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2010-10-05 Joint 4-A AgreementFERRY SERVICE OPERATIONS TRANSFER AGREEMENT by and among CITY OF ALAMEDA, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, and SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY OAK #4834 -5097 -9335 v12 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS 2 ARTICLE 2 AGREEMENT TO TRANSFER ACQUIRED ASSETS 13 Section 2.1 Transfer of Acquired Assets 13 Section 2.2 Assumption of Liabilities 13 Section 2.3 "AS IS" Transfer; UCC Disclaimer 13 Section 2.4 Transfer of Vessels 14 Section2.5 YC Barge 14 Section 2.6 Other Acquired Assets 14 ARTICLE 3 ESCROW; DUE DILIGENCE REVIEW OF ASSETS 14 Section3.1 Escrow 14 Section 3.2 Costs and Charges 15 Section3.3 Due Diligence 15 ARTICLE 4 CITY AND WETA' S AGREEMENT TO USE GOOD FAITH EFFORTS TO RENEW CERTAIN CONTRACTS AND RIGHTS 16 Section 4.1 Alameda /Oakland Ferry Service Agreement 16 Section 4.2 License 12192 16 Section 4.3 Blue Gold Fleet Agreement 16 Section 4.4 License 12194 17 Section 4.5 Alameda /Harbor Bay Ferry Service Agreement 17 Section4.6 Cooperation 17 ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS 17 Section 5.1 Representations and Warranties of City 17 Section 5.2 Representations and Warranties of Authority 19 Section 5.3 Representations and Warranties of WETA 20 Section 5.4 Changes in Representations and Warranties 21 Section 5.5 Covenants of City 21 Section 5.6 Covenants of Authority 22 ARTICLE 6 CONDITIONS PRECEDENT TO CLOSING 22 Section 6.1 Conditions Precedent 22 ARTICLE7 CLOSING 24 -1- OAK #4834 -5097 -9335 v12 TABLE OF CONTENTS (continued) Page Section 7.1 WETA's Obligations at Closing 24 Section 7.2 City's and Authority's Obligations at Closing 25 Section 7.3 Obligations of Escrow Holder 26 Section 7.4 Possession and Deliveries 27 ARTICLE 8 DEFAULT AND REMEDIES 27 Section 8.1 Breach by City or Authority 27 Section8.2 Breach by WETA 28 ARTICLE 9 INSURANCE AND INDEMNIFICATION 29 Section 9.1 WETA Insurance 29 Section9.2 City Insurance 33 Section 9.3 Risk Allocation 33 Section 9.4 Crane and Pier Head 34 Section 9.5 WETA Waiver and Release 36 Section9.6 Indemnification 36 Section9.7 Survival 37 ARTICLE 10 ESCROW HOLDER PROVISIONS 37 Section 10.1 Escrow Holder Obligations 37 Section 10.2 Authority of Escrow Holder 38 Section10.3 Reliance 38 Section 10.4 Liability of Escrow Holder 38 Section10.5 Counsel 39 Section10.6 Compliance 39 ARTICLE 11 POST CLOSING OBLIGATIONS OF THE PARTIES 39 Section 11.1 Post Closing Obligations 39 Section11.2 Funding 39 Section 11.3 Service Levels 41 Section 11.4 Infrastructure Maintenance and Repair 43 Section 11.5 Landing and Mooring Rights 44 Section11.6 Parking 48 Section 11.7 Maintenance and Capital Projects 50 -11- OAK #4834 -5097 -9335 v12 TABLE OF CONTENTS (continued) Page Section11.8 Audit 52 Section 11.9 Seaplane Lagoon; Alameda /Oakland Ferry Service Bifurcation 53 Section 11.10 MARSEC Security 54 ARTICLE 12 ADDITIONAL PROVISIONS 54 Section 12.1 Alternative Fuel Pilot Program 54 Section 12.2 Bus /Ferry Terminal Connection 55 Section 12.3 Ferry Service Manager 55 Section 12.4 Fuel Consortium 55 Section 12.5 Other Transit Service Agreements 55 Section 12.6 Periodic Report to City 55 Section 12.7 Rider Satisfaction and Service Quality Monitoring 55 Section 12.8 Fare Box Recovery Ratio Reporting 55 Section12.9 Parity 55 ARTICLE 13 MISCELLANEOUS 56 Section13.1 Notices 56 Section 13.2 Entire Agreement 57 Section13.3 Amendment 58 Section13.4 Headings 58 Section 13.5 Time of Essence 58 Section13.6 Governing Law 58 Section 13.7 Successors and Assigns; Assignment 58 Section 13.8 Invalid Provision 58 Section13.9 Enforcement 58 Section 13.10 Multiple Counterparts 58 Section 13.11 Construction 58 Section 13.12 No Recordation 59 Section 13.13 Further Assurances 59 Section13.14 No Waiver 59 Section13.15 Survival 59 SCHEDULE 1 ASSIGNED CONTRACTS -111 OAK #4834 -5097 -9335 v12 TABLE OF CONTENTS (continued) Page SCHEDULE 2 WARRANTIES SCHEDULE 3 AUTHORIZATIONS SCHEDULE 5 LEGAL PROCEEDINGS SCHEDULE 6 WATERSIDE ASSETS SCHEDULE 7 PROPRIETARY RIGHTS SCHEDULE 8 RETAINED AUTHORIZATIONS SCHEDULE 9 VESSELS SCHEDULE 10 REQUIRED LICENSES, PAYMENTS AND CONSENTS SCHEDULE 11 VESSEL PERMITTED ENCUMBRANCES SCHEDULE 12 NOTICES OF VIOLATION FOR TERMINALS SCHEDULE 13 AUTHORIZATIONS NOT OBTAINED SCHEDULE 14 NOTICES OF VIOLATION FOR SERVICES SCHEDULE 15 PENDING AND THREATENED LEGAL PROCEEDINGS SCHEDULE 16 DEFAULTS UNDER ASSIGNED CONTRACTS SCHEDULE 17 GRANT REQUIREMENTS EXHIBIT A FORM OF COAST GUARD BILL OF SALE EXHIBIT B FORM OF GENERAL BILL OF SALE EXHIBIT C YC BARGE BILL OF SALE EXHIBIT D FORM OF ASSIGNMENT OF CONTRACT RIGHTS EXHIBIT E FORM OF ASSIGNMENT OF PROPRIETARY RIGHTS EXHIBIT F FORM OF ASSIGNMENT OF CERTAIN LIABILITIES EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT EXHIBIT H FY 2010/11 BUDGET FOR THE SERVICES EXHIBIT I CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS (WETA) EXHIBIT J CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS (CITY /AUTHORITY) EXHIBIT K CERTIFICATE OF FERRY SERVICE ACCOUNT BALANCES EXHIBIT L FORM OF ASSIGNED CONTRACT ESTOPPEL CERTIFICATE EXHIBIT M MAP OF YC BARGE AND WATERSIDE ASSETS (MAIN STREET) EXHIBIT N MAP OF HARBOR BAY FLOAT AND WATERSIDE ASSETS (HARBOR BAY) EXHIBIT O DESIRED MAINTENANCE SCHEDULE FISCAL YEAR 2010/11 EXHIBIT P MAP OF HARBOR BAY PARKING LOT EXHIBIT Q PROPOSED LOCATION OF SEAPLANE LAGOON REPLACEMENT TERMINAL EXHIBIT R FISCAL YEAR 2010/11 SERVICE LEVELS EXHIBITS DIAGRAM OF MAIN STREET PIER HEAD AND CRANE EXHIBIT T DIAGRAM OF MAIN STREET CHANNEL EXHIBIT U CALTRANS GRANT ASSIGNMENT AGREEMENT EXHIBIT V DIAGRAM OF MAIN STREET LAND EXHIBIT W ESCROW AGREEMENT -iv- OAK #4834 -5097 -9335 v12 FERRY SERVICE OPERATIONS TRANSFER AGREEMENT THIS FERRY SERVICE OPERATIONS TRANSFER AGREEMENT "Agreement is made and effective as of the day of 2010 "Effective Date by and among the CITY OF ALAMEDA "City the ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY "Authority and the SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY "WETA RECITALS A. WETA was established pursuant to California Senate Bill 976, as amended by Senate Bill 1093, codified as the San Francisco Bay Area Water Emergency Transportation Response and Disaster Recovery Act, California Government Code sections 66540 et seq. (as so amended, "Act which authorizes the consolidation of San Francisco regional ferry services; B. The Act authorized implementation of the transition of the Alameda /Oakland Ferry Service and the Alameda /Harbor Bay Ferry Service from City to WETA through the transfer and lease (or alternative property rights transfer arrangements) to WETA of City's assets used in operating the Alameda /Oakland Ferry Service and the Alameda /Harbor Bay Ferry Service "Transition C. In furtherance of the Transition, WETA approved a Transition Plan in June 2009, which received input from City and other relevant agencies; D. Since adoption of the Transition Plan, WETA and City have refined the proposed approach to the Transition to provide for direct transfer of certain personal property and assignment of certain rights and obligations from City and Authority to WETA; E. WETA and City share a mutual desire to maintain high quality ferry service for the benefit of the citizens of and visitors to City and the region, and anticipate the establishment of a ferry maintenance facility in City to enhance WETA' s continued ability to provide such service; F. Financial support historically contributed to the Alameda /Harbor Bay Ferry Service and the Alameda /Oakland Ferry Service by local and regional funding sources has been essential to City's ability to provide high quality ferry service to City's residents and visitors, and the parties acknowledge that continued availability and contribution of such local and regional funds is a key to enable WETA to continue the provision of high quality ferry service to City's residents and visitors. G. WETA acknowledges that ongoing planning and development in City may result in the establishment of a new ferry terminal in City at Seaplane Lagoon; and H. WETA and City further acknowledge that City's ferry service needs may evolve over time as new communities are developed in City, and WETA and City are mindful of the need to anticipate such future needs in connection with the Transition. OAK #4834 -5097 -9335 v12 NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, City, Authority, and WETA hereby agree as follows: ARTICLE 1 Definitions "Acquired Assets" means all of City's and Authority's right, title and interest in and to all of the following listed items, together with entitlements of every kind and nature, absolute or contingent, associated with operating the Services (other than the Excluded Assets), including: (a) the Assigned Contracts; (b) the Assigned Contract Rights; (c) the Vessels; (d) the Waterside Assets; (e) the Transaction Cash; (f) the Books and Records; (g) the Authorizations; (h) the Proprietary Rights; (i) the Warranties; and (j) the Spare Parts and Equipment. "ACTC" means the Alameda County Transportation Commission. "Alameda /Harbor Bay Ferry Service" means regularly scheduled commuter ferry service between the Harbor Bay Ferry Terminal and the San Francisco Ferry Building at the Port of San Francisco. "Alameda /Harbor Bay Ferry Service Agreement" is defined in Section 4.5 "Alameda /Angel Island Service" means excursion ferry service between the Main Street Ferry Terminal and Angel Island in San Francisco Bay. "Alameda /Oakland Ferry Service" means the regularly scheduled commuter ferry service between the Main Street Ferry Terminal and the San Francisco Ferry Building at the Port of San Francisco (including up to one intervening Oakland stop). "Alameda /San Francisco Ferry Service" means regularly scheduled commuter ferry service between the Main Street Ferry Terminal (or, the Seaplane Lagoon Ferry Terminal to the OAK #4834 -5097 -9335 v12 2 extent the Main Street terminal is decommissioned and such ferry service is relocated so that it originates from the Seaplane Lagoon Ferry Terminal) and the San Francisco Ferry Building at the Port of San Francisco, with no intervening Oakland stop. "Ancillary Documents" means one or more Bills of Sale, Assignments of Contract Rights, Assignments of Proprietary Rights, Assumptions of Certain Liabilities and the Assignment and Assumption Agreement, substantially in the forms attached as Exhibit A through Exhibit G, respectively. "Assigned Contracts" means the contracts that pertain exclusively to the Services and other contracts to the extent they pertain to the Services (each of which is listed on Schedule 1), and are assigned to WETA as part of this Transaction. "Assigned Contract Rights" means all of City's rights and obligations under the Assigned Contracts. "Assignment and Assumption Agreement" means an agreement between City and WETA substantially in the form of the Assignment and Assumption Agreement attached as F,xhihit G- "Assumed Liabilities" means all liabilities and obligations of City and /or Authority with respect to the Acquired Assets, whether accruing before on or after the Closing Date, other than the Excluded Liabilities, including: (a) all liabilities for Taxes levied on the Acquired Assets, including any Taxes levied on the Acquired Assets arising in connection with the consummation of the transactions contemplated herby; (b) all liabilities of City or Authority under any Laws with respect to the Acquired Assets; Services; and (c) all liabilities of City or Authority under any Laws with respect to the (d) all liabilities and obligations of City or Authority under the Assigned Contracts or with respect to the Assigned Contract Rights. "Authority Lot" is defined in Section 11.6(a). "Authorizations" means any permit, license, authorization, order, decree, ruling, certificate, registration, filing, legislation, ordinance, resolution or other consent or approval (including Environmental Permits) granted by any Governmental Authority to City or WETA for a Service, which is a condition to the lawful operation of a Service or consummation of the transactions contemplated hereby as listed on Schedule 3, to the extent transferable. "Backup /Emergency Ferry Uses" is defined in Section 11.5(a)(iii)(B). OAK #4834 -5097 -9335 v12 3 "Bay Ship Yacht" means Bay Ship Yacht Co., a California corporation, or any of its successors, assigns, affiliates, or successor operator of the shipyard currently located and operated on City property immediately to the east of the Main Street Ferry Terminal. "Bifurcated Services" means the possible future Alameda /San Francisco Ferry Service between the San Francisco Ferry Building and the proposed Seaplane Lagoon Ferry Terminal, and the possible future WETA- operated ferry service between the Port of Oakland and the San Francisco Ferry Building, that may be operated if WETA determines to cease operation of the Alameda /Oakland Ferry Service and implement two distinct ferry services, one serving Oakland passengers between Jack London Square and the San Francisco Ferry Building, and one serving passengers between the proposed Seaplane Lagoon Ferry Terminal and the San Francisco Ferry Building. "Bifurcation" means cessation of operation of the Alameda /Oakland Ferry Service and implementation of two distinct ferry services, one serving Oakland passengers between Jack London Square and the San Francisco Ferry Building, and one serving passengers between the proposed Seaplane Lagoon Ferry Terminal and the San Francisco Ferry Building. "Blue Gold Fleet Agreement" is defined in Section 4.3 "Board" means the governing body of a Party, as applicable. "Books and Records" means all books, records, files and papers of City relating to Services, including all contracts and agreements to which City is a party or by which it is bound, its general and other ledgers, records of administrative proceedings, Tax records, financial statements, documents of title, personnel records, salary and wage records, inventory records, sales documentation, "as built" drawings, and specifications for the Waterside Assets except the YC Barge (and, as to Authority, "as built" drawings and specifications for the YC Barge), all to the extent in City's possession and /or control, regardless of the medium in which the same are fixed, but excluding confidential employee records, attorney client privileged documents or communications, and other privileged materials; provided, however that City will cooperate with and assist WETA in making such documents, records and materials available to WETA to the extent reasonably necessary to assist WETA in connection with any Legal Proceedings to which WETA may become a party as a result of the Transition but which pertain to facts or events concerning the City prior to the Closing Date. "Caltrans Grant Assignment Agreement" is defined in Section 6.1(v� "Certificate Regarding Truth of Representations and Warranties" is defined in Section 7.1(e� "CEQA" means the California Environmental Quality Act. "Change Considerations" means WETA's regional system needs balanced with City's interest in maintaining existing Service Levels for City's residents and businesses when compared to other existing WETA passenger ferry services on the San Francisco Bay (with due consideration allowing for "ramping up" in the early years of a start -up service). OAK #4834 -5097 -9335 v12 4 "City Lot" is defined in Section 11.6(a) "Claim" or "Claims" means any and all present and future liabilities, claims, demands, obligations, assessments, losses, costs, damages, and expenses of any nature whatsoever directly or indirectly related to ownership or operation of the Services (including reasonable attorneys' fees and court costs), whether known or unknown, whether now existing or hereafter arising. "Closing" means the consummation of transfer of the Services from City and Authority to WETA (including transfer of all Acquired Assets from City and Authority to WETA, and WETA's assumption of related obligations and payment of monies) as set forth in this Agreement. "Closing Date" means the date on which Closing occurs. "Costs and Charges" is defined in Section 3.2 "Crane" is defined in Section 9.4(a) "Default" means (a) a material breach of any Assigned Contract or Authorization, (b) the occurrence of an event that with the passage of time or the giving of notice or both would constitute a material breach of any Assigned Contract or Authorization, or (c) the occurrence of an event that with or without the passage of time or the giving of notice or both would give rise to a right of termination, renegotiation or acceleration under any Assigned Contract or Authorization or result in a material modification of the terms thereof. "Desired Maintenance Schedule" is defined in Section 11.7(a) "Encumbrance" means any claim, lien, pledge, option, charge, security interest, deed of trust, mortgage, building or contractual use restriction, conditional sales agreement, right of termination, forfeiture or cancellation, encumbrance or other similar right, whether voluntarily incurred or arising by operation of Law, and includes any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease in the nature thereof. "Environmental Condition" means (a) any Release or threatened Release into, at, on, under or in the Landside Assets (including the surface water, groundwater, surface soil, subsurface soil air, land or soil vapor thereof), or (b) any environmental contamination or pollution in violation of Environmental Laws existing at, on, under, or in the Landside Assets. "Environmental Laws" means those Laws which regulate (a) the protection or clean -up of the environment, (b) the use, treatment, storage, transportation, generation, manufacture, processing, distribution, handling or disposal of, or emission, discharge or other Release or threatened Release, and (c) the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources, or the health and safety of persons or property, including protection of the health and safety of employees. Environmental Laws include the Federal Water Pollution Control Act, Resource Conservation Recovery Act, Clean Water Act, Safe Drinking Water Act, Atomic Energy Act, Occupational Safety and Health Act, Toxic Substances Control Act, Clean Air Act, Comprehensive Environmental Response, OAK #4834 -5097 -9335 v12 5 Compensation and Liability Act, Hazardous Materials Transportation Act and all analogous or related Laws, whether federal, state, or local. "Environmental Permits" means all permits, authorizations, registrations, certificates, licenses, approvals or consents required under or issued by any Governmental Authority pursuant to Environmental Laws and related to or required for operation of the Services or maintenance of the Landside or Waterside Assets, including the Retained Authorizations. "Equitable Funding Level" is defined in Section 11.9(b)(iv). "Escrow" means the escrow of documents and funds to be administered by Escrow Holder in accordance with the terms of this Agreement. "Escrow Holder" means the title company retained by the Parties to act as escrow agent under the terms of this Agreement. "Excluded Assets" means: (a) originals of all personnel records and other original Books and Records that City is required to retain in its possession; (b) the Retained Authorizations, which are identified on Schedule 7; (c) the Landside Assets; and (d) all Authorizations whose transfer is prohibited by Law. "Excluded Liabilities" means and includes only the following: any obligation of City or Authority to WETA under this Agreement or the Ancillary Documents; any Retained Authorization; any Environmental Condition (other than any Environmental Condition which City or Authority prove by a preponderance of evidence, as determined by written agreement among the Parties or a court of competent jurisdiction, is the result of a Release caused by WETA or any WETA Parties which shall be the responsibility of WETA); and any liability arising out of events occurring prior to the Closing Date, except for payment obligations under the Assigned Contracts which shall be considered part of the Assumed Liabilities (but excluding those payment obligations arising as express or implied indemnity obligations under the Assigned Contracts, if any). "Excess Payment" is defined in Section 12.9(a)(i). "Ferry Service Agreement" is defined in Section 4.1. "Ferry Terminal" and "Ferry Terminals" means the Harbor Bay Ferry Terminal and the Main Street Ferry Terminal. The Ferry Terminals are part of the Landside Assets and do not include the Waterside Assets. "Force Maj eure" means a material delay beyond the reasonable control of the delayed Party caused by labor strikes, lock -outs, industry wide inability to procure materials, OAK #4834 -5097 -9335 v12 6 extraordinary restrictive governmental laws or regulations (such as gas rationing), mass riots, war, military power, sabotage, fire or other casualty, an act of God or other event of a similar nature or magnitude. "Force Maj eure Event" means any event caused by Force Maj eure and any other event specifically identified herein as a Force Maj eure Event. "Governmental Authority" means any federal, regional, state, local or other governmental agency, legislative body, court, authority, administrative agency, regulatory body, commission, joint powers agency or instrumentality, including any multinational authority having governmental or quasi governmental powers, but unless the context otherwise requires, excluding City, Authority. and WETA. "Harbor Bay Fees" is defined in Section 11.5(c)(iii) "Harbor Bay Ferry Terminal" means the ferry terminal located at 2 Mecartney Road, Alameda, California, out of which the Alameda /Harbor Bay Ferry Service is operated. "Harbor Bay Grant of Easement" is defined in Section 11.6(b)(i). "Harbor Bay Mooring Period" is defined in Section 11.5(c)(i). "Harbor Bay Operating Agreement" is defined in Section 11.6(b)(ii). "Alameda /Harbor Bay Ferry Service Operating Agreement" means the Sixth Amended and Restated Operating Agreement for the Alameda /Harbor Bay Ferry Service between the City of Alameda, a California municipal corporation and Harbor Bay Maritime, Inc., a California corporation, dated as of August 1, 2004, as amended. "Harbor Bay Parking Lot" is defined in Section 11.6(b)(i). "Hazardous Materials" means any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including any material or substance which is: (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under sections 25117, 25115 or 25122.7 of the California Health and Safety Code, or listed pursuant to California Health and Safety Code section 25140; (ii) defined as a "hazardous substance" under California Health and Safety Code section 25316 (Carpenter Presley- Tanner Hazardous Substance Account Act); (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under California Health and Safety Code section 25501 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a "hazardous substance" under California Health and Safety Code section 25281 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) friable asbestos; (vii) polychlorinated biphenyls; (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20; (ix) designated as "toxic pollutants" pursuant to section 311 of the Clean Water Act (33 U.S.C. §1317); (x) defined as a "hazardous waste" pursuant to section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. section 6903; or (xi) defined as "hazardous substances" pursuant to section 101 of the Comprehensive Environmental Response, OAK #4834 -5097 -9335 v12 7 Compensation, and Liability Act, 42 U.S.C. section 9601, et seq., as the foregoing statutes and regulations now exist or may hereafter be amended, regardless of whether such materials in the preceding subsections (i) to (xi) are solid, liquid or gas. "HBBPA" is defined in Section 11.2(d) "Indemnitees" is defined in Section 9.5(a) "Infrastructure Agreement" is defined in Section 11.2(a) "Inspection Period" is defined in Section 3.3 (a) "Knowledge" or "Known" means the current, actual knowledge of the designated representative of the Party making the representation or warranty. "Landside Assets" means the property of City, of Authority, and /or of HBBPA (but only to the extent pledged to or owned or controlled by City for Service purposes only), located at or above the top of the San Francisco Bay shoreline embankment as of the Effective Date and solely dedicated to, operated, or maintained, in connection with and necessary to provision of the Services (including the City Lot, the Authority Lot, the Harbor Bay Parking Lot, the Ferry Terminals, and shoreline embankment). "Law" means any law, decision, statute, ordinance, resolution, decree, order, writ, rule or regulation of a Governmental Authority, including City and Authority. "Legal Proceeding" or "Legal Proceedings" means any claim, action, suit, labor dispute or complaint, proceeding or investigation before any Governmental Authority, whether brought, initiated, asserted or maintained by a Governmental Authority or any other Person, or arbitral action. For purposes of this definition, Legal Proceedings include disputes by and between City and Authority. Legal Proceedings include those existing or threatened matters listed in Schedule 4. "License 12192" is defined in Section 4.2. "License 12194" is defined in Section 4.4. "Main Street Channel" means the portion of the channel offshore from the Main Street Ferry Terminal as depicted and identified on Exhibit T "Main Street Fees" is defined in Section 11.5(a)(iii)(C) "Main Street Ferry Terminal" means the ferry terminal located at 2990 Main Street, Alameda, California, out of which the Alameda /Oakland Ferry Service is currently operated. "Main Street Land" means the real property, including the Main Street Ferry Terminal, which is used to provide parking and ancillary facilities in connection with the Alameda /Oakland Ferry Service as of the Effective Date, as depicted and identified on Exhibit V OAK #4834 -5097 -9335 v12 "Main Street Mooring Period" is defined in Section 11.5(a)(i) "Main Street Rights" is defined in Section 11.5(a)(iii) "MARSEC" means the three tiered United States Coast Guard Maritime Security system created to be compatible with, and respond in a unison mode to, the federal Department of Homeland Security's Homeland Security Advisory System. "Material Adverse Change" or "Material Adverse Effect" means (a) with respect to any Party pre Closing, any adverse change, circumstance, or effect that, individually or in the aggregate, is likely to be materially adverse to the affected Party's position, the Acquired Assets, the Assumed Liabilities, or the Services and would impair or limit a Party's ability to perform its obligations under this Agreement; and (b) with respect to WETA, MTC, or the Services post Closing, any change, circumstance or effect, including increase in insurance, maintenance or repair costs, that, individually or in the aggregate, has a significant negative economic impact on the Service