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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):
July 28, 1995
Cedar Fair, L.P.
(Exact name of Registrant as specified in its charter)
Delaware
1-9444
34-1560655
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(Employer
Identification No.)
P.O. Box 5006, Sandusky, Ohio
44871-8006
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(419) 626-0830
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 28, 1995, the Registrant acquired substantially all of
the assets of Hunt Midwest Entertainment, Inc., a Delaware
corporation ("Seller"), in a transaction valued at $40.0 million,
pursuant to a Contribution Agreement whereby Seller contributed
assets to the Registrant in exchange for approximately 740,000
unregistered limited partnership units ("units") of the
Registrant and the assumption of certain liabilities.
The purchase price consists of the assumption of approximately
$16.5 million of liabilities and the issuance of approximately
$23.5 million of the Registrant's units valued at $31.50 per
unit. At the closing, Seller received 664,700 units,
representing approximately 90% of the total units expected to be
issued. Additional units will be issued on or before October 26,
1995 upon the determination of the final adjusted price. The
Registrant borrowed approximately $13.9 million on its existing
revolving credit facility to repay all long-term debt assumed in
the transaction.
As part of the transaction, Lee A. Derrough, President of Hunt
Midwest Enterprises, Inc., has been elected a member of the board
of directors of Cedar Fair Management Company, the Managing
General Partner of Cedar Fair, L.P.
Worlds of Fun and Oceans of Fun are located in Kansas City,
Missouri. Worlds of Fun is a traditional, family-oriented
amusement park and Oceans of Fun is one of the largest water
parks in the midwest. Together, they serve more than 1.5 million
guests per year, principally from Missouri, Kansas and Nebraska.
The assets acquired consist of a large variety of amusement rides
and attractions situated on approximately 310 acres, together
with food, merchandise and games buildings and equipment and
various support facilities. The Registrant also acquired all
receivables and inventories of Seller and assumed certain
payables, accruals and debt, as described above.
For the 1994 operating season, Worlds of Fun and Oceans of Fun
together had revenues of approximately $31.0 million and earnings
before interest, taxes and depreciation of $6.4 million.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
1. (a) Financial Statements of Business Acquired
(1) Financial Statements of Hunt Midwest
Entertainment, Inc. for
the years ended December 31, 1994 and 1993
(2) Interim Financial Statements of Hunt Midwest
Entertainment, Inc.
(b) Pro Forma Financial Information
It is impracticable to provide the required year-end and
interim financial statements and pro forma financial
information, Items 1(a) (1) and (2) and 1(b), at the time
this report is filed. The required financial information
will be filed as soon as practicable, but in no event will
it be filed later than 60 days after the date by which this
report must be filed.
(c).Exhibits
Exhibit (10) - Contribution Agreement by and among Hunt
Midwest Entertainment, Inc. and the
Registrant dated July 28, 1995. (All
exhibits described in the Agreement have
been omitted. Upon request, the
Registrant will furnish to the
Commission a copy of any omitted
exhibit.)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Cedar Fair, L.P.
(Registrant)
Date: August 11, 1995
By
Bruce A. Jackson, Corporate Vice
President, Finance and Chief Financial Officer
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT ("Agreement") is made as of
the 28th day of July, 1995, by and between HUNT MIDWEST
ENTERTAINMENT, INC., a Delaware corporation ("Seller"), and CEDAR
FAIR, L.P., a Delaware limited partnership ("Partnership").
RECITALS:
A. Seller owns and operates the tangible and intangible
assets comprising the business operations known as Worlds of Fun
and Oceans of Fun Amusement Parks located in Kansas City,
Missouri (as operated by Seller, the "Business").
B. Seller desires to contribute to Partnership, and
Partnership desires to acquire from Seller, substantially all of
the assets of the Business on the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, Partnership and Seller agree as follows:
ARTICLE I
CONTRIBUTION OF ASSETS
1.1 Description Of Assets. Except as otherwise provided
in Section 1.2 hereof, upon the terms, subject to the conditions,
and in reliance on the representations, warranties and covenants
set forth in this Agreement, Seller agrees to contribute and
transfer to Partnership, and Partnership agrees to
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acquire from Seller, on the Closing Date (as hereinafter defined)
all of the assets, properties, rights, contracts and claims
employed in connection with the operations of the Business, of
every kind and condition, wherever located, whether tangible or
intangible, real, personal or mixed (collectively hereinafter
referred to as the "Assets"), including but not limited to:
(a) Real Estate. The surface rights to the land,
together with the buildings and improvements thereon and
appurtenances thereto used in the Business, whether owned or
leased, located in Kansas City, Missouri, comprising
approximately 310.75 acres of land lying above the top of the
Winterset Ledge of limestone rock, as more fully described on
EXHIBIT 1.1(a) hereto (the "Real Estate").
(b) Machinery, Equipment and Vehicles. All machinery
and equipment and all vehicles owned or leased by Seller and used
in the operation of the Business, including without limitation
the machinery, equipment and vehicles listed on EXHIBIT 1.1(b)
hereto.
(c) Receivables. All receivables of the Business (other
than receivables from affiliates of Seller) held by Seller on the
Closing Date, including but not limited to the types of accounts
receivable and notes receivable described on EXHIBIT l.1(c)
hereto.
(d) Supplies and Inventory. All merchandise, games,
food and beverage, maintenance parts, uniforms, and restaurant,
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office and operating supplies and inventory owned by Seller and
used in the operation of the Business of the types described on
EXHIBIT 1.1(d) hereto.
(e) Deposits and Prepayments. All deposits and
prepayments of the Business made through the Closing Date.
(f) Intellectual Property. All licenses, franchises,
trademarks, trade names, and service marks (whether or not
registered), copyrights (whether or not registered), know-how,
technical assistance, proprietary technology, trade secrets,
training and procedural manuals, computer software and
confidential business information used or useful in the Business
(collectively hereinafter referred to as the "Intellectual
Property").
(g) Executory Contracts. All rights of Seller under
executory contracts of the Business, including but not limited to
sponsorship agreements, leases, and purchase and sale orders
entered into in the ordinary course of the Business, and in
existence on the Closing Date.
(h) Permits. The interest of Seller (to the extent
transferable) in all permits, licenses, orders and approvals of
all federal, state and local governmental or regulatory bodies.
(i) Records. All of Seller's books and records relating
to the Business, including without limitation financial records,
customer files, customer lists, supply lists,
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promotional and sales literature, personnel records, sales
records and inventory records.
(j) Cash on Hand. Petty cash funds, vault cash and any
other cash on hand of the Business located on the Real Estate on
the Closing Date excluding cash receipts for July 28, 1995.
(k) Other Property. All other tangible and intangible
property owned by Seller or any affiliate of Seller and used in
the Business.
1.2 Excluded Assets. Notwithstanding the foregoing, the
Assets contributed to Partnership shall not include the assets
specified on EXHIBIT 1.2.
ARTICLE II
PRICE
2.1 Basic Price and Adjustment. (a) The basic price
("Basic Price") for the Assets shall be equal to Forty Million
Dollars ($40,000,000). The Basic Price shall be subject to
adjustment as follows (as so adjusted, the "Adjusted Price"):
(i) Subtract the principal balance of, and accrued
and unpaid interest on, any debt, including prepayment penalties,
and other liabilities as of the Closing Date included in Assumed
Liabilities;
(ii) Subtract 50 percent of the amount of all receipts
through the Closing Date for sales of all types of tickets for
park admission on or after July 29, 1995; and
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(iii) Add the amount of petty cash funds, vault cash
and any other cash on hand of the Business at the close of
business on the Closing Date, excluding cash receipts for July
28, 1995 which shall after the Closing be deposited in Seller's
bank accounts.
(b) Prior to the Closing Date, Seller and Partnership
will cooperate in the calculation of a preliminary Adjusted Price
in accordance with paragraph (a) above, and will agree on the
amount of such preliminary Adjusted Price at least one business
day prior to the Closing Date. As soon as practicable following
the closing, but in no event later than 90 days following the
Closing, Seller and Partnership will cooperate in the calculation
of and agree upon the final Adjusted Price in accordance with
paragraph (a) above. Prior to the end of such 90-day period
Seller will also deliver final versions of the schedules required
under Section 2.7.
