Document:

Exhibit 10.29

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is
made as of May 30, 2006, by and among Festival Fun Parks, LLC, a Delaware
limited liability company (the “Company”), Palace Entertainment Holdings, Inc., a Delaware corporation
(“Holdings”) and James A. Burk (the “Executive”), each a “Party” and collectively the “Parties.” Unless otherwise indicated,
capitalized terms used herein are defined in Section 2.1.

 

ARTICLE I 

EMPLOYMENT TERMS

 

1.1                                Employment. The Company will employ the Executive, and the Executive accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on May 30, 2006 (the “Effective
Date”) and
ending as provided in Section 1.4(a) hereof (the “Employment
Period”).

 

1.2                                Position and Duties.

 

(a)                                  Generally. The Executive shall serve as the Chief Financial Officer of each of
Holdings and the Company and, in such capacity shall be responsible for the general
management of the finance, accounting and information technology of Holdings and
the Company, shall perform such duties as are customarily performed by a
chief financial officer of a company of a similar size and shall have such
power and authority as shall reasonably be required to enable him to perform his
duties hereunder; provided, however, that in exercising such power and
authority and performing such duties, he shall at all times be subject to the
authority and control of the Chief Executive Officer and the Boards of
Directors of Holdings and the Company.

 

(b)                                 Duties and Responsibilities. The Executive shall report to the Chief
Executive Officer and the Board of Directors of the Company and shall devote
his full business time and attention to the business and affairs of Holdings,
the Company and its Subsidiaries. The Executive shall perform his duties
and responsibilities in a diligent, trustworthy, businesslike and efficient
manner. The Executive shall not engage in any other business activities that
could reasonably be expected to conflict with the Executive’s duties,
responsibilities and obligations hereunder. During the Employment Period, the
Executive shall promptly bring to the Company or its Subsidiaries, as
applicable, all investment or business opportunities relating to the activities
described in Section 1.9(a) of which the Executive becomes
aware.

 

1.3                                Compensation.

 

(a)                                  Base Salary. The Executive’s base salary shall be $250,000.00 per annum (the “Base
Salary”). The
Base Salary payable for Fiscal Year 2006 shall be pro rated based on the number
of days from and including the Effective Date through and including December 31,
2006. The Base Salary will be payable to the Executive by the Company in
regular installments in accordance with the Company’s general payroll practices.
The Executive shall receive such increases in his Base Salary as the Board of
Directors of the Company may approve in its sole discretion from time to
time; provided that the Executive’s Base Salary will be reviewed not less often
than annually.

 

 

(b)                              Bonus.

 

(i) For Fiscal Year
2006, the Executive shall receive an annual cash bonus, payable to Executive on
or before April 30, 2007, in an amount determined in the sole discretion
of the Company’s Board of Directors, which amount shall be deemed earned if
Executive is employed as of December 31, 2006.

 

(ii) For Fiscal Year
2007 and for each subsequent Fiscal Year during the Term (as defined below),
the Executive shall be eligible to receive an annual cash bonus (the “Annual
Cash Bonus”), which
shall consist of two separate components and be payable to Executive on or
before the end of the fourth month following the end of the relevant Fiscal
Year, but in the event that the Company has not received its audited financial
statements for the relevant Fiscal Year by the date that is three and one-half
months after the end of such relevant Fiscal Year, the Company shall make such
payment within fifteen days but not later than the last day of the calendar
year following such Fiscal Year) after the Company’s receipt of audited financial
statements for such Fiscal Year, so long as Executive is employed by the
Company on the last day of such Fiscal Year, as follows:

 

(A)                              if the Company’s EBITDA for a Fiscal Year is
greater than or equal to the EBITDA Target for such Fiscal Year, Executive
shall receive an Annual Cash Bonus for such Fiscal Year equal to 50% of
Executive’s Base Salary; and

 

(B)                                if the Company’s EBITDA for a Fiscal Year is
greater than or equal to the EBITDA Target for such Fiscal Year, Executive
shall receive an additional Annual Cash Bonus for such Fiscal Year equal to the
product of the Available Cash Flow Excess multiplied by 10%.

 

(iii) For Fiscal Year
2007 only, the Annual Cash Bonus, if any, payable to Executive pursuant to this
Section 1,3(b)(ii)(A) and (B), shall be increased on a
pro rata basis to include the complete months in Fiscal Year 2006 following the
date the Acquisition is consummated minus any
annual bonus amount paid to Executive pursuant to Section 1.3(b)(i) (which
shall be deducted first out of any amount payable to Executive pursuant to Section 1.3(b)(ii)(A) and
second out of any amount payable to Executive pursuant to Section 1,3(b)(ii)(B)),

 

(c)                                   Withholding. All payments made under this Agreement (including Base Salary, bonus
payments, and other amounts) shall be subject to withholding for income taxes,
payroll taxes and other legally required deductions.

 

(d)                                  Expenses. The Company will reimburse the Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company’s policies in effect at that time with
respect to travel, entertainment and other business expenses, subject to the
Company’s requirements with respect to reporting and documentation of such
expenses.

