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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
August 28, 1996
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
5895 Windward Parkway, Suite 220
Alpharetta, GA 30202-4182
0-22458
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Commission File Number
GEORGIA 58-194 379
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(I.R.S. Employment I.D. No.)
Registrant's Telephone number, including area code: (770) 442-6640
Form 8-K
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Item 2 ACQUISITION OR DISPOSITION OF ASSETS
Prior to the transactions described herein, Mountasia
Entertainment International, Inc. (the "Company") was the
owner of a 16.6% limited partnership interest in National
Entertainment Funding, L.P. ("NEF"), the owner of three Family
Entertainment Centers ("FECs") in Miami, Florida, Henderson,
Nevada, and McAllen, Texas. The Company had constructed the
Henderson and McAllen FECS for NEF and sold the Miami FEC to
NEF.
On April 3, 1996, the Company entered into a Purchase and Sale
Agreement with Family Funn Entertainment, Inc. ("FFE") and
Family Entertainment Funding, L.P. ("FEF") to acquire their
respective general and limited partnership interests in NEF in
exchange for 9.1% Subordinated Convertible Debentures to be
issued by the Company (the "Debentures") in denominations
designated in the agreement. At that time the parties also
entered into a "Letter Agreement Concerning Closing" in which
all parties agreed that the closing of the transaction would
not occur until the Company had obtained the consent of
NationsBank, N.A. (South) ("NationsBank") to the contemplated
purchase and the consent of a majority of FEF's limited
partners. On April 19, 1996 these parties entered into
another letter agreement by which they agreed that the consent
of NationsBank would no longer be required if NationsBank's
loans to the Company and/or NEF were sold to a third party.
Also on April 3, 1996, the Company entered into a Purchase and
Sale Agreement with the shareholders of Amusement Co., Inc.
("ACI"), a general partner of NEF, and Amusement Co. Partners,
Inc. ("ACPI"), a limited partner of NEF, and with Capital
Trust Investments, Ltd. ("Capital Trust"), to acquire all of
the capital stock of ACI and ACPI and to acquire a $3 million
promissory note from Capital Trust in exchange for Debentures
in denominations designated in the agreement. The parties to
this agreement also entered into a "Letter Agreement
Concerning Closing" on that day agreeing that the closing
would not occur until NationsBank consented to the purchase.
On April 19, 1996 these parties entered into another letter
agreement by which they agreed that the consent of NationsBank
would no longer be required if NationsBank's loans to the
Company and/or NEF were sold to a third party.
On May 10, 1996, the Company entered into a Purchase and Sale
Agreement with Leisure Funn, Inc. ("LFI") to acquire its
general partnership interest in NEF in exchange for a $100
Debenture. No separate letter agreements were executed.
On August 28, 1996, the Company entered into Closing
Agreements with each of the sellers, thereby consummating the
transactions described in the Purchase and Sale Agreements
described above, and issued the Debentures.
Form 8-K
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The terms of the Debentures are as follows:
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Maturity . . . . . . . . . . . . . . . . January 1, 2002
Term and Principal Payments . . . . . . The principal shall be paid, at the Company's
option, in the form of (i) cash, (ii) shares of Common Stock
of the Company having a fair market value equal to the amount
of principal due, or (iii) a combination of cash and shares
of Common Stock of the Company such that the cash plus the
fair market value, as defined, of the shares of Common Stock
shall be equal to the amount of principal and any accrued
interest due.
Interest Rate . . . . . . . . . . . . . 9.1%, payable quarterly in arrears
Conversion Rights/Price . . . . . . . . Convertible into common stock at any time
after April 4, 1997 at a conversion price equal to the lower
of (i) the market price as defined, and (ii) $5.00. Each
Debenture will automatically convert into common stock on
December 31, 2002 in accordance with the above terms. The
Company has the option to require conversion into common
stock at any time after April 4, 1997.
Subordination . . . . . . . . . . . . . Subordinated to all future and existing
indebtedness.
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Contemporaneously with the above-described transactions, the Company
cancelled and rendered void 122,500 warrants which were originally issued
to Laffer Warren & Co., Langland Bay Equities, Ltd., and C.T. Capital Trust
N.V., each of which is related to NEF.
In connection with the above-described transactions, the Company entered
into a Consulting Agreement with Capital Trust Developments Limited
("Consultant") on April 3, 1996, to obtain consulting services from
Consultant with respect to the Company's acquisition of the NEF partnership
interests, in exchange for the issuance of $833,333 of the Debentures to
Consultant. The Consulting Agreement was terminated pursuant to the Closing
Agreement with the ACI and ACPI shareholders and with Capital Trust,
effective as of August 28, 1996.
Form 8-K
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The Company's purchase of the general and limited partnership interests
in NEF and of the capital stock of ACI and ACPI has been accounted for
under the purchase method of accounting, in accordance with Accounting
Principles Board Opinion No. 16, Business Combinations. The total purchase
price is calculated to be approximately $19,000,000, which amount includes
without limitation the assumption of a note payable by NEF to NationsBank
of $4,400,000, the issuance of $11,422,422 of Debentures, cash of $600,000
and the assumption of NEF's net liabilities. The purchase price was
determined based upon a multiple of cash flow of the FECs owned by NEF.
Estimated legal and accounting fees are $150,000, making the total cost of
the acquisition approximately $19,150,000.