2.2 Method of Payment. The Adjusted Price shall be
payable to Seller in units of limited partnership interest in
Partnership ("Units"), the value of which for this purpose is
agreed to be $31.50 per Unit. A number of Units equal in value
to 90 percent of the preliminary Adjusted Price shall be issued
and delivered to Seller on the Closing Date. A number of Units
equal in value to the final Adjusted Price less the number of
Units delivered to Seller on the Closing Date shall be issued and
delivered to Seller upon agreement between Seller and Partnership
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as to the final Adjusted Price in accordance with Section 2.1(b).
All Units issued to Seller in connection with this transaction
shall be deemed to have been issued on the Closing Date. If, at
the time the third quarter distribution is paid to holders of
Partnership's limited partnership interest, the final Adjusted
Price has not been determined, Partnership will pay the amount of
such distribution on the Units held at such time by Seller and
will pay the amount of such distribution on the Units comprising
the balance of the final Adjusted Price as soon as practicable
after the final Adjusted Price has been determined.
2.3 Assumed Liabilities. Partnership shall not assume
or be responsible for any liability or obligation of Seller,
whether known or unknown, accrued, absolute, contingent or
otherwise, except the following (the "Assumed Liabilities"):
(a) Accounts payable unpaid at the Closing Date, of the
types scheduled on EXHIBIT 2.3(a), relating to or arising out of
the conduct of the Business in the ordinary course through the
Closing Date.
(b) Accrued operating expenses, for the types of items
scheduled on EXHIBIT 2.3(b), relating to or arising out of the
conduct of the Business in the ordinary course through the
Closing Date.
(c) Liability for the debt and capital leases scheduled
on EXHIBIT 2.3(c), including accrued and unpaid interest thereon,
and prepayment penalties, all as of the Closing Date.
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(d) Obligations to perform, after the Closing Date,
under the executory contracts described under Section 1.1(g).
2.4 Retained Liabilities. Without limiting the
generality of Section 2.3, except for the Assumed Liabilities,
Seller shall retain all liabilities whether known or unknown,
accrued, absolute, contingent or otherwise, incurred by or
arising out of the ownership of the Assets or the operation of
the Business prior to the Closing Date (the "Retained
Liabilities"), including but not limited to:
(a) Liabilities for income and franchise taxes payable
with respect to the Business through the Closing Date, and for
all other taxes except current taxes not yet due on the Closing
Date of the types scheduled on EXHIBIT 2.3(b).
(b) All intercompany liabilities payable to any
affiliate of Seller other than those liabilities scheduled on
EXHIBIT 2.3(c).
(c) Costs and professional fees incurred by Seller or
any of its affiliates in connection with the transaction
contemplated by this Agreement.
(d) Any contingent liabilities related to or arising out
of events occurring or facts and circumstances in existence
before the Closing Date, including but not limited to personal
injury claims, labor-related or employee benefit matters, tax
matters or other claims or litigation of any kind, whether now
pending or threatened or asserted after the Closing.
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(e) Any claims or liabilities for amounts payable or
relating to: (i) employees of the Business in respect of
operations of the Business prior to the Closing Date, including
payroll for periods prior to the then-current payroll period at
the Closing Date; (ii) 50 percent of incentive compensation and
sales commissions earned or to be earned during calendar 1995
under Seller's programs in effect on the Closing Date; (iii)
deferred compensation, severance, medical benefit or
hospitalization or other employee benefit plans, programs or
arrangements maintained or contributed to by Seller or any
affiliate of Seller, or under federal or state laws governing
such plans, programs or arrangements and employee expense
accounts relating to the operations of the Business prior to the
Closing; and (iv) FICA taxes, withholding taxes, accrued salaries
and wages, and unemployment insurance payables relating to the
operation of the Business prior to the Closing Date, except to
the extent included in Assumed Liabilities under Section 2.3(b).
(f) Without limiting the generality of paragraph (d)
above, liabilities related to or arising out of events occurring
or circumstances in existence on or before the Closing Date in
connection with any matter of a nature regulated or addressed
under any Environmental Law, as defined in Section 4.7.
(g) Obligations under the employment contract identified
in EXHIBIT 4.12.
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2.5 Closing Date. The closing ("Closing") under this
Agreement shall take place at the offices of Squire, Sanders &
Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio
as of 11:59 p.m. (E.D.T.) on July 28, 1995, or at such other
date, time and place as shall be mutually agreeable to
Partnership and Seller (the date and the time of the Closing
herein referred to as the "Closing Date"). All matters at the
Closing shall be considered to take place simultaneously and no
delivery of any document shall be deemed complete until all
transactions and deliveries of documents are made.
2.6 Transfer Expenses. The costs of the title search,
the extended coverage owner's ALTA policy with endorsements, and
the recordation of the deed(s) and other instruments will be paid
by Seller.
2.7 Allocation of Price. Partnership and Seller will,
on or prior to the Closing Date, agree to an allocation of the
Adjusted Price among the Assets in a manner consistent with
Partnership's appraisal of the Assets, the provisions of Treas.
Reg. 1.704-l(b)(2)(iv)(h) and the principles of Section 1060 of
the Internal Revenue Code of 1986, as amended (the "Code"), which
allocation shall be reflected on a written schedule which shall
be delivered at Closing. Seller shall also provide a schedule
showing the adjusted tax basis for federal income and alternative
minimum tax purposes (and, if different, for any state income or
franchise tax purpose) of each Asset listed on the schedule.
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Such schedule may be subject to adjustment in accordance with
Section 2.1(b).
2.8 Statement of Intention. Partnership and Seller
intend that the contribution of Assets by Seller pursuant hereto,
and the assumption of Assumed Liabilities by Partnership and the
issuance of the Units in exchange for such Assets, will
constitute a contribution of the Assets by Seller to Partnership
pursuant to Code Section 721.
2.9. Assignment of Assets. (a) Seller will use best
efforts, and Partnership will cooperate with Seller, to obtain
all non-governmental approvals, consents or waivers necessary to
assign to Partnership all leases, contracts, licenses,
agreements, commitments, property interests, qualifications or
other rights included in the Assets or any claim, right or
benefit arising thereunder or resulting therefrom (collectively,
the "Interests") as soon as practicable in order that the
contribution of the Assets hereunder will not result in the
termination of, or default under, any Interest.
(b) To the extent any of the approvals, consents or
waivers referred to in paragraph (a) above have not been obtained
with respect to any Interest by Seller as of the Closing, and
without limiting the rights of Partnership under this Agreement,
Seller will, during the remaining term of such Interest, use best
efforts, to (i) obtain such approval, consent or waiver of any
third party; (ii) cooperate with Partnership in any reasonable
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and lawful arrangement designed to provide the benefits of such
Interest to Partnership; and (iii) enforce, at the request of
Partnership and at the expense and for the account of
Partnership, any rights of Seller arising from such Interest
against the issuer thereof or the other party or parties thereto
(including the right to elect to terminate any such Interest in
accordance with the terms thereof upon the written advice of
Partnership). To the extent that Seller enters into lawful
arrangements designed to provide the benefits of any Interest as
set forth in clause (ii) above, such Interest shall be deemed to
have been assigned to Partnership for purposes of Section 1.1
hereof.
2.10 Obtaining Permits and Licenses. Seller will assign,
transfer or convey to Partnership at the Closing those
governmental permits and licenses scheduled on EXHIBIT 2.10,
which are held or used by Seller exclusively in connection with
the Business and which can be assigned without consent under
applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP
Partnership hereby represents and warrants to Seller as
follows:
3.1 Organization. Partnership is a limited partnership
duly organized, validly existing and in good standing under the
laws of the State of Delaware. The managing general partner of
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Partnership is Cedar Fair Management Company, a corporation duly
organized, validly existing and in good standing under the laws
of the State of Ohio (the "Managing General Partner").
