SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 8, 2004

CEDAR FAIR, L.P.

(Exact name of Registrant as specified in its charter)

 

DELAWARE

1-9444

34-1560655

(State or other jurisdiction
of incorporation)

(Commission
File No.)

(I.R.S. Employer
Identification No.)

 

One Cedar Point Drive, Sandusky, Ohio

44870-5259

(Address of principal executive offices)

(Zip Code)

 

Registrant's telephone number, including area code: (419) 626-0830

 

N.A.

(Former name or former address, if changed since last report)

 

 

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

 

On April 8, 2004, Cedar Fair, L.P. (the "Registrant") completed the acquisition of Six Flags Worlds of Adventure, located near Cleveland, Ohio, from Six Flags, Inc., in a cash transaction valued at $144,250,000.

The transaction involved the acquisition of substantially all of the assets of the park, including the adjacent hotel and campground, but excluded all animals located at the park, all personal property assets directly related to those animals, the use of the name "Six Flags" and the intellectual property related to that name, and the license to use Warner Bros. characters, all of which are being retained by Six Flags. Cedar Fair assumed the complete operations and management of the park as of April 9 and has renamed the park "Geauga Lake." Cedar Fair and Six Flags determined the purchase price in arms-length negotiations.

Cedar Fair entered into a new long-term financing arrangement to fund a portion of the cash purchase price. A private placement of $75 million was completed with Prudential Investment Management, Inc. and its affiliates to provide funds for terms of seven to eleven years at a fixed rate of 4.72%. Cedar Fair funded the balance of the purchase price through an expansion of its revolving credit facility with KeyBank National Association and six other banks.

Geauga Lake is a family-oriented theme park situated on approximately 690 acres, including a 50-acre spring-fed lake. The park offers its guests a wide variety of rides and attractions, including 10 roller coasters, several children's areas, a water park, and various live shows, and entertains more than 1.5 million guests each year, principally from the Cleveland/Akron, Youngstown and Pittsburgh markets. Geauga Lake's 2004 operating season is scheduled to begin on May 1.

 

 

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits.

Exhibit (2) - Asset Purchase Agreement between Cedar Fair, L.P. and Six Flags, Inc., Funtime, Inc., Aurora Campground, Inc., Ohio Campgrounds Inc., and Ohio Hotel LLC, dated April 8, 2004. All exhibits and schedules to the Agreement have been omitted. Upon request, the Registrant will furnish to the Commission a copy of any exhibit or schedule.

Exhibit (10) - Amended and Restated Note Purchase and Private Shelf Agreement dated as of April 7, 2004, among Cedar Fair, L.P. and Knott's Berry Farm as co-issuers, and Prudential Investment Management, Inc. and affiliated companies as purchasers.

Exhibit (10.1) - Credit Agreement dated as of April 8, 2004 among Cedar Fair, L.P., Cedar Fair, Magnum Management Corporation and Knott's Berry Farm as co-borrowers, and KeyBank National Association, Bank One, NA, National City Bank, Wachovia Bank, National Association, Fifth Third Bank, Comerica Bank, and UMB Bank, N.A. as lenders.

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CEDAR FAIR, L.P.

By Cedar Fair Management Company, General Partner

 

By:

/s/ Bruce A. Jackson

 

Bruce A. Jackson
Corporate Vice President, Finance and
Chief Financial Officer

 

 

Date: April 23, 2004

 

 

EXHIBIT INDEX

 

Exhibit Number

 

Description

     

2

 

Asset Purchase Agreement between Cedar Fair, L.P. and Six Flags, Inc., Funtime, Inc., Aurora Campground, Inc., Ohio Campgrounds Inc., and Ohio Hotel LLC, dated April 8, 2004.

10

 

Amended and Restated Note Purchase and Private Shelf Agreement dated as of April 7, 2004, among Cedar Fair, L.P. and Knott's Berry Farm as co-issuers, and Prudential Investment Management, Inc. and affiliated companies as purchasers.

10.1

 

Credit Agreement dated as of April 8, 2004 among Cedar Fair, L.P., Cedar Fair, Magnum Management Corporation and Knott's Berry Farm as co-borrowers, and KeyBank National Association, Bank One, NA, National City Bank, Wachovia Bank, National Association, Fifth Third Bank, Comerica Bank, and UMB Bank, N.A. as lenders.

EXHIBIT 2

 

 

 

 

 

ASSET PURCHASE AGREEMENT

BETWEEN

CEDAR FAIR, L.P.

AND

SIX FLAGS, INC.

FUNTIME, INC.

AURORA CAMPGROUND, INC.

OHIO CAMPGROUNDS INC.

OHIO HOTEL LLC

 

 

 

 

DATED AS OF APRIL 8, 2004

 

ARTICLE I Purchase and Sale 1

Section 1.1 Transaction; Assets 1

Section 1.2 Excluded Assets 3

Section 1.3 Excluded Liabilities. 4

Section 1.4 Assumed Liabilities 6

Section 1.5 Purchase Price 6

Section 1.6 Closing Date 6

Section 1.7 Post-Closing Adjustment 6

Section 1.8 Intentionally Omitted 8

Section 1.9 Closing Prorations 8

Section 1.10 Consent of Third Parties 9

ARTICLE II Representations and Warranties of Parent and Sellers 10

Section 2.1 Parent and Sellers 10

Section 2.2 Corporate Power and Authority 10

Section 2.3 Conflicts, Consents and Approvals 10

Section 2.4 Title to Tangible Personal Property 11

Section 2.5 Title to Real Property; Existing Surveys 11

Section 2.6 Litigation 12

Section 2.7 Brokerage and Finder's Fees 12

Section 2.8 Environmental Matters 12

Section 2.9 Condition of Assets 14

Section 2.10 Trademarks, Etc. 14

Section 2.11 Financial Statements; Attendance 14

Section 2.12 Absence of Changes or Events 15

Section 2.13 Contracts 16

Section 2.14 Tax Matters 17

Section 2.15 Employee Benefits 18

Section 2.16 Insurance 19

Section 2.17 Compliance with Law 19

Section 2.18. No Other Representations or Warranties 20

ARTICLE III Representations and Warranties of Buyer 20

Section 3.1 Organization and Standing of Buyer 20

Section 3.2 Partnership Power and Authority 20

Section 3.3 Conflicts, Consents and Approvals 20

Section 3.4 No Litigation; Compliance with Law 20

Section 3.5 Financing 21

Section 3.6 Broker and Finder's Fees 21

 

ARTICLE IV Pre-Closing Covenants of Parent and Sellers 21

Section 4.1 Access; Cooperation 21

Section 4.2 Operation of the Business 22

Section 4.3 Consents and Approvals 22

Section 4.4 Communications 23

Section 4.5 Other Offers 23

Section 4.6 Title Insurance 23

Section 4.7 Surveys 23

Section 4.8 Software License 24

Section 4.9 Title and Survey Objections/Cure of Title and Survey Objections 24

Section 4.10. Disclosure Schedules 25

ARTICLE V Covenants of Parent and Sellers 26

Section 5.1 Further Assurances 26

Section 5.2 Removal of Excluded Assets 26

Section 5.3 Limited License to use Name 26

Section 5.4 Covenant Not-to-Compete 26

Section 5.5 Maintenance, Care and Risk Related to Animal Assets 26

Section 5.6 Preservation of Records 27

Section 5.7 Maintenance of Assets 27

ARTICLE VI Pre-Closing Covenants of Buyer 27

Section 6.1 Consents and Approvals 27

Section 6.2 Communications 27

Section 6.3 Financing 28

ARTICLE VII Covenants of Buyer 28

Section 7.1 Further Assurances 28

Section 7.2 Access to Tax and Other Information 28

Section 7.3 Preservation of Records. 29

ARTICLE VIII Conditions Precedent 29

Section 8.1 Mutual Conditions Precedent 29

Section 8.2 Conditions Precedent of Buyer 29

Section 8.3 Conditions Precedent of Sellers 32

ARTICLE IX Survival and Indemnity 33

Section 9.1 Survival of Representations and Warranties 33

Section 9.2 Indemnity by Parent and Sellers 33

Section 9.3 Indemnity by Buyer 34

Section 9.4 Tax Indemnity 34

Section 9.5 Claims Procedure. 35

Section 9.6 Tax Treatment of Indemnity Payments 37

Section 9.7 Calculation of Losses 37

Section 9.8 Exclusive Remedy 38

ARTICLE X Employee Matters 38

Section 10.1 Employees 38

Section 10.2 Paid Time Off 39

Section 10.3 Interviews 39

Section 10.4 Health Insurance 39

Section 10.5 COBRA 39

Section 10.6 Severance 39

Section 10.7 WARN Act 40

Section 10.8 Past Service Credit 40

ARTICLE XI Termination 40

Section 11.1 Termination 40

Section 11.2 Effect of Termination 40

ARTICLE XII Miscellaneous 41

Section 12.1 Expenses 41

Section 12.2 Entire Agreement 41

Section 12.3 Assignment; Binding Effect 41

Section 12.4 Modification; Waiver and Extensions 41

Section 12.5 Notices 42

Section 12.6 Bulk Sales Waiver 42

Section 12.7 Press Releases 42

Section 12.8 Captions 42

Section 12.9 Counterparts 42

Section 12.10 Severability 43

Section 12.11 Time 43

Section 12.12 Choice of Law 43

Section 12.13 Confidentiality Agreement 43

Section 12.14 No Third Party Beneficiaries 43

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as of the 8th day of April, 2004, by and among SIX FLAGS, INC., a Delaware corporation ("Parent"), Aurora Campground, Inc., an Ohio corporation and an indirect wholly-owned subsidiary of Parent ("Aurora Campground"), Funtime, Inc., an Ohio corporation and an indirect wholly-owned subsidiary of Parent ("Funtime"), Ohio Campgrounds Inc., an Ohio corporation and an indirect wholly-owned subsidiary of Parent ("Ohio Campgrounds"), Ohio Hotel LLC, an Ohio limited liability corporation and a direct wholly-owned subsidiary of Funtime ("Ohio Hotel" and together with Aurora Campground, Funtime and Ohio Campgrounds, "Sellers") and CEDAR FAIR, L.P., a Delaware limited partnership ("Buyer").

R E C I T A L S

A. Sellers own and operate the assets and business commonly known as "Six Flags Worlds of Adventure" situated at 1060 North Aurora Road, Aurora, Ohio 44202, including the adjacent hotel and campground (the "Business").

B. Sellers desire to sell, transfer and assign to Buyer (the "Sale") and Buyer desires to purchase and assume from Sellers (the "Purchase") all of the Assets and Assumed Liabilities, on the terms and conditions set forth herein.

C. Certain capitalized terms used in this Agreement shall have the meaning ascribed to such terms in Appendix A attached to this Agreement.

A G R E E M E N T S

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, promises and undertakings set forth herein and in order to set forth the terms and conditions of the Purchase and Sale (together, the "Transaction") and the manner of effecting the Transaction, Buyer and Sellers hereby agree as follows:

ARTICLE I
Purchase and Sale

Section 1.1 Transaction; Assets. Subject to all of the terms, conditions and provisions of this Agreement, at the Closing:

Assets. Each Seller shall sell, transfer, assign and deliver to Buyer, and Buyer shall purchase and acquire from such Seller, free and clear of any Encumbrances (except as provided herein), all of such Seller's respective right, title and interest in and to all of such Seller's respective property and assets of every kind and description, wherever located, that are primarily used or held for use in connection with the operation of the Business, including without limitation the following (but excluding the Excluded Assets):

(a) Real Property. All of the real property (the "Land") other than the Excluded Assets (i) used in the operation of the Business and which is located in Portage County, Ohio or Geauga County, Ohio, including, without limitation, all of the real property located in Portage County, Ohio or Geauga County, Ohio which is owned ("Owned Real Property") or leased ("Leased Real Property") by one or more of Sellers and/or in which a Seller or any affiliate of a Seller otherwise has an interest (including the mortgage in favor of Ohio Campgrounds secured by a lien on the Silverhorn Camping Resort (the "Campground Property")), or (ii) which is described on Schedule 1.1(a) attached hereto (which Schedule with respect to the Owned Real Estate shall include all real property indicated as owned by Sellers or any affiliate on the title commitment(s) and survey(s) pursuant to Sections 4.6 and 4.7, respectively), together with Sellers' interests in all easements, rights of way, appurtenances, mineral and water rights and other rights and benefits running with such parcels of real property and all buildings, improvements and fixtures located thereon (the "Improvements" and collectively with the Land, the "Real Property");

(b) Tangible Personal Property. All vehicles, furniture, fixtures, machinery, rides, equipment, maintenance parts and all other tangible personal property, wherever located, owned by Sellers on the Closing Date and primarily used or held for use in connection with the operation of the Business (collectively, the "Tangible Personal Property").