Form 8-K
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Item 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
It is impractical to provide the required financial
statements for the acquired businesses related in
Item 2 above at this time. The statements will be
prepared and filed under cover of Form 8 as soon as
practicable, but not later than sixty (60) days
following the date of this report.
(b) Pro forma financial information
It is impractical to provide the required pro forma
financial information for the acquired businesses
referenced in Item 2 above at this time. The
information will be prepared and filed under cover of
Form 8 as soon as practicable, but not later than
sixty (60) days following the date of this report.
(c) Exhibits*
1. "Purchase and Sale Agreement" by and among
Family Fun Entertainment, Inc., Family
Entertainment Funding, L.P., and Mountasia
Entertainment International, Inc. dated April
3, 1996.
2. "Letter Agreement Concerning Closing" by and
among Family Fun Entertainment, Inc., Family
Entertainment Funding, L.P., and Mountasia
Entertainment International, Inc. dated
April 3, 1996.
3. Letter agreement by and among Family Fun
Entertainment, Inc., Family Entertainment
Funding, L.P., and Mountasia Entertainment
International, Inc. dated April 19, 1996.
4. "Purchase and Sale Agreement" by and among
the sole shareholders of Amusement Co., Inc.,
Amusement Co. Partners, Inc., Capital Trust
Investments Limited and Mountasia
Entertainment International, Inc. dated April
3, 1996.
5. "Letter Agreement Concerning Closing" by and
among the sole shareholders of Amusement Co.,
Inc., Amusement Co. Partners, Inc., Capital
Trust Investments Limited and Mountasia
Entertainment International, Inc. dated April
3, 1996.
6. Letter agreement by and among the sole
shareholders of Amusement Co., Inc.,
Amusement Co. Partners, Inc., Capital
Form 8-K
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Trust Investments Limited and Mountasia
Entertainment International, Inc. dated April
19, 1996.
7. "Purchase and Sale Agreement" by and between
Leisure Funn, Inc. and Mountasia
Entertainment International, Inc. dated May
10, 1996.
8. "Consulting Agreement" between Mountasia
Entertainment International, Inc. and Capital
Trust Developments Limited dated April 3,
1996.
9. "Closing Agreement" by and among Family Fun
Entertainment, Inc., Family Entertainment
Funding, L.P., and Mountasia Entertainment
International, Inc. dated August 28, 1996.
10. "Closing Agreement" by and among the sole
shareholders of Amusement Co., Inc.,
Amusement Co. Partners, Inc., Capital Trust
Investments Limited and Mountasia
Entertainment International, Inc. dated
August 28, 1996.
11. "Closing Agreement" by and between Leisure
Funn, Inc. and Mountasia Entertainment
International, Inc. dated August 28, 1996.
12. Form of 9.1% Subordinated Convertible
Debenture due January 1, 2002.
* All exhibits are to be filed by amendment.
Form 8-K
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SIGNATURES
Pursuant to the requirements of the Securities Exchanges Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MOUNTASIA ENTERTAINMENT
INTERNATIONAL, INC.
(Registrant)
Date: September 12, 1996 By: /s/ L. Scott Demerau
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President, Chief Executive Officer
Form 8-K
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EXHIBIT INDEX*
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EXHIBIT NO. DESCRIPTION
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10.1 "Purchase and Sale Agreement" by and among Family Fun Entertainment, Inc., Family Entertainment
Funding, L.P., and Mountasia Entertainment International, Inc. dated April 3, 1996.
10.2 "Letter Agreement Concerning Closing" by and among Family Fun Entertainment, Inc., Family
Entertainment Funding, L.P., and Mountasia Entertainment International, Inc. dated April 3,
1996.
10.3 Letter agreement by and among Family Fun Entertainment, Inc., Family Entertainment Funding,
L.P., and Mountasia Entertainment International, Inc. dated April 19, 1996.
10.4 "Purchase and Sale Agreement" by and among the sole shareholders of Amusement Co., Inc.,
Amusement Co. Partners, Inc., Capital Trust Investments Limited and Mountasia Entertainment
International, Inc. dated April 3, 1996.
10.5 "Letter Agreement Concerning Closing" by and among the sole shareholders of Amusement Co.,
Inc., Amusement Co. Partners, Inc., Capital Trust Investments Limited and Mountasia
Entertainment International, Inc. dated April 3, 1996.
10.6 Letter agreement by and among the sole shareholders of Amusement Co., Inc., Amusement Co.
Partners, Inc., Capital Trust Investments Limited and Mountasia Entertainment International,
Inc. dated April 19, 1996.
10.7 "Purchase and Sale Agreement" by and between Leisure Funn, Inc. and Mountasia Entertainment
International, Inc. dated May 10, 1996.
10.8 "Consulting Agreement" between Mountasia Entertainment International, Inc. and Capital Trust
Developments Limited dated April 3, 1996.
10.9 "Closing Agreement" by and among Family Fun Entertainment, Inc., Family Entertainment Funding,
L.P., and Mountasia Entertainment International, Inc. dated August 28, 1996.
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Form 8-K
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10.10 "Closing Agreement" by and among the sole shareholders of Amusement Co., Inc., Amusement Co.
Partners, Inc., Capital Trust Investments Limited and Mountasia Entertainment International,
Inc. dated August 28, 1996.
10.11 "Closing Agreement" by and between Leisure Funn, Inc. and Mountasia Entertainment
International, Inc. dated August 28, 1996.
10.12 Form of 9.1% Subordinated Convertible Debenture due January 1, 2002.
* All exhibits to be filed by amendment.
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Form 8-K
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