Partnership has all requisite partnership power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
3.2 Authority for Transaction. The execution, delivery
and performance of this Agreement by Partnership and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by Partnership by all necessary
action on the part of Partnership. This Agreement has been duly
and validly executed and delivered by Partnership and is the
valid and binding Obligation of Partnership, enforceable against
Partnership in accordance with its terms. Neither the execution
and delivery of this Agreement by Partnership nor the performance
by Partnership pursuant hereto will (i) violate Partnership's
Certificate of Limited Partnership or the Third Amended and
Restated Agreement of Limited Partnership of Cedar Fair, L.P., as
amended (the "Limited Partnership Agreement") or, with or without
the giving of notice or the lapse of time, or both, (ii) violate
any provision of law, rule or regulation to which Partnership is
subject, (iii) violate any order, judgment or decree applicable
to Partnership or (iv) conflict with or result in a violation or
breach of, or permit any third party to rescind any term or
provision of, or constitute a default under any indenture,
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mortgage, deed of trust or other material contract, license or
other agreement to which Partnership is a party; except, in each
case, for violations, conflicts, breaches or defaults which in
the aggregate would not materially hinder or impair the
consummation of the transaction contemplated hereby.
3.3 Brokerage or Finder's Fees. Except for Bear
Stearns, Partnership has not employed any broker, finder or
agent, or, except for the fee or commission of Bear Stearns, the
cost of which will be borne by Partnership, agreed to pay or
incurred any brokerage fee, finder's fee or commission with
respect to the transaction contemplated by this Agreement.
3.4 Filings and Consents. Except for the requirements
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976
("HSR") and Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"), and except for filings required
for the registration of Partnership to do business in the State
of Missouri, no consent, approval or authorization of, or
declaration, exemption by, or filing or registration with, any
governmental or regulatory authority or other third party is
required to be made or obtained by Partnership in connection with
the execution, delivery and performance by Partnership of this
Agreement and the transaction contemplated hereby.
3.5 Partnership Information. Partnership has previously
delivered to Seller its Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 (the "Form 10-K"), and
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its Quarterly Report on Form 10-Q relating to the fiscal quarter
ended March 26, 1995 (the "Form 10-Q"). Neither the Form 10-K or
Form 10-Q, as of the dates they respectively were filed with the
Securities and Exchange Commission, and no representation or
warranty by Partnership in this Agreement, contains or will when
furnished contain any untrue statement of a material fact or
omits or will then omit to state a material fact necessary to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
3.6 Capitalization. Partnership's capitalization
consists entirely of at least 100 million units of limited
partnership interest and general partnership interest permitted
to be issued under the Limited Partnership Agreement, of which
22,240,208 units of limited partnership interest and a one
percent general partnership interest are outstanding as of the
date of this Agreement. Except as contemplated by this
Agreement, there are no outstanding rights to acquire, nor is
Partnership obligated in any manner to issue, units of its
limited or general partnership interest, other than approximately
52,500 units of limited partnership interest issuable to certain
employees as deferred compensation.
3.7 Units to be Issued. When issued to Seller pursuant
to this Agreement (a) the Partnership Interests (as defined in
the Limited Partnership Agreement) in Partnership represented by
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the Units will have been duly authorized by the Limited
Partnership Agreement and Delaware law, and (b) the Units issued
to Seller will represent validly issued and, subject to the terms
of this Agreement and of the Limited Partnership Agreement and to
statutory obligations under Delaware law, fully paid and
nonassessable limited partner interests in Partnership. Upon
compliance by Seller with the requirements of Section 12.2 of the
Limited Partnership Agreement, Seller will be admitted as an
Additional Limited Partner, as defined in the Limited Partnership
Agreement.
3.8 Absence of Changes. Except as disclosed in the Form
10-K or the Form 10-Q, since December 31, 1994, there has been no
material adverse change in the financial condition, business or
properties of Partnership.
3.9 Nonrecourse Debt. As of the Closing, the amount of
nonrecourse liability, as defined in Treas. Reg. 1,752-1(a)(2),
of the Partnership will not be less than Fifty Million Dollars
($50,000,000).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Partnership as
follows:
4.1 Corporate Organization. Seller is a corporation
duly organized, validly existing, and in good standing under the
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laws of the State of Delaware and is duly licensed and qualified
and in good standing in Missouri and all other jurisdictions
where licensing or qualification is required, except where the
failure to be so licensed or qualified would not have a material
adverse effect on the Business. Seller has all necessary
corporate power and authority to own and use its properties and
to transact the Business as presently conducted, and to execute,
deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
4.2 Power and Authority; No Default Upon Transfer. The
execution, delivery and performance of this Agreement by Seller
and the consummation of the transactions contemplated hereby have
been duly and validly authorized by Seller by all necessary
corporate action on the part of Seller. This Agreement has been
duly and validly executed and delivered by Seller and is the
valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms. Neither the execution and
delivery of this Agreement by Seller nor the performance by
Seller pursuant hereto will (i) violate Seller's Certificate of
Incorporation or By-Laws or, with or without the giving of notice
or the lapse of time, or both, (ii) violate any provision of law,
rule or regulation to which Seller is subject, (iii) violate any
order, judgment or decree applicable to Seller, or (iv), except
as disclosed on EXHIBIT 4.2, conflict with or result in a
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violation or breach of, or permit any third party to rescind any
term or provision of, or constitute a default under any
indenture, mortgage, deed of trust or other material contract,
license or other agreement to which Seller is a party.
4.3 Title to Tangible Personal Property. Except as
described on EXHIBIT 4.3, Seller has good title to the tangible
personal property included in the Assets, free and clear of all
mortgages, liens, security interests, charges, encumbrances or
other title defects of any nature whatsoever, except for the
liens of current state and local taxes not yet due and payable.
4.4 Title to Real Estate; Buildings. Except as
described on EXHIBIT 4.4, Seller has good and marketable title to
the Real Estate, free and clear of all mortgages, liens,
encumbrances and other title defects of any nature whatsoever,
except real estate taxes and assessments (general and special)
not yet due and payable, zoning ordinances, and except as
described in the commitment for title insurance described in
Section 7.1(e). The mining and other operations conducted and to
be conducted subjacent to the Real Estate will not cause harm to
or unreasonably interfere with the Real Estate or the Business.
Except as set forth on EXHIBIT 4.4 or otherwise disclosed to
Partnership in writing, all buildings and structures used in the
conduct of the Business are in good and usable condition and
conform with all existing applicable ordinances, codes and
regulations on the Closing Date.
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4.5 Condition of Assets. Except as set forth on
EXHIBIT 4.5 or otherwise disclosed to Partnership in writing, all
of the Assets necessary for the conduct of the Business (whether
real or personal, owned or leased) have been built, operated and
maintained in accordance with prudent practice in the amusement
park industry, including at a minimum compliance with applicable
manufacturers' recommendations, are in good condition and repair,
ordinary wear and tear excepted, and are usable and are presently
being used in the ordinary course of the Business, and all Assets
which are amusement rides or other equipment subject to
regulation by the State of Missouri or any political subdivision
thereof have been operated and maintained in accordance with all
regulations of such authorities. Except as set forth on
EXHIBIT 4.5, the Assets other than the Excluded Assets are
sufficient to carry on the Business in the manner in which Seller
has conducted such Business.
4.6 Litigation. Except as disclosed in EXHIBIT 4.6,
there is no action, suit or proceeding pending or, to the best of
Seller's Knowledge, threatened against or affecting Seller or any
affiliate of Seller, with respect to the Business or the Assets,
at law, in equity, by way of arbitration or before any
governmental department, commission, board or agency. Seller is
not in default with respect to any order, injunction or decree of
any court or governmental department, commission, board or agency
and no such order, injunction or decree is now in effect which
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restrains the operations of the Business or the use of the
Assets. To the best of Seller's Knowledge, there are no
presently existing facts or conditions which might give rise to
any charge, claim, litigation, proceeding, or investigation by
any third party which might materially adversely affect the
Business or the Assets, nor are there any facts or conditions
which might give rise to any order of condemnation, appropriation
or other taking of any of the Assets.
