RFP 527-134 Exhibit A-Sample Contract.pdf

State Park 1 Agreement No. C_________1

Washington State Parks And Recreation Commission

Concession Agreement

Agreement Number___________ _____________State Park and ___________________

THIS CONCESSION AGREEMENT (“Agreement”), by and between the State of Washington, acting through the WASHINGTON STATE PARKS AND RECREATION COMMISSION (“State”) and __________________ (“Concessionaire”), grants non-exclusive and nonpossessory concession rights of use in ____________ State Park in _________ County, Washington (“Park”), SUBJECT TO the terms and conditions contained in this Agreement, including exhibits to this Agreement, which are incorporated into and made a part of this Agreement by reference.

State enters into this Agreement to permit and facilitate Concessionaire’s operation ____________________ as described in Exhibit A (“Business”), from those State-owned facilities shown on Exhibit B (“Concession Facilities”). The purpose of this Agreement is to provide enhanced and expanded visitor experiences with the Park.

Definitions:

Contractor: A person or company that undertakes a contract and/or is under contractual obligation to provide materials or labor to perform a service or do a job.

Concessionaire: A Contractor that the State has authorized to use, on a non-possessory basis, a state-owned structure or location. A Concessionaire is always a Contractor and for purposes of this agreement the terms may be used interchangeably. Concessionaire is not a lessee of State and this Agreement is not intended and shall not be construed as a lease or as granting to Concessionaire any leasehold or possessory interest.

1. TERM

1.1 Term. This Agreement shall commence on Date of Execution (date of last signature) and shall expire coterminous with and in accordance with Section 1.2 – Concessionaire’s Performance.

1.2 Concessionaire Performance. This Concessionaire shall commence performance on _____________, or on the date signed by State, whichever is later (“Commencement Date”), and expire on _________, unless terminated earlier under another provision of this Agreement (the period from the Commencement Date to the date of expiration or termination is the “Agreement Term”).

1.3 Competitive Procurement: Concessionaire and State acknowledge that this Agreement is executed pursuant to Commission policies adopted on June 24, 2010, and was not competitively procured. State reserves the right to terminate

State Park 2 Agreement No. C_________1 this concession agreement, without cause, and award a concession agreement to any other interested party through a competitive process. Concessionaire may bid for the new concession. This right to terminate, without cause, as provided in this subsection shall expire two (2) years after the date of execution. State shall only exercise this specific right to terminate if State receives a bona fide concession application or application to lease the same premises or provide the services prior to the expiration of the two-year period and the concessionaire to this agreement is not selected to operate the concession through the competitive procurement process. The State shall give the Concessionaire 90 (ninety) days prior written notice of State’s intent to terminate the lease, and the Notice shall specify the date of termination.

2. OPERATION OF THE BUSINESS

2.1 Concessionaire’s Operation of the Business. Concessionaire shall operate the Business as described in Exhibit A (as may be modified by State under section 12.2, below) and shall perform all work, provide all labor, and provide all, equipment, furnishings, and supplies sufficient for the operation of the Business, except that equipment, furnishings, and supplies identified in Exhibit A as being provided by State. At all times during the Agreement Term, Concessionaire shall use reasonable efforts in operating the Business.

2.2 Additional Services. State may, at its sole discretion, authorize Concessionaire to provide other directly related concession services, all subject to space availability and approval in writing by State. Any such expansion of concession services shall be documented in an amendment to the description of the Business contained in Exhibit A.

2.3 Pricing of Goods, Services, and Rentals. Concessionaire shall adhere to the list of prices for goods, services, and rentals (“Price List”); Concessionaire may not charge more than the price listed on the Price List for any goods, service, or rental. The Price List shall describe each major category of goods for sale, services, or rentals, and the price range or rental rates of each category. All prices must be displayed in a conspicuous location at the Concession Facilities. An initial Price List is attached to Exhibit A; this initial Price List shall be in effect until a revised Price List is approved by State. Concessionaire may submit a proposed revised Price List to the Area Manager for review and approval prior to April 1 of each year during the Agreement Term. At its discretion, State may approve or deny the proposed revised Price List. At its discretion, State may limit or disapprove certain goods, services, or rentals, or the proposed sales prices or rental rates.

2.4 Qualifications of Concessionaire and Concession Personnel. Concessionaire and Concessionaire’s employees and agents shall be qualified to operate the Business, including, but not limited to, operating and maintaining any necessary equipment. Concessionaire and Concessionaire’s employees and agents shall

State Park 3 Agreement No. C_________1 perform in a businesslike and courteous manner and strive to provide quality service to park visitors. As required by state or local law, Concessionaire and employees must be in possession of all health or food and/or alcohol handling permits. If directed to do so by the Area Manager, Concessionaire or Concessionaire’s employees must, at all times, when on duty wear a name tag and clothing approved by State in order to be recognized as an employee of Concessionaire and any limitations or disapprovals will be communicated to Concessionaire in writing which may include email.