operations, assets, liabilities, financial condition, or Service Levels, or causes or results in suspension of any Services for more than ninety (90) calendar days, or such longer time period as may be agreed upon by the City Manager in his or her sole discretion, for a reason within WETA's control that is not otherwise permitted or excused hereunder (including pursuant to a Force Majeure Event), or cancellation or termination of any of the Services. "Measure B" means Alameda County's half -cent transportation sales tax, originally approved in 1986 and reauthorized by voters in November 2000. "MTC" means the Metropolitan Transportation Commission created by the California Legislature in 1970 (California Government Code §66500 et seq.), responsible for the transportation planning, coordinating and financing for the nine- county San Francisco Bay Area. "No Longer Operated" means that applicable Service has been terminated, or that Services Levels for the applicable Service has been or will be suspended for a period of more than one hundred eighty (180) calendar days [except to the extent such suspension is caused by (i) a Force Majeure Event, (ii) material interference with WETA's ability to use the Main Street Ferry Terminal by a third party granted access to the Main Street Channel or Main Street Land by City; (iii) temporary closure of a ferry terminal due to needed repairs or capital improvements; (iv) a Hazardous Materials Release not caused by WETA or WETA Parties that prevents use of a ferry terminal for the applicable Service, (v) Hazardous Materials remediation related to a Hazardous Materials Release not caused by WETA or WETA Parties that prevents use of a ferry terminal for the applicable Service; and (vi) an injunction or other court order or official action of a governmental agency with jurisdiction over the applicable Service or the ferry terminal preventing WETA from using a prevents use of a ferry terminal for the applicable Service, for any reason other than WETA's breach of this Agreement] or such longer period to which the City and WETA may agree in writing. City hereby delegates to its City Manager or Interim City Manager the authority to enter into such an agreement on City's behalf, and WETA hereby delegates to its Executive Director the authority to enter into such an agreement on WETA's behalf. OAK #4834 -5097 -9335 v12 9 "Party" or "Parties" shall respectively mean and refer to each of WETA, City and Authority, individually and collectively. "Permitted Encumbrances" means, with respect to an Acquired Asset, all of the following: (a) Any Encumbrance for Taxes, assessments and other governmental charges not yet due, payable and delinquent or which is currently being contested in good faith by appropriate Legal Proceedings. (b) Leases, reservations or other rights of others in, or minor defects and irregularities in title to, Acquired Assets, provided that such leases, reservations or other rights, defects or irregularities do not materially impair the use of such Acquired Assets for the purpose for which they are to be held by WETA. (c) Assigned Contracts. (d) Any Encumbrance arising by, through or under WETA. (e) Any Encumbrance which City or Authority has elected not to remove, to the extent WETA has not terminated this Agreement pursuant to Section (f) Any Assumed Liability.. "Person" means an individual, a partnership (whether general or limited), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority (or any department, agency, or political subdivision thereof). "Personalty" means the Vessels, the Waterside Assets, the Assigned Contracts and Assigned Contract Rights, the Spare Parts and Equipment, the Proprietary Rights, the Warranties, the Transaction Cash, and the Books and Records or each of the Services. "Pier Head" is defined in Section 9.4(a) "Port of Oakland" means the City of Oakland, acting by and through the Port of Oakland, a component unit of the City of Oakland. "Proposition 113" means the California Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (SB 1266: Chapter 25, Statutes of 2006). "Proprietary Rights" means, to the extent transferable, (a) all copyrights, copyright registrations, proprietary processes, trade secrets, license rights, specifications, technical manuals and data, drawings, inventions, designs, patents, patent applications, trade names, trademarks, service marks, product information and data, know -how and development work -in- progress, customer lists, software, business and marketing plans and other intellectual or intangible property embodied in or pertaining to a Service operation in which City holds a right or interest, whether pending, applied for or issued, whether filed in the United States or in other countries, OAK #4834 -5097 -9335 v12 10 together with all associated goodwill; (b) all things in which City holds a right or interest authored, discovered, developed, made, perfected, improved, designed, engineered, acquired, produced, conceived or first reduced to practice by City or any of its employees or agents that are embodied in, derived from or relate to a Service operation, in any stage of development, including modifications, enhancements, designs, concepts, techniques, methods, ideas, flow charts, coding sheets, notes and all other information in which City holds a right or interest relating to the Service operation; and (c) any and all design and code documentation, methodologies, processes, trade secrets, copyrights, design information, product information, technology, formulae, routines, engineering specifications, technical manuals and data, feasibility studies, market studies, traffic studies or projections, drawings, inventions, know -how, techniques, engineering work papers, and notes, development work -in- process, and other proprietary information and materials of any kind relating to the Services operation, in which City holds a right or interest, to the extent dedicated to, operated or maintained in connection with provision of the Services. Proprietary Rights include those listed in Schedule 6 "Reimbursement Agreement" is defined in Section 3.2 "Release" means any intentional or unintentional release, discharge, spill, leaking, pumping, pouring, emitting, emptying, injection, disposal or dumping of Hazardous Materials in violation of the Environmental Laws. "Retained Authorizations" means those Authorizations required to be retained by City under the terms of this Agreement as listed on Schedule 7. "RM -1" means Regional Measure 1 adopted by voters in November 1988 to authorize a standard auto toll of $1 for all state -owned Bay Area toll bridges. "RM -2" means Regional Measure 2, the March 2004 Ballot Measure (SB 916 Perata) to increase bridge tolls on state -owned bridges in the San Francisco Bay Area, to fund various transportation projects within the region that have been determined to reduce congestion or to make improvements to travel in the toll bridge corridors, as identified in SB 916 (Chapter 715, Statutes of 2004). "Seaplane Lagoon Ferry Terminal" is defined in Section 11.9 "Service" and "Services" means (i) the Alameda /Oakland Ferry Service in existence as of the Effective Date or the Alameda /San Francisco Ferry Service after Bifurcation, and (ii) the Alameda /Harbor Bay Ferry Service, individually and collectively. "Service Level" or "Service Levels" is defined in Section 11.3 (a� "Spare Parts and Equipment" means all tools and equipment, spare parts, and any other equipment and other tangible personalty owned by City wherever located (including in the possession of any of City's contractors, suppliers or other vendors) held for use in connection with the Services. "Supplemental Insurance" is defined in Section OAK #4834 -5097 -9335 v12 11 "Tax" or "Taxes" means any federal, state, local or foreign license, payroll, employment, excise, severance, stamp, occupation, premium, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, possessory interest, documentary, personalty, special assessment, sales, use, transfer, registration, value added, alternative or add -on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. "Term" means the period commencing on the Effective Date and expiring on (a) the expiration or other termination of the Harbor Bay Mooring Period as to those aspects of this Agreement relating to the Alameda /Harbor Bay Ferry Service; (b) on the expiration or termination of the Main Street Mooring Period as to those aspects of this Agreement relating to the Alameda /Oakland Ferry Service; and (c) as to those aspects of this Agreement which relate to both or neither the Alameda /Harbor Bay Ferry Service or the Alameda /Oakland Ferry Service, the later of the expiration or termination of the Main Street Mooring Period or expiration or termination of the Harbor Bay Mooring Period. "TIF /LLAD Equivalent" is defined in Section 11.2(a� "Title Abstract" is defined in Section "Transaction" means implementation of the Transition pursuant to the terms and conditions contained in this Agreement. "Transaction Cash" means all receivables, operating, and reserve account balances of funds in City's possession specifically designated for operation, maintenance, repair or rehabilitation of the Services, the Spare Parts and Equipment, the Waterside Assets or net payments under any Assigned Contracts, less the premium for the Supplemental Insurance. "Transition" is defined in the Recitals. "Triple Net Costs" is defined in Section 11.7(c)(i). "Vallejo Transit Agreement" is defined in Section 12.9(a). "Vessels" means the vessels specified in Schedule 8, including the Harbor Bay Express II, Bay Breeze, MV Encinal, and MV Peralta. "Warranties" means any service, repair, replacement, construction and other obligation, warranty, representation or guaranty based upon or arising out of any express or implied warranty, made or deemed to be made in connection with the acquisition, sale or lease, or to the extent applicable, construction or repair of any Vessel, Waterside Asset or Spare Parts and Equipment, or the performance of service by any seller, distributor, or manufacturer thereof or any other Person providing services to City in respect of the Vessels, Waterside Assets or Spare Parts and Equipment. "Waterside Assets" means (i) with respect to each Service, the pilings, aluminum passenger ramps, passenger gates, ramp awnings and the related gangways used in connection with operation of each Service, (ii) the YC Barge located at the Main Street Ferry Terminal, OAK #4834 -5097 -9335 v12 12 (iii) the float currently used in connection with the Alameda/Harbor Bay Ferry Service, and (iv) the navigational channel markers located off of the Harbor Bay Ferry Terminal; all located below the top of the San Francisco Bay shoreline embankment as of the Effective Date, as more particularly described in Schedule 5 (but specifically excluding the Crane and Pier Head). "WETA Parties" is defined in Section 9.5(a). "YC Barge" means that certain barge located off of the Main Street Ferry Terminal and which is owned by Authority, as depicted and identified on Exhibit M. "YC Barge Bill of Sale" is defined in Section 2.5. "YC Barge Price" is defined in Section 2.5. ARTICLE 2 Agreement to Transfer Acquired Assets Section 2.1 Transfer of Acquired Assets. (a) By City. Subject to the terms and conditions of this Agreement, and subject to Section 2.3 below, City shall assign, convey, transfer and deliver to WETA, and WETA shall accept from City as of the Closing Date, free and clear of all Encumbrances except for Permitted Encumbrances, all of the Acquired Assets to which City holds a right, title, or interest. (b) By Authority. Subject to the terms and conditions of this Agreement, and subject to Section 2.3 below, Authority shall assign, convey, transfer and deliver to WETA, and WETA shall accept from Authority as of the Closing Date, free and clear of all Encumbrances except for Permitted Encumbrances, all of Authority's right, title, and interest in and to the YC Barge. Section 2.2 Assumption of Liabilities. WETA agrees to assume and become responsible for, on and subject to the terms and conditions of this Agreement, all of the Assumed Liabilities at Closing. WETA will not assume or have any responsibility, however, with respect to any of the Excluded Liabilities. Section 2.3 "AS IS" Transfer; UCC Disclaimer. (a) Except as specifically stated in this Agreement or in any document of conveyance of the Vessels, the Waterside Assets, or the Spare Parts and Equipment, neither City nor Authority makes, nor shall City or Authority be deemed to make, any express or implied representation or warranty of any kind or nature as to the Vessels, the Waterside Assets, or the Spare Parts and Equipment, including the physical condition or safety of such property, or the accuracy or completeness of the Title Commitment, any inspection documents or consultant reports. Without limiting the foregoing, WETA hereby acknowledges that the Vessels, the Waterside Assets, and the Spare Parts and Equipment will be transferred to WETA, and WETA will acquire the same, "AS IS," "WHERE IS" and "WITH ALL FAULTS" and, except for the OAK #4834 -5097 -9335 v12 13 express City and Authority representations and warranties contained in Section 5.1 and Section 5.2 hereof or any document of conveyance of such property to WETA from City or Authority (as applicable), there are no representations or warranties, express or implied, made by City or Authority in connection with the Transaction. (b) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT NEITHER AUTHORITY NOR CITY IS MAKING OR HAS AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE VESSELS, THE YC BARGE, THE WATERSIDE ASSETS OR THE SPARE PARTS AND EQUIPMENT, INCLUDING ANY WARRANTIES OR REPRESENTATIONS AS TO MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. Section 2.4 Transfer of Vessels. At Closing, City shall transfer to WETA all of City's right, title and interest in and to the Vessels. City shall cooperate with and assist WETA in obtaining the transfer of the interests owned by the Port of Oakland, to WETA concurrent with or as soon as possible following Closing, provided, however, that Closing shall not be contingent upon the Port of Oakland's transfer of its interest in the Vessels. At Closing, the Bareboat Charter Agreements dated as of between City and WETA for use of WETA's Taurus, Gemini, Pisces and Scorpio vessels shall be deemed cancelled. Section 2.5 YC Barge. At Closing, Authority shall transfer to WETA all of Authority's right, title and interest in and to the YC Barge in exchange for WETA's payment to Authority of the sum of Ninety Thousand Dollars ($90,000) together with any applicable Costs and Charges (defined in Section 3.2) in the form of a certified or cashier's check, electronic transfer of federal funds or other immediately available funds "YC Barge Price paid through escrow and pursuant to a bill of sale in substantially the form attached hereto as Exhibit C "YC Barge Bill of Sale City and Authority shall cooperate with and assist WETA in effecting the transfer thereof. Section 2.6 Other Acquired Assets. At Closing, City shall take all other actions and execute all documents reasonably necessary to transfer all of City's right, title and interest in the other Acquired Assets to WETA, including execution and delivery of the Ancillary Documents and any other bills of sale, transfers of registrations and accounts, and assignments of contracts, permits and licenses. ARTICLE 3 Escrow; Due Diligence Review of Assets Section 3.1 Escrow. (a) Opening of Escrow. Within two (2) business days after the Effective Date, the Parties shall open an Escrow with Escrow Company and deposit a fully executed copy of this Agreement with Escrow Holder. Escrow Holder shall hold this Agreement and all deposits in the Escrow until Closing or earlier termination of this Agreement in accordance with the provisions hereof. OAK #4834 -5097 -9335 v12 14 Section 3.2 Costs and Charges WETA shall solely bear all costs and charges of Escrow, Closing, and consummation of the Transaction and Transition including any Taxes, escrow costs, fees, or charges, and recording and filing fees "Costs and Charges WETA shall deposit such Costs and Charges into Escrow; under no circumstances shall any portion of the Transaction Cash be used to pay such costs or charges. To the extent known or quantifiable by City or Authority, usual and customary costs incurred by or chargeable to City or Authority in connection with the Services which remain due and payable as of Closing shall be deducted from the Transaction Cash and paid by at or before Closing. WETA has also agreed to pay certain City expenses pursuant to that certain Administrative Costs Funding Agreement for Transition of Ferry Services between WETA and City dated as of February 1, 2010 "Reimbursement Agreement any sums due and owing from WETA to City thereunder shall be deducted Transition Cash or paid by WETA at or before Closing. Section 3.3 Due Dili (a) Review of Assets. WETA shall have the right to cause a third party to inspect the Waterside Assets, and to directly inspect or cause a third party to inspect the other Acquired Assets, at any time after the Effective Date and from time to time prior to December 1, 2010 "Inspection Period by delivery of not fewer than five (5) business days prior notice to City. WETA shall provide an initial proposed inspection schedule to City and Authority on or before October 15, 2010, and an outline of steps to be implemented by WETA to insure that inspections shall not reduce or delay any scheduled Service, departures or required carrying capacity. City, at no expense to City, shall reasonably cooperate and assist WETA in such inspections. Authority, at no expense to Authority, shall reasonably cooperate and assist WETA in inspection of the YC Barge. If WETA so requests, City shall arrange for the inspection of the Vessels, provided that WETA shall direct the nature and extent of all such inspections and pay all costs incurred by City to conduct such inspections, including on -board labor, marine surveyor, shipyard dry -dock, fuel, operator and City administrative costs, and the cost of providing replacement vessels of similar or greater size if needed, as determined by City in its reasonable discretion, within thirty (30) calendar days after City's presentation of an invoice itemizing such costs. (b) Access to City Books and Records. During the Inspection Period, City shall give WETA and its accountants and consultants, upon five (5) business days prior notice, full access during normal business hours to all Books and Records, documents, properties, files, contracts, and other instruments pertaining to the Services (except confidential employee records, attorney client privileged documents or communications, or other privileged materials), relating to the Acquired Assets and Assumed Liabilities to be transferred to or assumed by WETA or City's conduct of the Services, and will allow WETA to make copies of the same, all at WETA's expense. (c) Abstract of Title. Within the Inspection Period, WETA shall request an Abstract of Title for the Vessels from the United States Coast Guard "Title Abstract City shall cooperate with WETA's efforts to perform and obtain a current and comprehensive UCC lien and judgment search with respect to the Acquired Assets. No more than ten (10) business days after expiration of the Inspection Period, and in no event fewer than thirty (30) calendar days before the Closing Date, WETA shall notify City in writing of any Encumbrances identified OAK #4834 -5097 -9335 v12 15 in the Title Abstract or UCC lien and judgment search that are disapproved by WETA. Within ten (10) business days after WETA's notice by certified mail, facsimile, or email to the Interim City Manager (Ann Marie Gallant, facsimile: (510) 747 -4704, email: agallantgci.alameda.ca.us) with a copy to City's public works department (Matthew T. Naclerio, facsimile: (510) 749 -5867, email: mnacleriogci.alameda.ca.us), City shall advise WETA whether or not City will clear the disapproved Encumbrances. City's failure to respond to WETA within such time period shall be deemed to be City's election not to remove the Encumbrances. WETA shall have the right to terminate this Agreement within ten (10) business days after City's election (or deemed election) not to clear an Encumbrance that is disapproved by WETA. WETA's failure to so terminate this Agreement shall operate as WETA's acceptance of such Encumbrances. Any Encumbrance identified in the Title Abstract that is approved by WETA, or that City does not remove (to the extent WETA does not terminate this Agreement) shall be a "Permitted Encumbrance." To the extent WETA has not terminated this Agreement, or timely notified City of any disapproved Encumbrance, as provided herein, WETA shall either unconditionally accept such Encumbrance or bear all costs associated with removal thereof. ARTICLE 4 City and WETA's Agreement to Use Good Faith Efforts to Renew Certain Contracts and Rights Section 4.1 Alameda /Oakland Ferry Service Agreement If WETA has not entered into a separate agreement with the Port of Oakland that will be effective prior to or concurrent with Closing, then, subject to the consent of the Port of Oakland, City shall assign to WETA all of City's rights and obligations as set forth in that certain Amended and Restated Ferry Service Agreement between the City of Alameda and the Port of Oakland dated as of July 1, 2005, as amended by that certain First Amendment to Ferry Service Agreement dated as of July 1, 2006, Second Amendment to Ferry Service Agreement dated as of July 1, 2007, Third Amendment to Ferry Service Agreement dated as of July 1, 2008, Fourth Amendment to Ferry Service Agreement dated as of July 1, 2009 and Fifth Amendment to Ferry Service Agreement dated as of July 1, 2010 (collectively, the "Ferry Service Agreement Section 4.2 License 12192 City shall use good faith efforts to renew the Agreement for Landing Rights License 12192 between City and the Port of San Francisco covering the Alameda /San Francisco Ferry Service at the Port of San Francisco's Downtown Ferry Terminals, AT &T Park and China Basin "License 12192 on terms and conditions reasonably acceptable to WETA. If WETA has not entered into a separate agreement with the Port of San Francisco for landing rights for Alameda /San Francisco Ferry Services that will be effective prior to or concurrent with Closing, City shall assign City's rights and obligations under License 12192 to WETA, subject to the consent of the Port of San Francisco. WETA shall have the right to review and comment on any such renewed License 12192 prior to Closing. Section 4.3 Blue Gold Fleet Agreement Prior to the Effective Date, City has entered into an extension until June 30, 2011 of the Alameda /San Francisco Ferry Service Agreement between City and the Blue Gold Fleet, L.P., a Delaware limited partnership, dated as of August 1, 2004 (collectively, the "Blue Gold Fleet Agreement as amended by the Second through Twelfth Amendments thereto, for the continued operation of the Alameda /San OAK #4834 -5097 -9335 v12 16 Francisco Ferry Service. City shall assign its rights and obligations under the Blue Gold Fleet Agreement to WETA. Section 4.4 License 12194 City shall use good faith efforts to renew the Agreement for Landing Rights License 12194 between City and the Port of San Francisco covering the Alameda /Harbor Bay Ferry Service at the Port of San Francisco's Downtown Ferry Terminals "License 12194 If WETA has not entered into a separate agreement with the Port of San Francisco for landing rights for Alameda /Harbor Bay Ferry Service that will be effective prior to or concurrent with Closing, City shall assign City's rights and obligations under License 12194 to WETA, subject to the consent of the Port of San Francisco, if applicable. WETA shall have the right to review and comment on any such renewed License 12194 prior to Closing. Section 4.5 Alameda /Harbor Barmy Service Agreement Prior to the Effective Date, City and Harbor Bay Maritime, Inc. "Operator entered into the Eighth Amendment to the Sixth Amended and Restated Operating Agreement for the Alameda /Harbor Bay Ferry Service (collectively, the "Alameda /Harbor Bay Ferry Service Agreement for the continued operation of the Alameda /Harbor Bay Ferry Service until June 30, 2011. City shall assign City's rights and obligations under the Alameda /Harbor Bay Ferry Service Agreement to WETA, subject to the consent of the Operator. Section 4.6 Cooperation City and WETA, all at WETA's expense, shall cooperate with each other in the renewals and renegotiations referenced herein, including giving of any other required third party notices, and use diligent good faith efforts to obtain required Authorizations, third party consents, estoppel certificates, make any filings, and take other steps reasonably necessary to consummate the Transaction; provided, however, that City's failure to so cooperate shall constitute neither a breach nor a default by City under this Agreement. ARTICLE 5 Representations, Warranties and Covenants Section 5.1 Representations and Warranties of City As of the Effective Date, City represents and warrants the following, each of which shall be ratified as of Closing: (a) City is a duly organized and validly existing California charter city. City has the legal power and full authority to enter into, be bound by, and comply with the terms of this Agreement to which it is a Party, and has obtained all necessary authorizations, consents and approvals required for the execution, delivery and performance of this Agreement and the consummation of the Transaction. (b) To its Knowledge, the execution and delivery of this Agreement, the consummation of the Transaction, and the performance of or compliance with the terms, conditions and covenants of this Agreement will not violate or conflict with or result in the breach of any of the terms, conditions or provisions of any agreement, judicial order or instrument to which City is a party or by which City or any of City's assets are bound. (c) To its Knowledge, the interests to be transferred to WETA or granted pursuant to the terms of this Agreement constitute sufficient interests for WETA to operate the OAK #4834 -5097 -9335 v12 17 Services in substantially the same manner as they are being operated by City as of the Effective Date. (d) To its Knowledge, the Vessels to be transferred to WETA are free and clear of Encumbrances other than the Permitted Encumbrances specified in Schedule 10. (e) To its Knowledge, there are no pending or anticipated condemnation proceedings with respect to the Ferry Terminals. (f) To its Knowledge, the Transaction will not result in the material breach of any of the Assigned Contracts by City. (g) City has not sold or encumbered the Acquired Assets (h) To its Knowledge, all Books and Records delivered by City to WETA are true and accurate as of the date of such statements. (i) To its