(c) Inventory. All inventory located at the Real Property in connection with the Business other than inventory that bears, utilizes or contains the WB Marks or any other of Sellers' Retained Intellectual Property;

(d) Records and Manuals. All customer lists, manuals, drawings, imprints, engineering and design information, service and parts records, warranty records, maintenance and repair records and records of all employees hired by Buyer (provided employee consents are obtained) relating to the Assets or the Business (collectively, the "Records and Manuals");

(e) Permits. All licenses, certificates, variances, permits, consents, authorizations and approvals issued to Sellers as of the Closing Date by any governmental or quasi-governmental agency relating to or affecting the ownership or operation of the Assets or the Business, all of which material permits (whether or not assignable) are listed on Schedule 1.1(e) attached hereto, but excluding permits pertaining to the Excluded Assets (collectively, the "Permits").

(f) Personal Property Leases. All leases relating to the use of any personal property primarily used or held for use in connection with the Business, including, but not limited to the leases described on Schedule 1.1(f) attached hereto (the "Personal Property Leases").

(g) Real Property Leases. The leases, licenses, concession agreements and other agreements for the use or occupancy of all or any portion of the Leased Real Property by Sellers primarily in connection with the Business (collectively, the "Real Property Leases") described on Schedule 1.1(g) hereto.

(h) Contracts and Agreements. All of Sellers' rights under those contracts, purchase orders, sales orders, customer orders, distributor agreements, franchise agreements, sales representation agreements, warranty agreements, service agreements, guarantee agreements, confidentiality agreements, supply agreements, rights or option agreements, leases, concessions, licenses and any other agreements and commitments of any sort to which Sellers are a party on the Closing Date (including those pertaining to the use of any portion of the Real Property by third parties) that are primarily used or held for use in the operation of the Business, including, but not limited to all contracts and agreements described on Schedule 1.1(h), but excluding the Excluded Contracts (the "Contracts and Agreements").

(i) Intellectual Property Rights. All intellectual property owned by Sellers on the Closing Date and that is related to the Business and disclosed on Schedule 1.1(i) (the "Intangibles Acquired by Asset Purchase").

(j) Insurance Proceeds. Any proceeds from any property insurance of Sellers arising from a loss or event related to the Assets and occurring at any time after the date hereof, but before the Closing Date.

(k) The library of photographs, motion pictures and videos used in the marketing and promotion of the Business, but excluding any portions thereof that contain or utilize Sellers' Retained Intellectual Property.

(l) Other Assets. Except as provided in Section 1.2 below, all other tangible and intangible assets, including cash funds located at the Business, owned by Sellers on the Closing Date that are used primarily or held for use primarily in the ongoing operation of the Business.

All of the property and assets to be transferred to Buyer hereunder are herein referred to collectively as the "Assets."

Section 1.2 Excluded Assets.

Notwithstanding anything to the contrary set forth in Section 1.1 above, the term "Assets" shall specifically not include:

(a) any animals and all animal equipment, fixtures and supplies used or held for use in connection with the Business, including, but not limited to the animals, equipment and supplies listed on Schedule 1.2(a) attached hereto (collectively, the "Animal Assets");

(b) any Permits, Contracts and Agreements solely related to the Animal Assets;

(c) any intellectual property rights of Sellers and their affiliates listed on Schedule 1.2(c) (collectively, "Sellers' Retained Intellectual Property");

(d) any inventory, uniforms, costumes and supplies that contain, include or embody Sellers' Retained Intellectual Property and all Coca-Cola and related products and non-owned equipment;

(e) any insurance policies respecting the Sellers or the Business;

(f) any cash and cash equivalents (except for cash funds located at the Business), accounts receivable, notes receivable and other receivables;

(g) any computer hardware containing proprietary information of Parent and its subsidiaries (other than Sellers) listed on Schedule 1.2(g) and any non-assignable computer software listed on Schedule 1.2(g);

(h) any warranties or guaranties or other contractual agreements which are non-assignable and listed on Schedule 1.2(h);

(i) any claims and causes of action (except for insurance proceeds described in Section 1.1(j) hereof) against third parties respecting the Assets or the Business which relate to the period of time on or prior to the Closing Date, including without limitation, any proceeds from Tax protests, refunds, rebates or other recovery of Taxes, or utility refunds, but not including claims relating to the condition of the Assets;

(j) any employment records of any Seasonal Employee or Regular Employee (as defined in Section 10.1) not hired by Buyer as of the Closing Date;

(k) any multi-park agreements set forth on Schedule 1.2(k);

(l) any Real Property Leases described on Schedule 1.2(l) attached hereto;

(m) the Amended and Restated License Agreement, dated April 1, 1998, among Warner Bros. Consumer Products Division, DC Comics, Parent and Six Flags Theme Parks, Inc. (the "WB License");

(n) any Employee Benefit Plan and all insurance policies, trust agreements and other Contracts relating thereto;

(o) all Contracts and Agreements related exclusively to Excluded Assets (the "Excluded Contracts"); and

(p) all Permits related exclusively to Excluded Assets; and

(q) any assets set forth on Schedule 1.2(q) hereto (collectively with the items listed in Sections 1.2(a) through 1.2(p), above, the "Excluded Assets").

Section 1.3 Excluded Liabilities. Except as expressly set forth in Section 1.4, Buyer shall neither assume nor become responsible for any Liabilities of Sellers at the Closing (collectively, the "Excluded Liabilities"). All Excluded Liabilities shall remain the sole obligation and responsibility of Sellers and Sellers shall promptly discharge any such Liabilities in accordance with the past practices of the Business. Except as expressly set forth in Section 1.4, the Excluded Liabilities shall include all liabilities and obligations arising from or relating to ownership or operation of the Business or the Assets prior to or on the Closing Date, including, without limitation, the following:

(a) Liabilities relating to or arising in respect of any of the Excluded Assets;

(b) the fees and expenses incurred by Sellers in connection with negotiating, preparing, closing and carrying out the provisions of this Agreement, including, but not limited to, the fees, disbursements and expenses for Sellers' investment bankers, attorneys, accountants, and any other consultants;

(c) all salaries, bonuses, sales commissions and consulting fees payable to any current or former employees or agents of Sellers for services rendered prior to or on the Closing Date;

(d) one-half of personal property Taxes with respect to the Assets payable with respect to 2004, and all Taxes for any Tax period or portion thereof ending on or before the Closing Date (or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such period up to and including the Closing Date).

(e) all Liabilities of Parent or Sellers with respect to vacation, sick pay, holiday, and severance payments prior to or on the Closing Date;

(f) Liabilities under Sellers' Employee Benefit Plans, Sellers' Benefit Arrangements, and any Multiemployer Plan in which Sellers or an ERISA affiliate have been a participating employer;

(g) any indebtedness for borrowed money of Sellers;

(h) all Liabilities under Environmental Laws arising from or relating to ownership or operation of the Business and Assets prior to or on the Closing Date, including without limitation liabilities and obligations in respect of any Environmental Condition, and any Environmental Claim related thereto, which concerns the Real Property and any other property previously owned, leased or otherwise used in or by the Business, regardless of whether any such Liabilities or Environmental Claims arising from or relating to pre-Closing periods are asserted before or after the Closing Date (collectively, "Pre-Closing Environmental Liability"); and

(i) all Liabilities, including without limitation, defense costs, arising from and relating to any pending or threatened worker's compensation or other litigation or claims arising from events or incidents prior to or on the Closing Date.

Section 1.4 Assumed Liabilities. Buyer shall assume, pay, fulfill, perform or otherwise discharge (i) the Liabilities set forth on Schedule 1.4, (ii) all Liabilities of Sellers with respect to Prepaid Revenue (clauses (i) and (ii) together, the "Scheduled Liabilities"), (iii) the Liabilities of Sellers arising and to be performed after the Closing under the Permits, Personal Property Leases, and Contracts and Agreements (including Liabilities with respect to Contracts and Agreements for goods or services that are delivered or performed after the Closing Date), and (iv) one-half of the personal property Taxes with respect to the Assets payable with respect to 2004, and, except as otherwise provided in Section 1.9(a), all Liabilities for Taxes for any Tax period or portion thereof beginning after the Closing Date (or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such period after the Closing Date) (clauses (i)-(iv), collectively, the "Assumed Liabilities").

Section 1.5 Purchase Price. The purchase price (the "Purchase Price") to be paid by the Buyer for the Assets is One Hundred Forty-Four Million Two Hundred Fifty Thousand Dollars ($144,250,000) minus the Final Scheduled Liabilities Valuation (as defined in Section 1.7(d) below). At the Closing, the Buyer shall pay the Sellers a closing payment (the "Closing Payment") of One Hundred Forty-Four Million Two Hundred Fifty Thousand Dollars ($144,250,000) minus the Estimated Scheduled Liabilities Valuation (as defined in Section 1.7(a) below) by wire transfer of federal funds to an account or accounts designated by Sellers with notification of receipt of funds by Sellers' bank on the Closing Date. Any difference between the Purchase Price and the Closing Payment shall be paid by the Buyer or Sellers, as appropriate, pursuant to the terms of Section 1.7(e).

Section 1.6 Closing Date. The closing of the Purchase and Sale of the Assets in the Transaction contemplated by this Agreement (the "Closing") will take place at 9:00 a.m., Eastern Standard Time on April 8, 2004, in the offices of Squire, Sanders & Dempsey L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114 or at such other place or on such other date as is mutually agreeable to the parties; provided, however, that if any of the conditions to Closing set forth in Section 8.1 of this Agreement have not been satisfied or waived by both parties hereto on or before such date and time, then the Closing will occur at the foregoing place and time on the third business day after such condition has been satisfied or waived, but in no event shall the Closing occur after May 14, 2004. The date of the Closing is herein referred to as the "Closing Date."

Section 1.7 Post-Closing Adjustment

(a) On or prior to the Closing Date, Sellers shall deliver to Buyer a statement setting forth Sellers' estimate of the aggregate value of the Scheduled Liabilities (the "Estimated Scheduled Liabilities Valuation"), including an itemized list showing Sellers' estimate of each of the Scheduled Liabilities. The Estimated Scheduled Liabilities Valuation shall be prepared (i) in accordance with GAAP, and (ii) on a basis consistent with the preparation of the Financial Statements of the Business. The Estimated Scheduled Liabilities Valuation shall be used to calculate the Closing Payment absent manifest error.

(b) No later than sixty (60) days after the Closing Date, Buyer shall prepare and deliver to Sellers a statement setting forth the aggregate value of the Scheduled Liabilities as of the Closing Date (the "Closing Date Liabilities Valuation"), including an itemized list showing Buyer's determination of the value of each of the Scheduled Liabilities. The Closing Date Liabilities Valuation shall be prepared (i) in accordance with GAAP, and (ii) on a basis consistent with the preparation of the Financial Statements of the Business.

(c) After receipt of the Closing Date Liabilities Valuation, Sellers shall have thirty (30) days (the "Sellers' Review Period") to review it. If, within Sellers' Review Period, Sellers notify Buyer in writing that they object to any item(s) on the Closing Date Liabilities Valuation and specify the item(s) and amount(s) in dispute and the basis for such dispute (the "Sellers' Amendment Notice"), the parties shall use their best efforts to reach agreement in respect of the disputed items within the fifteen (15) day-period (the "Resolution Period") following the delivery of Sellers' Amendment Notice. Any item(s) on the Closing Date Liabilities Valuation not identified in writing as a disputed item within Sellers' Review Period shall be deemed to have been accepted by Sellers and not subject to any further review or change. If no Sellers' Amendment Notice is received by Buyer during Sellers' Review Period, the Closing Date Liabilities Valuation shall be deemed accepted by Sellers.

