EXHIBIT 10(aa)
1997 MANAGEMENT AGREEMENT
RELATING TO MARINE WORLD
THIS 1997 MANAGEMENT AGREEMENT RELATING TO MARINE WORLD (the "Agreement")
is made and entered into as of the 1st day of February, 1997, by and between the
MARINE WORLD JOINT POWERS AUTHORITY, a joint exercise of powers authority duly
created under the laws of the State of California (the "Authority"), and PARK
MANAGEMENT CORP., a California corporation (the "Manager").
RECITALS:
A. The Authority owns various animals, facilities, leasehold interests
and other assets related to the facility known as Marine World/Africa USA in
Vallejo, California ("Marine World").
B. The Manager has expertise in the operation of recreational facilities
similar in scope to that of Marine World, and is willing to provide management
services in connection with the operation of Marine World on the terms and
subject to the conditions set forth herein.
C. The Authority and the Manager now wish to enter into this Agreement in
order to set forth the rights and obligations of the parties with respect to the
provision of management services by the Manager for the period commencing
February 24, 1997.
AGREEMENT:
In consideration of the foregoing and the mutual promises herein set forth,
the parties hereto hereby agree as follows:
SECTION 1
REPRESENTATIONS AND RESPONSIBILITIES OF THE AUTHORITY
1.1 FULL POWER AND AUTHORITY. The Authority warrants and represents to
the Manager that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder. As of the date hereof, and at all
times prior to commencement by the Manager of its services hereunder, Marine
World has, and will have, been operated in compliance in all material respects
with all applicable federal, state and local laws, regulations, ordinances,
orders, and contracts and leases, including, without limitation, those relating
to employment, wages, hours and working conditions.
1.2 APPROVALS AND LICENSES FOR MARINE WORLD. The Authority warrants and
represents that it has all rights, interests, approvals, licenses, consents,
permits and agreements necessary to operate Marine World as it was operated
immediately prior to the effective date of this Agreement.
1.3 RESPONSIBILITIES OF THE AUTHORITY. As between the Authority and the
Manager (in its capacity as manager of Marine World hereunder), the Authority
shall have the direct and primary responsibility for:
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(i) the review and approval of all operating and capital budgets for
Marine World;
(ii) the appointment and supervision of an independent certified
public accountant (the "Auditor") to review all financial matters concerning
Marine World deemed relevant or appropriate by the Authority;
(iii) overall responsibility for all activities and facilities at
Marine World; and
(iv) the supervision and approval of all development and licensing of
intellectual property rights owned by the Authority.
1.4 BANK ACCOUNTS AND DISBURSEMENTS. The Authority shall establish
appropriate bank accounts for the deposit of gross receipts generated by, and
for cash disbursements required for, the operations of Marine World. The Manager
shall deposit all gross receipts in Authority accounts designated for such
purpose by the Authority, such deposits to be made as frequently as determined
prudent by the Manager with the approval of the Executive Director of the
Authority. The Manager is hereby authorized to disburse such receipts pursuant
to Section 2.9 below, subject to the provisions of Section 1.3(i) and (iii)
above and 2.2.3 below.
SECTION 2
REPRESENTATIONS AND RESPONSIBILITIES OF THE MANAGER
2.1 FULL POWER AND AUTHORITY. The Manager warrants and represents that it
has full power and authority to enter into this Agreement and perform its
obligations hereunder, and that it has conducted its own review of Marine World
prior to its execution of this Agreement and it is not relying on any
representation (other than as expressly set forth herein) of the Authority, the
City of Vallejo, the Redevelopment Agency of the City of Vallejo or the Vallejo
Public Financing Authority in connection with its execution of this Agreement
and its agreeing to act as Manager hereunder. The Manager warrants and
represents that it is a wholly-owned subsidiary of Premier Parks Inc., that its
sole business is acting as Manager under this Agreement, and that it is
authorized to transact business in the State of California to the extent
necessary to discharge its obligations hereunder.
2.2 RESPONSIBILITIES OF THE MANAGER.
2.2.1 As between the Manager and the Authority, the Manager (in
its capacity as manager of Marine World) shall have the direct responsibility
within the budgets approved by the Authority under Section 1.3(i) hereof and
subject to any specific direction by the Authority consistent with the
provisions hereof, for:
(i) the production and direction of all exhibitions at Marine
World;
(ii) the care, feeding and training of all marine mammals, exotic
land animals and other living creatures in captivity ("Animals") at Marine
World;
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(iii) the coordination of the activities of the Authority and the
Manager as necessary to achieve the efficient management and operation of
Marine World;
(iv) the maintenance and repair of all facilities, landscaping and
vegetation at Marine World, including, without limitation, elements of the
electrical and mechanical systems, all furniture, fixtures and equipment,
plumbing systems, building exteriors, drains, roofs, sidewalks, entrance
ways, exterior lighting, interior promenades and walkways (such maintenance
shall include custodial cleaning services, pest control and trash removal,
repairs, routine preventative maintenance, and any other activities
necessary to maintain Marine World in first class condition and usable on
all occasions as a recreational facility), and the design and installation
of any additional landscaping and vegetation;
(v) the organization and management of all admissions,
concessions, merchandising, security systems and parking facilities at
Marine World in a manner not inconsistent with the budgets and operational
reports referred to in Section 4;
(vi) the organization and management of all advertising and public
relations programs relating to Marine World, including the preparation and
submission to the Authority of an annual marketing plan for Marine World to
be submitted within sixty (60) days of the effective date of this Agreement
and on or about each January 31st thereafter during the term of this
Agreement, which shall set forth in detail the Manager's strategy for
marketing and promoting Marine World for the next year, including
attendance goals and other relevant information;
(vii) providing all assistance reasonably requested by the Authority
in connection with the preparation of budgets and operating policies for
Marine World, and the preparation of operating and capital budgets as
specified in Section 4 hereof;
(viii) establishing cash flow management and control systems and
financial reporting systems for Marine World in conjunction with the
Authority's representatives and the Auditor;
(ix) the use, protection and licensing of all intellectual property
rights of the Authority;
(x) coordination with the Authority as to and the maintenance of
ongoing fundraising, sponsorship and membership programs (taking into
consideration the provisions of Section 2.16(iii) hereof); and
(xi) the employment and management of all persons, and the
acquisition of all materials and equipment, necessary to carry out the
foregoing responsibilities (taking into consideration the provisions of
Section 2.16(ii) hereof).
