Document:

Exhibit 10.9

 

LEASE
AGREEMENT

 

This Lease Agreement (“Lease”) dated May 15,
2001, is between Mountain Creek Resort, Inc., formerly known as Great
Gorge Resort, Inc., a New Jersey corporation, with its principal place of
business at 200 Route 94, Vernon, NJ 07462 (“Landlord”), and N-Ovation Park
Management, Inc., a Delaware corporation, with its principal place of
business at 50 North Laura Street, Suite 2600, Jacksonville, FL 32202 (“Tenant”).
Tenant is a direct wholly-owned subsidiary of Alfa SmartParks, Inc., a
Delaware corporation (“Alfa”). Landlord and Tenant are each sometimes referred
to in this Lease individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

A.                                         Landlord owns and leases certain real
property (the “Overall Resort Property”), commonly known as “Mountain Creek,”
located in the Township of Vernon, County of Sussex, State of New Jersey, at
which Landlord currently operates a ski resort and a water park, and within
which Landlord is currently developing resort real estate.

 

B.                                           That portion of the Overall Resort Property
consisting of the water park, including water rides and amusements, as it is
presently existing, is hereinafter referred to as the “Water Park.” That
portion of the Overall Resort Property on which Landlord now or hereafter
operates its ski operations is hereafter referred to as the “Ski Operation
Property.”

 

C.                                           As part of the Overall Resort Property,
Landlord owns certain property in fee simple, and Landlord leases certain
property by virtue of that certain Lease Agreement, dated November 1,
1997, between Kellam Associates, Inc. and Angel Projects, Inc. (the “Kelley
Lease”), on which the Water Park is located. 
The fee and leased real property on which the Water Park is located
shall hereinafter be referred to as the “Real Property” and is depicted on Exhibit A.

 

D.                                          Certain improvements have been constructed on
the Real Property that are used in connection with the operation of the Water
Park (the “Improvements”). The Real Property and the Improvements are sometimes
collectively referred to herein as the “Water Park Property”.

 

E.                                            Landlord owns certain additional real
property in fee simple, consisting of a parking lot, ticket booths, point of
entry into the Water Park and certain other facilities that Landlord requires
use of in connection with its operation of the Overall Resort Property and that
Tenant requires use of in connection with its operation of the Water Park (the “Shared
Facilities”), which Shared Facilities are the subject of the Shared Facilities
License Agreement in the form attached as Exhibit B (the “Shared
Facilities License Agreement”).

 

Landlord desires to lease the Water Park Property to
Tenant and grant Tenant the right to use the Shared Facilities, upon and
subject to the terms and conditions described herein.

 

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NOW THEREFORE, for adequate consideration, the
receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant
hereby agree that the foregoing Recitals are true and correct and express their
intention to be bound by them, and the Parties farther agree as follows:

 

1.                                             Definitions and Interpretation.  In
this Lease, except as otherwise expressly provided or unless the context
otherwise requires, (a) the words used herein shall have the meanings
assigned to them in Exhibit C; (b) all references to Articles,
Sections, Exhibits or Schedules are deemed references to Articles, Sections,
Exhibits or Schedules respectively of this Lease; (c) words importing the
singular only also include the plural and vice versa where the context requires;
(d) the headings are for convenience only and are not intended as a guide
to interpretation of this Lease or any portion thereof; (e) the word “including”,
when following any general statement or term, is not to be construed as
limiting the general statement or term to the specific items or matters set
forth or to similar items or matters, but rather as permitting the general
statement or term to refer to all other items or matters that could reasonably
fall within its broadest possible scope; and (f) words importing the
masculine gender include the feminine or neuter, words in the singular include
the plural, words importing a corporate entity include individuals, and vice
versa.

 

2.                                             Leased Property.  Subject to and upon the terms and conditions
of this Lease, Landlord does hereby lease to Tenant and Tenant does hereby rent
from Landlord all of Landlord’s right, title, and interest in and to the Water
Park Property. Included as part of the Base Rent and at no additional cost to
Tenant, Tenant and its agents, employees and invitees are hereby granted a
nonexclusive license to use the Shared Facilities upon the terms and conditions
of the Shared Facilities License Agreement, a form of which is attached as Exhibit B
hereto.

 

3.                                       Use of the Property.

 

3.1                                 Water Park. This Lease permits the use of the Water Park Property only for the
operation of services and facilities customarily found at a water park facility
and for no other purpose and does not include or permit the operation of any
other services or businesses by Tenant beyond such use without the prior
written approval of Landlord. Tenant shall not permit or cause to be conducted
in or on the Water Park Property, any activity that constitutes a nuisance or
unreasonably interferes with Landlord’s ownership and operation of the Overall Resort
Property or any activity that subjects Landlord to any liability or
responsibility for injury to any person or damage to any property. Landlord
shall not permit or cause to be conducted in or on the Overall Resort Property,
any activity that unreasonably interferes with Tenant’s operation of the Water
Park Property or any activity that subjects Tenant to any liability or responsibility
for injury to any person or damage to any property.

 

3.2                                 Landlord’s Right of Entrance. As long as Landlord does not unreasonably interfere
with the exercise of the rights of Tenant under this Lease, provides reasonable
notice and has received Tenant’s consent (which will not be unreasonably
withheld), Landlord may enter upon and use the Water Park Property at any time (a) to
inspect the operation of Tenant’s business, the maintenance of Tenant’s
Property and Tenant’s compliance with the terms of this Lease; (b) to
maintain Landlord’s property; (c) for any other purpose in connection with
the operation of Landlord’s business; and (d) after consulting with Tenant
with respect to any plans and giving consideration to any suggestions of
Tenant, Landlord may permit third parties to use

 

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the
Water Park Property for purposes associated with Landlord’s business from time
to time, provided that such uses do not unreasonably interfere with the
exercise of the rights of Tenant under this Lease.

 

3.3                                 Tenant’s Right of Entrance. If, from time to time, Tenant requires
access to any of Landlord’s property that is adjoining the Water Park Property
in connection with Tenant’s business of operating or maintaining the Water
Park, Tenant shall provide Landlord with written notice stating the reason
Tenant desires such access. If Landlord consents, such consent not to be
unreasonably withheld, Tenant shall have reasonable access to such property; on
the conditions that (a) Tenant holds harmless and indemnifies Landlord for
any liabilities, losses or claims resulting from any activities on Landlord’s
property and (b) such activities shall be at Tenant’s sole cost and
expense.

 

4.                                       Term.

 

4.1                                 Term. The term of this Lease (“Term”) will commence at 12:01 a.m. on May 16,
2001 (the “Commencement Date”), and terminate at 12:00 midnight on September 30,
2030, and shall only run from April 1st to September 30th of each
year; provided that in 2001, the Term shall run from the Commencement Date
until September 30, 2001. Landlord retains the right to use the Water Park
Property during the rest of the year; on the condition that with Landlord’s
prior written consent, on a case-by-case basis, Tenant shall also have the
right to enter the Water Park Property at other times during the year for
activities in connection with the Water Park.

 

4.2                                 Tenant’s Right to Terminate After First
Season of Operation. Tenant
shall have the right to terminate this Lease, in Tenant’s sole and absolute
discretion, by delivering written notice of its desire to terminate to Landlord
on or before November 15, 2001. Any such termination of this Lease
pursuant to this Section 4.2 shall be effective as of December 31,
2001. In the event of such termination, Landlord shall reimburse to Tenant
within ninety (90) days after the effective date of such termination up to
$500,000 of capital costs and mobilization expenses actually incurred by Tenant
during the period prior to such termination. 
Any such reimbursement shall be conditioned on Tenant providing evidence
reasonably substantiating such costs and expenses; provided that Landlord shall
have no obligation to reimburse any single expenditure in excess of $50,000
unless Landlord was given at least 48 hours prior notice and an opportunity to
review, discuss with Tenant and approve such expenditure, such approval not to be
unreasonably withheld.

 

4.3                                 Improvement Extension Term. If, during the last five years of the Term,
Tenant (with Landlord’s prior written consent) makes Tenant Improvements to the
Water Park Property in excess of $750,000, the Term automatically shall be
extended for a period of (a) an additional five years from the date of the
completion of such Tenant Improvements or (b) five years from the date of
the expiration of the Term, whichever is shorter (the “Improvement Extension
Term”). All provisions of this Lease shall continue to apply during the period
of the Improvement Extension Term, including Rent, which shall continue to be
payable in the same manner as Rent was required to be paid during years 2
through 30 of the Term.

 

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5.                                             Rent.                    Tenant covenants and agrees to pay to
Landlord rent in an amount as determined in accordance with the following
provisions (collectively, “Rent”):

 

5.1                                 Base Rent.  Tenant shall pay as base rent (“Base Rent”) for the Term,
and to the extent applicable, the Improvement Extension Term, the following,
payable annually on or before October 31st of each year in accordance with
an officer’s certification from Tenant of Gross Revenues for such year;
provided, however, that an estimated payment based upon Gross Revenues (also
based upon an officer’s certification from Tenant) through the last full week
of August of each year shall be due and payable on September 30th of
such year. Notwithstanding the foregoing, however, the Base Rent for the 2001
season shall be due and payable on January 15, 2002, and shall be based on
an officer’s certification of EBITDA from Tenant:

 

	
  Year

  	
   

  	
  Rate

  
	
  Year
  1

  	
   

  	
  Fifty
  percent of the positive EBITDA for year ended December 31, 2001, due and
  payable by January 15, 2002. In the event EBITDA is negative, no rent
  shall be owed by Tenant to Landlord, and Landlord shall reimburse to Tenant
  no later than January 15, 2002, an amount equal to 50% of the negative EBITDA.

  
	
   

  	
   

  	
   

  
	
  Years
  2-30, and for each of the years comprising the Improvement Extension Term, if
  any.

  	
   

  	
  3.5%
  of Gross Revenues up to $4,000,000; 4.75% of Gross Revenues from $4,000,001
  to $6,000,000; 5.5% of Gross Revenues from $6,000,001 to $7,000,000; 7% of
  Gross Revenues from $7,000,001 to $8,000,000; 8% of Gross Revenues from
  $8,000,001 to $9,000,000; 9% of Gross Revenues from $9,000,001 to
  $10,000,000; and 10% of Gross Revenues above $10,000,000.

  

 

5.2                                 Additional Rent for Rent Under Kelley Lease. For each year during the Term (including
the first year), on or before January 15th of such year (commencing on
January 15, 2002), Tenant agrees to pay to Landlord as additional rent, fifty
percent (50%) of all amounts actually paid by Landlord as Annual Rent (as such
term is defined in the Kelley Lease), to the extent such payments of Annual
Rent were attributable to the immediately preceding calendar year. Tenant
acknowledges receipt of the Kelley Lease. In order to receive payment under
this Section 5.2, Landlord shall provide adequate documentation reasonably
substantiating the amount that Landlord actually paid in Annual Rent for which
Landlord is seeking payment hereunder. In addition, Tenant also is required to
reimburse Landlord for certain real property taxes paid by Landlord under the
Kelley Lease pursuant to Section 14 hereof.  The parties expressly agree that Tenant’s
obligation to pay 50% of the Annual Rent under the Kelley Lease shall be
adjusted, in an equitable manner as may be reasonably agreed upon between the
parties, if Landlord at any time engages in any profit making activities on any
portion of the real property that is subject to the Kelley Lease in a different
and inconsistent manner than Landlord is conducting activities on such property
as of the date hereof.

 

5.3                                 Late Penalty. If any installment of any required payment
(including Rent) is not paid by Tenant within ten (10) days after the date
it is due, then interest shall accrue from

 

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the
original due date on the unpaid installment at the then current prime rate of
National Community Bank of New Jersey (or its successors) during the first 30
days from said due date and at such prime rate plus 3% thereafter.

 

5.4                                 Right to Audit. Landlord shall have the right to request a
full audit of Tenant’s financial records as they relate to the determination of
Gross Revenues (or EBITDA, if such audit includes the first lease year)
relating to Tenant’s operation of the Water Park once every three years (which
audit shall apply to the immediately preceding three seasons). The audit shall
be conducted by an auditor of Landlord’s choosing and all fees and expenses
associated with such audit shall be the responsibility of Landlord; provided,
however, that if any such audit determines that Tenant underpaid its Base Rent
by more than $50,000 in any one of the seasons subject to such audit, all of
such audit fees and expenses shall instead be the sole the responsibility of
Tenant. In the event the audit determines there has been any underpayment or
overpayment for any of the years subject to the audit, Landlord or Tenant, as
appropriate, shall promptly, but in no case more than thirty (30) days after
such audit is finalized, make a cash payment to the other party in the amount
of such underpayment or overpayment as determined by the audit, as the case may
be.

 

6.                                             Landlord’s Deliveries. Landlord shall deliver the following items
to Tenant on or before July 31, 2001, which items are intended to enable
Tenant to make its decision whether or not to exercise its right to terminate
the Lease on or before November 15, 2001 pursuant to Section 4.2.

 

6.1                                 Title Commitment and Title Policy. Landlord will furnish to Tenant, at
Landlord’s expense, an ALTA Form commitment of title insurance (the “Title
Commitment”), committing to insure the leasehold interest of Tenant granted
herein subject to the encumbrances, covenants, conditions and restrictions set
forth as exceptions to title in such Title Commitment. If, and only if, Tenant
does not exercise its right to terminate the Lease on or before November 15,
2001, pursuant to Section 4.2, Landlord shall promptly thereafter deliver
to Tenant, at Landlord’s expense, an ALTA title insurance policy (the “Title
Policy”), in the form of the Title Commitment, in the amount of $1,500,000,
insuring Tenant’s leasehold interest.

 

6.2                                 Survey. Landlord will furnish to Tenant a current “as built” survey (the “Survey”)
covering the Real Property, certified by a Registered Land Surveyor reasonably acceptable
to Tenant. Such Survey will be in a form sufficient to allow the company
issuing the Title Commitment and the Title Policy (“Title Company”) to delete
the standard printed survey exceptions in the Title Policy and will show the
following: (a) the location of the improvements located on the Real
Property and all streets and easements on or contiguous to the Real Property; (b) the
points of access to all public streets and any limitations to such access; (c) any
encroachments on any of the Real Property by adjoining property owners or any
protrusions of the improvements located on the Real Property on adjoining
property; and (d) any applicable building setback lines and a certificate
by the surveyor that no portion(s) of the improvements located on the Real
Property protrude beyond any building setback lines.

 

6.3                                 Phase I Environmental Assessment. 
Landlord shall have prepared and furnish to Tenant a current Phase I
environmental assessment of the Real Property, in a form

 

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which meets the Preliminary Assessment/Site Evaluation Requirements of
the Technical Requirements for Site Remediation, NJAC 7:26E-1-1 et. seq.

 

6.4                                 Unrecorded Claims. Landlord shall deliver to Tenant an
affidavit of Landlord in form reasonably satisfactory to Tenant and the Title
Company, certifying that as of the date of the affidavit, to the extent true,
there are no rights which could give rise to laborers’, mechanics’ or
materialmen’s liens or other unrecorded claims against any portion of the Real
Property.

 

7.                                       Landlord’s Representations and Warranties. 
Landlord hereby represents and warrants to Tenant that as of the date
hereof:

 

7.1                                 Existence. Landlord is a New Jersey corporation, duly organized, existing, in
good standing and qualified to do business under the laws of the State of New
Jersey, and Landlord has full power and authority to lease and improve the
Water Park Property and to comply with the terms of this Lease.

 

7.2                                 Authority. The execution and delivery of this Lease by Landlord and the
consummation by Landlord of the transaction contemplated herein are within
Landlord’s capacity and all requisite action has been taken to make this Lease
valid and binding on Landlord in accordance with its terms.

 

7.3                                 No Legal Bar.  The
execution by Landlord of this Lease and the consummation by Landlord of the
transactions contemplated herein does not and will not (a) result in a
breach of any of the provisions of, or constitute a default or a condition
which on giving of notice or lapse of time or both would ripen into a default
under any indenture, agreement, instrument or obligation to which Landlord is a
party or by which any portion of the Water Park Property is bound; or (b) constitute
a violation of any order, rule or regulation applicable to Landlord or any
portion of the Water Park Property or the Shared Facilities, of any court or
any administrative agency or other governmental body having jurisdiction over
Landlord or any portion of the Water Park Property or the Shared Facilities.

 

7.4                                 No Default.  Landlord is not in default
under any indenture, mortgage, deed of trust, loan agreement, or other
agreement that might materially and adversely affect any portion of the Water
Park Property and which relate to or are secured by the Water Park Property or
the Shared Facilities. Neither Landlord nor the Water Park Property (or the
Shared Facilities) is subject to any agreement, restriction, requirement,
regulation or any order or decree of any court or governmental agency which
might materially and adversely affect operation of any portion of the Water
Park Property.

 

7.5                                 Title. Landlord has good and marketable title to that portion of the Real Property
that Landlord owns in fee simple, together with the Improvements, free and
clear of all liens, encumbrances and restrictions of any kind, except those
matters as may be set forth in the Title Commitment.

 

7.6                                 Leasehold Interest. Landlord is the lessee of a valid and
enforceable lease concerning the property subject to the Kelley Lease and has
an interest in the property sufficient

 

6

 

to
permit Landlord to sublease the property subject to the Kelley Lease to Tenant
under the terms and conditions stated herein.

 

7.7                                 No Restrictions on Use. To Landlord’s knowledge (it being
acknowledged by Tenant that Landlord is not aware of what the Title Commitment
or Survey may disclose), there are no encroachments, easements or restrictions
which would prohibit or limit the use of the Water Park Property as a water
park facility or the Shared Facilities in the manner that they are currently
being used by Landlord. Landlord agrees to reimburse and hold Tenant harmless from
all damages and expenses which Tenant may suffer by reason of any
encroachments, encumbrances, or defects in such title now in existence, except
as shall be identified and disclosed to Tenant in the Title Commitment and the
Survey. If Landlord fails or refuses to correct any such title defect which
would render the Real Property or the Improvements unsuitable for Tenant’s
intended use as a water park on or before November 1, 2001, Tenant shall have
the right to terminate this Lease and receive payment as calculated in Section 4.2,
as its sole and exclusive remedy hereunder.

 

7.8                                 Litigation.  There are no actions, suits,
proceedings or investigations pending or, to the knowledge of Landlord,
threatened against Landlord affecting any portion of the Water Park Property
(or Shared Facilities), at law or in equity, that could reasonably be expected
to have a material adverse effect on Tenant’s operation of the Water Park.
Neither Landlord nor the Water Park Property (or Shared Facilities) is subject
to any judgment, decree, injunction, rule or order of any court or
governmental body that could reasonably be expected to have a material adverse
effect on the operation of the Water Park.

 

7.9                                 Financial Information. 
Landlord has delivered to Tenant financial information regarding the
Water Park, which financial information is attached as Schedule 7.9 (“Financial
Information”).  Such Financial
Information and notes thereto fairly present the financial condition and the
results of operations, changes in stockholder equity, and cash flow of the
Water Park Property as of the respective dates of and for the periods referred
to in such Financial Information, all in accordance with generally accepted
accounting principles, and the Financial Information reflects the consistent
application of such accounting principles throughout the periods involved.
Landlord warrants that the Financial Information is true and accurate in all material
respects, as of the date made and as of the date of this Lease.

 

7.10                           No Undisclosed Liabilities. There are no liabilities of the Water Park,
or of Landlord related to the Water Park, of any kind whatsoever, other than
liabilities disclosed or provided for in the Financial Information or incurred
in the ordinary course of business since the date of the Financial Information.

 

7.11                           Absence of Certain Changes. Since the date of the Financial
Information, there has not been any material adverse change in the business,
operations, properties, assets or condition of the Water Park Property, and, to
Landlord’s knowledge, no event has occurred or circumstance exists that may
result in such a material adverse change.

 

7.12                           Compliance with the Law. To the extent necessary for the operation
of the Water Park and all elements within the Water Park, Landlord and the
Water Park each have all material authorizations, approvals, licenses and
orders of and from all governmental and

 

7

 

regulatory offices, including occupancy permits, necessary to carry on
the business of operating the Water Park, to own or hold under lease the
properties and assets they own or hold under lease and to perform all of their
obligations under the agreements to which they are a party, in all cases to the
extent related to the Water Park. To the extent necessary for the operation of
the Water Park and all elements within the Water Park, Landlord and the Water
Park are in compliance in all material respects with all applicable acts, laws,
ordinances, regulations and rules, orders, codes and determinations of any
federal, state or municipal government or of any subdivision of any thereof and
Landlord has received no notice of any claimed failure to comply with any
applicable building code, health or use regulation affecting the Water Park or
any element within the Water Park.

