CONTRIBUTION AGREEMENT
BY AND AMONG
CEDAR FAIR, L.P.,
XXXXX'X XXXXX FARM
AND
THE PARTNERS OF XXXXX'X XXXXX FARM
December 19, 1997
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (the "Agreement") is made this 19th
day of December, 1997, by and among Cedar Fair, L.P., a Delaware
limited partnership (the "Purchaser"), Xxxxx'x Xxxxx Farm, a
California General Partnership (the "Company"), and holders of
the partnership and assignee interests in the Company identified
on Schedule 3.02 attached hereto (collectively, the "Partners").
Recitals
A. The Partners own 100% of the outstanding
partnership interests of the Company.
B. The Company owns and operates the Xxxxx'x Xxxxx
Farm Theme Park and Knott's California Marketplace in Buena Park,
California, and manages Xxxxx'x Camp Snoopy at the Mall of
America in Bloomington, Minnesota pursuant to the MOA Agreement
(as defined in Section 2.07(b)).
C. On the terms and conditions set forth herein, the
parties hereto desire that all of the Partners contribute 99.9%
of their partnership and assignee interests of the Company to the
Purchaser and .1% of their partnership interests to Magnum
Management Corporation, a subsidiary of Purchaser ("Magnum").
NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties and covenants, and subject to the
conditions, herein set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. The following words shall have the following
meanings when used in this Agreement:
"Adjusted Unit Value" shall have the meaning specified
in Section 2.07(d).
"Authorized Representative" shall mean the person or
persons appointed by the Partners prior to the Closing to carry
out the duties and exercise the power and authority of the
Authorized Representative under the terms and provisions of this
Agreement. The initial Authorized Representative, whose
appointment is effective as of the date of this Agreement, is
Xxxxx Xxxxxxx. Such party, or any successor thereto, may be
removed at any time and a successor therefore may be appointed
pursuant to a Written Action. Any party serving as Authorized
Representative may resign at any time by providing notice of such
resignation in writing to the Purchaser and the Partners,
whereupon the Partners shall appoint a successor by Written
Action. No resignation or removal of the Authorized
Representative is effective under this Agreement until notice
thereof is provided to Purchaser in accordance with Section 10.01
hereof and no such resignation or removal will affect any action
taken prior thereto by the Authorized Representative.
"Balance Sheet Date" shall mean September 28, 1997.
"BOA Debt Schedule" shall mean the schedule submitted
to Purchaser by the Authorized Representative at least three
(3) business days prior to the Closing, which schedule shall set
forth the principal amount of the Company's indebtedness to Bank
of America, plus accrued but unpaid interest thereon through to
and including the Closing Date, which indebtedness and accrued
interest shall be paid by Purchaser pursuant to Section 2.03(b)
hereof as of the Closing Date.
"Closing" shall have the meaning specified in
Section 2.05.
"Closing Date" shall have the meaning specified in
Section 2.05.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Crescent Avenue Land Acquisition" shall mean the
Company's acquisition of approximately 6.7 acres of land at
Western and Crescent Avenues in Buena Park, California, as more
particularly described in Exhibit A.
"Current Assets" shall consist of the current assets as
shown on the December 29, 1996 Balance Sheet, the
September 28, 1997 Balance Sheet or the Final Balance Sheet, as
the case may be, which balance sheets shall each be prepared in
accordance with GAAP.
"Current Liabilities" shall consist of the current
liabilities as shown on the December 29, 1996 Balance Sheet, the
September 28, 1997 Balance Sheet or the Final Balance Sheet, as
the case may be, which balance sheets shall each be prepared in
accordance with GAAP.
"Current Value" on any given date shall mean a value
equal to the average daily closing price of a Unit on the New
York Stock Exchange Composite Tape for the ten (10) trading days
immediately preceding such date.
"Damages" shall have the meaning specified in Section
8.01.
"December 29, 1996 Balance Sheet" shall have the
meaning specified in Section 3.05.
"Environmental Laws" shall have the meaning specified
in Section 3.22.
"Expenditure Schedule" shall mean the schedule
submitted to Purchaser by the Authorized Representative at least
three (3) business days prior to the Closing, which schedule
shall set forth (i) the aggregate expenditures by the Company
made on or after January 1, 1997, in connection with or otherwise
relating to the Wooden Roller Coaster, currently being developed
by the Company, including but not limited to design, development,
site preparation and construction activities related thereto and
(ii) the aggregate capitalized expenditures made by the Company
on or before the Closing Date in connection with the Crescent
Avenue Land Acquisition and the La Palma Commercial Acquisition,
which expenditures shall be paid by Purchaser pursuant to
Section 2.03(e) hereof as of the Closing Date.
"Final Balance Sheet" shall mean a balance sheet of the
Company (including the assets and liabilities of Virginia's Gift
Shop and MOA Entertainment, L.P.) as of 11:59 p.m. on
December 28, 1997 in accordance with GAAP applied on a basis
consistent with the preparation of the 1996 Financial Statements.
"Final Balance Sheet Date" shall mean December 28,
1997.
"Final Balance Sheet Tax Liabilities" shall mean all
Tax Liabilities for Pre-Acquisition Taxable
Periods and Straddle Periods reflected in the Final
Balance Sheet and thus taken into account in determining the
Final Working Capital.
"Final Working Capital" shall mean Working Capital as
reflected in the Final Balance Sheet.
"Financial Statements" shall have the meaning specified
in Section 3.05.
"Fiscal Close Date" shall mean December 28, 1997, the
date on which the Company's 1997 tax and fiscal year ends.
"GAAP" shall mean generally accepted accounting
principles as applied on a consistent basis throughout the three
year period ended December 29, 1996.
"Hazardous Materials" shall have the meaning specified
in Section 3.22.
"Indebtedness" shall mean (i) obligations for borrowed
money, (ii) reimbursement obligations in respect of any letter of
credit (whether secured or unsecured), (iii) obligations
representing the deferred purchase price of property other than
accounts payable arising in connection with purchases in the
ordinary course of business, and (iv) any guarantee in respect of
any obligations referred to in clauses (i), (ii) or (iii).
"Independent Accounting Firm" shall mean a nationally
recognized independent accounting firm jointly selected by the
Authorized Representative and Purchaser. If such parties cannot
agree on such accounting firm, the accounting firm will be
selected as follows: the Authorized Representative and Purchaser
shall each submit the name of a nationally recognized independent
accounting firm that has not provided, in the two years prior to
the date the name of such firm is submitted for selection
pursuant to the terms hereof, professional Tax-related services
worth more than $100,000 to any of the Company, the Partners or
Purchaser or their respective affiliates, and the "Independent
Accounting Firm" shall mean the firm selected by lot from these
two firms.
"Intangible Personal Property" shall have the meaning
specified in Section 3.10.
"La Palma Commercial Acquisition" shall mean the
Company's acquisition of an approximate 20,300 square foot
commercial building located on La Palma Avenue in Buena Park,
California, as more particularly described in Exhibit A.
"Licenses" shall have the meaning specified in
Section 3.14.
"Long-Term Debt" shall mean the consolidated long-term
debt of the Company, determined in accordance with GAAP less
current installments of such long-term debt.
"Material Adverse Effect" shall mean changes,
developments or occurrences which, individually or in the
aggregate, have or reasonably can be expected to have a material
adverse effect on the assets, liabilities, business, operations
or financial condition or operating results of the Company.
"Partner Loan Account Schedule" shall mean the schedule
submitted to Purchaser by the
Authorized Representative at least three (3) business
days prior to the Closing, which schedule shall set forth the
principal amount of the Company's indebtedness to each Partner
(or affiliate thereof), plus accrued but unpaid interest thereon
through to and including the Closing Date, which indebtedness and
accrued interest shall be paid by Purchaser pursuant to
Section 2.03(a) hereof as of the Closing Date.
"Partners' Knowledge" shall mean that whenever a
representation or warranty is made herein as being "to the
Partners' knowledge" or "to the knowledge of the Partners" or
that the "Partners are aware" or "not aware" of a matter or words
of similar import, it shall mean that the Partners have made or
caused to be made (and the results thereof reported to them) a
reasonable inquiry to determine the accuracy of such
representation or warranty by officers of the Company whom the
Partners believe to be appropriate with respect to the subject
matter of the inquiry.
"Percentage Interests" shall mean the percentage
interests of the Partners in the Company as set forth in
Schedule 3.02.
"Post-Acquisition Taxable Period" shall mean a taxable
period of the Company that begins on or after the Closing Date.
"Pre-Acquisition Tax Liability" shall mean a Tax
liability of the Company for or with respect to any
Pre-Acquisition Taxable Period or any Straddle Period to the
extent allocable to the period ending on the Closing Date, but
not including any Stub Period Tax Liabilities.
"Pre-Acquisition Taxable Period" shall mean a taxable
period of the Company that ends before the Closing Date.
"Proceeding" shall mean any audit or other examination,
or any judicial or administrative proceeding, relating to
liability for or refunds or adjustments with respect to Taxes.
"Purchase Price" shall have the meaning specified in
Section 2.02.
"Purchaser Tax Liabilities" shall mean without
duplication, each and all of (i) the Final Balance Sheet Tax
Liabilities, (ii) Stub Period Tax Liabilities, (iii) Tax
Liabilities attributable to that portion of a Straddle Period
following the Closing Date, and (iv) Tax Liabilities attributable
to Post-Acquisition Taxable Periods.
"Purchaser Termination" shall have the meaning
specified in Section 9.02.
"Real Property" shall have the meaning specified in
Section 3.12.
"Retiring Executives" shall mean Xxxxx Xxx Xxxxxx,
Xxxxxx Xxxxx and Xxxxx Xxxxx.
"September 28, 1997 Balance Sheet" shall have the
meaning specified in Section 3.05.
"SERP Benefit" shall mean the supplemental employee
retirement benefit payable by the Company to Xxxxx Xxx Xxxxxx.
"Straddle Period" shall mean a taxable period of the
Company that includes but does not end on the Closing Date.
"Stub Period" shall mean, in the sole case wherein the
Closing Date occurs following December 29, 1997, the period
commencing on December 29, 1997, and ending on the Closing Date.
If the Closing occurs on or before December 29, 1997, all
references in this Agreement to the Stub Period shall be deemed
nonoperative.
"Stub Period Tax Liabilities" shall mean all Tax
Liabilities of the Company attributable to the Company's
activities during the Stub Period as determined in accordance
with Section 5.02(a)(3).
"Tax" or "Taxes" shall mean all taxes, including,
without limitation, all net income, gross receipts, sales, use,
withholding, payroll, employment, social security, unemployment,
disability, excise, property, and estimated taxes, together with
any interest, penalties, or additions thereto imposed by any
governmental taxing authority.
"Tax Liabilities" shall mean all liabilities for Taxes.
"Tax Return" shall mean all federal, state, local and
foreign tax returns, declarations, statements, reports,
schedules, form and information returns and any amendments to any
of the foregoing.
"Transaction Fee Schedule" shall mean the schedule
submitted to Purchaser by the Authorized Representative three
(3) business days prior to the Closing reflecting the fees and
expenses of the Company and the Partners in connection with the
transactions contemplated by this Agreement, including but not
limited to legal, accounting and investment banking fees, the
Change in Control Payments described in Section 5.01(b), the cash
severance benefits payable to the Retiring Executives, and the
SERP Benefit.
"Units" shall mean units of limited partnership
interest of Purchaser. All references herein to numbers of Units
and the price of Units take into account the 2-for-1 Unit split
which occurred on November 17, 1997.
"Unit Value" shall mean $23.34.
"Wooden Roller Coaster" shall mean the major capital
improvement/attraction consisting of a wooden roller coaster
being developed by the Company for opening in June, 1999. The
total cost of the project is currently estimated to be
approximately $24,000,000, with the Company anticipating 1997
expenditures of approximately $6,400,000.
"Working Capital" shall mean Current Assets less
Current Liabilities, exclusive of any indebtedness reflected in
the BOA Debt Schedule and fees and expenses reflected in the
Transaction Fee Schedule.
"Written Action" shall mean a written instrument
approved and executed by Partners holding more than sixty-six
percent (66%) of the Percentage Interests in the Company.
1.02 Additional Terms. In addition to the foregoing,
other capitalized terms used in this Agreement shall have the
meanings given to such terms where they first appear herein.
ARTICLE II
TRANSFER OF INTERESTS
2.01 Contribution of Interests. Subject to the terms
and conditions set forth herein, at the Closing, the Partners
shall contribute 99.9% and .1% of their partnership and assignee
interests in the Company to Purchaser and Magnum, respectively,
and Purchaser and Magnum shall acquire such partnership and
assignee interests. The partnership and assignee interests in
the Company shall be collectively referred to herein as the
"Interests."
