EXHIBIT 10(ab)
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PURCHASE OPTION AGREEMENT
Among
CITY OF VALLEJO,
MARINE WORLD JOINT POWERS AUTHORITY
and
REDEVELOPMENT AGENCY OF THE CITY OF VALLEJO,
collectively, as Optionor
and
PARK MANAGEMENT CORP.,
as Optionee
Property:
Marine World Park and Adjacent Property
City of Vallejo
Solano County, California
Dated as of August 29, 1997
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Prepared by:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
PURCHASE OPTION AGREEMENT
THIS PURCHASE OPTION AGREEMENT ("Agreement") is entered into as of
this 29th day of August, 1997 by and among the CITY OF VALLEJO, a municipal
corporation organized and existing under the laws of the State of California
(the "City"), the MARINE WORLD JOINT POWERS AUTHORITY, a joint exercise of
powers authority organized and existing under the laws of the State of
California (the "Authority") and the REDEVELOPMENT AGENCY OF THE CITY OF
VALLEJO, a public body, corporate and politic, organized and existing under the
laws of the State of California (the "Agency"); and PARK MANAGEMENT CORP., a
California corporation (the "Corporation").
R E C I T A L S:
A. The City owns fee simple title to approximately one hundred
thirty-eight (138) acres of land located in the City of Vallejo, County of
▇▇▇▇▇▇, State of California, and more particularly described in Exhibit A
attached hereto and made a part hereof (the "Land"). The City also owns or
controls the right to use the surface of Lake ▇▇▇▇▇▇, a flood control and
drainage reservoir consisting of approximately fifty-five (55) acres ("Lake
▇▇▇▇▇▇").
B. The City has entered into a 1997 Site Lease Relating to Marine
World dated as of January 1, 1997, whereby the City has leased the Land and
rights to use a portion of the surface of Lake ▇▇▇▇▇▇ to the Authority (the
"1997 City-Marine World Lease").
C. In connection with the Certificates of Participation Financing
(as defined in Section 7.14), the Authority and the City have entered into a
1997 Lease Agreement Relating to Marine World dated as of January 1, 1997 (the
"1997 Marine World-City Lease"), whereby the Authority leased back to the City a
portion of the Land more particularly described in Exhibit B attached hereto and
made a part hereof (the "Public Parcel", which Public Parcel shall be
hereinafter deemed to include all Improvements thereon) and rights to use a
portion of the surface of Lake ▇▇▇▇▇▇, the City and the Agency have entered into
a 1997 First Sublease Agreement Relating to Marine World dated as of January 1,
1997 (the "1997 City-Agency Lease"), whereby the City subleased to the Agency
the Public Parcel and the rights to use a portion of the surface of Lake ▇▇▇▇▇▇,
and the Agency and the Authority have entered into a 1997 Second Sublease
Agreement Relating to Marine World, dated as of January 1, 1997, whereby the
Agency subleased to the Authority the Public Parcel and the rights to use a
portion of the surface of Lake ▇▇▇▇▇▇ (the "1997 Agency-Marine World Lease").
The 1997 City-Marine World Lease, the 1997 Marine World-City Lease, the 1997
City-Agency Lease and the 1997 Agency-Marine World Lease are collectively
referred to herein as the "Public Leases" and the City, the Agency and the
Authority are hereinafter, as their interests may appear, collectively referred
to as the "Optionor."
D. Pursuant to that certain Option Agreement (Parcel Lease) dated as
of May 30, 1997, among the Authority, the Agency and the Corporation, the
Authority granted to the Corporation an option to lease a portion of the Land
identified in Exhibit C attached hereto and made a part hereof (the "Private
Parcel," which Private Parcel shall be hereinafter deemed to include all
Improvements thereon), to enable the Corporation to construct and operate
facilities on the Private Parcel compatible with those on the Public Parcel.
E. Optionor desires to grant to the Corporation an option (the
"Option") to acquire all of the right, title and interest of Optionor in and to
the Option Property on the terms, and subject to the conditions, set forth
herein, and the Agency and the Authority desire to relinquish, transfer and
assign all of their respective right, title and interest thereto and under the
Public Leases, on the terms, and subject to the conditions, set forth herein.
F. The Corporation desires to acquire the Option upon the terms and
conditions hereinafter set forth.
A G R E E M E N T
In consideration of the promises set forth herein and for other good
and valuable consideration, including but not limited to, amounts expended and
to be expended by or on behalf of the Corporation in connection with the making
of certain Improvements to the Option Property, the receipt and sufficiency of
which the parties hereto hereby acknowledge, the parties hereto hereby agree as
follows (refer to Section 7.14 for definitions of capitalized terms):
ARTICLE 1
TERMS OF OPTION
SECTION 1.1 Sale of Option. Optionor hereby grants to the
Corporation, and the Corporation hereby accepts from Optionor, the Option for
the consideration recited above, and on the terms set forth herein. In the event
the Corporation exercises the Option in accordance with Section 1.4, the parties
shall, at the Corporation's election, either execute and deliver a contract of
sale for the Option Property in form and substance reasonably acceptable to
Optionor and the Corporation, including but not limited to, and otherwise
consistent with, the terms set forth herein (the "Contract of Sale"), or
consummate the Closing in accordance with the terms hereof.
SECTION 1.2 Term. The term of the Option shall begin as of the date
hereof and expire on the date which is the soonest to occur of (i) the Closing
Date, (ii) the expiration of the Option in accordance with the terms hereof,
(iii) February 1, 2007 and (iv) the expiration by its terms of the Option under
and as defined in the Lease Option without exercise thereof by the Corporation
(such period shall hereinafter be referred to as the "Term"). If the Option is
not exercised in accordance herewith on or prior to the last day of the Term,
the Option shall
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automatically and without requiring further documentation, terminate and cease
to be of force and effect.
SECTION 1.3 Exclusivity. The Option to purchase the Option Property
shall be exclusive during the Term; provided, however, the parties shall have
the right to assign the Option and all of their respective right, title and
interest hereunder in accordance with Section 7.3 below.
SECTION 1.4 Exercise; Rescission. (a) Exercise of the Option herein
granted shall be by written notice thereof given by the Corporation to Optionor
not more than one hundred twenty (120) days prior to the prospective Closing in
the manner hereinafter provided during the Term (the "Exercise Notice").
Notwithstanding the foregoing, the Option may only be exercised (i) if the
Corporation has theretofore exercised the Option under and as defined in the
Lease Option and (ii) if the Exercise Notice is delivered more than one hundred
twenty (120) days prior to February 1, 2002, the Corporation shall have obtained
an opinion of a nationally recognized bond counsel acceptable to the Optionor to
the effect that the exercise of the Option will not cause the interest component
of the Lease Payments under the 1997 Marine World-City Lease to be includable in
the gross incomes of the owners of the related Certificates of Participation.