 

7.13                           Environmental Laws. To Landlord’s knowledge (it being
acknowledged by Tenant that Landlord is not aware of what the Phase I
environmental assessment may disclose), Landlord and the Water Park (a) have
obtained all permits, licenses, approvals and other authorizations which are
required with respect to the business or property of the Water Park or the
operation or ownership thereof under any Environmental Law; (b) are in
compliance with all terms and conditions of the required permits, licenses,
approvals and authorizations and with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any of the Environmental Laws as they relate to the
Water Park; (c) have not received any notice from any governmental
authority of any violation of or liability arising under any Environmental Laws
or any permits, licenses, approvals or other authorizations which are required
with respect to the business or properties of the Water Park or the operation
or ownership thereof; (d) are aware of no civil, criminal, administrative action,
suit, demand, claim, hearing, notice of violations, investigation, proceeding,
notice or demand letter pending or threatened against Landlord ownership or
operation of the Water Park relating in any way to any of the Environmental
Laws; and (e) represent that there are no past or present events,
conditions, circumstances, activities, practices, incidents, actions or plans
which may interfere with or prevent compliance or continued compliance by the
Water Park with the Environmental Laws, or which may give rise to any common law
or legal liability of the Water Park, including without limitation, liability
under any of the Environmental Laws, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, notice of violation, study or
investigation of Landlord or the Water Park, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any Hazardous Materials.

 

7.14                           Taxes.  To Landlord’s knowledge,
Landlord has filed all federal, state, local and foreign tax returns to the
extent required to be filed by applicable law for taxable periods ending on or
before the commencement of the Term and have paid all taxes shown to be payable
on such Tax Returns (except to the extent being contested in good faith).

 

7.15                           Sufficiency of Assets. Landlord owns or otherwise has the right to
use pursuant to a valid and enforceable lease, license or similar contractual
arrangement, all of the assets (whether tangible or intangible) that are used
or required for use in the operation of the Water Park.

 

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7.16                           Brokers and Finders. 
Landlord has not employed any broker, finder or investment banker or
incurred any liability for any investment banking fees, financial advisory fees,
brokerage fees or finders’ fees in connection with the transactions
contemplated herein.

 

7.17                           Agreements Affecting the Water Park. Attached as Schedule 7.17 is a list of
all contracts, agreements and understandings between Landlord and any party
providing goods and services to the Water Park, or otherwise relating to the
operation of the Water Park (the “Water Park Agreements”). Except as noted on Schedule 7.17,
the Water Park Agreements are all legal, valid, binding, enforceable and in
full force and effect in accordance with their terms and will continue to be so
following the consummation of the transactions contemplated by this Lease.

 

7.18.                        Labor Relations. Landlord is not a party to any collective
bargaining agreements with any labor union applicable to employees of Landlord.
There are no representations or certification proceedings or petitions seeking
a representation or certification proceeding pending or threatened to be
brought of filed with the National Labor Relations Board or any other labor
relations tribunal involving the employees of Landlord. There are no
grievances, unfair labor practices, or employment discrimination charges,
complaints, other than those described in Schedule 7.18.

 

7.19                         Insurance. As of the date hereof, Landlord (with respect to the Water Park) and
the Water Park are covered by valid and currently effective insurance policies
issued in favor of Landlord that are customary and adequate for companies of
similar size in the industry and locale in which the Water Park operates. All
policies are in full force and effect, all premiums due thereon have been paid
and Landlord has complied in all material respects with the provisions of such
policies.

 

8.                                       Tenant’s Representations and Warranties.

 

8.1                                 Existence.  Tenant is a corporation, duly
organized, existing, in good standing and qualified to do business under the
laws of the State of Delaware, and Tenant has full power and authority to lease
the Water Park Property and to comply with the terms of this Lease.  Tenant is a direct, wholly-owned subsidiary
of Alfa, which has been adequately capitalized and will continue to be adequately
capitalized by Alfa in order to perform all of its obligations hereunder.

 

8.2                                 Authority. The execution and delivery of this Lease by Tenant and the consummation
by Tenant of the transactions contemplated herein are within Tenant’s capacity and
all requisite action has been taken to make this Lease valid and binding on
Tenant in accordance with its terms.

 

8.3                                 No Legal Bar.  The
execution by Tenant of this Lease and the consummation by Tenant of the
transactions contemplated herein does not and will not (a) result in a
material breach of any of the provisions of, or constitute a material default
or a condition which on giving of notice or lapse of time or both would ripen
into a material default under any indenture, agreement, instrument or
obligation to which Tenant is a party; or (b) constitute a

 

9

 

material violation of any order, rule or regulation applicable to
Tenant of any court or any administrative Agency or other governmental body
having jurisdiction over Tenant.

 

8.4                                 Litigation.  There are no actions, suits,
proceedings or investigations pending or, to the knowledge of Tenant,
threatened against Tenant materially affecting the ability of Tenant to perform
its obligations hereunder, at law or in equity. Tenant is not subject to any judgment,
decree, injunction, rule or order of any court or governmental body which
could reasonably be expected to have a material adverse effect on Tenant’s
operation of the Water Park or any part of the Overall Resort Property.

 

8.5                                 Tenant Financial Statements. Tenant has delivered to Landlord financial information
regarding Alfa which financial statements are attached as Schedule 8.5 (“Tenant
Financial Statements”).  Such Tenant
Financial Statements and notes thereto fairly present the financial condition
and the results of operations, changes in stockholder equity, and cash flow of Alfa
as of the respective dates of and for the periods referred to in such Tenant
Financial Statements, all in accordance with generally accepted accounting
principles and the Tenant Financial Statements reflect the consistent
application of such accounting principles throughout the periods involved.
Tenant warrants that the Tenant Financial Statements are true and accurate in
all material respects, as of the date made and as of the date of this Lease, and Tenant further warrants that
Landlord may rely on the Tenant Financial Statements as fairly representing the
financial condition of Alfa and also as fairly representing the financial
capability of Tenant, as a wholly owned subsidiary of Alfa, to perform all of
its obligations hereunder.

 

8.6                                 Brokers and Finders. 
Tenant has not employed any broker, finder or investment banker or
incurred any liability for any investment banking fees, financial advisory fees,
brokerage fees or finders’ fees in connection with the transactions
contemplated herein.

 

9.                                       Landlord’s Covenants.

 

9.1. Payment of Negative EBIDTA. Should the first year of
operations, ending on September 30, 2001, yield a negative EBITDA, Tenant
shall deliver a statement, certified by Tenant’s chief financial officer,
setting forth the amount of such negative EBITDA, together with documentation
reasonably substantiating such amount and demonstrating to Landlord the manner
in which Tenant calculated such negative EBITDA. After receipt of such
certification and substantiating documentation, Landlord shall reimburse Tenant
an amount equal to 50% of the negative EBITDA on or before January 15,
2002.

 

9.2                                 Quiet Enjoyment.  For
so long as Tenant is not in default hereunder, Landlord covenants that Tenant
shall peacefully and quietly have, hold and enjoy the Water Park Property for
the Term, free and clear of interference by any person.

 

9.3                                 Kelley Lease. 
Landlord agrees to provide Tenant with evidence of Landlord’s compliance
with all of the terms and conditions of the Kelley Lease throughout the Term,
for example, by delivering copies to Tenant of all rent checks from Landlord
under the Kelley Lease as such rent is due and payable.

 

10

 

9.4                                 Insurance. Throughout the Term, Landlord shall insure the Water Park Property in
a manner that is customary and adequate for companies of similar size in the industry,
which own leased water park facilities.

 

9.5                                 Reporting. After Landlord’s ski mountain operating season at Mountain Creek is
completed each year, Landlord shall provide to Tenant the number of total skier
visits at Mountain Creek for such year promptly after such figures are
available to Landlord.

 

10.                                 Tenant’s Covenants.

 

10.1                           Waste or Nuisance. 
Tenant shall not commit or suffer to be committed any waste upon the
Water Park Property or Shared Facilities or any nuisance or other thing which
may disturb the quiet enjoyment of Landlord or any other user of the Water Park
Property or Shared Facilities provided that Landlord acknowledges that the
ordinary and prudent operation of Tenant’s business on the Water Park Properly
or Shared Facilities as permitted herein will not create a nuisance or disturb
the quiet enjoyment of Landlord. Tenant shall also keep the Water Park Property
or Shared Facilities and all other areas used by Tenant in a reasonably tidy
and clean condition,

 

10.2                           Training.  Tenant shall develop and make
available to all employees of Tenant training, operation and safety manuals
with respect to the operation of Tenant’s business at the Water Park Property
and ensure that its employees are provided with adequate training in respect of
the maintenance and safe operation of Tenant’s Property so as to ensure that
there is as little disruption or interference with the operation of Tenant’s
business as possible.

 

10.3                           Compliance with Laws. 
Tenant shall comply with and cause the Water Park Property to comply
with and shall assume all obligations and liabilities from the date of this Lease
with respect to (a) all laws, ordinances and regulations and other
governmental rules, orders and determinations presently in effect or hereafter
enacted, made or issued, whether or not presently contemplated (collectively, “Legal
Requirements”), applicable to the Water Park Property and any Improvements or
the ownership, operation, use or possession thereof and (b) all agreements,
contracts, insurance policies (including, without limitation, to the extent
necessary to prevent cancellation thereof and to insure full payment of any
claims made under such policies), covenants, conditions and restrictions now or
hereafter applicable to the Water Park or the ownership, operation, use or
possession thereof.

 

10.4                           Tenant’s Assumption of the Water Park
Agreements.  To the extent the Water Park Agreements
described in Schedule 7.17 remain in place after the execution of this Lease,
and to the extent the Water Park Agreements relate to the Water Park Property,
Tenant agrees to assume and be responsible for certain obligations of Landlord
contained in such Water Park Agreements as set forth on Schedule 7.17.

 

10.5                           Liens.  Tenant will remove and
discharge any charge, lien, security interest or encumbrance upon the Water
Park Property or upon any Rent or other sums payable hereunder which arises for
any reason, including, without limitation, all liens which arise out of the
possession, use, occupancy, construction, repair or rebuilding of the Water
Park Property or by reason of labor or materials furnished or claimed to have
been furnished to Tenant or for the

 

11

 

Water
Park Property, but not including (a) this Lease and tiny assignment hereof
or any sublease permitted hereunder and (b) any mortgage, charge, lien,
security interest or encumbrance created or caused by Landlord or its agents,
employees or representatives. Tenant may provide a bond or other security
acceptable to Landlord to remove or pay all costs associated with the removal
of any such lien. Nothing contained in this Lease shall be construed as
constituting the consent or request of Landlord, express or implied, to or for
the performance (on behalf of or for the benefit of Landlord) by any
contractor, laborer, materialman or vendor, of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Water Park Property or any part thereof. Notice is
hereby given that Landlord will not be liable for any labor, services or
materials furnished or to be furnished to Tenant, or to anyone holding an
interest in the Water Park Property or any part thereof through or under
Tenant, and that no mechanic’s or other liens for any such labor, services or
materials shall attach to or affect the interest of Landlord in and to the
Water Park Property.

 

10.6                           Operating Costs. 
Tenant shall be responsible for all operating costs, including costs
incurred in the maintenance, repair and management of the Water Park Property and
all charges of utilities, communications and similar services exclusively
serving the Water Park Property. Landlord and Tenant will use commercially
reasonable efforts to have all utilities and similar services exclusively
serving the Water Park Property transferred directly into Tenant’s name;
provided, however, that in the event any of such services are billed to
Landlord, Tenant agrees to pay its portion of any bills for such services
within ten (10) days of receipt of any such bills from Landlord, or
reimburse Landlord for Tenant’s share to the extent Landlord has paid such
bills and provides evidence reasonably substantiating such payments and setting
forth a reasonable calculation of Tenant’s share thereof.

 

10.7                           Insurance. Tenant shall during the Term take out and keep in full force and
effect, at its own cost, comprehensive general liability insurance which is
acceptable to Landlord, acting reasonably, against claims for personal injury,
bodily injury, including death, and property damage or loss arising out of the
use and occupation of the Water Park Property by Tenant and the business
conducted by Tenant and any other persons from the Water Park Property in which
the limit of liability shall not be less than $10,000,000 per person and $10,000,000
per occurrence.  The policies for such
insurance shall (a) name Landlord as an additional insured under the
policy; (b) prohibit the insurer from exercising any rights of subrogation
against Landlord; (c) afford protection to Landlord in respect of cross
liability between Landlord and Tenant under this Lease and provide that the
coverage under the policy shall not be cancelled or any provisions changed or
deleted, unless 30-days’ prior written notice is given to Landlord by the
insurer, (d) provide to Landlord from time to time, upon request, proof
that all premiums under the policy required to be maintained by Tenant under
this Lease have been paid and that the policy is in full force and effect and
contains the above terms; and (e) provide Landlord at least 30-days’ prior
written notice of any change to or cancellation or termination of the policy.
Tenant will provide to Landlord evidence acceptable to Landlord, acting
reasonably, that Tenant has taken out such insurance as Tenant is required to
take out under this section. Tenant will not be entitled to exercise any of its
rights under this Lease until such time as it has provided such evidence to
Landlord.

 

12

 

10.8                           Environmental Compliance. 
Tenant shall not cause or permit any Hazardous Materials to be placed,
held, located, released, transported or disposed of on, under, at or from the
Water Park Property except in accordance with Environmental Laws.

 

10.9                           Continued Operation. 
Tenant will continue the operation of the Water Park at a level of
quality at least consistent with past practices, and will meet the current operating
requirements as stipulated by local authorities having jurisdiction over such
operations; provided, however, Tenant shall not be under any obligation to
expend any of its own financial resources other than for traditional and
reasonable pre-opening costs (which shall be treated as operational expenses of
the Water Park) to satisfy the requirements of this Section 10.9 in the event
the Water Park Property, when delivered at the Commencement Date, is not
already meeting the highest standards of efficiency and safety and is not
already meeting or exceeding the operating requirements as stipulated by local
authorities having jurisdiction over such operations.

 

10.10                     Services.  To ensure full coordination
and integration into Landlord’s master marketing and sales plan, branding, and
best practice requirements for both summer and winter operations on the Overall
Resort Property, Tenant shall provide Landlord, with the principal elements of
its annual marketing and sales plan, including any provisions relating to sales
under and the general timing of any marketing plans, sponsorship agreements and
general promotions to be undertaken. Prior to commencing the implementation of
such plan, Tenant will deliver to Landlord for its review and approval written
descriptions in respect of such services, which approval will not be
unreasonably withheld or unduly delayed. 
If Landlord fails to respond within fifteen (15) days after receipt of
Tenant’s plan, Landlord shall be deemed to have approved such plan.

 

10.11                     Reporting.  During the operating season,
Tenant shall provide Landlord weekly reports, beginning 30 days after the
beginning of the Term, which list attendance figures and the revenues of the
Water Park for the previous week. Any attendance figures provided to Landlord
shall be kept strictly confidential in accordance with the provisions of Section 29.1.

 

11.                                 Net Lease.

 

11.1                           Net Lease. It is expressly understood and agreed by and between the Parties that
except as otherwise expressly provided herein, this Lease is a net lease, and
the Rent and all other sums payable hereunder to or on behalf of Landlord shall
be paid without notice or demand and without setoff, counterclaim, abatement,
suspension, deduction or defense.

 

11.2.                        No Abatement. Except as otherwise expressly provided in
the Lease, this Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease or be entitled to the abatement of any Rent or any
reduction thereof, nor shall the obligations hereunder of Tenant be otherwise
affected, other than pursuant to an express provision of this Lease, it being
the intention of the parties hereto that the Rent and all other charges payable
hereunder to or on behalf of Landlord shall continue to be payable in all
events and the obligations of Tenant hereunder shall continue unaffected,
unless the requirement to pay or perform the same shall be terminated pursuant
to an express provision of this Lease. Nothing contained in this Section 11.2

 

13

 

shall be deemed a waiver by Tenant of any rights that it may have to
bring a separate action with respect to any default by Landlord under this
Lease or any other agreement.

 

11.3                         Bankruptcy. Tenant covenants and agrees that it will remain obligated under this
Lease in accordance with its terms, and that Tenant will not take any action to
terminate, rescind or avoid this Lease, notwithstanding the bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding-up or other proceeding affecting Landlord or any assignee
of Landlord in any such proceeding and notwithstanding any action with respect
to this Lease which may be taken by any trustee or receiver of Landlord or of
any assignee of Landlord in any such proceeding or by any court in any such
proceeding.

 

12.                                 Shared Assets and Liabilities.

 

12.1                           Leased Employees. Tenant intends to lease employees from Landlord.
To the extent Landlord and Tenant agree to lease any such employees, Landlord
and Tenant shall enter into an employee sharing agreement, a form of which is
attached as Exhibit D.

 

12.2                           Shared Equipment. In addition to the Shared Facilities to be
licensed to Tenant pursuant to the Shared Facilities License Agreement, the
Patties intend to share certain equipment and personal property assisting in
the operation of their respective businesses. Any such agreement to share
equipment and personal property shall be subject to a separate written agreement
between the Parties, which shall set forth the manner in which the Parties will
share the costs associated with insurance, the maintenance and upkeep and,
subject to each Party’s approval, the replacement of any shared equipment and
personal property.  Each Party shall return
the equipment and personal property to the other in the same working order as
it was received, reasonable wear and tear excepted.  Except for costs associated with insurance, maintenance
and upkeep and replacement, as may be agreed between the Parties, Mountain Creek
shall receive no additional consideration for sharing any such personal
property and equipment.

 

12.3                           Expenses.  Tenant hereby assumes
responsibility for and agrees to pay certain expenses incurred by Landlord
prior to the Commencement Date, which expenses are set forth in detail on Schedule 12.3
hereto. Tenant shall reimburse Landlord for all such expenses previously paid
by Landlord, and shall promptly pay any of such expenses in accordance with their
terms that are yet to become due, as set forth on Schedule 12.3.

 

13.                                 Maintenance and Repair; Improvements.

 

13.1                           Tenant Improvements.  In
furtherance of operating the Water Park, Tenant shall be permitted, at its
expense, to make any additional alterations, additions, improvements or other
capital expansions on the Water Park Property (“Tenant Improvements”). Prior to
commencing its construction of any Tenant Improvements, Tenant will deliver to
Landlord for its review a package of Tenant Improvements detailing the design
of all such improvements and including detailed drawings and written
specifications in respect of the design, layout, and construction methods.
Landlord’s determination or concerns regarding Tenant’s plans will be given
within seven (7) days after receipt of Tenant’s plans. If Landlord has
concerns about the

 

14

 

Tenant
Improvement plans, Landlord will provide to Tenant, within such 7-day time
period, a written notice specifying in detail any reasonable changes requested.
Tenant shall confer with Landlord within fifteen (15) days of receipt of
Landlord’s notice of concerns in an effort to resolve (to Landlord’s reasonable
satisfaction) Landlord’s concerns. In any event, prior to Tenant commencing its
construction of any Tenant Improvements, Tenant shall have received Landlord’s
written approval of such Tenant Improvements, such approval not to be
unreasonably withheld.

 

13.2                           Maintenance and Repair. Tenant, at its own expense, will maintain
and make all repairs necessary to keep the Water Park Property in good repair.

 

13.3                           Modifications. If all or any part of Tenant Improvements
shall encroach upon any property, street or right-of-way adjoining or adjacent
to the Water Park Property, or shall violate the agreements or conditions
affecting the Water Park Property or any part thereof, or shall hinder,
obstruct or impair any easement or right-of-way to which the Water Park Property
is subject, then, promptly after written request of Landlord or of any person
so affected, Tenant shall, at its expense, either (a) obtain valid and
effective waivers or settlements of all claims, liabilities and damages
resulting therefrom or (b) if Landlord consents thereto, make such changes,
including alteration or removal, to Tenant Improvements and take such other
action as shall be necessary to remove or eliminate such encroachments,
violations, hindrances, obstructions or impairments; provided however, that
should Tenant make Tenant Improvements that have been reviewed by Landlord,
with Landlord’s concerns resolved to Landlord’s reasonable satisfaction as
described in Section 13.1, Landlord shall be deemed to have waived and
settled any and all claims, liabilities and damages for any alleged
encroachment of Landlord’s interests.

