AN AMENDMENT TO THE MAY 3, 1996 AGREEMENT
BETWEEN
THE CITY OF ATLANTIC CITY
AND
MIRAGE RESORTS, INCORPORATED
FOR THE DEVELOPMENT OF THE
HURON NORTH REDEVELOPMENT AREA
1. INITIAL RECITALS
THIS AMENDMENT (this "Amendment") known as "AN AMENDMENT TO
THE MAY 3, 1996 AGREEMENT BETWEEN THE CITY OF ATLANTIC CITY AND
MIRAGE RESORTS, INCORPORATED FOR THE DEVELOPMENT OF THE HURON
NORTH REDEVELOPMENT AREA" IS MADE THIS 8th DAY OF
January, 1998 by and between the City of Atlantic City
(the "City") and MAC, CORP. (the "Redeveloper"), in consideration
of the provisions set forth hereinafter and the mutual promises
contained therein.
WHEREAS, pursuant to Ordinance No. 14 of 1996 adopted
by the City Council of the City of Atlantic City (the "City
Council"), the City entered into a certain agreement known as "An
Agreement Between the City of Atlantic City and Mirage Resorts,
Incorporated for the Development of the Huron North Redevelopment
Area" (the "Agreement"), which Agreement was executed on May 3,
1996; and
WHEREAS, the Redeveloper is the successor by assignment, in
accordance with Section 5.6 of the Agreement, to the rights of
Mirage Resorts, Incorporated in and to the Agreement; and
EXHIBIT 10(nnn)
WHEREAS, Section 10.5.3 of the Agreement provides that any
amendment to the Agreement must be in writing and specifically
recite that it is being entered into by and between the City and
the Redeveloper with the specific intention to modify the terms
of the Agreement; and
WHEREAS, pursuant to Section 2(4) of Ordinance No. 14 of
1996, the City has designated property known and designated as
Lot 30 in Block 200 on the Tax Map of the City of Atlantic City
as shown on Exhibit A attached hereto an made a part hereof (the
"Vornado Site") as the Relocation Parcel; and
WHEREAS, the acquisition by the City of the Vornado Site for
the City Facilities is for a valid public use; and
WHEREAS, pursuant to Resolution No. 627 of 1996, the City
has obtained a preliminary appraisal of the Vornado Site which
provides that the fair market value of the Vornado Site is
approximately Three Million One Hundred Thousand Dollars
($3,100,000.00); and
WHEREAS, the Redeveloper is desirous of having the City
convey the Project Parcels to the Redeveloper in advance of the
Relocation; and
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WHEREAS, it would be in the best interest of the City to
accelerate the conveyance of the Project Parcels; and
WHEREAS, in the event of a conveyance of the Project Parcels
to the Redeveloper in advance of the Relocation, the City is
desirous of obtaining a limited nonexclusive license from the
Redeveloper to occupy the lands and improvements located on Lot
18 in Block RP 3; Lot 1 in Block RP 14 and Lot 1 in Block RP 15
on the Tax Map of the City as more fully described in Exhibit B
attached hereto and made a part hereof (the "City Facilities
Lots") in order to operate the City Facilities, subject to and in
accordance with the License Agreement (as hereinafter defined);
and
WHEREAS, the public interest of the City will be served by
obtaining such limited nonexclusive license from the Redeveloper;
and
WHEREAS, in Xxxxxx vs. City of Atlantic City, filed in or
about May, 1996 in the Superior Court of New Jersey, Law
Division, Atlantic County (the "Court") under Docket No. ATL-L-
1535-96 ("Xxxxxx"), the Court entered a judgment (the "Judgment")
which (1) dismissed with prejudice each and every count of the
amended complaint filed by the plaintiffs in Xxxxxx and (2)
modified two (2) Sections of the Agreement; and
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WHEREAS, in light of the foregoing recitals, the City and
the Redeveloper are desirous of entering into this Amendment to
amend various Sections of the Agreement; and
WHEREAS, the City and the Redeveloper acknowledge that the
mutual promises contained in this Amendment are good and valuable
consideration for the binding execution of this Amendment;
IT IS ON THE DATE STATED ABOVE AGREED BY AND BETWEEN THE
CITY AND THE REDEVELOPER AS FOLLOWS:
2. INCORPORATION OF RECITALS
2.0 Incorporation of Recitals. The recitals set forth in
Section 1 of this Amendment are hereby incorporated by reference
and are considered part of this Amendment.
