ASSET PURCHASE AGREEMENT
BY AND AMONG
PREMIER PARKS ACQUISITION CORP.,
PREMIER PARKS INC.,
CONCORD ENTERTAINMENT COMPANY,
FRE, INC.
(FAMILY RECREATIONAL ENTERPRISES, INC.),
THE SHAREHOLDERS OF FRE, INC.,
R&B ENTERTAINMENT, LLC,
AND
THE MEMBERS OF R&B ENTERTAINMENT, LLC,
OCTOBER 10, 1996
TABLE OF CONTENTS
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ARTICLE I SALE AND PURCHASE. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Assets to be Sold and Purchased . . . . . . . . . 1
SECTION 1.2 Assumed Liabilities . . . . . . . . . . . . . . . 4
SECTION 1.3 Purchase Price. . . . . . . . . . . . . . . . . . 5
SECTION 1.4 Allocation of the Purchase Price. . . . . . . . . 5
SECTION 1.5 Closing . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER,
FRE AND THE SHAREHOLDERS. . . . . . . . . . . . . . . . . . 6
SECTION 2.1 Authority Relative to this Agreement. . . . . . . 6
SECTION 2.2 No Conflicts; Consents. . . . . . . . . . . . . . 6
SECTION 2.3 Partnership Existence and Power . . . . . . . . . 7
SECTION 2.4 Formation Documents and Records . . . . . . . . . 7
SECTION 2.5 Financial Information . . . . . . . . . . . . . . 7
SECTION 2.6 Liabilities . . . . . . . . . . . . . . . . . . . 8
SECTION 2.7 Inventory . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.8 Absence of Certain Changes. . . . . . . . . . . . 8
SECTION 2.9 The Assets. . . . . . . . . . . . . . . . . . . . 9
SECTION 2.10 Contracts. . . . . . . . . . . . . . . . . . . . 10
SECTION 2.11 Intangible Property. . . . . . . . . . . . . . . 11
SECTION 2.12 Claims and Proceedings . . . . . . . . . . . . . 11
SECTION 2.13 Tax Matters. . . . . . . . . . . . . . . . . . . 11
SECTION 2.14 Employee Benefits Plans. . . . . . . . . . . . . 12
SECTION 2.15 Employee-Related Matters . . . . . . . . . . . . 13
SECTION 2.16 Insurance. . . . . . . . . . . . . . . . . . . . 14
SECTION 2.17 Compliance with Laws . . . . . . . . . . . . . . 14
SECTION 2.18 Permits. . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.19 Environmental Matters. . . . . . . . . . . . . . 15
SECTION 2.20 Finders; Fees. . . . . . . . . . . . . . . . . . 16
SECTION 2.21 Ability to Conduct Business. . . . . . . . . . . 16
SECTION 2.22 Lease. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IIA REPRESENTATIONS AND WARRANTIES OF
R&B AND THE MEMBERS. . . . . . . . . . . . . . . . . . . . 17
SECTION 2A.1 Authority Relative to this Agreement . . . . . . 17
SECTION 2A.2 No Conflicts; Consents . . . . . . . . . . . . . 18
SECTION 2A.3 Environmental Matters 18
SECTION 2A.4 Lease. . . . . . . . . . . . . . . . . . . . . . 18
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT . . . . . . 19
SECTION 3.1 Authority Relative to This Agreement. . . . . . . 19
SECTION 3.2 No Conflicts; Consents. . . . . . . . . . . . . . 19
SECTION 3.3 Corporate Existence and Power . . . . . . . . . . 19
SECTION 3.4 Finders; Fees . . . . . . . . . . . . . . . . . . 20
ARTICLE IV COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . 20
SECTION 4.1 Conduct of Business of Seller. . . . . . . . . . 20
SECTION 4.2 Corporate Examinations and Investigations. . . . 21
SECTION 4.3 Additional Financial Statements. . . . . . . . . 21
SECTION 4.4 Filings and Authorizations . . . . . . . . . . . 21
SECTION 4.5 Efforts to Consummate; Miscellaneous . . . . . . 22
SECTION 4.6 Negotiations With Others . . . . . . . . . . . . 22
SECTION 4.7 Notices of Certain Events. . . . . . . . . . . . 23
SECTION 4.8 Public Announcements . . . . . . . . . . . . . . 23
SECTION 4.9 Covenant Not-to-Compete. . . . . . . . . . . . . 23
SECTION 4.10 Expenses. . . . . . . . . . . . . . . . . . . . 25
SECTION 4.11 Tax Matters. . . . . . . . . . . . . . . . . . . 25
SECTION 4.12 Employee Matters . . . . . . . . . . . . . . . . 25
SECTION 4.13 Certain Renewals . . . . . . . . . . . . . . . . 26
SECTION 4.14 Collection of Accounts Receivable. . . . . . . . 26
SECTION 4.15 Transfer Taxes; Allocation . . . . . . . . . . . 26
SECTION 4.16 Discharge of Potential Liabilities.. . . . . . . 27
SECTION 4.17 Access.. . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.18 Structuring. . . . . . . . . . . . . . . . . . . 27
SECTION 4.19 Admissions . . . . . . . . . . . . . . . . . . . 27
ARTICLE V CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.1 Conditions to the Obligations of the Parties. . . 28
SECTION 5.2 Conditions to the Obligations of Seller . . . . . 28
SECTION 5.3 Conditions to the Obligations of Buyer. . . . . . 29
ARTICLE VI INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.1 Survival of Representations and Warranties. . . . 32
SECTION 6.2 Obligation of Seller, General Partners
and Principals to Indemnify . . . . . . . . . . . . . . . . 32
SECTION 6.3 Obligation of Buyer to Indemnify. . . . . . . . . 33
SECTION 6.4 Notice and Opportunity to Defend Third Party
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.5 Limits on Indemnification . . . . . . . . . . . . 34
SECTION 6.6 Adjustment. . . . . . . . . . . . . . . . . . . . 35
SECTION 6.7 Exclusive Remedy. . . . . . . . . . . . . . . . . 35
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ARTICLE VII SPECIFIC PERFORMANCE; TERMINATION. . . . . . . . . . . . . . . 36
SECTION 7.1 Specific Performance. . . . . . . . . . . . . . . 36
SECTION 7.2 Termination . . . . . . . . . . . . . . . . . . . 36
SECTION 7.3 Effect of Termination; Right to Proceed . . . . . 37
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.1 Notices . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.2 Entire Agreement. . . . . . . . . . . . . . . . . 39
SECTION 8.3 Waivers and Amendments; Non-Contractual
Remedies; Preservation of Remedies. . . . . . . . . . . . . 39
SECTION 8.4 Governing Law . . . . . . . . . . . . . . . . . . 39
SECTION 8.5 Binding Effect; No Assignment . . . . . . . . . . 39
SECTION 8.6 Exhibits. . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.7 Severability. . . . . . . . . . . . . . . . . . . 40
SECTION 8.8 Counterparts. . . . . . . . . . . . . . . . . . . 40
SECTION 8.9 Third Parties . . . . . . . . . . . . . . . . . . 40
SECTION 8.10 Further Assurances . . . . . . . . . . . . . . . 40
SECTION 8.11 Title and Risk of Loss.. . . . . . . . . . . . . 40
ARTICLE IX DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.1 Definitions . . . . . . . . . . . . . . . . . . . 41
SECTION 9.2 Interpretation. . . . . . . . . . . . . . . . . . 46
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of October 10, 1996, by
and among Premier Parks Acquisition Corp., a New York corporation ("BUYER"),
Premier Parks Inc., a Delaware corporation ("PARENT"), Concord Entertainment
Company, a California general partnership ("SELLER"), FRE, Inc. (Family
Recreational Enterprises, Inc.), a Missouri corporation and a general partner of
Seller ("FRE"), R&B Entertainment, LLC, a California limited liability company
and a general partner of Seller ("R&B," and together with FRE, the "GENERAL
PARTNERS"), the shareholders of FRE listed on the signature page hereof (the
"SHAREHOLDERS") and the members of R&B listed on the signature page hereof (the
"MEMBERS"). The Members and the Shareholders, who are parties to this Agreement
for purposes of Sections 2.1, 2.2, 2A.1, 2A.2 (as applicable), 4.6 and 4.9 and
Article VI only, are sometimes collectively referred to herein as the
"PRINCIPALS."
W I T N E S S E T H:
WHEREAS, Seller owns and, together with FRE as agent of Seller
under the Management Agreement, operates Waterworld USA/Concord (the "PARK"),
such ownership and operations being referred to herein as the "BUSINESS;" and
WHEREAS, Seller desires to sell and assign, and Buyer desires to
purchase and assume, substantially all of the assets and certain liabilities
relating to the Business upon and subject to the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
SALE AND PURCHASE
SECTION 1.1 ASSETS TO BE SOLD AND PURCHASED.
(a) Subject to Section 1.1(b) and the other terms and conditions
hereof, Seller shall sell, assign, transfer, convey and deliver to Buyer free
and clear of all Liens (other than Permitted Liens), and Buyer shall purchase
from Seller, all of the property, assets and rights used or held for use in the
Business (collectively, the "ASSETS") including:
(i) all of Seller's rights, title and interest in and to the
real property leased by Seller and used in the Business (the "LAND"), and all of
Seller's rights, title and interest in and to all buildings, improvements and
fixtures constructed thereon (the "IMPROVEMENTS," and together with Land, the
"REAL PROPERTY");
(ii) all of Seller's rights, title and interest in and to the
rides, machinery, equipment, tools, supplies, spare parts, rolling stock,
furniture and other tangible personal property used or held for use in the
Business (the "EQUIPMENT") on the Closing Date;
(iii) all proceeds from the sale of season passes and any other
pre-sold tickets ("PREPAID DEPOSITS") with respect to the 1997 season of the
Park as of the Closing Date;
(iv) all of Seller's and the General Partners' rights, title and
interest in, to and under all patents, patent applications, trade names,
trademarks, copyrights, servicemarks, trademark and servicemark registrations
and applications (including, without limitation, all of Seller's rights to use
the name "Waterworld USA" and any derivation thereof), whether or not used in
the Business;
(v) all of Seller's and the General Partners' rights in, to and
under trade secrets, formulae and specifications and technical know-how, whether
currently being used or under development, including engineering and other
drawings, data, design and specifications, product literature and related
materials, in each case which are owned or licensed by Seller as of the Closing
Date (together with the intellectual property described in Section 1.1(a)(iv),
the "INTELLECTUAL PROPERTY RIGHTS") and all of Seller's and the General
Partners' books, records and computer programs relating thereto;
(vi) all of Seller's rights in, to and under the goodwill of the
Business;
(vii) Seller's rights under all Contracts listed on SCHEDULE
1.1(A)(VII) including, but not limited to, the Lease (the "TRANSFERRED
CONTRACTS") and all prepaid expenses, claims and other prepayments, including
security deposits and other retentions held by third parties, with respect to
the Transferred Contracts as of the Closing Date, provided, however, that the
Transferred Contracts shall not include any Contract providing for the payment
to any Affiliate of Seller or the General Partners;
(viii) all of Seller's Inventory, wherever located, with respect to
the Business as such exists on the Closing Date;
(ix) all of Seller's rights under all governmental licenses,
certificates, permits and approvals relating to or necessary to the conduct of
the Business as of the Closing Date, to the extent such items are transferable
(the "PERMITS");
(x) all transferable warranties and guarantees pertaining to the
Assets; and
(xi) all books and records relating to the Business and the
Assets (whether kept or maintained by Seller, either of the General Partners or
any third party)
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including, without limitation, copies of lists of customers and suppliers;
admission tickets, season passes, records with respect to costs, Inventory and
Equipment; business development plans; advertising materials, catalogues,
correspondence, mailing lists, photographs, sales materials and records;
purchasing materials and records; personnel records with respect to employees of
the Business; media materials and plates; sales order files; ledgers and other
books of account; plans, specifications, surveys, reports and other materials
relating to the Real Property; other records required to continue the Business
as heretofore and now being conducted by or on behalf of Seller; and all
software programs, computer printouts, databases and related items used in the
Business.
(b) The Assets shall exclude the following assets and property (the
"EXCLUDED ASSETS"):
(i) all of Seller's rights, title and interest in and to the
Transaction Documents;
(ii) cash on hand, cash equivalents, investments (including,
without limitation, stock, debt instruments, options and other instruments and
securities) and bank deposits of Seller as of the Closing Date;
(iii) all of the accounts receivable of Seller as of the Closing
Date;
(iv) Tax refunds and recoveries and similar benefits of Seller
which relate to any period prior to the Closing Date and all of Seller's income
Tax Returns and records as of the Closing Date;
(v) all partnership records of Seller including, without
limitation, the minute books regarding meetings of the partners;
(vi) Seller's and the General Partners' rights under any Employee
Benefit Plans;
(vii) all of Seller's rights under any Insurance Policies or other
Contracts, other than the Transferred Contracts;
(viii) all of the licenses issued by the California Alcohol and
Beverage Commission; and
(ix) all assets relating exclusively to any of Seller's
operations, other than the Business.
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SECTION 1.2 ASSUMED LIABILITIES.
(a) Subject to the provisions of Section 1.2(b), Buyer shall assume,
pay, fulfill, perform or otherwise discharge the liabilities and obligations of
Seller arising and to be performed after the Closing under the Transferred
Contracts (the "ASSUMED LIABILITIES").
