EXHIBIT 10(ae)
PARCEL LEASE
BETWEEN
MARINE WORLD JOINT POWERS AUTHORITY ,
LANDLORD
AND
PARK MANAGEMENT CORP.,
TENANT
DATED AS OF NOVEMBER 7, 1997
TABLE OF CONTENTS
ARTICLE 1
DEMISE; TERM
SECTION 1.01. Demise of the Private Parcel. . . . . . . . . . . . . . . . . .2
SECTION 1.02. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.03. Renewal Option. . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.04. Rule Against Perpetuities . . . . . . . . . . . . . . . . . . .2
ARTICLE 2
RENT
SECTION 2.01. Minimum Annual Rent . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.02. Payment of Rent . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 2.03. No Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE 3
USE; ACCESS
SECTION 3.01. Use of Private Parcel . . . . . . . . . . . . . . . . . . . . l3
SECTION 3.02. Limitation on Use . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.03. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.04. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 3.05. Minimum Investment. . . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.06. Title to Improvements . . . . . . . . . . . . . . . . . . . . .5
SECTION 3.07. Use by Vendors; Parking . . . . . . . . . . . . . . . . . . . .6
SECTION 3.08. Access to Private Parcel. . . . . . . . . . . . . . . . . . . .6
SECTION 3.09. Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.10. Tenant's Property . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE 4
IMPOSITIONS
SECTION 4.01. Tenant's Obligation to Pay Impositions. . . . . . . . . . . . .7
SECTION 4.02. Segregation and Payment of Impositions. . . . . . . . . . . . .8
SECTION 4.03. Taxes Imposed Upon Creation of Leasehold. . . . . . . . . . . .9
ARTICLE 5
INSURANCE
SECTION 5.01. Extended Coverage and Liability . . . . . . . . . . . . . . . .9
SECTION 5.02. Carriers; Policies. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.03. Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5.04. Certificate of Insurance. . . . . . . . . . . . . . . . . . . 10
SECTION 5.05. Release and Waiver of Subrogation . . . . . . . . . . . . . . 10
SECTION 5.06. Title Insurance . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.07. Landlord's Insurance. . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 6
MAINTENANCE OF PROPERTY
SECTION 6.01. No Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.02. Tenant's Maintenance Obligations. . . . . . . . . . . . . . . 11
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ARTICLE 7
ALTERATIONS BY TENANT
SECTION 7.01. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7.02. Tenant Improvements . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 8
UTILITY SERVICES
SECTION 8.01. Utility Services. . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 9
DAMAGE TO THE PROPERTY
SECTION 9.01. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.02. Restoration or Termination. . . . . . . . . . . . . . . . . . 13
SECTION 9.03. Effect of Lease Termination . . . . . . . . . . . . . . . . . 14
SECTION 9.04. Insurance Proceeds. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9.05. Restoration . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 10
CONDEMNATION
SECTION 10.01. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.02. Total Taking. . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.03. Partial Taking. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.04. Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.05. Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 10.06. Landlord's Condemnation Covenant. . . . . . . . . . . . . . . 16
ARTICLE 11
LIENS
SECTION 11.01. No Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.02. Mechanics' Liens. . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 12
INSPECTION OF PREMISES BY LANDLORD
SECTION 12.01. Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 12.02. Exhibit for Sale or Lease . . . . . . . . . . . . . . . . . . 17
ARTICLE 13
ASSIGNMENT AND SUBLEASING
SECTION 13.01. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.02. Permitted Assignee. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.03. Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.04. Provisions Applicable to Both Assignments and Subleases . . . 19
ARTICLE 14
LEASEHOLD MORTGAGES
SECTION 14.01. Tenant's Right to Create Leasehold Mortgages. . . . . . . . . 19
SECTION 14.02. Insurance and Condemnation Proceeds . . . . . . . . . . . . . 20
SECTION 14.03. Permitted Leasehold Mortgagees. . . . . . . . . . . . . . . . 20
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SECTION 14.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 14.05. Time to Cure Defaults . . . . . . . . . . . . . . . . . . . . 20
SECTION 14.06. Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 14.07. No Amendment of Lease . . . . . . . . . . . . . . . . . . . . 21
SECTION 14.08. Foreclosure Permitted . . . . . . . . . . . . . . . . . . . . 21
SECTION 14.09. Right to Assign Following Foreclosure . . . . . . . . . . . . 22
SECTION 14.10. New Lease . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14.11. Additional Leasehold Mortgagee Requirements . . . . . . . . . 22
ARTICLE 15
TRANSFER BY LANDLORD
SECTION 15.01. Limitation of Landlord's Liability. . . . . . . . . . . . . . 23
SECTION 15.02. Limitation on Encumbrance by Landlord . . . . . . . . . . . . 23
SECTION 15.03. Other Limitations . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 16
INDEMNIFICATION
SECTION 16.01. Indemnification of Landlord . . . . . . . . . . . . . . . . . 23
SECTION 16.02. Indemnification of Tenant . . . . . . . . . . . . . . . . . . 24
ARTICLE 17
TENANT'S DEFAULT AND LANDLORD'S REMEDIES
SECTION 17.01. Tenant Default. . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 17.02. Notice From Landlord. . . . . . . . . . . . . . . . . . . . . 25
SECTION 17.03. Termination of Tenant's Right to Possession . . . . . . . . . 25
SECTION 17.04. Termination . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 17.05. Landlord's Equitable Relief . . . . . . . . . . . . . . . . . 26
SECTION 17.06. Landlord's Right to Perform Tenant's Covenants. . . . . . . . 26
SECTION 17.07. No Waiver by Landlord or Tenant . . . . . . . . . . . . . . . 26
SECTION 17.08. Landlord's Remedies Cumulative. . . . . . . . . . . . . . . . 26
SECTION 17.09. Counterclaims by Tenant in Action to Recover Possession . . . 27
SECTION 17.10. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 18
LANDLORD'S DEFAULT AND TENANT'S REMEDIES
SECTION 18.01. Landlord's Default. . . . . . . . . . . . . . . . . . . . . . 27
SECTION 18.02. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 18.03. Tenant's Remedies . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 18.04. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 19
ESTOPPEL CERTIFICATES; NON-DISTURBANCE
SECTION 19.01. Estoppel Certificate by Tenant. . . . . . . . . . . . . . . . 28
SECTION 19.02. Estoppel Certificate by Landlord. . . . . . . . . . . . . . . 28
SECTION 19.03. Estoppel Non-Disturbance. . . . . . . . . . . . . . . . . . . 28
ARTICLE 20
ARBITRATION; APPRAISAL
SECTION 20.01. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 20.02. Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 20.03. No Alteration of Lease. . . . . . . . . . . . . . . . . . . . 30
ARTICLE 21
END OF TERM; TERMINATION
SECTION 21.01. End of Term . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 21.02. Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 21.03. Acceptance of Surrender . . . . . . . . . . . . . . . . . . . 30
SECTION 21.04. Compensation to Tenant Upon Certain Events of Termination . . 30
SECTION 21.05. General Effect of Termination . . . . . . . . . . . . . . . . 31
ARTICLE 22
GENERAL PROVISIONS
SECTION 22.01. Provisions Subject to Applicable Law. . . . . . . . . . . . . 31
SECTION 22.02. Time is of the Essence. . . . . . . . . . . . . . . . . . . . 31
SECTION 22.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 22.04. Invalidity of Particular Provisions . . . . . . . . . . . . . 32
SECTION 22.05. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.06. No Joint Venture. . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.07. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.08. Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.09. Source of Payment of Obligations Incurred Under this Lease. . 32
SECTION 22.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.11. No Merger of Title. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 22.12. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 22.13. Contests. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 22.14. Nondiscrimination . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 22.15. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 22.16. Integration . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 22.17. Memorandum of Lease for Recording . . . . . . . . . . . . . . 34
SECTION 22.18. Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 23
ENVIRONMENTAL MATTERS
SECTION 23.01. Landlord's Environmental Obligations. . . . . . . . . . . . . 34
SECTION 23.02. Tenant's Environmental Obligations. . . . . . . . . . . . . . 35
SECTION 23.03. Legal Contests. . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 23.04. Additional Landlord Responsibilities; Termination of Lease. . 36
ARTICLE 24
SALE OF PRIVATE PARCEL; REPURCHASE OF TENANT'S ESTATE
SECTION 24.01. Landlord's Right to Sell. . . . . . . . . . . . . . . . . . . 36
SECTION 24.02. Repurchase of Tenant's Estate . . . . . . . . . . . . . . . . 37
ARTICLE 24A
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF LANDLORD
SECTION 24A.01.Landlord's Additional Representations and Warranties. . . . . 38
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ARTICLE 25
DEFINITION OF CERTAIN TERMS
SECTION 25.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 39
EXHIBITS
--------
EXHIBIT A - DESCRIPTION OF THE LAND
EXHIBIT B - DESCRIPTION OF THE PRIVATE PARCEL
EXHIBIT C - PERMITTED EXCEPTIONS
EXHIBIT D - RECIPROCAL EASEMENT AGREEMENT
EXHIBIT E - REVENUE SHARING AGREEMENT
PARCEL LEASE
This Parcel Lease, dated as of November 7, 1997 (the "Lease"), is made by
and between Marine World Joint Powers Authority, a joint exercise of powers
authority organized and existing under the laws of the State of California
(hereinafter called "Landlord"), whose address is City Hall, 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and Park Management Corp., a California
corporation (hereinafter called "Tenant"), whose address is Marine Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
RECITALS
A. All capitalized terms used herein and not defined in the section where
first used in this Lease are defined in Article 25 hereof or the definition of
such capitalized term is referenced in Article 25 hereof.
B. The City of Vallejo (the "City") owns approximately one hundred
thirty-eight (138) acres of land located in the County of Xxxxxx, State of
California, described in Exhibit A attached hereto (the "Land"). The City also
owns or controls the right to use the surface of Lake Xxxxxx, a flood control
and drainage reservoir consisting of approximately fifty-five (55) acres.
C. Certain improvements to the portion of the Land identified as the
"Public Parcel" below were refinanced on January 30, 1997, with the proceeds of
certificates of participation in the aggregate principal amount of $63,465,000
(the "Certificates of Participation Financing").
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D. In connection with the Certificates of Participation Financing, (i)
the City entered into a 1997 Site Lease Relating to Marine World dated as of
January 1, 1997 whereby the City leased the Land and rights to use Lake Xxxxxx
to the Landlord (the "1997 City-Marine World Lease"), (ii) the Landlord and the
City entered into a 1997 Lease Agreement Relating to Marine World, dated as of
January 1, 1997, whereby the Landlord leased back to the City a portion of the
Land (the "Public Parcel") and rights to use Lake Xxxxxx (the "1997 Marine
World-City Lease), (iii) the City and the Redevelopment Agency of the City of
Vallejo (the "Agency") entered into a 1997 First Sublease Agreement Relating to
Marine World, dated as of January 1 1997, whereby the City subleased to the
Agency the Public Parcel and the rights to use Lake Xxxxxx (the "1997
City-Agency Lease"), and (iv) the Agency and the Landlord entered into a 1997
Second Sublease Agreement Relating to Marine World, dated as of January 1, 1997,
whereby the Agency subleased to the Landlord the Public Parcel and the rights to
use Lake Xxxxxx (the "1997 Agency-Marine World Lease") to enable the Landlord to
operate and maintain a park under the name "Marine World/Africa U.S.A."
E. In connection with the exercise of an option (the "Option") granted by
the Landlord under the Option Agreement (Parcel Lease), dated as of May 30,
1997, between the Landlord and the Tenant, the Landlord and the Tenant now
desire to provide for a lease of the portion of the land identified in Exhibit B
attached hereto (the "Private Parcel," which Private Parcel shall be hereinafter
deemed to include, as appropriate, all Improvements thereon), to enable the
Tenant to construct and operate facilities on the Private Parcel compatible with
those on the Public Parcel.
ARTICLE 1
2
DEMISE TERM
SECTION 1.01. DEMISE OF THE PRIVATE PARCEL. Landlord hereby leases
to Tenant and Tenant hereby leases from Landlord, on the terms and conditions
set forth herein and subject only to the exceptions to title described in
Exhibit C attached hereto (the "Permitted Exceptions"), the Private Parcel
together with any buildings, structures, facilities, fixtures, equipment,
paving, surfacing, sewers, storm drains and other improvements which may now or
hereafter be located thereon belonging to or leased by Landlord, and all
easements, rights of way and other rights therein and appurtenances thereto.
Tenant has no rights under this Lease to the use of the surface or any part of
Lake Xxxxxx. Landlord warrants that the Land is subject only to the Permitted
Exceptions.
SECTION 1.02. TERM. The term of this Lease (the "Term") shall be for
a period of fifty-five (55) years commencing on the date of exercise of the
Option (the "Term Commencement Date") and ending on the date which is fifty-five
(55) years after the Term Commencement Date, unless this Lease is terminated on
an earlier date, or renewed in accordance with Section 1.03 below. Landlord
shall deliver possession of the Private Parcel to Tenant under this Lease on the
Term Commencement Date, and no other person or entity shall be in possession of
any thereof.
SECTION 1.03. RENEWAL OPTION. Tenant shall have the right, at its
election, to extend the original term of this Lease for four (4) extension
periods of ten (10) years each, and a final extension period of four (4) years
(each a "Renewal Option"). Each Renewal Option shall commence upon the
expiration of the original term or the prior Renewal Option (as the case may
be), provided that Tenant shall give to Landlord notice of the exercise of its
selection at least four (4) months prior to the expiration of the original
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term or such prior Renewal Option (as the case may be). Prior to the exercise by
Tenant of any of said elections to extend the original term, the expression "the
term of this Lease" or any equivalent expression shall mean the original term;
after the exercise by Tenant of any of the aforesaid elections, the expression
"the term of this Lease" or equivalent expression shall mean the original term
as it may have been extended. Except as expressly otherwise provided in this
Lease, all the agreements and conditions in this Lease contained shall apply to
the additional period or periods to which the original term shall be extended as
aforesaid, the term shall be extended upon the giving of the notice without the
requirement of any action on the part of Landlord.
SECTION 1.04. RULE AGAINST PERPETUITIES. If and to the extent that
any of the options, rights and privileges granted to Tenant under the provisions
of this Lease would, in the absence of the limitation imposed by this Section,
be invalid or unenforceable as being in violation of the rule against perpetuity
or any other rule of law relating to the vesting of interests in property or the
suspension of the power of alienation of property, then it is agreed that
notwithstanding any other provision of this Lease, said options, rights and
privileges, subject to the respective conditions governing the exercise of such
options, rights and privileges, shall be exercisable by Tenant only during a
period which shall end no later than twenty (20) years after the date of
execution of this Lease in which event, Tenant shall have the right, to the
extent permitted by Law, to exercise any or all of its Renewal Options prior to
the expiration of such period.
ARTICLE 2
RENT
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SECTION 2.01. MINIMUM ANNUAL RENT. Commencing on the Rent
Commencement Date and continuing throughout the remainder of the Term, Tenant
shall pay an annual fixed rent of One Dollar ($l.00) (the "Minimum Annual
Rent"). Tenant's obligation to pay Minimum Annual Rent on the Private Parcel
under this Lease shall commence on the date of exercise of the Option (the "Rent
Commencement Date").
SECTION 2.02. PAYMENT OF RENT. The Minimum Annual Rent shall be paid
in advance on the Rent Commencement Date and on each one year anniversary
thereof during the Term.
SECTION 2.03. NO SETOFF. Tenant covenants to pay the Minimum Annual
Rent herein reserved and all other sums which may become due hereunder or be
payable by Tenant hereunder, at the times and in the manner provided in this
Lease without notice or demand except as otherwise expressly provided herein.
The Minimum Annual Rent and any other amounts required to be paid by Tenant
hereunder are sometimes collectively referred to as, and shall constitute,
"rent".
ARTICLE 3
USE ACCESS
SECTION 3.01. USE OF PRIVATE PARCEL. Tenant shall develop the
Private Parcel with various Improvements, which may include, without limitation,
thrill rides, water attractions, themed areas, concert facilities, restaurants
and other food outlets, courts or other areas for preparation and/or service or
dispensing of food, game venues, theater and other show areas and merchandise
shops, all of which shall be compatible with the Improvements located on the
Public Parcel as of the date hereof. Tenant shall also in good faith
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consider the construction of a conference center in connection with its
development of the Private Parcel. Landlord shall cooperate with and assist
Tenant (at the written request and cost of the Tenant), in effecting development
of the Private Parcel.
Tenant shall furnish and equip the Improvements constructed on the Private
Parcel with all fixtures, furniture, furnishings, and other equipment and other
personal property (collectively, "Personal Property") of a quantity and quality
necessary to operate the Private Parcel in a manner at least comparable to the
operation of the other theme parks operated by PPI (the "Premier Parks");
provided, however, that Tenant, in its sole discretion, shall determine the
nature and quantity of attractions to be located at the Private Parcel at any
time during the Term. Tenant further agrees to maintain the Improvements and
such Personal Property and keep the same in good order and condition ordinary
wear and tear excepted, and promptly make all necessary repairs, replacements
and renewals thereof, except as otherwise expressly provided in this Lease
(including, but not limited to, Section 6.02).
The Private Parcel shall at all times be used as a theme and/or amusement
park and/or other entertainment venue, and/or in any other manner consistent
with the use of the Public Parcel, and shall be generally open for admission by
patrons at the same times as are the facilities on the Public Parcel, except as
otherwise expressly provided in this Lease; provided, however, it is expressly
understood and agreed that nothing in this Lease shall be deemed or construed to
require that all or any of the Private Parcel be continuously operated. Tenant
shall have the right to close all or any portion of the Private Parcel during
all or any such portion of the off season as Tenant shall determine.
The Landlord will implement as soon as practicable any substitution of
property between the Private
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Parcel and the Public Parcel which is requested by the Tenant in writing and is
otherwise consistent with the provisions of the 1997 Marine World-City Lease and
not adverse in any material respect to the operations conducted on the Public
Parcel. Upon any such substitution, the property transferred to the Private
Parcel shall for all purposes hereof be deemed part of the Private Parcel and
subject to the provisions of this Lease as if such property were originally part
of the Private Parcel. In connection with any such substitution, Tenant shall
promptly arrange for the recordation of a supplement to the description of the
Private Parcel in Exhibit B hereto in the real property records of Xxxxxx
County, California consistent therewith.