3. DEFINITIONS
3.0 Governing Definitions. The defined words, phrases and terms
in the Agreement shall have their same respective meaning in this
Amendment unless the context clearly indicates otherwise.
4. ENVIRONMENTAL ISSUES
4.0 Remediation Costs Contingency. Pursuant to the Judgment,
Section 4.3 of the Agreement is hereby amended to provide that
the Redeveloper shall have an implied duty of good faith and fair
dealing with respect to its determination whether the costs of
remediation (referred to in the last sentence of Section 4.3 of
the Agreement) are unreasonable.
"4.1 Hold Harmless Provision. Section 4.5 of the Agreement
is hereby amended to provide that the City's hold harmless and
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indemnification obligations set forth in Section 4.5 of the
Agreement shall remain in place with respect to the City
Facilities Lots (notwithstanding the passage of title thereto) so
long as either the License Agreement is in effect or the City has
failed to vacate the City Facilities Lots. Notwithstanding the
foregoing, in the event an appellate court in the Xxxxxx case, or
any other court with competent jurisdiction, voids the Agreement
or this Amendment or otherwise requires a reconveyance of the
Project Parcels from the Redeveloper to the City or if the City
exercises its right pursuant to the terms of the Agreement to
have the Project Parcels revert to the City (each, a
"Reconveyance"), then in such event (1) the City shall indemnify
and hold the Redeveloper harmless from all environmental
obligations which result from environmental conditions at the
Project Parcels except to the extent attributable to the acts of
the Redeveloper, (2) the Redeveloper's obligation to indemnify
and hold harmless the City set forth in Section 4.5 of the
Agreement shall terminate and (3) the Redeveloper shall reassign
the rights under the insurance policies (assigned by the City to
the Redeveloper pursuant to Section 4.5 of the Agreement) to the
City except that such reassignment shall not include any claims
made by the Redeveloper with respect to such insurance policies.
The terms of this Section 4.5 shall survive the Closing.
5. DEVELOPMENT OF THE PROJECT
5.0 Closing Date. Section 5.1.2 of the Agreement is hereby
deleted and of no force and effect and in its place the
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Redeveloper and the City (the "Parties" or "Parties") agree to
substitute the following provision:
"5.1.2 Closing Date. Notwithstanding anything to the contrary
in the Agreement or this Amendment, the Project Parcels as
identified in Section 5.1.1 shall be conveyed by the City to the
Redeveloper on the date which is one (1) business day following
the date City Ordinance No. 75 of 1997 (the "Ordinance")
approving this Amendment becomes effective pursuant to the terms
of Section 6 of the Ordinance (the "Closing Date"). The Closing
Date may be extended with the consent of the Parties. The
Redeveloper shall not be required to proceed with the Project or
the Closing if it is unable to obtain ALTA title insurance in an
amount equal to the full cost of the Project, without any
exceptions, exclusions or conditions which are not acceptable to
the Redeveloper."
5.1 Authorization to Convey. Section 5.1.2.1 of the Agreement
is hereby deleted and of no force and effect and in its place the
Parties agree to substitute the following provision:
"5.1.2.1 Authorization to Convey. The City agrees that in
adopting and executing this Amendment, it will simultaneously
adopt an ordinance authorizing and directing the Mayor of the
City of Atlantic City, or some other duly designated official of
the City, to execute and deliver to the Redeveloper on the
Closing Date (i) a deed conveying the Project Parcels in the form
attached hereto as Exhibit C and made a part hereof and (ii) any
and all other documents and instruments in accordance with terms
of the Agreement and this Amendment including, without
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limitation, (1) an assignment of the City's right, title and
interest in and to the City's lease on portions of the Project
Parcels with X.X. Xxxxxxx Company (the "Xxxxxxx Lease") and (2)
an assignment of the City's right, title and interest in and to
the City's lease on a portion of the Project Parcels with Marina
Associates ("Xxxxxx'x") (the "Xxxxxx'x Lease") provided that:
(A) The Redeveloper shall pay the City all rent (the
"Xxxxxx'x Rent") actually received by the Redeveloper
from Xxxxxx'x pursuant to paragraphs 2 and 4 of the
Xxxxxx'x Lease until such time as the Xxxxxx'x Lease is
terminated, provided that in the event that the average
assessed value of the Project Parcels for the year 1998
exceeds Ten Dollars ($10.00) per square foot (such
excess property taxes resulting from an assessment in
excess of Ten Dollars ($10.00) per square foot are
hereinafter referred to as the "Excess Taxes"), then
the Redeveloper shall, commencing at the time the City
establishes the 1998 assessment of the Project Parcels,
have the right to withhold and retain as the
Redeveloper's own monies a portion of the Xxxxxx'x Rent
equal to the amount of the Excess Taxes.