2.5 Background Checks. A criminal background check shall be performed on each and every person working on behalf of Concessionaire under this Agreement, including, but not limited to, each employee, agent, and volunteer of Concessionaire, and Concessionaire him- or herself (if a natural person), except that a person who neither interacts with Park visitors nor enters Park lands is not subject to a background check. Background checks required under this section shall be performed at Concessionaire’s expense or at the expense of the person subject to the background check. Background checks required under this section shall be completed prior to the person initially commencing work on behalf of Concessionaire and prior to resuming work on behalf of Concessionaire in each subsequent season, or a background check shall be performed at least annually for persons working year-round on behalf of Concessionaire. Concessionaire may not allow any person for whom a background check is required under this section to work on Concessionaire’s behalf if the person’s background check reveals information suggesting that the person poses a danger to the person or property of any Park visitor or Park staff or volunteers, or a danger to State’s property. At State’s request, Concessionaire shall provide State with copies of any, and all background checks conducted under this section.

2.6 Compliance with Laws, Rules, and Regulations. Concessionaire shall comply with all laws, ordinances, and rules relating to the use and occupancy of the Concession Facilities and conduct of the Business. Concessionaire will not permit any objectionable action which would constitute a nuisance or commit any waste upon the Concession Facilities.

2.7 Permits and Licenses. Concessionaire shall obtain and keep in force all permits, licenses, permissions, consents, and approvals required by governmental agencies or third parties in connection with Concessionaire’s operation of the Business and occupation of the Concession Facilities. Application for permits shall be at the sole risk, cost, and expense of Concessionaire. A copy of UBI licensing must be submitted to State prior to commencing operation of the Business, and copies of all other permits shall be supplied to State upon request. Concessionaire shall pay on a timely basis all taxes as may be lawfully imposed and will comply with all applicable local, state, and federal licensing requirements and standards necessary in the performance of this Agreement.

State Park 4 Agreement No. C_________1

2.8 Independent Contractor: Concessionaire operates the Business as an independent contractor of State. Operation of the Business is not in any way a partnership, agency, franchise, or joint venture between State and Concessionaire.

Except as expressly provided in this Agreement, neither party shall be bound, with respect to third parties, by any representation made by the other party. State has no obligation with respect to Concessionaire’s debts or other liabilities.

Concessionaire has the sole and exclusive right to hire, transfer, suspend, lay off, recall, promote, discipline, and discharge its employees and contractors and Concessionaire has the sole and exclusive control over its labor and employee relations policies and its policies related to wages, hours, and working conditions of its employees and contractors. In performing under this Agreement, neither Concessionaire nor Concessionaire’s employees or contractors are employees of State.

2.9 [INSERT ONLY FOR WATERCRAFT RENTAL CONCESSIONS] Watercraft Rental. If renting watercraft, Concessionaire shall provide Coast Guard approved personal flotation devices and a whistle to all watercraft rental customers and shall require in rental agreements, and in practice, their use by all persons in or on the watercraft as a condition of rental. The sale, rental, or provision of flotation devices not approved by the U.S. Coast Guard is prohibited. Rentals shall only be offered during daylight hours and must be returned by sundown. No rentals shall be taken out during inclement weather (such as high winds or chance of lightening).

3. FACILITIES

3.1 Use of Facilities. State authorizes Concessionaire to use the Concession Facilities as more particular described and assigned to Concessionaire in Exhibit B, as may be modified by State under section 12.2, below, for purposes of operation of the Business. The assignment of Concessionaire to the use of the Concession Facilities is not intended and shall not be construed as creating a leasehold or possessory interest in the Concession Facilities or any other portion of the property. Accordingly, Concessionaire’s use of the Concession Facilities is nonpossessory and nonexclusive, and Concessionaire may not displace or exclude any overlapping use of the same space or facilities by State or as permitted by State to the visiting public or other third parties. Concessionaire shall use the Concession Facilities only for the operation of the Business as authorized in this Agreement. Concessionaire is prohibited from conducting other commercial or non-commercial activities, or allowing the use and occupancy by other parties of the Concession Facilities not directly related to Concessionaire’s operation of the Business unless approved in advance and in writing by State.

3.2 Condition of Concession Facilities. Concessionaire accepts the Concession Facilities in its present condition, after renovation work by State and removal of trade fixtures and other personal property of State’s predecessor concessionaire, if any, as set forth in Exhibit B. The condition of the Concession Facilities shall be

State Park 5 Agreement No. C_________1 verified by the Concessionaire’s inspection of the Concession Facilities prior to the commencement of this Agreement.

3.3 Access to Concession Facilities. Concessionaire shall have access to the Concession Facilities as necessary to operate the Business over established Park roads and driveways during all normal Park operating hours, and during other times as may be approved by the Area Manager. Concessionaire may park vehicles and equipment only in those areas designated by the Area Manager.

Concessionaire’s access rights shall not be exercised in such manner and to such extent as to: (i) impede or interfere with the operation of the Park or business conducted by other concessionaires or authorized occupants; or (ii) violate any lease or agreement entered into between State and a third party.