In discharging its responsibilities described above, the Manager shall have full
authority to act within the operating and capital budgets approved by Authority,
and otherwise consistent with the marketing, maintenance and security plans
approved by the Authority. In addition, (i) in the event of an emergency, the
Manager shall contact the Executive Director of the Authority as soon as
practicable as to the Manager's response to the situation, and the Manager may
act as it deems necessary and as described to the Executive Director until such
time as it can obtain approval of the Authority as to any additional actions,
and (ii) in all
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other instances, the Manager may deviate up to ten percent (10%) from any
specific expense portion of the Authority-approved budget upon notice to the
Executive Director of the Authority and a showing of the means by which such
additional expense will be paid. Any material deviations by the Manager from
the Authority-approved budgets and plans for Marine World not described in the
preceding sentence must be approved by the Authority, or in exigent
circumstances by the Executive Director or another authorized representative of
the Authority.
2.2.2 The Manager and the Authority shall cause any governmental
licenses necessary and otherwise pertaining to Marine World (including but not
limited to any related to the sale of alcoholic beverages) to be transferred to
and maintained in the Manager's name, or, if the Authority shall request in
writing, in the name of the Authority.
2.2.3 Within the provisions of this Agreement, the Authority shall
retain direct authority over all activities at Marine World. The Authority may
appoint a subcommittee of its Board of Directors, and the Manager shall meet and
confer with such subcommittee and any duly authorized representative of the
Authority (including but not limited to the Executive Director of the Authority)
as soon as reasonably practicable following delivery to the Manager of a request
for such a meeting.
2.2.4 The Manager shall be permitted to review the personnel files of
all individuals who were employed at Marine World prior to the date of this
Agreement who apply for employment with the Manager. The Manager shall have
sole discretion as to all decisions relating to hiring of employees, the
employment of employees and the direction of the work force. The Manager shall
have the sole discretion to set all terms and conditions of employment for all
personnel the Manager will employ to operate Marine World. It is hereby
acknowledged that the Manager will not employ any persons associated with Marine
World prior to the commencement of the Manager's services hereunder until such
person's prior employment has been terminated. The Authority hereby
acknowledges that it has terminated the existing manager for Marine World
effective upon the commencement of the activities of the Manager hereunder. The
Authority shall have terminated or laid off any employees of the Authority
related to Marine World prior to the commencement of Manager's services under
this Agreement.
2.3 DESIGN AND CONSTRUCTION ADVISORY SERVICES. The Manager shall act as
the liaison between the Authority and the architects, engineers, contractors,
construction managers and construction lenders responsible for the design and
construction of any improvements to the Marine World facilities (the
"Construction"). The Manager shall monitor the progress, plans, budgets and
reports of the architects, engineers, contractors, construction manager and
construction lenders for the Marine World facilities and shall make written and
verbal reports regarding the design and construction to the Authority on a
regular basis as required by the Authority. In addition, and without limiting
the foregoing, the Authority hereby appoints the Manager as its agent, and the
Manager accepts appointment as agent of the Authority, to carry out all phases
of any improvements to the Marine World facilities, and the Manager, as agent of
the Authority, subject to the provisions hereof, assumes all rights, duties and
responsibilities of the Authority regarding supervision of the acquisition,
construction and installation of any improvements to the Marine World
facilities. Without in any way limiting the duties of the Manager under this
paragraph, in discharging its duties under this paragraph, the Manager shall
within the approved budgets and subject to Section 1.3 hereof:
(i) negotiate, enter into and administer all agreements for
architectural, contracting, engineering, testing or consulting services
related to the Construction, and any agreements for the
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furnishing of any supplies, materials, machinery or equipment relating to
the Construction, or any amendments to any such agreements; provided that
no agreement shall be executed on behalf of or be binding on the Authority
unless (a) such agreement is within the capital budget approved by the
Authority, or (b) the terms and conditions thereof and the party with whom
the agreement is to be made have been approved in writing by the Authority;
(ii) receive and audit, together with the appropriate supporting
documentation, all requests for payment in connection with the
Construction;
(iii) apply for and maintain in full force and effect any and all
governmental permits and approvals required for the lawful completion of
the Construction;
(iv) ensure compliance with all public bidding and prevailing wage
requirements related to any Construction, and all terms and conditions
contained in any governmental permit or approval required or obtained for
the lawful completion of the Construction, or in any insurance policy
affecting or covering the Construction, or in any surety bond obtained in
connection with the Construction;
(v) keep the Authority fully informed on a regular basis of the
progress of the Construction, including the preparation of such reports as
may from time to time be reasonably requested by the Authority;
(vi) inspect the progress of the course of the Construction,
including verification of the materials and labor furnished so as to be
competent to approve or disapprove requests for payment made by any persons
with respect to the Construction, and, in addition, verify that the
Construction is being carried out substantially in accordance with the
plans and specifications approved by the Authority, or, in the event that
the Construction is not being so carried out, to take corrective action and
promptly notify the Authority;
(vii) subject to the provisions of Section 2.5 hereof, hire and
retain as its employees and not as employees of the Authority, such
qualified personnel as may be required to fully perform the Manager
functions hereunder;
(viii) not permit (a) any change to the plans and specifications
relating to the Construction originally approved by the Authority if such
change would have the effect of materially scaling back, reducing,
eliminating or adversely affecting the quality of the facilities to be
constructed as contemplated by the capital budget approved by the Authority
with respect to the Construction, or (b) any change to the plans and
specifications originally approved by the Executive Director which would
require an additional expenditure in excess of $100,000; and
(ix) provide to the Authority upon its request copies of all
documents relating to the Construction including copies of all agreements
with contractors, subcontractors and material or equipment suppliers and
all correspondence between the Manager and such contractors, subcontractors
or suppliers.
