STOCK PURCHASE AGREEMENT
BY AND AMONG
PREMIER PARKS INC.,
STUART AMUSEMENT COMPANY,
THE ▇▇▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
DECEMBER 4, 1996
TABLE OF CONTENTS
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PAGE
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ARTICLE I SALE AND PURCHASE; CLOSING........................................1
SECTION 1.1 Purchase and Sale of Shares................................1
SECTION 1.2 Purchase Price.............................................1
SECTION 1.3 Closing....................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND SELLERS...............................................................3
SECTION 2.1 Status of the Shares.......................................3
SECTION 2.2 Title to the Shares........................................4
SECTION 2.3 Authority Relative to this Agreement.......................4
SECTION 2.4 No Conflicts; Consents.....................................4
SECTION 2.5 Corporate Existence and Power..............................4
SECTION 2.6 Charter Documents and Corporate Records....................5
SECTION 2.7 Financial Information......................................5
SECTION 2.8 Liabilities................................................6
SECTION 2.9 Company Receivables........................................6
SECTION 2.10 Inventories................................................6
SECTION 2.11 Absence of Certain Changes.................................6
SECTION 2.12 Properties.................................................7
SECTION 2.13 Contracts..................................................8
SECTION 2.14 Intangible Property........................................9
SECTION 2.15 Claims and Proceedings.....................................9
SECTION 2.16 Taxes......................................................9
SECTION 2.17 Employee Benefits Plans...................................12
SECTION 2.18 Employee-Related Matters..................................13
SECTION 2.19 Insurance.................................................14
SECTION 2.20 Compliance with Laws......................................15
SECTION 2.21 Permits...................................................15
SECTION 2.22 Environmental Matters.....................................15
SECTION 2.23 Finders; Fees.............................................16
SECTION 2.24 Depositaries; Powers of Attorney, etc.....................16
SECTION 2.25 Transaction Shares........................................16
SECTION 2.26 Disclosure................................................16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
BUYER...........................17
SECTION 3.1 Authority Relative to this Agreement......................17
SECTION 3.2 No Conflicts; Consents....................................17
SECTION 3.3 Corporate Existence and Power.............................17
SECTION 3.4 Finders; Fees.............................................18
SECTION 3.5 Buyer Reports.............................................18
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SECTION 3.6 Transaction Shares........................................18
SECTION 3.7 Financing.................................................18
ARTICLE IV COVENANTS AND AGREEMENTS........................................18
SECTION 4.1 Conduct of Business of Company............................18
SECTION 4.2 Corporate Examinations and Investigations.................19
SECTION 4.3 Additional Financial Statements...........................20
SECTION 4.4 Filings and Authorizations................................20
SECTION 4.5 Efforts to Consummate.....................................20
SECTION 4.6 Negotiations With Others..................................20
SECTION 4.7 Notices of Certain Events.................................21
SECTION 4.8 Public Announcements......................................21
SECTION 4.9 Expenses. ................................................21
SECTION 4.10 Tax Matters...............................................21
SECTION 4.11 Certain Renewals..........................................23
SECTION 4.12 Covenant Not-to-Compete...................................23
SECTION 4.13 Buyer Filings.............................................24
SECTION 4.14 No Section 338 Election...................................24
SECTION 4.15 Transfer and Discharge....................................24
ARTICLE V CONDITIONS TO CLOSING............................................25
SECTION 5.1 Conditions to the Obligations of the Parties..............25
SECTION 5.2 Conditions to the Obligations of Sellers..................25
SECTION 5.3 Conditions to the Obligations of Buyer....................26
ARTICLE VI INDEMNIFICATION..................................................29
SECTION 6.1 Survival of Representations and Warranties................29
SECTION 6.2 Obligation of Sellers to Indemnify........................30
SECTION 6.3 Obligation of Buyer to Indemnify..........................30
SECTION 6.4 Notice and Opportunity to Defend Third Party Claims.......30
SECTION 6.5 Limits on Indemnification.................................31
SECTION 6.6 Adjustment................................................32
SECTION 6.7 Exclusive Remedy..........................................32
ARTICLE VII SPECIFIC PERFORMANCE; TERMINATION................................32
SECTION 7.1 Specific Performance......................................32
SECTION 7.2 Termination...............................................32
SECTION 7.3 Effect of Termination; Right to Proceed...................33
ARTICLE VIII MISCELLANEOUS.............................................34
SECTION 8.1 Notices...................................................34
SECTION 8.2 Entire Agreement..........................................35
SECTION 8.3 Waivers and Amendments; NonContractual Remedies;
Preservation of Remedies..................................35
SECTION 8.4 Governing Law.............................................35
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SECTION 8.5 Binding Effect; No Assignment.............................35
SECTION 8.6 Exhibits..................................................36
SECTION 8.7 Severability..............................................36
SECTION 8.8 Counterparts..............................................36
SECTION 8.9 Third Parties.............................................36
SECTION 8.10 Further Assurances........................................36
ARTICLE IX DEFINITIONS......................................................36
SECTION 9.1 Definitions...............................................36
SECTION 9.2 Interpretation............................................43
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 4, 1996, by and among
Premier Parks Inc., a Delaware corporation ("BUYER"), Stuart Amusement Company,
a Massachusetts corporation (the "COMPANY"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇")
and The ▇▇▇▇▇▇▇ Family Limited Partnership, a Massachusetts limited partnership
(the "PARTNERSHIP") (▇▇▇▇▇▇▇ and the Partnership are sometimes hereinafter
referred to as the "SELLERS" and individually as a "SELLER").
W I T N E S S E T H:
WHEREAS, each Seller owns (beneficially and of record) the number of
shares of Class A Common Stock, without par value (the "CLASS A STOCK") and
Class B Common Stock, without par value (the "CLASS B STOCK" and together
with the Class A Stock, the "COMMON STOCK"), set forth on EXHIBIT A next to
the name of such Seller under the caption "Total Number of Shares"
(collectively, the "SHARES"), which Shares, together with the Company's
issued and outstanding shares of preferred stock (the "PREFERRED STOCK"),
constitute all of the issued and outstanding shares of capital stock of the
Company;
WHEREAS, each Seller desires to sell and Buyer desires to purchase
all of the Shares owned by such Seller on the terms and conditions set forth
herein.
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; CLOSING
SECTION 1.1 PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions set forth herein, at the Closing (as hereinafter defined), each
Seller shall sell, transfer and deliver to Buyer, and Buyer shall purchase and
accept from each Seller, the Shares of such Seller.
SECTION 1.2 PURCHASE PRICE. (a) Subject to any adjustment provided
for herein, the aggregate purchase price for the Shares shall be Twenty-Two
Million, One Hundred Fifty Thousand Dollars ($22,150,000) (as so adjusted,
the "PURCHASE PRICE").
(b) On the date hereof, Buyer, Sellers and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ &
Associates, P.C., as deposit agent (the "DEPOSIT AGENT"), have entered into a
deposit agreement (the "DEPOSIT AGREEMENT") substantially in the form of EXHIBIT
1.2(B) hereto, dated such date, pursuant to which Buyer has deposited One
Million Dollars ($1,000,000) (the "DEPOSIT") with the Deposit Agent in
accordance with the Deposit Agreement. At the
Closing, the Deposit Agent shall deliver to Buyer immediately available funds in
an amount equal to the Deposit, plus accrued interest, if any, thereon.
(c) On or prior to the Closing Date (as hereinafter defined),
Buyer, Sellers and an escrow agent selected by Buyer and Sellers ("ESCROW
AGENT") will execute and deliver an escrow agreement ("ESCROW AGREEMENT")
substantially in the form of EXHIBIT 1.2(C) hereto pursuant to which Buyer
will deliver to Escrow Agent an amount (the "ESCROW FUNDS") out of the
Purchase Price equal to $1,000,000 (the "INDEMNIFICATION FUNDS"), which
amount will provide a 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.
(d) The Purchase Price is payable as follows:
(i) at the Closing, Buyer shall pay to the holders of the
Preferred Stock the amount required to redeem or otherwise retire in full all
such Preferred Stock as of the Closing Date (the "PREFERRED STOCK PAYMENT");
(ii) at the Closing, Buyer shall pay to First National Bank of
Boston, the holder of the Term Note, the amount required to satisfy and
discharge the Term Note as of the Closing Date (the "TERM NOTE PAYMENT");
(iii) at the Closing, Buyer shall pay to First National Bank of
Boston the amount required to satisfy and discharge all obligations of the
Company and its Subsidiaries under the Revolving Credit Facility as of the
Closing Date (the "REVOLVING CREDIT PAYMENT");
(iv) at the Closing, Buyer shall either repay, assume or
discharge the other Liabilities of the Company and its Subsidiaries listed on
EXHIBIT 1.2(D) hereof at the amounts specified therein (the "LIABILITY PAYMENT,"
and collectively with the Preferred Stock Payment, the Term Note Payment and the
Revolving Credit Payment, the "CLOSING PAYMENTS");
(v) at the Closing, Buyer shall deliver the Escrow Funds to the
Escrow Agent; and
(vi) at the Closing, Buyer will deliver to Sellers an amount (the
"NET PROCEEDS") (in immediately available funds and by delivery of shares of
Buyer Stock as provided in Section 1.2(e)) equal to the Purchase Price MINUS the
sum of the amounts paid by Buyer pursuant to clauses (i)-(v), inclusive.
(e) At the Closing, Buyer will deliver to the Sellers, in
satisfaction and payment of One Million Dollars ($1,000,000) of the Net Proceeds
payable to such Sellers, shares of Buyer Stock (the "TRANSACTION SHARES"). For
purposes hereof, the Transaction Shares will be valued at the Average Closing
Price. No fractional shares of Buyer Stock will be issued pursuant to this
Section 1.2, and the number of Transaction Shares issuable to each Seller shall
be rounded down to the nearest number of whole shares
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of Buyer Stock. The parties acknowledge and agree that the Transaction Shares
are being issued pursuant to the exemption from the registration requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT") provided in
Section 4(2) thereof and constitute restricted securities within the meaning of
the Securities Act. Neither Seller may transfer the Transaction Shares absent
compliance with the provisions of the Securities Act and applicable state
securities laws and all stock certificates evidencing the Transaction Shares
shall bear a legend to such effect. At the Closing, Buyer and Sellers shall
enter into a registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT")
substantially in the form of EXHIBIT 1.2(E) hereto. The Registration Rights
Agreement will provide that Buyer will file a registration statement on Form S-3
(the "REGISTRATION STATEMENT") relating to the Transaction Shares no later than
five business days following the Closing Date, will pay all costs in respect
thereto (other than fees and expenses of counsel to Sellers and discounts, fees
or commissions upon resale of the Transaction Shares) and will use its
reasonable best efforts to have the Registration Statement declared effective as
soon as practicable following the filing thereof.
