursuant to the Project Agreements or (b) any
claim that would otherwise constitute a Team Indemnified Claim following the
Developer or any Component Entity (but only as to such Component) entering into
a cooperation agreement or other written arrangement pursuant to which a Sports
Complex Tenant agrees to cooperate with the development of the Project.

 

(b)                            Implementation of Authority
Indemnification Obligations.  In any situation in which the Developer
Indemnified Parties are entitled to receive and desire defense and/or
indemnification by the Authority for a Team Indemnified Claim, the Developer
Indemnified Parties shall give prompt notice of such Authority Indemnified
Claim to Authority.  Failure to give
prompt notice to Authority shall not relieve the Authority of any liability to
indemnify the Developer Indemnified Parties, unless such failure to give prompt
notice materially impairs Authority’s ability to defend.  Upon receipt of such notice, the Authority
shall resist and defend any action or proceeding arising out of any Developer
Indemnified Claim on behalf of the Developer Indemnified Parties, including the
employment of counsel reasonably acceptable to the Developer Indemnified
Parties, the payment of all expenses and the right to negotiate and consent to
settlement of any Team Indemnified Claim. 
All of the Developer Indemnified Parties shall have the right to employ
separate counsel in any action arising out of any Developer Indemnified Claim
and to participate in the defense thereof, but the fees and expenses of such

 

10

 

separate counsel shall be at the expense of the indemnified party
unless the employment of such counsel is specifically authorized by the
Authority, which authorization shall not be unreasonably withheld or
delayed.  The Authority shall not be
liable for any settlement of any such action effected without its consent, but
if settled with the consent of Authority or if there is a final judgment
against Authority or any Developer Indemnified Party in any such action,
Authority agrees to defend, indemnify and hold harmless the Developer
Indemnified Parties from and against any loss or liability by reason of such settlement
or judgment of a Team Indemnified Claim.

 

(c)                             Survival.  This indemnity by the Authority shall survive
the expiration or termination of this Agreement and Completion of the Project.

 

SECTION 7.                       Additional
Components and Allocations.

 

(a)                             The Baseball Stadium shall be
deemed to be an additional Component (the “Baseball Stadium Component”) and
subject to the provisions of the Original Redevelopment Agreement relating to
Components.  The Baseball Stadium
Component is shown on Exhibit ”E-1” attached hereto.

 

(b)                            The Office Component shall be
deemed to constitute two separate Components: the A-B Office Component and the
C-D Office Component as shown on Exhibit ”E-2” attached hereto.

 

(c)                             In furtherance of the provisions
of Sections 5.2(d)(ii) and 5.3(c) of the Original
Redevelopment Agreement, Authority agrees that the obligation to pay Ground
Rent and Developer PILOT Payments may be allocated among the following
Components in the following percentages at such time as the corresponding
Component Leases are entered into, with such obligation not to be transferred
to any Component Parts or Component Entities, except as expressly set forth
hereinbelow:

 

Hotel Component – 5.30%

A-B
Office Component – 13.35%

C-D
Office Component – 13.35%

Entertainment/Retail
Component - 63.25%

Baseball
Component - 4.75%

 

In the event that the A-B
Office Component and/or C-D Office Component are divided into additional
Components pursuant to the Declaration (i.e., separate A and B Components
and/or C and D Components), the obligation set forth above for each Office
Component may be divided into approximately equal shares between the two new
constituent Components.  The Authority
further acknowledges that the Entertainment/Retail Component may be further
subdivided into the “ERC Main Site” and “ERC Parking Site” to segregate the
parking facilities in the Entertainment/Retail Component from other operating
facilities pursuant to terms to be agreed by the Parties in the Project
Agreements.

 

(d)                            Developer acknowledges and
agrees that except as set forth above Developer

 

11

 

shall have no further right to segregate the Project Site into
Component Parts or Component Interests, except in connection with a request for
a modification to the Approved Master Plan as provided in the Redevelopment
Agreement.

 

SECTION 8.                       Borough Escrow.

 

(a)                             On or about the date hereof,
Borough and Authority have entered into a certain Second Addendum To Settlement
Agreement (the “Second Addendum”), pursuant to which the Authority’s
payments in lieu of taxes and other payments to the Borough will be modified to
reflect the development of the Project. 
The Second Addendum requires the Authority to post a $150,000 escrow
with Borough (the “$150,000 Escrow”) to cover reasonable costs incurred
by the Borough in the negotiation of the Second Addendum, and customarily
incurred in performance of the Borough’s obligations under Paragraphs 13 and 14
of the Second Addendum. Developer has agreed to post the $150,000 Escrow in satisfaction
of Authority’s obligation under the Second Addendum, as set forth hereinbelow.