(b) Buyer shall not assume or be bound by or otherwise be responsible
for any duties, responsibilities, obligations or Liabilities of Seller of any
kind or nature, known, unknown, contingent or otherwise, other than Liabilities
expressly assumed by it pursuant to Section 1.2(a). Without limiting the
generality of the foregoing, except as otherwise provided in this Agreement,
Buyer shall not assume, undertake or accept any duties, responsibilities,
obligations or Liabilities of Seller (whether existing now or at the Closing or
that may arise in the future) with respect to:
(i) any Liabilities of Seller, the General Partners or their
Affiliates relating to the ownership or operation of the Assets or the Business
on or prior to the Closing Date;
(ii) any Liabilities of Seller, the General Partners or their
Affiliates relating to the ownership or operation of the Excluded Assets and the
operations of Seller, the General Partners and their Affiliates other than the
Business;
(iii) all accounts payable relating to the Business incurred on or
prior to the Closing Date;
(iv) any Environmental Liabilities;
(v) Liabilities and obligations under Contracts that are not
Transferred Contracts including Liabilities under the Management Agreement;
(vi) Liabilities and obligations (A) arising or to be performed
at or prior to the Closing under the Transferred Contracts, (B) relating to any
rental or other payment under the Lease which is based on or related to the
revenues or other results of operations of the Business during its 1996 season
("PERCENTAGE RENT"), whether payable prior to, on or after the Closing Date, or
(C) arising out of a breach or default by Seller or the General Partners at or
prior to the Closing (including any event occurring prior to the Closing that
with the passage of time or giving of notice, or both, would become a breach or
default under any Transferred Contract);
(vii) Liabilities and obligations with respect to any Claims,
whether existing on the date hereof or arising hereafter, arising out of
ownership of the Assets or the operation of the Business on or prior to the
Closing;
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(viii) except as otherwise provided in this Agreement, Liabilities
and obligations to persons employed by Seller or FRE in connection with the
Business at any time prior to the Closing (or any of such employee's
beneficiaries, heirs or assignees) arising out of such employee's employment,
including the 1996 Bonuses;
(ix) Liabilities and obligations with respect to any federal,
state, local or foreign income, profits, franchise, sales or similar Tax
relating to the ownership of the Assets or the conduct of the Business on or
prior to the Closing or arising out of the Contemplated Transactions; and
(x) any Liabilities in respect of any Debt of the Seller,
all such duties, responsibilities, obligations or liabilities described in this
Section 1.2(b) being referred to herein as "RETAINED LIABILITIES."
As used herein, "ENVIRONMENTAL LIABILITIES" means any Liabilities, obligations,
responsibilities, obligations to conduct remedial actions, losses, damages,
punitive damages, consequential damages, costs and expenses (including, without
limitation, all reasonable fees, disbursements and expenses of counsel, expert
and consulting fees and costs of investigations and feasibility studies), fines,
penalties, and monetary sanctions, interest, direct or indirect, known or
unknown, absolute or contingent, past, present, or future, resulting from any
claim or demand by any person, whether based in contract, tort, implied or
express warranty, strict liability, common law, criminal or civil statute,
including any Environmental Law, arising solely out of the ownership or the
operation by the Seller, the General Partners or their Affiliates of the Assets
or the Business, in connection with environmental, health or safety conditions
at the Park or the manufacture, refining, storage, disposal or treatment of
Hazardous Substances by or on behalf of Seller.
SECTION 1.3 PURCHASE PRICE.
(a) The purchase price for the Assets (including the Inventory) shall
be $8,180,000 (the "PURCHASE PRICE") payable as provided in Section 5.2(c).
(b) On or prior to the Closing Date, Buyer and Seller and an escrow
agent selected by Buyer and Seller ("ESCROW AGENT") will execute and deliver an
escrow agreement ("ESCROW AGREEMENT") substantially in the form of EXHIBIT 1.3
hereto pursuant to which Buyer will deliver to Escrow Agent an amount out of the
Purchase Price equal to $409,000 (the "ESCROW FUNDS"), which amount will provide
a non-exclusive fund for a period of 18 months following the Closing for the
payment of any Losses for which Buyer may be entitled to indemnification as and
to the extent provided in Article VI.
SECTION 1.4 ALLOCATION OF THE PURCHASE PRICE. The Purchase Price shall be
allocated among the Assets and the covenant contained in Section 4.9 hereof in
the manner set forth on SCHEDULE 1.4 for all purposes, and each of the parties
shall make all appropriate tax and other filings on a basis consistent with such
allocation. The parties shall exchange
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drafts of any information returns required by Section 1060 of the Code, and all
similar state statutes, ten days prior to filing any such return.
SECTION 1.5 CLOSING. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Assets contemplated hereby (the
"CLOSING") shall take place at 10:00 a.m., local time, at the offices of Xxxx
Marks & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 no later than the
fifth business day (but not earlier than October 31, 1996) following the
satisfaction or waiver of the conditions specified in Article V (other than
conditions requiring the delivery of the Purchase Price, the Assets or
certificates, instruments and documents referenced in Section 5.2(e) and
Section 5.3(i), excluding the Lease Documents) (the "CLOSING DATE").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER,
FRE AND THE SHAREHOLDERS
Seller and FRE, jointly and severally, represent and warrant to Buyer, and
each Shareholder, severally, represents and warrants to Buyer (but only with
respect to matters set forth below in Sections 2.1 and 2.2 relating to such
Shareholder), that:
SECTION 2.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Seller, FRE and each
Shareholder have full power, capacity and authority to execute and deliver this
Agreement and each other Transaction Document to which each is or, at the
Closing, will be a party and to consummate the transactions contemplated hereby
and thereby (the "CONTEMPLATED TRANSACTIONS"). The execution and delivery of
this Agreement and the consummation of the Contemplated Transactions to which
Seller, FRE or any Shareholder is or, at the Closing, will be a party have been
duly and validly authorized by Seller, FRE and such Shareholder, and no other
proceedings on the part of Seller, FRE or such Shareholder (or any other person)
are necessary to authorize the execution and delivery by Seller, FRE or such
Shareholder of this Agreement or the consummation of the Contemplated
Transactions to which Seller, FRE or such Shareholder is or, at the Closing,
will be a party. This Agreement has been and, at the Closing, the other
Transaction Documents to which Seller, FRE or any Shareholder is a party will
have been, duly and validly executed and delivered by Seller, FRE and such
Shareholder, and (assuming the valid execution and delivery thereof by the other
parties thereto) constitute or will at the Closing constitute, as the case may
be, the legal, valid and binding agreements of Seller, FRE and such Shareholder
enforceable against Seller, FRE or such Shareholder in accordance with their
respective terms except as such obligations and their enforceability may be
limited by applicable bankruptcy and other similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies is subject to the discretion of the court before which any
proceeding therefor may be brought (whether at law or in equity).
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SECTION 2.2 NO CONFLICTS; CONSENTS. The execution, delivery and
performance by Seller, FRE and each Shareholder of this Agreement and each other
Transaction Document to which each is or will be a party or the consummation of
the Contemplated Transactions does not and will not (i) violate any provision of
the Agreement of General Partnership (or certificate of incorporation, by-laws
or other comparable instruments) of Seller, FRE or any corporate Shareholder;
(ii) require Seller, FRE, any Shareholder or any other Affiliate of Seller to
obtain any consent, approval or action of or waiver from, or make any filing
with, or give any notice to, any Governmental Body or any other person, except
for compliance with the HSR Act and except as set forth on SCHEDULE 2.2 (the
"SELLER REQUIRED CONSENTS"); (iii) if Seller Required Consents are obtained
prior to Closing, violate, conflict with or result in a breach or default under
(after the giving of notice or the passage of time or both), or permit the
termination of, any Contract of a type required to be listed on SCHEDULE 2.10 to
which Seller, FRE or any Shareholder is a party or by which it or its assets may
be bound or subject, or result in the creation of any Lien upon the Assets
pursuant to the terms of any such Contract; (iv) if Seller Required Consents are
obtained prior to Closing, violate any Law or Order of any Governmental Body
against, or binding upon, Seller, FRE, any Shareholder or upon the Assets or the
Business; or (v) if Seller Required Consents are obtained prior to Closing,
violate or result in the revocation or suspension of any Permit.
SECTION 2.3 PARTNERSHIP EXISTENCE AND POWER. Seller is a general
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of formation, and has all requisite powers and all material
Permits required to carry on the Business as now conducted. Except as set forth
on SCHEDULE 2.3, Seller does not own any equity interest or equity investment in
any other person.
SECTION 2.4 FORMATION DOCUMENTS AND RECORDS. (a) Seller has heretofore
delivered to Buyer true and complete copies of all filings made with any
Governmental Body in connection with its formation and the Agreement of the
General Partnership of Seller as in effect on the date hereof and all other
Contracts between Seller and either General Partner.
(b) All financial, business and accounting books, ledgers, accounts
and official and other records relating to Seller have been properly and
accurately kept and completed in all material respects, and there are no
material inaccuracies or discrepancies contained or reflected therein.
SECTION 2.5 FINANCIAL INFORMATION. (a) Seller has previously furnished to
Buyer true and complete copies of (i) Seller's audited financial statements at
and for the year ended December 31, 1995 (the "ANNUAL STATEMENTS"),
(ii) Seller's unaudited financial statements at and for each calendar month of
1996 and 1995 through August 31, 1996 (the "INTERIM STATEMENTS"), and (iii) all
management letters, audit letters and attorney audit response letters issued in
connection with Seller's audited financial statements for the year ended
December 31, 1995. The Annual Statements have been prepared in accordance with
GAAP consistently applied as set forth in the notes thereto and were audited by
Xxxxxx, Xxxxxx & Xxxxxxxx (without qualification in the report thereof). Each
delivered financial
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statement presents fairly the financial position of Seller as of its date, and
its earnings, changes in partners' equity and cash flow for the periods then
ended. Each delivered balance sheet fully sets forth all assets and Liabilities
of Seller existing as of its date which, under GAAP, should be set forth
therein, and each delivered statement of earnings sets forth the items of income
and expense of Seller which should appear therein under GAAP.
(b) SCHEDULE 2.5 accurately sets forth the attendance (by month) at
the Park included in the Business during 1993, 1994 and 1995 and each calendar
month of 1996 ending prior to the date hereof and by week for each full week
prior to the date hereof of the current calendar month.
SECTION 2.6 LIABILITIES. Except as and to the extent reflected in the
audited balance sheet of Seller ("the LATEST BALANCE SHEET") at December 31,
1995 ("the LATEST BALANCE SHEET DATE") referred to in Section 2.5, Seller did
not have, as of the Latest Balance Sheet Date, any Liabilities or obligations
(other than obligations of continued performance under Contracts and other
commitments and arrangements entered into in the ordinary course of business);
and except as described in SCHEDULE 2.6 hereto, Seller has not incurred any
Liabilities since the Latest Balance Sheet Date except (i) current Liabilities
for trade or business obligations incurred in connection with the purchase of
goods or services in the ordinary course of the Business and consistent with
past practice and (ii) Liabilities reflected on any balance sheet included in
the Interim Statements delivered to Buyer prior to the date hereof.
SECTION 2.7 INVENTORY. SCHEDULE 2.7 sets forth a true and complete list
of Inventory by category as of the date hereof (including an aging schedule
showing all items over 60 days old). All Inventory consists of items which are
good and merchantable and of a quantity and quality usable or saleable in the
ordinary course of the Business consistent with past practices.
SECTION 2.8 ABSENCE OF CERTAIN CHANGES. Since the Latest Balance Sheet
Date, except as disclosed in SCHEDULE 2.8, the Business has been conducted in
the ordinary course consistent with past practices and there has not been:
(a) Any material adverse change in the Assets or any material adverse
change in the condition (financial or otherwise), results of operations or
prospects of the Seller or the Business (collectively, the "CONDITION OF THE
BUSINESS") or any event, occurrence or circumstance that could reasonably be
expected to cause such a material adverse change.
(b) Any transaction or Contract with respect to the purchase,
acquisition, lease, disposition or transfer of any Assets or to any capital
expenditure relating to the Business (in each case, other than as disclosed in
any Interim Statement delivered to Buyer prior to the date of this Agreement or
transactions or Contracts entered into in the ordinary course of the Business in
accordance with past practice).
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(c) Any damage, destruction or other casualty loss (whether or not
covered by insurance), condemnation or other taking affecting the Business or
Seller to the extent material to the Business;
(d) Any change in any method of accounting or accounting practice by
Seller;
(e) Except as set forth in SCHEDULE 2.14 OR 2.15, any increase in the
compensation payable or to become payable to any officer, stockholder, director,
consultant, agent or employee of the Business, or any alteration in the benefits
payable to any thereof;
(f) Any material adverse change in the relationships of Seller or FRE
with the customers, suppliers and vendors of the Business; or
(g) Except for any changes made in the ordinary course of Business,
any material change in any of Seller's business policies, including advertising,
marketing, pricing, purchasing, personnel, returns or budget policies.
SECTION 2.9 THE ASSETS. (a) SCHEDULE 2.9 sets forth a complete list and
description of the Real Property. Seller has a valid leasehold interest in and
to the Land and good, marketable and insurable title to the Improvements, in
each case, free and clear of all Liens of any nature whatsoever, other than
(i) Liens securing or relating to Assumed Liabilities, (ii) Liens for current
Taxes not yet due and payable and (iii) in the case of the Land, easements,
covenants, restrictions and other similar encumbrances of record listed on
SCHEDULE 2.9, which do not relate to any Retained Liabilities and do not
materially interfere with the use of the Land or impair the conduct of the
Business (collectively, "PERMITTED LIENS"). SCHEDULE 2.9 sets forth with
respect to such Real Property a list of all title insurance policies, appraisal
reports, surveys and engineering and environmental reports (including, without
limitation, seismic and structural reports) held or controlled by Seller or FRE,
copies of which have been provided to Buyer. All Improvements located on the
Real Property are in good operating condition (subject to normal wear and tear)
with no structural or other defects known to Seller or FRE that could interfere
in any material respect with the operation of the Business, are located within
applicable boundary lines and are suitable for the purposes for which they are
currently used. The Business is not in violation in any material respect of any
building, zoning, anti-pollution, health, occupational safety or other Law,
Order Permit or non-transferable license in respect of the Real Property.
Except as disclosed on SCHEDULE 2.9, no person, other than Seller, has any right
to occupy or possess any of the Real Property. To Seller's best knowledge, the
Real Property complies with the California Subdivision Map Act and no portion of
the Real Property is located within a "Special Studies Zone" as designated under
the Xxxxxxx-Xxxxxx Special Studies Zone Act, Sections 2621-2630, inclusive, of
the California Public Resources Code. To Seller's best knowledge, no
Improvements are constructed of unreinforced masonry, and the Improvements
currently comply with all seismic upgrade, retrofit and condition requirements
of applicable laws and regulations. To Seller's best knowledge, there exist no
structural conditions with respect to the Improvements or the Equipment and no
soil or other conditions
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with respect to the Land that could increase the probability of material damage
to the Improvements or the Equipment as a result of earthquake or other seismic
activity.