Notwithstanding the foregoing, no portion of the Construction shall be
undertaken unless (a) it is expressly
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contemplated by and within the limitations of the capital budget approved by the
Authority and otherwise within the parameters of Section 2.3(viii) above, and/or
(b) the Manager has obtained the express prior written approval of the Authority
as to the scope and cost thereof.
2.4 PROFESSIONAL MANNER. The Manager shall fulfill its responsibilities
hereunder in a professional and diligent manner within the budgetary and
operating policy limitations established from time to time by the Authority and
in compliance in all material respects with all applicable federal, state and
local laws, regulations, ordinances, orders, contracts and leases governing the
operation of Marine World.
2.5 SUBCONTRACTORS. The Manager may subcontract the whole or any part of
the performance of its obligations and duties herein described to any affiliate
of the Manager or to any other person, firm or corporation approved in writing
by the Authority, which approval shall not be unreasonably withheld. The
subcontracting of the whole or any part of its obligations and duties as
aforesaid shall not relieve the Manager from liability and responsibility for
the performance of such obligations and duties. The Manager shall provide to
the Authority upon its request a list of any subcontractors performing services
at Marine World.
2.6 INSURANCE. The Manager shall recommend insurance coverage on behalf
of the Authority as is required pursuant to all leases governing the operation
of Marine World or is otherwise prudent in the judgment of the Manager, and the
Authority shall obtain and maintain such insurance coverage as it deems
necessary or reasonable for the operation of Marine World. Notwithstanding the
foregoing, the Manager shall at all times keep in full force and effect at least
such insurance coverage for Marine World as is required under the 1997 Second
Sublease Agreement Relating to Marine World, dated as of January 1, 1997,
between the Authority and the Redevelopment Agency of the City of Vallejo (the
"Second Sublease Agreement") as in effect on the date hereof.
2.7 FIDELITY COVERAGE. The Manager shall provide blanket fidelity
insurance coverage in an amount of at least $100,000, and otherwise in form and
substance satisfactory to the Authority, covering all personnel with access to
cash or with the ability or authority to make expenditures on behalf of the
Authority.
2.8 LIMITATION OF CONTRACTS. The Authority acknowledges that unless
otherwise provided herein or unless the Manager is otherwise directed by the
Authority, all contracts and agreements obligating the Authority with a term
(including any renewals or extensions) of not more than one (1) year from the
date of execution of the contract or the date hereof, whichever is later, with
respect to the duties of the Manager under Section 2.2, and otherwise consistent
with the approved budget for that year and the written operating policies (if
any) of the Authority (to the extent a written copy of which policies has been
provided to the Manager), may be entered into by the Manager and in the name of
the Authority without the further approval of the Authority, except that no
portion of the compensation under any such contract or agreement may be based
upon net profits from all or part of the operations of Marine World, and all
compensation under any such contract must be reasonable for the services
rendered, and any such contract shall be subject to termination at the option of
the Authority upon termination of this Agreement. Notwithstanding the
foregoing, the Manager may negotiate and enter into a collective bargaining
agreement with any union representing the Manager's employees and/or establish
the terms of employment of such employees without the need for any approval of
the Authority.
Notwithstanding any provision to the contrary contained in this Agreement,
the Manager shall not enter into any agreement on behalf of the Authority which
shall not be in compliance with Internal Revenue
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Service Revenue Procedure 93-19, or any successor Internal Revenue Service
regulation or procedure which may be applicable in the future, unless otherwise
expressly approved in writing by the Authority or its Executive Director.
The Manager agrees to take all actions necessary to evidence all contracts
entered into on behalf of the Authority and to assist the Authority in the
enforcement thereof. The Manager shall provide the Authority with copies of all
contracts and agreements which are binding upon or obligate the Authority.
2.9 COLLECTION OF REVENUES AND PAYMENT OF EXPENSES. The Manager is
authorized for and on behalf of the Authority to receive all cash receipts and
other revenues from Marine World and to make all disbursements necessary to
carry out the obligations of the Authority and the Manager hereunder within the
budgetary and policy limits approved or agreed to in writing by the Authority.
Within such limits and subject to Section 2.2.3, the Manager shall be entitled
to reimbursement from the Authority for all reasonable costs and expenses
incurred by the Manager to carry out such obligations, which shall include
without limitation all costs of the Manager which reasonably are allocable to
the services provided by the Manager under this Agreement. Notwithstanding the
foregoing, the Manager shall be entitled to reimbursement from the Authority for
all reasonable costs and expenses incurred by it in connection with the
commencement of its services hereunder, other than fees and expenses relating to
the negotiation, execution and delivery of (i) this Agreement, (ii) any option
to lease land within or adjacent to Marine World, or (iii) any option to
purchase all or any portion of Marine World.