SECTION 1.3 CLOSING. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Shares contemplated hereby (the
"CLOSING") shall take place at 10:00 a.m., local time, at the offices of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ & Associates, P.C., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ on January 31, 1997, or if on such date the conditions specified in
Article V shall not have been satisfied or waived (other than conditions
requiring the delivery of Purchase Price, certificates representing the Shares
or closing certificates and other instruments and documents referred to in
Section 5.2(f) or 5.3(l)), a date selected by Buyer not later than the fifth
business day following such satisfaction or waiver (the "CLOSING DATE").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLERS
Each Seller and the Company, jointly and severally, represent and warrant
to Buyer that:
SECTION 2.1 STATUS OF THE SHARES. The authorized and outstanding shares
of Class A Stock and Class B Stock (which, together with the shares of Preferred
Stock, are the only classes of capital stock of the Company outstanding) is as
set forth on SCHEDULE 2.1. Other than the Shares (and the shares of Preferred
Stock to be redeemed by the Company on or immediately prior to the Closing), at
the Closing, the Company will not have outstanding any rights, warrants or
options to acquire securities of the Company or any convertible or exchangeable
securities and, other than pursuant to this Agreement, no person will have any
right to acquire any securities of the Company. All of the Shares have been
duly authorized and duly and validly issued and are fully paid and
non-assessable, and none were issued in violation of any preemptive rights,
rights of first refusal or other contractual or legal restrictions of any kind.
SECTION 2.2 TITLE TO THE SHARES. Each Seller owns and holds good and
marketable title to its Shares free and clear of any Lien of any kind. Upon
consummation of
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the Contemplated Transactions (as hereinafter defined) in accordance herewith,
Buyer will own all of the issued and outstanding shares of capital stock of the
Company.
SECTION 2.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company and each
Seller have full power, capacity and authority to execute and deliver this
Agreement and each other Transaction Document to which it is 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 the Company and such
Seller is a party have been duly and validly authorized by the Company or such
Seller and no other proceedings on the part of the Company or such Seller (or
any other person) are necessary to authorize the execution and delivery by the
Company or such Seller of this Agreement or the consummation of the Contemplated
Transactions to which the Company or each Seller is a party. This Agreement and
the other Transaction Documents to which the Company or such Seller is a party
have been duly and validly executed and delivered by the Company or such Seller,
and (assuming the valid execution and delivery thereof by the other parties
thereto) constitute the legal, valid and binding agreements of the Company and
such Seller enforceable against the Company and such Seller 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 2.4 NO CONFLICTS; CONSENTS. The execution, delivery and
performance by the Company and each Seller of this Agreement and each other
Transaction Document to which it is a party, the consummation of the
Contemplated Transactions to which the Company or each Seller is a party or the
contemplated change of control of the stock ownership of the Company, will not
(i) violate any provision of the Limited Partnership Agreement (or the
certificate of incorporation or by-laws or comparable instruments) of the
Partnership, the Company or any Subsidiary; (ii) require Sellers, the Company or
any Subsidiary 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 2.4 (the "SELLERS REQUIRED CONSENTS"); (iii) if Sellers 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 2.13 to which any Seller, the Company or any Subsidiary is a
party or by which any of them or any of their Assets may be bound or subject, or
result in the creation of any Lien upon the Shares or upon any of the Assets of
the Company or any Subsidiary pursuant to the terms of any such Contract;
(iv) if Sellers Required Consents are obtained prior to Closing, violate any Law
or Order of any Governmental Body against, or binding upon, any Seller, the
Company or any Subsidiary or upon their respective Assets or the Business; or
(v) if Sellers Required Consents are obtained prior to Closing, violate or
result in the revocation or suspension of any Permit.
SECTION 2.5 CORPORATE EXISTENCE AND POWER. (a) Each of the Company and
each of its Subsidiaries is a corporation duly organized, validly existing and
in good
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standing under the laws of its jurisdiction of incorporation, and has all
requisite powers and all material Permits required to carry on the Business as
now conducted. Each of the Company and each of its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary. SCHEDULE 2.5
sets forth the name of each Subsidiary, its jurisdiction of incorporation or
other organization, each jurisdiction in which it is duly qualified to do
business as a foreign corporation, the authorized capital stock or other
ownership interests of, and the securities issued by, each Subsidiary. Except
for the Subsidiaries set forth on SCHEDULE 2.5, the Company does not directly or
indirectly own any interest or investment in any other person.
(b) All of the outstanding capital stock or other ownership
interests of each Subsidiary is owned by the Company, directly or indirectly,
free and clear of any Lien and any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). All of the outstanding capital stock or
other ownership interests of each Subsidiary is validly issued, fully paid and
nonassessable and was not issued in violation of any preemptive rights, rights
of first refusal or any other contractual or legal restrictions of any kind. No
Subsidiary has outstanding any rights, warrants or options to acquire securities
of such Subsidiary or any convertible or exchangeable securities and no person
has any right to acquire any securities of such Subsidiary.
SECTION 2.6 CHARTER DOCUMENTS AND CORPORATE RECORDS. The Company and
Sellers have heretofore delivered to Buyer true and complete copies of the
articles of organization, by-laws and minute books, or comparable instruments,
of the Company and each of the Subsidiaries as in effect on the date hereof.
The stock and transfer books of the Company and each of the Subsidiaries have
been made available to Buyer for its inspection and are true and complete.
SECTION 2.7 FINANCIAL INFORMATION. (a) The Company and Sellers have
previously furnished to Buyer true and complete copies of (i) the Company's
consolidated financial statements at and for the twelve-month periods ended
September 30, 1995, 1994 and 1993 (the "ANNUAL STATEMENTS"), (ii) the Company's
unaudited consolidated financial statements at and for the twelve months ended
September 30, 1996 (the "INTERIM STATEMENTS"), and (iii) all management letters,
management representation letters and attorney audit response letters issued in
connection with the Company's consolidated financial statements for each of the
three years ended September 30, 1995. The Annual Statements have been prepared
in accordance with GAAP consistently applied as set forth in the notes thereto
and were audited by KPMG Peat Marwick LLP ("KPMG") (without qualification in the
report thereof). Each delivered financial statement presents fairly the
consolidated financial position of the Company and its Subsidiaries as of its
date, and its consolidated earnings, changes in stockholders' equity and cash
flow for the periods then ended. Each delivered balance sheet fully sets forth
all consolidated Assets and Liabilities of the Company and its Subsidiaries
existing as of its date which, under GAAP, should be set forth therein, and each
delivered statement of earnings sets forth the items of consolidated income and
expense of the Company and its Subsidiaries which should appear therein under
GAAP.
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(b) SCHEDULE 2.7 accurately sets forth the attendance (by month)
at the Riverside Amusement Park (the "PARK") included in the Business during
1994, 1995 and 1996.
(c) All financial, business and accounting books, ledgers,
accounts and official and other records relating to the Company and each
Subsidiary 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 2.8 LIABILITIES. Except as and to the extent reflected in the
audited consolidated balance sheet of the Company and its Subsidiaries ("the
LATEST BALANCE SHEET") at September 30, 1995 ("the LATEST BALANCE SHEET DATE")
referred to in Section 2.7, the Company and its Subsidiaries 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 2.8 hereto, neither the Company nor any Subsidiary has
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, (ii) Liabilities in respect of borrowings under
the Revolving Credit Facility, (iii) Liabilities reflected on any balance sheet
included in the Interim Statements, (iv) Liabilities or obligations of continued
performance under Contracts and other commitments entered into in the ordinary
course of the Business, and (v) Liabilities incurred since the date of the
Interim Statements in the ordinary course of business and consistent with past
practices. As of the Closing Date, there will exist no Company Debt, other than
the Company Debt to be paid by Buyer pursuant to Section 1.2(d)(ii)-(iii).
SECTION 2.9 COMPANY RECEIVABLES. Except to the extent of the amount of
the reserve for doubtful accounts reflected in the Latest Balance Sheet or as
set forth in SCHEDULE 2.9, all the Receivables of the Company and each
Subsidiary reflected therein, and all Receivables that have arisen since the
Latest Balance Sheet Date (except Receivables as have been collected since such
date) are valid and enforceable claims, and constitute bona fide Receivables
resulting from the sale of goods and services in the ordinary course of the
Business. Other than returns of unused admission tickets for credit to customer
accounts, the Receivables are subject to no valid defense, offsets, returns,
allowances or credits of any kind. Except for Receivables or as set forth in
SCHEDULE 2.9, neither the Company nor any Subsidiary has made any loan or
advance to any person.
SECTION 2.10 INVENTORIES. SCHEDULE 2.10 sets forth a true and complete
list of Inventory by category as of September 30, 1996. No representation or
warranty is being made as to the merchantability or fitness for a particular use
with respect to the Inventory.
SECTION 2.11 ABSENCE OF CERTAIN CHANGES. (a) Since the Latest Balance
Sheet Date, except as set forth in this Agreement or disclosed in SCHEDULE 2.11
or reflected in the Interim Statements, each of the Company and the Subsidiaries
has conducted the Business in the ordinary course consistent with past practices
and there has not been:
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(i) Any material adverse change in the Condition of the Business
or any event, occurrence or circumstance that could reasonably be expected to
cause such a material adverse change;
(ii) Any transaction or Contract with respect to the purchase,
acquisition, lease, disposition or transfer of any Assets or to any capital
expenditure (in each case, other than in the ordinary course of the Business in
accordance with past practice);
(iii) Any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
other than regularly scheduled dividend payments on the Preferred Stock;
(iv) Any damage, destruction or other casualty loss (whether or
not covered by insurance), condemnation or other taking affecting the Assets of
the Company or any Subsidiary to the extent material to the Company or such
Subsidiary;
(v) Any change in any method of accounting or accounting
practice by the Company or any of the Subsidiaries;
(vi) Any increase in the compensation payable or to become
payable to any officer, stockholder, director, consultant, agent or full-time
employee of the Company or any Subsidiary, or any alteration in the benefits
payable to any thereof;
(vii) Any material adverse change in the relationships of the
Company and its Subsidiaries with its customers, suppliers and vendors;
(viii) Except for any changes made in the ordinary course of
Business, any material change in any of the Company's or any Subsidiary's
business policies, including advertising, marketing, pricing, purchasing,
personnel, returns or budget policies; or
(ix) Except in the ordinary course of the Business or as
disclosed in SCHEDULE 2.11, consistent with past practice, any payment, directly
or indirectly, of any Liability before the same became due in accordance with
its terms.
(b) Except as set forth on SCHEDULE 2.11, neither the Company
nor any Subsidiary has any Liability that is past due on the date hereof.