(d) If at the conclusion of the Resolution Period the parties have not reached an agreement on Sellers' objections, then all amounts and issues remaining in dispute shall be submitted by Sellers and Buyer to a Neutral Accountant. The fees, costs and expenses of the Neutral Accountant shall be borne proportionately by Buyer and Sellers to the extent that each party's calculation of the aggregate value of the Scheduled Liabilities differs from the final Scheduled Liabilities Valuation as finally determined by the Neutral Accountant. All costs and expenses incurred by the parties in connection with resolving any dispute under this Section 1.7 before the Neutral Accountant shall be borne by the party incurring such cost and expense. The Neutral Accountant shall act as an arbitrator to determine only those issues still in dispute at the end of the Sellers' Review Period. The Neutral Accountant's determination shall be made within forty-five (45) days after its engagement, shall be set forth in a written statement delivered to the Sellers and Buyer and shall be final, binding, conclusive and nonappealable for all purposes hereunder. The term "Final Scheduled Liabilities Valuation" shall mean the aggregate value of the Scheduled Liabilities as agreed to by Sellers and Buyer in accordance with Section 1.7(c) or the aggregate value of the Scheduled Liabilities resulting from the determination made by the Neutral Accountant in accordance with this Section 1.7(d) (in addition to those items theretofore agreed to by Sellers and Buyer during the Resolution Period or otherwise in accordance with Section 1.7(c)).

(e) If the Purchase Price is less than the Closing Payment, then the excess portion of the Closing Payment over the Purchase Price shall be paid by the Sellers to the Buyer. If the Purchase Price exceeds the Closing Payment, then the excess portion of the Purchase Price over the Closing Payment shall be paid by Buyer to the Sellers. The amount of any payment by Buyer or Sellers pursuant to this Section 1.7(e) plus interest thereon from and including the Closing Date but excluding the date of payment at the rate of 6.0% per annum shall be paid by Buyer or Sellers, as the case may be, by wire transfer of immediately available funds within five business days after the Final Scheduled Liabilities Valuation is agreed to by Sellers and Buyer or is determined by the Neutral Accountant in accordance with this Section 1.7.

Section 1.8 [INTENTIONALLY OMITTED]

Section 1.9 Closing Prorations. The following shall be prorated at or promptly following the Closing Date between the parties:

(a) Real Estate Taxes and Personal Property Taxes.  Real estate Taxes (including general and special assessments and water and sewerage charges) and personal property Taxes (together, "2004 Property Taxes") for 2004 shall be pro-rated between Sellers and Buyer by apportioning 2004 real estate Taxes between Sellers and Buyer in proportion to the number of days in 2004 up to and including the Closing Date, as to which such Taxes shall be the obligation of Sellers, and the number of days in 2004 following the Closing Date, as to which such Taxes shall be the obligation of Buyer and by apportioning 2004 personal property Taxes one-half to Buyer and one-half to Sellers. No more than thirty (30) days before a payment of 2004 Property Taxes by Sellers, whether in accordance with customary procedures for the payment of Property Taxes, pursuant to audit findings or otherwise in accordance with applicable law, Sellers shall provide Buyer with a copy of the relevant return, assessment or other documentation or a certification of the amount of the payment to be made within such thirty (30) day period (a "Payment Certification"). At least one day before the due date of each payment of 2004 Property Taxes, Buyer shall pay to Sellers, by wire transfer of immediately available funds to an account designated by Sellers in writing, Buyer's share of the total payment shown on such Payment Certification, as determined in accordance with this Section 1.9(a). Sellers shall pay, and indemnify and hold harmless Buyer against, all 2004 Property Taxes timely paid by Buyer to Sellers in accordance with this Section 1.9(a), all 2004 Property Taxes apportioned to Sellers in accordance with this Section 1.9(a) and all Property Taxes with respect to periods prior to 2004. Buyer shall indemnify and hold harmless Sellers against any liability in respect of 2004 Property Taxes apportioned to Buyer pursuant to this Section 1.9(a) that are not timely paid by Buyer to Sellers. This Section 1.9(a) shall survive the Closing until the lapse of the latest statute of limitations applicable to 2004 Property Taxes. Buyer shall, promptly upon receipt, provide to Sellers all notices, bills, assessments and other correspondence relating to 2004 Property Taxes or to Property Taxes for any Tax period or portion thereof ending on or before the Closing Date (or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such period up to and including the Closing Date).

(b) Real Property Transfer Taxes and Recording Fees. Sellers and Buyer shall each pay one-half of any transfer Taxes and recording fees assessed on the conveyance of the Real Property at Closing.

(c) Utilities. Sellers shall endeavor to have all meters read and final bills rendered for all utilities servicing the Business including, without limitation, water, sewer, gas and electricity, for the period to and including the Closing Date. Sellers shall pay all bills for such utilities for the period to and including the Closing Date by the due dates thereof. The provisions of this Section shall survive the Closing for a period of one (1) year.

(d) Personal Property Leases, Contracts and Agreements and Permits. Sellers and Buyer shall make such prorations and adjustments under all Personal Property Leases, Contracts and Agreements and Permits as shall be reasonably necessary to reflect Sellers' responsibility thereunder for the period of time prior to and including the Closing and Buyer's responsibility thereunder for the period of time after the Closing Date.

(e) Errors. If any errors or omissions are made at the Closing regarding adjustments or prorations, the parties shall make the appropriate corrections promptly after the discovery thereof. The provisions of this Section shall survive the Closing for a period of one (1) year.

Section 1.10 Consent of Third Parties. Nothing in this Agreement nor the consummation of the Transaction contemplated hereby shall be construed as an attempt or agreement to assign any Asset, including any Contract and Agreement, Permit, Real Property Lease, Personal Property Lease, certificate, approval, authorization or other right, which by its terms or by applicable law is nonassignable without the consent of a third party or a governmental body or is cancelable by a third party in the event of an assignment ("Nonassignable Assets") unless and until such consent, approval or authorization, or replacement thereof, shall have been obtained. With respect to such Nonassignable Assets, Sellers shall, and shall cause their respective affiliates to, use their commercially reasonable efforts to cooperate with Buyer at its request for up to 180 days following the Closing Date in endeavoring to obtain such consents promptly; provided, however, that such efforts shall not require Sellers or any of their respective affiliates to incur any actual out-of-pocket costs payable to any third party or provide any financial accommodation or to remain secondarily or contingently liable for any Assumed Liability to obtain any such consent. Buyer and Sellers shall use their respective commercially reasonable efforts to obtain, or cause to be obtained, any consent, substitution, approval or amendment required to novate all Liabilities under any and all Contracts and Agreements or other Liabilities that constitute Assumed Liabilities or to obtain in writing the unconditional release of Sellers and their respective affiliates so that, in any such case, Buyer shall be solely responsible for such Liabilities. To the extent permitted by applicable law, in the event consents or approvals to the assignment thereof cannot be obtained, such Nonassignable Assets shall be held, as of and from the Closing Date, by Sellers or the applicable affiliate of Sellers in trust for Buyer and the covenants and obligations thereunder shall be performed by Buyer in Sellers' or such affiliate's name and all benefits and obligations existing thereunder shall be for Buyer's account. Sellers shall take or cause to be taken at Buyer's expense such actions in its name or otherwise as Buyer may reasonably request so as to provide Buyer with the benefits of the Nonassignable Assets and to effect collection of money or other consideration that becomes due and payable under the Nonassignable Assets, and Sellers or the applicable affiliate of Sellers shall promptly pay over to Buyer all money or other consideration received by it in respect of all Nonassignable Assets. As of and from the Closing Date, each of the Sellers on behalf of itself and its affiliates authorizes Buyer, to the extent permitted by applicable law and the terms of the Nonassignable Assets, at Buyer's expense, to perform all the obligations and receive all the benefits of Sellers or their respective affiliates under the Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its name on its behalf or in the name of the applicable affiliate of Sellers and on such affiliate's behalf with respect thereto and Buyer agrees to indemnify and hold Sellers and their respective affiliates, agents, successors and assigns harmless from and against any and all Liabilities and Losses based upon, arising out of or relating to Buyer's performance of, or failure to perform, such obligations under the Nonassignable Assets, except for those Material Contracts that are not identified on Schedule 2.13.

ARTICLE II
Representations and Warranties of Parent and Sellers

In order to induce Buyer to enter into this Agreement, Parent and Sellers hereby represent, warrant, and agree as follows:

Section 2.1 Parent and Sellers.

(a) Sellers are duly organized and validly existing corporations or limited liability companies, as applicable, in good standing under the laws of the State of Ohio, and have all requisite power and authority, corporate and otherwise, to own, lease, use and operate their respective Assets and the Business as now conducted.

(b) Parent is a duly organized and validly existing corporation, in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to own, lease, use and operate its properties and business as now conducted.

Section 2.2 Corporate Power and Authority. Each of Parent and Sellers has full power and authority, corporate and otherwise, to execute and deliver this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the Transaction contemplated hereby have been duly and validly authorized by the Boards of Directors or the Members of each of Parent and Sellers. No other corporate acts or proceedings on the part of Parent, Sellers or any other Person are necessary to authorize this Agreement or the consummation of the Transaction contemplated hereby. This Agreement has been duly executed and delivered by each of Parent and Sellers and, when duly executed and delivered by the Buyer, this Agreement will constitute a valid and legally binding obligation of, and will be enforceable against, each of Parent and Sellers in accordance with its terms, except as enforceability may be affected by principles of equity, bankruptcy, insolvency, or creditors' rights.

Section 2.3 Conflicts, Consents and Approvals. Except as specifically set forth on Schedule 2.3 hereto, neither the execution and delivery of this Agreement, nor the consummation of the Transaction contemplated hereby, nor compliance by Parent or Sellers with any of the provisions hereof, will: (i) result in the creation of any material Encumbrance upon any of the Assets; (ii) violate any material order, writ, injunction, decree, or any statute, rule or regulation applicable to Parent, Sellers or any of the Assets; (iii) violate any provision of the Certificates of Incorporation, Bylaws or Operating Agreement of Parent or Sellers, or (iv) require any action or consent or approval of, or review by, or registration with any third party, court, or governmental body or other agency, instrumentality, or authority, other than as required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the "HSR Act") and for consents for the assignment of the Permits, the Contracts and Agreements and the Personal Property Leases that require consent by a third party in connection with the consummation of the Transaction.

Section 2.4 Title to Tangible Personal Property. Except as set forth on Schedule 2.4, the Sellers have good title to the tangible personal property material to the Business and included in the Assets, free and clear of all mortgages, liens, security interests, charges, encumbrances or other title defects in all material respects, except for the liens of current state and local taxes not yet due and payable.

Section 2.5 Title to Real Property; Existing Surveys. The Sellers have good and insurable fee simple title to all of the Owned Real Property and a valid leasehold interest in all Leased Real Property, free and clear of all Encumbrances and other title defects other than Permitted Exceptions. The term "Permitted Exceptions" shall mean (a) those exceptions to title shown in Schedule B, Section II of the Title Commitments and those matters shown on the Surveys which are not objected to by Buyer pursuant to, and in accordance with, Section 4.9 of this Agreement; (b) any and all present and future zoning restrictions, regulations, requirements, laws and ordinances of any City, Town or Village in which the Owned Real Property lies and of boards, bureaus, commissions, departments and bodies of any Municipal, County, State or Federal sovereign or other governmental authority now or hereafter having or acquiring jurisdiction of the Real Property or the use and improvement thereof; (c) street widenings, proposed or in existence, or any changes of grade, proposed or in existence; (d) statutory liens for current and past Taxes, if any, and other governmental charges for the current fiscal year, which are not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings provided an appropriate reserve is established therefore; (e) those "standard exceptions" from coverage set forth as Items 2, 3 and 6 of Schedule B, Section II, of each of the Title Commitments, provided that the inclusion of this subsection (e) shall not be construed to limit, impair or otherwise affect Buyer's right to object to items shown on the Surveys as set forth in Section 4.9 of this Agreement; (f) parties in possession of all or part of the Owned Real Property pursuant to any contract, concession agreement, service agreement or license agreement which is listed on the Disclosure Schedules to this Agreement; (g) any state of facts shown on the Existing Surveys, provided such state of facts would not reasonably be expected to materially adversely impact, either individually or in the aggregate, the operation of the Business as presently conducted or the current use or value of the Owned Real Property; (h) variations between the record lot lines of the Owned Real Property and those shown on the tax map, if any, provided the same would not reasonably be expected to materially adversely impact, individually or in the aggregate, the operation of the Business as presently conducted or the current use or value of the Owned Real Property, provided however, that the tax parcels will include all of the land comprising the Owned Real Property and no other land, except non-material parcels of land resulting from the shifting of the water-line in Geauga Lake, other non-material parcels of a similar size and value and any parcels identified as easements or other lessor rights; and (i) any other covenants, restrictions, easements, agreements, defects or other matters affecting, or imperfections in, title to the Owned Real Property, or any part thereof, which would not reasonably be expected to materially adversely impact, individually or in the aggregate, the operation of the Business as presently conducted or the current use or value of the Owned Real Property, and provided that none of the foregoing shall constitute Objections to the Title Policy. Except as set forth on Schedule 2.5 or Schedule 2.9, all Improvements used in the conduct of the Business are in good and useable condition, reasonable wear, tear and obsolescence excepted, and conform, in all material respects, with all existing applicable ordinances, codes and regulations in effect as of the date hereof.

