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HomeMy WebLinkAbout06272018 City Council Work Session - SEWARD ASSIGNMENT OF OPERATING AGREEMENT rl 507486\4005\00714195 Assignment, Assumption and Amendment of Agreement This Assignment, Assumption and Amendment of Agreement (this “Agreement”) is made this _____ day of _____, 2018, by and among Vigor Alaska - Seward LLC, an Alaska limited liability company (“Assignor”), JAG Alaska, Inc., an Alaska corporation (“Assignee”), and the City of Seward, Alaska, an Alaska municipal corporation (“City”). Assignor, Assignee and City may each be referred to as a “Party” and any two or more of them may be referred to collectively as the “Parties”. RECITALS A. By that certain Maintenance and Operating Agreement, dated as of April 1, 2012, and as amended by the Assignment, Assumption and Amendment of Operating Agreement, adopted as of June 1, 2014, copies of which are attached hereto marked ANNEX A (the “M&O Agreement”), by and between City and Assignor or its predecessor in interest, Assignor agreed to operate and maintain a shiplift facility owned by City (the “Shiplift Premises”). B. The M&O Agreement provides, among other things, the right of Assignor to assign the M&O Agreement, subject to the consent of the City. C. Assignor wishes to sell and assign to Assignee, and Assignee wishes to purchase from Assignor, substantially all of Assignor’s assets related to the Shiplift Premises, and to assume certain specifically identified liabilities of Assignor (the “Purchase/Sale Transaction”). One of the conditions precedent to the Purchase/Sale Transaction is Assignor’s assignment of the M&O Agreement to Assignee and Assignee’s acceptance and assumption of the M&O Agreement, and City’s release of Assignor from future liability under the M&O Agreement. The M&O Agreement permits Assignor to assign the M&O Agreement, subject to City’s consent. Therefore, the closing of the Purchase/Sale Transaction will be effective only if and when the Parties have executed and delivered this Agreement and the other conditions in Section 2 below have been satisfied or waived. AGREEMENT NOW, THEREFORE, in consideration of the provisions in, and intending to be legally bound by, this Agreement, the Parties agree as follows: 1. Recitals; Definitions. The recitals set forth above are incorporated in this Agreement by reference. Capitalized terms not otherwise defined in this Agreement will have the same meaning as in the M&O Agreement. 2. Assignment and Assumption of M&O Agreement; Release. Subject to the terms of this Agreement and the satisfaction of the conditions in this Section 2, Assignor assigns to Assignee all of Assignor’s right, title, and interest in and to the M&O Agreement (the “Assignment”). Assignee agrees to and accepts the Assignment and assumes and agrees to keep, perform, and fulfill all of the terms, covenants, conditions and obligations otherwise required to be kept by Assignor under the M&O Agreement that arise on and after the Effective Date described below. Lessor releases Assignor from any and all obligations and/or breach of the Lease that Assignment, Assumption and Amendment of Agreement Page 2 507486\4005\00714195 occurs on or after the Effective Date. This Agreement will not become effective or bind any of the Parties unless and until each of the following conditions has been satisfied (or waived) (the “Effective Date”): (a) Assignee has posted a performance and payment surety satisfactory to Lessor; (b) (b) Assignor has delivered to Assignee, in a form satisfactory to Assignee, a Bill of Sale and Assignment for the personal property owned by Assignor associated with the Shiplift Premises (the “Bill of Sale”); and (c) Assignee has delivered to Assignor, in immediately available funds, the consideration for that property stated in the Bill of Sale. 3. Direct Agreement. The M&O Agreement will continue in full force and effect as a direct agreement between City and Assignee, as Operator under, and upon and subject to all of the terms, covenants, and conditions of, the M&O Agreement. 4. Amendment to M&O Agreement. City and Assignee hereby amend the M&O Agreement, effective as of the Effective Date, to provide as follows: 4.1 Term. Section 2.01 of the M&O Agreement is deleted in its entirety and substituted with the following: “The Agreement Term commences on July [] 2018, and unless sooner terminated as provided herein ends at the earlier of (i) date of expiration or termination of the Lease term, and (ii) the fifth anniversary of July [] 2018”. 