3.4 Parking. Concessionaire shall be issued __ Concession Parking Passes by the Area Manager. Each Concession Parking Pass authorizes one vehicle to park within the Park, subject to limitations specified by the Area Manager, including designated parking places and times. Concession Parking Passes are subject to expiration, as specified by the Area Manager, and must be relinquished upon expiration or termination of this Agreement. Concession Parking Passes must be visibly displayed in the front windshield, or otherwise in a prominent location for motor vehicles without a windshield. Concession Parking Passes may only be used while Concessionaire, or its employees or agents, are operating the Business under this Agreement. All other parking within the Park, including by Concessionaire, its agents, employees, contractors, and customers, is subject to RCW 79A.80 and a Discover Pass or day-use permit is required.

3.5 Management. Concessionaire shall manage and maintain the Concession Facilities and all improvements thereon in accordance with the customary standards of the industry.

3.6 Maintenance and Repair. Concessionaire shall perform all minor maintenance and repairs, as defined herein, to keep the Concession Facilities in a safe, inviting, sanitary, and usable condition. Minor maintenance and repairs shall include, but is not limited to, routine maintenance; cleaning; removal of debris, litter, and obstructions; painting the inside of buildings; replacing light bulbs; and performing other minor interior maintenance, including minor electrical and plumbing repairs. Concessionaire shall immediately notify Area Manager in writing of any other maintenance or repair needs in the Concession Facilities.

Other maintenance and repair necessitated by the failure of Concessionaire to perform minor maintenance and repair shall be the responsibility of Concessionaire.

3.7 Damage. Concessionaire shall, at its own expense, repair to State’s satisfaction any damage to State’s property resulting from actions or omissions by Concessionaire or its agents or employees, beyond normal wear and tear.

State Park 6 Agreement No. C_________1

3.8 Signs and Advertisements. All signs of Concessionaire, whether affixed to the Concession Facilities, or placed upon or adjacent to the Concession Facilities, or used in any manner by Concessionaire, must fit into the Park’s aesthetics and agency sign policy, and shall be subject to the Area Manager’s prior approval.

3.9 Sanitation. Concessionaire is responsible for the cleanliness of the Concession Facilities, including all equipment, appliances, storage areas, and grounds used by Concessionaire. Concessionaire is responsible for removal and disposal of all garbage and refuse generated in the operation of the Business and shall participate in State’s recycling programs. As may be specified in Exhibit A, Concessionaire is responsible for disposal of all garbage and refuse in the area adjacent to the Concession Facilities as designated by the Area Manager. If serving food is part of the Business, Concessionaire shall use recyclable food and beverage containers as practicable. Concessionaire shall promptly provide to the Area Manager a copy of any and all health department inspection reports conducted by or on behalf of any governmental authority.

3.10 Hazardous Substances Prohibited. Except as expressly allowed in writing by State in Exhibit A as essential to the operation of the Business, Concessionaire shall not bring or keep in, on, or about the Concession Facilities, any hazardous substances. For purposes of this Agreement, hazardous substances include any that have been designated as hazardous, toxic, dangerous, or harmful, or which are subject to regulation as hazardous, toxic, dangerous, or harmful by any federal, state, or local law, regulation, statute, or ordinance. Concessionaire is liable for all cleanup costs and damages associated with the use, disposal, transportation, or generation of hazardous substances by Concessionaire or its employees, agents, assigns, contractors, subcontractors, licensees, or invitees.

This provision shall survive the expiration or termination of the Agreement.

3.11 Personal Property. State is not to be liable in any manner for or on account of any loss of damage sustained to any property in or about the Concession Facilities, except for such claims or losses which may be caused by State or its authorized agents or employees.

3.12 Condition at End of Agreement Term. Concessionaire shall, at its sole expense, clean and repair the Concession Facilities and restore it to the condition it was in upon delivery of the Concession Facilities to Concessionaire at the Commencement Date, reasonable wear and tear excepted.

3.13 Non-Applicability of Relocation Assistance. Concessionaire acknowledges that this Agreement does not at any time entitle Concessionaire to assistance under the Uniform Relocation and Real Property Acquisition Policy (RCW 8.26).

4. FINANCIAL RECORD KEEPING AND REPORTING

State Park 7 Agreement No. C_________1

4.1 Reporting and Cash Handling. Concessionaire shall adhere to written cash handling procedures. If Concessionaire currently does not have written cash handling procedures, it must establish them prior to beginning operation of the Business. Such cash handling procedures shall be commercially reasonably given the nature of the Business and sufficient to ensure safe and accurate accounting of all monies received by Concessionaire through operation of the Business.

4.2 Credit and Debit Cards. Concessionaire’s payment and record-keeping systems must be fully compliant with all Payment Card Industry Data Security Standards (PCI DSS) issued by the official Payment Card Industry Security Standards Council. Concessionaire acknowledges that it is responsible for the security of cardholder data that it possesses, or otherwise stores, processes, or transmits on behalf of the customer.