(b) Seller has good and marketable title to (or valid leasehold
interest in) all Equipment used in the Business, free and clear of all Liens
except Permitted Liens. The Equipment constituting a part of the Assets
(whether owned or leased) has been well-maintained in accordance with industry
standards, is in good condition and repair (subject to normal wear and tear) and
is, in the aggregate, adequate in quantity and quality for the operation of the
Business as presently conducted. The Assets that are amusement rides or other
equipment have, in the aggregate been operated and maintained in accordance with
industry practice. SCHEDULE 2.9 contains a list and description of all
Equipment with a book value (before depreciation) of $50,000 or more and
indicates the Equipment listed thereon that is leased.
(c) Seller has good and marketable title to the Assets (other than
the Real Property and Equipment) free and clear of any Liens other than
Permitted Liens.
SECTION 2.10 CONTRACTS. (a) SCHEDULE 2.10 sets forth an accurate and
complete list of all Contracts relating to the Business to which Seller or FRE
is a party or by which Seller, FRE or their respective assets are bound or
subject, except for those Contracts with persons who are not Affiliates of the
Seller, FRE or any Shareholder relating solely to the purchase or sale of
property (other than the Real Property) or services by or on behalf of Seller in
the ordinary course of the Business which (i) require Seller to make or receive
payments not in excess of $40,000 and (ii) have a remaining term of less than
twelve months on the date of this Agreement or are terminable by Seller without
penalty during such period. Schedule 2.10 also includes a brief description of
the Lease and all other Contracts relating to the Real Property. True and
correct copies of all written Contracts listed on such Schedule and summaries of
the material provisions of all oral Contracts so listed have been delivered to
Buyer.
(b) All Contracts listed on SCHEDULE 2.10 are valid, subsisting, in
full force and effect and binding upon Seller or FRE, as the case may be, and,
to the knowledge of Seller and FRE, the other parties thereto in accordance with
their terms. Neither Seller nor FRE is in default (or alleged default) under
any such Contract in any material respect, nor, to the knowledge of Seller or
FRE, is any other party thereto in default thereunder in any material respect
and to the knowledge of Seller and FRE, there is no condition that with notice
or the lapse of time or both would constitute a material default (or give rise
to a termination right) under any such Contract. To the knowledge of Seller or
FRE, none of the other parties to any Transferred Contract intends to terminate
or materially alter the provisions thereof by reason of the Contemplated
Transactions or otherwise. Since the Latest Balance Sheet Date, neither Seller
nor FRE has waived any material right under any Transferred Contract, materially
amended or extended beyond December 31, 1996 any such Transferred Contract or
terminated or failed to renew (or received notice of termination or failure to
renew with respect to) any such Transferred Contract.
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SECTION 2.11 INTANGIBLE PROPERTY. SCHEDULE 2.11 sets forth all
Intellectual Property Rights, including a copy of all registrations and
applications with respect thereto filed with or issued by any Governmental Body.
The Contemplated Transactions will not have an adverse effect on the right,
title and interest of Buyer as of the Closing Date in and to the Intellectual
Property Rights. Except as set forth on SCHEDULE 2.11, (i) neither Seller nor
FRE has received any written notice of invalidity, infringement or
misappropriation from any third party with respect to any Intellectual Property
Rights; (ii) to the knowledge of Seller and FRE, Seller has not interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property Rights of any third parties; and (iii) to the knowledge of
Seller and FRE, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
Rights of Seller.
SECTION 2.12 CLAIMS AND PROCEEDINGS. Except as set forth on SCHEDULE
2.12(a), there are no outstanding Orders of any Governmental Body against or
involving Seller, FRE, the Assets or the Business. Except as set forth on
SCHEDULE 2.12(b), there are no actions, suits, claims or counterclaims or legal,
administrative, governmental, arbitral or other proceedings or investigations
(collectively, "CLAIMS") (whether or not the defense thereof or Liabilities in
respect thereof are covered by insurance), pending or to the knowledge of Seller
or FRE threatened on the date hereof, against or involving Seller, FRE, the
Assets or the Business. Except as set forth on SCHEDULE 2.12(c), at the Closing
there will be no such Claims pending or, to the knowledge of Seller or FRE,
threatened, other than Claims that, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the Condition of the
Business. Except as set forth on SCHEDULE 2.12(d), to the knowledge of Seller
or FRE, on the date hereof, there is no fact, event or circumstances that would
give rise to any Claim. As of the Closing, there will exist no such fact, event
or circumstance known to Seller that would give rise to any Claim that, if
pending or threatened on the Closing Date, could reasonably be expected to have
a material adverse effect on the Condition of the Business.
SECTION 2.13 TAX MATTERS. (a) Except as disclosed on SCHEDULE 2.13, all
Tax Returns required to be filed by Seller (or its predecessors) on or before
the Closing Date have been or shall be timely filed and all Taxes which are due
have been or shall be paid. All Taxes of Seller and the General partners
attributable to the Business for periods ending on or before the Closing Date
which are not yet due have been adequately provided for. As of the time of
filing, the Tax Returns correctly reflected (and, as to any Tax Returns not
filed as of the date thereof will correctly reflect) the facts regarding the
income, Business, assets, operations, activities and status of Seller. There
are no Tax Liens upon any assets of Seller except for Liens for current Taxes
not yet due and payable. All amounts required to be withheld by Seller from
employees for income Taxes, social security and other payroll Taxes have been
collected and withheld, and either paid to the respective Governmental Bodies,
set aside in accounts for such purpose, or have been or will be accrued,
reserved against and entered upon the books and records of Seller. All Taxes
which are due and payable by Seller under the Lease for the period prior to and
including the Closing Date have been or shall be paid prior to Closing. Except
for sales Taxes which result from the
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consummation of the Contemplated Transactions, Seller has collected and remitted
to the appropriate Tax Authority all sales and use or similar Taxes required to
have been collected on or prior to the Closing Date and has been furnished
properly completed exemption certificates for all exempt transactions. Seller
has maintained and has in its possession all records, supporting documents and
exemption certificates required by applicable sales Tax statutes and regulations
to be retained in connection with the collection and remittance of sales and use
Taxes for all periods up to and including the Closing Date. Neither Seller (or
any of its predecessors) nor FRE is a party to or has received any notice with
respect to any proposed or pending examination, investigation, audit, action or
Claim by any Tax Authority relating to Taxes, nor is party to any dispute or, to
the knowledge of Seller and FRE, threatened dispute with respect thereto and no
Claim for assessment or collection of Taxes has been made upon Seller. SCHEDULE
2.13 includes a description of all such past examinations, investigations,
audits, actions or Claims within the past three years. Seller is not a "foreign
person" within the meaning of section 1445 of the Code, and Seller will furnish
Buyer with an affidavit that satisfies the requirements of section 1445 (b) (2)
of the Code. Seller is not and has never been a member of or included in any
consolidated, combined or unitary group for purposes of filing Tax Returns or
paying Taxes at any time. Seller has no Liability for Taxes of any other person
under Treasury Regulation section 1.1502-6 (or any similar provision of state or
foreign law), or as a transferee of such person, or under any other provision of
Law or Tax sharing, Tax indemnity or similar Contract.
(b) Buyer shall deduct and withhold three and one-third percent
(3-1/3%) of the purchase price for the Real Property unless Seller provides
Buyer prior to closing with a duly-executed withholding exemption certificate
(California Department of Revenue Form 590-RE), or in the event that Seller is a
non-California resident, a certificate issued by the California Franchise Tax
Board pursuant to California Revenue and Taxation Code Sections 18662 and 18668
stating either the amount of withholding required from Seller's proceeds or that
Seller is exempt from such withholding requirement, in which case such other
stated amount shall be withheld.
SECTION 2.14 EMPLOYEE BENEFITS PLANS. (a) SCHEDULE 2.14 lists all bonus,
deferred compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock and
stock option plans, all employment or severance contracts, health and medical
insurance plans, life insurance and disability insurance plans, other employee
benefit plans, contracts or arrangements including, but not limited to,
"employee benefit plans" within the meaning of Section 3(3) of ERISA (the
"EMPLOYEE BENEFIT PLANS") which cover any current or former employee, officer,
director or consultant of Seller or any portion of the Business. SCHEDULE 2.14
separately identifies all Deferred Compensation Liabilities and all Employee
Benefit Plans providing retiree benefits and a calculation of the present value
of all retiree Liabilities. All Employee Benefit Plans have been established
and maintained in all material respects in accordance with their terms. No
Employee Benefit Plan is or was collectively bargained for. The Employee
Benefit Plans which are described in Section 3(3) of ERISA (the "ERISA PLANS")
are in compliance in all material respects with all provisions of ERISA, other
applicable Laws and, if intended to be tax qualified, Sections 401(a) and 501(a)
of the Code. All
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ERISA Plans which are intended to qualify under Section 401(a) of the Code have
been submitted to and approved under Section 401(a) of the Code by the IRS and,
to the best knowledge of Seller and FRE, nothing has occurred which would cause
the loss of such tax qualification. No Liability under ERISA has been or is
expected to be incurred by Seller, FRE, or any Affiliate thereof with respect to
any ongoing, frozen or terminated "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any of them,
or the single-employer plan of any entity which is considered one employer with
Seller or FRE under Section 4001 of ERISA or Section 414 of the Code (an "ERISA
AFFILIATE"). Seller, FRE and their Affiliates have not incurred and do not
expect to incur any Liability with respect to a multi-employer plan under
Subtitle E of Title IV of ERISA (regardless of whether based on contributions of
an ERISA Affiliate) and have not made or are obligated to make any contributions
to any multi-employer plan. All contributions required to be made under the
terms of any Employee Benefit Plan have been timely made or have been duly
provided for. No single-employer plan of Seller, FRE or any ERISA Affiliate
thereof has any unfunded pension liability or any "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the
Code or Section 302 of ERISA. No Reportable Event has occurred with respect to
any ERISA Plan. Neither Seller nor FRE or their Affiliates has provided, or is
required to provide, security to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a) of the Code. Seller, FRE and each ERISA Affiliate
have paid all premiums (together with any interest, charges or penalties for
late payment thereon) required to be paid to the Pension Benefit Guaranty
Corporation with respect to each ERISA plan for which such premiums are
required. To the best knowledge of Seller and FRE, no ERISA Plan has engaged in
any transaction described in Section 406 or 407 of ERISA or Section 4975 of the
Code. Each ERISA Plan has at all times complied with the bonding requirements
of Section 412 of ERISA. Each Employee Benefit Plan can be unilaterally
terminated without penalty by Seller or FRE, as the case may be, on no more than
sixty (60) days' notice. There are no pending or, to the knowledge of Seller or
FRE, threatened Claims relating to any Employee Benefit Plan, other than routine
Claims for benefits in the ordinary course, asserted against (i) any Employee
Benefit Plan or its assets, (ii) Seller, FRE or any ERISA Affiliate or (iii) any
fiduciary, for which Seller or FRE may be directly or indirectly liable, through
indemnification obligations or otherwise.
(b) With respect to each Employee Benefit Plan, Seller has made
available to Buyer a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate and complete description) thereof (including all
amendments thereto which will become effective at a later date) and, to the
extent applicable, (i) any related trust agreement, annuity contract or other
funding instrument; (ii) the most recent summary plan description; (iii) the
most recent annual report form (FORM 5500 series), financial statement and
actuarial report; and (iv) the most recent IRS determination letter.
SECTION 2.15 EMPLOYEE-RELATED MATTERS. (a) SCHEDULE 2.15 contains a true
and correct list of all officers, directors, full-time employees and consultants
of Seller or the Business, including any agreement relating thereto, and a
description of the rate and nature of all compensation payable by or on behalf
of Seller to each such person.
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SCHEDULE 2.15 also contains a description of all existing severance, accrued
vacation policies or retiree benefits of any current or former officer,
director, employee or consultant (to the extent not included on SCHEDULE 2.14).
Except as set forth on such Schedule, the employment or consulting arrangement
of all such persons and all part-time employees of Seller is terminable at will.
(b) Except as set forth in SCHEDULE 2.15, (i) neither Seller nor FRE
is a party to any Contract with any labor organization or other representative
of its employees; (ii) there is no unfair labor practice charge or complaint
pending or, to the knowledge of Seller or FRE, threatened against Seller or FRE
relating to any employee of the Business; (iii) neither Seller nor FRE has
experienced any labor strike, slowdown, work stoppage or similar material labor
controversy within the past three years relating to the Business; (iv) no
representation question has been raised respecting any of Seller's employees
working within the past three years, nor, to the knowledge of Seller or FRE, are
there any campaigns being conducted to solicit authorization from such employees
to be represented by any labor organization; (v) no Claim before any
Governmental Body brought by or on behalf of any employee, prospective employee,
former employee, retiree, labor organization, other representative of the
employees of Seller or any Governmental Body, is pending or, to the knowledge of
Seller or FRE, threatened against Seller or FRE; (vi) neither Seller nor FRE is
a party to, or otherwise bound by, any Order relating to its employees or
employment practices; and (vii) except with respect to ongoing disputes of a
routine nature involving immaterial amounts, Seller has paid or caused to be
paid in full to all of its employees all wages, salaries, commissions, bonuses,
benefits and other compensation due and payable to such employees.
SECTION 2.16 INSURANCE. SCHEDULE 2.16 sets forth a list of all insurance
policies, fidelity and surety bonds and fiduciary liability policies ("the
INSURANCE POLICIES") covering the Assets, the Business, operations, employees,
officers, managers and directors of Seller and FRE and true and complete copies
of all such Insurance Policies have been delivered to Buyer. SCHEDULE 2.16 also
sets forth a true and complete list of Claims made in respect of Insurance
Policies during the three years prior to the date hereof. True and correct
copies of all loss runs with respect to such period have been delivered to
Buyer. There is no Claim by or on behalf of Seller pending under any of such
Insurance Policies, and the Lease with respect thereto, as to which coverage has
been questioned, denied or disputed by the underwriters of such Insurance
Policies or any requirement by any insurer to perform work which has not been
satisfied. All premiums payable on or before the Closing Date under all
Insurance Policies have been paid and Seller is otherwise in compliance in all
material respects with the terms and conditions of all such Insurance Policies.