Section 2.6 Litigation. Except as set forth on Schedule 2.6 hereto, (i) there is no action, suit or proceeding pending or, to the best of Sellers' Knowledge, threatened against the Sellers or any affiliate thereof, with respect to the Business or the Assets, at law, in equity, by way of arbitration or before any governmental department, commission, board or agency, (ii) to the Sellers' Knowledge the Sellers are not in default in any material respect with respect to any written order, injunction or decree of any court or governmental department, commission, board or agency and no such written order, injunction or decree is now in effect which restrains the operations of the Business as currently conducted or the sale or use of the Assets, and (iii) except for conducting the operations of the Business in the ordinary course of Business, Sellers are not presently engaged in or aware of any situation which would reasonably be expected to subject Sellers or Buyer to any material litigation, arbitration, order, condemnation proceeding, claim or other legal proceeding or governmental investigation relating to the Business or the Assets.

Section 2.7 Brokerage and Finder's Fees. Sellers have not and will not incur any brokerage, finder's or any other commission or similar fee in connection with the Transaction contemplated by this Agreement.

Section 2.8 Environmental Matters.

(a) For the purpose of this Agreement:

(i) "Environmental Claim" shall mean any and all actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings under Environmental Laws or any permit issued under Environmental Laws relating to a violation of or liability under Environmental Laws (for purposes hereof, a "Demand"), including, without limitation, (A) any and all Demands for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to Environmental Laws and (B) any and all Demands seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

(ii) "Environmental Condition" shall mean any and all conditions relating to soil, surface water, groundwater, stream sediment, air or other environmental media, whether on or migrating from the Real Property that violates applicable standards of Environmental Laws in effect as of the Closing, which shall with respect to the presence of Hazardous Materials in the soil or groundwater be those standards applicable to the properties given their use at the time of Closing, regardless of whether such conditions are discovered before or after the Closing Date and expressly including the post-Closing migration or exacerbation of any condition to the extent that such migration or exacerbation is not caused by Buyer's operation of the Business.

(iii) "Environmental Laws" shall mean all applicable federal, state and local laws (including common law), rules, ordinances, orders, directives, permits, approvals, decisions or decrees, remediation standards, and regulations relating to pollution or protection of human health or the environment, including, without limitation and whether similar or dissimilar to, any applicable provisions of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Resource Conservation Recovery Act ("RCRA"), 42 U.S.C. Sec. 6901 et seq. (RCRA), the Clean Water Act 33 U.S.C. Sec. 1251 et seq. (CWA), the Safe Drinking Water Act, 42 U.S.C. Sec. 300f et seq. (SWDA), the Clean Air Act, 42 U.S.C. Sec. 7401 et seq. (CAA), the Occupational Safety and Health Act, 29 U.S.C. 651 et seq. (OSHA), the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq. (TSCA), and the Emergency Planning and Right-to-Know Act of 1986, 42 U.S.C. Sec. 11001 et seq. (EPCRA).

(iv) "Hazardous Materials" shall mean (a) any element, compound or chemical that is characterized, regulated or defined as a contaminant, pollutant, hazardous or extremely hazardous substance, or a hazardous, medical, biohazardous, infectious or special waste under Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived products; (c) polychlorinated biphenyls ("PCBs"); (d) any substance exhibiting a hazardous waste characteristic including but not limited to corrosivity, ignitibility, toxicity or reactivity as well as any radioactive or explosive materials; and (e) any asbestos-containing materials.

(v) "Release" means any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) of Hazardous Materials.

    1. Except as set forth herein or on Schedule 2.8(b) hereto:

(i) To the Knowledge of Sellers, none of the Real Property is identified on any current list of contaminated or potentially contaminated property established by the United States Environmental Protection Agency or the Ohio Environmental Protection Agency;

(ii) Sellers' and, to their Knowledge, their predecessors' and affiliates', ownership and operation of the Business and Assets were and are in compliance with all Environmental Laws, except where the failure to comply would not reasonably be expected to have a material impact on the Business as currently conducted;

(iii) During Sellers' ownership of the Real Property and, to their Knowledge, at all other times, Hazardous Materials have not been managed, manufactured, produced or generated by, used on, treated or stored on, or transported to or from, the Real Property, other than as normally incidental to the conduct of the Business and in a manner that would not reasonably be expected to give rise to material Liabilities under Environmental Laws;

(iv) To the Knowledge of Sellers, there has been no Release of Hazardous Materials at, on, under or from any of the Real Property other than as would not be reasonably expected to result in an Environmental Claim, which if adversely decided would reasonably be expected to result in the owner of such Real Property incurring material liabilities under Environmental Laws;

(v) There are no pending, or, to the Knowledge of Sellers, threatened Environmental Claims including, without limitation investigations by any federal, state or local governmental entity, against or concerning Sellers with respect to the Business, Assets or Real Property;

(vi) To the Knowledge of Sellers, there are no conditions or circumstances which are reasonably likely to prevent or materially interfere with the use of the Real Property or the operation of the Business or the Assets as currently conducted in material compliance with Environmental Laws; and

(vii) There exists no Encumbrance created under Environmental Laws on any of the Real Property which would reasonably be expected to have a Material Adverse Effect.

This Section 2.8 is the sole and exclusive representation and warranty with respect to environmental matters.

Section 2.9 Condition of Assets. Except as set forth on Schedule 2.5 and Schedule 2.9, the Assets are, in all material respects, as of the date hereof, in good repair and operating condition, ordinary wear and tear excepted, as is suitable for their intended use. Except as set forth on Schedule 2.9, all of the Assets that are amusement rides (including related equipment) have been operated and maintained in all material respects in substantial compliance with all applicable laws and regulations of the State of Ohio and, to the extent any such Assets have been inspected by the State of Ohio for operation during the 2004 season, such Assets have been approved for operation during the 2004 season. The Sellers have operated and maintained all such Assets in accordance with prudent practice consistent with industry standards applicable to the operation of a regional amusement park, including, without limitation, compliance in all material respects with applicable manufacturers' written recommendations.

Section 2.10 Trademarks, Etc. To the Sellers' Knowledge, none of the past or present employees, officers, directors, shareholders or affiliates of the Sellers has any rights in any of the Intangibles Acquired by Asset Purchase. The Sellers have not granted any outstanding licenses or other rights to Intangibles Acquired by Asset Purchase except as described on Schedule 2.10, and the Sellers are not liable in any material respect, nor have the Sellers made any contract or arrangement whereby they may become liable in any material respect, to any person for any royalty or other compensation for the use of any Intangibles Acquired by Asset Purchase. The consummation of the Transaction contemplated hereby will not result in the loss or impairment of Buyer's right to own or use any Intangibles Acquired by Asset Purchase in any material respect. To Sellers' Knowledge the operations of the Business as presently conducted do not infringe any rights of others to the Intangibles Acquired by Asset Purchase or to any intellectual property owned by others.

Section 2.11 Financial Statements; Attendance.

(a) Sellers have delivered to Buyer true, correct and complete copies of the following financial statements (collectively the "Financial Statements") of the Business: (i) balance sheets and statements of income, as of and for the periods ended December 31, 2001, December 31, 2002 and December 31, 2003; and (ii) balance sheets and statements of income (the "Most Recent Financial Statements"), as of and for the two month period ended March 28, 2004 (the "Most Recent Fiscal Month End"). Except as set forth on Schedule 2.11(a) hereto, the Financial Statements (i) were prepared in accordance with generally accepted accounting principles in the United States consistently applied; and (ii) were prepared in accordance with the books and records of the Business and present fairly in all material respects the financial condition and results of operations of the Business as of the dates thereof and for the periods referred to therein.

(b) Schedule 2.11(b) accurately sets forth the attendance at the Business during 2001, 2002 and 2003.

Section 2.12 Absence of Changes or Events. Since December 31, 2003, except as set forth on Schedule 2.12 hereto, Sellers have operated the Business in the ordinary course of business consistent with past practices. Since December 31, 2003, Sellers have not:

(a) Mortgaged, pledged or granted any other Encumbrance on any portion of the Assets;

(b) Suffered any material change in the Assets or any material change in the condition (financial or otherwise) or results of operations of the Business or any event, occurrence or circumstance that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect;

(c) Suffered any damage, destruction or other casualty loss (whether or not covered by insurance), condemnation or other taking affecting the Assets or the Business in any material respect;

(d) Encountered any actual or threatened labor union organizing activity or collective bargaining negotiation, had any actual or threatened employee strikes, work stoppages, slow-downs or lock-outs, terminated any Employees for cause (other than in the ordinary course) or experienced any material change in its relationship with employees or the agents or independent contractors of the Business;

(e) Except for customary salary and wage increases as of January 1, 2004, and except as set forth in Schedule 2.12, made any material change in the rate of compensation, commission, bonus or other direct or indirect compensation payable or to become payable to any employee of the Sellers whose primary duties are at the Business, or any alteration in the benefits payable to any such employee.

Section 2.13 Contracts.

(a) Schedule 2.13(a) lists all Contracts and Agreements, whether written or oral, including amendments thereto, that fall into one or more of the following categories (each a "Material Contract" and, collectively, the "Material Contracts"):

(i) Any agreement involving the expenditure by the Business of more than $50,000 and not cancelable upon notice by Sellers without penalty or consent within ninety (90) days;

(ii) Any agreement relating to capital expenditures, providing for the payment of an aggregate amount of more than $50,000 and not cancelable upon notice by Sellers without penalty or consent within ninety (90) days;

(iii) Any agreement, contract, lease, plan, arrangement and/or commitment relating to the grant or receipt by Sellers of any license or royalty fees or other payment obligations to or from any Person;

(iv) Except for those employment agreements that are not assumed pursuant to this Agreement, any employment agreement, contract, policy, confidentiality or proprietary rights agreement, and/or commitment with or between Sellers and any of their respective employees, directors or officers, including without limitation those relating to severance;

(v) Partnership, joint venture or other cooperative arrangements or agreements involving a sharing of profits and expenses;

(vi) Any contract, agreement or arrangement containing covenants limiting the freedom of the Business to compete in any line of business with any person, group association or business entity or in any area or territory;

(vii) Any other agreement, contract and commitment the assignment of which either requires consent by a third party in connection with the consummation of the Transaction or that is entered into by Sellers that is outside of the ordinary course of the Business; and

(viii) Any lease pertaining to the use of any portion of the Real Property by third parties.

(b) Sellers have delivered to Buyer complete and correct copies of all Material Contracts together with all amendments thereto. All of the Material Contracts are the valid and binding obligations of the Sellers and, to the Knowledge of Sellers, the other respective parties thereto, are in full force and effect and as to Sellers are enforceable in accordance with their respective terms, except as the enforcement may be affected by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws relating to or limiting creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in a proceeding at law or in equity.

Section 2.14 Tax Matters.

(a) Except as set forth on Schedule 2.14(a), (i) each of the Sellers has filed all Tax Returns that it was required to file related to the Business or the Assets, (ii) all such Tax Returns were correct and complete in all respects, (iii) all Taxes related to the Business or the Assets owed by the Sellers (whether or not shown on any Tax Return) have been paid, (iv) none of the Sellers is the beneficiary of any extension of time within which to file any Tax Return related to the Business or the Assets, (v) no claim has ever been made by an authority in a jurisdiction where any of the Sellers does not file Tax Returns that it is or may be subject to taxation by that jurisdiction related to the operation of the Business or the Assets, and (vi) there are no Encumbrances on any of the assets of any of Sellers that arose in connection with any failure (or alleged failure) to pay any Tax related to the Business or the Assets.