2.10 FINANCIAL RESPONSIBILITY OF AUTHORITY. Except as otherwise provided
herein, it is hereby acknowledged that no payment shall be made under Section
2.9 or otherwise by the Authority to the Manager in respect of the compensation
and employee benefit expenses of the executive officers (and any overhead
expense) of Premier Parks Inc. incident to provision of management services
under this Agreement, except for the Management Fee referred to in Section 3.1
hereof.
Notwithstanding the foregoing, in performing its obligations hereunder, the
Manager shall act solely as agent of Authority and, in that connection, all
operating expenses of Marine World and all expenses of Manager incurred in the
performance of its obligations hereunder (including, without limitation, all
compensation or employee benefits expenses of all employees of any prior manager
of Marine World, all employees of the Authority and all employees of the Manager
providing services at or to Marine World, except as otherwise provided in
Section 2.12 hereof) in accordance with this Agreement, shall be borne by the
Authority, except that the Authority shall not pay or otherwise be responsible
for the payment of amounts referred to in the preceding paragraph (except for
the Management Fee). Without limiting the generality of the foregoing, all
debts and liabilities to third parties incurred by Manager in the course of
providing its services hereunder and within the limitations herein provided
shall be the debts and liabilities of Authority, and Manager may so inform any
such third party. To the extent funds necessary therefor are not generated by
the operation of Marine World or by any working capital financing of the
Authority, the Authority agrees to supply such funds. The Authority agrees to
use its best efforts to obtain working capital financing for Marine World
consistent with past practices of the Authority.
The Manager shall, in no event, be required to advance any of its funds for
the operation of Marine World nor to incur any liability in connection
therewith, unless the Authority shall have furnished the Manager with funds
necessary for the discharge therefor. However, the Manager shall have the right
(exercisable after three weeks prior written notice to the Authority), but not
the obligation, to advance on
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behalf of the Authority its own funds to the extent required to pay any such
obligation or liability of Marine World or the Authority. The Authority agrees
to repay the Manager on written demand any such advance, plus interest thereon
from the date of advancement at the prime rate.
2.11 COOPERATION. The Manager shall cooperate fully with and assist the
Authority in attempting to achieve the Authority's goals and objectives with
respect to Marine World.
2.12 TRANSITION OF MANAGEMENT AND OPERATION OF MARINE WORLD. Upon the
termination of this Agreement pursuant to Section 6 hereof, the Manager agrees
and covenants to cooperate fully with the Authority in the smooth and
businesslike transition of the management and operation of Marine World. The
Manager shall provide any prospective manager identified in writing by the
Authority with access to all activities at Marine World, and shall assist any
entity designated by the Authority to be the successor manager of Marine World
in employing any employee of the Manager whose primary duties are related to
Marine World, in connection with the future operation of Marine World on such
terms and conditions as shall be agreed to by each employee and such new
manager. The Authority shall in no way be responsible for any severance or
termination compensation to any employee of the Manager that is not employed by
the successor manager, to the extent that such severance or termination
compensation has accrued under arrangements contractually offered or negotiated
by the Manager from and after the date hereof without the prior written consent
of the Authority as to the specific employees and amounts involved.
The Manager shall, on the date of termination of this Agreement, (i)
transfer all licenses, permits and agreements of the Manager that relate to
Marine World to the new manager, (ii) transfer possession of any and all
Authority property to such new manager or as otherwise directed in writing by
the Authority, and (iii) vacate the Marine World site. The Authority shall
reimburse the Manager for any reasonable costs or expenses borne by the Manager
in connection with its performance of any obligations under this Section 2.12.
2.13 ALTERATIONS AND LIENS. The Manager shall not make, or suffer to be
made, any material alterations to any facility at Marine World without the prior
written consent of the Authority. The Manager shall not permit the assets of the
Authority to become subject to any lien arising out of the responsibilities of
the Manager hereunder.
2.14 NO DISCRIMINATION. The Manager shall not discriminate against any
employee or applicant for employment because of race, color, citizenship status,
national origin, ancestry, sex, sexual orientation, age, religion, creed,
physical or mental disability, marital status, veteran status, or any other
factor protected by law. The Manager shall not discriminate because of race,
color, citizenship status, national origin, ancestry, sex, sexual orientation,
age, religion, creed, physical or mental disability, marital status, veteran
status or any other factor protected by law against any person by refusing to
furnish such person any service or privilege offered to or enjoyed by the
general public, nor shall the Manager or its employees publicize Marine World in
any manner that would directly or inferentially reflect on the acceptability of
the patronage of any person because of race, color, citizenship status, national
origin, ancestry, sex, sexual orientation, age, religion, creed, physical or
mental disability, marital status, veteran status, or any other factor protected
by law.
The Manager shall take no action which would cause the Authority to violate
the provisions of Section 7.6(b) of the Second Sublease Agreement referred to in
Section 2.6 hereof.
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2.15 COOPERATION WITH FINANCING. The Manager agrees to cooperate, in
accordance with the terms of this Agreement, with the Authority in its efforts
to obtain financing to pay for the working capital needs of Marine World, the
refunding or payment of debt relating to Marine World, and/or the construction
of improvements at Marine World, and to sign such documents or take such actions
as reasonably may be requested by the Authority or the lenders of such
financing. The Authority shall be responsible for the repayment of any such
financing, and the Authority acknowledges that the Manager (in its capacity as
Manager hereunder) shall have no liability or responsibility whatsoever for the
repayment of any debt incurred to finance Marine World or the inability of the
Authority to obtain any such financing.
As of the date of execution of this Agreement, the Manager acknowledges
that it has supplied no equipment to the Authority and that it has no interest,
legal or equitable, including security interests, in or to any item of real
property, any fixture or any item of personal property located at Marine World.