4.7 Environmental Matters. Except as described on
EXHIBIT 4.7, the Business, as currently being conducted, and the
properties owned or operated by Seller in connection therewith,
are in compliance in all respects with existing applicable
Environmental Laws, except where the failure to be in such
compliance would not have a material adverse effect on the
Business or the Assets. The term "Environmental Laws" means all
existing applicable statutes, regulations, ordinances, standards
or requirements relating to protection of health, safety or the
environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. 9601, et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq.
("RCRA"), and all other federal, state and local laws and
regulations governing the use, presence or release of Regulated
Substances into the environment, existing at the Closing Date.
Except as described on EXHIBIT 4.7, Seller has timely filed all
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required reports, obtained all required approvals and permits,
and generated and maintained all required data, documentation and
records under applicable Environmental Laws. Neither Seller nor,
to the best of Seller's Knowledge, any other person has released,
generated, treated, disposed of, or transported to or from,
property owned or operated in connection with the Business, any
Regulated Substances except in compliance with applicable
Environmental Laws. For purposes of this Agreement, the term
"Regulated Substances" means and includes any hazardous or toxic
waste, substance or material defined as such in, or regulated or
addressed under, any Environmental Law. Seller has not received
any notice from any governmental agency charged with the
protection of public health or the environment, or other person
or entity, advising that it is responsible, or potentially
responsible, for clean-up or other costs associated with a
release or a threatened release of Regulated Substances at, on or
under any property owned or operated by Seller in connection with
the Business, or on or from some other facility to which
Regulated Substances from the Business may have been sent. To
the best of Seller's Knowledge, there are no prohibitions imposed
by any Environmental Law that could materially and adversely
affect any change or expansion of operations of the same or
similar nature as currently conducted by the Business.
<PAGE>
4.8 Financial Information.
(a) Audited Financials. Seller has delivered to
Partnership the audited financial statements of the Business for
the fiscal years ended December 31, 1993 and 1994 (collectively,
the "Audited Financials"). The Audited Financials have been
prepared in accordance with GAAP (except as disclosed in the
notes thereto), and present fairly in all material respects the
financial position of the Business at such dates and the related
results of operations and cash flows for the years then ended.
(b) June 30, 1995 Balance Sheet. Seller has delivered
to Partnership the unaudited June 30, 1995 balance sheet of the
Business (the "June 30, 1995 Balance Sheet"). The June 30, 1995
Balance Sheet is accurate and complete and fairly presents, in
all material respects, the financial position of the Business as
of June 30, 1995.
(c) Attendance Statistics. EXHIBIT 4.8(c) accurately
reflects the attendance at the amusement parks operated by the
Business during the last three calendar years.
(d) Receivables. All receivables included in the Assets
(1) are valid and subsisting; (2) were obtained in the ordinary
course of business; (3) are not subject to any defenses, set-offs
or counterclaims against Seller, other than returns of unused
admission tickets for credit to customer accounts; and (4) are
collectible in the ordinary course subject to bad debt losses
consistent with historical results of operation of the Business.
<PAGE>
(e) Inventories. All inventories included in the Assets
(which are described on EXHIBIT 1.1(d) hereto) are valued at the
lower of cost or market value and, except for obsolete or damaged
items which have been written down to an amount not in excess of
realizable market value, consist of items of a quality and
quantity currently usable and saleable in the ordinary course of
the Business as Seller has operated it in the past.
4.9 Qualified Liabilities. All of the Assumed
Liabilities were incurred either
(a) more than two years prior to the date of execution
of this Agreement; or
(b) in the ordinary course of Seller's conduct of the
Business not in anticipation of the transactions contemplated by
this Agreement.
4.10 Trademarks, Etc. EXHIBIT 4.10 lists all trademarks,
trade names, service marks and copyrights, and registrations of
any of the foregoing (and pending applications therefor),
intellectual property licenses, franchises and licensing and
franchising agreements (whether as licensor or franchisor or
licensee or franchisee) used in the Business and all other
agreements and commitments with respect to the Intellectual
Property. None of the past or present employees, officers,
directors or shareholders of Seller has any rights in any of the
Intellectual Property which has been or is used by Seller in the
Business. Seller has not granted any outstanding
<PAGE>
licenses or other rights to Intellectual Property used in the
Business that is owned by or licensed to Seller except as
described on EXHIBIT 4.10, and Seller is not liable, nor has
Seller made any contract or arrangement whereby it may become
liable, to any person for any royalty or other compensation for
the use of any Intellectual Property. None of the rights of
Seller in (as transferred to Partnership), to and under any
Intellectual Property used in the Business will be adversely
affected by the consummation of the transactions contemplated
hereby. There is no pending or, to the best of Seller's
Knowledge, threatened litigation or proceeding against Seller or
any of its affiliates involving such Intellectual Property, and
Seller has not received any notice or claim of conflict with the
asserted rights of others involving such Intellectual Property.
To the best of Seller's Knowledge, the operations of the Business
as presently conducted do not infringe any rights of others to
the Intellectual Property or to any intellectual property owned
by others.
4.11 Labor Relations. (a) EXHIBIT 4.11 contains a
complete list of all full-time employees of the Business
(including employees of Seller and employees of any affiliate of
Seller a majority of whose work relates to the Business), their
dates of hire, their rates of compensation and a description of
<PAGE>
all employee benefits provided by Seller or such affiliate,
including profit-sharing, bonus or incentive plans and all
insurance coverage. Since the date of such list, there has not
been any change in employee benefits or compensation payable or
to become payable by Seller or such affiliate to any such
employee except such changes required under the terms of one of
the collective bargaining agreements to which Seller is a party
and which are described in paragraph (c) below.
(b) (i) Neither Seller nor any affiliate thereof as
determined under Internal Revenue Code ("Code") section 414(b),
(c), (m) or (o) ("ERISA Affiliate") maintains, administers or
contributes to, or has maintained, administered or contributed
to, nor do the employees or former employees of Seller or any
ERISA Affiliate receive or expect to receive as a condition of
employment, benefits pursuant to any:
(A) employee pension benefit plan (as defined in
Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), including, without
limitation, any multiemployer plan as defined in Section
3(37) of ERISA ("Plan");
(B) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) ("Welfare Plan"); or
(C) bonus, deferred compensation, stock purchase,
stock option, severance plan, salary continuation,
vacation, sick leave, fringe benefit, incentive,
<PAGE>
insurance, welfare or similar arrangement ("Employee
Benefit Plan");
other than those Plans, Welfare Plans and Employee Benefit Plans
described in Exhibit 4.11. Except as required by section 4980B
of the Code, neither Seller nor any ERISA Affiliate has promised
any former employee or other individual not employed by Seller or
any ERISA Affiliate medical or other benefit coverage and neither
Seller nor any ERISA Affiliate maintains or contributes to any
plan or arrangement providing medical benefits to former
employees, their spouses or dependents or any other individual
not employed by Seller or any ERISA Affiliate.
(ii) All Plans, Welfare Plans and Employee Benefit Plans
and any related trust agreements or annuity contracts comply with
and are and have been operated in accordance with each applicable
provision of ERISA, the Code (including, without limitation, the
requirements of Code section 401(a), to the extent any Plan is
intended to conform to that section), other federal statutes,
state law (including, without limitation, state insurance law)
and the regulations and rules promulgated pursuant thereto or in
connection therewith, except any such noncompliance as would not
adversely affect the qualification of such Plans under the Code.
Seller has applied to the Internal Revenue Service ("IRS") for a
favorable determination as to the qualification under the Code of
each of the Plans and each amendment thereto. Each trust funding
any Plan or Welfare Plan is and has been tax-exempt.
<PAGE>
(iii) Neither Seller nor any ERISA Affiliate maintains,
administers or contributes to, or has ever maintained,
administered or contributed to, any Plan, including, without
limitation, any multiemployer plan (as defined in ERISA Section
3(37)), which is or was subject to Title IV of ERISA or the
minimum funding standard requirements of Code section 412 or
Section 302 of ERISA. Neither Seller nor any ERISA Affiliate has
failed to make any contributions or to pay any amounts due and
owing as required by the terms of any Plan, Welfare Plan or
Employee Benefit Plan, or under ERISA or any other applicable
law. Full payment has been made of all amounts which Seller or
any ERISA Affiliate is required or committed to pay to the Plans
as of the date hereof.