(b) Except as set forth on Schedule 2.14(b), Sellers have withheld and paid all Taxes required to have been withheld and paid, related to the Business or the Assets, in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

(c) Except as set forth on Schedule 2.14(c), (i) no shareholder of any Seller or director or officer (or employee responsible for Tax matters) of any Seller expects any authority to assess any additional Taxes related to the Business or the Assets for any period for which Tax Returns have been filed; and (ii) there is no dispute or claim concerning any Tax Liability of Sellers related to the Business or the Assets either (A) claimed or raised by any authority in writing, or (B) as to which any Seller and the directors and officers (and employees responsible for Tax matters) of any Seller has Knowledge based upon personal contact with any agent of such authority.

(d) Except as set forth on Schedule 2.14(d), no Sellers are a party to any Tax allocation, indemnification or sharing agreement that will (i) remain in effect subsequent to the Transaction and (ii) impose any obligation on Buyer or any of its affiliates.

(e) Except as set forth on Schedule 2.14(e), all amounts with respect to the Business or the Assets required to be collected or withheld by Sellers with respect to Taxes have been duly collected or withheld and any such amounts that are required to be remitted to any taxing authority have been duly remitted.

Section 2.15 Employee Benefits.

(a) Schedule 2.15(a) attached hereto sets forth and identifies (i) each material employee benefit plan (an "Employee Benefit Plan"), as defined in Section 3(3) of ERISA, which is an employee welfare benefit plan, as defined in Section 3(1) of ERISA (a "Welfare Plan"); (ii) each material Employee Benefit Plan which is an employee pension benefit plan, as defined in Section 3(2) of ERISA (a "Pension Plan"); and (iii) each bonus, deferred compensation, incentive compensation, holiday, vacation, termination, severance pay, sick pay, sick leave, disability, tuition refund, service award, company car, scholarship, relocation, award, program, policy or practice, other than an Employee Benefit Plan (a "Benefit Arrangement"), maintained by Sellers for any active, retired or former employee of the Business (a "Business Employee").

(b) No employees of Sellers or any subsidiary thereof or any trade or business (whether or not incorporated) that is part of the same controlled group or under common control with or part of an affiliated service group that includes any Seller within the meaning of Section 414(b), (c), (m) or (o) of the Code and Section 210 of ERISA currently participate or ever have participated in any multiemployer plan, as defined in Section 3(37) of ERISA (a "Multiemployer Plan") or a voluntary employees beneficiary association, as defined in Section 501(c)(9) of the Code (a "VEBA"). Neither Sellers nor any ERISA Affiliate (as defined in the Code) have ever been a participating employer in any Multiemployer Plan or sponsored a VEBA.

(c) Except as indicated on Schedule 2.15(c), with respect to each Employee Benefit Plan maintained for any Business Employee and each related funding arrangement of Sellers and any ERISA Affiliate: (i) each such Employee Benefit Plan has been maintained and administered in all material respects with all applicable laws, including, without limitation ERISA and the Code; (ii) each such Employee Benefit Plan which is a Pension Plan intended to qualify under Section 401(a) of the Code has been determined to be so qualified by the Internal Revenue Service; (iii) each trust maintained in conjunction with such Employee Benefit Plan which is a Pension Plan intended to qualify under Section 401(a) of the Code has been determined to be exempt from taxation by the Internal Revenue Service; (iv) none of such Employee Benefit Plans which are Pension Plans or the related trusts, or any administrator or trustee thereof, or party-in-interest or disqualified person thereto has engaged in a transaction that could cause any of them to be liable for a civil penalty under Section 409 or 502(i) or any other section of ERISA or result in a tax under Section 4975 or 4976 or any other section of Chapter 43 of Subtitle D of the Code; and (v) all amounts required to be paid to each such Employee Benefit Plan on or before the Closing Date has been paid within the time periods required by the Plans or by law.

(d) No "reportable event" (within the meaning of Section 4043 of ERISA) has occurred with respect to any Pension Plan of Sellers or an ERISA Affiliate;

(e) No Welfare Plan of Sellers or an ERISA Affiliate provides retiree medical or retiree life insurance benefits.

(f) Each Welfare Plan of Sellers which is a group health plan for any Business Employee has been operated in compliance in all respects with the requirements of Sections 601 through 608 of ERISA and Section 4980B of the Code relating to the continuation of coverage under certain circumstances in which coverage would otherwise cease.

(g) Any Employee Benefit Plan of Sellers for any Business Employee designed to satisfy the requirements of Section 125, 401(k), 409, 501(c)(9), 4975(e)(7) and/or 4980B of the Code satisfies such section in all respects.

(h) Except as indicated on Schedule 2.15(h), there is no audit which is in process by, or for which notification has been received from the Department of Labor, Internal Revenue Service, or Pension Benefit Guaranty Corporation with respect to any Pension Plan of Sellers.

(i) There are no claims pending by, or on behalf of, any of the Employee Benefit Plans of Sellers by any current or former Business Employee or beneficiary thereof, other than routine benefit claims.

Section 2.16 Insurance. Except as set forth in Schedule 2.16, as of the date hereof, there is no claim with respect to the Business pending under any of Sellers' insurance policies (the "Insurance Policies") as to which coverage has been questioned, denied or disputed by the underwriters of such Insurance Policies or any requirement by any insurer to perform work which has not been satisfied. Schedule 2.16 also sets forth, as of the date hereof, a true and complete list of claims pertaining to the Business made in respect of the Insurance Policies for the period since January 1, 2001. All premiums payable on or before the Closing Date under all Insurance Policies have been paid and Sellers and the Business 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. Except as provided in Schedule 2.16, claims under all Insurance Policies are payable on an "occurrence basis" such that a claim of any type covered thereunder that is asserted after the Closing Date for an event that occurred prior thereto would be covered by such Insurance Policies.

Section 2.17 Compliance with Law. Other than with respect to the matters set forth in Sections 2.3, 2.6, 2.8, 2.9, 2.14 and 2.15, Sellers have complied in all material respects with all laws, rules, regulations and orders applicable as of the date hereof to the conduct of the Business (including, without limitation, the operation by Sellers of the Real Property) as and in the manner conducted by Sellers, including, without limitation, zoning, use, noise, pollution, environmental, building, fire, safety and health laws and governmental regulations. Sellers have obtained all material Permits required by applicable law or governmental regulation in connection with the Business as now conducted. Except as set forth on Schedule 2.17, as of the date hereof, to Sellers knowledge, there are no proposed laws, rules, regulations or orders, or any judgments, decrees or other proceedings, which would be applicable to the Business or Assets and not applicable to any other amusement park currently operating in the State of Ohio, which would reasonably be expected to adversely affect the Business or Assets, either before or after the Closing.

Section 2.18. No Other Representations or Warranties. Except for the representations and warranties contained in this Article II (as modified by the Schedules hereto), neither Sellers nor any other person makes any other express or implied representation or warranty with respect to Sellers, the Business, the Assets, the Assumed Liabilities or the Transaction, and Sellers disclaim any other representations or warranties, whether made by Sellers, any affiliate of Sellers or any of their respective officers, directors, employees, agents or representatives.

 

ARTICLE III
Representations and Warranties of Buyer

In order to induce Sellers to enter into this Agreement, Buyer hereby represents, warrants, and agrees as follows:

Section 3.1 Organization and Standing of Buyer. Buyer is a duly organized and validly existing limited partnership, in good standing under the laws of the State of Delaware, and has all requisite power and authority, partnership and otherwise, to own, lease, use and operate its properties as now conducted. Buyer (or a wholly-owned subsidiary of Buyer that is designated by Buyer pursuant to Section 12.3 to carry out all or part of the Transaction) is duly qualified to do business and is in good standing as a foreign corporation in the State of Ohio.

Section 3.2 Partnership Power and Authority. Buyer has full power and authority, partnership and otherwise, to execute and deliver this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement and the consummation of the Transaction contemplated hereby have been duly and validly authorized by all necessary partnership action of Buyer. No other partnership acts or proceedings on the part of Buyer or its unitholders are necessary to authorize this Agreement or the consummation of the Transaction contemplated hereby. This Agreement has been duly executed and delivered by the Buyer and, when duly executed and delivered by the Sellers, this Agreement will constitute a valid and legally binding obligation of, and will be enforceable against, Buyer in accordance with its terms, except as enforceability may be affected by principles of equity, bankruptcy, insolvency, or creditor's rights.

Section 3.3 Conflicts, Consents and Approvals. Neither the execution and delivery of this Agreement, nor the consummation of the Transaction contemplated hereby, nor compliance by Buyer with any of the provisions hereof will (i) violate any order, writ, injunction, decree, or any statute, rule or regulation applicable to Buyer; (ii) violate any provision of the Certificate of Partnership or Partnership Agreement of Buyer; or (iii) require any action or consent or approval of, or review by, or registration with any third party, court, or governmental body or another agency, instrumentality or authority, other than as required by the HSR Act and consents for the assignment of the permits, contracts and leases described herein by the other contracting parties thereto.

Section 3.4 No Litigation; Compliance with Law. There is no action, suit or proceeding pending or, to the knowledge of Buyer, threatened against Buyer, or to which Buyer is otherwise a party, at law, in equity, by way of arbitration or before any governmental department, commission, board or agency which, if adversely determined, would reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or to consummate the Transaction contemplated hereby. Buyer is not subject to any order, injunction, judgment or decree of any governmental department, commission, board or agency, except to the extent the same would not reasonably be expected to have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or to consummate the Transaction contemplated hereby. Buyer is not presently engaged in or aware of any situation which could subject Sellers or Buyer to any litigation, arbitration, order, condemnation proceeding, claim or other legal proceeding or governmental investigation relating to the Transaction or arising out of this Agreement in any way.

Section 3.5 Financing. Assuming that the financing contemplated by Section 6.3 of this Agreement is consummated in accordance with the terms thereof, the funds to be borrowed by Buyer, together with Buyer's available cash, will provide sufficient funds for Buyer to pay the Purchase Price and to consummate the Transaction contemplated hereby. As of the date of this Agreement, to the knowledge of Buyer, there are no facts or circumstances related to the business, assets, operations, condition (financial or otherwise) or prospects of Buyer and its subsidiaries, or the Business, that create a basis for Buyer to believe that Buyer will not obtain all of the financing contemplated by Section 6.3 of this Agreement upon satisfaction of the conditions set forth in Sections 8.1 and 8.2 of this Agreement.

Section 3.6 Broker and Finder's Fees. Buyer has not and will not incur any brokerage, finder's or similar fee in connection with the Transaction.

ARTICLE IV
Pre-Closing Covenants of Parent and Sellers

Sellers agree that, subsequent to the date hereof and prior to the Closing Date:

Section 4.1 Access; Cooperation. Through the Closing Date, and subject to the terms of the Confidentiality Agreement, Sellers will afford to the authorized representatives of Buyer reasonable access to the Assets and to representatives of Sellers to discuss matters relating to the Assets. Any such investigation and examination shall be coordinated by Sellers and Buyer and conducted during regular business hours upon reasonable advance notice subject to restrictions under applicable law. Notwithstanding anything herein to the contrary, no such investigation or examination shall be permitted to the extent that it would require Sellers to disclose information subject to attorney-client privilege or conflict with any confidentiality obligations to which any of the Sellers is bound. To the extent Sellers believe that privilege or their confidentiality obligations preclude Buyer's investigation or examination under the foregoing sentence, they shall promptly provide Buyer a privilege log detailing with reasonable specificity the topics and general nature of the information withheld. If Buyer proposes a means that provides reasonable assurance of protecting the information or privilege, Sellers shall then promptly disclose the information at issue. Subject to these limitations, Buyer and Buyer's agents will be given the right to perform and conduct any and all necessary physical, engineering, environmental and other inspections of the Assets and all other relevant agreements and documents relating to the Assets as Buyer may reasonably request. Buyer shall restore the Assets to a condition substantially similar to the condition such Assets were in prior to any such testing. The parties hereby agree that such on-site inspections and investigations shall only be conducted with the consent of and coordination by Sellers.

Section 4.2 Operation of the Business.

(a) Except as expressly provided in this Agreement, between the date hereof and the Closing Date, Sellers shall:

(i) conduct the operations of the Business in the ordinary course of business consistent with past practice, and use their commercially reasonable efforts to preserve intact the present business organization and structure of the Business, keep available the services of the full-time employees of Sellers whose primary duties are at the Business and preserve their relationships with customers, suppliers and others having business dealings with the Business.

(ii) use their commercially reasonable efforts to maintain the machinery, equipment and rides primarily used or held for use in connection with the Business in good operating and usable condition, and in a state of good maintenance and repair, all in a manner that is consistent with preparing for the beginning of the 2004 operating season for the Business.