SECTION 2.12 PROPERTIES. (a) SCHEDULE 2.12A sets forth a complete list
and description of all real property owned or leased by the Company and its
Subsidiaries (the "REAL PROPERTY"). The Company and its Subsidiaries has good,
marketable and insurable fee simple (or leasehold) title to the Real Property,
free and clear of all Liens and other title defects of any nature whatsoever,
except real estate Taxes (general and specific) not yet due and payable,
restrictions imposed by zoning ordinances, Liens with respect to Company Debt to
be paid by Buyer at Closing hereunder, or as disclosed on SCHEDULE 2.12A
(collectively, the "PERMITTED LIENS"). SCHEDULE 2.12A also sets forth with
respect to such Real Property a list of all title insurance policies, deeds,
appraisal reports, surveys and environmental reports
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held or controlled by the Company, any Subsidiary or any Seller, copies of which
have been provided to Buyer. To the best of Sellers' knowledge, except as set
forth in SCHEDULE 2.12A, all structures and buildings of the Business do not
contain any structural or other material defects that could interfere in any
material respect with the operation of the Business and are located within
applicable boundary lines. To the best of Sellers' knowledge, the Business is
not in violation in any material respect of any building, zoning,
anti-pollution, health, occupational safety or other Law or any Order or Permit
in respect of such Real Property, structures and buildings. Except as
disclosed on SCHEDULE 2.12A, no person, other than the Company or any
Subsidiaries, has any right to occupy or possess any of the Real Property or any
such structures or buildings.
(b) The Company and its Subsidiaries have good and marketable
title to (or valid leasehold interest in) all personal property used in the
Business, free and clear of all Liens except as disclosed in SCHEDULE 2.12B. To
the best of Sellers' knowledge, the machinery, equipment and other tangible
personal property constituting a part of the Assets (whether owned or leased),
have been well-maintained in accordance with industry standards, are in good
condition and repair (subject to normal wear and tear) and are adequate in
quantity and quality for the operation of the Business as presently conducted.
SCHEDULE 2.12B contains a list and description of all (i) equipment and (ii)
other tangible personal property of the Company or any Subsidiary with a book
value (before depreciation) of $10,000 or more. Prior to the Closing, the
Company shall acquire good and marketable title to all personal property used in
the Business that, on the date hereof, is leased by the Company from Affiliates
of the Company or any Seller.
SECTION 2.13 CONTRACTS. (a) SCHEDULE 2.13 sets forth an accurate and
complete list of all Contracts to which the Company or any Subsidiary is a party
or by which it or its Assets are bound or subject, except only for those with
persons who are not Affiliates of either the Company or any Seller relating
solely to the purchase or sale of property or services by the Company or such
Subsidiary in the ordinary course of the Business which (i) require the Company
or such Subsidiary 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 the Company or such Subsidiary without penalty during such
period. 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 2.13 are valid, subsisting,
in full force and effect and binding upon the Company or any Subsidiary, as the
case may be, and, to the knowledge of the Company or Sellers, the other parties
thereto in accordance with their terms. Except as set forth in SCHEDULE 2.13,
each of the Company and the Subsidiaries is not in default (or alleged default)
under any such Contract in any material respect, nor, to the knowledge of the
Company or Sellers, is any other party thereto in default thereunder in any
material respect, nor does any condition exist that with notice or the lapse of
time or both would constitute a material default (or give rise to a termination
right) thereunder. To the knowledge of the Company or Sellers, none of the
other parties to any such 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
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the Company nor any Subsidiary has waived any material right under any such
Contract, materially amended or extended beyond December 31, 1996 any such
Contract or terminated or failed to renew (or received notice of termination or
failure to renew with respect to) any such Contract.
SECTION 2.14 INTANGIBLE PROPERTY. SCHEDULE 2.14 sets forth all
trademarks, registered copyrights, service marks and trade names owned or used
by the Company or any of the Subsidiaries, all applications for any of the
foregoing, and all permits, grants and licenses or other rights running to or
from the Company or any of the Subsidiaries relating to any of the foregoing,
and there are no other trademarks, copyrights, service marks and trade names
that are material to the Business (the "INTELLECTUAL PROPERTY RIGHTS"). The
Contemplated Transactions will not adversely affect the right, title and
interest of the Company or any Subsidiary in and to the Intellectual Property
Rights. To Sellers' best knowledge, the Intellectual Property Rights do not
infringe on or conflict with the rights or intellectual property of third
parties.
SECTION 2.15 CLAIMS AND PROCEEDINGS. Except as set forth on SCHEDULE
2.15, there are no outstanding Orders of any Governmental Body against or
involving the Company, any of the Subsidiaries or the Business. Except as set
forth on SCHEDULE 2.15, there are no actions, suits, claims or counterclaims or
legal, administrative or arbitral proceedings or investigations (collectively,
"CLAIMS") (whether or not the defense thereof or Liabilities in respect thereof
are covered by insurance), pending or threatened on the date hereof, against or
involving the Company, any of the Subsidiaries or any of their respective Assets
or the Business. SCHEDULE 2.15 also indicates those Claims the defense thereof
or Liabilities in respect thereof are covered by insurance. Except as set forth
on SCHEDULE 2.15, to the knowledge of the Company or Sellers, on the date
hereof, there is no fact, event or circumstances that would give rise to any
uninsured Claim. All notices required to have been given to any insurance
company listed as insuring against any Claim set forth on SCHEDULE 2.15 have
been timely and duly given and, except as set forth on SCHEDULE 2.15, no
insurance company has asserted that such Claim is not covered by the applicable
policy relating to such Claim. There are no Claims pending or, to the knowledge
of the Company or Sellers, threatened that would give rise to any right of
indemnification on the part of any director or officer of the Company or any of
the Subsidiaries or the heirs, executors or administrators of such director or
officer, against the Company or any of the Subsidiaries.
SECTION 2.16 TAXES. (a) Except as set forth in SCHEDULE 2.16:
(i) the Company and its Subsidiaries have timely filed or, if
not yet due, will timely file all Tax Returns required to be filed by them for
all taxable periods ending on or before the Closing Date and all such Tax
Returns are true, correct and complete;
(ii) the Company and its Subsidiaries have paid or, if payment is
not yet due, will, on or before the Closing Date, pay to the appropriate Tax
Authority or have established, in accordance with GAAP and consistent with past
practice, accruals that are reflected on the Interim Statements for the payment
of, all Taxes of the Company and its Subsidiaries for all taxable periods ending
on or before the Closing Date;
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(iii) no extension of time has been requested or granted for the
Company or any of its Subsidiaries to file any Tax Return that has not yet been
filed or to pay any Tax that has not yet been paid and neither the Company nor
its Subsidiaries have granted a power of attorney that remains outstanding with
regard to any Tax matter;
(iv) neither the Company nor any of its Subsidiaries has received
notice of a determination by a Tax authority that Taxes are owed by the Company
or any of its Subsidiaries (such determination to be referred to as a "TAX
DEFICIENCY") and, to the knowledge of the Company or Sellers, no Tax Deficiency
is proposed or threatened;
(v) all Tax Deficiencies have been paid or finally settled and
all amounts determined by settlement to be owed have been paid;
(vi) there are no Tax Liens on or pending against the Company,
its Subsidiaries or any of their properties;
(vii) there are no presently outstanding waivers or extensions or
requests for waiver or extension of the time within which a Tax Deficiency may
be asserted or assessed;
(viii) no issue has been raised in any examination, investigation,
audit, suit, action, claim or proceeding relating to Taxes (a "TAX AUDIT")
which, by application of similar principles to any past, present or future
period, would result in a Tax Deficiency for such period;
(ix) there are no pending or, to the knowledge of the Company or
Sellers, threatened Tax Audits of the Company or any of its Subsidiaries;
(x) neither the Company nor any Subsidiary has ever been
required to include in income any adjustment pursuant to section 481 of the Code
or pursuant to a closing agreement as defined in section 7121 of the Code and no
Tax Authority has ever made or proposed any such adjustment;
(xi) neither the Company nor any Subsidiary owns any property
that is tax-exempt use property within the meaning of section 168(b) of the Code
or that is described in section 168(f)(8) of the Internal Revenue Code as in
effect prior to its amendment by the Tax Reform Act of 1986;
(xii) neither the Company nor any Subsidiary is a party to any
arrangement to which section 280G of the Code could under any circumstances
apply;
(xiii) neither the Company nor any Subsidiary has filed a consent
pursuant to section 341(f) of the Code or agreed for section 341(f)(2) to apply
to the disposition of any asset;
(xiv) neither the Company nor any Subsidiary is now or has ever
been (a) an includable member of an "affiliated group" within the meaning of
section
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1504(a) of the Code other than an affiliated group consisting only of the
Company and one or more of its current Subsidiaries, (b) a member of any
consolidated, combined or unitary Tax Return filing group other than a group
consisting only of the Company and one or more of its Subsidiaries, (c) a party
to an agreement that obligates it to make any payment computed by reference to
the Taxes, taxable income or tax losses of any other individual or entity, (d) a
personal holding company as defined in section 542 of the Code, (e) the owner of
an interest in an entity that is or is treated as a partnership, trust,
regulated investment company as defined in section 851 of the Code, real estate
investment trust as defined in section 856 of the Code or foreign personal
holding company as defined in section 552(a) of the Code, (f) a United States
shareholder as defined in section 951(b) of the Code of a controlled foreign
corporation as defined in section 957 of the Code or (g) a United States real
property holding company within the meaning of section 897(c)(2) of the Code;
(xv) neither the Company nor any of the Subsidiaries has any
deferred intercompany gains or losses that have not been fully taken into income
for income Tax purposes;
(xvi) there are no transfer or other taxes imposed by the
Commonwealth of Massachusetts on either the Company or Buyer by virtue of the
Contemplated Transactions; or
(xvii) no claim has been made by any Tax Authority that the Company
or a Subsidiary is subject to Tax in a jurisdiction in which the Company or the
respective Subsidiary is not then paying Tax of the type asserted.
Each reference to a provision of the Code in this Section 2.16 shall be treated
for state and local Tax purposes as a reference to analogous or similar
provisions of state and local law.