Knowledge, City has not received any notice that the Ferry Terminals are in violation of any applicable Laws, except for those matters specified in Schedule 11. (j) To its Knowledge, all required Authorizations for operation of the Services have been obtained and are effective and in good standing and will be included in the Assigned Contracts, except for any matters identified in Schedule 12. (k) Except as otherwise disclosed by City in Schedule 13, no notice from any Governmental Authority has been received by City indicating that the Services currently fail to comply with one or more applicable Laws. (1) To its Knowledge, except as otherwise disclosed by City in Schedule 14, there are no pending or threatened Legal Proceedings against City directly related to the Services or to the Transaction, nor are there any Assumed Liabilities, which would result in a Material Adverse Change or affect City's ability to validly close the Transaction, or WETA's ability to operate the Services at the Service Levels contemplated by this Agreement. (m) To its Knowledge, all schedules and exhibits to this Agreement are true, accurate and complete. (n) To its Knowledge, except as listed in Schedule 15, there are no Defaults existing under the Assigned Contracts. (o) To its Knowledge, the Assigned Contracts represent all material agreements necessary for WETA to operate the Services in substantially the same manner as they are being operated by City as of the Effective Date. (p) To its Knowledge, there are no pending or threatened claims of any third party against City with respect to City's ownership or operation of the Ferry Terminals, the Acquired Assets or the Services, nor are there in existence any facts or circumstances in OAK #4834 -5097 -9335 v12 18 existence with respect to City's ownership or operation of the Ferry Terminals or the Services that may give rise to a third party claim against City with respect thereto. The representations and warranties set forth in this Section 5.1 shall survive for a period of three (3) years following the Closing Date. As referenced above, "Knowledge of City" means the Knowledge of Ernest Sanchez, who is most knowledgeable about the matters specified in this Section 5.1 and who is City's designated representative for purposes of these representations and warranties. Section 5.2 Representations and Warranties of Authority. As of the Effective Date, Authority, to represents and warrants the following, each of which shall be ratified as of Closing: (a) Authority is a duly organized and validly existing California joint powers authority. Authority has the legal power and full authority to enter into, be bound by, and comply with the terms of this Agreement to which it is a Party, and has obtained all necessary authorizations, consents and approvals required for the execution, delivery and performance of this Agreement and the consummation of the transaction contemplated herein. (b) To its Knowledge, the execution and delivery of this Agreement, the consummation of the Transaction, and the performance of or compliance with the terms, conditions and covenants of this Agreement will not violate or conflict with or result in the breach of any of the terms, conditions or provisions of any agreement, judicial order or instrument to which Authority is a party or by which Authority or any of Authority's assets are bound. (c) To its Knowledge, there are no pending or anticipated condemnation proceedings with respect to the City Lot or the Authority Lot. (d) To its Knowledge, the Transaction will not result in the material breach of any of the Assigned Contracts by Authority. (e) To its Knowledge, Authority has not received any notice that the Main Street Ferry Terminal is in violation of any applicable Laws, except for those matters specified in Schedule 1 1 (f) To its Knowledge, except as otherwise disclosed by Authority in Schedule 13 to this Agreement, no notice from any Governmental Authority has been received by Authority indicating that the use of Authority assets in connection with the Services currently fails to comply with one or more applicable Laws. (g) To its Knowledge, except as otherwise disclosed by Authority in Schedule 14 to this Agreement, there are no pending or threatened Legal Proceedings against Authority directly related to the Services or the Transaction, which would result in a Material Adverse Change or affect Authority's ability to validly close the Transaction, or WETA's ability to operate the Services at the Service Levels contemplated by this Agreement. (h) To its Knowledge, all schedules and exhibits to this Agreement that pertain to Authority are true, accurate and complete. OAK #4834 -5097 -9335 v12 19 (i) To its Knowledge, except as listed in Schedule 15 to this Agreement, there are no Defaults existing under any of the Assigned Contracts to which Authority is a Party. 0) To its Knowledge, there are no pending or threatened claims of any third party against Authority with respect to Authority's lease or operation of Authority Lot or the YC Barge, nor are there in existence any facts or circumstances in existence with respect to Authority's lease or operation of the Authority Lot or the YC Barge that may give rise to a third party claim against City with respect thereto. The representations and warranties set forth in this Section 5.2 shall survive for a period of three (3) years following the Closing Date. As referenced above, "Knowledge of Authority" means the Knowledge of Nanette Mocanu Banks, who is most knowledgeable about the matters specified in this Section 5.2, and who is Authority's designated representative for purposes of these representations and warranties. Section 5.3 Representations and Warranties of WETA. As of the Effective Date, WETA hereby represents and warrants the following, each of which shall be ratified as of Closing: (a) WETA is a duly organized and validly existing California transportation authority. WETA has legal power and full authority to enter into, be bound by, and comply with the terms of this Agreement to which it is a Party, and has obtained all necessary Authorizations required for the execution, delivery and performance of this Agreement and the consummation of the Transaction. (b) To its Knowledge, the execution and delivery of this Agreement, the consummation of the Transaction, and the performance of or compliance with the terms, conditions and covenants of this Agreement will not violate or conflict with or result in the breach of any of the terms, conditions or provisions of any agreement, judicial order or instrument to which WETA is a party or by which WETA or any of WETA's assets are bound. (c) All consents of any entity related to or affiliated with WETA that are necessary to consummate the Transition and the Transaction have been obtained. (d) To its Knowledge, there are no pending or threatened Legal Proceedings that would affect WETA's ability to validly close the Transaction or consummate the Transition. (e) To its Knowledge, no licenses from, payments to or consents of any other person are required in connection with the Transition or Transaction, except as are listed in Schedule 9_ (f) To its Knowledge, all required Authorizations for operation of the Services have been obtained and are effective and in good standing and will be included in the Assigned Contracts, except for any matters identified in Schedule 12. (g) To its Knowledge, except as otherwise disclosed in Schedule 13 to this Agreement, no notice from any Governmental Authority has been received by or is known to WETA indicating that the Services currently fail to comply with one or more applicable Laws. OAK #4834 -5097 -9335 v12 20 (h) To its Knowledge, all schedules and exhibits to this Agreement are true, accurate and complete. (i) Subject to the terms of this Agreement, WETA shall use its best efforts to continue to operate the Services in substantially the same manner as they are being operated by City as of the Effective Date. 0) WETA's representations and warranties above shall survive for three (3) years following the Closing Date. The phrase "to the Knowledge of WETA" means the Knowledge, as of the Effective Date, of Nina Rannells, WETA Executive Director, who is most knowledgeable about the matters specified in this Section 5.3 and WETA's designated representative for purposes of the above representations and warranties. Section 5.4 Changes in Representations and Warranties The Parties shall give each other prompt notice of any occurrence making a representation or warranty untrue, inaccurate or incomplete. If the Party receiving notice determines in its reasonable discretion that the untruthfulness, inaccuracy or incompleteness of such representation or warranty will have a Material Adverse Effect on the Services or the Transaction, then the Parties shall meet and confer to determine any steps to be taken to address such Material Adverse Effect, which may include termination of this Agreement by the Party for whose benefit such representation or warranty has been made. Section 5.5 Covenants of City City covenants that it shall take each of the following actions: (a) From the Effective Date to the Closing Date, and subject to funding availability, City agrees to operate each Service in substantially the same manner (but subject, however, to reasonably prudent transit industry standards) as the relevant Service has been operating during fiscal year 2010/11. The operation of each Service shall include maintenance of facilities, advertising and provision of regular and excursion ferry service. (b) From the Effective Date to the Closing Date, City agrees to perform all of City's material obligations under the Assigned Contracts to which City is a Party. (c) From the Effective Date to the Closing Date, City agrees that it shall not sell or encumber or authorize any liens being filed against the Acquired Assets in which it has an interest. (d) From the Effective Date to the Closing Date, City shall allow WETA, at WETA's expense, to observe supervision and oversight of Assigned Contracts so that seamless transition of responsibility may occur as of Closing. WETA's activities shall not unreasonably impact Service operations. (e) From the Effective Date and continuing to and after Closing, City shall provide WETA with reasonable access to the Books and Records, at WETA's expense and as City staffing allows. OAK #4834 -5097 -9335 v12 21 Section 5.6 Covenants of Authority Authority covenants that it shall take each of the following actions: (a) From the Effective Date to the Closing Date, Authority agrees to perform all of Authority's material obligations under the Assigned Contracts to which Authority a Party. (b) From the Effective Date to the Closing Date, Authority agrees that it shall not encumber or authorize any liens being filed against the Acquired Assets in which it has an interest. ARTICLE 6 Conditions Precedent to Closing Section 6.1 Conditions Precedent The following are Conditions Precedent to Closing and consummation of the Transaction. Each or any one or more of which may be waived in writing by the Party for whose benefit such Condition Precedent exists. (a) Within Inspection Period, WETA shall have inspected and reasonably approved of the condition of the Acquired Assets to be transferred to WETA, and all such assets are in their condition as when inspected and approved by WETA and in compliance with all Authorizations and Laws. (b) All Authorizations necessary to WETA's legal operation of the Services are validly issued and effective as of the Closing Date. (c) All required insurance is issued and effective. (d) WETA, City, and Authority have all taken the necessary Board actions to approve the Transaction. (e) No Material Adverse Change in operation of a Service has occurred between the Effective Date and the Closing Date. (f) There are no Encumbrances against the Vessels, the Waterside Assets, or the Spare Parts and Equipment, other than the Permitted Encumbrances existing as of the Closing Date. (g) For the benefit of WETA, there are no Defaults by City or Authority. (h) For the benefit of City and Authority, there are no Defaults by WETA. (i) There are no Legal Proceedings challenging the Agreement, the Transition, the Transaction, or any other matter affecting the operation or proposed transfer of the Services. (j) There are no material inaccuracies in the representations or warranties of the Parties hereunder. OAK #4834 -5097 -9335 v12 22 (k) All documents required for consummation of Closing shall have been delivered to Escrow Holder. (1) The Parties shall have performed all obligations necessary for consummation of Closing. City. (m) Any funds required shall have been deposited into Escrow by WETA and (n) WETA shall have received United States Coast Guard approval of WETA's facilities security plan for providing MARSEC required security to the Ferry Terminals. (o) All required consents to assignment of the Assigned Contracts and Assigned Contract Rights shall have been obtained from all necessary third parties, and City shall have validly assigned all Assigned Contracts to WETA as of the Closing Date, and such Assigned Contracts, as assigned to WETA, shall be in full force and effect. (p) WETA and City shall have delivered the duly executed Assignment and Assumption Agreement to Escrow. (q) City and Authority (as applicable) shall have deposited duly executed Bill(s) of Sale and the YC Barge Bill of Sale, into escrow. (r) WETA shall have deposited the YC Barge Price into escrow. in place. (s) All insurance policies and coverages required by this Agreement shall be (t) The Supplemental Insurance policy shall be in place. (u) City shall have provided WETA with a fully executed copy of the Fifth Amendment to Ferry Service Agreement. (v) City and WETA shall have entered into that certain Assignment and Assumption Agreement between City as "Assignor" and WETA as "Assignee," substantially in the form attached hereto as Exhibit U "Caltrans Grant Assignment Agreement with respect to all of Assignor's right, title and interest in and to the Leases, Licenses and Other Agreements and all amendments thereto, that are described on Exhibit 1 attached to the Caltrans Grant Assignment Agreement, together with all security deposits and other deposits held by Assignor under the terms of said Leases, Licenses and Other Agreements, and Caltrans shall have delivered to Escrow Holder Caltrans' written consent to such Caltrans Grant Assignment Agreement. OAK #4834 -5097 -9335 v12 23 ARTICLE 7 Closing The exchange of money and documents described in this ARTICLE 7 shall be deemed to have occurred when each of the concurrent conditions set forth in Section 7.1 and Section 7.2 have been either satisfied or waived. Closing shall be conducted through the Escrow held by Escrow Holder on January 4, 2011 or on such other date as City and WETA mutually agree "Closing Date but not later than February 15, 2011 "Outside Closing Date At or prior to Closing, each of City and Authority shall perform the obligations set forth in, respectively, Section 5.5 and Section 5.6, the performance of which obligations shall be concurrent conditions. In the event Closing does not take place on or before the Outside Closing Date, this Agreement may be terminated at the option of either Party hereto and all documents and monies placed in escrow shall be returned to the Party that deposited them. Section 7.1 WETA's Obligations at Closing. At Closing, WETA shall deliver or cause to be delivered to City and Authority (as applicable) through the Escrow the following: (a) Authorization. Such authorizing documents of WETA as shall be reasonably required by the Escrow Company or City and Authority to evidence WETA's authority to execute this Agreement and any documents to be executed by WETA at Closing, and to consummate the Transaction. (b) Assignment and Assumption Agreement. Four (4) original duly executed and acknowledged counterparts of the Assignment and Assumption Agreement substantially in the form attached to this Agreement as Exhibit G. (c) Estimated Settlement Statement. Four (4) original, duly executed counterparts of an estimated settlement statement in form and content reasonably satisfactory to each of City, Authority, and WETA. (d) Evidence of Insurance. Evidence acceptable to City and Authority that upon Closing, all insurance that WETA and /or its operator is required to maintain pursuant to this Agreement will be in place and effective as required herein. (e) Certificate Regarding Truth of Representations and Warranties. WETA's duly executed Certificate Regarding Truth of Representations and Warranties certifying that all representations and warranties of WETA made in this Agreement remain true, accurate and complete as of the Closing Date, substantially in the form of the Certificate Regarding Truth of Representations (WETA) attached as Exhibit I. (f) Form CG -1258. Original, duly executed Application for Initial Issue, Exchange, or Replacement of Certificate of Documentation; Re- documentation (Form CG -1258) for transfer of the Vessels to WETA, substantially in the form attached as Exhibit A. (g) YC Barge Price and Bill of Sale. The YC Barge Price together with two (2) original, duly executed counterparts of the YC Barge Bill of Sale for transfer of the YC Barge from Authority to WETA. OAK #4834 -5097 -9335 v12 24 (h) Closing Costs. WETA shall deposit all Closing Costs into Escrow. (i) Other Documents. Such additional documents, resolutions, consents and affidavits reasonably necessary or advisable to effect Closing; provided, however, that such other documents shall not be inconsistent with the terms and provisions of this Agreement. Section 7.2 City's and Authority's Obligations at Closing. At Closing, City (and, where specifically identified, Authority) shall deliver or cause to be delivered the following to WETA through Escrow: (a) Evidence of Authority. Such organizational and authorizing documents of City and Authority as shall be reasonably required by the Escrow Company or WETA evidencing City's and Authority's authority to execute this Agreement and any documents to be executed by City and Authority at Closing, and to consummate the Transaction. (b) Assignment and Assumption Agreement. Four (4) original duly executed and acknowledged counterparts of the Assignment and Assumption Agreement substantially in the form attached as Exhibit G. (c) Estimated Settlement Statement. Four (4) original, duly executed counterparts of an estimated settlement statement in form and content reasonably satisfactory to City, Authority, and WETA. (d) Evidence of Insurance. Evidence acceptable to WETA that upon Closing, if any, all insurance that either City or Authority is required to maintain pursuant to this Agreement will be in place and effective as required herein. (e) Certificate Regarding Truth of Representations and Warranties. City's and Authority's duly executed Certificates Regarding Truth of Representations certifying that all representations and warranties of City and Authority made in this Agreement remain true, accurate and complete as of the Closing Date, substantially in the form of the Certificate Regarding Truth of Representations (City /Authority) attached as Exhibit J (f) Transaction Cash. All Transaction Cash is to be transferred to WETA upon Closing, together with a certificate of City attesting that such funds constitute the entire balance thereof, substantially in the form of the Certificate of Ferry Service Account Balances attached as Exhibit A. (g) US CG -1340. An original, duly executed Bill of Sale in United States Coast Guard Form CG -1340, evidencing the transfer of City's interest in each of the Vessels to WETA. (h) Bill of Sale. Duly executed original Bill(s) of Sale evidencing the transfer of City's interest in the Waterside Assets (except the YC Barge), the Spare Parts and Equipment, and any other Acquired Assets for which a Bill of Sale is appropriate to evidence transfer of City's interest to WETA. OAK #4834 -5097 -9335 v12 25 (i) YC Barge Bill of Sale. Authority shall delivery two (2) original, duly executed counterparts of the YC Barge Bill of Sale for transfer of the YC Barge from Authority to WETA. (j) Consents to Assignment. Original, duly executed Consents to Assignment as required for the Assigned Contracts and Assigned Contract Rights as listed in Schedule 1. (k) Escrow Company Documents. Any and all affidavits, undertakings, certificates or other documents required to be delivered by City or, subject to the reasonable approval of City and its counsel, otherwise customarily required by the Escrow Company in order to close Escrow. (1) Estoppel Certificates. Original estoppel certificates, duly executed by the counter parties to the Assigned Contracts, substantially in the form attached as Exhibit L. (m) Other Documents. Such additional documents, resolutions, consents and affidavits reasonably necessary or advisable to effect the valid consummation of Closing; provided, however, that such other documents shall not be inconsistent with the terms and provisions of this Agreement. Section 7.3 Obligations of Escrow Holder. At Closing, Escrow Holder, which shall be subject to a separate escrow agreement in substantially the form of Exhibit W hereto, shall: (a) Deliver Funds to WETA. Deliver the Transaction Cash to a bank account designated by WETA in writing to Escrow Holder prior to Closing. (b) Deliver YC Barge Price to Authority_. Deliver the YC Barge Price to a bank account designated by Authority in writing to Escrow Holder prior to Closing. (c) Deliver Documents to City and WETA. Deliver to City and WETA two (2) fully executed counterparts of the Assignment and Assumption Agreement and any other documents consistent with the respective escrow instructions delivered by City or WETA. (d) Deliver Documents to Authority. Deliver to Authority one (1) fully executed counterpart of the YC Barge Bill of Sale and any other documents consistent with the escrow instructions delivered by Authority. (e) Filings. File the documents provided for in Section 7. and Section 7.2(x) with the United States Coast Guard in accordance with instructions from WETA. (f) Settlement Statement. Deliver to City and WETA (i) an estimated settlement statement prepared by Escrow Holder and approved by City and WETA not less than two (2)business days prior to Closing and (ii) a final settlement statement within one (1) business day after the later of Closing or when the documents specified in Section 7.1(fl and Section 7.2(x) are filed with the United States Coast Guard. OAK #4834 -5097 -9335 v12 26 Section 7.4 Possession and Deliveries (a) Authority shall deliver to WETA possession of the YC Barge at Closing, subject to the terms and conditions of Section 2.3 Section 2.5 and the YC Barge Bill of Sale. (b) City shall deliver exclusive possession of the Acquired Assets to WETA at Closing, subject only to the Permitted Encumbrances and rights of counter parties to the Assigned Contracts together with all keys and passcards for the Vessels or other Acquired Assets in the possession of City. (c) City shall deliver the following items to WETA outside Escrow within ten (10) business days after the Closing Date: (a) originals of the Assigned Contracts to the extent in City's possession, or copies of any Assigned Contracts not in City's possession together with an affidavit from City as to such copies being true and complete copies of the Assigned Contract(s), (b) copies of the correspondence Books and Records pertaining to the Assigned Contracts, (c) originals of any other items which City was required to furnish WETA copies of or make available pursuant to this Agreement, including the Books and Records and (d) notices to the counter parties under the Assigned Contracts, advising them of the Transition and directing them to direct future correspondence to WETA at the place designated by WETA. ARTICLE 8 Default and Remedies Section 8.1 Breach b Cit or Authority. (a) Pre Closing. City or Authority (as applicable) shall be deemed to be in default under this Agreement if it fails to perform under this Agreement, to meet, comply with, or perform any covenant, agreement, or obligation required on its part in the manner required in this Agreement prior to Closing and /or fails to consummate the Transaction; provided, however, that neither City nor Authority shall be in default under this Agreement to the extent the applicable failure was caused by the failure of a condition precedent to City's or Authority's obligation, caused by WETA, or caused by a Force Maj eure Event. In the event of such a default, WETA, shall notify the defaulting Party in writing. If the defaulting Party fails to cure its default within ten (10) business days after notice from WETA of the nature of such default, or to commence to cure any noticed default that is incapable of being cured within such ten (10) business day period and thereafter diligently prosecute the cure to completion, then as WETA's sole and exclusive remedy, WETA may either: (i) terminate this Agreement as to the defaulting Party or both City and Authority, in WETA's discretion; or hereunder. (ii) seek specific performance of defaulting Party's obligations (b) Post Closing. After Closing, in the event of any breach of City's or Authority's (as applicable) covenants, representations or warranties hereunder or under any other agreement, document, certificate or instrument delivered by City or Authority (as applicable) to OAK #4834 -5097 -9335 v12 27 WETA and which survives Closing, WETA shall notify the defaulting Party in writing. Except to the extent the defaulting party's breach was caused by WETA, or caused by a Force Majeure Event, if the defaulting Party fails to cure such a default within ten (10) business days after notice from WETA of the nature of such default, or to commence to cure any noticed default that is incapable of being cured within such ten (10) business day period and thereafter diligently prosecute the cure to completion, then as WETA's sole and exclusive remedy (except for any right of WETA to indemnification or defense provided in this Agreement, or the provisions of this Agreement providing for payment of attorneys' fees in the event of a dispute), WETA may seek the recovery of direct actual damages incurred by WETA solely as a result of such default; provided, however, that to the extent that the default is curable, prior to WETA's exercise of any right or remedy as a result of such default, WETA will first deliver written notice to the defaulting Party and give the defaulting Party ten (10) additional business days thereafter in which to cure said default, if the defaulting Party so elects. (c) Limit on Damages Notwithstanding anything to the contrary contained in this Agreement, neither City nor Authority shall have any liability to WETA for business interruption, punitive, speculative, or consequential damages. Section 8.2 Breach by WETA (a) Pre Closing. (i) WETA shall be