Once commenced, all construction, alteration or repair work permitted
herein shall be accomplished as expeditiously and diligently as is commercially
practicable. Tenant shall take all reasonably necessary measures to minimize
any damage, disruption or inconvenience to the Public Parcel caused by such work
and make adequate reasonable and customary provision for the safety and
convenience of all persons affected thereby, including but not limited to using
commercially practicable methods to control all objectionable or unpleasant
dust, noise, odor and other materially adverse effects thereof, upon the Public
Parcel and/or the normal use thereof. Tenant shall repair, at its own cost and
expense, any and all damage caused by such work, except as otherwise expressly
provided in this Lease.
Any work performed by or on behalf of Landlord or by or on behalf of Tenant
or any occupant or sublessee to connect to, repair, relocate, maintain or
install any storm drain, sanitary sewer, water line, gas-line, telephone conduit
or any other public utility service shall be performed so as to minimize
interference with the provision of such services to occupants, sublessees and
other persons.
SECTION 3.02. LIMITATION ON USE. Tenant shall not use or permit to
be used any part of the
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Private Parcel for any illegal purposes and will not cause or maintain any
nuisance in, at or on the Private Parcel. Tenant shall not do anything, or
permit anything to be done, in or about the Private Parcel which will: (i)
invalidate or be in conflict in any material way with the provisions of any fire
or other insurance policies covering the Private Parcel; or (ii) result in an
inability of Tenant to obtain fire insurance from reputable companies for the
Improvements on the Private Parcel as required by Article 5.
SECTION 3.03. COMPLIANCE. Throughout the Term Tenant shall timely
comply in all material respects with all Laws and the requirements of all
policies of insurance which may be applicable to the Private Parcel, including
the making of any required Improvements on the Private Parcel; provided,
however, that notwithstanding the foregoing Tenant shall have the right to use
the Private Parcel for the uses permitted pursuant to Sections 3.01 and 3.02
even if there is a change in Laws applicable to the Private Parcel, and further
provided that Landlord shall be responsible for any and all violations of Law
existing on the Term Commencement Date. Landlord agrees, within thirty (30)
days (or such sooner period as may be required by Law) after delivery by Tenant
of written notice to Landlord which notice is delivered within one year of the
Term Commencement Date, to either (a) cure any such violation(s) existing on the
Term Commencement Date in compliance with Laws or (b) to notify Tenant in
writing of Landlord's desire that Tenant effect such cure and its commitment to
reimburse Tenant for all reasonable costs expended by Tenant in order to
effectuate such cure; provided, however, if Landlord fails to either: (i) effect
such cure at least ten (10) business days prior to the expiration of the period
prescribed by Law to do so; or (ii) notify Tenant of its election of
subparagraph (b) above within ten (10) business days of receipt of Tenant's
notice, then Tenant may effectuate such cure and be promptly reimbursed by
Landlord.
SECTION 3.04. OTHER AGREEMENTS. Landlord and Tenant acknowledge and
agree that there
8
shall be no merger of this Lease and any of the Master Lease, the 1997
City-Marine World Lease, the 1997 Marine World-City Lease, the 1997 City-Agency
Lease or the 1997 Agency-Marine World Lease (collectively, the "Public Leases").
Notwithstanding the foregoing, Landlord and Tenant acknowledge that they will
benefit from a common plan of operation of improvements on the Public Parcel and
the Improvements on the Private Parcel, and by allowing patrons of the Public
Parcel free access to the public areas of the Private Parcel, and patrons of the
Private Parcel free access to the public areas of the Public Parcel, subject to
the terms and conditions of this Lease and the Reciprocal Easement Agreement.
To that end, Landlord and Tenant have entered into the Reciprocal Easement
Agreement and the Revenue Sharing Agreement (the "Other Agreements"), and
acknowledge and agree that the terms of the Other Agreements and the Public
Leases are integral to Tenant's use of the Private Parcel and Landlord's use of
the Public Parcel.
SECTION 3.05. MINIMUM INVESTMENT. Tenant hereby agrees to expend at
least an aggregate $7,000,000 towards the construction of Improvements (which
shall include at least one major attraction) on the Private Parcel (the "Minimum
Investment") during the two year period commencing with the Term Commencement
Date. Notwithstanding the foregoing, (a) the Minimum Investment shall be
reduced by an amount equivalent to the amount, if any, by which the amounts
expended by Tenant under that certain Option Agreement exceeds the "Purchase
Amount" as defined therein (and as referenced in clause (i)(b) of Section 1.05
thereof), provided that, in any event, the Improvements to be so constructed
shall include a major attraction or attractions; (b) Tenant shall not expend in
excess of $50,000,000 (exclusive of any costs of Restoration, replacement of
damaged or obsolescent Improvements) towards construction of Improvements on the
Private Parcel during the Term, unless it shall first obtain an opinion of
nationally-recognized bond counsel acceptable to the Landlord to the effect that
expenditures in excess of such amount will not result in
9
the interest component of the Certificates of Participation Financing being
included in the gross incomes of the owners of the certificates of participation
for federal income tax purposes or otherwise result in a breach of the
Landlord's covenants in Section 10.05 of the Trust Agreement referenced in the
Agency-Marine World Lease, and (c) Landlord will reasonably consider any
proposal in writing by Tenant to include the cost of any of Tenant's Property
towards the Minimum Investment, and if such Tenant's Property is ever removed
from the Private Parcel, it is replaced with other property of equal or greater
value.
From time to time (but not less than annually), and otherwise upon written
request of Landlord, Tenant shall provide Landlord with a written report as to
the extent of its investment in Improvements to the Private Parcel and the then
value thereof, which value shall be based on the actual cost of such
Improvements less depreciation thereof determined in accordance with generally
accepted accounting principles and less the value (after depreciation determined
as aforesaid) of any such damaged, destroyed or taken Improvements which are
not replaced or reconstructed during the period covered by the report. Each
annual report shall, at a minimum, show any additional Investment during the
immediately preceding year. The amounts actually expended, from time to time,
by Tenant towards the construction of Improvements in accordance with the
preceding paragraph, as may be adjusted in accordance with the terms hereof and
valued in accordance with the preceding sentence, shall be referred to herein as
the "Investment."
SECTION 3.06. TITLE TO IMPROVEMENTS. If Improvements are constructed
by Tenant on the Private Parcel under this Lease, title to such Improvements
shall remain the property of Tenant during the remainder of the Term and, upon
expiration of the Term, title to all Improvements then vested in Tenant which
have not been removed from the Private Parcel within twenty (20) days after
expiration shall vest in Landlord and the same shall become the property of
Landlord at that time without notice or execution of
10
further instruments and without cost, expense or obligation of any kind or
nature to Landlord; provided, however, notwithstanding anything to the contrary
in any Public Lease or in any Other Agreement, the parties acknowledge that
Tenant may remove any and all Improvements at any time prior to the expiration
or earlier termination of this Lease either: (a) in connection with any
Restoration; or (b) at any other time Tenant determines, in its sole discretion,
so long as the Minimum Investment has been made and is being maintained in
accordance with the terms of this Lease. Upon expiration or termination of this
Lease (other than termination arising out of a Total Taking or a Landlord's
Default), Tenant agrees to not remove Improvements selected by Tenant (which
shall include at least one major attraction) with an original cost to Tenant
equal to the Minimum Investment. Tenant agrees to execute, deliver, and if
necessary, cause to be recorded, such instruments as Landlord shall reasonably
request to cause title to all Improvements located on the Private Parcel upon
the expiration or earlier termination of this Lease to be so vested in Landlord
if not removed by Tenant as aforesaid.
SECTION 3.07. USE BY VENDORS; PARKING. (a) At any time during the
term of this Lease, Tenant may lease or license departments, grant concessions
or enter into space/occupancy leases granting third parties the right to sell
goods, wares, merchandise, food and services and/or provide games, attractions,
arcades and other entertainment in or at the Private Parcel. The foregoing
shall not be considered a subletting or assignment for purposes of this Lease,
including but not limited to Article 13 hereof nor shall such licensee or
concessionaire be considered a subtenant within the meaning of this Lease,
provided that such party's business is not in the eyes of the public separately
identifiable from Tenant's business at the Private Parcel, and the subletting is
not for more than an insubstantial portion of the area of the Private Parcel.
Tenant shall assure that any such leases, licenses or concessions are
subordinate to this Lease, and terminate upon termination of this Lease.
11
(b) Tenant (including any subtenant, licensee and concessionaire thereof)
shall be entitled to the use of parking spaces in the parking lot serving the
Public Parcel for its employees, agents, guests and other invitees on the same
terms as employees, agents, guests and other invitees of Landlord with respect
to the Public Parcel, subject to the Rules and Regulations (as defined in the
REA) and the other terms of the REA.
SECTION 3.08. ACCESS TO PRIVATE PARCEL. Landlord agrees that
Tenant shall have sole and exclusive access to all of the Private Parcel at all
times during the term of this Lease, except to the extent otherwise expressly
provided herein or in the Reciprocal Easement Agreement, and that Landlord shall
not permit or create, or cause to be permitted or created, any event or
condition which results in preventing or restricting Tenant from, or otherwise
materially interfering with, the use and enjoyment by Tenant of the Private
Parcel for its intended purpose, including but not limited to impairing its
access thereto.
SECTION 3.09. SIGNS. Tenant may install and maintain a sign or signs
at the Private Parcel provided same are in compliance with any and all
applicable Laws. Landlord shall cooperate with Tenant (including, without
limitation, execution of all applications) in connection with any Permits which
are required in connection with the installation or maintenance of said signs.
Landlord shall not erect any signs at the Private Parcel without Tenant's prior
written consent.
SECTION 3.10. TENANT'S PROPERTY. (a) All stock-in-trade, personal
property, furniture, furnishings, machinery, equipment and movable trade
fixtures (not constituting Improvements) supplied by or installed by or on
behalf of Tenant at Tenant's sole cost and expense, including Personal Property
("Tenant's Property"), shall remain the property of Tenant and Tenant may remove
Tenant's Property from
12
the Private Parcel at anytime during the Term so long as such removal does not
otherwise cause a Tenant's Default, and at the end of the Term or upon sooner
termination as aforesaid.
(b) Tenant shall have the right, without obtaining Landlord's prior written
consent, to enter into various leasing or other financing arrangements with
respect to such Tenant's Property ("Equipment Financing"), whether such
Equipment Financing is in the form of conditional sale contract, chattel
mortgage, lease or other like security interest. Neither the Landlord nor any
party claiming by, through or under Landlord shall have any lien for the
performance of any obligations of Tenant upon any Tenant's Property and
Landlord, for itself and any party claiming by, through or under Landlord,
hereby expressly waives the provisions of any Law giving to it such a lien.
Landlord agrees, if requested by or on behalf of any lender to which Tenant
shall grant a security interest in the Tenant's Property or any lessor of
Tenant's Property in connection with such Equipment Financing (collectively, the
"Equipment Lessor"), to promptly execute, acknowledge and deliver such waivers
or other instruments reasonably required by Tenant and/or the Equipment Lessor
to confirm that Landlord: (i) has waived any such lien, (ii) agrees that the
Equipment Lessor shall have the right to enter upon the Private Parcel for the
purposes of removing Tenant's Property, and (iii) shall not hinder or delay such
removal, provided that Tenant or the Equipment Lessor shall agree to (A) repair
any damage to the Improvements caused by such removal, and (B) otherwise comply
with the terms of this Lease in connection with such removal. Landlord shall use
all commercially reasonable efforts to require the holder of any mortgage
affecting Landlord's interest in the Private Parcel to agree to do likewise (or
in lieu thereof deliver a non-disturbance agreement containing appropriate
provision therefor). Anything herein to the contrary notwithstanding, the
existence or continuance of any such security interest in connection with
Tenant's Property shall not be deemed a Tenant Default hereunder.
13
ARTICLE 4
IMPOSITIONS
SECTION 4.01. TENANT'S OBLIGATION TO PAY IMPOSITIONS. Tenant shall
pay, before any fine, penalty, interest or cost may be added thereto for the
non-payment thereof, all Impositions which are hereafter assessed, imposed or
become a lien upon the Private Parcel or any part thereof during the Term;
provided, however, that Tenant shall only be obligated to pay Impositions
assessed against its possessory interest created by this Lease and not against
the fee and reversion, or any other interest or property or other asset retained
by Landlord. If, by Law, any such Imposition may be paid in installments,
Tenant may pay the same (and, to the extent required, any accrued interest
thereon) in installments before any fine, penalty, interest or cost may be added
thereto for the nonpayment thereof and Tenant shall only be required to pay
those installments coming due during the Term.
"Impositions" shall be defined as all taxes (including possessory interest
taxes associated with the Private Parcel and the execution of this Lease),
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 Private Parcel, any Improvements, any
of Tenant's Personal Property now or hereafter located thereon, on the leasehold
estate created hereby or which may be imposed
14
upon any taxable interest of Tenant acquired pursuant to this Lease or on
account of any taxable possessory right which Tenant may have acquired pursuant
to this Lease, or any part thereof or which may be levied upon or measured by
the rent payable hereunder. Notwithstanding anything to the contrary set forth
above or elsewhere in this Lease, "Impositions" shall not include any income,
excess profit, estate, inheritance, successions transfer, franchise, capital or
other tax assessment upon the fee interest of Landlord in the Private Parcel or
upon the rentals payable under this Lease, all of which shall be the obligation
of Landlord. Tenant will pay or reimburse Landlord, as the case may be, for any
fine, penalty, interest or cost which may be added by the collecting authority
for the late payment or nonpayment of any Imposition required to be paid by
Tenant hereunder. All Impositions imposed for the tax year in which this Lease
shall commence, and the tax year in which this Lease shall terminate, shall be
apportioned between Tenant and Landlord.
Notwithstanding the foregoing, Tenant shall have the right to contest any
Imposition or other assessment, valuation or levy against all or any part of the
Private Parcel, or any interest therein, in accordance with applicable Laws and
the provisions of Section 22.13 hereof.
SECTION 4.02. SEGREGATION AND PAYMENT OF IMPOSITIONS.
Notwithstanding the foregoing or anything in the REA to the contrary:
(a) If Tenant, in its sole discretion, desires that the parties' respective
interests in the Private Parcel and the Public Parcel be separately assessed
with respect to the assessment of Impositions (and abatements, exemptions and
credits available with respect thereto), based on the value of the relevant
parties' respective interests therein, then Tenant (or, if required by Law,
promptly after written notice from Tenant, Landlord)
15
shall make application to the assessor's office therefore and Landlord shall
execute and deliver, or cause to be executed and delivered, all such documents,
instruments, applications or other forms which may be necessary in connection
therewith, and otherwise cooperate with Tenant, at Tenant's expense, in
connection with such application.
(b) If Tenant's interest in the Private Parcel is not separately assessed
as aforesaid, then Tenant's share of the Impositions shall be deemed to be the
Impositions which are due and payable as assessed against Tenant's possessory
interest in the Private Parcel and the Improvements only. The parties shall
arrange for the relevant taxing authorities to send copies of all tax bills for
any tax year related to the Private Parcel or the Improvements to Tenant and, if
legally permissible, to accept payment of their respective portions directly
from Tenant and Landlord. The amount of Impositions payable by each of the
parties hereunder related to the Private Parcel or the Improvements for any tax
year shall be timely paid by each party directly to the taxing authority for
said tax year so as to avoid the accrual of interest or the payment of a
penalty.
(c) The Imposition upon the Private Parcel and the Improvements for any tax
year shall mean such amounts as shall be finally determined after deducting net
reductions or abatements, refunds or rebates, if any, to be the Impositions
payable with respect to the Private Parcel and the Improvements for said tax
year. For the purposes of determining payments due from each of Tenant and
Landlord in accordance with the provisions of this Article, the Impositions upon
the Private Parcel and the Improvements for any tax year shall be deemed to be
the Impositions assessed for such year until such time as a reduction,
abatement, refund or rebate shall be made for such tax year, and, if any
reduction, abatement, rebate or
16
refund shall be made for any tax year, an appropriate refund shall be made with
respect to the amount paid by each of Tenant and Landlord on account of
Impositions dependent upon the amount of such reduction, abatement, rebate or
refund, less the cost and expense of obtaining the same.
(d) If the Private Parcel and the Improvements, or any part thereof is
entitled to any abatements, exemptions or credits of or against Impositions and
same are granted, each of the parties hereto hereby agrees that thereafter it
shall use commercially reasonable efforts to ensure that said abatements,
exemptions or credits of Impositions shall not be terminated, rescinded or
otherwise lost due to its wrongful acts or omissions (whether or not acts or
omissions are permitted by this Lease).
(e) If Tenant is required to escrow Impositions with a Leasehold Mortgagee,
then, at Tenant's request and upon reasonable evidence of such requirement,
Landlord shall pay to Tenant on the first day of each month during the term of
this Lease that Tenant is required to so escrow Impositions, a sum equal to one
twelfth (1/12) of amount, if any, payable by Landlord in respect of Impositions
against the fee and reversion retained by Landlord in the Private Parcel
hereunder.
(f) Notwithstanding the foregoing, or anything to the contrary set forth
herein or anything in the REA to the contrary, Tenant shall have the right,
exercisable upon written notice to Landlord, to make any payment of Landlord's
share of the Impositions in order to avoid the accrual of interest or other late
fees or the imposition of a penalty or creation of a lien upon the Private
Parcel if Landlord does not pay same on or before the later of 3 business days:
(i) from the date of delivery of such notice, or (ii) prior to the date such
payment is due to in order to avoid the accrual of interest or other late fees
or the imposition of a penalty or creation of a lien upon the Private Parcel. In
the event Tenant makes any such payment or otherwise incurs any cost or expense
as a result of the non-payment of the share of the Impositions allocated to the
Landlord, Tenant shall have the right to immediate repayment of the same from
Landlord together with interest thereon
17
until paid at the Interest Rate.