4.3 Review and Audit. At any time during the Agreement Term, State may review and audit Concessionaire’s financial records and other records related to Concessionaire’s operation of the Business. Concessionaire shall maintain a true account of all receipts and disbursements and other commercially reasonable financial and accounting records related to operation of the Business.

Concessionaire shall make available for review and audit any and all financial and accounting records related to operation of the Business, including, but not limited to, individual transaction receipts, daily records of gross sales, annual financial statements (balance sheet and income statement), and Excise Tax Returns submitted to the Washington State Department of Revenue. State may require a review or audit of Concessionaire’s books and records by an authorized independent certified public accountant. If such review or audit shows a discrepancy in gross sales of ten percent (10%) or more, Concessionaire must pay for the cost of the review or audit; if such discrepancy is less than ten percent (10%), the cost of the review or audit will be borne by State. Failure to properly report all gross revenue is grounds for immediate termination of this Agreement.

5. REQUIRED PAYMENTS

5.1 Fee. Concessionaire shall pay to State annual concession fee (“Concession Fee”) for the use of Concession Facilities. The term “Concession Fee” may also mean to include a portion of or percentage of gross revenue.

5.2 Amount of Concession Fee. [Option 1 – up front, flat amount] Concession Fee shall be $____ which is due on or before the Commencement Date and in each subsequent year (if any) during the Agreement Term on or before April 1. This amount is subject to adjustment for subsequent years (if any) during the Agreement Term as provided below. Additionally, pursuant to Washington State RCW 82.29A.030 all rent[s] are subject to State leasehold tax which is currently 12.84% of rent. This Agreement is expressly not intended and shall not be construed as a lease or as granting any leasehold or possessory interest; however, to the extent the Concession Fee is deemed taxable under RCW 82.29A.030, State Park 8 Agreement No. C_________1

Concessionaire shall pay all applicable leasehold tax now or hereafter assessed on Concessionaire’s use of the Concession Facilities.

Periodic Adjustment. Concession Fee shall be renegotiated and adjusted [annually] or [every other year] or [every five years] on or before March 1. At State’s option, Concession Fee will be adjusted using one of the following methods:

a. Concession Fee will be increased annually by three percent (3%).

b. State will adjust Concession Fee based on an appraisal conducted by the State.

When Concession Fee is adjusted as provided in this section, State shall give notice to Concessionaire that an adjustment to Concession Fee has been made, including the amount of the adjusted Concession Fee. Such notice shall be provided on or before March 1. Failure by State to adjust Concession Fee when it is permitted to do so is not a waiver by State of the opportunity to adjust Concession Fee in future years.

OR

[Option 2 – percent of revenues] Concessionaire shall pay to State Concession Fee based on a percentage of the gross annual revenue derived from operation of the Business under this Agreement. Such Concession Fee shall be due on the fifteenth (15th) day of November each year. Concession Fee shall be ______ percent of gross revenue from operation of the Business collected between the Commencement Date and October 31 (in the first year of operation of the Business) or between November 1 and October 31 (in any subsequent year). The formula for calculating Concession Fee is total gross revenue, exclusive of sales tax collected, times ______ percent. Additionally, pursuant to Washington State RCW 82.29A.030 all rent[s] are subject to State leasehold tax which is currently 12.84% of rent. This Agreement is expressly not intended and shall not be construed as a lease or as granting any leasehold or possessory interest; however, to the extent the Concession Fee is deemed taxable under RCW 82.29A.030, Concessionaire shall pay all applicable leasehold tax now or hereafter assessed on Concessionaire’s use of the Concession Facilities.

Concessionaire must also submit to State, a copy of the excise tax report filed with the Washington State Department of Revenue. If the report includes activity at non-concession locations, Concessionaire shall include a supplemental report segmenting the activity authorized under this agreement.

OR

State Park 9 Agreement No. C_________1

[Option 3 – percentage first year, flat rate in subsequent years] In the first year of operation of the Business under this Agreement, Concessionaire shall pay to State Concession Fee based on percentage of gross annual revenue derived from operation of the Business under this Agreement. Concession Fee for the second and subsequent years shall be an amount determined by State as provided below.

This Agreement is expressly not intended and shall not be construed as a lease or as granting any leasehold or possessory interest; however, to the extent the Concession Fee is deemed taxable under RCW 82.29A.030, Concessionaire shall pay all applicable leasehold tax now or hereafter assessed on Concessionaire’s use of the Concession Facilities.

First Year. Concessionaire shall pay to State Concession Fee based on a percentage of the gross annual revenue derived from the operation of the Business during the first year of operation. Such Concession Fee shall be due on or before November 15. Concession Fee shall be ______ percent of gross revenue from the Business collected between the Commencement Date and October 31. The formula for calculating Concession Fee is total gross revenue, exclusive of sales tax collected, times ______ percent.

Second and Subsequent Years. Concession Fee for the second year of operation shall be determined by State at its discretion. State shall give notice to Concessionaire of its determination of the amount of Concession Fee, including the Concession Fee amount. Such notice shall be provided on or before March 1.