(b) SCHEDULE 2.16 contains (i) a schedule of the filing dates of
all Tax Returns required to be filed by the Company or its Subsidiaries, (ii) a
description of all past Tax Audits involving the Company or its Subsidiaries,
(iii) a list of all elections made by the Company or its Subsidiaries relating
to Taxes, (iv) a description of the accounting methods employed by the Company
and its Subsidiaries and any changes in such accounting methods that occurred
during a year for which the statute of limitations remains open, (v) a schedule
of the Company's and each Subsidiary's tax basis in its assets and the annual
depreciation deductions for such assets over their remaining tax recovery
period, (vi) a schedule of the amortization period and annual amortization
deductions for each item subject to amortization and a description of the asset
or other item that is subject to amortization (E.G., loan issuance costs),
(vii) a schedule of the tax basis of the Company in the stock of its
Subsidiaries and of each Subsidiary in the stock of its Subsidiaries, (viii) a
schedule of the tax attributes of the Company and each Subsidiary (including but
not limited to net operating and capital losses and investment and alternative
minimum tax credits) shown on a separate company basis, together with a
description of all limitations to which such tax attributes are subject (E.G.,
Section 382 limitations or separate return limitation year restrictions) that
can be carried forward to the Company's taxable year ending after [March 31,
1996]. Except as set forth in SCHEDULE 2.16, the Company and its Subsidiaries
have retained all supporting and backup papers, receipts, spreadsheets and other
information necessary for (i) the preparation of all Tax Returns that have not
yet been filed and (ii) the defense of all Tax Audits
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involving taxable periods either ending on or during the six (6) years prior to
the Closing Date or from which there are unutilized net operating loss, capital
loss or investment tax credit carryovers.
(c) Except as set forth in SCHEDULE 2.16 and except for sales
Taxes which result from the consummation of the Contemplated Transactions, the
Company and its Subsidiaries have 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 have been furnished properly completed
exemption certificates for all exempt transactions. The Company and its
Subsidiaries have maintained and have in their 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.
SECTION 2.17 EMPLOYEE BENEFITS PLANS. (a) Except as set forth on
SCHEDULE 2.17, neither Sellers, the Company or its Subsidiaries nor any
Affiliate of Sellers or its Subsidiaries, nor the Business, nor any portion of
the Business (all of the above hereinafter individually and collectively called
the "ENTITY"), nor any other company or entity which together with the Entity
constitutes a member of the Entity's "controlled group" or "affiliated service
group" (within the meaning of Sections 4001(a)(14) and/or (b) of ERISA and/or
Sections 414(b), (c), (m) or (o) of the Code (such group or groups hereinafter
referred to individually and collectively as the "GROUP")), has at any time
adopted or maintained, or has any present or future obligation to contribute to
or make payment under (i) any employee benefit plan (as defined in Section 3(3)
of ERISA), or (ii) any other benefit plan, program, contract or arrangement of
any kind whatsoever (whether for the benefit of present, former, retired or
future employees, officers, directors or consultants of the Entity or the Group,
or for the benefit of any other person or persons) including, without
limitation, arrangements providing for contributions, benefits or payments in
the event of a change of ownership or control in whole or in part of the Entity
or the Group, or with respect to disability, relocation, child care, educational
assistance, deferred compensation, pension, retirement, profit sharing, thrift,
savings, stock ownership, stock bonus, restricted stock, health, dental,
medical, life, hospitalization, stock purchase, stock option, incentive, bonus,
sabbatical leave, vacation, severance or other contribution, benefit or payment
of any kind, or (iii) any employment, consulting, service or other contract of
any kind whatsoever (all such employee benefit plans and other benefit plans,
programs, contracts or arrangements and such employment, consulting, service or
other Contracts hereinafter individually and collectively called the "EMPLOYEE
BENEFIT PLAN(S)"). No Entity and no member of the Group is or has at any time
been obligated to contribute to any Employee Benefit Plan subject to Title IV of
ERISA. No Entity and no member of the Group has completely or partially
withdrawn from any "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
(b) In addition, except as set forth in SCHEDULE 2.17 hereof, to
the best knowledge of Sellers, (i) there have been no "prohibited transactions"
within the meaning of Section 406 of ERISA or Section 4975 of the Code with
respect to any of the Employee Benefit Plans; (ii) no Liability has been or is
expected to be incurred by the Entity or any member of the Group under Title IV
of ERISA with respect to any Employee Benefit Plan currently or formerly
maintained by any of them; (iii) any and all amounts which the
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Entity or any member of the Group are required to pay as contributions or
otherwise to, or with respect to the Employee Benefit Plans have been timely
made; (iv) no Employee Benefit Plan has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, and neither Entity nor any member of the Group has
provided, or is required to provide, security to any Employee Benefit Plan which
is subject to Title IV of ERISA or otherwise; (v) the current value of all
"benefit liabilities" within the meaning of Section 4001(a)(16) of ERISA under
each Employee Benefit Plan which is subject to Title IV of ERISA or otherwise,
does not exceed the current value of the assets of such Employee Benefit Plan
allocable to such benefit liabilities; (vi) each of the Employee Benefit Plans
has been operated and administered in accordance with all applicable Laws; (vii)
each of the Employee Benefit Plans which is intended to be "qualified" within
the meaning of Sections 401(a) and 501(a) of the Code has been determined by the
IRS to be so qualified and continues to be so qualified; (viii) there are no
pending, threatened or anticipated Claims involving any of the Employee Benefit
Plans; (ix) the Entity and the Group have not incurred and do not expect to
incur any withdrawal liability with respect to a multiemployer plan under
Subtitle E of Title IV of ERISA; (x) no notice of a "reportable event" within
the meaning of Section 4043 of ERISA has been required to be filed with respect
to any Employee Benefit Plan; (ix) neither the Entity nor any member of the
Group is a party to, or participates in, or has any Liability or contingent
Liability with respect to any multiemployer plan; (xii) neither the execution
and delivery of this Agreement nor the consummation of the Contemplated
Transactions will accelerate benefits or any payments under any Employee Benefit
Plan; and (xiii) neither the Entity nor any member of the Group has any
commitment to create any additional Employee Benefit Plan, or to amend any
Employee Benefit Plan so as to increase benefits thereunder.
(c) SCHEDULE 2.17 identifies all Employee Benefit Plans covering
current, former or retired employees, officers, directors and consultants of the
Entity and the Group (the "ENTITY PLANS"). A true and correct copy of each of
the Entity Plans (and all amendments thereto, whether currently effective or to
become effective at a later date) listed on SCHEDULE 2.17 and all contracts
relating thereto, or to the funding thereof (including, without limitation, all
trust agreements, insurance contracts, investment management agreements,
subscription and participation agreements, administration and recordkeeping
agreements) have been provided to Buyer. All Entity Plans have at all times
been established and maintained in accordance with their terms. Each Entity
Plan can be unilaterally terminated without penalty by Seller on no more than
sixty (60) days' notice. In the case of any Entity Plan which is not in written
form, an accurate description of such Entity Plan has been provided to Buyer. A
true and correct copy of the most recent annual report, actuarial report,
summary plan description, and IRS determination letter and/or ruling with
respect to each such Entity Plan, and a current schedule of assets (and the fair
market value thereof assuming liquidation of any asset which is not readily
tradeable) held with respect to any funded Entity Plan has been provided to
Buyer, and there have been no material changes in the financial condition in the
respective Entity Plans (or other information provided hereunder) from that
stated in such annual report, actuarial reports and schedule of assets.
SECTION 2.18 EMPLOYEE-RELATED MATTERS. (a) SCHEDULE 2.18 contains a true
and correct list of all directors, full-time employees and consultants of the
Company and its Subsidiaries, including any agreement relating thereto, and a
description of the rate and
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nature of all compensation payable by the Company or such Subsidiary to each
such person. SCHEDULE 2.18 also contains a description of all existing
severance, accrued vacation policies or retiree benefits of any current or
former director, officer, employee or consultant (to the extent not included in
SCHEDULE 2.17). Except as set forth on such Schedule, the employment or
consulting arrangement of all such persons is, subject to applicable laws
involving the wrongful termination of employees, terminable at will.
(b) Except as set forth in SCHEDULE 2.18, (i) the Company and
the Subsidiaries are not a party to any Contract with any labor organization or
other representative of their employees; (ii) there is no unfair labor practice
charge or complaint pending or, to the knowledge of the Company or Sellers,
threatened against the Company or any of the Subsidiaries; (iii) the Company and
the Subsidiaries have not experienced any labor strike, slowdown, work stoppage
or similar material labor controversy within the past three years; (iv) no
representation question has been raised respecting any of the Company's or any
of the Subsidiaries' employees working within the past three years, nor, to the
knowledge of the Company or Sellers, are there any campaigns being conducted to
solicit authorization from the Company's employees or any of the Subsidiaries'
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 or other representative of the
Company's employees or any of the Subsidiaries' employees, is pending or, to the
knowledge of the Company or Sellers, threatened against the Company or any of
the Subsidiaries; (vi) neither the Company nor any Subsidiary 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, the Company and the Subsidiaries have paid in full to all of
their employees all wages, salaries, commissions, bonuses, benefits and other
compensation due and payable to such employees.
SECTION 2.19 INSURANCE. SCHEDULE 2.19 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 and directors of the Company and the Subsidiaries and true and complete
copies of all such Insurance Policies have been delivered to Buyer.
SCHEDULE 2.19 also sets forth (a) with respect to each Insurance Policy the
applicable deductible amounts and any material limitations to coverage and (b)
any letter of credit relating to any such Insurance Policy and all inspections
and reports delivered to the Company or any Subsidiary by any insurer with
respect to such Insurance Policies, copies of which have been delivered to
Buyer. True and correct copies of all loss runs with respect to such period
have been delivered to Buyer. Except as set forth in SCHEDULE 2.19, there is no
Claim by the Company or any of the Subsidiaries pending under any of such
Insurance Policies as to which coverage has been questioned, denied or disputed
by the underwriters of such Insurance Policies or requirement by any insurer to
perform work which has not been satisfied. No premiums payable under all
Insurance Policies are overdue and the Company and the Subsidiaries are
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. The insurance in effect with respect to any Real Property is in an
amount of the full replacement value of such Real Property, including the
buildings and improvements thereon. Neither the Company nor Sellers know of any
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threatened termination of, premium increase with respect to, or uncompleted
requirements under any Insurance Policy. No premiums are or will be payable
under Insurance Policies after the Closing in respect of insurance provided for
periods prior to the Closing Date.
SECTION 2.20 COMPLIANCE WITH LAWS. Neither the Company nor any of the
Subsidiaries is in violation in any material respect of any material order,
judgment, injunction, award, citation, decree, consent decree or writ
(collectively, "ORDERS"), or any material law, statute, code, ordinance, rule,
regulation or other requirement (collectively, "LAWS"), of any government or
political subdivision thereof, whether federal, state, local or foreign, or any
agency or instrumentality of any such government or political subdivision, or
any court or arbitrator (collectively, "GOVERNMENTAL BODIES") affecting its
Assets or the Business.