(b) Notwithstanding any provision of this Agreement to
contrary, at any time after delivery of the Exercise Notice, and on or before
the thirty-fifth (35th) day prior to the prospective Closing Date, for any
reason or for no reason and without the necessity of any explanation, the
Corporation may give Optionor a written notice in the manner hereinafter
provided during the Term (the "Rescission Notice") whereby the Corporation
elects to rescind the Exercise Notice, whereupon this Agreement and the
obligations of the parties hereunder shall continue in force and effect as if
such Exercise Notice had not been delivered. In the event that the Corporation
delivers any such Rescission Notice, the Corporation shall promptly pay, upon
receipt of an invoice therefor, all costs incurred by Optionor related to
actions taken by Optionor in response to the Exercise Notice reasonably related
to preparing for the Closing.
SECTION 1.5 Time and Place of Closing. Upon timely and proper
exercise of the Option as herein provided, the purchase and sale of the Option
Property shall be consummated at a closing (the "Closing") to occur on a date
(the "Closing Date") selected by the Corporation in the Exercise Notice, which
is not less than sixty (60) days following the delivery of such Exercise Notice.
The Closing shall occur at the office of the City Manager or at such other
location as shall be mutually acceptable to the Corporation and the Optionor.
ARTICLE 2
CLOSING
SECTION 2.1 Purchase Price. If the Option is exercised by the
Corporation in accordance with the terms hereof, the Corporation shall pay to,
or as directed by, the Authority on or prior to the Closing Date as
consideration for the acquisition of the Option Property, an amount (the
"Purchase Price") equal to the greater of (i) the sum of (A) the then
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applicable Assessment Bond Amount and (B) the outstanding principal amount of
the Certificates of Participation as of the Closing Date or (ii) the Fair Market
Value. Except as otherwise provided herein, the Purchase Price shall be paid in
immediately available funds by federal funds wire transfer, or as otherwise
directed by Optionor in writing at least five (5) business days' prior to the
Closing. The Purchase Price shall be allocated among the Option Property as set
forth on a schedule prepared by the Corporation, reasonably acceptable to the
Optionor and delivered on or prior to the Closing. Each party shall make all
appropriate tax and other filings on a basis consistent with such allocation.
SECTION 2.2 The Corporation's Closing Conditions. Upon the
Corporation's exercise of the Option, the Corporation shall effectuate the
Closing on the Closing Date in accordance with the terms hereof or the Contract
of Sale (if any), provided the following conditions have been satisfied or
waived by the Corporation on or prior to such Closing Date:
(a) Optionor's Closing Documents (as described in Section 2.4
hereof) shall have been duly executed and delivered to the Corporation.
(b) The Corporation shall have received all Governmental
Approvals and such other permits, licenses, reports, including but not limited
to an environmental report with soil samples, and such other evidence reasonably
required by the Corporation, showing that the Option Property and the Business
are in substantial compliance with all applicable Laws, including but not
limited to Environmental Laws, except to the extent that any non-compliance does
not have a material adverse effect on the Option Property or the Condition of
the Business.
(c) All of the representations and warranties of Optionor set
forth herein and in any Contract of Sale shall have been true and correct in all
material respects on the date hereof or thereof, as the case may be, and on the
Closing Date, and Optionor shall have performed and complied with all
agreements, obligations and covenants required by this Agreement or any Contract
of Sale to be performed or complied with by it at or prior to the Closing Date.
(d) The Corporation shall have received an A.L.T.A. form of
owner's policy of title insurance issued by a title company acceptable to it
(the "Title Company"), insuring fee simple marketable title in the Realty in the
name of the Corporation (or its nominee or designee) subject to the Permitted
Encumbrances.
(e) The Certificates of Participation and all other
indebtedness or other liabilities secured by all or any part of the Option
Property or any interest therein, other than Assumed Liabilities and Permitted
Encumbrances, shall have been paid in full by, or on behalf of, Optionor or
shall have been duly called for prepayment in full on the Closing Date and the
Corporation shall have received evidence satisfactory to it that such prepayment
shall have been made or will be made on the Closing Date from the Purchase Price
received by the Authority.
(f) If, on the Closing Date, the Corporation shall not be the
manager of the Business, the Corporation shall have received evidence,
satisfactory to it, that any Contract between Optionor and any third party,
pursuant to which such party acts as manager of the Business shall terminate on
the Closing Date.
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(g) All accounts payable relating to the Business and other
Retained Liabilities existing as of the Closing Date shall have been paid by
Optionor, duly provided for under the RSA or paid by the Corporation on behalf
of Optionor out of the Purchase Price.
(h) All Optionor Required Consents (as defined in Section
3.1(j)) shall have been obtained and the Corporation shall have received
evidence, reasonably satisfactory to it, to that effect.
(i) Optionor shall have delivered to the Corporation at the
Closing possession and control of the Option Property.
(j) No change shall have occurred subsequent to the Exercise
Notice but prior to the Closing to all or any part of the Option Property which
alone or in the aggregate has a material adverse effect on the Option Property,
the Business or the Fair Market Value, nor has any event occurred or condition
exist at or prior to the Closing which may give rise to such change.
(k) No Claim (as defined in Section 3.1(d)) instituted by any
person (other than the Corporation or its Affiliates) shall have been commenced
or be pending against Optionor, the Corporation or any of their Affiliates,
which Claim seeks to restrain, prevent, change or delay in any material respect
the transactions contemplated hereby or seeks to challenge any of the material
terms or provisions of this Agreement or seeks material damages in connection
with any of such transactions.
SECTION 2.3 Optionor's Closing Conditions. Upon the Corporation's
exercise of the Option, Optionor shall effectuate the Closing on the Closing
Date in accordance with, the terms hereof or with the Contract of Sale (if any),
provided (a) the Corporation shall have paid, or caused to be paid, the Purchase
Price and (b) the Corporation's Closing Documents (as described in Section 2.4)
shall have been executed and delivered to Optionor.
SECTION 2.4 Closing Deliveries. (a) Optionor shall deliver, or cause
to be delivered, at Closing, the following (collectively, the "Optionor's
Closing Documents"):
(i) The City shall have executed and delivered to the
Corporation a general warranty deed in the form generally in use in California
and otherwise acceptable to the Corporation and reasonably approved by counsel
to Optionor (the "Deed") conveying fee simple marketable title to the Realty to
the Corporation (or a nominee or designee thereof), free and clear of all liens,
claims, encumbrances and other matters affecting such title, except those set
forth in Exhibit D attached hereto and made a part hereof (the "Permitted
Encumbrances").
(ii) Each Optionor shall have executed and delivered to
the Corporation such bills of sale, assignments and other instruments of
transfer, in form and substance acceptable to the Corporation and reasonably
approved by counsel to Optionor, as shall be necessary or desirable to vest in
the Corporation all of its respective right, title and interest in, to and under
the Option Property and to consummate the transactions contemplated hereby.
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(iii) Evidence, reasonably acceptable to the
Corporation, of Optionor's due formation, good standing and authorization to
effectuate the transactions contemplated herein, and such certificates of duly
authorized representatives of Optionor as the Corporation shall reasonably
request with respect to such transactions.
(iv) Evidence, reasonably acceptable to the Corporation,
of the satisfaction and discharge of the Certificates of Participation and the
other Retained Liabilities referred to in Section 2.2(e) and (g).