The second year Concession Fee amount shall be renegotiated and adjusted [annually] or [every other year] or [every five years] on or before March 1. At State’s option, Concession Fee will be adjusted using one of the following methods:

a. Concession Fee will be increased annually by three percent (3%).

b. State will adjust Concession Fee based on an appraisal conducted by the State.

When Concession Fee is adjusted as provided in this section, State shall give notice to Concessionaire that an adjustment to Concession Fee has been made, including the amount of the adjusted Concession Fee. Such notice shall be provided on or before March 1. Failure by State to adjust Concession Fee when it is permitted to do so is not a waiver by State of the opportunity to adjust Concession Fee in future years.

5.3 Utilities and Other Expenses. During the term of this Agreement, Concessionaire shall pay all expenses incurred by Concessionaire in the use of the Concession Facilities and operation of the Business, including, but not limited to, all utility charges, including all charges for electricity, water, gas, telecommunications, and all costs of maintaining and repairing, consistent with Section 3.6 above, the Concession Facilities and all improvements thereon

State Park 10 Agreement No. C_________1 whether now existing or hereafter installed. Concessionaire is so obligated whether or not such expenses are billed to Concessionaire, to State, or to any other party. Concessionaire shall indemnify, defend, and hold State harmless against and from any loss, liability, or expense resulting from any failure of Concessionaire to pay all such charges when due. All service lines of such utilities shall be installed and connected to existing public utilities at no cost to State.

5.4 Road Use Fee. [Optional] In addition to Concession Fee, Concessionaire shall pay an annual road use fee of $______, subject to adjustment as set forth in this section, on or before the Commencement Date and in each subsequent year of this Agreement (if any) on the anniversary of the Commencement Date.

5.5 Taxes and Assessments. Concessionaire shall pay all taxes and assessments and other governmental charges of any kind applicable or attributable to the operation of the Business or use of the Concession Facilities, including, without limitation, to the extent any leasehold tax is deemed applicable and payable to State pursuant to RCW 82.29A.

5.6 Manner of Payment. All payments, including Concession Fee payments and payments for other sums owed, shall be made by check or money order payable to State and mailed to the address listed in section 12.1 (Notices and Submittals), or to any other payee as directed by State in writing, or mailed to any other address which State, or any successors-in-interest to State, may designate to Concessionaire in writing. Notwithstanding that payments may be made by mail, payments shall in any event be received by State on or before the date due as specified in this Agreement. Payments may also be made to State by electronic funds transfer, per arrangement through State’s Financial Services Office.

5.7 Charges for Late Payments and NSF Checks. Notwithstanding State’s right to terminate this Agreement for nonpayment of fees, Concessionaire shall pay interest at the rate of one percent (1%) per month on delinquent Concession Fee, other fees, or other sums owing under the terms of this Agreement, commencing with the date originally due. Payment of Fee, other fees, and other sums when due is required under this Agreement and this section does not constitute or imply the extension of credit by State. There shall be a thirty-dollar ($30.00) handling fee for any check returned by the bank as uncollectible for any reason. The parties agree that such charges represent a fair and reasonable estimate of costs incurred by State by reason of late payments and uncollectible checks.

5.8 No Counterclaim, Setoff, or Abatement of Concession Fee or Other Sums Owed. Concession Fee, other fees, and all other sums for which Concessionaire is obligated to pay State under this Agreement shall be paid without notice, demand, counterclaim, setoff, deduction, or defense and without abatement, and the obligations and liabilities of Concessionaire shall in no way be released, State Park 11 Agreement No. C_________1 discharged, or otherwise affected (except as expressly provided in this Agreement) by reason of:

a. Any damage to or destruction of or any taking of the Concession Facilities or any part thereof;

b. Any restriction of or prevention of or interference with any use of the Concession Facilities or any part thereof;

c. Any title defect or encumbrance or any eviction from the Concession Facilities or any part thereof by title paramount or otherwise;

d. Any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation, or other like proceeding relating to State, or any action taken with respect to this Agreement by any trustee or receiver of State, or by any court, in any such proceeding;

e. Any claim which Concessionaire has or might have against State;

f. Any failure on the part of State to perform or comply with any of the terms of this Agreement or of any other agreement with Concessionaire;

or

g. Any other occurrence whatsoever, whether similar or dissimilar to the remedy consequent upon a breach thereof, and no submission by Concessionaire or acceptance by State of full or partial Concession Fee during the continuance of any such breach, shall constitute a waiver for any such breach or of any such term.

No waiver of any breach shall affect or alter this Agreement, which shall continue in full force and effect, or the respective rights of State and Concessionaire with respect to any other then-existing or subsequent breach.

5.9 Failure to Pay. In the event Concessionaire fails to pay any expense or amount due under this Agreement, State may, but shall not be obligated to, pay any such amount, and the amounts so paid shall immediately be due and payable by Concessionaire to State and shall thereafter bear interest at the rate of 12% per annum.