The Manager shall inform the Authority in writing as to any such equipment or
interest that may be supplied or arise in the course of its performance
hereunder.
2.16 PROMOTION OF VALLEJO. The Manager shall include references to the
City of Vallejo in marketing and promotional materials related to Marine World,
and use its best efforts to (i) use contractors, vendors and service providers
located in the City of Vallejo in discharging its responsibilities under Section
2.2.1 hereof, and to give preference to such contractors, vendors and service
providers in the event of equivalent quality and price, and (ii) include in its
annual operating budgets under Section 4.1 and otherwise to implement reduced
price admission and/or other programs targeted towards allowing access to Marine
World for economically disadvantaged residents of Vallejo, especially families
and children.
SECTION 3
MANAGEMENT FEE
3.1 MANAGEMENT FEE. The Manager shall be entitled to receive a management
fee (the "Management Fee") consisting of: (i) $250,000 annually, payable in
equal monthly installments of $20,833.33, commencing on the first business day
of the calendar month which first commences after the effective date of this
Agreement and continuing on the first business day of each month thereafter so
long as this Agreement remains in effect; plus (ii) an annual fee equal to
twenty percent (20%) of the gross revenues arising from Marine World in excess
of $35,000,000 during each twelve month period from November 1 through October
31 (but in the case of the period commencing on the date hereof and ending on
October 31, 1997, $31,700,000); provided that any compensation payable under the
preceding clause (ii) shall not be more than the compensation paid during the
applicable twelve month period to which such compensation relates under the
preceding clause (i). Not later than January 31 of each year during the term of
this Agreement, commencing January 31, 1998 and otherwise following the
completion of the annual financial audit of Marine World, the Manager shall
submit to the Authority a request for any compensation due to it under clause
(ii) of the first sentence of this Section 3.1, providing supporting detail for
the amount owed. The Authority shall promptly review such information and make
payment of any amount owed to the Manager under said clause (ii) by the
succeeding February 28.
3.2 MANAGEMENT FEE REASONABLE. The Authority and the Manager acknowledge
and agree that the amount of the Management Fee is reasonable in relation to the
services to be performed by the Manager
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hereunder.
3.3 PAYMENT ABSOLUTE. Payment of the Management Fee shall be made without
regard to the financial status of Marine World.
SECTION 4
ANNUAL BUDGETS AND REPORTS
4.1 OPERATING BUDGET. Within sixty (60) days of the effective date of
this Agreement and on or about January 31 of each year during the term of this
Agreement, the Manager shall prepare operating programs and a budget for Marine
World for the remainder of the then current operating year in the case of the
first budget, and for the succeeding operating year in the case of all other
budgets, and shall submit them to the Authority by such date. Such budgets
shall include detailed line items with respect to (i) projected attendance, (ii)
revenues (including expected prices and/or pricing policies for admission,
parking, concessions and merchandise), (iii) expenses and (iv) capital
improvements, and shall otherwise set forth the Manager's general strategy for
reducing expenses and increasing revenues.
4.2 CAPITAL BUDGET. Within sixty (60) days of the effective date of this
Agreement and on or about January 31 of each year during the term of this
Agreement, the Manager shall submit to the Authority an annual capital
expenditure request and cash flow projection as well as a projected capital and
operating reserves report. The reports due on each January 31 shall include a
summary five year capital improvement plan for Marine World.
4.3 OTHER PLANNING DOCUMENTS. The Manager shall, in addition to the other
budgets and reports required under this Section 4, submit to the Authority for
its review and approval, within ninety (90) days of the effective date of this
Agreement and on or about each January 31 during the term of this Agreement, (i)
the marketing plan referred to in Section 2.2.1(vi) and consistent with Section
2.16(i), (ii) a maintenance plan for Marine World consistent with Section
2.2.1(iv), (iii) a security plan consistent with Section 2.2.1(v), and including
both emergency and non emergency protocols to be followed by management
employees, and (iv) a list of insurance maintained for Marine World consistent
with Section 2.6. In addition, the Manager shall prepare a cash flow budget and
otherwise assist the Authority in connection with the annual cash flow borrowing
by the Authority for Marine World, which budget must be prepared and refined in
late September or early October of each year so that such cash flow borrowing
can be completed by November 1 of each year.
4.4 AUTHORITY REVIEW AND APPROVAL. The Authority shall notify the Manager
of its approval or disapproval of any budgets or reports submitted to it
pursuant to Section 4.1, 4.2 and 4.3 with thirty (30) days of any such
submittal. Failure of the Authority to disapprove of any such report or budget,
or any portion thereof, within said thirty day period shall be deemed to be
approval by the Authority. If the Authority disapproves a portion of any report
or budget, the Manager may act under the portions thereof not so disapproved,
and shall revise the portion that was disapproved until satisfactory to the
Authority. With respect to any portion thereof not approved or deemed approved
by the Authority, the prior period's budget or report shall remain in effect
with respect to such portion until a new budget or report with respect thereto
shall have been so approved. The Manager shall revise reports from time to time
to reflect Authority comments or concerns, and material changes in the
operations of Marine World.
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4.5 ANNUAL DISCLOSURE. The Manager shall assist the Authority and
promptly provide any information requested by the Authority in connection with,
the annual disclosure responsibilities of the Authority under Section 7.9 of the
Second Sublease Agreement referred to in Section 2.6, or otherwise in connection
with the annual cash flow borrowing of the Authority.
4.6 ASSISTANCE CONCERNING MEETINGS. The Manager shall provide such
information or assistance to the Authority as the Authority may request in
relation to preparing for meetings of the Board of Directors of the Authority.