(g) Notwithstanding the foregoing, or anything to the contrary set forth
herein, Landlord shall have the right, exercisable upon written notice to
Tenant, to make any payment of Tenant's share of the Impositions in order to
avoid the accrual of interest or other late fees or the imposition of a penalty
or creation of a lien upon the Private Parcel if Tenant does not pay same on or
before the later of 3 business days: (i) from the date of delivery of such
notice, or (ii) prior to the date such payment is due to in order to avoid the
accrual of interest or other late fees or the imposition of a penalty or
creation of a lien upon the Private Parcel. In the event Landlord makes any such
payment or otherwise incurs any cost or expense as a result of the non-payment
of the share of the Impositions allocated to the Tenant, Landlord shall have the
right to immediate repayment of the same from Tenant together with interest
thereon until paid at the Interest Rate.
SECTION 4.03. TAXES IMPOSED UPON CREATION OF LEASEHOLD. Landlord
shall be solely responsible for and shall pay all realty transfer taxes and
similar taxes imposed by any governmental authority upon or in connection with
the execution and delivery of this Lease or the recording of a short form
hereof, or both, and Landlord and Tenant shall timely execute any realty
transfer tax return or similar instruments required in connection therewith.
ARTICLE 5
INSURANCE
SECTION 5.01. EXTENDED COVERAGE AND LIABILITY. Tenant shall,
throughout the Term, maintain
18
with respect to the Private Parcel and Tenant's Personal Property insurance of
the following character:
(a) A policy of fire and extended coverage insurance on the Improvements
in an amount not less than 75% of the actual replacement cost of all of the
Improvements on the Private Parcel with diminution of such cost for depreciation
or obsolescence.
(b) Comprehensive public liability and property damage insurance covering
the Private Parcel and the Improvements with combined single limit coverage in
an amount not less than that customarily, from time to time carried by other
regional, nondestination theme parks of comparable size and with comparable
facilities at such time, which shall be conclusively evidenced by a certificate
of Tenant to the effect that the insurance maintained hereunder is not less than
that maintained at Premier Parks and other comparable regional, non destination
theme parks.
(c) A policy or policies of worker's compensation insurance and any other
employee benefit insurance sufficient to comply with all Laws.
(d) Such other insurance, in such amounts and against such other risks, as
is not less than that customarily, from time to time carried by other regional,
nondestination theme parks of comparable size and with comparable facilities at
such time, which shall be conclusively evidenced by a certificate of Tenant to
the effect that the insurance maintained hereunder is not less than that
maintained at Premier Parks and other comparable regional, non destination theme
parks.
SECTION 5.02. CARRIERS; POLICIES. All insurance provided for
pursuant to Section 5.01 hereof
19
shall:
(a) Be effected under a valid and enforceable policy or policies issued by
insurers of recognized responsibility; provided, however, it is acknowledged and
agreed that [to be completed prior to execution of this Parcel Lease] is an
acceptable insurer;
(b) Name Landlord and Tenant as insured parties thereunder, as their
respective interests may appear;
(c) Provide that (i) no cancellation, modification (to the extent of a
modification to coverage which results in non-compliance hereunder) or
termination thereof on account of nonpayment of premiums or any other reason
shall be effective until at least twenty (20) days after delivery of written
notice thereof to Landlord, and (ii) to the extent obtainable without additional
premium, such insurance shall not be invalidated as to the interest of Landlord
by any act, omission or neglect of Tenant, any Leasehold Mortgagee, their
respective employees or agents or any occupant of the Private Parcel which might
otherwise result in a forfeiture or suspension of such insurance; and
(d) Have, at Tenant's election, deductibles not greater than those for
insurance carried by Premier Parks and other regional, non destination theme
parks generally, as certified by Tenant to Landlord.
Tenant shall be permitted to effect any of the insurance coverage required
under this Article to be procured and maintained by Tenant by means of a
"blanket" or "umbrella" policy or policies of insurance or
20
to self-insure as to any of the insurance required by the terms of this Article
5 for so long as Tenant's net worth, computed in accordance with generally
accepted accounting principles consistently applied, exceeds one hundred million
dollars ($100,000,000) and Tenant otherwise has liquid assets in excess of one
million dollars ($1,000,000). If Tenant so elects to self-insure, Tenant shall
give Landlord written notice of its election and shall simultaneously furnish to
Landlord proof of its net worth at the time of such election and, thereafter, at
least once a year.
SECTION 5.03. PROCEEDS. Fire and extended coverage insurance
proceeds and boiler and machinery insurance proceeds paid to Tenant by reason of
damage to the Improvements, subject to the provisions of Article 9 hereof, shall
be used by Tenant to restore the Improvements if Tenant elects to do so under
Article 9.
SECTION 5.04. CERTIFICATE OF INSURANCE. Tenant shall furnish to
Landlord a certificate of insurance, insurance binders or other reasonable
evidence as set forth in Section 5.02 or otherwise herein, issued by the
insurance provider, or its authorized agent (or if there is no insurance
provider, other evidence of applicable coverage), evidencing Tenant's compliance
with the insurance coverage requirements of this Article upon the execution and
delivery of this Lease, and thirty (30) days before the expiration of any
insurance policy required hereunder.
SECTION 5.05. RELEASE AND WAIVER OF SUBROGATION. To the extent
permitted by Law, Landlord and Tenant hereby waive all rights of recovery and
causes of action, and each releases the other from any liability (provided such
party's right of full recovery under the applicable policy is not adversely
affected), from all claims it might otherwise have (including a claim for
negligence) which it might have against the
21
other party for losses, damages or destruction occasioned during the Term to the
property of each located within or upon or constituting a part of the Private
Parcel, which losses and damages are of the type covered under the policies
required by this Article or actually carried. The policies required by this
Article shall provide for waivers of any right of subrogation that the insurer
of such party may acquire against the other party hereto with respect to any
such losses so long as the same is obtainable at no significant additional cost.
Notwithstanding the foregoing, nothing shall be deemed to release either party
hereto from liability for damages resulting from the fault or negligence of said
party or its agents.
SECTION 5.06. TITLE INSURANCE. Landlord shall provide to Tenant, on
the Term Commencement Date, a title insurance policy (or irrevocable commitment
to issue same subject to no conditions) issued by a title company designated by
Landlord and reasonably acceptable to Tenant, which shall insure that a valid
leasehold interest in the entire Private Parcel has been created under this
Lease in favor of Tenant, subject only to the Permitted Exceptions in a form and
containing such endorsements as are reasonably acceptable to Tenant and
customary in the circumstances. The amount of the title insurance shall be not
less than $7,000,000; provided that Landlord shall obtain an endorsement thereto
to the effect that coverage thereunder shall increase such that it is always
equivalent to the Investment.
SECTION 5.07. LANDLORD'S INSURANCE. (a) Landlord agrees that at all
time during the term of this Lease, it will maintain with respect to the Public
Parcel, insurance in an amount not less than that required under the 1997
Agency-Marine World Lease (without giving effect to clause (ii) and (iii) of the
first sentence of Section 5.4 thereof, but the percentage in clause (i) of the
first sentence of said Section 5.4 shall be deemed to be seventy-five percent
(75%) instead of ninety percent (90%) for purposes of this Parcel Lease).
Landlord agrees that, upon the written request of Tenant, Landlord shall furnish
Tenant with
22
evidence of insurance required under the foregoing provision.
(b) It is expressly understood and agreed that at such times (if any) as
Landlord or Landlord's contractors, agents, employees or representatives are in
or about the Private Parcel in connection with Tenant's work and/or any work
being performed by or on behalf of Landlord, Landlord's commercial general
liability insurance or the commercial general liability insurance maintained by
Landlord's contractors shall in all events be deemed to be the primary coverage
(regardless of any requirement that Tenant be named, for some purposes, as an
additional insured on such policies, and regardless of any other insurance that
Tenant may maintain or elect to obtain) with respect to any and all injury, loss
or damage or claims for injury, death, loss or damage, of whatever nature, to
any person or property in the Private Parcel or resulting from any occurrence
in, on or about the Private Parcel directly attributable to Landlord or
Landlord's contractors, agents, employees or representatives.
ARTICLE 6
MAINTENANCE OF PROPERTY
SECTION 6.01. NO WASTE. Tenant shall not commit waste or damage the
Private Parcel.
SECTION 6.02. TENANT'S MAINTENANCE OBLIGATIONS;. Except as
specifically provided herein or in the REA, Landlord shall not be obligated to
make repairs or replacements of any kind or to maintain the Private Parcel.
Throughout the Term, Tenant shall maintain the Improvements, if any, in such
operating condition and repair as may be necessary at any time to maintain the
Private Parcel in a manner at least
23
comparable to other Premier Parks and other regional, non destination theme
parks of comparable size and attendance. Except as otherwise provided in this
Lease or the Reciprocal Easement Agreement, Tenant shall make all necessary
repairs and replacements to the Improvements, whether structural or
nonstructural, interior or exterior, ordinary or extraordinary, foreseen or
unforeseen as are necessary to comply with the preceding sentence. Except as
otherwise provided herein or the REA, Tenant hereby expressly waives all right
to make repairs at Landlord's expense under Section 1941 of the California Civil
Code, as it may from time to time be amended, replaced or restated.
ARTICLE 7
ALTERATIONS BY TENANT
SECTION 7.01. ALTERATIONS. At any time and from time to time during
the Term, Tenant may, but is not obligated to, construct or otherwise make new
Improvements on any part of the Private Parcel and to demolish, remove, replace,
alter, relocate, reconstruct, or add to any existing Improvements in whole or in
part, to modify or change the contour or grade, or both, of the Private Parcel
(any of which activities is referred to herein as an "Alteration"), provided
that all of the following conditions are satisfied with respect to the
Alteration in question:
(a) Once commenced, each Alteration shall be effected with due diligence,
in a good workmanlike manner, and in material compliance with all Laws and
insurance requirements.
(b) The expenses for any Alteration shall be timely and-fully paid or
shall be adequately
24
provided for by Tenant; provided, however, that Tenant shall be permitted to
contest the validity and/or amount of any such expense provided that it does not
result in the imposition of a lien against the Private Parcel unless either: (i)
such lien is removed within 60 days from the date Tenant receives notice
thereof, or (ii) such lien is adequately bonded, or otherwise provided for in a
manner acceptable to Landlord.
(c) Prior to making any Alteration which costs in excess of One Hundred
Thousand Dollars ($100,000), Landlord shall have received at least ten (10) days
prior written notice from Tenant of the proposed Alteration; provided that
notice may be given such lesser period of time in advance as is required by Law
or emergency.
SECTION 7.02. TENANT IMPROVEMENTS. (a) Landlord shall cooperate with
Tenant (including its architects and contractors), which shall include but not
be limited to, executing all documents, providing all information, appearing
before governmental boards and authorities and such other actions as may be
required or otherwise reasonably requested by Tenant in connection with
obtaining all building permits, licensees and other governmental approvals and
authorizations which may be required to commence or complete Improvements and
other work at the Private Parcel, proposed by Tenant (collectively, the
"Permits"), at Tenant's written request and at Tenant's expense.
(b) If, within six (6) months after the Term Commencement Date, despite
prompt application to and diligent prosecution with the appropriate governmental
authorities, Tenant is unable to obtain the Permit(s) necessary to enable Tenant
to construct such Improvements necessary to satisfy Tenant's obligations under
Section 3.05 hereof, Tenant shall be entitled, at is sole discretion, to either
(i) terminate this Lease, or (ii)
25
continue to attempt to obtain same within the next ensuing twenty-four (24)
months. Notwithstanding the foregoing, if (x) the Permit(s) are refused, or (y)
the Permit(s) have not been issued by the expiration of said additional
twenty-four (24) month period, or (z) the City is required to advance monies to
make regularly scheduled Lease Payments under the 1997 Marine World-City Lease
from its own funds at any time during any such twenty-four (24) month period,
then at any time after the occurrence of any of such events (but prior to the
issuance of said Permit(s)), either Landlord or Tenant may cancel this Lease by
written notice to the other, effective on the tenth (10th) day following the
date of such notice. In such event, this Lease shall thereupon be terminated,
and neither party shall have any further liability to the other hereunder,
except as may otherwise be expressly provided herein.
(c) Landlord hereby grants to Tenant for use by Tenant and its servants,
agents, employees and independent contractors working on, or in connection with,
Improvements proposed by Tenant, any replacement, restoration, alteration,
improvement, or repair thereof, and the installation, replacement or repair of
Tenant's Property, trade fixtures, furniture and equipment, all necessary or
appropriate rights of access, ingress and egress across the Public Areas (as
defined in the REA) to and from the Private Parcel, and the right to do all such
other things as may be incidental thereto. During the course of such work there
shall be made available to those working on or in the Improvements, for the
parking of trucks and delivery and workmen's vehicles and storage of materials,
those portions of Public Parcel as are required for such purpose under the REA.
ARTICLE 8
UTILITY SERVICES
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SECTION 8.01. UTILITY SERVICES. Subject to any applicable provisions
of the Reciprocal Easement Agreement, Tenant shall (i) pay as the same become
due all charges for all public and private utility services at any time rendered
to or for the benefit of the Private Parcel, (ii) comply in all material
respects with all contracts relating to such services, and (iii) do all other
things reasonably required for the maintenance and continuance of all such
services. Tenant hereby expressly waives any and all claims for compensation,
damages, payments or offset against Landlord based upon or with respect to any
and all loss or damage now or hereafter sustained by Tenant by reason of any
defect, deficiency, failure or impairment of whatever kind or nature in any
service or utility furnished or supplied to or used by Tenant or any other party
in connection with the use, occupancy, maintenance, or operation of the Private
Parcel, except for any damage caused by Landlord's act or failure to act with
respect to supplying any utility.
ARTICLE 9
DAMAGE TO THE PROPERTY
SECTION 9.01. NOTICE. In the event of any material damage to the
Private Parcel caused by fire or other peril, Tenant shall promptly give written
notice thereof to Landlord generally describing the nature and extent of such
damage.
SECTION 9.02. RESTORATION OR TERMINATION.
(a) Except as provided to the contrary elsewhere in this Lease, in the
event of any damage to the
27
Improvements for which insurance proceeds are made available to Tenant, Tenant
shall, within a reasonable period of time, commence and complete such
restoration, replacement, or rebuilding of the Improvements as Tenant
determines, in its sole discretion, to make, so long as and on condition that
upon the completion of such restoration, replacement and/or rebuilding Tenant's
obligations to maintain the Minimum Investment are met, to the extent possible
with the available insurance proceeds (such restoration, replacement, and
rebuilding, together with any temporary repairs pending completion of the work,
being hereinafter called "Restoration"). In the event of any Major Damage to
the Improvements, Tenant shall, at Tenant's option upon written notice to
Landlord, as promptly as practicable, either (i) commence and complete
Restoration, (ii) so long as the Minimum Investment is then maintained by
Tenant, elect to operate with the remaining Improvements; or (iii) elect to
terminate this Lease. If Tenant elects to so terminate this Lease and there are
any insurance proceeds made available to Tenant, then such proceeds shall be
payable to Tenant, except as may otherwise be provided under any Leasehold
Mortgage.
(b) For purposes hereof, "Major Damage" to the Improvements shall mean
such damage that the cost of Restoration by reason thereof will exceed
twenty-five percent (25%) of the cost to replace the Improvements on the Land in
their entirety as of the date of the damage. "Major Damage" shall also include
damage, destruction or casualty to the Private Parcel or the Improvements
thereat which: (i) is total or substantially total; (ii) renders such Private
Parcel, the Improvements or the use thereof untenantable or substantially
untenantable; or (iii) cannot be repaired or restored at least two years prior
to the expiration of the Term. For purposes hereof, "untenantable" shall mean
that Tenant is prevented or prohibited from using the Private Parcel or the
Improvements in a manner substantially comparable to that existing on the date
immediately preceding the subject damage, destruction or casualty. In the event
Landlord and Tenant cannot mutually agree upon such replacement cost or the
percentage of such damage, such matter or matters shall
28
be submitted to arbitration pursuant to Section 20.01.
SECTION 9.03. EFFECT OF LEASE TERMINATION. If Tenant elects to
terminate this Lease pursuant to this Article, the following shall apply:
(a) If Landlord so elects, Tenant shall raze that part of the Improvements
that have been damaged and clear the area of all debris; provided that Tenant
shall have no obligation under this Section 9.03(a) if the damage, destruction
or other casualty resulted from or was related to the negligence, fraud or
willful misconduct of Landlord, its agents, employees, contractors or licensees.
(b) This Lease shall terminate and the parties shall thereupon be released
from their obligations under this Lease, except for those obligations which have
accrued prior to the effective date of such termination, upon either: (i) the
date set forth in Tenant's notice of termination, or (ii) if Landlord makes the
election under subparagraph (a) above, the date on which such demolition and
clearing is completed.
SECTION 9.04. INSURANCE PROCEEDS. Any loss in excess of Five Hundred
Thousand Dollars ($500,000) that results in the aggregate value of the
Improvements being less than the Minimum Investment, which is covered by the
insurance required to be carried hereunder shall be payable to a trustee (which
shall be a bank or trust company, designated by Landlord and approved by Tenant,
having an office in San Francisco, California and which has capital and surplus
of at least Fifty Million Dollars ($50,000,000) or to a Leasehold Mortgagee of
Tenant that is the holder of any first mortgage or deed of trust which is a lien
against the Improvements which have been damaged, at the option of such
Leasehold Mortgagee; provided,
29
however, such payment shall be made to a bank or trust company, in trust, if
there is no Leasehold Mortgagee. All amounts collected on any such policies
shall be made available to Tenant, and shall be paid out by the said trustee or
Leasehold Mortgagee from time to time as the Restoration shall progress, in
amounts designated by certification by architects licensed to do business in the
State of California, showing the application of said amounts as payment for such
Restoration; provided, however, that such trustee or Leasehold Mortgagee, as
applicable, shall first be satisfied that the amount necessary to provide for
the Restoration, according to the plans adopted therefor, which may be in excess
of the amount received upon such policies, has been provided by the insured for
such purposes and its application for such purposes is assured. If the damage
is such that the insurance award is for less than Five Hundred Thousand Dollars
($500,000), or if the Minimum Investment has been satisfied or, to the extent
not satisfied deposited into escrow in accordance with this Lease, then the
insurance award shall be paid directly over to Tenant. Tenant shall pay all
reasonable fees of the trustee for its services. Any excess of monies received
from insurance remaining with the trustee or Leasehold Mortgagee after the
reconstruction or repairof the Improvements shall be paid to Tenant.