(c) Seller has provided to Partnership a true and
complete copy of Seller's collective bargaining agreements with
Service Employees International Union, Local 96, and the American
Federation of Musicians, Local 34. Seller is not a party to any
other collective bargaining agreements or other contracts or
commitments to or with any labor unions or other employee
representatives or groups of employees, and, to the best of
Seller's Knowledge, no other labor organization or any
representative thereof has made any attempt to organize or
represent employees of Seller. No employee of an affiliate of
Seller listed on EXHIBIT 4.11 is a member of any labor union.
<PAGE>
4.12 Contracts and Commitments. EXHIBIT 4.12 contains a
complete list of all contracts, leases or other commitments
relating to the Business involving more than $25,000 or at least
one year in duration. Seller is not in default under any such
contract and all such contracts, leases and commitments are valid
and in effect; and, to the best of Seller's Knowledge, no other
party thereto is in default. Seller has delivered to Partnership
a true and correct copy of each document listed on EXHIBIT 4.12.
4.13 Brokerage and Finder's Fee. Seller has not employed
any broker, finder or agent, or agreed to pay or incurred any
brokerage fee, finder's fee or commission with respect to the
transactions contemplated by this Agreement.
4.14 Compliance with Laws. Except as described on
EXHIBIT 4.2 or otherwise disclosed to Partnership in writing,
Seller and its affiliates have, in the operation of the Business,
duly complied with all laws and regulations of federal, state,
local and foreign governments applicable to the Business, and
Seller is not in default with respect to any order, judgment,
writ, injunction, decree, award, rule or regulation applicable to
the Business of any court, governmental or regulatory body or
arbitrator and no event has occurred which with notice or the
passage of time or both would constitute such a default. Seller
has not received notice of any violation of any law or regulation
of any federal, state, local or foreign government relating to
the Business.
<PAGE>
4.15 Filings and Consent. Other than the approval
required under HSR and the amendment of the zoning ordinance
referred to in Section 7.1(h) hereof, no authorization, approval
or consent of any governmental department, bureau or agency or
other public board or authority is required for the consummation
by Seller of the transactions contemplated by this Agreement.
4.16 Licenses and Permits. Attached hereto as EXHIBIT
4.16 is a list of all licenses and permits held by Seller for the
operation of the Business, copies of which licenses and permits
have been furnished to Partnership. Such licenses and permits
constitute all licenses and permits necessary for Seller to own
the Assets or conduct the Business. Each such license or permit
is in full force and effect. There is no material violation of
any such license or permit. No proceeding is pending or, to the
best of Seller's Knowledge, threatened seeking the revocation or
limitation of any such license or permit.
4.17 Absence of Certain Changes. Since December 31,
1994, there has not been:
(a) any material adverse change in the financial
condition, assets or liabilities, or results of operations, of
the Business other than changes in the ordinary course of
business, which changes have not in the aggregate been and are
not reasonably likely to become materially adverse;
<PAGE>
(b) any materially adverse change in the relationship of
Seller or any of its affiliates with any suppliers, customers,
sponsors or other third parties having business relationships
with the Business; or
(c) any change in the accounting principles or practice
utilized by Seller with respect to the Business.
4.18 Material Misstatements or Omissions. No
representation or warranty by Seller in this Agreement nor any
document, certificate or schedule furnished or to be furnished to
Partnership by or on behalf of Seller pursuant hereto contains,
or will when furnished contain, any untrue statement of a
material fact, or omits, or will then omit to state, a material
fact necessary to be stated therein or necessary in order to make
the statement therein, in light of the circumstances under which
they were made not misleading.
ARTICLE V
COVENANTS OF PARTNERSHIP
Partnership covenants and agrees with Seller as follows:
5.1 Confidentiality of Information. All nonpublic
documents and information obtained pursuant to this Agreement
shall be deemed strictly confidential, and if the transaction
contemplated by this Agreement is not consummated for any reason,
all copies of said information shall promptly be returned (except
for one copy which shall be retained in strict confidence by
Partnership's counsel) and Partnership shall
<PAGE>
maintain such confidence and shall not disclose or utilize such
nonpublic information in any way, except (a) as it may have
otherwise become public information without breach of this
Agreement by Partnership, or (b) as it may be required to be
divulged by Partnership to comply with legal requirements in
which case, Partnership will notify Seller, consult with Seller
on the advisability of taking steps to resist or narrow such
requirement and, if disclosure is then legally required,
cooperate with Seller in any attempt that Seller makes to obtain
reliable assurance that confidential treatment will be accorded
to designated portions of such information. Nothing in this
Section shall be construed to restrict the disclosure by
Partnership of such information which Partnership reasonably
believes it is obligated to disclose under the federal securities
laws.
5.2 HSR Filing. Partnership has filed or caused to be
filed the reports, documents, filings and other data required to
be filed pursuant to HSR and the regulations promulgated
thereunder, and shall promptly coordinate with Seller and respond
to any requests for additional information in connection
therewith.
5.3 Cooperation. Partnership will cooperate with Seller
to secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as
<PAGE>
shall be required in order to consummate the transaction
contemplated hereby.
5.4 Books and Records; Personnel. For a period of five
years after the Closing Date (or such longer period as may be
required by any federal, state or local governmental agency or
ongoing litigation or in connection with any administrative
proceeding):
(a) Partnership will not dispose of or destroy any of
the business records and files of the Business except after first
giving 30 days' prior written notice to Seller. Seller shall
have the right, at its option and expense, upon prior written
notice to Partnership within such 30-day period, to take
possession of the records and files within 60 days after the date
of Seller's notice to Partnership.
(b) Partnership will allow Seller and its
representatives access to all business records and files of the
Business which are transferred to Partnership in connection
herewith, during regular business hours and upon reasonable
notice at Partnership's principal place of business or at any
location where such records are stored, and Seller shall have the
right, at its own expense, to make copies of any such records and
files; provided, however, that any such access or copying shall
be had or done in such manner so as not to interfere with the
normal conduct of Partnership's business or operations.
<PAGE>
(c) Partnership will make reasonably available to
Seller, upon written request and on a basis that does not
interfere with Partnership's normal operation of the Business or
any other business of the Partnership, (i) Partnership's
personnel to assist Seller in locating and obtaining records and
files maintained by Partnership and (ii) any of Partnership's
personnel previously in Seller's employ whose assistance or
participation is reasonably required by Seller in anticipation
of, or preparation for, existing or future litigation, tax return
preparation or other matters in which Seller or any of its
affiliates is involved and which is related to the Business.
5.5 Board Membership. Partnership will use its best
efforts to cause a representative of Seller to be elected to the
Board of Directors of the Managing General Partner, so long as
Seller owns more than 690,000 Units; provided, however, that such
representative shall be Lee Derrough, Lamar Hunt or another
individual reasonably acceptable to the Managing General Partner
and to Partnership.
ARTICLE VI
COVENANTS OF SELLER
Seller covenants and agrees with Partnership as follows:
6.1 Carry on Business in Usual Manner. From the date
hereof to the Closing Date, Seller will carry on the Business in
the usual and ordinary course as heretofore conducted (including
but not limited to practices with regard to receivables and
<PAGE>
payables) and, without the written consent of Partnership, Seller
will not engage in any transaction which would be inconsistent
with any representation or warranty of Seller set forth herein or
which would cause a breach of any such representation or
warranty. Seller agrees to use its best efforts to keep the
Business intact, to keep available the services of its present
employees, and to preserve the goodwill of its suppliers,
sponsors, customers and others having business relations with it.