2.02 Purchase Price for Interests. The aggregate
purchase price to be paid by Purchaser and Magnum for the
Interests (the "Purchase Price"), which shall be payable as set
forth in Section 2.03 hereof, shall be equal to the sum of the
following:
(a) Two Hundred Forty-Five Million Dollars
($245,000,000), subject to adjustment as set forth in
Section 2.05, Section 2.06 and Section 2.07;
(b) all expenditures by the Company made on or
after January 1, 1997, in connection with or otherwise relating
to the Wooden Roller Coaster currently being developed by the
Company, including but not limited to design, development, site
preparation and construction activities related thereto; and
(c) all capitalized expenditures made by the
Company on or before the Closing Date in connection with the
Crescent Avenue Land Acquisition and the La Palma Commercial
Acquisition.
2.03 Payment of Purchase Price. The purchase price shall be paid
by Purchaser as follows:
(a) At the Closing, Purchaser shall pay the
aggregate amount of the indebtedness of the Company owed to
certain Partners or affiliates thereof, as reflected in the
Partner Loan Account Schedule and inclusive of principal and
interest accrued through the Closing Date, with such payment to
be made by wire transfer of immediately available funds to an
account specified by the Authorized Representative for
distribution to the respective Partners.
(b) At the Closing, Purchaser shall pay, by wire
transfer of immediately available funds, to Bank of America the
aggregate amount of indebtedness, inclusive of principal and
interest accrued through the Closing Date, as set forth in the
BOA Debt Schedule.
(c) At the Closing, or following the Closing in
the case of payments required pursuant to Section 5.01(b) hereof,
Purchaser shall pay the fees and expenses reflected in the
Transaction Fee Schedule, with Purchaser to make payment of such
fees and expenses by wire transfer of immediately available funds
or by check delivered at the Closing, whichever may be applicable
as specified in the Transaction Fee Schedule.
(d) At the Closing, as security for the Partners'
performance of their obligations set forth in Section 2.06,
Section 2.07 and Section 8.01 of this Agreement, the Partners
hereby direct and authorize Purchaser to deposit in escrow with
NBD Bank, N.A. as escrow agent ("Escrow Agent") certificates,
registered in the name of and issued to the Partners (in
accordance with their respective Percentage Interests),
representing One Million Seventy-One Thousand One Hundred Twenty-
Two (1,071,122) Units (the "Escrowed Units"). The Escrowed Units
shall be accompanied by assignment powers in blank, to be held
and distributed in accordance with the terms and conditions of
the Escrow Agreement attached hereto as Exhibit B ("Escrow
Agreement"). Notwithstanding such arrangement, the Partners
shall retain all voting rights and all rights to dividends and
other distributions with respect to the Escrowed Units.
Notwithstanding the foregoing, if any Partners elect to receive
all cash pursuant to Section 2.03(e) below, Purchaser shall
deposit cash rather than Escrowed Units with the
Escrow Agent in an amount equal to the product of $25,000,000
multiplied by such Partners' respective Percentage Interests.
(e) At the Closing, Purchaser shall pay to an
account specified by the Authorized Representative for
distribution to the Partners, in accordance with their respective
Percentage Interests, by wire transfer of immediately available
funds or by delivery of Units, an amount in the aggregate sum
equal to the Purchase Price set forth in Section 2.02 less the
amounts set forth in subsections (a), (b) (c) and (d) above.
Each Partner may elect to have its pro rata share of the Purchase
Price paid to it in Units or in cash, or a combination of Units
and cash. For purposes of calculating the number of Units
payable to the Partners pursuant to this Section 2.03, Units
shall be valued at $23.34 (the "Unit Value"). Written notice of
each Partner's election must be delivered to Purchaser at least
twenty (20) days prior to the Closing Date. In the event written
notice of such election is not delivered at least twenty (20)
days prior to the Closing Date, Purchaser shall pay such
Partner's pro rata share in Units.
(f) Although Units will be issued on the Closing
Date, the parties agree that the holders of such Units will not
be deemed to have received any income with respect thereto in
1997 nor entitled to any distributions declared with respect to
1997.
2.04 The Partners to Deliver Title and Possession. At
the Closing, each of the Partners shall deliver to Purchaser
executed documents of transfer for each of their respective
Interests and other good and sufficient instruments of transfer
as Purchaser may reasonably require to vest effectively in
Purchaser good and valid title to the Interests, free and clear
of any claims, liens, pledges, options, security interests,
trusts, encumbrances or other rights or interests of any person,
in accordance with the terms hereof.
2.05 Date, Time and Place of Closing. The consummation
of the transactions contemplated by this Agreement (the
"Closing") shall take place effective as of 12:01 a.m., local
time, on December 29, 1997, or on the fifth business day
following the date on which all conditions precedent to the
obligations of the parties hereunder have been satisfied or
waived, whichever is the later to occur (the "Closing Date"), at
the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 0 Xxxx Xxxxx, Xxxxxx,
Xxxxxxxxxx 00000 or at such other date, time and place as may be
mutually agreed upon in writing by the parties. Purchaser shall
be entitled to all revenues and profits generated on the Closing
Date and shall be responsible for any
taxes, costs, losses or other expenses incurred on such date. If
the Closing Date occurs after December 29, 1997, however, all
profit, loss, revenues, costs and expenses incurred with respect
to the operation of the business of the Company from and after
12:01 a.m. December 29, 1997 shall be for the benefit of and
account of the Purchaser. Without limiting the generality of the
foregoing, any additional indebtedness incurred by the Company in
order to fund such operations from and after December 29, 1997
under its credit facility with Bank of America shall be added to
the Purchase Price. All proceedings to take place at the Closing
shall take place simultaneously, and no delivery shall be
considered to have been made until all such proceedings have been
completed.
2.06 Working Capital Adjustment.
(a) The Purchase Price for the Interests will be
adjusted, by increasing or decreasing the amount thereof,
pursuant to the following provisions of this Section 2.06 (the
"Working Capital Adjustment"). If the Final Working Capital is
less than one dollar, the Purchase Price shall be reduced by, and
the Partners shall return to Purchaser, that number of Units
(valued at the Unit Value) equal to the difference between one
dollar and the Final Working Capital. In the event that the
Final Working Capital is greater than one dollar, the Purchase
Price shall be increased by, and Purchaser shall issue to the
Partners, that number of Units (valued at the Unit Value) equal
to the difference between the Final Working Capital and one
dollar. The Working Capital Adjustment shall be payable after
the Closing Date as set forth below and shall be reduced by the
amount of the Pro Forma Working Capital Adjustment (as defined
below).
(b) In an effort to reduce the amount of the
Working Capital Adjustment after the Closing Date, a pro forma
Working Capital Adjustment shall initially be calculated at the
Closing (the "Pro Forma Working Capital Adjustment") based on the
most recently available balance sheet (the "Pre-Closing Balance
Sheet"). The Pro Forma Working Capital Adjustment shall be
determined as follows: the payment to be made by Purchaser at the
Closing pursuant to Section 2.02(a) shall be increased or
decreased, as applicable, to the extent that the Working Capital
as reflected in the Pre-Closing Balance Sheet is greater than or
less than, as the case may be, one dollar.
(c) No later than 60 days following the Closing
Date, Deloitte & Touche LLP shall prepare and deliver to the
Authorized Representative and Purchaser an audited Final Balance
Sheet. During the 30 days after delivery of the audited Final
Balance Sheet, the Authorized Representative and Purchaser and
their respective representatives and accountants shall have the
right to review, audit and approve the appropriate entries on the
audited Final Balance Sheet concerning the Final Working Capital.
The Authorized Representative and Purchaser and their respective
representatives and accountants shall have the right to review
the workpapers of Deloitte & Touche LLP used in preparing the
audited Final Balance Sheet and the Authorized Representative and
his representatives and accountants shall have full access to the
books and records of the Company for the purpose of verifying the
accuracy and fairness of the audited Final Balance Sheet. If
neither party objects to the audited Final Balance Sheet within
such 30-day period, it shall be deemed acceptable to and binding
upon the parties.
(d) If either the Authorized Representative or
Purchaser has any objections to the audited Final Balance Sheet,
such party will deliver a detailed statement describing their
objections to the other party within 30 days after receiving the
audited Final Balance Sheet. Purchaser and the Authorized
Representative will use reasonable efforts to resolve any such
objections themselves. If the parties do not obtain a final
resolution within 30 days after a party has received the
statement of objections, however, Purchaser and the Authorized
Representative will select an accounting firm mutually acceptable
to them to resolve any remaining objections. The fees and
expenses incurred by the mutually acceptable accounting firm in
resolving any disputes shall be paid half by the Partners and
half by Purchaser.
2.07 Contract Adjustments.
(a) UFS Adjustment. In the event the "Peanuts"
License Agreement (the "Peanuts Agreement") between the Company
and the United Features Syndicate ("UFS") dated May 28, 1997
(effective June 1, 1998) is terminated by UFS within one year of
the Closing Date, the Purchase Price shall be reduced by, and the
Partners shall return to Purchaser, Units having an Adjusted Unit
Value equal to $5 million; provided, however, that such reduction
in Purchase Price shall not be payable if the termination results
from any action or inaction of Purchaser unrelated to the
acquisition by Purchaser of the Partners' interests in the
Company.
(b) MOA Adjustment. In the event that the
Design, Development and Management Services Agreement between MOA
Entertainment L.P., the Company and Minnertainment Company dated
July 10, 1990 (the "MOA Agreement") is terminated within one year
of the Closing Date, the Purchase Price shall be reduced by, and
the Partners shall return to Purchaser Units
having an Adjusted Unit Value equal to $20 million, less any
amounts paid or payable to the Company or Purchaser pursuant to
the MOA Agreement after the Closing Date; provided, however, that
such reduction in purchase price shall not be payable if the
termination results from any action or inaction of Purchaser
unrelated to the acquisition by Purchaser of the Partners'
interests in the Company. In the event that the MOA Agreement is
amended (or it is terminated and an agreement providing for
substantially similar services is entered into) and such
agreement provides for average net annual compensation to the
Company or Purchaser in an amount less than $2.1 million, the
Purchase Price shall be reduced by, and the Partners shall return
to Purchaser Units having an Adjusted Unit Value equal to the
difference between (i) $20 million minus (ii) the product of the
net annual compensation payable under the amended or new
agreement (taking into account incentive, percentage, profit
participation or similar contingent payments) multiplied by
9.524.
(c) Termination Defined. For purposes of the
adjustments set forth in this Section 2.07, a termination of the
Peanuts Agreement or the MOA Agreement followed by the execution
of an agreement providing for substantially similar rights or
services shall not constitute a termination for purposes of
triggering an adjustment to the Purchase Price.
(d) Adjusted Unit Value Defined. For purposes of
calculating the number of Units to be returned to Purchaser in
the event of a Purchase Price adjustment pursuant to
subsection (a) or (b) of this Section 2.07, the Adjusted Unit
Value shall be the Unit Value, plus or minus, as the case may be,
the product of .5 multiplied by the difference between the
Current Value as of the date of the Final Determination (as
defined in Section 3.5 of the Escrow Agreement) and the Unit
Value.
(e) Partners Right to Bring Suit. In the event
that the Peanuts Agreement or the MOA Agreement are terminated
within one year of the Closing Date and the Purchase Price is
reduced as set forth in Sections 2.07(a) or (b), the Partners
shall have the right to bring suit against any of the parties to
such agreements (other than Purchaser, except as set forth in
Section 8.02 hereof) for breach of contract or other action.
Purchaser agrees to cooperate with and assist the Partners in any
such action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERS
The Partners, severally and not jointly, and the Company
represent and warrant to Purchaser that at the Closing:
3.01 Organization, Good Standing and Authority. The
Company is a general partnership duly formed and validly existing
under the laws of the State of California. The Company has full
partnership power and authority to carry on its business as it is
now conducted, and is entitled to own, lease or operate the
properties and assets it now owns, leases or operates. The
Company is qualified to do business and has all required and
appropriate licenses in each jurisdiction in which its failure to
obtain or maintain such qualification or licensing (i) would have
a Material Adverse Effect or (ii) would result in a material
breach of any of the other representations, warranties or
covenants set forth in this Agreement. Each of the Partners has
the requisite corporate or trustee power and authority, as the
case may be, to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of the Partners, has been
authorized by all necessary corporate or trustee action, as the
case may be, of the Partners and constitutes a legal, valid and
binding obligation of each Partner, enforceable against each of
them in accordance with its terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to creditors
rights generally. Except as described in Exhibit A, the Company
does not own, directly or indirectly, legally or beneficially, or
have any rights to acquire, any shares of capital stock or any
equity interest in, or otherwise control, any corporation,
company, partnership, joint venture or other entity or business.