(v) Any and all other documentation required or
reasonably requested by the Title Company in order to issue a title policy in
the form required under Section 2.2(d) hereof in order to effectuate the
transactions contemplated herein and in the Contract of Sale (if any).
(b) The Corporation shall deliver, or cause to be delivered,
at the Closing, the following (collectively, the "Corporation's Closing
Documents"):
(i) An assumption agreement of the Corporation, in form
and substance acceptable to Optionor, with respect to the Assumed Liabilities.
(ii) Evidence, reasonably acceptable to Optionor, of the
Corporation's due formation, good standing and authorization to effectuate the
transactions contemplated herein.
SECTION 2.5 Closing Costs.
(a) Optionor shall pay, or cause to be paid, the following in
connection with the Closing: (i) all revenue, documentary, and/or transfer
stamps or taxes, if any, incident to the Deed or conveyance thereupon; (ii)
fifty percent (50%) of all costs, fees and expenses of the Appraiser; and (iii)
all of its attorneys' fees and disbursements.
(b) The Corporation shall pay, or cause to be paid, the
following in connection with the Closing: (i) fifty percent (50%) of all costs,
fees and expenses of the Appraiser; (ii) one hundred percent (100%) of all title
insurance, survey and environmental report costs; and (iii) all of its
attorneys' fees and disbursements.
ARTICLE 3
REPRESENTATIONS AND COVENANTS
SECTION 3.1 Representations and Warranties of Optionor. Each
Optionor jointly and severally represents, warrants and covenants as follows:
(a) The City is the owner in fee simple of the Realty, free
and clear of all liens, claims, encumbrances and other matters affecting title,
except for the Permitted Encumbrances.
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(b) Optionor owns, or has a valid leasehold interest in and
to, the Option Property (other than the Realty) free and clear of all liens,
claims and encumbrances, except for Assumed Liabilities and the Permitted
Encumbrances.
(c)(i) If the Corporation is not then the manager of the
Business, within twenty (20) days after delivery of the Exercise Notice,
Optionor will deliver to the Corporation an accurate and complete list as of the
date of the Exercise Notice (the "Contract Schedule") of all Contracts relating
to the Business to which Optionor is a party or by which Optionor or the Option
Property are bound or subject, except for those Contracts with persons who are
not affiliates of Optionor relating solely to the purchase or sale of property
(other than the Realty) or services by or on behalf of Optionor in the ordinary
course of the Business which (x) require Optionor to make or receive payments
not in excess of $40,000 and (y) have a remaining term of less than twelve
months on the Closing Date or are terminable by Optionor without penalty during
such period. True and correct copies of all written Contracts listed on such
Schedule and summaries of the material provisions of all oral Contracts so
listed will accompany the Contract Schedule.
(ii) As of the Closing Date, all Contracts listed on the
Contract Schedule will be valid, subsisting, in full force and effect and
binding upon Optionor and the other parties thereto in accordance with their
terms. Optionor will not be in default under any such Contract in any material
respect, nor will any other party thereto be in default thereunder in any
material respect.
(d) If the Corporation is not then the manager of the
Business, within twenty (20) days after delivery of the Exercise Notice,
Optionor will deliver to the Corporation an accurate and complete list as of the
date of the Exercise Notice (the "Claims Schedule") of (i) all outstanding
Orders of any Governmental Authority against or involving the Option Property or
the Business, and (ii) all actions, suits, claims or counterclaims or legal,
administrative, governmental, arbitral or other proceedings or investigations
(collectively, "Claims") (whether or not the defense thereof or liabilities in
respect thereof are covered by insurance), pending or to the knowledge of
Optionor threatened on such date, against or involving the Option Property or
the Business. At the Closing there will be no such Orders or Claims pending or
threatened, other than Orders or Claims that, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the
Condition of the Business. As of the Closing, there will exist no such fact,
event or circumstance known to Optionor that would give rise to any Claim that,
if pending or threatened on the Closing Date, could reasonably be expected to
have a material adverse effect on the Condition of the Business.
(e) Optionor is not in violation in any material respect of
any order, judgment, injunction, award, citation, decree, consent decree or writ
(collectively, "Orders") applicable to the Option Property or the Business, or
any material Law affecting the Option Property or the Business. All Permits
material to the use and occupancy of the Option Property and the conduct of the
Business are in full force and effect and the Optionor is in compliance in all
material respects therewith. If the Corporation shall not then be the manager of
the Business, within twenty (20) days after delivery of the Exercise Notice,
Optionor will deliver
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to the Corporation an accurate and complete list of all Permits, indicating
thereon which Permits are then non-transferable to the Corporation.
(f) To the best of Optionor's knowledge, (i) the Realty has
never been used to store, bury, deposit, place, dump, discharge, spill, release,
incinerate or otherwise dispose of any Hazardous Materials (as hereinafter
defined); (ii) there are no existing Environmental Conditions affecting the
Option Property or Environmental Compliance Liability with respect thereto, nor
is Optionor aware of the existence of any event or condition which may give rise
thereto; and (iii) Optionor has not received any notice of any violation of any
Environmental Law.
(g) If the Corporation is not then the manager of the
Business, within twenty (20) days after delivery of the Exercise Notice,
Optionor will deliver to the Corporation an accurate and complete list as of the
date of the Exercise Notice (i) all Intellectual Property Rights, including a
copy of all registrations and applications with respect thereto filed with or
issued by any Governmental Authority, and (ii) a list of all employees of the
Business and a description of all employee benefit plans, Contracts or
arrangements with respect to employment, applicable to such employees. The
transactions contemplated by this Agreement will not have an adverse effect on
the right, title and interest of the Corporation as of the Closing Date in and
to the Intellectual Property Rights.
(h) Optionor has not dealt with any real estate broker which
has been involved in the granting of the Option or the execution of this
Agreement, and no broker's or real estate commission is due as a result thereof
or of the consummation of the transactions contemplated herein. The Authority
shall be solely responsible and liable for any broker's or real estate
commission which may be payable in consequence of the execution of this Option
and/or the sale and purchase of the Option Property pursuant to the exercise of
the Option herein granted.
(i) Each Optionor is duly formed and in good standing in the
State of California and each Optionor and each person executing this Agreement
on behalf thereof, is duly and validly authorized to do so, and has full power
and authority to do so and has taken all necessary corporate, municipal or other
governmental action on its part in connection with the performance of its
obligations hereunder and under the Contract of Sale (if any). Each of this
Agreement and the Contract of Sale, if any, is a legal, valid and binding
obligation of Optionor.