6.2 Access to Information. From the date hereof to the
Closing Date, Seller will afford to the representatives of
Partnership, including its counsel and auditors, during normal
business hours and upon reasonable notice, reasonable access to
the Assets and to any and all information with respect to the
Business, to the end that Partnership may have full opportunity
to make such investigation in advance of the Closing Date as it
shall reasonably desire. All such information and access shall
be subject to Section 5.1 of this Agreement, relating to the
confidentiality of information.
6.3 HSR Filing. Seller has filed or caused to be filed
the reports, documents, filings and other data required to be
filed pursuant to HSR and the regulations promulgated thereunder,
and shall promptly coordinate with Partnership and respond to any
requests for additional information in connection therewith.
<PAGE>
6.4 Further Assurances. From and after the Closing
Date, Seller shall, at the request of Partnership, execute and
deliver to Partnership all such further assignments, endorsements
and other documents as Partnership may reasonably request for the
purpose of effecting transfer of Seller's title to the Assets to
Partnership.
6.5 Employment of Employees. Seller will use its best
efforts to assist Partnership in securing the services of the
employees indicated on EXHIBIT 4.11 from and after the Closing
Date.
6.6 Exclusivity. Unless notified by Partnership in
writing that Partnership is no longer considering the acquisition
of the Business, or unless the Closing has not occurred on or
before September 30, 1995, Seller will not, directly or
indirectly, offer or agree to sell, or provide an option to buy,
any of the Assets to or initiate, entertain or conduct any
negotiations with, or supply documents to, any corporation,
partnership, firm or person other than Partnership, for purposes
of permitting analysis or evaluation of the sale or other
disposition of all or substantially all of the assets comprising
the Business.
6.7 Noncompetition. For a period of five years after
the Closing Date, Seller agrees not to compete with Partnership
in the operation of any amusement park or similar business
<PAGE>
competitive with the amusement parks presently operated by the
Business within a 200-mile radius of such amusement parks. As
promptly as possible following the Closing Date, Seller or its
affiliate will dissolve Oceans of Fun St. Louis, Inc., a Missouri
corporation, or will cause the name of such corporation to be
changed to a name which will not be confusingly similar to any
trade name presently used by the Business.
6.8 Tax Payments and Returns.
(a) Seller will be responsible for the timely payment of
all taxes due with respect to its ownership of the Assets and
operation of the Business prior to the Closing except taxes
constituting Assumed Liabilities.
(b) Seller will be responsible for all tax returns and
reports required by law to be filed in respect of the Assets and
the Business for all periods ending on or prior to the Closing.
Seller will provide Partnership with copies of all of Seller's
state and federal returns filed with respect to the contribution
of the Assets under this Agreement or with respect to periods
including the Closing Date, and with any other tax information
reasonably requested by Partnership.
6.9 Restrictions on Development. From and after the
date hereof, Seller shall not sell or develop the parcel of real
property comprising approximately 29.48 acres, adjacent to the
southwest corner of the Real Estate, presently owned by Seller
<PAGE>
and more particularly described in EXHIBIT 6.9 (the "Undeveloped
Parcel") except in accordance with the restrictions set forth in
EXHIBIT 6.9.
6.10 Ownership of Units. Seller shall not permit
ownership of Units by Seller and its affiliates to aggregate ten
percent or more during the five-year period following the Closing
Date.
6.11 Computer Services. Following the Closing Date,
Seller's affiliate will provide computer services to the Business
on the terms set forth in EXHIBIT 6.11.
6.12 Warehouse Lease. Following the Closing Date,
Seller's affiliate, Hunt Midwest Real Estate Development, Inc.,
will lease the underground warehouse space presently used by the
Business to Partnership on the terms set forth in EXHIBIT 6.12.
6.13 License of Service Mark. Seller will license to
Partnership the right to use the service mark, "QISS Quality
Integrity Safety and Service," on the terms set forth in EXHIBIT
6.13.
6.14 Underground Operations. Seller will, and will cause
its affiliates to, at all times conduct all operations subjacent
to the Real Estate in accordance with the prevailing industry
standards for a prudent operator of such activities.
6.15 Qualification of Plans. Seller will promptly adopt
any amendments to the Plans required by the IRS in order to
obtain favorable determination letters with respect thereto, and
<PAGE>
will supply to Partnership a copy of the IRS determination letter
with respect to each Plan promptly following Seller's receipt
thereof.
ARTICLE VII
CONDITIONS OF CLOSING
7.1 Conditions to Partnership's Obligations. The
obligations of Partnership to consummate the transactions
contemplated by this Agreement shall be subject to the
satisfaction of the following conditions by Seller on or before
the Closing Date, except as Partnership may waive the same in
writing:
(a) No Material Adverse Change. From December 31, 1994,
to the Closing Date there shall have been no material adverse
change in the Assets or in the financial condition or results of
operations of the Business and there shall have been no
occurrence or circumstances (whether arising heretofore or
hereafter) which might result in any such material adverse
change.
(b) Accuracy of Representations and Warranties on
Closing Date. The representations and warranties made herein by
Seller shall be correct on and as of the Closing Date, with the
same force and effect as though such representations and
warranties were made on and as of the Closing Date, and Seller
shall have fully complied with all the covenants, terms and
conditions hereof.
<PAGE>
(c) Consents. All consents required by Partnership to
be obtained in connection with the transaction contemplated by
this Agreement shall have been obtained.
(d) Absence of Casualty. Between the date hereof and
the Closing, there shall have been no material damage or
destruction to the Assets.
(e) Receipt of Title Insurance. Partnership shall
receive, on the Closing Date, an extended coverage owner's ALTA
policy with endorsements, issued by Chicago Title, insuring that
fee simple ownership of the Real Estate is in Partnership,
subject only to the exceptions set forth in the commitment for
such policy.
(f) Investment Letter. Partnership shall have received
from Seller an investment letter in the form attached as EXHIBIT
7.1(f).
(g) Deliveries. Seller shall have delivered all
documents required to be delivered under Section 9.2 hereof.
(h) Zoning. The height restriction imposed on the Real
Estate shall have been amended in accordance with EXHIBIT 7.1(h).
(i) Underground Operations. Partnership shall be
satisfied that the separate ownership of rights and the conduct
of underground operations subjacent to the Real Estate do not and
will not create a material risk to, and will not unreasonably
interfere with, Partnership's future operation of the Business.
<PAGE>
(j) Municipal Services. Partnership shall be satisfied
that the municipal services, including but not limited to water
supply, available to the Business will be sufficient to support
the Business as Partnership presently expects to develop it
during the five years following the Closing Date.
7.2 Conditions to Seller's Obligations. The obligations
of Seller to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following
conditions by Partnership on or before the Closing Date, except
as Seller may waive the same in writing:
(a) Accuracy of Representations and Warranties on
Closing Date. The representations and warranties made herein by
Partnership shall be correct on and as of the Closing Date, with
the same force and effect as though such representations and
warranties were made on and as of the Closing Date and
Partnership shall have fully complied with all the covenants,
terms and conditions hereof.
(b) Deliveries. Partnership shall have delivered all
documents required to be delivered under Section 9.1 hereof and
Partnership shall have issued 90 percent of the Units comprising
the preliminary Adjusted Price in accordance with Section 2.2
hereof.
<PAGE>
(c) No Adverse Change. From December 31, 1994 to the
Closing Date, there shall have been no material adverse change in
the financial condition or results of operations, or assets of
the Partnership.
(d) Board Representation. A representative of Seller
shall have been elected, subject to the Closing of the
transaction contemplated by this Agreement, to the Board of
Directors of the Managing General Partner.
7.3 Conditions to the Obligations of Both Parties. The
respective obligations of Partnership and Seller hereunder shall
be subject, as of the Closing Date, to the following conditions:
(a) HSR. The expiration of all applicable waiting
periods under HSR or early termination thereof.
(b) Absence of Proceedings. No injunction, restraining
order or other order of a court of competent jurisdiction shall
be in effect which restrains or prohibits the consummation of the
transactions contemplated by this Agreement.