3.02 Ownership of Interests and Power to Transfer. All
of the Interests are validly issued and outstanding, fully paid
and nonassessable. The Percentage Interests owned by each
Partner are set forth on Schedule 3.02 hereto. Neither the
Partners nor the Company have granted, issued or agreed to grant
or issue any other partnership interests in the Company (other
than the Interests), and there are no outstanding options,
subscription rights, securities that are convertible into or
exchangeable for, or any other commitments of any character
relating to, the Interests or any other partnership interests of
the Company. The Partners have good and valid title to, and
sole record and beneficial ownership of, the Interests, free and
clear of any claims, liens, pledges, options, security interests,
trusts, encumbrances or other rights or interests of any person,
and the Partners have the absolute and unrestricted right, power,
authority and capacity to transfer the Interests to Purchaser at
the Closing.
3.03 Consents and Approvals of Governmental
Authorities. Except as set forth in Schedule 3.03 hereto, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority by
the Partners or the Company is required in connection with the
execution, delivery and performance of this Agreement by the
Partners and the Company and the consummation by the Partners and
the Company of the transactions contemplated hereby.
3.04 Agreement not a Breach. Except as set forth on
Schedule 3.04 hereto, the execution of this Agreement by each of
the Partners and the fulfillment, performance and compliance with
the terms and provisions of this Agreement by each of the
Partners will not (i) conflict with or result in a breach of any
provision of the general partnership agreement of the Company;
(ii) conflict with, violate or result in a breach of the terms,
conditions or provisions of, or constitute (with or without
giving of notice or the lapse of time or both), a default (or
give rise to any right of termination, cancellation,
acceleration, suspension or revocation) or result in the
acceleration of any obligation under, or permit termination of,
any material agreement, lease, license, note, contract or
instrument to which any of the Partners or the Company, as the
case may be, is a party or by which any of them or their property
is bound; (iii) accelerate, or constitute (with or without giving
of notice or the lapse of time or both) an event entitling the
holder of any Indebtedness of the Company to accelerate the
maturity of any such Indebtedness, permit subordination of any
such Indebtedness of the Company to any other Indebtedness of the
Company to which the Company was not already subordinated; (iv)
conflict with or violate the provisions of any law or any
material judgment, decree, order, regulation or rule of any court
or governmental authority or any material covenant or restriction
binding upon the Company; (v) violate or result in the
modification, termination or loss of any material permit, license
or other authorization applicable to the Company; or (vi) result
in the creation of any material lien, charge or encumbrance upon
any partnership interest in or assets of the Company under any
agreement or instrument to which the Company is a party or by
which the Company is bound.
3.05 Financial Statements. The Partners have delivered
to Purchaser the audited consolidated balance sheet of the
Company as of December 29, 1996 (the "December 29, 1996 Balance
Sheet") and related statements of income and cash flow for the
twelve month period then ended (the "1996 Financial Statements").
In addition, the Partners have delivered to Purchaser (a) the
unaudited consolidated balance sheet of the Company as of
September 28, 1997 (the "September 28, 1997 Balance Sheet") and
related statements of income and cash flow for the nine month
period then ended (the "Interim Financial Statements"), (b) the
unaudited balance sheet of Virginia's Gift Shop ("VGS") as of
September 28, 1997 and related statements of income and cash flow
for the nine month period then ended (the "VGS Financial
Statements") and (c) the unaudited balance sheet of MOA
Entertainment, L.P. ("MOA") as of September 28, 1997 and related
statements of income and cash flow for the nine month period then
ended (the "MOA Financial Statements"). The 1996 Financial
Statements, the Interim Financial Statements, the VGS Financial
Statements and the MOA Financial Statements are collectively
referred to herein as the "Financial Statements" and are attached
hereto as Schedule 3.05. Except as set forth in Schedule 3.05
hereto, the Financial Statements (i) were prepared in accordance
with the books and records of the Company, VGS or MOA, as
applicable; (ii) were prepared in accordance with such entity's
accounting policies and principles and are in accordance with
GAAP (except that the Interim Financial Statements, the VGS
Financial Statements and the MOA Financial Statements are
unaudited and therefore do not have certain notes otherwise
required by GAAP and may be subject to year-end audit
adjustments); and (iii) present fairly the financial condition
and results of operations of the Company, VGS or MOA, as
applicable, at the dates and for the periods covered thereby.
3.06 Absence of Certain Changes. Except as set forth
in Exhibit A and Schedule 3.06, since the Balance Sheet Date
there has not been:
(a) Any Material Adverse Effect, and the Company
has in all material respects conducted its business in the
ordinary course consistent with past practices;
(b) Any increase in the compensation paid or
payable by the Company, other than in the ordinary course of
business, to any of its officers or employees;
(c) Any recapitalization in respect of the
partnership interests in the Company or any direct or indirect
redemption, purchase or other acquisition of any such
partnership interest or any agreement to do any of the foregoing;
(d) Any issuance, transfer, sale or pledge by the
Company of any partnership interest or of any commitments,
options, rights or privileges under which the Company is or may
become obligated to issue any partnership interests;
(e) Any Indebtedness incurred by the Company
(excluding intercompany transactions), except such as may have
been incurred or entered into in the ordinary course of business
and consistent with past practices;
(f) Any loan made or agreed to be made by the
Company (excluding intercompany transactions), nor has the
Company become liable or agreed to become liable as a guarantor
with respect to any loan;
(g) Any waiver by the Company of any right or
rights of material value or any payment, direct or indirect, of
any material debt, liability or other obligation before the same
became due in accordance with its terms;
(h) Any change in the accounting methods,
practices or policies followed by the Company from those in
effect during the past three fiscal years;
(i) Except for the purchase, replacement or
disposition of assets in the ordinary course of business, any
purchase or other acquisition of, or any sale, lease, disposition
of, mortgage, pledge or subjection to any lien or encumbrance on,
any material property or assets, tangible or intangible assets of
the Company or any agreement to do any of the foregoing; or
(j) Any materially adverse change in the
relationship of the Company or any of its affiliates with any
suppliers, customers, sponsors or other third parties having
business relationships with the Company.
3.07 Taxes. Except as set forth in Schedule 3.07
hereto, the Company has (a) timely filed or caused to be timely
filed all Tax Returns of the Company required to be filed as of
the date hereof (after giving effect to any valid extension of
time to file such Tax Returns) and (b) paid, when due (or made
provision in accordance with GAAP with respect thereto), all
taxes as shown to be due and payable on said Tax Returns. No Tax
Liabilities, disallowances, deficiencies or assessments relating
to the business, assets or employees of the Company have been
assessed on, asserted or proposed to the Company as of the date
hereof and all such Tax Returns are complete, accurate and in all
material respects and were prepared in accordance with all legal
requirements applicable thereto. No federal, state, local or
foreign audits, other administrative proceedings
or court proceedings are presently pending with regard to any
Taxes or Tax Returns of the Company wherein an adverse
determination or ruling in any one such proceeding or in all such
proceedings in the aggregate would have (or reasonably be
expected to result in) a Material Adverse Effect.
3.08 Collective Bargaining Agreements and Employee
Benefits. Except as described in Schedule 3.08, the Company is
not involved in any labor discussion with any unit or group
seeking to become the bargaining unit for any of its employees,
nor has any such unit or group notified the Partners or the
Company of an intention to commence any organizational activities
among the employees of the Company. Schedule 3.08 contains a
listing of (a) each collective bargaining agreement and other
labor agreement to which the Company is a party or by which it is
bound, (b) each employment, consulting, severance, deferred
compensation, bonus, Interest purchase, Interest option, salary
continuation, incentive and any other employee benefit plan or
agreement providing for compensation or other benefits to
employees (including officers), or independent contractors,
individually or as a group, to which the Company is a party or by
which it is bound; (c) each "employee pension benefit plan" as
defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and not exempted under Section
4(b) or 201 of ERISA maintained by the Company or to which the
Company is required to contribute, including any multi-employer
pension plan; and (d) each "employee welfare benefit plan" as
defined in Section 3(1) of ERISA maintained by the Company or to
which the Company contributes or is required to contribute,
including any multi-employer welfare plan, and each other plan
under which "fringe benefits" (including, without limitation,
vacation plans or programs, severance benefits, sick leave plans
or programs, dental or medical plans or programs, and related or
similar benefits) are afforded to employees of, or otherwise
required to be provided by, the Company. The Company has
complied in all material respects with all applicable laws, rules
and regulations relating to employment, including those relating
to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by appropriate
governmental authorities. Except as set forth in Schedule 3.08,
all employee benefit plans, as defined in Section 3(3) of ERISA,
of the Company in effect at any time since inception of the
Company are now, and have always been, established, maintained
and operated in accordance, in all material respects, with all
applicable laws (including, but not limited to, ERISA and the
Code) and all regulations and interpretations thereunder and in
accordance with their plan documents. Except as set forth in
Schedule 3.08, there is no unfunded liability for vested or non-
vested benefits under any funded employee benefit plan, and all
contributions required to be made to or with respect to each
employee benefit plan and all costs of administering each
employee benefit plan have been completely and timely paid. With
respect to each benefit plan that is subject to Title IV of
ERISA, no liability or obligation to the PBGC has been incurred
or is expected except for insurance premiums under Section 4007
of ERISA, and all insurance premiums incurred or accrued up to
and including the Closing Date have been or will be timely paid
by the Company; and no amount is, and as of the Closing Date no
amount will be, due or owing from the Company to any
"multiemployer plan" (as defined in Section 3(37) of ERISA) on
account of any withdrawal therefrom. There has been no
prohibited transaction as described in Section 406 of ERISA and
Section 4975 of the Code with respect to any employee benefit
plan. No employee benefit plan provides medical benefits to any
former employees (including retirees) of the Company, other than
benefits required to be provided under Section 490B of the Code.
3.09 Litigation. Except as set forth in Schedule 3.09:
(a) Neither the Partners nor the Company is a
party to, or to their knowledge is affected by, any writ,
injunction or decree of any court or governmental instrumentality
which, individually or in the aggregate, could reasonably have a
Material Adverse Effect;
(b) The Company is not engaged in, or to the
knowledge of the Partners or the Company, threatened with, nor is
there pending, any legal action or other proceeding before any
court or administrative agency and no written claims have been
made against the Company, except any such action, proceeding or
claim which, if adversely decided, could not reasonably result in
a Material Adverse Effect; and
(c) No investigations of or claims against the
Company, or its officers have been made or, are, to the knowledge
of the Partners or the Company, pending or threatened by any
governmental body or agency.
3.10 Licenses of Intangible Personal Property. There
is listed in Schedule 3.10 all licenses or similar agreements or
arrangements that are material to the business of the Company and
to which the Company is a party either as licensee or licensor
for any item of intangible personal property ("Intangible
Personal Property") and except as set forth on Schedule 3.10:
(a) No proceedings have been instituted or are
pending or, to the knowledge of the Partners and the Company,
threatened, nor have any claims or notices been received, that
challenge the rights of the Company in any material respect in
and to any of such Intangible Personal Property or any license
thereof;
(b) There are no pending or, to the knowledge of
the Partners and the Company, threatened claims, demands or
proceedings, restricting the right of the Company to use,
charging the Company with infringement of, or making any other
claim with respect to, any of such Intangible Personal Property
or any license thereof which, if adversely determined, could,
individually or in the aggregate, reasonably have a Material
Adverse Effect; and
(c) None of the rights of the Company in (as
transferred to Purchaser), to and under any Intangible Personal
Property will be materially adversely affected by the
consummation of the transactions contemplated hereby; and
(d) To the Partners' knowledge, the operations of
the business of the Company as presently conducted do not
infringe any rights of others to any intellectual property owned
by others.
3.11 Insurance. Schedule 3.11 sets forth a true,
correct and complete list of all insurance policies of any nature
whatsoever maintained by the Company pertaining to the business
of the Company. The Company maintains, with responsible
insurance carriers, property, auto liability, workers'
compensation and general liability insurance. Such policies and
binders are and shall remain in full force and effect through the
Closing Date and, except as otherwise set forth on Schedule 3.11,
such policies, or other policies covering the same risks, have
been in full force and effect, without gaps, continuously for the
past five (5) years. Copies of all such policies have been made
available to Purchaser for its inspection. The Company is not in
default under any of such policies or binders, and to the
knowledge of the Partners and the Company, has not failed to give
any notice or to present any claim under any such policy or
binder in a due and timely fashion.