(j) No consents from, notice to, filings with, approvals by,
or other permission of any third party is, or at the Closing will be, required,
under Law, Contract or otherwise, in order for Optionor to execute and deliver
this Agreement or the Contract of Sale and to perform its obligations hereunder
or thereunder or otherwise effectuate the transactions contemplated thereby,
except such that have been obtained or made on or prior to the Closing (the
"Optionor Required Consents"). The execution, delivery and performance by
Optionor of this Agreement and each other agreement or instrument executed and
delivered hereunder to which each is or will be a party or the consummation of
the transactions contemplated hereby does not and will not (i) violate any
provision of the organizational documents of Optionor; (ii) require Optionor to
obtain any consent, approval or action of or waiver from, or make any
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filing with, or give any notice to, any Governmental Authority or any other
person, except for Optionor Required Consents; (iii) if Optionor Required
Consents are obtained prior to Closing, violate, conflict with or result in a
breach or default under (after the giving of notice or the passage of time or
both), or permit the termination of, any Contract of a type required to be
listed on the Contract Schedule to which Optionor is a party or by which it, the
Option Property or the Business may be bound or subject, or result in the
creation of any lien upon the Option Property pursuant to the terms of any such
Contract; (iv) if Optionor Required Consents are obtained prior to Closing,
violate any Law or Order of any Governmental Authority against, or binding upon,
Optionor, the Option Property or the Business; or (v) if Optionor Required
Consents are obtained prior to Closing, violate or result in the revocation or
suspension of any Permit.
(k) As of the Closing, the Option Property will be sufficient
and adequate to permit the continued conduct of the Business as it was
theretofore conducted by Optionor.
SECTION 3.2 Covenants.
(a) In the event the purchase and sale of the Option Property
will result in a subdivision of the Option Property or otherwise requires
Governmental Approval, the Authority agrees to use its best efforts to cause
such Governmental Approvals to be granted. The Authority shall cooperate with
the Corporation in order that any such Governmental Approvals shall be issued.
The costs and expenses of obtaining any Governmental Approval required to
consummate the transactions contemplated hereby shall be borne equally by the
parties.
(b) Within thirty (30) days from the date of execution of this
Option by Optionor, Optionor will furnish, or cause to be furnished, or as
directed by, the Corporation, at Optionor's sole expense, copies of all existing
title insurance policies and reports covering the Option Property, all
topographic and boundary surveys and legal descriptions of the Option Property,
all engineering and environmental reports and all appraisals with respect to the
Option Property, to the extent in the possession of the City or the Authority.
(c) Except as may otherwise be expressly permitted under any
Other Agreement, Optionor shall not sell, assign, transfer, convey, mortgage,
pledge or otherwise encumber the Realty during the Term. Subsequent to the date
of the Exercise Notice, Optionor shall not sell, assign, transfer, convey,
mortgage, pledge or otherwise encumber any Assets, except in the ordinary course
of the Business, consistent with past practice.
(d) Except as may be expressly permitted under any Other
Agreement, Optionor shall not cause, create, permit or otherwise consent to any
event, condition, action or documentation which may have which alone or in the
aggregate has a material adverse effect on the Option Property or the Condition
of the Business, and shall promptly notify the Corporation of any event or
condition which may give rise to such change.
(e) Optionor shall comply with its obligations under the Other
Agreements, including but not limited to any obligations with respect to the
payment of Impositions and other sums and maintenance of the Option Property.
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(f) The Authority shall not request or consent to any change
or variance in the current zoning or use (including uses permitted by any
approved master plan) permitted by Governmental Authorities of all or any part
of the Option Property without the prior written consent of the Corporation, to
be exercised in its sole discretion. This covenant shall survive the Closing.
(g) Subsequent to the date of this Agreement and, except in
the ordinary course of the Business, the Optionor will not, without the prior
written consent of the Corporation, enter into any Contract relating to the
Business or the Option Property of the type required to be included on the
Contract Schedule or exercise any rights to renew or extend any such Contract if
the term of such Contract (including any renewal or extension periods) ends
after February 1, 2002.
(h) All Impositions, general and special assessments and
general and special utility charges and other operating expenses relating to the
Business shall be duly provided for under the RSA or apportioned at the Closing
as of the Closing Date. At the Closing, the Corporation and Optionor shall
reimburse the other party, as appropriate, for amounts payable pursuant to this
Section.
(i) Except as otherwise contemplated under the RSA, Optionor
agrees to pay and discharge when due all claims of creditors of Optionor or
other Retained Liabilities that may be asserted against the Corporation or any
Affiliate thereof in their capacities as such under this Agreement, except with
respect to the Assumed Liabilities.
(j) Subsequent to the date of the Exercise Notice, Optionor
will not increase the compensation of, or make any change in any employee
benefit plans, Contracts or arrangements applicable to, any employee of the
Business and will operate the Business only in the ordinary course of the
Business, consistent with past practice, or as otherwise consented to by the
Corporation.
(k) Subject to the terms and conditions herein, each of the
Optionor and the Corporation shall take or cause to be taken all action and
shall do or cause to be done all things necessary, proper or advisable to
consummate and make effective, as soon as reasonably practicable after the date
of the Exercise Notice, the transactions contemplated hereby, including, but not
limited to, the obtaining of all Optionor Required Consents and Permits or
consents of any third party, whether private or governmental, required in
connection with such party's performance of such transactions and each party
hereto shall cooperate with the other in all of the foregoing. Without limiting
the generality of the foregoing, the Optionor covenants and agrees to take or
cause to be taken all action and to do or cause to be done all things necessary,
proper or advisable in order to cause the representations and warranties of
Optionor herein and in any Contract of Sale to be true and correct on and as of
the Closing Date.
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ARTICLE 4
INSPECTION; ACCESS
During the Term, in the event the Corporation is no longer the
manager of the Business, upon reasonable prior written notice to the City
Manager, the Corporation shall have the right to go upon all or any part of the
Realty to make such investigation of the Option Property and the Business, as
such examination of the books and records relating thereto, as the Corporation
shall deem necessary or desirable in order to determine whether to exercise the
Option. Such investigation may include surveys, appraisals, engineering studies,
test borings, and inspections (including subsurface inspections), and as may
otherwise be required in order to obtain Governmental Approvals; provided,
however, in the exercise of the rights herein given, the Corporation shall not
unreasonably interfere with the use by Optionor of the Option Property, subject
to its rights under the Other Agreements, if same is then being used thereby.
ARTICLE 5
CONDEMNATION; CASUALTY
If, prior to the Closing, all or any part of the Option Property
shall be damaged or destroyed by fire or other casualty, or taken in any
proceeding by any Governmental Authority vested with the power of eminent
domain, by condemnation or otherwise, or shall be acquired for public or
quasi-public purposes, or condemnation proceedings therefor shall have been
threatened or instituted, then the Corporation shall have the right and election
of sending a Rescission Notice in accordance with this Agreement with the effect
being as set forth in Section 1.4(b). If the Option is exercised in accordance
herewith, then at the election of the Corporation, Optionor shall assign,
transfer and set over to the Corporation all of its right, title and interest in
and to any proceeds and award that may be made for such damage, destruction or
taking, in which event the Purchase Price of the Option Property shall remain
unchanged.