SECTION 9.05. RESTORATION. All Restoration undertaken by Tenant
pursuant to this Article 9 and pursuant to Article 10 shall be effected with due
diligence, in a good workmanlike manner, in material compliance with all Laws
and insurance requirements.
ARTICLE 10
CONDEMNATION
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SECTION 10.01. NOTICE. In the event of a Taking of all or any part
of the Private Parcel, or the commencement of any proceedings or negotiations
which might result in such Taking, Tenant shall, within a reasonable period of
time, give written notice thereof to Landlord.
SECTION 10.02. TOTAL TAKING. In the event of a Taking of the entire
Private Parcel and/or Improvements, this Lease shall terminate as of the date
title vests in the condemning authority or the date the condemning authority is
entitled to possession, whichever first occurs (the "Date of Taking"). In case
of a Taking of such a substantial part of the Private Parcel and/or Improvements
as shall result in the Private Parcel remaining after such Taking (even if
Restoration were made) being unsuitable or economically unfeasible for the use
to which the Private Parcel had been put by Tenant prior to such Taking, Tenant
may, at its option, terminate this Lease by written notice to Landlord given
within ninety (90) days after the Date of Taking, such termination to be
effective as of a date specified in such notice within one hundred twenty (120)
days after the Date of Taking; provided, however, Tenant shall be relieved of
all monetary obligations and other liabilities arising under this Lease from and
after the date of such Taking, except for any such obligation or liability which
arises solely as a result of Tenant's gross negligence or willful misconduct.
Any Taking of the Private Parcel of the character referred to in this Section
which results in the termination of this Lease is referred to herein as a "Total
Taking". If Tenant elects to terminate this Lease pursuant to the provisions
hereof, then the parties shall be released thereby without further obligations
to the other party as of the effective date of such termination subject to (i)
the indemnification provisions hereof with respect to events occurring prior to
termination, and (ii) the payment to Landlord by Tenant of all accrued
obligations of Tenant to Landlord hereunder as of the effective date of such
termination.
SECTION 10.03. PARTIAL TAKING. In case of a Taking of the Private
Parcel and/or the
31
Improvements other than a Total Taking (a "Partial Taking"), (i) this Lease
shall remain in full force and effect as to the portion of the Private Parcel
remaining immediately after such Taking, and (ii) Tenant shall promptly commence
and complete Restoration of the Private Parcel provided that (so long as
Tenant's obligations hereunder as to the Minimum Investment are satisfied)
Tenant shall not be obligated to expend more for the Restoration than the amount
awarded for such Restoration by the condemning authority, which amount shall be
paid to Tenant for use in completing such Restoration.
SECTION 10.04. AWARD. Any award and other payments on account of a
Taking, less costs, fees and expenses incurred in the collection thereof ("Net
Award") shall be applied as follows:
(a) In case of a Partial Taking (except a Taking for temporary use) ,
Tenant shall furnish to Landlord evidence satisfactory to Landlord of the total
estimated cost of the Restoration required by Section 10.03.
(b) The Net Award received on account of a Partial Taking (except a Taking
for temporary use) shall be held by Tenant and applied to pay the cost of
Restoration. The balance, if any, shall be paid as follows: (i) first, an
amount equivalent to the Investment made by Tenant as of the date immediately
prior to such Taking shall be paid to Tenant and (ii) then, the balance, if any,
shall be divided between Landlord and Tenant in the ratio, as nearly as
practicable, which (i) the then value of Landlord's interest in the Private
Parcel valued as unimproved and encumbered by this Lease, bears to (ii) the then
value of Tenant's interest in this Lease for the remainder of the Term
(including the period of all Renewal Options and the full value of all
Improvements), each as determined by appraisal conducted pursuant to Section
20.02.
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(c) Any Net Award received on account of a Taking for temporary use shall
be paid as follows:
(i) each party shall attempt to obtain a separate award for its own
damages resulting from such temporary Taking;
(ii) if the condemning authority fails or refuses to grant separate
awards to each party, then the Net Award for a Taking for temporary
use-shall be divided between Landlord and Tenant based on the then existing
value of their respective interests in the Private Parcel. If the parties
are unable to agree on the amount to be so paid, the dispute shall be
submitted to arbitration pursuant to Section 20.01;
provided, however, that (A) if any portion of any such award is paid by the
condemnor by reason of any damage to the Improvements, such portion shall be
held for the benefit of Tenant and applied as provided in the first sentence of
subsection (b) of this Section; and (B) if any portion of an award or payment on
account of a Taking for temporary use relates to a period beyond the date of
termination of the Term, such portion shall be paid to Landlord.
(d) The Net Award received on account of a Total Taking shall be allocated
as set forth in the second sentence of subsection (b) of this Section.
SECTION 10.05. ABATEMENT OF RENT;. In the event of a Partial Taking,
effective as of the Date
33
of Taking the Minimum Annual Rent shall be permanently reduced to that amount
which bears the same relationship to the Minimum Annual Rent due as of the Rent
Commencement Date as the fair market value of the Private Parcel which remains
after the taking bears to the fair market value of all of the Private Parcel
immediately prior to the Taking. In the event of a Taking for temporary use,
the Minimum Annual Rent shall be temporarily abated during the period of such
Taking in proportion to the degree to which Tenant's use of the Private Parcel
is impaired by such Taking. If the parties are unable to agree on the amount of
any abatement required by this Section, the dispute shall be submitted to
arbitration pursuant to Section 20.01.
SECTION 10.06. LANDLORD'S CONDEMNATION COVENANT;. Landlord hereby
covenants and agrees to refrain from consenting to, or permitting, any Taking
without obtaining Tenant's prior written consent thereto and further, that
Tenant shall, at its option, to be exercised in its sole discretion, be entitled
to participate in any proceedings and negotiations in connection with any such
Taking and other agreements relating or incidental thereto.
ARTICLE 11
LIENS
SECTION 11.01. NO LIENS. Tenant will not create any mortgage, deed
of trust, lien, security interest, encumbrance or charge on, pledge of or
conditional sale or other title retention agreement with respect to the Private
Parcel, other than (i) this Lease, subleases and other agreements permitted by
Article 13, and Leasehold Mortgages permitted by Article 14, (ii) liens for
Impositions not yet payable, or payable without the addition of any fine,
penalty, interest or cost for nonpayment, or being contested as permitted by
34
Section 22.13, (iii) liens of mechanics, materialmen, suppliers or vendors, or
rights thereto, for sums which under the terms of the related contracts are not
at the time due or which are being contested as permitted by Section 22.13, (iv)
the Reciprocal Easement Agreement and as may be expressly permitted thereunder,
(v) the granting of easements, restrictions and rights of way necessary or
desirable in connection with the construction of the Improvements or otherwise
granted in the ordinary course of business; or (vi) liens on and in connection
with any Equipment Financing or otherwise in connection with the acquisition of
Tenant's Property.
SECTION 11.02. MECHANICS' LIENS. Nothing contained in this Lease
shall be construed as a requirement of Landlord for the performance of any labor
or the furnishing of any materials for any specific improvements, alterations or
repairs of or to the Private Parcel. Tenant agrees that Tenant will, at all
times when the same may be necessary, or in Tenant's opinion desirable, and
subject to Tenant's rights under Section 22.13, take such action as may be
required under any Law then in existence which will prevent the enforcement of
any mechanics' or similar liens against the fee of the Private Parcel for or on
account of labor, services or materials furnished to Tenant, or furnished at
Tenant's request. Tenant will allow Landlord from time to time to post a notice
of nonresponsibility on the Private Parcel.
ARTICLE 12
INSPECTION OF PREMISES BY LANDLORD
SECTION 12.01. ENTRY. Tenant shall permit Landlord and the
authorized representatives of Landlord to enter the Private Parcel at all
reasonable times after at least twenty-four (24) hours prior notice
35
to Tenant (and at any time in the event of emergencies) for the purpose of (a)
inspecting the same, and (b) performing any work therein that may be necessary
by reason of a Tenant Default, which work shall be performed in material
compliance with all applicable Laws. Nothing herein shall imply any duty upon
the part of Landlord to do any such work which, under any provision of this
Lease, Tenant may be required to perform, nor to place upon Landlord any
obligation for the care, supervision or repair of the Private Parcel except as
otherwise specified in this Lease. Landlord may, during the progress of any
work on the Private Parcel, keep and store therein all necessary materials,
tools and equipment. Landlord's entry shall not unreasonably interfere with
Tenant's use of the Private Parcel. Landlord shall indemnify, defend and hold
Tenant harmless from and against any and all loss, claim, cost expense and other
liability incurred or suffered by Tenant as a result of the presence of Landlord
on the Private Parcel or the work performed thereby.
SECTION 12.02. EXHIBIT FOR SALE OR LEASE. Landlord is hereby given
the right during usual business hours to enter the Private Parcel and to exhibit
the same in a reasonable manner for the purpose of sale, and during the last
twenty-four (24) months of the Term of this lease to exhibit the same to any
prospective tenant provided, in both cases, Landlord complies with the
requirements of Section 12.01 and so long as any applicable conditions in
Article 24 have been satisfied.
ARTICLE 13
ASSIGNMENT AND SUBLEASING
SECTION 13.01. ASSIGNMENT. Tenant shall have the absolute right to
assign or otherwise transfer Tenant's interest in this Lease, the Improvements
and any of Tenant's Property ("Tenant's Estate")
36
(i) to any persons or entities so long as Tenant first obtains Landlord's
consent, which consent shall not be unreasonably withheld or delayed, and/or
(ii) to a Permitted Assignee. The following provisions shall apply to any
assignment by Tenant:
(a) Any proposed assignee, by instrument in writing, shall expressly
assume all of the obligations of Tenant to be performed under this Lease, the
Reciprocal Easement Agreement and the Revenue Sharing Agreement from and after
the effective date of the assignment.
(b) Following any assignment made in accordance with the provisions of
this Section, the assignor shall have no further obligations under this Lease
and shall be released from all liability therefor except for the performance of
obligations under this Lease accruing before the effective date of the
assignment.
(c) The provisions of this Section regarding assignment shall not apply to
any Leasehold Mortgage, which shall be governed by the provisions of ARTICLE 14.
SECTION 13.02. PERMITTED ASSIGNEE;. As used herein, the term
"Permitted Assignee" shall mean any of the following:
(a) An assignee which at the time of the proposed assignment (i) has such
financial standing and responsibility as to give reasonable assurance that all
of Tenant's obligations under the Lease, the Reciprocal Easement Agreement and
the Revenue Sharing Agreement following the assignment will be performed, and
(ii) has such experience and reputation in the operation of the
37
business then being operated on the Private Parcel to give reasonable assurance
that such business will continue to be operated at the level and in accordance
with the standards maintained prior to the assignment, or such proposed assignee
has entered into a management agreement with an entity that has such experience
and reputation, and (iii) certifies to the Landlord in writing to the effect
that (A) it is not then nor has ever been the subject of a voluntary bankruptcy
or insolvency proceeding or any involuntary such proceeding that was not
dismissed within 120 days of the filing thereof, (B) it is not the subject of
any state or federal investigation with respect to its management, financial
statements or operations (nor is any manager referred to in the preceeding
clause (ii)), (C) it is not in violation of any State or federal rule or
regulation applicable to it, and (D) no litigation is pending or known to be
threatened against it which could materially adversely affect its financial
condition or operations.; or
(b) A successor or affiliate of the assigning Tenant, which is defined as
(i) any corporation that controls, is controlled by, or is under common control
with the assigning Tenant (ii) the surviving corporation in connection with a
corporate reorganization, or the merger of Tenant into, or the consolidation of
Tenant with, another corporation or corporations, or (iii) any successor owner
of all or substantially all of Tenant's business or assets located on the
Private Parcel.
SECTION 13.03. SUBLEASES. Tenant shall have the absolute right to
sublet all or any part of the Private Parcel so long as either: (x) the total
aggregate area affected by all subleases then in effect does not constitute more
than twenty percent (20%) of the Private Parcel; or (b) such sublease is to an
entity described in Section 13.02 (a) or (b). In addition, Tenant may enter
into other subleases which would not qualify under the preceding sentence with
the approval of Landlord, which approval shall not be unreasonably withheld
38
or delayed. Each of the following provisions shall apply to any sublease
entered into in compliance with this Section:
(a) Tenant shall remain primarily obligated to perform Tenant's
obligations under this Lease.
(b) Each sublease shall contain a provision requiring the subtenant to
attorn to Landlord in the event this Lease is terminated.
(c) With respect to any sublease between unrelated parties requiring the
subtenant to pay a fair market rent and which is otherwise on market terms and
complies with this Section, Landlord shall, upon request by such subtenant,
enter into a recognition and nondisturbance agreement which provides for the
following: (i) Landlord shall recognize the sublease and not disturb the
subtenant's possession only so long as such subtenant shall not be in default
under its sublease: (ii) the subtenant will attorn to Landlord; and (iii)
Landlord shall not be responsible to the subtenant under the sublease except for
obligations accruing subsequent to the date of such attornment.
SECTION 13.04. PROVISIONS APPLICABLE TO BOTH ASSIGNMENTS AND
SUBLEASES. The following provisions shall apply to any assignment or sublease
proposed by Tenant:
(a) Tenant shall give Landlord at least thirty (30) days prior written
notice of any desire to enter into any assignment or sublease, unless such
assignee or sublessee is an entity under Section 13.02(b), which notice shall
describe in reasonable detail the proposed terms of such transfer,
39
along with identity of the proposed assignee or subtenant, and sufficient
financial information about the proposed assignee or subtenant to enable
Landlord to reasonably evaluate the financial condition of the proposed assignee
or subtenant. If Landlord fails to approve or disapprove the proposed transfer
within thirty (30) days after receipt of Tenant's written notice requesting such
approval, Landlord shall be deemed to have approved the transfer in question.
(b) Any attempted assignment or sublease that does not comply with the
provisions of this Article shall be voidable at Landlord's option within 30 days
after delivery of written notice thereof to Landlord.
(c) Landlord's consent to any one assignment or sublease shall not
constitute a waiver of the provisions of this Article as to any subsequent
proposed assignment or sublease.
(d) In the event a dispute arises between Landlord and Tenant as to
whether or not Landlord is obligated to approve an assignment or sublease
proposed by Tenant, such dispute shall be settled by arbitration conducted in
accordance with the procedures described in Section 20.01.
ARTICLE 14
LEASEHOLD MORTGAGES
SECTION 14.01. TENANT'S RIGHT TO CREATE LEASEHOLD MORTGAGES. At any
time and from time to time during the Term, Tenant may assign or encumber all or
any part of Tenant's Estate by way of one or
40
more deeds of trust, mortgages, or other security devices (a "Leasehold
Mortgage", the holder of which is referred to herein as a "Leasehold
Mortgagee"); provided, that any such Leasehold Mortgage shall be subject and
subordinate to the rights of Landlord hereunder. Any Leasehold Mortgage shall
cover no interest in any real property other than Tenant's Estate. Any
Leasehold Mortgage shall be subordinate to Landlord's interest in the Private
Parcel and Landlord's rights under Section 17.10.
SECTION 14.02. INSURANCE AND CONDEMNATION PROCEEDS. Any Leasehold
Mortgage shall contain provisions permitting the disposition and application of
insurance proceeds and condemnation awards in the manner provided in this Lease
to the extent necessary to maintain the Minimum Investment; and if not so
necessary, insurance proceeds and condemnation awards may be disposed of and
applied as required under any such Leasehold Mortgage. Upon the written request
of any Leasehold Mortgagee, the Leasehold Mortgagee shall be named as an
additional insured on all policies of insurance carried by Tenant pursuant to
Article 5 as its interests appear. Each Leasehold Mortgagee shall have the
right to participate in any settlement or adjustment of insurance proceeds or
condemnation awards. If an institutional lender is the holder of a Leasehold
Mortgage which is a first lien on Tenant's Estate and if such lender so
requires, all insurance proceeds and condemnation proceeds shall be paid to such
lender to be held in trust for disbursal in accordance with the provisions of
this Lease.
SECTION 14.03. PERMITTED LEASEHOLD MORTGAGEES. Any Leasehold
Mortgage may be given only to (i) an institutional lender, which shall include a
bank or trust company, savings bank, insurance company, pension or retirement
fund, credit company, or real estate investment trust having assets of not less
than Twenty-Five Million Dollars ($25,000,000), or (ii) such other type of
lender as may be approved by Landlord, which approval shall not be unreasonably
withheld or withheld.
41
SECTION 14.04. NOTICES. If a Leasehold Mortgagee shall have given to
Landlord a notice specifying its name and address, Landlord shall give to such
Leasehold Mortgagee a copy of any and all notices from time to time given to
Tenant by Landlord (including, without limitation, any notice of default) at the
same time and manner as and whenever any such notice shall thereafter be given
by Landlord to Tenant, addressed to such Leasehold Mortgagee at the address last
furnished to Landlord;. No such notice of any kind by Landlord shall be deemed
to have been given to Tenant unless and until a copy thereof shall have been so
given to such Leasehold Mortgagee.
SECTION 14.05. TIME TO CURE DEFAULTS. In the case of any notice of
default given by Landlord to Tenant, the Leasehold Mortgagee shall thereupon
have the same concurrent grace periods as are given Tenant for remedying a
default or causing it to be remedied, plus, in each case, an additional period
of thirty (30) days after the expiration thereof or after Landlord has served
such notice of default upon each Leasehold Mortgagee, whichever is later.
Provided that all monetary obligations of Tenant under this Lease shall be duly
performed, these grace periods shall be extended as set forth in the respective
circumstances below.
(a) In those instances which reasonably require the Leasehold Mortgagee to
be in possession of the Private Parcel to cure any default by Lessee, the time
therein allowed the Leasehold Mortgagee to cure any default by Tenant shall be
deemed extended to include the period of time required by the Leasehold
Mortgagee to obtain such possession with due diligence.
(b) In those instances in which a Leasehold Mortgagee is prohibited by any
process or injunction issued by any court or by reason of any action by any
court having jurisdiction of any
42
bankruptcy or insolvency proceeding involving Tenant or by the provisions of the
bankruptcy laws from commencing or prosecuting foreclosure or other appropriate
proceedings in the nature thereof, the time herein allowed a Leasehold Mortgagee
to prosecute such foreclosure or other proceeding shall be extended for the
period of such prohibition.