3.12 Real Property. There is listed in Schedule 3.12:
(i) a description of each parcel of real property owned by the
Company and (ii) a listing of each lease of real property under
which the Company is a lessee, lessor, sublessee or sublessor, as
so designated therein ((i) and (ii), collectively, the "Real
Property"). Except as indicated in Schedule 3.12:
(a) The Company has beneficial ownership of and
good and marketable title in fee simple to the Real Property
described in Schedule 3.12 as owned by the Company free and clear
of all mortgages, liens, encumbrances, leases, equities, security
interests, pledges conditional sale agreements, title retention
agreements, claims, charges, easements, licenses, rights-of-way,
covenants, conditions, restrictions, options and adverse or
equitable claims or rights and other title defects of any nature
whatsoever (collectively, "Liens"), except for liens, if any, for
property taxes not yet due and other items which do not and will
not impair, in any material respect, the usefulness to the
Company, or the value or the marketability, of any such Real
Properties;
(b) Each material lease, easement and other real
property interest held by the Company is valid, in full force and
effect, and the Company is not in material default thereunder;
(c) None of the Partners or the Company has
received any notice, or has any knowledge, that any of the
buildings, structures or other material improvements erected on
the Real Property owned or leased by the Company, or the present
use thereof, (i) do not conform in all material respects with all
applicable laws (or does not constitute a legal nonconforming
use), codes, ordinances, regulations or other laws and applicable
deed restrictions, (ii) materially encroach on property of
others, or (iii) have not been operated and/or maintained in
accordance with industry standards; and
(d) None of the Partners or the Company has
received notice from any municipal body or other public authority
requiring work to be done or improvements to be made upon any of
the Real Property and has no knowledge of the enactment or
adoption of any law, code, regulation, ordinance or resolution by
any such body or authority authorizing work or improvements for
which any of the Real Property may be assessed.
3.13 Material Contracts. Schedule 3.13 sets forth a
true, correct and complete list of:
(a) Each contract between the Company and any
party to whom the Company provides products or services which
involves more than $150,000 in consideration for any twelve month
period; and
(b) Each contract (except for real property
leases and insurance contracts) between the Company and any party
to whom the Company is obligated to pay more than $150,000 in
consideration for any twelve month period.
The contracts and agreements which are required to be identified
in Schedule 3.13 pursuant to subsections (a) and (b) above are
hereinafter referred to as the "Material Contracts." True and
complete copies of each Material Contract have been delivered to
Purchaser by the Company. Except as set forth in Schedule 3.13:
(i) Each of the Material Contracts is a valid, binding
and enforceable agreement of the Company and, to the knowledge of
the Partners, the other parties thereto and, to the knowledge of
the Partners, will, subject to the satisfaction of the conditions
in Articles VI and VII, continue to be valid, binding and
enforceable immediately after the Closing, subject to equitable
defenses for specific performance and injunctive relief;
(ii) As of the date hereof, the Partners have no reason
to believe that the Company will not be able to fulfill in all
material respects all of its obligations under the Material
Contracts which remain to be performed after the date hereof; and
(iii) To the knowledge of the Partners, there has
not occurred any material default (or event which upon provision
of notice or lapse of time or both would become such a default)
under any of the Material Contracts on the part of the Company.
3.14 Governmental Permits and Licenses. Schedule 3.14
contains a true, correct and complete list of the governmental
permits, licenses, franchises and other certificates and
authorizations (the "Licenses") that are required for and are
material to the operation of the business conducted by the
Company as such business is now conducted. Except as set forth
on Schedule 3.14, all of such Licenses are, and as of the Closing
will be, in full force and effect and the continuing validity and
effectiveness of such Licenses will not be affected by the sale
and transfer of the Interests to Purchaser. The Company has
provided, or prior to the Closing Date will provide, Purchaser
with true, correct and complete copies of each License listed in
Schedule 3.14. Except as set forth on Schedule 3.14, the Company
is and has been in compliance in all material respects with all
material conditions or requirements of such Licenses, and neither
the Company nor any of the Partners has been notified by any
governmental or licensing authority that any governmental or
licensing authority intends to cancel, terminate or modify any of
such Licenses.
3.15 Management Personnel. Schedule 3.15 contains a
true and complete list of the names, current salaries and
incentive compensation arrangements of all management employees
of the Company who earned in excess of $75,000 in the calendar
year ended December 31, 1996 or who will, at their present
salaries, earn in excess of $75,000 in the calendar year ending
December 31, 1997.
3.16 Banking Facilities. Schedule 3.16 contains a true
and complete list of:
(a) Each bank, savings and loan or other
institution in which the Company has a deposit, custodial, trust
or similar account or safety deposit or lock box account and the
numbers and types of the accounts or safety deposit boxes
maintained by the Company at such institutions; and
(b) The names of all persons authorized to draw
on each such account or to have access to any such safety deposit
or lock box facility, together with a description of any
limitations on such authority of each such person with respect
thereto.
3.17 Compliance with Law. Except as set forth on
Schedule 3.17 hereto, the conduct of business by the Company has
not violated or breached and does not violate or breach in any
material respect (and no event has occurred which with notice or
the lapse of time, or both, would constitute a violation or
breach of) any federal, state, local or foreign laws, statutes,
ordinances, rules, regulations, decrees, orders, permits,
licenses, governmental authorizations, consents or approvals
required for the Company to conduct its business as currently
conducted, or other similar items applicable to the Company or
any of its properties or assets in force on the date hereof
including, without limitation, federal, state and municipal (a)
laws and regulations affecting the protection of the health and
safety of employees, and (b) laws and regulations affecting equal
employment opportunity. There are no unresolved notices of
deficiency or charges of violation brought or, to the knowledge
of the Partners, threatened or pending against the Company,
including under any federal or state regulation or otherwise,
which individually or in the aggregate would have (or could
reasonably result in) a Material Adverse Effect, or interfere
with the maintenance or reissuance of any of the Licenses held by
the Company, and there are no facts or circumstances known to the
Partners that would constitute a reasonable basis on which any
such proceedings, notices or actions may be instituted, issued or
brought hereafter.
3.18 Consents of Non-Governmental Third Parties.
Except as set forth in Schedule 3.18 hereto, no material consent,
waiver, approval or authorization of any non-governmental third
party is necessary for the execution, delivery or consummation by
the Company and each of the Partners of the transactions
contemplated hereby.
3.19 Broker's Commission or Finder's Fee. Neither the
Company nor the Partners have retained any broker or finder
(other than Xxxxxxx, Xxxxx & Co.) or agreed to become obligated
to pay any fee or commission to any broker or finder (other than
fees and commissions payable to Xxxxxxx, Sachs & Co.) for or on
account of the transactions contemplated by this Agreement. The
payment of fees and commissions to Xxxxxxx, Xxxxx & Co. will be
paid by Purchaser pursuant to Section 2.03(c) above.
3.20 No Undisclosed Liabilities. The Company does not
have, and as of the Closing Date will not have, any liabilities,
obligations or commitments (absolute, accrued or contingent)
matured or unmatured (herein "Liabilities") except
(i) Liabilities which are adequately reflected or fully reserved
against in the September 28, 1997 Balance Sheet, (ii) Liabilities
which have been incurred in the ordinary course of business and
consistent with past practice since the date of the September 28,
1997 Balance Sheet, (iii) Liabilities disclosed in Exhibit A or
in the Schedules hereto and (iv) Liabilities arising under
contracts or other agreements which because of the dollar amount
involved are not required to be listed in the Schedules hereto
(collectively, the "Known Liabilities").
3.21 Title to and Condition of Assets. The Company has
good and marketable title to all of its assets (real, personal or
mixed, tangible and intangible). Except as set forth on
Schedule 3.21, none of the Company's assets is subject to any
Liens except for (i) liens for taxes or other amounts not yet due
and payable, and (ii) liens and encumbrances which individually
or in the aggregate do not materially impair the usefulness or
value of such assets. All assets which are amusement rides
(including related equipment) (a) have been operated and
maintained in accordance with prudent practice in the amusement
park industry, including complying with manufacturers'
recommendations, (b) have been operated and maintained in
substantial compliance with all applicable regulations of the
State of California or any political subdivision thereof and (c)
are in good condition and repair, except for ordinary wear and
tear, and are usable and presently being used in the ordinary
course of business.
3.22 Environmental Matters.
(a) For the purposes of this Agreement, the term
"Environmental Laws" shall mean all federal, state and local
environmental protection, occupational, health and safety or
similar laws, ordinances, restrictions, licenses, rules,
regulations and permit conditions, including, but not limited to,
the Federal Water Pollution Control Act, Resource
Conservation & Recovery Act, Clean Air Act, Comprehensive
Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right to Know, Occupational Safety and
Health Act and other federal, state or local laws of similar
effect, each as amended, and the term "Hazardous Materials" shall
mean any hazardous or toxic substances, wastes or materials,
defined as such or governed by any applicable Environmental Law.
(b) Except as disclosed on Schedule 3.22, (i) the
Company has not received any notices, directives, violation
reports, actions or claims from or by (1) any federal, state or
local governmental agency concerning the Company and any
Environmental Laws or (2) any person alleging that, in connection
with Hazardous Materials, conditions at the Real Properties of
the Company have resulted in or caused or threatened to result in
or cause injury or death to any person or damage to any property,
including without limitation, damage to natural resources, and to
the Partners' knowledge, no such notices, directives, violation
reports, actions, claims, assessments or allegations exist;
(ii) to the knowledge of the Partners, the Company does not
currently lease, operate or own any Real Properties that are
listed or are threatened to be listed on a "Superfund" List or
with respect to which, to the knowledge of the Partners, there is
any pending or threatened proceeding or investigation under any
Environmental Law; (iii) to the knowledge of the Partners,
throughout the period of ownership and/or operation of any of the
Real Properties by the Company, the Company has operated and
continues to operate the Real Properties in compliance with all
Environmental Laws; (iv) no underground storage tanks either are
or, to the Partners' knowledge, have been located at any of the
Real Properties; (v) to the knowledge of the Partners, there has
been no spill, discharge, release, contamination or cleanup of or
by any Hazardous Materials used, generated, treated, stored,
disposed of or handled by the Company at the Real Properties or
otherwise and to the Partners' knowledge, no spill, discharge or
release or contamination or cleanup of or by Hazardous Materials
has occurred on or to the Real Properties by any third party;
(vi) to the knowledge of the Partners, the Company has not used,
generated, treated, stored, disposed of, handled, transported or
released any Hazardous Material in a manner which would give rise
to any liability under any Environmental Laws; and (vii) to the
Partners' knowledge, the Company has not released any other
person from any claim under any Environmental Law nor waived any
rights or defenses concerning any environmental conditions at
any Real Properties or in connection with the Company's use,
ownership and/or operation of its assets and properties.
(c) To the knowledge of the Partners, the
existing systems for delivering water to, and taking sewage from,
the Xxxxx'x Xxxxx Farm Theme Park in Buena Park, California
comply with all applicable Environmental Laws, and are sufficient
to serve the Company's operations at such location as of the
Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Partners as follows:
4.01 Organization and Corporate Authority; Binding
Obligation. Purchaser is a limited partnership duly formed,
validly existing and in good standing under the laws of the State
of Delaware, and Purchaser has full power and authority to carry
on its business as it is now conducted, and is entitled to own,
lease or operate the properties and assets it now owns, leases or
operates. Purchaser is qualified to do business, is in good
standing and has all required and appropriate licenses in each
jurisdiction in which its failure to obtain or maintain such
qualification, good standing or licensing (i) would have a
material adverse effect on the financial condition, earnings,
business or assets of Purchaser, or (ii) would result in a
material breach of any of the other representations, warranties
or covenants set forth in this Agreement. Purchaser has all
requisite partnership power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
This Agreement and all other agreements herein contemplated to be
executed by Purchaser have been duly authorized by all necessary
partnership action and constitute (or upon execution and delivery
will constitute) legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their
respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to creditors'
rights generally.
4.02 Agreement not a Breach. Except as set forth on
Schedule 4.02 hereto, the execution of this Agreement by
Purchaser and the fulfillment, performance and compliance with
the terms and provisions of this Agreement by Purchaser will not
(i) conflict with or result in any breach of any provisions of
the Third Amended and Restated Agreement of Limited Partnership
of Purchaser or the certificate of limited partnership of
Purchaser (collectively, "Purchaser's LP Agreements"); (ii)
conflict with, violate or result in a breach of the terms,
conditions or provisions of, or constitute (with or without the
giving of notice or the lapse of time, or both) a default (or
give rise to any right of termination, cancellation,
acceleration, suspension or revocation) or result in the
acceleration of any obligation under, or permit termination of,
any material agreement or instrument to which Purchaser is a
party or by which Purchaser is bound; (iii) accelerate, or
constitute an event entitling the holder of any Indebtedness of
Purchaser to accelerate the maturity of any such Indebtedness of
Purchaser, permit subordination of any Indebtedness of Purchaser
to any other Indebtedness of Purchaser to which it was not
already subordinated; (iv) conflict with or violate the
provisions of any law or any material judgment, decree, order,
regulation or rule of any court or governmental authority or any
material covenant or restriction binding upon Purchaser; (v)
violate any material permit, license or other authorization
applicable to Purchaser; or (vi) result in the creation of any
material lien, charge or encumbrance upon any assets of Purchaser
under any agreement or instrument to which Purchaser is a party
or by which Purchaser is bound.
4.03 Consents and Approvals of Governmental
Authorities. Except as set forth in Schedule 4.03 hereto, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and
performance of this Agreement by Purchaser and the consummation
by Purchaser of the transactions contemplated hereby.