ARTICLE 6
EVENT OF DEFAULT
SECTION 6.1 Rights Upon Default. (a) If, following delivery of an
Exercise Notice and if no Rescission Notice is delivered, Optionor does not
close the purchase of the Option Property in accordance with the terms of this
Agreement (including without limitation the nonsatisfaction of the conditions to
Closing specified in Section 2.2), or shall otherwise fail or refuse to observe
and keep the terms of this Agreement or the Contract of Sale, then the
Corporation shall have the right, at its sole option, to (i) elect to declare
this Agreement cancelled, whereupon, the Corporation shall be entitled to
exercise any and all rights and remedies available to it by contract, at law or
in equity, which rights and remedies shall be cumulative, or (ii) elect to
affirm this Agreement and enforce its specific performance or recover against
the Authority for its breach. The Authority shall be liable for and agrees to
pay all damages, costs and expenses incurred by the Corporation arising out of
or in connection with
11
or resulting from the failure or refusal of Optionor to close the purchase and
observe and keep the terms of this Agreement or the Contract of Sale, as
aforesaid, including reasonable attorneys' and other experts' fees and
disbursements.
(b) If, having given the Exercise Notice and not having given
a Rescission Notice, the Corporation does not close the purchase of the Option
Property in accordance with the terms of this Agreement or shall otherwise fail
or refuse to observe and keep the terms of this Agreement or the Contract of
Sale, then Optionor shall be entitled to exercise any and all rights and
remedies available to it by contract, at law or in equity. The Corporation shall
be liable for and agrees to pay all damages, costs and expenses incurred by
Optionor arising out of or in connection with or resulting from the failure or
refusal of the Corporation to close the purchase and observe and keep the terms
of this Agreement or the Contract of Sale, as aforesaid, including reasonable
attorneys' and other experts' fees and disbursements.
(c) In furtherance of the foregoing, the parties acknowledge
that (i) it will be impossible to measure in money the damage to the Corporation
of any failure by Optionor to comply with any of the obligations imposed by this
Agreement, including its failure to cause the conditions to Closing specified in
Section 2.2 to be satisfied, (ii) every such restriction and obligation is
material, and (iii) in the event of any such failure, the Corporation will not
have an adequate remedy at law or in damages. Therefore, each Optionor hereby
consents to the issuance of an injunction or the enforcement of other equitable
remedies against it upon the suit of the Corporation, without bond or other
security, to compel performance of any term hereof, and waives any defenses to
any such suit in the nature of failure of consideration, breach of any other
provision of this Agreement (other than the failure by the Corporation to tender
payment of the Purchase Price as provided herein), and availability of relief in
damages; provided, however, that the foregoing shall not be deemed to constitute
a waiver of any claim for damages that Optionor may have under Section 6.1(b)
above or otherwise.
(d) In the event that any condition to Closing specified in
Section 2.2 shall not have been satisfied on or prior to the Closing Date, the
Corporation shall have the right, which shall be in addition to any other rights
or remedies it may have hereunder, at law or in equity, to postpone the Closing
for a reasonable period and, during such period, the Corporation shall have the
right, in the name, on behalf and at the expense of Optionor, to take such
action or do such things as shall be necessary, proper or advisable to cause all
such conditions to Closing to be satisfied. In such event, all references herein
to the Closing Date shall be to the actual date on which the Closing occurs.
SECTION 6.2 Attorneys' Fees. Should litigation be commenced between
the parties hereto concerning this Agreement, the Contract of Sale or the rights
and duties of the parties in relation thereto or otherwise with respect to the
Option Property, whether it be an action for damages or equitable or declaratory
relief, the prevailing party in such litigation shall be entitled, in addition
to all other relief as may be granted by a court of competent jurisdiction,
reasonable sums as and for attorneys' fees and disbursements. If any court
proceeding hereunder embraces more than one dispute and one party is the
prevailing party with respect to one but not all of those disputes, the court
shall apportion the costs and expenses and the reasonable attorneys' fees and
disbursements incurred by the parties to the separate disputes
12
embraced by the proceeding, and thereby equitably determine the amount thereof
to be borne by each party.
ARTICLE 7
GENERAL PROVISIONS
SECTION 7.1 Notices. For purposes of serving notices, or requesting
or granting approvals or authorizations under this Agreement, as well as for
purposes of transmitting correspondence concerning this Agreement and all of the
activities of the parties hereunder, the addresses of the parties shall be as
follows:
If to the Corporation: c/o Premier Parks Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman and CEO
with a copy to: ▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the City: City of Vallejo
City Hall
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: City Manager
If to the Agency: The Redevelopment Agency of the City of Vallejo
c/o City of Vallejo
City Hall
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director
If to the Authority: Marine World Joint Powers Authority
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Any party may change its address as stated above upon written notice to the
other parties. Any notice or other communication under this Agreement shall be
deemed given (i) upon personal delivery, (ii) upon receipt by each other party
as evidenced by a written receipt of the United
13
States Postal Service or any reputable courier service, (iii) three (3) days
after deposit, postage prepaid and correctly addressed, with the United States
Postal Service, registered or certified, or with a reputable courier service,
(iv) one (1) day after delivery, postage prepaid and correctly addressed, with a
reputable courier service guaranteeing overnight delivery, or (v) upon receipt
of a telecopy provided a confirmation of delivery is sent via first class,
registered or certified mail with the United States Postal Service or with a
reputable courier service.
SECTION 7.2 Additional Actions and Documents. The parties agree to
execute and deliver such further documents and take such actions as may be
required to carry out the intent and purposes of this Agreement and to comply
with any Laws which may be applicable to this Agreement. Optionor shall
cooperate with the Corporation in connection with the Corporation's full
exercise of its rights hereunder, such cooperation to be at the Corporation's
cost and expense (but the Corporation shall not be obligated to pay Optionor for
any of Optionor's overhead), Optionor's cooperation to include but not be
limited to the furnishing of information required under Section 3.2(b) and such
other information as reasonably requested by the Corporation from time to time
during the Term.
SECTION 7.3 Successors and Assigns. This Agreement shall inure to
the benefit of and apply to and bind the respective heirs, successors,
executors, administrators and assigns of the parties to this Agreement.
Notwithstanding the foregoing, no party may assign its rights or obligations
under this Agreement, other than (a) in connection with a Permitted Sale under,
and in accordance with, the Private Parcel Lease, (b) the Corporation to Premier
Parks Inc. (or a wholly-owned subsidiary thereof), (c) the Authority to the
Agency or City, or (d) the Agency to the City; provided, however, that no
assignment (whether or not so permitted) shall be effective unless and until the
assignee expressly assumes in writing all of the obligations of assignor
hereunder; and further provided that no such assignment shall relieve any
assignor from its obligations and liabilities hereunder. Notwithstanding
anything to the contrary set forth herein or in any Public Lease or Other
Agreement, any assignment by a party of its interest hereunder or in the Option
Property shall be expressly made subject to this Agreement and the rights of the
Corporation and the Optionor hereunder and shall have no effect thereupon.
SECTION 7.4 Counterparts. This Agreement may be executed in
counterparts, each of which when taken together shall constitute one agreement.
SECTION 7.5 Captions; Gender; Phrases. The captions used in this
Agreement are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. When the context of this
Agreement requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural. The terms "shall," "will" and "agree" are mandatory. The term "may" is
permissive. When a party is required to do something by this Agreement, it shall
do so at its sole cost and expense without right of reimbursement from the other
party unless specific provision is made therefor.