 

(e)                                   Vacation; Holiday Pay and Sick Leave. The Executive shall be entitled to four (4) weeks’
paid vacation in each calendar year, which if not taken during any year may be
carried forward to any subsequent year. Executive shall receive holiday pay and
paid sick leave

 

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as provided to other executive employees of Holdings and the Company. Upon
cessation of Executive’s employment for any reason, Executive shall receive pay
for all accrued and unused vacation, calculated at his base salary rate in
effect at the time of the cessation of his employment, provided that the amount
of vacation that Executive shall be entitled to accrue during the Term shall be
in accordance with Company policy and in no event shall such accrued vacation exceed
8 weeks at any given time.

 

(f)                                    Additional Benefits. During the Employment Period, the Executive
shall be entitled to participate (for himself and, as applicable, his
dependents) in the group medical, life, 401k and other insurance programs,
employee benefit plans and perquisites which may be adopted by the Board
for participation by the Company’s senior management or executives, as well as
dental, life and disability insurance coverage, with payment of, or
reimbursement for, such insurance premiums by the Company, subject to, in all
cases, the terms and conditions established by the Board with respect to such
plans (collectively, the “Benefits”);
provided, however, that the Board, in its discretion, may revise
the terms of any Benefits so long as such revision does not have a
disproportionately negative impact on the Executive vis-a-vis other Company
employees, to the extent applicable.

 

(g)                                 Incentive Unit Grant. On the Effective Date, the Executive shall
receive a grant (the “Equity Grant”) of 408.11 Class B-1 Units, 680.19 Class B-2
Units and 272.07 Class B-3 Units (as defined in the LLC Agreement) of
Palace Holdings Group, LLC. The Equity Grant shall be subject to the terms and
provisions of the LLC Agreement including, without limitation, the vesting,
forfeiture, repurchase and giveback provisions of Sections 3.1(c), 10.3 and
11.3 of the LLC Agreement.

 

(h)                                 Director and Officer Insurance. The Company shall use commercially
reasonable efforts to purchase and maintain a Directors and Officers liability
insurance policy on terms and conditions deemed acceptable to the Board of
Directors, acting in good faith, which policy will cover Executive at all times
during his employment.

 

1.4                                Term and Termination.

 

(a)                                  Duration. The Employment Period shall commence on the Effective Date and shall
terminate three (3) years from the Acquisition Date (the “Term”), unless earlier terminated by the
Company or the Executive as set forth in this Section 1.4. The Term
of the Agreement shall renew automatically for one-year periods, unless either
party gives the other party written notice of its intention not to renew the
Agreement no later than 90 days prior to the expiration of the then current
Term. This Agreement may be terminated during the Term upon the first to
occur of (i) termination of the Executive’s employment by the Company for
Cause, (ii) termination of the Executive’s employment by the Company
without Cause, (iii) the Executive’s resignation with Good Reason, (iv) the
Executive’s resignation other than for Good Reason, or (v) the Executive’s
death or Disability. The Executive shall not terminate the Agreement with or
without Good Reason, unless he gives the Company written notice that he intends
to terminate the Agreement at least 90 days prior to the Executive’s proposed
Termination Date. Upon termination of this Agreement, the Executive shall
execute and deliver to the Company a release in form and substance
acceptable to the Company.

 

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(b)                                  Severance Upon Termination Without Cause or Upon
Resignation by the Executive For Good Reason. If the Employment Period is terminated by the Company without Cause
or if the Executive resigns for Good Reason, subject to the Executive’s
continued performance of the terms of this Agreement that survive the
Termination Date, the Executive will be entitled to receive (1) (i) if
such termination occurs prior to the eighteen-month anniversary of the
Effective Date, his Base Salary for the greater of (x) twelve months and (y)
the period of time remaining in such eighteen-month period, (ii) if such
termination occurs after the eighteen-month anniversary of the Effective Date,
his base salary and benefits equal to twelve months and (2) if such
termination or resignation occurs between October 1 and December 31,
Executive will be entitled to a prorated Annual Cash Bonus based on the number
of days during the relevant Fiscal Year that precede the date of termination
(each of (1) and (2) referred to as the “Severance Payment”). The Executive also shall be
entitled to receive payment for all reimbursable expenses or other entitlements
then due and owing to the Executive as of the Termination Date.: In the event
that the Executive breaches his obligations under Section 1.6, 1.7,
1.8 or 1.9 of this Agreement, the Company’s obligation to make
any Severance Payments and provide any Benefits shall cease as of the date of
such breach.

 

(c)                                   Death and Disability. In the event of the Company terminates this
Agreement due to the death or Disability of the Executive, the Executive shall
be entitled to no severance or other termination benefits from and after the
termination of his employment, except as provided in Section 1.4(b) hereof.
Any other rights and benefits the Executive may have under employee
benefit plans and programs of the Company generally in the event of the
Executive’s Disability shall be determined in accordance with the terms of such
plans and programs. In the event of Executive’s death, any rights and benefits
that the Executive’s estate or any other person may have under employee
benefit plans and programs of the Company generally in the event of the
Executive’s death shall be determined in accordance with the terms of such
plans and programs.