deemed to be in default under this Agreement if WETA fails to meet, comply with, or perform any covenant, agreement, or obligation required on its part in the manner required in this Agreement prior to Closing and /or fails to consummate the Transaction; provided, however, that WETA shall not be in default under this Agreement to the extent the applicable failure was caused by the failure of a condition precedent to WETA's obligation, caused by City or Authority, or caused by a Force Maj eure Event. In the event of such a default (and except as to any default which relates to payment of the YC Barge Price), City or Authority (as applicable) shall notify WETA in writing. If WETA fails to cure such default within ten (10) business days after such notice of the nature of the default, or to commence to cure any noticed default incapable of cure within such ten (10) business day period and thereafter diligently prosecute such cure to completion, as City's or Authority's (as applicable) sole and exclusive remedy (except for any right to indemnification or defense provided in this Agreement, or the provisions of this Agreement providing for payment of attorneys' fees in the event of a dispute), City or Authority (as applicable) may terminate this Agreement, and receive reimbursement from WETA of City's or Authority's (as applicable) actual costs incurred in connection with this Agreement, the Transfer, and the Transition, to the extent not already reimbursed by WETA pursuant to the Reimbursement Agreement. (ii) If WETA's default relates to payment of the YC Barge Price and WETA fails to cure such default within ten (10) business days after notice from Authority, then as Authority's sole and exclusive remedy (except for any right of Authority to indemnification or defense provided in this Agreement, or the provisions of this Agreement providing for payment of attorneys' fees in the event of a dispute), Authority may terminate this Agreement as to any Authority obligations hereunder (including transfer of the YC Barge), and receive reimbursement OAK #4834 -5097 -9335 v12 28 from WETA of Authority's actual third -party costs incurred in connection with this Agreement, the Transfer, and the Transition. (b) Post Closing After Closing, in the event of any breach of WETA's covenants, representations or warranties hereunder which survive closing, or under any of the Assigned Contracts or Assumed Liabilities, City or Authority (as applicable) shall notify WETA in writing. Except to the extent WETA's breach was caused by City or Authority, or caused by a Force Maj eure Event, if WETA fails to cure such default within ten (10) business days after notice, or to commence to cure any default incapable of cure within such ten (10) business day period and thereafter diligently prosecute such cure to completion, as City's or Authority's sole and exclusive remedies (except for any right of City to indemnification or defense provided in this Agreement, or the provisions of this Agreement providing for payment of attorneys' fees in the event of a dispute) City and /or Authority (as applicable) may seek the recovery of direct actual damages incurred by City or Authority (as applicable) solely as a result of WETA's post closing default. (c) Limit on Damages. Notwithstanding anything to the contrary contained in this Agreement, WETA shall have no liability to City or Authority for business interruption, punitive, speculative, or consequential damages. ARTICLE 9 Insurance and Indemnification Section 9.1 WETA Insurance. (a) Coverages. WETA, and /or the operator of the Service at the direction of WETA, shall procure and maintain in full force and effect the following insurance coverage during the Term: (i) Workers' compensation insurance in the full statutory limits as required by (i) the State of California, and (ii) the laws of the United States (including, to full statutory limits, the Longshoremen and Harbor Workers Act "USL &H as applicable. (ii) Employers' Liability insurance in an amount not less than One Million Dollars ($1,000,000) per occurrence. (iii) Commercial general liability insurance in an amount not less than Two Million Dollars ($2,000,000) per occurrence, covering all legal liability for personal injury, bodily injury, death or property damage which may arise out of (1) operation of the Services, and /or (2) operation of the Landside Assets, including the Ferry Terminals, the City Lot, Authority Lot, and the Harbor Bay Parking Lot. Coverage shall be extended to include coverage for Terminal Operations, Action Over Indemnities, Contractual Liability and Blanket Additional Insureds and any watercraft exclusion deleted. General liability insurance shall also include a no host alcohol endorsement. (iv) Protection and Indemnity insurance pursuant to Form SP -23 (Revised 1/56) or equivalent, including, without limitation, Jones Act Insurance, with a OAK #4834 -5097 -9335 v12 29 minimum of One Million Dollars ($1,000,000) per occurrence. Insurance to include, or be provided under a separate policy, War Terrorism coverage in accordance with American Hull Insurance Syndicate War Risk Protection Indemnity Clauses. (v) Pollution and environmental liability insurance, including coverage for damages, cleanup and restoration costs, with an amount not less than One Million Dollars ($1,000,000) per occurrence. (vi) With respect to the Vessels and any other vessels to be owned or operated by WETA, insurance covering navigating hull and machinery, subject to the terms and conditions of the American Institute Hull Clauses policy (6/2/1977) and the American Institute Liner Negligence Clause (6/2/1977) or equivalent, in an amount equal to such vessels' agreed value. Insurance to include, or be provided under a separate policy, War Terrorism coverage in accordance with American Institute Hull War and Strikes Clauses, including damage by acts of vandalism, sabotage or malicious mischief. (vii) Automobile liability (bodily injury and property damage) in an amount not less than One Million Dollars ($1,000,000) combined single limit extending to owned, non owned, and hired vehicles. (viii) Bumbershoot liability in the amount of Nine Million Dollars ($9,000,000) each occurrence in excess of the primary limits specified in Section 9.1(a)(ii), iv Lv) and vii above covering all legal liability for personal injury, bodily injury or death to passengers and crew; property damage; and pollution and environmental liability, which may arise out of the Services. (b) General Requirements. (i) All insurance provided pursuant to this Agreement shall be effected under valid enforceable policies issued by insurers of recognized responsibility having a rating of at least A -VII in the most current edition of Best's Insurance Reports. (ii) All insurance policies, except workers' compensation, required by this Agreement shall be endorsed or otherwise provide the following: (A) Name City, the Port of Oakland, the Navy, Authority, the City and County of San Francisco, the Port of San Francisco, and the MTC, and their respective councils, boards, commissions, department, officers, employees, agents and volunteers as additional insureds to be covered as insured as respects liability arising out of the Services. The coverage shall contain no special limitations on the scope of protection afforded to City, the Port of Oakland, the Navy, Authority, City and County of San Francisco, the Port of San Francisco, and the MTC, and their councils, boards, commissions, department, officers, employees, agents and volunteers. Any owner limitations applicable to the Protection and Indemnity insurance shall be deleted. An additional insured named herein shall not be held liable for any premium, deductible portion of any loss, or expense of any nature on the policies required hereunder or any extension thereof. Any other insurance, self insurance, or joint self insurance held by an additional insured shall not be required to contribute anything toward any loss or expense OAK #4834 -5097 -9335 v12 30 covered by the insurance required hereunder and shall be considered excess as to the additional insured. (B) All policies shall be endorsed to provide thirty (30) calendar days' advance written notice to City's Risk Manager of cancellation, except in the cast of cancellation for nonpayment of premium, in which case cancellation shall not take effect until ten (10) business days prior written notice has been given. WETA covenants and agrees to give City reasonable notice in the event that it learns or has any reason to believe that any such policy may be canceled or that the coverage of any such policy may be reduced. WETA shall provide thirty (30) calendar day prior notice to City of any material change to the policy terms and conditions. (iii) All insurance coverage shall be primary insurance to any other insurance available to the additional insureds (including self insurance or joint self insurance), with respect to any claims arising out of operation of the Services and /or the Landside Assets, including the Ferry Terminals, the City Lot, the Authority Lot, and the Harbor Bay Parking Lot, and that insurance applies separately to each insured against whom claim is made or suit is brought. All policies shall include provisions denying such respective insurer the right of subrogation and recovery against City, the Port of Oakland, the Navy, Authority, City and County of San Francisco, the Port of San Francisco and the MTC. Such policies shall also provide for severability of interests and that an act or omission of one of the named insureds which would void or otherwise reduce coverage shall not reduce or void the coverage as to any insured, and shall afford coverage for all claims based on acts, omissions, injury or damage which occurred or arose (or the onset of which occurred or arose) in whole or in part during the policy period. (iv) Any deductibles or self- insured retentions shall be declared and approved by City's Risk Manager. (v) All insurance coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (vi) The amounts of required insurance may be increased from time to time by City upon one hundred twenty (120) calendar days' written notice to WETA, provided however such increases shall not be required more than once every five (5) years, and the required increased policy amount shall in all instances be commercially reasonable and consistent with prudent transit industry insurance practices. (vii) The Parties agree to consider reasonable adjustments in the amounts of required insurance may be reviewed if and to the extent a material change in use occurs at Main Street Ferry Terminal or Harbor Bay Ferry Terminal, as applicable. WETA or the City may upon written notice request a review of the required policy amounts pursuant to the foregoing. In all instances insurance is to be commercially reasonable and consistent with prudent transit industry insurance practices and taking into account the nature of the actual use. OAK #4834 -5097 -9335 v12 31 (c) Certificates On or before the commencement of the Term, WETA shall deliver to City certificates of insurance in form reasonably satisfactory to City's Risk Manager, evidencing the coverages required hereunder "Evidence of Insurance and WETA shall provide City with Evidence of Insurance thereafter before the expiration dates of expiring policies. Such certificates shall also contain substantially the following statement: "Should any of the above insurance covered by this Certificate be canceled or coverage reduced before the expiration date thereof, the insurer afforded coverage shall provide thirty (30) days' advance notice to the City of Alameda by certified mail, Attention: Risk Manager." (d) Endorsements. In addition to the insurance certificates required under Section 9.1(c) above, to the extent one or more of the above required policies of insurance will be provided by WETA's operator(s), WETA shall ensure that its operator(s), and each insurer providing coverage on behalf of such operator(s), provides a policy endorsement in favor of City and ARRA in form reasonably satisfactory to City's Risk Manager, containing substantially the following statement: "Insurer confirms, represents, and warrants that the City of Alameda "City and Alameda Reuse and Redevelopment Authority "ARRA are each an additional insured under the policy to which this endorsement is attached, and that the coverage afforded by such policy extends to City and ARRA in accordance with their status as additional insureds. The coverage provided to City and ARRA as additional insureds is on the same terms, clauses and conditions as the first named insured on the policy. City and ARRA's status as additional insureds is not prejudiced in any way by the absence of contract between [insert name applicable operator/first named insured] and City and /or ARRA. Insurer shall advise City and ARRA in writing promptly of any actual or pending lapse of any insurances or coverage's under the policy attached to this endorsement, whether by expiration, termination, failure to renew or otherwise and of any default in payment of any premium and any other act or omission on the part of [insert name applicable operator/first named insured]. In addition, Insurer will provide at least thirty (30) days prior written notice by certified mail to City and ARRA, Attn: Risk Manager, in the event of cancellation for non payment of premium or any reduction in coverage." (e) Failure to Secure. If WETA at any time during the Term hereof should fail to secure or maintain or fail to cause to be maintained the foregoing insurance, City shall be permitted to obtain such insurance in WETA's name or as an agent of WETA; provided, however, City shall notify WETA in writing of the inadequacy of WETA's insurance and WETA shall have a thirty (30) calendar day cure period to allow WETA adequate time to secure such OAK #4834 -5097 -9335 v12 32 insurance. If WETA fails to secure such insurance after the expiration of the cure period, City shall be compensated by WETA for the costs of the insurance premiums, plus interest at the maximum rate permitted by law computed from the date such premiums have been paid. WETA shall indemnify and hold harmless City and Authority from any Claims arising from the failure to maintain any of the insurance policies required above. Section 9.2 City Insurance (a) For the duration of the Term, City shall maintain all -risk (excluding flood and earthquake) insurance or an insurance equivalent (such as that offered through and by a joint powers authority, pooled funds or similar collective) insuring the buildings and improvements on the Landside Assets similar to that carried by City on its other properties. In the event of an insured loss or casualty of City -owned buildings or improvements at the Landside Assets, City shall use available insurance or insurance equivalent proceeds to make the necessary repairs to such City -owned buildings or improvements. WETA shall be obligated to reimburse City as part of the Triple Net Costs for the cost of any deductibles or self insured retentions under such City property casualty insurance policies or insurance equivalents, not to exceed Twenty Five Thousand Dollars ($25,000) in the aggregate for any such loss or casualty, or such other increased amounts as agreed to by City and WETA from time to time during the Term. (b) City shall obtain commercial general liability insurance coverage insuring City and Authority for claims up to $500,000 to the extent related to or arising out of the Services, Landside Assets or Waterside Assets, which claims may have accrued pre Closing but have not been reported against City or Authority as of the Closing "Supplemental Insurance The premium for such Supplemental Insurance shall be deducted from pre Closing ferry service account balances; City estimates such premium will be approximately Twenty -Five Thousand Dollars ($25,000). Section 9.3 Risk Allocation (a) Pre Closing Condemnation. If, after the Effective Date but prior to Closing, an action is initiated to take any of the Landside Assets by eminent domain proceedings or by deed in lieu thereof, City shall promptly upon learning thereof give WETA written notice of any such action together with all relevant information concerning such proceedings, and if WETA determines that such taking is reasonably likely to have a Material Adverse Effect on a Service, WETA may elect (either at or prior to Closing by delivering written notice to City and Escrow Holder) to terminate this Agreement in its entirety (and not as to the affected Service only). (b) Pre Closing Casualty. City shall promptly notify WETA in writing upon learning of a casualty prior to Closing to any of the Acquired Assets, or to the Landside Assets that would have a Material Adverse Effect on operation of any of the Services. If the Acquired Assets, or any part thereof, suffers any unfunded damage in excess of Twenty Five Thousand Dollars ($25,000) prior to Closing from fire or other casualty which City, at its sole option, does not elect to repair, or the Landside Assets incur any damage that City does not elect to repair that would have a Material Adverse Effect on operation of the Services, WETA may either at or prior to Closing by delivering written notice to City and Escrow Holder within ten (10) business days OAK #4834 -5097 -9335 v12 33 after WETA has received written notice from City (i) terminate this Agreement in its entirety (and not as to the affected Service only), or (ii) consummate Closing, in which latter event all of City's right, title and interest in and to the proceeds of any insurance covering such damage (less an amount equal to any expenses and costs incurred by City to collect or adjust such insurance and to repair or restore the damaged property and any portion of such proceeds paid or to be paid on account of the loss of income from the affected Service for the period prior to and including Closing Date, all of which shall be payable to City), shall be assigned to WETA at Closing. If the Acquired Assets, or any part thereof, suffers any damage equal to or less than Twenty Five Thousand Dollars ($25,000) prior to Closing, WETA agrees that it will consummate the Transaction and accept the assignment of the proceeds of any insurance covering such damage. (c) Catastrophic Loss In the event of unfunded catastrophic damage to the Landside Assets which causes either or both Services to be No Longer Operated, City and WETA shall work cooperatively to seek application of insurance proceeds or other source of funding for the necessary repairs. Such catastrophic damage shall be considered a Force Majeure Event, and WETA shall have no obligation to reimburse City for unfunded costs that City may incur if City elects to repair such damage. If, after taking into account the Change Considerations, and meeting and conferring with City, WETA reasonably determines that an event of unfunded catastrophic damage to the Landside Assets or the shoreline embankment requires WETA to discontinue or relocate the relevant Service to other facilities until necessary repairs are completed, WETA shall provide City with a good faith estimate of the duration of such discontinuance or relocation, and shall make good faith efforts to offer ferry services at Service Levels equivalent to the affected Service. Section 9.4 Crane and Pier Head. (a) City is evaluating the possibility of removing or retrofitting the Crane (defined below). Subject to compliance with applicable Law (including CEQA), City shall prepare necessary environmental documents and seek approval of the Alameda Historic Advisory Board and other responsible party /ies (to the extent any such approval(s) is /are required), to permit the removal or retrofitting of the Crane situated on the pier head located at the Main Street Ferry Terminal as shown on Exhibit S "Crane" and "Pier Head respectively). City shall exercise good faith efforts to obtain such approval prior to the first anniversary of the Effective Date. Subject to compliance with applicable Law (including CEQA), receipt of necessary approvals, and receipt of reasonable cost estimates /bids, City will commit City, Alameda Reuse and Redevelopment Authority, and /or other local funds to pay for such work and enter contracts for removal and /or retrofitting of the Crane. City shall insert language into their contract(s) with any contractor(s) performing such removal or retrofitting requiring that such contractor(s) obtain and maintain a commercial general liability insurance policy in an amount and on terms reasonably acceptable to WETA, naming City, Authority, and WETA as additional insureds thereunder. City shall provide WETA with a copy of a Certificate of Insurance evidencing that WETA is an additional named insured under such policy prior to City authorizing the contractor to commence work on the Crane. City shall further require the contractor to cooperate with WETA in scheduling any work on the Crane so as to minimize interference with the Services. OAK #4834 -5097 -9335 v12 34 (b) Authority agrees that the YC Barge Price shall be held and remain in Escrow until such time as City has entered into a contract for removal or retrofit of the Crane as provided in Section 9. above. If City has not entered in to such a contract by the second anniversary of the Closing Date, then the Parties agree that the YC Barge Price shall be disbursed from Escrow to WETA, and may be used by WETA, solely for purposes of Crane removal or retrofit and /or Pier Head maintenance and repair. Upon City's or Authority's request, and provided that City or Authority is making diligent good faith progress towards removal or retrofitting of the Crane, WETA shall extend the foregoing two (2) year time period by an additional time period which is reasonably necessary to effect such removal or retrofitting. (c) Interruption of WETA's ability to operate the Alameda /Oakland Ferry Service due to failure or collapse of the Crane and /or Pier Head or unreasonable interference by the City's contractor during initial retrofitting and /or removal of the Crane as described in Section 9. shall constitute a Force Maj eure Event. If the cost to repair such collapse or failure is not funded by insurance, WETA and City shall cooperate in seeking to obtain alternative funding required to repair damage caused by such failure or collapse so that the Alameda /Oakland Ferry Service may be resumed as soon as possible. If the Parties are unable to identify and secure reasonably acceptable funding within a reasonable period of time (not to exceed ninety (90) calendar days) and if the failure or collapse of the Crane and /or Pier Head prevents WETA from operating the Alameda /Oakland Ferry Service out of the Main Street Ferry Terminal for a period of ninety (90) calendar days, then City may propose that WETA operate such service out of an alternative location in Alameda provided by City on substantially the same terms as set forth in this Agreement with respect to the Main Street Ferry Terminal, and WETA in good faith shall consider whether such proposed alternative location is reasonably feasible and, if it is, use diligent good faith efforts to relocate the Service to such alternative location proposed by City, or to another reasonably feasible alternative location in Alameda identified by WETA. If WETA determines that no reasonably feasible alternative location exists, WETA shall have the right to suspend the Alameda /Oakland Ferry Service until the earlier of (i) implementation of a feasible alternative location, (ii) availability of the Seaplane Lagoon Ferry Terminal, or (iii) restoration of the ability to operate the Alameda /Oakland Ferry Service out of the Main Street Ferry Terminal. Suspension of the Alameda /Oakland Ferry Service out of the Main Street Ferry Terminal for such reason, or temporary relocation of such service to another location, shall not result in a determination that the Main Street Ferry Terminal is "No Longer Operated." (d) Notwithstanding the foregoing, or anything in this Agreement to the contrary, City, Authority and WETA each disclaims ownership of, dominion and control over, or liability or responsibility for either or both of the Crane or Pier Head. The Parties agree that no insuring of the Crane and /or Pier Head, removal, retrofitting, maintenance, repair, similar activity, or lack thereof related to the Crane and /or Pier Head, or request for, payment of, or non- payment of monies related to the Crane and /or Pier Head (whether by or on behalf of City, Authority or WETA) is intended or shall be construed to demonstrate, create, or admit any City, Authority or WETA ownership of, dominion or control over, or liability or responsibility for either or both of the Crane or Pier Head. Each Party expressly acknowledges and agrees that it shall not use any such acts or omissions by another Party as evidence thereof. OAK #4834 -5097 -9335 v12 35 Section 9.5 WETA Waiver and Release (a) WETA and its officers, directors, agents, contractors, managers, employees, parents, affiliates, partners, members, subsidiaries, successors, assigns, tenants, grantees, attorneys, and licensees (individually and collectively, "WETA Parties hereby fully release and discharge Authority and City and its and their respective officers, officials, employees, volunteers, agents and representatives and each of them (collectively, "Indemnitees from and against any and all Claims arising out of or in any way connected with or otherwise based upon any or all of the following: (i) Obligations of WETA or WETA Parties to comply with all applicable Laws and standards with respect to the Transition, the Transaction, or any of the Services. (ii) Any material default or breach by WETA or any WETA Parties of any provision of this Agreement. (iii) The operation, maintenance or management of any of the Services, including any damages to property or injuries to persons, including accidental death (including attorneys' fees and costs) accruing on or after Closing, except to the extent caused by the fraud, gross negligence or willful misconduct of any Indemnitee or directly related to the Excluded Liabilities. (iv) Assumed Liabilities. (v) Any Release which City proves, by a preponderance of the evidence, was caused by WETA or any WETA Parties as determined by written agreement among the Parties or a court of competent jurisdiction. (b) California Civil Code Section 1542 It is hereby intended that the releases contained in this Section 9.5 relate to Claims that either WETA or any WETA Parties may have, or claim to have, against Indemnitees with respect to the subject matter contained in Section 9.5(a) or the events relating thereto. By releasing and forever discharging such Claims which are related to or which arise under or in connection with the items set out above, WETA on behalf of itself and all WETA Parties expressly waives any rights under California Civil Code section 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. (c) The