SECTION 5
RECORDS; ACCOUNTS AND MONTHLY REPORTS
5.1 MAINTENANCE OF RECORDS. The Manager shall cause to be kept at Marine
World full, true and accurate, in all material respects, books, accounts and
records of the management and operations of Marine World and of all transactions
relating thereto as such operations extend to the responsibilities of the
Manager hereunder.
5.2 ACCOUNTING METHOD; AVAILABILITY. Such books, accounts and records
shall be kept on the accrual basis of accounting in accordance with generally
accepted accounting principles and practices and shall be available for
inspection by the Auditor, the Authority and their respective agents and
employees.
5.3 FINANCIAL STATEMENTS AND INFORMATION. The Manager shall provide the
Authority with monthly financial statements, in a form reasonably acceptable to
the Executive Director of the Authority, respecting the operations of Marine
World, including a balance sheet, cash flow report, statement of operations,
budget variance to date and other pertinent financial data reasonably requested
by the Authority, no later than twenty (20) days following the end of each
month. The Manager shall provide to the Authority for its review a list of
warrants representing amounts disbursed in furtherance of the activities and
operations at Marine World on a monthly basis, or as otherwise requested by the
Authority. In addition, the Manager shall cause to be prepared such other
management and financial reports concerning Marine World as the Authority may
reasonably request from time to time.
5.4 RIGHT TO INSPECT. The Authority has the right to inspect and to audit
all the books and records relating to the management and operation of Marine
World which rights shall remain in effect for the duration of this Agreement and
for five (5) years thereafter.
SECTION 6
TERM AND TERMINATION
6.1 TERM OF AGREEMENT. This Agreement shall commence on the date of
termination of the Interim Management Agreement Relating to Marine World,
entered into as of November 1, 1996, between the Authority and Marine
World/Africa USA Partners, a California Limited Partnership, and shall terminate
on February 1, 2002, unless sooner terminated as set forth in paragraph 6.3.
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6.2 DEFAULT.
6.2.1 Failure by either party hereto to pay or deposit sums due
by one party to the other, or as otherwise required under this Agreement,
within five (5) days notice by the other of such failure shall be a default
hereunder, provided that if the default is of a nature that it cannot be
cured within five (5) days, then the defaulting party shall not be deemed
in default if it takes reasonable steps to commence to cure the default
within such five (5) day period and proceeds with due diligence thereafter
to cure its default within ten (10) days of notice of default.
6.2.2 Violation in any material respect by the Manager of any
laws, ordinances, rules and regulations or orders of any public authority
having jurisdiction over Marine World and failure by the Manager to cure
the applicable violation within five (5) days following notice of any
violation thereof from the Authority, any officer thereof or the applicable
governmental agency shall be a default by the Manager hereunder; provided,
however, that the Manager shall not be in default hereunder if such cure
cannot be reasonably accomplished within such period so long as the Manager
commences cure within such five (5) day period and proceeds with due
diligence thereafter to cure said default within (i) thirty (30) days of
notice thereof; or (ii) if not so cured during such period, so long as a
failure to cure the violation does not have a material adverse effect on
the operations or financial condition of the Park, such longer period as is
necessary to effect such cure.
6.2.3 Either party shall be deemed in default under this
Agreement in the event of an uncured material breach of any provision of
this Agreement not otherwise referred to in Sections 6.2.1 or 6.2.2. The
nondefaulting party must give written notice to the defaulting party
specifying the full particulars of the breach alleged. The defaulting
party shall have thirty (30) days from the date of the notice to cure the
breach or take steps reasonably acceptable to the nondefaulting party to
cure the breach which actions must be diligently pursued and concluded in a
reasonable period.
6.2.4 The occurrence of any affirmative act by the Manager (i)
which directly causes an Event of Default (as such term is defined in the
Second Sublease Agreement referred to in Section 2.6 hereof) with respect
to any obligation of the Authority under Sections 5.2, 5.3, 5.4, 5.5, 5.7,
5.9, 6.1, 7.2 or 7.6 of said Second Sublease Agreement as the same exists
on the date hereof, or an Event of Default (as such term is defined in the
Trust Agreement referred to in said Second Sublease Agreement) in Section
10.06 of said Trust Agreement as the same exists on the date hereof, and
(ii) which has a material adverse effect on the operations or financial
condition of Marine World.
6.3 EARLIER TERMINATION. Notwithstanding the provisions of Section 6.1
hereof, this Agreement shall be terminated sooner:
(i) at the option of either party hereto, if the Authority and
Premier Parks Inc. (or a wholly-owned subsidiary thereof) have not entered
into an option agreement in respect of a lease of property adjacent to or
within Marine World which is mutually satisfactory to them by April 1,
1997, upon ninety (90) days prior written notice to the other party,
provided that any such termination by the Manager shall not be effective
until the earlier of (a) at the option of the Authority, two hundred
seventy (270) days from the receipt by the Authority of such notice, or (b)
the appointment of and assumption of duties by a new manager for Marine
World;
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(ii) at the option of the Manager, if the Authority and Premier Parks
Inc. (or a wholly-owned subsidiary thereof) have not entered into an option
agreement in respect of a purchase by Premier Parks Inc. (or a wholly-owned
subsidiary thereof) of Marine World by September 1, 1997, upon not less
than ninety (90) days prior written notice by the Manager to the Authority;
(iii) at any time by mutual agreement between the Manager and the
Authority;
(iv) at the option of either party hereto, upon substantial
destruction or taking by eminent domain of such portions of Marine World so
as to make the operation of Marine World, in the opinion of the Authority,
economically infeasible;
(v) subject to the provisions of Section 6.4, immediately upon a
default under Section 6.2 at the election of the nondefaulting party;
(vi) at the option of the Authority with thirty days prior written
notice to the Manager, and effective upon appointment of and assumption of
duties by a new manager for Marine World, (a) on the date which is three
(3) years from the date of this Agreement, and (b) following notice to the
Authority by Premier Parks Inc. (or its wholly owned subsidiary which is
the holder of the option) that it will not exercise an option to lease land
adjacent to Marine World as such option is contemplated by the option
agreement referred to in clause (i) above; or
(vii) at the option of the Manager, if the Manager in good faith has
a material disagreement with the Authority over (a) changes mandated by the
Authority to budgets previously approved by the Authority under Section 4.4
hereof or (b) the Authority's operating policies with respect to Marine
World, upon ninety days written notice from the Manager to the Authority as
to the substance of such disagreement, provided that any such termination
by the Manager shall not be effective until the earlier of (a) at the
option of the Authority, one hundred fifty (150) days from the receipt by
the Authority of such notice, or (b) the appointment of and assumption of
duties by a new manager for Marine World.