SECTION 14.06. RIGHT TO CURE. During the continuation of a Tenant
Default, a Leasehold Mortgagee shall, without prejudice to its rights against
Tenant, without payment of any penalty to Landlord and within the period and as
otherwise provided herein, have the right, but not the obligation, to do any of
the following if Tenant has failed to do so within applicable notice and cure
periods: pay all of the rents due hereunder, to effect any insurance, to pay any
Impositions, to make any repairs and improvements, to do any other act or thing
required of Tenant hereunder or which may be necessary and proper to be done in
the performance and observance of the agreements, covenants and conditions
hereof, to remedy any default of Tenant or cause the same to be remedied, to
acquire Tenants Estate, or to commence foreclosure or other appropriate
proceedings. For such purposes Landlord and Tenant hereby authorize a Leasehold
Mortgagee to enter upon the Private Parcel and to exercise any of Tenant's
rights and powers under this Lease, and, subject to the provisions of this
Lease, under the Leasehold Mortgage. Landlord shall accept performance by the
Leasehold Mortgagee of any covenant, condition or agreement on Tenant's part to
be performed hereunder with the same force and effect as though performed by
Tenant. No Tenant Default shall be deemed to exist and this Lease shall not be
terminated by Landlord so long as any Leasehold Mortgagee shall, in good faith,
have commenced to rectify any claimed Tenant Default or to exercise its rights
to acquire Tenant's Estate or commence foreclosure or other appropriate
proceedings, and to prosecute the same to completion with diligence and
continuity; provided, however, that the Leasehold Mortgagee shall not be
required to continue such foreclosure proceedings if such Tenant Default be
cured. Notwithstanding anything
43
contained in this Lease to the contrary, Landlord may not terminate this Lease
as a result of any Tenant Default relating to bankruptcy or other act of
insolvency described in subparagraphs (c), d), (e), (f), or (g) of SECTION 17.01
if any Leasehold Mortgagee commences or has commenced and thereafter is
continuously pursuing the foreclosure of its Leasehold Mortgage but only so long
as such Leasehold Mortgagee performs, or otherwise causes to be performed, in
accordance with Section 14.05 all obligations of Tenant under the Lease which
are susceptible of being performed by such Leasehold Mortgagee (including the
payment of rent and all other monetary obligations) until such time as the
interest of Tenant under this Lease is so acquired or sold upon foreclosure or
by way of other appropriate proceedings in the nature thereof.
SECTION 14.07. NO AMENDMENT OF LEASE. From and after receiving
notice from any Leasehold Mortgagee that a Leasehold Mortgage has been created
and continues in effect, if and to the extent required under said Leasehold
Mortgage, neither Landlord nor Tenant shall cancel, terminate, surrender, modify
or amend this Lease in any respect which materially adversely affects the
Leasehold Mortgagee without the prior written consent of the Leasehold
Mortgagee. No Leasehold Mortgagee shall become liable under the provisions of
this Lease unless and until such time as it becomes, and then only for so long
as it remains, the owner of Tenant's Estate, and such liability shall be limited
to the rights and insurances required to be carried hereunder (whether or not so
carried) and to its interest in the Private Parcel.
SECTION 14.08. FORECLOSURE PERMITTED. Foreclosure of a Leasehold
Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue
of any power contained in the Leasehold Mortgage, or any conveyance of Tenant's
Estate from Tenant to a Leasehold Mortgagee, its nominee, designee, successor
and/or assign through, or in lieu of, foreclosure or other appropriate
proceedings in the nature thereof, shall not require the consent of Landlord nor
shall it constitute a breach of any provision of or a
44
default under this Lease, and upon such foreclosure, sale or conveyance Landlord
shall recognize the Leasehold Mortgagee as Tenant hereunder.
SECTION 14.09. RIGHT TO ASSIGN FOLLOWING FORECLOSURE. If a Leasehold
Mortgagee, its nominee, designee, successor and/or assign shall acquire Tenant's
Estate as a result of a sale under a Leasehold Mortgage pursuant to a power of
sale contained therein, pursuant to a judgment of foreclosure, through any
transfer in lieu of foreclosure, or through settlement of or arising out of any
pending or contemplated foreclosure action, or in the event a Leasehold
Mortgagee, its nominee, designee, successor and/or assign becomes Tenant under
this Lease or any new lease obtained pursuant to SECTION 14.10, such Leasehold
Mortgagee's right thereafter to assign or transfer this Lease or such new lease
shall be subject to the reasonable approval of the Landlord, which approval may
be conditioned upon a showing that the assignee or transferee satisfies the
requirements for a "Permitted Assignee" under Section 13.02(a) hereof. Upon an
assignment by a Leasehold Mortgagee, its nominee, designee, successor and/or
assign of Tenant's Estate, such Leasehold Mortgagee, its nominee, designee,
successor and/or assign shall be released from any further liability for the
performance of the obligations of the Tenant under this Lease. Any purchaser at
a foreclosure sale, other than a Leasehold Mortgagee, its nominee, designee,
successor and/or assign, must be conditioned upon the factors described in
clauses (i) and (ii) of the preceding sentence, and must assume this Lease and
Tenant's obligations under the Reciprocal Easement Agreement and the Revenue
Sharing Agreement, and it shall have no right in respect to the Private Parcel
unless it has obtained such approval and so assumes and delivers a duplicate
original of the assumption agreement (to be executed in form for recording)
within ten (10) days after such purchaser acquires title to the Tenant's Estate.
SECTION 14.10. NEW LEASE. In the event that this Lease is terminated
by Landlord on account
45
of a Tenant Default (and provided that an unsatisfied Leasehold Mortgage stands
of record) or in the event Tenant's Estate shall be sold, assigned or
transferred pursuant to the exercise of any remedy of a Leasehold Mortgagee, or
pursuant to judicial or other proceedings, subject to compliance with Section
14.09, Landlord shall execute and deliver a new lease of the premises leased
hereby to the Leasehold Mortgagee or its nominee, designee, purchaser, assignee
or transferee, upon written request by such person or entity given within sixty
(60) days after such termination, sale, assignment or transfer for the remainder
of the Term with the same agreements, covenants and conditions (except for any
requirements which have been fulfilled by Tenant prior to termination) as are
contained herein and with priority equal to that of this Lease; provided,
however, that the Leasehold Mortgagee shall promptly cure, or cause to be cured,
any existing Tenant Default hereunder, and provided further that if more than
one Leasehold Mortgagee requests such new lease, the Leasehold Mortgagee holding
the most senior Leasehold Mortgage shall prevail. Upon execution and delivery
of such new lease, Landlord shall cooperate with the new tenant thereunder, at
the expense of the said new tenant, in taking such action as shall be necessary
to cancel and discharge this Lease and to remove Tenant named herein from the
Private Parcel. In such event the ownership of the Improvements shall be deemed
to have been transferred directly to such transferee of Tenant's Estate and the
provisions of this Lease causing such Improvements to become the property of
Landlord in the event of termination of this Lease shall be ineffective as
applied to any such transfer. Landlord shall, at no expense to Landlord,
execute such deed or other instrument of conveyance as may be necessary for fee
simple title to the Improvements, but not the Private Parcel, to be insured upon
such transfer of enant's Estate.
SECTION 14.11. ADDITIONAL LEASEHOLD MORTGAGEE REQUIREMENTS. Landlord
and Tenant shall cooperate in including in this Lease by suitable amendment from
time to time any provision consistent with the provisions of this Lease which
may reasonably be requested by any proposed Leasehold Mortgagee for
46
the purpose of implementing the mortgagee protection provisions contained in
this Lease and allowing such Leasehold Mortgagee reasonable means to protect or
preserve the validity or enforceability of the lien the Leasehold Mortgage on
the occurrence of a Tenant Default under the terms of this Lease. Landlord and
Tenant each agree to execute and deliver (and to acknowledge, if necessary, for
recording purposes) any agreement necessary to effect any such amendment;
provided, however, that any such amendment shall not in any way affect the term
or rent under this Lease nor otherwise in any material respect adversely affect
any rights of Landlord under this Lease.
Tenant shall, on or about October 1st of each year that this Lease in in
effect, provide Landlord with a written list of all Leasehold Mortgages then in
effect and setting forth the identity of each Leasehold Mortgagee, the lease
assets and the term of each such Leasehold Mortgage. Upon written request of
the Landlord, Tenant shall provide Landlord with a copy of any Leasehold
Mortgage then in effect.
ARTICLE 15
TRANSFER BY LANDLORD
SECTION 15.01. LIMITATION OF LANDLORD'S LIABILITY. The term
"Landlord" as used in this Lease shall be limited to mean only the Landlord
named herein, its successors and assigns. In the event of any transfer of all
of Landlord's interest in and to the premises leased hereby in accordance with
the terms of this Lease, including but not limited to, Article 24 hereof, the
Landlord named herein (and in case of any subsequent transfers, the then
transferor) shall be automatically freed and relieved from and after the date of
such transfer of all liability with regard to the performance of any covenants
or obligations on the part of Landlord contained in this Lease thereafter to be
performed, provided that any funds in the hands of, under
47
the control of, or being held for the benefit of Landlord (or the then
transferor at the time of such transfer) in which Tenant has an interest shall
be turned over to the transferee, in trust, for application pursuant to the
provisions hereof, and any amount then due and payable to Tenant by Landlord or
the then transferor under any provision of this Lease shall be paid to Tenant
and such transfer is made in compliance with this Lease.
SECTION 15.02. LIMITATION ON ENCUMBRANCE BY LANDLORD. This Lease
shall automatically and without further documentation be prior and superior to
any lease (other than the Public Leases), mortgage, deed of trust, hypothecate,
pledge or other encumbrance made, created, or permitted by Landlord or resulting
from actions or omissions of Landlord (including tax liens or judgment liens),
and Landlord shall not cause or permit any such hypothecation, pledge, deed of
trust or other encumbrance to be made (whether arising voluntarily, by operation
of Law or otherwise) unless such hypothecation, pledge, deed of trust or other
encumbrance specifically by its terms provides that it is subject and
subordinate to this Lease in a manner and in a form approved by Tenant.
SECTION 15.03. OTHER LIMITATIONS. Landlord covenants and agrees with
Tenant that it shall not cause, create or permit (whether voluntarily, by
operation of Law or otherwise) any lien, claim, charge or attachment to be filed
against all or any portion of the Private Parcel, the Improvements and/or any
interest created by this Lease.
ARTICLE 16
INDEMNIFICATION
48
SECTION 16.01. INDEMNIFICATION OF LANDLORD. Tenant shall protect,
indemnify, defend and hold Landlord harmless from and against all liabilities,
obligations, claims, damages, penalties, causes of action, judgments,
settlements, orders and other costs and expenses (including, without limitation,
attorneys' fees and expenses) imposed upon or incurred by or asserted against
Landlord or the Private Parcel by reason of the occurrence or existence of any
of the following: (i) any accident, injury to or death of persons (including
workmen) or loss of or damage to property occurring on the Private Parcel or any
part thereof; (ii) any use, non-use, possession, occupation, operation,
maintenance, management or condition of the Private Parcel or any part thereof
during the Term; (iii) any failure on the part of Tenant to perform or comply
with any of the terms of this Lease; (iv) the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Private Parcel or any part thereof by or on behalf of Tenant; or (v) any gross
negligence or willful misconduct on the part of Tenant or any of its agents,
contractors, servants, employees, sublessees, licensees or invitees; except in
each case described in the preceding clauses (i) through (v) to the extent
caused by a breach by Landlord or by the gross negligence or willful misconduct
of Landlord, its agents, servants, employees, sublessees contractors, licensees,
invitees, representatives or assigns.
SECTION 16.02. INDEMNIFICATION OF TENANT. Landlord shall protect,
indemnify, defend and hold Tenant harmless from and against all liabilities,
obligations, claims, damages, penalties, causes of action, judgments,
settlements, orders and other costs and expenses (including, without limitation,
reasonable attorneys fees and expenses) imposed upon or incurred by or asserted
against Tenant or the Private Parcel by reason of the occurrence or existence of
any death, bodily injury, personal injury or property damage resulting from the
gross negligence or willful misconduct of Landlord, its agents servants,
employees, sublessees, contractors, licensees, invitees, representatives or
assigns or resulting from any failure on the part of Landlord to perform or
comply with any of the terms of this Lease or the breach of any representation
49
made by Landlord in this Lease.
ARTICLE 17
TENANT'S DEFAULT AND LANDLORD'S REMEDIES
SECTION 17.01. TENANT DEFAULT. The occurrence and continuation
beyond the expiration of applicable notice and cure periods of any one or more
of the following events shall be a "Tenant Default":
(a) Tenant shall fail to pay any sum due to Landlord hereunder within
thirty (30) days after written notice that the same is past due and payable.
(b) Tenant shall fail to perform or comply with any other term hereof,
such failure shall continue for more than thirty (30) days after notice thereof
from Landlord, and Tenant shall not within such period commence with due
diligence and dispatch the curing of such default, or having so commenced, shall
thereafter fail or neglect to prosecute or complete with diligence and dispatch
the curing of such default.
(c) The filing by or against Tenant, of any proceedings under any state or
federal insolvency or bankruptcy law, or any comparable law that is now or
hereafter may be in effect, whether for liquidation or reorganization, where
such proceedings are not dismissed within ninety (90) days after filing.
50
(d) The entry of an order for relief against Tenant under any bankruptcy,
insolvency or reorganization case.
(e) The appointment of a receiver, trustee, liquidator, custodian or
similar officer of all or any part of the property of Tenant if such appointment
is not discharged within sixty (60) days after such appointment.
(f) The assignment of all or substantially all of the property of Tenant
for the benefit of creditors.
(g) A writ of attachment or execution is levied on Tenant's interest in
this Lease which writ is not discharged within sixty (60) days after attachment
or execution.
(h) Tenant shall default in the performance of any of its obligations
under the Reciprocal Easement Agreement or the Revenue Sharing Agreement and
such default continues for more than thirty (30) days after notice from
Landlord, and Tenant shall not within such period commence with due diligence
and dispatch the curing of such default, or having so commenced, shall
thereafter fail or neglect to prosecute or complete with diligence and dispatch
the curing of such default.
(i) Failure by Tenant to complete the Minimum Investment within two years
of the Term Commencement Date, provided that so long as Tenant is proceeding in
good faith no such default shall occur by reason of delays arising out of
compliance with any Laws applicable to construction of Improvements incident to
the Minimum Investment or other Force Majeure and; PROVIDED FURTHER,
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that no Tenant Default shall occur and be continuing hereunder if, prior to the
end of such two-year period, Tenant has deposited into escrow, on terms
reasonably acceptable to Landlord, an amount equal to the unexpended portion of
the Minimum Investment.
SECTION 17.02. NOTICE FROM LANDLORD. Subject to the terms of Article
14 of this Lease, if there exists a Tenant Default Landlord, at any time
thereafter while such Tenant Default exists, may give a written termination
notice to Tenant, and on the date specified in such notice (which shall be at
least ten business days after the delivery of such notice) this Lease shall
terminate unless Tenant has cured such Tenant Default and, subject to any
equitable or other rights available at law to prevent or mitigate a forfeiture,
the Term shall expire and terminate and all rights of Tenant under this Lease
shall cease. If there exists a Tenant Default, Landlord may elect not to
terminate this Lease and may continue to enforce all of its rights and remedies
under this Lease, including the right to recover the rent as it becomes due as
provided by California Civil Code Section 1951.4. Tenant shall reimburse
Landlord for all costs and expenses incurred by or on behalf of Landlord
(including, without limitation, reasonable attorneys' fees and expenses)
occasioned by any Tenant Default under this Lease.
SECTION 17.03. TERMINATION OF TENANT'S RIGHT TO POSSESSION. If there
exists a Tenant Default, then, subject to the terms of Article 14 of this Lease,
Landlord shall have the immediate right to re-enter the Private Parcel and
terminate Tenant's right to possession of the Private Parcel, in which event
Tenant shall promptly surrender possession of the Private Parcel and pay to
Landlord all amounts due Landlord hereunder. Landlord may, but shall have no
obligation to, remove all persons and property therefrom, subject to Tenant's
rights to remove and retain same under Sections 3.06 and 3.10 above. Such
property may be removed and stored in a warehouse or elsewhere at the expense
and risk of and for the account of Tenant. Should Landlord
52
elect, in accordance with this Lease, to re-enter, or should Landlord terminate
Tenant's right to possession pursuant to legal proceedings or to any notice
provided for by law, this Lease shall terminate.
SECTION 17.04. TERMINATION. If this Lease is terminated by Landlord
in accordance with the terms hereof because of the occurrence of a Tenant
Default, Landlord may recover from Tenant:
(a) The worth at the time of award of the unpaid rent and all other sums
payable hereunder which are due, owing and unpaid by Tenant to Landlord at the
time of termination;
(b) The worth at the time of award of the unpaid rent and all other sums
payable hereunder which would have come due after termination until the time of
award, reduced by the amount, if any, of such loss which Tenant proves could
have been reasonably avoided;
(c) All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease; and
(d) At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by the laws of the State
of California. As used in subsections (a) and (b) above, the term "worth at the
time of award" is computed by allowing interest at a rate equal to the lesser of
(i) two percent (2%) over the reference rate announced from time to time by Bank
of America National Trust and Savings Association, or (ii) the maximum rate an
individual is permitted by law to charge (the "Interest Rate"). As used in
subsection (c) above, the term "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal
53
Reserve Bank of San Francisco at the time of award, plus one percent (1%).
SECTION 17.05. LANDLORD'S EQUITABLE RELIEF. No expiration or
termination of this Lease pursuant to Section 17.04, or by operation of Law or
otherwise in the event of a Tenant Default, and no repossession of the Private
Parcel pursuant to Section 17.03 or otherwise, shall relieve Tenant of its
liabilities and obligations arising prior to such termination or repossession,
all of which shall survive such expiration, termination or repossession,
including, without limitation, the right of Landlord under Section 16.01 to
indemnification for liability, arising prior to termination of this Lease to the
extent provided for therein, for personal injuries or property damage, nor shall
anything in this Lease be deemed to affect the right of Landlord to equitable
relief where such relief is permitted at Law.