 

(b)                            Developer shall either (i) deposit
the $150,000 Escrow directly with Borough, or (ii) deposit the $150,000
Escrow with the Authority.  In the event
the Developer deposits the $150,000 Escrow directly with the Borough, the
Authority shall notify the Borough that the $150,000 Escrow required by the
Second Addendum has been deposited on the Authority’s behalf by the Developer,
and the Authority will request that Borough deposit same into a separate
account that shall be drawn down upon by Borough pursuant to the terms of the
Second Addendum.  In the event the
Developer deposits the $150,000 Escrow with the Authority, the Authority shall
immediately deposit such sum with the Borough as the Authority’s escrow
pursuant to the Second Addendum.  The
$150,000 Escrow shall be paid in two installments with one-third being due on
the Ground Lease Execution Date and two-thirds being on the Development Rights
Fee Funding Date.

 

(c)                             On a monthly basis (or other
time period in which Borough provides same), the Authority shall provide
Developer with a statement of costs and expenses paid from the $150,000
Escrow.  Developer hereby acknowledges
that because the Borough will be drawing from the $150,000 Escrow pursuant to
the Second Addendum, any accounting of the disbursements from the $150,000
Escrow will be generated by the Borough and the Authority’s obligations under
the first sentence of this paragraph shall be limited to diligently proceeding
to obtain such accounting from the Borough and transmitting the same to the
Developer.  In the event any portion of
the $150,000 Escrow has not been disbursed to the Borough for costs permitted
under Paragraph 15 of the Second Addendum prior to the completion of the
Meadowlands Xanadu Redevelopment, then the Authority hereby agrees to promptly
and diligently pursue the return of such balance from the Borough.  If the Borough refunds such remainder to the
Authority, the Authority shall immediately deliver the same to the
Developer.  If the Authority fails to
diligently proceed to recover the above-referenced remainder of the $150,000
Escrow from the Borough, then the Developer shall have the right to pursue
recovery of the same directly from the Borough and in the name of the Authority
and the Authority agrees to diligently cooperate with the Developer in
connection with the same.

 

(d)                            In the event that the Developer
delivers notice to the Authority stating that it

 

12

 

reasonably believes that any disbursement from the $150,000 Escrow by
the Borough is excessive, improper, unreasonable or otherwise not permitted,
then the Authority hereby agrees to promptly and diligently pursue a protest or
otherwise contest the Borough’s rights to make the disbursement in
question.  In the event the Authority
reasonably disagrees with the Developer’s belief that the Borough’s
disbursement is excessive, improper, unreasonable or otherwise not permitted,
Developer shall have the right to pursue a protest directly with the Borough
and in the name of the Authority, and the Authority agrees to diligently
cooperate with the Developer in connection with the same.

 

(e)                             Notwithstanding anything to the
contrary set forth above, in the event the Borough shall require reimbursement,
or take a disbursement from the $150,000 Escrow, for (i) costs incurred in
the negotiation of the Second Addendum, and/or (ii) costs incurred in
connection with matters addressed in Paragraphs 6 and/or 9 of the Second
Addendum, and/or (iii) costs incurred in the performance of the Borough’s
obligations under Paragraphs 13 and/or 14 of the Second Addendum, which
performance was requested by the Authority rather than by Developer; then the
Authority shall pay the corresponding amount to the Developer within 30 days
after the Authority’s receipt of notice of such requirement by the Borough or
drawn down by the Borough on the $150,000 Escrow.

 

SECTION 9.                       Emergency Services.

 

(a)                             The parties acknowledge that the
Second Addendum requires the Borough and the Authority to develop a plan for
provision of adequate fire, rescue and emergency medical services to the
Project.  Notwithstanding such provision,
Developer agrees that, at its sole expense, it shall retain a qualified
consultant, reasonably acceptable to Authority and Borough, to develop such
plan, the components of which shall be consistent with industry standards.  Developer shall require such consultant to
consult with the Authority and the Borough in the course of such
preparation.  The final plan to be
implemented shall be reasonably acceptable to the Authority and Borough, and
the services described therein shall be deemed to be “adequate” for the
purposes of the Second Addendum.