4.04 Broker's Commission or Finder's Fee. Purchaser
has not retained any broker or finder or agreed to become
obligated to pay any fee or commission to any broker or finder
(other than the fees and expenses of Xxxxxxx, Xxxxx & Co. payable
pursuant to Section 2.03(c) hereof) for or on account of the
transactions contemplated by this Agreement which would result in
any obligation on the part of the Partners.
4.05 Litigation. There is no claim or legal action
pending or, to the knowledge of Purchaser, threatened against
Purchaser which might materially adversely affect the performance
by Purchaser of its obligations hereunder.
4.06 Consents of Non-Governmental Third Parties.
Except as set forth in Schedule 4.06 hereto, no material consent,
waiver, approval or authorization of any non-governmental third
party is necessary for the execution, delivery or consummation by
Purchaser of the transactions contemplated hereby.
4.07 Accredited Investor. Purchaser represents and
warrants that it is an "Accredited Investor" as such term is
defined in Rule 501 under Regulation D of the 1933 Act (as
hereinafter defined).
4.08 Purchase for Investment. Purchaser acknowledges
that Purchaser is acquiring the Interests for its own account and
not with a view to, or present intention of, distribution thereof
in violation of the Securities Act of 1933, as amended (the "1933
Act") or any state securities laws, and the Interests will not be
disposed of in contravention of the 1933 Act or state securities
laws. Purchaser also acknowledges that no public market now
exists for the Interests and that it is unlikely that a public
market for the Interests will develop.
4.09 Interests Not Registered. Purchaser acknowledges
that the Interests have not been registered under the 1933 Act or
any state securities laws and, therefore, cannot be sold, and
must be held indefinitely, unless subsequently registered under
the 1933 Act and state securities laws or unless an exemption
from such registration is available.
4.10 Economic Risk. Purchaser acknowledges that its
investment in the Interests involves a high degree of risk and
represents that it is able to bear the economic risk of its
investment in the Interests for an indefinite period of time.
4.11 Financing. Purchaser has sufficient funds, or has
written commitments for such funds (true copies of which have
been delivered to the Partners), to deliver the Purchase Price
set forth in Section 2.02 at the Closing and to consummate the
transactions contemplated by this Agreement.
4.12 Status of Units. All of the Units issued to the
Partners pursuant to this Agreement shall be within the number of
such units which Purchaser is authorized to issue under the
Purchaser's LP Agreements and shall be valid and, subject to the
terms of this Agreement and Purchaser's LP Agreements and to the
statutory obligations under Delaware law, fully paid and
nonassessable, and Publicly Fungible, as that term is defined in
Section 5.09 hereof.
ARTICLE V
CERTAIN AGREEMENTS
5.01 Certain Employee Matters.
(a) General Employees. Purchaser agrees that
following the Closing all employees of the Company who are
employed immediately prior to the Closing will be given full
credit for all accrued vacation and holiday pay and all
accumulated sick pay of such employees, and Purchaser shall be
responsible for any severance payments or similar benefits
payable to any such employees whose employment is terminated
following the Closing. Such employees are intended third party
beneficiaries of the provisions of this Section 5.01(a).
(b) Management Employees. Purchaser acknowledges
that certain management employees set forth on Schedule 5.01
(each, a "Management Employee") have each been granted certain
change in control payments payable in the amounts and on the
dates set forth opposite each such Management Employee's name on
Schedule 5.01 (the "Change in Control Payments"). The Purchaser
acknowledges and agrees that after the Closing, Purchaser shall
cause the Company to pay the Change in Control Payments on the
respective dates such amounts are to be paid pursuant to Schedule
5.01.
5.02 Tax Matters.
(a) Certain Operating Conventions and Procedures.
(1) The parties acknowledge and agree that,
for U.S. federal and California income Tax purposes, the 1997
taxable year of the Company shall end as of the close of business
on the Fiscal Close Date. The parties further agree that for all
Tax purposes the Closing shall be deemed to occur prior to the
Company's opening of business or accrual or receipt of any income
on the Closing Date, and that all of the Company's income, gains
and other Tax items attributable to the Closing Date shall be
included and reported by the Purchaser in Tax Returns for Post-
Acquisition Taxable Periods and that all Taxes attributable to
the Company's income, gains or other Tax items for the Closing
Date shall be paid by the Purchaser.
(2) The allocation of any Tax Liability
between the portion of any Straddle Period ending on the Closing
Date, and the portion of such Straddle Period after such date
shall be made by means of a closing of the books and records of
the Company as of the close of business on the Fiscal Close Date
as if a taxable period ended as of the close of such date;
provided, however, that exemptions, allowances or deductions that
are calculated on an annual basis (including, but not limited to,
depreciation and amortization deductions) shall be allocated
between the period ending on such date and the period after such
date in the proportion which the number of days in each such
period bears to the total number of days in the Straddle Period.
(3) The allocation of any Tax Liability to
the Stub Period (if any) shall be made by treating such Stub
Period as a separate taxable period for purposes of Taxes payable
by or assessable against the Company based on a closing
of the Company's books and records as of the close of the Closing
Date and with exemptions, allowances or deductions which are
calculated on an annual basis being allocated to the Stub Period
in the proportion to which the number of days in the Stub Period
bear to the applicable annual taxable period.
(4) Except as provided otherwise in
Section 5.02(b)(3)(ii), for federal and state income tax purposes
the parties shall treat the exchange transaction contemplated
hereunder as a contribution by the Partners of property to
Purchaser in a transaction subject to Code Section 721(a) and, to
the extent of the cash payments made by Purchaser pursuant to
Section 2.03, Code Section 731(a). For all such purposes the
Partners shall be treated as receiving the Units and cash in the
capacity of partners making contributions to Purchaser.
(b) Filing of Tax Returns; Payment of Taxes.
(1) Tax Returns Required to Be Filed Prior
to the Closing Date. The Company shall prepare and file or cause
to be filed all Tax Returns of Company required to be filed
(after giving effect to any valid extension of time in which to
make such filings) prior to the Closing Date and shall pay or
cause to be paid all Taxes shown to be due and payable on such
Tax Returns, less the portion of such Taxes (if any) which are
Stub Period Tax Liabilities and thus constitute Purchaser Tax
Liabilities, which amount shall be paid by Purchaser.
(2) Tax Returns for Pre-Acquisition Taxable
Periods and Straddle Periods.
(i) The Authorized Representative shall
prepare or cause to be prepared, for Pre-Acquisition Taxable
Periods and for any Straddle Periods, all Tax Returns required to
be filed by the Company and which are not required to be (after
giving effect to any valid extensions) filed on or prior to the
Closing Date. The books and records of the Company will be
maintained, and the federal, state and other income Tax Returns
of the Company will be filed, so as to properly reflect the
operations of the Company through the end of the Closing Date.
(ii) For income tax purposes, the
liabilities for the payments reflected in the Transaction Fee
Schedule, including, without limitation, any payments required
pursuant to Section 5.01(b), for the severance benefit payments
to the Retiring Executives and the SERP Benefit (collectively,
the " Transaction Liabilities") shall be treated and reported as
accrued as of the Fiscal Close Date, and such Transaction
Liabilities shall be reflected as accrued expense items on the
Company's Tax Returns for the Pre-Acquisition Taxable Period
ending on and including the Fiscal Close Date.
(iii) The Authorized Representative
shall (A) file or cause to be filed all Tax Returns to which
Section 5.02(b)(1) and this Section 5.02(b)(2) apply and
(B) shall pay or cause to be paid, on or before the applicable
due date(s) therefor, all Taxes shown on such Tax Returns to be
due and payable, less, in each case, the portion of such Taxes
which are Purchaser Tax Liabilities, which amount shall be paid
by Purchaser.
(iv) The Purchaser shall pay or cause to
be paid, on or before the applicable due date(s) therefor, all
Purchaser Tax Liabilities.
(3) Tax Returns for Post-Acquisition Taxable
Periods.
(i) Purchaser shall prepare or cause to
be prepared the Tax Returns for Post-Acquisition Taxable Periods
and shall pay or cause to be paid all Taxes shown on such Tax
Returns to be due and payable.
(ii) For purposes of applying the
provisions of Code Section 704(c), the regulations thereunder and
comparable provisions under applicable state income tax laws
(collectively the "Section 704(c) Rules"), the parties agree as
follows:
(A) The Section 704(c) Rules shall
be applied as if the contribution and exchange transaction
contemplated hereunder had been effected through a contribution
of the Company's assets (rather than the Partners' Interests) to
Purchaser in exchange for cash and Units and the Purchaser then
contributed the Company's assets to a lower-tier partnership,
resulting ultimately in the effect described in Treasury
Regulation Section 1.704-3(a)(9);
(B) The real property consisting
of the approximately 150 acres (exclusive of any improvements
thereto and also exclusive of the real property being acquired in
the Crescent Avenue Land Acquisition and the La Palma Commercial
Acquisition) shall be deemed to have a fair market value of
Ninety Million Dollars as of the Closing Date; and
(C) Except as provided in
Section 5.02(b)(3)(ii)(D), in applying the Section 704(c) Rules
in Post-Acquisition Taxable Periods with respect to the
differences, respectively, in the tax basis and the fair market
value of the Company's assets and the Purchaser's assets as of
the Closing Date, Purchaser hereby covenants and represents that
(a) the "traditional method" subject to the "ceiling rule" of
Treasury Regulation Section 1.704-3(b) shall be used, (b) the
conventions and assumptions used in applying such traditional
method shall be such that, to the maximum extent possible, the
aggregate annual allocation of tax depreciation and tax
amortization to the Partners in Post-Acquisition Taxable Periods
will equal the aggregate tax depreciation and tax amortization
attributable to the tax basis of the Company's assets as of the
Closing Date, and (c) the Section 704(c) Rules and the covenants
and representations set forth in the foregoing clauses (a) and
(b) will be applied in a manner reflecting the conventions and
assumptions illustrated in Schedule I of Exhibit 5.02(b)(3)(ii),
provided, however, that the actual application of the
Section 704(c) Rules will be based on the actual valuations of
the Company's assets and the Purchaser's assets as of the Closing
Date (provided further, however, that for such purposes the
valuation for the Company's real property shall be as provided in
Section 5.02(b)(3)(ii)(B)).
(D) The parties acknowledge and
agree that, as of the date of this Agreement, there are Proposed
Treasury Regulations (the "Proposed Regulations") which, if made
effective, would operate to prohibit Purchaser from using the
"remedial method," as described in Treasury Regulation 1.704-3(d)
(the "Remedial Method"), in applying the Section 704(c) Rules in
Post-Acquisition Taxable Periods with respect to the differences
as of the Closing Date in the tax basis and fair market value of
the Company's and the Purchaser's goodwill, going concern value
and similar "Section 197" assets. In the event that such
Proposed Regulations are revised or withdrawn or other action is
taken by the U.S. Treasury so as to allow the use of the Remedial
Method for such purposes, then the parties agree that
Section 5.02(B)(3)(ii)(C) shall be deemed inoperative
and, in lieu thereof, the parties agree that in applying the
Section 704(c) Rules in Post-Acquisition Taxable Periods with
respect to the differences, respectively, in the tax basis and
the fair market value of the Company's assets and the Purchaser's
assets as of the Closing Date, Purchaser hereby covenants and
represents that (a) the "remedial method" described in Treasury
Regulation Section 1.704-3(d) shall be used, (b) the conventions
and assumptions used in applying such remedial method shall be
such that, to the maximum extent possible, the aggregate annual
allocation of tax depreciation and tax amortization from the
Closing Date assets of the Purchaser to the Partners in Post-
Acquisition Taxable Periods will equal the aggregate tax
depreciation and tax amortization attributable to the Company's
assets as of the Closing Date that is allocable to the other
limited partners of Purchaser, and (c) the Section 704(c) Rules
and the covenants and representations set forth in the foregoing
clauses (a) and (b) will be applied in a manner reflecting the
conventions and assumptions illustrated in Schedule II of
Exhibit 5.02(b)(3)(ii), provided, however, that the actual
application of the Section 704(c) Rules will be based on the
actual valuations of the Company's assets and the Purchaser's
assets as of the Closing Date (provided further, however, that
for such purposes the valuation for the Company's real property
shall be as provided in Section 5.02(b)(3)(ii)(B)).
(iv) Purchaser agrees to take all actions,
including the making of applicable elections, necessary or
appropriate to allow the Company (or any successor thereto, or,
if the Company is merged or liquidated into Purchaser, the
division or business segment in which the Company's business is
thereafter conducted) to continue, following the Closing, to use
the last-in-first-out ("Lifo") tax accounting method for the
Company's inventories, provided, however, the Purchaser shall not
be obligated hereunder to cause the Company to continue to use
such Lifo method with respect to the Company's inventories if at
any time such use of such method is not permitted under
applicable law.
(c) Proceedings.
(1) Purchaser shall, promptly upon receipt
of notice thereof by Purchaser or Company, notify the Authorized
Representative in writing of any communication with respect to
any pending or threatened Proceeding in connection with a Pre-
Acquisition Tax Liability (or an issue related thereto).
Purchaser shall include with such notification a true, correct
and complete copy of any written communication, and an accurate
and complete written summary of any oral communication, so
received by Purchaser or Company.
(2) The Authorized Representative shall have
responsibility and authority to represent the interests of the
Company and Partners in any Proceeding relating to
Pre-Acquisition Taxable Periods, Straddle Periods or otherwise
with respect to Pre-Acquisition Tax Liabilities and to employ
counsel of its choice at its expense; provided, however, that
Purchaser shall be permitted to participate (at its own expense)
in any such Proceedings and all hearings related thereto.
(3) The Purchaser and/or the Company, as
applicable, shall execute and deliver to the Authorized
Representative any power of attorney requested by the Authorized
Representative in connection with any Proceeding described in
this Section 5.02(c); provided, however, that such power of
attorney is necessary or appropriate to permit the Authorized
Representative to conduct such Proceeding.
(d) Cooperation; Maintenance and Retention of
Records. Purchaser shall, and shall cause the Company to,
provide the Authorized Representative with such assistance and
documents as may be reasonably requested by the Authorized
Representative in connection with (i) the preparation of any Tax
Return, (ii) the conduct of any Proceeding, (iii) any matter
relating to Pre-Acquisition Tax Liabilities and (iv) any other
matter that is a subject of this Section 5.02, and the Authorized
Representative shall pay any reasonable legal, accounting and
other fees and out-of-pocket expenses incurred by the Purchaser
and/or the Company in connection therewith. Purchaser and the
Company shall retain or cause to be retained all Tax Returns,
schedules and workpapers, and all material records or other
documents relating thereto, until the expiration of the statute
of limitations (including any waivers or extensions thereof) of
the taxable years to which such Tax Returns and other documents
relate or until the expiration of any additional period that the
Authorized Representative reasonably requests, in writing, with
respect to specific material records or documents. If Purchaser
or the Company intends to destroy any material records or
documents, it shall provide the Authorized Representative with
reasonable advance notice and the opportunity to copy or take
possession of such records and documents. The parties hereto
will notify each other party in writing of any waivers or
extensions of the
applicable statute of limitations that may affect the period for
which the foregoing records or other documents must be retained.
(e) Disputes. If the parties disagree as to any
matter arising out of this Section 5.02, the parties shall
attempt in good faith to resolve such dispute. If such dispute
is not resolved within 15 days, the parties shall jointly retain
the Independent Accounting Firm to resolve the dispute. The fees
of the Independent Accounting Firm shall be borne equally by the
parties having the dispute, and the decision of such Independent
Accounting Firm shall be final and binding on all parties
involved. Following the decision of the Independent Accounting
Firm, the parties shall each take or cause to be taken any action
that is necessary or appropriate to implement such decision of
the Independent Accounting Firm, including, without limitation,
the prompt payment of Taxes as directed by the Independent
Accounting Firm.
5.03 Conduct of Business. From the date hereof until
the Closing Date and other than as set forth in Exhibit A, the
Partners shall cause the Company to conduct its business only in
the ordinary course of business and consistent with past
practices. Without limiting the generality of the foregoing,
except as otherwise expressly permitted by this Agreement, set
forth in Exhibit A or consented to or approved in writing and in
advance by an authorized officer of Purchaser, the Company, and
where appropriate the Partners, covenant as follows with respect
to the period between the date hereof and the Closing Date:
(a) The Company and the Partners will use all
reasonable efforts to substantially preserve intact the present
business organization of the Company and to preserve the
relationships with persons having business dealings with the
Company and to keep available the services of its present
officers and key employees, subject to the terms of this
Agreement;
(b) The Company will maintain its books, accounts
and records consistent with past practices and policies and in
accordance with GAAP;
(c) The Company will not make, adopt or propose
any change in its partnership agreement as in force and effect on
the date hereof that would have any adverse impact on the
transactions contemplated by this Agreement;
(d) The Company will not issue, set aside,
redeem, purchase or otherwise acquire any of its partnership
interests or issue any options or other rights to purchase any
of its partnership interests, any securities convertible or
exchangeable for partnership interests or commit to do any of the
foregoing;
(e) Except as disclosed on Schedule 3.08, the
Company will not enter into any employment contract or agreement
with any existing or prospective employee which is not terminable
at will;
(f) The Company will not cancel, without full
payment, any note, loan or other obligation owing to the Company;
(g) The Company will not make any capital
expenditure (or series of related expenditures) involving more
than $150,000, except for expenditures set forth on
Schedule 3.13;
(h) Except in the ordinary course of business and
consistent with past practices, the Company will not increase the
compensation payable to or the benefits afforded any of its
officers, employees, consultants or agents of the Company nor
shall it adopt or amend any employee benefit plan or compensation
or commission arrangement, provided, however, the Company may, in
its discretion, amend any severance or incentive agreements with
its employees, including the SERP Benefit agreement, so as to
assure that the severance benefits payable to the Retiring
Executives, the SERP Benefit and the Change in Control Payments
payable upon a closing of the contribution and exchange
transaction contemplated hereunder shall be treated for income
tax purposes as accruable and deductible as of the Fiscal Close
Date and thus reported as an expense item on the Company's income
Tax Returns for the period ending on and including the Fiscal
Close Date;
(i) The Company will not sell or otherwise
dispose of, or enter into any agreement for the sale or
disposition of, or mortgage or encumber or permit to exist any
liens, claims or security interests on, any of its assets or
properties, except for sales of inventory and obsolete equipment
in the ordinary course of business consistent with past
practices;
(j) The Company shall maintain its existing
insurance policies covering it, unless comparable insurance is
substituted therefor, and shall not take any action to terminate
or modify those insurance policies;
(k) The Company shall observe and perform, and
remain in compliance with, its respective obligations in
agreements and contracts the breach or violation of which would
have, individually or in the aggregate, a Material Adverse Effect
and not enter into any agreements or contracts which
would require payments by the Company of more than $150,000 over
any period of twelve months;
(l) The Company shall not merge or consolidate
with any other person or (except in the ordinary course) acquire
a material amount of assets of any other person;
(m) The Company shall not sell, lease, license or
otherwise surrender, relinquish or dispose of (i) any material
facility owned or leased by the Company or (ii) any assets or
property which are material to the Company taken as a whole,
except pursuant to existing contracts or commitments (the terms
of which have been disclosed to Purchaser prior to the date
hereof), or in the ordinary course of business consistent with
past practice;
(n) The Company shall not agree or commit to do
any of the foregoing; and
(o) Except to the extent necessary to comply with
the requirements of applicable laws and regulations, the Company
shall not (i) take, or agree or commit to take, any action that
would make any representation and warranty of the Company
hereunder inaccurate in any material respect at, or as of any
time prior to, the Closing, (ii) omit, or agree or commit to
omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material
respect at any such time, provided, however, that the Company
shall be permitted to take or omit to take such action which
(without any uncertainty) can be cured, and in fact is cured, at
or prior to the Closing or (iii) take, or agree to commit to
take, any action that would result in, or is reasonably likely to
result in, any conditions of this Agreement set forth in
Article VI and Article VII not being satisfied.
Notwithstanding anything contained in this Section 5.03 to the
contrary, the Company shall not have any restrictions upon
expenditures or acts related to the design, planning or
construction of the Wooden Roller Coaster currently being
developed at the Xxxxx'x Xxxxx Farm Theme Park in Buena Park,
California scheduled to open June, 1999, provided, however, that
the Company shall consult with Purchaser through the Closing Date
on the status of this project and any significant modifications
from the plans and budgets presented to Purchaser in September
1997.
5.04 Access to Properties. Between the date hereof and
the Closing Date, with reasonable prior notice, the Partners will
give and will cause the Company to give to authorized
representatives of Purchaser full access, during normal business
hours, in such manner as not to unduly disrupt normal business
activities, to any and all premises, properties, contracts,
commitments, books, records and affairs of the Company, and will
cause the officers of the Company to furnish any and all
financial, technical and operating data and other information as
Purchaser shall from time to time reasonably request.
5.05 Confidentiality and Nonsolicitation. Pending the
Closing, Purchaser will hold in confidence all information
obtained in connection with the transactions completed herein and
will use such information only for purposes related to the
transactions contemplated hereby. Purchaser further agrees that,
pending the Closing, it will not disclose any such information to
any third party except upon the prior written consent of the
Partners, or except as required by law or except to its advisors
who have agreed to maintain the confidentiality of such
information. If the transactions contemplated hereby are not
consummated, Purchaser will return all data to the Partners and
continue to honor the foregoing confidentiality and non-
disclosure covenants for a period of five years. Such obligation
of confidentiality shall not extend to any information (a) which
is shown to be or to have been generally known to others engaged
in the same trade or business as the Company, (b) previously
known to Purchaser prior to the start of discussions leading to
the execution of this Agreement, (c) obtained by Purchaser in
good faith from third parties who are not obligated to maintain
the information confidential or (d) that is or shall be public
knowledge through no act or omission by Purchaser or any of its
directors, officers, employees, professional advisors or other
representatives. Furthermore, if the transactions contemplated
hereby are not consummated, Purchaser agrees that for a period of
three years it will not, nor will it permit its officers,
directors, employees, agents or representatives to, directly or
indirectly solicit or attempt to solicit any of the employees of
the Company at the level of manager or above to leave the Company
or to become employees of or consultants to any other person or
entity.
5.06 Exclusive Nature of Agreement. Prior to the
Closing, or such earlier date on which this Agreement is
terminated in accordance with its terms, the Partners, the
Company and their officers, employees, agents and representatives
will not, directly or indirectly, solicit from any person, or
otherwise encourage any person to make, any inquiries or
proposals, or furnish information, relating to the acquisition,
in whole or in part, of the Company or the Interests or engage in
any negotiations or enter into any agreement or understanding
with any person (other than Purchaser) regarding the acquisition,
in whole or in part, of
the Company or the Interests. The Partners will not furnish any
information concerning the Company to any person other than
Purchaser for the purpose of, or with the intent of, permitting
such person or entity to evaluate a possible acquisition, in
whole or in part, of the Company or the Interests.
Notwithstanding anything in this Agreement to the contrary, the
Partners and the Company, as the case may be, shall as promptly
as practicable advise Purchaser orally and in writing of the
receipt by it (or by any officer, director or employee of, or any
investment banker, attorney, accountant or other advisor or
representative of, the Company) after the date hereof of any
acquisition proposal, or any inquiry which could lead to any
acquisition proposal, the material terms and conditions of such
acquisition proposal or inquiry, and the identity of the person
making the acquisition proposal or inquiry. The Partners or the
Company, as the case may be, will keep Purchaser fully informed
of the status and details of any such acquisition proposal or
inquiry.
5.07 Consummation of Agreement; Cooperation. The
parties shall use their best efforts to perform and fulfill all
obligations on their respective parts to be performed and
fulfilled under this Agreement, and to cause all the conditions
precedent to the consummation of the transactions to be timely
satisfied, to the end that the transactions contemplated by this
Agreement shall be effected substantially in accordance with its
terms. The parties hereto shall cooperate with each other in
such actions and in securing requisite approvals and each party
shall deliver such further documents as the other party may
reasonably request as necessary to evidence such transactions.
In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and
Purchaser and the Authorized Representative shall take all such
necessary action. The Partners acknowledge that the Units will
not have been registered under either federal or state securities
laws and agree to provide Purchaser prior to the Closing Date
with reasonably appropriate investment representations in writing
in connection with a private offer of securities.
5.08 Redemption of Units. Until the first anniversary
of the Closing Date, at the request of the Authorized
Representative, during any period consisting of three full
calendar months, Purchaser shall be required to redeem from the
Partners, from any source of funds legally available therefor, up
to an aggregate of 500,000 Units at a price per Unit equal to the
closing price on the New York Stock Exchange on the date any
such request is received by Purchaser in accordance with Section
10.01 hereof and upon surrender of the certificate(s)
representing the Units for which redemption is sought in
accordance with this Section 5.08. Purchaser shall effect such
redemptions by paying the aggregate redemption amount within 20
days of receipt of any such request.
5.09 Preservation of Fungibility of Units. Purchaser
will not take or cause to be taken, whether prior to or at any
time following the Closing, any action which will, or is
reasonably likely to, result in the Units issued to the Partners
pursuant to this Agreement (each a "KBF Unit" and collectively,
the "KBF Units") not being Publicly Fungible (as defined herein).