5.10 Late Charge for Failure to Pay. In the event Concessionaire fails to make any payment due under this Agreement upon the date due, including, but not limited to, payment of Concession Fee, State shall be entitled to collect from Concessionaire a late charge equal to one percent (1%) of the amount of the delinquent payment.

State Park 12 Agreement No. C_________1

5.11 Application of Payments. Payments made under this Agreement will be applied in the following order: (1) interest, (2) Concession Fee, (3) leasehold tax (if any), and (4) other charges.

5.12 Performance Bond [OPTIONAL] Upon execution of this Agreement, Concessionaire shall furnish to State a good and sufficient corporate surety bond (“Bond”) or other security satisfactory to State in the amount of __________________________. Such Bond must secure the full performance by Concessionaire of all the terms and conditions of this Agreement to be performed by Concessionaire, including, but not limited to, the payment by Concessionaire of all amounts now or hereafter due and payable to State during the Term of this Agreement. The Bond must be in a form and issued by a surety company acceptable to State. The amount of the Bond must be adjusted to reflect any modification to any term or condition of this Agreement to be performed by Concessionaire. A new or modified Bond shall be delivered to State not less than 30 days following the effective date of any such modification. Upon any default by Concessionaire of any obligations under this Agreement, any amount of the Bond may be appropriated by State to offset the liability of Concessionaire to State, but such Bond and State’s appropriation thereof or realization thereon shall in no way limit the liability or obligations of Concessionaire or the rights or remedies of State.

6. INDEMNITY AND INSURANCE

6.1 Indemnity. Concessionaire shall release, indemnify, defend (with counsel acceptable to State), and hold harmless State, its employees, officers, and agents from and against any and all claims arising out of Concessionaire’s operation of the Business and the use, occupation, or control of the Concession Facilities by Concessionaire, Concessionaire’s sublessees, invitees, agents, employees, licensees, or permittees, or caused by the operation or failure to operate any equipment, improvements, or other property or fixtures on the Concession Facilities, except as may arise solely out of the willful and grossly negligent acts of State or State’s officials, employees, or agents. “Claim” as used in this section means any claim of any nature whatsoever for penalties, financial loss, damages (including, but not limited to, bodily injury, sickness, disease, or death, or injury to or destruction of property, land, and other natural resources, including the loss of use thereof), costs or expenses (including, but not limited to, attorneys’ fees), whether or not resulting in a suit or action or reduced to judgment. This release and the obligation to indemnify shall not be eliminated or reduced by the concurrent negligence of State, its officials, employees, or agents, except as provided in this section. To the extent that RCW 4.24.115 is applicable to any indemnification provision of this Agreement, State and Concessionaire agree that provision shall not require Concessionaire to indemnify, defend, and hold State harmless from State’s sole or concurrent negligence, if any. Concessionaire waives its immunity under RCW Title 51 to the extent it is required to indemnify State. This subsection is in addition to and does not in any way limit or diminish

State Park 13 Agreement No. C_________1

Concessionaire’s liability or indemnity obligations otherwise provided for in this Agreement. If a Concessionaire requires any person to execute a personal release of liability related to use of goods or services provided through the Business, Concessionaire shall include within the release an express release of the State of Washington in addition to any other persons or entities released.

6.2 Liability Insurance. At all times during the Agreement Term, Concessionaire shall keep in full force a commercial general liability insurance policy, acceptable to State, insuring Concessionaire and providing coverage for liability for both bodily injury and property damage arising out of any and all of Concessionaire’s actions or omissions related to operation of the Business or use of the Concession Facilities. Said commercial general liability insurance policy shall also name State as an additional insured under the policy and provide coverage as well against any liability arising out of the use, occupancy, or maintenance of the Concession Facilities and all areas appurtenant thereto, including, but not limited to, liability arising out of any and all activities described in Exhibit A. Such insurance must be provided on an occurrence basis of not less than one million dollars ($1,000,000) combined single limit per occurrence, with a general aggregate limit of not less than two million dollars ($2,000,000). Purchase of these minimum limits does not relieve Concessionaire from liability for losses greater than these amounts. The amount of the insurance required may hereafter be increased or decreased by written notice of State at its sole option. A certificate evidencing such coverage referencing the Park and Agreement shall be provided to State at its address of record provided in this Agreement. All policies shall specify that any legal expenses incurred by any claim against the insured shall be covered over and above said liability limit, such that said liability limit represents a “‘net’” liability limit. In the event insurance containing such specifications cannot be acquired, then Concessionaire shall purchase insurance with liability limits which are fifty percent (50%) higher than set forth above.

6.3 Cancellation. The Certificate(s) of Insurance must provide a minimum of 30 days’ written notice to State by the insurer before cancellation, non-renewal, or any material change of any insurance coverage included therein. No reduction in the amount of coverage shall be made without the prior written approval of State.