SECTION 2.21 PERMITS. The Company and the Subsidiaries have obtained all
licenses, permits, certificates, certificates of occupancy, orders,
authorizations and approvals of (collectively, "PERMITS") including without
limitation, all Permits relating to the Company's ownership and operation of the
Race Track, and have made all required registrations and filings with, any
Governmental Body that are material to the conduct of the Business. To the best
knowledge of Sellers, all Permits material to the Business are listed on
SCHEDULE 2.21 and are in full force and effect; no material violations are or
have been recorded in respect of any Permit; and no proceeding is pending or, to
the knowledge of the Company or Sellers, threatened to revoke or limit any
Permit.
SECTION 2.22 ENVIRONMENTAL MATTERS. (a) Except as disclosed in SCHEDULE
2.22, to Sellers' best knowledge, there has been, directly or indirectly, no
use, manufacture, generation, refining, storage, transport, disposal or
treatment of Hazardous Substances by or on behalf of the Company or any
Subsidiary (or, to the knowledge of the Company or Sellers, any predecessor in
interest), or any Release at, on or under any Real Property by or on behalf of
the Company or any Subsidiary, or, to the knowledge of the Company or Sellers,
by any other person, in violation of any Environmental Law or which would
require remedial action under any Environmental Law; to the best of Sellers'
knowledge, neither the Company, any Subsidiary nor Sellers has contaminated the
soil, ground water or surface water of such Real Property, and to the knowledge
of the Company or Sellers, none of the soil, ground water or surface water of
such Real Property is or has been contaminated by any Release.
(b) Except as disclosed in SCHEDULE 2.22, 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 the Company, any Subsidiary, or
any tenant or licensee of the Company, any Subsidiary or Sellers.
(c) To Sellers' best knowledge, as to the ownership or operation
of the Assets or the Business, neither the Company, the Subsidiaries nor Sellers
have 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.
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(d) (i) Except as disclosed in SCHEDULE 2.22, to Sellers' best
knowledge, 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 the Company or Sellers, 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
the Company or any Subsidiary, or to the Company's or Sellers' 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. The Company
has delivered to Buyer copies of all environmental reports and all other written
materials held or controlled by or on behalf of it, the Subsidiaries or Sellers
regarding the environmental matters set forth in this Section 2.22.
Notwithstanding the foregoing, if the Real Property contains or contained any
such Tanks, the Company and Sellers represent that, to the best of their
knowledge, the Company and the Subsidiaries are 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 2.23 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 any Seller, the Company or any of the Subsidiaries who might be
entitled to any fee or commission from any Seller, the Company or any of the
Subsidiaries upon consummation of the Contemplated Transactions.
SECTION 2.24 DEPOSITARIES; POWERS OF ATTORNEY, ETC. SCHEDULE 2.24 sets
forth (i) the name of each bank or similar entity in which the Company or any
Subsidiary has an account, lock box or safe deposit box and the names of all
persons authorized to draw thereon or to have access thereto; and (ii) the name
of each person holding a general or special power of attorney from the Company
or each of the Subsidiaries and a description of the terms thereof.
SECTION 2.25 TRANSACTION SHARES. Each Seller represents and warrants to
Buyer that the Transaction Shares are being acquired by such Seller for its own
account and not with a view to the distribution, resale or other transfer
thereof, except in compliance with the Securities Act and applicable state
securities laws. Each Seller is an "accredited investor" as such term is
defined in Regulation D promulgated under the Securities Act. Each Seller has
(i) reviewed carefully the Buyer Reports, (ii) such knowledge and experience in
financial, tax and business matters so as to enable it to make an informed
investment decision with respect to the Transaction Shares and (iii) overall
commitments to investments which are not readily marketable as are reasonable in
relation to such Seller's net worth.
SECTION 2.26 DISCLOSURE. Neither this Agreement, the Schedules hereto,
nor any audited or unaudited financial statements, documents or certificates
furnished or to be furnished to Buyer by or on behalf of the Company or any
Seller pursuant to this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers that:
SECTION 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer 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 Buyer 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 are necessary to authorize the execution and delivery by Buyer of this
Agreement or the consummation of the Contemplated Transactions to which it is
or, at the Closing, will be a party. This Agreement has been and, at the
Closing, the other Transaction Documents to which Buyer is a party will have
been duly and validly executed and delivered by Buyer 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, enforceable against Buyer 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 Buyer 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; (ii) require Buyer 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 or its 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 or upon its assets or business.
SECTION 3.3 CORPORATE EXISTENCE AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
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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.
SECTION 3.5 BUYER REPORTS. Buyer has delivered to Sellers true and
correct copies of Buyer's Preliminary Prospectus dated November 21, 1996
(collectively, together with the Buyer Filings and disclosure statement, if any,
provided to the Sellers pursuant to Section 4.13, the "BUYER REPORTS"). At the
Closing Date, the Buyer Reports, taken as a whole, will not contain an untrue
statement of material fact, nor omit to state a material fact necessary to make
the statements made therein not misleading.
SECTION 3.6 TRANSACTION SHARES. The Transaction Shares have been duly
authorized by Buyer and, when issued to the Sellers at the Closing, will have
been duly issued and will be fully paid and non-assessable shares of Buyer
Stock.
SECTION 3.7 FINANCING. Buyer acknowledges that, following the Closing, it
will be required to pledge the Shares and the shares of capital stock of the
Subsidiaries in favor of certain of Buyer's lenders.
ARTICLE IV
COVENANTS AND AGREEMENTS
SECTION 4.1 CONDUCT OF BUSINESS OF THE COMPANY. (a) From the date hereof
through the Closing Date, the Company agrees, and agrees to cause each
Subsidiary, and Sellers agree to cause the Company and each Subsidiary:
(i) To conduct their operations according to the ordinary and
usual course of the Business consistent with past practice, to preserve intact
their present business organization and structure, to use reasonable efforts to
keep available the services of their present officers, agents and full-time
employees, to use reasonable efforts to preserve and maintain their Assets and
the good will of the Business and to use reasonable efforts to preserve their
relationships with customers and suppliers, and others having business dealings
with them.
(ii) To maintain in the ordinary course of the Business,
consistent with past practice and in accordance with all Contracts, the Real
Property, all their material structures, equipment, rides and other tangible
property in their present repair, order and condition, subject to ordinary wear
and tear.
(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 in any Schedule hereto.
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(iv) Not to incur any Company Debt, other than pursuant to the
Revolving Credit Facility.
(v) Not to redeem or purchase from the holders of the Preferred
Stock any shares of Preferred Stock.
(vi) Not to undertake (nor permit to be undertaken) any of the
actions specified in Section 2.11.
(vii) Not to pay, discharge or satisfy any material Claim or
Liability (including without limitation, Liabilities referred to in Section
1.2(d)(ii)-(iv), inclusive), 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.
(b) From the date hereof through the Closing Date, the Company
and Sellers agree that the affairs of the Company and each Subsidiary will be
conducted in such a manner so that the representations and warranties of the
Company and Sellers 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, the Company
and Sellers agree that the Company and its Subsidiaries 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 Contract and will not take
any such action if Buyer objects thereto in writing.
SECTION 4.2 CORPORATE EXAMINATIONS AND INVESTIGATIONS. (a) Prior to the
Closing Date, the Company and Sellers 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 the Company and the Subsidiaries, and such examination of the
books, records and financial condition of the Company and the Subsidiaries, as
Buyer reasonably deems necessary. Any such investigation and examination shall
be conducted at reasonable times, under reasonable circumstances and upon
reasonable notice, and the Company and Sellers shall, and shall cause the
Subsidiaries to, cooperate fully therein. In that connection, the Company and
Sellers shall make available to the Representatives of Buyer during such period,
without however causing any unreasonable interruption in the operations of the
Company or any Subsidiary, all such information and copies of such documents and
records concerning the affairs of the Company and the Subsidiaries as such
Representatives may reasonably request, shall permit the Representatives of
Buyer access to the Assets of Company and the Subsidiaries and all parts thereof
and to their respective employees, customers, suppliers, Contractors and others,
and shall cause the Company's and the Subsidiaries' 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 either Seller or the Company contained in this Agreement.
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SECTION 4.3 ADDITIONAL FINANCIAL STATEMENTS. Prior to the Closing Date,
as soon as available and in any event within fifteen (15) calendar days after
the end of each monthly accounting period of the Company ending after the date
of the most recent Interim Statement, the Company and Sellers shall furnish
Buyer with an unaudited consolidated financial statement of the Company and its
Subsidiaries for such month in form and substance comparable to the Interim
Statements and with such other financial or other information routinely prepared
by the Company or any Subsidiary. No later than December 31, 1996, Sellers will
deliver the audit report of KPMG (without qualification therein except with
respect to defaults by the Company under certain loan agreements relating to the
Company Debt) on the Interim Statements.
SECTION 4.4 FILINGS AND AUTHORIZATIONS. The Company and Sellers, on the
one hand, and Buyer, on the other, before or promptly 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 and which are required by Law to effectuate the consummation of the
Contemplated Transactions. The Company and Sellers, 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. The Company and
Sellers, 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 Subsidiaries and 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
each other party prior to such filing and shall not make any such filing or
submission to which Buyer or Sellers, 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. Subject to the terms and conditions
herein, each party hereto, without payment or further consideration, shall use
its 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 Sellers 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.
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, the Company and Sellers agree that none of them, nor any Subsidiary, 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
any Seller, the Company, any Subsidiary or Representative thereof receives any
offer or proposal to enter into discussions
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or negotiations relating to any of the above, the Company and Sellers 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.
SECTION 4.7 NOTICES OF CERTAIN EVENTS. Prior to the Closing Date, each of
the Company and Sellers, on the one hand, and Buyer, on the other, 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 material 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 material violation or breach
of any covenant of any party contained in this Agreement.
SECTION 4.8 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the Company
and Sellers, on the one hand, and Buyer, on the other, 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
Sellers 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 EXPENSES. Buyer and Sellers shall each pay 50% of the
expenses incurred in connection with the title insurance (in an amount not to
exceed the fair market value of the Real Property) and survey referred to in
Section 5.3(f). Buyer shall pay the filing fees incurred in connection with any
filing under the HSR Act. Except as otherwise specifically provided in this
Agreement, Buyer and Sellers shall bear their respective expenses, and Sellers
will bear the expenses of the Company, in each case, incurred in connection with
the preparation, execution and performance of this Agreement and the
Contemplated Transaction, including, without limitation, all fees and expenses
of their respective Representatives.
SECTION 4.10 TAX MATTERS. (a) Except as otherwise provided in Section
4.10(b), Sellers shall cause the Company and the Subsidiaries to (i) timely
prepare and file with the appropriate Tax Authorities all Tax Returns required
to be filed with respect to any taxable period of the Company or any of the
Subsidiaries that ends on or before the Closing Date and (ii) pay (not later
than the day before the Closing Date) to the appropriate Tax Authorities all
Taxes shown on such Tax Returns. Unless otherwise required by the relevant Tax
Authority or by applicable Laws, Sellers and Buyer agree to cause the Company
and the
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Subsidiaries (i) to file all Tax Returns on the basis that the taxable period
that includes the Closing Date ends at the close of business on the Closing Date
and (ii) to elect to file Tax Returns on that basis where such an election is
available.