SECTION 7.6 Invalidity. Where any party is obligated not to perform
any act, such party is also obligated to restrain any others within its control
from performing such act, including its agents, invitees, contractors,
subcontractors, and employees. Should any provision of this Agreement prove to
be invalid or illegal, such invalidity or illegality shall in no way
14
affect, impair or invalidate any other provision hereof, and such remaining
provisions shall remain in full force and effect.
SECTION 7.7 Entire Agreement; Modifications. This Agreement and the
Exhibits attached hereto, which are incorporated herein by this reference, shall
constitute the entire agreement between the parties and shall supersede all
other agreements respecting the Option. No subsequent change or addition to this
Agreement shall be binding unless it is in writing and is signed by the parties
hereto.
SECTION 7.8 Arbitration of Disputes. Any disputes between Optionor
and the Corporation arising out of or related to this Agreement which cannot be
resolved by good faith negotiation shall be resolved through binding
arbitration. Any such party may elect to commence arbitration at any time by
giving notice to the other party. The parties then shall attempt to agree on the
appointment of a panel of three independent arbitrators. Each of Optionor and
the Corporation may select one of the arbitrators for such panel, and if they do
not identify their respective arbitrator to the other party or they cannot agree
on the third arbitrator within twenty (20) days of the notice electing
arbitration, such arbitrators) shall be appointed through the procedures of the
American Arbitration Association. Any arbitrator selected to serve shall be
qualified by training and experience for the matters for which such arbitrator
is designated to serve. The arbitration shall be conducted in Vallejo,
California under the commercial arbitration rules then in effect of the American
Arbitration Association. The written decision and findings of a majority of the
panel of arbitrators shall be final, binding and conclusive as between the
parties and may be enforced on the application by any party or by order or
judgment entered in any court having jurisdiction. The parties hereby consent to
the jurisdiction and venue of the federal courts located in the Eastern District
of the State of California and state courts located in ▇▇▇▇▇▇ County, California
for this purpose. The parties shall use all commercially practicable efforts to
cause arbitrator or arbitrators so selected to furnish Optionor and the
Corporation with a written decision within forty-five (45) days of the date of
selection of the last of the arbitrators to be so selected. Any decision so
submitted shall be signed by a majority of the arbitrators.
The Corporation and Optionor each shall advance one-half (1/2) of
the costs of any arbitration. However, the prevailing party in any arbitration
proceeding or legal action arising out of, or in connection with, this Agreement
shall be entitled to recover its reasonable attorneys' and experts' fees and
disbursements and its costs and expenses incurred in connection with such
arbitration proceeding or legal action. The arbitrators shall specify the
prevailing party or parties in its award. If more than one arbitrable dispute is
adjudicated then the costs and expenses of the arbitration shall be apportioned
by the arbitrators in the arbitration award to each separate dispute.
SECTION 7.9 No Joint Venture. This Agreement is not intended, nor
shall it be deemed, to create a joint venture between the Corporation and any or
all Optionors or to grant any existing right of ownership of the Corporation in
or to the Public Parcel or the Improvements thereon.
SECTION 7.10 Waiver of Personal Liability. No member, officer, agent
or employee of the Authority, the Agency or the Corporation shall be
individually or personally
15
liable for the obligations of the Authority, the Agency or the Corporation,
respectively, hereunder; but nothing herein contained shall relieve any such
member, officer, agent or employee of any Optionor from the performance of any
official duty provided by law or this Agreement.
SECTION 7.11 Controlling Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California.
SECTION 7.12 Survival. Any provision herein contained which by its
nature and effect if required to be observed, kept or performed after the
Closing shall survive the Closing and remain binding upon and for the benefit of
the parties hereto their heirs, assigns, successors and legal or personal
representatives until fully observed, kept or performed.
SECTION 7.13 Recording of Option. Optionor shall execute,
acknowledge, deliver and file with the Recorder's Office for ▇▇▇▇▇▇ County a
short form of this Agreement suitable for recording, which instrument shall not
reveal the purchase price and/or any other dollar amounts herein mentioned.
SECTION 7.14 Certain Definitions. For purposes of this Agreement,
the following terms shall have the meaning ascribed thereto below:
Affiliate of any person means any other person directly or
indirectly through one or more intermediary persons, controlling, controlled by
or under common control with such person.
Appraiser has the meaning set forth in the definition of "Fair
Market Value."
Assessment Bond Amount means (i) if the Exercise Notice is delivered
on or before January 31, 2003, $1,000,000 or (ii) if the Exercise Notice is
delivered after that date, $2,000,000; less, in each case, the outstanding
principal amount of the Assessment Bonds which are secured by a lien on the
Option Property as of the Closing Date. In no event shall the Assessment Bond
Amount be less than zero.
Assessment Bonds mean the portion of the principal amount of the
City's Assessment Bonds (Fairground Drive Assessment District No. 65), the
repayment of which is payable from parking revenues at the Option Property and
which are secured by a lien on the Option Property, which portion of such
principal amount equals $4,810,410.46 on the date of this Agreement.
Assets means all of the property, assets and rights (other than the
Realty) used or held for use in the Business, including:
(i) the rides, machinery, equipment, tools, supplies,
spare parts, rolling stock, furniture and other tangible personal property of
Optionor used or held for use in the Business on the Closing Date;
16
(ii) all of Optionor's patents, patent applications,
trade names, trademarks, copyrights, servicemarks, trademark and servicemark
registrations and applications (including, without limitation, the name "Marine
World Africa USA" and any derivation thereof), used in the Business;
(iii) all trade secrets, formulae and specifications and
technical know-how, whether being used or under development, including
engineering and other drawings, data, design and specifications, product
literature and related materials, in each case which relate to the Business and
are owned or licensed by Optionor as of the Closing Date and all books, records
and computer programs relating thereto (together with the items referred to in
clause (ii) above, the "Intellectual Property Rights");
(iv) the goodwill of Optionor in the Business;
(v) Optionor's rights under all Transferred Contracts
and all prepaid expenses, claims and other prepayments, including security
deposits and other retentions held by third parties, with respect to the
Transferred Contracts as of the Closing Date;
(vi) all inventory, wherever located, of Optionor with
respect to the Business as such exists on the Closing Date;
(vii) all of Optionor's rights under all Permits
relating to or necessary to the conduct of the Business as of the Closing Date,
to the extent such items are transferable;
(viii) all transferable warranties and guarantees owned
by or for the benefit of Optionor pertaining to the Assets;
(ix) all proceeds from the sale of passes or tickets to
customers of the Business to the extent applicable to periods after the Closing;
and
(x) all books and records of the Authority relating to
the Business and the Option Property (whether kept or maintained by Optionor or
any third party) including, without limitation, copies of lists of customers and
suppliers; admission tickets, season passes, records with respect to costs,
inventory and equipment; business development plans; advertising materials,
catalogues, correspondence, mailing lists, photographs, sales materials and
records; purchasing materials and records; personnel records with respect to
employees of the Business; media materials and plates; sales order files;
ledgers and other books of account; plans, specifications, surveys, reports and
other materials relating to the Realty; other records of the Authority required
to continue the Business as then being conducted by or on behalf of the
Authority; and all software programs, computer printouts, databases and related
items of the Authority used in the Business.