 

(d)                                  Salary and Other Payments Through Termination. If the Executive’s employment with the
Company is terminated during the Term (i) by the Company for Cause or (ii) by
the Executive other than for Good Reason, the Executive will be entitled to
receive his Base Salary through the Termination Date, but will not be entitled
to receive any Severance Payments or Benefits after the Termination Date. The
Executive shall be entitled to receive payment for all reimbursable expenses or
other entitlements then due and owing to the Executive as of the Termination
Date.

 

(e)                                   Other Rights. Except as set forth in Section 1.4(b),
all of the Executive’s rights to Base Salary, Benefits and Annual Cash Bonuses
hereunder (if any) which accrue or become payable after the termination of the
Employment Period shall cease upon such termination.

 

1.5                              Key Man Life Insurance. The Company shall have the right to
purchase in the Executive’s name a “key man” life insurance policy naming the
Company or any of its Subsidiaries as the sole beneficiary thereunder. The
Executive agrees to take all reasonable measures necessary to effect the
foregoing, including without limitation submitting to a physical examination
for the purpose of determining eligibility therefore and cooperating with any
matters related to the application for, and if obtained, the maintenance of,
such insurance policy. If Executive is found ineligible for some reason for
such “key man” life insurance either at the inception of his employment or at
anytime thereafter, this ineligibility will not affect Executive’s

 

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employability under this Agreement or constitute Cause for termination of
Executive’s employment.

 

1.6                                Confidential Information.

 

(a)                                  The Executive shall not disclose or, directly
or indirectly, use at any time, during the Employment Period or thereafter, any
Confidential Information (as defined below) of which the Executive is or
becomes aware, whether or not such information is developed by his, except to
the extent that (i) such disclosure or use is required by the Executive’s
performance of the duties assigned to the Executive by the Board, (ii) the
Executive is required by subpoena or similar process to disclose or discuss any
Confidential Information, provided, that in such case, the Executive shall
promptly inform the Company of such event and shall cooperate with the
Company in attempting to obtain a protective order or to otherwise restrict
such disclosure or (iii) such Confidential Information becomes generally
known to and available for use by the public, other than as a result of any
action or inaction by the Executive. At the Company’s expense, the Executive
shall take all appropriate steps to safeguard Confidential Information and to
protect it against disclosure, misuse, espionage, loss and theft. The Executive
acknowledges that the Confidential Information obtained by him during the
course of his employment with the Company is the sole and exclusive property of
the Company and its Subsidiaries, as applicable.

 

(b)                                 The Executive understands that the Company
and its Subsidiaries will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on the part of
the Company and its Subsidiaries to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the Employment Period
and thereafter, and without in any way limiting the provisions of Section 1.6(a) above,
the Executive will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than personnel of the Company or its
Subsidiaries who need to know such information in connection with their work
for the Company or its Subsidiaries) or use, except in connection with his work
for the Company or its Subsidiaries, Third Party Information unless expressly
authorized by the Board in writing.

 

(c)                                  As used in this Agreement, the term “Confidential
Information” means
information that is not generally known to the public and that is used,
developed or obtained by Holdings and its Subsidiaries (including the Company
and its Subsidiaries) and any of the Company’s predecessor entities in
connection with its business, including but not limited to (i) business
development, growth and other strategic business plans, (ii) properties
available for acquisition, financing development or sale, (iii) accounting
and business methods, (iv) services or products and the marketing of such
services and products, (v) fees, costs and pricing structures, (vi) designs,
(vii) analysis, (viii) drawings, photographs and reports, (ix) computer
software, including operating systems, applications and program listings, (x) flow
charts, manuals and documentation, (xi) data bases, (xii) inventions, devices,
new developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (xiii) copyrightable works, (xiv) all
technology and trade secrets, (xv) confidential terms of material agreements
and customer relationships, and (xvi) all similar and related information in
whatever form. Confidential Information shall not include any information that
has become generally available to the public prior to the date the Executive
proposes to disclose or use such information or general know-how of the
Executive.

 

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1.7                                 Inventions and Patents. In the event that the Executive, as part of
his activities on behalf of the Company or any of its Subsidiaries, generates,
authors or contributes to any invention, design, new development, device,
product, method or process (whether or not patentable or reduced to practice or
comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any other form of Confidential
Information relating directly or indirectly to the business of the Company or
any of its Subsidiaries as now or hereinafter conducted (collectively, “Intellectual
Property’”), the
Executive acknowledges that such Intellectual Property is the sole and
exclusive property of the Company and its Subsidiaries and hereby assigns all
right, title and interest in and to such Intellectual Property to the Company
and its Subsidiaries. Any copyrightable work prepared in whole or in part by
the Executive will be deemed “a work made for hire” under Section 201(b) of
the 1976 Copyright Act, and the Company and its Subsidiaries shall own all of
the rights comprised in the copyright therein. The Executive shall promptly and
fully disclose all Intellectual Property to the Company and shall cooperate
with the Company and its Subsidiaries to protect the Company’s and its
Subsidiaries’ interests in and rights to such Intellectual Property (including,
without limitation, providing reasonable assistance in securing patent
protection and copyright registrations and executing all documents as
reasonably requested by the Company, whether such requests occur prior to or
after termination of the Executive’s employment with the Company). Anything
herein to the contrary notwithstanding, the obligations of Executive shall be
limited to and subject to the terms and provisions of California Labor Code Section 2870,
a copy of which is attached hereto as Exhibit A.