(b) Buyer shall cause the Company to timely prepare and file
with the appropriate Tax Authorities all income Tax Returns that are required to
be filed by the Company or any of the Subsidiaries with respect to taxable year
ending on March 31, 1997. To the extent that the Taxes shown as due on such Tax
Returns shall exceed $25,000, Sellers shall pay forthwith the amount of such
excess to the Company.
(c) Except as otherwise provided in Section 4.10(b), all Taxes
(other than taxes based on income) with respect to any taxable period of the
Company or any Subsidiaries that includes but does not end on the Closing Date
(a "Straddle Period") shall be apportioned as of the Closing Date and, at the
Closing, Buyer or Sellers shall reimburse each other, as appropriate, for
amounts payable pursuant to this sentence. Except as otherwise provided in
Section 4.10(b), Buyer shall cause the Company to timely prepare and file with
the appropriate Tax Authorities all Tax Returns that are required to be filed
with respect to any Straddle Period and Sellers shall forthwith deliver to the
Company all Taxes allocable to periods ending on or prior to the Closing Date,
except to the extent paid at the Closing pursuant to the first sentence of this
Section 4.10(c). For purposes of this Section 4.10(c), Taxes shall be allocated
within a Straddle Period, between the period up to and including the Closing
Date and the period beginning after the Closing Date, (i) in the case of Taxes
that accrue over time, in proportion to the periods elapsed before and after the
Closing Date, (ii) in the case of Taxes based on income, (x) in proportion to
the federal taxable income in each such period or (y) if federal taxable income
for either period is zero or less, only to the portion of the Straddle Period
for which there is positive federal taxable income, and (iii) in the case of all
other Taxes, in a manner reasonably acceptable to Buyer and ▇▇▇▇▇▇▇. The
provisions of this Section 4.10(c) shall be subject to the obligation of Buyer
under Section 5.2(d) with respect to Net Operating Expenses.
(d) Amounts payable pursuant to Section 4.10(b) or (e), and
refunds or credits of the Taxes with respect to which such amounts were
determined, shall be treated for Tax and financial reporting purposes by Buyer,
Sellers, the Company and the Subsidiaries as an adjustment of the Purchase
Price.
(e) Refunds or credits of Taxes that were paid by the Company or
any of the Subsidiaries with respect to any periods shall be for the account of
the Company.
(f) Sellers, the Company, each Subsidiary and Buyer shall
reasonably cooperate, and shall cause their respective Representatives
reasonably to cooperate, in preparing and filing all Tax Returns, including
maintaining and making available to each other all records necessary in
connection with the preparation and filing of Tax Returns, the payment of Taxes
and the resolution of Tax Audits and Tax Deficiencies with respect to all
taxable periods. Buyer recognizes that Sellers and their Affiliates will need
access, from time to time, after the Closing Date, to certain accounting and Tax
records and information held by the Company and the Subsidiaries that pertain to
events occurring prior to the Closing Date. Buyer therefore agrees to cause the
Company and each of the
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Subsidiaries to allow Sellers and their Representatives, at times and dates
reasonably acceptable to the Company, to inspect, review and make copies of such
records as Sellers and the Company deem necessary or appropriate, PROVIDED such
activities are conducted during normal business hours on reasonable advance
notice.
SECTION 4.11 CERTAIN RENEWALS. With respect to each Permit which may
expire prior to the Closing Date or within sixty days thereafter, the Company
shall (i) timely file with the appropriate Governmental Bodies applications for
renewal of each such Permit and all authorizations or approvals of NASCAR
relating to the operation of the Race Track (the "APPLICATIONS"), (ii) deliver
to Buyer true and complete copies of such Applications, (iii) diligently
prosecute such Applications to conclusion, and (iv) cooperate fully with all
Governmental Bodies in the processing of such Applications.
SECTION 4.12 COVENANT NOT-TO-COMPETE. During the period commencing on the
Closing Date and ending five years thereafter (the "TERM"):
(a) In order to preserve the Business and goodwill of the
Company, ▇▇▇▇▇▇▇ agrees that he 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 recreational park, amusement park, theme park, water park,
video arcade, family amusement or entertainment center or automobile racing
facility located within the Territory. The foregoing provisions shall not,
however, prohibit the ownership by ▇▇▇▇▇▇▇ of not more than two percent (2%) of
any class of outstanding equity securities listed for trading on a national
securities exchange or publicly traded in the over-the-counter market which
engages in any of such businesses. For the purposes of this Agreement,
"TERRITORY" shall mean any area within a 250 mile radius of the Park.
(b) ▇▇▇▇▇▇▇ agrees that he will not, directly or indirectly,
during the Term, for his own benefit or for the benefit of any other person
solicit the professional services of any Representative, agent or consultant of
any Affiliate of Buyer or otherwise interfere with the relationship between
Buyer or any Affiliate and any of such persons.
(c) After the Closing, Sellers will not, and will use their best
efforts to cause Sellers' Representatives not to, 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"). The Confidential Information includes, without
limitation, the business practices, financial information, customer and
prospective customers names, leads and account information, 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 Sellers pertaining to the Park.
(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
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addition to any other rights and remedies which it may have, at law or in
equity, to an injunction enjoining and restraining Sellers and/or Sellers'
Representatives from doing or continuing to do any such act or any other
violations or threatened violations of this Section 4.12.
(e) If one or more of the provisions contained in this
Section 4.12 (or any portion of any such provision) shall for any reason be
finally held by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Section (or any portion of any such
provision), but this Section shall be construed as if such invalid, illegal or
unenforceable provision (or portion thereof) had not been contained in this
Agreement. If, for any reason, any of the restrictions or covenants contained
in this Section 4.12 is finally held by a court of competent jurisdiction to
cover a geographic area or to be for a length of time that is not permitted by
applicable Law, or in any way construed to be too broad or to any extent
invalid, such provision shall not be determined to be null, void or of no
effect, but to the extent it is or would be valid or enforceable under
applicable Law, it shall be construed and interpreted to provide for a covenant
having the maximum enforceable geographic area, time period and other provisions
(not greater than those contained in this Section) as shall be valid and
enforceable under such applicable Law.
SECTION 4.13 BUYER FILINGS. During the period prior to the Closing Date,
Buyer shall deliver to Sellers, promptly after the filing thereof, a true and
correct copy of each report, information statement or other document ("BUYER
FILINGS") filed by Buyer with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. Prior to the Closing Date, Buyer
(i) will provide Sellers with a reasonable opportunity to ask questions and
receive answers from Representatives of Buyer concerning their purchase of the
Transaction Shares, and (ii) may, in its discretion, provide to each Seller a
disclosure statement containing such information as Buyer shall deem necessary
to comply with the representation and warranty contained in the last sentence of
Section 3.5.
SECTION 4.14 NO SECTION 338 ELECTION. Buyer shall not make an election
under Section 338 of the Code in connection with the Contemplated Transactions.
SECTION 4.15 TRANSFER AND DISCHARGE. Prior to the Closing Date, ▇▇▇▇▇▇▇
shall transfer to the Company all of ▇▇▇▇▇▇▇'▇ right, title and interest in and
to the rides known as "Slingshot" and "Sea Dragon," free and clear of any Liens
and, as full consideration for such transfer, the Company shall release and
discharge ▇▇▇▇▇▇▇ from his indebtedness on the date hereof in favor of the
Company in a principal amount not in excess of $66,000.
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ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The obligations
of Sellers and Buyer to consummate the Contemplated Transactions are subject to
the satisfaction of the following conditions:
(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.
SECTION 5.2 CONDITIONS TO THE OBLIGATIONS OF SELLERS. The obligations of
Sellers and the Company hereunder to consummate the Contemplated Transactions
are subject, at the option of Sellers, 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 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. (i) Buyer shall have paid the Closing
Payments;
(ii) Buyer shall have delivered the Escrow Funds to the Escrow
Agent; and
(iii) Buyer shall have delivered to Sellers (i) certificates
representing the Transaction Shares which each Seller is entitled to receive,
registered in the name of such Seller and (2) executed copies of the
Registration Rights Agreement;
(iv) Buyer shall have delivered to Sellers immediately available
funds equal to the Net Proceeds LESS the product obtained by multiplying (i) the
number of shares of Transaction Shares, BY (ii) the Average Closing Price; and
(v) Buyer shall have delivered to Sellers releases of the
guarantees of ▇▇▇▇▇▇▇ listed on SCHEDULE 5.2(C)(V) or shall have delivered to
Sellers Buyer's indemnification of ▇▇▇▇▇▇▇ with respect to such guarantees.
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(d) NET OPERATING EXPENSES. Buyer shall have paid to the
Company (for application toward the Closing Payments) an amount in immediately
available funds equal to the Net Operating Expenses of the Business for each
calendar month (or portion thereof) during the period (the "PERIOD") commencing
November 1, 1996 through the Closing Date, PROVIDED that Buyer shall not be
obligated to pay pursuant to this Section with respect to any calendar month
during the Period an amount in excess of $500,000 (or, in the case of any
portion of a month during such Period, an amount in excess of the product
obtained by multiplying $500,000 by a fraction, the numerator of which shall be
the number of days elapsed during such portion of such month and the denominator
shall be equal to the number of days during such month).
(e) BUYER REQUIRED CONSENTS. All Buyer Required Consents shall
have been obtained.
(f) DOCUMENTATION. There shall have been delivered to Sellers
the following:
(i) A certificate, dated the Closing Date, of the Chairman of
the Board, the President or Chief Financial Officer of Buyer 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 Buyer 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 Buyer 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 reasonably requested by Sellers.
(iv) A signed opinion of Buyer's counsel, dated the Closing Date
and addressed to Sellers, in a form reasonably acceptable to Sellers.
(v) Copies of all Buyer Required Consents.
(vi) An executed copy of the Escrow Agreement.
SECTION 5.3 CONDITIONS TO THE OBLIGATIONS OF BUYER. All obligations of
Buyer to consummate the Contemplated Transactions hereunder are subject, at the
option of Buyer, to the fulfillment prior to or at the Closing of each of the
following further conditions:
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(a) PERFORMANCE. Each of the Company and Sellers 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 each of the Company and each Seller contained in this Agreement
and in any certificate or other writing delivered by the Company or such Seller
pursuant hereto shall be true at and as of the Closing Date as if made at and as
of such time.
(c) ENVIRONMENTAL MATTERS. Buyer shall have received an
environmental report from an environmental consultant reasonably acceptable to
Sellers on the Real Property demonstrating that the representations and
warranties in Article II with respect to environmental matters are accurate in
all material respect.