ARTICLE VIII
TERMINATION AND ABANDONMENT
8.1 Right to Termination. This Agreement may be
terminated and the transactions contemplated herein abandoned
prior to Closing in the following manner:
(a) Mutual Consent. By mutual consent of Partnership
and Seller; or
<PAGE>
(b) By Partnership or Seller. (i) By Partnership, if
any condition specified in Section 7.1 has not been satisfied or
waived; (ii) by Seller, if any condition specified in Section 7.2
has not been satisfied or waived; or (iii) by Partnership or
Seller (provided that the terminating party is not otherwise in
default of or in breach of this Agreement) in the event that the
Closing shall not have occurred on July 28, 1995.
8.2 Effect of Termination. If for any reason this
Agreement shall be terminated, this Agreement, except for the
obligations under Section 5.1 and to pay brokerage fees, shall
thenceforth be void without any further action by the parties.
In the event of any such termination, neither Seller nor
Partnership, nor any of their respective stockholders, general or
limited partners, directors or officers shall have any obligation
to the other in damages or for costs, expenses, or otherwise in
connection with this Agreement or the transaction contemplated
herein, provided, however, that termination pursuant to Section
8.1(b)(iii) hereof shall not relieve any defaulting or breaching
party from any liability to the other parties hereto.
ARTICLE IX
CLOSING OBLIGATIONS
9.1 Partnership's Closing Obligations. At the Closing,
Partnership shall deliver the following to Seller:
<PAGE>
(a) Certificates representing 90 percent of the Units
comprising the preliminary Adjusted Price.
(b) A certificate signed by an officer of the Managing
General Partner of Partnership, on behalf of Partnership, to the
effect that the representations and warranties of Partnership
made herein are true and correct as of the Closing Date and that
Partnership has fully performed all of its commitments hereunder.
(c) A duly executed instrument effecting the assumption
by Partnership of the Assumed Liabilities.
(d) An opinion of counsel to Partnership in the form
attached as EXHIBIT 9.1(d).
9.2 Seller's Closing Obligations. At the Closing,
Seller shall deliver to Partnership the following:
(a) A certificate signed by an officer of Seller, on
behalf of Seller, to the effect that the representations and
warranties of Seller made herein are true and correct as of the
Closing Date and that Seller has fully performed all of its
commitments hereunder.
(b) A special warranty deed to the Real Estate
acceptable to Chicago Title Insurance Corporation (the deed may
be delivered into escrow for the purpose of recording on the
Closing Date).
<PAGE>
(c) A General Conveyance, Assignment and Bill of Sale in
the form attached as EXHIBIT 9.2(c) conveying the Assets to
Partnership.
(d) An Assignment or Assignments of the Intellectual
Property.
(e) Certificates of Title for any automobiles, trucks,
trailers or other titled vehicles transferred hereunder.
(f) Specific assignments of such contracts, leases,
Assets or agreements as Partnership may reasonably request.
(g) An instrument, in recordable form, imposing the
restrictions on sale or development of the Undeveloped Parcel set
forth in EXHIBIT 6.9.
(h) Any other instruments of conveyance that counsel for
Partnership may reasonably deem necessary or desirable to effect
or evidence the transfers contemplated hereby.
(i) Evidence of all consents obtained by Seller.
(j) An opinion of counsel to Seller in the form attached
as EXHIBIT 9.2(j).
(k) The agreed preliminary price allocation schedule
required under Section 2.7.
(l) The computer services agreement required under
Section 6.11.
(m) The warehouse lease required under Section 6.12.
<PAGE>
ARTICLE X
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
10.1 Survival of Warranties. All representations and
warranties made herein and in any certificate delivered pursuant
hereto shall be deemed to have been relied upon by Seller or
Partnership, as the case may be, notwithstanding any
investigation heretofore made or omitted by Seller or by
Partnership, as the case may be. The representations and
warranties of Seller and Partnership shall survive until the
third anniversary of the Closing of the transactions contemplated
by this Agreement, except that Seller's representations and
warranties contained in Section 4.7 shall survive the Closing in
perpetuity.
10.2 Indemnification.
(a) Seller agrees to hold harmless, indemnify and defend
Partnership and its legal representatives, successors and assigns
from and against any loss, claim, cause of action, damage,
liability, expense or cost of any kind or amount whatever
including court costs and reasonable attorneys' fees which result
from or arise out of any:
(i) breach of any representation or warranty
contained in Section 4 hereof made by Seller;
(ii) failure to perform any covenant,
obligation or agreement of Seller made herein;
<PAGE>
(iii) claims or liabilities arising from
noncompliance with bulk sales laws;
(iv) any Retained Liability;
(v) without limiting the generality or
applicability of this Section 10.2(a), any claims
or liabilities relating to events or conditions in
existence on the Real Estate prior to Closing or
any future cleanup or closure obligations
respecting Regulated Substances used or stored on
the Real Estate prior to Closing;
(vi) claims or liabilities related to or
arising out of mining or other operations
conducted and to be conducted subjacent to the
Real Estate, including but not limited to any harm
to or unreasonable interference with the Real
Estate or the Business; or
(vii) the matters described on Exhibit 10.2.
(b) Partnership agrees to hold harmless, indemnify and
defend Seller and its legal representatives, successors and
assigns from and against any loss, claim, cause of action,
damage, liability, expense or cost of any kind or amount whatever
including court costs and reasonable attorneys' fees which result
from or arise out of:
<PAGE>
(i) any breach of any representation or
warranty contained in Section 3 hereof made by
Partnership;
(ii) any failure to perform any covenant,
obligation or agreement of Partnership made
herein;
(iii) any Assumed Liability; or
(iv) any violation or alleged violation of
any Environmental Law or any license or permit
pertaining to any Environmental Law to the extent
attributed to the ownership and operation of the
Business or the Assets by Partnership, or the
generation, transport, treatment, recycling,
storage or disposal of Hazardous Substances, or
arrangement therefor, at the Real Estate after the
Closing by Partnership; provided, however, that if
the loss, claim, cause of action, damage,
liability, expense or cost results both from
Hazardous Substances in existence before the
Closing and from the new release of Hazardous
Substances by Partnership, liability between
Seller and Partnership shall be apportioned on the
basis of the respective causal contributions of
the new releases of Hazardous Substances by
<PAGE>
Partnership compared to environmental conditions
in existence at or prior to the Closing.
(c) In the event Partnership or Seller (the "Claimant")
desires to make a claim ("Claim") against the other
("Indemnitor") under this Section 10.2, the Claimant shall give
prompt notice in writing to the Indemnitor setting forth the
amount, nature and circumstances of the Claim. In the event
that, as to any particular Claim, Claimant fails to give such
prompt notice to Indemnitor, Claimant shall be deemed to have
waived its right of indemnification for such Claim, but only to
the extent that Indemnitor is actually prejudiced by any delay in
its receipt of notice of such Claim.
(d) In the event that any legal proceedings shall be
instituted or that any Claim or demand shall be asserted by
Claimant in respect of which payment may be sought by Claimant
from Indemnitor under the provisions of this Section 10.2,
Indemnitor shall have the right, at its option and at its own
expense (i) to be represented by counsel of its choice who must
be reasonably satisfactory to the Claimant and (ii) to defend
against, negotiate, settle or otherwise deal with any proceeding,
claim or demand which relates to any loss, liability, damage or
deficiency indemnified against hereunder; provided, however, that
no settlement shall be made without the prior written consent of
the Claimant which shall not be unreasonably withheld.
Notwithstanding the preceding sentence, the Claimant may
<PAGE>
participate in any such proceeding with counsel of its choice and
at its expense; provided, however, that if defendants in any such
action include both the Claimant and the Indemnitor, and the
Claimant shall have been advised by its counsel that there may be
legal defenses available to the Claimant which are different from
or in addition to those available to the Indemnitor, the Claimant
shall have the right to employ its own counsel in such action,
and in such event, the fees and expenses of such counsel shall be
borne by the Indemnitor. To the extent the Indemnitor elects not
to defend such proceeding, claim or demand and the Claimant
defends against, settles or otherwise deals with any such
proceeding, claim or demand, which settlement may be made without
the consent of the Indemnitor, the Claimant will act reasonably
and in accordance with its good faith business judgment. The
parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any
such legal proceeding, claim or demand. After any final judgment
or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, or the Claimant and the
Indemnitor shall have arrived at a mutually binding agreement
with respect to each separate matter indemnified by the
Indemnitor hereunder, the Claimant shall forward to the
Indemnitor notice of any sums due and owing by it with respect to
<PAGE>
such matter and such Indemnitor shall be required to pay all of
the sums so owing to the other party by wire transfer, certified
or bank cashier's check within 30 days after the date of such
notice.