SECTION 17.06. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.
Tenant covenants and agrees that if Tenant shall at any time fail to perform any
act, covenant, term, condition or agreement on Tenant's part to be performed
under this Lease, Landlord may, but shall not be obligated to do so, after ten
(10) business days prior written notice, or such longer notice as may be
required to be given pursuant to the terms hereof, or such lesser notice as
required to comply with applicable Law or by reason of an emergency, if Tenant
has not cured such failure, perform any such act, covenant, term, condition or
agreement for and on behalf of Tenant, and Tenant shall reimburse Landlord for
all sums so paid by Landlord, and all necessary incidental costs and expenses in
connection with the performance of any such act by Landlord, including
reasonable attorneys' fees, together with interest thereon at the Interest Rate
from the date of the making of such expenditure by Landlord.
SECTION 17.07. NO WAIVER BY LANDLORD OR TENANT. No failure by
Landlord or Tenant to insist
54
upon the strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a breach thereof, and no submission by Tenant or
acceptance by Landlord of full or partial rent during the continuance of any
such breach shall constitute a waiver of any such breach or of any such term.
No waiver of any breach shall affect or alter this Lease, which shall continue
in full force and effect, or the respective rights of Landlord or Tenant with
respect to any other then existing or subsequent breach.
The failure of Landlord to insist upon strict performance of any of the
obligations of Tenant hereunder in one or more instances shall not be deemed a
waiver of Landlord's right to insist upon the full and strict performance of the
same or any other obligation of Tenant at a subsequent times nor shall the
failure of Landlord to seek redress for the violation of any obligation or
covenant of Tenant be deemed to preclude Landlord from seeking redress for any
subsequent violation nor to prevent a subsequent act which would originally have
constituted a violation from having all the force and effect of an original
violation.
SECTION 17.08. LANDLORD'S REMEDIES CUMULATIVE. Each right, power and
remedy of Landlord provided for in this Lease or existing at Law or in equity
shall be cumulative and concurrent and shall be in addition to every other
right, power or remedy provided for in this Lease or existing at Law or in
equity, and the exercise or beginning of the exercise by Landlord of any one or
more of the rights, powers or remedies provided for in this Lease or existing at
Law or in equity shall not preclude the simultaneous or later exercise by
Landlord of any or all such other rights, powers or remedies.
SECTION 17.09. COUNTERCLAIMS BY TENANT IN ACTION TO RECOVER
POSSESSION. Anything to the contrary contained in this Lease notwithstanding,
nothing contained herein shall be deemed to preclude Tenant from interposing any
counterclaim in a summary proceeding instituted by Landlord to recover
55
possession of the Private Parcel if Tenant's failure to do so would operate as a
bar to or waiver of Tenant's right to raise such claim in another action or
proceeding.
SECTION 17.10. FORCE MAJEURE. Anything to the contrary contained in
this Lease notwithstanding, Tenant shall not be deemed to be in default of any
such obligations if it shall be prevented from or delayed in performing such
obligation by reason of the occurrence of a Force Majeure, and Tenant's time for
such performance shall be extended by the number of days during which any
condition of Force Majeure prevails.
ARTICLE 18
LANDLORD'S DEFAULT AND TENANT'S REMEDIES
SECTION 18.01. LANDLORD'S DEFAULT. A "Landlord's Default" shall have
occurred hereunder thereby entitling Tenant to exercise each right, power and
remedy to which it is entitled under this Lease, at Law or in equity, if
Landlord breaches any representation or warranty (when made) or covenant on its
part to be performed under this Lease or any Other Agreement which is not cured
within thirty (30) days (or such sooner period as may be required by Law, or by
virtue of an emergency) after written notice by Tenant to Landlord and the City
specifying wherein Landlord has failed to perform such obligation; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are reasonably required for performance, then Landlord shall
not be in default if Landlord commences performance within such thirty-day
period and thereafter diligently prosecutes the same to completion.
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SECTION 18.02. FORCE MAJEURE. Anything to the contrary contained in
this Lease notwithstanding, Landlord shall not be deemed to be in default of any
of its obligations hereunder if it shall be prevented from or delayed in
performing such obligation by reason of Force Majeure and Landlord's time for
such performance shall be extended by the number of days during which any
condition of Force Majeure prevails.
SECTION 18.03. TENANT'S REMEDIES. If a Landlord's Default occurs,
then Tenant shall have the right, in addition to any and all other remedies to
which it is entitled under this Lease, including but not limited to Section
21.04 (a) after ten (10) business days' (or such sooner period as may be
required by Law, or by virtue of an emergency) written notice to Landlord and
the City of its intent to do so, to perform any obligation of Landlord and to
either, at Tenant's option: (i) obtain immediate reimbursement of all costs of
performing such obligation plus interest at the Interest Rate from the date any
sum is expended until Landlord reimburses Tenant, or (ii) deduct the cost of
performing such obligations plus interest at the Interest Rate from the date so
incurred from its next installment of rent, or (b) seek specific performance.
Tenant shall also have any other remedy available to it at Law or in equity
under California law, which remedies shall be cumulative in the manner described
by Section 17.08 for Landlord's remedies.
SECTION 18.04. NO WAIVER. The failure of Tenant to insist upon
strict performance of any of the obligations of Landlord hereunder in one or
more instances shall not be deemed a waiver of Tenant's right to insist upon the
full and strict performance of the same or any other obligation of Landlord at a
subsequent times nor shall the failure of Tenant to seek redress for the
violation of any obligation or covenant of Landlord be deemed to preclude Tenant
from seeking redress for any subsequent violation nor to prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of
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an original violation.
ARTICLE 19
ESTOPPEL CERTIFICATES; NON-DISTURBANCE
SECTION 19.01. ESTOPPEL CERTIFICATE BY TENANT. Tenant will execute,
acknowledge and deliver to Landlord within twenty (20) days after a written
request therefor a certificate certifying that (i) this Lease is unmodified and
in full force and effect (or, if there have been modifications, that this Lease
is in full force and effect, as modified and stating the modifications), (ii)
the dates, if any, to which any rent and other sums payable hereunder have been
paid, and (iii) no notice has been received by Tenant of any default which has
not been cured, and to the knowledge of Tenant no defaults by Landlord then
exist, except in either case as to defaults specified in said certificate. Any
such certificate may be relied upon by any prospective purchaser or mortgagee of
the Land or any part thereof, so long as such sale or mortgage is made in
compliance with this Lease, including but not limited to Article 24 below.
SECTION 19.02. ESTOPPEL CERTIFICATE BY LANDLORD. Landlord will
execute, acknowledge and deliver to Tenant or any sublessee within twenty (20)
days after a written request therefor, a certificate certifying (i) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
stating the modifications), (ii) that the dates, if any, to which rent and other
sums payable hereunder have been paid, and (iii) whether or not, to the
knowledge of Landlord, there are then existing any defaults under this Lease
(and if so, specifying the same). Any such certificate may be relied upon by
any prospective transferee, mortgagee, or sublessee of Tenant's interest
58
under this Lease.
SECTION 19.03. ESTOPPEL NON-DISTURBANCE. (a) Landlord shall cause
the lessor of each and every ground, overriding or underlying lease of the
Private Parcel, now or hereafter in effect, whether or not such lease shall
cover other lands or buildings or leases, and all renewals, extensions,
supplements, modifications, consolidations and replacements thereof or thereto
and substitutions therefor (each, a "Superior Lease"), and the holder of each
and every trust indenture and mortgage, whether or not such trust indenture or
mortgage shall cover other lands or buildings or leases, which affects all or
any part of the Private Parcel, the Improvements or any such Superior Lease and
the leasehold interest created thereby, and all renewals, extensions,
supplements, modifications, consolidations and replacements thereof or thereto
and substitutions therefor (each a "Superior Mortgage") to execute, acknowledge
and deliver an agreement to the effect that the leasehold estate granted to
Tenant under this Lease and the rights of Tenant to quiet and peaceful
possession under this Lease will not be terminated or disturbed by reason of any
termination of such Superior Lease(s) or the foreclosure of any such Superior
Mortgage(s), so long as there shall not be then existing a Tenant Default under
this Lease
(b) In the event of any act or omission of Landlord which would give the
lessor of a Superior Lease (each, a "Superior Lessor") the right, immediately or
after lapse of a period of time, to cancel or terminate the Superior Lease, or
to otherwise recover possession of all or any part of the Private Parcel,
Superior Lessor shall not exercise such right until: (i) it has given written
notice of such act or omission to Tenant and a reasonable period for remedying
such act or omission (which reasonable period shall in no event be less than the
period to which Landlord would be entitled under Superior Lease or otherwise,
plus an additional 30 days); and (ii) Tenant shall not have cured, or caused to
be cured, such act or omission within such reasonable
59
period following the giving of such notice and following the time when such
Superior Lessor shall have become entitled under the Superior Lease to remedy
the same; provided, however, that if Tenant has given written notice of
intention to, and commenced to, remedy such act or omission within said
reasonable period, Tenant shall be entitled to a reasonable amount of time to
complete curing same.
ARTICLE 20
ARBITRATION APPRAISAL
SECTION 20.01. ARBITRATION. Whenever in this Lease it is provided
that a dispute shall be determined by arbitration or if any of the Parties shall
otherwise desire arbitration, the arbitration shall be conducted as provided in
this Article. The party desiring such arbitration shall give written notice
thereof to the other specifying the dispute to be arbitrated. Within thirty
(30) days after the date on which the arbitration procedure is invoked, each
party shall appoint an experienced arbitrator and notify the other party of the
arbitrator's name and address. The two arbitrators so appointed shall appoint a
third experienced arbitrator. If the three arbitrators to be so appointed are
not appointed within forty-five (45) days of the date the arbitration procedure
is invoked, then either Landlord or Tenant shall be entitled to apply to the
Presiding Judge of the Superior Court of the County of Xxxxxx for the selection
of a third arbitrator who shall then participate in the arbitration. The
arbitration shall be conducted in Xxxxxx County, 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 of either party or by the order or judgment entered in any court
having jurisdiction. The parties hereby consent to the jurisdiction and venue
of the federal courts located in
60
the Eastern District of the State of California and state courts located in
Xxxxxx County, California for this purpose. The parties hereto shall use all
commercially practicable efforts to cause the arbitrator or arbitrators so
selected to furnish Landlord and Tenant 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.
Landlord and Tenant 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 Lease 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.
SECTION 20.02. APPRAISAL. Any appraisal required or permitted
hereunder shall be made in the manner described in this Section. Within thirty
(30) days of the event giving rise the need for an appraisal, Landlord and
Tenant shall each appoint one appraiser to determine the fair market value of
the interest or property to be appraised, and notice of such appointment shall
be given to the other party. If either party shall fail or refuse so to appoint
an appraiser and give notice thereof within such period, the appraiser appointed
by the other party shall within fifteen (15) days thereafter individually make
such determination. If the parties have each so appointed an appraiser within
such thirty (30) day period and the appraisers thus appointed shall be unable to
agree on such value within sixty (60) days of such appointment, they shall,
within fifteen (15) days thereafter, join to appoint a third appraiser and, if
they fail so to appoint such third appraiser within such period, the third
appraiser shall be appointed by the Presiding Judge of the Superior
61
Court for the County of Xxxxxx, and such third appraiser shall then individually
determine such value, such determination to be binding upon each of the parties.
All appraisers appointed hereunder shall be competent, qualified by training and
experience in the County of Xxxxxx, disinterested and independent and shall be
members in good standing of the American Institute of Real Estate Appraisers or
its successor and all appraisal reports shall be rendered in writing and signed
by the appraiser or appraisers making the report. All costs, fees and expenses
of the appraisers appointed by each party shall be borne by the party appointing
such appraiser, and all costs, fees and expenses of the third appraiser, if any,
shall be borne equally by Tenant and Landlord.
SECTION 20.03. NO ALTERATION OF LEASE. The arbitrator or
arbitrators, or appraiser or appraisers, shall have the right only to interpret
and apply the terms of this Lease, and may not change any such terms or deprive
any party to this Lease of any right or remedy expressly or impliedly provided
in this Lease.
ARTICLE 21
END OF TERM TERMINATION
SECTION 21.01. END OF TERM. Upon the expiration of the Term or other
termination of the Lease, Tenant shall quit and surrender to Landlord the
Private Parcel in good order and condition, ordinary wear and tear and damage by
fire and other perils excepted. If Landlord shall so require and notifies
Tenant in writing of such requirement at least one hundred eighty (180) days
before the end of the Term, Tenant shall at its sole cost remove any
Improvements designated by Landlord for removal and clear the Private Parcel
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of all debris. Tenant agrees to execute all documents reasonably necessary to
evidence any such termination. The foregoing is not intended and shall not be
construed to derogate in any way Tenant's rights to remove its Improvements and
Tenant's Property under Sections 3.06 and 3.10 above.
SECTION 21.02. HOLDING OVER. Any holding over by Tenant after the
expiration or termination of this Lease shall not constitute renewal hereof or
give Tenant any rights hereunder or in the Private Parcel, except with the prior
written consent of Landlord. Any holding over after the expiration or
termination of this Lease with the consent of Landlord shall be construed to be
a tenancy from month to month at a rent equal to the rent payable by Tenant
hereunder prior to such expiration or termination (prorated on a monthly basis)
and shall otherwise be on the terms and conditions herein specified so far as
applicable. Any holding over without Landlord's consent shall constitute a
default by Tenant and entitle Landlord to exercise any or all of its remedies as
provided herein.
SECTION 21.03. ACCEPTANCE OF SURRENDER. No modification, termination
or surrender of this Lease or surrender of the Private Parcel by Tenant shall be
valid or effective unless agreed to and accepted in writing by Landlord, and no
act by any representative or agent of Landlord, other than such a written
agreement and acceptance by Landlord, shall constitute an acceptance thereof.
SECTION 21.04. COMPENSATION TO TENANT UPON CERTAIN EVENTS OF
TERMINATION. In the event of (a) a Landlord's Default, and (b) such Landlord's
Default has a material adverse effect on the value and/or operation of the
Tenant's business conducted on the Private Parcel, and (c) no adequate remedy at
Law or in equity exists to cure the Landlord's Default or fully compensate
Tenant for its detriment as a result thereof, and (d) no Tenant Default has
occurred and is then continuing hereunder, and (e) Tenant elects to terminate
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this Lease and so terminates this Lease in accordance with its terms, Tenant
shall be entitled to receive, as liquidated damages (it being agreed that
Tenant's damages in such event are not as certainable) an amount equal to the
sum of : (i) the then value of the Investment as determined under Section 3.05,
(ii) the Purchase Price (as defined in the Option Agreement) plus any investment
made by Tenant towards improvement of the Public Parcel in accordance with the
procedure set forth in Section 1.05 of the Option Agreement, but less fifteen
percent 15% of such amount (but not more than a total of 100%) for each Lease
Year that has elapsed since the Rent Commencement Date (so that no amount will
be added by reason of this clause (ii) after the seventh Lease Year), and (iii)
interest on the amounts set forth in clauses (i) and (ii) at the Interest Rate
from the date each such amount was expended by Tenant to the date of payment or
such earlier date, if any, as the Improvement was destroyed, taken or rendered
obsolete and not replaced; reduced by an amount equal to the fair market value
of any Improvements removed by Tenant in connection with such termination (less
any expenses incurred by Tenant in connection with such removal); but not to
exceed, in total, the then going concern value of Tenant's business conducted on
the Private Parcel prior to such Landlord Default and termination as determined
by an investment banking firm selected by Tenant and reasonably acceptable to
Landlord. The provisions of Section 11.1 of the REA shall in no way limit
Tenant's rights under this Section 21.04.
SECTION 21.05. GENERAL EFFECT OF TERMINATION. Whenever in this Lease
provision is made that either party shall have the right to terminate this
Lease, then unless in said provision it is expressly provided otherwise
(including, without limitation, as is provided in this Article 21), neither
party hereto shall thereafter have any claim against the other under this Lease
or on account of the termination hereof, except for those accruing prior to the
effective date of such termination. It is intended by the parties hereto that
all of the obligations and liabilities of Landlord and Tenant which shall have
accrued as the date of termination of this
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Lease shall survive termination of the Lease, except as specifically set forth
in this Lease. Termination of this Lease shall also result in a concurrent
termination of the REA and the Revenue Sharing Agreement.
ARTICLE 22
GENERAL PROVISIONS
SECTION 22.01. PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate any applicable Law, and are intended to be
limited to the extent necessary so that they will not render this Lease invalid,
unenforceable or not entitled to be recorded under any applicable Law.
SECTION 22.02. TIME IS OF THE ESSENCE. Time is of the essence in the
performance of all of the terms and provisions of this Lease; provided, however,
that any prevention or delay due to Force Majeure shall excuse the performance,
for a period equal to the period of any such prevention or delay, of any
obligation hereunder.
SECTION 22.03. NOTICES. All notices, demands, consents, and requests
which may or are to be given by any party to the other shall be in writing. All
notices, demands, consents and requests to Tenant shall be deemed to have been
properly given if served personally on Tenant during business hours, or if by
United States registered or certified mail, return receipt requested, postage
prepaid, or via nationally recognized overnight mail carrier addressed to Tenant
at its address first set forth above, or at such other place or places as Tenant
may from time to time designate by written notice to Landlord. All notices,
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demands, consents and requests to Landlord shall be deemed to have been properly
given if served personally on Landlord, or if sent by United States registered
or certified mail, return receipt requested, postage prepaid, or via nationally
recognized overnight mail carrier addressed to Landlord at its address first set
forth above, or at such place or places as Landlord may from time to time
designate by written notice to Tenant. Notices, demands, consents and requests
which are served upon either party in the manner aforesaid shall be deemed
sufficiently served or given for all purposes hereunder as follows: (a) on the
date delivered, if served personally; (b) the third business day after being
mailed, if served by certified or registered mail; or (c) the next business day,
if served by overnight mail. Copies of all notices to Tenant shall be sent in
the same manner and at the same time to Tenant's attorneys, Xxxx Marks & Xxxxx,
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxx, Esq.
SECTION 22.04. INVALIDITY OF PARTICULAR PROVISIONS. If any term or
provision of this Lease or the application thereof to any persons or
circumstances shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by Law.