 

(b)                            Developer acknowledges that,
pursuant to the plan described in subparagraph (a) above, Authority may
provide fire, rescue and emergency medical services to the Project in
cooperation with the Borough.  Developer
agrees that the Authority shall be immune from liability for damages in any
civil action brought by Developer as a result of the Authority’s acts of
commission or omission arising out of and in the course of its rendering in
good faith any such fire, rescue and emergency medical services and, if more
expansive, to the same extent that the Borough is granted such immunity as a
matter of law.

 

SECTION 10.                Construction
Procedures Prior to Development Rights Fee Funding Date.  Notwithstanding anything set forth in the
Original Redevelopment Agreement to the contrary, the Authority and Developer
acknowledge and agree that in the event that Developer desires to perform any
construction on the Project Site prior to the Development Rights Fee Funding
Date, the terms and conditions of the Access and Indemnity Agreements shall
govern and control.  Notwithstanding
anything set forth in the Access and Indemnity Agreements, the Access and
Indemnity Agreement shall survive the Ground Lease Execution Date, and shall 

 

13

 

terminate on the Development
Rights Fee Funding Date.

 

SECTION 11.                Project Operating Agreement.  The Authority and the Developer
acknowledge and agree that the parking management summary set forth on Exhibit ”F”
attached hereto (the “Parking Management Summary”) represents the
understanding of the Parties with regard to parking and traffic management at
the Project Site following the Development Rights Fee Funding Date.  During the thirty (30) day period following
the Ground Lease Execution Date, Authority and Developer shall endeavor in good
faith to negotiate and finalize a definitive Project Operating Agreement that
will substantially incorporate the terms of the Parking Management Summary.

 

SECTION 12.                Waiver.

 

(a)                             Due Diligence.  Developer has received an executed Due
Diligence Certification in the form of Exhibit ”G” attached
hereto.  Developer has reviewed the
Provided Due Diligence Documents, as such term is defined in the Due Diligence
Certification and has satisfied itself as to the contents thereof.  Developer hereby waives its rights to raise
any Complex Agreement Objections and all other rights set forth in Section 6.4
of the Original Redevelopment Agreement.

 

SECTION 13.                Title.  Section 4.2 (b) is hereby
amended to extend the Title Objection Date through the Development Rights Fee
Funding Date.

 

SECTION 14.                Errata.

 

(a)                             The words “Ground Rent Increase
Index” in the last sentence of Schedule 5.2(d) of the Original
Redevelopment Agreement are deleted and replaced with the words “Consumer Price
Index”.

 

(b)                            The words
“Meadowlands
Master Developer Limited Partnership” in Section 10.2(a)(ii) of the
Original Redevelopment Agreement are deleted and replaced with the words:  “Meadowlands Mills/Mack-Cali Limited
Partnership”.

 

(c)                             The definition of “Force
Majeure Event” is amended so that the phrase “(vii) acts or omissions
of the other Party, except in conformance with this Agreement” is deleted in
its entirety.

 

SECTION 15.                Full Force
and Effect.  Except as
expressly modified by this First Amendment, all of the terms and conditions of
the Original Redevelopment Agreement shall continue in full force and effect,
and all Parties hereto shall be entitled to the benefits thereof.

 

SECTION 16.                Counterparts.  This First Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, and

 

14

 

all of which when taken together
shall constitute one and the same agreement.

 

SECTION 17.                Governing
Law.  This First
Amendment, including the validity thereof and the rights and obligations of the
parties hereunder, shall be construed in accordance with and governed by the
laws of the State of New Jersey.

 

15

 

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

 

 

	
  NEW JERSEY SPORTS AND

  EXPOSITION AUTHORITY

  	
  MEADOWLANDS MILLS/MACK-CALI

  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meadowlands Mills Limited Partnership,

  
	
  By:

  	
        /s/
  George R. Zoffinger

  	
   

  	
   

  	
  its Managing General Partner

  
	
   

  	
  George R. Zoffinger

  	
   

  	
  By:

  	
  Meadowlands Mills, L.L.C.,

  
	
   

  	
  President 

  	
   

  	
   

  	
  its Managing General Partner

  
	
   

  	
   

  	
   

  	
  By: The Mills Limited Partnership,

  
	
   

  	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  	
  By: The
  Mills Corporation,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James F. Dausch