(d) SELLERS REQUIRED CONSENTS. All Sellers Required Consents
shall have been obtained.
(e) LIENS. All Liens on the Assets or Real Property (other than
Permitted Liens) shall have been released and discharged in form and substance
acceptable to Buyer.
(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 exceptions as are customary on the ALTA
standard title insurance form or which are specifically agreed to by Buyer, from
a title insurance company reasonably satisfactory to Sellers 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, easements and rights-of-way of record, improvements and
encroachments, if any, and otherwise complying with ALTA-ASCM Land Title Survey
requirements. Sellers shall have delivered to such title insurance company all
agreements, instruments and documents reasonably required by it to issue the
title insurance referred to above.
(g) RELEASES. Sellers and all Affiliates of Sellers shall have
delivered to Buyer executed copies of releases in favor of the Company and each
Subsidiary substantially in the form of EXHIBIT 5.3A hereto and all Contracts
between the Company or any Subsidiary and either Seller or any such Affiliate
shall have been terminated as of the Closing Date.
(h) DAMAGE. There shall not have occurred since the date of
execution of this Agreement, any damage, destruction or other casualty loss
(whether or not covered by insurance), condemnation or other taking materially
adversely affecting the Business.
(i) PREFERRED STOCK CERTIFICATES; EVIDENCE OF CLOSING
LIABILITIES. The holders of the Preferred Stock shall have delivered to the
Buyer certificates representing the Preferred Stock in suitable form for
transfer by delivery and the other recipients of the
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Closing Payments shall have delivered to Buyer all notes and other evidence of
the Liabilities discharged thereby.
(j) CLAIMS. Subsequent to the date of this Agreement, there shall not
have arisen any Claims (other than Claims the substance of which is disclosed on
a Schedule to this Agreement) (whether or not the defense thereof or Liabilities
in respect thereof are covered by insurance), asserted or threatened against or
involving the Company, any of the Subsidiaries or any of their respective Assets
or the Business, other than Claims that, individually or in the aggregate,
together with all other Claims existing or threatened on the Closing Date, could
not reasonably be expected to have a material adverse effect on the Condition of
the Business. There shall exist no fact, event or circumstance on the Closing
Date known to the Company or Sellers that could give rise to any Claim (other
than Claims the substance of which is disclosed on a Schedule to this Agreement)
that, if pending or threatened on the Closing Date, could individually or in the
aggregate, together with all other Claims existing or threatened on such date,
reasonably be expected to have a material adverse effect on the Condition of the
Business.
(k) NO PROCEEDING OR LITIGATION. No Claim instituted by any
person (other than Buyer or its Affiliates), shall have been commenced or be
pending against Sellers or any of their Affiliates, officers or directors, which
Claim (i) 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
the Contemplated Transactions and (ii) could, in the reasonable opinion of the
Buyer, (x) result in a material adverse effect in the Condition of the Business
or (y) delay or otherwise affect, in a manner adverse to Buyer, the Contemplated
Transactions.
(l) DOCUMENTATION. There shall have been delivered to Buyer the
following:
(i) A certificate dated the Closing Date, of the Company and
each Seller, confirming the matters set forth in Sections 5.3(a) and (b).
(ii) Certificate, dated the Closing Date, of the Clerk or
Assistant Clerk of the general partner (the "GENERAL PARTNER") of the
Partnership certifying, among other things, that attached or appended to such
certificate (A) is a true and correct copy of the Limited Partnership Agreement
(or comparable instruments) of the Partnership and all amendments, if any,
thereto as of the date thereof; (B) is a true copy of the resolutions of the
board of directors of the General Partner authorizing the execution, delivery
and performance of this Agreement, and each other Transaction Document to be
delivered by the Partnership pursuant hereto; and (C) are the names and
signatures of the duly elected or appointed officers of such General Partner who
are authorized to execute and deliver this Agreement and any certificate,
document or other instrument in connection herewith.
(iii) A certificate, dated the Closing Date, of the Clerk or
Assistant Clerk of the Company certifying, among other things, that attached or
appended to
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such certificate (A) is a true and correct copy of the certificate of
incorporation and by-laws (or comparable instruments) of the Company and each of
its Subsidiaries and all amendments, if any, thereto as of the date thereof; (B)
is a true copy of all corporate actions taken by the board of directors of the
Company authorizing the execution, delivery and performance of this Agreement,
and the Contemplated Transactions; and (C) are the names of the directors and
officers of the Company and each of the Subsidiaries.
(iv) Evidence of the good standing and corporate existence of the
Company and the Subsidiaries reasonably requested by Buyer.
(v) A signed opinion of the Company's and Sellers' counsel,
dated the Closing Date, addressed to Buyer, in a form reasonably acceptable to
Buyer.
(vi) Copies of all Sellers Required Consents and material
Permits.
(vii) An executed copy of the Escrow Agreement.
(viii) An executed copy of the Registration Rights Agreement
executed by each Seller.
(ix) Possession and control of the Assets of the Company and its
Subsidiaries (including all corporate books, seals, bank accounts, records and
documents).
(x) The resignations, dated on or before the Closing Date, of
each director of the Company and each Subsidiary.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) Notwithstanding any right of Buyer fully to investigate the affairs of the
Company and its Subsidiaries 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 the Company and Sellers 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 the Company
and Sellers 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 in Section 2.2 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 Sellers shall not terminate as to any specific claim or claims of
the type referred to in Section 6.2 hereof,
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whether or not fixed as to liability or liquidated as to amount, with respect to
which Sellers have 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(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 SELLERS TO INDEMNIFY. Each Seller, jointly and
severally, agrees 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, the Company, any Subsidiary or any of
the foregoing persons arising out of (i) any breach of the representations and
warranties of the Company or Sellers contained in this Agreement or in the
Schedules or any Transaction Document; (ii) any breach of the covenants and
agreements of the Company or Sellers contained in this Agreement or in the
Schedules or any Transaction Document; or (iii) any Retained Liabilities.
SECTION 6.3 OBLIGATION OF BUYER TO INDEMNIFY. Buyer agrees to indemnify,
defend and hold harmless each Seller (and any director, officer, employee,
Affiliate or successors and assigns of any thereof) from and against any Losses
suffered or incurred by either Seller or any of the foregoing persons arising
out of (i) any breach of the representations and warranties of Buyer or of the
covenants and agreements of Buyer contained in this Agreement or in the
Schedules or any Transaction Document; 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, 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
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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. At any time an Asserted Liability
shall be pending, the Indemnifying Party and Indemnitee will consult with each
other with respect thereto no less frequently than monthly. Without limiting
the generality of the foregoing, Sellers shall defend, at their expense, the
▇▇▇▇▇▇▇ Claim, and Sellers shall retain final decision making authority with
respect to all aspects of the ▇▇▇▇▇▇▇ Claim including, but not limited to,
defense strategy, settlement, compromise and adjudication of the matter.
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 Indemnification Funds;
PROVIDED, HOWEVER, that if (A) the aggregate amount of such Losses shall be in
excess of the amount of the Indemnification Funds or (B) any Losses shall arise
after termination or expiration of the Escrow Agreement with respect to which
Buyer is entitled to indemnification pursuant to Section 6.2(ii) or (iii), then
Sellers shall be obligated to indemnify Buyer in respect of all such Losses not
satisfied by delivery to Buyer of Indemnification Funds to the extent provided
in this Article VI. Notwithstanding the foregoing, (i) the aggregate amount of
Losses under Section 6.2(i) as to which Buyer shall be entitled to
indemnification hereunder shall not exceed an amount equal to the
Indemnification Funds; (ii) the aggregate amount of all Losses under Sections
6.2(ii) and (iii), other than Losses in respect of the ▇▇▇▇▇▇▇ Claim, as to
which Buyer shall be entitled to indemnification hereunder, shall not exceed
$2,500,000; and (iii) Sellers' liability for indemnification hereunder with
respect to all Losses (including the ▇▇▇▇▇▇▇ Claim) shall not exceed
$10,000,000.
(b) Sellers shall not have any obligation to indemnify Buyer
pursuant to Section 6.2(i) or (iii) hereof with respect to any Losses specified
therein unless
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and until Buyer shall have incurred Losses under Section 6.2 in an aggregate
amount in excess of $100,000 in which event Buyer shall be entitled to be
indemnified for all of its Losses subject to the provisions of Section 6.5(a)
above. As used in this Agreement, "Losses" shall be determined after giving
effect to the receipt by the Indemnitee of any insurance proceeds relating to
such Loss.
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 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. Sellers acknowledge and agree that, if
Sellers fail 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 Sellers' obligations under this Agreement. Sellers specifically
affirm 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 Sellers and Buyer;
(b) By Sellers 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 Sellers; (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 Sellers; or (iii) any condition
to Sellers' obligations hereunder becomes incapable of fulfillment through no
fault of Sellers and is not waived by Sellers, PROVIDED that, on the date of
termination, all conditions to Buyer's obligations specified in Sections 5.3(a),
(b), (c), (d), (f), (g), (h), (i) (j), (k) and (l) shall have been
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satisfied and Sellers shall then be otherwise ready, willing and able to proceed
with the Closing hereunder;
(c) By Buyer, if (i) there has been a material misrepresentation
or breach of warranty on the part of the Company or Sellers 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) the Company or either Seller 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, all conditions to Sellers' obligations hereunder
specified in Sections 5.2(a), (b) and (e) shall have been satisfied and Buyer
shall then be otherwise ready, willing and able to proceed with the Closing
hereunder;
(d) By Sellers 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 the Company, any Seller or Buyer from consummating the
Contemplated Transactions is entered and such Order shall have become final and
nonappealable; and
(e) By either Sellers or Buyer if the Closing shall not have
occurred on or prior to April 30, 1997, PROVIDED that (i) if so terminated by
Sellers, the conditions specified in the proviso of Section 7.2(b) shall have
been satisfied on the date of termination and Sellers shall be then otherwise
ready, willing and able to proceed with the Closing, 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 Buyer shall be then otherwise ready,
willing and able to proceed with the Closing.
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 4.9 shall survive the termination hereof. In addition, in the
event of a termination by Sellers under Sections 7.2(b) or 7.2(e), Sellers shall
be entitled, in addition to any other remedies at law or in equity, to the
receipt of the Deposit as provided in the Deposit Agreement. 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.
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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:
(i) If to Buyer, one copy to:
Premier Parks Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
with a copy to:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(ii) If to the Company, one copy to:
Stuart Amusement Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (413)
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Associates, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(iii) If to Sellers, one copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Associates, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(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 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 Sellers, the Company and Buyer.