SECTION 22.05. APPLICABLE LAW. This Lease and the rights of the
parties hereunder shall be governed by the Laws of the State of California,
applicable to contracts made and performed in such State.
SECTION 22.06. NO JOINT VENTURE. It is agreed that no thing
contained in this Lease shall be deemed or construed as creating a partnership
or joint venture between Landlord and Tenant or between Landlord and any other
party, or cause Landlord to be responsible in any way for the debts or
obligations of
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Tenant or any other party.
SECTION 22.07. ATTORNEYS' FEES. Should any party here to institute
any action or proceeding in court or before an arbitrator to enforce any
provision hereof or for damages by reason of an alleged breach of any provision
of this Lease, the prevailing party shall be entitled to receive from the losing
party, in addition to the court or arbitration costs incurred by the prevailing
party, such amount as the court or arbitrator may adjudge to be reasonable
attorneys' fees for the services rendered the prevailing party in such action or
proceeding.
SECTION 22.08. NET LEASE. This Lease is a net lease, and payments
due and payable hereunder to or on behalf of Landlord shall be paid without
notice or demand and without offset, counterclaim, abatement, suspension,
deferment, deduction or defense, except as otherwise expressly provided herein.
SECTION 22.09. SOURCE OF PAYMENT OF OBLIGATIONS INCURRED UNDER THIS
LEASE. Whenever a party hereto is entitled to reimbursement or compensation by
the other party hereto and said amount is not paid when due, if such obligation
is not of a character such that it is included in the definition of Operating
Expenses under the Revenue Sharing Agreement and entitled to be paid as such,
the amount so owing shall be paid from said party's share under clause (v) of
Section 1.3(c) of the Revenue Sharing Agreement prior to the remission of any
amount otherwise to be disbursed to the delinquent party under said clause (v).
Any party desiring to avail itself of the foregoing provision, shall send
written notice of the amount owing (and the specific obligation giving rise to
the debt) to the Treasurer (as defined in the Revenue Sharing Agreement) with a
copy to the delinquent party.
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SECTION 22.10. SUCCESSORS. The terms and conditions contained in
this Lease shall run with the Land and shall bind and inure the benefit of
Landlord and Tenant, and to their respective successors and assigns.
SECTION 22.11. NO MERGER OF TITLE. There shall be no merger of the
leasehold estate created by this Lease with the fee estate in the Private Parcel
by reason of the fact that the same person may own or hold (i) the leasehold
estate created by this Lease or any interest in such leasehold estate, and (ii)
any interest in such fee estate, unless Tenant is such holder and Tenant desires
title to so merge. No such merger shall occur unless and until all persons
having any interest in the leasehold estate created by this Lease and the fee
estate in the Private Parcel shall join in a written instrument effecting such
merger.
SECTION 22.12. QUIET ENJOYMENT. This Lease is subject to the 1997
City-Marine World Lease. Landlord represents that this Lease does not violate
any provision of the Public Leases, and that no provision of this Lease is in
conflict with any of the provisions of any of the Public Leases. As long as a
Tenant Default does not exist, Landlord shall be obligated to perform all of its
obligations under any of the Public Leases to which it is a party, and during
the Term Tenant shall have quiet enjoyment of the premises leased hereby. If
Landlord is given the right under any of the Public Leases to terminate any such
Public Lease (other than for reasons related to a Tenant Default), Landlord
shall not exercise such right of termination without the prior written consent
of Tenant which consent shall not be unreasonably withheld or delayed. Landlord
shall not enter into, and shall not consent to any amendment, modification,
extension or other agreement with respect to any or all Public Leases to which
it is a party which adversely affects Tenant's interest in the Private Parcel,
the Improvements or this Lease.
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SECTION 22.13. CONTESTS. Tenant shall have the right, after at least
ten (10) days prior written notice to Landlord (or such shorter period as may be
required at Law in order to preserve the right to do so), to contest the amount
or validity of any Imposition or Law or lien by appropriate proceedings
conducted in good faith and with due diligence, at its sole cost and expense.
If Tenant has not yet made the Minimum Investment, or deposited into escrow
under terms and conditions reasonably satisfactory to Landlord the amount by
which the Minimum Investment then exceeds the Investment, then, Tenant shall
furnish to Landlord security reasonably satisfactory to Landlord against any
claim, loss, liability or expense incurred as a result of such nonpayment or
delay therein. In the event of any such contest, if the final determination
thereof is adverse to Tenant, then Tenant shall pay fully the amounts involved
in such contest, together with any penalties, fines, interests, costs and
expenses that may have accrued thereon or that may result from any such contest
by Tenant, and after such payment by Tenant, Landlord will promptly return to
Tenant such security as Landlord shall have received in connection with such
contest, unless such adverse determination results directly from or is otherwise
directly related to Landlord's failure to comply with its obligations under this
Lease, or Landlord's negligence or misconduct, in which event, Landlord shall
immediately after written notice of such adverse determination return such
deposit to Tenant. Landlord shall join in any such proceeding if any Law now or
hereafter in effect shall require that such proceedings be brought by and/or in
the name of Landlord or any owner of the Private Parcel. Neither Landlord nor
the Private Parcel shall be subjected to any liability for the payment of any
costs, fees, including attorneys' fees, or expenses in connection with any such
proceeding (except to the extent that such adverse determination results from or
is otherwise related to Landlord's failure tocomply with its obligations under
this Lease, or Landlord's negligence or misconduct). Tenant shall be entitled to
any refund of any such Imposition and penalties or interest thereon, which shall
have been paid by Tenant or paid by Landlord, for which Landlord shall have been
fully reimbursed.
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SECTION 22.14. NONDISCRIMINATION. Tenant covenants by and for
itself, its heirs, executors, administrators and assigns and all persons
claiming under or through it, and this Lease is made and accepted upon and
subject to the condition, that there shall be no discrimination against or
segregation of any person or group of persons on account of sex, marital status,
race, color, religion, creed, national origin or ancestry, in the leasing,
subleasing, transferring, use, or enjoyment of the premises herein leased nor
shall Tenant, or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, subtenants,
licensees, vendees invitees, or customers with respect to the Private Parcel or
the operation of any business thereon.
SECTION 22.15. INTERPRETATION. The language in all parts of this
Lease shall be construed as a whole according to its fair meaning, and not
strictly for or against either Landlord or Tenant. The captions used in this
Lease are for convenience only and shall not be considered in the construction
or interpretation of any provision hereof. When the context of this Lease
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 thin Lease, it shall do so at its
sole cost and expense without right of reimbursement from the other party unless
a specific provision is made therefor.
SECTION 22.16. INTEGRATION. This Lease, together with the Reciprocal
Easement Agreement and the Revenue Sharing Agreement and their respective
exhibits and documents incorporated by reference, constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and there
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are no conditions, representations or agreements regarding the matters covered
by this Lease which are not expressed herein or in the Reciprocal Easement
Agreement and the Revenue Sharing Agreement.
SECTION 22.17. MEMORANDUM OF LEASE FOR RECORDING. Landlord and
Tenant shall, upon the Term Commencement Date, execute a memorandum or "short
form" of this Lease in a form prepared by Landlord and reasonably acceptable to
Tenant, for purposes of, and in a form suitable for, being recorded. The
memorandum or "short form" of this Lease shall describe the parties, Landlord
and Tenant, set forth a description of the Lease Premises, specify the term of
this Lease, and shall incorporate this Lease by reference. Said memorandum
shall be recorded in the office of the County Recorder of the County of Xxxxxx
as soon as practicable after the date of execution of this Lease.
SECTION 22.18. CONSENTS. Whenever any consent or approval is
required under the terms of this Lease, except as otherwise specifically
provided herein such consent shall not unreasonably be withheld, conditioned or
delayed. In the event that a party shall fail to give written notice of its
intention not to give consent or approval, together with the reason(s) therefor,
within fifteen (15) days after written request for such consent or approval, the
consent or approval shall be deemed to have been given.
ARTICLE 23
ENVIRONMENTAL MATTERS
SECTION 23.01. LANDLORD'S ENVIRONMENTAL OBLIGATIONS. Landlord
represents and warrants that it has not created, placed, stored, transported, or
disposed of, nor is it aware of, any Environmental
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Condition or Hazardous Materials in, on, at, around or under or affecting all or
any part of the Private Parcel, and further, that Landlord shall be responsible
for all Environmental Compliance Liability with respect to the Private Parcel,
unless resulting from Tenant's breach of any obligation hereunder, or from
Tenant's gross negligence or willful misconduct, subject to the provisions of
Section 3.03 hereof. Landlord further represents, warrants, covenants and agrees
that no portion of the land constituting the Private Parcel (including the
surface and subsurface thereof) was ever used for the dumping or storage of any
Hazardous Materials. Notwithstanding anything to the contrary contained
elsewhere herein, Landlord agrees to be responsible for and indemnify, defend
and hold harmless Tenant and its officers, directors and employees, affiliates
and its successors and assigns, at Landlord's sole cost and expense, from and
against any and all losses, claims, liabilities, damages, judgments, expenses
(including reasonable attorneys' fees and disbursements), fees, fines and other
costs (whether relating to or arising out of actions or claims by governmental
authorities or private parties), relating to or arising out of the existence of
any Environmental Compliance Liability or other Environmental Condition existing
in, on, at, around or under or affecting the Private Parcel on the Term
Commencement Date (subject to the provisions of Section 3.03 hereof), or
otherwise arising from the gross negligence or willful misconduct of Landlord
its agents, servants, employees, contractors, sublessees or other tenants,
occupants, or licensees (or their guests and invitees) of the Public Parcel.
Landlord represents and warrants that it shall not permit any dumping or storage
on, in, around, under, or about the Private Parcel of any Hazardous Materials,
or otherwise cause, create, permitor suffer an Environmental Condition, during
the Term of this Lease.
In the event at any time during the Term Tenant should desire to make any
alterations, additions or improvements to the Private Parcel, including the
Improvements, and is forced to incur any identifiable charges or expenses
arising as a result of Hazardous Materials or other Environmental Condition in
or at the
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Private Parcel which existed as of the Term Commencement Date, then,
notwithstanding anything to the contrary set forth in this Lease or the REA
Landlord shall be fully responsible for and shall reimburse Tenant for such
expenses upon demand of Tenant that were caused by the existence of such
Hazardous Materials or other Environmental Condition.
SECTION 23.02. TENANT'S ENVIRONMENTAL OBLIGATIONS. Tenant represents
and warrants that it shall not create, place, store, transport, or dispose of
any Environmental Condition or Hazardous Materials in, on, at, around or under
or affecting all or any part of the Private Parcel, and further, that Tenant
shall be responsible for all Environmental Compliance Liability with respect to
the Private Parcel which results from Tenant's gross negligence or willful
misconduct or that of its agents, employees or contractors. Notwithstanding
anything to the contrary contained elsewhere herein, Tenant agrees to be
responsible for and indemnify, defend and hold harmless Landlord and its
officers, directors and employees, and its successors and assigns, at Tenant's
sole cost and expense, from and against any and all losses, claims, liabilities,
damages, judgments, expenses (including reasonable attorneys' fees and
disbursements), fees, fines and other costs (whether relating to or arising out
of actions or claims by governmental authorities or private parties), relating
to or arising out of the existence of any Environmental Condition created in,
on, at or under the Private Parcel during the Term of this Lease (except to the
extent resulting or arising from the gross negligence or willful misconduct of
Landlord or its officers, employees, agents, contractors, licensees, guests or
invitees), or otherwise arising from the gross negligence or willful misconduct
of Tenant or other tenants, occupants, or licensees (or their guests) of Tenant.
It is a condition to Tenant's obligations under this subparagraph that Tenant
shall receive reasonably prompt notice of any claim against Landlord.
SECTION 23.03. LEGAL CONTESTS. For purposes of this Article, any
party entitled to be
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indemnified under subparagraphs (a) or (b) above shall be referred to as the
"Indemnified Party;" and any party required to so indemnify another party shall
be referred to as an "Indemnifying Party." The Indemnified Party shall have the
right to contest, by appropriate legal proceedings, but without cost, liability
or expense to the Indemnifying Party, the validity of any Environmental Law
provided that such contest will not result in any lien, charge or liability,
civil or criminal, or result in a default under any Leasehold Mortgage. In
addition, if compliance with such Environmental Law may be legally held in
abeyance without the occurrence of any danger to persons or property or threat
thereof, lien, charge or liability, civil or criminal, or a default under any
Leasehold Mortgage, for a failure to comply during such contest, the
Indemnifying Party may postpone compliance therewith until the final
determination of any such proceedings, provided that such proceedings are
pursued in good faith and with due diligence. The provisions of this Section
shall survive the expiration or sooner termination of this Lease.
SECTION 23.04. ADDITIONAL LANDLORD RESPONSIBILITIES; TERMINATION OF
LEASE. If, as a result of the presence of any Environmental Compliance
Liability, Hazardous Materials or other Environmental Condition within, on,
under, about or otherwise affecting the Private Parcel which existed as of the
Term Commencement Date or is directly attributable to the breach by Landlord of
its obligations under this Article or the gross negligence or willful misconduct
of Landlord, any of the following shall occur, then Tenant shall have the right
to terminate this Lease upon sixty (60) days written notice sent to Landlord if:
(i) Tenant shall be unable to conduct, or shall be prohibited by public
authorities from conducting, its normal business operations within the Private
Parcel, (ii) normal business operations within the Private Parcel or normal
pedestrian and vehicular access to the Private Parcel shall be unreasonably
interfered with as a result of any work of removal, repair, restoration or other
construction work performed in connection with the removal and/or remediation of
any such Environmental Compliance Liability, Hazardous Materials or other
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Environmental Condition, or (iii) Landlord shall have failed to do either of the
following, at Tenant's option, within the specified periods: (A) to promptly
initiate and diligently prosecute to completion any action which may be
necessary to xxxxx and remediate such event or conditions, to Tenant's
satisfaction based on an environmental report prepared by a licensed
environmental engineer selected by Tenant (and reasonably acceptable to
Landlord), showing the abatement and remediation of such event or condition in
compliance with applicable Law, the cost for which shall be paid by Landlord
promptly after written request therefor from Tenant, or (B) pay to Tenant,
within fifteen (15) days after written request therefor, the amount reasonably
estimated by Tenant to be required for Tenant to complete the abatement and
remediation of such event or conditions, which estimate shall be based on a
Phase I environmental site assessment prepared by a licensedenvironmental
engineer selected by Tenant (and reasonably acceptable to Landlord), the cost
for which shall be borne by Landlord and included in such payment.
ARTICLE 24
SALE OF PRIVATE PARCEL REPURCHASE OF TENANT'S ESTATE
SECTION 24.01. LANDLORD'S RIGHT TO SELL. (a) Notwithstanding anything
to the contrary set forth elsewhere in this Lease, neither Landlord nor the
Agency shall cause or permit (whether voluntarily, by operation of Law or
otherwise) the sale, transfer or conveyance (collectively, a "TRANSFER") of any
of their respective interests in either the Public Parcel or the Private Parcel,
without the prior written consent of Tenant, to be given or withheld in its sole
discretion, prior to or during the month following, the date on which Tenant (or
any affiliate thereof) may exercise an option (the "PURCHASE OPTION") to
purchase the Public Parcel and the Private Parcel for a purchase price not
exceeding the greater of (i) the principal amount
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of the Certificates of Participation Financing as of the date of the exercise of
the Purchase Option or (ii) the aggregate fair market value of the Public Parcel
and the Private Parcel on such date (determined without regard to Tenant's
Investment), and otherwise under mutually acceptable terms.
(b) Subject to the restrictions set forth in Section 24.01(a), Landlord
shall have the right to transfer to any person its leasehold estate in the
Private Parcel and assign its interest in this Lease (a "Permitted Sale")
without limitation; provided, however, that any such transfer shall also include
the simultaneous transfer to, and assumption by, such person of all of
Landlord's rights, title and obligations in and to the Reciprocal Easement
Agreement and the Revenue Sharing Agreement, and further provided that such
Permitted Sale shall be subject to this Lease and any Purchase Option then in
effect and transferee shall assume in writing, in form and substance reasonably
acceptable to Tenant, the obligations of Landlord under this Lease, the Revenue
Sharing Agreement and the REA. Upon any such Permitted Sale in accordance with
the foregoing, Landlord shall automatically be relieved of any obligations under
this Lease, other than those obligations which accrued prior to the date
thereof.
(c) In the event Landlord desires to effect a Permitted Sale, it shall
first submit to Tenant in writing the terms of the proposed sale (the "Sale
Terms"). Tenant shall have forty-five (45) days after receipt of Landlord's
written notice of the Sale Terms (the "Refusal Period") within which to accept
the Sale Terms in writing to Landlord. If Tenant does not accept the Sale Terms
as aforesaid within such Refusal Period, then Landlord shall have the right
effect the Permitted Sale on the Sale Terms within 120 days after the end of the
Refusal Period (the "Third Party Period"), without any further notice or other
obligation to Tenant. If the Permitted Sale is not effected within such Third
Party Period, then, prior to any Permitted Sale after the expiration of such
Third Party Period (a "New Permitted Sale") (regardless of whether the Terms of
such
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New Permitted Sale are the same or different from those of the Permitted Sale),
the Terms of the New Permitted Sale shall first be submitted to Tenant as
aforesaid, and the provisions of this Section again shall apply.
(d) The foregoing provisions shall not apply to any transfer by Landlord of
its interest in the Private Parcel to the Agency, the City or the Vallejo Public
Financing Authority, which transfer may be made at any time at the discretion of
Landlord without the consent of Tenant, provided that the transfer shall be
subject to all of the obligations of Landlord under this Lease, the Purchase
Option, the Reciprocal Easement Agreement and the Revenue Sharing Agreement and
the transferee shall assume in writing, in form and substance reasonably
acceptable to Tenant, the obligations of Landlord under this Lease, the Revenue
Sharing Agreement, the Purchase Option and the REA.
(e) In addition to any other rights or remedies set forth herein, including
but not limited to those at Law or in equity, the breach of any of the
obligations of Landlord or the Agency under this Section 24.01 shall entitle
Tenant to terminate this Lease upon written notice to Landlord, whereupon the
Lease shall have no further force and effect and such termination shall have the
effect more particularly set forth in Article 21 including but not limited to
Section 21.04.