waiver and release in this Section 9.5 does not extend to any Claims arising out of the Excluded Liabilities. Section 9.6 Indemnification WETA shall defend (with counsel reasonably acceptable to Authority and City, as applicable), indemnify, assume all responsibility for, and hold Indemnitees harmless from and against any and all present and future Claims arising out of or in OAK #4834 -5097 -9335 v12 36 any way connected with or otherwise based upon the matters set forth in Section 9.5 Notwithstanding any other provision of this Agreement, WETA's indemnity obligations contained in this Agreement expressly exclude Claims to the extent caused by City's or Authority's fraud, gross negligence or willful misconduct and Claims to the extent directly related to the Excluded Liabilities, as determined by written agreement among the Parties or a court of competent jurisdiction. In instances where City is shown to have engaged in fraud, gross negligence or willful misconduct, and where such City fraud, gross negligence or willful misconduct accounts for only a percentage of the liability involved, the obligation of WETA as to City will be limited to that portion or percentage of liability not attributable to the fraud, gross negligence or willful misconduct of City. In instances where Authority is shown to have engaged in fraud, gross negligence or willful misconduct, and where such Authority fraud, gross negligence or willful misconduct accounts for only a percentage of the liability involved, the obligation of WETA as to Authority will be limited to that portion or percentage of liability not attributable to the fraud, gross negligence or willful misconduct of Authority. WETA acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of WETA under this Section 9.6 are material elements of the consideration to City and Authority for the performance of their obligations under this Agreement, and that City and Authority would not have entered this Agreement unless such obligations were as provided for herein. Section 9.7 Survival WETA's obligations under this ARTICLE 9 including Section 9.5 and Section 9.6 shall survive expiration or other termination of this Agreement. ARTICLE 10 Escrow Holder Provisions Section 10.1 Escrow Holder Obligations (a) Escrow Holder is not a Party to, and is not bound by, or charged with notice of any agreement out of which the Escrow may arise, other than this ARTICLE 10 in its entirety and Section 7.3 Escrow Holder shall hold all deposits in accordance with the terms and provisions of this Agreement. Escrow Holder shall comply with all reporting requirements of section 6045 of the Internal Revenue Code of 1986 and the regulations promulgated thereunder. Escrow Holder undertakes to perform only such duties as are expressly set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against Escrow Holder. (b) This Agreement constitute joint escrow instructions of the Parties and Escrow Holder is hereby empowered to act thereunder. The parties hereto agree to do all acts reasonably necessary to close Escrow in the shortest possible time. All funds received in Escrow shall be deposited with other escrow funds in an interest bearing account with a state or national bank doing business in the State of California. All disbursements shall be made by check or wire transfer from such account. All interest on the escrow funds shall belong, and be disbursed to, WETA. OAK #4834 -5097 -9335 v12 37 (c) If, in the opinion of any Party, it is necessary or convenient in order to accomplish Closing of the Transaction, such Party may execute supplemental escrow instructions and /or require that the parties sign supplemental joint escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of the Agreement shall control. The Parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. Escrow Holder is instructed to release to each Party escrow closing statements to the respective parties. Section 10.2 Authority of Escrow Holder Escrow Holder is authorized to, and shall: (a) Promptly execute the acknowledgment of this Agreement as provided following the Parties' signature page, and return the acknowledgment to the each Party by email or facsimile and regular mail. (b) Pay and charge WETA for all Costs and Charges. (c) Subject to satisfaction of the Conditions Precedent, implement the Transaction as provided in this Agreement. (d) Do such other actions as necessary to fulfill Escrow Holder's obligations under the Agreement. (e) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099 -5 form, and be responsible for withholding taxes, if any such forms are provided for or required by law. (f) Verify that all documents were properly dated and executed personally, not under power of attorney, by the Party named as the signator as set forth therein, initialed, and where applicable, witnessed and acknowledged, and that all exhibits were appended. (g) Do such other actions as necessary to fulfill Escrow Holder's obligations under the Agreement. Section 10.3 Reliance Escrow Holder may act in reliance upon any writing or instrument or signature which it, in good faith, believes, and any statement or assertion contained in such writing or instrument, and may assume that any person purporting to give any writing, notice, advice or instrument in connection with the provisions of this Agreement has been duly authorized to do so. Escrow Holder shall not be liable in any manner for the sufficiency or correctness as to form, manner and execution, or validity of any instrument deposited in escrow, nor as to the identity, authority, or right of any person executing the same, and Escrow Holder's duties under this Agreement shall be limited to those provided in this Agreement. Section 10.4 Liability of Escrow Holder The Parties acknowledge that Escrow Holder is acting solely as a stakeholder at their request and for their convenience, that Escrow Holder shall not be deemed to be the agent of either of the Parties, and that Escrow Holder shall not be liable to either of the Parties for any action or omission on its part taken or made in good faith, OAK #4834 -5097 -9335 v12 38 and not in disregard of this Agreement, but shall be liable for its negligent acts and for any loss, cost or expense incurred by City, Authority, or WETA resulting from Escrow Holder's mistake of law respecting Escrow Holder's scope or nature of its duties. WETA shall indemnify and hold Escrow Holder harmless from and against all costs, claims and expenses, including reasonable attorneys' fees, incurred in connection with the performance of Escrow Holder's duties hereunder, except with respect to actions or omissions taken or made by Escrow Holder in bad faith, in disregard of this Agreement or involving negligence on the part of Escrow Holder. Section 10.5 Counsel Escrow Holder may consult with counsel of its own choice and have full and complete authorization and protection in accordance with the opinion of such counsel. Escrow Holder shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind, unless caused by its negligence or willful misconduct. Section 10.6 Compliance If Escrow Holder cannot comply with all of the foregoing terms and conditions or receives inconsistent instructions from any Party, Escrow Holder is not authorized to close Escrow and in such event should contact each Party's designated representative or the attorneys identified in Section 13. 1 without delay for further instruction. Each Party reserves the right to withdraw any and all documents and funds submitted herewith or under separate cover at any time prior to the close of Escrow. The delivery of documents and funds into Escrow in no way binds any Party. ARTICLE II Post Closing Obligations of the Parties Section 11.1 Post Closing Obligations Each of the Parties agrees that certain aspects of the relationship between City, Authority, and WETA shall not terminate as of Closing and that certain matters require ongoing obligations of the Parties, as specified in this ARTICLE 11 If desired by the Parties, City, Authority (if applicable), and WETA shall enter into a Services Operations Agreement, containing substantially the terms of this ARTICLE 11 to govern the relationship of the Parties from and after Closing. Section 11.2 Funding. The Parties mutually desire to provide for continued funding of the Services from a combination of local and regional funding sources, as more fully set forth below. (a) "TIF /CLAD Equivalent" means funds (from whatever source available to City) in amounts equivalent to: (i) the traffic improvement funds (A) that are actually received by City in each partial or full fiscal year following the Effective Date pursuant to the Infrastructure Agreement between City, Harbor Bay Isle Associates, Harbor Bay Village Four Associates, and Harbor Bay Village Five Associates dated April 4, 1989 "Infrastructure Agreement or (B) that would have been actually received by City but for City's failure to enforce its rights under the Infrastructure Agreement or release of its right to receive funds thereunder; but not to exceed $500,000 per fiscal year; lus OAK #4834 -5097 -9335 v12 39 (ii) the landscape and lighting district funds (A) that are actually received by City in each partial or full fiscal year following the Effective Date pursuant to the Island City Landscaping &Lighting District 84 -2 assessment levy, including the Engineer's Report dated May 12, 1988, or (B) that would have been actually received by City but for City's failure to enforce its rights under such assessment levy or release of its right to receive funds thereunder; but not to exceed $78,194 (i.e., the amount for the Alameda /Harbor Bay Ferry Service as identified in the fiscal year 2010/11 Budget for the Services, a copy of which is attached as Exhibit H) per fiscal year. (b) As consideration for WETA to operate or cause to be operated the Alameda /Harbor Bay Ferry Service as provided in this Agreement, and so long as traffic improvement funds and landscape and lighting district funds pursuant to the Infrastructure Agreement, are available to and actually received by City for the Alameda /Harbor Bay Ferry Service, City shall pay the TIF /LLAD Equivalent to WETA exclusively for WETA's operation of the Alameda /Harbor Bay Ferry Service. Beginning with the first full fiscal year following Closing, City shall remit to WETA the TIF /LLAD Equivalent in four (4) quarterly payments. Thirty days prior to the first business day of each fiscal quarter, WETA shall submit to City's Finance Director a written request for payment and City shall make the TIF /LLAD Equivalent payment on the first business day of each fiscal quarter. If Closing occurs on a date other than the first day of the fiscal year, then City shall pay to WETA an amount equal to the difference of the full amount of such fiscal year's TIF /LLAD Equivalent, less the amount of traffic improvement and landscape and lighting district funds expended by City on costs related to the Alameda /Harbor Bay Ferry Service prior to Closing during such partial fiscal year. City shall provide an accounting to WETA at Closing of all such traffic improvement and landscape and lighting district funds expended by City prior to Closing. Notwithstanding anything in this Agreement to the contrary, WETA shall dedicate the entirety of the TIF /LLAD Equivalent exclusively to the Alameda /Harbor Bay Ferry Service, and for no other purpose, and shall reserve any TIF /LLAD Equivalent surpluses for future Alameda /Harbor Bay Ferry Service operating deficits. In addition, any and all landscape and lighting district monies used to fund the TIF /LLAD Equivalent shall be used exclusively for purposes of paying Harbor Bay Ferry Terminal maintenance and insurance costs and other expenses as allowed by applicable Law. From time to time during the Term, but not more than once every ten (10) years, City may request that WETA meet and confer with City to review and examine whether the TIF /LLAD Equivalent funds continue to be necessary to fund operation of the Alameda /Harbor Bay Ferry Service. If the TIF /LLAD Equivalent is no longer necessary to meet the ongoing operational needs of the Alameda /Harbor Bay Ferry Service or fund reserves for such ongoing operational needs, as determined by WETA in its reasonable discretion, the TIF /LLAD Equivalent shall be reduced or eliminated as appropriate. Notwithstanding anything in this Agreement to the contrary, if the Alameda /Harbor Bay Ferry Service is No Longer Operated for any reason other than a Force Maj eure Event, then, unless otherwise agreed by City and WETA, the City Manager, in his /her reasonable discretion, may suspend City's obligation to contribute the TIF /LLAD Equivalent or other sums until such time as the Alameda /Harbor Bay Ferry Service resumes operation if the City's suspension of payment of the TIF /LLAD contribution will not result have a Material Adverse Effect on the Alameda /Harbor Bay Ferry Service. (c) Provided that (i) RM -1 remains in effect (currently March 2022), and (ii) City is in compliance with City's covenants set forth in Section 11.2(b), above and is OAK #4834 -5097 -9335 v12 40 continuing to pay WETA the TIF /LLAD Equivalent in an amount provided in Section 11.2(a� above, and (iii) the Alameda /Harbor Bay Ferry Service and either the Alameda /Oakland Ferry Service or the Bifurcated Services are operating, then WETA shall provide a continuing commitment of WETA's regional funds for the Services (including the Alameda /Harbor Bay Ferry Service and either the Alameda /Oakland Ferry Service or the Bifurcated Services, as the case may be) in an amount equivalent to at least (A) 51.4% of total annual RM1 -5% ferry operating revenues (including southern and northern bridge group totals) actually allocated to WETA, plus (B) if the Alameda /Oakland Ferry Service is operating, an additional amount of RM -2 revenues in an amount equivalent to at least 3.9% of the then current fiscal year budgeted operating expenses for the Alameda /Oakland Ferry Service, or if the Bifurcated Services are operating, an equitable amount of RM -2 revenues as determined by WETA taking into consideration then current budgeted operating expenses for the Bifurcated Services (in each case such RM -2 funds shall only be made available to the extent necessary to cover operating deficits other than deficits caused by City failure to make its TIF /LLAD Equivalent contribution) In addition, WETA shall commit all Measure B funds allocated to WETA by ACTC, exclusively to support either or both of the Services serving City; provided, however, WETA may, in its sole discretion, substitute other funds secured by WETA in place of Measure B funds, so long as the substitute funding is in an amount equal to the Measure B funds allocated by ACTC to WETA. (d) City shall assist WETA in WETA's efforts to seek ongoing contributions toward the Alameda /Harbor Bay Ferry Service from the Harbor Bay Business Park Association "HBBPA and ongoing contributions from the Port of Oakland toward the Alameda /Oakland Ferry Service, in amounts at least equivalent to those in the fiscal year 2010/11 Budget for the Services. (e) WETA may implement periodic fare increases, consistent with City's current practice of every two (2) to three (3) years or a system -wide WETA policy, to adjust fares commensurate with increases in the Consumer Price Index for All Urban Consumers, San Francisco Oakland -San Jose Metropolitan Statistical Area and /or other relevant cost indices as WETA may determine necessary or appropriate to cover operating expenses, and /or to ensure that the Services continue to meet grant funding performance requirements. (f) If new ferry transit funding sources, including gas taxes, vehicle license fees or additional bridge toll revenues, become available to WETA in the future, WETA will endeavor to equitably allocate funds from such sources among the Services and other ferry services operated by WETA. City shall work collaboratively with WETA in support of efforts to obtain additional funding sources for the Services, and reauthorization of Measure B funds to support the Services. Section 11.3 Service Levels. (a) "Service Level" or "Service Levels" means established services levels for the applicable Services for a full fiscal year. To the extent a Service Level is adjusted during a fiscal year or for a partial fiscal year, the terms "Service Level" or "Service Levels" shall mean the service level for the applicable Service for the immediately preceding full fiscal year. Core services levels for the Seaplane Lagoon Ferry Service shall be established as provided in Section 11.9 b Except as expressly provided in this Section 11.3 WETA shall inform City and, upon OAK #4834 -5097 -9335 v12 41 request of City, WETA staff shall make an informational presentation at a duly noticed meeting of the Alameda City Council and provide City staff, officials, representatives and citizens with an opportunity to comment and provide input to WETA (i) before any Service Level is reduced below applicable fiscal year 2010/11 service levels, and (ii) before further reductions are made to any Service Levels which have been reduced to or are then below the applicable fiscal year 2010/11 service levels. Schedules showing the fiscal year 2010/11 service levels for each Service are attached as Exhibit R The Parties acknowledge and agree that in the event of Bifurcation, references to Service Levels shall mean and include the Service Level for the Alameda /Harbor Bay Ferry Service and the new service level adopted by WETA for the Alameda /San Francisco Ferry Service. (b) Subject to the terms of this Section 11.3 (b) WETA shall continue to maintain and operate the Services at the Service Levels, provided that projected revenues and other funding for each Service, taking into account the Change Considerations and Assumed Liabilities, remain sufficient to cover such Service's operating expenses without incurring a deficit that is likely to cause a Material Adverse Effect. (i) The Parties acknowledge that it is WETA's intent to undertake a procurement for a consolidated operating agreement for the Services following Closing. Pursuant to the current Blue Gold Fleet Agreement, the current operator of the Alameda /Oakland Service provides a boat and crew for an additional 5:20 p.m. weekday departure from Pier 41 to Jack London Square "5:20 Run If WETA no longer contracts with a ferry operator having or able to secure landing rights at Pier 41 and landing rights at another facility on the San Francisco waterfront location cannot be secured, and after meeting and conferring with City, WETA reasonably determines that a contract for the consolidated Services cannot be procured that includes the 5:20 Run at a reasonable cost, then WETA may eliminate the 5:20 Run from the Alameda /Oakland Ferry Service. (ii) The Parties further acknowledge and agree that the current operator of the Alameda /Oakland Ferry Service provides the Alameda /Angel Island Service and ferry service to AT &T Park. Procurement of a consolidated operating agreement may require changes in such destinations and services, including adjustments in times for departures and arrivals. If, after taking into account the Change Considerations, and meeting and conferring with City, WETA reasonably determines that such changes are required by the applicable consolidated operating agreement, then WETA shall be entitled to make such changes. (c) In the event of a projected budget shortfall for a Service, WETA, taking into account the Change Considerations, shall in good faith consider options for resolving the projected budget shortfall without reducing Service Levels, including identifying alternative funding sources, including increasing RM -2 funding; utilizing Service operating surpluses from prior years; utilizing other system reserves; implementing fare increases (in addition to the regular periodic fare increases referenced in Section 11.2 above); deferring capital projects; modifying Service operator contracts; reducing administrative overhead expenses and /or reducing service operations costs, all to levels commensurate with the increased costs and /or reduced revenue. In the event WETA determines that a projected funding shortfall requires Service reductions below the Service Levels, WETA shall notify City and they shall meet and confer in good faith to cooperatively and expeditiously resolve the funding shortfall. WETA and OAK #4834 -5097 -9335 v12 42 City shall in good faith work together to consider all options available to minimize Service Level reductions and avoid Material Adverse Effects. Prior to final approval of a reduction in any Service Level (excluding ferry service to Angel Island, AT &T Park and the 5:20 Run) by WETA, WETA shall notify City, and if requested by City, shall make an informational presentation at a duly noticed meeting of the Alameda City Council and provide City staff, officials, representatives and citizens with an opportunity to comment and provide input to WETA regarding the proposed Service Level reduction. (d) In the event that WETA determines either or both Services shall be eliminated or suspended for a period of more than one hundred eighty (180) calendar days, then subject to City being lawfully able to operate ferry service in the San Francisco Bay, WETA and City shall negotiate in good faith to provide City with the opportunity to reacquire the Acquired Assets and applicable federal, state, regional and local funding sources and Service reserves as necessary for City's operation of the relevant Service(s). (e) If WETA desires to eliminate the Oakland stop from the Alameda /Oakland Ferry Service, WETA shall notify City and, upon City's request, shall make an informational presentation at a duly noticed meeting of the Alameda City Council. Section 11.4 Infrastructure Maintenance and Repair (a) WETA shall assume financial responsibility for maintaining, repairing, and replacing the Waterside Assets, the Ferry Terminals, the Landside Assets, and other capital facilities and vessels required to support Services operations from RM -1, RM -2, Proposition 1 B, or other regional, state, federal or other funds that are available to WETA, or shall become available to WETA in the future. (b) WETA shall fund the ongoing costs of maintenance, repair, and purchase /replacement of the Waterside Assets as needed, utilizing RM 1 -2% funds, RM -2 funds, or state, federal or other funds secured by WETA for this purpose. Schedule 16- (c) WETA shall assume City's existing grant requirements set forth in (d) WETA shall secure and provide access to additional ferries and vessels to support current and future Services as needed. (e) For so long as WETA operates the Services, WETA shall fund maintenance, repair, replacement and capital improvements necessary for the sustainable and ongoing operation of the Landside Assets, including parking facilities owned and managed by City or Authority for use by ferry passengers in their current configuration; such funding shall be in accordance with an annual budget for such improvements to be developed and agreed to by City and WETA as set forth in Section 11.7 WETA shall not be required to pay any increase in the cost of parking facilities attributable to any improvements that City or Authority may make to the City Lot or the Authority Lot as they exist on the Effective Date or at any new location to which a Ferry Terminal may relocate as provided herein, unless such improvements are made at WETA's request or with WETA's consent and agreement to pay increased costs. Upon WETA's request, City shall cooperate in locating a ticket vending machine or machines at the Ferry OAK #4834 -5097 -9335 v12 43 Terminals, provided that WETA shall purchase the machines and pay, as part of the Triple Net Costs, all of City's costs in connection therewith. WETA acknowledges that the ability to make improvements is subject to City's easement rights or other interests in the applicable property and applicable third party agreements. Section 11.5 Landing and Mooring Rights (a) Main Street Ferry Terminal. (i) "Main Street Mooring Period" means that period of time which starts as of the Effective Date and ends on the earliest of (A) sixty -six (66) years after the Effective Date; or (B) when all of the Alameda /Oakland Ferry Service, Alameda /San Francisco Ferry Service, and Backup /Emergency Ferry Uses are No Longer Operated out of the Main Street Ferry Terminal, City has given WETA written notice of City's intent to terminate the Main Street Mooring Period due to WETA's failure to use the Main Street Ferry Terminal to operate at least one of the Alameda /Oakland Ferry Service, the Alameda /San Francisco Ferry Service, or Backup /Emergency Ferry Use, and WETA has failed to recommence use of the Main Street Ferry Terminal for at least one of such purposes within thirty (30) days of receipt of such notice, which notice may be given up to thirty (30) days prior to the end of the one hundred eighty day period triggering the "No Longer Operated" status of the Alameda /Oakland Ferry Service, the Alameda /San Francisco Ferry Service, or Backup /Emergency Ferry Use, as applicable; or (C) on the effective date of termination set forth in City's notice to WETA pursuant to Section 11.5 a (ii). (ii) The Parties acknowledge that City must retain flexibility for future use of City -owned property, including to enrich the lives of Alameda citizens and for revenue generation. As such, City shall have the right to terminate the Main Street Mooring Period (and automatically therewith terminate the Main Street Rights) as follows: (A) If both the Alameda/Oakland Ferry Service and the Alameda/San Francisco Ferry Service are No Longer Operated out of the Main Street Ferry, but WETA is operating Backup /Emergency Ferry Uses out of the Main Street Ferry Terminal, and City, Authority or any other entity created by City desires to enter into an agreement with Bay Ship &Yacht (or an affiliate of Bay Ship &Yacht or a third party whose use is a component of Bay Ship &Yacht's operations) for use of the Main Street Ferry Terminal, the Main Street Land, and /or the Main Street Channel, then City may elect to terminate the Main Street Mooring period upon ninety (90) calendar days prior written notice to WETA; provided, however that any such agreement between City, Authority or any other entity created by City and Bay Ship &Yacht (or an affiliate of Bay Ship &Yacht or a third party whose use is a component of Bay Ship Yacht's operations) shall (I) contain provisions substantially similar to those delineated in Section 11.5(b)(i) clauses (A) through (G) with respect to the Backup /Emergency Ferry Uses, and (II) shall additionally require Bay Ship &Yacht to (1) provide adequate facilities at the Main Street Ferry Terminal or an equivalent -sized area that is substantially equivalent in convenience and terms and conditions of use, for Backup/Emergency Ferry Uses and to accommodate activation of the Backup /Emergency