6.4 AGENCY RIGHT TO CURE. The Redevelopment Agency of the City of Vallejo
(the "Agency") shall have the right to receive from the Manager notice of and
have the right to cure any breach by or default of the Authority under this
Agreement, on behalf of and at the expense of the Authority during any period
that Authority is in default thereunder; provided that, except in case of an
emergency requiring earlier action, the Agency shall give Authority not less
than fifteen (15) days prior written notice of the Agency's intent to cure on
behalf of Authority. The Agency shall have a reasonable period of time
(considering the nature of the default) to cure any default of Authority,
following the expiration of all periods (including any extensions of time and
period during which performance is waived) allowed for Authority's cure of such
default, in the event that Authority has failed to cure.
6.5 PRORATION OF MANAGEMENT FEE UPON TERMINATION. If this Agreement is
terminated prior to the end of its term (as described in Section 6.1), the
Authority shall pay to the Manager, within thirty (30) days after such
termination and after deducting any amounts owed by the Manager to the Authority
hereunder, any compensation due under Section 4.1(i), and a pro rata amount to
be agreed upon by the Authority and the Manager in respect of Section 4.1(ii)
based upon the operations of Marine World to the date of termination as compared
to the immediately preceding two years; provided that no such compensation
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shall be owing in respect of Section 4.1(ii) in the event of a termination by
the Authority by reason of a default by the Manager of the character described
in Section 6.2.
SECTION 7
INDEMNIFICATION
7.1 INDEMNIFICATION BY AUTHORITY. The Authority shall indemnify and hold
the Manager harmless from any and all claims, costs, damages and liabilities,
including reasonable attorneys fees and expenses ("Loss"), as and when incurred
by reason of or arising out of (i) any and all debts, liabilities or
obligations, whether direct or contingent, of any party relating to Marine
World, existing on, or arising out of the operation or ownership of Marine World
prior to, the commencement of Manager's services hereunder or (ii) the
performance by the Manager of its duties and responsibilities hereunder or its
status as "manager" of Marine World, except for those arising out of:
(a) the negligence or willful misconduct of the Manager or its
officers, directors, agents or employees; or
(b) a breach by the Manager or its employees, agents, subcontractors
or assigns of its duties or obligations hereunder.
7.2 INDEMNIFICATION BY THE MANAGER. The Manager shall indemnify, defend
(with counsel approved by the Authority) and hold the Authority and its
officers, directors, employees and agents harmless from any and all claims,
costs, damages or liabilities, including reasonable attorneys fees and expenses
("Loss") as and when incurred by reason of or arising from:
(i) the gross negligence or willful misconduct of the Manager or its
employees, agents or subcontractors; or
(ii) a breach by the Manager or its employees, agents, subcontractors
or assigns of its duties or obligations hereunder.
7.3 INSURANCE PROCEEDS. Any loss to be indemnified under this Section 7
shall be after deducting any insurance proceeds received in connection with such
loss by the party suffering the loss.
SECTION 8
FORCE MAJEURE
8.1 OBLIGATIONS SUSPENDED. If the Manager or the Authority is unable by
reason of Force Majeure (as herein defined) to carry out any obligation under
this Agreement, such obligation shall be suspended only so far as it is
physically affected by such Force Majeure during the continuance thereof. The
party unable to perform shall give the other party prompt notice of such Force
Majeure with reasonably full particulars thereof and, insofar as is known, the
probable extent to which it will be unable to perform or be delayed in
performing such obligation. The party unable to perform shall use all possible
diligence to remove such Force Majeure as quickly as possible.
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8.2 REMOVAL OF FORCE MAJEURE. The requirement that any Force Majeure
shall be removed with all possible diligence shall not require the settlement by
the party unable to perform of strikes, lockouts or other labor disputes or the
meeting of any claims of or demands by any supplier or government entity which
reasonably may be harmful to the best interests of the Authority or the Manager.
8.3 DEFINITION. For the purpose of paragraphs 8.1 and 8.2 hereof, "Force
Majeure" shall mean an act of God, strike, lockout or other industrial
disturbance, act of a public enemy, war, blockade, public riot, lightning, fire,
storm, earthquake, flood, explosion, governmental restraint, breakage, or
accidents to equipment and any other cause whether of the kind specifically
enumerated above or otherwise, which shall not reasonably be within the control
of the party claiming suspension.