 

1.8                                 Delivery of Materials Upon Termination of
Employment. As requested by
the Company from time to time and upon the termination of the Executive’s
employment with the Company for any reason, the Executive shall promptly
deliver to the Company all copies and embodiments, in whatever form, of all
Confidential Information, Intellectual Property and property of the Company and
its Subsidiaries in the Executive’s possession or within his control
(including, but not limited to, office keys, access cards, written records,
notes, photographs, manuals, notebooks, documentation, program listings, flow
charts, magnetic media, disks, diskettes, tapes and any other materials
containing any Confidential Information or Intellectual Property) irrespective
of the location or form of such material and, if requested by the Company,
shall provide the Company with written confirmation that all such materials
have been delivered to the Company.

 

1.9                                 Non-Compete, Non-Solicitation.

 

(a)                                  The Executive acknowledges and agrees that
the Executive’s services to the Company and its Subsidiaries are unique in
nature and that the Company and its Subsidiaries would be irreparably damaged
if the Executive were to provide similar services to any Person competing with
the Company and its Subsidiaries or engaged in the Business. The Executive
further acknowledges that, in the course of his employment with the Company, he
will become familiar with the Company’s and its Subsidiaries’ trade secrets and
with other Confidential Information. During the Noncompete Period other than as
an employee of the Company, he shall not, directly or indirectly, whether for
himself or for any other Person, permit his name to be used by or participate
in any business or enterprise (including, without limitation, any division,
group or franchise of a larger organization) that engages or proposes to engage
in the Business in the Restricted Territories. For purposes of this Agreement,
the term “participate in”

 

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shall include, without limitation, having any direct or indirect
interest in any Person, whether as a sole proprietor, owner, stockholder,
partner, member, joint venturer, creditor or otherwise, or rendering any direct
or indirect service or assistance to any Person (whether as a director,
officer, supervisor, employee, agent, consultant or otherwise). Nothing herein
will prohibit the Executive from mere passive ownership of not more than five
percent (5%) of the outstanding stock of any class of a publicly held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market. As used herein, the phrase “mere passive ownership”
shall include voting or otherwise granting any consents or approvals required
to be obtained from such Person as an owner of stock or other ownership
interests in any entity pursuant to the charter or other organizational
documents of such entity, but shall not include, without limitation, any
involvement in the day-to-day operations of such entity.

 

(b)                                 During the Nonsolicitation Period, the
Executive will not directly, or indirectly through another Person, induce or
attempt to induce any customer, supplier, licensee, or other business relation
of the Company or any of its Subsidiaries to cease doing business with the
Company or any of its Subsidiaries, or induce or attempt to induce any corporate
officer, general manager or other employee of the Company or any of its
Subsidiaries to terminate such employee’s employment with the Company or any of
its Subsidiaries, or hire any such person unless such person’s employment was
terminated by the Company or any of its Subsidiaries, or in any way interfere
with the relationship between any such customer, supplier, licensee, employee
or business relation and the Company or any of its Subsidiaries, including,
without limitation, knowingly making any negative statements or communications
concerning the Company or any of its Subsidiaries. The Executive acknowledges
and agrees that the Company and its Subsidiaries would be irreparably damaged
if the Executive were to breach any of the provisions contained in this Section 1.9(b).

 

1.10                          Enforcement. If, at
the time of enforcement of Section 1.6, 1.7, 1.8, 1.9
or a court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the Parties agree that, to the extent permitted by
applicable law, the maximum period, scope or geographical area reasonable under
such circumstances will be substituted for the Noncompete Period, scope or area.
Because the Executive’s services are unique and because the Executive has
access to Confidential Information and Intellectual Property, the Parties agree
that money damages would be an inadequate remedy for any breach of Section 1.6,
1.7, 1.8, 1.9 or. Therefore, in the event of a breach or
threatened breach of Section 1.6, 1.7, 1.8, 1.9
or the Company or any of its Subsidiaries or any of their respective successors
or assigns may, in addition to other rights and remedies existing in their
favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce, or prevent any
violations of, the provisions hereof (without posting a bond or other security).
The Parties hereby acknowledge and agree that (a) performance of the
services of the Executive hereunder may occur in jurisdictions other than
the jurisdiction whose law the Parties have agreed shall govern the
construction, validity and interpretation of this Agreement, (b) the law
of the State of New York shall govern construction, validity and interpretation
of this Agreement to the fullest extent possible, and (c) Section 1.6,
1.7, 1.8, 1.9 or shall restrict the Executive only to the
extent permitted by applicable law.