The term Assets shall exclude the following assets and
property:
(i) all of Optionor's rights, title and interest in and
to this Agreement;
17
(ii) except as contemplated by clause (ix) above, cash
on hand, cash equivalents, investments (including, without limitation, stock,
debt instruments, options and other instruments and securities) and bank
deposits of Optionor as of the Closing Date;
(iii) all of the accounts receivable of Optionor as of
the Closing Date;
(iv) tax refunds and recoveries and similar benefits of
Optionor which relate to any period prior to the Closing Date and all of
Optionor's income tax returns and records as of the Closing Date; and
(v) all assets of Optionor not related to the Business.
Assumed Liabilities means the liabilities and obligations of
Optionor arising and to be performed after the Closing under the Transferred
Contracts, other than any such liability or obligation arising out of a breach
or default by Optionor thereunder at or prior to the Closing Date (including any
event occurring prior to the Closing that with the passage of time or giving of
notice, or both, would become a breach or default under any Transferred
Contract).
Business means the ownership and operation of Marine World Africa
USA conducted on the Public Parcel and, to the extent of Optionor's interest
therein, the Private Parcel.
Certificates of Participation means those certain certificates of
participation, the proceeds of which refinanced certain improvements on the
Public Parcel, delivered on January 30, 1997 in the original aggregate principal
amount of $63,465,000, as the same exist on the date of this Agreement, together
with any refinancing thereof and any other debt financing obtained by, or debt
obligations of, an Optionor in lieu thereof, or in addition thereto to the
extent secured by or otherwise encumbering all or any part of the Option
Property or any interest therein.
Condition of the Business means the condition (financial or
otherwise), results of operations or prospects of the Business.
Contract means any contract, agreement, indenture, note, bond,
lease, conditional sale contract, mortgage, license, franchise, instrument,
commitment or other binding arrangement, whether written or oral, and all
modifications and amendments thereto and substitutes thereof, to which Optionor
is a party or a beneficiary, relating to the Business.
Easements means all easements, rights-of-way, sidewalks, gores of
land, streets, ways, alleys, passages, passageways, sewer rights, waters, water
courses, water rights and powers, air, light and other rights, estates, titles,
interests, privileges, liberties, servitudes, licenses, tenements, hereditaments
and appurtenances whatsoever, in any way belonging, relating or appertaining to
the Realty or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, and all reversions, remainders and rents
thereof.
Environmental Compliance Liability means any obligation or liability
arising as the result of any default, violation or breach by Optionor of its
affiliates or previous tenants of
18
the Option Property or adjoining tenants during the Term of: (i) environmental
permits and other approvals, consents, licenses, certificates and authorizations
applicable to such Option Property of the operation of prior tenant's or other
occupant's business and activities thereon which are required by Environmental
Laws; (ii) any environmental regulatory compliance requirements applicable to
such Option Property or operations conducted on or from such Option Property
under Environmental Laws; or (iii) other Environmental Laws, except, in each
case, for any obligation or liability arising out of the negligence or willful
misconduct of the Corporation.
Environmental Condition means circumstances with respect to soil,
land surface, subsurface strata, surface waters, groundwaters, stream sediments,
air and similar environmental media both on and off the Option Property
resulting from any activity, inactivity, operations or Release occurring on or
off the Option Property, which under Environmental Laws require investigatory,
corrective and/or remedial measures and/or that may result in claims or demands
or give rise to liabilities of any Optionor or the Corporation or to third
parties including, but not limited to, Governmental Authorities.
Environmental Laws means any and all Laws concerning air, water,
solid waste, Hazardous Materials, Releases, worker and community right-to-know,
hazard communication, noise, resource protection, subdivision, inland wetlands
and watercourses, health protection and similar environmental, health, safety,
and land use concerns in all cases at any time, from time to time in effect
during the Term.
Fair Market Value means the aggregate fair market value of the
Business, valued as a going concern as determined below by an investment banking
firm selected by the Corporation and reasonably acceptable to Optionor (the
"Appraiser"). The parties agree that Fair Market Value shall be determined as
encumbered by the Other Agreements (including without limitation, the RSA) and
any other obligations of Optionor relating to the Option Property. In order to
give effect to such determination, the parties hereby instruct the Appraiser to
determine Fair Market Value using an income approach, by (a) multiplying (i) the
cash flow received by Optionor under clause (v) of Section 1.3(c) of the RSA
with respect to the last full fiscal year of the Authority immediately preceding
the date on which the Option is exercised, plus any amounts paid during such
fiscal year in respect of the regularly scheduled debt service on the debt
obligations relating to the Business referred to in clause (iv) of such Section
1.3(c)) by (ii) five (or such other multiple that is determined by the Appraiser
to represent the then prevailing multiple of cash flow used to value businesses
comparable to the Business in connection with the purchase and sale thereof),
and (b) subtracting from such product the outstanding principal amount of the
debt referred to in clause (iv) of such Section 1.3(c).
Governmental Approvals means all approvals, permits, licenses
consents, authorizations, waivers, variances, acknowledgments and the like by
Governmental Authorities which are a condition to the consummation of the
transactions contemplated hereunder at Closing. Governmental Approvals will not
be deemed to have been secured unless all of same are final and unappealable.
The Corporation may, at its sole option, but without obligation, waive any or
all Governmental Approvals.
19
Governmental Authority means any government, any department of any
government or any entity controlled by any of the foregoing directly or
indirectly (federal, state, county, town or local) and includes utility and
telephone companies and any other entity with the power of eminent domain or
with jurisdiction over, or which could impact, affect or stop, the Business.
Hazardous Materials means an petroleum, petroleum products, fuel
oil, derivatives of petroleum products or fuel oil, explosives, reactive
materials, ignitable materials, corrosive materials, hazardous chemicals,
hazardous wastes, hazardous substances, extremely hazardous substances, toxic
substances, toxic chemicals, radioactive materials, medical waste, biomedical
waste, infectious materials and any other element, compound mixture, solution or
substance which may pose a present or potential hazard to human health or safety
or to the environment.
Imposition means all taxes (including possessory interest taxes
associated with the Option Property), assessments (including all assessments for
public improvements or benefits, fees, water, sewer or similar rents, rates and
charges, excises, levies, license fees, permit fees, inspection fees and other
authorization fees and other governmental charges of any kind or nature
whatsoever, whether general or special, ordinary or extraordinary, foreseen or
unforeseen, or hereafter levied or assessed in lieu of or in substitution of any
of the foregoing of every character (including all interest and penalties
thereon), which at any time during or in respect of the Term may be assessed,
levied, confirmed or imposed on or in respect of or be a lien upon the Option
Property, or any part thereof or interest therein, on the leasehold estate
created by any lease or which may be imposed upon any taxable interest of an
Optionor acquired pursuant to a Public Lease or on account of any taxable
possessory right which an Optionor may have acquired pursuant to a Public Lease,
or any part thereof or which may be levied upon or measured by the rent payable
thereunder. Notwithstanding anything to the contrary set forth above,
"Impositions" shall not include any income, excess profit, estate, inheritance,
successions transfer, franchise, capital or other tax assessment upon the
interest of any other party in the Option Property.