SECTION 9
MISCELLANEOUS
9.1 NO PRIVATE BUSINESS USE. The Manager shall take all reasonable steps
in connection with this Agreement as may be requested by the Authority to ensure
that Marine World is not deemed to be used for a private business use within the
meaning of Section 141(b) of the Internal Revenue Code of 1986 and applicable
rulings, procedures and regulations of the Internal Revenue Service, so as to
cause the City of Vallejo or the Authority to violate the covenant in Section
10.05(a) of the 1997 Trust Agreement Relating to Marine World, dated as of
January 1, 1997, among the City of Vallejo, the Authority and BNY Western Trust
Company.
9.2 NO WAIVER. No delay or failure on the part of any party in exercising
any right hereunder shall impair any such right or any remedy of the party so
delaying or failing, nor shall it be construed to be a waiver of any continuing
breach or default hereunder or any acquiescence therein or of any similar breach
or default thereafter occurring, nor shall any waiver of any single breach or
default hereunder be deemed a waiver of any other breach or default theretofore
or thereafter occurring.
9.3 AMENDMENTS. This Agreement may be amended, modified, waived, released
or discharged only by a written amendment executed by the parties hereto.
9.4 SEVERABILITY. If any court of competent jurisdiction holds that any
provision of this Agreement is void, voidable, illegal or unenforceable, or that
this Agreement would be void, voidable, illegal or unenforceable unless any
provision hereof were severed herefrom, that provision shall be severable from
and shall not affect the continued operation of the rest of this Agreement;
provided that if the provision to be severed is a material part of this
Agreement, the foregoing shall not apply, and the parties shall in good faith
renegotiate such provision.
9.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on all
parties hereto and their respective successors and permitted assigns. A party
may not assign its rights or be released from its obligations in, to or under,
this Agreement except as may expressly be approved in writing by the other party
hereto in its sole and absolute discretion; provided that the Authority may at
any time assign this Agreement to the City of Vallejo, the Agency, the Vallejo
Public Financing Authority or another agency of either the City or the Agency
which has the use and possession of Marine World. The experience and
capabilities of the
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Manager were of primary importance to the Authority in entering into this
Agreement, and the Authority shall be under no obligation whatsoever to approve
any prospective assignee of the Manager hereunder.
9.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which, when so executed, shall be deemed to be an original and all of which,
when taken together, shall constitute one agreement.
9.7 NOTICES. Any notice, document or other item to be given, delivered,
furnished or received under this Agreement shall be deemed given, delivered,
furnished or received when given in writing and personally delivered to an
officer of the applicable party or, after the same is deposited with the United
States Postal Service, postage prepaid, registered or certified first class
mail, return receipt requested, addressed to such applicable party at the
address or addresses indicated herein therefor, or at such other address or
addresses as such party may from time to time designate by written notice to the
other, at the time of delivery shown on such return receipt:
(a) If to the Authority: Marine World Joint Powers Authority, x/x
Xxxx xx Xxxxxxx, Xxxx Hall, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000, Attention: City Manager, with a copy to City Attorney of the City of
Vallejo, City Hall, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(b) If to the Manager: Park Management Corp., c/o Premier Parks Inc.,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Chief Financial Officer, with a copy to Xxxx Marks & Xxxxx LLP, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X.
Xxxxxxxx.
9.8 INDEPENDENT CONTRACTOR. The relationship between the Manager and the
Authority is that of an independent contractor and, except as herein expressly
provided, neither party is granted any right or authority to assume or create
any obligation or responsibility, express or implied, on behalf of or in the
name of the other or to bind the other in any manner or thing whatsoever.
9.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the management and operation of Marine World
by the Manager during the term of this Agreement.
9.10 ARBITRATION OF DISPUTES.
9.10.1 Any disputes between the parties arising out of or
related to this Agreement which cannot be resolved by good faith
negotiation shall be resolved through binding arbitration. Any 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 party 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
arbitrator(s) 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
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arbitrators shall be final, binding and conclusive as between the parties
and may be 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
Xxxxxx County, California for this purpose.
9.10.2 The parties 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 attorney's fees 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.
9.11 REMEDIES NOT EXCLUSIVE. The remedies provided herein for breach of
this Agreement are not exclusive, and in event of breach, the parties hereto
shall have all the remedies provided by law.
9.12 NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to and
does not create any rights or interests in any person not a party hereto, except
the Agency, as provided in Section 6.4 hereof.
9.13 AUTHORITY CONSENTS AND APPROVALS. No consents, authorization or
approval required by this Agreement to be given by the Authority will be
unreasonably withheld. Unless otherwise provided herein, all matters submitted
by the Manager for approval by the Authority shall be deemed approved by the
Authority unless the Authority notifies Manager in writing of its disapproval
thereof within the time period specified herein for such approval or, if no such
time period is specified, within thirty (30) days after such matter is so
submitted in writing by the Manager to the Authority.
9.14 LIMITATION ON MANAGER'S ACTIVITIES. The Manager hereby acknowledges
and agrees that it is a single purpose corporation whose sole corporate purpose
is to act as Manager hereunder, and that it will not engage in any activities
unrelated to its performance as Manager hereunder without the prior written
consent of the Authority.
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9.15 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and performed in such State, and Xxxxxx County, California, shall be the county
of venue in the event of any legal proceedings with respect to this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of
the date first above written.
MARINE WORLD JOINT POWERS AUTHORITY
By: /s/
--------------------------------
Executive Director
PARK MANAGEMENT CORP.
By: /s/
--------------------------------
Chairman and
Chief Executive Officer
Premier Parks Inc. hereby fully and unconditionally guarantees the
performance by Park Management Corp. of its obligations under Sections 2, 4, 5
and 7.2 of the foregoing Agreement.
PREMIER PARKS INC.
By: /s/
------------------------------
Chairman and
Chief Executive Officer
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