 

1.11                          Survival. Sections
1.6, 1.7, 1.8 and 1.9 will survive and continue in
full force in accordance with their terms notwithstanding any termination of
the Employment Period.

 

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1.12                           Consideration. The Executive hereby agrees and
acknowledges that the Equity Grant constitutes good and valuable consideration
for the covenant and obligations incurred by Executive pursuant to Section 1.9.

 

ARTICLE III

DEFINED TERMS

 

2.1                                  Definitions. For purposes of this Agreement, the following terms will have the
following meanings:

 

“Acquisition” means
the purchase of the stock of the Company by Holdings, as contemplated by that
certain Stock Purchase Agreement by and among Palace Entertainment, Inc. the
Company and Holdings, dated February 9, 2006.

 

“Available Cash Flow Excess” means, for any Fiscal Year, the product of (x) the amount by which EBITDA
for such Fiscal Year exceeds Target EBITDA, multiplied by (y) 20%; provided
that the aggregate amount payable by the Company to all employees in respect of
the Available Cash Flow Excess shall in no event exceed (i) for Fiscal
Year 2007, $2,250,000 plus a pro rata increase based on the number of complete
months in Fiscal Year 2006 following the date the Acquisition is consummated,
and (ii) for each subsequent Fiscal Year during the Employment Period,
such amount that is determined by the Company’s Board of Directors in its sole
discretion.

 

“Business” means the
business of owning and operating Family Entertainment Centers.

 

“Cause” means with respect to the Executive one or
more of the following: (i) the commission of a felony or other crime
involving moral turpitude or the commission of any other act or omission
involving dishonesty or fraud with respect to the Company or any of its
Subsidiaries or any of their customers or suppliers, (ii) reporting to
work under the influence of alcohol or illegal drugs, or the use of illegal
drugs (whether or not at the workplace), (iii) substantial and repeated
failure to perform duties as reasonably directed by the Board, (iv) any
act or omission aiding or abetting a competitor, supplier or customer of the
Company or any of its Subsidiaries to the material disadvantage or detriment of
the Company and its Subsidiaries, (v) material breach of fiduciary duty,
gross negligence or willful misconduct with respect to the Company or any of
its Subsidiaries, or (vi) any other material breach of this Agreement;
provided, however, that if any such breach is subject to cure, Executive shall
be entitled to written notice of and an opportunity to cure such breach to the
Board’s reasonable satisfaction within 30 calendar days of notice of such
breach. For purposes of clarification, VisionMaker shall not be deemed a
competitor or supplier during such time as it is in compliance with that
certain License Agreement dated as of the date hereof with the Company.

 

“Disability” shall
have the meaning set forth in a policy or policies of disability insurance, if
any, the Company obtains for the benefit of itself and/or its employees. If
there is no definition of “disability” applicable under any such policy or
policies, if any, then the Executive shall be considered disabled due to mental
or physical impairment or disability, despite reasonable accommodations by the
Company and its Subsidiaries, to perform his

 

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customary or other comparable duties with the Company or its
Subsidiaries immediately prior to such disability for a period of at least 120
consecutive days or for at least 180 non-consecutive days in any 12-month
period.

 

“EBITDA” means, for a
Fiscal Year, earnings before interest, taxes, depreciation and amortization
determined in good faith by the Company’s Board of Directors following each
Fiscal Year based on the audited financial statements of the Company and its
subsidiaries for such Fiscal Year using the same methodology used in developing
the EBITDA Target for such Fiscal Year, as adjusted to reflect capital
expenditures and changes in average working capital during the Fiscal Year. Notwithstanding
the foregoing, not later than 30 days after the commencement of the Fiscal
Year, the Compensation Committee of the Board of Directors in consultation with
the Executive may adjust the criteria to calculate EBITDA.

 

“EBITDA Target” means
for each Fiscal Year the target amount established by the Company’s
Compensation Committee of the Board of Directors not later than thirty days
after the commencement of the Fiscal Year (it being understood that the Company’s
Board of Directors may, but shall not be obligated to, make adjustments to
adjust for the effect of extraordinary corporate transactions (acquisitions or
dispositions of businesses) during the Fiscal Year and shall be adjusted to
include the aggregate amount of Annual Bonuses for such Fiscal Year).

 

“Family Entertainment Center” means amusement parks, theme parks or similar facilities that (x) offer
water-leisure recreational facilities and other water attractions and/or (y)
offer a broad selection of attractions, including but not limited to, miniature
golf, go kart raceways, batting cages, rides and/or arcade pavilions.

 

“Fiscal Year” means
the fiscal year of the Company and its Subsidiaries ended December 31.