(e) If Claimant withholds, for any reason, consent to a
settlement involving only the payment of money, Indemnitor's
maximum liability under this Article X for any subsequent
settlement or judgment plus the costs and expenses of the
continued defense of the claim shall be the amount of the
rejected settlement. To the extent Indemnitor incurs liability
in excess of such maximum amount, Claimant shall immediately
reimburse Indemnitor on demand. Upon rejection of any settlement
into which Indemnitor is willing to enter, Claimant may, at its
option, assume the defense of such claim with Indemnitor
remaining liable under this Article X, subject to the maximum
amount set forth above. Indemnitor shall, upon demand,
immediately reimburse Claimant for all liabilities incurred by
Claimant after assumption of the defense.
(f) The exclusive remedy available to a party hereto in
respect of the indemnity provided by Sections 10.2(a) and (b)
shall be to proceed in the manner and subject to the limitations
contained in this Article X.
<PAGE>
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Each of the parties hereto shall bear its
own expenses in connection with the negotiation and consummation
of the transactions contemplated hereby.
11.2 Representations to Seller's Knowledge. Whenever a
representation or warranty is made herein as being "to the best
of Seller's Knowledge", it is understood that the officers and/or
directors of Seller have made or caused to be made (and the
results thereof reported to them) a reasonable investigation to
determine the accuracy of such representation or warranty by
personnel or representatives competent to determine the accuracy
thereof.
11.3 Counsel's Right to Rely. In furnishing opinions
pursuant to this Agreement, counsel may rely upon certificates of
governmental officials, opinions of other counsel, certificates
of the officers of Seller or of Partnership, and such other data
as they may deem appropriate as the basis for their opinions.
11.4 Waiver of Compliance with Bulk Sales Law.
Partnership hereby waives compliance by Seller with the
provisions of any applicable bulk sales law.
11.5 Notices. Any notice required or permitted to be
given under this Agreement shall be in writing and shall be
personally delivered or sent by certified or registered United
<PAGE>
States mail, postage prepaid, or by overnight courier service,
and addressed as follows:
(a) If to Seller:
Hunt Midwest Entertainment, Inc.
8300 N.E. Underground Drive
Kansas City, Missouri 64161
Attention: President
With a copy to:
Seigfreid, Bingham, Levy, Selzer & Gee, P.C.
2800 Commerce Tower
911 Main Street
Kansas City, Missouri 64105
Attention: James T. Seigfreid, Esq.
(b) If to Partnership:
Cedar Fair, L.P.
c/o Cedar Fair Management Company
One Causeway Drive
Sandusky, Ohio 44871
Attention: President
With a copy to:
Squire, Sanders & Dempsey
4900 Society Center
127 Public Square
Cleveland, Ohio 44114-1304
Attention: Mary Ann Jorgenson, Esq.
Any notice which is delivered personally in the manner provided
herein shall be conclusively deemed to have been duly given to
the party to whom it is directed upon actual receipt by such
party. Any notice which is addressed and sent by overnight
courier in the manner provided herein shall be conclusively
deemed to have been duly given to the party to which it is
addressed at the close of business, local time, of the recipient
on the 2nd day after it is so dispatched by overnight courier.
<PAGE>
Any notice which is addressed and mailed in the manner provided
herein shall be conclusively deemed to have been duly given to
the party to which it is addressed at the close of business,
local time, of the recipient on the 3rd day after the day it is
so placed in the mail.
11.6 Entire Agreement and Amendment. This Agreement
constitutes the entire agreement of the parties and there are no
agreements or commitments except as set forth herein (or in the
exhibits expressly referred to herein); this Agreement may be
amended only by an instrument in writing executed by the parties
hereto and authorized as provided herein. Nothing expressed or
implied in this Agreement is intended, or shall be construed, to
confer upon or give any person, firm or corporation other than
the parties hereto any rights or remedies under or by reason of
this Agreement.
11.7 Restrictions on Transfer of Units; No Registration
Rights. Seller acknowledges that the Units to be received as the
Adjusted Price hereunder will be received in a transaction not
involving any public offering, will be "restricted securities"
under the Securities Act, and may not be sold or transferred
without registration under the Securities Act or exemption from
such registration (including any exemption that may be provided
pursuant to Rule 144 under the Securities Act). Seller
acknowledges that such Units may be sold, transferred, pledged or
hypothecated or otherwise disposed of only in compliance with
<PAGE>
applicable federal and state securities laws and with evidence
satisfactory to Partnership that the contemplated transaction is
permitted by such laws without registration.
11.8 Curative Allocations. Partnership and Seller agree
that, for income tax purposes, but not for capital account
purposes, Partnership shall make special allocations of gross
income, deduction, gain or loss, as may be selected by the
Managing General Partner, to or from Seller (the "Curative
Allocations") in such aggregate amount as is necessary to
increase the Partnership taxable income otherwise allocable to
Seller in an amount equal to the difference between the fair
market value as determined by Partnership's appraisal and the
"Net Tax Value" of the depreciable and amortizable assets
contributed by Seller to the Partnership (said difference being
the "Book/Tax Difference"), reduced by Seller's pro-rata interest
in a similarly-determined difference for Partnership's assets as
of Closing. The term "Net Tax Value" means the adjusted basis
for income tax purposes of the contributed assets as of Closing.
Calculation of the Curative Allocation shall be made separately
for each category of contributed assets. The amount of the
Curative Allocation per Unit and per year shall be calculated by
Partnership in conformity with the principles of Treas. Reg.
1.704-3(d) as follows:
<PAGE>
(a) The Book/Tax Difference in the contributed assets
shall be deemed to be property placed in service by Partnership
as of July 1, 1995.
(b) The amount of the Curative Allocation per calendar
year shall be calculated by treating the net Book/Tax Differences
as newly acquired property and using MACRS and Section 197 lives
and methods.
(c) The Curative Allocation to a Unit shall continue
after transfer or assignment by Seller until the aggregate amount
of Curative Allocation for said Unit shall equal the Book/Tax
Difference attributable to that Unit, or until Partnership shall
cease to be taxed as a partnership.
Seller agrees to accept Partnership's calculation of the
annual Curative Allocation and to prepare its income tax returns
consistent with Partnership's calculation made in accordance with
this Section 11.8. Allocations of Partnership income, other than
income from the Business during 1995, to the Units shall be made
using the monthly convention presently used by Partnership.
Partnership income from the Business during 1995 shall be
allocated among Unitholders who are partners beginning July 31,
1995.
11.9 Execution of Counterparts. For the convenience of
the parties, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same document.
<PAGE>
11.10 Governing Law. This Agreement shall be construed
and governed by the laws of the State of Missouri.
11.11 No Assignment. This Agreement may not be assigned
by Partnership or by Seller without the prior written consent of
Seller or Partnership, as the case may be, except that
Partnership may, without such consent, assign this Agreement to a
corporation or partnership owned or controlled by Partnership.
11.12 Public Announcements. Neither party will make any
public announcement or filing with respect to the transaction
provided for herein without the prior consent of the other party
hereto, except such filings or announcements as Partnership
reasonably believes it is obligated to make under the federal
securities laws, or except as otherwise required by law.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their representatives duly thereunto
authorized, all as of the date first above written.
HUNT MIDWEST ENTERTAINMENT, INC.
/S/ Lee A. Derrough
By: Lee A. Derrough
President and Chief Executive
Officer
CEDAR FAIR, L.P.
By: CEDAR FAIR MANAGEMENT COMPANY
Its General Partner
/S/ Richard L. Kinzel
By: Richard L. Kinzel
President and Chief Executive
Officer