4.2 Notices. Operator’s notice address provided for in Section 7.04 of the M&O Agreement is deleted in its entirety and substituted with the following: JAG Alaska, Inc. 225 East Chicago St. Jonesville, MI 49250 _______________ Attention: Tim Jagielski 5. Warranties and Representations. As of the Effective Date and except as otherwise disclosed in the M&O Agreement: 5.1 City. City represents and warrants to Assignor and to Assignee that: (a) the documents attached as ANNEX A are collectively a true and correct copy of the M&O Agreement immediately prior to the Effective Date; (b) other than the provisions of this Agreement and that certain Ground Lease dated as of April 25, 1995, as amended, the M&O Agreement represents the entire agreement between City and Assignor relating to the Shiplift Premises and has not been amended by any agreement, written, verbal or otherwise, between Assignor and City; (c) neither City nor Assignor has taken any action to terminate the M&O Agreement, and the M&O Agreement remains in full force and effect, enforceable in accordance with its terms; (d) beginning on the Effective Date, and subject to the terms of the M&O Agreement, the Shiplift Premises at all times hereafter during the term of the M&O Agreement may be used by Assignee (or its assignee or sublessee) without any lawful interruption by City or any person or persons claiming under or through City; and (e) City has the right, power, and authority to enter into this Agreement. 5.2 Assignor. Assignor represents and warrants to City and to Assignee that during the period of Assignor’s Operation of the Shiplift Premises: (a) Assignor has not taken any Assignment, Assumption and Amendment of Agreement Page 3 507486\4005\00714195 action to terminate the M&O Agreement; (b) all material obligations under the M&O Agreement have been complied with by Assignor (or waived by Lessor), no material violation of or default under any of the terms of the M&O Agreement by Assignor has occurred, and no facts exist which, with the giving of notice and/or the passage of time, would constitute such a violation or default by Assignor under the M&O Agreement; (c) Assignor has not assigned the M&O Agreement to any other person nor has Assignor received notice of an assignment of the M&O Agreement by City; (d) Assignor has not delegated all or any portion of the operation of the Shiplift Premises to any other person; and (e) Assignor has the right, power, and authority to enter into this Agreement. 5.3 Assignee. Assignee represents, warrants and covenants to City and to Assignee that: (a) Assignee has taken all necessary corporate action to enter into this Agreement and carry out its provisions; (b) Assignee has the financial capacity and expertise to enter into this Agreement and to operate the Shiplift Premises in accordance with this Agreement; (c) Assignee’s entry into this Agreement and carrying out its provisions does not violate or conflict with the terms of any law or order of any administrative agency or the terms of any agreement of the Assignee or any order, judicial or otherwise to which Assignee may be subject; and (d) Assignee has the right, power, and authority to enter into this Agreement. 6. Environmental Matters. Section 6 (Environmental Matters) of the parties’ Assignment, Assumption and Amendment of Lease dated the same date as this Agreement (the “Assignment of Lease”), is incorporated in this Agreement by this reference. All references to “Lessor” in Section 6 of the Assignement of Lease will mean and refer to the City. All other capitalized terms that are used in Section 6 of the Assignment of Lease will have the meanings assigned to those terms in this Agreement, or if those terms are not defined in this Agreement, they will have the meanings assigned to those terms in the Assignment of Lease. 7. Miscellaneous: 7.1 Successors and Assigns. This Agreement will inure to the benefit and will be binding upon the successors and assigns of each of the Parties. 