(iii) notify Buyer of any material claims pertaining to the Business made in respect of the Insurance Policies between the date hereof and the Closing Date.

(iv) not enter into any Contract or Agreement of a type required to be included on any Schedule hereto except Contracts and Agreements entered into in the ordinary course of business and except Contracts and Agreements approved by Buyer, which approval shall not be unreasonably withheld or delayed.

(b) Between the date hereof and the Closing Date, Sellers agree that they will use their commercially reasonable efforts to conduct the business of the Business in such a manner so that the representations and warranties of Sellers contained herein shall continue to be true and correct in all material respects on and as of the Closing Date as if made on and as of the Closing Date.

Section 4.3 Consents and Approvals. In accordance with, and subject to Section 1.10 of this Agreement, Sellers shall use their commercially reasonable efforts to obtain all Permits required to be obtained by them from any appropriate governmental agency or authority or other person in connection with the consummation of the Transaction contemplated by this Agreement, including without limitation (a) securing, whether before or after the Closing, all third party consents to the assignment of the Permits, Personal Property Leases, Real Property Leases and Contracts and Agreements, and (b) filing under the HSR Act, furnishing all requested materials throughout the HSR process (including any "second request"), and cooperating with all governmental agencies and authorities.

Section 4.4 Communications. Prior to the Closing Date, Parent and Sellers shall, subject to applicable law and to any confidentiality obligations of Sellers, promptly notify Buyer of:

(a) any notice or other communication delivered or received by Parent or Sellers (or their representatives) to or from any third party (other than notices or other communications solely among Sellers' representatives or between Sellers and Buyer) which would reasonably be expected to materially adversely affect the ability of Parent or Sellers to consummate the Transaction contemplated hereby (including, without limitation, any notice or other communication to or from any third party objecting to, or alleging that the consent of any person is or may be required in connection with, the Transaction contemplated hereby);

(b) any event, condition or circumstance occurring from the date hereof through the Closing Date that would constitute a material violation or breach of any Sellers' 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 4.5 Other Offers. From the date of this Agreement until it is terminated in accordance with Article XI, Parent and Sellers shall not, and shall cause their officers, directors, employees and other agents not to, take any action to: (i) encourage, solicit or initiate the submission of any Acquisition Proposal (as defined below) with respect to any third party, (ii) enter into any agreement with respect to any Acquisition Proposal with respect to any third party or (iii) participate in any way in discussions or negotiations with, or furnish any information to, any person in connection with, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal with respect to any third party. The term "Acquisition Proposal" shall mean any proposal, offer, bid, or other indication concerning the sale or transfer of the Business or the Assets or any material portion thereof or any merger or other business combination of the Business or the Assets, to or with any Person other than Buyer.

Section 4.6 Title Insurance. Sellers have obtained and delivered, or caused to be delivered, to Buyer, a commitment with respect to each separately owned portion (each, a "Site") of the Owned Real Property (individually, each a "Title Commitment," collectively the "Title Commitments") for an A.L.T.A. title insurance policy to insure fee simple marketable title, subject to those matters described in Schedule B, Section II, of the Title Policy, to Buyer of the Owned Real Property prepared by First American Title Insurance Company (the "Title Company"), together with true, legible copies of all material instruments referred to therein. The cost of obtaining the Title Commitments shall be borne equally by the Sellers and the Buyer.

Section 4.7 Surveys. Sellers have delivered to Buyer copies of the Existing Surveys and a complete copy of the Campground Survey. As soon as practicable after the Closing Date, but no later than June 11, 2004, each of the parties shall use their respective commercially reasonable efforts to cause the surveyor to deliver to Buyer and Sellers the Final Survey. The New Surveys shall be prepared by a licensed surveyor who shall certify the New Surveys in favor of Sellers, Buyer and the Title Company. Subject to reasonable approval of Sellers, Buyer and the Title Company, and consistent with applicable laws and governmental requirements, the metes and bounds legal description of the Owned Real Property contained in the Title Policy shall be used in the Deeds. In the event that the metes and bounds legal description used in the Final Survey (the "Final Survey Legal") is different from that contained in the Title Policy and/or in the Deeds, the parties agree to use their respective commercially reasonable efforts to cause the Title Policy to be endorsed to use the Final Survey Legal and Sellers will file corrective deeds to ensure the vesting in Buyer of all Owned Real Property. The cost of obtaining the New Surveys shall be borne equally by Sellers and the Buyer.

Section 4.8 Software License. Sellers agree to cooperate with Buyer and reasonably assist Buyer, both before and for a reasonable period of time after Closing, in securing certain software used for the operation of the Business, as reasonably requested by Buyer. In particular, Sellers shall use their commercially reasonable efforts to negotiate a mutually acceptable one (1) year software license with Buyer for such Business software owned by Sellers (including, but not limited to software related to the ticket system used in the Business), which license shall apply solely to the Business. In addition, Sellers shall assist Buyer in obtaining consents or licenses from third party owners of such operating software which is licensed to Sellers and available for use by the Business after the Transaction. In no event will Sellers be obligated to make any payments in respect of securing for use by Buyer any such software used in the operation of the Business.

Section 4.9 Title and Survey Objections/Cure of Title and Survey Objections. Buyer has delivered to Sellers the written notice attached hereto as Exhibit E (the "Initial Objection Letter") listing all objections Buyer has to matters contained in the Title Commitments and any matters shown on the Initial Surveys ("Pre-Closing Objections"); provided, however, that in no event shall Buyer be entitled to raise any Objection with respect to Permitted Exceptions. Furthermore, within fifteen (15) business days after receiving the Final Survey, Buyer shall provide written notice (the "Second Objection Letter," and, collectively with the Initial Objection Letter, the "Objection Letters") of objections Buyer may have to matters shown on the Final Survey, which shall exclude those matters which were depicted on the Initial Surveys and those matters which constitute Permitted Exceptions ("Post-Closing Objections," and, collectively with Pre-Closing Objections, "Objection(s)"). Sellers agree to cure any Objections which can be cured by the payment of a fixed sum of money (such as mortgages, judgment liens and mechanics liens) ("Monetary Objections"). Notwithstanding the foregoing, or anything to the contrary set forth herein:

(a) Timing. If Buyer fails to notify Sellers of an objection within the time provided herein, then Buyer shall be deemed to have accepted the Title Policy and Surveys subject to such objection and the basis therefore and such objection shall be deemed a Permitted Exception (except any Encumbrance to be released at or before Closing). Notwithstanding the foregoing, Buyer shall use commercially reasonable efforts to notify Sellers of any Objection promptly upon discovering the basis for such Objection, which shall in all events be no later than the time period set forth above.

(b) Pre-Closing Objections. Sellers shall have until the Closing (or such longer period requested by Sellers as Buyer may in writing approve) to cure or remove, or have the Title Company insure over through Affirmative Assurance, all or any Pre-Closing Objections. If Seller is unable to effect a cure, removal or Affirmative Assurance of any Pre-Closing Objections prior to Closing (or any date to which Closing has been adjourned), Buyer shall accept conveyance of the Owned Real Property at Closing, subject to such Pre-Closing Objection in which event any such uncured Pre-Closing Objection automatically shall be deemed to be a Post-Closing Objection which shall be subject to the provisions of Section 4.9(c), below; whereupon, Sellers shall convey the Owned Real Property as required under this Agreement subject to the terms and conditions contained herein.

(c) Post-Closing Objections. From and after the delivery of the Second Objection Letter, Buyer shall have the right, but not the obligation, to elect, on written notice ("Cure Notice") to the Sellers and Title Company within six (6) months of the Closing Date, to cure or remove ("Cure") any of the Post-Closing Objections, at Seller's sole cost and expense. Within twenty (20) business days of receiving a Cure Notice, Sellers shall provide Buyer with written notice setting forth, in reasonable specificity, Sellers' proposed method ("Cure Plan") to be used by Buyer, at Sellers' sole cost and expense, to effect such Cure.

Sellers agree to execute any and all affidavits or other documents (including, without limitation, indemnification agreements) reasonably required by the Title Company in order for the Title Company to issue the Title Policy as required by this Agreement and to otherwise remove and/or cure any and all Post-Closing Objections and as to those Post-Closing Objections that cannot be removed or cured by the Title Company, to provide affirmative assurance to Buyer in form and substance acceptable to Buyer including, without limitation, affirmative assurance in respect of any encroachments against forced removal, forfeiture or reversion of title of any Improvements (the "Affirmative Assurance").

(d) Indemnification. In the event Sellers are not able or willing to cure any Post-Closing Objection and the Title Company is unable or unwilling to provide the Affirmative Assurance, then Sellers shall indemnify and hold harmless Buyer and Buyer's Indemnified Persons from and against all Losses with respect thereto as provided under Sections 9.2 and 9.5(g) of this Agreement, and subject to the terms thereof.

Section 4.10. Disclosure Schedules. Sellers may, at their option, include in the Schedules items that are not material in order to avoid any misunderstanding, and such inclusion, or any references to dollar amounts, shall not be deemed to be an acknowledgment or representation that such items are material, to establish any standard of materiality or to define further the meaning of such terms for purposes of this Agreement. All matters disclosed in a Schedule shall be deemed to be disclosed in each Schedule to which it is, upon review of all Schedules, reasonably apparent that such matters relate.

 

ARTICLE V
Covenants of Parent and Sellers

Section 5.1 Further Assurances. Parent and Sellers agree that subsequent to the Closing, at the reasonable request of Buyer, they will execute and deliver, or cause to be executed and delivered to Buyer, or Buyer's designee, such further instruments of transfer and conveyance, and take such other actions as may be reasonably necessary to carry out and consummate the Transaction contemplated by this Agreement.

Section 5.2 Removal of Excluded Assets. Within (a) one hundred twenty (120) days after the Closing with respect to Animal Assets and (b) thirty (30) days after the Closing with respect to Excluded Assets other than Animal Assets, Sellers shall, at their sole cost and expense (including with respect to any material damage to the Assets), remove all Excluded Assets and may remove from the Business or eliminate by painting over or similar actions, all signs, renderings or other materials bearing any of Sellers' Retained Intellectual Property; provided, however, that Sellers shall not be responsible for replacing any such signs, renderings or other materials bearing any of Sellers' Retained Intellectual Property. At all times during such removal, Buyer shall have the right to have a representative present. To the extent not removed by Sellers, Buyer shall, at a reasonable cost and expense to be paid by Sellers, remove all such signs and materials prior to the opening of its 2004 operating season.

Section 5.3 Limited License to use Name. For the duration of the 2004 operating season, Sellers shall provide Buyer with a royalty-free license to publicize that the Business was formerly known as "Six Flags Worlds of Adventure".

Section 5.4 Covenant Not-to-Compete. In order to preserve the value of the Business being acquired by Buyer hereunder, Parent and Sellers agree that they will not, and will cause their controlled affiliates not to, for a period of three (3) years from the Closing Date, directly or indirectly, as a partner, officer, employee, director, stockholder, investor, lender, proprietor, manager, consultant, representative, agent or otherwise, become or be interested in, or associate with or render assistance to, any person (other than Buyer) engaged in the ownership, operation and/or management of any "Six Flags" or similar amusement park facility located within one hundred fifty (150) miles of the Business. The foregoing provisions shall not, however, (i) affect in any way the conduct by Parent, Sellers or their respective affiliates of any other business owned by them outside of such restricted area, or owned and operated by Parent or Sellers as of the date of this Agreement within such restricted area; or (ii) prohibit the ownership by any person 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 of any person (other than Buyer) which engages in any such business.

Section 5.5 Maintenance, Care and Risk Related to Animal Assets. Following the Closing, and for a period not to exceed one hundred twenty (120) days thereafter, Buyer will permit representatives of Sellers access to the Business in order to continue the care and feeding of the animals located thereat and to arrange for the removal of the Animal Assets. Such activity will be at Sellers' sole cost and expense and will be conducted at times and in a manner reasonably acceptable to Buyer and designed to minimize interference with Buyer's operation of the Business. For the avoidance of doubt, it is the intent of the parties that Sellers shall retain all liabilities related to the care and maintenance of the Animal Assets, including, but not limited to, all costs incurred to care for and maintain the Animal Assets, either before or after the Closing. Sellers shall also retain all risks related to the Animal Assets and the risk of loss of the Animal Assets, either before or after the Closing. Parent and Sellers, jointly and severally, shall indemnify the Buyer from and against the entirety of any Losses Buyer may suffer resulting from, arising out of or relating to the Animal Assets, except to the extent such Losses are the result of Buyer's gross negligence or willful misconduct.