SECTION 24.02. REPURCHASE OF TENANT'S ESTATE. Notwithstanding any
other provision of this Lease but subject to the restrictions set forth in
Section 24.01(a), Landlord shall have the right to purchase from Tenant all of
Tenant's right, title and interest in and to Tenant's Estate, the Reciprocal
Easement Agreement and the Revenue Sharing Agreement (the "Repurchase") on the
following terms and conditions:
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(i) The Repurchase shall be incident to a Permitted Sale to a
transferee totally independent of, unrelated to, Landlord, the City, the
Agency or the Vallejo Public Financing Authority.
(ii) Tenant shall have failed to exercise its right of purchase under
Section 24.01 within the Refusal Period.
(iii) The price of the Repurchase (the "Repurchase Price") shall be
equal to the fair market value of the operations of Tenant (as reflected in
this Lease, the Reciprocal Easement Agreement and the Revenue Sharing
Agreement), valued as a going concern, as determined by an investment
banking firm selected by Tenant and reasonably approved in writing by
Landlord. Tenant shall promptly provide to the investment banking firm such
information as is reasonably requested by such firm to determine said fair
market value. The Repurchase Price shall be payable in immediately
available funds from Landlord to Tenant on the earlier of the date of the
Repurchase or the closing of the Permitted Sale.
(iv) Tenant shall execute and deliver such documents evidencing
reconveyance of Tenant's Estate as shall be reasonably requested by
Landlord, and shall vacate the Private Parcel, upon receipt by Tenant of
the Repurchase Price.
(v) Any Repurchase shall not occur if the same shall cause the
Authority to breach any term or provisions of the 1997 Agency-Authority
Lease, or otherwise result in a default under any of the documents related
to the Certificates of Participation Financing, in which case the related
Permitted Sale shall not occur.
ARTICLE 24A
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ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF LANDLORD:
SECTION 24A.01. LANDLORD'S ADDITIONAL REPRESENTATIONS AND WARRANTIES.
Landlord represents and warrants to Tenant (upon which warranties and
representations Tenant has relied in executing and delivering this Lease) that:
(a) With respect to each of the Public Leases to which Landlord is a party
, the following is true and correct: (i) it is in full force and effect; (ii)
there are no defaults by Landlord or the other parties thereto existing
thereunder beyond the expiration of applicable notice and cure periods; (iii)
all rent and other amounts due thereunder have been paid to the last day of the
month preceding the month in which this Lease is executed; and (iv) there have
been no amendments, modifications, supplement, extensions or other agreement
entered into between Landlord and the other parties thereto affecting the
matters set forth therein, except as have been disclosed to Tenant in writing;
(b) A valid certificate of occupancy exists for the improvements currently
existing on the Private Parcel and Landlord has not done and is not aware of any
work, improvements or other acts taken with respect to the Private Parcel
requiring an amendment or modification of such certificate, or the issuance of a
new certificate;
(c) No work has been done or materials or services provided to or on
behalf of Landlord which may entitle a mechanic, materialman or warehouseman to
file a lien against or affecting all or any part of the Private Parcel;
79
(d) Landlord has no knowledge of pending or contemplated condemnation
proceedings affecting the Private Parcel or any part thereof; and
(e) There are no portions of the Private Parcel which lie within areas
designated by any governmental authority as "wetlands".
Landlord's breach of any of the foregoing representations shall entitle
Tenant to terminate this Lease upon prior written notice to Landlord whereupon
this Lease shall automatically terminate on the date set forth in such notice,
which date shall be deemed to be the expiration of the Term hereof, and the
parties shall have no further rights or obligations hereinafter except as
otherwise expressly provided herein, including under Article 21.
ARTICLE 25
DEFINITION OF CERTAIN TERMS
SECTION 25.01. DEFINITIONS. The meanings of the following terms when
used in this Lease shall be determined as follows:
ALTERATION is defined in SECTION 7.01.
CERTIFICATES OF PARTICIPATION FINANCING is defined in RECITAL C.
80
CITY is defined in RECITAL B.
DATE OF TAKING is defined in SECTION 10.02.
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 at or
prior to the commencement of the term of this Lease.
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 Private Parcel resulting
from any activity, inactivity, operations or Release occurring on or off such
Private Parcel, 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 Landlord or Tenant or to third parties including, but not
limited to, governmental entities.
ENVIRONMENTAL COMPLIANCE LIABILITY means any obligation or liability
arising as the result of any default, violation or breach by Landlord or its
affiliates or previous tenants of the demised premises or adjoining tenants
prior to the commencement of the term of this Lease of: (i) environmental
Permits and other approvals, consents, licenses, certificates and authorizations
applicable to the Private Parcel of
81
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 the Private Parcel or
operations conducted on or from the Private Parcel under Environmental Laws; or
(iii) other Environmental Laws.
EQUIPMENT FINANCING is defined in SECTION 3.10.
EQUIPMENT LESSOR is defined in SECTION 3.10.
FORCE MAJEURE shall mean delays or defaults due to war; insurrection;
strikes, lockouts; riots; floods; earthquakes; fires; casualties; acts of God;
acts of the public enemy; epidemics; quarantine restrictions; unusually severe
weather; or other causes beyond the reasonable control of the party obligated to
perform (except financial inability). An extension of time for any such cause
shall be for the period of the enforced delay and shall commence to run from the
time of the commencement of the cause if notice by the party claiming such
extension is given to the other party or parties within thirty (30) days after
the commencement of the cause.
HAZARDOUS MATERIALS means any 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.
IMPOSITIONS is defined in SECTION 4.01.
82
IMPROVEMENTS shall mean any buildings, improvements, fixtures, signs,
rides, attractions, and any renewals and replacements thereof, erected, built,
installed or constructed upon the Private Parcel during the Term.
INTEREST RATE is defined in SECTION 17.04.
INVESTMENT is defined in SECTION 3.05.
LAKE XXXXXX is defined in RECITAL B.
LAND is defined in RECITAL B.
LANDLORD is defined in the introductory paragraph to this Lease.
LANDLORD'S DEFAULT is defined in SECTION 18.01.
LAWS shall mean 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 or 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
Private
83
Parcel.
LEASE shall mean this Parcel Lease.
LEASE YEAR shall mean (i) the period from the Rent Commencement Date to and
including the day prior to the Rent Commencement Date next following, (ii) each
successive twelve (12) month period thereafter during the Term, and (iii) the
period ending on the date on which this Lease terminates and beginning on the
anniversary of the Rent Commencement Date preceding such termination date.
LEASEHOLD MORTGAGE is defined in SECTION 14.01 and (shall exclude any
Equipment Financing).
LEASEHOLD MORTGAGEE is defined in Section 14.01 and (shall exclude any
Equipment Lessor).
MAJOR DAMAGE is defined in SECTION 9.02.
MASTER LEASE means the Master Lease dated December 20, 1974 between the
City and the Greater Vallejo Recreation District.
MINIMUM ANNUAL RENT is defined in SECTION 2.01.
MINIMUM INVESTMENT is defined in SECTION 3.05.
NET AWARD is defined in SECTION 10.04.
84
1997 CITY - MARINE WORLD LEASE is defined in RECITAL D.
1997 MARINE WORLD - CITY LEASE is defined in RECITAL D.
1997 CITY - AGENCY LEASE is defined in RECITAL D.
1997 AGENCY - MARINE WORLD LEASE is defined in RECITAL D.
NEW PERMITTED SALE is defined in SECTION 24.01.
OPTION is defined in RECITAL E.
OTHER AGREEMENTS is defined in SECTION 3.04.
PPI means Premier Parks Inc. and/or its wholly-owned subsidiaries.
PARTIAL TAKING is defined in SECTION 10.03.
PERMITTED ASSIGNEE is defined in SECTION 13.02.
PERMITTED EXCEPTIONS is defined in SECTION 1.01.
85
PERMITTED SALE is defined in SECTION 24.01.
PERSONAL PROPERTY shall mean all fixtures, furniture, furnishings, and
other equipment and other personal property, excluding Improvements, placed on
the Private Parcel by Tenant.
PREMIER PARKS is defined in SECTION 3.01.
PRIVATE PARCEL shall mean the portion of the Land leased hereby.
PUBLIC LEASE is defined in SECTION 3.04.
PUBLIC PARCEL is defined in RECITAL D.
PURCHASE OPTION is defined in SECTION 24.01(A).
RECIPROCAL EASEMENT AGREEMENT or REA shall mean the Reciprocal Easement
Agreement between the Landlord and the Tenant in the form attached hereto as
EXHIBIT D.
REFUSAL PERIOD is defined in SECTION 24.01.
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.) ("RCRA"), the Comprehensive Environmental Response,
86
Compensation and Liability Act (42 U.S.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, chemicals, or industrial, toxic or
hazardous substances or wastes as may be amended from time to time, or other
Environmental Laws.
RENT COMMENCEMENT DATE is defined in SECTION 2.01.
REPURCHASE is defined in SECTION 24.02.
REPURCHASE PRICE is defined in SECTION 24.02.
REVENUE SHARING AGREEMENT shall mean the agreement by that name between the
Landlord and the Tenant in the form attached hereto as EXHIBIT E.
RESTORATION is defined in SECTION 9.02.
SALE TERMS is defined in SECTION 24.01.
SUPERIOR LEASE is defined in SECTION 19.03.
87
SUPERIOR LESSOR is defined in SECTION 19.03.
SUPERIOR MORTGAGE is defined in SECTION 19.03.
TAKING shall mean the taking of all or any part of the Private Parcel or
the possession thereof under the power of eminent domain or voluntary sale of
all or any part of the Private Parcel to any person having the power of eminent
domain, provided that the Private Parcel or such part thereof is then under the
threat of condemnation.
TENANT DEFAULT is defined in SECTION 17.01.
TENANT'S ESTATE is defined in SECTION 13.01.
TENANT'S PROPERTY is defined in SECTION 3.10.
TERM is defined in SECTION 1.02.
TERM COMMENCEMENT DATE is defined in SECTION 1.02.
88
THIRD PARTY PERIOD is defined in SECTION 24.01.
TOTAL TAKING is defined in SECTION 10.02.
LANDLORD:
MARINE WORLD JOINT POWERS AUTHORITY
By: /s/
---------------------------
Executive Director
TENANT:
PARK MANAGEMENT CORP.
By: /s/
-----------------------------
Chairman and Chief Executive
Officer
89
The undersigned hereby acknowledges and consents to the foregoing Parcel Lease
and all of the terms and conditions set forth therein.
CITY OF VALLEJO
By: /s/
----------------------------
City Manager
REDEVELOPMENT AGENCY OF THE CITY OF VALLEJO
By: /s/
----------------------------
Executive Director
EXHIBIT A
DESCRIPTION OF THE LAND
The real property constituting the Site consists of that certain land
located in the City of Vallejo, County of Xxxxxx, State of California, more
fully described as follows:
REAL PROPERTY in the City of Vallejo, County of Xxxxxx, State of California,
described as follows:
PARCEL ONE:
A portion of the Parcel of land described in the Deed to the City of Vallejo,
recorded February 16, 1946 in Book 337 of Official Records, Page 337, Series No.
2545, and being a portion of Section 6, Township 3 North, Range 3 West, Mount
Diablo Base and Meridian, described as follows:
Beginning at the Northeasterly corner of Xxx 00, Xxxxx Xxxxx Xxxxxxx, Xxxx
Xx. 0, as shown in Book 22 of Maps at Page 19, Xxxxxx County Records; thence
along the Northerly line of said Xxxxx Xxxxx Xxxxxxx, Xxxx Xx. 0 xxx Xxxxx
Xxxxx Xxxxxxx, Unit No. 1 shown in Book 19 of Maps at Page 24, Xxxxxx County
Records, North 89 degree 28'32" West, 1,500.00 feet; thence North 15 degree
40'00" East, 758.00 feet; thence North 23 degree 22'00" East, 223.00 feet;
thence North 41 degree 08'00" East, 382.00 feet; thence North 45 degree
24'00" East, 230.21 feet; thence North 85 degree 55'13" East, 215.99 feet;
thence North 4 degree 04'47" West, 350.00 feet; thence South 85 degree 55'13"
West, 889.86
A-2
feet; thence North 38 degree 23'17" West, 2,260.00 feet; thence North 51
degree 36'43" East, 189.51 feet; thence North 41 degree 55'09" West, 427.75
feet to a point on the proposed new Southerly right-of-way line of Xxxxx
Xxxxxxx Xx. 00; thence along said Southerly line, South 84 degree 57'14"
East, 1,180.93 feet; thence East 265.00 feet; thence South 84 degree 46'02"
East, 348.45 feet; thence South 80 degree 54'00" East 229.08 feet; thence
South 82 degree 55'13" East, 217.44 feet to the intersection of the proposed
Westerly line of Fairgrounds Drive; thence South 36 degree 18'50" East, 93.97
feet; thence South 37 degree 19'48" East, 215.15 feet; thence South 10 degree
15'18" East, 73.76 feet to the beginning of a curve to the left with a radius
of 86.00 feet; thence along said curve, through a central angle of 27 degree
04'27", an arc distance of 40.64 feet; thence South 37 degree 19'45" East,
85.33 feet to the beginning of a curve to the left with a radius of 44.00
feet; thence along said curve, through a central angle of 90 degree 00'00" an
arc distance of 69.12 feet; thence South 32 degree 30'00" East 142.51 feet;
thence South 37 degree 19'53" East, 40.96 feet to the beginning of a curve to
the right with a radius of 978.00 feet; thence along said curve, through a
central angle of 5 degree 24'00", an arc distance of 92.17 feet to a point of
compound curvature; thence along a curve to the right with a radius of 170.00
feet, through a central angle of 32 degree 15'00", an arc distance of 95.69
feet; thence South 20 degree 30'53" East, 101.30 feet to the beginning of a
curve to the right with a radius of 941.00 feet; thence along said curve,
through a central angle of 16 degree 57'00", an arc distance of 278.37 feet;
thence South 3 degree 33'55" East, 52.43 feet; thence South 86 degree 26'14"
West, 46.99 feet; thence South 31 degree 13'02" East, 123.95 feet; thence
South 6 degree 34'05" East, 639.79 feet; thence South 4 degree 43'59" East,
800.07 feet; thence South 5 degree 26'51" East, 400.12 feet; thence South 4
degree 40'07" East, 440.03 feet; thence South 12 degree 55'17" West, 162.65
feet to the point of beginning.
EXCEPTING FROM PARCEL ONE ABOVE: That portion of the premises conveyed to the
State of California, by Deed recorded November 29, 1973 in Book 1866 of Official
Records, Page 536, Series No. 28896, Xxxxxx County Records, and as modified by
the State of California Relinquishment to the City of
A-3
Vallejo in Instrument recorded July 12, 1979 in Book 1979 at Page 57270, Series
No. 33917, Xxxxxx County Official Records.
FURTHER EXCEPTING THEREFROM: All those portions of Parcel One above conveyed by
Marine World Foundation, a California non-profit public benefit corporation to
Xxxxxxx X. Xxxxxx, etal, by the following Corporation Grant Deeds, recorded June
26, 1987 t Book 1987, Pages 86969, 86974, 87009, 86979, 87049, 87004, 87044,
87039, 86984, 87014, 87019, 87024, 87029, 87034, 86989, 86994 and 86999, Xxxxxx
County Records.
FURTHER EXCEPTING THEREFROM: All those portions of Parcel One above conveyed by
Marine World Foundation, a California nonprofit public benefit corporation, to
the State of California, by Quitclaim Deed recorded December 11, 1989, Series
No. 890088359, and by Quitclaim Deed recorded February 6, 1990, Series No.
900009554, Xxxxxx County Records.
PARCEL TWO:
An easement as an appurtenance to Parcel One above for the surface use of Lake
Xxxxxx and being a portion of the parcel of land described in the Deed to the
City of Vallejo, recorded February 16, 1946 in Book 337 of Official Records,
Page 337, Series No. 2545, and being a portion of Section 6, Township 3 North,
Range 3 West, Mount Diablo Base and Meridian, described as follows:
Commencing at the Northeasterly corner of Xxx 00, Xxxxx Xxxxx Xxxxxxx Xxxx Xx. 0
as shown in Book 22 of Maps at Page 19, Xxxxxx County Records, thence along the
Northerly line of Xxxxx Xxxxx Xxxxxxx Xxxx
X-0
Xx. 0 and the Northerly line of Xxxxx Xxxxx Xxxxxxx Xxxx Xx. 0, xxxx Xxxx Xx.
0 being shown in Book 19 of Maps at Page 24, Xxxxxx County Records, North 89
degree 28'32" West, 1,500.00 feet; thence along the Easterly fence of Xxx
Xxxxx Park, North 15 degree 40'00" East, 758.00 feet; thence North 23 degree
22'00" East, 223.00 feet; thence North 41 degree 08'00" East, 382.00 feet;
thence North 45 degree 24'00" East, 230.21 feet; thence North 85 degree
55'13" East to its intersection with the 72.5 foot contour line on the
Southerly shore of Lake Xxxxxx (City of Vallejo Datum) shown on Topographic
Map showing the boundaries of Parcel 1, Flosden Acres Redevelopment Plan,
Amendment No. 3-857023, Xxxxxxxx Engineers-Bissell & Xxxx, and as amended by
the site rough grading lakeshore development drawing C-2.1 of April 1985,
said point of intersection being the true point of beginning; thence
following said 72.5 foot contour line in a Northwesterly, Northeasterly,
Southeasterly, Southerly and Westerly direction around the shore of Lake
Xxxxxx to the point of beginning.
A-5
EXHIBIT B
DESCRIPTION OF THE PROPERTY
[to come Y description to include all or a portion of the
real property described in the 1997 Site Lease Relating to
Marine World, that was not leased under the 1997 Lease
Agreement Relating to Marine World]
B-1
EXHIBIT C
PERMITTED EXCEPTIONS
[to be completed prior to execution of the Parcel Lease,
based upon a title report, acceptable to the parties, done
prior to execution]
C-1
EXHIBIT D
RECIPROCAL EASEMENT AGREEMENT
D-1
EXHIBIT E
REVENUE SHARING AGREEMENT
E-2