6.4 Industrial Insurance Coverage. Concessionaire shall obtain and maintain at all times during the Agreement Term industrial insurance coverage as required by the Department of Labor & Industries for itself and its employees prior to commencing operation of the Business under this Agreement. State will not be responsible for payment of industrial insurance premiums or for any other claim or benefit for Concessionaire, or any subcontractor or employee of Concessionaire, which might arise under the industrial insurance laws during Concessionaire’s operation of the Business under this Agreement.

6.5 Automobile Insurance. Concessionaire shall obtain and maintain at all times during the Agreement Term business auto liability as required by state law and, if

State Park 14 Agreement No. C_________1 necessary, commercial umbrella liability insurance with a limit of not less than one million dollars ($1,000,000) per accident. Such insurance shall cover liability arising out of “Any Auto.”

6.6 Fire Insurance. Unless expressly waived, Concessionaire shall obtain and maintain at all times during the Agreement Term insurance for fire and casualty.

Such insurance shall be a fire legal liability policy in the amount of full replacement value or fifty thousand dollars ($50,000), whichever is higher, naming State as the beneficiary. The amount of insurance required may hereafter be increased or decreased at the option of State. All policies shall carry a minimum 30 days’ notification of cancellation clause.

6.7 Other Insurance. In addition to that insurance specifically required by this Agreement, Concessionaire shall obtain and maintain at all times during the Agreement Term such other insurance as is typically or customarily maintained for the Business.

6.8 Evidence of Insurance. Concessionaire must furnish evidence of all insurance required under this Agreement in the form of a Certificate of Insurance satisfactory to State (such as ISO form CG 00 01 or equivalent), executed by a duly authorized representative of each insurer, showing compliance with the insurance requirements set forth herein, and shall be sent marked “Concession Program” to State’s address shown herein.

6.9 Independent Contractors. Concessionaire shall require any independent contractors, if any, to obtain and maintain the same insurance coverage required of Concessionaire, at all times such independent contractor is performing work at the Concession Facilities on behalf of Concessionaire during the Agreement Term.

7. CONCESSIONAIRE EQUIPMENT, FURNISHINGS, AND SUPPLIES

7.1 Equipment, Furnishings, and Supplies. As set forth in Exhibit A, Concessionaire shall, at its own expense, provide all equipment, furnishings, and supplies necessary for operating the Business beyond any equipment, furnishings, or supplies provided by State at its sole discretion. State shall have no responsibility to provide any equipment, furnishings, or supplies, except as identified in Exhibit A. Concessionaire accepts any equipment, furnishings, or supplies provided by State in its present condition, as-is-where-is. Concessionaire may only attach or fasten (such as by screwing, nailing, welding, gluing, etc.)

equipment in or on the Concession Facilities with the prior written approval of State.

7.2 Maintenance Equipment, Furnishings, and Supplies. Concessionaire shall, at its own expense, maintain, in good working order and in a safe and sanitary condition, all equipment, furnishings, and supplies necessary for operating the

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Business, including that equipment provided by State (if any). State shall have no responsibility to maintain any equipment, furnishings, or supplies or for the loss or damage to Concessionaire’s equipment, furnishings, or supplies. To mitigate the potential for damage or loss through theft or malicious mischief, Concessionaire shall store equipment and supplies as provided in Exhibit A when not in use.

7.3 Equipment Replacement. Concessionaire shall maintain that equipment provided by State (if any) in good working order and shall, at its own expense, replace any equipment provided by State that is not in good working order or that may otherwise pose a hazard. Concessionaire shall maintain any Concessionaire-owned equipment and shall replace, at its own expense, any of its own equipment that is not in good working order or that may otherwise pose a hazard. Equipment purchased by Concessionaire, including equipment purchased by Concessionaire to replace equipment provided by State, shall remain the property of Concessionaire. Except as expressly agreed to in writing by State, the cost of equipment replacement or repair shall in no way reduce or offset Concession Fee or other payments due to State under this Agreement.

7.4 Ownership of Equipment and Supplies at Agreement Expiration or Termination. Any personal property owned by Concessionaire used in the conduct of business by Concessionaire and placed by Concessionaire in or on the Concession Facilities shall not become part of the real property, even if attached or fastened to the Concession Facilities. Such personal property may be removed by Concessionaire at any time during the term of this Agreement, or within 30 days of the expiration or termination of this Agreement, provided Concessionaire is not in default under this Agreement, and provided any damage to the Concession Facilities occasioned by such removal is immediately repaired to the satisfaction of State. All other fixtures, equipment, and improvements constructed or installed in or upon the Concession Facilities shall be deemed to become part of the real property and, upon completion, shall become the sole and exclusive property of State, free of any and all claims of Concessionaire or any person or entity claiming by or through Concessionaire. In the event Concessionaire does not remove its personal property from the Concession Facilities within 30 days of the expiration or termination of this Agreement, State may at its sole election:

a. Require Concessionaire to remove such property at Concessionaire’s sole expense, and Concessionaire shall be liable for any damage to the Concession Facilities;

b. Treat said personal property as abandoned, retaining the property as part of the Concession Facilities; or

c. Have the personal property removed and stored or disposed of at Concessionaire’s sole expense.