  	
   

  
	
   

  	
   

  	
   

  	
  James F. Dausch

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mack-Cali Meadowlands Special L.L.C.,

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
  By:

  	
  Mack-Cali Realty, L.P., sole member

  
	
   

  	
   

  	
   

  	
  By:

  	
  Mack-Cali Realty Corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitchell E. Hersh

  	
   

  
	
   

  	
   

  	
   

  	
  Mitchell E.
  Hersh

  
	
   

  	
   

  	
   

  	
  Chief
  Executive OfficerExhibit 10.6

 

SECOND AMENDMENT TO REDEVELOMENT AGREEMENT

 

THIS SECOND AMENDMENT TO REDEVELOPMENT
AGREEMENT (this “Second Amendment”) is made as
of March    , 2005 to be effective as of November 26,
2004 (the “Second Amendment Effective Date”) by and between the NEW JERSEY SPORTS AND EXPOSITION AUTHORITY,
a public body corporate and politic with corporate succession and having an
address at Meadowlands Sports Complex, 50 State Route 120, East Rutherford, New
Jersey 07073 (the “Authority”), and MEADOWLANDS
MILLS/MACK-CALI LIMITED PARTNERSHIP, a Delaware limited partnership,
having an address at c/o The Mills Corporation, 1300 Wilson Boulevard, Suite 400,
Arlington, Virginia 22209, and its permitted successors and assigns (the “Developer”).  The Developer and the Authority are referred
to herein individually as a “Party” and collectively as the “Parties”.

 

Background

 

A.            Pursuant to the terms of that
certain Redevelopment Agreement dated as of December 3, 2003, as amended
by that certain First Amendment to Redevelopment Agreement dated as of October 5,
2004 (as amended, the “Redevelopment Agreement”), the Parties agreed to
certain terms and conditions for the redevelopment of a portion of the
Meadowlands Sports Complex with a mixed use entertainment, retail, office and
hotel project.  Capitalized terms used
but not otherwise defined in this Second Amendment shall have the meanings
given to such terms in the Redevelopment Agreement.

 

B.            During the course of obtaining
certain Development Approvals, the Parties participated in the statutory
consultation process mandated by Section 23 and Section 5x of the
Enabling Legislation.  This consultation
process concluded with the issuance of that certain report entitled “Hearing
Officers’ Report and Recommendations in the Matter of the Hearings Held on the
Proposed Meadowlands Xanadu Redevelopment Project (April 26-30, 2004)” by
the New Jersey Department of Environmental Protection and New Jersey
Meadowlands Commission (the “Hearing Officers’ Report”).  Following the issuance of the Hearing
Officers’ Report, the New Jersey Department of Environmental Protection issued
an Order dated October 1, 2004 amending certain of the recommendations set
forth in the Hearing Officers’ Report and requiring that the Parties enter into
an amendment to the Redevelopment Agreement not later than sixty (60) days
following the issuance of the Order.

 

C.            The Parties wish to amend the
Redevelopment Agreement to modify certain terms and conditions thereof in the
manner consistent with the requirements of the Hearing Officers’ Report and
Order.

 

Agreement

 

NOW THEREFORE, in
consideration of the promises and mutual obligations of the Parties hereto and
such other good and valuable consideration, the receipt and sufficiency are
hereby acknowledged, the Parties intending to be legally bound hereby do hereby
covenant and agree with each other as follows:

 

 

SECTION 1.         Amendments.  Section 7.2 of the Redevelopment
Agreement is amended so that the following is added as the second paragraph of
that Section:

 

“Developer and the Authority agree to
implement their respective tasks described in the findings of fact and
recommendations in the Hearing Officers’ Report and Recommendations dated August 19,
2004 which are part of the consultation process required by Sections 5:10-5x
and 5:10-23 of the Enabling Legislation, as modified by the Order dated October 1,
2004 of the Commissioner of the NJDEP. 
The persons responsible for the respective tasks are identified in Exhibit “A”
to that certain Second Amendment to Redevelopment Agreement dated as of March 15,
2005 to be effective as of November 26, 2004 by and between the Authority
and the Developer.”

 

SECTION 2.         General Provisions.

 

(a)           Governing
Law.  This Second Amendment shall be
governed by and construed in accordance with the laws of the State of New
Jersey.