 

13.4                           Removal of Tenant Improvements. Within sixty (60) days following termination
or expiration of this Lease for any reason, Tenant shall have the right to
remove from the Water Park Property any Tenant Improvements or equipment that
Tenant has placed or constructed on the Water Park Property. In the event of
any such removal, Tenant shall restore the premises from which such equipment
or Tenant Improvements were removed by reasonable grading and seeding. All
Tenant Improvements or equipment not removed from the Water Park Property
within a period of sixty (60) days from the termination or expiration of this
Lease shall become the property of Landlord (without any obligation of Landlord
to compensate Tenant therefore).

 

14.                                 Taxes; Utilities.

 

14.1                           Subject to Section 14.2 below, Landlord
shall be responsible for the payment of all real property taxes applicable to
the Overall Resort Property (“Real Estate Taxes”) and shall pay such Real
Estate Taxes before delinquency.

 

14.2                           Commencing on April 1st of the first
year following the Commencement Date, and for each year thereafter (including
any partial year, if applicable), Tenant shall pay to Landlord, as additional
Rent, it share of Real Estate Taxes and set forth on Schedule 14.2 hereto (“Tenant’s
Proportionate Share”), in the manner described in Section 14.4 below. Schedule 14.2
may be amended, from time to time, upon the written agreement of Landlord and
Tenant.

 

15

 

14.3                           Landlord shall furnish Tenant with Landlord’s
good faith written estimate of Real Estate Taxes and Tenant’s Proportionate
Share of the Real Estate Taxes on or before the first day of each year or as
soon thereafter as is reasonably practical. Thereafter, the last written estimate
furnished by Landlord to Tenant shall apply until Landlord replaces it with a
new written estimate.  Landlord may
reestimate in good faith Real Estate Taxes and Tenant’s Proportionate Share of
the Real Estate Taxes one (1) time during each year, and such reestimate shall
take effect upon Tenant’s receipt of written notice thereof from Landlord.

 

14.4                           On the first day of each calendar month
during each April 1st through September 30th period during the Term,
Tenant shall pay to Landlord an amount equal to one-sixth of Tenant’s
Proportionate Share based on Landlord’s last written estimate of the Real Estate
Taxes (to be pro rated if the Term expires during such year). During the 2001
season, Tenant shall pay to Landlord an amount equal to Tenant’s Proportionate
Share for the 2001 season in four equal monthly payments on June 1, July 1,
August 1 and September 1, 2001. Notwithstanding the foregoing, if
Landlord delivers to Tenant a written reestimate of Real Estate Taxes and
Tenant’s Proportionate Share of the Real Estate Taxes for any year, the first
monthly installment of Tenant’s Proportionate Share of the Real Estate Taxes
due after Tenant’s receipt of such written reestimate shall be adjusted to
account for any previous overpayment or underpayment of Tenant’s Proportionate
Share of the Real Estate Taxes resulting from the inaccuracy of Landlord’s
initial estimate of the Real Estate Taxes.

 

14.5                           Within 180 days after the end of each year,
Landlord shall furnish to Tenant a written statement setting forth the actual
amount of (a) Real Estate Taxes for that year, (b) Tenant’s
Proportionate Share of the Real Estate Taxes for that year, and (c) the
payments that Tenant made on account of Tenant’s Proportionate Share of the
Real Estate Taxes pursuant to Section 14.4 above for that year. Landlord
also shall provide to Tenant a tax bill issued by the taxing authority
reflecting the Real Estate Tax assessment for that year. If the written
statement indicates that Tenant underpaid Tenant’s Proportionate Share of the
Real Estate Tax Increase for such year, Tenant shall pay the amount of the
deficiency to Landlord on the first day of the calendar month following the
month in which Tenant receives the statement from Landlord. If the written
statement indicates that Tenant overpaid Tenant’s Proportionate Share of such increase,
Landlord shall pay the amount of the overpayment to Tenant on the first day of
the calendar month following the month Landlord received notice from the taxing
authority as to the correct assessment.

 

15.                                 Indemnity.

 

15.1                           Tenant’s Indemnity. Tenant shall defend all actions against
Landlord and any affiliate, partner, officer, director, member, employee or
shareholder of Landlord (collectively, the “Landlord Indemnified Parties”), with
respect to, and shall pay, protect, indemnify and save harmless the Landlord
Indemnified Parties from and against, any and all liabilities, losses, damages,
costs, expenses (including, without limitation, reasonable attorneys’ fees and
expenses and including costs of enforcement of this indemnity), causes of
action, suits, claims, demands or judgments of any nature arising from (a) injury
to or death of any person, or damage to or loss of property, during the Term,
in the Water Park Property or any adjoining sidewalks, streets or ways, or
connected with the use, condition or occupancy of any thereof that is not due
to the negligent or intentional misconduct of Landlord or from a breach by
Landlord of

 

16

 

this Lease or any related agreement; or (b) violation of this
Lease by Tenant or (c) the operation of the Water Park following the
Commencement Date.

 

15.2                           Landlord’s Indemnity. Landlord shall defend all actions against
Tenant and any affiliate, partner, officer, director, member, employee or
shareholder of Tenant (collectively, the Tenant Indemnified Parties”), with
respect to, and shall pay, protect, indemnify and save harmless the Tenant
Indemnified Parties from and against any and all liabilities, losses, damages,
costs, expenses (including, without limitation, reasonable attorneys’ fees and
expenses and including costs of enforcement of this indemnity), causes of
action, suits, claims, demands or judgments of any nature arising from (a) injury
to or death of any person, or damage to or loss of property, in the Water Park
Property or any adjoining sidewalks, streets or ways, or connected with the
use, condition or occupancy of any thereof that is due to the negligent or
intentional misconduct of Landlord or from a breach by Landlord of this Lease
or any related agreement; (b) violation of this Lease by Landlord; or (c) the
operation of the Water Park Property prior to the Commencement Date.

 

16.                                 Laws, Regulations and Approvals. Tenant shall have the right, at its own expense,
to make applications to appropriate agencies or boards of municipal, county,
state and/or federal governments for permission to use the Water Park Property
for the uses permitted herein, so long as any such approvals do not affect Landlord’s
rights with respect to any other portions of the Overall Resort Property.
Landlord agrees to reasonably cooperate with Tenant in connection with such
applications and agrees to authorize any documents that may be required for
such purpose. Nothing herein shall be construed to bar or impair the right of
Tenant to appeal any decision of any governmental body and during the pendency
of any such time for appeal and/or appeals, Tenant shall not be deemed to be in
violation of the requirements of this Section 16.

 

17.                                 Equipment Financing. Tenant shall be permitted to apply for
equipment financing for construction, improvements, alterations, and additions
on the Real Property subject to the condition that without Landlord’s prior
written consent, which may be withheld in Landlord’s sole and absolute
discretion, any such financing may not be secured by this Lease or Tenant’s rights
hereunder. Landlord agrees to join in the execution of all essential documents
to carry out the purposes of this Section 17 and to execute Landlord’s
waiver or mortgagee’s waiver of similar documents as may be reasonably required
by an institutional lender, equipment lessor, or similar party in connection
with Tenant’s acquisition of equipment financing pursuant to this Section 17.
In any event, no encumbrance shall extend beyond the termination of this Lease
or any renewal hereof.

 

18.                                 Eminent Domain. If all or any substantial part of the Water
Park Property or Shared Facilities shall be taken under eminent domain or
condemnation proceedings, this Lease may be terminated at the option of
Landlord or Tenant and the Term shall end as of such date as shall be fixed by
notice in writing and, notwithstanding any other provision of this Lease, no
further payments shall be due any Party as a result of such termination. In the
event of any taking or condemnation, nothing contained herein shall be deemed
or construed to prevent Landlord or Tenant from enforcing and prosecuting a
claim or claims for the value of its respective interest or rights in
connection with such taking or condemnation proceedings, whether partial or
complete.

 

17

 

19.                                 Tenant’s Default and Landlord’s Remedies.

 

19.1                           Default.  Tenant shall be in default
under this Lease if during the Term (a) any Rent or other sums are not
paid by Tenant within five (5) days after receipt of written notice from
Landlord; (b) Tenant breaches any of its covenants or obligations under
this Lease or the Shared Facilities Agreement and does not remedy the breach
within fourteen (14) days after receipt by Tenant of written notice of default
from the Landlord (or, if any such breach reasonably requires a longer period
to remedy, Tenant has not commenced to diligently remedy such breach within
fourteen (14) days after receipt of such notice or thereafter fails to continuously
and diligently proceed to remedy such breach); (c) if this Lease is seized
or taken in execution or attachment by any creditor of Tenant, or if Tenant
makes any assignment for the benefit of creditors or becomes bankrupt or
insolvent or takes the benefit of any act for bankrupt or insolvent debtors, or
if Tenant is wound up, or if a receiver or receiver-manager of Tenant’s affairs
is appointed and not vacated within thirty (30) days; or (d) Tenant no
longer is 100% owned by Alfa or Tenant assigns or sublets its interest herein
to any entity that is not 100% owned by Alfa.

 

19.2                           Landlord Performing Tenant’s Duties.  If
Tenant defaults in the performance of any of its covenants or agreements under
this Lease, Landlord may perform or remedy the same for the account of Tenant
and may enter upon the Water Park Property for that purpose. Tenant shall pay
to the Landlord on demand all reasonable costs and expenses incurred by
Landlord in remedying or attempting to remedy such default.

 

19.3                           All Amounts Payable as Rent. All amounts payable by Tenant under this Lease
shall be deemed to be Rent and recoverable as Rent and Landlord shall have the
rights and remedies against Tenant for default in payment of any such amount as
Landlord has for default in payment of Rent.

 

19.4                           Landlord’s Remedies in the Event of Tenant’s
Default.  If Tenant shall default under this Lease as
set forth in Section 19.1 above, Landlord shall have the following rights
and remedied, in addition to all other rights and remedies at law or equity,
and none of the following, regardless of whether exercised by Landlord, shall
preclude the exercise of any other right or remedy whether herein set forth or
existing at law or equity:

 

(a)                                  Landlord shall have the right to terminate
this Lease by giving Tenant written notice thereof. No act by or on behalf of
Landlord, such as entry onto the Water Park Property by Landlord to perform
maintenance and repairs and efforts to relet the Water Park Property, other
than giving Tenant written notice of termination, shall terminate this Lease.
If Landlord gives such notice of termination, this Lease and the Term hereof as
well as the right, title and interest of Tenant under this Lease shall wholly
cease and expire in the same manner and with the same force and effect (except
as to Tenant’s liability for Rent) on the date specified in such notice as if
such date were the expiration date of the Term without the necessity of
re-entry or any other act on Landlord’s part. Upon any termination of this
Lease, Tenant shall quit and surrender to Landlord the Water Park Property. If
this Lease is terminated, Tenant shall remain liable to Landlord for Rent
accruing thereafter and for damages in an amount equal to the total of:

 

18

 

(i)                                     all costs, including, without limitation,
reasonable attorneys’ fees and disbursements, incurred by Landlord to recover
the Water Park Property and to enforce its other rights and remedies;

 

(ii)                                  all Rent accrued and unpaid as of the date of
the termination, plus interest as provided in Section 5.3 above; and

 

(iii)                               any other sums that Landlord is entitled to
collect under this Lease, at law or in equity for damages and losses actually
suffered or incurred by Landlord as a result of Tenant’s default

 

(b)                                 Landlord may, without demand or notice,
re-enter and take possession of the Water Park Property or any part thereof,
expel Tenant and those claiming through or under Tenant, and remove the effects
of any and all such persons without being deemed guilty of any manner of
trespass, without prejudice to any remedies for arrears of rent or preceding
breach of covenants and without terminating this Lease or otherwise relieving
Tenant of any obligation hereunder. 
Should Landlord elect to re-enter, or should Landlord take possession
pursuant to legal proceedings or pursuant to any notice provided for by law,
Landlord may, from time to time, without terminating
this Lease, relet the Water Park Property or any part thereof for such term or
terms and at such rental or rentals, and upon such other conditions as Landlord,
acting reasonably, deems advisable, with the right to make alterations and
repairs to the Water Park Property. No such re-entry, repossession or reletting
of the Water Park Property by Landlord shall be construed as an election on
Landlord’s part to terminate this Lease unless a written notice of termination
is given to Tenant by Landlord. No such re-entry, repossession or reletting of
the Water Park Property shall relieve Tenant of its liability and obligation
under this Lease, all of which shall survive such re-entry, repossession or reletting.
Upon the occurrence of such re-entry or repossession, Landlord shall be
entitled to the amount of the Rent, which would be payable hereunder if such
re-entry or repossession had not occurred, less the net proceeds, if any, of
any reletting of the Water Park Property after deducting all of Landlord’s
expenses in connection with such reletting, including, without limitation, all
repossession costs, reasonable legal expenses, reasonable attorneys’ fees,
expenses of employees, alteration costs and expenses of preparation for such
reletting.  Tenant shall pay such amount
to Landlord on the days on which the Rent due hereunder would have been payable
hereunder if possession had not been retaken. In no event shall Tenant be
entitled to receive the excess, if any, of net rent collected by Landlord as a
result of such reletting over the sums payable by Tenant to Landlord hereunder.

 

(c)                                  If Tenant shall default in making any payment
required to be made by Tenant, other than payments due to Landlord under this
Lease, or shall default in performing any other obligations of Tenant under this
Lease, Landlord may, but shall not be obligated to, make such payment or, on
behalf of Tenant, expend such sum as may be necessary to perform such
obligation. All sums so expended by Landlord shall be repaid by Tenant to
Landlord, as additional Rent, on demand. No such payment or expenditure by
Landlord shall be deemed a waiver of Tenant’s default, nor shall it affect any
other right or remedy of Landlord by reason of such default.

 

19.5                           All rights and remedies of Landlord in this Lease shall be cumulative
and not alternative.

 

19

 

20.                                 Landlord’s Default and Tenant’s Remedies.

 

20.1                           Landlord’s Default. Landlord shall be in default under this
Lease if during the Term (a) any sums owed to Tenant by Landlord are not
paid by Landlord within five (5) days after receipt of written notice from
Tenant; (b) Landlord breaches any of its covenants or obligations under
this Lease or the Shared Facilities Agreement and does not remedy the breach
within fourteen (14) days after receipt by the Landlord of written notice of
default from the Tenant (or, if any such breach reasonably requires a longer
period to remedy, Landlord has not commenced to diligently remedy such breach
within fourteen (14) days after receipt of such notice or thereafter fails to
continuously and diligently proceed to remedy such breach); or (c) if this
Lease is seized or taken in execution or attachment by any creditor of
Landlord, or if Landlord makes any assignment for the benefit of creditors or
becomes bankrupt or insolvent or takes the benefit of any act for bankrupt or
insolvent debtors, or if Landlord is wound up, or if a receiver or
receiver-manager of Landlord’s affairs is appointed and not vacated within
thirty (30) days.

 

20.2                           Tenant’s Remedies in the Event of Landlord’s
Default. If Landlord shall
default under this Lease as set form in Section 20.1, Tenant shall have
all rights and remedies available to Tenant at law or in equity.

 

21.                                 Landlord’s Termination Rights.

 

21.1                           Landlord’s Right to Terminate Without Cause.

 

(a)                                  Landlord shall have the right to terminate
this Lease without cause, for any reason whatsoever, upon written notice to
Tenant given between September 15th and December 31st of any year,
following Tenant’s 2005 season of operating the Water Park. The effective date
of termination of the Lease pursuant to this Section 21.1 shall be the
first February 1st following Tenant’s receipt of such notice.

 

(b)                                 In the event of termination pursuant to this Section 21.1,
Landlord shall be obligated to pay to Tenant, in immediately available funds,
on or before sixty (60) days following the effective date of such termination,
a termination payment equal to the sum of the following:

 

(i)                                     the unamortized cost of those Tenant
Improvements that were constructed by Tenant on the Water Park Property since
the Commencement Date, but only to the extent of those Tenant Improvements that
Landlord and Tenant have agreed in writing will remain on the Water Park
Property following Landlord’s termination of the Lease. The unamortized cost of
each Tenant Improvement shall be determined by reducing Tenant’s cost of such
Tenant Improvement by five percent (5%) per year for up to twenty (20) years,
from the date the Tenant Improvement was placed in service through the
effective date of termination; plus

 

(ii)                                  an amount equal to the product of (A) the
EBITDA for the Water Park season that ended immediately prior to the effective
date of termination, multiplied by (B) four (4).

 

20

 

(c)                                  As a condition to Landlord’s obligation to
make the termination payment hereunder, Tenant shall be required to reasonably
substantiate its calculation of EBITDA and the unamortized cost of the Tenant
Improvements on which such termination payment shall be based. If the Parties
are unable to agree on the amount of EBITDA and the unamortized cost of the
Tenant Improvements, the Parties shall jointly select an unrelated, third party
accountant that shall examine Tenant’s books and records to determine such amounts,
which determination shall be conclusive and binding on the Parties.

 

(d)                                 Landlord shall have the right to offset
against any termination payment due to Tenant all Rent and other sums due to
Landlord as of the date Landlord is required to make such termination payment
to Tenant.

 

22.                                 Tenant’s Termination Rights. 

 

22.1                           Tenant’s Right to Terminate Upon Landlord’s Sale of Ski Operation
Property and/or the Water Park Property to Unrelated Third Party.

 

(a)                                  Provided Tenant is not in default hereunder,
Tenant shall have the right to terminate this Lease upon written notice to
Landlord if at any time during the Term, Landlord sells or otherwise transfers
all or substantially all of its interest in the Ski Operation Property and/or
the Water Park Property to an unrelated third party that is not an Affiliate of
Landlord.

 

(b)                                 To be effective, any such notice of
termination must be delivered by Tenant to Landlord within sixty (60) days
after Tenant receives notice from Landlord that such sale or other transfer has
taken place. Failure of Tenant to deliver written notice of termination within
such sixty (60) day period shall be deemed a waiver of Tenant’s right to
terminate pursuant to this Section 22.1. 
If the termination notice is given between September 15th and December 31st
of any year, then the termination shall be effective on the first February 1st
following Landlord’s receipt of such termination notice. If the termination
notice is given at any other time during the year, then the termination shall
be effective on the first September 30th following Landlord’s receipt of
such termination notice.

 

(c)                                  In the event of termination pursuant to this Section 22.1,
Landlord shall be obligated to pay to Tenant, in immediately available funds,
on or before sixty (60) days following the effective date of such termination,
a termination payment equal to the unamortized cost of those Tenant
Improvements that were constructed by Tenant on the Water Park Property since
the Commencement Date, but only to the extent of those Tenant Improvements that
Landlord and Tenant have agreed in writing will remain on the Water Park
Property following Tenant’s termination of the Lease. The unamortized cost of
each Tenant Improvement shall be determined by reducing Tenant’s cost of such Tenant
Improvement by five percent (5%) per year for up to twenty (20) years, from the
date the Tenant Improvement was placed in service through the effective date of
termination.

 

(d)                                 As a condition to Landlord’s obligation to
make the termination payment hereunder, Tenant shall be required to reasonably
substantiate its calculation of the unamortized

 

21

 

cost of the Tenant Improvements on which the termination payment shall
be based. If the Parties are unable to agree on the unamortized cost of the
Tenant Improvements, the Parties shall jointly select an unrelated, third party
accountant that shall examine Tenant’s books and records to determine such
amount, which determination shall be conclusive and binding on the Parties.

 

(e)                                  Landlord shall have the right to off-set
against the termination payment due to Tenant all Rent and other sums due to
Landlord hereunder as of the date Landlord is required to make such termination
payment to Tenant.

 

22.2                           Tenant’s Right to Terminate Upon Landlord
Ceasing to Develop Resort Real Estate for Five (5) Consecutive
Years or Landlord Ceasing to Conduct Ski Operations for One Full Ski Season.

 

(a)                                  Provided Tenant is not in default hereunder,
Tenant shall have the right to terminate this Lease upon written notice to
Landlord, upon the following events:

 

(i)                                     Prior to the substantial completion of a
number of single-family, hotel, condominium, condominium-hotel, townhome and/or
timeshare units totaling 400 units, collectively, that have not yet been
constructed but are constructed in the future on the Overall Resort Property
(the “Targeted Development”), if at any time during the fifteen (15) year
period commencing on the Commencement Date and terminating on May 15,
2016, Landlord (or any successor to Landlord) suspends or discontinues for a
period of five (5) consecutive years, any significant real estate
development activities within the Overall Resort Property, for any reason other
than a Force Majeure Event (it being understood that upon substantial
completion of the Targeted Development, this Section 22.2(a)(i) shall
no longer be applicable); or

 

(ii)                                  If at any time during the Term, Landlord (or
any successor to Landlord), closes (and makes it known to the public that it is
closing), for a full ski season (consisting of the period from December 15th
through March 31st of any year), the operation of all or substantially all
of the ski area facilities within the Overall Resort Property, for any reason
other than a Force Majeure Event.

 

(b)                                 To be effective, any such notice of
termination must be delivered by Tenant to Landlord within sixty (60) days
after either of the events described in Section 22.2(a)(i) or 22.2(a)(ii) takes
place.  Failure of Tenant to deliver
written notice of termination within such sixty (60) day period shall be deemed
a waiver of Tenant’s right to terminate pursuant to this Section 22.2.  If the termination notice is given between September 15th
and December 31st of any year, the termination shall be effective on the
first February 1st following Landlord’s receipt of such termination
notice. If the termination notice is given at any other time during the year,
the termination shall be effective on the first September 30th following
Tenant’s receipt of such termination notice.

 

(c)                                  In the event of termination pursuant to this Section 22.2,
Landlord shall be obligated to pay to Tenant, in immediately available funds,
on or before October 31st following the effective date of such
termination, (i) a termination payment equal to the product of the EBITDA
for the Water Park season that ended immediately prior to the effective date of

 

22

 

termination,
multiplied by two (2) and (ii) Landlord shall be obligated to pay to
Tenant a termination payment equal to the unamortized cost of those Tenant
Improvements that were constructed by Tenant on the Water Park Property since
the Commencement Date, but only to the extent of those Tenant Improvements that
Landlord and Tenant have agreed in writing will remain on the Water Park
Property following Tenant’s termination of the Lease. The unamortized cost of
each Tenant Improvement shall be determined by reducing Tenant’s cost of such
Tenant Improvement by five percent (5%) per year for up to twenty (20) years,
from the date the Tenant Improvement was placed in service through the
effective date of termination.

 

(d)                                 As a condition to Landlord’s obligation to
make the termination payment hereunder, Tenant shall be required to reasonably substantiate
its calculation of EBITDA and the unamortized cost of any Tenant Improvements
on which such termination payment shall be based. In the event the Parties are
unable to agree on the amount of EBITDA, the Parties shall jointly select an
unrelated, third party accountant that shall examine Tenant’s books and records
to determine such amount, which determination shall be conclusive and binding
on the Parties.

 

(e)                                  Landlord shall have the right to off-set
against the termination payment due to Tenant all Rent and other sums due to
Landlord as of the date Landlord is required to make such termination payment
to Tenant.

 

23.                                 Right of First Opportunity. In consideration for Tenant’s entering into
this Lease, Landlord and its Affiliates hereby agree not to offer to any third
party for management, or operation, any water park or aquatic facility which (a) Landlord
or its Affiliates choose to have operated by a third party and (b) that is
within or part of the operations of those resorts where Landlord or its
Affiliates control the operations, without first giving Tenant written notice
of the business opportunity and the opportunity to negotiate with Landlord (or
its Affiliate) a binding management/operation agreement. Tenant shall have
thirty (30) calendar days after receipt of such notice within which to attempt
to negotiate with Landlord a binding agreement with respect to such
opportunity. If Landlord and Tenant shall fail to enter into such a binding
agreement for any reason whatsoever within such thirty (30) calendar day
period, Landlord shall be free thereafter to enter into the
management/operation agreement with any third party.

 

24.                                 Holding Over. Any holding over after the expiration of
the Term of the Lease, with the express written consent of Landlord, shall be
construed to be a tenancy from month to month, and shall be on the terms and
conditions herein specified so far as applicable.

 

25.                                 Non-Liability of Affiliates, Stockholders,
Officers, Directors. In no
event shall the Affiliates, stockholders, officers or directors of Tenant or
Landlord be held to any individual liability as Affiliates, stockholders,
officers, or directors, for any default, damages or other breach of
obligations, whether of this Lease or any instruments made in pursuance thereof
by either Party hereto.

 

26.                                 Recording Memorandum of Lease.  If
Tenant has not delivered notice of termination of this Lease on or before November 15,
2001, pursuant to Section 4.2, Tenant shall have the right to record a
memorandum or short form of this Lease after that date so that any prospective
purchaser or other lienholders will have notice that title shall be subject to
the leasehold and other rights granted herein to Tenant. At such time Landlord
agrees to execute a

 

23

 

memorandum or short form of Lease that does not include any mention of
the consideration paid under this Lease. Any such short form or memorandum
shall have attached to it an accurate legal description of the Real Property as
contained in the Title Policy, and shall encumber no other real property owned
or leased by Landlord. Following termination of this Lease, upon request by
Landlord, Tenant agrees to execute a release as may be reasonably required by
Tenant to cause any such memorandum or short form of Lease to be removed of
record.

 

27.                                 Assignment.

 

27.1                           Transfer or Pledge by Landlord. Subject to Section 22.1, Landlord
shall be free to transfer its fee interest in the Overall Resort Property, the
Water Park Property or any part thereof or interest therein, subject, however,
to the extent applicable, to the terms of this Lease. Any such transfer shall
relieve the transferor of all liability and obligation hereunder (to the extent
of the interest transferred) accruing after the date of the transfer and any
assignee shall be bound by the terms and provisions of this Lease. Landlord
shall be free to pledge or mortgage its interest in the Water Park Property and
this Lease on the condition that either (a) this Lease shall be superior
to such pledge or mortgage or (b) if this Lease is to be subordinate to
the mortgage of any lender of Landlord, Tenant receives a nondisturbance
agreement reasonably acceptable to Tenant from the holder of such pledge or
mortgage.

 

27.2                           Assignment by Tenant. Upon prior notice to Landlord, Tenant may
assign or sublet this Lease only to an entity that is 100% owned by Alfa, on
the condition that Tenant shall not be released from any of its obligations
hereunder. No other assignment, sublease or transfer of this Lease shall be
permitted by Tenant, without Landlord’s prior written consent, which Landlord
may grant or deny in its sole and absolute discretion.  For purposes of this provision, any change in
ownership of Tenant, so that Tenant is no longer 100% owned by Alfa, shall be
deemed an assignment that is not permitted hereunder.

 

28.                                 Assignees Bound. All the terms, covenants and conditions of
this Lease shall be binding upon and inure to the benefit of the parties
hereto, as well as their respective successors and permitted assigns.

 

29.                                 Confidentiality, Public Announcement and
Non-Compete.

 

29.1                                       Confidentiality. The Parties each agree to hold, and to
cause its employees, consultants and advisors to hold, in strict confidence,
unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, all documents and
information furnished to it by such other Party or its representatives in
connection with the transactions contemplated by this Lease concerning (a) the
other Party or its Affiliates; and (b) the negotiation or terms of this
Lease and the transactions contemplated hereby (except to the extent that such
information can be shown to have been (i) previously known by the Party to
which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) lawfully acquired from other sources by the Party to which
it was furnished) (“Confidential Information”), and neither Party will release
or disclose such information to any other person, except its auditors,
attorneys, financial advisors, bankers and other consultants and advisors in
connection with this Lease. Upon termination of this Lease, each Party agrees
to

 

24

 

promptly
return to the other Party all documents and other written material containing
any Confidential Information of the other Party.

 

29.2                           Public Announcement.  From
time to time, each Party shall submit any proposed public announcement with
respect to the Lease to the other Party for prior approval, which shall not be
unreasonably withheld; provided, however, that until December 31, 2001,
the Parties must mutually agree on any press releases or other public
announcements regarding this Lease and the Parties’ relationship with respect
thereto, and until December 31, 2001, either Party may withhold approval
of any such press release in its sole and absolute discretion.

 

29.3                           Non-Compete. During the Term, neither Landlord nor any of Landlord’s Affiliates
shall, without the prior written consent of Tenant, own or operate any water
parks within a 100-mile radius of the Water Park. Landlord acknowledges that
any breach, or threatened breach, of the provisions of this Section 29.3
shall cause irreparable harm to Tenant, which harm cannot be fully redressed by
the payment of damages to Tenant, and, accordingly, Landlord agrees that Tenant
shall be entitled, in addition to any other right and remedy it may have, at
law or in equity, to an injunction, without the posting of any bond or other
security, enjoining or restraining Landlord or Landlord’s Affiliates from any
violation or threatened violation of this Section 29.3 of this Lease.

 

30.                                 Miscellaneous.

 

30.1                           Governing Law.  This
Lease shall be construed and enforceable in accordance with the laws of the
State of New Jersey.

 

30.2                           Mineral Rights. This Lease does not transfer to Tenant any
of Landlord’s mineral rights that may be appurtenant to the Real Property.
Landlord shall not have the right to undertake mining or exploration activities
on the Real Property affecting the Water Park during the Term or any renewals,
without the prior written consent of Tenant.

 

30.3                           Kelley Rights. 
Tenant agrees to honor the agreement that Edward B. Kelley, Ruth Kelley
and their children and grandchildren living as of the date hereof shall have the
right to free use of the Water Park, pursuant to and in accordance with the
Kelley Lease.

 

30.4                           Attorneys’ Fees.  The
Parties shall be entitled to recover reasonable attorneys’ fees and costs
actually incurred in connection with any effort to collect past due Rent or
enforce any other term of this Lease.

 

30.5                           Set-Off.  Tenant shall not be permitted
to set off against the Rent any amounts owed by Landlord to Tenant.

 

30.6                           Force Majeure.  If
either Party is delayed or prevented from the performance of any act or the
fulfillment of any obligation under this Lease by reason of an act of God or a
labor strike or other labor stoppage (a “Force Majeure Event”), such
lapsed or failed performance shall be excused, and the period for the
performance of any such act or the fulfillment of any such obligation shall be
extended, until the abatement of such Force Majeure Event and a period of time
reasonably necessary to allow the affected Party to recover therefrom.

 

25

 

30.7                           Notice.  All notices, demands and other
communications to be given or delivered under or by reason of the provisions of
this Lease will be in writing and will be deemed to have been given when
personally delivered (including overnight carriers) or when receipt is acknowledged,
if sent by facsimile, telecopy or other electronic transmission device. All
notices and other communications to Landlord and Tenant will, unless another
address is specified in writing, be sent to the address of Landlord at Mountain
Creek Resort, Inc., 200 Route 94 Vernon, NJ 07462, facsimile: (604) 938-7320,
with a copy to Jacobs Chase Frick Kleinkopf & Kelley LLC 1050 17th
Street, Suite 1500, Denver, CO 80265, Attn: Steven Cohen, facsimile: (303)
685-4869, and to Tenant at N-Ovation Park Management, Inc., 50 North Laura
Street, Suite 2600, Jacksonville, FL 32202, attn: Executive Vice
President, Nathan D. Goldman and Chief Legal Officer, Gwen Hutcheson Griggs,
facsimile: (904) 356-2596.

 

30.8                           Entire Agreement; Amendment.  This
Lease (together with all Exhibits, Schedules and other agreements referenced
herein) contains all of the agreements of the Parties hereto with respect to
the matters contained herein and no prior or contemporaneous agreement or
understanding, oral or written, pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended except by
an agreement in writing signed by the Parties hereto or their respective
successors in interest and expressly stating that it is an amendment of this
Lease.

 

30.9                           Execution by Fax.  This
Lease may be executed by the Parties and transmitted by fax and if so executed
and transmitted, this Lease shall be for all purposes effective as if the Parties
had delivered an executed original document.

 

30.10                     Severability.  If
any part of this Lease is or becomes or is held by any court of competent
jurisdiction to be illegal, null or void, or against public policy, then the relevant
portions shall be rewritten only to such extent as required to render the
interest excludable and upon terms satisfactory to Tenant. The remaining parts
of this Lease shall not be affected thereby and shall remain valid and
enforceable.

 

30.11                     Waiver. Either Party may waive any breach of or compliance by the other Party
with any covenant or provision of this Lease by delivering to the other Party
written notice stating the terms and extent of such waiver. Any waiver under
this Lease by any Party hereto shall not be construed to extend or apply beyond
its stated terms and shall not be deemed to be a waiver of any preceding or
subsequent breach under this Lease. No failure or delay on the part of any
Party in exercising any right, power, or privilege under this Lease shall
operate as a waiver, nor shall a single or partial exercise or waiver thereof
preclude any other or further exercise or the exercise of any other right,
power or privilege.

 

30.12                     Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument.

 

30.13                     Interpretation. The terms and conditions hereof have been fully
and fairly negotiated by the Parties, and no rule of strict construction
shall be applied against or in favor of either party hereto by virtue of their
being deemed the draftsman hereof.

 

26

 

30.14                     Further Assurances.  The
Parties will, and will cause their respective employees, agents and
representatives to, prepare, execute, at the executing Party’s expense, and deliver,
at the request of any Party hereto, any and all documents or instruments
reasonably necessary or appropriate to create, evidence or confirm the grant,
discharge or release, as the case may be, of any right, interest, or
obligation.

 

30.15                     Notice of Material Impact.  Each
Party shall deliver to the other Party written notice and a description of any
default or breach or other event that might have a materially adverse impact
upon the Water Park, its financial condition, results of operations, prospects,
or business, such notice to be delivered promptly after a Party becomes aware
of such default or other event.

 

30.16                     Time of Essence. Time is of the essence in the performance
of this Lease.

 

30.17                     Subordination, Non-Disturbance and Attornment.  This
Lease, including the covenant of quiet enjoyment, is and shall be subject and
subordinate to all ground and underlying leases, all mortgages, deeds of trust
or other encumbrances, and any and all renewals, extensions, modifications,
consolidations and replacements of any or all of the foregoing, now or hereafter
affecting all or any portion of the premises subject to this Lease (except to
the extent any such instrument shall expressly provide that this Lease is
superior thereto), provided, however, that as a condition of any such
subordination, the mortgagee, transferee, purchaser, lessor or beneficiary
shall agree that Tenant’s use or possession of the premises subject to this Lease
shall not be disturbed, nor shall its obligations be enlarged or its rights
abridged. Without diminishing any other rights of Tenant provided for elsewhere
herein (for example, any termination rights that have expressly been granted to
Tenant herein) in the event any proceedings are brought for default under any
ground or underlying lease or for the foreclosure of any mortgage, deed of
trust or other encumbrance to which this Lease is subject and subordinate,
Tenant shall, upon request of the party succeeding to the interest of Landlord
as a result of such proceedings, automatically attorn to and become the tenant
of such successor in interest without change in the terms of this Lease. Tenant
shall, on request by, and without cost to Landlord or such successor in
interest, execute and promptly deliver any instruments confirming such
attornment.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Lease the day and year first above written.

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MOUNTAIN
  CREEK RESORT, INC.,

  	
   

  	
  N-OVATION
  PARK MANAGEMENT,

  	
   

  
	
  a
  New Jersey corporation

  	
   

  	
  INC.,
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Charles Blier

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Vice President & General Manager

  	
   

  	
  Its:

  	
   

  	
   

  

 

27

 

prospects, or business, such notice to be
delivered promptly after a Party becomes aware of such default or other event.

 

30.16       Time
of Essence. Time is of the essence in the performance of this Lease.

 

30.17       Subordination,
Non-Disturbance and Attornment. This Lease, including the covenant of quiet
enjoyment, is and shall be subject and subordinate to all ground and underlying
leases, all mortgages, deeds of trust or other encumbrances, and any and all
renewals, extensions, modifications, consolidations and replacements of any or
all of the foregoing, now or hereafter affecting all or any portion of the
premises subject to this Lease (except to the extent any such instrument shall
expressly provide that this Lease is superior thereto), provided, however, that
as a condition of any such subordination, the mortgagee, transferee, purchaser,
lessor or beneficiary shall agree that Tenant’s use or possession of the
premises subject to this Lease shall not be disturbed, nor shall its
obligations be enlarged or its rights abridged. Without diminishing any other
rights of Tenant provided for elsewhere herein (for example, any termination
rights that have expressly been granted to Tenant herein) in the event any
proceedings are brought for default under any ground or underlying lease or for
the foreclosure of any mortgage, deed of trust or other encumbrance to which
this Lease is subject and subordinate, Tenant shall, upon request of the party
succeeding to the interest of Landlord as a result of such proceedings, automatically
attorn to and become the tenant of such successor in interest without change in
the terms of this Lease. Tenant shall, on request by, and without cost to
Landlord or such successor in interest, execute and promptly deliver any
instruments confirming such attornment.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Lease the day and year first above written.

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MOUNTAIN
  CREEK RESORT, INC.,

  	
   

  	
  N-OVATION
  PARK MANAGEMENT,

  	
   

  
	
  a
  New Jersey corporation

  	
   

  	
  INC.,
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Randal H. Drew

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
  President

  	
   

  

 

28

 

Exhibit A
to Lease Agreement Dated as of May 15, 2001 By and Between

Mountain
Creek Resort, Inc. and N-Ovation Park Management, Inc.

 

	
  GROUP

  
	
  FUNCTION

  
	
  AREA

  

 

 

1

 

EXHIBIT B
TO LEASE AGREEMENT DATED AS OF MAY 15, 2001

BY AND
BETWEEN MOUNTAIN CREEK RESORT, INC.

AND
N-OVATION PARK MANAGEMENT, INC.

 

SHARED
FACILITIES LICENSE AGREEMENT

 

THIS SHARED FACILITIES LICENSE AGREEMENT
(this “Agreement”), dated as of May 15, 2001, is by and between
N-OVATION PARK MANAGEMENT, INC., a Delaware corporation (“N-Ovation”)
and MOUNTAIN CREEK RESORT, INC., a New Jersey corporation (“Mountain Creek”).

 

RECITALS

 

A.                                   Mountain Creek owns and leases certain real
property and improvements, consisting of approximately 140 acres located in the
Town of Vernon, County of Sussex, State of New Jersey, and commonly known as “Mountain
Creek Resort” (the “Overall Resort Property”), on which Mountain Creek
operates a ski resort (the “Ski Resort”), and a water park, consisting
of water rides and amusements, commonly known as “Water World” (the “Water
Park”). The Overall Resort Property also consists of additional developable
real estate that Mountain Creek intends to develop in the future.

 

B.                                     Concurrently herewith, Mountain Creek has
entered into a Lease Agreement with N-Ovation (the “Water Park Lease”),
pursuant to which Mountain Creek has agreed to lease to N-Ovation and N-Ovation
has agreed to lease from Mountain Creek that portion of the Overall Resort
Property on which the Water Park is located, as more particularly depicted on Exhibit A
hereto (the “Water Park Property”).

 

C.                                     The term of the Water Park Lease is for
thirty (30) summer seasons, commencing on April 1st and terminating on September 30th of each year, except for the first year, in
which the season shall commence on May 15th and terminate September 30, 2001 (in
each case, a “Usage Period,” or collectively, the “Usage Periods”).

 

D.                                    Many of the Overall Resort Property’s and the
Water Park Property’s operations are complimentary.

 

E.                                      In conjunction with N-Ovation’s operation of
the Water Park pursuant to the terms of the Water Park Lease, Mountain Creek
desires to grant to N-Ovation and N-Ovation desires to accept from Mountain
Creek certain licenses (collectively the “Licenses”), regarding portions
of the Overall Resort Property within the vicinity of the Water Park Property,
as more particularly set forth herein, upon and subject to the terms and
conditions contained in this License Agreement.

 

In consideration of the rent to be paid by
N-Ovation pursuant to the Water Park Lease and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Mountain Creek hereby grants to N-Ovation, and N-Ovation hereby accepts from
Mountain Creek, the Licenses, upon and subject to the terms and conditions
contained herein.

 

 

ARTICLE I

THE DAY SKIER PARKING LOT
LICENSE

 

1.01                           The Day Skier Parking Lot License.

 

(a)                                  Subject to the limitations hereafter
provided, Mountain Creek hereby grants to N-Ovation, a nonexclusive license (the
“Day Skier Parking Lot License”) to use during the Usage Periods only,
solely for the purpose of providing its employees, customers, visitors and
guests with parking in connection with N-Ovation’s operation of the Water Park,
any and all parking lots and all related improvements that from time to time
exist and that are used by Mountain Creek to provide parking for day skiers
visiting the Ski Resort (“Day Skier Parking Lots”).

 

(b)                                 During each Usage Period, at least 2500
parking spaces within the Day Skier Parking Lots are required to be made
available to N-Ovation for use by N-Ovation’s employees, visitors, and guests
under the provisions of this Day Skier Parking Lot License (sometimes hereafter
referred to as the “Required Water Park Parking”).

 

(c)                                  The actual, particular areas to be used from
time to time by N-Ovation for the Required Water Park Parking are to be
designated by Mountain Creek and may change from time to time, and N-Ovation
agrees to limit its use under this Day Skier Parking Lot License to such
limited areas; on the condition that at least 2,150 parking spaces designated
by Mountain Creek for the Required Water Park Parking may not be farther than
700 meters from the main entrance to the Water Park Property. To the extent
that Intrawest designates any additional parking spaces to satisfy the
requirement for the Required Water Park Parking that are located farther than
700 meters from the main entrance to the Water Park Property, Intrawest shall operate,
at Intrawest’s cost and expense, a bus shuttle service to enable customers of
N-Ovation utilizing such parking spaces to access the Water Park. Any such bus
shuttle system shall operate during such times and with such frequency as shall
be reasonably agreed between Intrawest and N-Ovation.

 

(d)                                 The use of the Day Skier Parking Lots by
N-Ovation are not to be used generally by construction vehicles in conjunction
with construction activities taking place on the Water Park Property, it being
the intention of the parties that alternative parking within the Water Park
Property shall be available for use by such construction vehicles in connection
with any such construction activities.

 

(e)                                  Mountain Creek may reasonably regulate or
require N-Ovation to regulate the use of the areas designated for the Required
Water Park Parking by use of stamps, passes, stickers or other reasonable means
to assure compliance with the terms and provisions hereof.

 

(f)                                    The Day Skier Parking Lot License shall
include vehicle and pedestrian ingress and egress to the Day Skier Parking
Lots, or any portion thereof.

 

1.02                           Operation, Maintenance and Repair of Day Skier Parking Lots.

 

(a)                                  At its sole cost and expense, during the
Usage Periods only, N-Ovation shall be responsible for:

 

2

 

(i)                                     all repairs necessary for the maintenance of
the Day Skier Parking Lots;

 

(ii)                                  all rubbish removal from, and street sweeping
for, the Day Skier Parking Lots; and

 

(iii)                               generally keeping the Day Skier Parking Lots
in good order and condition.

 

(b)                                 N-Ovation shall maintain and repair the Day
Skier Parking Lots in a good and workmanlike manner that provides for the safe and
efficient use and operation of the Day Skier Parking Lots, and prior to the end
of each Usage Period, N-Ovation shall perform any required maintenance so as to
cause the Day Skier Parking Lots to be returned to the same condition that such
Day Skier Parking Lots were in upon commencement of such Usage Period, ordinary
wear and tear excepted.

 

ARTICLE II

THE TICKET SALES FACILITIES
LICENSE

 

2.01                           The Ticket Sales Facilities License.

 

(a)                                  Subject to the limitations hereafter
provided, Mountain Creek hereby grants to N-Ovation, a nonexclusive license
(the “Ticket Sales Facilities License”), to use during the Usage Periods
only, solely for the purpose of selling admission tickets and providing other customary
and ordinary guest services (such as will-call and group ticket sales) to
customers of the Water Park, at all times in cooperation with Mountain Creek,
any ticket booths, counters and related structures that from time to time exist
and that are used by Mountain Creek to sell lift tickets for the Ski Area (collectively,
the “Ticket Sales Facilities”).

 

(b)                                 This Ticket Sales Facilities License shall
apply only to the structures from which N-Ovation will sell admission tickets
and provide certain customer service functions, and shall not apply to any
utilities, equipment or personal property contained within or used in connection
with such Ticket Sales Facilities, it being the intention of the parties to
enter into separate agreements if the parties will, in fact, share any such
utilities, equipment or personal property, which agreements shall set forth
cost sharing and maintenance obligations, among other things.

 

(c)                                  The current location of the Ticket Sales
Facilities is depicted on Exhibit B hereto. Mountain Creek shall
have the right, from time to time, to relocate the Ticket Sales Facilities to
other locations within the Overall Resort Property.

 

(d)                                 This Ticket Sales Facilities License shall
include pedestrian ingress and egress to the Ticket Sales Facilities.

 

3

 

2.02                           Operation, Maintenance and Repair of the Ticket Sales Facilities.

 

(a)                                  At its sole cost and expense, during the
Usage Periods, N-Ovation shall be responsible for:

 

(i)                                     all repairs necessary for the maintenance of
the Ticket Sales Facilities;

 

(ii)                                  all rubbish removal and street sweeping for the areas immediately surrounding
the Ticket Sales Facilities; and

 

(iii)                               generally keeping the Ticket Sales Facilities
in good order and condition.

 

(b)                                 N-Ovation shall maintain and repair the
Ticket Sales Facilities in a good and workmanlike manner, and prior to the end
of each Usage Period, N-Ovation shall perform any required maintenance so as to
cause the Ticket Sales Facilities to be returned to the same condition that
such Ticket Sales Facilities were in upon commencement of such Usage Period,
ordinary wear and tear excepted.

 

ARTICLE III

FOOD PREPARATION AND STORAGE
FACILITIES

 

3.01                           The Food Preparation and Storage Facilities License.

 

(a)                                  Subject to the limitations hereafter provided,
Mountain Creek hereby grants to N-Ovation a nonexclusive license (the “Food
Preparation and Storage License”) to use during the Usage Periods only,
solely for the preparation and storage of food and beverages in connection with
N-Ovation’s operation of the Water Park, at all times in cooperation with
Mountain Creek, certain food preparation and storage facilities that from time
to time exist and that are used by Mountain Creek in connection with providing
food and beverage services for day skiers visiting the Ski Area (the “Food
Preparation and Storage Facilities”).

 

(b)                                 The Food Preparation and Storage Facilities
License shall apply only to the structures (for example, kitchens) in which
N-Ovation will perform food preparation and storage, and shall not apply to any
utilities, equipment or personal property (such as electricity, heating,
stoves, refrigerators, freezers, etc.) contained within or used in connection
with such Food Preparation and Storage Facilities, it being the intention of
the parties to enter into separate agreements if the parties will, in fact,
share any such utility costs; equipment or personal property, which agreements
will set forth cost sharing and maintenance obligations, among other things.

 

(c)                                  The Food Preparation and Storage Faculties
currently are located within the temporary structure commonly known as the “Hex
2 Building.” Mountain Creek shall have the right, from time to time, to
designate Food Preparation and Storage Facilities for use by N-Ovation hereunder,
at other locations within the Overall Resort Property, and N-Ovation agrees

 

4

 

to
limit its use under this Food Preparation and Storage License to such
designated Food Preparation and Storage Facilities.

 

(d)                                 The Food Preparation and Storage Facilities
License shall include vehicular and pedestrian ingress and egress to the Food
Preparation and Storage Facilities.

 

3.02                           Operation, Maintenance, and Repair of the Food Preparation and Storage
Facilities.

 

(a)                                  At its sole cost and expense, during the
Usage Periods, N-Ovation shall be responsible for:

 

(i)                                     all repairs necessary for the maintenance of
the Food Preparation and Storage Facilities; and

 

(ii)                                  generally keeping the Food Preparation and
Storage Facilities in good order and condition.

 

(b)                                 N-Ovation shall maintain and repair the Food
Preparation and Storage Facilities in a good and workmanlike manner, and prior
to the end of each Usage Period, N-Ovation shall perform any required
maintenance so as to cause the Food Preparation and Storage Facilities to be
returned to the same condition that such Food Preparation and Storage
Facilities were in upon commencement of such Usage Period, ordinary wear and
tear excepted.

 

ARTICLE IV

ADMINISTRATIVE OFFICE SPACE
LICENSE

 

4.01                           The Administrative Office Space License.

 

(a)                                  Grant of Administrative Office Space Licenses. Subject to the limitations hereafter
provided, Mountain Creek hereby giants to N-Ovation, a nonexclusive license
(the “Administrative Office Space License”) to use at all times during
the year (not limited to Usage Periods), solely for general office space use
for up to a maximum of five (5) full-time employees of N-Ovation
performing services in connection with the Water Park, together and at all
times in cooperation with Mountain Creek, certain administrative office space
facilities located within the Overall Resort Property, that from time to time
exist and that are used by administrative personnel of Mountain Creek in
connection with Mountain Creek’s operation of the Ski Resort (“Administrative
Office Space Facilities”).

 

(b)                                 The Administrative Office Space Facilities
currently are located within the area commonly known as “Cobblestone Village.”
Mountain Creek shall have the right, from time to time, to designate alternate
(including temporary) Administrative Office Space Facilities in other locations
for use by N-Ovation hereunder, and N-Ovation agrees to limit its use under this
Administrative Office Space License to such designated Administrative Office
Space Facilities.

 

(c)                                  The Administrative Office Space Facilities
License shall apply only to actual office spaces, and shall not apply to any
utilities, equipment or personal property (such as

 

5

 

phones,
computers, desks, file cabinets, etc.) contained within or used in connection
with such Administrative Office Space Facilities, it being the intention of the
parties to enter into separate agreements if the parties will, in fact, share
any such utilities, equipment or personal property, which agreements will set
forth cost sharing and maintenance obligations, among other things.

 

(d)               N-Ovation expressly agrees that Mountain Creek shall have the right to redesignate
any Administrative Office Space Facilities to be used by N-Ovation hereunder at
any time, and from time to time, on a space available basis, it being
acknowledged that any such relocation may need to take place during the year
based on the seasonality of Mountain Creek’s business operations and the fact
that certain Administrative Office Space Facilities may be available at certain
times (for example, during the Usage Periods), but not available at other tunes,
N-Ovations agrees that it shall have no claim against Mountain Creek based on any
cost, expense or inconvenience resulting from any such relocation of
Administrative Office Space Facilities.

 

(e)               Mountain Creek makes no representation as to
the size or quality of the Administrative Office Space Facilities to be
provided for N-Ovation’s use hereunder, and N-Ovation acknowledges that such
Administrative Office Space Facilities may include, from time to time,
temporary, modular type office space facilities.

 

(f)                This Administrative Office Space Facilities
License include ingress and egress to the Administrative Office Space
Facilities.

 

4.02           Operation, Maintenance and Repair of the
Administrative Office Space Facilities.

 

(a)           At its sole cost and expense, at all times N-Ovation shall be
responsible for:

 

(i)         all repairs necessary for the maintenance of
the Administrative Office Space Facilities; and

 

(ii)        generally keeping the Administrative Office
Space Facilities in good order and condition.

 

(b)           At all times, N-Ovation shall maintain the Administrative Office Space Facilities
in a good and workmanlike manner.

 

ARTICLE V

CORPORATE PICNIC AREA LICENSE

 

5.01           The Corporate Picnic Area License.

 

(a)           Subject to the limitations hereafter provided, Mountain Creek hereby
grants to N-Ovation, a non-exclusive license (the “Corporate Picnic Area License”),
to use during the Usage Periods only, solely for corporate and group functions
and events in connection with N-Ovation’s operation of the Water Park, together
and at all times in cooperation with Mountain Creek, certain picnic area
facilities (including tent and picnic bench facilities), that

 

6

 

from
time to time exist and that are used by Mountain Creek for corporate and group
functions and events (the “Corporate Picnic Facilities”).

 

(b)           The Corporate Picnic Facilities currently are located in the location
generally depicted on Exhibit B hereto. Mountain Creek shall have the
right, from time to time, to designate Corporate Picnic Facilities for use by
N-Ovation hereunder, in other locations within the Overall Resort Property in
reasonable proximity to the Water Park, and N-Ovation agrees to limit its use
under this Corporate Picnic Area License to such designated Corporate Picnic
Facilities.

 

(c)           This Corporate Picnic Area License shall include ingress and egress to
the Corporate Picnic Facilities.

 

5.02          Operation, Maintenance and Repair of the
Corporate Picnic Area Facilities.

 

(a)           At its sole cost and expense, during the Usage Periods, N-Ovation shall
be responsible for:

 

(i)          all repairs necessary for the maintenance of
the Corporate Picnic Facilities;

 

(ii)         all rubbish removal for the areas immediately
surrounding the Corporate Picnic Facilities; and

 

(iii)        generally keeping the Corporate Picnic
Facilities in good order and repair.

 

(b)           N-Ovation shall maintain and replace the Corporate Picnic Facilities in
a good and workmanlike manner, and prior to the end of each Usage Period,
N-Ovation shall perform any required maintenance so as to cause the Corporate
Picnic Facilities to be returned to the same condition that such Corporate
Picnic Facilities were in upon commencement of such Usage Period, ordinary wear
and tear excepted.

 

ARTICLE VI

THE CASH CONTROL STUCTURE LICENSE

 

6.01         The Cash Control Structure License.

 

(a)           Subject to the limitations hereafter provided, Mountain Creek hereby
grants to N-Ovation, an exclusive license (the “Cash Control Structure
License”), to use during the Usage Periods only, solely for the purpose of
controlling and securing cash in connection with N-Ovation’s operation of the
Water Park (including the right to change locks for each Usage Period to permit
N-Ovation to access such Cash Control Structure), a secured structure or area (“Cash
Control Structure”), that exists from time to time and that is used by
Mountain Creek for purposes of controlling and securing cash in connection with
Mountain Creek’s operation of the Ski Resort during the ski season.

 

7

 

(b)           This Cash Control Structure License shall apply only to the structures from
which N-Ovation shall control and secure cash in connection with N-Ovation’s
operation of the Water Park, and shall not apply to any utilities or equipment
or personal property contained within or used in connection with such Cash
Control Structure, it being the intention of the parties to enter into separate
agreements if the parties will, in fact, share any such equipment or personal
property, which agreements shall set forth cost sharing and maintenance
obligations, among other things.

 

(c)           The Cash Control Structure is currently located in the Cobblestone
Village area in the area shown on Exhibit B hereto. Mountain Creek shall
have the right, from time to time, to designate a Cash Control Structure for
use by N-Ovation hereunder, in another location or area within the Overall
Resort Property, and N-Ovation agrees to limit its use under this Cash Control
Structure License to such designated location or area.

 

(d)           This Cash Control Structure License shall include pedestrian ingress
and egress to the Cash Control Structure.

 

6.02           Operation, Maintenance and Repair of the Cash
Control Structure Facilities.

 

(a)           At its sole cost and expense, during the Usage Periods, N-Ovation shall
be responsible for:

 

(i)          all repairs necessary for the maintenance of the
Cash Control Structure;

 

(ii)         all rubbish removal and street sweeping for
the areas immediately surrounding the Cash Control Structure; and

 

(iii)        generally keeping the Cash Control Structure
in good order and condition.

 

(b)           N-Ovation shall maintain and repair the Cash Control Structure in a
good and workmanlike manner, and prior to the end of each Usage Period,
N-Ovation shall perform any required maintenance so as to cause the Cash
Control Structure to be returned to the same condition that such Cash Control
Structure was in upon commencement of such Usage Period, ordinary wear and tear
excepted.

 

ARTICLE VII

THE FIRST AID FACILITIES LICENSE

 

7.01           The First Aid Facilities License.

 

(a)           Subject to the limitations hereafter provided, Mountain Creek hereby
grants to N-Ovation, a nonexclusive license (the “First Aid Facilities
License”), to use during the Usage Periods only, solely for the purpose of
providing first aid and emergency medical treatment services to customers of
the Water Park, at all times in cooperation with Mountain

 

8

 

Creek,
any structure that from time to time exists and that is used by Mountain Creek
for purposes of providing first aid and emergency medical treatment services in
connection with Mountain Creek’s operation of the Ski Resort (collectively, the
“First Aid Facilities”).

 

(b)           This First Aid Facilities License shall apply only to the structures
from which N-Ovation will provide first aid and emergency medical treatment
services, and shall not apply to any utilities or equipment or personal
property contained within or used in connection with such First Aid Facilities,
it being the intention of the parties to enter into separate agreements if the
parties will, in fact, share any such utilities, equipment or personal
property, which agreements shall set forth cost sharing and maintenance
obligations, among other things.

 

(c)           The current location of the First Aid Facilities is in the area
generally shown on Exhibit B hereto in which Mountain Creek currently
maintains its first aid facilities. Mountain Creek shall have the right, from
time to time, to relocate the First Aid Facilities to any other location within
the Overall Resort Property.

 

(d)           This First Aid Facilities License shall include pedestrian ingress and egress
to the First Aid Facilities.

 

7.02           Operation, Maintenance and Repair of the
First Aid Facilities.

 

(a)           At its sole cost and expense, during the Usage Periods, N-Ovation shall
be responsible for:

 

(i)          all repairs necessary for the maintenance of
the First Aid Facilities;

 

(ii)         all rubbish removal and street sweeping for
the areas immediately surrounding the First Aid Facilities; and

 

(iii)        generally keeping the First Aid Facilities in
good order and condition.

 

(b)           N-Ovation shall maintain and repair the First Aid Facilities in a good
and workmanlike manner, and prior to the end of each Usage Period, N-Ovation
shall perform any required maintenance so as to cause the First Aid Facilities
to be returned to the same condition that such First Aid Facilities were in
upon commencement of such Usage Period, ordinary wear and tear excepted.

 

9

 

ARTICLE VIII

GENERAL TERMS AND CONDITIONS

 

8.01           Term. The term of the License granted under this Agreement (the “Term”)
shall be effective as of the “Commencement Date,” as defined in the Lease
Agreement and, unless sooner terminated as provided herein, shall continue for
a period ending on the first date on which N-Ovation ceases for any reason to
continue to operate the Water Park in accordance with the Lease Agreement.

 

8.02           Termination.

 

(a)           The Licenses granted under this Agreement may, at Mountain Creek’s election,
be terminated immediately (i) if N-Ovation is in default under the Lease Agreement
(subject to any applicable cure periods) or (ii) if for any reason the Lease
Agreement has been terminated or otherwise is not in full force and effect. In
addition, if N-Ovation fails to perform any of its agreements or obligations
under this Agreement, Mountain Creek may give notice in writing to N-Ovation of
such failure, and if N-Ovation does not cure such failure to the satisfaction
of Mountain Creek within thirty (30) days from the date Mountain Creek gives
such notice to N-Ovation, the Licenses granted under this Agreement may, at
Mountain Creek’s election, be terminated.

 

(b)           In the event of the expiration of the Term or the termination pursuant
to the provisions of Section 8.02(a) of the Licenses granted under this
Agreement, N-Ovation shall immediately cease any use of the Day Skier Parking
Lots, The Ticket Sales Facilities, the Food Preparation and Storage Facilities,
the Administrative Office Facilities and the Corporate Picnic Facilities; on the
condition that N-Ovation shall have a reasonable period of time to remove any
of N-Ovation’s equipment or personal property located within such facilities.

 

8.03           Insurance. N-Ovation shall maintain, at its sole cost and expense, the following
insurance, in the amounts specified below in connection with N-Ovation’s use
and enjoyment of the Licenses granted by this License Agreement:

 

(a)           during the course of any construction or maintenance activities by
N-Ovation pursuant to the terms of this License Agreement, worker’s
compensation insurance covering all persons employed by N-Ovation during the
course of such construction activities; and

 

(b)           commercial general liability insurance, with a primary limit of at
least $10,000,000 per person and $10,000,000 per occurrence:

 

(i)          premises, operations, personal injury,
contractual liability, products/completed operations hazard and broad form
property damage coverages; and

 

(ii)         provisions for severability of interest.

 

10

 

8.04          Release and Indemnity.

 

(a)           Release. To the fullest extent permitted by law, N-Ovation hereby releases
Mountain Creek, and its directors, officers, employees and agents (collectively
the “Relevant Persons” and each, individually, a “Relevant Person”)
from any liability for, and no Relevant Person shall be liable in any manner to
N-Ovation or any other person claiming through N-Ovation for, any death,
injury, loss, damage, cost or expense of any nature whatsoever resulting from
N-Ovation’s use of any real property pursuant to the Licenses hereunder, except
to the extent that the same results from the gross negligence or willful
misconduct of the Relevant Person.

 

(b)           Indemnity. N-Ovation shall indemnify, defend and hold harmless each Relevant
Person from any claim, suit, proceeding, loss, damage, cost or expense,
including, without limitation, attorneys’ fees and consultants’ fees, asserted
against or incurred by the Relevant Person as a result of or in connection
N-Ovation’s failure to perform or observe any obligation or condition to be performed
or observed by N-Ovation under this Agreement.

 

8.05          Mountain Creek’s Reservations. Mountain Creek reserves the right to use
any real property subject to the Licenses for any purpose that does not
unreasonably interfere with the use and enjoyment of the Licenses by N-Ovation
hereunder. In addition to, and notwithstanding the limitation on Mountain Creek’s
rights set forth above, Mountain Creek reserves the right to alter any
improvements located within the real property subject to the Licenses and to
construct any additional improvements within the real property subject to the
Licenses. Except as otherwise expressly provided herein, Mountain Creek
reserves the right to relocate elsewhere on the Overall Resort Property or on
the other property in close proximity to the Overall Resort Property any of the
Licenses provided for herein so long as such new location does not deprive N-Ovation
of the practical benefit of the License(s).

 

8.06          Notices.

 

(a)           Written Notice; Delivery and Addresses. Any notice to be given by any party to the
other in connection with this License Agreement shall be in writing and
delivered by registered or certified mail, overnight courier, telecopy,
telegram or hand delivered to the address of the party to whom notice is being
given as set forth below.

 

if to N-Ovation:

 

N-Ovation
Park Management, Inc.

50
North Laura Street, Suite 2600

Jacksonville,
Florida 32202

Attention:
Nathan Goldman

Telephone
No.: 904-356-2532

Fax
No.: 904-356-2596

 

11

 

if to Mountain Creek:

 

Mountain
Creek Resort, Inc.

200
Route 94

Vernon,
New Jersey 07462

Attention:
Charles Blier

Telephone
No.: 973-827-3900

Fax
No.: (973) 209-3363

 

with a copy to:

 

Jacobs
Chase Frick Kleinkopf & Kelley LLC

1050
Seventeenth Street, Suite 1500

Denver,
CO 80265

Attention:
Steven M. Cohen

Telephone
No.: 303-892-4454

Fax
No.: 303-685-4869

 

(b)           Receipt of Notices. Any notice sent by registered or certified
mail will be deemed to have been received three business days following the
date of mailing (provided that at such time no postal strike is in progress or
has been publicly announced). Any notice sent by overnight courier will be
deemed to have been received one business day following the date of delivery to
the overnight courier. Any notice sent in any other manner stipulated in this
Section 8.06 will be deemed to have been received on the day it is sent.

 

(c)           Change of Address. Any party may change its address for notice
by advising the other party in writing of such change, and until the other
party is so advised, it will be entitled to continue sending notices to the
last address it is advised of in writing.

 

8.7             Enforcement of Obligations. If either Mountain Creek or N-Ovation shall
fail to comply with any agreement, covenant or obligation contained in this
License Agreement, the other party shall have full power and authority to
enforce compliance in any manner provided for by law or in equity, including,
without limitation, (a) an action for damages, or (b) an action to enjoin any
violation or specifically enforce the provisions hereof.

 

8.8             Regulations. Without limiting the reserved rights of Mountain Creek to regulate the
use of any Licenses created herein, but rather in addition to such rights,
Mountain Creek expressly reserves the right to regulate any and all of the
Licenses created hereunder in a manner that is compatible with, and in
furtherance of, the operation of the Ski Area and the real estate development
plans of Mountain Creek. Any such regulations shall be reasonable, shall take
into account the respective interests of both Mountain Creek and N-Ovation, may
be amended from time to time, and the use of the Licenses by N-Ovation shall be
subject to such regulations.

 

8.9             Parties Approval. If a party having the right to approve or
consent (the “Approving Party”) to any document or proposed action
hereunder neither approves nor denies such a request for such approval or
consent for a period of 30 days after written request therefore is received by
the Approving Party, such failure shall be considered to be the legal
equivalent of

 

12

 

express
approval or consent, as the case may be, and the Approving Party shall be
legally bound thereby for all purposes thereafter.

 

8.10          Miscellaneous.

 

(a)           Successors and Assigns. This Agreement shall inure to the benefit
of N-Ovation, its successors and assigns. The parties shall be permitted to
assign this Agreement only to the same parties and in conjunction with an
assignment of the Water Park Lease.

 

(b)           Mutual Cooperation. The provisions hereof are intended by the
parties to reasonably accommodate the interests of both Mountain Creek and
N-Ovation. Whenever the approval, consent or determination of one or the other
of the parties is provided for herein with respect to any matter, such approval
or determination shall not be unreasonably withheld or delayed.  In addition, to the extent N-Ovation is
limited under any of the Licenses hereunder to usages of certain facilities
only during the Usage Periods, from time to time and on a case-by-case basis,
subject to Mountain Creek’s prior consent, Mountain Creek shall reasonably cooperate
with N-Ovation to the extent N-Ovation requires use of the facilities subject
to this Lease in connection with N-Ovation’s operation of the Water Park at
other times other than the Usage Period.

 

(c)           Limitation of Use of License. It is the intention of the parties that at
all times hereunder, the Licenses herein be, and they are hereby, limited and
confined to those areas actually developed for the uses contemplated herein,
and that at no time will any party hereto contend that such Licenses extend to
areas improved with buildings or structures or other areas not suitable for the
expressed purposes set out hereinabove for such Licenses. Further, N-Ovation,
at its expense, shall provide such instruments as may be
reasonably requested by Mountain Creek to accommodate any request from any of
its lenders or its principals as to the limits and extent of the Licenses
hereunder.

 

(d)           Amendments. Mountain Creek and N-Ovation may modify this License Agreement only
by a written amendment signed by both Mountain Creek and N-Ovation.

 

(e)           Captions. The captions appearing in this License Agreement have been inserted,
as a matter of convenience and for reference only and in no way define, limit
or enlarge the scope or meaning of this License Agreement or any of its
provisions.

 

(f)            Governing Law. This License Agreement shall be construed
in accordance with and governed by the laws of the State of New Jersey.

 

(g)           Partial Invalidity. If for any reason whatsoever, any term,
obligation or condition of this License Agreement, or the application thereof
to any person or circumstance, is to any extent held or rendered invalid,
unenforceable or illegal, then such term, obligation or condition:

 

(i)          shall be deemed to be Independent of the
remainder of the License Agreement and to be severable and divisible therefrom,
and its invalidity, unenforceability or illegality shall not affect, impair or
invalidate the remainder of the License Agreement or any part thereof; and

 

13

 

(ii)         the remainder of the License Agreement not
affected, impaired or invalidated will continue to be applicable and enforceable
to the fullest extent permitted by law against any person and circumstance
other than those as to which it has been held or rendered invalid,
unenforceable and illegal.

 

(h)               Attorneys’ Fees. Notwithstanding anything to the contrary
contained in this License Agreement, if either party institutes legal
proceedings against the other with respect to this License Agreement, or the
use, enjoyment, operation or condition of any License, the nonprevailing party
shall pay to the prevailing party an amount equal to all attorneys’ fees and
disbursements and all other costs and expenses incurred by the prevailing party
in connection therewith.

 

(i)                Mediation.

 

(i)          When Used. The process of mediation as herein set forth shall be used when any
controversy arises as to the construction or compliance with any provisions of
this License Agreement. All parties shall, in good faith, attempt to resolve
any controversy by mediation prior to instituting any action in a court of law
or equity.

 

(ii)         Procedure. Any party to a controversy subject to mediation hereunder may
institute mediation proceedings upon written notice delivered to the other
parties in person or by certified mail, which shall reasonably identify the
subject of the controversy. Within fifteen (15) days from receipt of such
notice, the parties shall select a mediator or in the event the parties cannot
agree on a mediator, each party shall name and appoint one mediator. If any
party fails to appoint a mediator within such period, the mediator shall be the
mediator appointed by the party having timely made such appointment. The two
appointed mediators shall then appoint a mediator who will mediate the
controversy between the parties. The mediator shall select the time and place
for hearing the controversy and shall notify the parties of such time and place
by written notice delivered in person or by certified mail at least five (5)
days prior to the proceeding. The proceeding shall be conducted by the mediator
and conducted according to the mediation rules of the American Arbitration
Association, except where they are specifically overridden by or contradict the
laws of the State of New Jersey.

 

(iii)        Decision. Any resolution resolved by mediation shall be in writing, signed by
all parties and shall be binding on all parties and enforceable in any court of
competent jurisdiction. The fees for the mediator and costs and expenses
incurred by the mediator shall be paid equally by the parties. Each party shall
be responsible for its own attorney’s fees and costs.

 

(j)                No Recording. This License may not be recorded.

 

(k)               Subordination, Non-Disturbance and Attornment. This Agreement is and shall be subject and
subordinate to all ground and underlying leases, all mortgages, deeds of trust
or other encumbrances, and any and all renewals, extensions, modifications,
consolidations and replacements of any or all of the foregoing, now or
hereafter affecting all or any portion of the premises subject to this
Agreement, provided, however, that as a condition of any such

 

14

 

subordination, the
mortgagee, transferee, purchaser, lessor or beneficiary shall agree that
N-Ovation’s use of the premises subject to this Agreement shall not be
disturbed, nor shall its obligations be enlarged or its rights abridged.
Without diminishing any other rights of N-Ovation provided for elsewhere herein
or in the Water Park Lease (for example, any termination rights that have
expressly been granted to N-Ovation herein or in the Water Park Lease), in the
event any proceedings are brought for default under any ground or underlying
lease or for the foreclosure of any mortgage, deed of trust or other
encumbrance to which this Agreement is subject and subordinate, N-Ovation
shall, upon request of the party succeeding to the interest of Mountain Creek
as a result of such proceedings, automatically attorn to and become the tenant
of such successor in interest without change in the terms of this Agreement. N-Ovation
shall, on request by, and without cost to Mountain Creek or such successor in
interest, execute and promptly deliver any instruments confirming such
attornment.

 

[The remainder of this page is intentionally left blank]

 

15

 

Executed
to be effective as of the date first set forth above.

 

	
   

  	
  MOUNTAIN
  CREEK:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mountain Creek Resort,
  Inc., a New Jersey

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  N-OVATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  N-Ovation Park Management,
  IDC., a Delaware

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

16

 

EXHIBIT A

(Attached to and forming a part of License
Agreement

between Mountain Creek Resort, Inc. and

N-Ovation Park Management, Inc.)

 

DRAWING SHOWING THE WATER PARK PROPERTY

 

 

EXHIBIT B

(Attached to and forming a part of License
Agreement

between Mountain Creek Resort, Inc. and

N-Ovation Park Management, Inc.)

 

DRAWING SHOWING THE GENERAL
LOCATION OF CERTAIN OF

THE SHARED FACILITIES

 

 

Exhibit C

 

Definitions

 

“Affiliate(s)”
means: (a) any person which, directly or indirectly, is in control of, is
controlled by or is under common control with the party for whom an affiliate
is being determined; (b) any person who is a director or officer of any person
described in clause (a) above or of the party for whom an affiliate is being
determined; or (c) any partner (general or limited), trustee, beneficiary,
spouse, parent, child (including an adult child) or sibling or any person
described in clause (a) above or of the party for whom an affiliate is being
determined. For purposes hereof, control of a person means the power, direct or
indirect, to: (i) vote 50% or more of the securities having ordinary voting
power for the election of directors (or comparable positions) of such person;
or (ii) direct or cause the direction of the management and policies of such
person, whether by contract or otherwise and either alone or in conjunction
with others.

 

“Alfa” has
the meaning set forth in the Recitals.

 

“Base Rent”
has the meaning set forth in Section 5.1.

 

“Commencement Date” has the meaning set forth in Section 4.1.

 

“Confidential Information” has the meaning set forth in Section 29.1.

 

“EBITDA”
means, for any period, earnings of a company before interest, taxes,
depreciation and amortization, calculated in accordance with generally accepted
accounting principals, which is commonly referred to as “net operating income.”
 For purposes of this Lease, the
calculation of EBITDA shall exclude all expenses that are overhead allocations
from Tenant’s corporate office that are not directly related to the Water Park
operations; provided that direct costs for travel expenses by corporate office
personnel, up to a maximum of $25,000 per year, shall not be excluded from such
calculation of EBITDA.

 

“Environmental Laws” means all applicable Laws which impose any obligations relating to the
protection, conversation or restoration of the natural environment or relating
to the storage, use or manufacture of Hazardous Materials or the release of
Hazardous Materials into the environment.

 

“Financial Information” has the meaning set forth in Section 7.9.

 

“Force Majeure Event” has the meaning set forth in Section 30.6.

 

“Gross Revenues”
means the entire amount of the receipts, for cash, credit, or otherwise, of all
sales and services, and all other receivables whatsoever (but not including
aged receivables that are more than 90 days late) of all of Tenant’s business
conducted at, in, upon, or from the Water Park Property or Shared Facilities,
including, without limiting the generality of the foregoing, receipts and
receivables in respect of any sale effected by Tenant or Landlord in

 

1

 

respect
of such business, which amount shall be net of the following: goods and
services tax, any discounts granted to wholesalers, and any commissions paid by
Tenant to third parties that are not employees or independent sales
representatives of Tenant). There also shall not be included in Gross Revenues
any sums shown separately from the price and collected and paid out for any
direct retail sales tax imposed pursuant to any applicable Laws.

 

“Hazardous Materials” means any explosives, radioactive substance,
ureaformaldehyde foam insulation, asbestos, chlorobiphenyls, pollutants,
contaminants, hazardous, corrosive or toxic substances, special waste or waste
of any kind, including any substance the storage, manufacture, disposal,
treatment, generation, use, transport, remediation or released into the
environment of which is prohibited, controlled, regulated or licensed by any
federal, provincial or municipal authority having jurisdiction over the Water
Park.

 

“Improvement Extension Term” has the meaning set forth in Section 4.3.

 

“Improvements”
has the meaning set forth in the Recitals to this Lease.

 

“Kelley Lease”
has the meaning set forth in the Recitals to this Lease.

 

“Landlord”
means Mountain Creek Resort, Inc, a New Jersey corporation.

 

“Landlord Indemnified Parties” has the meaning set forth in Section 15.1.

 

“Laws” means
all statutes, laws, regulations, by-laws, building codes, orders, permits and
requirements of any federal, provincial, municipal or other public authority
(including the Workers’ Compensation Board) having jurisdiction at any time and
from time to time in force.

 

“Lease” means
this instrument, as amended from time to time.

 

“Legal Requirements” has the meaning set forth in Section 10.3.

 

“Overall Resort Property” has the meaning set forth in the Recitals to this Lease.

 

“Real Estate Taxes” has the meaning set forth in Section 14.1.

 

“Real Property”
means the property depicted on Exhibit A hereto.

 

“Rent” has
the meaning set forth in Section 5.

 

“Shared Facilities” means the property described in the Shared Facilities License
Agreement.

 

“Shared Facilities License Agreement” has the meaning set forth in the Recitals to
this Lease.

 

2

 

“Ski Operation Property” means that portion of the Overall Resort Property that is used for the
ski operations of Landlord known as “Mountain Creek.”

 

“Survey” has
the meaning set forth in Section 6.2.

 

“Targeted Development” has the meaning set forth in Section 22.2.

 

“Tax Returns”
means any return, declaration, report, claim for refund, or information return
statement relating to taxes, including any schedule or attachment thereto, and
including any amendment thereof.

 

“Tenant”
means N-Ovation Park Management, Inc., a Delaware corporation.

 

“Tenant Financial Statements” has the meaning set forth in Section 8.5.

 

“Tenant Improvements” has the meaning set forth in Section 13.1.

 

“Tenant Indemnified Parties” has the meaning set forth in Section 15.2.

 

“Tenant’s Proportionate Share” has the meaning set forth in Section 14.2.

 

“Term” means the term of this Lease set out in
Section 4.1 including any extension term(s) if Tenant exercises its option to
extend this Lease for such extension term(s).

 

“Title Commitment” has the meaning set forth in Section 6.1.

 

“Title Company”
has the meaning set forth in Section 6.2.

 

“Title Policy”
has the meaning set forth in Section 6.1.

 

“Water Park”
has the meaning set forth in the Recitals to this Lease.

 

“Water Park Agreements” has the meaning set forth in Section 7.17.

 

“Water Park Property” has the meaning set forth in the Recitals to this Lease.

 

3

 

EXHIBIT D TO LEASE AGREEMENT DATED AS OF MAY 15, 2001

BY AND BETWEEN MOUNTAIN CREEK RESORT, INC.

AND N-OVATION PARK MANAGEMENT, INC.

 

EMPLOYEE SHARING AGREEMENT

 

THIS
EMPLOYEE SHARING AGREEMENT (this “Agreement”), effective as of May 15, 2001, is
between MOUNTAIN CREEK RESORT, INC., a New Jersey corporation (“Mountain Creek”)
and N-OVATION PARK MANAGEMENT, INC., a Delaware corporation (the “Park Manager”).

 

RECITALS

 

A.              Mountain Creek owns and leases certain real
property (the “Overall Resort Property”), located in the Town of Vernon, County
of Sussex, State of New Jersey, at which Mountain Creek currently operates a
ski resort, commonly referred to as “Mountain Creek,” and a water park,
consisting of water rides and amusements, commonly known as “Water World” (the “Water
Park”).

 

B.              Mountain Creek and the Park Manager have
entered into a Lease Agreement (the “Lease Agreement”) pursuant to which the
Park Manager is to operate the Water Park on the terms and conditions set forth
therein.

 

C.              Many of the Overall Resort Property’s and the
Water Park’s operations are complimentary.

 

D.              In conjunction with the services to be
provided under the Lease Agreement, Mountain Creek and the Park Manager desire
to share the services of certain Mountain Creek employees and the costs
associated with those employees on the terms set forth herein.

 

AGREEMENT

 

In consideration of the foregoing, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mountain Creek and the Park Manager agree as follows.

 

1.              Sharing of Employees.

 

a.            Definitions. As used herein, the following terms shall have the following
meanings:

 

i.          “Employee,” individually, and “Employees,”
collectively, mean(s) the individuals listed on the attached Exhibit A,
and any other individuals agreed to in writing by Mountain Creek and the Park
Manager.

 

 

Effective
as of the date set forth above.

 

 

	
  MOUNTAIN CREEK RESORT,
  INC., a

  	
   

  
	
  New Jersey corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  N-OVATION PARK MANAGEMENT,

  	
   

  
	
  INC., a Delaware
  corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
								

 

4

 

FIRST AMENDMENT TO LEASE
AGREEMENT

 

This First
Amendment to Lease Agreement (“Amendment”) dated November 15, 2001, is between
Mountain Creek Resort, Inc., formerly known as Great Gorge Resort, Inc., a New
Jersey corporation, with its principal place of business at 200 Route 94, Vernon,
NJ 07462 (“Landlord”), and N-Ovation Park Management, Inc., a Delaware
corporation, with its principal place of business at One West Adams Street,
Suite 200, Jacksonville, FL 32202 (“Tenant”). Capitalized terms contained
herein shall have the same meaning at that certain Lease Agreement between the
Parties dated May 15, 2001.

 

WHEREAS, the Parties entered into a Lease Agreement on May 15, 2001;

 

WHEREAS, the Parties now desire to amend the Lease Agreement to extend
the period in which the Tenant may terminate the Lease Agreement;

 

NOW THEREFORE, for adequate consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

 

1.             Pursuant to Section
30.8 of the Lease Agreement, the Parties expressly amend the Lease Agreement as
set forth in this Amendment.

 

2.             Section 4.2 of the
Lease Agreement is hereby deleted and replaced with the following Section:

 

4.2           Tenant’s
Right to Terminate After First Season of Operation. Tenant shall have the
right to terminate this Lease, in Tenant’s sole and absolute discretion, by
delivering written notice of its desire to terminate to Landlord on or before
November 30, 2001. Any such termination of this Lease pursuant to this Section
4.2 shall be effective as of December 31, 2001. In the event of such
termination, Landlord shall reimburse to Tenant within (90) days after the
effective date of such termination up to $500,000 of capital costs and
mobilization expenses actually incurred by Tenant during the period prior to
such termination. Any such reimbursement shall be conditioned on Tenant
providing evidence reasonably substantiating such costs and expenses; provided
that Landlord shall have no obligation to reimburse any single expenditure is
excess of $50,000 unless Landlord was given at least 48 hours prior notice and
an opportunity to review, discuss with Tenant and approve such expenditure,
such approval not to be unreasonably withheld.

 

3.             All references in the
Lease Agreement to termination of the Lease Agreement on November 15, 2001,
including those in Section 4.2, 6, 6.1, and 26 are hereby amended by
substituting November 30, 2001 for the November 15, 2001 date.

 

 

4.             This Agreement may be
executed in several counterparts and transmitted by facsimile and if no
executed and transmitted shall be for all purposes effective as if the parties
had delivered an executed original document.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  MOUNTAIN CREEK RESORT, INC.,

  	
  N-OVATION PARK

  
	
   

  	
  MANAGEMENT,

  
	
  a New Jersey corporation

  	
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Charles
  Blier

  	
   

  	
  By:

  	
  /s/ NATHAN GOLDMAN

  	
   

  
	
  Its:

  	
  VICE PRESIDENT &

  	
   

  	
  Its:

  	
  Executive Vice President

  	
   

  
	
   

  	
  GENERAL MANAGER

  	
   

  	
   

  

 

 

SECOND AMENDMENT TO LEASE
AGREEMENT

 

This Second
Amendment to Lease Agreement (“Amendment”) dated November 30, 2001, is between
Mountain Creek Resort, Inc., formerly known as Great Gorge Resort, Inc., a New
Jersey corporation, with the principal place of business at 200 Route 94, Vernon,
NJ 0762 (“Landlord”) and N-Ovation Park Management, Inc., a Delaware
corporation, with its principal place of business at One West Adams Street,
Suite 200, Jacksonville, FL 32202 (“Tenant”). Tenant is a direct wholly-owned
subsidiary of Alfa SmartParks, Inc., a Delaware corporation (“Alfa”)
Capitalized terms contained herein shall have the same meaning as that certain
Lease Agreement between the Parties dated May 15, 2001.

 

WHEREAS, the Parties entered into a Lease Agreement on May 15, 2001;

 

WHEREAS, the Parties new desire to amend the Lease Agreement to extend
the period in which the Tenant may terminate the Lease Agreement;

 

NOW THEREFORE, for adequate consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

 

1.             Pursuant to Section
30.8 of the Lease Agreement, the Parties expressly amend the Lease Agreement as
set forth in this Amendment.

 

2.             Section 4.2 of the
Lease Agreement is hereby deleted and replaced with the following Section:

 

4.2           Tenant’s
Right to Terminate After First season of Operation. Tenant shall have the
right to terminate this Lease, in Tenant’s sole and absolute discretion, by
delivering written notice of its desire to terminate to Landlord on or before
December 20, 2001. Any such termination of this Lease pursuant to this Section
4.2 shall be effective as of December 31, 2001. In the event of such
termination, Landlord shall reimburse to Tenant within ninety (90) days after
the effective date of such termination up to $500,000 of capital costs and
mobilization expenses actually incurred by Tenant during the period prior to
such termination. Any such reimbursement shall be conditioned on Tenant
providing evidence reasonably substantiating such costs and expenses; provided
that Landlord shall have no obligation to reimburse any single expenditure in
excess of $50,000 unless Landlord was given at least 48 hours prior notice and
an opportunity to review, discuss with Tenant and approve such expenditure,
such approval not to be unreasonably withheld.

 

3.             All references in the
Lease Agreement to termination of the Lease Agreement on November 15, 2001,
including those in Sections 4.2, 6, 6.1 and 2.6 are hereby amended by
substituting December 20, 2001 for the November 15, 2001 date.

 

 

4.             This Agreement may be
executed in several counterparts and transmitted by facsimile and if so
executed and transmitted shall be for all purposes effective as if the parties
had delivered an executed original document.

 

	
  LANDLORD

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  MOUNTAIN CREEK RESORT, INC.,

  	
  N-OVATION PARK

  
	
   

  	
  MANAGEMENT,

  
	
  a New Jersey corporation

  	
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Charles
  Blier

  	
   

  	
  By:

  	
   

  	
   

  
	
  Its:

  	
  VICE PRESIDENT & GENERAL MANAGER

  	
   

  	
  Its:

  	
   

  	
   

  
							

 

 

THIRD AMENDMENT TO LEASE
AGREEMENT

 

This Third
Amendment to Lease Agreement (“Amendment”) dated as of March 1, 2002, is
between Mountain Creek Resort, Inc., formerly known as Great Gorge Resort,
Inc., a New Jersey corporation, with its principal place of business at 200
Route 94, Vernon, NJ 07462 (“Landlord”), and N-Ovation Park Management, Inc., a
Delaware corporation, with its principal place of business at One West Adams
Street, Suite 200, Jacksonville, FL 32202 (“Tenant”). Tenant is a direct wholly-owned
subsidiary of Alfa SmartParks, Inc., a Delaware corporation (“Alfa”). Capitalized
terms used but not defined herein shall have the same meaning given to such
terms in that certain Lease Agreement between the Parties dated May 15, 2001,
related to certain water park property at Mountain Creek Resort (the “Lease
Agreement”).

 

WHEREAS, the
Parties entered into the Lease Agreement on May 15, 2001;

 

WHEREAS, the
Parties entered into a First Amendment to Lease Agreement on November 15, 2001
(the “First Amendment”);

 

WHEREAS, the
Parties entered into a Second Amendment to Lease Agreement on November 30, 2001
(the “Second Amendment”); and

 

WHEREAS, the
Parties now desire to amend the Lease Agreement to extend the period in which
the Tenant may terminate the Lease Agreement and to terminate the First
Amendment and the Second Amendment.

 

NOW THEREFORE, for
adequate consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

 

1.             Amendment.
Pursuant to Section 30.8 of the Lease Agreement, the Parties expressly amend the
Lease Agreement as not such in this Amendment. The First Amendment and the
Second Amendment are hereby terminated.

 

2.             Cost
Participation for Improvements. To the extent Tenant makes or has made improvements
(“Insurance Prompted Improvements”) to the Water Park Property as identified
pursuant to the insurance report dated September 19, 2001, prepared by American
Specialty (the “Report”), Landlord will reimburse Tenant $105,000 (the “Reimbursable
Amount”) for such Insurance Prompted Improvements; provided, however, that
Tenant shall make the Report available to Landlord for Landlord’s review. In
addition, in the event the actual cost of the perimeter fence construction as set
forth in the Report, the Reimbursable Amount shall be reduced by an amount
equal to 50% of the difference between such actual cost and such estimated cost.
Any reimbursement required to be made by Landlord pursuant to this Section 2
shall be paid by means of a credit against Tenant’s rent payment for the year
2002.

 

 

3.             Section
4.2 of the Lease Amendment. Section 4.2 of the Lease Agreement is hereby
deleted and replaced with the following Section:

 

“4.2         Tenant’s right to
Terminate After Second Season of Operation. Tenant shall have the right to
terminate this Lease, in Tenant’s sole and absolute discretion, by delivering
written notice of the desire to terminate to Landlord on or before November 16,
2002. Any such termination of this Lease pursuant to this Section 4.2 shall be
effective as of December 31, 2002.”

 

4.             Lease
Agreement. Except as specifically amended pursuant to this Amendment, all
terms and conditions of the Lease Agreement remain in full force shall effect.

 

5.             Office
Redemption. All redemption in the Lease Agreement to termination of the
Lease Agreement on November 15, 2001 (without regard to the First Amendment and
the Second Amendment including those in Section 6, 6.1, and [ILLEGIBLE] are
hereby amended by substituting November 15, 2002 for the November 15, 2001 date.

 

6.             [ILLEGIBLE].
This Agreement may be executed in several [ILLEGIBLE] [ILLEGIBLE] by
[ILLEGIBLE] and if no [ILLEGIBLE] and [ILLEGIBLE] shall be for all [ILLEGIBLE]
[ILLEGIBLE] as of the parties had delivered an [ILLEGIBLE] original document.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  MOUNTAIN GREEK RESORT, INC.,

  	
  N-OVATION PARK MANAGEMENT,

  
	
  a New Jersey corporation

  	
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Charles
  Blier

  	
   

  	
  By:

  	
  /s/ NATHAN GOLDMAN

  	
   

  
	
  Its:

  	
  VICE PRESIDENT &

  	
   

  	
  Its:

  	
  Executive Vice President

  	
   

  
	
   

  	
  GENERAL MANAGER

  	
   

  	
   

  

 

2

 

FOURTH AMENDMENT TO LEASE AGREEMENT

 

THIS FOURTH AMENDMENT TO LEASE AGREEMENT (this “Amendment”)
is made and entered into as of the 5th day of July, 2002 (the “Effective Date”), by
and between MOUNTAIN CREEK RESORT, INC., a New Jersey corporation (“Landlord”),
N-OVATION PARK MANAGEMENT, INC., a Delaware corporation (“Tenant”), and
FESTIVAL FUN PARKS, LLC, a Delaware limited liability company, dba PALACE
ENTERTAINMENT (“Palace”), with reference to the following facts:

 

A.            WHEREAS, Landlord, as landlord, and Tenant,
as tenant, entered into that certain Lease Agreement dated May 15, 2001 (as
amended from time-to-time, the “Lease”), demising certain real property more
particularly described therein (the “Real Property”) to Tenant;

 

B.             WHEREAS, the Lease was amended by Landlord
and Tenant pursuant to the following agreements: (i) that certain First
Amendment to Lease Agreement dated as of November 15, 2001, (ii) that certain
Second Amendment to Lease Agreement dated as of November 30, 2001, and (iii)
that certain Third Amendment to Lease Agreement dated as of March 1, 2002;

 

C.             WHEREAS, Landlord and Tenant desire to
further amend the Lease pursuant to the terms and conditions of this Amendment;
and

 

D.             WHEREAS, Palace and Alfa Smartparks, Inc, a
Delaware corporation (“Alfa”), Alfa Alfa America, Inc., a Delaware corporation
(“AAA”), and Alfa Alfa Holdings, S.A., a Greek corporation (“Holdings”)
(collectively, “Sellers”), entered into that certain Stock Purchase Agreement,
dated as of May 30, 2002 (the “Stock Purchase Agreement”), pursuant to which
Sellers will transfer, or cause to be transferred, to Palace, on or about the
Effective Date, all of Tenant’s interest in and to the Lease.

 

NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.              Definitions. All capitalized terms used in this Amendment which are not defined
herein shall have the same meanings ascribed to such terms in the Lease.

 

2.              Representation and Warranty of Landlord and
Tenant. Landlord and Tenant
hereby represent and warrant to Palace that, immediately prior to the Effective
Date, Tenant was the duly acting “Tenant” under the Lease and enjoyed the rights
and benefits and performed the duties and obligations of “Tenant” under the
Lease.

 

3.              Assignment. Tenant hereby assigns and transfers to Palace all of its right, title
and interest in and to the Lease (as amended hereby), and Tenant conveys, assigns
and transfers to Palace all of its right, title and interest in and to any and
all

 

 

buildings,
improvements and appurtenances located on the Water Park Property (“Improvements”),
all effective as of the Effective Date.

 

4.              Assumption. Palace hereby assumes, effective as of the Effective Date, all of
Tenant’s right, title and interest under the Lease and all obligations of
Tenant as the tenant under the Lease to be performed under the Lease from and
after the Effective Date, and agrees to be bound by and perform all of the
covenants, duties and obligations to be performed by the tenant under the Lease
from and after the Effective Date. Notwithstanding the foregoing, as between
Palace and Tenant, Palace shall have no obligation, liability or responsibility
whatsoever for any liability, cost, expense or obligation of Tenant under the
Lease which is attributable to any period prior to the Effective Date.

 

5.              Consent to Assignment of Lease and Conveyance
of Improvements. Notwithstanding
anything to the contrary contained in the Lease, Landlord (i) hereby consents
to the assignment of the Lease by Tenant to Palace and the transfer of Tenant’s
right, title and interest in and to the Lease, and (ii) further consents to the
conveyance, assignment and transfer of Tenant’s right, title and interest in
and to the Improvements by Tenant to Palace pursuant to the terms and
conditions of this Amendment. Landlord hereby agrees to recognize Palace or
such designated entity, as the case may be, from and after the Effective Date,
as “Tenant” under the Lease.

 

6.              Indemnification by Tenant. Tenant for itself, its (past and present) officers,
directors, shareholders, attorneys, legal representatives, and constituent
parent, subsidiary and affiliate corporations and each of their past and
present partners, officers, agents and employees, and each of their successors
and assigns (collectively, the “Tenant Parties”) hereby agrees to indemnify, defend
and hold harmless Palace and the Palace Parties (as defined below) from and
against any and all claims, demands, obligations, duties, liabilities, damages,
expenses, indebtedness, debts, breaches of contract, duty or relationship,
acts, omissions, misfeasance, malfeasance, causes of action, sums of money, accounts,
compensation, contracts, controversies, promises, damages, costs, losses and remedies
therefor, causes of action, rights of indemnity or liability of any type, kind,
nature, description or character whatsoever, and irrespective of how, why or by
reason of what facts, whether known or unknown, whether heretofore now existing
or hereafter arising, whether liquidated or unliquidated related to the Lease
and/or the Water Park Property (collectively, “Claims”) which Palace or the
Palace Parties may incur or which may be asserted against Palace or the Palace
Parties by reason of any alleged obligation, undertaking or omission of Tenant
as “Tenant” under the Lease, which Claims arise or arose from events occurring
prior to the Effective Date.

 

7.              Indemnification by Palace. Palace for itself, its (past and present) officers,
directors, shareholders, attorneys, legal representatives, and constituent
parents, subsidiaries and affiliates and each of their past and present
partners, officers, agents and employees, and each of their successors and
assigns (collectively, the “Palace Parties”)

 

2

 

hereby
agrees to indemnify, defend and hold harmless Tenant and the Tenant Parties (as
defined above) from and against any and all Claims which Tenant or the Tenant
Parties may incur or which may be asserted against Tenant or the Tenant Parties
by reason of any alleged obligation, undertaking or omission of Palace as the
successor “Tenant” under the Lease, which Claims arise or arose from events
occurring from and after the Effective Date.

 

8.             Notice and Identity of Leasehold Mortgagee.  For
purposes of notice pursuant to the Lease the address of Tenant shall be:

 

c/o
Festival Fun Parks, LLC

d/b/a
Palace Entertainment

18300
Von Karman, Suite 900

Irvine,
California 92612

Attn:   Gary
Fitzpatrick, Esq.,

           General
Counsel

 

with a copy to:                      Paul,
Hastings, Janofsky & Walker LLP

555
South Flower Street, 23rd Floor

Los
Angeles, California 90071-2371

Attention:
Robert A. Miller, Jr., Esq.

 

9.             Delivery of Subordination or Non-Disturbance
Agreement. Landlord hereby
represents and warrants that no person or entity has any mortgage, deed of
trust or any other hypothecation for security upon the Property as of the date
of this Amendment.

 

10.           Intentionally Omitted.

 

11.           Attorneys’ Fees. If any dispute should arise between the
parties hereto regarding the terms or subject matter of this Amendment or the
enforcement or breach of such terms, then the party prevailing in such dispute,
whether by out-of-court settlement or final judicial determination, shall be
entitled to recover from the non-prevailing party all costs and expenses of
such dispute incurred by such prevailing party, including, without limitation,
reasonable attorneys’ fees.

 

12.           Construction; Reaffirmation. Except as expressly amended hereby, all of
the terms and conditions of the Lease shall remain unmodified and in full force
and effect. In the event of a conflict between the terms and conditions of the
Lease and the terms and conditions of this Amendment, the terms and conditions
of this Amendment shall govern and prevail. The Lease, as amended by this
Amendment, is hereby reaffirmed.

 

13.           Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which, together, shall

 

3

 

constitute one and the same
instrument, binding on the parties hereto. The signature of any party hereto to
any counterpart hereof shall be deemed a signature to, and may be appended to,
ay other counterpart hereof. Facsimile signatures shall be fully binding and
effective for all purposes as if they were original signatures.

 

[No
Further Text On This Page]

 

4

 

IN WITNESS WHEREOF, the undersigned have
executed this Amendment on the date first above written.

 

	
  “TENANT”

  	
   

  
	
   

  	
   

  
	
  N-OVATION
  PARK MANAGEMENT, INC.,

  	
   

  
	
  a
  Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Nathan D. Goldman

  	
   

  	
   

  
	
  Name:

  	
  Nathan
  D. Goldman

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “PALACE”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FESTIVAL
  FUN PARKS, LLC,

  	
   

  	
   

  
	
  a
  Delaware limited liability company dba PALACE ENTERTAINMENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Gary Fitzpatrick

  	
   

  	
   

  
	
  Name:

  	
  Gary
  Fitzpatrick

  	
   

  	
   

  
	
  Title:

  	
  VP Executive Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “LANDLORD”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MOUNTAIN
  CREEK RESORT, INC.,

  	
   

  	
   

  
	
  a
  New Jersey corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Charles Blier

  	
   

  	
   

  
	
  Name:

  	
  CHARLES BLIER

  	
   

  	
   

  
	
  Title:

  	
  VICE PRESIDENT &

  	
   

  	
   

  
	
   

  	
  GENERAL MANAGERExhibit 10.10

 

THIS LEASE AGREEMENT made as of this 1st day of
November, 1997,

 

BETWEEN: KELLAM ASSOCIATES, INC. located at
Star Route, Vernon, in the Township of Vernon, in the County of Sussex and
State of New Jersey, herein designated as the “Landlord”.

 

AND: ANGEL PROJECTS LLC, located c/o Praedium
Management, Inc., 11 Madison Avenue, 26th Floor, New York, N.Y., Attn: Mr. Thomas
R. Arnold, herein designated as the “Tenant”;

 

WITNESSETH, THAT, the Landlord does hereby lease to
the Tenant and the Tenant does hereby rent from the Landlord the following
described premises: A tract of 35 acres comprising Tax Lots 11, 12, &
13, plus a portion of Lot 16, Block 190, as more particularly shown in Schedule A
and described in Schedule B attached hereto (the “Property”), for a term
commencing on November 1, 1997, and ending on December 31, 2035, to
be used and occupied for any purpose permitted by federal, state, county and
local governments.

 

UPON THE FOLLOWING CONDITIONS AND COVENANTS:

 

FIRST: The Tenant covenants and agrees to pay to the Landlord rent in an
amount as determined in accordance with the following provisions:

 

A:                                   FIXED RENT BASIS (CPI Adjusted)

 

Annual rent of Two Hundred and Twelve Thousand
Dollars ($212,000.00) (the “Initial Annual Rent”) shall be paid monthly on the
15th of each month. The rent shall commence on November 1, 1997 and Tenant
agrees to pay the rent due for the period of November 1, 1997 through December 31,
1997 on January 15, 1998. The Initial Annual Rent shall be in effect for
the period November 1, 1997 through and including December 31, 1998.

 

The Initial Annual Rent shall be increased on each January 1st,
commencing January 1, 1999, by the same percentage by which the Consumer
Price Index for Urban Wage Earners and Clerical Workers for the New York, NY
and

 

1

 

Northeastern New Jersey area shall have
increased since the prior January 1st. The percentage increase in the cost
of living over the prior year shall be multiplied times the Initial Annual Rent
to determine the annual rent (the “Annual Rent”) for the next year.

 

B.                                     PREPAYMENT OF
ANNUAL RENT. Notwithstanding anything to the contrary set forth in this
Lease:

 

1)                                      The
Initial Annual Rent payable under this Lease for the period January 1,
1998 through December 31, 1998 shall be reduced by an amount equal to the
real estate taxes outstanding as of January 1, 1998 (the “Initial Rent
Reduction”) on three condominium units commonly known as Unit 1, Building G50,
Unit 1, Building G51 and Unit 2, Building G19 at the condominium known as the
Stonehill Condominiums. Such reduction shall be affected by reducing the
monthly payments of the Initial Annual Rent by an amount equal to the Initial
Rent Reduction divided by 12.

 

2)                                      The
Annual Rent payable under this Lease for the period January 1, 1999
through December 31, 1999, shall be reduced by $30,000, and such reduction
shall be effected by reducing the monthly payments of Annual Rent for such
period by $2,500.

 

3)                                      The
Annual Rent payable under this Lease for the period January 1, 2035 to December 31,
2035, shall be reduced by $30,000, and such reduction shall be effected by
reducing the monthly payments of Annual Rent for such period by $2,500.

 

C.                                     LATE
PENALTY

 

If any installment of any required payment is
not paid within ten (10) days of date it is due, then interest shall
accrue from the original due date on the unpaid installment at the current
prime rate of National Community Bank of New Jersey or its successors during
the first 30 days from said due date and at prime rate plus 2% thereafter.

 

As additional rent, Tenant agrees to pay
directly to the Township of Vernon, all of the real property taxes for the
subject premises leased (i.e., essentially Lots 11, 12, 13 and the part of
Lot 16 to the North of the northerly side line of the New Jersey Power and
Light Basement) designated on the Tax Map of the Township of Vernon and shown
in Schedule A, including any roll back taxes that may become due
under the agricultural assessment program.

 

2

 

Tenant shall keep such tax payments current
and shall furnish proof of tax payment annually on or before December 1st
of each year, beginning on December 1, 1998.

 

However, Tenant shall have the right to seek
one or more subdivisions of the Property for the purpose of creating one or
more separate tax lots for all or any portion of the Property, subject to
consent by the Landlord, which consent shall not be unreasonably denied.

 

SECOND:
IMPROVEMENTS: Tenant shall be permitted to
make any alterations, additions or improvements on the Property, including but
not limited to the ski lift, the aqua skoot ride, portions of the wave pool,
ski runs and road without the consent of the Landlord and to construct any
other facilities on the Property provided said alterations, additions,
improvements and facilities are permitted by all applicable federal, state,
county and municipal laws and regulations. Unless otherwise provided herein,
all such alterations, additions, improvements, or new facilities shall belong
to and remain the property of the Tenant. Tenant shall be permitted to
construct or install any signs related to the use of the Property without the
consent of the Landlord, provided said signs are permitted by all applicable
federal, state, county and municipal laws and regulations. It is agreed that
all buildings and improvements placed upon the Property by the Tenant, its
successors and assigns, shall remain the exclusive property of the Tenant, its
successors or assigns, shall be considered as personalty and not as part of
the real estate, and may be removed or demolished during the lease term,
subject to restoration of the premises by Tenant.

 

THIRD: REMOVAL OF
IMPROVEMENTS: Upon the termination or expiration of this Lease, or
termination or expiration of any renewal terms of this Lease, provided all rent
has been paid to date. Tenant shall remove all structures, improvements,
alterations or equipment, or parts thereof, from the Property within one year
from the termination

 

3

 

or expiration of the Lease or any renewal hereof, unless the parties
have agreed in writing that specific facilities are to be left by Tenant on the
Property or to demolish said structures, improvements, alterations or
equipment, or parts thereof, within a period of one year from the termination
or expiration of the Lease or any renewal hereof. Tenant shall remove all
demolition material and restore the premises by reasonable grading and seeding.
In the event Tenant fails to remove the equipment as required then such
equipment is considered abandoned and the Landlord may dispose of same at
his discretion.

 

FOURTH: UTILITIES: Tenant shall provide at its own
cost and expense for all sewer, water, fuel, gas, oil, heat, electricity,
power, materials and services which may be furnished or used by it in or
about the demised premises. Tenant agrees to remove or pay the cost of removal
of all utilities and any utility easements placed on the premises after the
execution of this Lease, within six (6) months of the termination of this
Lease or any renewal hereof, if the Landlord requests such removal in writing.

 

FIFTH: INDEMNITY
INSURANCE: Tenant, at Tenant’s own cost and expense, shall obtain or
provide and keep in full force during the term hereof, general public liability
insurance insuring against any and all liability or claims of liability arising
out of, occasioned by, or resulting from any accident or otherwise in or about
the Property, for injuries to any person or persons, pursuant to coverage held
by Tenant for the Vernon Valley and Great Gorge Ski areas and Action Park,
which coverage in no event shall be less than $2,000,000.00 for each
occurrence. The policies of insurance shall be issued by companies authorized
to do business in the State of New Jersey and shall name Landlord as co-insured
with respect to the Property. Tenant shall furnish a certificate of insurance
showing said coverage to be in effect. Tenant will name Landlord as co-insured
on its general liability policies covering the Property for whatever

 

4

 

amount applies in Tenant’s future policies for the operation of the
Vernon Valley and Grant Gorge Ski Area and Action Park. Tenant shall hold
Landlord harmless from any and all consequences arising out of activities of
Tenant, its agents, guests or assigns on the Property.

 

SIXTH: LAWS,
REGULATIONS AND APPROVALS: Tenant shall have the right, at its own expense,
to make applications to appropriate agencies or boards of municipal county,
state and/or federal governments for permission to use the Property for any
uses permitted by federal, state, county, and municipal laws and regulation.
The Landlord agrees to cooperate with the Tenant in connection with such
applications and agrees to sign any documents that may be required for
such purpose. Tenant shall comply with all laws, rules and orders of all
federal, state, county or municipal governments or departments which may be
applicable to the Property. Nothing herein shall be construed to bar or impair
the right of Tenant to appeal any decision of any governmental body and during
the pendency of any such time for appeal and/or appeals, Tenant shall not be
deemed to be in violation of the requirements of this paragraph.

 

SEVENTH: ASSIGNMENT
BY TENANT: The Tenant shall have the right at any time to sublet the
Property or any part thereof or to assign this Lease or any portion
thereof to any person or entity without Landlord’s written consent, provided that
the total payment to Landlord as set forth in Paragraph FIRST is not decreased
as a result of such assignment.

 

EIGHT: MORTGAGE:
The Tenant shall be permitted to apply for construction financing and mortgages
or other permanent mortgage financing for improvements and alterations on the
Property. Landlord agrees to join in the execution of all essential documents
to carry out the purposes of this paragraph and to execute Landlord’s waiver or
Mortgagee’s waiver or similar documents as may be reasonably required by
an institutional lender, equipment lessor, or similar party in connection with
Tenant’s acquisition of financing

 

5

 

respecting personal property, equipment, furniture, fixtures,
structures, or other improvements, provided that such Mortgage does not impair
the security of the Landlord. Tenant shall be permitted to mortgage or
otherwise encumber its interest in the Property, without the consent of the
Landlord. Such mortgage or encumbrance shall not extend beyond the termination
of this Lease or any renewal hereof.

 

NINTH: EMINENT
DOMAIN: If all or any part of the land and premises leased herein
shall be taken under eminent domain or condemnation proceedings, this Lease may be
terminated at the option of the Tenant and the term hereof shall end as of such
date as shall be fixed by notice in writing. Tenant shall have a period of up
to one year from said termination or condemnation to remove all personal
property and improvements, but Tenant shall pay Landlord for the one year
period or any shorter period which it takes to remove said property and
improvements. Such rent shall be paid on a monthly basis in proportion to the
number of months that it takes Tenant to remove improvements and other property
or otherwise vacate the premises.

 

TENTH: DEFAULT:
This Lease is made upon the express condition that if Tenant fails to pay any
installment of rental (e.g. fixed rent, additional rent, tax, etc.) reserved
hereunder or part thereof after the same shall become due and payable and
such failure shall continue for a period of 45 days, then the Landlord, after
45 days written notice to the Tenant, and Tenant’s failure to make the required
payments within such 90 day period, may lawfully declare the termination hereof
and by due process of law expel, remove and put out the Tenant or any person or
persons occupying said premises. During the period that Tenant has failed to
make the payments as required in accordance with the terms of this Lease.
Tenant shall not remove any of its structures and/or equipment affixed to the
property from said leased premises without the

 

6

 

written consent of the Landlord. Landlord may, however, after
occurrence of any default, by notice to Tenant in writing, give notice to
Tenant to remove all of its structures and equipment from said leased premises
within one (1) year from the date of said notice.

 

In the event Tenant fails to remove the
equipment within the period set forth above, then Landlord may at his
discretion remove the equipment at the Tenant’s expense and dispose of the same
and retain the net proceeds.

 

In the event of any termination of this
Lease, Landlord’s damage shall not exceed damages in the amount of one year’s
rent provided that Tenant has complied with all the terms of the Lease.

 

ELEVENTH: RIGHT
OF FIRST REFUSAL: In consideration for the Tenant’s entering this Lease
Agreement, Landlord hereby agrees not to sell all or any portion of the
Property, without first giving Tenant written notice of the purchasing price,
the terms of payment and other terms of sale, together with a copy of the
agreement of sale signed by the Landlord and purchaser subject to this right of
first refusal and the continued applicability of the Lease. The Tenant shall
have ninety (90) calendar days after the receipt of such notice within which to
exercise the option to purchase the Property, or portion thereof subject to
such offer, upon the terms offered to such prospective purchaser by the Landlord.
If the Tenant shall fail to exercise the option to purchase, Landlord shall be
free thereafter to sell the Property to said contract purchaser, provided that
the price, payment terms, and other terms are the same as those offered to the
Tenant, and further provided that said sale to the contract purchaser is
consummated and closed within six (6) months thereafter. Any sale of the
Property shall, however, remain subject to the continuing rights of the Tenant
under this Lease, including, but not limited to, the right of first refusal to
purchase the Property from any successor in interest of the Landlord.

 

7

 

TWELFTH: TITLE
REPRESENTATION: Landlord represents that there are no encroachments,
easements or restrictions which would prohibit or limit the use of the
Property, with the exception of the easement to Jersey Central Power &
Light Co. as shown on Schedule A. Landlord further represents that
Landlord owns the Property being leased, has good right to lease the same, and
warrants and agrees to defend the title thereto and to reimburse and hold
Tenant harmless from all damages and expenses which Tenant may suffer by
reason of any encroachments, encumbrance, or defects in such title now in
existence or hereafter occurring during the term of this Lease. Landlord
represents and warrants that he has marketable title to the Property being
leased. At the time of the execution of the Lease, Landlord agrees to give to
Tenant an Affidavit of Title to the Property in the usual form and
consistent with the provisions of this paragraph. Landlord agrees to correct
any title defects which would render the Property unmarketable, within six (6) months
of the date of execution of this Lease. Within six (6) months of the date of
execution of this Lease or within six (6) months notice to Landlord of
discovery of any title defect during the term of this Lease, Landlord agrees to
correct any title defect which would render the Property unmarketable. If the
Landlord fails or refuses to correct any such defects within six (6) months
of the date of this Lease or the date of the notice, Tenant shall have the
right to correct the defects and to deduct from the rent all costs, fees, and
expenses incurred in the process and to accomplish the corrections of such
title defects.

 

THIRTEENTH: NOTICES:
All notices which are required to be given in writing, by either the Landlord or
Tenant under the terms of this Lease, shall be made by certified mail, return
receipt requested; with postage prepaid. Notices to Tenant shall be addressed
to Angel Projects LLC c/o Praedium Management, Inc., 11 Madison Avenue,
26th Floor, New York, N.Y., Attn. Mr. Thomas R. Arnold, and notices to
Landlord shall be directed

 

8

 

to Kollam Associates, Inc., Attn: Mr. Edward B. Kelley, Star
Route, Vernon, New Jersey 07462. Change of address by either party must be by written
notice to the other in the same manner as above specified.

 

FOURTEENTH: HOLDING
OVER: Any holding over after the expiration of the term of the Lease with
the consent of the Landlord shall be construed to be a tenancy from month to
month and shall be on the terms and conditions herein specified so far as
applicable.

 

FIFTEENTH: REPRESENTATIVES
BOUND: All the terms, covenants and conditions of this Lease shall be
binding upon and inure to the benefit of the parties hereto, subsequent
purchasers and successors in title, as well as their respective heirs,
executors, administrators, successors and assigns.

 

SIXTEENTH: NON-LIABILITY
OF STOCKHOLDERS, OFFICERS, DIRECTORS: In no event shall the stockholders,
officers or directors of the Tenant be held to any Individual liability as
stockholders, officers, or directors, for any default damages or other breach
of obligations, whether of this Lease or any instrument made in pursuance
thereof by either party thereto.

 

SEVENTEENTH: RECORDING
MEMORANDUM OF LEASE: Tenant shall have the right to record a memorandum or
short form of this Lease so that any prospective purchaser or other lienholders
will have notice that title shall be subject to the leasehold granted herein
and shall also be subject to the right of first refusal and other rights
granted herein to the Tenant. At the time of execution of this Lease, Landlord
agrees to execute a memorandum or short form of Lease that does not
include any mention of the consideration paid in this Lease.

 

9

 

EIGHTEENTH: QUIET
ENJOYMENT: The Landlord covenants that the Tenant shall peacefully and
quietly have, hold and enjoy the Property for the term and renewals aforesaid.

 

NINETEENTH: MISCELLANEOUS:

 

A.                                   This Lease shall be
construed and enforceable in accordance with the laws of the State of New
Jersey.

 

B.                                     In all reference
herein to any parties, persons, entities, or corporations, the use of any
particular gender or the plural or singular number is intended to include the
appropriate gender or number as the text or the within instrument may require.

 

C.                                     This Lease does
not transfer to Tenant, Landlord’s mineral rights to the Property during the
term of this Lease. However, any purchase by Tenant pursuant to the right of
first refusal created under this Lease shall include all rights in the Property
held by the Landlord including all mineral rights. Landlord shall not have the
right to separately transfer said mineral rights during the term or renewals of
this Lease, without the prior written consent of Tenant, except as part of
a sale of the subject premises, which sale is subject to a right of first
refusal by Tenant pursuant to Paragraph TWELFTH and subject to the terms of
this Lease. Landlord shall not have the right to undertake mining or
exploration activities on the leased premises during the term of this Lease or
any renewals, without the prior written consent of Tenant.

 

D.                                    Edward B. Kelley,
Ruth Kelley and their children and grandchildren living as of the date hereof
shall have the right to free use of Action Park and the Vernon Valley/Great
Gorge Ski Area and shall have free preferred club privileges to the Norseman’s
Club and be

 

10

 

entitled to free preferred skiing at Tenant’s facilities for the term
of this Lease and any renewal thereunder.

 

E.                                      The Landlord
shall be entitled to recover reasonable attorneys’ fees and costs actually
incurred in connection with any effort to collect past-due rent or enforce any
other term of this Lease breached by Tenant.

 

F.                                      Except as set
forth in Article First, Section B, of this Lease, the Tenant shall
not be permitted to set off against the Initial Annual Rent, or the Annual
Rent, as the case may be, of any amounts owed by Landlord to Tenant.

 

TWENTIETH:
[Intentionally Omitted]

 

TWENTY-FIRST:
[Intentionally Omitted]

 

TWENTY-SECOND: ASSIGNMENT
BY LANDLORD: Landlord shall have the right to assign this Lease to a
corporation, limited partnerships or other entity without consent of the
Tenant.

 

TWENTY-THIRD: TERM.
The term of this Lease shall be November 1, 1997 through and including December
31, 2035.

 

11

 

IN WITNESS WHEREOF, the parties hereto have
hereunto set their hands and seals, or caused these present to be signed by
their corporate officers and their corporate seal to be hereto affixed the day
and year first above written.

 

	
  SIGNED, SEALED, AND DELIVERED

  	
  KELLAM ASSOCIATES, INC.

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
  /s/ Paul F. Koch

  	
   

  	
  By:

  	
  /s/ Edward B. Kelley

  	
   

  
	
  Paul F. Koch

  	
   

  	
  Edward B. Kelley

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANGEL PROJECTS LLC

  
	
   

  	
   

  
	
   

  	
  By: The Praedium Recovery Fund, L.P.

  
	
   

  	
   

  
	
   

  	
  By: Praedium Management, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas R. Arnold

  	
   

  
	
   

  	
   

  	
  Thomas R. Arnold

  
	
   

  	
   

  	
  Vice President

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  [ILLEGIBLE]

  	
   

  	
   

  
						

 

12

 

	
  STATE OF NEW JERSEY

  	
  )

  
	
   

  	
   

  
	
   

  	
  ss:

  
	
   

  	
   

  
	
  COUNTY OF SUSSEX

  	
  )

  

 

I certify that on December 31, 1997,
EDWARD B. KELLEY, President of Kellam Associates, Inc., personally came
before me and acknowledged under oath, to my satisfaction, that he personally
signed the attached document and signed, scaled and delivered this document as
his act and deed.

 

	
   

  	
  Duly sworn to before me this 31 day of

  
	
   

  	
  December, 1997

  
	
   

  	
   

  
	
   

  	
  /s/ Anne Kozdron

  	
   

  
	
   

  	
  Notary public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ANNE KOZDRON

  	
   

  
	
   

  	
  NOTARY
  PUBLIC OF NEW JERSEY

  	
   

  
	
   

  	
  My
  Commission Expires August 26, 2001

  	
   

  

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
   

  
	
   

  	
  ss:

  
	
   

  	
   

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

I certify that on January 5, 1998,
THOMAS R. ARNOLD, Vice President of Praedium Management, Inc., personally
came before me and acknowledged under oath, to my satisfaction, that he
personally signed the attached document and signed, sealed and delivered this
document as his act and deed.

 

	
   

  	
  Duly sworn to before me this 5th day of 

  
	
   

  	
  January, 1998

  
	
   

  	
   

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Notary public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [ILLEGIBLE]

  	
   

  

 

 

SCHEDULE A

 

 

SCHEDULE A

 

 

RIDER TO
LEASE AGREEMENT BETWEEN KELLAM ASSOCIATES, INC. AND ANGEL PROJECTS LLC
MADE AS OF NOVEMBER 1, 1997

 

THIS RIDER TO LEASE AGREEMENT made as of November 1,
1997.

 

BETWEEN: KELLAM ASSOCIATES, INC. located
at Star Route, Vernon, New Jersey, hereby designated as “Landlord”.

 

AND: ANGEL PROJECTS LLC, located c/o Praedium
Management, Inc., 11 Madison Avenue, 26th Floor, New York, New
York, Attn: Mr. Thomas R. Arnold, hereby designated as “Tenant”;

 

WHEREAS Landlord and Tenant are parties to a
Lease Agreement made as of November 1, 1997, and

 

WHEREAS the Lease Agreement recites as part of
the demised premises a portion of Lot 16, Block 190, and

 

WHEREAS Landlord is unable to make any
representations or warranties concerning its existing interests in and to said
portion of Lot 16, Block 190.

 

NOW THEREFORE, upon the foregoing.

 

A. The Lease Agreement is hereby modified and
amended to provide that the demised premises shall include Lot 16, Block 190,
only to the extent of the Landlord’s right, title and interest in such parcel,
if any.

 

 

SCHEDULE B

 

LICENSED N.Y., N.J., N.H., VT., &
PA.

Amisa M. Gilpatrick, P.L.S,
NJ#11132

 

Amisa M. Gilpatrick

 

LAND SURVEYOR

CHURCH STREET, BOX 36 - VERNON,
N.J 07482

 

3/5/85

 

EDWARD & RUTH KELLEY

LOT 11 12 & 13

BLOCK 190

VERNON TOWNSHIP

 

BEGINNING at a concrete monument marking the fourth corner of the first
lot of 42.16 acres, described in a mortgage dated August 10, 1959 between August Lamring
and wife and Charles J. Sammie and Elizabeth E. Sammie, his wife, and recorded
in the Sussex County Clerk’s Office in Book 318 of Mortgages at Page 287;
and thence from said beginning point runs (1) South seventy degrees fifty
minutes twenty seconds West (S 70-50-20 W) 772.86 feet to a point; thence (2) South
sixty-three degrees forty-two minutes West (S 63-42 W) 150.78 feet to a point;
thence (3) North forty-eight degrees fifty-three minutes thirty seconds
West (N 48-53-30 W) 995.21 feet to a point in the centerline of New Jersey
State Highway Route 94; thence (4) Along the centerline of said highway on
a curve to the right with radius 1000.00 feet an arc length of 56.36 feet to a
point of tangent; thence (5) North seventy-two degrees two minutes
twenty-four seconds East (N 72-02-24 E) 1505.61 feet to a point; thence (6) North
sixty-six degrees fifty-four minutes fifty seconds East (N 66-54-50 E) 151.02
feet to a point; thence (7) South forty-nine degrees forty-one minutes
thirty seconds East (S 49-41-30 E) 863.05 feet to a point; thence (8) South
sixty-four degrees thirty-one minutes forty seconds West (S 64-31-40 W) 739.20
feet to the point and place of beginning.

 

CONTAINING 31.8361 Acres of Land

 

EXCEPTING and reserving the rights of the public in that portion of New
Jersey State Highway Route 94, that may be contained herein.

 

ALSO excepting and reserving that portion of an easement given to New
Jersey Power and Light Company Transmission Line.

 

THIS description written by Amisa M. Gilpatrick, Land Surveyor, Vernon
Township, New Jersey.

 

Also including, however, approximately 3.953 acres of land to be
subdivided from Lot 16, Block 190 and added to Lots 11, 12 and 13.

 

SCHEDULE B

 

 

IN WITNESS WHEREOF, the parties hereto have
hereunto set their hands and seals, or caused these present to be signed by
their corporate officers and their corporate seal to be affixed the day and year
first above written.

 

	
  SIGNED, SEALED, AND DELIVERED

  	
  KELLAM ASSOCIATES, INC.

  
	
   

  	
   

  
	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
  /s/ Paul F. Koch

  	
   

  	
  By: 

  	
  /s/ Edward B. Kelley

  	
   

  
	
  Paul F. Koch

  	
   

  	
  Edward B. Kelley

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANGEL PROJECTS LLC

  
	
   

  	
   

  
	
   

  	
  By: The Praedium Recovery Fund, L.P.

  
	
   

  	
   

  
	
   

  	
  By: Praedium Management, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Thomas R. Arnold

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  By:

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