 

“Good Reason” means
the occurrence, without the Executive’s written consent, of one or more of the
following events: (i) the Company reduces the amount of Executive’s Base
Salary or Annual Cash Bonus, (ii) the Company requires that the Executive
relocate his principal place of employment to a site that is more than 50 miles
from the Company’s current headquarters at 4590 MacArthur Boulevard, Newport
Beach, California 92660 or if the Company changes the location of its
headquarters with the consent of Executive to a location that is more than 50
miles from such location, (iii) the Company materially reduces the
Executive’s responsibilities or (iv) the Company changes Executive’s title
or otherwise materially breaches the terms of this Agreement; provided that no
such event shall constitute Good Reason hereunder unless (a) the Executive
shall have given written notice to the Company of the Executive’s intent to
resign for Good Reason within 60 days after the Executive becomes aware of the
occurrence of any such event and (b) such event or occurrence shall not
have been resolved to the Executive’s reasonable satisfaction within 60 days of
the Company’s receipt of such notice.

 

“LLC Agreement” means
the Limited Liability Company Agreement of Palace Holdings Group, LLC as of
dated April 12, 2006, as amended from time to time.

 

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“Noncompete Period” means the Employment Period and 24 months thereafter, provided that if
the Employment Period is terminated by the Company without Cause or if
Executive resigns for Good Reason, then the Noncompete Period means the
Employment Period and 12 months thereafter.

 

“Nonsolicitation Period” means the Employment Period and 24 months thereafter.

 

“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or the United States of America any other nation, any state or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government.

 

“Restricted Territories” means the United States and its territories and possessions in which
the Company engages in the business as of the Termination Date.

 

“Subsidiary” has
the meaning given such term in the LLC Agreement.

 

“Termination Date” means the date of the Executive’s termination of employment with the
Company.

 

2.2                                  Other Definitional Provisions.

 

(a)                                   Section references contained in this
Agreement are references to sections in this Agreement, unless otherwise
specified. Each defined term used in this Agreement has a comparable meaning
when used in its plural or singular form. Each gender-specific term used in
this Agreement has a comparable meaning whether used in a masculine, feminine
or gender-neutral form.

 

(b)                                  Whenever the term “including” (whether or not
that term is followed by the phrase “but not limited to” or “without limitation”
or words of similar effect) is used in this Agreement in connection with a
listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or an exclusive listing of, the items within that classification.

 

ARTICLE III

MISCELLANEOUS TERMS

 

3.1                                 Dispute Resolution.

 

(a)                                  Except with respect to disputes and claims
under Section 1.6, 1.7, 1.8 or 1.9 hereof
(which may be pursued in any court of competent jurisdiction), each Party
agrees that arbitration, pursuant to the rules of the Federal Mediation
and Conciliation Service (the “FMCS”) in
effect as of the date of commencement of the arbitration (the “FMCS
Rules”), shall
be the sole and exclusive method for resolving any claim or dispute (“Claim”) arising out of or

 

10

 

relating
to the rights and obligations of the parties under this Agreement and the
employment of the Executive by the Company (including, without limitation,
claims and disputes regarding employment discrimination, sexual harassment,
termination and discharge), whether such claim arose or the facts on which such
Claim is based occurred prior to or after the execution and delivery of this Agreement.
The Parties agree that (i) one arbitrator shall be appointed pursuant to
the FMCS Rules to conduct any such arbitration and (ii) all meetings
of the Parties and all hearings with respect to any such arbitration shall take
place in New York, New York, or if such Claim does not arise out of or include
a Claim under Section 1.9, then such arbitration shall take place in Los
Angeles, CA. The Parties further agree that, unless otherwise determined by the
arbitrator, (x) each Party to the arbitration shall bear its own costs and
expenses (including, without limitation, all attorneys’ fees and expenses,
except to the extent otherwise required by applicable law) and (y) all costs
and expenses of the arbitration proceeding (such as filing fees, the arbitrator’s
fees, hearing expenses, etc.) shall be borne equally by the Parties; provided
that nothing herein shall be interpreted to preclude the arbitrator from
allocating the costs and expenses of the Parties and of such proceeding among
the Parties in any manner that the arbitrator may lawfully determine to do
so. The Parties agree that the judgment, award or other determination of any
arbitration under the FMCS Rules shall be final, conclusive and binding on
all of the Parties. Nothing in this Section 0(a) shall
prohibit any Party from instituting litigation to enforce any final judgment,
award or determination of the arbitration. Each Party hereby irrevocably
submits to the jurisdiction of the United States District Court for the
Southern District of New York, or if such Claim does not arise out of or
include a Claim under Section 1.9, then to the jurisdiction of the United
States District Court for the Central District of California, and agrees that
such court shall be the exclusive forum for the enforcement of any such final
judgment, award or determination of the arbitration. Each Party irrevocably
consents to service of process by registered mail or personal service and
waives any objection on the grounds of personal jurisdiction, venue or
inconvenience of the forum.