Ferry Uses at such area (upon such advance notice from WETA as is reasonable under the circumstances) to the extent the need for such activation is triggered by a Force Majeure Event, (2) provide WETA with a mooring space for one ferry OAK #4834 -5097 -9335 v12 44 vessel, all at no expense to WETA, and (3) provide that WETA shall be a third party beneficiary of such provisions of the Agreement. WETA and City agree that the fair market value of any free mooring space provided by Bay Ship Yacht to WETA in any fiscal year pursuant to the preceding sentence above shall reduce the amount of City's required annual TIF /LLAD Equivalent payment obligation for such fiscal year under Section 11.2 above. The fair market value of such free mooring space shall be determined taking into consideration the economic terms of the new City /Bay Ship Yacht agreement. (B) If both the Alameda /Oakland Ferry Service and the Alameda /San Francisco Ferry Service are No Longer Operated out of the Main Street Ferry Terminal, but WETA is operating Backup /Emergency Ferry Uses out of the Main Street Ferry Terminal, and City desires to enter into an agreement with a third party for use of the Main Street Ferry Terminal, Main Street Land, and /or the Main Street Channel, then City may terminate the Main Street Mooring period upon ninety (90) calendar days prior written notice to WETA; provided that such third party is not affiliated with Bay Ship Yacht, and that such third party use is not a component of Bay Ship Yacht operations. (iii) Main Street Rights. (A) Generally. During the Main Street Mooring Period, WETA shall have the exclusive (subject to paragraph (C), below) right to locate and maintain at the Main Street Ferry Terminal the Waterside Assets associated with the Alameda /Oakland Ferry Service and the Alameda /San Francisco Ferry Service operated by WETA out of the Main Street Ferry Terminal, and exclusive (subject to paragraph (C) below) landing and mooring rights at the existing Main Street Ferry Terminal for the Alameda /Oakland Ferry Service, the Alameda /San Francisco Ferry Service, and such occasional ferry operations and third party charter and occasional vessel operations that WETA may approve in its discretion, all at the locations shown on the map attached as Exhibit M (collectively, "Main Street Rights WETA's ongoing payment of all Triple Net Costs incurred by City for maintenance, repair, and replacement of the Landside Assets at the Main Street Ferry Terminal as provided in Section 1 "Main Street Fees shall constitute the consideration for the Main Street Rights during the Main Street Mooring Period. (B) Backup /Emer Uses. During the Main Street Mooring Period, even if both the Alameda /Oakland Ferry Service and the Alameda /San Francisco Ferry Service are No Longer Operated out of the Main Street Ferry Terminal, WETA may continue to so locate and maintain the Waterside Assets associated with the Main Street Ferry Terminal and exercise its landing and mooring rights at the Main Street Ferry Terminal on a calendar year quarter -to- quarter basis for purposes of maintaining emergency or backup ferry service capabilities and mooring of WETA's ferry vessels exclusively within the area shown on Exhibit M "Backup/Emergency Ferry Uses which rights shall thenceforth constitute the Main Street Rights. The Main Street Rights are intended by the Parties to be, and shall be construed as, a personal license from City to WETA, and not a property interest, and shall remain in effect only so long as the Main Street Mooring Period has not expired or otherwise been terminated. OAK #4834 -5097 -9335 v12 45 (C) Third Party Landing During the Main Street Mooring Period, City shall have no right without WETA's prior written consent (which shall not be unreasonably withheld, conditioned, or delayed) to allow scheduled or unscheduled landings at the Main Street Ferry Terminal. If City desires to permit landing at the Main Street Ferry Terminal by third parties with no pre- existing landing or mooring rights, City shall submit a written request to WETA, including a statement of the fee to be paid by such third party for the privilege of landing at the Main Street Ferry Terminal, and a proposed budget for all costs to be incurred by City in connection with such third party landing rights. City shall require that any such third party granted landing rights shall name WETA as an additional insured on any insurance policies that City requires such third party to provide to City as a condition to such landing rights, and that WETA be included as an indemnified party in any indemnity obligation that City requires of such third party. In the event that WETA consents to a third party landing at the Main Street Ferry Terminal other than by a WETA vessel, WETA shall be entitled to any payments made by such third parties for the privilege of landing at the Main Street Ferry Terminal, less City's actual costs incurred in connection with such third party landing rights (including staff time, consultant and attorneys fees), which payments shall be used by WETA exclusively to support the Services. (b) Main Street Channel and Main Street Land Neither City nor Authority makes any representation or warranty as to the non -use, use, availability, or suitability of the Main Street Channel or the Main Street Land for WETA or Service purposes. WETA acknowledges and agrees that third parties and other governmental agencies may have or assert concurrent or superior use rights or interests in or jurisdiction over the Main Street Channel or the Main Street Land. Except as expressly provided in Section 11.5(b) 0i and Section 11.5(b)(ii) inclusive, third party use of the Main Street Land or the Main Street Channel, or City's or Authority's failure to monitor or control use thereof, shall constitute neither a breach nor a default by City or Authority under this Agreement. If WETA is prevented from using the Main Street Channel due to a third party's concurrent or superior use right, such occurrence shall constitute a Force Maj eure Event as to WETA, and WETA shall not be obligated to provide ferry service during the pendency of such Force Maj eure Event. (i) During the Main Street Mooring Period Generally During the Main Street Mooring Period, any agreement entered into by City and /or Authority and /or any other City entity with any third party for use of the Main Street Channel and /or the Main Street Land (including new agreements in connection with Bay Ship Yacht's operations, or the operations of any successor user of the properties bordering the Main Street Land) shall: (A) prohibit such third party from interfering with WETA's operation of the Alameda /Oakland Ferry Service, the Alameda /San Francisco Service, or any Backup /Emergency Ferry Uses (as applicable) out of the Main Street Ferry Terminal; (B) require that the third party indemnify, defend and hold WETA harmless against liability or losses for property damage, death, or bodily injury caused by such third party use; (C) name WETA as an additional insured on the third party's required insurance policies, the scope and coverage of which shall be sub. ect to WETA's prior review and written approval not to be unreasonably withheld, conditioned, or delayed; (D) provide that WETA shall be a third party beneficiary for purposes of enforcing such third party's obligations with respect to noninterference with the Alameda /Oakland Ferry Service, the Alameda /San Francisco Service, or any Backup /Emergency Ferry Uses (as applicable), insurance and indemnity, and any other provisions reasonably construed as to have an impact on WETA's OAK #4834 -5097 -9335 v12 46 operation of the Alameda /Oakland Ferry Service, Alameda /San Francisco Ferry Service or Backup /Emergency Ferry Service (as applicable), and that WETA shall be entitled to recover from such third party costs incurred by WETA to enforce such rights; (E) provide that such third party shall waive and release WETA from and against any liability to such third party in connection with the third party's use of the Main Street Channel and /or Main Street Land, except to the extent the liability or loss results from WETA's gross negligence or willful misconduct; (F) provide that such third party pay a reasonable share of the costs associated with the Main Street Land and reducing the Main Street Fees payable by WETA accordingly, and (G) provide that, except as otherwise provided in this Agreement, WETA shall be entitled to all rights and remedies available at law or in equity for breach of such agreement, including specific performance. (ii) During WETA's Operation of the Alameda /Oakland Ferry Service or the Alameda /San Francisco Ferry Service out of the Main Street Ferry Terminal The provisions of this Section 11.5(b)(ii) are in addition to the provisions of Section 11.5(b)(i) and shall have effect so long as WETA operates either the Alameda /Oakland Ferry Service or the Alameda /San Francisco Ferry Service out of the Main Street Ferry Terminal. Subject to existing Bay Ship Yacht use rights (as the same may be extended), and to the extent that City or Authority does have an interest in or control over the Main Street Channel or the Main Street Land, each agrees that it will not enter into agreements with third parties, or grant to third parties rights to use, the Main Street Channel or the Main Street Land without WETA's prior written consent (which WETA shall not unreasonably withhold, condition, or delay) and, at WETA's expense, each shall use good faith diligent efforts to prevent unauthorized use of the Main Street Channel and Main Street Land by third parties. It shall be reasonable for WETA to withhold consent if such use would more likely than not result in a Material Adverse Effect on WETA's operation of the Alameda /Oakland Ferry Service or the Alameda /San Francisco Ferry Service out of the Main Street Ferry Terminal. WETA shall reasonably and in good faith consider each request for use of the Main Street Channel or the Main Street Land and shall provide City and Authority with written notice of WETA's decision, including the basis of its reasoning, within thirty (30) calendar days after the date of the use request. If WETA denies the use request, City or Authority, as applicable, may request that WETA meet and confer with them and, upon request of City or Authority staff, as the case may be, make an informational presentation at a duly noticed meeting of the Authority Board or the Alameda City Council, as the case may be. Thereafter, WETA shall provide City and Authority with new written notice of WETA's decision, including the basis of its reasoning. Upon receipt of notice from WETA that such third party use is negatively impacting the Alameda /Oakland Ferry Service or the Alameda /San Francisco Ferry Service out of the Main Street Ferry Terminal in violation of such contract terms, City and Authority shall promptly notify such third party user to cease such interfering use and, upon WETA's request and at WETA's sole expense, shall take other reasonable steps necessary to prevent such interference. (c) Harbor Barmy Terminal. (i) "Harbor Bay Mooring Period" means that period of time which starts as of the Effective Date and ends on the earlier of (A) sixty-six (66) years after the Effective Date or (B) when the Alameda/Harbor Bay Ferry Service is No Longer Operated by WETA out of the Harbor Bay Ferry Terminal, City has given WETA written notice of City's OAK #4834 -5097 -9335 v12 47 intent to terminate the Harbor Bay Mooring Period due to WETA's failure to use the Harbor Bay Ferry Terminal to operate the Alameda /Harbor Bay Ferry Service, and WETA has failed to recommence the Alameda/Harbor Bay Ferry Service out of the Harbor Bay Ferry Terminal within thirty (30) days of receipt of such notice, which notice may be given up to thirty (30) days prior to the end of the one hundred eighty day period triggering the "No Longer Operated" status of the Alameda/Harbor Bay Ferry Service; or (C) on the effective date of termination set forth in City's notice to WETA pursuant to Section 11.5(a)(ii). (ii) During the Harbor Bay Mooring Period, WETA shall have the right to locate and maintain the Waterside Assets associated with the Harbor Bay Ferry at the locations shown on the map attached as Exhibit N WETA shall have those landing and mooring rights permitted pursuant to Exhibit H to the Assignment and Assumption Agreement Regarding Certain Licenses, Permits and Obligations under Planning Approvals for the Marine Portions of the Harbor Bay Ferry Terminal dated May 5, 2004, by and between Harbor Bay Isle Associates, Harbor Bay Maritime, Inc. and City, including scheduled and unscheduled moorage by WETA from time to time of one WETA vessel alongside the float at the Harbor Bay Ferry Terminal "Harbor Bay Rights The Harbor Bay Rights are intended by the Parties to be, and shall be construed as, a personal license from City to WETA, and not a property interest. (iii) City shall have no right without WETA's prior written consent to allow third party vessels to make scheduled or unscheduled landings at the Harbor Bay Ferry Terminal. If City desires to permit a third party landing at the Harbor Bay Ferry Terminal, City shall submit a written request to WETA, including a statement of the fee to be paid by such third party for the privilege of landing at the Harbor Bay Ferry Terminal, and a proposed budget for all costs to be incurred by City in connection with such third party landing rights. City shall require that any such third party granted landing rights shall name WETA as an additional insured on any insurance policies that City requires such third party to provide to City as a condition to such landing rights, and that WETA be included as an indemnified party in any indemnity obligation that City requires of such third party. In the event that WETA consents to a third party landing at the Harbor Bay Ferry Terminal other than by a WETA vessel, WETA shall thereafter be entitled to any payments made by such third parties for the privilege of landing at the Harbor Bay Ferry Terminal, less City's actual costs incurred in connection with such third party landing rights (including staff time, consultant and attorneys fees), which payments shall be used by WETA exclusively to support the Services. WETA's ongoing payment of Triple Net Costs incurred by City for maintenance, repair, and replacement of the Landside Assets at the Harbor Bay Ferry Terminal as provided in Section 11.7(c) "Harbor Bay Fees shall constitute the consideration for the landing and mooring rights at Harbor Bay provided herein. Section 11.6 Parking. (a) Main Street Ferry Terminal. (i) City, Authority and WETA acknowledge that, as of the Effective Date, parking is provided for ferry patrons at the Main Street Ferry Terminal in two adjacent lots, one on land owned by City "City Lot and one on land owned by United States Navy, leased to Authority, and subleased to City "Authority Lot Subject to their respective rights in and to the City Lot and Authority Lot, City and Authority (as applicable) shall make the City Lot and OAK #4834 -5097 -9335 v12 48 the Authority Lot available for parking by ferry patrons at all times that regular Alameda /Oakland Ferry Service or Alameda /San Francisco Ferry Service is operating out of the Main Street Ferry Terminal, reasonable closures for Force Maj eure Events, maintenance, repairs and construction of improvements excepted, and as reasonably practicable when Back Up /Emergency Use is activated by WETA. (ii) City shall maintain, repair, resurface and reconstruct from time to time, as necessary, all facilities associated with the Landside Assets, subject to WETA pre approval of such project(s) and payment of the costs thereof. (iii) Except as otherwise agreed by the Parties, if both the City Lot and the Authority Lot are unavailable for use by WETA ferry service patrons for more than thirty (30) consecutive calendar days and if reasonably convenient substitute parking is not available, then, after taking into account the Change Considerations, meeting and conferring with City, and if requested by City, making an informational presentation at a duly noticed meeting of the Alameda City Council, WETA may, notwithstanding other provisions of this Agreement, temporarily discontinue, relocate, reduce, or eliminate the Alameda /Oakland Ferry Service or Alameda /San Francisco Ferry Service operating out of the Main Street Ferry Terminal without being in breach or default of WETA's obligations to provide the Services under this Agreement until such time as the City Lot, Authority Lot, or substitute parking that is substantially equivalent in convenience and terms and conditions of use is available. (b) Harbor Bav Ferry Terminal. (i) City and WETA acknowledge that, as of the Effective Date, parking is provided for ferry patrons at the Harbor Bay Ferry Terminal in the Parking and Staging Area shown on the map attached as Exhibit P "Harbor Bay Parking Lot City has an easement to use the Harbor Bay Parking Lot for ferry patron parking pursuant to that certain Grant of Easement and Assignment of Permits and Enabling Agreements for Public Marine Transportation Facility dated as of December 28, 1998, between Harbor Bay Isle Associates, a partnership, and City "Harbor Bay Grant of Easement City covenants and agrees that, subject to the Harbor Bay Grant of Easement or other terms governing City's Harbor Bay Parking Lot interests, City shall use good faith efforts to ensure that the Harbor Bay Parking Lot remains available for parking by ferry patrons at all times that WETA is operating the Alameda /Harbor Bay Ferry Service out of the Harbor Bay Ferry Terminal, reasonable closures for Force Maj eure Events, maintenance, repairs and construction of improvements excepted. For so long as it operates the Alameda /Harbor Bay Ferry Service out of the Harbor Bay Ferry Terminal, WETA shall make good faith efforts not to cause City's rights under the Harbor Bay Grant of Easement to terminate. (ii) Operation, maintenance, and management of the Harbor Bay Parking Lot and Harbor Bay Ferry Terminal facilities is provided by the HBBPA pursuant to that certain First Amended and Restated Agreement for Operation, Maintenance and Management of Public Marine Transportation Terminal Facility between City and HBBPA dated as of May 5, 2004 "Harbor Bay Operating Agreement The Harbor Bay Operating Agreement requires HBBPA to continue to provide the services required thereunder so long as regular passenger ferry service is operated from the Harbor Bay Ferry Terminal to the San Francisco Ferry OAK #4834 -5097 -9335 v12 49 Building at the Port of San Francisco. City agrees to use good faith efforts to ensure that HBBPA continues to provide the services required under the Harbor Bay Operating Agreement, and to maintain, repair, resurface and reconstruct from time to time, as necessary, all facilities associated with the Landside Assets at the Harbor Bay Ferry Terminal, including the Harbor Bay Parking Lot and the shoreline embankment in accordance with the Desired Maintenance Schedule, including payment of utilities for lighting and water service to the Harbor Bay Ferry Terminal. WETA shall make good faith efforts not to cause City's rights under the Harbor Bay Operating Agreement to terminate, and hereby acknowledges, represents, and warrants to City that WETA is familiar with the terms of the Harbor Bay Operating Agreement. So long as WETA is operating ferry service from the Harbor Bay Ferry Terminal, WETA shall comply with all ferry service obligations under the Harbor Bay Operating Agreement and shall take all steps reasonably necessary to ensure continued effectiveness of the Harbor Bay Operating Agreement and City's easement rights under the Harbor Bay Grant of Easement. (iii) Except as otherwise agreed by City and WETA, if the Harbor Bay Parking Lot is unavailable for use by WETA ferry service patrons for more than thirty (30) consecutive calendar days and if substitute parking that is substantially equivalent in convenience and terms and conditions of use is not available, then, after taking into account the Change Considerations, meeting and conferring with City, and if requested by City, making an informational presentation at a duly noticed meeting of the Alameda City Council, WETA may temporarily discontinue, relocate, reduce, or eliminate the ferry service to the Harbor Bay Ferry Terminal until such time as the Harbor Bay Parking Lot or substitute parking that is substantially equivalent with respect to convenience, terms and conditions of use is available. (iv) WETA agrees that as payment of the Harbor Bay Fees, it shall reimburse City for all Triple Net Costs (defined in Section 11.7(c)(i)) in accordance with the process described in Section 11.7. Section 11.7 Maintenance and Capital Projects (a) Scheduled Maintenance and Capital Projects. No later than February 1 st of each fiscal year, WETA shall submit to City a Schedule of Desired Maintenance and Repair Activities and Proposed Allowance for the next fiscal year "Desired Maintenance Schedule The Desired Maintenance Schedule shall identify by Ferry Terminal any desired maintenance and repair tasks for that Ferry Terminal, including ongoing activities performed by City in accordance with the then current Desired Maintenance Schedule tasks, any special maintenance activities desired and all capital projects for the terminal that WETA would agree to fund in the next fiscal year, subject to any specific grant approvals. Within forty -five (45) calendar days after City's receipt of the Desired Maintenance Schedule, City shall prepare and submit to WETA for its review and approval, a proposed annual budget based on WETA's annual submission of the Desired Maintenance Schedule. WETA and City shall work together to agree upon a final budget for each fiscal year on or before May 1 st of the prior fiscal year. Project implementation will be subj ect to City Council approval of associated City budgets and WETA receipt of necessary grant approvals. In the event that City is unable to implement any task/project, City shall specify the reasons why it is unable to do so. A Desired Maintenance Schedule for fiscal year 2010/11 is attached as Exhibit O. OAK #4834 -5097 -9335 v12 50 (b) Unscheduled Maintenance and Capital Projects. (i) City and WETA mutually acknowledge that from time to time, repair, maintenance or capital projects in addition to those identified in the Desired Maintenance Schedule, may be identified by WETA or City. If identified by WETA, WETA shall advise City if WETA desires additional maintenance, repair, or other services above and beyond those identified in the agreed upon Desired Maintenance Schedule for a given fiscal year. If identified by City, City shall notify WETA in writing of the work required. Within twenty (20) calendar days after receipt by WETA of City notice, WETA shall notify City of WETA's agreement to pay the cost of the work or shall provide an explanation of WETA's decision not to agree to pay for the work. If the work is necessary to address an imminent public health or safety hazard emergency, then City shall secure the facility as is necessary to prevent access by the public and protect the public safety, and may commence such actions as are immediately required to minimize risk of further damage or injury at WETA's expense without WETA's prior written approval, provided that City shall notify WETA of the situation as soon as reasonably practicable. Once the immediate threat to public health or safety resulting from the emergency has been stabilized, WETA's prior written consent shall be required for any further work to repair damage resulting from the public health or safety emergency at WETA's cost. (ii) City shall perform, or procure contracts to perform, scheduled and unscheduled maintenance and repairs for the Landside Assets that will be done at WETA's expense in accordance with City's normal bidding procedures, and in accordance with any other state and /or federal procurement procedures and terms that may apply as a result of the source of WETA's funding for such maintenance and repair expenses. (c) Costs and Pam. (i) Triple Net Costs. "Triple Net Costs" means any and all actual expenses associated with any and all maintenance, repair, replacement, operation, and insurance of the Landside Assets (including the rip -rap, and provision of utilities), whether incurred pursuant to the tasks /projects set forth in the Desired Maintenance Schedule, identified by City or WETA, or otherwise permitted under this ARTICLE 11 and not reimbursed to City by third parties. Services provided directly by City (including City oversight and administrative expenses), including all services identified in Section 11.4(e) and Section 11.7(a) and (12) above, shall be reimbursed at City's fully loaded actual costs computed on the same basis as costs allocated generally within City. Services provided by third party contracts that are not paid directly by WETA shall be reimbursed based on actual out -of- pocket costs. Costs associated with remediation of any Environmental Condition are expressly excluded from the definition of Triple Net Costs, except to the extent City and /or Authority demonstrate by a preponderance of the evidence that a Release was caused by WETA or any WETA Parties, in which case WETA shall be solely responsible for the costs associated with such remediation of such Release. City and WETA shall agree upon a formula for allocating to the Services the cost of any items provided by City in connection with the Landside Assets on a case by case basis with respect to each such cost. If the cost of any item is allocable to the Landside Assets as well as to other City -owned or managed non -ferry related properties or activities, WETA shall pay for the proportionate share of the cost of such item, as reasonably determined by City. OAK #4834 -5097 -9335 v12 51 (ii) Pam. (A) Desired Maintenance and Repair Activities for Scheduled Maintenance and Capital Projects WETA shall deposit with City funds to cover the approved budget for each fiscal year; each deposit shall cover the upcoming quarter and shall be made in advance on a quarterly basis. City shall reimburse itself from such funds on the basis of invoices for actual costs incurred by City. City shall provide WETA with a statement and related invoices for expenses incurred each quarter, within thirty (30) calendar days after the close of the quarter. Any amounts advanced by WETA and not required to pay approved actual costs shall be returned to WETA within thirty (30) calendar days after the end of each fiscal year, or at WETA's direction, credited to the next deposit due from WETA to City. WETA shall reimburse City the cost of approved capital projects within thirty (30) calendar days after City's presentment of each progress payment invoice for such approved capital project. WETA shall also reimburse City for City's actual costs and expenses, including