7.2 Interpretation. The words “includes” and “including” are not limited in any way and mean “includes or including without limitation.” The word “person” includes individuals, corporations, partnerships, limited liability companies, co-operatives, associations and other natural and legal persons. The term “and/or” means each and all of the persons, words, provisions or items connected by that term; i.e., it has a joint and several meaning. The words “will,” “shall,” and “must” are synonyms, and each refers to action that is mandatory rather than optional. All documents and exhibits attached to or referenced in this Agreement are a part of and are incorporated in this Agreement. Each Party has had an opportunity to have this Agreement reviewed by its attorneys; therefore, no rule of construction or interpretation that disfavors the Party drafting these Terms, or that favors the other Party, will apply to the interpretation of this Agreement. Instead, this Agreement will be interpreted according to its fair meaning. If there is any conflict between the provisions of the M&O Agreement and the provisions of this Agreement, the provisions of this Agreement will control, and except as expressly amended by this Agreement, all of the terms, covenants and conditions of the M&O Agreement will remain in full force and effect after the Effective Date. All section and paragraph headings of this Agreement are inserted for convenience only and will not constitute a part of this Agreement, nor will they in any way Assignment, Assumption and Amendment of Agreement Page 4 507486\4005\00714195 affect its meaning, construction, interpretation or effect. This Agreement will be construed and enforced exclusively in accordance with the laws of the State of Alaska. 7.3 Notices. All notices, requests, demands, directions and other communications (collectively, “notices”) under the provisions of this Agreement will be in writing (including email communication) unless otherwise expressly permitted under this Agreement and will be sent by first-class or first-class express mail, or by email with confirmation in writing mailed first-class, in all cases with charges prepaid, and any such properly given notice will be effective when received. All notices will be sent to the applicable Party at its address in Section 7.04 of the M&O Agreement (as amended by this Agreement) or, in the case of Assignor, to 5555 N. Channel Avenue, Portland, OR 97217, Attn: General Counsel, or in accordance with the then unrevoked written direction from that Party to the other Parties. 7.4 Relationship. The Parties recognize that nothing in the M&O Agreement or this Agreement is intended or will be construed to create an employer/employee relationship or a joint venture or a partnership relationship, or to allow City or Assignor to exercise control or direction over the matter or method by which Assignee performs under this Agreement. 7.5 Severability. The invalidity of any portion of this Agreement will not affect the force and effect of the remaining valid portions of this Agreement. 7.6 Further Assurances. Each of City, Assignor, and Assignee will, from time to time upon the request of any of the others, promptly and duly execute, acknowledge and deliver any and all such further instruments and documents, and will take such further action, as may be necessary or desirable to confirm this Agreement and to carry out its purpose and intent. 7.7 Counterparts/Execution. This Agreement may be executed in counterparts, including by means of PDF signature pages, each of which will constitute an original and all of which, when taken together, will constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by electronic transmission will constitute effective execution and delivery of this Agreement as to the Parties and such copies may be used in lieu of the original Agreement for all purposes. 8. City’s Consent. Assignor and Assignee acknowledge and agree that City’s consent is necessary for this Agreement. City, intending to be legally bound hereby, consents to the Assignment of the M&O Agreement by Assignor to Assignee pursuant to the terms of this Agreement. City represents and warrants that it has full power and authority to enter into and grant this City’s consent. Each of Assignee and Assignor have provided City with certified copies of all necessary corporate resolutions and other documents evidencing the authority of persons signing this Agreement on their behalf and to bind them in accordance with the terms of this Agreement. [SIGNATURES FOLLOW ON NEXT PAGE] Assignment, Assumption and Amendment of Agreement Page 5 507486\4005\00714195 IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals by their duly authorized officers as of the date and year set forth opposite their names below, intending to be legally bound. Dated: ASSIGNOR: VIGOR ALASKA—SEWARD LLC, an Alaska limited liability company By: _____________________________ Name: Title: Dated: ASSIGNEE: JAG Alaska, Inc., a ___________ corporation By: _____________________________ Name: Title: Dated: LESSOR: CITY OF SEWARD, ALASKA, an Alaska municipal corporation By: _____________________________ Name: Title: ANNEX B Page 1 507486\4005\00714195 ANNEX A