All Insurance Policies are in full force and effect.
SECTION 2.17 COMPLIANCE WITH LAWS. Neither Seller nor FRE is in violation
in any material respect of any order, judgment, injunction, award, citation,
decree, consent decree or writ (collectively, "ORDERS"), or any material law,
statute, code, ordinance, rule, regulation or other requirement, including any
Environmental Laws (collectively, "LAWS"), of any government or political
subdivision thereof, whether federal, state, local or
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foreign, or any agency or instrumentality of any such government or political
subdivision, or any court or arbitrator (collectively, "GOVERNMENTAL BODIES")
affecting the Assets or the Business.
SECTION 2.18 PERMITS. Seller and FRE have obtained all Permits and
non-transferable licenses, and have made all required registrations and filings
with, any Governmental Body that are material to the use and occupancy of the
Real Property or the conduct of the Business. All material Permits and
non-transferable licenses are listed on SCHEDULE 2.18 and are in full force and
effect; no material violations are or have been recorded in respect of any
Permit or non-transferable license within three years prior to the Closing Date;
and no proceeding is pending or, to the knowledge of Seller or FRE, threatened
to revoke or limit any Permit or non-transferable license. Except as listed on
SCHEDULE 2.18, no Permit will terminate by reason of the Contemplated
Transactions.
SECTION 2.19 ENVIRONMENTAL MATTERS. Except as referenced in SCHEDULE
2.19: (a) there has been, directly or indirectly, no use, manufacture,
generation, refining, storage, transport, disposal or treatment of Hazardous
Substances by or on behalf of Seller (or, to the knowledge of Seller or FRE, any
predecessor in interest), or any Release at, on or under any Real Property by or
on behalf of Seller, or, to the knowledge of Seller or FRE, by any other person,
in violation of any Environmental Law or which would require remedial action
under any Environmental Law; neither Seller nor FRE has contaminated the soil,
ground water or surface water, and to the knowledge of Seller and FRE, none of
the soil, ground water or surface water of such Real Property is or has been
contaminated by any Release.
(b) No portion of the Real Property has ever been used as a petroleum
storage, refining or distribution facility or terminal, or a gasoline station by
Seller, FRE, or any tenant or licensee of Seller or FRE thereat.
(c) As to the ownership or operation of the Assets or the Business,
Sellers and FRE have not created, suffered or permitted, and have not received
any written notice of (i) any alleged violation with respect to any
Environmental Law; or (ii) any prior, pending or threatened Regulatory Action or
other Claim involving any such party or any present or former owner, lessee or
operator of the Real Property.
(d) (i) There are no incinerators, septic tanks, underground or
aboveground tanks or cesspools, pipes or pipelines for the storage or
transportation of Hazardous Materials, including without limitation, heating
oil, fuel oil, gasoline and/or other petroleum products, whether such tanks,
pipelines or pipes are in operation, closed or abandoned (the "TANKS") located,
or to the knowledge of Seller and FRE, which have been located, on, at or under
the Real Property, (ii) all sewage from the Real Property is discharged into a
public sanitary sewer system, and (iii) there has been no Release by or on
behalf of Seller, or to Seller's or FRE's knowledge by any other party, into the
atmosphere, any adjoining or adjacent body of water, or adjoining or adjacent
property in violation of Environmental Law. Seller has delivered to Buyer
copies of all environmental reports and
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all other written materials held or controlled by or on behalf of Seller
regarding the environmental matters set forth in this Section 2.19.
Notwithstanding the foregoing, if the Real Property contains any such Tanks,
Seller and FRE represent that Seller is in compliance in all material respects
with all registration and other requirements of Environmental Law (including
U.S.C. Section 6991, "Regulation of Underground Storage Tanks") regulating the
existence, usage and removal thereof.
SECTION 2.20 FINDERS; FEES. Except as set forth in SCHEDULE 2.20, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Seller or FRE who might be
entitled to any fee or commission from Seller or FRE upon consummation of the
Contemplated Transactions. All fees and commissions described in SCHEDULE 2.20
will have been paid in full by or on behalf of Seller prior to the Closing.
SECTION 2.21 ABILITY TO CONDUCT BUSINESS. As of the Closing, the Assets
will be sufficient and adequate to permit the continued conduct of the Business
substantially as it has been conducted since January 1, 1996 and, assuming all
Seller Required Consents are obtained, the consummation of the Contemplated
Transactions hereby will enable Buyer to conduct the Business substantially as
it has been conducted since that date.
SECTION 2.22 LEASE. Except as set forth in SCHEDULE 2.22:
(a) the Lease is in full force and effect with no default by Seller,
or to its knowledge, lessor existing beyond applicable notice and cure periods
or any event or condition which, with the giving of notice or passage of time
would constitute such a default, and neither Seller, nor to its knowledge,
lessor under the Lease has any existing rights of offset or abatement;
(b) all work, repairs and improvements (including capital
improvements) required to have been done on or prior to the Closing under the
Lease by Seller have been completed in accordance therewith, and Seller has or
caused to be waived any and all rights to terminate the Lease with respect
thereto;
(c) the Lease is superior to any and all mortgages now or hereafter
constituting a Lien on the Real Property and/or the interest of either party to
the Lease therein;
(d) there are no rights of first refusal, options to purchase,
"buy-out" rights, or other termination rights which have been exercised, or are
currently exercisable, by either party to the Lease;
(e) all rent and other amounts payable by or on behalf of Seller
under the Lease have been paid to the date hereof, and shall be paid to the date
of Closing;
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(f) any amounts payable to Seller under the Lease have been paid to
the date hereof, and shall be apportioned at Closing;
(g) Seller has satisfied all requirements under the Lease with
respect to expenditure of funds for capital improvements, marketing, maintenance
and repairs and as otherwise may be required thereunder; and
(h) Seller has obtained and shall, prior to Closing deliver to Buyer,
all requisite consents obtained in connection with capital improvements made or
proposed to be made by Seller at the Real Property and all capital improvement
plans required to be submitted by Seller under the Lease have been submitted and
approved by the lessor thereunder in accordance therewith and, prior to the
Closing, Seller will not submit any such plan without the prior written consent
of Buyer.
ARTICLE IIA
REPRESENTATIONS AND WARRANTIES OF R&B AND THE MEMBERS
R&B represents and warrants to Buyer, and each Member, severally,
represents and warrants to Buyer (but only with respect to Sections 2A.1 and
2A.2 relating to such Member), that:
SECTION 2A.1 AUTHORITY RELATIVE TO THIS AGREEMENT. R&B and each of the
Members have full power, capacity and authority to execute and deliver this
Agreement and each other Transaction Document to which each is or, at the
Closing, will be a party and to consummate the Contemplated Transactions. The
execution and delivery of this Agreement and the consummation of the
Contemplated Transactions to which R&B or any Member is or, at the Closing, will
be a party have been duly and validly authorized by R&B or such Member, as the
case may be, and no other proceedings on the part of R&B or such Member (or any
other person) are necessary to authorize the execution and delivery by R&B or
such Member of this Agreement or the consummation of the Contemplated
Transactions to which R&B or such Member is or, at the Closing, will be a party.
This Agreement has been and, at the Closing, the other Transaction Documents to
which R&B or any Member is a party will have been duly and validly executed and
delivered by R&B or such Member, as the case may be, and (assuming the valid
execution and delivery thereof by the other parties thereto) constitute or will
at the Closing constitute, as the case may be, the legal, valid and binding
agreements of R&B or such Member enforceable against R&B or such Member in
accordance with their respective terms except as such obligations and their
enforceability may be limited by applicable bankruptcy and other similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at law or in
equity).
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SECTION 2A.2 NO CONFLICTS; CONSENTS. The execution, delivery and
performance by R&B and each Member of this Agreement and each other Transaction
Document to which each is or will be a party or the consummation of the
Contemplated Transactions does not and will not (i) violate any provision of the
Agreement of General Partnership (or certificate of incorporation, by-laws or
other comparable instruments) of Seller, R&B or any corporate Member; (ii)
require Seller (to the knowledge of R&B and each Member), R&B, any Member or any
other Affiliate to obtain any consent, approval or action of or waiver from, or
make any filing with, or give any notice to, any Governmental Body or any other
person, except for compliance with the HSR Act and except as set forth on
SCHEDULE 2.2; or (iii) if Seller Required Consents are obtained prior to
Closing, violate any Law or Order or any Governmental Body against, or binding
upon, Seller, R&B or any Member.
SECTION 2A.3 ENVIRONMENTAL MATTERS. Seller has made available to Buyer
certain environmental reports listed on Schedule 2.19. To the best knowledge of
R&B without further inquiry, such environmental reports are true and correct in
all material respects.
SECTION 2A.4 LEASE. Except as set forth in Schedule 2.22:
(a) to the best knowledge of R&B, the Lease is in full force and
effect with no default by Seller, or to its knowledge, lessor existing beyond
applicable notice and cure periods or any event or condition which, with the
giving of notice or passage of time would constitute such a default, and neither
Seller, nor to its knowledge, lessor under the Lease has any existing rights of
offset or abatement;
(b) there are no rights of first refusal, options to purchase,
"buyout" rights, or other termination rights which have been exercised, or are
currently exercisable, by either party to the Lease;
(c) all rent and other amounts payable by or on behalf of Seller
under the Lease have been paid to the date hereof, and shall be paid to the date
of Closing;
(d) any amounts payable to Seller under the Lease have been paid to
the date hereof, and shall be apportioned at Closing; and
(e) upon approval by the Lessor, Seller will have obtained and
delivered to Buyer prior to Closing, all requisite consents to assign the Lease
to Buyer.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Buyer and Parent represent and warrant to Seller and the General Partners
that:
SECTION 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Buyer and
Parent has full power and authority to execute and deliver this Agreement and
each other Transaction Document to which it is or, at the Closing, will be a
party and to consummate the Contemplated Transactions. The execution and
delivery of this Agreement and the consummation of the Contemplated Transactions
to which each of Buyer and Parent is or, at the Closing, will be a party have
been duly and validly authorized and approved by the board of directors thereof
and no other corporate proceedings on the part of Buyer or Parent are necessary
to authorize the execution and delivery by Buyer and Parent of this Agreement or
the consummation of the Contemplated Transactions to which either is a party.
This Agreement has been and, at the Closing, the other Transaction Documents to
which each of Buyer and Parent is a party will have been duly and validly
executed and delivered by Buyer and Parent and (assuming the valid execution and
delivery thereof by the other parties thereto) constitutes or will at the
Closing constitute, as the case may be, the legal, valid and binding agreement
of Buyer and Parent, enforceable against Buyer or Parent, as the case may be, in
accordance with their respective terms, except as such obligations and their
enforceability may be limited by applicable bankruptcy and other similar laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at law or in
equity).
SECTION 3.2 NO CONFLICTS; CONSENTS. The execution, delivery and
performance by each of Buyer and Parent of this Agreement and each other
Transaction Document to which it is or, at the Closing, will be a party and the
consummation of the Contemplated Transactions to which it is or, at the Closing,
will be a party do not and will not (i) violate any provision of the certificate
of incorporation or by-laws of Buyer or Parent; (ii) require Buyer or Parent to
obtain any consent, approval or action of or waiver from, or make any filing
with, or give any notice to, any Governmental Body or any other person, except
for compliance with the HSR Act and except as set forth in SCHEDULE 3.2 (the
"BUYER REQUIRED CONSENTS"); (iii) if Buyer Required Consents are obtained prior
to the Closing, violate, conflict with or result in the breach or default under
(after the giving of notice or the passage of time); or permit the termination
of, any material Contract to which Buyer is a party or by which Buyer, Parent or
either of their assets may be bound or subject; or (iv) if Buyer Required
Consents are obtained prior to the Closing, violate any Law or Order of any
Governmental Body against, or binding upon, Buyer, the Parent or upon their
assets or business.
SECTION 3.3 CORPORATE EXISTENCE AND POWER. Each of Buyer and Parent is a
corporation duly organized, validly existing and in good standing under the laws
of its state
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of incorporation and each has all requisite corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and as it will be conducted upon consummation
of the Contemplated Transactions. At the Closing, Buyer (or its assignee) will
be qualified to do business in the State of California.
SECTION 3.4 FINDERS; FEES. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Buyer who might be entitled to any fee or commission from Buyer upon
consummation of the Contemplated Transactions.
ARTICLE IV
COVENANTS AND AGREEMENTS
SECTION 4.1 CONDUCT OF BUSINESS OF SELLER. (a) From the date hereof
through the Closing Date, Seller and the General Partners agree:
(i) To conduct the operations of the Business according to the
ordinary and usual course of the Business consistent with past practice, to
preserve intact the present business organization and structure, to use
reasonable efforts to keep available the services of the present officers,
agents and full-time employees of the Business, to use reasonable efforts to
preserve and maintain the Assets and the good will of the Business and to use
reasonable efforts to preserve the relationships of Seller and each of the
General Partners with customers and suppliers, and others having business
dealings with the Business.
(ii) To maintain in the ordinary course of the Business,
consistent with past practice and in accordance with all Contracts, the Real
Property, all Equipment, the Inventory and other tangible property in their
present repair, order and condition, subject to ordinary wear and tear and to
the requirements of such Contracts.
(iii) Not to incur any Liability (other than Liabilities incurred
in the ordinary course of the Business, consistent with past practice, which are
not in the aggregate material thereto), nor enter into any Contract of a type
required to be included on any Schedule hereto.
(iv) Not to undertake (nor permit to be undertaken) any of the
actions specified in Section 2.8.
(v) Not to pay, discharge or satisfy any material Claim or
Liability, other than the payment, discharge or satisfaction in the ordinary
course of the Business of Claims or Liabilities incurred in the ordinary course
of Business, consistent with past practice.
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(vi) to fully comply with the Lease and immediately deliver to
Buyer copies of all notices delivered or received thereunder or in connection
therewith.
(b) From the date hereof through the Closing Date, Seller and the
General Partners agree that they will use reasonable efforts to conduct the
Business in such a manner so that the representations and warranties of Seller
and the General Partners contained herein shall continue to be true and correct
on and as of the Closing Date as if made on and as of the Closing Date.