(B) The City shall retain and have the sole obligation
to Xxxxxx'x to pay Xxxxxx'x the unamortized cost of the
Infrastructure and Site Improvements, if any, pursuant
to the terms and conditions of paragraphs 19, 20 and 22
of the Xxxxxx'x Lease and the City shall indemnify and
hold the Redeveloper harmless from such obligations;
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(C) The City shall assess the land covered by the
Xxxxxx'x Lease for taxes and shall xxxx Xxxxxx'x for
such taxes pursuant to the terms of paragraph 22 of the
Xxxxxx'x Lease and the Redeveloper shall have no
obligation in connection therewith during the term of
the Xxxxxx'x Lease; and
(D) The Redeveloper represents in good faith that it
does not currently expect to terminate the Xxxxxx'x
Lease prior to December 31, 1998. Notwithstanding the
foregoing, the Redeveloper may terminate the Xxxxxx'x
Lease pursuant to its terms at any time provided that
(1) the Redeveloper determines in good faith in its
sole discretion that the termination of the Xxxxxx'x
Lease is necessary or beneficial to the Redeveloper for
the purpose of the development of the Project or the
Site or (2) the Redeveloper otherwise determines in
good faith in its sole discretion to terminate the
Xxxxxx'x Lease.
The City shall not terminate either the Xxxxxxx Lease or the
Xxxxxx'x Lease prior to the Closing without the prior written
consent of the Redeveloper. All rent and other charges paid to
the City under the Xxxxxxx Lease shall be prorated as of the
Closing Date and credited against any monies to be paid to the
City at the Closing in accordance with the terms and conditions
of Section 6 herein."
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5.2 Limited Nonexclusive License to Occupy the City Facilities
Lots. Section 5 of the Agreement is hereby amended to add the
following provision:
"5.2.1.2 Limited Nonexclusive License to Occupy the City
Facilities Lots. The Redeveloper grants the City a limited
nonexclusive, nonassignable license (the "License") to occupy the
City Facilities Lots subject to easements, restrictions, and
agreements of record, the Xxxxxxx Lease and the terms and
conditions set forth in that certain license agreement (the
"License Agreement") attached hereto as Exhibit "D" and made a
part hereof."
5.3. Reconveyance of the Project Parcels. Pursuant to the
Judgment, in the event that the Redeveloper desires to sell,
lease or otherwise transfer the Project Parcels or the Project or
any part thereof prior to completion of construction of the
Project, the Redeveloper shall first obtain the written consent
of the City; and in the event the Redeveloper so requests the
written consent of the City, the City shall act reasonably under
the circumstances and shall not unreasonably withhold its
consent.
6. RELOCATION OF THE CITY FACILITIES
6.0 Relocation of the City's Facilities. Sections 6.1 through
6.6, inclusive, of the Agreement are hereby deleted and of no
force and effect and in their place the Parties agree to
substitute the following provisions:
"6.1 Relocation. The City and the Redeveloper acknowledge that
in order to proceed with the development of the Site, the
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Redeveloper may utilize the City Facilities Lots. The City
agrees that it will be responsible to relocate the City
Facilities to another location within the City ("Relocation" or
"the Relocation"). Accordingly the Parties agree that upon the
signing of this Amendment, the City will promptly acquire the
Vornado Site exercising its powers of eminent domain, if
necessary, and will promptly improve and relocate the City
Facilities to the Vornado Site, with the understanding that all
costs in connection therewith shall be paid for by the City
incurring indebtedness and issuing bonds as authorized by
Ordinance Xx. 00 xx 0000 (xxx "Xxxx Xxxxxxxxx") and if
necessary, such other funding sources in accordance with the law.
6.2 Assistance from City. [Intentionally Omitted]
6.3 Configuration. [Intentionally Omitted]
6.4 Redeveloper's Rights Prior to Relocation. [Intentionally
Omitted]
6.5 Cost of Relocation. [Intentionally Omitted]
6.6 Other Limitation. [Intentionally Omitted]"
7. REDEVELOPER'S PAYMENTS
7.0 Redeveloper's Payments. The Agreement is hereby amended to
add the following provisions:
"11.0 Redeveloper's Payments.