overhead, associated with the planning, design, construction and final close out for such projects including contract administration, materials testing, permitting and environmental review. Subject to mutual agreement of City, WETA, City's contracts with vendors for performance of Landside Asset maintenance and repair services may provide for direct WETA payments to the service providers, in which case WETA shall not be required to deposit funds in advance with the City with respect to costs to be incurred with respect to such contracts. WETA shall cooperate with City to accommodate such direct payment approach, including (to the extent required by applicable vendors) becoming a party to such vendor contracts for the limited purpose of such direct payments. City shall provide WETA with access to its books, records, accounts and invoices, in accordance with Section 11.8, for inspection and audit as set forth therein. (B) Unscheduled Maintenance and Capital Projects. Sums incurred by City and approved by WETA pursuant to Section 11.7(b) shall be paid by WETA to City within thirty (30) calendar days after City's presentation of an invoice itemizing such costs. WETA shall also reimburse City for City's actual costs and expenses, including overhead, associated with the planning, design, construction and final close out for such projects including contract administration, materials testing, permitting and environmental review. Subject to mutual agreement of City and WETA, City's contracts with vendors for performance of Landside Asset maintenance and repair services may provide for direct WETA payments to the service providers. Section 11.8 Audit. (a) WETA hereby acknowledges and agrees that City will incur fiscal year 2010/11 and 2011/12 audit expenses related to the Services in an amount of up to Seven Thousand Dollars ($7,000). Such sum shall be withheld from the Transaction Cash and held in Escrow after Closing for City's use in paying audit costs, and Escrow Holder shall distribute such amount to City immediately upon City's unilateral, written request therefor. Any unexpended amounts shall be distributed to WETA upon City's written instruction. (b) City shall keep and maintain books, documents, records and accounts and other evidence with respect to the amounts charged to WETA hereunder or pertaining to the Assumed Liabilities in accordance with generally accepted accounting principles and practices consistently OAK #4834 -5097 -9335 v12 52 applied. City shall maintain and make such materials available to WETA for audit and for such other purposes as may be required by WETA in connection with any of the Assumed Liabilities or as may be necessary in connection with WETA's compliance with obligations related to, or ability to secure, grants or other funding for the Services. Such materials shall be made available at City's offices at all reasonable times during the Term and for four (4) years from the expiration or termination of this Agreement. City shall permit WETA's auditor, or any duly authorized representative of WETA, to have access to any books, documents, records, accounts and other evidence required to verify the charges and expenses allocated to WETA pursuant to this Agreement. WETA shall bear the costs of any such audit. WETA shall not conduct an audit of City's books and records with respect to this Agreement more frequently than once per calendar year, or more frequently if required for WETA to comply with the requirements of a governmental agency in the exercise of its jurisdiction or contract obligations with respect to funding for the Services. If the audit discloses errors in the City's books and records, then (i) if WETA has overpaid amounts chargeable to WETA, City shall remit such overpayment to WETA within thirty (30) days of WETA's notice to City of the overpayment, or (ii) if WETA has underpaid amounts chargeable to WETA, City shall invoice WETA for such amounts and WETA shall pay such invoice within thirty (30) days of receipt of the invoice. Section 11.9 Seaplane Lagoon; Alameda /Oakland Ferry Service Bifurcation (a) City, Authority, and WETA acknowledge that in the future a new ferry terminal may be constructed at Seaplane Lagoon "Seaplane Lagoon Ferry Terminal the general location thereof is identified on Exhibit (b) City, Authority, and WETA shall in good faith work with each other and the Seaplane Lagoon master developer or other developer(s) (as applicable) to explore the viability of Bifurcated Services including: (A) relocating the Main Street Ferry Terminal operations to Seaplane Lagoon; (B) discontinuing passenger operations to /from the existing Main Street Ferry Terminal; (C) constructing the Seaplane Lagoon Ferry Terminal; and (D) establishing core service levels for the Alameda /San Francisco Ferry operating out of Seaplane Lagoon. As part of those discussions, it is anticipated that the Parties and developer(s) (as applicable) would: (i) Take into consideration the impact of the foregoing changes on the viability of the former Oakland /San Francisco leg of the Alameda/Oakland Ferry Service. (ii) Use diligent good faith efforts to ensure that WETA shall have landing and mooring rights at the Seaplane Lagoon Ferry Terminal substantially similar to the Main Street Rights. (iii) Work towards establishing a transportation demand management fund for public transit generally, including a portion thereof (as determined based on City and developer negotiations) intended to partially support ferry service and allocating the ferry service portion of that fund to offset ferry terminal maintenance costs as well as operating costs for the Alameda/San Francisco Ferry Service (provided that such funds shall be in addition to and not in lieu of the Equitable Funding Level of RM -1, RM -2, and Measure B funds, and other applicable funding, for the Alameda/San Francisco Ferry Service). OAK #4834 -5097 -9335 v12 53 (iv) Develop a budget for the Alameda /San Francisco Ferry Service. Potential revenue sources to be considered shall include projected fare box revenues, transportation demand fund monies, Measure B funds, and an equitable allocation of RM -1 5% and RM -2 funding, and other non -local subsidy funding sources as may be available to WETA "Equitable Funding Level The determination of an Equitable Funding Level shall take into consideration: (A) The number of Alameda ferry riders as measured by the number of tickets redeemed on the Service by customers using the Main Street Ferry Terminal; (B) The per passenger public subsidy level in the then current Alameda/Oakland Ferry Service annual budget; (C) MTC established grant eligibility requirements for RM -1, RM -2, and other non -local subsidy funding, as applicable; and (D) New core Service Levels established for the Alameda/San Francisco Ferry Service operating out of Seaplane Lagoon. (c) Subject to ACTC approval (which WETA shall recommend), WETA shall allocate to the Alameda /San Francisco Ferry Service operating out of the Seaplane Lagoon Ferry Terminal the Measure B funds previously supporting the Alameda/Oakland Ferry Service. (d) If WETA determines to pursue Bifurcation, then WETA shall recommend that MTC approve the Equitable Funding Level for the Alameda/San Francisco Ferry Service operating out of Seaplane Lagoon. Section 11.10 MARSEC Security Notwithstanding anything in this Agreement to the contrary, WETA shall be solely responsible for providing MARSEC required facility security plans for the Landside Assets and bearing all costs, obligations, and liabilities associated therewith. ARTICLE 12 Additional Provisions Section 12.1 Alternative Fuel Pilot Program City and WETA acknowledge that City is exploring the feasibility of a liquidated natural gas fueling station project that would include the conversion and testing of a liquidated natural gas fueled ferry vessel. If City secures funding for this project, WETA shall work cooperatively with City and its alternative fuels consultant on conversion of a WETA ferry vessel to liquidated natural gas and the testing of the vessel. The cost of WETA staff time, provision of a suitable ferry boat, modification of vessel, testing and other related project costs shall be paid by City from pilot project grant funds. City and WETA shall also work cooperatively to address opportunities to deploy in the Services sustainable technologies that may become available from time to time. OAK #4834 -5097 -9335 v12 54 Section 12.2 Bus /Ferry Terminal Connection WETA shall cooperate with City and AC Transit in efforts to provide the ongoing availability of bus transit to the Ferry Terminals and to coordinate bus scheduling with Service arrivals and departures. Section 12.3 Ferry Service Manager WETA shall provide employment to City's current Services manager consistent with the requirements of the Act. No other City or Authority employees will be offered employment by WETA. Section 12.4 Fuel Consortium WETA shall work with regional transit operating and planning agencies to explore the feasibility of establishing a fuel purchasing consortium. Section 12.5 Other Transit Service Agreements WETA shall work in good faith to develop agreements with operators of connecting transit services to develop a system for providing transfers between the Services and such other connecting transit services. Section 12.6 Periodic Report to City WETA will make available to City information reasonably requested by City regarding the Services from time to time, including information regarding ridership, funding and revenues, and proposed changes to schedule, destinations, and /or fares (if any) Section 12.7 Rider Satisfaction and Service Quality Monitoring WETA will implement reasonable practices designed to measure and assure customer satisfaction. Such practices may include establishing a ferry rider advisory committee to periodically review rider ship, marketing, on -time performance, rider related service issues, and any proposed fare or schedule changes, conducting periodic rider satisfaction surveys and periodically analyzing the on -time performance of the ferries. WETA shall make the results of such reviews and analyses available to City upon request. Section 12.8 Fare Box Recovery Ratio Reporting WETA shall in good faith work with MTC to analyze and implement appropriate fare box recovery requirements for the Services, which may include consolidation of the fare box revenues for the Alameda /San Francisco Ferry Service and Alameda /Harbor Bay Ferry Service into a unified system. Section 12.9 Parity (a) Vallejo Transit Agreement WETA represents to City that WETA intends to negotiate and enter into an agreement with the City of Vallejo for the transition to WETA of the existing BayLink ferry services currently operated by the City of Vallejo "Vallejo Transition Agreement as contemplated by the Act, on terms and conditions substantially consistent with the terms of this Agreement. (i) Landing and Mooring Fees Consistent with the Act, it is WETA's intent to structure the Vallejo Transition Agreement to minimize increases in operating costs for the Vallejo ferry services, including the costs associated with landing and mooring at the Vallejo ferry terminal, in order to help ensure that services can be sustained by WETA, consistent with City of Vallejo and WETA desires, into the future. As such, WETA intends to cover actual costs incurred for WETA's access to the Vallejo ferry terminal to provide such continued Vallejo services. If WETA pays any sums exceeding reimbursement of such actual costs "Excess OAK #4834 -5097 -9335 v12 55 Payment then WETA shall notify City thereof in writing (together with provision of applicable agreements and a financial analysis of the basis for any Excess Payment) and, if requested by City, take into account the Change Considerations and meet and confer with City in good faith[lnstallii. To the extent the Excess Fees represent payment of rent or are not reasonably allocable to a difference in costs or obligations to be borne by the City of Vallejo (as opposed to those obligations of City under this Agreement), and consistent with and subject to WETA's obligations under the Act, City shall be entitled to increase the Main Street Fees provided for in Section 11.6 and the Harbor Bay Fees provided for in Section 11.6(a)(iii by comparable amounts. (ii) Consideration for Acquired Assets It is WETA's intent to structure the Vallejo Transition Agreement to provide for the City of Vallej o's transfer of ferry system assets to WETA without the payment of monetary consideration by WETA for such transfer. If WETA agrees to pay monetary consideration to the City of Vallejo for the transfer of ferry system assets from the City of Vallejo to WETA, then WETA shall notify City thereof in writing (together with provision of any applicable agreements and a financial analysis of the basis for any such payment) and, if requested by City, meet and confer with City in good faith, and upon request of City staff make an informational presentation at a duly noticed meeting of the Authority Board or the Alameda City Council, as the case may be. To the extent that any such payment represents reimbursement to the City of Vallejo of any costs funded by sources other than the City of Vallej o' s general fund, and consistent with and subject to WETA's obligations under the Act, City shall be entitled to payment for the Acquired Assets calculated in a manner comparable to the basis for the payment to the City of Vallejo. ARTICLE 13 Miscellaneous Section 13.1 Notices All notices, demands and requests which may be given or which are required to be given by either Party to the other, and any exercise of a right of termination provided by this Agreement, shall be in writing and shall be deemed effective either: (a) on the date personally delivered to the address below, as evidenced by written receipt therefor, whether or not actually received by the person to whom addressed; (b) on the third (3rd) business day after being sent, by certified or registered mail, postage prepaid, return receipt requested, addressed to the intended recipient at the address specified below; or (c) on the first (1 st) business day after being deposited into the custody of a nationally recognized overnight delivery service such as Federal Express or United Parcel Service, addressed to such Party at the address specified below. For purposes of this Section 13. 1 the addresses of the Parties for all notices are as follows (unless changed by similar notice in writing given by the particular person whose address is to be changed): OAK #4834 -5097 -9335 v12 56 If to City or Authority: Alameda City Hall 2263 Santa Clara Avenue Alameda CA 94501 Attn: City Manager Ph: (510) 747 -4700 with copies to: City of Alameda Public Works Department 950 West Mall Square, Room 110 Alameda, CA 94501 Attn: Public Works Director Ph: (510) 749 -5840 and: Gerald J. Ramiza, Esq. Burke Williams Sorensen, LLP 1901 Harrison Street, Suite 900 Oakland, CA 94612 Ph: (510) 273 -8780 If to WETA: Water Emergency Transportation Authority Pier 9, The Embarcadero, Suite 111 San Francisco, CA 94111 Attn: Nina Rannells, Executive Director Ph: (415) 364 -3186 with a copy to: Stanley S. Taylor, Esq. Nossaman, LLP 50 California Street, 34th Floor San Francisco, CA 94111 Ph: (415) 398 -3600 Section 13.2 Entire Agreement This Agreement (including the schedules and exhibits attached hereto, all of which are hereby incorporated by reference, and stand -alone versions thereof) and the Reimbursement Agreement embody the entire agreement between the Parties concerning the subject matter hereof, and there are no oral or written agreements between the Parties, nor any representations made by either Party relative to the subject matter hereof, which are not expressly set forth or incorporated herein. OAK #4834 -5097 -9335 v12 57 Section 13.3 Amendment This Agreement may be amended only by a written instrument executed by each of the Parties hereto. Section 13.4 Headings The captions and headings used in this Agreement are for convenience only and do not in any way limit, amplify, or otherwise modify the provisions of this Agreement. Section 13.5 Time of Essence Time is of the essence of this Agreement; however, if the final date of any period which is set out in any provision of this Agreement falls on a Saturday, Sunday or legal holiday under the laws of the United States or the State in which the Property is located, then, in such event, the time of such period shall be extended to the next business day which is not a Saturday, Sunday or legal holiday. Section 13.6 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State California and the laws of the United States pertaining to transactions in such State, without reference to choice of law principles which might indicate that the law of some other jurisdiction may apply. Section 13.7 Successors and Assigns; Assignment This Agreement shall bind and inure to the benefit of City, Authority, and WETA and their respective heirs, executors, administrators, personal and legal representatives, successors and permitted assigns. Section 13.8 Invalid Provision If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and, the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid, or unenforceable provision or by its severance from this Agreement. Section 13.9 Enforcement In the event a dispute arises concerning the performance, meaning or interpretation of any provision of this Agreement or any document executed in connection with this Agreement, the prevailing Party in such dispute shall be awarded any and all costs and expenses incurred by such Party in enforcing, defending or establishing its rights hereunder or thereunder, including court costs and reasonable attorneys' fees. In addition to the foregoing, the prevailing Party shall also be entitled to recover its reasonable attorneys' fees incurred in any appeals or any post judgment proceedings to collect or enforce any such judgment. Section 13.10 Multiple Counterparts This Agreement may be executed in a number of identical counterparts which, taken together, shall constitute collectively one agreement. Section 13.11 Construction City, Authority and WETA acknowledge that each Party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits hereto. The words "include" and "including" shall be construed as if followed by the words "without limitation." OAK #4834 -5097 -9335 v12 58 Section 13.12 No Recordation City, Authority and WETA hereby acknowledge that neither this Agreement nor any memorandum or affidavit thereof shall be recorded of public record in any county. Section 13.13 Further Assurances In addition to the acts and deeds recited herein and contemplated to be performed, executed or delivered by City, Authority and WETA, each Party hereby agrees to perform, execute and deliver, or cause to be performed, executed and delivered, as of Closing or thereafter any and all such further acts, deeds and assurances as City, Authority or WETA, as the case may be, may reasonably require in order to consummate fully the transactions contemplated hereunder. WETA shall promptly reimburse City for any actual costs incurred by City in connection therewith to the extent not specifically addressed in this Agreement or the Reimbursement Agreement. Section 13.14 No Waiver No consent or waiver by either Party to or of any breach or nonperformance of any representation, condition, covenant or warranty shall be enforceable unless in writing signed by the Party entitled to enforce performance, and such signed consent or waiver shall not be construed as a consent to or waiver of any other breach or non performance of the same or any other representation, condition, covenant, or warranty. Section 13.15 Survival All of the provisions of this ARTICLE 13 shall survive Closing or any earlier termination of this Agreement. Signatures Follow On Next Page OAK #4834 -5097 -9335 v12 59 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day first above written. SAN FRANCISCO BAY AREA WATER CITY OF ALAMEDA EMERGENCY TRANSPORTATION AUTHORITY BY: BY: Name: Nina Rannells Title: Executive Director DATE: APPR O VED AS TO FORM. Stanley S. Taylor Nossaman, LLP Legal Counsel to Authority Name: Ann Marie Gallant Title: Interim City Manager DATE: RECOMMENDED FOR APPROVAL Matthew T. Naclerio Public Works Director APPR O VED AS TO FORM. Teresa L. Highsmith, City Attorney ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY BY: Name: Ann Marie Gallant Title: Interim Executive Director DATE: ESCROW HOLDER BY: Name: Title: DATE: OAK #4834 -5097 -9335 v12 60 Escrow Holder Acknowledgement The undersigned acknowledges receipt of this Agreement and agrees to act as escrow holder escrow agent in this transaction strictly in accordance with this Agreement. ESCROW HOLDER By: Company: Name: Title: Dated: 2010 OAK #4834 -5097 -9335 v12 61 SCHEDULE 1 ASSIGNED CONTRACTS HARBOR BAY 1. Sixth Amended and Restated Operating Agreement for the Alameda /Harbor Bay Ferry Service dated August 1, 2004 by and between City and Harbor Bay Maritime, Inc., as amended 2. Assignment and Assumption Agreement Regarding Certain Licenses, Permits and Obligations Under Planning Approvals for the Marine Portions of the Harbor Bay Ferry Terminal dated May 5, 2004, by and between Harbor Bay Isle Associates, Harbor Bay Maritime, Inc. and City [NOTE: May need partial assignment for Coast Guard and /or Department of Army permits] MAIN STREET 1. Agreement for Alameda /San Francisco Ferry Service dated August 1, 2004 by and between City and Blue Gold Fleet, L.P., as amended 2. Amended and Restated Ferry Service Agreement between City and Port of Oakland dated July 1, 2005, as amended [NOTE: need copy of most recent amendment] 3. Addendum to Purchase Order Number 1000707, undated, by and between City and Call Em -All, LLC [NOTE: Need original purchase order; need to understand what services are] 4. Consultant Agreement dated August 2009 by and between City and Xaplan Associates [NOTE: Need signed agreement; need extension beyond June 30, 2010; need to determine if contract applies to both Main Street and Harbor Bay] 5. Consultant Agreement dated August 25, 2009 by and between City and Professional Staffing Resources, Inc. "Angel Island Concession Agreement" means "Blue Gold Fleet Agreement" is defined in Section 4.3. "Ferry Service Agreement" is defined in Section 4.1. "Harbor Bay Operating Agreement" is defined in Section 11.6(b)(ii). "Harbor Bay Grant of Easement" is defined in Section 11.6(b)(i). "Alameda /Harbor Bay Ferry Service Agreement" is defined in Section 4.5. "License 12192" is defined in Section 4.2. OAK #4834 -5097 -9335 v12 "License 12194" is defined in Section 4.4. OAK #4834 -5097 -9335 v12 SCHEDULE 2 WARRANTIES OAK #4834 -5097 -9335 v12 SCHEDULE 3 AUTHORIZATIONS 1. Both services: Port of San Francisco with respect to new License to Land [NOTE: Need to include China Basin per Blue &Gold agreement.] 2. Harbor Bay: Coast Guard with respect to Private Aids to Navigation Permit No. 18649 [NOTE: Need copy of permit itself; need to determine whether to be assigned and whether Coast Guard consent is required] 3. Main Street: Port of Oakland with respect to Ferry Service Agreement 4. Main Street: California Department of Parks and Recreation with respect to Blue &Gold contract [NOTE: Blue &Gold requires access rights to Angel Island. Need to either waive or obtain new agreement current agreement expired in 1996] OAK #4834 -5097 -9335 v12 SCHEDULE 4 LEGAL PROCEEDINGS [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 5 WATERSIDE ASSETS [To be completed by Alameda] Main Street Ferry Terminal YT Barge (ARRA) Passenger Float Gangway Awnin Security Gate Pilings Harbor Bay Ferry Terminal Passenger Float Gangway Security Gate Pilings Channel Markers, Harbor Bay Ferry Lights, 1, 2, 3, 4 and 6 OAK #4834 -5097 -9335 v12 SCHEDULE 6 PROPRIETARY RIGHTS [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 7 RETAINED AUTHORIZATIONS [To be provided by Alameda] [E.g. ADA court order.] OAK #4834 -5097 -9335 v12 SCHEDULE 8 VESSELS 1. Harbor Bay Express II; Official Number 998632, Gross Tonnage 52, Year Built 1993 2. Bay Breeze; Official Number 1020550, Gross Tonnage 99, Year Built 1994 3. M.V. Encinal; Official Number 682580, Gross Tonnage 96, Year Built 1985 4. M.V. Peralta; Official Number 1118810, Gross Tonnage 91, Year Built 2001 OAK #4834 -5097 -9335 v12 SCHEDULE 9 REQUIRED LICENSES, PAYMENTS AND CONSENTS Licenses: 1. Coast Guard 2. BCDC 3. Others? Payments None. Consents: 1. See Schedule 3 "Authorizations," above OAK #4834 -5097 -9335 v12 SCHEDULE 10 VESSEL PERMITTED ENCUMBRANCES [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 11 NOTICES OF VIOLATION FOR TERMINALS [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 12 AUTHORIZATIONS NOT OBTAINED [To be determined] OAK #4834 -5097 -9335 v12 SCHEDULE 13 NOTICES OF VIOLATION FOR SERVICES [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 14 PENDING AND THREATENED LEGAL PROCEEDINGS [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 15 DEFAULTS UNDER ASSIGNED CONTRACTS [To be provided by Alameda] OAK #4834 -5097 -9335 v12 SCHEDULE 16 GRANT REQUIREMENTS 1. Valley Power with respect to Bay Breeze generators [NOTE: Need copy of agreement] 2. Agreement between the Alameda County Transportation Improvement Authority and City dated May 22, 2008 [NOTE: Need to determine if assigned contract, grant or both] 3. Carl Moyer Program Grant Agreements IOMOY162 and 11MOY19 [NOTE: Need to determine if assigned contract, grant or both] 4. Various Caltrans grant agreements [NOTE: Need copies] 5. BAAQMD grants [NOTE: Need copies] OAK #4834 -5097 -9335 v12 EXHIBIT A FORM OF COAST GUARD BILL OF SALE OAK #4834 -5097 -9335 v12 OMB APPROVED 1625 -0027 EXPIRATION DATE: OAK #4834 -5097 -9335 v12 THIS SECTION FOR COAST GUARD USE ONLY U.S. DEPARTMENT OF APPLICATION FOR INITIAL ISSUE HOMELAND SECURITY CASE NUMBER: U.S. COAST GUARD EXCHANGE, CG -1258 (REV. 06/04) OR REPLACEMENT OF CERTIFICATE OF CHECK DOCUMENTATION; REDOCUMENTATION FEE: NOTE: FILING THIS APPLICATION DOES NOT ENTITLE A VESSEL TO DOCUMENTATION OR TO ANY CHANGES SOUGHT ON A CERTIFICATE OF DOCUMENTATION. OFFICIAL NUMBERS DESIGNATED ON THE BASIS OF THIS APPLICATION ARE NOT TRANSFERABLE. ONLY A CURRENT CERTIFICATE OF DOCUMENTATION IS VALID FOR VESSEL OPERATION. I. COMPLETE FOR ALL APPLICATIONS A. VESSEL NAME B. OFFICIAL NUMBER (IF AWARDED) AND HULL APPROVED: IDENTIFICATION NUMBER IF ANY DATE: C. NAME OF MANAGING OWNER D. ADDRESS OF MANAGING OWNER TELEPHONE NUMBER (OPTIONAL): SOCIAL SECURITY OR TAX ID NUMBER SHOW PHYSICAL ADDRESS IF DIFFERENT FROM MAILING ADDRESS E. NAMES AND SOCIAL SECURITY OR TAX ID NUMBERS OF ALL OTHER OWNERS F. HAILING PORT INCLUDING STATE (TO BE MARKED ON VESSEL) ATTACH SHEET LISTING ADDITIONAL OWNERS IF NECESSARY G. CITIZENSHIP VESSEL OWNED: F BY ONE OR MORE INDIVIDUALS I (WE) CERTIFY THAT ALL OWNERS OF THIS VESSEL ARE CITIZENS OF THE UNITED STATES F BY JOINT VENTURE OR ASSOCIATION I (WE) CERTIFY THAT ALL MEMBERS OF THIS (JOINT