 

(b)           Entire
Agreement.  This Second Amendment
constitutes the entire agreement between the parties hereto and may not be
modified except by a written instrument executed by the parties hereto.

 

(c)           Captions.  Paragraph headings are used herein solely for
reference purposes and are not to be construed as part of this Second
Amendment.

 

(d)           Counterparts.  This Second Amendment may be executed in
counterpart copies, each of which shall constitute an original but all of which
together shall constitute one and the same instrument.

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

2

 

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

 

	
  NEW JERSEY SPORTS AND

  EXPOSITION AUTHORITY

  	
  MEADOWLANDS MILLS/MACK-CALI

  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Meadowlands Mills Limited Partnership,

  
	
  By:

  	
        /s/
  George R. Zoffinger

  	
   

  	
   

  	
  its Managing General Partner

  
	
   

  	
  George R. Zoffinger

  	
   

  	
  By:

  	
  Meadowlands Mills, L.L.C.,

  
	
   

  	
  President 

  	
   

  	
   

  	
  its Managing General Partner

  
	
   

  	
   

  	
   

  	
  By: The Mills Limited Partnership,

  
	
   

  	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  	
  By: The Mills Corporation,

  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James F. Dausch

  	
   

  
	
   

  	
   

  	
   

  	
  James F. Dausch

  
	
   

  	
   

  	
   

  	
  President-Development Division

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mack-Cali Meadowlands Special L.L.C.,

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
  By:

  	
  Mack-Cali Realty, L.P., sole member

  
	
   

  	
   

  	
   

  	
  By:

  	
  Mack-Cali Realty Corporation,

  
	
   

  	
   

  	
   

  	
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mitchell E. Hersh

  	
   

  
	
   

  	
   

  	
   

  	
  Mitchell E.
  Hersh

  
	
   

  	
   

  	
   

  	
  Chief
  Executive Officer

  
										

 

3

 

EXHIBIT A

 

Responsibility for Hearing Officers’ Recommendations

 

The Developer shall be responsible to respond to all of the
recommendations and requirements in Article II – Findings of Fact and
Recommendations in the Hearing Officer’s Report and Recommendations dated August 19,
2004, as modified by the Order dated October 1, 2004 issued by the
Commissioner of the NJDEP, except for the following items which shall be the
responsibility of the Authority to undertake, either wholly or partially, as
indicated:

 

Quarterly Reports.  Joint responsibility with the Developer for
quarterly progress reports to the NJDEP and NJMC.

 

Recommendation 4c.
Installation of trash racks, if necessary.

 

Recommendation 9a.  Regional Traffic Study Prepare and
submit the regional traffic analysis and a regional transportation improvement
plan to the Hearing Officers and NJ DOT.

 

Recommendation 9g.  Cooperation with the Developer in its
preparation of a final parking management plan.

 

Recommendation 9i.
Cooperation with the Developer in its work with NJ Transit and other private
carriers to provide bus service to the Project Site in addition to the bus
service in the area around the Arena Site.

 

Recommendations 9k and 9l.  Clarification that the Commissioner’s Order
dated October 1, 2004 stating that a portion of event ticket fees
collected at the Sports Complex and/or Meadowlands Xanadu are not required to
be used to fund mass transit or local roadway improvements also applies to parking
fees.

 

Recommendation 12a.  Submission of an executed copy of the PILOT
agreement to the NJMC Chief Fiscal Officer

 

Recommendation 12b.  Cooperation with the Developer in its
preparation of emergency action plans and response protocols.

 

Recommendation 12c.  The contribution to the NJMC Municipal
Assistance Program shall be made by the Authority from the Tenant PILOT Payment
made by the Developer in compliance with the Master Ground Lease between the
Authority and the Developer dated October 5, 2004.

 

Recommendation 16a.  Provision of financial assistance to the NJMC
by a one time contribution with respect to claimed prior obligations.

 

 

Recommendation 17.  Renewal of the existing NJPDES permit for
surface water discharges and modification of the drainage area for the
Meadowlands Xanadu Redevelopment project served by Lagoon 3.

 

For purposes hereof, Developer acknowledges and agrees that cooperation
by the Authority shall not be construed to alter, diminish or otherwise modify
in any respect the discretion of the Authority under the Redevelopment
Agreement and the Project Agreements in considering any matter that is subject
to the approval of the Authority, including, without limitation, those matters
that are subject to Authority approval pursuant to Section 6.2 of
the Redevelopment Agreement.

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