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 Commonwealth of Massachusetts 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 any party hereto without the express written consent of Buyer (in the
case of assignment by either Seller) or Sellers (in the case of assignment by
Buyer) and any purported assignment, unless so consented to, shall be void and
without effect; PROVIDED, HOWEVER, without obtaining such consent, Buyer may
assign its rights hereunder to any of its Affiliates. Nothing herein express or
implied is
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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, Sellers will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged or
delivered, all such further documents, instruments or assurances, as may be
necessary, desirable or proper to carry out the intent and accomplish the
purposes of this Agreement. Sellers and Buyer will each, respectively, bear
their or its own costs and expenses incurred in compliance with the first
sentence of this Section 8.10. In addition, at the cost of Buyer, Sellers will,
at any time and from time to time after the Closing Date, cooperate with Buyer
in obtaining all financial information regarding the Company and its
Subsidiaries for periods prior to the Closing Date required to be filed or made
publicly available by Buyer under the federal securities laws.
ARTICLE IX
DEFINITIONS
SECTION 9.1 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"ACQUISITION PROPOSAL" shall mean any proposal involving, directly or
indirectly, (i) the acquisition of, or merger or other business combination
involving the Company or any Subsidiary, (ii) the sale or other transfer of any
capital stock of the
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Company or any of its Subsidiaries, (iii) the sale, lease, transfer or
management of the Business, (iv) the sale or other transfer of any Assets
(except in the ordinary course) and (v) any other transaction inconsistent with
the Contemplated Transaction or which would render any of them impossible or
impracticable to consummate.
"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.
"ASSETS" shall mean properties, rights, interests and assets of every kind,
real, personal or mixed, tangible and intangible, used or usable in the
Business.
"ASSUMED LIABILITIES" shall mean the Liabilities and obligations referred
to in clauses (x) and (y) of the second sentence of the definition of "Retained
Liabilities" and Liabilities of the Company and its Subsidiaries arising on and
after the Closing under Contracts disclosed on any Schedule.
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.
"AVERAGE CLOSING PRICE" shall mean the numerical average of the closing
sales price (regular way) per shares of Buyer Stock (or, in case no such
reported sales takes place on such day the average of the closing bid and asked
prices) on the Nasdaq National Market System, for each of the five Trading Days
ending two Trading Days prior to the Closing Date.
"BUSINESS" shall mean the ownership and operation of the Assets comprising
the business operations of Riverside Amusement Park and the Race Track.
"BUYER STOCK" shall mean the shares of Common Stock, par value $.05 per
share, of Buyer as the same exist on the date hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY DEBT" shall mean (i) money borrowed by the Company or any
Subsidiary from any person; (ii) any indebtedness of the Company or any
Subsidiary arising under leases required to be capitalized under GAAP or
evidenced by a note, bond, debenture or similar instrument; (iii) any
indebtedness of the Company or any Subsidiary 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);
-37-
and (iv) any Liability of the Company or any Subsidiary under any guaranty,
letter of credit, performance credit or other agreement having the effect of
assuring a creditor against loss.
"CONDITION OF BUSINESS" shall mean the financial condition, prospects or
the results of operations of the Business, the Assets of the Company and its
Subsidiaries, taken as a whole.
"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.
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.
"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 human health or 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.
"ENVIRONMENTAL LIABILITIES" shall mean 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 from 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 (or any predecessor
in interest), in each case, on or prior to the Closing Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED TAX LIABILITIES" shall mean any and all Liabilities for Taxes
(other than Tax Liabilities arising out of the Contemplated Transactions that
are payable by Buyer hereunder and the income Tax Liabilities referred to in
Section 4.10(b) up to $25,000) that are payable by Sellers or the Company or any
Subsidiary pursuant to the terms of this
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Agreement or pursuant to Law arising out of events, transactions, facts or
circumstances occurring or existing on or prior to the Closing Date.
"▇▇▇▇▇▇▇ CLAIM" shall mean the Claim of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Associates set forth in the complaint filed in the Hampden County Superior
Court, Civil Action No. 95-1446 and any other Claim made by either such person
against Sellers, the Company or any Subsidiary arising out of events,
transactions, facts or circumstances occurring or existing on or prior to the
Closing Date.
"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, 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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 the Company and its Subsidiaries and held for resale or
for distribution, together with packaging and samples thereof, operating
supplies and spare or maintenance parts owned by the Company and its
Subsidiaries as of such date.
"IRS" shall mean the Internal Revenue Service.
The term "KNOWLEDGE" with respect to (a) any individual shall mean actual
knowledge and (b) any corporation shall mean the actual knowledge of the
directors and the executive officers of such corporation; and "KNOWS" has a
correlative meaning.
"LIABILITY" shall mean any direct or indirect indebtedness, liability,
assessment, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, ▇▇▇▇▇▇ 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).
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"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.
"LIMITED PARTNERSHIP AGREEMENT" shall mean The ▇▇▇▇▇▇▇ Family Limited
Partnership Agreement dated May 25, 1994.
"LITIGATION CLAIMS" shall mean any and all Claims against the Company, any
Subsidiary, any of their respective Assets or the Business, whether asserted
prior to or after the Closing Date, arising out of events, transactions, facts
or circumstances occurring or existing on or prior to the Closing Date (other
than Claims arising out of trade or other payables existing on the Closing Date
incurred in the ordinary course of the Business).
"NET OPERATING EXPENSES" for any calendar month or portion thereof shall
mean the excess of (A) all expenses of the Business that are paid and incurred
during such month or portion thereof in the ordinary course of Business,
consistent with past practice and under GAAP would be classified as operating
expenses, other than (i) principal and interest on Company Debt, (ii) any
Liability or obligation of the type reflected on EXHIBIT 1.2(D) or (iii) any
expenses incurred in connection with Excluded Litigation Claims over (B) all
cash receipts of the Business for such month or portion thereof.
"1933 ACT" shall mean the Securities Act of 1933, as amended, and all rules
and regulations promulgated thereunder.
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.
"RACE TRACK" shall mean the quarter-mile auto race track located in the
Company's premises in Agawam, Massachusetts.
"RECEIVABLES" shall mean as of any date any trade accounts receivable,
notes receivable, sales representative advances and other miscellaneous
receivables of the Company and its Subsidiaries arising in the ordinary course
of the Business.
"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, or any 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,
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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 Sections
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"RETAINED LIABILITIES" shall mean Liabilities of the Company or any
Subsidiary for (a) Litigation Claims to the extent that the aggregate Losses of
the Company and its Subsidiaries subsequent to the date hereof with respect to
all such Claims exceed the amount specified in Exhibit 1.2(d) under the caption
"Litigation accruals" (collectively, the "EXCLUDED LITIGATION CLAIMS"); (b)
Excluded Tax Liabilities; (c) other Liabilities of the Company or any Subsidiary
existing on the Closing Date, excluding Liabilities listed on Exhibit 1.2(d) and
Operating Expenses payable by Buyer hereunder; and (d) the ▇▇▇▇▇▇▇ Claim.
Retained Liabilities do not include (w) Environmental Liabilities, (x)
Liabilities for federal and state income Taxes, including alternative minimum
Taxes, for the fiscal year ending March 31, 1997 to the extent equal to or less
than $25,000, and (y) Net Operating Expenses payable by Buyer hereunder.
"REVOLVING CREDIT FACILITY" shall mean the credit facility made available
pursuant to a loan and security agreement dated June 18, 1992, as amended, among
Riverside Park Enterprises, Inc. and MultiBank West (now The First National Bank
of Boston).
"SUBSIDIARY" of the Company shall mean any entity 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 the
Company. Without limiting the generality of the foregoing, the term
Subsidiaries includes (i) Riverside Park Enterprises, Inc. and (ii) Riverside
Park Food Services, Inc.
"TAX" (including, with correlative meaning, the terms "TAXES" and
"TAXABLE") shall mean (i)(A) 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 (B) 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,
in either case, with respect to the Company, any Subsidiary, 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 the Company or any Subsidiary 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 the Company, or any Subsidiary 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.
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"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.
"TERM NOTE" shall mean the term note dated June 18, 1992, as amended, made
by Riverside Park Enterprises, Inc., payable to the order of MultiBank West (now
The First National Bank of Boston), in initial principal amount of $4,000,000.
"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.
The term "VOTING POWER" when used with reference to the capital stock of,
or units of equity interests in, any person shall mean the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote in
the election of directors of such person (if such person is a corporation) or to
participate in the management and control of such person (if such person is not
a corporation).
(b) The following terms are defined in the following sections of
this Agreement:
TERM SECTION
Annual Statements 2.7(a)
Asserted Liability 6.4(a)
Buyer Recital
Buyer Filings 4.13
Buyer Reports 3.5
▇▇▇▇▇▇▇ Recital
Claims 2.15
Claims Notice 6.4(a)
Class A Stock Recital
Class B Stock Recital
Closing 1.3
Closing Date 1.3
Closing Payments 1.2(d)
Common Stock Recital
Company Recital
Contemplated Transactions 2.3
Deposit 1.2(b)
Deposit Agent 1.2(b)
Employee Benefit Plan 2.17(a)
Entity 2.17(a)
Entity Plans 2.17(c)
ERISA Affiliate 2.17(a)
ERISA Plan 2.17(a)
Escrow Agent 1.2(c)
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Escrow Agreement 1.2(c)
Escrow Funds 1.2(c)
General Partner 5.3(m)
Governmental Bodies 2.20
Indemnification Funds 1.2(c)
Indemnifying Party 6.4(a)
Indemnitee 6.4(a)
Insurance Policies 2.19
Intellectual Property Rights 2.14
Interim Statements 2.7(a)
KPMG 2.7(a)
Latest Balance Sheet 2.8
Latest Balance Sheet Date 2.8
Laws 2.20
Liability Payment 1.2(d)
Losses 6.2
Net Proceeds 1.2(d)
Orders 2.20
Park 2.7(b)
Period 5.2(d)
Permits 2.21
Permitted Liens 2.12(a)
Preferred Stock Recital
Preferred Stock Payment 1.2(d)
Real Property 2.12(a)
Registration Rights Agreement 1.2(e)
Registration Statement 1.2(e)
Representatives 4.2
Revolving Credit Payment 1.2(d)
Securities Act 1.2(e)
Sellers Recital
Sellers Required Consents 2.4
Shares Recital
Straddle Period 4.10(c)
Tax Audit 2.16(a)
Tax Deficiency 2.16(a)
Term Note Payment 1.2(d)
The ▇▇▇▇▇ Family Limited Partnership Recital
Transaction Shares 1.2(e)
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
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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 Stock Purchase
Agreement as of the date set forth above.
PREMIER PARKS INC.
By:
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
STUART AMUSEMENT COMPANY
By:-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President
THE ▇▇▇▇▇▇▇ FAMILY LIMITED
PARTNERSHIP
By: EJC Corp., sole general partner
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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