As used herein the term Publicly Fungible shall mean, with
respect to the KBF Units, their eligibility and qualification for
inclusion in, and, for public market trading purposes, for
treatment as pari passu with all other Units included in, the
class of Units which as of the Closing Date are listed on the New
York Stock Exchange as a single class of partnership securities
of Purchaser. For purposes of the foregoing, the Public
Fungibility of the KBF Units shall be determined without regard
to the fact that all or any portion of the KBF Units are not
registered under the 1933 Act or any state securities laws and,
therefore, may not be resold unless registered or unless an
exception for registration is available.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions
contemplated hereby shall be subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions
any one or more of which may be waived by Purchaser.
6.01 Performance of Agreements. Each of the Partners
and the Company shall have performed in all material respects
their respective covenants, obligations and agreements contained
in this Agreement required to be performed prior to the Closing,
and the Authorized Representative and the Company shall have
delivered to Purchaser a certificate to such effect.
6.02 Representations and Warranties True. The
representations and warranties of the Partners and the Company
contained in this Agreement which are qualified with respect to
materiality shall be true and correct in all respects, and such
representations and warranties that are not so qualified shall
each be true and correct in all material respects in each case as
of the date hereof and on the Closing Date as if made again
on such Date, and at the Closing the Authorized Representative
and the Company shall have delivered to Purchaser a certificate
to such effect.
6.03 No Pending or Threatened Claim. No condition or
restriction of any governmental or regulatory authority shall be
in effect and no claim, action, suit, investigation or other
proceeding shall be pending or threatened before any court or
governmental or regulatory authority that presents a substantial
risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material
damages or other relief in connection therewith.
6.04 Opinion of the Partners' and Company's Counsel.
Purchaser shall have been furnished at the Closing with an
opinion of the Partners' and the Company's counsel, dated the
Closing Date, in form and substance reasonably satisfactory to
Purchaser, to the effect that:
(a) The Company is a general partnership and is
duly organized and validly existing under the laws of the State
of California.
(b) All corporate or trustee actions, as
applicable, required to be taken by or on the part of the
Partners and all partnership actions required to be taken by or
on the part of the Company to authorize the execution, delivery
and performance of this Agreement by each of the Partners and the
Company have been duly and properly taken.
(c) This Agreement has been duly authorized,
executed and delivered by each of the Partners and the Company,
and constitutes valid and binding obligations of each of the
Partners and the Company, enforceable against each of them, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) Except as set forth in Schedule 3.04 to the
Agreement, the execution and delivery of this Agreement by each
of the Partners and by the Company and the consummation of the
transactions contemplated hereby by each of the Partners and by
the Company do not (i) violate any constitutional or statutory
provision or requirement, or to such counsel's knowledge, violate
any judicial or administrative order, award, consent decree,
judgment or decree applicable to the Partners or the Company or
charter documents of each of the Partners; (ii) conflict with any
terms, conditions or provisions of the
partnership agreement of the Company; or (iii) to such counsel's
knowledge, result in the creation of any lien, charge or
encumbrance upon any of the assets or property of the Company
under any Material Contract, other than such liens, charges or
encumbrances which would not have a Material Adverse Effect.
6.05 No Material Adverse Change. After the date hereof
and prior to the Closing Date, there shall not have occurred any
Material Adverse Effect. Purchaser shall have received a
certificate addressed to it from the Partners dated the Closing
Date to the foregoing effect.
6.06 Resignations. The Partners shall have delivered
to Purchaser the resignations of the officers or employees of the
Company whose names appear on Schedule 6.06, effective as of the
Closing Date.
6.07 Xxxx-Xxxxx-Xxxxxx. All applicable requirements
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976
and the rules promulgated thereunder shall have been met,
including the expiration of all applicable waiting periods, and
neither the Department of Justice nor the Federal Trade
Commission shall have raised objections to the transactions
contemplated hereby.
6.08 Agreement Not to Compete. Each of the Partners
shall have entered into an agreement not to compete substantially
in the form attached hereto as Exhibit C with the Company and
Purchaser.
6.09 Consents. All consents, approvals and waivers
from third parties and governmental authorities required to
consummate the transactions as contemplated hereby shall have
been obtained without the imposition on Purchaser or, the Company
of any materially burdensome conditions, restrictions or
obligations that were not applicable to the Partners or, the
Company during the year ending December 28, 1997.
6.10 Subscription Agreements. Each of the Partners
shall have entered into subscription agreements in the form
attached hereto as Exhibit D to evidence the private offer of
securities to each such Partner pursuant to Section 2.03(e)
hereof.
6.11 Escrow Agreement. Each of the Partners shall have
entered into the Escrow Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of the Partners and the Company to consummate the
transactions contemplated hereby shall be subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions, any one or more of which may be waived by
the Authorized Representative:
7.01 Performance of Agreements. The Purchaser shall
have performed in all material respects its covenants,
obligations and agreements contained in this Agreement required
to be performed prior to the Closing, and Purchaser shall have
delivered to the Authorized Representative a certificate to such
effect.
7.02 Representations and Warranties True. The
representations and warranties of Purchaser contained in this
Agreement which are qualified with respect to materiality shall
be true and correct in all respects, and such representations and
warranties that are not so qualified shall be true and correct in
all material respects in each case as of the date hereof and on
the Closing Date, as if made again on such date, and at the
Closing Purchaser shall have delivered to the Authorized
Representative a certificate to such effect.
7.03 Opinion of Counsel. The Partners shall have been
furnished with an opinion of counsel to Purchaser, dated the
Closing Date, to the effect that:
(a) Purchaser is a limited partnership duly
formed, validly existing and in good standing under the laws of
the State of Delaware.
(b) All partnership actions required to be taken
by or on the part of Purchaser to authorize the execution,
delivery and performance of this Agreement by Purchaser have been
duly and properly taken.
(c) This Agreement has been duly authorized,
executed and delivered by Purchaser, and constitutes valid and
binding obligations of Purchaser, enforceable against it, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) The execution and delivery of this Agreement
by Purchaser and the consummation of the transactions
contemplated hereby by Purchaser do not (i) violate any
constitutional or statutory provision or requirement, or to such
counsel's knowledge, violate any judicial or administrative
order, award, consent decree, judgment or decree applicable to
Purchaser; (ii) conflict with any terms, conditions or provisions
of the Purchaser's LP Agreements; or (iii) to such counsel's
knowledge, result in the creation of any lien, charge or
encumbrance upon any of the assets or property of Purchaser under
any such agreement or instrument, other than such liens, charges
or encumbrances which, separately or in the aggregate, would not
have a material adverse effect on Purchaser.
7.04 No Pending or Threatened Claim. No condition or
restriction of any governmental or regulatory authority shall be
in effect and no claim, action, suit, investigation or other
proceeding shall be pending or threatened before any court or
governmental or regulatory authority that presents a substantial
risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material
damages or other relief in connection therewith.
7.05 Payment of Certain Obligations. Purchaser shall
have paid the Purchase Price in the manner set forth in
Section 2.03.
7.06 Xxxx-Xxxxx-Xxxxxx. All applicable requirements
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976
and the rules promulgated thereunder shall have been met,
including the expiration of all applicable waiting periods, and
neither the Department of Justice nor the Federal Trade
Commission shall have raised objection to the transactions
contemplated hereby.
7.07 Escrow Agreement. Purchaser shall have entered
into the Escrow Agreement.
ARTICLE VIII
INDEMNIFICATION
8.01 Indemnification by the Partners. The Partners
shall indemnify and hold harmless Purchaser and its respective
officers, directors, partners, employees, successors and assigns
in respect of any and all claims, actions, suits or other
proceedings and any and all losses, costs, expenses, liabilities,
fines, penalties, interest, and damages, whether or not arising
out of any claim, action, suit or other proceeding
(and including reasonable counsel and accountants' fees and
expenses and all other reasonable costs and expenses of
investigation, defense or settlement of claims and amounts paid
in settlement) ("Damages") incurred by, imposed on or borne by
Purchaser or, the Company resulting from:
(a) The breach of any of the representations or
warranties made by the Partners or the Company in this Agreement;
or
(b) The breach or the failure of performance by
the Partners or the Company of any of the covenants, agreements
or obligations that they are to perform hereunder.
Damages shall exclude any amount with respect to which Purchaser
shall be entitled to receive and shall have received payment
under any insurance policy which provides coverage for the
liability to which such amount relates.
8.02 Indemnification by Purchaser. Purchaser shall
indemnify and hold harmless the Partners, in respect of any and
all Damages incurred by, imposed on or borne by the Partners
resulting from:
(a) The breach of any of the representations or
warranties made by Purchaser in this Agreement; or
(b) The breach or the failure of performance by
Purchaser of any of the covenants, agreements or obligations that
it is to perform hereunder.
8.03 Claims for Indemnification. Whenever any claim
shall arise for indemnification hereunder, the party entitled to
indemnification (the "indemnified party") shall promptly notify
the other party or parties (the "indemnifying party") of the
claim and, when known, the facts constituting the basis for such
claim; provided that the indemnified party's failure to give such
notice shall not affect any rights or remedies of an indemnified
party hereunder with respect to indemnification for damages
except to the extent that the indemnifying party is materially
prejudiced thereby. In the event of any claim for
indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, the notice to
the indemnifying party shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. The
indemnified party shall promptly deliver to the indemnifying
party copies of all notices and documents (including court
papers) received by the indemnified party relating to the third
party claim. The indemnified party shall not settle or
compromise any claim by a third party for which it is entitled
indemnification hereunder, without the prior written consent of
the indemnifying party (which shall not be unreasonably withheld)
unless suit shall have been instituted against it and the
indemnifying party shall not have taken control of such suit
after notification thereof as provided in Section 8.04 of this
Agreement.
8.04 Defense by Indemnifying Party. In connection with
any claim giving rise to indemnity hereunder or resulting from or
arising out of any claim or legal proceeding by a person who is
not a party to this Agreement, the indemnifying party at its sole
cost and expense may, upon written notice to the indemnified
party, assume the defense of any such claim or legal proceeding
if it acknowledges to the indemnified party in writing its
obligations to indemnify the indemnified party with respect to
all elements of such claim, and thereafter diligently conducts
the defense thereof with counsel reasonably acceptable to the
indemnified party. The indemnified party shall be entitled to
participate in (but not control) the defense of any such action,
with its counsel and at its own expense. If the indemnifying
party does not assume or fails to conduct in a diligent manner
the defense of any such claim or litigation resulting therefrom,
(a) the indemnified party may defend against such claim or
litigation, in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after
giving notice of the same to the indemnifying party, on such
terms as the indemnified party may deem appropriate, and (b) the
indemnifying party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its
own expense. If the indemnifying party thereafter seeks to
question the manner in which the indemnified party defended such
third party claim or the amount or nature of any such settlement,
the indemnifying party shall have the burden to prove by a
preponderance of the evidence that the indemnified party did not
defend or settle such third party claim in a reasonably prudent
manner. Each party agrees to cooperate fully with the other,
such cooperation to include, without limitation, attendance at
depositions and the provision of relevant documents as may be
reasonably requested by the indemnifying party, provided that the
indemnifying party will hold the indemnified party harmless from
all of its expenses, including reasonable attorney's fees,
incurred in connection with such cooperation by the indemnified
party.
8.05 Manner of Indemnification. All indemnification
hereunder shall be effected by payment of cash or delivery of a
certified or official bank check to the indemnified party or in
the case of an indemnification by the Partners, by the payment of
cash or the return of Units having a Current Value equal to the
amount to be indemnified pursuant to the terms of the Escrow
Agreement.
8.06 Limitations on Indemnification. All
representations and warranties made by the parties herein or in
any instrument or document furnished in connection herewith shall
survive the Closing and any investigation at any time made by or
on behalf of the parties hereto and (a) the representations and
warranties set forth in Sections 3.02, 3.07 and 3.21 will survive
until the expiration of the respective statute of limitations
with respect to such matters and (b) all other representations
and warranties set forth herein or in any instrument or document
furnished in connection herewith will expire on the second
anniversary of the Closing Date, unless prior to such time a
claim specifying a breach of any such representation or warranty
is submitted in writing to the indemnifying party and identified
as a claim for indemnification pursuant to this Agreement. No
claim or action for indemnity pursuant to Sections 8.01 or 8.02
hereof for breach of any representation or warranty shall be
asserted or maintained by any party hereto after the expiration
of such representation or warranty pursuant to the provisions of
this Section except for claims made in writing prior to such
expiration and actions (whether instituted before or after such
expiration) based on any claim made in writing prior to such
expiration. Notwithstanding any provision of this Agreement to
the contrary, (i) the Partners shall have no obligation to
indemnify any person entitled to indemnity under Section 8.01
unless the persons so entitled to indemnity thereunder have
suffered Damages in an aggregate amount in excess of $1,000,000
and then only to the extent of such excess; (ii) the Partners'
aggregate liability under Section 8.01 shall in no event exceed
$50,000,000 and no Partner's individual liability shall exceed an
amount equal to the product of $50,000,000 multiplied by such
Partner's Percentage Interest.