VENTURE) (ASSOCIATION) ARE CITIZENS OF THE UNITED STATES, ELIGIBLE TO DOCUMENT THE VESSELS COVERED BY THIS APPLICATION WITH THE ENDORSEMENT(S) SOUGHT IN THEIR OWN RIGHT. F IN A TRUST ARRANGEMENT I (WE) CERTIFY THAT ALL TRUSTEES AND ALL BENEFICIARIES WITH AN ENFORCEABLE INTEREST IN THIS TRUST ARRANGEMENT ARE CITIZENS OF THE UNITED STATES, ELIGIBLE TO DOCUMENT VESSEL WITH THE ENDORSEMENT(S) SOUGHT IN THEIR OWN RIGHT. F BY A PARTNERSHIP OR LIMITED LIABILITY COMPANY I (WE) CERTIFY THAT ALL PARTNERS IN THIS PARTNERSHIP (MEMBERS OF THIS LLC) ARE CITIZENS OF A. GENERAL PARTNERSHIP OR LIMITED THE UNITED STATES ELIGIBLE TO DOCUMENT VESSELS IN THEIR OWN RIGHT, AND THAT THE PART LIABILITY COMPANY (LLC) NERSHIP LLC MEETS THE FOLLOWING EQUITY REQUIREMENTS: EQUITY OWNED BY U.S. CITIZENS. AT LEAST 50% MORE THAN 50 LESS THAN 75% 75% OR MORE B. LIMITED PARTNERSHIP I (WE) CERTIFY THAT ALL GENERAL PARTNERS IN THIS PARTNERSHIP ARE CITIZENS OF THE UNITED STATES, ELIGIBLE TO DOCUMENT VESSELS IN THEIR OWN RIGHT AND THAT THE PARTNERSHIP MEETS THE FOLLOWING EQUITY REQUIREMENTS, EQUITY INTEREST OWNED BY CITIZENS OF THE U.S. ELIGIBLE TO DOCUMENT VESSELS IN THEIR OWN RIGHT WITH THE ENDORSEMENT SOUGHT. AT LEAST 50% MORE THAN 50 LESS THAN 75% 75% OR MORE F VESSEL OWNED BY A CORPORATION D. NUMBER OF DIRECTORS NECESSARY TO CONSTITUTE A QUORUM A. STATE OF INCORPORATION E. NUMBER OF ALIEN DIRECTORS B. CITIZENSHIP OF PRESIDENT (AND OTHER CHIEF EXECUTIVE F. PERCENTAGE OF STOCK OWNED BY U.S. CITIZENS ELIGIBLE TO DOCUMENT VESSELS IN THEIR OFFICER, IF ANY) OWN RIGHT, WITH THE ENDORSEMENT(S) SOUGHT ON THIS APPLICATION (APPLIES TO ALL TIERS OF OWNERSHIP.) C. CITIZENSHIP OF CHAIRMAN OF THE BOARD LESS THAN 50% AT LEAST 50% MORE THAN 50 LESS THAN 75% 75% OR MORE F VESSEL OWNED BY A CORPORATION QUALIFIED AND CURRENT CERTIFICATE OF COMPLIANCE ATTACHED. I (WE) CERTIFY THAT THE CORPORATE APPLYING UNDER 46 CFR 68.01 (BOWATER) STRUCTURE HAS NOT CHANGED SINCE ISSUANCE OF THAT CERTIFICATE, AND THAT THE VESSEL, IF SELF PROPELLED, IS LESS THAN 500 GROSS TONS. F VESSEL OWNED OR OPERATED BY NOT FOR PROFIT COPY OF CURRENT LETTER OF QUALIFICATION ATTACHED. I (WE) CERTIFY THAT THE INFORMATION OIL RECOVERY COOPERATIVE ON FILE WITH REGARD TO COOPERATIVE AND ISSUANCE OF THAT LETTER REMAINS UNCHANGED. H. ENDORSEMENTS FOR WHICH APPLICATION IS MADE. (IF MORE THAN ONE, INDICATE ESTIMATED PERCENTAGE FOR EACH). F RECREATIONAL F COASTWISE FISHERY COASTWISE (BOWATER ONLY) F REGISTRY F OIL SPILL RESPONSE OAK #4834 -5097 -9335 v12 F COASTWISE UNDER CHARTER TO AN ENTITY QUALIFIED TO ENGAGE IN COASTWISE 46 APP USC 802. COPY OF CHARTER ON FILE WITH U.S.C.G. PREVIOUS EDITION OBSOLETE .EVERSE OF UU -12-Ni (REV. 06/04) L PRIMARY SERVICE F-1 COMMERCIAL FISHING BOAT F-1 FISH PROCESSING VESSEL F-1 FREIGHT SHIP F-1 FREIGHT BARGE F-1 INDUSTRIAL VESSEL F-1 MOBILE OFFSHORE DRILLING UNIT F-1 OIL RECOVERY F-1 OFFSHORE SUPPLY VESSEL F-1 PASSENGER (6 OR FEWER) F-1 PASSENGER (MORE THAN 6 F-1 PASSENGER BARGE (6 OR FEWER) F-1 PASSENGER BARGE (MORE THAN 6) F-1 PUBLIC FREIGHT F-1 PUBLIC TANKSHIP /BARGE F-1 PUBLIC VESSEL, UNC F-1 RESEARCH VESSEL PURPOSE OF APPLICATION F-1 1. EXCHANGE OF CERTIFICATE OF DOCUMENTATION. SN 7530- 00 -FOI -0800 FI SCHOOL SHIP TANK BARGE TANK SHIP F TOWING VESSEL F-1 UNCLASSIFIED VESSEL F-1 RECREATIONAL F-1 2. REPLACEMENT OF LOST, WRONGFULLY WITHHELD OR MUTILATED CERTIFICATE OF DOCUMENTATION. F-1 3. RETURN TO DOCUMENTATION FOLLOWING DELETION, NAME OF VESSEL WHEN LAST DOCUMENTED: F-1 4. APPLICATION FOR OFFICIAL NUMBER AND FIRST CERTIFICATE OF DOCUMENTATION. VESSEL F-1 WAS BUILT AT IN OR F-1 IS UNDER CONSTRUCTION AT HULL MATERIAL: F]WOOD F-1 STEEL F-1 OTHER (DESCRIBE) APPROXIMATE LENGTH OF VESSEL PREVIOUS NAMES, NUMBERS, OR FOREIGN REGISTRATIONS OF VESSEL K. CERTIFICATION: I (WE) CERTIFY THAT: (A) I AM (WE ARE) A CITIZEN(S) OF THE UNITED STATES AND LEGALLY AUTHORIZED TO EXECUTE THIS APPLICATION IN THE CAPACITY SHOWN; (B) THAT THE VESSEL(S) TO WHICH THIS APPLICATION APPLIES; (i) F]HAS (HAVE) BEEN MARKED OR ❑WILL BE MARKED IN ACCORDANCE WITH THE DIRECTIONS IN THE INSTRUCTION SHEET (CG- 1258 -A) FOR THIS APPLICATION; (ii) WILL AT ALL TIMES REMAIN UNDER THE COMMAND OF A U.S. CITIZEN, UNLESS DOCUMENTED SOLELY WITH A RECREATIONAL ENDORSEMENT. (iii) WILL NOT BE OPERATED IN A TRADE NOT AUTHORIZED BY THE ENDORSEMENT(S) ON THE CERTIFICATE(S) OF DOCUMENTATION; (iv) HAS NOT BEEN REBUILT SINCE LAST DOCUMENTATION (v) THE VESSEL IS FINOT TITLED UNDER A STATE OR F IS TITLED UNDER THE LAWS OF (C) THE NAME(S) OF THE VESSEL(S) WILL NOT BE CHANGED WITHOUT APPROVAL FROM NATIONAL VESSEL DOCUMENTATION CENTER; AND (D) (WE) WILL PROMPTLY NOTIFY THE NATIONAL VESSEL DOCUMENTATION CENTER UPON A CHANGE IN ANY OF THE INFORMATION OR REPRESENTATIONS IN THIS APPLICATION. PRINTED OR TYPED NAME SIGNATURE GENERAL PARTNER, CORPORATE OFFICER) DATE: CAPACITY (E.G., OWNER, AGENT, TRUSTEE, MONTH /YEAR AND IS SCHEDULED FOR COMPLETION IN F-1 FIBROUS REINFORCED PLASTIC F-1 ALUMINUM FICONCRETE. OAK #4834 -5097 -9335 v12 PRIVACY ACT STATEMENT IN ACCORDANCE WITH 5 U.S.C. 553a, THE FOLLOWING INFORMATION IS PROVIDED TO YOU WHEN SUPPLYING PERSONAL INFORMATION TO THE U.S. COAST GUARD. 1. AUTHORITY SOLICITATION OF THIS INFORMATION IS AUTHORIZED BY 46 U.S.C., CHAPTERS 121 AND 125; 46 U.S.C. APP. 802 AND 883. 2. THE PRINCIPAL PURPOSES FOR WHICH THIS INFORMATION IS TO BE USED ARE: (1) TO DETERMINE CITIZENSHIP OF THE OWNER OF THE VESSEL FOR WHICH APPLICATION FOR DOCUMENTATION IS MADE; AND (2) TO DETERMINE ELIGIBILITY OF THE VESSEL TO BE DOCUMENTED WITH THE TRADE ENDORSEMENT SOUGHT. 3. THE ROUTINE USES WHICH MAY BE MADE OF THIS INFORMATION INCLUDE RELEASE TO LAW ENFORCEMENT OFFICIALS, TO THE GENERAL PUBLIC UNDER FREEDOM OF INFORMATION ACT, AND TO PUBLISH INFORMATION ABOUT U.S. DOCUMENTED VESSELS. 4. DISCLOSURE OF THE INFORMATION REQUESTED ON THIS FORM IS VOLUNTARY, HOWEVER, FAILURE TO PROVIDE THE INFORMATION REQUESTED WILL RESULT IN DENIAL OF THE APPLICATION FOR DOCUMENTATION, WHICH MAY PREVENT THE OWNER FROM OPERATING THE VESSEL(S) IN A SPECIFIED TRADE. AN AGENCY MAY NOT CONDUCT OR SPONSOR, AND A PERSON IS NOT REQUIRED TO A COLLECTION OF INFORMATION UNLESS IT DISPLAYS A VALID OMB CONTROL NUMBER. THE COAST GUARD ESTIMATES THAT THE AVERAGE BURDEN FOR THIS FORM IS 30 MINUTES. YOU MAY SUBMIT ANY COMMENTS CONCERNING THE ACCURACY OF THIS BURDEN ESTIMATE OR MAKE SUGGESTIONS FOR REDUCING THE BURDEN TO: U.S. COAST GUARD, NATIONAL VESSEL DOCUMENTATION CENTER, 792 T J JACKSON DRIVE, FALLING WATERS, WEST VIRGINIA 25419, OR OFFICE OF MANAGEMENT AND BUDGET, PAPERWORK REDUCTION PROJECT (1625- 0027), WASHINGTON, DC 20503. OAK #4834 -5097 -9335 v12 INSTRUCTIONS FOR COMPLETING FORM CG -1258 (CG -1258A Revised MAR/2006) A. VESSEL NAME Insert name by which you wish the vessel to be known. If applying to change the vessel's name, insert the old vessel name in parenthesis. B. OFFICIAL NUMBER AND HIN Insert the official number awarded by the Coast Guard for all but Initial Issue cases. If the vessel has an assigned Hull Identification Number (HIN) it should also be shown. C. MANAGING OWNER Name the owner to whom the Coast Guard should send correspondence and their Social Security number. A Social Security or TAX I.D. number IS REQUIRED A telephone number is not required but is helpful. Only an owner or part owner can be the managing owner. For vessels owned by a corporation the corporation is the managing owner: for a trust arrangement, the trustee is the managing owner: for a Partnership or a LLC, the name of the Partnership or the LLC should be shown. D. ADDRESS OF MANAGING OWNER Show your mailing address. If your physical (street) address is different from your mailing address, show BOTH addresses. TRUST All trustees and each beneficiary with an enforceable interest must be citizens. Attach a list naming all trustees, other than managing owner and any beneficiary only if they have an enforceable interest. PARTNERSHIP or LIMITED LIABILITY COMPANY (LLC) Check if general or limited and other applicable block AND attach a list of all general partners or members if an LLC. All partners or members of an LLC must be U.S. Citizens. CORPORATION ALL blocks (A through F) must be completed. CORPORATIONS QUALIFIED UNDER 46 CFR 68.01 OR OWNED BY A NOT -FOR- PROFIT OIL RECOVERY COOPERATIVE Attach a copy of the Certificate of Compliance or Letter of Qualification issued by the Director, NVDC. H. ENDORSEMENTS Check the appropriate block(s) to indicate the endorsement(s) for which application is made. E. NAME(S) AND SOCIAL SECURITY NUMBER(S) OR TAX I.D. NUMBER(S) of all persons (other than managing owner) who own an interest in the vessel. If no owners other than the managing owner, leave blank. F. HAILING PORT Insert name of place and state exactly as it is or will be marked on the vessel. The hailing port must be a place in the United States. Commonly known abbreviations are acceptable. (e.g., NY, NY) G. CITIZENSHIP Check the appropriate box (es) to show the type of entity which own(s) the vessel and to certify that the owner(s) meet the appropriate citizenship requirements. INDIVIDUAL Includes native born and naturalized U.S. citizens. JOINT VENTURE /ASSOCIATION Attach a list naming all joint venturers /members. The percentage held by each need not be shown. I. PRIMARY SERVICE Check only ONE primary service the vessel will be used for. J. PURPOSE OF APPLICATION Check applicable blocks to show purposes of application. If vessel has never been documented, check Block #4 and provide ALL requested information which is known about the vessel's place and year of build, hull material, approximate length and previous names and numbers. If this information is unknown, please indicate. K. CERTIFICATION Complete as appropriate. The law provides severe penalties for false statements against both the person (including agents) making the statement and against the vessel for which it is made. OAK #4834 -5097 -9335 v12 VESSEL MARKING INSTRUCTIONS Every documented vessel must be marked with its official number, name and hailing port. A Certificate of Documentation is not valid for operation of the vessel until the vessel is marked in accordance with the prescribed regulations contained in 46 CFR 67.120. OFFICIAL NUMBERS The official number shown on the Certificate of Documentation, preceded by the abbreviation "NO" must be marked in block -type Arabic numerals of at least 3 inches in height on some clearly visible interior structural part of the hull. The number must be permanently affixed so that alteration, removal or replacement would be obvious and cause some scarring or damage to the surrounding hull area. NAME AND HAILING PORT: For Recreational vessels the name and hailing port must marked together on some clearly visible exterior part of the hull. For Commercial vessels the name must be marked pm each bow and the vessel name and hailing port must also be marked on the stern. The markings may be made by the use of any means and materials that result in durable markings. All must be at least 4 inches in height, made in clearly legible letters o the Latin alphabet or Arabic or Roman numerals. A vessel's Hailing Port marking must include BOTH a place (city) and the state, territory or possession where the place (city) is located. Only the state, territory or possession maybe abbreviated unless the city is a commonly known abbreviation, such as N.Y., N.Y. NOTE: REQUIREMENT FOR SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER: The requirement to supply this information is codified in Chapter 125, Title 46, U.S. Code. OAK #4834 -5097 -9335 v12 EXHIBIT B FORM OF GENERAL BILL OF SALE OAK #4834 -5097 -9335 v12 BILL OF SALE Subject to the terms and conditions of the Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the CITY OF ALAMEDA "Transferor conveys to the SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY, "Transferee and to Transferee's successors and assigns, all of Transferor's right, title and interest, legal and equitable, in and to the personalty listed in Schedule 1 attached hereto. All terms used herein as defined terms shall have the meanings set forth for such terms in the Agreement. Transferor hereby covenants and agrees that Transferor will from time to time, if requested by Transferee or her successors and assigns, to do, execute, acknowledge and deliver, or will cause to be done, executed, and delivered to Transferee, or its successors or assigns, such and all further acts, transfers, assignments, deeds, powers and assurances of title, and additional papers and instruments, and to do or cause to be done all acts or things as often as may be proper or necessary for better assuring, conveying, transferring and assigning all of the property hereby conveyed, transferred or assigned and to vest in the Transferee the entire right, title and interest of the Transferor in and to all of the said property and effectively to carry out the intent hereof. Dated this day of 2010. CITY OF ALAMEDA, a municipal corporation BY: Name: Ann Marie Gallant Title: Interim City Manager DATE: SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY BY: Name: Nina Rannells Title: Executive Director DATE: OAK #4834 -5097 -9335 v12 ATTACHMENT I TO FORM OF BILL OF SALE PERSONALTY OAK #4834 -5097 -9335 v12 PERSONALTY [To be completed by Alameda] OAK #4834 -5097 -9335 v12 EXHIBIT C YC BARGE BILL OF SALE OAK #4834 -5097 -9335 v12 YC BARGE BILL OF SALE Subject to the terms and conditions of the Agreement, and specifically Section 2.3 Section 2.5 thereof, in exchange for the YC Barge Price, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City of Alameda and Alameda Reuse and Redevelopment Authority "Transferor conveys to the SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY, "Transferee and to Transferee's successors and assigns, all of Transferor's right, title and interest, legal and equitable, in and to the YC Barge. All terms used herein as defined terms shall have the meanings set forth for such terms in the Agreement. Transferor hereby covenants and agrees that Transferor will from time to time, if requested by Transferee or her successors and assigns, to do, execute, acknowledge and deliver, or will cause to be done, executed, and delivered to Transferee, or its successors or assigns, such and all further acts, transfers, assignments, deeds, powers and assurances of title, and additional papers and instruments, and to do or cause to be done all acts or things as often as may be proper or necessary for better assuring, conveying, transferring and assigning all of the property hereby conveyed, transferred or assigned and to vest in the Transferee the entire right, title and interest of the Transferor in and to all of the said property and effectively to carry out the intent hereof. Dated this day of 2010. CITY OF ALAMEDA AND ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, a BY: Name: Title: DATE: SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY IC Name: Nina Rannells Title: Executive Director DATE: OAK #4834 -5097 -9335 v12 EXHIBIT D FORM OF ASSIGNMENT OF CONTRACT RIGHTS OAK #4834 -5097 -9335 v12 ASSIGNMENT OF CONTRACT RIGHTS [To be determined if needed] OAK #4834 -5097 -9335 v12 EXHIBIT E FORM OF ASSIGNMENT OF PROPRIETARY RIGHTS OAK #4834 -5097 -9335 v12 ASSIGNMENT OF PROPRIETARY RIGHTS [To be determined if needed] OAK #4834 -5097 -9335 v12 EXHIBIT F FORM OF ASSIGNMENT OF CERTAIN LIABILITIES OAK #4834 -5097 -9335 v12 ASSIGNMENT OF CERTAIN LIABILITIES [To be determined if needed] OAK #4834 -5097 -9335 v12 EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT OAK #4834 -5097 -9335 v12 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement "Assignment is made and entered into as of 2010, by and between the City of Alameda and the Alameda Reuse and Redevelopment Authority (collectively "Seller and San Francisco Bay Area Water Emergency Transportation Authority "WETA pursuant to the terms of that certain Ferry Service Operations Transfer Agreement dated as of 2010 "Agreement 1. Seller, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, has granted, sold, assigned, transferred, conveyed, and delivered and does hereby grant, sell, assign, transfer, convey and deliver unto WETA, all of Seller's right, title, and interest in and to the following described items arising or used in connection with the ferry services commonly known as the Alameda /San Francisco Ferry Service and the Alameda /Harbor Bay Ferry Service (each a "Service" and, collectively, the "Services (a) All of Seller's right, title and interest in and to the written contracts and agreements pertaining to the Real Property set forth on Schedule 1 attached hereto (collectively, the "Assigned Contracts (b) All of Seller's rights, title and interest in and to the warranties specified in Schedule 2 attached hereto; (c) To the extent assignable, all intangible property "Intangible Property if any, owned by Seller as of the date hereof and pertaining to or used in connection with the operation, maintenance or management of the Services or the Assigned Contracts including all additional unexpired warranties upon the vessels and equipment owned by Seller and used in connection with the Service (other than those specified in Schedule 2), all copyrights, logos, designs, trademarks, trade names (other than the trade names of Seller or its affiliates), service marks and goodwill associated with the Services, including in particular the names "Alameda /Oakland Ferry Service" and "Alameda /Harbor Bay Ferry Service" and all licenses, permits, entitlements, government approvals and certificates which benefit the Services. 2. Seller and WETA hereby covenant and agree as follows: (a) WETA accepts the aforesaid assignment and WETA assumes and agrees to be bound by and timely perform, observe, discharge, and otherwise comply with each and every one of the agreements, duties, obligations, covenants and undertakings of Seller under the Assigned Contracts arising from and after Closing. (b) WETA hereby defends, indemnifies and agrees to hold harmless Seller from and against Claims which Seller may incur, sustain, or suffer, or which may be asserted or assessed against Seller on or after the date hereof, arising out of, pertaining to or in any way connected with the obligations, duties, and liabilities under the Assigned Contracts, or any of them, to be kept and performed by Seller or WETA whether accruing prior to or from and after the date hereof; provided, however, that WETA shall have no obligation to so indemnify, hold harmless and defend Seller against any such Claims if and to the extent that such Claims arise out of Seller's gross negligence or willful misconduct prior to Closing. OAK #4834 -5097 -9335 v12 (c) The burden of the indemnity made in paragraph 2(b) hereof shall not be assigned. Except as aforesaid, this Agreement shall bind and inure to the benefit of the Parties and their respective successors, legal representatives and assigns. 3. No Implied Warranties. WETA SPECIFICALLY ACKNOWLEDGES AND AGREES THAT EXCEPT TO THE EXTENT SPECIFICALLY AND EXPRESSLY SET FORTH HEREIN OR IN THE AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE PERSONAL PROPERTY, LEASES, ASSIGNED CONTRACTS OR WARRANTIES. THE PROVISIONS OF SECTIONS 2 AND 5 OF THE AGREEMENT ARE HEREBY INCORPORATED BY THIS REFERENCE AS IF FULLY SET FORTH IN THIS ASSIGNMENT. OAK #4834 -5097 -9335 v12 IN WITNESS WHEREOF, Seller and WETA have executed this Assignment effective as of the day of 2010. Seller: City of Alameda, a municipal corporation Name: Anne Marie Gallant Title: Interim City Manager DATE: WETA: San Francisco Bay Area Water Emergency Transportation Authority Name: Nina Rannells Title: Executive Director DATE: OAK #4834 -5097 -9335 v12 ASSIGNED CONTRACTS [Above Schedule 2 to be inserted upon finalization] OAK #4834 -5097 -9335 v12 WARRANTIES [Above Schedule 2 to be inserted upon finalization]] OAK #4834 -5097 -9335 v12 EXHIBIT H FY 2010/11 BUDGET FOR THE SERVICES OAK #4834 -5097 -9335 v12 FY 2010/11 BUDGET FOR THE SERVICES [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT I CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS (WETA) OAK #4834 -5097 -9335 v12 CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS AND WARRANTIES This Certificate Regarding Truth of Representations and Warranties "Certificate is executed and delivered by San Francisco Bay Area Water Emergency Transportation Authority "Buyer as of 2010 to City of Alameda "Seller Reference is made to that certain Ferry Service Operations Transfer Agreement dated as of 2010 "Agreement Capitalized terms used herein but not otherwise defined shall have the meaning given such term in the Agreement. This Certificate is being delivered pursuant to Section 7.1(e) of the Agreement. Buyer hereby certifies to Seller that the representations and warranties of Buyer set forth in Section 5.3 are true and correct as of the Closing Date in all material respects. This Certificate is subject to any qualifications set forth in each such specific representation and warranty and the limitations set forth in Section 5.2. BUYER: San Francisco Bay Area Water Emergency Transportation Authority Name: Nina Rannells Title: Executive Director DATE: OAK #4834 -5097 -9335 v12 EXHIBIT J CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS (CITY /AUTHORITY) OAK #4834 -5097 -9335 v12 CERTIFICATE REGARDING TRUTH OF REPRESENTATIONS AND WARRANTIES This Certificate Regarding Truth of Representations and Warranties "Certificate is executed and delivered by City of Alameda and Alameda Reuse and Redevelopment Authority (collectively, "Seller as of 2010 to San Francisco Bay Area Water Emergency Transportation Authority "Buyer Reference is made to that certain Ferry Service Operations Transfer Agreement dated as of 2010 "Agreement Capitalized terms used herein but not otherwise defined shall have the meaning given such term in the Agreement. This Certificate is being delivered pursuant to Section 7.1(e) of the Agreement. Seller hereby certifies to Buyer that the representations and warranties of Seller set forth in Section 5.1 are true and correct as of the Closing Date in all material respects. This Certificate is subject to any qualifications set forth in each such specific representation and warranty and the limitations set forth in Section 5.2. SELLER: City of Alameda, a municipal corporation Name: Anne Marie Gallant Title: Interim City Manager DATE: Alameda Reuse and Redevelopment Authority, a C• Name: Title: DATE: OAK #4834 -5097 -9335 v12 EXHIBIT K CERTIFICATE OF FERRY SERVICE ACCOUNT BALANCES OAK #4834 -5097 -9335 v12 CERTIFICATE OF FERRY SERVICE ACCOUNT BALANCES This Certificate of Ferry Service Account Balances "Certificate is executed and delivered by City of Alameda "Seller as of 2010 to San Francisco Bay Area Water Emergency Transportation Authority "Buyer Reference is made to that certain Ferry Service Operations Transfer Agreement dated as of 2010 "Agreement Capitalized terms used herein but not otherwise defined shall have the meaning given such term in the Agreement. This Certificate is being delivered pursuant to Section 7.2(x) of the Agreement. Seller hereby certifies that, as of the date of this Certificate, Seller has the following account balances in each of its ferry operations financial accounts: OPERATING, MAIN STREET: OPERATING, HARBOR BAY: RESERVES, MAIN STREET: RESERVES, HARBOR BAY: [need details on account functions and types from Alameda] As provided in Agreement Section 9.2(12), the premium for the Supplemental Insurance shall be deducted from the ferry service account balances; City estimates such premium will be in no event be less than Twenty -Five Thousand Dollars ($25,000.00). SELLER: City of Alameda, a municipal corporation Name: Anne Marie Gallant Title: Interim City Manager DATE: OAK #4834 -5097 -9335 v12 EXHIBIT L FORM OF ASSIGNED CONTRACT ESTOPPEL CERTIFICATE OAK #4834 -5097 -9335 v12 ASSIGNED CONTRACT ESTOPPEL CERTIFICATE TO: SAN FRANCISCO BAY AREA WATER EMERGENCY TRANSPORTATION AUTHORITY RE: [Contract Name] The undersigned, "Contract Party understands that the San Francisco Bay Area Water Emergency Transportation Authority "Buyer has contracted to acquire the ferry services commonly known as the Alameda /San Francisco Ferry Service and the Alameda /Harbor Bay Ferry Service "Services from the City of Alameda "Seller" or "City City has entered into "Contract with respect to its operation of the Services, which Contract is to be assigned to Buyer pursuant to the transfer of the Services. The Contract Party hereby certifies the following with respect to the Contract and agrees that you and your assigns may rely upon the same in acquiring said Services: I The Contract is in full force and effect, constitutes a binding obligation of the Parties, and has not been modified or amended either orally or in writing. 2. All payments required to be made by Seller, and all payments required to be made by Contract Party, pursuant to the Contract prior to the date hereof have been paid, except 3. All Parties to the Contract have performed all obligations required thereunder. 4. The Contract Party asserts no claim of default under the Contract, and to the best of the Contract Party's knowledge and belief, there is no default by Seller under the Contract. Dated: November 2007 Very truly yours, By: Name: Its: OAK #4834 -5097 -9335 v12 EXHIBIT M MAP OF YC BARGE AND WATERSIDE ASSETS (MAIN STREET) OAK #4834 -5097 -9335 v12 MAP OF YC BARGE AND WATERSIDE ASSETS (MAIN STREET) [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT N MAP OF HARBOR BAY FLOAT AND WATERSIDE ASSETS (HARBOR BAY) OAK #4834 -5097 -9335 v12 MAP OF HARBOR BAY FLOAT AND WATERSIDE ASSETS (HARBOR BAY) [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT 0 DESIRED MAINTENANCE SCHEDULE FISCAL YEAR 2010/11 OAK #4834 -5097 -9335 v12 DESIRED MAINTENANCE SCHEDULE FISCAL YEAR 2010/11 [To be provided by Alameda] OAK #4834 -5097 -9335 v12 EXHIBIT P MAP OF HARBOR BAY PARKING LOT OAK #4834 -5097 -9335 v12 MAP OF HARBOR BAY PARKING LOT [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT Q PROPOSED LOCATION OF SEAPLANE LAGOON REPLACEMENT TERMINAL OAK #4834 -5097 -9335 v12 PROPOSED LOCATION OF SEAPLANE LAGOON REPLACEMENT TERMINAL [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT R FISCAL YEAR 2010/11 SERVICE LEVELS OAK #4834 -5097 -9335 v12 FISCAL YEAR 2010/11 SERVICE LEVELS [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT S DIAGRAM OF CRANE AND PIER HEAD OAK #4834 -5097 -9335 v12 DIAGRAM OF CRANE AND PIER HEAD [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT T DIAGRAM OF MAIN STREET CHANNEL OAK #4834 -5097 -9335 v12 DIAGRAM OF MAIN STREET CHANNEL [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT U CALTRANS GRANT ASSIGNMENT AGREEMENT OAK #4834 -5097 -9335 v12 CALTRANS GRANT ASSIGNMENT AGREEMENT [to be attachedl OAK #4834 -5097 -9335 v12 EXHIBIT V DIAGRAM OF MAIN STREET LAND OAK #4834 -5097 -9335 v12 DIAGRAM OF MAIN STREET LAND [to be attached] OAK #4834 -5097 -9335 v12 EXHIBIT W ESCROW AGREEMENT OAK #4834 -5097 -9335 v12 ESCROW AGREEMENT [to be attached] OAK #4834 -5097 -9335 v12