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Concessionaire shall promptly reimburse State for damage caused to the Concession Facilities by the removal of any of Concessionaire’s personal property from the Concession Facilities, whether removal is by Concessionaire or State.

8. IMPROVEMENTS

8.1 Authorized Improvements. Concessionaire may, at no cost to State and only with State’s prior written approval, make improvements, including additions and modifications to Concession Facilities provided by State to enable provision of the services as set forth in the Agreement. In making any improvements, Concessionaire shall obtain all licenses and permits, and comply with all applicable codes, regulations, and statutes. Concessionaire shall supply such plans, drawings, and specifications as needed by State to evaluate the acceptability of any improvements prior to commencing work. State may condition, limit, or deny approval of proposed improvements at its sole discretion, which approval shall be provided only in writing. Improvements become the property of State upon completion unless otherwise agreed upon by State in writing in advance.

8.2 Development Plan. Prior to any development or the construction of any and all improvements on or to the Concession Facilities, Concessionaire must submit a complete development plan to State for its written approval. The plan shall include, but is not limited to, the following:

a. Map showing areas to be developed, location of improvements, and location of utility and other easements;

b. Land clearing, leveling, and erosion control plans;

c. List of proposed improvements and detailed plans for the improvements;

d. Estimated itemized cost of proposed improvements; and

e. Schedule of completion dates for proposed improvements.

After completion of construction, Concessionaire shall provide to State “as-built” drawings showing the exact location of all improvements. In case of incomplete improvements or development, Concessionaire shall restore the land to its original condition unless otherwise directed in writing by State.

8.3 Unauthorized Improvements. Any improvements not included in the original or amended development plan as approved by State, or as provided for by Letters of Authorization issued by State, made on or to the site, without the written consent of State, shall immediately become the property of State or at State’ option, must be removed by Concessionaire at Concessionaire’s sole cost. Said removal shall occur within 30 days unless sooner required by Area Manager for reasons of safety.

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8.4 Concessionaire Liens. Concessionaire must not suffer or permit any lien to be filed against State’s interest in the Concession Facilities, or improvements thereon by reason of work, labor, or services performed thereon or materials supplied to, by, or through Concessionaire. Concessionaire agrees to pay or cause to be paid all sums legally due and payable by it on account of any labor performed or materials furnished in connection with any work performed on the Concession Facilities. Concessionaire must indemnify State for any costs, damages, or expenses (including attorneys’ fees and court costs) incurred in defending any liens or in obtaining their discharge or as a result of such other asserted claims against the right, title, and interest of the State in the Concession Facilities or under the terms of this Agreement, whether such costs, damages, or expenses were incurred prior or subsequent to expiration or termination or cancellation of this Agreement.

9. RESERVATIONS BY STATE

9.1 State’s Reserved Rights. State reserves the right to merchandise, through vending machines or other means, at any location within the Park, other than the Concession Facilities, certain items including, but not limited to, snacks, beverages, and educational, recreational, and interpretive materials, as well as official State memorabilia. State further reserves the right to grant privileges on occasion to certain non-profit groups to sell materials for fund-raising purposes.

9.2 Compliance. State shall have access to the Concession Facilities at all times to secure compliance with this Agreement.

9.3 Park Closure. Concessionaire acknowledges that the Park may be closed, or access to the Park may be limited, from time-to-time. Concessionaire hereby waives any claim against State for any losses suffered or allegedly suffered due to change of fees, park-operating periods or conditions, or closure of the Park for any reason.

9.4 Easements. The State reserves the right to grant easements, permits, and/or other rights (“Easements”) over and across the Concession Facilities and the right for Easement holders to enter upon the Concession Facilities to maintain, repair, and enhance existing facilities and install new facilities. Such rights shall be exercised in such a manner so as to minimize any disruption to Concessionaire.

9.5 State Modification/Improvement of the Park or Concession Facilities. State may at any time, at its discretion and expense, make improvements to, or repairs, maintenance, and/or modifications of the Park or the Concession Facilities.

Concessionaire hereby waives any claim against State for any loss of income suffered or allegedly suffered by Concessionaire from State’s improvement to, or repairs, maintenance, and/or modifications of the Concession Facilities.

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9.6 Railbanking. [OPTIONAL] Notwithstanding any other provision of this Agreement, Concessionaire recognizes that State’s rights with respect to the Concession Facilities were obtained through railbanking pursuant to 16 U.S.C.

§ 1247(d) and are subject to rail reactivation. Concessionaire shall ensure that its activities are consistent with State’s interim trail use, and acknowledges possible future rail reactivation. Should rail use be reactivated on the Concession Facilities, this Agreement will terminate.

10. ASSIGNMENT

10.1 Assignment/Transfer. The rights granted under this Agreement may not be assigned or transferred to any other person or entity by act of Concessionaire, operation of law, or other means without the expressed prior written approval of State at State’s sole discretion. Concessionaire’s right of use under this Agreement does not entitle it to and it shall not mortgage, encumber, lease or sublease, or otherwise alienate this Agreement.