 

(b)                                 Notwithstanding the foregoing, prior to any
Party instituting any arbitration proceeding hereunder to resolve any Claim,
such Party first shall submit the Claim to a mediation proceeding among the
Parties which shall be governed by the prevailing procedures of the FMCS and
shall be conducted in New York, New York, or if such Claim does not arise out
of or include a Claim under Section 1.9, then such mediation shall be
conducted in Los Angeles, CA. If the Parties have not agreed in writing to a
resolution of the Claim pursuant to the mediation within 45 days after the
commencement thereof of if any Party refuses to participate in the mediation
process, then the Claim may be submitted to arbitration under Section 3.1(a) above.
Unless otherwise determined by the mediator, each Party shall bear its own
costs and expenses incurred in connection with the mediation, and all costs and
expenses of the mediation proceeding shall be borne equally by the Parties;
provided that nothing herein shall be interpreted to preclude the mediator from
allocating the costs and expenses of the Parties and of such proceeding among
the Parties in any manner that the arbitrator may lawfully determine to do
so.

 

3.2                                 Notices. Any notice provided for in this Agreement must be in writing and must
be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested), sent by reputable overnight courier
service (charges prepaid) or sent by facsimile (voice confirmed) to the
recipient at the address or facsimile number indicated below:

 

11

 

	
  To
  the Company:

  	
   

  
	
   

  	
   

  
	
  4590
  MacArthur Boulevard

  	
   

  
	
  Newport
  Beach, CA 92660

  	
   

  
	
  Telephone:

  	
  (949)
  797-9721

  
	
  Telecopy:

  	
  (949)
  261-1414

  
	
  Attention:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
  With
  copies to:

  	
   

  
	
   

  	
   

  
	
  MidOcean
  Partners, LP

  	
   

  
	
  320
  Park Avenue, 17th Floor

  	
   

  
	
  New
  York, NY 10022

  	
   

  
	
  Telephone:

  	
  (212)
  497-1400

  
	
  Telecopy:

  	
  (212)
  497-1375

  
	
  Attention:

  	
  Tyler
  Zachem

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  Morrison
  Cohen LLP

  	
   

  
	
  909
  Third Avenue

  	
   

  
	
  27th
  Floor

  	
   

  
	
  New
  York, NY 10022

  	
   

  
	
  Telephone:

  	
  (212)
  735-8716

  
	
  Telecopy:

  	
  (212)
  735-8708

  
	
  Attention:

  	
  David
  A. Scherl

  
	
   

  	
   

  
	
  To
  the Executive:

  	
   

  
	
   

  	
   

  
	
  4590
  MacArthur Boulevard

  	
   

  
	
  Newport
  Beach, CA 92660

  	
   

  
	
  Telephone:

  	
  (949)
  261-0404

  
	
  Telecopy:

  	
  (949)
  261-1414

  
	
  Attention:

  	
  Chief
  Financial Officer

  
			

 

or
such other address or to the attention of such other Person as the recipient
Party will have specified by prior written notice to the sending Party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.

 

3.3                                  Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

3.4                                  Complete Agreement. This Agreement, the LLC Agreement, that certain
Investment Agreement by and among Palace Holdings Group, LLC, a Delaware
limited liability

 

12

 

company
(“Parent”} and the Investors Listed on Schedule I
thereto, dated April 12, 2006, and that certain Letter Agreement Regarding
the Grant of Incentive Units by and between Parent and the Executive, dated April 12,
2006, embodies the complete agreement and understanding among the Parties with
regard to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the Parties, written
or oral, which may have related to the subject matter hereof in any way. To
the extent that this Agreement provides greater benefits to the Executive than
available under the Company’s employee handbook or other corporate policies,
then this Agreement shall prevail.

 

3.5                                 Counterparts. This Agreement may be executed in
separate counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement.

 

3.6                                 Assignment. Without the Executive’s consent, the Company may not assign its
rights and obligations under this Agreement except (i) to a “Successor”
(as defined below) or (ii) to an entity that is formed and controlled by
the Company or any of its Subsidiaries. This Agreement is personal to the
Executive, and the Executive shall not have the right to assign the Executive’s
interest in this Agreement, any rights under this Agreement or any duties
imposed under this Agreement, nor shall the Executive have the right to pledge,
hypothecate, transfer, assign or otherwise encumber the Executive’s right to
receive any form of compensation hereunder without the prior written
consent of the Board. As used in this Section 3.7, “Successor” shall include any Person that at
any time, whether by purchase, merger or otherwise, directly or indirectly
acquires all or substantially all of the assets of, or ownership interests in,
the Company and its Subsidiaries.

 

3.7                                 Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by the Company, the Executive, and
their respective heirs, successors and permitted assigns.

 

3.8                                 Choice of Law. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by and construed in
accordance with the domestic laws of the State of New York without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.

 

3.9                                 Remedies. Subject to the provisions of Section 0, each Party will
be entitled to enforce its rights under this Agreement specifically, to recover
damages and costs caused by any breach of any provision of this Agreement and
to exercise all other rights existing in its favor. Nothing herein shall
prohibit any arbitrator or judicial authority from awarding attorneys’ fees or
costs to a prevailing Party in any arbitration or other proceeding to the
extent that such arbitrator or authority may lawfully do so.