Section 5.6 Preservation of Records. Sellers agree to preserve and keep the records held by them or their respective affiliates relating to the Business for a period of seven (7) years from the Closing Date and shall make such records available to the Buyer as may be reasonably required by such party in connection with, among other things, any insurance claims by, legal proceedings or tax audits against or governmental investigations of Buyer or any of its respective affiliates in order to enable Buyer to comply with its respective obligations under this Agreement and each other agreement, document or instrument contemplated hereby or thereby. In the event Sellers wish to destroy such records after that time, any Seller shall first give ninety (90) days prior written notice to Buyer and Buyer shall have the right at its option and expense, upon prior written notice given to Sellers within that ninety (90) day period, to take possession of the records within one hundred and eighty (180) days after the date of such notice.

Section 5.7 Maintenance of Assets. Funtime, or a successor to its assets and liabilities that assumes Funtime's obligations to Buyer under this Agreement by express agreement or by operation of law, will continue to hold, directly or indirectly, at least 40% interest in Elitch Gardens L.P. and at least 99% interest in Parc Six Flags Montreal, S.E.C. until Sellers have paid in full all applicable sales and use Taxes through 2004 or are not otherwise liable therefor.

ARTICLE VI
Pre-Closing Covenants of Buyer

Buyer agrees that, subsequent to the date hereof and prior to the Closing Date:

Section 6.1 Consents and Approvals. In accordance with, and subject to Section 1.10 of this Agreement, Buyer shall use its commercially reasonable best efforts to obtain all licenses, consents or other approvals required to be obtained by it from any appropriate governmental agency or authority or other person in connection with the consummation of the Transaction contemplated by this Agreement, including without limitation (a) securing all third party consents to the assignment of the Permits, Personal Property Leases, and Contracts and Agreements, and (b) filing under the HSR Act, furnishing all requested materials throughout the HSR process (including any "second request"), and cooperating with all governmental agencies and authorities.

Section 6.2 Communications. Prior to the Closing Date, Buyer shall, subject to applicable law and any confidentiality obligations of Buyer, promptly notify Sellers:

(a) of any notice or other communication delivered or received by Buyer (or its representatives) to or from any third party (other than notices or other communications solely among Buyer representatives or between Buyer and Sellers) with respect to the Transaction contemplated hereby (including, without limitation, any notice or other communication to or from any third party objecting to, or alleging that the consent of any person is or may be required in connection with, the Transaction contemplated hereby); or

(b) of any event, condition or circumstance occurring from the date hereof through the Closing Date that would constitute a material violation or breach of any Buyer 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; or

(c) if for any reason Buyer no longer believes in good faith that it will be able to obtain any of the financing necessary for the consummation of the Transaction contemplated hereby.

Section 6.3 Financing. Buyer agrees that it shall use its reasonable best efforts to obtain the financing necessary for the consummation of the Transaction contemplated hereby, and shall not, and shall not permit any of its subsidiaries or affiliates to, without the prior written consent of Sellers, take any action or enter into any transaction, including, without limitation, any merger, acquisition, joint venture, disposition, lease, contract or debt or equity financing that could reasonably be expected to impair, delay or prevent Buyer's obtaining of the financing necessary for the consummation of the Transaction contemplated hereby.

ARTICLE VII
Covenants of Buyer

Section 7.1 Further Assurances. Buyer agrees that subsequent to the Closing, at the reasonable request of Sellers, it will execute and deliver, or cause to be executed and delivered to Sellers, or Sellers' designee, such further instruments of transfer and conveyance, and take such other actions as may be reasonably necessary to carry out and consummate the Transaction contemplated by this Agreement.

Section 7.2 Access to Tax and Other Information. For a period of three (3) years after the Closing Date or the expiration of all statutes of limitation, whichever is longer (the "Review Period"), upon the request of Sellers, Buyer hereby grants to Sellers and Sellers' employees, agents and representatives the right, upon forty-eight (48) hours notice and during normal business hours, to inspect and copy the books, records and other documents of Buyer related to the Business or the Assets, to provide copies of such information and materials to third parties and to view and measure the Assets (provided that such measurement shall not disturb the Assets) and to consult with the employees, agents and representatives of Buyer in connection with (i) any claim or investigation by the Internal Revenue Service or any state, local or foreign taxing authority, (ii) the prosecution or defense of any other claim or suit, which is made by or against Sellers, (iii) the substantiation that no payments (including money, property, services, and all other forms of consideration) have been made by or on behalf of Buyer or for the benefit of any employee or agent of Sellers who may be reasonably expected to influence Sellers' decision to enter into this Agreement, or (iv) for purposes of dealing with any Objections (as defined in Section 4.9).

Section 7.3 Preservation of Records. Buyer agrees to preserve and keep the records acquired by it or its affiliates in this Transaction relating to the Business for a period of seven (7) years from the Closing Date and shall make such records available to Sellers as may be reasonably required by Sellers in connection with, among other things, any insurance claims by, legal proceedings or tax audits against or governmental investigations of Sellers or any of their respective affiliates. In the event Buyer wishes to destroy such records after that time, Buyer shall first give ninety (90) days prior written notice to Sellers and Sellers shall have the right at their option and expense, upon prior written notice given to Buyer within that ninety (90) day period, to take possession of the records within one hundred and eighty (180) days after the date of such notice.

ARTICLE VIII
Conditions Precedent

Section 8.1 Mutual Conditions Precedent. The obligations of Sellers, on the one hand, and of Buyer, on the other hand, to consummate the Transaction contemplated herein shall be subject, in each instance, to the fulfillment or written waiver, of each of the following conditions at or prior to the Closing:

(a) Premerger Notification. The parties hereto shall have made all filings and furnished all materials required by the HSR Act with respect to the Transaction contemplated hereby, and all waiting periods (as may be extended by any governmental agency request) under the HSR Act shall have expired or been terminated without the institution of a proceeding challenging the Transaction contemplated hereby by the Federal Trade Commission or the United States Department of Justice.

(b) Legal Action. No temporary restraining order, preliminary injunction or permanent injunction or other order preventing the consummation of the Transaction contemplated hereby shall have been issued by any federal or state court and remain in effect, and, with respect to litigation by any governmental or quasi-governmental agency, no litigation seeking the issuance of such an order or injunction, or seeking the imposition against Sellers or Buyer of damages if the purchase and sale contemplated hereby is consummated, shall be pending which has a reasonable probability of resulting in such order, injunction or damages.

Section 8.2 Conditions Precedent of Buyer. The obligations of Buyer hereunder to consummate the Transaction contemplated herein shall be subject, in each instance, to the following conditions:

(a) Accuracy of Representations and Warranties of Sellers; Compliance. Each of the representations and warranties of Sellers contained in this Agreement which are qualified by the term "material" or similar phrase shall be true and correct in all respects as of the date of this Agreement and at and as of the Closing Date as though then made and the other representations and warranties of Sellers contained in this Agreement shall be true, complete and correct in all material respects at and as of the Closing Date as though such representations and warranties were made as of the Closing Date, and Sellers shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement at or prior to the Closing Date; provided that the condition set forth in this Section 8.2(a) shall be deemed satisfied notwithstanding the failure of (i) the representations and warranties set forth in Sections 2.15(b) through 2.15(i) hereof to be true and correct in all material respects, or (ii) the representations and warranties set forth in Section 2.6 hereof to be true and correct in all respects as a result of matters arising after the date hereof to the extent that such failure to be true and correct would not reasonably be expected to result in a Material Adverse Effect. On the Closing Date, Sellers shall have delivered to Buyer a certificate executed by the Chairman of the Board, the Chief Financial Officer, or a Vice-President or President of each of Sellers to the foregoing effect.

(b) Title Insurance Policy. Buyer shall procure an Owner's Fee Policy of Title Insurance (ALTA Form B-1970, if available) issued by the Title Company in a form approved by Buyer in its reasonable discretion in the amount of Seventy-Eight Million Dollars ($78,000,000) (the "Title Policy") insuring fee simple marketable title in Buyer to each parcel of Real Property free and clear of all Encumbrances, except as otherwise provided herein. Without limiting the generality of the foregoing, said policy shall contain no exception for the following: (i) any of the so-called "standard title exceptions", including, without limitation, the standard survey exception and (ii) Taxes or special assessments which are not shown as existing liens by the public records (unless included in the Permitted Exceptions). Said policy further shall contain such endorsements and affirmative assurance as reasonably are requested by Buyer, including, without limitation, comprehensive, zoning, contiguity (if appropriate), deletion of the co-insurance provision, tax parcel and access endorsements and the Affirmative Assurance including, without limitation, insurance against forced removal, forfeiture or reversion of title by reason of the violation of any covenants, restrictions, terms and/or conditions of any Encumbrance. The parties shall use their respective commercially reasonable efforts to cause the Title Policy to be issued by the Title Company on the Closing Date and the Title Company will update the Title Policy upon receipt of the Final Survey and the Second Objection Letter in order to address, remove and/or cure such Objections, or provide Affirmative Assurance, as required by this Agreement. The cost of all premiums and similar fees and charges required in connection with the issuance of the Title Policy shall be borne equally by Sellers and Buyer.

(c) Sellers Closing Documents. Delivery by Sellers to Buyer at the Closing of the following documents, each dated as of the Closing Date unless otherwise specified.

(i) Limited Warranty Deeds in the forms of Exhibit A-1 (Geauga County) and Exhibit A-2 (Portage County) attached hereto (the "Deeds") conveying the Owned Real Property, duly executed and acknowledged by Sellers and in recordable form, conveying to Buyer good and insurable fee simple title to the Owned Real Property, subject only to the Permitted Exceptions;

(ii) A bill of sale duly executed by Sellers respecting Tangible Personal Property, Inventories and Records and Manuals in the form of Exhibit B attached hereto (the "Bill of Sale");

(iii) An assignment and assumption agreement duly executed by Sellers respecting the Permits (if any) in the form of Exhibit C attached hereto (the "Permit Assignment");

(iv) An assignment and assumption agreement duly executed by Sellers respecting the Contracts and Agreements and Personal Property Leases in the form of
Exhibit D-1 attached hereto (the "Contracts Assignment") and an assignment and assumption of the Real Property Leases (collectively, the "Real Property Leases Assignment"), in substantially the form annexed hereto as Exhibit D-2;

(v) An affidavit, duly executed by Sellers, stating under penalty of perjury, Sellers' United States taxpayer identification number and that Sellers are not "foreign persons" as defined in Section 1445(f)(3) of the Code and otherwise in the form prescribed by the Internal Revenue Service;

(vi) Certificate from each of the Sellers described in Section 8.2(a);

(vii) Copies of the resolutions, certified by the Secretaries or Assistant Secretaries of Sellers as being in full force and effect on the Closing Date, duly adopted by the Boards of Directors or Members of Sellers evidencing the approval and authorization of the execution and delivery of this Agreement, the consummation of the Transaction contemplated hereby and the taking of all necessary corporate action to enable Sellers to comply with all of the terms of this Agreement;

(viii) An affidavit of title in the form reasonably required by the Title Company in order to issue the Title Policy contemplated hereunder;

(ix) Certificates of good standing of Sellers, certified by the Secretary of State of Ohio, dated within ten (10) days prior to the Closing;

(x) Such affidavits as shall be reasonably required by the Title Company to (a) eliminate the standard exceptions in the Title Policy relating to mechanics liens and (b) insure over any "gap" period resulting from any delay in recording of documents or later-dating the title insurance file;

(xi) An originally executed copy of that certain Installment Mortgage Note dated August 10, 1999, in the principal amount of One Million Dollars ($1,000,000.00) or a lost note affidavit executed by Sellers; and

(xii) Such other and further instruments, documents and other considerations as Buyer may reasonably deem necessary or desirable, or as may be required, to consummate the Transaction.

(d) Buyer shall have obtained on terms and conditions reasonably satisfactory to it all of the financing it needs in order to finance the Transaction; and

(e) Sellers shall have obtained those consents specifically listed on Schedule 8.2(e) ("Material Consents") on terms or conditions reasonably satisfactory to Buyer.