(c) From the date hereof through the Closing Date, Seller and the
General Partners agree that they will consult with Buyer prior to any renewal,
amendment, extension or termination of, waiver of any material right under, or
any failure to renew, any Transferred Contract and will not take any such action
if Buyer objects thereto in writing.
SECTION 4.2 CORPORATE EXAMINATIONS AND INVESTIGATIONS. Prior to the
Closing Date, Seller and the General Partners agree that Buyer shall be
entitled, through its directors, officers, Affiliates, employees, attorneys,
accountants, representatives, lenders, consultants and other agents
(collectively, "REPRESENTATIVES") to make such investigation of the Assets, the
Business and operations of Seller, and such examination of the books, records
and financial condition of Seller, as Buyer reasonably deems necessary. Any
such investigation and examination shall be conducted at reasonable times, under
reasonable circumstances and upon reasonable notice, and Seller shall cooperate
fully therein. In that connection, Seller and the General Partners shall make
available to the Representatives of Buyer during such period, without however
causing any unreasonable interruption in the operations of Seller, all such
information and copies of such documents and records concerning the Business and
the affairs of Seller as such Representatives may reasonably request, shall
permit the Representatives of Buyer access to the Assets and all parts thereof,
and to Seller's and the Business' employees, customers, suppliers, contractors
and others, and shall cause Seller's Representatives to cooperate fully in
connection with such review and examination. No investigation by Buyer shall
diminish or obviate any of the representations, warranties, covenants or
agreements of Seller and the General Partners contained in this Agreement.
SECTION 4.3 ADDITIONAL FINANCIAL STATEMENTS. Prior to the Closing Date,
as soon as available and in any event within thirty (30) calendar days after the
end of each monthly accounting period of Seller ending after the date of the
most recent Interim Statement, Seller shall furnish Buyer with an unaudited
financial statements of Seller for such month in form and substance comparable
to the Interim Statements and with such other financial or other information
routinely prepared by or on behalf of Seller or reasonably requested by Buyer.
SECTION 4.4 FILINGS AND AUTHORIZATIONS. Seller and Buyer, before or
within two business days after the execution and delivery of this Agreement,
shall file or supply, or cause to be filed or supplied, all notifications,
reports and other information required to be filed or supplied pursuant to the
HSR Act in connection with the Contemplated Transactions
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and which are required by Law to effectuate the consummation of the Contemplated
Transactions. Seller and the General Partners, on the one hand, and Buyer, on
the other, shall cooperate with each other in connection with such filings and
furnish each other with copies of such filings and any correspondence received
from any Governmental Body in connection therewith. Seller and the General
Partners, on the one hand, and Buyer, on the other, as promptly as practicable,
shall make, or cause to be made, all filings and submissions under such Laws as
are applicable to them or to their respective Affiliates, as may be required for
them to consummate the Contemplated Transactions in accordance with the terms of
this Agreement and shall furnish copies thereof to the other party prior to such
filing and shall not make any such filing or submission to which Buyer or
Seller, as the case may be, reasonably objects in writing. All such filings
shall comply in form and content in all material respects with applicable Law.
SECTION 4.5 EFFORTS TO CONSUMMATE; MISCELLANEOUS. Subject to the terms
and conditions herein, each of Seller, the General Partners and Buyer, without
payment or further consideration, shall use good faith efforts to take or cause
to be taken all action and to do or cause to be done all things necessary,
proper or advisable under applicable Laws, Permits and Orders to consummate and
make effective, as soon as reasonably practicable, the Contemplated
Transactions, including, but not limited to, the obtaining of all Seller
Required Consents and Buyer Required Consents and Permits or consents of any
third party, whether private or governmental, required in connection with such
party's performance of such transactions and each party hereto shall cooperate
with the other in all of the foregoing. Without limiting the generality of the
foregoing, Seller and the General Partners will, upon execution of this
Agreement, use reasonable best efforts to obtain, as soon as practicable
thereafter, execution of the Lease Documents by the landlord under the Lease,
and all costs and expenses incurred in connection therewith shall be borne
equally by Seller and Buyer. Seller, the General Partners and Buyer agree that
the Contemplated Transactions comply with the terms and provisions of
Section 3.2 of the Lease, and hereby incorporate by reference the provisions of
subsection(c) thereof into this Agreement.
SECTION 4.6 NEGOTIATIONS WITH OTHERS. From and after the date hereof
unless and until this Agreement shall have terminated in accordance with its
terms, Seller, each General Partner and each Principal agrees that neither
Seller, nor either General Partner, any Principal, any of their Affiliates,
officers, directors, employees, shareholders or other Representatives, will
directly or indirectly (i) solicit, engage in discussions or engage in
negotiations with any person (other than Buyer or any of its Affiliates) with
respect to an Acquisition Proposal; (ii) provide information to any person
(other than Buyer or any of its Representatives) in connection with an
Acquisition Proposal; or (iii) enter into any transaction with any person (other
than Buyer or any of its Affiliates) with respect to an Acquisition Proposal.
If Seller, either General Partner, any Principal or any Affiliate or
Representative thereof receives any offer or proposal to enter into discussions
or negotiations relating to any of the above, such party will immediately notify
Buyer in writing as to the identity of the offeror or the party making any such
proposal and the specific terms of such offer or proposal.
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SECTION 4.7 NOTICES OF CERTAIN EVENTS. Prior to the Closing Date, Seller
and Buyer shall promptly notify the other of:
(a) any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
Contemplated Transactions;
(b) any notice or other communication from any Governmental Body in
connection with the Contemplated Transactions; and
(c) any event, condition or circumstance occurring from the date
hereof through the Closing Date that would constitute a violation or breach of
any representation or warranty, whether made as of the date hereof or as of the
Closing Date, or that would constitute a violation or breach of any covenant of
any party contained in this Agreement.
SECTION 4.8 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, Seller and
Buyer will consult with each other before issuing any press release or otherwise
making any public statement with respect to the Contemplated Transactions, and
will not issue any such press release or make any such public statement without
the prior approval of Buyer or Seller, as the case may be, except as may be
required by applicable Law in which event the other party shall have the right
to review and comment upon (but not approve) any such press release or public
statement prior to its issuance.
SECTION 4.9 COVENANT NOT-TO-COMPETE. During the period commencing on the
Closing Date and ending on the earlier of (i) the date Buyer or its successors
or assigns shall cease operation of the Business or (ii) five years thereafter
(the "TERM"):
(a) In order to preserve the value of the Assets being sold to Buyer,
each of Seller, FRE and the Shareholders agrees that it will not, directly or
indirectly, as a partner, officer, employee, director, stockholder, proprietor,
consultant, representative, agent or otherwise become or be interested in, or
associate with or render assistance to, any person engaged in the ownership,
operation and/or management of any (i) water park located within 100 miles of
the Park; or (ii) amusement park, theme park, mini-theme park or family
amusement or entertainment center located within 50 miles of the Park, provided
that Seller and the Shareholders may engage in the ownership, operation and/or
management of a family entertainment center within such 50 mile radius provided
that such center is within a one (1) mile radius of the locations specified in
SCHEDULE 4.9 within the cities of San Xxxxxx, San Xxxxx, Union City and San
Xxxx. Each of R&B and the Members agrees that it will not directly or
indirectly, as a partner, officer, employee, director, stockholder, proprietor,
consultant, representative, agent or otherwise become or be interested in, or
associate with or render assistance to, any person engaged in the ownership,
operation, and/or management of any waterpark located within 50 miles of the
Park. The foregoing provisions shall not, however, prohibit (x) the ownership
by any person of not more than five percent (5%) of any class of outstanding
equity securities listed for trading on a national securities exchange or
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publicly traded in the over-the-counter market which engages in any of such
businesses; or (y) the employment of Xxxxxx Xxxxx by any person.
(b) Each of Seller, the General Partners and the Principals agrees
that it will not, directly or indirectly, during the Term, for its own benefit
or for the benefit of any other entity or person knowingly solicit the
professional services of any employee, agent or consultant of Buyer or any
Affiliate of Buyer or otherwise interfere with the relationship between Buyer or
any Affiliate and any of such persons.
(c) After the Closing, neither Seller, nor any General Partner,
Principal or Seller's Representative will, directly or indirectly, use, disclose
or make available to anyone (other than Buyer) any confidential information
concerning the ownership and/or operation of the Park (the "CONFIDENTIAL
INFORMATION"), except to the extent that such Confidential Information has been
made publicly available by Buyer. The Confidential Information includes,
without limitation, the business practices, financial information, customer and
prospective customers names, suppliers and prospective suppliers names, leads
and account information, mailing lists, computer programs, advertising campaigns
(including, without limitation, displays, drawings, memoranda, designs, styles
or devices), employee names, compensation and benefit information of Seller or
the General Partners pertaining to the Park. In the event that Seller, either
General Partner or any Principal is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, Seller, such General Partner or such Principal shall
notify Buyer promptly of the request or requirement so that Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
Section 4.9(c). If, in the absence of a protective order or the receipt of a
waiver hereunder, Seller, either General Partner or a Principal is, on the
advice of counsel, compelled to disclose any Confidential Information to the
tribunal or else stand liable for contempt, Seller, such General Partner or such
Principal may disclose the Confidential Information to the tribunal; provided
that Seller, such General Partner or such Principal shall use its best efforts
to obtain, at the request of Buyer, an order or other assurance that
confidential treatment shall be accorded to such portion of the Confidential
Information required to be disclosed as Buyer shall designate.
(d) The parties agree that a violation of the foregoing agreements
not to compete or disclose, or any provision thereof, will cause irreparable
damage to Buyer, and Buyer shall be entitled (without any requirement of posting
a bond or other security), in addition to any other rights and remedies which it
may have, at law or in equity, to an injunction enjoining and restraining
Seller, any General Partner, Principal and/or Representative thereof from doing
or continuing to do any such act or any other violations or threatened
violations of this Section 4.9.
(e) The parties hereto agree that the covenant set forth in this
Section 4.9 (the "Covenant") is reasonable with respect to its duration,
geographical area and scope. The Covenant is expressly intended to conform with
Section 16601 of the California Business and Professional Code. If the final
judgment of a court of competent jurisdiction
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declares that any term or provision of this Section 4.9 is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
SECTION 4.10 EXPENSES. Buyer and Seller shall each pay 50% of the
expenses incurred in connection with any filing under the HSR Act and the title
insurance and survey referred to in Section 5.3(f). Except as otherwise
specifically provided in this Agreement, Buyer, on the one hand, and Seller and
the General Partners on the other hand, shall bear their respective expenses, in
each case, incurred in connection with the preparation, execution and
performance of this Agreement and the Contemplated Transactions, including,
without limitation, all fees and expenses of their respective Representatives.
SECTION 4.11 TAX MATTERS. (a) Seller shall provide Buyer with a
clearance certificate or similar document(s) that may be required by the Tax
Authority of any jurisdiction in order to relieve Buyer of any obligation to
withhold any portion of the Purchase Price.
(b) Prior to Seller's filing of any Tax Return for its Taxable year
ended December 31, 1996, Seller shall provide Buyer with a copy of such Tax
Return at least ten business days prior to the date on which Seller gives notice
to Buyer that Seller will file such Return. Seller will prepare such Tax
Returns and compute the amount of its income and the Tax liability owed by it,
if any, in accordance and consistent with the past custom and practice of Seller
in filing its Tax Returns. Seller shall timely pay all Taxes (including
payments of estimated Taxes) that are shown as due and payable on such Tax
Returns.
SECTION 4.12 EMPLOYEE MATTERS.
(a) On the Closing Date, Buyer shall offer employment to such
employees of the Business as it shall determine in its sole discretion, which
offer will include employee benefits that are comparable to those offered by
Buyer or its Affiliates to their comparable employees as of the Closing Date,
PROVIDED, HOWEVER, that any offer of employment shall be contingent upon the
Closing actually occurring. All such employees who accept Buyer's offer of
employment will become employees of Buyer ("TRANSFERRED EMPLOYEES") as of the
Closing Date.
(b) Seller and FRE shall retain responsibility and complete liability
for all benefits earned by the Transferred Employees through the Closing Date
under Seller's or any of the General Partners' Employee Benefit Plans and shall
pay or cause to be paid to each Transferred Employee the accrued benefit of such
Transferred Employee thereunder in
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accordance with the terms of such Employee Benefit Plans. No assets held in
trust in respect of any Employee Benefit Plan of Seller or any of the General
Partners shall be transferred to Buyer or to any plan adopted or maintained by
Buyer.
(c) Seller shall bear the entire cost and expense of wages, salaries,
bonuses (including all bonuses based on or related to the results of operations
of the Business during its 1996 season, whether payable prior to, on or after
the Closing Date (the "1996 BONUSES"), severance obligations, worker's
compensation claims, and any other direct or indirect compensation or employee
benefits (whether arising under Seller's or any of the General Partners'
Employee Benefit Plans or otherwise) of all employees of the Business for all
periods ending on or prior to the Closing Date, irrespective of time at which
any claims therefor are made. For purposes hereof, an expense will be deemed to
be incurred when the services related thereto have been rendered and a
disability shall be deemed to have occurred on the date of the applicable
accident or trauma rather than the date upon which any determination is made
concerning the existence of the disability.
(d) Neither Buyer nor Seller intend this Section to create any rights
or interests, except as between Buyer and each of Seller and the General
Partners, and no present or future employees thereof (or any dependents of such
employees) will be treated or deemed as third party beneficiaries in or under
this Agreement.
SECTION 4.13 CERTAIN RENEWALS. With respect to each Permit which may
expire prior to the Closing Date or within sixty days thereafter, Seller and FRE
shall (i) timely file with the appropriate Governmental Bodies applications for
renewal of each such Permit (the "APPLICATIONS"); (ii) deliver to Buyer true and
complete copies of such Applications; (iii) diligently prosecute such
Applications prior to Closing; and (iv) cooperate fully with all Governmental
Bodies in the processing of such Applications.