 

3.10                           Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement will affect the validity, binding effect or
enforceability of this Agreement.

 

13

 

3.11                            Third Party Beneficiaries. This Agreement will not confer any rights or remedies upon any Person
other than the Parties and their respective successors and permitted assigns.

 

3.12                            The Executive’s Representations. The Executive hereby represents and warrants to the Company that (a) the
execution, delivery and performance of this Agreement by the Executive do not
and shall not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which the
Executive is a party or by which he is bound, (b) the Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other Person and (c) upon the execution
and delivery of this Agreement by the Company, this Agreement shall be the
valid and binding obligation of the Executive, enforceable in accordance with
its terms.

 

3.13                            Amendment to Comply with Section 409A of the Code. To the extent that this Agreement or any part thereof
is deemed to be a nonqualified deferred compensation plan subject to Section 409A
of the Code and the Treasury Regulations (including proposed regulations) and
guidance promulgated thereunder, (a) the provisions of this Agreement
shall be interpreted in a manner to the maximum extent possible to comply in
good faith with Code Section 409A, and (b) the parties hereto agree
to amend this Agreement for purposes of complying with Code Section 409A
promptly upon issuance of any Treasury regulations or guidance thereunder, provided, that any such amendment shall not materially change the
present value of the benefits payable to the Executive hereunder or otherwise
materially adversely affect the Executive, the Company, or any affiliate of the
Company, without the consent of such party.

 

[END OF PAGE] 

[SIGNATURE PAGE FOLLOWS]

 

14

 

IN WITNESS WHEREOF, the Parties have executed this
Employment Agreement as of the date first written above.

 

	
   

  	
  FESTIVAL
  FUN PARKS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John
  A. Cora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and

  	
   

  
	
   

  	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PALACE
  ENTERTAINMENT HOLDINGS,

  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Cora

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John
  A. Cora

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and 

  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ JAMES A. BURK

  	
   

  
	
   

  	
  JAMES A. BURKExhibit
10.30

 

 

May 10, 2006

 

 

 

 

Todd R. Wulffson

2508 Platt Place

Tustin Ranch, CA   92782

 

Dear Todd,

 

This letter confirms our offer of employment
for the position of Vice President, General Counsel, for Festival Fun Parks,
LLC, which is a wholly-owned subsidiary of Palace Entertainment Holdings, Inc.
Your annual base salary will be $225,000. 
We look forward to you joining our team, effective May 22, 2006.

 

You
will receive equity incentive units in Palace Holdings Group, LLC.  You will be mailed a separate packet
containing additional detailed information as well as documents requiring your
signature. The terms and conditions of the equity grant will be set forth in
the unit grant agreement and operating agreement of Palace Holdings Group, LLC.

 

You
will be eligible to receive an annual cash bonus as determined by the board of
directors of Festival in its sole discretion. 
You are guaranteed a minimum bonus payment of $25,000 to be paid in
February, 2007, subject to being on the payroll.

 

In addition, you are eligible for other
benefits made available to Festival employees, which includes a major medical
plan, group term life insurance, dental insurance, vision care, 401(k) plan,
vacation and holiday periods. Should you have any questions regarding these benefits,
please feel free to contact me at 949-797-9707.

 

You agree that, without the Company’s prior written consent, you shall
not engage in any activity during your employment with the Company that would
conflict with, interfere with, impede or diminish the performance of your
duties for the Company or would otherwise be prejudicial to the Company’s
business interests.

 

On your first day, you will meet with me for
a “sign-in” session.  Please complete the
enclosed documents prior to arriving for your appointment. As the law now
requires us to verify your authorization to work in the United States, be sure
to bring documentation that will permit us to verify your eligibility (refer to
the reverse side of the U. S. Department of Justice Employment Eligibility
Verification form for acceptable documents). Should you require further
assistance or directions, please do not hesitate to give me a call.

 

This letter sets forth the terms of your
employment with the Company and supersedes any prior representations or agreements,
whether written or oral. You agree to treat with confidentiality the terms of
this offer and to not disclose or discuss or release any such terms to any
person or entity (except your attorney, accountant and other consultants)
without the consent of the Company. This letter may not be modified or amended,
except by a written agreement, signed by the Company and you.

 

Your employment with the Company is for no
specified term and is “at will,” and may be terminated by you or the Company at
any time, with or without cause.  In
return for the consideration set forth herein, you agree to provide the Company
with thirty (30) days’ advance notice of your resignation.

 

 

We all look forward to your joining our
Company. I am confident that you will find this an exciting Company to work for
and that you will be an excellent addition to our senior leadership team. Please
feel free to call me if you have any questions.

 

Sincerely,

 

 

/s/ Dennis Ciolli

 

	
  Dennis Ciolli

  	
  Accepted:

  	
  /s/ Todd R. Wulffson

  
	
   

  	
   

  
	
  Vice President-Human
  Resources

  	
   

  
	
  Festival Fun Parks, LLC

  	
  Date:

  	
  May 22, 2006

  

 

 

2

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