(i) The City acknowledges that on December 3, 1997,
the Redeveloper has escrowed the sum of Seven Hundred
Fifty Thousand Dollars ($750,000) (the "Escrow Fund")
with PNC Bank. The Escrow Fund shall be for the
purpose of providing the City with the necessary
downpayment for the Bond Ordinance in accordance with
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the Local Bond Law. In the event that the Closing
occurs on the Closing Date, the Escrow Fund shall be
immediately paid to the City. In the event that the
Closing does not occur on the Closing Date, the Escrow
Fund shall be immediately paid to the Redeveloper;
(ii) In the event that the Closing occurs on the
Closing Date, the Redeveloper shall, on the Closing
Date, pay the City the additional sum of Three Million
Seven Hundred Fifty Thousand Dollars ($3,750,000);
(iii) In the event that (A) the Closing occurs on the
Closing Date and (B) the City vacates the City
Facilities Lot on or before June 1, 1999 in accordance
with the terms of the License, the Redeveloper shall
pay the City the additional sum of Three Million Seven
Hundred Fifty Thousand Dollars ($3,750,000) on each of
the following dates: December 1, 1999, December 1,
2000 and December 1, 2001;
(iv) The Redeveloper's obligation to pay the City the
amounts set forth in this Section are subject to all
conditions and provisions set forth in the Agreement
and this Amendment;
(v) The City and the Redeveloper acknowledge and agree
that the Planning Escrow Account (the "Planning Escrow
Account") established by the Redeveloper pursuant to
the requirements of the RFQ contains One Million
Dollars ($1,000,000) plus interest, which Planning
Escrow Account is on deposit at PNC Bank, in account
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number 00-0000-0000. The City and the Redeveloper
acknowledge and agree that Seven Hundred Fifty Thousand
Dollars ($750,000) of the Planning Escrow Account has
been set aside as and shall constitute the Escrow Fund
to be withdrawn from the Planning Escrow Account and
paid pursuant to the terms of Section 6.7(i) herein.
The City and the Redeveloper agree that the Planning
Escrow Account, less the Escrow Fund, shall be
withdrawn in its entirety and paid to the Redeveloper
on the Closing Date. The City and the Redeveloper
agree to take all necessary actions and execute and
deliver all necessary instruments and documents in
order to accomplish the terms and conditions of this
Section; and
(vi) In the event of a Reconveyance (1) the Redeveloper
shall not be required to make any further payments to
the City pursuant to the terms of this Section and (2)
any monies theretofore paid to the City pursuant to the
terms of this Section (the "Relocation Payments") plus
interest thereon at the New Jersey Court Rule-
established judgment interest rate (as same may be
changed from time to time) commencing from the date of
each respective payment of the Relocation Payments (the
"Relocation Payments Plus Interest") shall be paid by
the City to the Redeveloper at the time of, and in the
event, the City, at a later date, transfers, by
conveyance, lease or otherwise, all or any portion of
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the Project Parcels to another person or entity
(following the reversion or the reconveyance of title
to all or a portion of the Project Parcels to the
City). The Relocation Payments Plus Interest shall be
secured by a first purchase money mortgage which shall
be executed and delivered by the City to the
Redeveloper on the date of such reversion or
reconveyance of title to all or a portion of the
Project Parcels to the City. The City shall require
that the transferee of an interest in and to all or a
portion of the Project Parcels shall pay monies to the
City as consideration for such transfer in an amount
not less than the Relocation Payments Plus Interest.
Accordingly, no certification of funds pursuant to the
Local Budget Law is necessary in connection with the
City's obligation, if any, to pay the Relocation
Payments Plus Interest to the Redeveloper as the monies
constituting the Relocation Payments Plus Interest
shall be paid to the City by person(s) and/or
entity(ies) other than the City."
8. MISCELLANEOUS
8.0 Ratification of All Other Terms and Conditions of the
Agreement. Except to the extent inconsistent with the terms and
conditions of this Amendment, all remaining terms and conditions
of the Agreement are hereby ratified and confirmed and are agreed
to be in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment
effective as of the date appearing on the first page hereof.
ATTEST: THE CITY OF ATLANTIC CITY
XXXXXXXX XXXXX XXXXX XXXXXX
____________________ By:________________________
Assist. City Clerk
Title Mayor
Approved as to form:
XXXXXX X. XXXXX
_______________________________
XXXXXX X. XXXXX, City Solicitor
ATTEST: MAC, CORP.
XXXXX X. XXXXXX XXXXX X. XXXXX
____________________ By:_______________________
Title VP/Asst. Secretary
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