SECTION 4.14 COLLECTION OF ACCOUNTS RECEIVABLE. From and after the
Closing Date, Buyer shall be solely responsible for collecting the accounts
receivable of Seller existing on the Closing Date (the "RECEIVABLES") and,
except as provided herein, neither Seller nor any General Partner shall take any
action to collect any such Receivables. Buyer shall give prompt written notice
to Seller of any amount collected in respect of any Receivable and shall
promptly remit such amount to Seller. Any amount received without designation
of the invoice to which it should be applied shall first be applied to the
Receivables due from such account debtor. Any amount received by Buyer from any
account debtor, which is designated by such account debtor as applicable to a
receivable other than a Receivable, shall be the property of Buyer and shall be
applied by Buyer to the balance then due and owing by such account debtor to
Buyer. With respect to any Receivable that is not collected within 90 days
following the Closing Date, Buyer shall either (a) make payment to Seller of
such Receivable on behalf of the account debtor or (b) consent in writing to the
commencement by Seller, at its expense, of legal action to collect such
Receivable.
SECTION 4.15 TRANSFER TAXES; ALLOCATIONS. (a) All excise, sales, value
added, use, registration, stamp, transfer and similar Taxes, including, without
limitation, any
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real estate transfer taxes relating to the Real Property or the Lease, any
personal property transfer Taxes relating to the Assets, incurred in connection
with this Agreement and the Contemplated Transactions shall be borne equally by
Seller and Buyer. Buyer and Seller shall cooperate in providing each other
appropriate resale exemption certificates and other appropriate Tax
documentation and related information at or prior to Closing, as required by
law.
(b) Real estate taxes, personal property taxes, water and sewer
charges, general and special assessments and general and special utility charges
and other similar operating expenses relating to the Business shall be
apportioned at the Closing as of the Closing Date. At the Closing, Buyer and
Seller shall reimburse the other party, as appropriate, for amounts payable
pursuant to this Section 4.15(b).
SECTION 4.16 DISCHARGE OF POTENTIAL LIABILITIES. Seller agrees to pay and
discharge when due all claims of creditors of Seller that may be asserted
against Buyer or Parent except with respect to the Assumed Liabilities.
SECTION 4.17 ACCESS. After the Closing and from time to time, each party
hereto shall permit the other parties and their Representatives to have access
during regular business hours and upon reasonable notice, to inspect and copy
agreements, records, books and other documents that are included in or relate to
the Assets or the Business and identified with reasonable particularity,
wherever located, for the purposes of (i) preparing Tax Returns and financial
statements and responding to Tax audits, and (ii) prosecuting or defending any
Claim, which arises out of or relates to the Business or the Assets. Each party
shall cooperate fully with the other party in connection with the foregoing.
If, after the Closing, any party determines to destroy any agreements, records,
books or documents referred to above, it will give to the other party at least
two months' prior written notice thereof, and such other party shall have the
right during such two-month period upon reasonable notice and during regular
business hours to take possession of any such agreements, records, books or
documents.
SECTION 4.18 STRUCTURING. Seller acknowledges that Buyer may prior to
Closing propose an alternative structure for the Contemplated Transactions and
agrees that, unless in the reasonable opinion of Seller such alternative
adversely affects the rights and obligations of Seller, the General Partners or
the Principals or such alternative structure results in a net expense to such
parties, the parties at or prior to Closing shall enter into such amendments
hereto or other instruments and documents as shall be required to effect such
alternative structure.
SECTION 4.19 ADMISSIONS. For a period of ten (10) years following the
Closing Date, Buyer shall provide R&B with 150 single day admission tickets to
the Park per year upon its written request.
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ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The obligations
of Seller and Buyer to consummate the Contemplated Transactions are subject to
the satisfaction of the following conditions, which, in the case of Section
5.1(c), may be waived by Buyer and Seller:
(a) HSR ACT. Any applicable waiting period under the HSR Act
relating to the Contemplated Transactions shall have expired.
(b) NO INJUNCTION. No provision of any applicable Law and no Order
shall prohibit the consummation of the Contemplated Transactions.
(c) NO PROCEEDING OR LITIGATION. No Claim instituted by any person
(other than Buyer, Seller, the General Partners, the Principals or their
respective Affiliates), shall have been commenced or pending against Seller,
Buyer or any of their respective Affiliates, officers or directors which Claim
seeks to restrain, prevent, change or delay in any material respect the
Contemplated Transactions or seeks to challenge any of the material terms or
provisions of this Agreement or seeks material damages in connection with any of
such transactions.
SECTION 5.2 CONDITIONS TO THE OBLIGATIONS OF SELLER. All obligations of
Seller hereunder are subject, at the option of Seller, to the fulfillment prior
to or at the Closing of each of the following further conditions:
(a) PERFORMANCE. Buyer shall have performed and complied with all
agreements, obligations and covenants required by this Agreement to be performed
or complied with by it at or prior to the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer and Parent contained in this Agreement and in any
certificate or other writing delivered by Buyer pursuant hereto shall be true at
and as of the Closing Date as if made at and as of such time.
(c) PURCHASE PRICE. Buyer shall have paid to Seller by wire transfer
of immediately available funds an amount equal the Purchase Price less the sum
of the Escrow Funds and the Prepaid Deposits. Buyer shall have delivered to the
Escrow Agent, in accordance with the terms of the Escrow Agreement, the Escrow
Funds.
(d) BUYER REQUIRED CONSENTS. All Buyer Required Consents shall have
been obtained.
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(e) DOCUMENTATION. There shall have been delivered to Seller the
following:
(i) A certificate, dated the Closing Date, of the Chairman of
the Board, the President or Chief Financial Officer of Buyer and Parent
confirming the matters set forth in Section 5.2(a) and (b) hereof.
(ii) A certificate, dated the Closing Date, of the Secretary or
Assistant Secretary of each such party certifying, among other things, that
attached or appended to such certificate (A) is a true and correct copy of its
Certificate of Incorporation and all amendments if any thereto as of the date
thereof; (B) is a true and correct copy of its By-laws as of the date thereof;
(C) is a true copy of all corporate actions taken by it, including resolutions
of its board of directors authorizing the execution, delivery and performance of
this Agreement, and each other Transaction Document to be delivered by such
party pursuant hereto; and (D) are the names and signatures of its duly elected
or appointed officers who are authorized to execute and deliver this Agreement
and any certificate, document or other instrument in connection herewith.
(iii) Evidence of the good standing and corporate existence of
Buyer and Parent reasonably requested by Seller.
(iv) A signed opinion of Buyer's counsel, dated the Closing Date
and addressed to Seller, substantially in the form of opinion annexed as EXHIBIT
5.2B hereto.
(v) Copies of all Buyer Required Consents.
(vi) An executed copy of the Escrow Agreement.
(vii) An executed copy of an assumption agreement substantially in
the form annexed as EXHIBIT 5.2C (the "ASSUMPTION AGREEMENT").
SECTION 5.3 CONDITIONS TO THE OBLIGATIONS OF BUYER. All obligations of
Buyer hereunder are subject, at the option of Buyer, to the fulfillment prior to
or at the Closing of each of the following further conditions:
(a) PERFORMANCE. Seller shall have performed and complied with all
agreements, obligations and covenants required by this Agreement to be performed
or complied with by it or him at or prior to the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller, the General Partners and Principals contained in this
Agreement and in any certificate or other writing delivered by Seller pursuant
hereto shall be true at and as of the Closing Date as if made at and as of such
time.
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(c) ENVIRONMENTAL MATTERS. Buyer shall have received environmental
reports prepared by a licensed, qualified environmental engineer acceptable to
Buyer on the Real Property confirming the accuracy of the representations and
warranties in Article II with respect to environmental matters.
(d) SELLER REQUIRED CONSENTS. All Seller Required Consents shall
have been obtained.
(e) SACRAMENTO AGREEMENT. The transactions contemplated by the
agreement (the "SACRAMENTO AGREEMENT") among Buyer, Parent, FRE and the
Shareholders with respect to the acquisition by Buyer of substantially all of
the assets of FRE comprising the business operations of Waterworld
USA/Sacramento and Paradise Island/Sacramento shall have been consummated.
(f) SURVEY AND TITLE INSURANCE. Buyer shall have procured (i) title
insurance with respect to the Real Property (including easements, rights-of-way,
conditions and restrictions of record), which insurance shall be subject only to
Permitted Liens and such standard or other exceptions on the extended coverage
ALTA Form (1992) title insurance policy as are reasonably acceptable to Buyer,
from a nationally recognized title insurance company qualified to do business in
California reasonably satisfactory to Buyer and Seller in an amount reasonably
satisfactory to Buyer; and (ii) a recent survey, by a licensed surveyor selected
by Buyer, of the Real Property, showing the boundaries, monuments, publicly
dedicated access, easements and rights-of-way of record, improvements (including
all Improvements) and encroachments, if any, and otherwise complying with ALTA-
ASCM Land Title Survey requirements.
(g) DISCHARGE OF CERTAIN LIABILITY. Seller shall have delivered to
Buyer evidence, reasonably satisfactory to Buyer, of the payment and discharge
by Seller of the Percentage Rent, the 1996 Bonuses, the fees and commissions
described on Schedule 2.20, and all other amounts payable by or on behalf of
Seller on or prior to the Closing Date under Employee Benefit Plans.
(h) MANAGEMENT AGREEMENT. Effective the Closing Date, the management
agreement (the "MANAGEMENT AGREEMENT") by and between FRE and Seller, dated
September 28, 1994, shall have been terminated and be of no further force and
effect.
(i) DOCUMENTATION. There shall have been delivered to Buyer the
following:
(i) A certificate dated the Closing Date, of the Chairman of the
Board or President of Seller and the General Partners, confirming the matters
set forth in Sections 5.3(a) and (b).
(ii) Certificates, dated the Closing Date, of the Secretary or
Assistant Secretary of each General Partner certifying, among other things, that
attached or
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appended to such certificate (A) are true and correct copies of all filings made
with any Governmental Body in connection with its formation and the Agreement of
General Partnership of Seller and all amendments, if any, thereto as of the date
thereof; (B) is a true copy of the resolutions of the board of directors or
managers of such General Partners authorizing the execution, delivery and
performance of this Agreement by each General Partner and Seller, and each other
Transaction Document to be delivered by Seller pursuant hereto; and (D) are the
names and signatures of the duly elected or appointed officers of such General
Partners who are authorized to execute and deliver this Agreement and any
certificate, document or other instrument in connection herewith.
(iii) Evidence of the partnership existence of Seller reasonably
requested by Buyer.
(iv) A signed opinion of Seller's counsel, dated the Closing
Date, addressed to Buyer, substantially in the form of opinion annexed as
EXHIBIT 5.3A hereto.
(v) Copies of all Seller Required Consents and all Permits.
(vi) (A) certified true and complete copies of the Lease and all
amendments and modifications thereof, and (B) an executed consent to assignment,
lien and estoppel certificate from the lessor under the Lease, substantially in
the form of EXHIBIT 5.3B hereto (the "LEASE DOCUMENTS").
(vii) An executed copy of the Escrow Agreement.
(viii) Possession and control of the Assets.
(ix) An executed copy of a Xxxx of Sale and Assignment
substantially in a form annexed hereto as EXHIBIT 5.3C ("the XXXX OF SALE").
(x) An executed copy of the Assumption Agreement.
(xi) An executed copy of a release (the "PARTNERSHIP RELEASE") by
the General Partners, releasing and discharging Seller from any and all Claims
and Liabilities against Seller arising out of or relating to the Business or the
operations of Seller except for any such Claims and Liabilities which any of the
General Partners may have against Seller under the Agreement of General
Partnership.
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ARTICLE VI
INDEMNIFICATION
SECTION 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. (a)
Notwithstanding any right of Buyer fully to investigate the affairs of Seller
and notwithstanding any knowledge of facts determined or determinable by Buyer
pursuant to such investigation or right of investigation, Buyer has the right to
rely fully upon the representations, warranties, covenants and agreements of
Seller and the General Partners contained in this Agreement, or listed or
disclosed on any Schedule hereto or in any instrument delivered in connection
with or pursuant to any of the foregoing. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing hereunder. Notwithstanding the foregoing, all
representations and warranties of Seller, the General Partners or Principals
contained in this Agreement, on any Schedule hereto or in any instrument
delivered in connection with or pursuant to this Agreement (other than the
representations and warranties as to title in Section 2.9 and the
representations and warranties in Sections 2.13, 2.14, and 2.19, which shall
terminate and expire upon expiration of the applicable statute of limitations)
shall terminate and expire 18 months after the Closing Date; PROVIDED, HOWEVER,
that the liability of Seller, any General Partner or any Principal shall not
terminate as to any specific claim or claims of the type referred to in Section
6.2 hereof, whether or not fixed as to liability or liquidated as to amount,
with respect to which Seller, such General Partner or such Principal has been
given specific notice on or prior to the date on which such liabilities would
otherwise terminate pursuant to the terms of this Section 6.1(a) and PROVIDED,
FURTHER, that the termination of any such representation and warranty shall not
affect the ability of Buyer to seek indemnification under Sections 6.2(a)(iii)
or 6.2(b)(iii) below.
(b) All representations and warranties of Buyer shall terminate and
expire 18 months after the Closing Date; PROVIDED, HOWEVER, that the liability
of Buyer shall not terminate as to any specific claim or claims of the type
referred to in Section 6.3 hereof, whether or not fixed as to liability or
liquidated as to amount, with respect to which Buyer has been given specific
notice on or prior to the date on which such Liability would otherwise terminate
pursuant to the terms of this Section 6.1(b).
SECTION 6.2 OBLIGATION OF SELLER, GENERAL PARTNERS AND PRINCIPALS TO
INDEMNIFY. Subject to the provisions of Section 6.5: (a) Seller and FRE,
jointly and severally, agree to indemnify, defend and hold harmless Buyer (and
its respective directors, officers, employees, Affiliates, successors and
assigns) from and against all Claims, losses, Liabilities, damages,
deficiencies, judgments, settlements, costs of investigation or other expenses
(including interest, penalties and reasonable attorneys' fees and disbursements
and expenses incurred in enforcing this indemnification) (collectively, the
"LOSSES") suffered or incurred by Buyer or any of the foregoing persons arising
out of (i) any breach of the representations and warranties of Seller and FRE
contained in this Agreement or in the Schedules or any Transaction Document;
(ii) any breach of the covenants and agreements of
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Seller or FRE contained in this Agreement or in the Schedules or any Transaction
Document; or (iii) any Retained Liabilities.