Improvements means any buildings, improvements, fixtures, additions,
signs, rides and attractions built, installed or constructed upon, or affixed
to, the Land.
Laws means all applicable present and future laws, ordinances,
rules, regulations, permits, authorizations, orders and requirements, including,
without limitation, all consents or approvals required to be obtained from, and
all rules and regulations of, and all building and zoning laws of, all federal,
state county and municipal governments, the departments, bureaus, agencies or
commissions thereof, authorities, board of officers, any national or local board
of fire underwriters, or any other body or bodies exercising similar functions,
having or acquiring jurisdiction of, or which may affect or be applicable to the
Option Property.
Lease Option means that certain Option Agreement (Parcel Lease)
dated as of May 30, 1997 among the Authority, the Agency and the Corporation.
Option Property means all of Optionor's right, title and interest in
and to, all of the following: (a) the Realty, (b) the rights to use the portion
of the surface of Lake ▇▇▇▇▇▇ identified in Exhibit E hereto and (c) the Assets.
20
Other Agreements mean the Private Parcel Lease, Lease Option, REA
and RSA.
Permits means all licenses, permits and approvals for the ownership,
construction, maintenance, operation, use and occupancy of the Option Property,
the conduct of the Business or any part thereof and any amendments, renewals and
replacements thereof.
Private Parcel Lease means that certain Parcel Lease between the
Authority and the Corporation which may be entered into pursuant to the Lease
Option.
REA means that certain Reciprocal Easement Agreement between the
Authority and the Corporation, which may from time to time be in effect during
the Term pursuant to the Private Parcel Lease.
Realty means the Land, all Improvements and all Easements, including
the Public Parcel and the Private Parcel.
Release means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping, or as otherwise defined under the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901), et seq.) ("RCA"), the Comprehensive Environmental
Response, Compensation and Liability Act (42 US.C. Section 9601, et seq.)
("CERCLA"), or any other federal, state or local Environmental Law, including
Laws relating to emissions, discharges, releases or threatened releases or
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemical, or industrial,
toxic or hazardous substances or wastes as may be amended from time to time, or
other Environmental Laws.
Rescission Notice has the meaning set forth in Section 1.4(b).
Retained Liabilities means any and all duties, responsibilities,
obligations or liabilities of Optionor of any kind or nature, known, unknown,
contingent or otherwise ("Liabilities"), other than Assumed Liabilities. Without
limiting the generality of the foregoing, except as otherwise provided in this
Agreement, Retained Liabilities shall include:
(i) any Liabilities of Optionor or their Affiliates
relating to the ownership or operation of the Option Property or the Business on
or prior to the Closing Date;
(ii) all accounts payable relating to the Business
incurred on or prior to the Closing Date;
(iii) any Environmental Compliance Liabilities arising
out of the ownership of the Option Property or the operation of the Business on
or prior to the Closing;
(iv) Liabilities and obligations with respect to any
Claims, whether existing on the Closing Date or arising thereafter, arising out
of the ownership of the Option
21
Property or the operation of the Business on or prior to the Closing, except for
Claims arising out of the negligence or willful misconduct of the Corporation;
(v) Liabilities and obligations to persons employed by
Optionor in connection with the Business at any time prior to the Closing (or
any of such employee's beneficiaries, heirs or assignees) arising out of such
employee's employment;
(vi) Liabilities and obligations with respect to any
federal, state, local or foreign income, profits, franchise, sales or similar
tax relating to the ownership of the Option Property or the conduct of the
Business on or prior to the Closing or arising out of the transactions
contemplated hereby; and
(vii) any Liabilities in respect of any debt of
Optionor.
RSA means that certain Revenue Sharing Agreement among the
Authority, the Agency and the Corporation which may, from time to time during
the Term be in effect pursuant to the Private Parcel Lease.
Transferred Contracts means all Contracts existing on the Closing
Date, other than (i) if at the time of the delivery of the Exercise Notice, the
Corporation shall not be the manager of the Business, any Contract listed on the
Contract Schedule that the Corporation has notified Optionor in writing prior to
the Closing that the Corporation will not assume, (ii) any Contract of a type
required to be listed on the Contract Schedule and not so listed, (iii) any
Contract entered into after the date of the Contract Schedule, except as
permitted hereby and (iv) any Contract that cannot be transferred to or assumed
by the Corporation under applicable law or the transfer or assignment thereof
would result in debt obligations of the City losing their tax-exempt status
(i.e., bonds related to the assessment district for the parking area).
SECTION 7.15 Exhibits. The parties acknowledge that the Exhibits
hereto have not been finalized on the date of execution hereof. The parties
agree to finalize such Exhibits promptly following confirmation of certain
matters relating to title and existing encumbrances in respect of the Option
Property, and this Agreement shall be the legal and binding obligation of the
parties at all times after execution hereof unless all such Exhibits have not
been mutually agreed to within thirty (30) days after the date hereof.
22
IN WITNESS WHEREOF, Optionor and the Corporation have executed this
Agreement as of the date set forth hereinafter.
OPTIONOR:
PARK MANAGEMENT CORP. CITY OF VALLEJO
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/
--------------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ City Manager
Vice President and
Chief Financial Officer
MARINE WORLD JOINT POWERS
AUTHORITY
By: /s/
----------------------------------
Executive Director
REDEVELOPMENT AGENCY OF THE
CITY OF VALLEJO
By: /s/
----------------------------------
Executive Director
23
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On August 28, 1997 before me, ▇▇▇ ▇. ▇▇▇▇▇, Notary Public,
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or
the entity on behalf of which the person acted, executed the instrument.
Witness my hand and notarial seal.
------------------------------------
Signature of Notary Public (Seal)
STATE OF )
) ss.:
COUNTY OF )
On August __, 1997 before me, ________________, Notary Public
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature on the instrument, the person(s), or the entity
on behalf of which the person(s) acted, executed the instrument.
Witness my hand and notarial seal.
------------------------------------
Signature of Notary Public (Seal)
STATE OF )
) ss.:
COUNTY OF )
On August __, 1997 before me, ________________, Notary Public
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature on the instrument, the person(s), or the entity
on behalf of which the person(s) acted, executed the instrument.
Witness my hand and notarial seal.
------------------------------------
Signature of Notary Public (Seal)
STATE OF )
) ss.:
COUNTY OF )
On August __, 1997 before me, ________________, Notary Public
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature on the instrument, the person(s), or the entity
on behalf of which the person(s) acted, executed the instrument.
Witness my hand and notarial seal.
------------------------------------
Signature of Notary Public (Seal)
Exhibit A
Legal Description of Land
Exhibit B
Legal Description of Public Parcel
Exhibit C
Legal Description of Private Parcel
REAL PROPERTY in the City of Vallejo, County of ▇▇▇▇▇▇, State of
California, being a portion of Parcel One described in Exhibit A to this
Agreement, described as follows:
Exhibit D
Schedule of Permitted Encumbrances
Exhibit E
Portion of Surface of Lake ▇▇▇▇▇▇
CERTAIN PROPERTY, and the rights therein and incidental thereto, in
the City of Vallejo, County of ▇▇▇▇▇▇, State of California, described as
follows: