Document:

Exhibit 10.11

 

RECORDING REQUESTED BY COUNTY ENGINEER AND MAIL TO:

 

	
  EXECUTIVE OFFICER

  	
   

  
	
  BOARD OF SUPERVISORS

  	
   

  
	
  [ILLEGIBLE] 383 Hall of Administration

  	
   

  
	
  500 W. Temple Street

  	
   

  
	
  Los Angeles, California 90012

  	
   

  

 

CONCESSION AGREEMENT FOR CONSTRUCTION, MAINTENANCE AND OPERATION OF A
PLANNED RECREATIONAL DEVELOPMENT AT FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

THIS
CONCESSION AGREEMENT, made and entered into this 8th day of March,
1983,

 

BY
AND BETWEEN

 

COUNTY
OF LOS ANGELES, a body corporate and politic, hereinafter referred to as “County”.

 

AND

 

SPECIALTY
VILLAGES, a general partnership, and BRYANT L. MORRIS, General Partner,
hereinafter referred to as “Concessionaire”.

 

WITNESSETH:

 

WHEREAS,
County is a lessee in possession of Frank G. Bonelli Regional County Park
pursuant to a lease with the Los Angeles County-Frank G. Bonelli Regional
County Park Authority; and

 

WHEREAS,
the Board of Supervisors is authorized by the provisions of Government Code
Section 25907 to lease said lands for concessions and services that are
consistent with public park and recreation purposes; and

 

WHEREAS,
a concession for the construction and operation of a planned recreational
development is consistent with said purposes; and

 

WHEREAS,
Concessionaire is willing to exercise the grant of such a concession in
accordance with the terms and conditions prescribed therefor;

 

NOW,
THEREFORE, in consideration of the mutual promises, covenants and conditions
set forth herein, the parties hereto and each of then do agree as follows:

 

1.               CONCESSION GRANTED.

 

1.01                                                                           See Amd 3 p.2

 

 

1.02                                                                           The concession shall be exclusive only within
the confines of the Frank G. Bonelli Regional County Swim Park.

 

2.               CONCESSION PREMISES.

 

2.01                                                                           See Amd 3 p.2

 

2.02                                                                           The concession premises shall be used only
and exclusively for concession purposes, and such other purposes as are related
thereto provided express approval therefor is granted by the Director, and for
no other purposes whatsoever.

 

2.03                                                                           Concessionaire acknowledges personal
inspection of the concession premises and the surrounding area and evaluation
of the extent to which the physical condition thereof will affect the
concession. Concessionaire accepts the concession premises in their present
physical condition, and agrees to make no demands upon County for any
improvements or alteration thereof.

 

2.04                                                                           Concessionaire shall construct the
improvements hereinafter required upon the concession premises. Any other
improvements, additions, alterations, repairs or changes thereto shall be
subject to prior approval thereof by the Director; securing of applicable
permits therefor; and compliance with such terms and conditions relating
thereto, as may be imposed thereon by the Director. All construction shall be
at Concessionaire’s expense.

 

2.05                                                                           Concessionaire hereby acknowledges the title
of County and/or any other public agencies having jurisdiction thereover, in
and to the concession premises and the improvements located thereon, and covenants
and agrees never to assail, contest or resist said title.

 

2.06                                                                           Ownership of all structures, buildings or
improvements constructed by Concessionaire upon the concession premises and all
alterations,

 

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additions or betterments thereto, shall
remain in Concessionaire until termination of this agreement. Upon termination
thereof, whether by expiration of the term, cancellation, forfeiture or
otherwise, ownership thereto shall vest in County without compensation being
paid therefor, and such structures, buildings and/or improvements shall be
surrendered with the concession premises, unless demand for the removal thereof
shall be given by the Director at least ninety (90) days prior to the date of
termination. Should Concessionaire fail to remove said structures, buildings
and improvements, same may be sold, removed or demolished, and Concessionaire
shall reimburse County for any cost or expense in connection therewith in
excess of any consideration received by County as a result of said sale,
removal or demolition.

 

2.5         OPTION.

 

2.5.01                                                                  County grants to Concessionaire this option
to lease the land described in Exhibit B until the third (3rd) anniversary date
of this contract.

 

2.5.02                                                                  Concessionaire may not assign this option and
the rights thereunder without the express written consent of the Director.

 

2.5.03                                                                  Only if Concessionaire has performed the acts
set forth herein as consideration for the option or is in the diligent and
continuous performance thereof, may be exercise this option.

 

2.5.04                                                                  If Concessionaire has performed the acts
constituting consideration for the option within the period therefor, including
any extension(s) thereof, as provided in this agreement, Concessionaire may
exercise this option by tender of written notice of exercise of option. This
notice shall be

 

3

 

addressed
to the Board of Supervisors of County; and signed by each individual
Concessionaire with an acknowledgment of each signature by a person authorized
to attest thereto by law.

 

2.5.05                                                                  Service of the notice shall be made in the
manner provided by the agreement for notices, except that in addition to the officer
designated for

 

3a

 

service of notice on County, copies of the
notice shall also be served upon the Director at 550 South Vermont Avenue, Los
Angeles, California 90020, or such other place as may hereinafter be designated
in writing to Concessionaire by Director, and upon the County Parks Director,
453 South Vermont Avenue, Los Angeles, California 90020.

 

2.5.06                                                                  Upon exercise of the option the Director
shall prepare a lease amendment to this lease and concession agreement, as
amended, and submit same for approval and execution by Concessionaire and the
Board of Supervisors of County. The lease amendment shall convey a leasehold
estate in the land described in Exhibit B as the Phase Two Area for use as a
planned recreational development area [without any development being prescribed
therefor as a condition for continuation of possession and rights of user
granted therein.] The covenants and conditions related to the required
development program for the leasehold estate conveyed is the land described in
Exhibit B as the Phase Two Planned Recreational Development shall provide for
diligent performance of the construction obligation; commencement of
construction following County’s posting of the site with a notice of
nonresponsibility; County approval of final plans and specifications, including
landscaping; County inspection and access to the construction; extensions for
force majeure and good cause; warranty of materials and workmanship,
performance and payment bonds, personal surety on security deposit on amounts
and form as required for the development.

 

2.5.07                                                                  If Concessionaire fails to exercise this option
within the period therefor, including any extension(s) thereof, the option
shall automatically terminate without notice to Concessionaire and all rights
of Concessionaire shall immediately cease.

 

2.5.08                                                                  The consideration for this option shall be
completion of development on the land described in Exhibit A.

 

4

 

2.5.09                                                                  County grants a license to Concessionaire to
use the land described in Exhibit B for the option period, including any
extension(s) thereof, for the purpose of conducting thereon such
investigations, studies and tests as may be required for development of the
works of improvement to be constructed thereon.

 

2.5.10                                                                  Concessionaire shall notify the Director at
least forty-eight (48) hours prior to the start of any investigation of soil
conditions by means of soil borings. Test locations shall be barricaded to
prevent public access thereto during the boring thereof and backfilled
following removal of all soils therefrom.

 

2.5.11                                                                  The stockpiling of excavated material and the
storage of any materials, tests or equipment shall be subject to the
satisfaction of the Director.

 

2.5.12                                                                  Concessionaire shall not interfere with the
public use and enjoyment of the areas of the Frank G. Bonelli Regional County
Park located outside of the licensed premises.

 

2.5.13                                                                  Optionee shall immediately correct any unsafe
condition and/or unsafe practices arising out of and in the course of the use
of the license granted.

 

2.5.14                                                                  Concessionaire shall save, keep and hold harmless
County and all of its officers, agents and employees from all damages, suits,
costs or expenses in law or equity, including costs of suit and expenses for
legal services that may at any time arise or be set up by any person, including
the agents, servants and employees of Concessionaire, and/or County, for
personal injury, death and/or property damage arising out of the use of the
licensed premises, when caused by an act or omission on the part of
Concessionaire or the agents, servants, and employees thereof, that allegedly
constitutes:

 

a.
Negligence;

 

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b.
Creation of maintenance of a dangerous condition of public property;

 

c.
Breach of warranty, express or implied;

 

d.
Defectiveness of product; or

 

e.
Intentional infliction of harm.

 

2.5.15                                                                  In the event of any of the aforementioned
persons recovers a judgment against County or any of its officers, agents or
employees, by reason of any of the aforementioned acts or omissions,
Concessionaire shall indemnify same in an amount equal to the judgment entered.

 

3.               TERM.

 

3.01                                                                           See Amd 3 p.2

 

3.02                                                                           See Amd 3 p.2

 

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4.               PAYMENT.

 

4.01                                                                           See
Amd 3 p.3 & Amd 3-A p.3

 

7

 

4.02                                                                           See
Amd 3 p.5

 

8

 

5.               ACCOUNTING
RECORDS.

 

5.01                                                                           Concessionaire
shall be required to maintain a method of accounting which shall to the
satisfaction of the Auditor-Controller correctly and accurately reflect the
gross receipts and disbursements of Concessionaire in connection with the
concession. The method of accounting, including bank accounts, established for
the concession shall be separate from the accounting system used for any other
business operated by Concessionaire or for recording Concessionaire’s personal
financial affairs. Such method shall include the keeping of the following
documents:

 

a.               Regular books of accounting such as
general ledgers.

 

b.              Journals including any supporting and
underlying documents such as vouchers, checks, tickets, bank statements, etc.

 

c.               State and Federal income tax returns and
sales tax returns

 

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and checks and other documents
providing payment of sums shown which shall be kept in confidence by County.

 

d.                                      Cash
register tapes (daily tapes may be separated but shall be retained so that from
day to day the sales can be identified).

 

e.                                       Any
other reporting records that the Auditor-Controller deems necessary for proper
reporting of receipts.

 

5.02                                                                           All
sales shall be recorded by means of cash registers which publicly display the
amount of each sale and automatically issue a customer’s receipt or certify the
amount recorded in a sales slip. Said cash registers shall in all cases have
locked-in sales totals and transaction counters which are constantly
accumulating and which cannot, in either case, be reset, and in addition thereto,
a tape located within the register on which transaction numbers and sales
details are imprinted. Beginning and ending cash register readings shall be
made a matter of daily record.

 

5.03                                                                           All
documents, books and accounting records shall be open for inspection and
reinspection at any reasonable time during the term of this agreement and for
twelve (12) months thereafter. In addition, the Auditor-Controller may from
time to time conduct an audit and reaudit of the books and business conducted
by Concessionaire and observe the operation of the business so that accuracy of
the above records can be confirmed. If the report of gross sales made by
Concessionaire to the Auditor-Controller should be found to be less than the
amount of gross sales disclosed by such audit and observation, Concessionaire
shall pay the delinquent amount within thirty (30) days of billing therefor. If
the additional amount due exceeds two percent (2%), and there is no reasonable
basis for the failure to report and pay thereon, Concessionaire shall also pay
the cost of the audit and the penalty heretofore provided for delinquent payments.
All information obtained in connection with the Auditor-Controller’s
inspections of records or audit shall be treated as confidential information
and exempt from public disclosure thereof.

 

10

 

5.04                                                                           Concessionaire
shall furnish the Auditor-Controller with a monthly gross receipts report
showing the amount payable therefrom to the County. Such a report shall
accompany each monthly payment required to be made as provided herein. The
monthly reporting period shall be by calendar month, rather than monthly
anniversary date of the effective date of the concession agreement. In addition
thereto, Concessionaire shall furnish the Auditor-Controller with an annual
profit and loss statement and a balance sheet prepared by a person and in a
form acceptable to said officer. The annual financial statements shall be
submitted within sixty (60) days of the close of an agreement year. Said
closing date shall be determined by reference to the date for commencement of
the term herein provided.

 

6.               REQUIRED
CONSTRUCTION.

 

6.01                                                                           Concessionaire
shall construct a planned recreational development upon the concession premises
in accordance with the development program therefor that have heretofore been
prepared by Concessionaire and approved by County and are attached herewith as
Exhibit D.

 

6.02                                                                           Concessionaire
shall commence construction of the above described improvements, including
facilities for gas, water, electricity, sewage and telephone service, following
County’s posting of the construction site with a notice of nonresponsibility,
and shall diligently prosecute and complete name. In no event shall the
completion of this responsibility be extended beyond July 1, 1983.

 

6.03                                                                           No
modification of said final plane and specification or of said improvements,
including landscaping, shall be made by Concessionaire without approval
therefor by the Director.

 

6.04                                                                           Concessionaire
agrees that County may have on the site at any time during the construction
period an inspector who shall have the right of access to the concession
premises and the construction work. Concessionaire shall, at the commencement
of the construction work, notify the Director in

 

11

 

writing of the identity, place of business and telephone number of
Concessionaire’s on-the-job representative. Said representative shall be
Concessionaire’s prime consultant for the inspector of County.

 

6.05                                                                           The
parties agree that any delay in the construction due to fire, earthquake, war,
labor dispute or other events beyond the control of Concessionaire shall extend
the time in which said construction must be completed by the length of time of
such delay.

 

6.06                                                                           Concessionaire
shall construct, perform, complete and maintain all construction and
installations covered by this agreement in a good and workmanlike manner and
with high quality materials, and shall furnish all tools, equipment, labor and
material necessary to perform and complete the same, and hereby expressly
warrants that all said materials and workmanship will be free from defects.

 

6.07                                                                           It
is understood that the construction required herein may, at the discretion of
Concessionaire, be constructed in phases, each phase being separated from the
other by a period of time to be determined by Concessionaire. However, the
nature of the construction to be performed in each phase and the time interval
between phases shall be subject to approval by the Director. In no event shall
the phasing of the construction required herein extend the completion thereof
beyond the date heretofore provided. Should the required construction be phased
as herein provided, diligent prosecution thereof shall require commencement of
each phase on or before the date selected for commencement thereof.

 

7.               ADDITIONAL
CAPITAL IMPROVEMENT.

 

7.01                                                                           See
Amd 3 p.6

 

12

 

8.               RENTAL
CREDIT.

 

 

13

 

9.               BONDS.

 

9.01                                                                           Concessionaire
shall purchase performance and payment bonds from corporations duly authorized
to issue surety bonds by the State before constructing any works of improvement
upon the concession premises. Each bond shall name Concessionaire as principal,
company as surety, and County as obliges thereon. The payment bond shall also inure
to the benefit of all claimants, as said term is presently defined by Section
3085 of the State Civil Code, or may hereafter be amended, so as to give such
persons a right of action to recover thereon in any suit brought to foreclose
the liens provided for in Title 13 of Part 4 of Division 3 of said Civil Code
or in a separate suit brought upon the bond. Each bond shall be in a sum equal
to ONE HUNDRED PERCENT (100%) of the costs for construction of the works of
improvement to be located upon the concession premises, as estimated by the
Director. The condition of the performance bond shall be such that if the
principal shall well and truly perform the construction herein required,
pursuant to the approved plans and specifications therefor, then surety shall
no longer be bound thereon. The condition of the payment bond shall be such
that if the principal shall well and truly pay, or cause to be paid, all claims
for labor, materials, appliances, terms, or power, or either or all, performed,
furnished or contributed in connection with said works of improvement, then
surety shall no longer be bound thereon. Said bonds shall be subject to
approval by the Director as to sufficiency and liability of sureties named
thereon. Said bonds shall be maintained in full force and effect by
Concessionaire until said works of improvement have been completed and claims
for labor and materials have been paid.

 

9.02                                                                           The
Director may accept in lieu of the bonds heretofore described, the performance
and payment bonds of corporations duly authorized to issue surety bonds by the
State, naming as principal a licensed contractor employed by Concessionaire to
construct works of improvement on the concession

 

14

 

promises, provided each bond is in an amount equal to the percentage
hereinabove provided for said bonds of the cost of the construction to be
performed by said contractor; names County as an additional obligee; contains
terms and conditions substantially similar to the requirements heretofore
specified; and is satisfactory as to sufficiency and liability of sureties
named thereon.

 

9.03                                                                           The
Director may also accept in lieu of the bonds heretofore described, the promise
of one or more individuals to pay County in the event of a default of
Concessionaire to well and truly perform the construction, pursuant to the
approved plans and specifications therefor, and to pay claimants, as herein
defined, in the event of a default of Concessionaire to pay or cause to be
paid, all claims for labor, materials, appliances, terms, or power, or either
or all, performed, furnished or contributed in connection with said works of
improvement, provided corporate surety bonds cannot be obtained; the surety-ship
obligation is in writing; the liability as surety and/or guarantor of said
principal obligation is commensurate with Concessionaire, becomes absolute upon
breach and can be exonerated only by performance or payment; and the
sufficiency of the individuals to discharge their liability thereon is
justified to the satisfaction of said officer.

 

9.04                                                                           Concessionaire
shall have the option to deposit with the Auditor-Controller cash or United
States Government securities in all respects satisfactory to said officer in
lieu of the surety obligations herein required. Said cash or securities shall
be deemed deposited with County to secure full and satisfactory performance of
the principal obligations heretofore described for which surety is required,
and shall be released upon satisfactory performance thereof, as evidenced by
certification of completion by the Director and release of mechanic’s liens by
all persons furnishing labor and material thereon.

 

15

 

10.         OPERATING
RESPONSIBILITIES.

 

10.01                                                                     Compliance
with Law.

 

Concessionaire shall conform to and abide by all municipal and county
ordinances, and all state and federal laws and regulations, insofar as the same
or any of them are applicable; and where permits and/or licenses are required
for the concession and/or any construction authorized herein, the same must be
first obtained from the regulatory agency having jurisdiction thereover.

 

10.02                                                                     Compliance
with Rules and Regulations.

 

Concessionaire shall conform to and abide by all rules and regulations
of the Board of Supervisors, the Director, and the Director of Parks and
Recreation insofar as the same or any of them are applicable.

 

10.03                                                                     Disorderly
Persons.

 

Concessionaire agrees to not allow any loud, boisterous or disorderly
persons to loiter about the concession premises.

 

10.04                                                                     Illegal
Activities.

 

Concessionaire shall not permit any illegal activities to be conducted
upon the concession premises.

 

10.05                                                                     See
Amd 3 p.10

 

10.06                                                                     Noninterference.

 

Concessionaire shall not interfere with the public use of Frank G.
Bonelli Regional County Park.

 

10.07                                                                     See
Amd 3 p.10

 

16

 

10.08                                                                     Days
and Hours of Operation. See Amd 3 p.12

 

17

 

10.09                                                                     Prices.

 

Concessionaire shall at all times maintain a complete list or schedule
of the prices charged for all goods or services, or combinations thereof,
supplied to the public on or from the concession premises. Said prices shall be
fair and reasonable based upon the following considerations: that the
concession is intended to serve the needs of the public for the goods and/or
services supplied at a fair and reasonable cost; comparability with prices
charged for similar goods and/or services supplied in the Los Angeles
Metropolitan Area; and reasonableness of profit margin is view of the cost of
providing same in compliance with the obligations assumed in this agreement. In
the event the Director notifies Concessionaire that prices being charged are
not fair and reasonable, Concessionaire shall have the right to confer with the
Director and justify said prices. Following reasonable conference and
consultation thereon, Concessionaire shall make such price adjustments as may
be ordered by the Director. Concessionaire may appeal the determination of the
Director to the Board of Supervisors, whose decision thereon shall be final and
conclusive. However, Concessionaire shall comply with the ordered price
adjustment pending the appeal and final ruling thereon by the Board of
Supervisors.

 

10.10                                                                     Removal
of Objectionable Goods and Services.

 

Concessionaire shall immediately remove or withdraw from sale any goods
or services which may be found objectionable to the public welfare by the
Director following receipt of written notification therefor.

 

10.11                                                                     Utilities.

 

Concessionaire shall provide and pay for any necessary utilities,
including water and electricity consumed by Concessionaire in the construction,
maintenance and operation of the planned recreational development. The
telephone number shall be placed in the name of the concession and shall not be
transferred to any other location. Concessionaire waives any and all claims
against County for compensation for loss or damage caused by a defect,
deficiency

 

18

 

or impairment of any utility
system, water system, water supply system, drainage system, waste system,
heating or gas system, electrical apparatus or wires serving the concession
premises.

 

10.12                                                                     Sanitation.

 

No effective matter or refuse or substance constituting an unnecessary,
unreasonable or unlawful fire hazard, or material detrimental to the public
health, shall be permitted or remain on the concession premises and within a
distance of fifty (50) feet thereof, and Concessionaire shall prevent any
accumulation thereof from occurring. Concessionaire shall see that all refuse
is collected as often as necessary, and in no case less than twice a week, and
shall pay all charges which may be made for the removal thereof. Concessionaire
shall furnish all equipment and materials necessary, including trash
receptacles of the size, type and number required by the Director, to maintain
the concession premises and the area within a distance of fifty (50) feet
thereof in a sanitary condition;

 

10.13                                                                     Maintenance.

 

Concessionaire shall be responsible for maintaining the concession
premises in good and substantial repair and condition; and in compliance
therewith shall perform all repairs to or replacement of all improvements and
equipment thereon, including the painting thereof, upon written request
therefor by the Director. In addition to this general requirement
Concessionaire shall perform any and all repairs required for the maintenance
thereof in compliance with all Laws applicable thereto.

 

10.14                                                                     Security
Devices.

 

Concessionaire may provide any legal devices, installations, or
equipment designed for the purpose of protecting the concession premises from
theft, burglary or vandalism, provided written approval for installation is
first

 

19

 

obtained from the Director. All
purchases and installations thereof shall be at Concessionaire’s expense.

 

10.15                                                                     Safety.

 

Concessionaire shall immediately correct any unsafe condition of the
concession premises, as well as any unsafe practices occuring thereon. Concessionaire
shall obtain emergency medical care for any member of the public who is in need
thereof, because of illness or injury occurring on the concession premises. Concessionaire
shall cooperate fully with County in the investigation of any accidental injury
or death occurring on the concession premises, including a prompt report
thereof to the Director.

 

10.16                                                                     Trade
Fixtures.

 

Concessionaire shall provide and install all appliances, furniture,
fixtures and equipment that are required for the concession. During the last
thirty (30) days preceding the termination of this agreement, Concessionaire
shall remove same from the concession premises, other that for those items of
personalty which have been furnished by County or so affixed that their removal
therefrom cannot be accomplished without damage to the realty. Should
Concessionaire fail to so remove said appliances, furniture, fixtures and
equipment within said thirty (30) day period, Concessionaire shall lose all
right, title and interest in and thereto, and County may elect to keep same
upon the premises or to sell, remove or demolish same. Concessionaire shall
reimburse County for any cost incurred in excess of any consideration received
from the sale, removal or demolition thereof.

 

10.17                                                                     Merchandise.

 

Concessionaire shall provide and maintain the necessary investory of
concession merchandise required to meet the needs of the public therefor. All
food and beverages sold or kept for sale by Concessionaire shall be first-class
in quality, wholesome and pure, and shall conform to the federal, state and
County food laws, ordinances and regulations in all respects. No adulterated,
misbranded or impure articles shall be sold or kept for sale by Concessionaire,

 

20

 

and all merchandise kept on
hand by Concessionaire shall be stored and handled with due regard for
sanitation. In the event food is below first class, the Director shall have the
right to order the improvement of the quality of any food kept or offered for
sale.

 

10.18                                                                     See
Amd 3 p.12

 

10.19                                                                     Habitation.

 

The concession premises shall not be used for human habitation, other
than as approved night watchman or patrolman, except for concession premises
resigned, constructed and operated for the express purpose of accommodating
human habitation.

 

11.         DESTRUCTION
OF CONCESSION PREMISES AND/OR FRANK G. BONELLI SWIM PARK

 

11.01                                                                     In
the event the concession premises shall be totally or partially destroyed from
a risk covered by the insurance required herein, Concessionaire shall either restore
the premises or terminate this agreement. If the destruction is from a risk for
which coverage is not required or provided under said policy of insurance,
County and/or Concessionaire shall either restore the premises or terminate
this agreement. County shall make the loss adjustment with the insurance
company insuring the loss and receive payment of the proceeds of insurance. Said
proceeds shall be held for the benefit of Concessionaire only in the event of
an election by Concessionaire to restore the premises and shall be disbursed in
installments as construction progresses for payment of the costs of restoration
upon satisfactory performance of the work required, as evidenced by certification
of completion by the Director and release of mechanic’s liens by all persons
furnishing labor and material thereon. If the proceeds of insurance are
insufficient to pay the actual costs

 

21

 

of restoration, Concessionaire
shall deposit the amount of the deficiency with the Auditor-Controller upon
demand therefor by the Director, and said sums shall be held for payment of
said costs and disbursed in the manner heretofore provided. Any undisbursed
funds shall be retained by County and credited to the rental reserved over the
remaining term of the agreement to the extent that any funds remaining at end
of term will be reimbursed to Concessionaire by County. If Concessionaire
elects to restore the concession premises, plans, specifications, and
construction cost estimates for the restoration thereof shall be prepared by
Concessionaire and forwarded to Director for approval prior to the performance
of any work thereon. Said documents shall be prepared and submitted in a timely
manner following adjustment of the loss and receipt of the proceeds of
insurance by County. The required construction shall be performed by
Concessionaire and/or licensed and bondable contractor(s) thereof who shall be
required to carry public liability and property damage insurance, worker’s
compensation insurance, and standard fire and extended coverage insurance, with
vandalism and malicious mischief endorsements, during the period of
construction, in amounts equal to the insurance limits required herein. Said
construction shall be commenced promptly following the approval thereof by the
Director, issuance of permits therefor by governmental agencies having
jurisdiction thereover, and posting of the construction site by County with notice
of nonresponsibility and shall be diligently prosecuted to completion. All work
shall be performed in accordance with the approved plans and specifications,
unless changes therein are approved in advance thereof by Director. Concessionaire
agrees that County may have on the site at any time during the construction
period as inspector who shall have the right of access to the concession
premises and the work occurring thereon. Concessionaire shall, at the
commencement of the construction work notify Director in writing of the
identify, place of business, and telephone number of responsible person(s) in
charge of the construction to be occurring thereon.  All construction shall be performed

 

22

 

in a good and workmanlike
manner. Upon completion of the restoration, Concessionaire shall immediately
record a notice of completion with the Registrar-Recorder.

 

22a

 

 

11.02                                                                     If the premises are restored, this agreement
shall continue in full force and effect, except that the payments to be made by
Concessionaire shall be abated and/or other relief afforded to the extent that
the Director may determine the damage and/or restoration interferes with
the concesiion, provided a claim therefor is filed with the Director within one
hundred (100) days of notice of election to restore the premises. Any such
claim shall be denied, if the destruction of the concession premises is found
by the Director to have been caused by the gross neglect of Concessionaire.
Concessionaire agrees to cooperate in the determination of the abatement and/or
other relief to be provided by furnishing all information requested relative to
the concession, and permitting examination and audit of all accounting records
kept in connection with the conduct thereof.

 

11.03                                                                     Concessionaire shall cooperate in the
restoration of the concession premises by vacating and removing therefrom all
items of inventory, trade fixtures, equipment and furnishings for such periods
as are required for the restoration thereof.

 

11.04                                                                     The aforesaid provisions for abatement and/or
other relief shall also be applicable to a total or partial destruction of
Frank C. Bonelli Swim Park by the aforementioned causes, except that the relief
to be provided shall be based upon the extent the Director may determine
that the reduction in the public’s use of Frank G. Bonelli Swim Park due to the
partial or total closure thereof has affected the concession.

 

11.05                                                                     Concessionaire agrees to accept the remedy
heretofore provided in the event of a destruction of the concession premises
and/or Frank G. Bonelli Swim Park and hereby waives any and all additional
rights and remedies for relief or compensation that are presently available or may hereinafter
be made available under the laws and statutes of this state.

 

12.         CONSTRUCTION BY COUNTY AFFECTING CONCESSION
PREMISES AND/OR FRANK G. BONELLI REGIONAL COUNTY PARK.

 

12.01                                                                     In the event County shall construct or cause
to be constructed a new facility for the concession, this agreement shall
continue in full force

 

23

 

and
effect, except that the payments to be made by Concessionaire shall be abated
and/or other relief afforded to the extent that the Director may determine
the construction interferes with the concession, provided a claim therefor is
filed with the Director within one hundred (100) days of commencement of
construction.

 

12.02                                                                     Concessionaire agrees to cooperate with
County in the event the construction affects the concession premises by
vacating and removing therefrom all items of inventory, trade fixtures,
equipment and furnishings for such periods as are required by the construction
of the new facilities. Concessionaire further agrees to cooperate in the
determination of the abatement and/or other relief to be provided by furnishing
all information requested relative to the concession and permitting examination
and audit of all accounting records kept in connection with the conduct thereof.

 

12.03                                                                     Following completion of the new facility,
Concessionaire shall resume the concession therefrom within thirty (30) days of
notice from the Director that the concession premises are tenantable.

 

12.04                                                                     The aforementioned provisions of this section shall
also be applicable in the event of performance of work on Frank C. Bonelli
Regional County Park that requires a partial or total closure thereof, except
that the abatement and/or other relief to be provided shall be based upon the
extent the Director may determine that the reduction in the public’s use
of Frank G. Bonelli Regional County Park due to the partial or total closure
thereof, has affected the concession.

 

12.05                                                                     Concessionaire agrees to accept the remedy
heretofore provided in the event of construction upon the concession premises
and/or Frank G. Bonelli Regional County Park, and hereby waives any and all
additional rights and remedies for relief or compensation that are presently
available or may be made available hereinafter under the laws and statutes
of this state.

 

24

 

13.         SECURITY
DEPOSIT.

 

13.01                                                                     Prior to the commencement of this agreement,
Concessionaire shall pay to the Auditor-Controller the sum of TWENTY
THOUSAND-EIGHT HUNDRED THIRTY-THREE DOLLARS AND 33/100 ($20,833.33). In lieu
thereof, Concessionaire may deposit said amount in a commercial bank or
savings and loan association acceptable to the Auditor-Controller, provided
that a certificate of deposit is delivered to said officer giving County the
right to withdraw any or all of said amount during the term of this agreement.
Concessionaire shall be entitled to any and all interest accruing from said
certificate of deposit. In addition to said sum, Concessionaire shall purchase
a performance bond in the amount of FORTY-ONE THOUSAND SIX HUNDRED SIXTY-SIX
DOLLARS and 66/100 ($41,666.66) from a corporation duly authorized to issue
surety bonds by the State prior to the commencement of this agreement. Said
bond shall [ILLEGIBLE] Concessionaire as principal, company as surety, and
County as obligee thereon.

 

13.02                                                                     Said sum and bond shall serve as security for
faithful performance of all covenants, promises and conditions assumed by
Concessionaire herein, and may be applied in satisfaction and/or mitigation
of damages arising from a breach thereof, including, but not limited to,
delinquent payments; correction of maintenance deficiencies; securing required
insurance; loss of revenue due to abandonment, vacation or discontinuance of
concession operations, discrimination; refunding of deposits for scheduled
events which are required to be cancelled due to abandonment, vacation or
discontinuance of concession operations; completion of construction; and
payment of mechanic’s liens. Application of amounts on deposit and/or under
said bond in satisfaction and/or mitigation of damages shall be without
prejudice to the exercise of any other rights provided herein or by law to
remedy a breach of this agreement.

 

13.03                                                                     In the event any or all of said sum and/or
bond are applied in satisfaction and/or mitigation of damages, Concessionaire
shall immediately deposit such sums and/or renew said bond in such amounts as
are necessary to restore the

 

25

 

security
deposit to the full amount required hereunder.

 

13.04                                                                     Said sum shall be returned to Concessionaire
upon termination of this agreement less any amounts that may be withheld
therefrom by County as heretofore provided.

 

14.         HOLD
HARMLESS AND INDEMNIFICATION.

 

14.01                       See Amd 3 p.13

 

26

 

15.         INSURANCE.

 

See
Amd 3 p.14

 

27

 

16.         TAXES AND ASSESSMENTS.

 

16.01                                                                     The
property interest conveyed herein may be subject to real property taxation
and/or assessment thereon, and is the event thereof, Concessionaire shall pay
before delinquency all lawful taxes, assessments, fees or charges which at any
time may be levied by the State, County, City or any other tax or
assessment-levying body upon the concession premises and any improvements
located thereon.

 

16.02                                                                     Concessionaire
shall also pay all taxes, assessments,
fees and charges on goods, merchandise fixtures, appliances and equipment owned
or used therein.

 

17.         TRANSFERS.

 

17.01                                                                     Concessionaire
shall not, without written consent of the Director, assign, hypothecate, or
mortgage this agreement or sublease or license any portion of the concession
premises. Any attempted assignment, hypothecation, mortgage,

 

28

 

sublease or license without the consent of
the Director shall render this agreement null and void. Consent to the
foregoing shall not be unreasonably withheld by the Director.

 

17.02                                                                     Each
and all the provisions, agreements, terms, covenants and conditions herein contained to be performed by
Concessionaire shall be binding upon any transferee thereof.

 

17.03                                                                     This
agreement or any interest therein shall not be transferable in proceedings in
attachment or execution against Concessionaire, or in voluntary or involuntary
proceedings in bankruptcy or
insolvency or receivership taken by or against Concessionaire, or by any
process of law including proceedings under Chapter X or XI of the Bankruptcy
Act.

 

17.04                                                                     Shareholders
and/or partners of Concessionaire may transfer, sell, exchange, assign or
divest themselves of any interest they may have therein. However, in the
event of any such sale,
transfer, exchange, assignment or divestment is effected in such a way as to
give majority control of Concessionaire to any persons, corporation,
partnership or legal entity other than the majority controlling interest
therein at the time of the execution of this agreement, approval thereof shall
be required. Consent to any such transfer shall only be refused if the Director
finds that the transferee is lacking in experience and/or financial ability to
conduct the concession.

 

17.05                                                                     The
prohibition herein contained shall not be applicable
with respect to transfers of this agreement arising from the exercise of a
power of sale or judicial foreclosure pursuant to the terms and conditions of a
hypothecation or mortgage previously approved by the Director.

 

17.06 &
17.07                          See
Amd 3 p.17

 

18.         NONDISCRIMINATION.

 

18.01                                                                     See
Amd 3 p.18

 

29

 

19.         EASEMENTS.

 

19.01                                                                     County
reserves the right to establish, grant or utilize
easements or rights of way over, under, along and across the concession
premises for utilities and/or public access to Frank G. Bonelli Regional County
Park, provided County shall exercise such rights in a manner as will avoid any
substantial interference with the operations to be conducted hereunder. Should
the establishment of such easements permanently deprive Concessionaire of the
use of a portion of the concession premises, an abatement of payments shall be
provided in an amount proportional to the total area of the concession premises
in the before and after conditions.

 

20.         CANCELLATION.

 

20.01                                                                     Upon
the occurrence of any one or more of the events of default hereinafter
described, this agreement shall be subject to cancellation. As a

 

30

 

condition precedent thereto, the Director shall give Concessionaire ten
(10) days’ notice by registered or certified mail of the date set for
cancellation thereof; the grounds therefor and that an opportunity to be heard
thereon will be afforded on or before said date, if request is made therefor.

 

20.02                                                                     Upon
cancellation County shall have the right to take possession of the concession premises, including all
improvements, equipment, and inventory located thereon, and use for the purpose
of satisfying and/or mitigating all damages arising from a breach of this
agreement.

 

20.03                                                                     Action
by County to effectuate a cancellation and forfeiture of possession shall be
without prejudice to the exercise of any other rights provided herein or by law
to remedy a breach of this agreement.

 

20.04                                                                     Any
trustee, beneficiary, mortgages or lender under a hypothecation or mortgage previously approved by the Director
shall have the right at any time during the term of this agreement to undertake
any and all action that may be required in order to prevent a cancellation
of this agreement and a forfeiture of the concession. Accordingly, the Director
shall send a copy of any intended cancellation of this agreement to any of the
aforementioned parties whose security would be affected thereby; and upon
request thereof for postponement, extend the date set therefor by such time as
the Director finds reasonable in order to allow said parties to correct the
grounds therefor or to provide a new Concessionaire under a power of sale or
foreclosure sustained in the hypothecation or mortgage, who upon transfer
thereto shall become responsible for the correction thereof within such time as
may be allowed by the Director.

 

20.05                                                                     See
Amd 3 p.20

 

21.         EVENTS OF DEFAULT.

 

21.01                                                                     The
abandonment, vacation or discontinuance of operations on the concession
premises for more than forty-eight (48) consecutive hours, except for off-season
periods.

 

21.02                                                                     The
failure of Concessionaire to punctually pay or make the payments required
hereunder when due, where the delinquency continues beyond ten (10) days
following written notice for payment thereof.

 

31

 

21.03                                                                     The
failure of Concessionaire to operate in the manner required by this agreement,
where such failure continues for more than ten (10) days after written
notice from the Director to correct the condition therein specified.

 

21.04                                                                     The
failure to maintain the concession premises and the improvements constructed
thereon in the state of repair required hereunder, and in a clean, sanitary,
safe and satisfactory condition, where such failure continues for more than ten
(10) days after written notice from the Director to correct the condition.

 

21.05                                                                     The
failure of Concessionaire to keep, perform and observe all other promises,
covenants, conditions and agreements set forth in this agreement, where such
failure continues for more than thirty (30) days after written notice from the
Director for correction thereof, provided that where fulfillment of such
obligation requires activity over a period of time and Concessionaire shall
have commenced to perform whatever may be required to cure the particular
default within ten (10) days after such notice and continues such
performance diligently, said time limit may be waived in the manner and to
the extent allowed by the Director.

 

21.06                                                                     The
filing of a voluntary petition in bankruptcy by Concessionaire; the
adjudication of Concessionaire as a bankrupt; the appointment of any receiver
of Concessionaire’s assets; the making of a general assignment for the benefit
of creditors, a petition or answer seeking an arrangement for the
reorganization of Concessionaire under any Federal Reorganization Act,
including petitions or answers under Chapters X or XI of the Bankruptcy Act;
the occurrence of any act which operates to deprive Concessionaire permanently
of the rights, powers and privileges necessary for the proper conduct and
operation of the concession; the levy of any attachment or execution which
substantially interferes with Concessionaire’s operations under this agreement
and which attachment or execution is not vacated, dismissed, stayed or set aside
within a period of sixty (60) days.

 

32

 

 

21.07                       Determination by the Director, the State Fair
Employment Commission, or the Federal Equal Employment Opportunity Commission
of discrimination having been practiced by Concessionaire in violation of state
and/or federal laws thereon.

 

21.08                       Transfer of the majority controlling interest
of Concessionaire to persons other than those who are in control at the time of
the execution of this agreement without approval thereof by the Director.

 

21.09                       Failure to have commenced required
construction by March 8, 1983, or any phase thereof on or before the date
selected for commencement thereof.

 

21.10                       Failure to have completed required
construction by July 1, 1983.

 

21.11                       See Amd 3 p.21

 

22.   WAIVER.

 

22.01                       Any waiver by County of any breach of any one
or more of the covenants, conditions, terms and agreements herein contained
shall not be construed to be a waiver of any subsequent or other breach of the
same or of any other covenant, condition, term or agreement herein contained,
nor shall failure on the part of County to require exact, full and
complete compliance with any of the covenants, conditions, terms or agreements
herein contained be construed as in any manner changing the terms of this
agreement or estopping County from enforcing the full provisions thereof.

 

22.02                       No delay, failure, or omission of County to
re-enter the concession premises or to exercise any right, power, privilege or
option, arising from any default, nor any subsequent acceptance of payments
then or thereafter accrued shall impair any such right, power, privilege or
option, or be construed as a waiver of or acquiescence in such default or as a
relinquishment of any right.

 

22.03                       No notice to Concessionaire shall be required
to restore or revive “time of the essence” after the waiver by County of any
default.

 

22.04                       No option, right, power, remedy or privilege
of County shall be construed as being exhausted by the exercise thereof in one
or more instances. The rights, powers, options and remedies given County by
this agreement shall be

 

33

 

cumulative.

 

23.   RIGHT OF ENTRY.

 

23.01                       Any officer and/or employee of County may enter
upon the concession premises at any and all reasonable times for the purpose of
determining whether or not Concessionaire is complying with the terms and
conditions thereof, or for any other purpose incidental to the rights of County
within the Frank G. Bonelli Regional County Park.

 

23.02                       In the event of an abandonment, vacation or
discontinuance of concession operations for a period in excess of forty-eight
(48) hours, Concessionaire hereby irrevocably appoints County as an agent for
continuing operation of the concession granted herein, and in connection
therewith authorizes the officers and employees thereof to (1) take
possession of the concession premises, including all improvements, equipment
and inventory thereon; (2) remove any and all persons or property on said
premises and place any such property in storage for the account of and at the
expense of Concessionaire; (3) sublease or license the premises; and (4) after
payment of all expenses of such subleasing or licensing apply all payments
realized therefrom to the satisfaction and/or mitigation of all damages arising
from Concessionaire’s breach of this agreement. Entry by the officers and
employees of County upon the concession premises for the purpose of exercising
the authority conferred hereon as agent of Concessionaire shall be without
prejudice to the exercise of any other rights provided herein or by law to
ready a breach of this concession agreement.

 

24.   SURRENDER.

 

24.01                       Upon expiration of the term hereof, or
cancellation thereof as herein provided, Concessionaire shall peaceably vacate
the concession premises and any and all improvements located thereon and
deliver up the same to County in a reasonably good condition, ordinary wear and
tear excepted subject to the right of County to demand removal thereof to the
extent that Paragraph 2.04 may be applicable thereto.

 

34

 

25.   INTERPRETATION.

 

25.01                       This agreement shall be interpreted according
to the rules which govern the interpretation of contracts, as prescribed
in Part 2 of Division 3 of the State Civil Code, commencing with Section 1635.

 

25.02                       The headings herein contained are for
conveniences and references only and are not intended to define or limit the
scope of any provision thereof.

 

25.03                       The following words as used herein shall be
construed to have the following meaning, unless otherwise apparent from the
context in which they are used:

 

“Auditor-Controller”: the Auditor-Controller of
County or an authorized representative thereof.

 

“Concession”: the privilege of engaging in the
commercial activities authorized herein on the public property designated
thereof.

 

See Amd 3. p.21

 

“Cross Receipts”: all money, cash receipts, assets,
property or other things of value, including but not limited to gross charges,
sales, rentals, fees and commissions made or earned by Concessionaire, and/or
assignees, subleases, or permittees thereof, whether collected or accrued from
any business, use or occupation, or any combination thereof, transacted, or
performed in whole or in part, on the concession premises, including but not
limited to rentals, the rendering or supplying at services and the sale of
goods, wares or merchandise. There shall be deducted from said gross receipts
the following:

 

a.     Sales and excise taxes applicable thereto,
required to be collected by Concessionaire, and/or the sublessees or permittees
thereof.

 

35

 

b.     Federal,
state, municipal or other taxes collected from the consumers, regardless of
whether the amount thereof is stated to the consumer as a separate charge,
provided the amount of such taxes shall be above on the accounting records for
the concession as hereinafter required.

 

c.     Receipts
from the sale or trade-in value of any equipment used on the concession
premises and owned by Concessionaire.

 

d.     Receipts
in the form of refunds from or the value of merchandise, supplies or
equipment returned to the shippers, suppliers or manufacturers.

 

e.     Receipts
with respect to any sale where the subject of such sale, or some part thereof,
is thereafter returned by the purchaser and accepted by Concessionaire, to the
extent of any refund actually granted or adjustment actually made, either in
the form of cash or credit, including meals for employees.

 

“Planned Recreational Development”: Family
swim park as described in attached Exhibit D.

 

See Amd 3 p.21

"State": the State of California.

 

26.   ENFORCEMENT.

 

26.01                       The
Director shall be responsible for the enforcement of this agreement on behalf
of County and shall be assisted therein by those officers and employees of
County having duties in connection with the administration thereof.

 

26.02                       In
the event County commences legal proceedings for the enforcement of this
agreement or recovery of the premises used herein, prevailing party in any
legal action shall be awarded reasonable attorney’s fees.

 

27.   NOTICES.

 

27.01                       See
Amd 3 p.22

36

 

27.02                       In
performing the obligations hereunder, Concessionaire is engaged solely in the
capacity of independent contractor, it being expressly understood that no
relationship between the contracting parties hereto other than that of
independent contractor, has been or intended to be created. This concession
agreement does not constitute, and the parties hereto do not intend to create
thereby a partnership, or a joint venture, or a relationship of master and
servant or principal and agent, as it is actually understood and agreed that
the relationship created thereby and the construction of rights and duties
thereunder is to be determined in accordance with the laws relating to owners
and occupants of real property.

 

28.   ENTIRE
AGREEMENT.

 

28.01                       This
document and the exhibits attached hereto, constitutes the entire agreement
between the County and Concessionaire for the concession and use granted at
Frank G. Bonelli Regional County Park for a planned recreational development
therein. All other agreements, promises and representations with respect
thereto, other than contained herein, are expressly revoked, as it has

 

37

 

been the intention of the parties to provide for a complete integration
within the provisions of this document, and the exhibits attached hereto, the
terms, conditions, promises and covenants relating to the concession and the
premises to be used in the conduct thereof. The unenforceability, invalidity,
or illegality of any provision of this agreement shall not render the other
provisions thereof unenforceable, invalid or illegal.

 

28.02                       This
document may be modified only by further written agreement between the
parties hereto. Any such modification shall not be affective unless and until
executed by Concessionaire and in the case of County until approved by the
Board of Supervisors and executed by the Chairman thereof.

 

29.           See Amd 3 p.22

 

38

 

IN WITNESS WHEREOF, Concessionaire has
executed this agreement, or caused it to be duly executed, and County of Los
Angeles, by order of its Board of Supervisors has caused this agreement to be
executed on its behalf by the Chairman of said Board and attested by the
Executive Officer-Clerk thereof, the day and year first above written.

 

	
   

  	
  Specialty Villages, a general partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE] general partner

  	
   

  
	
   

  	
   

  
	
   

  	
  CONCESSIONAIRE

  
	
   

  	
   

  
	
  [SEAL]

  	
  COUNTY OF LOS ANGELES

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Antonovich

  	
   

  
	
   

  	
   

  	
  Chairman, Board of Supervisors

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  JAMES S. MIZE, Executive Officer-

  	
   

  
	
  Clerk of the Board of Supervisors

  	
   

  
	
   

  	
  ADOPTED

  
	
  By

  	
  /s/ Marcia Fredrickson

  	
   

  	
  BOARD OF
  SUPERVISORS

  
	
  Deputy

  	
  COUNTY OF
  LOS ANGELES

  
	
   

  	
   

  
	
   

  	
  14  MAR 8 1983

  
	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
   

  	
  /s/ James S. Mize

  	
   

  
	
  JOHN H. LARSON

  	
  JAMES S.
  MIZE

  
	
  County Counsel

  	
  EXECUTIVE
  OFFICER

  
	
   

  	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
  Deputy

  	
   

  
	
   

  	
   

  
	
  [ILLEGIBLE]

  	
   

  
	
  2/10/83

  	
  I hereby certify that pursuant to

  Section 25103, of the Government Code,

  delivery of this document has been made.

  
	
   

  	
   

  
	
  [SEAL]

  	
  JAMES S. MIZE

  
	
   

  	
  Executive Officer-Clerk of

  
	
   

  	
  the Board of Supervisors

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Marcia Fredrickson

  	
   

  
	
   

  	
  Deputy

  
														

 

 

CLERK’S CERTIFICATE

 

	
  STATE OF CALIFORNIA

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF LOS ANGELES

  	
  )

  

 

On February 6, 1969 the Board of Supervisors
for the County of Los Angeles adopted a resolution pursuant to Section 25103
of the Government Code which authorized the use of facsimile signatures of the
Chairman of the Board on all papers, documents or instruments requiring his
signature.

 

The undersigned hereby certifies that on this 8th
day of March, 1983, the facsimile signature of MICHAEL D. ANTONOVICH Chairman
of the Board of Supervisors of the County of Los Angeles was affixed hereto as
the official execution of this document. The undersigned further certifies that
on this date, a copy of the document was delivered to the Chairman of the Board
of Supervisors of the County of Los Angeles.

 

In witness whereof, I have also hereunto set my hand
and affixed my official seal the day and year above written.

 

	
   

  	
  RICHARD A. SCHOENI, Assistant

  
	
   

  	
  Executive Officer of the Board of

  
	
   

  	
  Supervisors of Los Angeles County

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcia Frederickson

  	
   

  
	
   

  	
  Deputy

  

 

 

 

PUBLIC AGENCY ACKNOWLEDGEMENT

 

	
  STATE OF CALIFORNIA

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF

  	
  )

  

 

                On June 15, 1983, before
me, the undersigned, a notary public in and for said county and state,
personally appeared Marcia Frederickson, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person who executed the
within instrument, as a Deputy of the Clerk of the Board of Supervisors of Los
Angeles County, and acknowledged to me that such Clerk of the Board of
Supervisors of Los Angeles County executed the same.

 

WITNESS
my hand and official seal

 

(Seal)

 

	
   

  	
  /s/ Georgette Waugh

  	
   

  

 

OFFICIAL
SEAL

GEORGETTE
WAUGH

[ILLEGIBLE]

LOS
ANGELES COUNTY

[ILLEGIBLE]

 

 

 

 

EXHIBIT B

 

Beginning
at the northwest corner of Exhibit “A” the boundary will extend west along
the road right-of-way of San Diana Avenue to the 210 Freeway right-of-way. From
that point the boundary will follow the freeway right-of-way southerly to
Coordinate

 

	
  E. 4,342,650

  	
   

  
	
  N. 4,144,960

  	
   

  

 

Boundary
will then extend east to Coordinate

 

	
  E. 4,343,770

  	
   

  
	
  N. 4,144,960

  	
   

  

 

than
to  Coordinate

 

	
  E. 4,344,500

  	
   

  
	
  N. 4,144,980

  	
   

  

 

Boundary
will then parallel old San Diana road northerly to Coordinate

 

	
  E. 4,344,540

  	
   

  
	
  N. 4,145,450

  	
   

  

 

Continuing
in a northeast direction boundary will continue to  Coordinate 

 

	
  E. 4,344,886

  	
   

  
	
  N. 4,145,220

  	
   

  

 

then
directly north to exist chain link fence on  south boundary of the swim park.

 

 

EXHIBIT “C”

 

	
  Beginning at Coordinate

  	
  E. 4,344,500 Boundary will extend south parallel

  
	
   

  	
  N. 4,144,960 

  
	
  to Old San Diana Road to the east side of
  Westlake Park Road and follow 

  
	
  said park road to Coordinate

  	
  E. 4,344,960 then west to Coordinate

  	
  E. 4,344,400

  
	
   

  	
  N. 4,143,890 

  	
  N. 4,143,750

  
	
  then southwest to Coordinate

  	
  E. 4,343,830

  
	
   

  	
  N. 4,143,320

  
	
   

  
	
  At this point the boundary will be defined
  by projecting a line established by an angle north 54[ILLEGIBLE] West, which
  will extend 

  
	
  to the 210 Freeway right-of-way, follow the
  right-of-way north to Coordinate

  	
  E. 4,342,850 then east 

  
	
   

  	
  N. 4,144,960

  
	
   

  	
   

  
	
  to Coordinate

  	
  E. 4,343,770 and then to Coordinate

  	
  E. 4,344,500

  
	
   

  	
  N. 4,144,960

  	
  N. 4,144,960

  
							

 

Exhibit “D”

 

THE BONELLI FAMILY WATERPARK:

CONCEPTS AND DESCRIPTIONS

 

MAIN
PAVILLION

 

Entry
to the swimpark area is through the main pavillion.  Patrons will find everything needed to enjoy
a full day of water activities.  At the
Swim Wear Boutique, adjacent to the Food Faire, pleasant and helpful staff will
assist park patrons to satisfy their every need.

 

A
single paid admission to the swimpark area permits one to enjoy every
attraction as often as desired throughout the day ... but the excitment is just
beginning.

 

SWIMMING
LAGOON  AND  WAVE  COVE

 

At the
heart of the waterpark is the Swimming Lagoon and Wave Cove.  This lushly landscaped central area is
surrounded by a myriad of activities. 
There are cascading waterfalls to swim through, rope swings and cable
slides just like the old swimming hole, water cannons to squirt at one’s
favorite friend with, diving cliffs, mini-slides, a water volleyball court, and
palm covered islands to just lay on and rest. 
The lagoon will be surrounded by white sand beaches.  A terraced stone tropically landscaped
viewing area will provide spectator seating. 
An old fashioned wooden boardwalk will access all of the areas around
the lagoon.

 

Just
beyond the central island, the Wave Cove replicates an ocean beach with
breaking waves.  These waves will vary
from two feet to three feet in height, breaking toward the sandy shore approximately
75 feet from the point at which the wave is generated.

 

The
configuration of the Wave Cove is similar to a normal pool in that it has a
deep and a shallow end. However, it differs in that the shallow and fans out in
an alluvial nature. This widening of our cove will allow the waves generated by
the machinery to dissipate, thus enabling people enjoying the cove to choose
the size of waves they prefer.

 

 

An
island separates the Wave Cove from the Swim Lagoon.  This palm covered atoll will serve as a
resting place for tired swimmers, as well as an elevated viewing station for
our lifeguards.

 

WATERSLIDES

 

Waterslide
Mountain - an adventurer’s delight. 
Those who walk up its winding path will grow with anticipation as they
catch glimpses of boys and girls sliding through the twists and turns around
the trees below. Slipping into the chute, the ride begins with a rush, through
the waterfall, into fast turns, quick drops, and a splashing finale.

 

Facing
off with Waterslide Mountain, in the challenge for the most exciting ride are
the Canyon Waterslide and the Fast Slide. 
The Canyon Waterslide puts a picturesque touch on a relaxing escape from
the everyday would.  But don’t be fooled,
its surprise ending is a sight to behold.

 

For
those who seek the feel of real speed the Fast Slide is the choice.  Climb the tower, slip into the chute, and go
like gangbusters.  It is one steep,
straight drop to the pool below.  Like a
race with time, the Fast Slide is the thrill of thrills among the swimpark’s
many attractions.

 

One
need not choose which slide to ride but rather which slide to ride first.

 

ADULT POOL

 

This
is a passive area for adults only, allowing them the opportunity to get away
from the hustle and bustle of worldly cares. 
A series of hot tubs, spas, and cool dip pools, interspersed with lush
vegetation, rocks, and splashing water provide an ideal setting to just
relax.  Swim-up bars and saunas are possible
(but subject to County approval).

 

PARTICIPATORY
FOUNTAIN

 

The
purpose of the participatory fountain is to allow both adults and youngsters to
experience a variety of both passive and active water effects.

 

CHILDREN’S PLAY
POOL

 

This
concept is similar to the participatory fountain on a smaller scale.  Our intention is to design each component

 

 

of the pool as a new and
different experience.  We will emphasize
water, while retaining the things kids love to do.  Climbing, crawling, jumping, and splashing
become the adventure of imaginative play.

 

QUALITY OF WATERPARK
ENVIRONMENT

 

Every
element of the swimpark complex, including the ample parking area, will receive
the utmost attention of the maintenance staff. 
A clean, well-groomed park is a pleasure to discover and return to.  The whole idea of relaxation is enhanced by
the knowledge that the facilities are clean, safe, and that the staff is well
trained in the services they provide and anxious to assist you in having a
memorable experience.

 

 

 

 

 

 

 

 

THE  FOOD  FAIRE

 

With
all these activities, everyone is bound to work up an appetite.  Fresh fruit carts, juices, and barbequed Polynesian
delights will offer satisfaction to those desirous of a hearty meal or just a
quick snack.

 

Our
food operation will emphasize the freshest, highest quality, most wholesome
food available.  We feel that people
enjoying either the waterpark or picnicing by the lake should have the
opportunity to enjoy good food.  By
serving such items as fresh ground beef in our hamburgers, and all beef hot dogs,
we can accomplish this end. Fresh tropical fruits and juices will highlight our
healthy approach to food service.

 

Furthermore,
it will be our objective to provide good food at affordable prices.  For this reason the swimpark food concession
is not intended as a major profit center. 
Wholesome, top-quality food is expensive to make; however, we feel that
the additional cost of serving superior food is justified by the goodwill generated
among our patrons.

 

Additionally,
to tie into our waterpark group sales concept, special catered picnics will be
offered.  These events will be packaged
plans and will give the guest full use of the waterpark as well as a choice
from an assortment of savory menus.

 

Two of
the great bills of fare we will offer our group guests are:

 

1.             THE
“WESTERN CHUCKWAGON BUFFET”

Spare Ribs &
Barbequed Chicken

Mixed
Green Salad

Corn-On
The-Cob

Potato
Salad

Carrot
Salad

Fresh
Fruit Salad

Baked
Beans

Hot
Rolls & Beverage

 

 

2.             THE
“TAHITIAN LUAU BUFFET”

Sweet &
Sour Ribs, Chicken Polynesian

Beef
Teriyaki

Tahitian
Pineapple Sweet Potatoes

Hawaiian
Vegetables

Tropical
Fruit Salad

Bananas &
Coconut

Fried
Rice & Noodles

Wonton &
Beverage

 

As a
footnote, the price of package plans will vary depending on the menu a group
selects, and the actual member of guests in the group.

 

 

DESCRIPTION:

 

PARCEL 1:

 

THAT PORTION OF TRACT NO.
17[ILLEGIBLE]6, SHEET NO. 2 IN THE CITY OF SAN DIMAS, IN THE COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS SHOWN ON MAP FILED IN BOOK 22 PAGES 38 AND 39 OF MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AND THAT PORTION OF TRACT
NO. 1796, SHEET NO. 3, IN SAID CITY, AS SHOWN ON MAP FILED IN BOOK 22 PAGES 42
AND 43 OF SAID MAPS, WITHIN THE FOLLOWING DESCRIBED BOUNDARIES:

 

COMMENCING AT THE
EASTERLY TERMINUS OF THAT CERTAIN COURSE OF NORTH 75 DEGREES 00 MINUTES 00
SECONDS EAST 1537.46 FEET IN THE CENTER LINE OF THAT CERTAIN 60.00 FOOT STRIP
OF LAND DESCRIBED IN PARCEL 5[ILLEGIBLE] OF LIS PENDENS RECORDED AS DOCUMENT
NO. 24[ILLEGIBLE]2 ON AUGUST 6, 1968 IN BOOK M-2941 PAGE 387, OFFICIAL
RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE SOUTH 74
DEGREES 59 MINUTES 27 SECONDS WEST ALONG SAID CERTAIN COURSE 443.95 FEET;
THENCE SOUTH 23 DEGREES 3[ILLEGIBLE] MINUTES 15 SECONDS WEST 3[ILLEGIBLE].41
FEET TO A POINT IN THE SOUTHERLY BOUNDARY OF SAID CERTAIN [ILLEGIBLE]0.00 FOOT
STRIP OF LAND SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE CONTINUING
SOUTH 23 DEGREES 3[ILLEGIBLE] MINUTES 15 SECONDS WEST [ILLEGIBLE] FEET TO A
POINT DISTANT SOUTH 23 DEGREES 3[ILLEGIBLE] MINUTES 15 SECONDS WEST THEREON 12[ILLEGIBLE].0[ILLEGIBLE]
FEET FROM SAID CERTAIN COURSE; THENCE SOUTH 50 DEGREES 52 MINUTES 32 SECONDS WEST
556.54 FEET; THENCE SOUTH 34 DEGREES 13 MINUTUES 30 SECONDS EAST 362.71 FEET;
THENCE SOUTH 25 DEGREES [ILLEGIBLE] MINUTES 50 SECONDS EAST [ILLEGIBLE] FEET;
THENCE SOUTH 7 DEGREES 17 MINUTES 32 SECONDS WEST [ILLEGIBLE] FEET; THENCE
SOUTH 53 DEGREES 5[ILLEGIBLE] MINUTES 17 SECONDS WEST 132.[ILLEGIBLE] FEET;
THENCE SOUTH 23 DEGREES 53 MINUTES 0[ILLEGIBLE] SECONDS EAST 1[ILLEGIBLE]9.2[ILLEGIBLE]
FEET; THENCE SOUTH 61 DEGREES 36 MINUTES 49 SECONDS EAST 261.09 FEET; THENCE
SOUTH [ILLEGIBLE]1 DEGREES 11 MINUTES 24 SECONDS EAST 211.32 FEET; THENCE NORTH
40 DEGREES 22 MINUTES 21 SECONDS EAST 161.28 FEET; THENCE NORTH 69 DEGREES 51
MINUTES 0[ILLEGIBLE] SECONDS EAST 362.[ILLEGIBLE]5 FEET; THENCE NORTH 57
DEGREES 06 MINUTES 56 SECONDS EAST 140.00 FEET; THENCE NORTH 72 DEGREES 36
MINUTES 56 SECONDS EAST 157.00 FEET; THENCE SOUTH 77 DEGREES 23 MINUTES 04
SECONDS EAST 253.00 FEET TO THE WESTERLY BOUNDARY OF THAT CERTAIN 60 FOOT STRIP
OF LAND DESCRIBED IN DEED TO COUNTY OF LOS ANGELES FOR SAN DIMAS AVENUE
(FORMERLY SAN DIMAS-SPADRA ROAD), RECORDED ON MAY 1[ILLEGIBLE], 1935 IN
BOOK 13459 PAGE 67 OF SAID OFFICIAL RECORDS; THENCE NORTHERLY AND NORTHEASTERLY
ALONG SAID SAN DIMAS AVENUE TO THE MOST NORTHERLY CORNER OF SAID CERTAIN 60
FOOT STRIP OF LAND SAID MOST NORTHERLY CORNER BEING THE SOUTHWESTERLY TERMINUS
OF THAT CERTAIN COURSE OF SOUTH 25 DEGREES 50 MINUTES 10 SECONDS WEST [ILLEGIBLE]5.46
FEET IN THE NORTHWESTERLY BOUNDARY OF SAN DIMAS AVENUE, AS SHOWN ON COUNTY
SURVEYOR’S MAP NO. [ILLEGIBLE]-5071. ON FILE IN THE OFFICE OF THE COUNTY
ENGINEER OF THE COUNTY OF LOS ANGELES; THENCE NORTHEASTERLY, NORTHERLY AND
NORTHWESTERLY ALONG SAID SAN DIMAS AVENUE, TO THE SOUTHWESTERLY BOUNDARY OF
THAT CERTAIN 60 FOOT STRIP OF LAND DESCRIBED IN DEED TO COUNTY OF LOS ANGELES
FOR SAN DIMAS AVENUE (FORMERLY SAN DIMAS-SPADRA ROAD), RECORDED AS DOCUMENT NO.
10[ILLEGIBLE]0 ON FEBRUARY 2, 1931 IN BOOK 10633, PAGE [ILLEGIBLE] OF SAID
OFFICIAL RECORDS; THENCE NORTHWESTERLY, NORTHERLY AND NORTHEASTERLY ALONG THE
SOUTHWESTERLY, WESTERLY AND NORTHWESTERLY BOUNDARIES OF SAID LAST MENTIONED
CERTAIN 60 FOOT STRIP OF LAND TO THE EASTERLY LINE OF LOT 12, SAID TRACT NO. 1796,
SHEET NO. 2; THENCE NORTHERLY ALONG SAID EASTERLY LINE AND ITS NORTHERLY
PROLONGATION TO A CURVE CONCENTRIC WITH AND 20 FEET SOUTHEASTERLY MEASURED
RADIALLY FROM THAT CERTAIN [ILLEGIBLE] FOOT RADIUS CURVE IN THE EASTERLY,
SOUTHEASTERLY AND SOUTHERLY BOUNDARIES OF LOT 13, SAID LAST MENTIONED TRACT;
THENCE SOUTHWESTERLY AND WESTERLY ALONG SAID CONCENTRIC CURVE TO A LINE
PARALLEL WITH AND 20 FEET SOUTHERLY, MEASURED AT RIGHT ANGLES, FROM THAT
CERTAIN COURSE OF SOUTH 77

 

EXHIBIT “A”

 

1

 

 

AMENDMENT NO. 1 TO
CONCESSION AGREEMENT NO. 43893

FOR CONSTRUCTION,
MAINTENANCE AND OPERATION OF A PLANNED

RECREATIONAL
DEVELOPMENT AT

FRANK G. BONELLI
REGIONAL COUNTRY SWIM PARK

 

This Amendment to
Consession Agreement made this 6th day of May, 1986,

 

	
  BY AND BETWEEN

  	
   

  	
  COUNTY
  OF LOS ANGELES, a body corporate and politic, hereinafter referred to as
  "County",

  
	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
  RAGING
  WATERS, a partnership, and BRYANT L. MORRIS, an individual, hereinafter
  referred to as "Concessionaire",

  

 

WITNESSETH:

 

WHEREAS, pursuant to
Concession Agreement No. 43893 hereinafter referred to as the Concession
Agreement, Specialty Villages, a general partnership and Bryant L. Morris,
a general partner, were granted the right to construct; operate and maintain a
planned recreational development at Frank G. Bonelli Regional County Swim
Park; and

 

WHEREAS, on May 5, 1983
Specialty Villages, a general partnership and Bryant L. Morris, a general
partner, consented to an assignment of the Concession Agreement to Raging
Waters, a partnership, and Bryant L. Morris, an individual; and

 

WHEREAS, the Concessionaire
has used its best efforts but may be unable to acquire the required ONE MILLION
DOLLARS ($1,000,000) insurance coverage due to the current industry-wide
insurance crisis; and

 

 

1

 

WHEREAS, both parties agree that the aforementioned
circumstances (1) are beyond the control of the Concessionaire and (2) were unknown
to either the County or the Concessionaire at the commencement of the contract
term; and 

 

WHEREAS, the cost of commercial insurance, if
available, will impose a substantial and harsh burden on the Concessionaire,
and

 

WHEREAS, if Concessionaire obtains the required ONE
MILLION DOLLAR ($1,000,000) commercial insurance coverage per Contract No.
[ILLEGIBLE], County is agreeable to modify the rent provisions; and 

 

WHEREAS, there is further need to modify the insurance
requirements of the Concession Agreement to allow the Concessionaire to
self-insure for third party liability on its concession operations;

 

NOW, THEREFORE, in consideration of the mutual
promises, covenants and conditions set forth herein, the parties hereto and
each of them do agree as follows:

 

1.                                       OPERATIVE
DATE

 

The effective date of this amendment shall be the date
of approval thereof by the Board of Supervisors, and shall continue for one (1)
year and at the option of the Director from year to year thereafter unless
otherwise modified or terminated by the Director.

 

2.                                       PAYMENT

 

Subparagraph 4.01(c) is added as follows:

 

“c. Notwithstanding the provisions set forth above,
Concessionaire shall only pay percentage rent calculated on gross receipts
received by Concessionaire in excess of ONE MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS ($1,250,000) during each contract year.”

 

2

 

3.                                       RENTAL
CREDIT

 

Paragraph 8.07 is added as follows:

 

“8.07 Notwithstanding the provisions set forth above,
Concessionaire shall be allowed reimbursement of the applicable rental credit
and County’s rent credit obligation shall not be reduced as determined
hereinabove during the term of this amendment.”

 

4.                                       INDEMNIFICATION

 

Nothing in these provisions shall relieve Concessionaire
of the obligation to indemnify and defend County as set forth in paragraph 14.

 

5.                                       INSURANCE

 

5.01 Paragraph 15.01 is hereby deleted and the
following paragraph is substituted therefore:

 

“15.01 Concessionaire shall purchase on or before commencement
of the Concession, policies of liability and worker’s compensation insurance
from companies authorized to transact business in the State by the Insurance
Commissioner thereof. In lieu thereof, Concessionaire may establish a program
of funded self insurance, upon notification and approval by the County Risk
Manager, for comprehensive general liability covering its operation herein.

 

5.02 Paragraph 15.04 is hereby deleted.

 

6.                                       RATIFICATION

 

All other terms, conditions, covenants and promises of
the Concession Agreement not affected by the provision of this supplemental
agreement shall remain in full force and effect and are hereby reaffirmed.

 

3

 

IN WITNESS WHEREOF, Concessionaire has executed this
agreement, or, caused it to be duly executed, and County of Los Angeles, by
order of its Board of Supervisors, has caused this agreement to be executed on
its behalf by the Chairman of said Board and attested by the Executive
Officer-Clerk of the Board on the day and year above written.

 

 

	
   

  	
  CONCESSIONAIRE

  
	
   

  	
   

  
	
   

  	
  RAGING WATERS, a partnership

  
	
   

  	
  BRYANT L. MORRIS, an Individual

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RAGING WATERS, INC.

  
	
   

  	
   

  	
  a California Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  BRYANT L. MORRIS, President

  
	
   

  	
   

  	
  and as an Individual

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  COUNTY OF LOS ANGELES

  
	
   

  	
   

  	
   

  
	
   

  	
  [SEAL]

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman, Board of Supervisors

  

 

	
  ATTEST:

  	
  ADOPTED

  
	
   

  	
  BOARD OF SUPERVISORS

  
	
  LARRY J. MONTEILH,

  	
  COUNTY OF LOS ANGELES

  
	
  Executive Officer-Clerk of

  	
   

  
	
  the Board of Supervisors

  	
  MAY 06 1986

  
	
   

  	
  /s/ Larry J. Monteilh

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  LARRY J. MONTEILH

  
	
   

  	
  Deputy

  	
   

  	
  EXECUTIVE OFFICER

  

 

 

	
  APPROVED AS TO FORM

  
	
   

  
	
  DEWITT W. CLINTON

  
	
  County Counsel

  
	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Deputy

  	
   

  	
   

  

 

4

 

NOW, THEREFORE, in consideration of the mutual
promises, covenants and conditions set forth herein, the parties hereto and
each of them do agree as follows:

 

1.                                       PAYMENT

 

1.01 Paragraph 4.04 of the Concession Agreement
is amended to provide that “Payment shall be made to the Auditor-Controller on
or before the fifteenth (15th) day of the calendar month following each month
of the term provided herein. Payment may be made by check or draft issued and
payable to the Department of Parks and Recreation, County of Los Angeles, and
mailed or otherwise delivered to said office at [ILLEGIBLE] South Vermont
Avenue, Los Angeles, California 90020, Attention: Fiscal Division. A late
payment charge of two percent (2%) per month shall be added to any late payment
received by the Auditor-Controller after the last day of the calendar month in
which payment is due. However the penalty herein provided may be waived,
whenever the Director finds it’s payment excusable by reason of extenuating
circumstances. County shall not be obligated at any time during the term herein
provided to notify Concessionaire of the accumulation of late payment
penalties.

 

2.                                       RATIFICATION

 

2.01 All other terms, conditions, covenants and
promises of the Concession Agreement not affected by the provisions of this
Amendment to the Concession Agreement shall remain in full force and effect and
are hereby reaffirmed.

 

3.                                       OPERATIVE
DATE

 

3.01 The effective date of this Amendment shall be the
first day of the month next succeeding the date of execution thereof by the
County.

 

2

 

IN WITNESS WHEREOF, Concessionaire has executed this
Amendment, or caused it to be duly executed, and County of Los Angeles, by
order of its Board of Supervisors, has caused this Amendment to the Concession
Agreement to be executed on its behalf by the Director, Department of Parks and
Recreation, or an authorized representative thereof and attested by the
Executive Officer-Clerk of the Board thereof, on the day and year first above
written. 

 

 

	
   

  	
  CONCESSIONAIRE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  RAGING WATERS, a partnership

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  BRYANT L. MORRIS, an individual

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COUNTY OF LOS ANGELES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Ralph S. Cryder

  	
   

  
	
   

  	
   

  	
  Ralph S. Cryder, Director

  
	
   

  	
   

  	
  Department of Parks and Recreation 

  
					

 

	
  APPROVED AS TO FORM:

  
	
   

  
	
  DE WITT W. CLINTON

  
	
  County Counsel

  
	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Deputy

  	
   

  	
   

  

 

3

 

SUPPLEMENT 3

 

AMENDMENT NUMBER 3 TO
CONCESSION AGREEMENT

NUMBER 43893 FOR CONSTRUCTION, MAINTENANCE AND OPERATION 

OF A PLANNED RECREATIONAL DEVELOPMENT AT

FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

THIS AMENDMENT TO CONCESSION AGREEMENT, made this 5th day of
December, 1989.

 

	
  BY AND BETWEEN

  	
   

  
	
   

  	
  COUNTY OF LOS ANGELES, a body

  
	
   

  	
  corporate and politic hereinafter

  
	
   

  	
   

  
	
   

  	
  referred to as “County”

  
	
  AND

  	
   

  
	
   

  	
  RAGING WATERS, a California

  
	
   

  	
  Partnership, hereinafter referred

  
	
   

  	
  to as “Concessionaire”.

  

 

W I T
N E S S E T H:

 

WHEREAS, the Concessionaire has satisfactorily
performed pursuant to a Concession Agreement dated March 8, 1983; and

 

WHEREAS, Concessionaire and County are committed to
continuing to provide quality services and facilities to the public; and

 

WHEREAS, Concessionaire and County are in agreement
that the modifications set forth below will assure high quality services and
facilities;

 

NOW, THEREFORE, in consideration of the mutual
promises, covenants and conditions set forth herein, the parties hereto and
each of them do agree as follows:

 

1.                                     CONCESSION
GRANTED

 

Paragraph 1 is hereby deleted and the following
paragraph is substituted therefore:

 

1

 

“1.01                     Concessionaire is hereby
authorized to lease the premises as described herein, operate a planned
recreation development, charge admission and parking fees, sell food and
beverages and merchandise, and engage in other such activities that promote
family recreation and entertainment as may be hereinafter approved by the
Director.”

 

2.                                       CONCESSION
PREMISES

 

Paragraph 2.01 is hereby deleted and the following
paragraph is substituted therefore:

 

“2.01                     The concession shall be conducted
on the lands described in Exhibit 1 attached hereto, that are hereby leased,
let and hired for use as a planned recreational development. Further,
references in this amendment and in agreement Number 43893 to Exhibit A shall
be deemed Exhibit 1 Area A and references to Exhibit B shall be deemed Exhibit
1 Area B.”

 

2.5                                 OPTION

 

Sub-paragraph 2.15.16 is hereby deleted.

 

3.                                       TERM

 

Paragraph 3.01 is hereby deleted and the following
paragraph is substituted therefore:

 

“3.01                     The term of the concession shall
be for a period commencing March 8, 1983 and ending December 31, 2009.”

 

Paragraph 3.02 is hereby deleted and the following
paragraph is substituted therefore:

 

“3.02                     In the event Concessionaire holds
over beyond the term herein provided with the consent, expressed or implied of County,
such holding shall be from month-to-month only, subject to the conditions of
this agreement; shall not be a renewal thereof; and shall be at the monthly
compensation provided

 

2

 

herein. Concessionaire shall have the option to renew this agreement
for an additional consecutive twenty-five (25) year term on the same terms and
conditions as set forth in this agreement. In the event Concessionaire intends
to exercise said option, written notice thereof shall be provided to the
Director at least three (3) years and one hundred and eighty (180) days prior
to the expiration date of the term provided for herein.”

 

4.                                       PAYMENT

 

Paragraph 4.01 is deleted and the following paragraphs
are hereby substituted therefore:

 

“4.01                     Concessionaire shall pay County
for the concession and use granted herein the greater of the following amounts:

 

a.                                       Four
Hundred Fifty Thousand Dollars ($450,000) per year;

 

or

 

b.                                      A
percentage of the [ILLEGIBLE] gross receipts from admission fees, the sale of
food and beverage, video game machines, vending machines, merchandise, parking,
facility rental, equipment rental and any and all other sales, fees, rentals
and services for the term of this concessions and any extension thereof as
follows:

 

1)                                      Operational
year commencing on January 1, 1990, through December 31, 1999 – six and
one–half percent (6 1/2%);

2)                                      Operational
year commencing on January 1, 2000, and thereafter – seven percent (7%).

 

c.                                       When
the Director and Concessionaire find that a percentage of gross receipts is not
suitable or applicable for a particular activity not otherwise provided for
herein, the Director may establish an annual minimum amount or a percentage as
payment for the privilege of 

 

3

 

 

engaging therein.  Said amount
shall be set by mutual consent of the Director and the Concessionaire and shall
be reasonable in accordance with the revenue to be generated therefrom.”

 

d.             The
percentage(s) of the monthly gross receipts and/or annual minimum provided for
herein shall be subject to readjustment upon demand therefore by either party
within ninety (90) days next preceding the first annual anniversary date of
this agreement.  Thereafter, said
percentage(s) and/or annual minimum shall be subject to readjustment upon
demand therefor by either party within ninety (90) days of the end of every two
(2) year period following said anniversary date for the remainder of the term
herein provided.  Said percentage(s)
and/or annual minimum shall be readjusted by mutual agreement within thirty
(30) days of demand therefor; and in the absence thereof, by submission of the
controversy thereon to arbitration under the Commercial Arbitration Rules of
the American Arbitration Association, except as hereinafter modified; the
locale for the arbitration shall be within the City of Los Angeles; the sole
issue for determination by the arbitrator shall be the fair rental value for
the concession and use granted herein in accordance with the terms and
conditions therefor as specified herein; and the expenses subject to assessment
by the arbitrator shall be borne equally by the parties.  In the event the final determination of the
percentage(s) and/or annual minimum subject to readjustment is delayed beyond
the date for commencement thereof, Concessionaire shall continue to make
monthly payments based upon the percentage(s) and annual minimum of the preceding
period; the final determination thereof shall be retroactive to the anniversary
date therefor; and proper adjustment shall be made for payments made during
said interim based upon the preceding amounts therefor with any

 

4

 

 

overpayment being credited against future rentals reserved and any
delinquency being paid on or before the twenty-fifth (25th) day of the month
next succeeding the date of final determination.”

 

e. [ILLEGIBLE] See Amd 3A p.3

 

Paragraph 4.02 is hereby deleted and the following
paragraph is hereby substituted therefore.

 

“4.02       Payment
shall be made to County’s Department of Parks and Recreation on or before the
fifteenth (15th) day of the calendar month following each month of the term
provided for herein. Payment shall be made by check or draft issued and payable
to the County of Los Angeles Department of Parks and Recreation, and mailed to
the County of Los Angeles, Department of Parks and Recreation, c/o
Treasurer-Tax Collector, P.O. Box 54927, Los Angeles, California 90054-0927 or
such other place as may hereafter be designated in writing to the
Concessionaire. A late payment charge of two percent (2%) per month shall be
added to any late rental payment that is received after the last day of the
calendar month in which payment is due. However, the late payment charge herein
provided may be waived whenever the Director, upon appeal by Concessionaire,
finds the late payment excusable by reason of extenuating circumstances. County
shall not be obligated at any time during the term provided herein to notify
the Concessionaire of the accumulation of late payment charges.”

 

Paragraph 4.03 and 4.04 are hereby deleted.

 

5.             ACCOUNTING RECORDS

 

No revisions.

 

6.             REQUIRED
CONSTRUCTION

 

No revisions.

 

5

 

7.             ADDITIONAL CAPITAL
IMPROVEMENT

 

Paragraph 7 is hereby deleted and the following
paragraph is substituted therefore:

 

“7.01       Director
and Concessionaire shall agree from time to time that various capital
improvement(s) mutually agreed upon, shall be completed by Concessionaire on
the land described in Exhibit 1 Area A as necessary to improve and/or insure
the useability of the premises. The Concessionaire agrees and understands that
the authorization granted by County of a portion of gross receipts for the
purpose of providing capital improvement funding as set forth below is based
upon the County’s intention that expenditures will be directed to capital
improvements authorized by this paragraph. Further, the Concessionaire agrees
and understands that the funding allocation as set forth in this paragraph is
the sole source of revenue from the County for said projects. In no event shall
monies paid to County, pursuant to paragraph 4 above, be utilized for
expenditures authorized under this paragraph. By way of definition, these
capital improvements shall include those items and costs associated with the
design, engineering, permitting, bonding, financing, and construction including
but not limited to labor, material and supervision for:

 

a.             New
rides, landscaping, attractions, and parking areas;

 

b.             Improvements
which result in an increase of in-park revenue such as additional food
facilities, retail shops, games and picnic facilities;

 

c.             Rehabilitation
of an existing ride, landscaping, attraction, parking area, food facility,
retail shop, game and picnic facility, but only to the extent that such
rehabilitation is adding a new improvement to an existing fixture and is not
for maintenance purposes.

 

d.             Improvements
which increase the safety and security of park patrons and employees.

 

6

 

7.02         An annual
Capital Improvement Program for such additional capital improvements shall be
prepared by Concessionaire and approved by the Director and shall indicate the
description of the improvements to be made, the estimated improvement costs,
and the projected time frame for commencement and completion of the
improvement.

 

7.03         Prior to
commencement of construction, Concessionaire shall submit to Director for
reasonable approval all plans, specifications and construction cost estimates
for the improvements to be constructed upon the demised premises. Within
twenty-one (21) business days of submittal, Director shall notify
Concessionaire as to Capital Improvement Program approval in part or in whole
with comment and recommendation for those parts not approved. Director shall
signify acceptance or rejection by delivering to Concessionaire, within said
period, as reviewed Capital Improvement Program submittal with each page marked
“approved” or “rejected”, as the case may be, and initiated by Director. If
Director does not deliver a reviewed Capital Improvement Program so marked to
Concessionaire within this period of time, it shall be deemed that County has
accepted the Capital Improvement Program in its entirety. Upon approval by
Director, no modification of said plans, specifications, or improvements,
including landscaping, shall be made by Concessionaire without further approval
thereof by the Director. Concessionaire agrees that County may have on the site
at any time during the construction improvement period an inspector who shall
have the right of access to the premises and the construction work.

 

7.04         The parties agree
that any delay in the construction due to fire, earthquake, war, labor dispute
or other events beyond the control of Concessionaire shall extend the time in
which said construction must be completed by the length of time of such delay.

 

7

 

7.05         Concessionaire
shall construct, perform, complete and maintain all construction and
installations covered by this agreement in a good and workmanlike manner and
with high quality materials, and shall furnish all tools, equipment, labor and
material necessary to perform and complete the same, and hereby expressly
warrants that all said materials and workmanship will be free from defects.

 

7.06         It is
understood that the construction and/or improvements required herein may, at
the discretion of Concessionaire, be constructed in phases, each phase being
separated from the other by a period of time to be mutually agreed upon by
Concessionaire and the Director. In no event shall the phasing of the
construction required herein extend the completion thereof beyond the date
heretofore provided. Should the required construction be phased as herein
provided, diligent prosecution thereof shall require commencement of each phase
on or before the date selected for commencement thereof.

 

7.07         Commencing
with the operational year starting on January 1, 1990, Concessionaire agrees to
retain six and one-half percent (6 1/2%) of gross receipts for purposes of
reinvestment into additional capital improvements as contemplated pursuant to this
paragraph. The amounts so retained are hereinafter referred to as Retained
Capital Improvement Funds. Additionally, Concessionaire agrees to submit,
within sixty (60) days of the end of each operational year a report of, final
costs verifying expenditures of any and all Capital Improvement Projects
authorized herein.

 

7.07.01    Commencing
with the operational year starting on January 1, 2000, and thereafter,
Concessionaire shall retain six percent (6%) of gross receipts for purposes of
reinvestment into capital improvements. Additionally, Concessionaire shall
increase the rent payment to County, as provided in paragraph 4, to seven
percent (7%) of gross receipts.

 

8

 

7.08         It is
understood that Concessionaire is not required to spend the Retained Capital
Improvement Funds as earned. Beginning with the effective date of this
amendment, rather, Concessionaire may accumulate up to three (3) years of
Retained Capital Improvement Funds prior to spending such funds for a Capital
Improvement. If Concessionaire fails to expend all funds accumulated including
the interest earned thereon, if any, within six (6) months following the ending
of said three (3) year period, the remaining funds shall be paid to County by
Concessionaire within thirty (30) days upon demand. For example, if
Concessionaire fails to expend any or all of the Retained Capital Improvement
Funds for the operational years 1990, 1991 and 1992, said funds shall be paid
to and retained by County.

 

7.09         Concessionaire,
at its option, may choose to spend in excess of the monies accumulated in the
Retained Capital Improvement Fund, whereupon, Concessionaire shall receive a
credit in like amount as against future required funding to the Retained
Capital Improvement Fund. Notwithstanding this provision, Concessionaire shall
not be entitled to reimbursement from the Retained Capital Improvement Fund for
capital improvement credit that is outstanding as of the commencement of the
final three (3) year period of this agreement. Additionally, at the
commencement of said final three (3) year period, all unexpended funds shall be
paid to and retained by County.

 

7.10         In lieu of
retaining Capital Improvement Funds during the final three (3) years of this
Agreement and in addition to the rent provided for in paragraph 4.01,
Concessionaire shall increase the rent due to the County by an amount equal to
the required funding of the Retained Capital Improvement Fund. However, in the
event Concessionaire exercises the option as set forth in paragraph 3.02,
Concessionaire may continue to utilize Retained Capital Improvement Funds as
authorized herein.

 

9

 

8.             RENTAL CREDIT

 

Paragraph 8 is hereby deleted.

 

9.             BONDS

 

No revisions.

 

10.           OPERATING
RESPONSIBILITIES

 

Paragraph 10.05 is hereby deleted and the following
paragraph is substituted therefore:

 

“10.05     Signs

 

a.             Concessionaire
shall not post signs or advertising matter that shall be visible to the public
outside the concession premises unless prior approval therefor is obtained from
the Director.

 

b.             Director
reserves the right to request Concessionaire to remove or repair
Concessionaire’s signs or advertising material, whether or not visible to the
public from any location within or outside of the concession premises, that he
reasonably deems objectionable.”

 

Paragraph 10.07 is deleted and the following
subparagraphs are hereby substituted therefore:

 

“10.07     Concession
Staff

 

10.07.01  Concessionaire
shall maintain an adequate and proper staff. The Director may at any time give
Concessionaire written notice to the effect that the conduct or action of a
designated employee of Concessionaire is, in the reasonable belief of the
Director, detrimental to the interest of the public patronizing the premises.
Following Director’s written notice therefor Concessionaire shall, at
Director’s discretion: (1) terminate such employee’s work assignment at Raging
Waters, or (2) Concessionaire shall meet with

 

10

 

representatives of the Director to consider the appropriate course of
action with respect to such matter and Concessionaire shall take reasonable
measures under the circumstances to assure the Director that the conduct and
activities of Concessionaire’s employee will not be detrimental to the interest
of the public patronizing the premises.

 

10.07.02  Concessionaire
shall designate one member of the staff as the Concession Manager with whom
County may deal on a daily basis. County prefers that the Concession Manager be
an officer or partner. Any other persons selected by Concessionaire as
Concession Manager shall be skilled in the management of businesses similar to
the Concession and shall be subject to approval by the Director. The Concession
Manager shall devote substantial time and attention to the operation of the
Concession and render such services and convenience to the public as are
required. The Concession Manager shall be fully acquainted with the Concession;
familiar with the terms and conditions prescribed therefor by this agreement;
and authorized to act in the day-to-day operation thereof. Concessionaire shall
file with the Director a certificate for each member of the food Concession
staff showing that within the last two (2) years such person has been examined
and has been found to be free of communicable tuberculosis. “Certificate” means
a document signed by the examining physician and surgeon who is licensed under
Chapter 5 (commencing with Section 2000), Division 2 of the State Business and
Professions Code, or a notice from a public health agency or unit of the
Tuberculosis Association which indicates freedom from active tuberculosis.”

 

11

 

Paragraph 10.08 is deleted and the following paragraph
is hereby substituted therefore:

 

“10.08     Days
and Hours of Operation

 

At a minimum, Concessionaire shall keep the Concession
facilities open every day including holidays from June 16, through Labor Day,
except during periods of inclement weather, each year during the term of this
agreement. Concessionaire shall have the right to open during such other
periods as are economically prudent. The minimum hours of operation shall be
10.00 a.m to 6:00 p.m. each day the Concession facilities are required to be
open. Concessionaire shall have the right to extend its operating hours as are
economically prudent and are not in violation of any County ordinance. Any
changes in the minimum days and minimum hours for operation heretofore
prescribed shall be subject to prior approval by the Director.”

 

Paragraph 10.18 is deleted and the following paragraph
is hereby substituted therefore:

 

“10.18     Concessionaire
warrants that it shall fully comply with all laws regarding employment of
aliens and others, and that all its employees performing services hereunder
meet the citizenship or alien status requirements contained in Federal and
State statutes and regulations including, but not limited to, the Immigration
Reform and Control Act of 1986 (P.L. 99-603). Concessionaire shall obtain, from
all covered employees performing services hereunder, all verification and other
documentation of employment eligibility status required by Federal statutes and
regulations as they currently exist and as they may be hereafter amended.
Concessionaire shall retain such documentation for all covered employees for
the period prescribed by law. Concessionaire shall indemnify, defend, and hold
harmless, the County, its officers and employees from employer sanctions and
any other liability which

 

12

 

may be assessed against Concessionaire or County or both in connection
with any alleged violation of Federal statutes or regulations pertaining to the
eligibility for employment of persons performing services under this
agreement.”

 

11.           DESTRUCTION OF
CONCESSION PREMISES AND/OR FRANK G. BONELLI SWIM PARK

 

No revisions.

 

12.           CONSTRUCTION
BY COUNTY AFFECTING CONCESSION PREMISES AND/OR FRANK G. BONELLI REGIONAL COUNTY
PARK

 

No revisions.

 

13.           SECURITY
DEPOSIT

 

No revisions.

 

14.           HOLD
HARMLESS AND INDEMNIFICATION

 

Paragraphs 14.01 and 14.02 are deleted and the
following paragraph is hereby substituted therefore:

 

“14.01     Concessionaire
agrees to indemnify, defend and save harmless the County and Los Angeles County
Flood Control District, their agents, officers ad employees from and against
any and all liability, expense, including defense costs and legal fees, and
claims for damages of any nature whatsoever, including, but not limited to,
bodily injury, death, personal injury, or property damage arising from or
connected with Concessionaire’s operations or its services hereunder, including
any workers’ compensation suits, liability or expense, arising from or
connected with services performed on behalf of Concessionaire by any person
pursuant to this agreement.

 

13

 

Concessionaire’s duty to indemnify the County and Los Angeles County
Flood Control District shall survive the expiration or other termination of this
agreement.”

 

15.           INSURANCE

 

Paragraphs 15.01, through 15.07 inclusive are deleted
and the following paragraphs are hereby substituted therein:

 

“15.01             Without
limiting Concessionaire’s indemnification of the County, and Los Angeles County
Flood Control District, Concessionaire shall provide and maintain at its own
expense during the term of this agreement the following program(s) of insurance
covering its operations hereunder. In lieu thereof, Concessionaire may
establish a program of funded self insurance, upon notification of and approval
by the County Risk Manager, for comprehensive general liability covering its
operation herein. Such insurance shall be provided by insurer(s) satisfactory
to County’s Risk Manager and evidence of such programs satisfactory to County
shall be delivered to the Director on or before the effective date of this
agreement. Such evidence shall specifically identify this agreement and shall
contain express conditions that County is to be given written notice as least
thirty (30) days in advance of any modification or termination of any program
of insurance. Such insurance shall be primary to and not contributing with any
other insurance maintained by County and, with the exception of Worker’s
Compensation Insurance, shall name the County, and the Los Angeles County Flood
Control District as additional insureds:

 

15.01.01          Concessionaire
shall provide and maintain the following forms and amounts of insurance:

 

a.     Liability

 

Comprehensive General
Liability Insurance endorsed for Independent Contractor, Premises-Operations,
Products/Completed Operations,

 

14

 

Contractual, Broad Form Property Damage, and Personal injury with a
combined single limit of not less than ONE MILLION DOLLARS ($1,000,000) per
occurrence. If such insurance is written on a Claims Made Form, such insurance
shall be endorsed to provide an extended reporting period of not less than five
years following termination of this agreement.

 

b.     Workers’
Compensation

 

A program of Workers’ Compensation insurance in an
amount and form to meet all applicable requirements of the Labor Code of the
State of California, including Employer’s Liability with a ONE HUNDRED THOUSAND
DOLLARS ($100,000) limit covering all persons providing services by or on
behalf of Concessionaire and all risks to such persons under this agreement.

 

c.     Property
Coverage

 

(1) Real Property - All Risk insurance, including
flood, for the full insurable replacement value with a deductible no greater
than five percent (5%) for all-risk related coverages and (2) Personal
Property-Insurance for the actual cash value against the hazards of fire,
theft, burglary, vandalism and malicious mischief.

 

15.01.02          During
the period(s) of construction as required herein, Concessionaire shall provide
the following forms and amounts of insurance:

 

a.     Builder’s
All-Risk Insurance

 

Including flood coverage covering the entire work,
against loss or damage until completion and acceptance by the Director.
Insurance shall be in an amount for the replacement value of the construction
required and endorsed for broad form property damage, breach of warranty,
explosion, collapse, and underground hazards. Deductibles not exceeding five
percent (5%) of the construction cost will be permitted.

 

15

 

 

b.     Comprehensive
General Liability

 

Insurance endorsed for Independent Contractor,
Premises-Operations, Products/Completed Operations, Contractual, Broad Form
Property Damage, and Personal Injury with a combined single limit of not less
than ONE MILLION DOLLARS ($1,000,000) per occurrence.

 

c.     Comprehensive
Auto Liability

 

Endorsed for all owned and non-owned vehicles with a
combined single limit of at least THREE HUNDRED THOUSAND DOLLARS ($300,000) per
occurrence.

 

d.     Workers’
Compensation

 

A program of Workers’ Compensation insurance in an
amount and form to meet all applicable requirements of the Labor Code of the
State of California, including Employer’s Liability with a ONE HUNDRED THOUSAND
DOLLARS ($100,000) limit covering all persons providing services by or on
behalf of Concessionaire and all risks to such persons under this agreement.

 

15.02               Failure
on the part of Concessionaire to procure or maintain required insurance shall
constitute a material breach of contract upon which County may immediately
terminate this agreement.

 

15.03               Conduct
of Concessionaire’s operations shall not commence until Concessionaire has
compiled with the aforementioned insurance requirements. Further, said
operations, whether in whole or in part, shall be subject to suspension by the
Director during any period that Concessionaire fails to maintain said policies
in full force and effect.

 

15.04               The
specified amount of liability insurance required herein may be subject to
renegotiation on an annual basis. Should either party request renegotiation
with respect to the amount of liability insurance to be provided,

 

16

 

the determination thereof shall be established through mutual
negotiations between the parties. Concessionaire shall continue to provide
liability insurance in the amount currently being provided pending final
renegotiation thereof in the manner heretofore provided.

 

15.04.01          Subsequent
to such renegotiation as hereinbefore described and with the concurrence of
County’s Risk Manager and County Counsel, the Director shall prepare and
execute, and the Concessionaire shall execute the appropriate amendment to this
agreement.

 

15.05               No
cancellation provision in any insurance policy shall be construed in derogation
of the continuous duty of Concessionaire to furnish insurance during the term
of this agreement. At least thirty (30) days prior to the expiration of any
such policy, a signed and complete certificate of insurance, with all
endorsements required by this Section, showing that such insurance coverage has
been renewed or extended shall be filed with Director.”

 

16.           TAXES AND
ASSESSMENTS

 

No revisions.

 

17.           TRANSFERS

 

Paragraph 17.06 and 17.07 are hereby added as follows:

 

“17.06             In
reference to Section 17.05 hereinbefore, the County’s consent with regard to
successive transfers of this concession arising from the exercise of a power of
sale of judicial foreclosure or the assignment of the agreement in lieu of
foreclosure, pursuant to the terms of a deed of trust previously approved by
the County shall not be unreasonably withheld.

 

17

 

17.07               In
the event Concessionaire shall request the prior written consent of Director to
give, assign, transfer or grant control of this agreement pursuant to Section
17.04 above and subsequently the Director gives written consent to the
assignment, a transfer fee equal to one percent (1%) of the gross sales price
shall be paid to County. Said sum shall be payable to County in full upon the
date of transfer or upon the close of the escrow related to this transfer,
whichever date occurs first. Prior to Director’s consent to such assignment,
the assignor (1) shall deliver to assignee a written schedule of all sums due
and owing to County from the assignor with such schedule being in form and
content subject to approval of the Director in all respects and (2) shall
deliver to Director, as part of the acceptance of the assignment, a written
acknowledgement by the assignee that the assignee (a) affirms the sums due and
owing to County and (b) accepts responsibility for payment of such sums
directly to County.”

 

18.           NON-DISCRIMINATION
AND CIVIL RIGHTS COMPLIANCE

 

Paragraph 18 is hereby deleted and the following
paragraph is substituted therefore:

 

“18.01             Concessionaire
hereby certifies and agrees that it will comply with Title VI of the Civil
Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Age
Discrimination Act of 1975, Title IX of the Education Amendments of 1972, where
applicable, and Title 43, part 17 of the Code of Federal Regulations Subparts A
and B, to the end that no persons shall, on the grounds of race, creed, color,
national origin, political affiliation, marital status, sex, age or handicap,
be subjected to discrimination under the privileges and use granted by this
agreement or under any project, program or activity supported by this
agreement.

 

18

 

18.02               Concessionaire
certifies and agrees that all persons employed thereby, are and shall be
treated equally without regard to or because of race, creed, color, national
origin, political affiliation, marital status, sex, age or handicap and in
compliance with all federal and state laws prohibiting discrimination in
employment, including but not limited to, the Federal Civil Rights Act of 1964;
the Unruh Civil Rights Act; the Cartwright Act; and the State Fair Employment
Practices Act.

 

18.03               Concessionaire
certifies and agrees that subcontractors, bidders and vendors thereof are and
shall be selected without regard to or because of race, creed, color, national
origin, political affiliation, marital status, sex, age or handicap.

 

18.04               All
employment records shall be open for inspection and reinspection at any
reasonable time during the term of this agreement for the purpose of verifying
the practice of non-discrimination by Concessionaire in the areas heretofore
described.

 

18.05               If
County finds that any of the above provisions have been violated, the same
shall constitute a material breach of contract upon which County may determine
to cancel, terminate, or suspend this agreement. While County reserves the
right to determine independently that the non-discrimination provisions of this
agreement have been violated, in addition, a determination by the California
Fair Employment and Housing Department or the Federal Equal Employment
Opportunity Commission that Concessionaire has violated State or Federal
non-discrimination laws or regulations shall constitute a finding by County
that Concessionaire has violated the non-discrimination provisions of this
agreement.

 

18.06               The
parties agree that in the event Concessionaire violates the non-discrimination
provisions contained herein, County shall, at its option, be

 

19

 

entitled to a sum of ONE THOUSAND DOLLARS ($1,000.00) pursuant to
California Civil Code 1671 as liquidated damages in lieu of cancelling,
terminating or suspending this agreement. Concessionaire further agrees that
ONE THOUSAND DOLLARS ($1,000.00) is a reasonable sum under all of the
circumstances existing at the time of the execution of this agreement.”

 

19.           EASEMENTS

 

No revisions.

 

20.           CANCELLATION

 

Paragraph 20.05 is hereby added as follows:

 

“20.05     With respect to Section 20.04
of this agreement, Director shall provide a Notice of Default to any Lender who
holds an approved encumbrance under Paragraph 29.01 hereof, provided that such
Lender shall have previously filed a written notice with the Director
specifying the Lender’s name, address and amount incumbered. Such Notice of
Default shall be provided to the Lender at the same time the Director provides
such Notice to the Concessionaire. With regard to any defaults, Director shall
not terminate this agreement so long as the Lender, within thirty (30) days of
the date of final performance by the Concessionaire in the Notice of Default
either (1) cures the default, or (2) pursuant to the terms of paragraph 29.02
infra, institutes proceedings to pursue its remedies in connection with a
default on Concessionaire’s loan and thereafter proceeds with due diligence to
prosecute such proceedings to a conclusion.”

 

20

 

21.           EVENTS OF DEFAULT

 

Paragraph 21.11 is hereby added as follows:

 

“21.11     Insolvency of Concessionaire

 

Concessionaire shall be deemed to be insolvent if it has ceased to pay
its debts in the ordinary course of business or cannot pay its debts as they
become due, whether it has committed the act of bankruptcy or not, or whether
insolvent within the meaning of the Federal Bankruptcy law or not.”

 

22.           WAIVER

 

No revisions.

 

23.           RIGHT OF ENTRY

 

No revisions.

 

24.           SURRENDER

 

No revisions.

 

25.           INTERPRETATION

 

The following term is hereby added to paragraph 25.03:

 

“Operational Year”: 
Concessionaire’s operational year shall be defined as a calendar year.

 

The term “Director” as stated in paragraph 25.03 is defined as follows:

 

“Director”:  Director of
Department of Parks and Recreation or an authorized representative thereof.”

 

26.           ENFORCEMENT

 

No revisions.

 

21

 

27.           NOTICES

 

Paragraph 27.01 is hereby deleted and the following paragraph is
substituted therefore:

 

“27.01     Any notice required to be
given under the terms of this agreement or any law applicable thereto may be
placed in a sealed envelope, with postage paid, addressed to the person on whom
it is to be served and deposited in a post office, mailbox, sub-post office,
substation or mail chute, or other like facility regularly maintained by the
United States Postal Service. The address to be used for any notice served by
mail upon Concessionaire shall be 111 Raging Waters Drive, San Dimas, CA 91773,
and Bryant L. Morris, Box 1977, Rancho Santa Fe, CA 92067 or such other place
as may hereinafter be designated in writing to the Director by Concessionaire.
Any notice served by mail upon County shall be addressed to the Director,
Department of Parks and Recreation, 433 South Vermont Avenue, Los Angeles, CA
90020, or such other place as may hereinafter be designated in writing to
Concessionaire by the Director. Service by mail shall be deemed complete upon
deposit in the above-mentioned manner.”

 

28.           ENTIRE AGREEMENT

 

No revisions.

 

29.           LEASE ENCUMBRANCE

 

Paragraph 29 is hereby added:

 

“29.01     County through its Director
agrees to execute such documents or concession amendments as are reasonably
necessary to consent to the encumbrance of this agreement, leasehold estate,
trade fixtures and

 

22

 

personalty, by deed of trust, mortgage, chattel mortgage or other
security agreement, to a reputable lender (“Lender”), subject only to Director’s
reasonable approval of such encumbrance.

 

29.02       County and Concessionaire
agree to incorporate the following language into any consent to encumbrance
agreement entered into between County, Concessionaire and Lender.

 

“a.           County shall not
terminate the Concession Agreement or do anything to adversely affect the value
of the leasehold interest therein during such time as Lender may cure a default
on the Concession Agreement or pursue its remedies in connection with a default
on its loan; provided, however, County may suspend the right of Concessionaire
to resume operation of the Concession under the Concession Agreement. It is the
intent of the parties to preserve the leasehold estate in order to permit a
sale of the collateral or an assumption of the obligation and Concession
Agreement by another entity pursuant to the terms of this Consent to
Encumbrance Agreement, but in so doing to suspend the right of defaulting
Concessionaire therein and to preserve any rights, remedies, or damages County
or Lender may have against the defaulting Concessionaire to the same extent as
though a default had occurred, the Concession Agreement had been terminated,
and/or the loan matured.”

 

b.             Upon institution of
foreclosure proceedings by Lender, Lender may request County to extend the
Lender additional time to facilitate Lender’s efforts in retaining qualified
individuals or entities to assume the operation of the improvements as
consistent with the terms of the Concession Agreement. County shall agree to
Lender’s request for time extensions conditioned upon: (1) Lender agreeing to
keep and maintain the premises, appurtenances and equipment thereon, clean and
free of rubbish, graffiti, and

 

23

 

other waste matter; (2) Lender providing for the regular and proper
minor maintenance of the Concession Premises, equipment, trade fixtures, and
landscaping so as to reduce or prevent deterioration thereof (by way of
example, Lender would be required to water the landscaping to prevent the loss
of plant material, and Lender would be required to repair a leaky valve that
threatened to cause immediate damage to property or equipment, however, Lender
would not be required to restore chipped for faded paint, or repair equipment
or structures that were in need of service but did not pose an immediate threat
of damage to person or property); and (3) Lender acting with due diligence to
lift or remove any automatic stay in bankruptcy. In the event Concessionaire or
its creditors seek to place Concessionaire under the protection of federal or
state statute. The time extended shall be increments of ninety (90) days.
Lender may request an additional ninety (90) day extension of County’s consent
not to terminate, and County shall reasonably agree to such a request so long
as County determines that the [ILLEGIBLE] and the legal proceedings hereto are
proceeding in good faith and with due diligence, and so long as Lender
continues to agree to the aforementioned conditions (1-3). Extensions
additional to those previously mentioned shall be at the sole discretion of
County.

 

c.             Upon institution of
foreclosure proceedings by Lender, Lender may request of County, for the
benefit of a prospective transferee-concessionaire, a readjustment of the
percentage and/or annual minimum rent. This readjustment shall be by mutual
agreement within thirty (30) days of demand therefor; and in the absence of
agreement, by submission of the controversy thereon to arbitration under the
Commercial Arbitration Rules of the American Arbitration Association. The
locale for arbitration shall be within the City of Los Angeles. The sole issue
for determination by the

 

24

 

arbitrator shall be the fair rental value for the concession and use
granted herein in accordance with the terms and conditions therefor as
specified herein. All expenses subject to assessment by the arbitrator shall be
borne equally by the parties.

 

d.             Within ten (10) days
of institution of foreclosure proceedings by Lender, Lender and County shall
mutually agree upon the selection of an independent, third party appraiser for
purposes of establishing Fair Market Liquidated Value of Concessionaire’s
assets as encumbered by Lender. This appraiser shall be instructed: (1) to
establish Fair Market Liquidated Value for said assets as of the contemplated
date of Lender’s acquisition through foreclosure; and (2) to deliver its
completed appraisal to Lender and County (by way of the Director) prior to the
contemplated date of Lender’s acquisition through foreclosure. Costs of
appraisal are to be shared equally by County and Lender. In the event Lender is
unsuccessful in attempting to procure a new operator of the concession
threshold, and Lender subsequently acquires title or interest to the defaulting
Concessionaire’s assets pursuant to foreclosure proceedings by way of deed of
trust, mortgage, chattel mortgage or other security agreement which encumbered
the Concession Agreement, the leasehold estate created therein, and any
improvements, trade fixtures, or personalty appurtenant thereto, Lender agrees
to grant to County through the Director, a five work day option to purchase any
and all right, title and interest in said assets at Fair Market Liquidated
Value as established by the completed appraisal. Said option period is to
commence as of the date of County’s receipt of Lender’s written notice to
Director of Lender’s acquisition. Exercise of the option by County shall be in
writing and delivered to Lender within the five (5) working day period. If the
County exercises its purchase option, County shall be obligated to pay Lender
the

 

25

 

appraised amount within sixty (60) days of its notice of exercise. If
County fails to exercise its purchase option within said five (5) working day
period, then, Lender may proceed with due diligence in liquidating its assets
in accordance with the terms of this agreement.

 

e.             The remedies provided
herein are not exclusive of any other remedy the Lender could pursue in law or
in equity, all such remedies being cumulative and not exclusive.

 

f.              At no time shall
Lender indemnify County or Concessionaire or assume any liability or obligation
of County or Concessionaire. At all times, shall rent remain an obligation of
the defaulting Concessionaire with no recourse to Lender.

 

29.03       Director shall in no event
be required to approve an encumbrance permitted by this provision in connection
with any letter of credit the proceeds of which are not expended on capital
improvements approved by the Director hereunder.”

 

30.           RENT CREDIT WAIVER
AND AMENDMENT NUMBER 1 NULLIFICATION

 

Concessionaire agrees that the existing amount of funds consisting of
approximately $1.3 million, for previously approved capital improvement
projects due and owing as a credit against rent is hereby waived. Further,
County and Concessionaire agree that Amendment Number 1, dated May 5, 1986, to
Concession Agreement Number 43893 is hereby nullified.

 

31.           OPERATIVE DATE

 

The effective date of this amendment shall be January 1, 1990.

 

26

 

32.           RATIFICATION

 

All other terms, conditions, covenants and promises of the Concession
Agreement not affected by the provision of this Amendment shall remain in full
force and effect and are hereby reaffirmed.

 

27

 

IN WITNESS WHEREOF, Concessionaire has executed this Amendment, or
caused it to be duly executed, and County of Los Angeles, by order of its Board
of Supervisors, has caused this Amendment to the Concession Agreement to be
executed on its behalf by the Director, Department of Parks and Recreation, or
an authorized representative thereof and attested by the Executive
Officer-Clerk of the Board thereof, on the day and year first above written.

 

	
   

  	
  CONCESSIONAIRE

  
	
   

  	
  RAGING WATERS, a California Partnership

  
	
   

  	
   

  
	
   

  	
  By: Raging Waters, Inc. Managing Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
  

  	
   

  	
  Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COUNTY OF LOS ANGELES

  
	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Chairman, Board of Supervisors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LARRY J. MONTEILH,

  	
   

  	
   

  	
   

  
	
  Executive Officer-Clerk of

  	
   

  	
   

  	
   

  
	
  the Board of Supervisors

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Lurona C. Walton

  	
   

  	
   

  	
  ADOPTED

  	
   

  
	
   

  	
  Deputy

  	
   

  	
   

  	
  BOARD OF SUPERVISORS

  	
   

  
	
   

  	
   

  	
  COUNTY OF LOS ANGELES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  APPROVED AS TO FORM:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  53

  	
  DEC 05 1989

  	
   

  
	
  DEWITT W. CLINTON

  	
   

  	
   

  	
   

  
	
  County Counsel

  	
   

  	
  /s/ Larry J. Monteilh

  	
   

  
	
   

  	
   

  	
  LARRY J. MONTEILH

  	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
  EXECUTIVE OFFICER

  	
   

  
	
  Deputy

  	
   

  	
   

  	
   

  	
   

  
									

 

 

	
  BH:10/25/89

  	
   

  	
   

  	
   

  	
   

  

 

28

 

[partnership]

 

 

	
  STATE OF CALIFORNIA

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
  County of Los Angeles

  	
  )

  	
   

  	
   

  

 

 

On this 9th day of November in the year of 1989, before me, Frank S.
Zolin, County Clerk/ Executive Officer of the Superior Court, in and for said
County, personally appeared. Bryant L. Morris, President, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
that executed this instrument, on behalf of the partnership of Raging Waters,
and acknowledged that the partnership executed it.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this Certificate first above written.

 

 

	
  

  	
  FRANK S. ZOLIN

  	
   

  
	
  County Clerk/Executive Officer

  	
   

  
	
  of said Superior Court

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Deputy County Clerk

  	
   

  
				

 

 

 

 

[ILLEGIBLE] 3-A

 

AMENDMENT NO. 3-A TO CONCESSION
AGREEMENT NO. 43893

FOR CONSTRUCTION, MAINTENANCE AND OPERATION OF A PLANNED

RECREATIONAL DEVELOPMENT AT

FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

This Amendment to Concession Agreement made this 16th
day of February, 1993.

 

 

	
  BY AND BETWEEN

  	
  COUNTY OF LOS ANGELES, a body

  
	
   

  	
  corporate and politic, hereinafter

  
	
   

  	
  referred to as “County”

  
	
   

  	
   

  
	
  AND

  	
  RAGING WATERS GROUP INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
  hereinafter referred to as

  
	
   

  	
  “Concessionaire”.

  

 

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, pursuant to Concession Agreement No. 43893, approved on March
8, 1983 Specialty Villages, a general partnership and Bryant L. Morris, a
general partner, were granted the right to construct, operate and maintain a
planned recreational development at Frank G. Bonelli Regional County Swim Park;
and

 

WHEREAS, on May 5, 1983 Specialty Villages, a general partnership and
Bryant L. Morris, a general partner consented to an assignment of the
Concession Agreement No. 43893 to Raging Waters, a partnership, and Bryant L.
Morris, an individual; and

 

WHEREAS, Concession Agreement No. 43893 was amended as of (a) May 6,
1986 (Amendment No. 1), (b) as of September 2, 1987 (Amendment No. 2), (c) as
of December 5, 1989 (Amendment No. 3). (Concession Agreement No. 43893 as so
amended is referred to hereinafter as the Concession Agreement.); and

 

1

 

WHEREAS, the Concessionaire has exercised its option in respect of Area
B; and

 

WHEREAS, on May 31, 1991 Raging Waters, a partnership, and Bryant L.
Morris, an individual, assigned the Concession Agreement to Raging Waters Group
Inc.; and

 

WHEREAS, the current Master Plan for Bonelli Regional County Park was
prepared in 1970 and requires updating; and

 

WHEREAS, an updated Master Plan and Environmental Impact Report should
be prepared which will identify the potential future uses of Frank G. Bonelli
Regional County Park for recreational purposes; and

 

WHEREAS, the parties agree that the advice and professional services of
independent expert consultants satisfactory to County are necessary for the
updated Master Plan and environmental document preparation process; and

 

WHEREAS, Concessionaire has agreed to pay initially the cost of
suitable qualified independent expert consultants for professional services and
related disbursements and costs in connection with the preparation of said
planning and environmental process up to a maximum of $330,000 on condition
that (a) the financial terms and provisions of the agreements for professional
services shall have been previously approved in writing by the Concessionaire
and (b) that no variation of financial terms and provisions shall be permitted
or allowed by County without the prior written consent of Concessionaire and
(c) that County agrees to share in said costs subject to the terms of this
Amendment No. 3-A; and

 

WHEREAS, County is willing to authorize retention of rent as set forth
below in an amount not to exceed ONE HUNDRED SIXTY-FIVE THOUSAND DOLLARS
($165,000) as its one-half share of the cost for said professional services and
related disbursements and costs; and

 

 

WHEREAS, notwithstanding the fact that the cost for said professional
services have been estimated not to exceed THREE HUNDRED THIRTY THOUSAND
DOLLARS ($330,000), in the event of cost overruns, neither County nor
Concessionaire shall be obligated to expend more than the respective amounts
herein provided unless they shall have previously otherwise agreed in writing.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, the parties hereto do agree as follows:

 

1.             OPERATIVE DATE

 

The effective date of this Amendment shall be the date of approval
thereof by the Board of Supervisors and shall be applicable for the 1993
operational year as defined in Section 25 of Amendment No. 3 to Agreement No.
43893 and shall continue for each operational year thereafter until the County’s
one-half share of the consultants’ costs, in an amount not to exceed ONE
HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($165,000), has been satisfied as set forth
below.

 

2.             PAYMENT/RENTAL CREDIT

 

Subparagraphs 4.01(e) and 4.01(f) are added as follows:

 

“e.           Notwithstanding the
provisions set forth above Concessionaire shall pay to County percentage rent
otherwise due and owing to County until County has received EIGHT HUNDRED
TWENTY-NINE THOUSAND DOLLARS ($829,000) as calculated on gross receipts received
by Concessionaire. Percentage rent due County in excess of $829,000 shall be
retained by Concessionaire for satisfaction of County’s share of consultants’
fees, expenses, and related disbursements and costs for preparation of a master
plan or amended master plan and environmental document. Concessionaire shall
retain said excess percentage rent for operational year 1993 and

 

 

 

each operational year thereafter until such time that County’s one-half
share of consultant’s fees, expenses and related disbursements and costs in an
amount not to exceed ONE HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($165,000), has
been retained by Concessionaire. Concessionaire shall not be entitled to any
interest on County’s share of consultants’ fees, expenses, and related disbursements
and costs notwithstanding the number of operational years required to retain
County’s share.

 

f.                                         In
the event Concessionaire retains the entire amount of ONE HUNDRED SIXTY-FIVE
THOUSAND DOLLARS ($165,000) as prescribed above and the amount of the County’s
share of funds due for all of the consultants’ fees, expenses and related
disbursements and costs is less than ONE HUNDRED SIXTY-FIVE THOUSAND DOLLARS
($165,000), Concessionaire shall refund the difference to County within thirty
(30) days of completion of consultants’ work required herein.”

 

3.                                       COUNTY’S
INDEPENDENT JUDGMENT

 

Concessionaire
hereby understands that County, as the lead agency, shall exercise its
independent judgment in the review and analysis of information submitted by any
consultant as required herein. Concessionaire also understands that draft
documents to be circulated shall reflect the County’s independent judgment and
that the County’s certification of a final environmental document shall be
conditioned upon a finding that the County’s independent judgment is reflected
in said document.

 

4.                                       INDEMNIFICATION

 

Concessionaire
shall indemnify, defend, save and hold harmless the County and its officers,
directors, agents and employees from and against any and all liability,
expenses, losses, costs, levies, fines or claims for damages of any nature
whatsoever,

 

31

 

including reasonable defense
costs and legal fees, arising out of or in connection with the implementation
of this Amendment No. 3-A which result from any breach of the terms of the
Concession Agreement or this Amendment No. 3-A by the Concessionaire, or which
result from development or planned development by Concessionaire of land leased
to Concessionaire under the Concession Agreement. County shall promptly notify
Concessionaire of any claim or action and consult with Concessionaire regarding
any claim or action for which indemnity may be sought hereunder and shall not
settle any such claim or action without Concessionaire’s consent, which will
not unreasonably withheld. County shall indemnify, defend, save and hold
harmless the Concessionaire and its officers, directors, agents and employees
from and against any and all liability, expenses, losses, costs, levies, fines
or claims for damages of any nature whatsoever, including reasonable defense
costs and legal fees, arising out of or in connection with the implementation
of this Amendment No. 3-A which result from any breach of the terms of the
Concession Agreement or this Amendment No. 3-A by the County.

 

5.                                       RATIFICATION

 

All other
terms, conditions, covenants and promises of the Concession Agreement not
affected by the provision of this supplemental agreement shall remain in full
force and effect and are hereby reaffirmed.

 

32

 

IN WITNESS
WHEREOF, Concessionaire has executed this Amendment, or caused it to be duly
executed, and County of Los Angeles, by order of its Board of Supervisors, has
caused this Amendment to the Concession Agreement to be executed on its behalf
by the Chairman of said Board and attested by the Executive Officer-Clerk of
the Board thereof, on the day and year first above written.

 

	
   

  	
  CONCESSIONAIRE

  
	
   

  	
   

  
	
   

  	
  RAGING WATERS GROUP INC. a

  
	
   

  	
  California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Alan Joelson

  	
   

  
	
   

  	
   

  	
  Alan Joelson, Joint CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COUNTY OF LOS ANGELES

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Chairman, Board of Supervisors

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  LARRY J. MONTEILH,

  	
  [SEAL]

  	
   

  
	
  Executive Officer-Clerk of

  	
   

  
	
  the Board of Supervisors

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Deputy

  	
   

  	
   

  
	
   

  	
   

  
	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
  ADOPTED

  
	
  DEWITT W. CLINTON

  	
  BOARD OF SUPERVISORS

  
	
  County Counsel

  	
  COUNTY OF LOS ANGELES

  
	
   

  	
   

  
	
  By

  	
  /s/ Helen S. Parker

  	
   

  	
   

  
	
   

  	
  Principal Deputy

  	
   

  	
  FEB. 16 1993

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Larry J. Monteilh

  
	
   

  	
   

  	
   

  	
  LARRY J. Monteilh

  
	
   

  	
   

  	
   

  	
  EXECUTIVE OFFICER

  
								

 

33

 

(corporation single)

 

 

	
  STATE OF
  CALIFORNIA

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.

  
	
  County of
  Los Angeles

  	
  )

  	
   

  

 

On this 19th
day of JUNE in the year of 1992, before me, Charles Welssburd,
Registrar-Recorder/County Clerk of the County of Los Angeles, personally
appeared ALAN JOELSON personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed this instrument as JOINT
CEO of RAGING WATERS GROUP INC. the corporation therein named, and acknowledged
to me that such corporation executed the within instrument pursuant to its
bylaws or a resolution of its board of directors.

 

IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.

 

	
   

  	
  CHARLES WEISSBURD

  	
   

  
	
   

  	
  Registrar-Recorder/County
  Clerk

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Deputy
  County Clark

  	
   

  
					

 

34

 

[ILLEGIBLE]

 

	
  CLERK OF THE BOARD OF SUPERVISORS

  	
   

  
	
  Room 383 Hall of Administration.

  	
   

  	
   

  
	
  500 West Temple Street

  	
   

  	
   

  
	
  Los Angeles, California 90012

  	
   

  	
   

  

 

 

	
  ASSIGNMENT OF CONCESSION AGREEMENT NO.
  43893

  	
   

  
	
  FOR FAMILY SWIM PARK AT

  	
  FEE $ 8

  	
  P

  
	
  FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

  	
                     5 

  

 

SPECIALTY VILLAGES, a partnership, does hereby assign, transfer, grant,
convey and set over unto RAGING WATERS, a partnership, and BRYANT L. MORRIS, an
individual, all right, title and interest in and to that certain concession
agreement dated March 8, 1983, made and entered into between the COUNTY OF LOS
ANGELES, and recorded concurrently herewith.

 

It is understood that this assignment is not effective until the date
of approval by the Director, Department of County Engineer-Facilities.

 

 

	
  Dated this 5th day of May, 1983.

  	
  RECORDED IN OFFICIAL RECORDS

  OF LOS ANGELES COUNTY, CA [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JUL 8 1983 AT[ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Recorder’s
  Office

  	
   

  

 

	
   

  	
   

  	
  /s/ Specialty Villages

  	
   

  
	
   

  	
   

  	
  SPECIALTY VILLAGES, a partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  BRYANT L. MORRIS, general partner

  

 

	
  STATE OF CALIFORNIA

  	
  )

  	
   

  	
   

  	
   

  	
  RECORDER’S MEMO

  	
   

  
	
   

  	
  )

  	
   

  	
   

  	
   

  	
  POOR RECORD IS DUE TO

  	
   

  
	
  COUNTY OF LOS ANGELES

  	
  )

  	
   

  	
   

  	
   

  	
  QUALITY OF ORIGINAL DOCUMENT

  	
   

  

 

 

On this 5 day of May, in the year 1983, before me, JOHN J. CORCORAN,
County Clerk and ex-officio Clerk of the Superior Court in and for said County,
personally appeared [ILLEGIBLE] known to me (or proved to me on the basis of
satisfactory evidence) to be the person that executed this instrument, on
behalf of the partnership and acknowledged to me that the partnership executed
it.

 

IN WITNESS WHEREOF: I have hereunto set my hand and affixed the seal
the day and year in this Certificate first above written.

 

 

	
  [SEAL]

  	
  JOHN J. CORCORAN, County Clerk and

  
	
  ex-officio Clerk of said Superior Court

  
	
   

  
	
   

  
	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Deputy

  	
   

  

 

 

ACCEPTANCE OF ASSIGNMENT OF

CONCESSION AGREEMENT NO. [ILLEGIBLE] FAMILY
SWIM PARK AT

FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

RAGING WATERS, a partnership, and BRYANT L. MORRIS, an individual,
hereby accept the foregoing assignment of that certain concession agreement
dated March 8, 1983, made and entered into between the COUNTY OF LOS ANGELES
and SPECIALTY VILLAGES, a partnership, and assume responsibility for
performance of all promises, covenants and conditions of said agreement on the
part of Concessionaire therein named to be performed.

 

It is understood that this assignment is not effective until the date
of approval by the Director, Department of County Engineer-Facilities.

 

Dated this [ILLEGIBLE] day of May, 1983.

 

 

	
   

  	
  RAGING WATERS, a partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RAGING WATERS, INC.,

  
	
   

  	
   

  	
  A California Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
  BRYANT L. MORRIS, President

  

 

	
  STATE OF CALIFORNIA

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  ) ss.

  	
   

  	
   

  	
   

  
	
  COUNTY OF LOS ANGELES

  	
  )

  	
   

  	
   

  	
   

  

 

 

On this 15th day of May, in the year 1983,
before me, JOHN J. CORCORAN, County Clerk and ex-officio Clerk of the Superior
Court in and for said County, personally appeared Bryant L. Morris, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as president (or secretary) or on
behalf of the corporation therein named, said corporation being known to me to
be one of the partners of Raging Waters, the partnership that executed the
within instrument, and acknowledged to me that such corporation executed the
within instrument pursuant to its by-laws or a resolution of its board of
directors as such partner and acknowledged to me that the partnership executed
it.

 

IN WITNESS WHEREOF, I have hereunto set my band and affixed [ILLEGIBLE]
the day and year in this Certificate first above written.

 

 

	
  [SEAL]

  	
  JOHN J. CORCORAN, County Clerk and

  
	
  ex-officio Clerk of said Superior Court

  
	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Deputy

  	
   

  

 

 

CONSENT TO ASSIGNMENT OF

CONCESSION AGREEMENT NO. 43843 FOR FAMILY
SWIM PARK

AT FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

COUNTY OF LOS ANGELES, hereinafter referred to as County, as grantor of
the concession and use granted under that certain concession agreement dated
March 8, 1983, hereinafter referred to as the lease, does hereby consent to the
assignment of the lease by the present concessionaire, SPECIALTY VILLAGES, a
partnership, hereinafter referred to as Assignor, to RAGING WATERS, a
partnership and BRYANT L. MORRIS, an individual, hereinafter referred to as
Assignees. The consent to the assignment authorized herein is subject to the
following express conditions therefor:

 

(a) This Consent to Assignment shall be null and void and of no further
force and effect until and unless the assignment herein approved is complete
and irrevocable in all respects and any escrow opened to accomplish same has
been closed and County notified thereof within thirty (30) days of this Consent
to Assignment.

 

(b) This assignment, having once become complete and irrevocable in all
respects, shall thereafter be fully binding upon the Assignees, whether or not
the Assignor and Assignees have entered into a separate agreement or
understanding to which County is not a party and which provided for or
otherwise purports, to affect the assignment, and whether or not in such event
any party thereto alleges, claims, or otherwise shows or proves that there has
been a breach, default, violation or termination of any such separate
agreement;

 

 

	
   

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
  BRYANT L. MORRIS, an individual

  	
   

  

 

	
  STATE OF CALIFORNIA

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.

  	
   

  	
   

  	
   

  
	
  COUNTY OF LOS ANGELES

  	
  )

  	
   

  	
   

  	
   

  	
   

  

 

 

On this 5th day of May, in the year 198 ,
before me, JOHN J. CORCORAN, County Clerk and ex-officio Clerk of the Superior Court
in and for said County, personally appeared [ILLEGIBLE], personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to this instrument, and acknowledged that he executed it.

 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
the day and year in this Certificate first above written.

 

	
  

  	
  JOHN J. CORCORAN, County Clerk and

  
	
  ex-officio Clerk of said Superior Court

  
	
  By

  	
  [ILLEGIBLE]

  	
   

  
	
  Deputy

  

 

 

	
   

  	
  CLERK OF THE
  BOARD OF SUPERVISORS

  
	
   

  	
  Room 383
  Hall of Administration

  
	
   

  	
  500 West
  Temple Street

  
	
   

  	
  Los Angeles,
  California 90012

  

 

CONSENT TO ASSIGNMENT OF

CONCESSION AGREEMENT NO. 43843 FOR FAMILY
SWIM PARK

AT FRANK G. BONELLI REGIONAL COUNTY SWIM PARK

 

COUNTY OF LOS ANGELES, hereinafter referred to as County, as grantor of
the concession and use granted under that certain concession agreement dated
March 8, 1983, hereinafter referred to as the lease, does hereby consent to the
assignment of the lease by the present concessionaire, SPECIALTY VILLAGES, a
partnership, hereinafter referred to as Assignor, to RAGING WATERS, a
partnership, and BRYANT L. MORRIS, an individual, hereinafter referred to as
Assignees. The consent to the assignment authorized herein is subject to the
following express conditions therefor:

 

(a) This Consent to Assignment shall be null and void and of no further
force and effect until and unless the assignment herein approved is complete
and irrevocable in all respects and any escrow opened to accomplish same has
been closed and County notified thereof within thirty (30) days of this Consent
to Assignment.

 

(b) This assignment, having once become complete and irrevocable in all
respects, shall thereafter be fully binding upon the Assignees, whether or not
the Assignor and Assignees have entered into a separate agreement or
understanding to which County is not a party and which provided for or
otherwise purports, to affect the assignment, and whether or not in such event
any party thereto alleges, claims, or otherwise shows or proves that there has
been a breach, default, violation or termination of any such separate
agreement;

 

 

91- 808323

 

	
  RECORDING REQUESTED BY

  	
  RECORDED IN
  OFFICIAL RECORDS

  
	
  AND WHEN RECORDED MAIL TO :

  	
  RECORDER’S
  OFFICE

  
	
   

  	
  LOS ANGELES
  COUNTY

  
	
  Clerk of the Board of Supervisors

  	
  CALIFORNIA

  
	
  Room 383 Hall of Administration

  	
   

  
	
  500 West Temple Street

  	
  1 MIN. PAST
  12 P.M. MAY 31, 1991

  
	
  Los Angeles, California 90012

  	
  FEE $ 27.00

  

 

ASSIGNMENT OF CONCESSION
AGREEMENT NUMBER 43893

FOR THE BONELLI REGIONAL COUNTY
SWIM PARK

 

RAGING WATERS, a California general
partnership, does hereby sell, assign, transfer, grant, convey, deliver and set
over unto RAGING WATERS GROUP INC., without further liability for performance
thereon, all right, title and interest in and to (i) that certain
concession Agreement No. 43893 for Construction, Maintenance and Operation
of a Planned Recreational Development of Frank G. Bonelli Regional County Swim
Park, dated as of March 8, 1983, by and between Raging Waters, a
California general partnership, a successor by assignment to Specialty
Villages, a general partnership (Bryant L. Morris, general partner), as
concessionaire, and the County of Los Angeles, as landlord, as amended by
(A) Amendment No. 1 to Concession Agreement No. 43893 dated as
of May 6, 1986, (B) Amendment No. 2 to Concession Agreement
No. 43893 dated as of September 2, 1987, and (C) Amendment
No. 3 to Concession Agreement No. 43893 dated as of December 5,
1989, and as affected by the Memorandum of Understanding Regarding Raging
Waters Expansion Negotiations - contract No. 43893 dated March 13,
1984 to the extent not superseded by the subsequent amendments (such Concession
Agreement, as so amended and affected, is referred to herein as the “Concession
Agreement”); and (ii) the rights in Area B on Exhibit A attached
hereto (“Area B”) pursuant to the due exercise of the option with respect to
Area B set forth in Section 2.05.01 of the Concession Agreement.

 

Said assignment is made pursuant to Paragraph
17.01 of said Concession Agreement. Upon written consent to said assignment by
the Director, a transfer fee of $124,000.00, pursuant to Paragraph 17 of said
Concession Agreement, shall be paid to the County.

 

 

It is understood that this assignment is not
effective until the date of approval by the Director of the Los Angeles County
Department of Parks and Recreation.

 

Dated this 31st day of May, 1991.

 

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  RAGING WATERS, a California general

  
	
   

  	
  partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  RAGING WATERS, INC. Managing

  
	
   

  	
   

  	
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Bryant L. Morris

  	
   

  
	
   

  	
   

  	
   

  	
  BRYANT L. MORRIS,

  
	
   

  	
   

  	
   

  	
  President

  

 

	
  STATE OF CALIFORNIA

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF LOS ANGELES

  	
  )

  	
   

  

 

 

On May 30, 1991, before me, the
undersigned, personally appeared Bryant L. Morris, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument as President of Raging Waters, Inc. and
acknowledged to me (1) that said corporation executed it pursuant to its
by-laws or a resolution of its board of directors as a general partner of the
partnership therein named, and (2) that said partnership executed it.

 

 

	
  OFFICIAL
  SEAL

  	
   

  	
  /s/ Deborah B.Cook

  
	
  DEBORAH B. COOK

  	
   

  	
  Notary Public in and for said

  
	
  NOTARY
  PUBLIC - CALIFORNIA

  	
   

  	
  County and State

  
	
  LOS ANGELES
  COUNTY

  	
   

  	
   

  
	
  My comm.
  expires MAR 30, 1994

  	
   

  	
  My commission expires: 3/30/94

  

 

2

 

ACCEPTANCE OF ASSIGNMENT OF

CONCESSION AGREEMENT NUMBER
43893 FOR THE

BONELLI REGIONAL COUNTY SWIM
PARK

 

RAGING WATERS GROUP INC., does hereby accept
the foregoing assignment of (i) that certain Concession Agreement
No. 43893 for Construction, Maintenance and Operation of a Planned
Recreational Development of Frank G. Bonelli Regional County Swim Park, dated
as of March 8, 1983, by and between Raging Waters, a California general
partnership, a successor by assignment to Specialty Villages, a general
partnership (Bryant L. Morris, general partner), as concessionaire, and the
county of Los Angeles, as landlord, as amended by (A) Amendment No. 1
to Concession Agreement No. 43893 dated as of May 6, 1986,
(B) Amendment No. 2 to Concession Agreement No. 43893 dated as
of September 2, 1987, and (C) Amendment No. 3 to Concession
Agreement No. 43893 dated as of December 5, 1989, and as affected by
the Memorandum of Understanding Regarding Raging Waters Expansion Negotiations
- Contract No. 43893 dated March 13, 1984 to the extent not
superseded by the subsequent amendments (such Concession Agreement, as so
amended and affected, is referred to herein as the “Concession Agreement”); and
(ii) the rights in Area B on Exhibit A attached hereto (“Area B”) pursuant
to the due exercise of the option with respect to Area B set forth in
Section 2.05.01 of the Concession Agreement, and assumes responsibility
for performance of all promises, covenants, and conditions of said Concession
Agreement on the part of the Concessionaire therein named to be performed
from and after the effective date of such assignment.

 

It is understood that this assignment is not
effective unit the date of approval by the Director of the Los Angeles County
Department of Parks and Recreation.

 

Dated this 31st day of May 1991.

 

	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  RAGING WATERS GROUP INC., a

  
	
   

  	
  California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Its: 

  	
  Joint Chief Executive Officer

  	
   

  
					

 

3

 

	
  STATE OF CALIFORNIA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF LOS ANGELES

  	
  )

  

 

On May 30, 1991, before me, the
undersigned, personally appeared Alan Joelson, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed this instrument as Joint CEO of the corporation therein named and
acknowledged to me that said corporation executed it pursuant to its by-laws or
a resolution of its board of directors.

 

	
  OFFICIAL
  SEAL

  	
   

  	
  /s/ Deborah B.Cook

  
	
  DEBORAH B. COOK

  	
   

  	
  Notary Public in and for said

  
	
  NOTARY
  PUBLIC - CALIFORNIA

  	
   

  	
  County and State

  
	
  LOS ANGELES
  COUNTY

  	
   

  	
   

  
	
  My comm.
  expires MAR 30, 1994

  	
   

  	
  My commission expires: 3/30/94

  

 

4

 

CONSENT TO ASSIGNMENT

OF CONCESSION AGREEMENT NUMBER
43893 FOR THE

BONELLI REGIONAL COUNTY SWIM PARK

 

The COUNTY OF LOS ANGELES, hereinafter
referred to as “COUNTY”, as grantor of concession and use granted under
(i) that certain Concession Agreement No. 43893 for Construction,
Maintenance and Operation of a Planned Recreational Development of Frank G.
Bonelli Regional County Swim Park, dated as of March 8, 1983, by and
between Raging Waters, a California general partnership, a successor by
assignment to Specialty Villages, a general partnership, (Bryant L. Morris,
general partner), as concessionaire, and the County of Los Angeles, as
landlord, as amended by (A) Amendment No. 1 to Concession Agreement
No. 43893 dated as of May 6, 1986, (B) Amendment No. 2 to
Concession Agreement No. 43893 dated as of September 2, 1987, and
(C) Amendment No. 3 to Concession Agreement No. 43893 dated as
of December 5, 1989, and as affected by the Memorandum of Understanding
Regarding Raging Waters Expansion Negotiations - Contract No. 43893 dated
March 13, 1984 to the extent not superseded by the subsequent amendments
(such Concession Agreement, as no amended and affected, is referred to herein
as the “Concession Agreement”); and (ii) the rights in Area B on
Exhibit A attached hereto (“Area B”) pursuant to the due exercise of the
option with respect to Area B set forth in Section 2.05.01 of the
Concession Agreement, does hereby consent to the assignment of said Concession
Agreement and the rights in Area B by the present concessionaire.

 

RAGING WATERS, a California partnership, is
hereinafter referred to as “Assignor”, and RAGING WATERS GROUP INC., a
California corporation is hereinafter referred to as “Assignee”. County further
agrees that upon the effective date of said assignment, Assignor shall be fully
relieved of any and all obligations thereunder. The consent to the assignment
authorized herein is subject to the following express conditions therefor:

 

a.             This
consent to assignment shall be null and void and of no further force and effect
until and unless the assignment herein approved is complete and irrevocable in
all respects and any escrow opened to accomplish same has been closed and
County notified thereof within thirty (30) days of this Consent to Assignment.

 

b.             This
consent to assignment shall be null and void and of no further force and effect
in the event payment of the transfer fee of $124,000.00, pursuant to Paragraph
17 of said Concession Agreement, is not paid to the County.

 

c.             This
assignment, having once become complete and irrevocable in all respects, shall
thereafter be fully binding upon the Assignee, whether or not the Assignor and
Assignee have entered into a separate agreement or understanding to which

 

5

 

County is not a party and which provides for or otherwise purports, to
affect the assignment, and whether or not in such event any party thereto
alleges, claims or otherwise shows or proves that there has been a breach,
default, violation or termination of any such separate agreement; and

 

d.             That
no further assignment and/or sublease thereof shall be made without the written
consent of County first having been obtained in accordance with the paragraphs
therein contained under Paragraph 17 (Transfers).

 

Dated this 31st day of May, 1991.

 

 

	
   

  	
  COUNTY OF LOS ANGELES DEPARTMENT

  
	
   

  	
  OF PARKS AND RECREATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Rodney E. Cooper

  
	
   

  	
   

  	
  Rodney E. Cooper, Director

  

 

	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
   

  
	
  DEWITT W. CLINTON

  	
   

  
	
  COUNTY COUNSEL

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Helen S. Parker

  	
   

  	
   

  
	
   

  	
  Senior
  Deputy

  	
   

  
				

 

6

 

	
  STATE OF CALIFORNIA

  	
  )

  
	
   

  	
  )  ss.

  
	
  COUNTY OF 

  	
  Los Angeles

  	
   

  	
  )

  
				

 

 

On May 30, 1991, before me the undersigned Notary Public, personally
appeared Rodney E. Cooper, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the Director of the Department of Parks and Recreation
for the County of Los Angeles, the public agency that executed the within
instrument, and acknowledged to me that he executed the within instrument as
the Director of the Department of Parks and Recreation for the County of Los
Angeles, a public agency, and that said public agency executed the same
pursuant to duly adopted ordinances or resolutions of the Los Angeles County
Board of Supervisors.

 

WITNESS my hand and official seal.

 

 

	
   

  	
  /s/ Deborah B. Cook

  	
   

  
	
   

  	
  Notary Public in and for said County

  and State

  
	
   

  	
   

  
	
  My commission expires:

  	
  OFFICIAL SEAL

  
	
   

  	
  DEBORAH B. COOK

  
	
  3/30/94

  	
   

  	
  NOTARY PUBLIC - CALIFORNIA

  
	
   

  	
   

  	
  LOS ANGELES COUNTY

  
	
   

  	
   

  	
  My comm. expires MAR 30, 1994

  

 

 

 

 

Exhibit “B”

 

PARCEL A:

 

All that subleasehold estate created by and all of the right, title and
interest of the trustor as concessionaire/lessee in, to and under that certain
Concession Agreement for Construction, Maintenance and Operation of a Planned
Recreation Development at Frank G. Bonelli Regional County Swim Park, by and
between County of Los Angeles, a body corporate and politic, duly organized and
existing pursuant to an agreement entitled “Joint Exercise of Powers Agreement”
and Amendment No. 1 of said agreement, dated February 11, 1970 and December 22,
1970, respectively, as issuer, and Specialty Villages, a general partnership,
and Bryant L. Morris, General Partner, concessionaire/lessee dated March 8,
1963 and recorded July 8, 1963 as Instrument No. 83-771071, Official Records,
Los Angeles County and as assigned by Assignment of Concession Agreement No.
43893 for Family Swim Park at Frank G. Bonelli Regional County Swim Park by and
between Specialty Villages, a partnership, and Raging Waters, a partnership,
dated May 8, 1963 and recorded July 8, 1963 as Instrument No. 83-771072, Official
Records, Los Angeles County affecting the following described real property:

 

PARCEL 1:

 

That portion of Trust 1796, Sheet No. 2, in the City of San Dimis,
County of Los Angeles, State of California, as shown on map filed in Book 22,
Pages 38 and 39 of Maps, in the office of the County Recorder of said County,
and that portion of Tract 1796, Sheet No. 3, in said City, as shown on map
filed in Book 22, Pages 42 and 43 of said Maps, within the following described boundaries:

 

Commencing at the Easterly terminus of that certain course of North [ILLEGIBLE]
East [ILLEGIBLE] in the centerline of that certain 60.00 foot wide strip of
land described in Parcel [ILLEGIBLE] of Lis Pendens recorded as Instrument No.
2482 on August 6, 1988 in Book H2941, Page 387, Official Records, in the office
of the County Recorder of said County; thence South 74°
[ILLEGIBLE] 27” West along said certain course 443.85 feet; thence South [ILLEGIBLE]
West 38.41 feet to a point in the Southerly boundary of said certain 60.00 foot
strip of land said point being the true point of beginning; thence continuing
South [ILLEGIBLE] West 69.67 feet to a point distant South 23°38’15”
West thereon [ILLEGIBLE] feet from said certain course; thence South [ILLEGIBLE]
West [ILLEGIBLE] feet; thence South [ILLEGIBLE] East [ILLEGIBLE] feet; thence
South [ILLEGIBLE] East [ILLEGIBLE] feet thence South 7°17’32”
West [ILLEGIBLE] feet; thence South [ILLEGIBLE] West 132.86 feet; thence South
23°83’08”
East 189.21 feet; thence South 61°38’49” East [ILLEGIBLE]
feet; thence South [ILLEGIBLE] East 211.32 feet; thence North 40°
22’21” East [ILLEGIBLE] feet; thence North [ILLEGIBLE] East 157.00 feet, thence
South 77° 23’ 04” East [ILLEGIBLE] feet to the Westerly
boundary of that certain 60 foot strip of land described in deed to County of
Los Angeles for

 

 

San Dimas Avenue (formerly San Dimas-Spadre Road), recorded on May 15,
1935 in Book 13459, Page 67 of said Official Records; thence Northerly and
Northeasterly along said San Dimas Avenue to the most Northerly corner of said
certain 60 foot strip of land said most Northerly corner being the
Southwesterly terminus of that certain course of South 25°
50’ 10” West [ILLEGIBLE] 5.46 feet in the Northwesterly boundary of San Dimas
Avenue, as shown on County Surveyor’s Map No. 8-5071, on file in the office of
the Country Engineer of the County of Los Angeles; thence Northwesterly,
Northerly and Northwesterly along said San Dimas Avenue, to the Southwesterly boundary
of that certain 60 foot strip of land described in deed to County of Los
Angeles for San Dimas Avenue (formerly San Dimas-Spadra Road), recorded as
Instrument No. 1088 on February 2, 1931 in Book 10633, Page 5, Official
Records: thence Northwesterly, Northerly and Northwesterly along the
Southwesterly, Westerly and Northwesterly boundaries of said last mentioned
certain 60 foot strip of land to the Easterly line of Lot 12, said Tract 1796, Sheet
No. 2; thence Northerly along said Easterly line and its Northerly prolongation
to a curve concentric with and 20 feet Southeasterly measured radially from
that certain 54.99 foot radius curve in the Easterly, Southeasterly and
Southerly boundaries of Lot 13, said last mentioned tract; thence Southwesterly
and Westerly along said concentric curve to a line parallel with and 20 feet
Southerly, measured at right angles, from that certain course of South 77°
59’ West 109.15 feet in said last mentioned Southerly boundary; thence Westerly
along said parallel line to a curve concentric with and 20 feet Southerly;
measured radially, from that certain 215.45 feet radius curve in said last
mentioned Southeasterly and Southerly boundaries; thence Westerly and
Southwesterly along said last mentioned concentric curve to a line parallel
with and 20 feet Southeasterly, measured at right angles, from that certain
course of South 49° 17’ West 74.93 feet is said last mentioned
Southeasterly boundary; thence Southwesterly along said last mentioned parallel
line to a curve concentric with and 20 feet Southeasterly, measured radially,
from that certain 163.67 feet radius curve in said last mentioned Southeasterly
and Southerly boundaries; thence Southwesterly and Westerly along said last
mentioned concentric curve to a line parallel with and 20 feet. Southerly,
measured at right angles, from that certain course of South [ILLEGIBLE] feet in
said last mentioned Southerly boundary; thence Westerly along said last
mentioned parallel line to a curve concentric with and 20 feet Southerly,
measured radially from that certain 271.36 foot radius curve in said last
mentioned Southerly and Southeasterly boundaries; thence Westerly and
Southwesterly along said last mentioned concentric curve to a line parallel
with and 20 feet Southeasterly, measured at right angles, from that certain
course of South 49° 44’ West 67.91 feet in said last mentioned
Southeasterly boundary; thence Southwesterly along said last mentioned parallel
line to a curve concentric with and 20 feet Southeasterly, measured radially
from that certain 10.26 foot radius curve in said last mentioned Southeasterly
and Southerly boundaries; thence Southwesterly and Westerly along said last
mentioned concentric curve to a curve concentric with and 20 feet Southerly,
measured radially, from that certain 48.34 foot radius curve in said last
mentioned Southerly boundary; thence Westerly along said last mentioned
concentric curve to the Southerly prolongation of the Westerly line of said Lot
13; thence Northerly along said Southerly prolongation and said Westerly line
to the Southerly boundary of

 

 

Said certain 60.00 foot strip of land; thence Westerly along said last
mentioned Southerly boundary to said true point of beginning.

 

EXCEPT from that portion of said land included within Parcels 18 and 19
of the deed herein described all minerals, including oil and gas, lying below a
depth of 500 feet, without however the right to drill or mine through the
surface thereof, as reserved by the State of California, in a deed recorded
September 17, 1970 in Book D4835, Page 633, Official Records.

 

PARCEL 2:

 

Those portions of Lots 13 and 14 of Tract No. 1795, Sheet 2, in the
City of San Dimas, County of Los Angeles, State of California, as per map
recorded in Book 22, Pages 38 to 47 inclusive of Maps, in the office of the
County Recorder of said County, together with that portion of San Dimas Avenue,
40 feet wide, as shown on said map vacated by Resolution of the Board of the
Supervisors of said County adopted September 22, 1942, a certified copy of
which was recorded on September 28, 1942 in Book 19587, Page 198, Official
Records, described as a whole as follows:

 

Beginning at the Northeast
corner of Lot 12 of said Tract 1795; thence Northerly along the Northerly
prolongation of the Easterly line of said Lot 12 to a point in a curve
concentric with and 20 feet Southeasterly, measured radially, from that 51.99
foot radius curve in the Easterly, Southeasterly and Southerly boundaries of
said Lot 13 said point being the true point of beginning of this description;
thence is a generally Southwesterly direction along a line parallel with and
distant Southeasterly 20 feet, measured at right angles or radially, from the
Southeasterly line of said Lot 13 to the Southerly prolongation of the Westerly
line of said Lot 13; thence Northerly along said Southerly prolongation to and
along said Westerly line to the Southerly boundary of that certain 60.00 foot
strip of land firstly described in Parcel 6A in the Final Order of Condemnation
entered in Los Angeles County Superior Court, Case No. 937075, a certified copy
of which was recorded July 27, 1970 as Instrument No. 1190 in Book 04783, Page
639, Official Records; thence Northeasterly along said Southerly boundary to
the most Westerly corner of the land secondly described in said Parcel 6A;
thence Northeasterly, Southeasterly and Northeasterly along the Southeasterly,
Southwesterly and Southeasterly lines of the land secondly described in said
Parcel 6A to the Northeasterly line of said Lot 14; thence Southeasterly along
said Northeasterly line to the most Northerly corner of the land described in
the deed to the County of Los Angeles, recorded January 28, 1931 as Instrument
No. 1263, in Book 10628, Page 142, Official Records of said County; thence
Southwesterly along the Northwesterly line of the land described in said last
mentioned deed to the most Westerly corner thereof; thence Southeasterly along
the Southwesterly line of the land described in said last mentioned deed to the
most Southerly corner thereof; said most Southerly corner being a point in the
Westerly boundary of that certain 60.00 foot strip of land described in the
deed to the County of Los Angeles, recorded December 4, 1931 as Instrument No.
1354, in Book 11282, Page 173, Official Records; thence Southerly along said
Westerly boundary to the centerline of San Dimas Avenue, 40 feet wide, as

 

 

said centerline is shown on the map of said Tract 1796; thence
Southwesterly along said centerline to the intersection with a curve concentric
with and 20 feet southeasterly, measured radially from that 54.99 foot radius
curve in the Easterly, Southeasterly and Southerly boundaries of said Lot 13;
thence Southeasterly along said concentric curve to the true point of
beginning.

 

PARCEL 3:

 

That portion of Lot 6 of Tract 1796, Sheet 2, in the City of San Dimas,
County of Los Angeles, State of California, as per map recorded-in Book 22,
Pages 38 to 47 inclusive of Maps, in the office of the County Recorder of said
County, together with that portion of San Dimas Avenue, 40 feet wide, as shown
on said map vacated by Resolution of the Board of Supervisors of said County
adopted September 22, 1942 a certified copy of which was recorded on September
29, 1942, in Book 19687, Page 199, Official Records of said County, described
as a whole as follows:

 

Beginning at the Northeast corner of Lot 12 of said Tract 1795; thence
Northerly along the Northerly prolongation of the Easterly line of said Lot 12
to a curve concentric with and 20 feet Southeasterly, measured radially from
that 54.99 foot radius curve in the Easterly, Southeasterly and Southerly
boundaries of said Lot 13; thence Northeasterly along said concentric curve to
a line parallel with and 20 feet Southeasterly, measured at right angles, from
the Southeasterly line of Lot 14 of said Tract 1735; thence Northeasterly along
said parallel line to the Westerly boundary of that certain 60.00 foot strip of
land described in the deed to the County of Los Angeles, recorded December 4,
1931 as Instrument No. 1354, in Book 11282, Page 173, Official Records; thence
Southerly along said Westerly boundary to the Easterly line of said Lot 12;
thence Northerly along said Easterly line to the point of beginning.

 

Together with all of trustor’s right, title and interest in and to all
buildings and improvements situated on such property;

 

Together with all modifications, extensions and renewals of said lease.

 

PARCEL 8:

 

All of trustor’s right, title and interest now and existing or
hereafter arising, whether by grant or in expectancy and howsoever acquired, in
and to the demised property described in Parcel A hereinabove.Exhibit 10.12

 

FIFTH
AMENDMENT AND RESTATED LEASE

BETWEEN

THE CITY OF SAN JOSE

AND

PARAMOUNT PARKS INC.

[PREVIOUSLY THOMAS
J. LOCHTEFELD AND RAGING WATERS SAN JOSE]

 

This Fifth Amendment and Restated Lease is between the CITY OF SAN
JOSE, a municipal corporation of the State of California (“City”) and PARAMOUNT
PARKS INC., a Delaware corporation, qualified to do business in the State of
California (“Lessee”) and is effective as of the date of full execution.

 

RECITALS

 

1.                                       City owns Lake Cunningham Park which is
bordered by White and Tully Roads and
Cunningham Avenue and Capitol Expressway. On March 5, 1985, City and Thomas J. Lochtefeld entered into a lease of
a portion of Lake Cunningham Park for the purpose of constructing and operating
a water theme park (the “Original Lease”).

 

2.                                       On May 2, 1985, City consented to an
assignment of the Original Lease from Thomas J. Lochtefeld to Raging Waters San
Jose (“Raging Waters”).

 

3.                                       On January 28, 1986, City and Raging
Waters entered into the First Amendment to the Original Lease, to amend
Paragraph 29, in order for Raging Waters to obtain financing from the Bank of
British Columbia and to correct Exhibit D to the Original Lease.

 

4.                                       On February 26, 1991, City and Raging
Waters entered into the Second Amendment to the Original Lease to again amend
Paragraph 29 in order for Raging Waters to obtain refinancing of a loan in the
amount of $3.1 million from the Bank of British Columbia and to obtain a loan
from Sanwa Bank of California in the amount of $2.9 million.

 

5.                                       On September 28, 1993, the parties
entered into the Third Amendment to the

 

1

 

Original
Lease in order to reduce Raging Waters’ leasehold by 95 feet so that City could
expand City’s parking lot. The parties at that time also agreed to attach each
of the original exhibits to the Third Amendment for the purposes of clarity.

 

6.                                       On March 8, 1995, City and Raging Waters
entered into the Fourth Amendment and Restated Lease (the “Lease” or the “Agreement”)
in order to, among other things, extend the term of the agreement by 20 years
for a total term of 40 years, to provide for Raging Waters’ construction of
additional improvements, to revise the rent schedule and to establish a
capital improvement fund. Additionally, the parties wish to restate the Lease
for the purposes of clarity and convenience.

 

7.                                       On May 11, 1995, City approved the
assignment and assumption of the Lease from Raging Waters to Lessee. The
parties now wish to enter into this Fifth Amendment and Restated Lease in order
to substitute the requirement for an annual audited report with an alternative
financial reporting procedure and to revise the Lease’s provisions with respect
to maintenance.

 

8.                                       Under the Original Lease, Raging Waters was
obligated to construct certain improvements. The parties acknowledge completion
of the original improvements.

 

9.                                       City received grants through the Land and
Water Conservation Fund Act (“Federal grants”) and grants from the State of
California Department of Parks and Recreation (“State grants”) for acquisition
and development of Lake Cunningham Park.

 

10.                                 The National Park Service of the U.S.
Department of the Interior will review Lessee’s plans for future improvements
to the water theme park in order to determine whether they are consistent with
the terms of the City’s Federal grant agreements.

 

11.                                 Pursuant to City of San Jose Charter Section 1700
and Measure M, approved by the citizens of San Jose on November 6, 1990,
City may lease portions of Lake Cunningham Park for a term not to exceed 55
years.

 

12.                                 City’s Director of Conventions, Arts and
Entertainment (“CAE Director”) or such other department head appointed by City’s
Manager is responsible for the administration of this Lease on City’s behalf.

 

In
view of the above, City and Lessee agree as follows:

 

2

 

ARTICLE 1

THE
FACILITIES

 

SECTION 1.01                                      LEASED PREMISES.

 

A.                                   City leases to Lessee, and Lessee leases from
City the parcel of land located in Santa Clara County described in the attached
Exhibit A (“Leased Premises”). Lessee shall have the right of access
(ingress and egress) by foot and by vehicle over City-owned property also as
shown on Exhibit A for the purpose of the construction, operation and
maintenance of the Leased Premises during the term of the Lease. City reserves
the right in an emergency, such as, but not limited to, flood or earthquake, to
deny such access to the public and restrict such access to Lessee for the
duration of the emergency, without liability to City.

 

B.                                     Lessee acknowledges receipt of a policy of
title insurance, issued by Valley Title Company at the time the parties entered
into the Original Lease.

 

SECTION 1.02                                      USE OF PREMISES.

 

A.                                   The Leased Premises shall be operated by
Lessee for public outdoor recreation purposes in compliance with the Land and Water Conservation Fund Act
and federal and State grant
requirements. Pursuant to such public outdoor recreation purposes, the Leased
Premises shall be used for the primary purpose of constructing, operating and
maintaining thereon a Water Theme Park for public use substantially of the type
and nature described in the attached Exhibit B (the “Water Theme Park Plan”).
The term “Water Theme Park” as used in this Agreement refers to the facility
described in the Water Theme Park Plan.

 

B.                                     The Leased Premises may be used for the
following Water Theme Park public uses: Operating and maintaining picnic
grounds, amphitheaters, lagoons, beaches, fountains, geysers, waterfalls,
waterslides, kiddle pools, and wave pools, together with the following
incidental uses: snack bars, food and beverage (including beer and wine)
concessions, gift shops and sundry support facilities, and for such other
incidental uses

 

3

 

as
are specifically approved in writing by City, which approval shall not be
unreasonably denied. All incidental activities and uses must be complementary
to the primary use of a Water Theme Park and serve the patrons of the Water
Theme Park. The gift shops and sundry support facilities shall be limited in
scope and scale to the minimum necessary to cater to the specific needs of the
public utilizing the water theme activities.

 

SECTION 1.03                                      PROHIBITED OPERATIONS AND
ACTIVITIES.

 

Lessee
shall not engage in any of the following activities:

 

A.                                   Selling any distilled spirits on the Leased
Premises except with the approval of the CAE Director.

 

B.                                     Conducting any business activity on the
Leased Premises or any other part of Lake Cunningham Park that is not permitted
under this Lease.

 

ARTICLE 2

TERM

 

SECTION 2.01                                      LEASE TERM.

 

Lessee
shall have and hold the Leased Premises for a 40 year term commencing as of March 5,
1985 and expiring on March 5, 2025.

 

ARTICLE 3

LEASE
PAYMENTS

 

SECTION 3.01                                      GROSS RECEIPTS.

 

A.                                   The term “Gross Receipts” as used in this
Agreement means the total of:

 

1.                                       All sales made in or upon, through or from
the Leased Premises, whether for cash or credit, and whether payment is
actually made or not, and whether said sales are made by Lessee, its agents,
sublessees, concessionaires, or licensees.

 

2.                                       All charges made for services rendered and/or
from or upon orders placed at the Leased Premises whether by Lessee, its
agents, sublessees, concessionaires, or

 

4

 

licensees.

 

3.                                       All admission, entry, and other fees of any
nature or kind charged by Lessee, its agents, sublessees, concessionaires, or
licensees (including nonrefundable deposits).

 

4.                                       All sums deposited in any coin-operated
vending machine or other device maintained on the Leased Premises, regardless
of the ownership of the machine or device, or whether such sums are removed and
counted by Lessee or others, and regardless of what percentage thereof Lessee
is entitled to receive.

 

5.                                       All rents received by Lessee for use of the
Leased Premises for office purposes.

 

6.                                       Proceeds from business interruption
insurance, loss of earnings insurance, or other insurance of a similar kind.

 

B.                                     “Gross Receipts” shall exclude:

 

1.                                       All sums or credits received in settlement of
claims for loss or damage to merchandise.

 

2.                                       Proceeds of casualty insurance claims.

 

3.                                       Proceeds from sale or trade-in value of any
furniture, furnishings, or equipment used by Lessee, its sublessees,
concessionaires, licensees, and others under contract with Lessee.

 

4.                                       Merchandise returned to a wholesaler or
transferred to another store or warehouse owned by or affiliated with Lessee or
its sublessees, concessionaires, or licensees.

 

5.                                       Interest, service or sales carrying charges
or other charges, however designated, paid by customers for extension of credit
on sales where said charge is not included in the merchandise sales price.

 

6.                                       The price allowed on merchandise traded in by
customers for credit or the amount of credit for discounts and allowances made
in lieu of acceptance thereof.

 

7.                                       State uniform sales and use taxes; and other
taxes imposed on the consumer by a government agency but collected by the
Lessee or sublessees and paid over periodically to a governmental agency.

 

5

 

8.                                       All deposits accepted and treated as a
liability according to generally accepted accounting principles (i.e., security
deposit on a sublease, or deposits on lockers).

 

C.                                     Lessee may deduct from Gross Receipts if the
amount has previously been reported:

 

1.                                       All credits or refunds made to customers,
guests, or patrons.

 

2.                                       That portion of the gross receipts of all
coin-operated devices that must be, by contract concerning them, turned over to
a person, firm or corporation, in which the Lessee, Its sublessees,
concessionaires or licensees have no direct or indirect financial interest in
the coin-operated device.

 

SECTION 3.02                                      LOCATION OF PAYMENT.

 

Payments
by Lessee to City shall be made to the Director of Finance, 801 North First Street,
San Jose, California 95110.

 

SECTION 3.03                                      LEASE PAYMENTS THROUGH 1994.

 

A.                                   Lessee agrees to pay to City as lease
payments for each calendar year, commencing with 1985 and ending with 1994
either:

 

1.                                       the minimum annual rental, if higher than the
annual percentage rental, or

 

2.                                       if the annual percentage rental exceeds the
minimum annual rental, the annual percentage rental, less the capital
improvement credit, if any.

 

B.                                     Payments by Lessee for calendar years 1985
through and including 1994,
shall be made at the following times:

 

1.                                       Lessee shall pay 1/5 (one-fifth) of the
minimum annual rental on June 30, July 31, August 31, September 30
and October 31 of each year beginning with 1985 and ending in 1994.

 

2.                                       Lessee shall pay the balance of the annual
rental payable for each calendar year from 1985 to 1994 on January 31 of
the following year less the amount of the capital improvement credit for that
year pursuant to subsection 3.03.E, below.

 

C.                                     The annual percentage rental for each calendar
year between 1985 and 1994 is

 

6

 

the following amount of
annual Gross Receipts:

 

	
  1.

  	
  1985,
  1986, 1987

  	
   

  	
  3

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  1988,
  1989, 1990, 1991

  	
   

  	
  4

  	
  %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  1992
  through 1994

  	
   

  	
  5.5

  	
  %

  	
   

  

 

D.                                    The minimum annual rental for each calendar
year between 1985 and 1994 is as follows:

 

	
  1.

  	
  1985

  	
   

  	
  $100,000

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  1986

  	
   

  	
  $100,000

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  1987-1994

  	
   

  	
  The
  greater of $100,000 or 75% of the average annual percentage rental payable
  for the previous two calendar years (excluding any capital improvement
  credit).

  

 

E.                                      For the years 1985 through 1994, Lessee shall
have a capital improvement credit for the total cost of building picnic areas
in the total amount of $110,000. This may be taken only against the annual
percentage rental in excess of $110,000. The maximum amount of credit for 1985
and 1986 shall be $50,000 for each year.

 

SECTION 3.04                                      LEASE PAYMENTS FROM 1995 THROUGH 2024.

 

A.                                   Commencing in 1995, Lessee shall pay City an
annual lease payment in the amount of 5.5% of Gross Receipts. Lessee shall make
its annual lease payments in six installments on the following dates: June 30,
July 31, August 31, September 30, October 31 and January 31
of the following year.

 

B.                                     Commencing in 1998, Lessee shall make its
annual lease payments in five installments on the following dates: June 30,
July 31, August 31, September 30 and October 31. If
necessary, Lessee shall make a sixth payment no later than March 31 of the
following year to reflect any moneys remaining owed to City that were
identified in

 

7

 

the Annual Report
required by Article 9.

 

SECTION 3.05                                      RENTAL CREDIT FOR PERIOD
BETWEEN 1995 AND 2004.

 

A.                                   If Lessee completes construction of the
improvements identified in the attached Exhibit C, a rental credit will
apply as specified below. The amount of the annual rental credit will be $1 per
car paying the parking fee during the time periods in which the City collects a
fee for parking at Lake Cunningham Park. The annual rental credit will be in effect
for a period of five years commencing as of the date of completion of the Improvements
identified in Exhibit C, or until the total amount of the annual credit
totals $675,000, whichever occurs first.

 

B.                                     The annual rental credit will be calculated
on a monthly basis. Effective on the one month anniversary of the completion of
the improvements identified in Exhibit C, City will furnish to Lessee a
monthly statement setting forth the portion of the annual rental credit which
accrued during the previous month. Lessee may apply the portion of the annual
rental credit as identified in the Parking Credit Statement to Lessee’s next installment
of rent due. The parties recognize and agree that between January 1 and May 31,
Lessee makes no installments on the current year’s annual rent. Lessee shall apply
the parking credits granted, if any, as stated in the Monthly Parking Credit Statements
for the months of January through May, to the June 30 installment of Lessee’s
annual rent. In the event that the total credits exceed the total rental installment
due on June 30, then Lessee may apply the remaining parking credits to the
next installments of annual rent until the parking credits have been exhausted.

 

SECTION 3.06                                      CHARGES ON PAST-DUE PAYMENTS.

 

A.                                   If Lessee fails to make any payments under
this Lease by the due dates, Lessee shall pay a charge on such past-due amounts
at the lesser of the two following rates:

 

1.                                       18% per annum; or

 

2.                                       5% per annum plus the rate prevailing on the
25th day of the month preceding the date of execution of this Lease
established by the Federal Reserve Bank of San Francisco on advances to member
banks under Section 13 and 13a of the

 

8

 

Federal Reserve Act.

 

B.                                     This provision shall not be deemed as a
forbearance on the payments of such amounts, and City retains any and all remedies for nonpayment of such
amounts.

 

ARTICLE 4

CAPITAL IMPROVEMENTS AND
MAINTENANCE

 

SECTION 4.01                                      CAPITAL IMPROVEMENTS.

 

“Capital
Improvements” means those repairs and replacements of capital items, including
fixtures, machinery or equipment which are necessary to repair or replace, over
time and which are subject to wearing out after a useful life.

 

SECTION 4.02                                      INVESTMENT IN CAPITAL
IMPROVEMENTS.

 

A.                                   In addition to Lessee’s maintenance
obligations set forth below, Lessee shall make any and all Capital Improvements
in a timely way. For calendar year 1998 and for each year throughout the term
of this Lease, Lessee shall expend at least $130,000 (“Minimum Maintenance
Allocation”) towards Lessee’s maintenance obligations under this Lease.
Commencing January 1, 1999 and each year following during the term of this
Lease, the Minimum Maintenance Allocation shall be adjusted by the Consumer Price
for Urban Wage Earners and Clerical Workers (“CPI”), using 1998 as the base year,
of the Bureau of Labor Statistics of the United States Department of Labor for
San Francisco-Oakland. Regardless of increases in the CPI, the Minimum
Maintenance Allocation shall not be adjusted upwards by more than 5% in any one
year.

 

B.                                     If the cost of Lessee’s maintenance
obligations exceeds the Minimum Maintenance Allocation, Lessee shall be
required to expend the amount necessary to maintain the Leased Premises,
including the Capital Improvements, in accordance with the terms of this Lease.

 

C.                                     In addition to Lessee’s bonding obligations
set forth elsewhere in this Lease, Lessee shall be required to furnish a
performance bond to secure Lessee’s obligations under this Article. The form of
the bond shall be substantially in the form of

 

9

 

Appendix
1. The legal form of the bond shall be satisfactory to the City Attorney, which
approval shall not be unreasonably withheld. The surety issuing the performance
bond shall be an “Admitted Surety,” as defined in Section 7.01. City shall
have the right to draw against the performance bond in the event of Lessee’s
failure to fully perform Lessee’s maintenance obligations as set forth in this
Article. City will provide Lessee with the opportunity to cure Lessee’s breach
in accordance with the provisions of Article 17 prior to drawing upon the
performance bond. Upon City’s withdrawal of all or any portion of the
performance bond, Lessee shall renew or replace the performance bond in order
to bring it current. Failure to renew or replenish the performance bond within
10 days of receipt of City’s notice to do so shall constitute a default of this
Lease.

 

SECTION 4.03                                      MAINTENANCE.

 

A.                                   Lessee shall, except as otherwise provided
herein, at Lessee’s sole cost and expense, keep and maintain the Leased
Premises as well as the various equipment described in this Lease, and every
part thereof in safe and good order, condition and repair.

 

B.                                     Lessee shall provide regular and normal
maintenance to all areas included in the Leased Premises.

 

C.                                     Lessee, at Lessee’s own cost and expense,
shall keep and maintain the Leased Premises clean and free of rubbish, litter,
graffiti, dirt, garbage, and other waste matter at all times; shall provide for
the regular and proper maintenance of the Leased Premises in a clean and
sanitary manner; and shall provide for the removal and disposal of garbage and
rubbish from Leased Premises.

 

D.                                    If any repairs required under the terms of
this Lease to be made by Lessee are reasonably deemed by the CAE Director to be
necessary, the Director may demand that Lessee make the same promptly. If
Lessee fails, refuses or neglects to commence such repairs and complete the
same with reasonable dispatch, City may cause such repairs to be made, and
shall not be responsible to the Lessee for any loss or damage that may accrue
to Lessee or Lessee’s business. In the event the City makes or causes said
repairs to be made, Lessee agrees to pay to the City on demand the cost

 

10

 

thereof.

 

E.                                      City shall not be required to make any
improvements, repairs or alterations to the Leased Premises that are not specified in this Lease.

 

SECTION 4.04                                      ANNUAL MAINTENANCE REPORT.

 

A.                                   Commencing in 1999, Lessee shall furnish to
the CAE Director on or before May 1, a written report from a qualified
consultant certifying that the Leased Premises have been maintained to a
standard consistent with the Water Park Industry; that the Leased Premises are
maintained in a safe condition; and that the Leased Premises are in compliance
with all building codes. The consultant’s reports shall also specify the repairs
and replacements that have been made during the prior year.

 

B.                                     The consultant providing the Annual
Maintenance Report shall meet the following qualifications:

 

1.                                       the consultant must not be an employee of
either Lessee or any of Lessee’s affiliates;

 

2.                                       the consultant must have the necessary
background, training, education and licenses that may be required in order to
provide the certifications required by the Annual Maintenance Report.

 

ARTICLE 5

IMPROVEMENTS

 

SECTION 5.01                                      CONSTRUCTION OF IMPROVEMENTS
BY LESSEE.

 

A.                                   Lessee shall not make any material
alterations or changes in the Leased Premises, including without limitation,
Capital Improvements, except in accordance with this Article. The term “Improvements”
as used in this Article means Capital Improvements, as well as all other
material alterations to the Leased Premises.

 

B.                                     Lessee shall submit to the City’s Director of
Public Works a realistic estimate of the cost of any Improvements to be
installed by the Lessee upon the Leased Premises prior to the commencement of
construction of the Improvements. This estimate shall be

 

11

 

subject
to verification by the City upon completion of the Improvements.

 

SECTION 5.02                                      PARTICULAR
IMPROVEMENTS.

 

The parties agree that the improvements identified in the “Legend”
portion of Exhibit B have been completed. On or before June 1, 1995,
Lessee shall, at its own cost, complete construction of a wave pool, promenade
and restrooms as more particularly described in the attached Exhibit C.

 

SECTION 5.03                                      PLANS
AND SPECIFICATIONS.

 

A.                                   Lessee shall, at Lessee’s sole cost and
expense, develop or have developed, plans and specifications for all Improvements.
All plans and specifications shall be prepared under the direction of and
certified by qualified professionals such as Architects, Landscape Architects, Structural
Engineers, Electrical Engineers, Mechanical Engineers and others as applicable
and who are licensed as required by the State of California. Lessee shall
design improvements in accordance with contemporary standards of design as
recognized in the Water Theme Park Industry and in accordance with City’s
standard specifications, then in effect.

 

B.                                     Lessee shall submit plans and documents
necessary to secure City’s site development permits to Director of the Public
Works Department as the owner’s representative, for review, and approval. Any
changes in the plans and specifications must be approved by the Director of
Public Works. The approval of Director of Public Works of the plans and
specifications or any changes therein shall not be unreasonably withheld.

 

C.                                     The Improvements must meet current editions
of all applicable codes and regulations established by City, County, State and
Federal jurisdictions.

 

D.                                    City shall be responsible for processing any
environmental clearance required for Improvements.

 

E.                                      City shall be responsible for the timely
clearance of the plans and specifications for Improvements through the federal
and state grant administration agencies. In the event that the federal or state
grant administration agencies, upon review of the plans

 

12

 

and specifications of the
Improvements, request any change in the plans and specifications, the parties
acknowledge that the requested change must be addressed. Lessee shall make the
required change if the cost of the requested change is equal to, or less than,
10% of the proposed Improvements. In the event that the cost of the requested
change is more than 10% of the proposed Improvements, then City, at its sole
option, may pay for the additional cost or relieve Lessee of the obligation to
install the particular improvement or element of the improvement requiring the
requested change.

 

SECTION 5.04                                      PERMITS AND TAXES.

 

A.            Lessee agrees that any and all site
development permits, building permits, and any other necessary approvals for
the improvements shall be obtained prior to the commencement of construction.

 

B.            Lessee shall secure and pay for all necessary
permits, licenses, and taxes for the construction of Improvements, including
but not limited to the following:

 

1.             Storm sewer area fees;

 

2.             Sanitary area fees;

 

3.             Sewage Treatment Plant fees;

 

4.             Construction and Conveyance Taxes;

 

5.             Building Permit;

 

(a)           Plan Check and inspection fees;

 

(b)           Site Permits;

 

(c)           Building and Structure Tax;

 

(d)           CRMP Tax.

 

C.            Fees and taxes payable pursuant to this section are
due and payable prior to the issuance of the building permits and are payable
at the current rate at the time of payment.

 

13

 

SECTION 5.05                                      INSPECTION AND TESTING.

 

A.                                   Lessee shall construct and install all
Improvements as shown in the approved plans and specifications. All contractors
and subcontractors engaged in the construction of Improvements must be
currently licensed by the State of California, where appropriate.

 

B.                                     Lessee shall employ properly licensed and
vocationally qualified consultants satisfactory to City to provide City with
soil reports and material testing reports when requested by City’s Director of
Public Works.

 

C.                                     Lessee shall have a testing and inspection
program satisfactory to the reasonable requirements of the Director of Public
Works. The program shall be detailed when the plans are prepared to determine
exactly what materials must be tested and to what standards (ASTM standards
will be the criteria); provided, however, that tests of concrete, structural
steel, flame-retardant material and roofing material shall absolutely be
required.

 

D.                                    Lessee shall submit all test results to the
Department of Public Works for review and retention for the public record. All
results of testing which do not meet the standards of the testing program shall
be reconstructed and results resubmitted for review and retention.

 

E.                                      Lessee shall provide inspection reports by
properly licensed and occupationally qualified architects and/or engineers
satisfactory to the reasonable requirements of the Director of Public Works to
certify to City that all electrical and mechanical work and structures are
built to the approved plans and specifications.

 

F.                                      Lessee understands and agrees that
Improvements shall be subject to complete inspection and approval by City’s
Public Works Department as the owner’s representative. City shall have the
right to have on the Leased Premises at any time during the construction period
an inspector who shall have the right of access to the Leased Premises and the
construction work.

 

G.                                     Where construction of Improvements is in
phases, Lessee shall not proceed with subsequent phases of construction until
the prior phase of construction has been inspected and approved by the City’s
Public Works Department. It is understood by

 

14

 

City
that time is of the essence in the inspection and approval process of the
Public Works Department of City.

 

H.                                    The inspection by the Public Works Department
shall be independent of and supplementary to the inspection reports provided by
Lessee.

 

I.                                         Lessee shall furnish City with final as-built
drawings upon completion of construction.

 

SECTION 5.06                                      DIRT.

 

In
the event that City performs any work at Lake Cunningham Park requiring the
excavation of dirt (“Dirt”). City agrees to give Lessee the right of first
refusal to use the Dirt for construction purposes on the Leased Premises.
Lessee shall bear all costs incidental to removal of the Dirt from the point of
excavation to Lessee’s desired site, but City shall not charge Lessee for the
value of the Dirt. City makes no representations or warranties regarding the
quality or condition of the any Dirt and Lessee agrees to accept the Dirt “as
is.” Lessee shall indemnify and hold City harmless from any liability or damage
to any property, including without limitation, City’s property as a result of
Lessee’s removal or use of the Dirt.

 

ARTICLE 6

CONDITION
OF CITY PROPERTY–DAMAGES

 

SECTION 6.01                                      INSPECTION OF PROPERTY.

 

A.                                   Lessee acknowledges personal inspection of
the Leased Premises and the remainder of Lake Cunningham Park and evaluation of
the extent which such physical condition will affect the Water Theme Park
operation. Lessee agrees to mutually inspect said property with City to
document the existing condition of said property.

 

B.                                     City agrees that it will make no changes to
the Leased Premises after such inspection without notification to Lessee and
approval by Lessee, which approval shall not be unreasonably withheld. Such
approval shall not be needed in an emergency. Lessee agrees to make no demands
upon City for any improvements or alterations

 

15

 

thereto
other than agreed to herein or subsequently agreed to in writing.

 

C.                                     Lessee acknowledges the presence of
high-pressure gas lines in the area adjacent to land use “E” shown on Exhibit B.

 

SECTION 6.02                                      DAMAGE TO CITY PROPERTY.

 

Lessee
shall pay to City the cost of any damage to access roads or other City property
in Lake Cunningham Park caused by Lessee or its contractors or subcontractors
in the construction, improvement or operation of the Leased Premises,
reasonable wear and tear excepted.

 

ARTICLE 7

BONDS AND LIENS

 

SECTION 7.01                                      ADMITTED SURETY.

 

The
term “Admitted Surety” as used in this Article means a surety or insurance
carrier admitted to transact insurance in the State of California, as evidenced
by the surety’s or insurer’s possession of a valid Certificate of Authority issued
by the California Department of Insurance, as defined by the California
Insurance Code.

 

SECTION 7.02                                      SECURITY INSTRUMENTS.

 

A.                                   Lessee, as a condition of the approval of the
plans and specifications for any Improvements by the Director of Public Works,
shall at its own cost and expense procure and provide a payment bond or letter
of credit, or when permitted as set forth below, a certificate of deposit, as
specified in this section. Lessee shall refrain from performing, or causing the
performance of, any work related to the construction of Improvements until
Lessee furnishes a bond, letter of credit, or when permitted as set forth
below, a certificate of deposit, satisfying this section to cover the
costs of materials and labor, supplies and equipment used directly or indirectly
for Improvements to be constructed, to guarantee and assure the prompt payment
of same and to protect City from all liens or liability arising from such
construction.

 

16

 

B.                                     Lessee shall furnish to City a payment bond
or letter of credit in an amount equal to not less than One Hundred Percent of
the cost estimate of the Improvements as approved by the Director of Public
Works except where the circumstances described in subsection C, below,
apply.

 

C.                                     In instances where the funds to pay for the
Improvements are held or controlled by a third party, such as Lessee’s lender
or in an escrow account, mutually acceptable to the City Manager and Lessee,
and the payment of the funds to Lessee will be made upon Lessee’s satisfaction
of the conditions, substantially in the form and substance as set forth in Exhibit C, the following provisions shall apply:

 

1.                                       In instances where the total estimated cost
of the Improvements does not exceed $100,000, the City Manager, in lieu of the
payment bond or letter of credit in the full amount of the estimated cost of
the improvements, shall instead require a payment bond, letter of credit, or
certificate of deposit in an amount equal to the maximum amount that Lessee
will incur before payment is made to Lessee by Lessee’s lender or the escrow
holder. In no event, however, shall the payment bond, letter of credit, or certificate
of deposit be in an amount less than 20% of the estimated cost of improvements.

 

2.                                       In instances where the total estimated cost
of the improvements exceeds $100,000, the City Manager, in lieu of the payment
bond or letter of credit in the full amount of the estimated cost of the
Improvements, shall instead require a payment bond or letter of credit in an
amount equal to the maximum amount that Lessee will incur before payment is
made to Lessee by Lessee’s lender or the escrow holder. In no event, however,
shall the payment bond or letter of credit be in an amount less than 20% of the
estimated cost of improvements.

 

D.                                    In the instances where a payment bond is
furnished, to be approved, the bond must comply with the following provisions:

 

1.                                       The bond shall provide that if Lessee or its
subcontractors fails to pay any of the persons named in Section 3181 of
the California Civil Code, or amounts due under the Unemployment Insurance Code
with respect to the work or labor contracted to be done and performed by any
claimant, then the surety or sureties will pay for

 

17

 

same,
in an amount not exceeding the amount of the bond, and also, in case suit is
brought upon the bond, a reasonable attorney’s fee to be fixed by the court.

 

2.                                       The bond must be issued by an Admitted Surety
and shall, by its term, Inure to the benefit of any of the persons named in Section 3181
of the California Civil Code, to give a right of action to such persons or
their assigns in any suit brought upon the bond, including the right of action
to recover on the bond, in any suit brought to foreclose the liens provided for
in Title 15, Part A, Division 3 of the California Civil Code or in a
separate suit brought on this bond.

 

3.                                       The bond shall otherwise comply with all of
the provisions of Title 15, Part 4, Division 3 of the California Civil
Code.

 

4.                                       The legal form of the bond shall be
satisfactory to the City Attorney, which approval shall not be unreasonably
withheld.

 

E.                                      In instances where Lessee furnishes City with
a letter of credit, the letter of credit must meet the following provisions:

 

1.                                       The letter of credit must be an irrevocable
standby letter of credit and must be issued by a banking institution authorized
to transact business within the State of California and reasonably acceptable
to City’s Manager.

 

2.                                       The letter of credit must be payable upon
City’s demand for payment.

 

3.                                       The duration of the letter of credit shall be
for a period time to cover the construction of the Improvements, including a
reasonable amount of time for any unanticipated delays and the time for the
filing of claims to have expired.

 

4.                                       The legal form of the letter of credit shall
be satisfactory to the City Attorney, which approval shall not be unreasonably
withheld.

 

F.                                      In instances where Lessee furnishes a
certificate of deposit, the certificate of deposit must meet the following
provisions:

 

1.                                       The certificate of deposit must be issued by
a banking institution authorized to transact business within the State of
California and reasonably acceptable to City’s Manager.

 

2.                                       The certificate of deposit must be payable
upon City’s demand for payment.

 

18

 

3.                                       The duration of the certificate of deposit
shall be for a period time to cover the construction of the Improvements,
including a reasonable amount of time for any unanticipated delays and the time
for the filing of claims to have expired.

 

4.                                       The legal form of the certificate of deposit
shall be satisfactory to the City Attorney, which approval shall not be
unreasonably withheld.

 

SECTION 7.03                                      INDEMNITY.

 

Lessee
shall at all times indemnify and save City harmless from all claims for labor
or materials in connection with construction, repair, alteration, or
installation of structures, Improvements, equipment, or facilities upon the
Leased Premises, and from the cost of defending against such claims, including
attorney’s fees. This section will survive expiration or sooner
termination of this Agreement.

 

SECTION 7.04                                      LIENS.

 

In
the event a lien is imposed upon the Leased Premises, City may require that
Lessee shall either:

 

A.                                   Record a valid Release of Lien; or

 

B.                                     Deposit with City cash in an amount equal to
125% of the amount of the lien and authorize payment to the extent of said
deposit to any subsequent judgment holder that may arise as a matter of public
record from litigation with regard to lienholder’s claim; or

 

C.                                     Procure and record a bond in accordance with Section 3143
of the California Civil Code; which frees the Leased Premises from the claim of
the lien and from any action brought to foreclose upon the lien.

 

ARTICLE 8

PARKING
FACILITIES

 

SECTION 8.01                                      CITY’S PARKING FACILITY.

 

A.                                   City shall operate the parking facility
adjacent to the Leased Premises (“City’s Parking Facility”) and shall collect
and be entitled to all revenue therefrom.

 

19

 

B.                                     City may charge parking fees for parking in
City’s Parking Facility at a rate not to exceed the rate charged at any of City’s
Regional Parks: Kelley Park, Alum
Rock Park and Almaden Lake Park (collectively, “City’s Regional Parks”). The
parties acknowledge and agree that rates in effect at City’s Regional Parks,
are $3 per car and $7 per bus, as of September, 1994.

 

C.                                     City shall be responsible for security,
capital maintenance, and normal maintenance in City’s Parking Facility as City
deems reasonably necessary, except daily litter and trash maintenance during
Lessee’s operating periods. Lessee shall provide parking assistance, and daily
litter and trash maintenance in the City’s Parking Facility during Lessee’s
operating periods.

 

SECTION 8.02                                      ADDITIONAL
PARKING.

 

City
agrees to construct additional parking adjacent to the Capitol Expressway Berm
as described in the Lake Cunningham Park Master Plan (“Additional Parking”) if
Lessee  demonstrates that
the Additional Parking is required as specified in this Section.

 

A.                                   The Additional Parking will be deemed
required, if the undeveloped portion of the Leased Premises (“Overflow Lot”) is
utilized by City and Lessee for parking of cars on 24 days during a single operating season of
the Leased Premises at a minimum capacity of 50% for at least one hour, or is
filled to capacity on 12 days during a single operating season of the Leased
Premises.

 

The parties acknowledge that the capacity of the Overflow Lot is 75
cars. Lessee, at its sole cost, shall be responsible for any work necessary to
render the Overflow Lot suitable for unpaved parking purposes, including
without limitation, grading work, and any work necessary to maintain the
Overflow Lot. Once the Overflow Lot is in a condition suitable for parking
purposes, either City or Lessee may initiate use of the Overflow Lot if the
following conditions are met: (1) there is no available parking spaces in
Lots A, B, C and the Marina Parking Lot as depicted in Exhibit B and (2) the
initiating party orally notifies the other that the Overflow Lot is in use. For
purposes of this subsection, notice to the City must be made to Park Facility
Supervisor or a Lake Cunningham Park Ranger on duty and notice to Lessee must
be

 

20

 

made
to Lessee’s park manager.

 

Lessee will provide staff to direct cars into the Overflow Lot. City
staff will monitor usage of the Lake Cunningham parking lots including the
Overflow Lot when it is in use.

 

B.                                     Alternatively, if Lessee constructs
additional Improvements in the Overflow Lot, the need for Additional Parking
will be deemed to be required.

 

SECTION 8.03                                      CONSTRUCTION OF ADDITIONAL
PARKING.

 

In
the event that the need for Additional Parking is demonstrated as specified in Section 8.02,
then City agrees to use reasonable efforts to complete construction of the
Additional Parking prior to the commencement of Lessee’s next operating season.

 

ARTICLE 9

RECORD
KEEPING

 

SECTION 9.01                                      FINANCIAL AND ACCOUNTING RECORDS.

 

A.                                   Lessee shall establish and maintain complete
records of the financial transactions of all the business operations conducted
on the Leased Premises or in any way related thereto, which records shall be
kept in conformance with generally accepted principles of accounting and as
reasonably required by City’s Director of Finance. The method of accounting
shall correctly and accurately reflect the Gross Receipts and disbursements of
Lessee in connection with the Leased Premises. The system of accounting,
including bank accounts, established for the Leased Premises shall be separate
from the accounting system used for any other business operated by Lessee or
for recording Lessee’s personal financial affairs.

 

B.                                     Lessee shall use cash registers for the
recordation of all receipts associated with operations permitted under this
Lease, excluding ticket sales. Cash registers must be kept in full public view
during such times that the Leased Premises are open for business. Lessee shall
retain cash register tapes for four (4) years, or until such time as their
destruction is authorized by City’s Director of Finance, whichever is sooner.

 

21

 

C.                                     Lessee shall use a method of ticketing approved
by the Director of Finance for those Gross Receipts which are based on a
percentage of gross ticket sales. Where season-long passes are issued by the
Lessee, the Director of Finance will be given a list of pass recipients,
including the purpose for granting each pass. The number of one-day passes
granted for promotional purposes in any year must receive the prior approval of
the Director of Finance. Passes issued for purposes not approved by the Director
of Finance shall be accounted for as though full admission charges had been collected
for each pass. The approval of the Finance Director shall not be unreasonably
withheld.

 

D.                                    City reserves the right at its own expense to
conduct audits of Lessee’s operations under this Lease. All accounting records,
basic or secondary, used in the ordinary course of business, including cash
register tapes and all banking deposit tickets, statements and any other
banking records, purchase invoices, and all records of sales, excise or luxury
taxes paid or payable by Lessee for sales, fees and charges from the operation
of Leased Premises shall be made available to City’s Manager, City’s Attorney,
City’s Director of Finance, City’s Auditor and/or the CAE Director for inspection
and/or auditing purposes upon request.

 

E.                                      Except as provided in subsection B
above, Lessee shall maintain all the documents required to be maintained under
this Agreement for a minimum period of four years or such longer period as is
required by law from the date of expiration or sooner termination of this
Agreement.

 

SECTION 9.02                                      ACCOUNTING AND OPERATIONS REPORTS.

 

A.                                   Lessee shall prepare and submit by the
fifteenth (15th) day of the following month to the City for each
operating month during the term of this Lease, a detailed report of the Gross
Receipts from the operations for the preceding calendar month. Lessee shall
also submit a detailed report of the Gross Receipts from the operations for the
preceding calendar year by January 15 of the following year, except for
the year 2025 in which the report shall be due fifteen (15) days after the
termination of the Lease. Such reports shall be in such form, detail and number
of copies that are acceptable to

 

22

 

City’s
Director of Finance and one true and signed copy of each report shall be sent
to the Director of Finance.

 

B.                                     Through calendar year 1994 and for other
periods of time as may be required by this Lease, Lessee shall also have
prepared an audited annual report by an independent certified public accountant
in accordance with generally accepted accounting/auditing principles of all
financial transactions of the preceding year related to Lessee’s operation
under this Lease (“Audited Report”). The Audited Report must be in a form
acceptable to the Director of Finance and must include (but not be limited to) separately
stated total Gross Receipts from admissions, group picnics and food and beverage
sales. The Audited Report, when required by this Lease, shall be submitted to
Director no later than March 31 following each calendar year of operation
during the term of this Lease except for the year 2024 in which the Audited
Report shall be due thirty (30) days after the termination of the Lease.

 

C.                                     Commencing with calendar year 1995, Lessee
shall have prepared an annual “Agreed Upon Procedures Report” for the prior
calendar year which is prepared in accordance with the procedures set forth in
the attached Appendix 2 (“Annual Report”). Appendix 2 also sets forth the
period of time to be covered and the due dates for the initial and subsequent
Annual Reports. In the event that Lessee assigns or transfers this Lease to any
other person or entity, City, at its option, may require the assignee as condition
of the assignment, to prepare annual audited financial reports consistent with the
provisions of subsection B. above, in lieu of the Annual Report.

 

D.                                    If the annual Gross Receipts shown by the
report made by Lessee to the Director of Finance pursuant to subsection A.
above should be found to be less than the amount of annual Gross Receipts
disclosed by the Audited Report or Annual Report, as required in subsections B.
or C. above, Lessee shall pay the delinquent amount along with submission of
the Report. If the Audited Report or Annual Report indicates that the annual
Gross Receipts were in excess of the Gross Receipts shown by the unaudited report
required by subsection A. above, Lessee shall receive a rental credit for
any over payment for the next year, except that in the case of the reports for
calendar year 2024, any overpayment shall be refunded to Lessee by City.

 

23

 

ARTICLE 10

STANDARD
OF OPERATIONS

 

SECTION 10.01                               SCOPE
AND QUALITY OF OPERATIONS.

 

A.                                   Lessee may operate the Leased Premises at
such days and hours as shall be reasonably approved by the CAE Director. At a
minimum, Lessee shall operate the Leased Premises for eight (8) hours
daily during the time period when East Side Union High School District (the
high school district in which the Leased Premises are located) is in recess for
the summer months, weather permitting. In the event that East Side Union High
School District changes its schedule to a year round schedule, Lessee
shall operate the Leased Premises for eight (8) hours daily from June 1
to Labor Day, weather permitting.

 

B.                                     Lessee shall furnish adequate daily on-site
internal security for the Leased Premises. Lessee shall also provide necessary
lifeguards for public safety.

 

C.                                     Lessee shall, at all times, operate the
Leased Premises and conduct all operations in a good businesslike manner and
render to the public using the Leased Premises, good quality products and
efficient and courteous service. Lessee shall submit to the CAE Director a menu
listing the food to be served on the Leased Premises. In the event that City
finds that service rendered or products sold by the Lessee are substandard, or
that any other provisions of this Lease are not being adequately performed or
complied with, Lessee, upon notice from City of the nonperformance or noncompliance,
shall immediately correct any such violation, deficiency or omission.

 

SECTION 10.02                               EMPLOYEES.

 

Lessee
shall use its best efforts in requiring that any and all personnel employed by
the Lessee in conducting the operations of the Leased Premises are vocationally
qualified to perform the duties assigned to them and are of good moral
character. Lessee’s employees must be neatly attired and shall conduct
themselves at all times in a

 

24

 

courteous
and businesslike manner.

 

ARTICLE 11

ENTRANCE FEES AND PRICES

 

SECTION 11.01                               ENTRANCE FEES.

 

The
Leased Premises shall be open to the public at fees which are not in excess of
the usual and customary fees for a water theme park and shall be subject to the
approval of the CAE Director. Lessee shall submit the entrance fees and any
other fees for activities prior to start of annual operations to the CAE
Director for the Director’s approval, which approval will not be unreasonably
withheld.

 

SECTION 11.02                               PRICING.

 

The
prices to be charged by Lessee for all services, food and beverages shall be
fair and reasonable and subject to the approval of the CAE Director. Lessee
shall submit a list of such prices to the CAE Director for the Director’s
approval at least ten (10) days prior to the beginning of annual
operations. Lessee shall also submit any changes in such prices to the CAE
Director for the Director’s approval at the time of making such changes. The
failure of the CAE Director to disapprove any changed prices submitted within
ten (10) days of the submittal shall be deemed an approval of such prices.
The approval of the CAE Director shall not be unreasonably withheld.

 

25

 

ARTICLE 12

UTILITIES

 

SECTION 12.01                               UTILITIES.

 

A.                                   Lessee, at its own cost, shall construct or
cause to be constructed, all utility lines from existing facilities and shall
maintain the lines so constructed. Where it is necessary for Lessee to bring
utilities to the Leased Premises, Lessee shall locate such utilities at
locations approved by the Director of Public Works, and City shall grant Lessee
rights of entry as approved by the Director of Public Works for the
construction and maintenance of such utilities. Lessee agrees to repair to City’s
standard specifications any damages caused by Lessee’s construction and
installation of utility lines.

 

B.                                     Unless and except to the extent otherwise
specifically provided by other provisions of this Lease, Lessee shall pay for
all metered and unmetered utility services including garbage service supplied
to the Leased Premises. Lessee shall reimburse City for well taxes paid by City
on water taken by Lessee from the well on the Leased Premises. Water furnished
by San Jose Municipal Water System to Lessee shall be charged to Lessee at the
prevailing rates for such service.

 

C.                                     Lessee shall pay City utility taxes on all
utility services used by Lessee. City shall bill Lessee for all utility taxes
not billed directly to Lessee by the utility service supplier.

 

D.                                    Lessee shall pay for cost of installation of
any secondary utility meters necessary to determine the cost of utilities used
by Lessee on utilities which are currently metered to the City.

 

E.                                      Lessee shall provide and pay for all
telephone installation, equipment and service required by Lessee.

 

F.                                      City reserves, and shall always have the
right to enter Leased Premises by itself or its agents for the purpose of
developing, repairing and maintaining existing City utilities through the
Leased Premises. Nonemergency development, repair and maintenance by City shall
be coordinated with Lessee’s operating hours and schedule

 

26

 

as
far as reasonably practical.

 

G.                                     City reserves, and shall always have the
right to water from the existing well in addition to access to maintain the existing well. City shall reasonably
coordinate such access with Lessee’s operating schedule.

 

H.                                    Lessee shall allow access to the existing
well site by PG&E and its large equipment. PG&E’s access must be maintained at all times.

 

I.                                         Lessee shall protect existing City utility
lines at all times during construction and operation of the Leased Premises.
Any damage to these utility lines shall be repaired by Lessee at Lessee’s sole cost, except where
damage is caused by City, in which case
City shall repair such damage.

 

J.                                        City shall cause to be installed at its
expense on the Leased Premises a gas pressure reducer system if required to
connect to PG&E’s source line.

 

ARTICLE 13

SIGNS AND ADVERTISING

 

SECTION 13.01                               SIGNS.

 

A.                                   Signs within Lake Cunningham Park.

 

1.                                       Lessee shall not attach, hang, or otherwise
affix or display any commercial advertising sign or device within the Leased
Premises or upon Lake Cunningham Park property without the prior written
consent of the CAE Director.

 

2.                                       Lessee shall have the right to have a sign or
signs advertising the Water Theme Park on the Lake Cunningham Park property
outside the Leased Premises during the Lease term at Lessee’s sole cost. Such
sign or signs shall be at a location as shown on Exhibit B. The design and
construction of any such sign shall be approved by the Director of Public
Works. The maintenance of any such sign and any complementary landscaping shall
be the sole responsibility of the Lessee. Lessee shall bear the cost of any
utilities constructed to the site of any such sign and shall pay for any
utilities used thereon. The Director of Public Works shall grant an
encroachment permit or right of entry with reasonable conditions and
restrictions to allow Lessee to

 

27

 

construct
and maintain the necessary utilities to serve such sign(s) at locations approved
by the Director of Public Works. This permit shall not constitute an easement,
deed or other interest in real
property.

 

B.                                     Signs outside of Lake Cunningham Park. 

 

For
all signs outside of Lake Cunningham Park, Lessee shall be subject to all the
ordinances, resolutions, rules and
regulations of the City of San Jose or any other applicable governmental entity. Lessee shall pay for all necessary
permits for such signs.

 

SECTION 13.02                               IDENTIFICATION OF FACILITY.

 

Signs,
literature and advertising must identify the Water Theme Park, as far as
reasonably practical, as public-owned property operated as an outdoor
recreational facility open to the public.

 

ARTICLE 14

COMPLIANCE WITH LAWS

 

SECTION 14.01                               COMPLIANCE WITH ORDERS, ORDINANCES AND LAWS.

 

Lessee
shall obtain and maintain all required City of San Jose and State of California
licenses that are required by City ordinance and State law as a condition
precedent to operating the Leased Premises. Lessee shall fully comply with all
Federal, State, and local laws, statutes, and ordinances; all orders of the
Health Officer of the County of Santa Clara; all directives of the CAE
Director. Lessee shall grant access for inspection purposes of any duly
authorized representative of the State Board of Health or the County’s Health
Officer, or any duly authorized representative of the CAE Director.

 

SECTION 14.02                               NONDISCRIMINATION.

 

A.                                   In the performance of work under this Lease,
Lessee, or its contractors or subcontractors will not refuse or fail to hire or
employ any qualified person, or bar or

 

28

 

discharge
from employment any person, or discriminate against any person, with respect to
his or her compensation, terms, conditions or privileges of employment, because
of such person’s race, color, creed, religion, national origin, ancestry, sex,
age, or physical handicap, except for valid reasons of health and safety.

 

B.                                     Lessee or its sublessees will not
discriminate in the providing of admission or service hereunder against any
person on the basis of sex, race, color, creed, religion, national origin, or
residency, nor for age or physical handicap except for valid reasons of health
and safety.

 

C.                                     Lessee shall include in any subcontract a
nondiscrimination clause forbidding discrimination against any person in the
providing of service hereunder because of sex, race, color, religion, creed,
national origin, or residency, nor for age or physical handicap except for
valid reasons of health and safety.

 

D.                                    Lessee shall comply with the provisions of
Title VI of the Civil Rights Act of 1964, and all other laws related to non-discrimination.

 

SECTION 14.03                               TAXES/NOTICE
OF POSSESSORY INTEREST TAX.

 

A.                                   Lessee recognizes and understands that this
Lease may create a possessory interest subject to property taxation and that
Lessee may be subject to payment of property taxes levied on such interest, and
that such tax payment shall not reduce any rental fees due City hereunder, and
that any such tax shall be the liability of and be paid by the Lessee.

 

B.                                     Lessee shall also pay for all taxes,
assessments, fees and charges on goods, merchandise, fixtures, appliances and
equipment owned by Lessee or used on the Leased Premises.

 

29

 

ARTICLE 15

ASSIGNMENT

 

SECTION 15.01                               ASSIGNMENT OF INTEREST IN LESSEE.

 

Lessee
represents and warrants that Lessee is a wholly owned subsidiary of Viacom
Inc.

 

SECTION 15.02                               ASSIGNMENT, SUBLEASING, TRANSFERS.

 

A.                                   Lessee shall not assign this Lease or any
interest herein, and shall not sublet the Leased Premises or any part thereof,
or any right or privilege appurtenant thereto, or suffer any other person (the
agents, officers and employees of City excepted) to occupy or use the Leased
Premises without prior written consent of the City Manager, which consent shall
not be unreasonably withheld. In considering a request for assignment or
subletting, the City Manager shall consider the reputation, economic strength
and experience of the party to which the assignment or sublease is to be made.
The consent of the City Manager to an assignment of the Lease or to the sublease
of a major portion of the Leased Premises shall additionally require that the
City Manager be reasonably satisfied that the proposed assignee or sublessee:

 

1.                                       Is an experienced, successful and reputable
developer and constructor of major water theme parks, if the assignment or
sublease is during any construction phase;

 

2.                                       Is an experienced, successful and reputable
operator of major water theme parks;

 

3.                                       Has a net worth exceeding Six Million Dollars
($6,000,000);

 

4.                                       Is in sufficient financial condition to
handle the lease obligations with adequate security to City, including
furnishing to City the performance bond required under Article 4 and the
bonds required in Article 7;

 

5.                                       Has an excellent reputation for business
operations and service to the public.

 

30

 

B.                                     Lessee agrees that conditions on assignment
set out above and in subsection D below are reasonable and waives any and
all rights under California Civil Code §1951.4.

 

C.                                     A copy of any proposed sublease shall be
delivered to the City with the request for consent to sublease. A consent to
one assignment, subletting, occupation or use by any other person shall not be
deemed to be a consent to any subsequent assignment, subletting, occupation or
use by another person. Any such assignment or subletting without such consent
shall be void.

 

D.                                    Any assignee of Lessee shall execute an
agreement running to City assuming Lessee’s obligation under this Lease, and
Lessee shall remain fully obligated to City under this Lease notwithstanding
any transfer, assignment, subletting to any transferee, assignee, sublessee or
encumbrance by any second lender unless Lessee is released in writing by the
City Manager. Such release will not be unreasonably withheld by the City
Manager.

 

E.                                      This section shall not be applicable
with respect to transfers of this Lease arising from the exercise of a power of
sale or judicial foreclosure pursuant to the terms and conditions of a
hypothecation or mortgage previously approved by City pursuant to section 15.02.

 

F.                                      All of the terms and provisions of this Lease
shall inure to the benefit of and be binding upon the parties hereto and any
successors of Lessee as fully and to the same extent as though specifically
mentioned in each instance, and all covenants, stipulations and agreements in
this Lease shall extend to and bind any assigns or sublessees of Lessee.

 

SECTION 15.03                               LEASE
ENCUMBRANCE.

 

City
agrees to consent to an encumbrance, reasonably requested by Lessee, of this
Lease, leasehold estate and the improvements thereon, by deed of trust,
mortgage, chattel mortgage or other security instrument, to assure the payment
of a promissory note or notes of Lessee pursuant to a consent to encumbrance
and amendment of Lease approved by the City Manager and satisfactory to the
City Attorney. Such

 

31

 

consent
and amendment shall provide that any assignment or sale in foreclosure, in lieu
of foreclosure of otherwise, to any party other than the original encumbrancer,
shall be to a reputable, qualified and financially responsible person or
entity.

 

ARTICLE 16

INDEMNIFICATION AND INSURANCE

 

SECTION 16.01                               INDEMNIFICATION AND HOLD HARMLESS.

 

This
Lease is made upon the express condition that Lessee covenants and agrees to
defend, indemnify and hold harmless City, its officers, employees and agents
from all damages, causes of action, claims, judgments, penalties, liabilities,
losses, costs, or obligations on account of or arising out of or resulting from
any cause or causes whatsoever, in any way connected with Leased Premises, or
its use by Lessee, its sublessees, contractors, employees, licensees or agents,
including but not limited to, the failure of Lessee, its sublessees,
contractors, employees, licensees or agents to keep the Leased Premises and all
improvements in good, safe and sanitary condition, and any acts, activities, or
omissions of Lessee, its sublessees, contractors, employees, licensees or
agents in connection with any activity, service, or work performed pursuant to
this Lease. It is agreed, however, that Lessee’s obligation to indemnify,
defend and hold City harmless does not apply to injury, damage, or loss caused
solely by the active negligence of City or its officers or employees acting
within the course and scope of their employment by City, when neither Lessee
nor any of Lessee’s agents, employees, guests or licensees are in any way at
fault and in no way contributed to causing the injury or loss. This section will
survive expiration or sooner termination of this Agreement.

 

32

 

SECTION 16.02                               INSURANCE REQUIREMENTS.

 

Lessee
at Lessee’s sole cost and expense, and for the entire term of this Lease or any
renewal shall obtain and maintain at least all of the minimum insurance
requirements set forth in the attached Exhibit E.

 

SECTION 16.03                               INCREASE IN INSURANCE
COVERAGE.

 

Any
increase in the amount of liability insurance coverages, as required in Exhibit E,
may be subject to renegotiation after the fifth year of operation and at each
fifth year interval thereafter. The negotiations shall commence three (3) months
prior to the termination of the current insurance period. In the event
agreement is not reached within three (3) months from commencement of
negotiations, the controversy, at City’s option, shall be submitted to
arbitration under the Commercial Rules of Arbitration of the American
Arbitration Association, except as hereinafter modified; the locale for the
arbitration shall be within the City of San Jose; the sole issue for
determination by the arbitrator shall be the increase in the liability insurance
coverages required for the  period
under review. The arbitrator shall consider among any other relevant factors,
the change in the U.S. Department
of Labor San Francisco-Oakland Consumer Price Index for all urban consumers, any changes in
liability laws affecting the operation of the Leased Premises, any changes in
the number and monetary amount of personal injury claims and judgments that may
arise out of operation of the Leased Premises, and the claims history of the
operation of the Leased Premises. The expenses of the arbitration shall be
borne equally by the parties. Lessee shall continue to provide liability
insurance in the amount currently being provided pending final renegotiation
thereof in the manner heretofore provided.

 

33

 

ARTICLE 17

 

DEFAULT AND REMEDIES

 

SECTION 17.01                               TIME OF ESSENCE/BREACH.

 

A.                                   Where performance by either party of this
Lease is specified to occur on or before
a certain date, time shall be of the essence.

 

B.                                     Performance by the Lessee of each and every
condition, covenant or provision of this Lease is material, the breach of which
shall constitute a material breach for which the City may terminate this Lease.

 

SECTION 17.02                               DEFAULT BY LESSEE.

 

Without
limiting the generality of Section 17.01, the following shall be
considered as  default on
the part of the Lessee:

 

A.                                   Any action taken or suffered by the Lessee
under any insolvency or bankruptcy act,
including the appointment of a receiver to take possession of all or
substantially all of the assets of the Lessee; provided that if such action is
not initiated by Lessee, Lessee
shall have ninety (90) days in which to terminate, set aside or otherwise cure such
action.

 

B.                                     Any general assignment by Lessee on behalf of
creditors;

 

C.                                     Vacation or abandonment of the Leased
Premises by Lessee;

 

D.                                    Transfer of the managing interest of Lessee
without the consent of the City Manager
or any other transfer that is in violation of the terms of Article 15.

 

E.                                      Failure to comply with Article 7 of this
Lease within fifteen (15) days after written notice of City’s requirement of a
bond, release of lien or cash as provided In Article 7.

 

F.                                      The failure to complete any improvements in a
timely manner.

 

G.                                     Failure to make rental payments to City or
principal and interest payments to any lender when due, where the delinquency
continues beyond fifteen (15) days
following written notice for payment.

 

34

 

H.                                    Failure to provide and maintain all insurance
as set forth in Article 16. 

 

I.                                         Failure to comply with the provisions of Article 4
where the failure continues for fifteen (15) days following written notice from
City specifying the breach of Article 4.

 

J.                                        The failure in the performance or compliance
with any of the other terms, covenants or conditions contained in this Lease
within thirty (30) days following the service on Lessee of a written notice
from City specifying the default complained of; provided that in the event such
default is not curable within thirty (30) days after the service of written
notice upon Lessee, City shall not terminate the Lease pursuant to such default
if Lessee immediately commences to cure said default and diligently pursues
such cure to completion.

 

K.                                    Any trustee, beneficiary, mortgagee or lender
under a hypothecation or mortgage previously approved by the City Manager shall
have the right during the term of this Lease and within thirty (30) days of
written notice of default from City to undertake to cure any default or to
prevent a termination of this Lease by acting in place of the Lessee.

 

SECTION 17.03                               CONTINUANCE OF LEASE
AFTER DEFAULT.

 

A.                                   This Lease shall continue in effect for so
long as City does not terminate Lessee’s right to possession, though Lessee may
be in default under the Lease and has abandoned the property, and City may
enforce all its rights and remedies under this Lease, including, but not
limited to, the right to recover the rent as it becomes due under the Lease. No
act of City except the giving of written notice to Lessee shall terminate this
Lease.

 

B.                                     For purposes of this section, the following
do not constitute a termination of Lessee’s right to possession:

 

1.                                       Acts by City of maintenance, or preservation,
or efforts to relet the property;

 

2.                                       The appointment of a receiver upon initiative
of City to protect the City’s interest under this Lease.

 

35

 

SECTION 17.04                               RIGHT OF TERMINATION UPON
DEFAULT.

 

A.                                   It is understood and agreed that in the event
of any default on the part of Lessee, City shall have the right, in addition to
or as an alternative to any other right it may have, to terminate this Lease
and enter into possession of and retake the Leased Premises and evict Lessee
therefrom and to retain any and all improvements constructed within the Leased
Premises.

 

B.                                     Termination under this section or any
other provisions of the Lease shall not relieve Lessee from the payment of any
sum then due to City or from any claim for damages previously accrued or then
accruing against Lessee.

 

C.                                     Upon termination, City shall be entitled to:

 

1.                                       each installment of rent or to any
combination of installments for any period before termination, plus interest at
the rate set forth in Section 3.06 above, from the due date of each
installment; and

 

2.                                       damages in the following sums:

 

a.                                       All amounts that would have fallen due as
rent between the time of termination of this Lease and the time of the claim,
judgment or other award, less the avails of any re-leasing and less any amounts
of such rent loss that Lessee proves City could reasonably have avoided, plus
interest at the rate set forth in section 3.06, above; and

 

b.                                      The “worth” at the time of the claim,
judgment or other award, of the amount by which the unpaid rental fee for the
balance of the term after the time of the award exceeds the amount of rental
fee loss that Lessee proves could have reasonably been avoided. “Worth”, as
used in this subsection C.2.b, is computed by discounting the total at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
claim, judgment or award, plus one percent (1%); and

 

c.                                       Any other amount necessary to compensate City
for all detriment proximately caused by the Lessee’s failure to perform Lessee’s
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the costs and expenses
of re-leasing, and the costs of alterations and repairs necessary for such
re-leasing.

 

36

 

SECTION 17.05                               CITY’S RIGHT TO CURE
BREACHES OF LEASE.

 

In
the event of any breach hereunder by Lessee, City may at any time, without
having any obligation to do so, and without notice, cure such breach for the
account and at the expense of the Lessee. If City at any time by reason of said
breach is compelled to pay or elects to pay any moneys or do any act which will
require the payment of any money, or is required to incur any expense, including
reasonable attorney’s fees, in instituting proceedings or defending any actions
or proceedings to enforce City’s rights hereunder or otherwise, the sum or sums
of money so paid by City, together with interest at the maximum rate allowed by
law plus costs and damages, shall be deemed to be additional rental fee hereunder
and shall be due and payable from the Lessee to the City on the first day of
the calendar month following the incurring of each such respective expense.

 

SECTION 17.06                               WAIVER OF BREACH.

 

The
waiver by City of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any other term, covenant or
condition, nor of any subsequent breach of the same or any other term, covenant
or condition herein contained. Any consent or approval given by City to an act
of Lessee for which consent or approval is required under this Lease shall not
be deemed to waive or render unnecessary the need for City’s consent or
approval to or of any subsequent similar act of Lessee. The subsequent
acceptance of rental fees hereunder by City shall not be deemed to be a waiver
of any preceding breach by Lessee of any term, covenant or condition of this
Lease other than the failure of Lessee to pay the particular rental fees so
accepted, regardless of City’s knowledge of such preceding breach at the time
of the accepting of such rental fees.

 

37

 

ARTICLE 18

DESTRUCTION AND TAKING OF THE LEASED
PREMISES

 

SECTION 18.01                               DESTRUCTION OF
PREMISES.

 

A.                                   If, during the term of this Lease, Lessee’s
improvements are totally or partially destroyed from a risk required to be
covered by the insurance required under this Lease or actually covered by
insurance, this Lease shall not terminate and Lessee shall promptly and
diligently restore or cause to be restored Lessee’s improvements to substantially
the same condition as they were in immediately before such destruction, whether
or not the insurance proceeds are sufficient to cover the actual cost of restoration.
Where the risk was not required to be covered by insurance under this Lease,
Lessee shall only be required to restore to the extent of insurance proceeds received.

 

B.                                     If such destruction takes place when this
Lease, or any extension thereof, has six (6) years or fewer remaining,
Lessee may terminate this Lease upon payment to City of any and all insurance
proceeds; except Lessee’s share of proceeds from business interruption or loss
of income insurance to be defined as the remainder of these proceeds after
paying the City the greater of $100,000 or 75% of the average annual rent paid
for the previous two calendar years (excluding any credits).

 

C.                                     If laws existing at the time of the proposed
restoration do not permit the restoration, Lessee, with the prior consent of
its lender, may elect to terminate this Lease by giving notice to City. In the
event this Lease is so terminated, any excess insurance proceeds from risks
required to be covered by this Lease shall be used as follows:

 

1.                                       First:                                  The payment of any outstanding balance due
any lender;

 

2.                                       Second:                  The payment of any demolition and clean-up
costs necessary to remove the improvements and return the Leased Premises to
its condition before the improvements were built, or at the option of City, to
remove the damaged improvements and restore the Leased Premises to a usable
condition if the latter option is not more expensive than returning the Leased
Premises to its original condition;

 

38

 

3.                                       Third:                             The balance of the insurance proceeds shall
be divided between Lessee and City based on the proportion that the value of
Lessee’s interest in the Leased Premises for the balance of the term of the
Lease bears to the value of City’s entire interest in the Leased Premises,
including both City’s interest during the balance of the Lease term and City’s
remainder interest after the term of the Lease expires.

 

4.                                       Valuations for this purpose shall be based on
the income method of valuation by determining the present value of the
interests in the property on the basis of the future net income that it could
have been expected to earn had the improvements not been partially or totally
destroyed.

 

D.                                    If, during the term, Lessee’s improvements
are totally or partially destroyed from a risk not covered by the insurance
described in this Lease nor actually covered by insurance, this Lease shall not
terminate except as expressly provided herein, and Lessee shall restore Lessee’s
improvements to substantially the same condition they were in immediately
before destruction. However, if the cost of restoration exceeds seven and
one-half percent (7-1/2%) of the then replacement value of Lessee’s total improvements,
or if existing laws do not permit the restoration, then Lessee, with the prior
consent of its lender, can elect to terminate this lease by giving notice to
City.

 

E.                                      Lessee acknowledges that the provisions of
this Agreement govern in the event that the Leased Premises are damaged or
destroyed and accordingly Lessee waives its rights, if any, under California
Civil Code Sections 1932 and 1933.

 

SECTION 18.02                               TOTAL TAKING.

 

A.                                   If the whole of the Leased Premises, or other
improvements to be made by Lessee shall be taken by right of eminent domain or
otherwise for any public or quasi-public use, then, when possession shall be
taken thereunder by the condemnor, or the Lessee is deprived of its practical
use of the Leased Premises, and other improvements, whichever date is earlier,
this Lease and all rights of City and Lessee hereunder, shall terminate and any
rent and all other payments required of Lessee shall be apportioned between the
parties.

 

39

 

B.                                     In the event of a partial taking, as a result
of which the remaining portion of the Leased Premises, or any other
improvements on the Leased Premises cannot be restored to an economically
operable facility of a comparable kind and quality existing prior to the taking
with the condemnation awards received by Lessee, then this Lease at Lessee’s
option shall terminate as of the time when possession of the Leased Premises
shall be taken by the condemnor or Lessee is deprived of its practical use
thereof, whichever date is earlier.

 

SECTION 18.03                               PARTIAL TAKING.

 

If
a portion of the Leased Premises or any other improvements shall be taken by right
of eminent domain or otherwise for any public or quasi-public use and the
remaining portion of the Leased Premises and improvements can be restored by
Lessee to an economically operable facility of comparable kind and quality to
the facility existing prior to the taking, then this Lease shall not be
affected and Lessee shall retain the remaining portion of the Leased Premises.

 

SECTION 18.04                               EMINENT DOMAIN AWARD.

 

If
there is a taking by right of eminent domain, the rights and obligations of the
parties with reference to the award and the distribution thereof shall be
determined in  accordance
with the provisions of this section. Lessee shall have the right to participate
in any settlement proceeding. The award shall be paid to City and Lessee and
the award shall belong to the
City except that Lessee shall receive from the award the following:

 

A.                                   A sum attributable to the value of Lessee’s
leasehold estate including improvements, which sum shall be first applied
toward any outstanding balance due a Lessee’s lender to the extent that the
taking affects the lender’s collateral;

 

B.                                     A sum attributable to severance damages to be
used solely for the restoration of the improvements upon the remainder of the
Leased Premises; and

 

C.                                     A sum attributable to loss of goodwill.

 

40

 

ARTICLE 19

FORCE
MAJEURE

 

SECTION 19.01                               FORCE MAJEURE.

 

A.                                   The term “force majeure” as used herein means
acts of God; strikes, lockouts, or other industrial disturbances; acts of
public enemy, blockades, wars, insurrections, or riots; epidemics; landslides,
earthquakes, fires, storms, floods, or washouts; arrests, title disputes, or
other litigation; governmental restraints, either federal or state, civil or
military; civil disturbances; explosions; inability to obtain necessary
materials, supplies, labor; inability to obtain timely approvals and
inspections or permits due to administrative procedure, existing or future rules,
regulations, orders, laws, or proclamations, either federal, state, city or
county, civil or military; so long as the above causes or events are beyond the
control of the affected party.

 

B.                                     Should Lessee or City, during construction
and/or operations be delayed in or prevented, in whole or in part, from
performing any obligations or conditions hereunder or from exercising its
rights by reason of or as a result of any force majeure, it shall be excused
from performing such obligations or conditions during such period of delay or
prevention. Should either party be delayed or prevented from performing any
obligation or exercising any right hereunder for a period exceeding six (6) months
by a force majeure event, the delayed party shall notify the other party of its
plans and schedule to end such delay or prevention and of its plans and schedule to
commence performance under the Lease.

 

C.                                     If the City, for any reason outside of its
control, cannot deliver possession of the Leased Premises to the Lessee at the
commencement of the term of this Lease, Lessee shall have the option to terminate
this Lease, but City shall not be liable to Lessee for any loss or damage
resulting therefrom.

 

SECTION 19.02                               RENTAL ADJUSTMENT.

 

In
the event Lessee is prevented from operating the Water Theme Park during normal
operating periods by a “force
majeure” event which is not a risk required to be covered

 

41

 

by
loss of income or business interruption insurance and not actually covered by
business interruption or loss of income insurance, the rent in amount equal to
the average of the rent paid by Lessee for the previous three years may be
abated to the extent that the City Manager may reasonably determine that such “force
majeure” event interfered with the normal operation of the Leased Premises and
caused a loss of income to Lessee, and was in no way caused or exacerbated by
the Lessee, and provided a written claim is filed within sixty (60) days after
the commencement of such event. Lessee agrees to cooperate in the determination
of the rental abatement by furnishing all information requested relative to the
operation of the Leased Premises and permitting examination and audit of the
accounting records kept in connection with the Leased Premises.

 

ARTICLE 20

SURRENDER OF PREMISES

 

SECTION 20.01.                            ABANDONMENT, VACATION OR
SURRENDER OF PROPERTY DURING TERM

 

If
Lessee should abandon, vacate or surrender the Leased Premises, or be
dispossessed by process of law, or otherwise, then in that event, unless and
except to the extent otherwise specifically provided by other provisions of
this Lease, any personal property belonging to the Lessee and left on the
Leased Premises shall be deemed to be abandoned, at the option of the City.

 

SECTION 20.02.                            SURRENDER OF LEASE PROPERTY
AT END OF LEASE TERM

 

A.                                   On the last day of the term of or upon the
sooner termination of this Lease, Lessee shall quit and surrender the Leased
Premises in good condition and repair (reasonable use and wear and damage by
acts of God excepted), together with all alterations, additions, improvements
and betterments which may have been made in or to the Leased Premises, except
movable furniture and trade fixtures put in at the

 

42

 

expense
of the Lessee, and except such other property, if any, which Lessee is
expressly authorized by other provisions of this Lease to remove from the
Leased Premises. Lessee shall ascertain from the City Manager, within 4 years from the expiration of the
Lease Term, whether the City Manager desires to have Lessee remove any
alterations, additions, improvements or betterments which may have been made by
Lessee and to restore the Leased Premises, or any part or parts thereof, to the
same condition as when received (reasonable use and wear thereof and damage by
acts of God excepted), and, if the City Manager should so desire, then Lessee
shall so restore the Leased Premises to their natural condition at Lessee’s
sole cost and expense. The parties agree, however, to the extent that there are
funds available in the Cap Fund, Lessee may utilize funds from the Cap Fund for
restoration of the Leased Premises to their natural condition.

 

B.                                     Lessee, on or before the end of the Lease
term, shall remove all property owned by Lessee (except such as Lessee may be
required to surrender under the provisions of the immediately preceding
subsection) from the Leased Premises, and all such property not so removed
shall be deemed, at the option of the City, to have been abandoned by the
Lessee.

 

C.                                     If the Leased Premises are not surrendered on
the last day of the term or any sooner termination of this Lease, as
hereinabove provided, Lessee shall defend and indemnify City against all loss,
damage or liability suffered by City because of Lessee’s delay in so
surrendering the Leased Premises, including, but not by way of limitation, any
and all claims by any succeeding tenant or Lessee founded on such delays.

 

ARTICLE 21

MISCELLANEOUS

 

SECTION 21.01                               ENTRY AND INSPECTION BY CITY.

 

City
reserves, and shall always have the right, to enter the Leased Premises for the
purpose of viewing and ascertaining the condition of the same, or to protect its
interest in the Leased Premises or to inspect the operations conducted on the
Leased

 

43

 

Premises.
In the event that such entry or inspection by City discloses in the reasonable
opinion of the City that Leased Premises are not in a safe, healthy and
satisfactory condition or a violation of any Municipal, State or Federal
ordinance, statute or law, or any breach of condition of lease, City shall have
the right, after ten (10) days’ written notice to Lessee, to have any
necessary maintenance work done for and at the expense of Lessee. Lessee agrees
to pay promptly any and all costs incurred, including reasonable expenses of
City in having such necessary work done in order to keep the Leased Premises in
a safe, healthy and satisfactory condition and to cure any violations of breach
of conditions of this Lease. Repayment thereof shall be deemed to be a part of
the rent and paid as such on the next day upon which the rent becomes due.

 

SECTION 21.02                               INDEPENDENT CONTRACTOR.

 

The
parties mutually agree that Lessee and Lessee’s employees are and will at all
times be independent contractors and not agents or employees of the City and
that Lessee and Lessee’s employees shall not be entitled to any salary, fringe
benefits, pension, Workers’ Compensation, sick leave, insurance, or any other
benefit or right connected with employment by the City of San Jose, or any
other compensation.

 

SECTION 21.03                               GOVERNING LAW/VENUE.

 

The
parties agree that this Agreement shall be governed and construed in accordance
with the laws of the State of California. In the event that suit shall be
brought by either party to this Agreement, the parties agree that venue shall
be exclusively vested in the state courts of the County of Santa Clara, or
where otherwise appropriate, exclusively in the United States District Court,
Northern District of California, San Jose, California.

 

SECTION 21.04                               CAPTIONS.

 

The
headings of the sections and subsections of this Agreement are inserted for
convenience only. They do not constitute a part of this Agreement and shall not
be used in its construction.

 

44

 

SECTION 21.05                               EXHIBITS/AMENDMENTS.

 

Any
and all exhibits which are referred to in this Agreement are incorporated
herein by reference and are deemed a part of this Agreement. This Agreement may
only be amended by formal written agreement executed by both parties.

 

SECTION 21.06                               SEVERABILITY.

 

If
a court of competent jurisdiction adjudges any provision of this Agreement as
void or unenforceable, the remaining provisions shall not be affected hereby
and shall remain in full force and effect.

 

SECTION 21.07                               NOTICES.

 

All
notices and other communications required or permitted to be given under this
Agreement must be in writing and must be personally served or mailed, postage
prepaid and return receipt requested, addressed to the respective parties as
follows:

 

45

 

	
  To
  City:

  	
   

  	
  Director
  of Conventions, Arts and

  
	
   

  	
   

  	
  Entertainment

  
	
   

  	
   

  	
  408
  Almaden Boulevard

  
	
   

  	
   

  	
  San
  Jose, CA 95110

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  City
  Attorney’s Office

  
	
   

  	
   

  	
  151
  West Mission Street

  
	
   

  	
   

  	
  San
  Jose, CA 95110

  
	
   

  	
   

  	
   

  
	
  To
  Lessee:

  	
   

  	
  General
  Manager

  
	
   

  	
   

  	
  Raging
  Waters

  
	
   

  	
   

  	
  P.O. Box
  21368

  
	
   

  	
   

  	
  San
  Jose, CA 95151-1362

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Viacom
  Inc.

  
	
   

  	
   

  	
  1515
  Broadway

  
	
   

  	
   

  	
  New
  York, New York 10036-5794

  
	
   

  	
   

  	
  Attn:
  General Counsel

  

 

Notices
sent in accordance with this provision are effective on the date personally
delivered or, if mailed, three (3) days after deposit in the mail.

 

SECTION 21.08                               NUISANCE WASTE.

 

Lessee
shall not commit, nor suffer to be committed, any waste upon the Leased
Premises, nor any illegal activity, nor any public or private nuisance, nor
other act or thing which may disturb the quiet enjoyment of any occupant,
tenant, patron or member of the public using or occupying any portion of Lake
Cunningham Park.

 

46

 

	
   

  	
  CITY OF SAN JOSE, a municipal

  
	
   

  	
  corporation

  
	
  APPROVED AS TO FORM:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nina S. Grayson

  	
   

  
	
   

  	
  Title:

  	
  Assistant to the City Manager

  	
   

  
	
   

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
   

  
	
  Sr. Deputy City Attorney

  	
  Date:

  	
  4.24.98

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARAMOUNT
  PARKS INC., a Delaware

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Title:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  22 April 98

  	
   

  
								

 

47

 

The
land referred to herein is described as follows:

 

All
that certain property situate in the City of San Jose, County of Santa Clara,
State of California, described as follows:

 

PARCEL
1: (AMENDED)

 

A
portion of Lots 41 through 47, as shown on the Map of the Subdivision of the
Fillmore Tract filed for record in Book C of Maps, at page 57, Santa Clara
County Records, being more particularly described as follows:

 

BEGINNING
at the point within said Lot 45 that bears N. 42° 44’ 02”E.,890.83 feet from a found 3/4” iron
pipe, tagged SCCO, in a monument box at the intersection of Tully Road and
Capitol Expressway;

 

thence
from said Point of Beginning N. 85° 52’ 44” W, 94.61 feet;

thence
S. 85° 03’ 34” W., 80.74 feet;

thence
S. 73° 38’ 53” W., 75.18 feet;

thence
N. 20° 49’ 21” W.’ 143.38 feet;

thence
S. 69° 10’ 43” W., 22.08 feet;

thence
along a curve to the right having a radius of 197.00 feet through

a
central angle of 72° 05’ 26” for an arc length of 247.87 feet;

thence
N. 38° 43’ 51” W., 826.69 feet;

thence
along a curve to the right having a radius of 225.00 feet through a central
angle of 106° 30’ 00” for an arc length of 418.23 feet to
a point that bears S. 77° 54’ 51” E., 873.13 feet from a found 3/4”
iron pipe tagged SCCO in a monument box at the intersection of the
centerlines of Cunningham Avenue and Capitol Expressway;

 

thence
N. 67° 46’ 04” E., 440.26 feet;

thence
N. 24° 04’ 35” W., 168.94 feet;

thence
N. 65° 55’ 25” E., 247.06 feet;

thence
N. 56° 41’ 58” E., 199.16 feet;

thence
N. 67° 52’ 34” E., 148.13 feet;

thence
N. 68° 45’ 18” E., 73.71 feet to a point that bears
S. 68° 45’ 18”
W. 100.00 feet and S. 59° 21’ 42” W., 1,731.26 feet from a found lead
plug in a granite monument at the intersection of the centerlines of
Cunningham Avenue and White Road; thence S. 21°  06’
09” E., 377.03 feet to a point on the shoreline of the lake in Lake Cunningham
Park as it existed during May of 1983; thence along said shoreline the
following courses:

 

A-1

 

thence
S. 51° 34’ 27” W., 90.24 feet;

thence
S. 75° 45’ 23” W., 86.65 feet;

thence
N. 68° 47’ 10” W., 109.48 feet;

thence
S. 78° 04’ 36” W., 74.95 feet;

thence
S. 56° 59’ 03” W.; 166.78 feet;

thence
S 79° 18’ 06” W., 72.16 feet;

thence
S. 53° 03’ 51” W., 43.56 feet;

thence
S 22° 56’ 48” W., 28.36 feet;

thence
S 05° 00’ 57” W., 29.70 feet;

thence
S 11° 08’ 57” E., 47.03 feet;

thence
S 46° 09’ 12” E., 143.49 feet;

thence
S 20° 45’ 27” E., 78.28 feet;

thence
S. 01° 39’ 02” W., 138.85 feet;

thence
S. 09° 12’ 05” E., 28.54 feet;

thence
S. 30° 57’ 48” E., 29.43 feet;

thence
S. 43° 49’ 10” E., 65.57 feet;

thence
N. 84° 03’ 33” E, 13.94 feet;

thence
S. 58° 33’ 07” E., 71.74 feet;

thence
S. 43° 56’ 17” E., 33.09 feet;

thence
S. 23° 40’ 14” E., 40.71 feet;

thence
S. 03° 54’ 37” W., 28.44 feet;

thence
S. 25° 06’ 34” W.,-41.15 feet

thence
S. 35° 11’ 45” W., 93.70 feet;

thence
S. 11° 01’ 45” W., 28.47 feet;

thence
S. 06° 34’ 56” E., 54.61 feet;

thence
S. 02° 55’ 49” W., 95.39 feet;

thence
N. 34° 13’ 19” E., 50.90 feet;

thence
N. 47° 49’ 33” E. 19.45 feet;

thence
N. 63° 26’ 36” E., 23.41 feet;

thence
N. 82° 31’ 05” E., 24.86 feet;

thence
S. 86° 47’ 49” E., 55.61 feet;

thence
N. 87° 08’48” E., 182.44 feet;

thence
S. 29° 47’ 10” E., 82.44 feet;

thence
S. 77° 22’ 19” E., 58.89 feet;

thence
leaving said shoreline, S. 30° 46’ 06” W., 346.06 feet; to the Point of
Beginning.

 

A-2

 

PARCEL 2:

 

A non-exclusive casement
for ingress and egress and parking and the installation and maintenance of
public utilities over, under, upon and across the roadways, walkways, and
parking areas installed within the premises, described as follows:

 

Commencing at the most
northwesterly corner of parcel “D” as said parcel is shown on the Record of
Survey recorded in Book 258 of Maps, at page 13, Santa Clara County
Records, said corner being a point on a line that is parallel with and 67.00
feet northeasterly measured at right angles from the center line of Capitol
Expressway, shown on said map as MEDIAN CENTERLINE, FUTURE CAPITOL EXPRESSWAY;
thence along said parallel line N. 29° 20’ 00” W. 22.76 feet to the TRUE POINT OF BEGINNING; thence
continuing along said parallel line N. 29°
20’ 00” W. 1,670.57 feet; thence N. 27°
02’ 30” W. 100.16 feet to
a point in a line that is parallel with and 71.00 feet northeasterly measured
at right angles from the centerline of Capitol Expressway, shown as Centerline
Future Capitol Expressway on the Record of Survey recorded in Book 258 of Maps,
at page 14, Santa Clara County Records; thence along said parallel line N.
29° 20’ 00” W. 120.00 feet;
thence along a tangent curve to the right having a radius of 40.00 feet,
through a central angle of 97° 32’ 00” an arc length of 68.09 feet to a point in a
line that is parallel with and 30.00 feet southeasterly measured at right
angles from the centerline of Cunningham Avenue, as said Avenue is shown on
said last mentioned map; thence along said parallel line, N. 68 12’ 00”
E. 3,407.73 feet; thence along a tangent curve to the right having a radius of
24.00 feet, through a central angle of 75°
54’ 13”, an are length of 31.79 feet to a point in a line that is parallel with
and 90.00 feet southwesterly measured at right angles, from the centerline of
White Road, as said road is shown on the “Map of the Subdivision of the
Fillmore Tract”, recorded in Book “C” of Maps, at page 57, Santa Clara
County Records; thence along said parallel line S. 35° 53’ 47” E., 2,245.39 feet; thence along a tangent curve to the
right, having a radius of 1,710.00 feet, through a central angle of 07° 44’ 09”, an are length of 230.88
feet to a point of compound curvature; thence along a tangent curve to the
right, having a radius of 50.00 feet, through a central angle of 102° 15’ 03” an are length of 89.23 feet
to a point of reverse curvature; thence along a tangent curve to the left,
having a

 

A-3

 

radius of 1,065.00 feet,
through a central angle of 29° 04’ 44”, an arc length of 540.52 feet; thence S.
45° 00’ 41” W. 476.17. feet; thence along a tangent curve to the right, having
a radius of 935.00 feet, through a central angle of 64° 09’ 44”, an arc length
of 1,047.05 feet to a point of reverse curvature; thence along a tangent curve
to the left, having a radius of 1,065.00 feet, through a central angle of 53°
14’ 45”, an arc length of 989.72 feet to a point of reverse curvature; thence
along a tangent curve to the right, having a radius of 40.00 feet, through a
central angle of 97° 05’ 25”, an arc length of 67.78 feet; thence N. 26° 58’ 55”,
W. 136.72 feet; thence along a tangent curve to the left, having a radius of
160.00 feet, through a central angle of 76° 43’ 00” an arc length of 214.23
feet to a point in the northerly line of said Parcel “D” thence along said
northerly line, S. 76° 18’ 05” W. (S. 76 17’ W per map), 671.17 feet; thence
along a tangent curve to the right having a radius of 30.00 feet, through a
central angle of 74° 21’ 55”, an arc length of 38.94 feet to the TRUE POINT OF
BEGINNING.

 

EXCEPTING THEREFROM all
that portion thereof lying within the bounds of Parcel 1 (AMENDED) above
described.

 

(APN #491-1- 30,31 and
#491-2-25,47)

 

A-4

 

EXHIBIT C

 

PART 1
OF EXHIBIT C- DESCRIPTION OF IMPROVEMENTS AND SCHEDULE REFERRED TO IN
SECTION 5.02

 

The particular
improvements described in Section 5.02 consist of the following
construction elements as described in the approved plans and specifications
dated February 23,1995, and on file with the City’s Department of Public
Works:

 

Wave Pool

SCS Pirate Ship
Interactive Play Structure

Mechanical Room

Bath House

First Aid/Aquatics
Station

Miscellaneous
Decking

Miscellaneous
Landscaping

 

The improvements
referenced above are scheduled to be completed on or before June 1,1995.

 

PART 2
OF EXHIBIT C - CONDITIONS REFERENCED IN SECTION 7.02

 

Lessee’s lender or the
escrow holder (“Payer”) wilt disburse the funds for the improvements upon
Lessee’s submission to the Payor’s reasonable satisfaction of the documents
described below. Nothing in this Exhibit precludes the Payor from
requiring Lessee to meet additional conditions for its disbursement of funding
for improvements.

 

1.                                     such
architect’s certificates as the Payor may require;

 

2.                                     a
certificate signed by the general manager of the improvement setting forth the
specific use of the funds to be disbursed;

 

3.                                       a
certificate signed by Lessee and the architect, accompanied by invoices, where
required by the Payor, setting forth the total cost of all work performed since
the previous disbursement;

 

4.                                       either
a Conditional Waiver and Release Upon Progress Payment or an Unconditional
Waiver and Release Upon Final Payment, as appropriate, in the form prescribed
by California Civil Code Section 3262, including any amendments to Section 3262,
executed by each subcontractor and material supplier intended to be paid out of
the particular disbursement and covering all labor, services, equipment and
materials

 

C-1

 

performed or supplied by
the particular subcontractor or material supplier since the previous
disbursement;

 

5.                                    written
evidence in a form and substance satisfactory to the Payor that the Contractor
has been paid in full for all labor, services, equipment and materials
performed or supplied by the Contractor prior to the previous disbursement;

 

6.                                    a
copy of the recorded notice of completion, prior to disbursement of the final
payment of funds held by Payor for the improvements.

 

C-2

 

EXHIBIT D

 

INTERESTS IN RAGING WATERS

 

This
exhibit is left blank intentionally.

 

D-1

 

EXHIBIT E

 

INSURANCE
REQUIREMENTS

 

A.                                   Minimum
Scope of Insurance

 

Coverage shall be at
least as broad as:

 

1.                            Insurance
Services Office from number GI 0002 (Ed. 1/73) covering Commercial General
Liability and Insurance Services Office form number GL 0404 covering Broad Form Commercial
General Liability; or Insurance Services Office Commercial General Liability
coverage (“occurrence” Form CG 001), including X, C, U (Explosion,
collapse & underground) and Liquor Liability for the sale of alcohol.

 

2.                            Insurance
Services Office form number Ca 0001 (Ed. 12/90) covering Automobile Liability,
Code 1 “any auto,” or Code 2 “owned autos” and Endorsement CA 0025. Coverage
also to include Code 8 “hired autos” and Code 9 “nonowned” autos.

 

3.                            Workers’
Compensation insurance as required by the Labor Code of the State of California
and Employers Liability insurance.

 

4.                            Property
Insurance against all risks of loss to any tenant improvement or betterments.

 

B.                                     Minimum
Limits of Insurance

Lessee shall maintain
limits no less than:

 

1.                           Commercial
General Liability: $1,000,000 per occurrence for bodily injury, personal
injury, and property damage. If Commercial General Liability Insurance or other
form with a general aggregate limit is used, either the general aggregate limit
shall apply separately to this project/location or the general aggregate limit
shall be twice the required occurrence limit.

 

2.                           Automobile
Liability: $1,000,000 combined single limit per accident for bodily injury and
property damage.

 

3.                           Workers’
Compensation and Employers Liability: Workers’ Compensation limits as required
by the Labor Code of the State of California and Employers Liability limits of
$1,000,000 per accident.

 

E-1

 

4.                                       A
Property policy for Fire written on an all risk basis for an amount not less
than the replacement cost of all leasehold improvements and betterments:

 

(1)                                  This
policy shall also include DIC (not to include earthquake and flood coverage).

 

(2)                                  Also
included in this policy shall be loss of income (business interruption)
coverage in an amount not less than the amount of the minimum annual rental for
that year of the lease, or $20,000 per annum, whichever is greater.

 

C.                                Deductibles
and Self-Insured Retentions

 

Any
deductibles or self-insured retentions must be declared to, and approved by,
the City. At the option of the city, either: the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects the City, its
officials, employees, agents and contractors; or the Lessee shall provide proof
of financial responsibility by either an annual report or audited financial
statement of losses and related investigations, claim administration and
defenses expenses in an amount specified by the City equal to the self-insured
retentions.

 

D.                               Other
Insurance Provisions

 

The policies are to
contain, or be endorsed to contain, the following provisions: 

 

1.                                       Commercial
General Liability and Automobile Liability Coverages

 

a.                                       The
City of San Jose, its officials, employees, agents, volunteers and contractors
are to be covered as an additional insured as respects: Liability arising out
of activities performed by, or on behalf of, the Lessee; products and completed
operations of the Lessee; premises owned, leased or used by the Lessee; or
automobiles owned, leased, hired or borrowed by the Lessee. The coverage shall
contain no special limitations on the scope of protection afforded to the City,
its officials, employees, agents, volunteers, and contractors.

 

b.                                      The
Lessee’s insurance coverage shall be primary insurance as respects the City,
its officials, employees, agents, volunteers, and contractors. Any insurance or
self-insurance maintained by the City, its officials, employees, agents,

 

E-2

 

volunteers, or
contractors shall be excess of the Lessee’s insurance and shall not contribute
with it.

 

c.                                       Any
failure to comply with reporting provisions of the policies shall not affect
coverage provided to the City, its officials, employees, agents, volunteers, or
contractors.

 

d.                                      Coverage
shall state that the Lessee’s insurance shall apply separately to each insured
against whom claim is made or suit is brought, except with respect to the
limits of the insurer’s liability.

 

2.                                       All
Coverages

 

Each insurance policy
required by this clause shall be endorsed to state that coverage shall not be
suspended, voided, canceled, or reduced in limits except after thirty (30) days’
prior written notice has been given to the City.

 

E.                                  Acceptability
of Insurers

 

Insurance is to be placed
with insurers acceptable to the City’s Risk Manager.

 

F.                                  Verification
of Coverage

 

Lessee shall furnish the
City with certificates of insurance and/or with original endorsements affecting
coverage required by this clause. The certificates and/or endorsements for each
insurance policy are to be signed by a person authorized by that insurer to
bind coverage on its behalf.

 

Proof of insurance shall
be mailed to the following address or any subsequent address as may be directed
in writing by the Risk Manager:

 

City of San Jose

c/o Risk Management

152 North Third Street

San Jose, CA 95110-2105

 

E-3

 

G.                                     Subcontractors

 

Lessee shall include all
subtenants as insureds under its policies or shall obtain separate certificates
and endorsements for each subtenant.

 

E-4

 

AGREEMENT
REGARDING THE

ASSIGNMENT AND ASSUMPTION OF LEASE

AND CONSENT TO THE ASSIGNMENT

 

This Agreement is by and
among the CITY OF SAN JOSÉ (“City”), a municipal corporation, OGDEN ENTERTAINMENT,
INC., (“OEI”), a Delaware Corporation, and OGDEN PARK MANAGEMENT, INC., (“Ogden
Parks”), a Delaware Corporation.

 

RECITALS

 

A.                                   City
and OEI are parties to a lease of City-owned property under a lease entitled: “Fifth
Amendment and Restated Lease Between the City of San José and Paramount Parks, Inc.”
and dated 4-24-98 (the “Lease”).  On March 18,
1999, City approved the assignment of the Lease from Paramount Parks, Inc.,
to OEI.  Under the Lease, the leased
premises are to be used and operated as a water theme park, known as Raging
Waters San José.

 

B.                                     On
March 8, 2000, Ogden Corporation (“Ogden”), the parent company of OEI,
entered into an acquisition agreement with Alfa Alfa Holdings S.A., a Greek
corporation (“Alfa Alfa”), pursuant to which, among other things, Ogden agreed
to sell to Alfa Alfa the business conducted by Ogden, through subsidiaries,
joint ventures, consortiums of other arrangements, relating to the ownership
and operation of water parks and other themed entertainment parks and attractions
(the “Business”) of which the Lease is a part.

 

C.                                     In
order to effect the safe of the Business, Ogden will (1) cause OEI to
transfer to Ogden Parks all of OEI’s rights, title and interest in the business
and all relations obligations and liabilities of OEI and (2) subject to
the closing of the sale of the Business to Alfa Alfa, Ogden will cause all of
the outstanding stock of Ogden Parks to be transferred to Alfa Alfa.

 

D.                                    The
purpose of this Agreement is to specify the terms and conditions under which
City has agreed to the proposed assignment of the Lease from OEI to Ogden
Parks.

 

In view of the above, the
parties agree:

 

SECTION 1.                            Assignment
and Assumption of the Lease.

 

A.                                   OEI
assigns all of OEI’s right, title, and interest in and to and delegates all of
OEI’s duties, obligations, and responsibilities under the Lease to Ogden Parks
effective as of the date of full execution of this Agreement by the parties (“Assignment
Date”).

 

B.                                     Ogden
Parks accepts all of OEI’s right, title and interest in and to and assumes and
shall faithfully perform all of the duties, obligations, and responsibilities
of OEI under the Lease and agrees to be bound by all of the terms and
conditions of the Lease

 

City of San Jose

 

1

 

as if Ogden Parks was an
original signatory to the Lease. 
Specifically, Ogden Parks agrees to assume all obligations and
liabilities in and under the Lease regardless of the date on which such
obligations or liabilities arose.

 

SECTION 2.                            Approval
of Assignment.

 

A.                                   City
consents to the assignment to Ogden Parks of all of OEI’s right, title,
interest, duties, obligations, and responsibilities in and under the Lease as
specified in Section 1 and the subsequent sale of Ogden Parks to Alfa Alfa
subject to the conditions set forth in subsection B, below: City’s consent
to assignment under this Agreement is made with the express condition that this
consent will not be deemed a consent to any subsequent assignment or sale,
other than the proposed sale of Ogden Parks to Alfa Alfa.

 

B.                                     Concurrent
with or prior to execution of this Agreement, Ogden Parks shall provide City
with the following:

 

1.                                       copies
of certificates of insurance that meet the requirements of the Lease; and

 

2.                                       a
performance bond that meets the requirements of the Lease; and

 

3.                                       the
written agreement, executed by an authorized representative of Alfa Alfa,
pursuant to which Alfa Alfa agrees that in the event a lawsuit involving this
Agreement or the Lease is filed by City, Alfa Alfa will unconditionally accept
the jurisdiction of a federal or state court located in Santa Clara County,
California.

 

SECTION 3.                            Notices.

 

All notices and other
communications required or permitted to be given under this Agreement or the
Lease shall be sent in accordance with the provisions of the Lease and
addressed as follows:

 

	
  To City:

  	
  City of San José

  
	
   

  	
  Director of
  Conventions, Arts and

  
	
   

  	
  Entertainment

  
	
   

  	
  408 Almaden Blvd.

  
	
   

  	
  San José, CA 95110

  
	
   

  	
   

  
	
  To Ogden Parks:

  	
  Ogden Park Management, Inc.

  
	
   

  	
  Suite 210 – 6800
  Plaza Drive

  
	
   

  	
  New Orleans, LA 70127

  
	
   

  	
   

  
	
  To OEI:

  	
  Ogden Entertainment, Inc.

  
	
   

  	
  25th Floor

  
	
   

  	
  Two Pennsylvania Plaza

  
	
   

  	
  New York, NY 10121

  

 

2

 

	
   

  	
   

  
	
  Alfa Alfa

  	
  Alfa Alfa Holdings S.A.

  
	
   

  	
  4 Ap. Pavlou Str,

  
	
   

  	
  Marousi (Athens),
  Greece

  
	
   

  	
  151 23

  

 

SECTION 4.                            Miscellaneous
Provisions.

 

4.1                               Entire
Agreement.

 

This Agreement supersedes
any prior agreement, oral or written, and contains the entire agreement by and
among OEI, Ogden Parks and City regarding City’s consent to the Assignment.  No subsequent agreement, representation, or
promise made by either party hereto, or by or to an employee, officer, agent or
representative of either party shall be of any effect unless it is in writing
and executed by the party to be bound thereby.

 

4.2                               Applicable
Law.

 

This Agreement shall be
deemed to be made and construed in accordance with the laws of the State of
California.  In the event suit is brought
by either party hereunder, the parties agree that venue for such action shall
be the state courts of California in the County of Santa Clara or in the United
States District Court in the Northern District of California.

 

4.3                               Waiver.

 

The waiver or failure to
enforce any provision of this Agreement shall not operate as a waiver of any
future breach of any such provision or any other provision hereof.

 

4.4                               Severability.

 

In the event any
covenant, condition or provision herein contained is held to be invalid by a
court of competent jurisdictions, the invalidity of any such covenant,
condition, or provision, shall in no way affect any other covenant, condition
or provision herein contained, provided the invalidity of any such covenant,
condition or provision does not materially prejudice the parties in their
respective rights and obligations contained in the valid covenants, conditions
or provisions of this Agreement.

 

3

 

4.5                               Interpretation.

 

This Agreement is a
negotiated document and shall not be interpreted for or against any party by
reason of the fact that such party may have drafted this Agreement or any
provision thereof.

 

WITNESS THE EXECUTION
HEREOF on the date first hereinbelow set forth.

 

	
   

  	
  CITY OF SAN JOSE, a
  municipal

  
	
  APPROVED AS TO FORM:

  	
  corporation

  
	
   

  	
   

  
	
  /s/ Danielle Kenealey

  	
   

  	
  By

  	
      /s/  Del D. Borgsdorf

  	
   

  
	
  Danielle Kenealey

  	
  Name:

  	
    DEL D.
  BORGSDORF

  	
   

  
	
  Sr. Deputy City
  Attorney

  	
  Title:

  	
    CITY
  MANAGER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date: 

  	
  5/8/00

  	
   

  
	
   

  	
   

  
	
   

  	
  OGDEN ENTERTAINMENT
  INC., a

  
	
   

  	
  Delaware Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas C. Etter

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
    Thomas C.
  Etter

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
     Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
     5/3/2000

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Ogden Park Management
  Inc., a

  
	
   

  	
  Delaware Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randal H. Drew, Sr.
  VP

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
    Randal H.
  Drew

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
     Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
     5/4/2000

  	
   

  
									

 

4

 

ASSIGNMENT AND
ASSUMPTION OF LEASE

 

THIS ASSIGNMENT AND
ASSUMPTION OF LEASE, dated as of March 2, 1999 is by and between PARAMOUNT
PARKS INC., a Delaware corporation, (the “Assignee”) and OGDEN ENTERTAINMENT
INC., a Delaware corporation (the “Assignee”).

 

BACKGROUND

 

A.                                   Assignee
is the Tenant under a certain Lease dated March 5, 1985 as last amended
and restated by Fifth Amendment and Restated Lease, between The City of San
Jose, as Lessor, and Assignee, as Lessee (the [ILLEGIBLE]).

 

B.                                     Pursuant
to an asset Purchase Agreement dated as of March 2, 1999 (the “Agreement
of Sale”), Assignor agreed to assign on the date hereof, being the date of
Closing under the Asset Purchase Agreement, all of [ILLEGIBLE] under the
[ILLEGIBLE] to Assignee and to deliver [ILLEGIBLE] of the properties known as
Raging Waters San Jose; a water theme amusement park located in a portion of
the Lake Cunningham Regional Park as more fully described in the Lease.

 

C.                                     Under
the Asset Purchase Agreement, Assignor and Assignee have agreed to [ILLEGIBLE]
Closing an agreement pursuant to which Assignor shall assign to Assigneee all
of its rights under the Lease and Assignee shall assume all obligations of the
[ILLEGIBLE] under the Lease.

 

COVENANTS

 

NOW, THEREFORE, for good,
and valuable consideration, the receipt, and legal sufficiency of which is
hereby acknowledged, Assignor and Assignee agree as follows:

 

1.                                       Assignment
and Delivery/Assumption and [ILLEGIBLE]. 
Subject to those specific name of the Asset Purchase Agreement as shall
survive the Closing under the Asset Purchase Agreement.

 

(a)                                  Assignor
hereby transfers, assigns and conveys to Assignee all of Assignor’s right;
title and interest in, to and under the Lease, and Assignor is delivering possession
of the Leased Premises to Assignee on the date hereof; and 

 

(b)                                 Assignee
hereby assumes and agrees to perform all obligations of Assignor as listed
under the Lease regardless of whether such obligations arose before or after
the date hereof.

 

2.                                       [ILLEGIBLE].  The City of San Jose, as [ILLEGIBLE] under
the Lease has given its [ILLEGIBLE] to the assignment of the Lease pursuant to Section 15.02
of the Lease. Attached to this Assignment as Exhibit “A”, is a
[ILLEGIBLE], [ILLEGIBLE] and complete copy of the [ILLEGIBLE] of the City of
San Jose assignment of the Lease.

 

 

IN WITNESS WHEREOF, and
[ILLEGIBLE] to be legally bound hereby, Assignee and Assignee have executed,
this Assignment and Assumption of Lease as of the day and year first above
written.

 

	
  [ILLEGIBLE]

  	
   

  	
  ASSIGNOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARAMOUNT PARKS INC., a
  Delaware

  
	
   

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gayle Ando

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gayle Ando

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Exec. VP & General
  Mgr.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OGDEN ENTERTAINMENT
  INC., a

  
	
   

  	
   

  	
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ RANDAL H. DREW

  	
   

  
	
   

  	
   

  	
  Name:

  	
  RANDAL H. DREW

  	
   

  
	
   

  	
   

  	
  Title:

  	
  SENIOR VICE PRESIDENT

  	
   

  
								

 

 

EXHIBIT “A”

 

CONSENT

 

THE CITY OF SAN JOSE (the
“City”) hereby consents to that certain Assignment and Assumption of Lease in
form as attached hereto as Exhibit “1” between PARMOUNT PARKS INC., a Delaware
Corporation, (the “Assignor”) and OGDEN ENTERTAINMENT INC., a Delaware
Corporation, (the “Assignee”) on the express condition that this consent will
not be deemed a consent to any subsequent assignment, but rather any subsequent
assignment will require the consent of the undersigned pursuant to the Lease
(as defined in the attached Assignment and Assumption of Lease). The City
hereby releases the Assignor from any and all liability for the performance of
any obligations of lessee under the Lease regardless of whether such
obligations arose before or after the date of the Assignment and Assumption of
Lease.

 

 

	
   

  	
  LANDLORD

  
	
   

  	
   

  
	
   

  	
  THE CITY OF SAN JOSE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Special Assistant

  to the City Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date of Consent:

  	
     3/18/99

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Approved as to form:

  
	
   

  	
   

  
	
   

  	
  /s/ Danielle Kenealey

  	
   

  
	
   

  	
  Sr. Deputy City
  Attorney

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