(b) R&B agrees to indemnify, defend and hold harmless Buyer (and its
respective directors, officers, employees, Affiliates, successors and assigns)
from and against all Losses suffered or incurred by Buyer or any of the
foregoing persons arising out of (i) any breach of the representations and
warranties of R & B contained in this Agreement or in the Schedules or any
Transaction Document or (ii) any breach of the covenants and agreements of R&B
contained in this Agreement or in the Schedules or any Transaction Document.
(c) Each Shareholder agrees to indemnify, defend and hold harmless
Buyer (and its respective directors, officers, employees, Affiliates, successors
and assigns) from and against all Losses suffered or incurred by Buyer or any of
the foregoing persons arising out of (i) any breach of the representations and
warranties of such Shareholder contained in this Agreement; (ii) any breach of
the representations and warranties of Seller and FRE contained in this Agreement
or in the Schedules or any Transaction Document; or (iii) any Retained
Liabilities, PROVIDED that the obligations of Shareholders to indemnify Buyer in
respect of the Losses specified in clauses (ii) and (iii) above shall be several
and in proportion (which proportion shall be determined based upon 100% of such
Losses in the aggregate) to the Shareholders' respective distributions of
proceeds from FRE in connection with the Contemplated Transactions.
(d) Each Member agrees to indemnify, defend and hold harmless Buyer
(and its respective directors, officers, employees, Affiliates, successors and
assigns) from and against all Losses suffered or incurred by Buyer or any of the
foregoing persons arising out of (i) any breach of the representations and
warranties of such Member contained in this Agreement, or (ii) any breach of the
representations of R&B contained in this Agreement or in the Schedules or any
Transaction Document, PROVIDED that the obligations of the Members to indemnify
Buyer in respect of the Losses specified in clause (ii) above shall be several
and in proportion (which proportion shall be determined based upon 100% of such
Losses in the aggregate) to the Members' respective distributions of proceeds
from R&B in connection with the Contemplated Transactions.
SECTION 6.3 OBLIGATION OF BUYER TO INDEMNIFY. Buyer and Parent agree to
indemnify, defend and hold harmless each of Seller and the General Partners (and
any director, officer, employee, Affiliate or successors and assigns of any
thereof) from and against any Losses suffered or incurred by Seller, either
General Partner or any of the foregoing persons arising out of (i) any breach of
the representations and warranties of Buyer and Parent or of the covenants and
agreements of Buyer and Parent contained in this Agreement or in the Schedules
or any Transaction Documents; or (ii) any Assumed Liabilities.
SECTION 6.4 NOTICE AND OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS. (a)
Promptly after receipt by any party hereto (the "INDEMNITEE") of notice of any
demand,
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claim or circumstance which would or might give rise to a claim or the
commencement (or threatened commencement) of any action, proceeding or
investigation (an "ASSERTED LIABILITY") that may result in a Loss, the
Indemnitee shall give prompt notice thereof (the "CLAIMS NOTICE") to the party
or parties obligated to provide indemnification pursuant to Section 6.2 or 6.3
(collectively, the "INDEMNIFYING PARTY"). The Claims Notice shall describe the
Asserted Liability in reasonable detail and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Loss that has been
or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to defend, at its own expense
and with its own counsel, any Asserted Liability unless (i) the Asserted
Liability seeks an Order, injunction or other equitable or declaratory relief
against the Indemnitee or (ii) the Indemnitee shall have reasonably concluded
that (x) there is a conflict of interest between the Indemnitee and the
Indemnifying Party in the conduct of such defense or (y) the Indemnitee shall
have one or more defenses not available to the Indemnifying Party. If the
Indemnifying Party elects to defend such Asserted Liability, it shall within
thirty days (or sooner, if the nature of the Asserted Liability so requires)
notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the defense of such
Asserted Liability. If the Indemnifying Party elects not to defend the Asserted
Liability, is not permitted to defend the Asserted Liability by reason of the
first sentence of this Section 6.4(b), fails to notify the Indemnitee of its
election as herein provided or contests its obligation to indemnify under this
Agreement with respect to such Asserted Liability, the Indemnitee may pay,
compromise or defend such Asserted Liability at the sole cost and expense of the
Indemnifying Party. Notwithstanding the foregoing, neither the Indemnifying
Party nor the Indemnitee may settle or compromise any claim over the reasonable
written objection of the other, PROVIDED that the Indemnitee may settle or
compromise any claim as to which the Indemnifying Party has failed to notify the
Indemnitee of its election under this Section 6.4(b) or as to which the
Indemnifying Party is contesting its indemnification obligations hereunder. In
any event, the Indemnitee and the Indemnifying Party may participate, at their
own expense, in the defense of any Asserted Liability. If the Indemnifying
Party chooses to defend any Asserted Liability, the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense. Any Losses of
any Indemnitee for which indemnification is available hereunder shall be paid
upon written demand therefor.
SECTION 6.5 LIMITS ON INDEMNIFICATION. (a) Buyer's remedies with respect
to Losses specified in Section 6.2 shall be satisfied first by the assertion of
its rights under the Escrow Agreement in respect of the Escrow Funds; PROVIDED,
HOWEVER, that if the aggregate amount of such Losses shall be in excess of the
amount of the Escrow Funds or if such Losses shall arise after termination or
expiration of the Escrow Agreement, then the Seller, FRE, R&B, the Shareholders
and the Members shall be obligated to indemnify Buyer in respect of all Losses
not satisfied by delivery to Buyer of Escrow Funds to the extent provided in
this Article VI.
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(b) In the event that any Order of any Governmental Body shall have
been issued in favor of Buyer (or its assignees) against Seller, FRE, R&B or any
Principal with respect to the indemnification of Buyer's Losses hereunder, Buyer
shall enforce such Order first against Seller or FRE (with respect to Orders
against Seller, FRE or any Shareholder only) or R&B (with respect to Orders
against R&B or any Member only) and then, to the extent Buyer has not received
payment for such Losses from Seller, FRE or R&B, any Shareholder (with respect
to Orders against Seller, FRE or any Shareholder only) or any Member (with
respect to Orders against R&B or any Member only) PROVIDED, HOWEVER, that if
Buyer shall not (after diligent efforts) be able to enforce fully such Order
against Seller, FRE or R&B within 12 months after the date of such Order, Buyer
shall be entitled to enforce such Order against any such Shareholder (with
respect to Orders against Seller, FRE or any Shareholder only) or any Member
(with respect to Orders against R&B or any Member only). Notwithstanding the
foregoing, any Buyer Losses in respect of the sales and use tax dispute
described on SCHEDULE 2.13 shall be fully indemnifiable without regard to the
provisions hereof relating to the Stipulated Amount and, in the event Seller or
Shareholders indemnify Buyer with respect to such Losses, the amount of such
Losses shall not be included in the calculation of the Stipulated Amount.
Notwithstanding anything to the contrary in this Agreement, the Shareholders and
the Members shall be primary obligors together with Seller and the General
Partners and shall not be deemed as sureties or guarantors of the obligations of
Seller or the General Partners pursuant to Article VI, and in furtherance
thereof the Shareholders and Members specifically acknowledge that they are not
entitled to exercise and do hereby waive any rights or defenses available to a
surety or guarantor by reason of Sections 2787-2855 (inclusive) of the
California Civil Code, and any rights or defenses arising out of an election of
remedies by Buyer.
(c) Seller, the General Partners and the Principals shall not be
liable to Buyer for any Loss arising under Section 6.2 above (A) in respect of
any individual Loss of less than $5,000 and (B) unless the aggregate amount of
all such Losses exceeds $50,000 in the aggregate (the "Stipulated Amount"), in
which case Seller shall be liable for the full amount of such Losses in excess
of the Stipulated Amount. Notwithstanding any provision of this Agreement, the
Seller, the General Partners and the Principals shall not be obligated to pay,
in the aggregate, an amount in excess of $2,045,000 pursuant to the provisions
of this Article VI.
SECTION 6.6 ADJUSTMENT. It is the intent of the parties that any amounts
paid under Sections 6.2 or 6.3 shall represent an adjustment of the Purchase
Price and the parties will report such payments consistent with such intent.
Nevertheless, if any payment pursuant to Section 6.2 or 6.3 hereof would be
treated by any Tax Authority as other than a Purchase Price adjustment and
would, on that basis, be includable in the gross income of the Indemnitee that
is reported to such Tax Authority, then such payment shall be increased by the
amount necessary so that the Indemnitee is fully and completely indemnified on
an after-Tax basis.
SECTION 6.7 EXCLUSIVE REMEDY. Except as otherwise explicitly provided in
this Agreement, the parties agree that the indemnification provisions of this
Article VI shall
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constitute the parties' sole and exclusive remedies in respect of this Agreement
and the Contemplated Transactions (other than Claims in the nature of fraud).
ARTICLE VII
SPECIFIC PERFORMANCE; TERMINATION
SECTION 7.1 SPECIFIC PERFORMANCE. Seller acknowledges and agrees that, if
Seller fails to proceed with the Closing in any circumstance other than those
described in clauses (a), (b), (d) or (e) of Section 7.2 below, Buyer will not
have adequate remedies at law with respect to such breach and that, in such
event, Buyer shall be entitled, without the necessity or obligation of posting a
bond or other security, to commence a suit in equity to obtain specific
performance of Seller's obligations under this Agreement. Seller specifically
affirms the appropriateness of such injunctive or other equitable relief in any
such action.
SECTION 7.2 TERMINATION. This Agreement may be terminated and the
Contemplated Transactions may be abandoned at any time prior to the Closing:
(a) By mutual written consent of Seller and Buyer;
(b) By Seller if (i) there has been a material misrepresentation or
breach of warranty on the part of Buyer in the representations and warranties
contained herein and such material misrepresentation or breach of warranty, if
curable, is not cured within 30 days after written notice thereof from Seller;
(ii) Buyer has committed a material breach of any covenant imposed upon it
hereunder and fails to cure such breach within 30 days after written notice
thereof from Seller; or (iii) any condition to Seller's obligations hereunder
becomes incapable of fulfillment through no fault of Seller and is not waived by
Seller, PROVIDED that, on the date of termination, the conditions to Buyer's
obligations hereunder specified in Sections 5.3(a), (b), (c), (d), (g) and (i)
(vi) hereof shall have been satisfied, all comparable conditions to the
obligations of Buyer under the Sacramento Agreement shall have been satisfied
and the Seller and the seller under Sacramento Agreement shall be otherwise
ready, willing, and able to proceed with the Closing hereunder and the closing
under the Sacramento Agreement;
(c) By Buyer, if (i) there has been a material misrepresentation or
breach of warranty on the part of Seller, the General Partners or the Principals
in the representations and warranties contained herein and such material
misrepresentation or breach of warranty, if curable, is not cured within 30 days
after written notice thereof from Buyer; (ii) either Seller or either General
Partner has committed a material breach of any covenant imposed upon it
hereunder and fails to cure such breach within 30 days after written notice
thereof from Buyer; or (iii) any condition to Buyer's obligations hereunder
becomes incapable of fulfillment through no fault of Buyer and is not waived by
Buyer, PROVIDED that, on the date of termination, the conditions to Seller's
obligations hereunder specified in Sections 5.2(a) (b) and (d) hereof shall have
been satisfied, all of the comparable conditions
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to the obligations of seller under the Sacramento Agreement shall have been
satisfied and Buyer shall be otherwise ready, willing and able to proceed with
the Closing hereunder and the closing under the Sacramento Agreement;
(d) By Seller or by Buyer, if there shall be any Law that makes
consummation of the Contemplated Transactions illegal or otherwise prohibited,
or if any Order enjoining Seller or Buyer from consummating the Contemplated
Transactions is entered and such Order shall have become final and
nonappealable; and
(e) By either Seller or Buyer if the Closing shall not have occurred
on or prior to November 30, 1996, provided that (i) if so terminated by Seller,
the conditions specified in the proviso of Section 7.2(b) shall have been
satisfied on the date of termination, and the Seller and the seller under the
Sacramento Agreement shall be otherwise ready, willing and able to proceed with
the Closing and the closing under the Sacramento Agreement, or (ii) if so
terminated by Buyer, the conditions specified in the proviso of Section 7.2(c)
shall have been satisfied on the date of termination and the Buyer shall be then
otherwise ready, willing and able to proceed with the Closing and the closing
under the Sacramento Agreement.
SECTION 7.3 EFFECT OF TERMINATION; RIGHT TO PROCEED. Subject to the
provisions of Section 7.1 hereof, in the event that this Agreement shall be
terminated pursuant to Section 7.2, all further obligations of the parties under
the Agreement shall terminate without further liability of any party hereunder
except (i) to the extent that a party has made a material misrepresentation
hereunder or committed a breach of any material covenant and agreement imposed
upon it hereunder; (ii) to the extent that any condition to a party's
obligations hereunder became incapable of fulfillment because of the breach by a
party of its obligations hereunder and (iii) that the agreements contained in
Sections 4.8 and 4.10 shall survive the termination hereof. In the event that a
condition precedent to its obligation is not met, nothing contained herein shall
be deemed to require any party to terminate this Agreement, rather than to waive
such condition precedent and proceed with the Contemplated Transactions.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, telecopied or mailed (by registered or
certified mail, postage prepaid) as follows:
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(i) If to Buyer or Parent, one copy to:
Premier Parks California Inc.
c/o Premier Parks Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Chairman and CEO
with a copy to:
Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
(ii) If to Seller, one copy to:
Concord Entertainment Company
c/o Family Recreational Enterprises, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxx Xxxxx
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxxxxx, Esq.
(iii) If to FRE or the Shareholders, one copy to:
Family Recreational Enterprises, Inc.
Ferrellgas
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx Xxxxxxx
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(iv) If to R&B or the Members, one copy to:
R&B Entertainment, LLC
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx Xxxxxxx
(b) Each such notice or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in Section 8.1(a) (with confirmation of transmission); or (ii) if
given by any other means, when delivered at the address specified in Section
8.1(a). Any party by notice given in accordance with this Section 8.1 to the
other party may designate another address (or telecopier number) or person for
receipt of notices hereunder. Notices by a party may be given by counsel to
such party.