8.07 Exclusivity of Indemnification. The parties
hereto agree that the indemnification provisions of this
Article VIII are intended to provide the exclusive remedy as to
all Damages they may incur arising from or relating to the
transactions contemplated hereby, and each party hereby waives,
to the extent it may do so, any other rights or remedies that may
arise under any applicable statute, rule or regulation; provided,
however, that the foregoing shall not be interpreted to limit the
types of remedies, including specific performance or other
equitable remedies, which may be sought by an
indemnified person in connection with a breach of any covenant or
agreement contained herein.
8.08 Termination of Indemnification. The obligations
to indemnify and hold harmless a party hereto pursuant to this
Article VIII shall terminate when the applicable representation
or warranty terminates pursuant to Section 8.06; provided,
however, that such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the
person to be indemnified shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice
(stating in reasonable detail the basis of such claim) to the
indemnifying person.
ARTICLE IX
TERMINATION
9.01 Termination. This Agreement may be terminated
prior to the Closing (a) by the mutual written consent of the
parties hereto; (b) by either Purchaser or the Authorized
Representative, at any time after March 31, 1998 if for any
reason the purchase by Purchaser of the Interests shall not have
been consummated by such date; (c) by Purchaser if there has been
a material misrepresentation or material breach on the part of
the Partners in the representations, warranties and covenants of
the Partners set forth herein which, if curable, has not been
cured within 10 business days after notice thereof by Purchaser;
(d) by the Authorized Representative, if there has been a
material misrepresentation or material breach on the part of
Purchaser in the representations, warranties and covenants of
Purchaser set forth herein which, if curable, has not been cured
within 10 business days after notice thereof by the Authorized
Representative; (e) by Purchaser upon delivery to the Authorized
Representative, of a written notice if any event occurs which
renders impossible of satisfaction one or more of the conditions
to Purchaser's obligations contained in Article VI hereof and
noncompliance is not waived by Purchaser; and (f) by the
Authorized Representative, upon delivery to Purchaser of a
written notice if any event occurs which renders impossible of
satisfaction one or more conditions to the Partners' obligations
contained in Article VII hereof and noncompliance is not waived
by the Authorized Representative. The termination of this
Agreement, except pursuant to subsection (a), shall not affect
the right of any party to bring an action against another party
for breach of this Agreement.
9.02 Liquidated Damages in the Event of Purchaser
Termination. The parties acknowledge and agree that as of the
time of the execution of this Agreement it is impractical, if not
impossible, to reasonably ascertain the extent of damages which
shall be incurred by the Partners as a result of a termination of
this Agreement pursuant to Section 9.01(b), (d) or (f), which
termination results from a willful or negligent act of Purchaser
(a "Purchaser Termination"). The factors relating to the
impracticability of ascertaining damages include, but are not
limited to, the fact that: (a) substantial damage results to the
Partners from delay and loss of opportunity with other potential
purchasers and (b) potential purchasers who were eliminated from
purchasing the Company due to the purchase price offered by the
Purchaser may not subsequently have the interest or resources to
make another offer to purchase the Company and the value of this
loss is impossible to calculate in precise monetary terms.
Accordingly, in the event of a Purchaser Termination, the
Purchaser shall be assessed liquidated damages in the amount of
Fifteen Million Dollars ($15,000,000) payable to the Company.
The parties acknowledge and agree that the above described
liquidated damages provisions represent a reasonable sum in light
of all the circumstances. The Purchaser shall pay any assessed
liquidated damages within ten (10) days after a Purchaser
Termination.
9.03 Liquidated Damages in the Event of Partner
Termination The parties acknowledge and agree that as of the
time of the execution of this Agreement it is impractical, if not
impossible, to reasonably ascertain the extent of damages which
shall be incurred by Purchaser as a result of a termination of
this Agreement pursuant to Section 9.01(b), (c) or (e), which
termination results from a willful or negligent act of the
Partners (a "Partner Termination"). The factors relating to the
impracticability of ascertaining damages include, but are not
limited to, the fact that (a) substantial damage results to
Purchaser from delay and loss of opportunity with respect to
other potential acquisitions it may be interested in and (b) the
Company represents a unique asset to Purchaser which cannot be
duplicated or replaced and the value of this loss is impossible
to calculate in precise monetary terms. Accordingly, in the
event of a Partner Termination, the Partners shall be assessed
liquidated damages in the amount of $15,000,000 payable to
Purchaser. The parties acknowledge and
agree that the above described liquidated damages provisions
represent a reasonable sum in light of all the circumstances.
The Partners shall pay any assessed liquidated damages within ten
(10) days after a Partner Termination.
ARTICLE X
GENERAL PROVISIONS
10.01 Notices. All notices, requests and demands
to or upon the respective parties hereto to be effective shall be
in writing (including by facsimile) and, unless otherwise
expressly provided herein, shall be delivered during normal
business hours by hand, by Federal Express, United Parcel Service
or other reputable overnight commercial delivery service, or by
facsimile notice, confirmation of receipt received, addressed as
follows, or to such other address as may be hereafter notified by
the respective parties hereto:
(a) If to the Authorized Representative or the
Company, to:
Xxxxxxx Management Corporation
Three Xxxxx Xxxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Facsimile Number: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Facsimile Number: (000) 000-0000
(b) If to Purchaser, to:
Cedar Fair, L.P.
X.X. Xxx 0000
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: President
Facsimile Number: (000) 000-0000
With a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Xx., Esq.
Facsimile Number: (000) 000-0000
10.02 Entire Agreement. This Agreement constitutes
the entire understanding between the parties with respect to the
subject matter hereof, superseding all negotiations, prior
discussions and preliminary agreements.
10.03 Governing Law. This Agreement and the rights
and obligations of the parties under this Agreement shall be
governed by and construed in accordance with the laws of the
State of California, excluding its rules of conflicts of law.
10.04 Consent to Jurisdiction and Forum Selection.
The parties agree that all actions or proceedings arising in
connection with this Agreement shall be tried and litigated
exclusively in the State and Federal courts located in the County
of Orange, State of California. The aforementioned choice of
venue is intended by the parties to be mandatory and not
permissive in nature, thereby precluding the possibility of
litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in
this paragraph. Each party hereby waives any right it may have
to assert the doctrine of forum non conveniens or similar
doctrine or to object to venue with respect to any proceeding
brought in accordance with this paragraph, and stipulates that
the State and Federal courts located in the County of Orange,
State of California shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute,
controversy or proceeding arising out of or related to this
Agreement. Each party hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action
against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices as set forth in this Agreement,
or in the manner set forth in Section 10.01 of this Agreement for
the giving of notice. Any final judgment rendered against a
party in any action or proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.
10.05 Attorneys' Fees. If either party to this
Agreement shall bring any action, suit, counterclaim or appeal
for any relief against the other, declaratory or otherwise, to
enforce the terms hereof or to declare rights hereunder
(collectively, an "Action"), the prevailing party shall be
entitled to recover as part of any such Action its reasonable
attorneys' fees and costs, including any fees and costs incurred
in bringing and prosecuting such Action and/or enforcing any
order, judgment, ruling or award granted as part of such Action.
"Prevailing party" within the meaning of this section includes,
without limitation, a party who agrees to dismiss an Action upon
the other party's payment of all or a portion of the sums
allegedly due or performance of the covenants allegedly breached,
or who obtains substantially the relief sought by it.
10.06 Amendment and Waiver. This Agreement may be
amended only by a written instrument signed by the parties
hereto. No failure to exercise and no delay in exercising, on
the part of any party, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law. The failure of
any party to insist upon a strict performance of any of the terms
or provisions of this Agreement, or to exercise any option, right
or remedy herein contained, shall not be construed as a waiver or
as a relinquishment for the future of such term, provision,
option, right or remedy, but the same shall continue and remain
in full force and effect. No waiver by any party of any term or
provision of this Agreement shall be deemed to have been made
unless expressed in writing and signed by such party.
10.07 Captions. The captions of the Sections of
this Agreement are for convenience only and shall not be
considered or referred to in resolving questions of construction.
10.08 Counterparts. This Agreement may be executed
by one or more of the parties hereto on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
10.09 Assignment. Neither this Agreement nor any
of the rights or obligations hereunder shall be assignable by any
party without the written consent of the others.
10.10 Severability. Any portion or provision of
the Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining portions or
provisions hereof in such jurisdiction or, to the extent
permitted by law, rendering that or any other portion or
provision of the Agreement invalid, illegal or unenforceable in
any other jurisdiction.
10.11 Expenses. Except as otherwise expressly
provided herein, the parties shall, whether or not the
transactions contemplated hereby are consummated, each bear their
own legal, accounting, investment banking and other fees and
expenses in connection with this Agreement and the transactions
contemplated hereby.
10.12 Schedules. All schedules, exhibits,
appendices and documents referred to in or attached to this
Agreement are integral parts of this Agreement as if fully set
forth herein, and all statements appearing therein shall be
deemed disclosed for all purposes and not only in connection with
the specific representation to which they are explicitly
referenced.
10.13 Records. After the Closing, Purchaser shall
cause the Company to keep and preserve all books and records of
the Company existing as of the Closing for a period of at least
three years after the Closing. Purchaser will cause the Company
to afford to the representatives of the Partners, including its
counsel and accountants, reasonable access to, and, at the
Partners' expense, copies of, the records retained by the Company
during normal business hours after the Closing Date upon
reasonable notice for proper business purposes. Purchaser and
the Company shall also make their respective officers and
employees available to the Partners at reasonable times and
places after the Closing upon reasonable notice for proper
business purposes.
10.14 Further Assurances. From time to time after
the Closing Date, at Purchaser's request and without further
consideration, the Partners shall execute and deliver to
Purchaser such documents and take such other action as Purchaser
may reasonably request in order to consummate more effectively
the transactions contemplated hereby and to vest in Purchaser
good and valid title to the Interests and to carry out the intent
of this Agreement. From time to time after the Closing Date, at
the request of the Partners and without further consideration,
the Purchaser shall execute and deliver to the Partners such
documents and take such other action as the Partners may
reasonably request in order to consummate more effectively the
sale of the Interests and to carry out the intent of this
Agreement.
10.15 Publicity. The parties shall cooperate with
each other in the development and distribution of all news
releases and other public disclosures relating to the
transactions contemplated hereby. None of the parties shall
issue or make, or cause to have issued or made, any press release
or announcement concerning the transactions contemplated hereby
without the advance approval in writing of the form and substance
thereof by the other party, unless otherwise required by
applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
CEDAR FAIR, L.P. (the "Purchaser")
By: Cedar Fair Management Company
Its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President and Chief
Executive Officer
XXXXX'X XXXXX FARM (the "Company")
By: /s/ Xxxxx X. Xxx Xxxxxx
Xxxxx X. Xxx Xxxxxx
President and Chief
Executive Officer
THE PARTNERS
XXXXXXX XXXXX, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxx
XXXXXXX X. XXXXX
President
VMK ENTERPRISES, INC.,
a California corporation
By: /s/ Xxxxxxxx X. Xxxxxx
XXXXXXXX X. XXXXXX
President
THE X. XXXXX COMPANY,
a California corporation
By: /s/ Xxxxxx Xxxxx
XXXXXX XXXXX
President
X. XXXXX ENTERPRISES,
a California corporation
By: /s/ Xxxxxx Xxxxx
XXXXXX XXXXX
President
XXX & XXXX XXXXXXXX ENTERPRISES,
INC., a California corporation
By: /s/ Xxx X. Xxxxxxxx
XXX X. XXXXXXXX
President
By: /s/ Xxxxxx Xxxxx
XXXXXX XXXXX
as Trustee of a Trust established
under the Will of Xxxxxxxx Xxxxx,
deceased, for the benefit of Xxxxxx
Xxxxx
By: /s/ Xxxxxxxx X. Xxxxxx
XXXXXXXX X. XXXXXX
as Trustee of a Trust established
under the Will of Xxxxxxxx Xxxxx,
deceased, for the benefit of
Xxxxxxxx X. Xxxxxx
XXXXXX X. XXXXXXXX & ASSOCIATES,
INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
XXXXXX X. XXXXXXXX
President
D.W.O. ENTERPRISES, INC.,
a California corporation
By: /s/ Xxx X. Xxxxxxxx
XXX X. XXXXXXXX
President
XXXX X. XXXXXXX, INC.,
a California corporation
By: /s/ Xxxx X. Xxxxxxx
XXXX X. XXXXXXX
President
XXXXXXX XXXXX, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxx
XXXXXXX XXXXX
President
XXXXXXX XXXXX, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxx
XXXXXXX XXXXX
President
TRAVEL BY XXXX, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
XXXXXXX XXXXXXXXXX
President
XXXXX X. XXXXXXXX TRUST NO. 1
By: /s/ Xxxxx X. Xxxxxxxx Xxxx
Xxxxx L. Xxxxxxxx Xxxx
Trustee