SECTION 8.2 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits hereto) and the collateral agreements executed in connection with the
consummation of the Contemplated Transactions contain the entire agreement among
the parties with respect to the subject matter hereof and related transactions
and supersede all prior agreements, written or oral, with respect thereto.
SECTION 8.3 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES; PRESERVATION
OF REMEDIES. This Agreement may be amended, superseded, cancelled, renewed or
extended only by a written instrument signed by Seller and Buyer, PROVIDED that
any amendment to the provisions of Article VI relating to the General Partners
or the Principals shall require the written consent of the General Partners or a
majority in interest of the Principals as the case may be. The provisions
hereof may be waived in writing by the party to be charged therewith. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. Except as otherwise
provided herein, the rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies that any party may otherwise have at law
or in equity.
SECTION 8.4 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of California applicable to agreements
made and to be performed entirely within such State, without regard to the
conflict of laws rules thereof.
SECTION 8.5 BINDING EFFECT; NO ASSIGNMENT. This Agreement and all of its
provisions, rights and obligations shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives. This Agreement may not be assigned (including by operation of
Law) by a party without the
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express written consent of Buyer (in the case of assignment by Seller, General
Partner or Principal) or Seller (in the case of assignment by Buyer) and any
purported assignment, unless so consented to, shall be void and without effect.
Notwithstanding the foregoing, Buyer and Seller agree that Buyer may cause one
or more Affiliates, subsidiaries or other entities designated by it to carry out
all or part of the Contemplated Transactions to be carried out by Buyer.
Nothing herein express or implied is intended or shall be construed to confer
upon or to give anyone other than the parties hereto and their respective heirs,
legal representatives and successors any rights or benefits under or by reason
of this Agreement and no other party shall have any right to enforce any of the
provisions of this Agreement.
SECTION 8.6 EXHIBITS. All Exhibits and Schedules attached hereto are
hereby incorporated by reference into, and made a part of, this Agreement.
SECTION 8.7 SEVERABILITY. If any provision of this Agreement for any
reason shall be held to be illegal, invalid or unenforceable, such illegality
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such illegal, invalid or unenforceable provision had never
been included herein.
SECTION 8.8 COUNTERPARTS. The Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the signatories.
SECTION 8.9 THIRD PARTIES. Except as specifically set forth or referred
to herein, nothing herein express or implied is intended or shall be construed
to confer upon or give to any person other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement or the Contemplated Transactions.
SECTION 8.10 FURTHER ASSURANCES. At any time and from time to time after
the Closing Date, upon the request of Buyer, Seller will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged or
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney or assurances as may be reasonably required for the better
transferring, assigning, conveying, granting, assuring and confirming to Buyer,
or for aiding and assisting in the collection of or reducing to possession by
Buyer, any of the Assets to be transferred, conveyed and assigned hereunder or
to vest in Buyer all of Seller's right, title and interest in and to the Assets
being conveyed hereunder. Seller and Buyer will each, respectively, bear their
own costs and expenses incurred in compliance with its obligations under this
Section 8.10.
SECTION 8.11 TITLE AND RISK OF LOSS. Legal title, equitable title and
risk of loss with respect to the Assets and rights to be transferred hereunder
shall not pass to Buyer until the Assets or right is transferred at the Closing
hereunder.
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ARTICLE IX
DEFINITIONS
SECTION 9.1 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"ACQUISITION PROPOSAL" shall mean any proposal for the acquisition of, or
merger or other business combination involving Seller or the sale of any equity
interest in, or the Business or any assets of, Seller (except in the ordinary
course), other than the transactions contemplated by this Agreement.
"AFFILIATE" of any person means any other person directly or indirectly
through one or more intermediary persons, controlling, controlled by or under
common control with such person.
"AGREEMENT" or "THIS AGREEMENT" shall mean, and the words "HEREIN",
"HEREOF" and "HEREUNDER" and words of similar import shall refer to, this
agreement as it from time to time may be amended.
"AGREEMENT OF GENERAL PARTNERSHIP" shall mean the Joint Venture Agreement
of Concord Entertainment Company, a California general partnership, dated as of
September 28, 1994.
The term "AUDIT" or "AUDITED" when used in regard to financial statements
shall mean an examination of the financial statements by a firm of independent
certified public accountants in accordance with generally accepted auditing
standards for the purpose of expressing an opinion thereon.
"CONTRACT" shall mean any contract, agreement, indenture, note, bond,
lease, conditional sale contract, mortgage, license, franchise, instrument,
commitment or other binding arrangement, whether written or oral, and all
modifications and amendments thereto and substitutes thereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
The term "CONTROL", with respect to any person, shall mean the power to
direct the management and policies of such person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other persons by or through stock ownership, agency or otherwise; and the
terms "CONTROLLING" and "CONTROLLED" shall have meanings correlative to the
foregoing.
"DEBT" shall mean (i) money borrowed by or on behalf of Seller from any
person; (ii) any indebtedness of Seller arising under leases required to be
capitalized under
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GAAP or evidenced by a note, bond, debenture or similar instrument; (iii) any
indebtedness of Seller arising under purchase money obligations or representing
the deferred purchase price of property and services (other than current trade
payables incurred in the ordinary course of the Business); and (iv) any
Liability of Seller under any guaranty, letter of credit, performance credit or
other agreement having the effect of assuring a creditor against loss.
"DEFERRED COMPENSATION LIABILITIES" shall mean all payments required to be
made by Seller or any of the General Partners under any Employee Benefit Plan.
"ENVIRONMENTAL LAWS" shall mean any and all Laws (including common law),
Orders, Permits, agreements or any other requirement or restriction promulgated,
imposed, enacted or issued by any federal, state, local and foreign Governmental
Bodies relating to the environment, including the emission, discharge or Release
of pollutants, contaminants, Hazardous Substances or wastes into the environment
(which includes, without limitation, ambient air, surface water, ground water,
or land), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" shall mean generally accepted accounting principles in effect on the
date hereof as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States.
"HAZARDOUS SUBSTANCES" shall mean any dangerous, toxic, radioactive,
caustic or otherwise hazardous material, pollutant, contaminant, chemical, waste
or substance defined, listed or described as any of such in or governed by any
Environmental Law, including but not limited to urea-formaldehyde,
polychlorinated biphenyls, asbestos or asbestos-containing materials, radon,
explosives, known carcinogens, petroleum and its derivatives, petroleum
products, flammable materials, radioactive materials, controlled or toxic
substances, any pollutant or contaminant, or any substance which might cause any
injury to human health or safety or to the environment or might subject the
owner or operator of the Real Property to any Regulatory Actions or Claims.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INVENTORY" shall mean, as of any date, collectively, all inventories of
prize materials, food, beverages (alcoholic and nonalcoholic), merchandise, and
other products owned by or on behalf of Seller and held for resale or for
distribution, together with
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packaging and samples thereof, operating supplies and spare or maintenance parts
owned by Seller as of such date.
"IRS" shall mean the Internal Revenue Service.
"LEASE" shall mean the ground lease between the City of Concord and Seller,
dated September 28, 1994.
"LIABILITY" shall mean any direct or indirect indebtedness, liability,
assessment, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit, performance
credits or with respect to insurance loss accruals).
"LIEN" shall mean, with respect to any Asset, any mortgage, lien (including
mechanics, warehousemen, laborers and landlords liens), claim, pledge, charge,
security interest, preemptive right, right of first refusal, option, judgment,
title defect, or encumbrance of any kind in respect of or affecting such Asset.
The term "PERSON" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity,
including a government or political subdivision or an agency or instrumentality
thereof.
"REGULATORY ACTIONS" shall mean any Claim, demand, action, suit, summons,
citation, directive, investigation, litigation, inquiry, enforcement action,
Lien, encumbrance, restriction, settlement, remediation, response, clean-up or
closure arrangement or other remedial obligation or proceeding brought or
instigated by any Governmental Body in connection with any Environmental Law,
including, without limitation, the listing of the Real Property on any list of
contaminated or potentially contaminated sites or potential or verified
Hazardous Waste sites under any Environmental Law, civil, criminal and/or
administrative proceedings, whether or not seeking costs, damages, penalties or
expenses.
"RELEASE" shall mean the intentional or unintentional, spilling, leaking,
disposing, discharging or disturbance of, or emitting, depositing, injecting,
leaching, escaping, or any other release or threatened release to or from,
however defined, any Hazardous Substance in violation of any Environmental Law.
"REPORTABLE EVENT" shall mean any of the events described in Section
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"SUBSIDIARY" of Seller or Buyer shall mean any person of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are owned
directly or indirectly through one or more intermediaries, or both, by Seller or
Buyer.
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"TAX" (including, with correlative meaning, the terms "TAXES" and
"TAXABLE") shall mean (i) any net income, gross income, gross receipts, sales,
use, ad valorem, transfer, transfer gains, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, rent, recording,
occupation, premium, real or personal property, intangibles, environmental or
windfall profits tax, alternative or add-on minimum tax, customs duty or other
tax, fee, duty, levy, impost, assessment or charge of any kind whatsoever
(including but not limited to taxes assessed to real property and water and
sewer rents relating thereto), together with any interest and any penalty,
addition to tax or additional amount imposed by any Governmental Body (domestic
or foreign) (a "TAX AUTHORITY") responsible for the imposition of any such tax,
with respect to Seller, the Business or the Assets (or the transfer thereof);
(ii) any liability for the payment of any amount of the type described in the
immediately preceding clause (i) as a result of Seller being a member of an
affiliated or combined group with any other corporation at any time on or prior
to the Closing Date; and (iii) any liability of Seller for the payment of any
amounts of the type described in the immediately preceding clause (i) as a
result of a contractual obligation to indemnify any other person.
"TAX RETURN" shall mean any return or report (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be supplied to any Tax Authority.
"TRANSACTION DOCUMENTS" shall mean, collectively, this Agreement, and each
of the other agreements and instruments to be executed and delivered by all or
some of the parties hereto in connection with the consummation of the
transactions contemplated hereby.
(b) The following terms are defined in the following sections of this
Agreement:
Term Section
---- -------
Annual Statements 2.5(a)
Applications 4.13
Asserted Liability 6.4(a)
Assets 1.1(a)
Assumed Liabilities 1.2(a)
Assumption Agreement 5.2(e)
Xxxx of Sale 5.3(l)
Business Recital
Buyer Recital
Buyer Required Consents 3.2
Claims 2.12
Claims Notice 6.4(a)
Closing 1.5
Closing Date 1.5
Concord 2.3
Concord Agreement 5.3(e)
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Condition of the Business 2.8
Contemplated Transactions 2.1
Employee Benefit Plan 2.14(a)
Environmental Liabilities 1.2(b)
Equipment 1.1(a)
ERISA Affiliate 2.14(a)
ERISA Plan 2.14(a)
Escrow Agent 1.3(b)
Escrow Agreement 1.3(b)
Escrow Funds 1.3(b)
Excluded Assets 1.1(b)
FRE Recital
General Partners Recital
Governmental Bodies 2.17
Improvements 1.1(a)
Indemnifying Party 6.4(a)
Indemnitee 6.4(a)
Insurance Policies 2.16
Intellectual Property Rights 1.1(a)
Interim Statements 2.5(a)
Land 1.1(a)
Latest Balance Sheet 2.6
Latest Balance Sheet Date 2.6
Laws 2.17
Lease Documents 5.3(i)(vi)
Losses 6.2
Management Agreement 5.3(h)
1996 Bonus 4.12(c)
Orders 2.17
Park Recital
Partnership Release 5.3
Percentage Rent 1.2(b)
Permits 1.1(a)
Permitted Liens 2.9(a)
Prepaid Deposits 1.1(a)
Principals Recital
Purchase Price 1.3(a)
R&B Recital
Real Property 1.1(a)
Receivables 4.14
Representatives 4.2
Retained Liabilities 1.2(b)
Sacramento Agreement 5.3
Seller Recital
Seller Required Consents 2.2
Shareholders Recital
Term 4.9
Territory 4.9(a)
Transferred Contracts 1.1(a)
Transferred Employees 4.12(a)
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SECTION 9.2 INTERPRETATION. Unless the context otherwise requires, the
terms defined in Section 9.1 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms defined herein. All accounting terms defined in Section 9.1,
and those accounting terms used in this Agreement not defined in Section 9.1,
except as otherwise expressly provided herein, shall have the meanings
customarily given thereto in accordance with GAAP. When a reference is made in
this Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
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IN WITNESS WHEREOF, the undersigned have executed this Asset Purchase
Agreement as of the date set forth above.
PREMIER PARKS ACQUISITION CORP.
By:
--------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board and
Chief Executive Officer
PREMIER PARKS INC.
By:
--------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board and
Chief Executive Officer
CONCORD ENTERTAINMENT COMPANY
By:FRE, INC. (FAMILY RECREATIONAL
ENTERPRISES, INC.), general partner
By:
--------------------------------
Name:
Title:
By:R&B ENTERTAINMENT LLC,
general partner
By:
--------------------------------
Name:
Title:
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FRE, INC. (FAMILY RECREATIONAL
ENTERPRISES, INC.)
By:
------------------------------
Name:
Title:
R&B ENTERTAINMENT LLC
By:
------------------------------
Name:
Title:
SHAREHOLDERS:
THE XXXXX X. XXXXXXX REVOCABLE
TRUST
By:
--------------------------------
Xxxxx X. Xxxxxxx, Trustee
THE XXXXX AND XXXXX XXXXX TRUST
By:
--------------------------------
Name:
Title: Trustee
--------------------------------
Xxxxx X. Xxxxxxx
--------------------------------
Xxxx X. Xxxxxx
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--------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxx
--------------------------------
Xxx Xxxxxxx
MEMBERS:
THE XXXXX FAMILY TRUST
By:
-----------------------------
Xxxxx X. Xxxxx, Trustee
R&B PROPERTIES, INC.
By:
-----------------------------
Name:
Title:
TKT DEVELOPMENT GROUP, L.P.
By: , general partner
---------------------
By:
---------------------------
Name:
Title:
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--------------------------------
Xxxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
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