Section 8.3 Conditions Precedent of Sellers. The obligations of Sellers hereunder to consummate the Transaction contemplated herein shall be subject, in each instance, to the following conditions:

(a) Accuracy of Representations and Warranties of Buyer; Compliance. Each of the representations and warranties of Buyer contained in this Agreement which are qualified by the term "material" or similar phrase shall be true and correct in all respects as of the date of this Agreement and at and as of the Closing Date as though then made and the other representations and warranties of Buyer contained in this Agreement shall be true, complete and correct in all material respects at and as of the Closing Date as though such representations and warranties were made as of the Closing Date and Buyer shall have performed in all material respects all obligations and complied in all material respects with all covenants and conditions required by this Agreement at or prior to the Closing Date. On the Closing Date, Buyer shall have delivered to Sellers a certificate executed by a Vice-President or President of Buyer to the foregoing effect.

(b) Buyer shall have delivered, or caused to be delivered, to Sellers evidence of the wire transfer referred to in Section 1.5.

(c) Buyer Closing Documents. Delivery by Buyer to Sellers at the Closing of the following documents, each dated as of the Closing Date unless otherwise specified:

(i) Two (2) Real Property Conveyance Fee Statements of Value and Receipt duly executed by Buyer for each of the Deeds (one for Geauga County and one for Portage County);

(ii) The Permit Assignment, if any, duly executed by Buyer;

(iii) The Contracts Assignment duly executed by Buyer;

(iv) A certificate from Buyer described in Section 8.3(a);

(v) A certificate of good standing of Buyer, certified by the Secretary of State of Delaware dated within ten (10) days prior to the Closing;

(vi) Copies of the resolutions, certified by the Secretary or an Assistant Secretary of Buyer as being in full force and effect on the Closing Date, evidencing that the Board of Directors of Buyer have approved and authorized the execution of this Agreement, the consummation of the Transaction contemplated hereby and thereby and the taking of all necessary corporate action to enable them to comply with all of the terms of this Agreement; and

(vii) Such other and further instruments, documents and other considerations as Sellers may reasonably deem necessary or desirable, or as may be required, to consummate the Transaction, including as may be required by the Title Company of Buyer in order to issue the Title Policy required by this Agreement; and

(viii) The Real Property Leases Assignment duly executed by Buyer.

ARTICLE IX
Survival and Indemnity

Section 9.1 Survival of Representations and Warranties. The representations and warranties of each party contained in this Agreement shall survive the Closing Date for a period of eighteen (18) months following the Closing Date; provided, however, that (i) the representations and warranties of Sellers contained in Sections 2.1 (relating to organization and standing of Parent and Sellers), 2.2 (Corporate Power and Authority), 2.3 (Conflicts, Consents and Authority) and 2.4 and 2.5 (Title) shall survive indefinitely; (ii) the representations and warranties of Sellers contained in Section 2.8 (relating to environmental matters) and 2.15 (Employee Matters) shall survive for a period of four years following the Closing Date, and (iii) the representations and warranties of Sellers contained in Section 2.14 (relating to Taxes) and the obligation to indemnify in respect thereof shall survive the Closing Date until the expiration of the applicable statute of limitations, after giving effect to any extensions or waivers, (in each case, the "Survival Period"). No Claim for indemnification under Sections 9.2 and 9.3 with respect to the representations and warranties of each party contained in this Agreement shall be made unless a Claim Notice has been delivered to the Indemnifying Party within the applicable Survival Period, except that any Claim relating to Section 2.14 (relating to Taxes) may be asserted until 60 days after the expiration of the applicable Survival Period. Notwithstanding the expiration of any Survival Period, if a Claim Notice has been given by Buyer to Sellers with respect to a representation or warranty of Parent and/or Sellers within the applicable Survival Period, then the relevant representation or warranty shall survive, solely as to such Claim as is asserted in the Claim Notice, until such Claim has been finally resolved.

Section 9.2 Indemnity by Parent and Sellers. Subject to the survival periods set forth in Section 9.1 and the claim procedures set forth in Section 9.5 hereof, Parent and Sellers, jointly and severally, shall indemnify and hold harmless Buyer, its successors and assigns, and its officers, directors, employees, agents and affiliates ("Buyer's Indemnified Persons"), against any Losses actually incurred as the result of (a) a breach of any representation or warranty by Sellers contained in this Agreement or the other agreements to be delivered in connection with the closing of this Transaction; (b) a breach of the covenants and agreements of Sellers contained in this Agreement or the other agreements to be delivered in connection with the closing of this Transaction; (c) any Excluded Liabilities; (d) enforcement of this Section 9.2; (e) Liabilities arising from Prepaid Revenue to the extent not previously reflected in the Final Scheduled Liabilities Valuation; and (f) any Losses that are incurred in connection with any Claim made by the holder of any undivided fee simple interest in Parcel 6 of the Campground Property, including, without limitation, any cost incurred by Buyer in foreclosing on such interest; or (g) the Post-Closing Objections as specifically set forth in Section 4.9(c); provided, however, that, with respect to any Claims of Buyer for Losses pursuant to Section (a) above (other than for Losses in respect of a breach of Sections 2.1, 2.2, 2.3, 2.4, 2.5 and 2.14), neither Parent nor Sellers shall be liable for any such Losses unless the aggregate amount of all such Losses resulting to the Buyer's Indemnified Persons from all such breaches or claims exceeds $1,500,000 (the "Allowance"), and then Parent and Sellers shall be liable for all such amounts starting from the first dollar. In no event shall the aggregate indemnification to be paid by Parent and Sellers with respect to Claims for Losses resulting from the Second Objection Letter pursuant to Section 4.9(c) and pursuant to Section (a) above (other than for Losses in respect of a breach of Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.14 and 5.5) exceed $30,000,000 (the "Cap"). Regardless of any limitations set forth elsewhere in this Agreement (including, without limitation, those in this Section 9.2), Parent and Sellers shall defend, indemnify and hold Buyer harmless from and against Losses incurred to complete the project identified on Schedule 9.2 (the "Scheduled Project").

Section 9.3 Indemnity by Buyer. Subject to the survival periods set forth in Section 9.1 and the claim procedures set forth in Section 9.5 hereof, Buyer shall indemnify and hold harmless each of Parent and Sellers, their respective successors and assigns, and their respective officers, directors, employees, agents and affiliates ("Sellers' Indemnified Persons") against any Losses which any of Sellers' Indemnified Persons may suffer, sustain or become subject to, as the result of (a) a breach of any representation or warranty by Buyer contained in this Agreement or the other agreements to be delivered in connection with the Closing of this Transaction; (b) a breach of the covenants and agreements of Buyer contained in this Agreement or the other agreements to be delivered in connection with the closing of this Transaction; (c) any Assumed Liabilities; or (d) enforcement of this Section 9.3; provided, however, that, with respect to any Claims of Buyer for Losses pursuant to Section (a) above (other than for Losses in respect of a breach of Sections 3.1, 3.2 and 3.3), Buyer shall not be liable for any such Losses unless the aggregate amount of all such Losses resulting to Sellers' Indemnified Persons from all such breaches or claims exceeds the Allowance set forth in Section 9.2, and then Buyer shall be liable for all such amounts starting from the first dollar. In no event shall the aggregate indemnification to be paid by Buyer with respect to any Claims of Buyer for Losses pursuant to Section (a) above (other than for Losses in respect of a breach of Sections 3.1, 3.2 and 3.3) exceed the Cap.

Section 9.4 Tax Indemnity. Parent and Sellers, jointly and severally, shall indemnify the Buyer from and against the entirety of any Losses the Buyer may suffer resulting from, arising out of, relating to, or caused by any Liability of the Parent or Sellers (a) for any Taxes of the Sellers for any Tax period or portion thereof ending on or before the Closing Date (or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such period up to and including the Closing Date) and (b) for the unpaid Taxes of any Person (other than Sellers) under Treasury regulation Sec. 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. Buyer shall, promptly upon receipt, provide to Sellers all Tax notices, bills, assessments and other correspondence relating to Taxes for any Tax period or portion thereof ending on or before the Closing Date (or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such period up to and including the Closing Date).

Section 9.5 Claims Procedure.

(a) Upon the occurrence of any event that a party hereto (the "Indemnified Party") asserts to be the basis for a claim for indemnification against the other party (the "Indemnifying Party") under this Article IX (a "Claim"), then the Indemnified Party shall promptly give notice (a "Claim Notice") to the Indemnifying Party thereof in writing, which Claim Notice shall set forth (i) a particular description of the event or condition that is the basis for the Claim; and (ii) the amount reasonably necessary to satisfy such Claim; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation under this Agreement except to the extent the Indemnifying Party thereby is prejudiced.

(b) If the Claim involves the claim of any third person (a "Third-Party Claim"), the Indemnifying Party shall have the right to assume and control the defense of the Third-Party Claim with counsel of its own choice reasonably satisfactory to the Indemnified Party, so long as the Indemnifying Party notifies the Indemnified Party of such defense in writing within thirty (30) days after the Indemnified Party has given notice of the Third-Party Claim and the Indemnifying Party conducts the defense of the Third-Party Claim actively and diligently; provided, however, that the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third-Party Claim; and provided, further, that the Indemnified Party shall pay the fees and disbursements of such separate counsel unless (i) the employment of such separate counsel has been specifically authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party has failed to assume the defense of such Third Party Claim within thirty (30) days after receipt of notice thereof with counsel reasonably satisfactory to such Indemnified Party, or (iii) the named parties to the proceeding in which such Claim has been asserted include both the Indemnifying Party and such Indemnified Party and, in the reasonable opinion of counsel to such Indemnified Party, there exists one or more defenses that may be available to the Indemnified Party that are in conflict with those available to the Indemnifying Party.

(c) The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Third-Party Claim. Notwithstanding anything in this Section 9.5 to the contrary: (i) the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld), unless as part of such judgment or settlement the Indemnified Party is released in writing from all liability with respect to such Third Party Claim and the business of the Indemnified Party will not become subject to any restrictions or conditions not previously applicable to it or otherwise be adversely affected, and (ii) the Indemnified Party shall not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld) unless as part of such judgment or settlement the Indemnifying Party is released in writing from all liability with respect to such Third Party Claim and the business of the Indemnifying Party will not become subject to any restrictions or conditions not previously applicable to it or otherwise be adversely affected.

(d) In the event the Indemnifying Party does not assume and conduct the defense of the Third-Party Claim in accordance with Section 9.5(b), the Indemnified Party may defend against the Third-Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with or obtain any consent from the Indemnifying Party in connection therewith).

(e) Whenever the Indemnified Party shall have given a Claim Notice to the Indemnifying Party that does not involve a Third-Party Claim, the Indemnifying Party may, within thirty (30) days after receipt of such Claim Notice, notify the Indemnified Party that the Indemnifying Party disputes the Claim for indemnification set forth in such Claim Notice (a "Dispute Notice"). If, with respect to the claim for indemnification set forth in a Claim Notice, no Dispute Notice is given to the Indemnified Party within such thirty (30) day period, the Claim shall be deemed valid, and the Indemnifying Party shall be obligated to pay to the Indemnified Party the amount specified in the Claim Notice with respect to such Claim. If a Dispute Notice is given to the Indemnified Party, the dispute that is the subject of such notice shall be resolved as follows: The Indemnified Party and the Indemnifying Party shall first attempt to resolve the dispute through a good faith discussion of the Claim. If such discussion does not result in a resolution acceptable to either the Indemnified Party or the Indemnifying Party, either party may resort to any remedies available in law or in equity in a court of competent jurisdiction.

(f) Regardless of any other provisions to the contrary, Buyer shall undertake, direct and control any work not completed by Closing related to the Scheduled Project identified on Schedule 9.2. In conducting such work, Buyer shall act in a commercially reasonable manner at all times and shall provide Parent and Sellers with reasonable advance notice of and the opportunity to comment on its planned approach to the Scheduled Project. Buyer shall also provide Parent and Sellers access to monitor the performance of its work on the Scheduled Project and copies of all substantive correspondence and reports. Anything in this Agreement to the contrary notwithstanding, Sellers shall have no Liability to Buyer with regard to either (i) any Environmental Condition within the area of the Business commonly known as Hook's Lagoon identified on Exhibit F hereto ("Hook's Lagoon") that was either known to Buyer on the Closing Date or should have been known to Buyer on such date following a reasonable investigation or inquiry regarding Hook's Lagoon (it being understood that such Environmental Conditions do not include any condition that was reasonably discoverable only with physical sampling of soil or groundwater unless actually known to Buyer) or (ii) the condition of any of the Tangible Personal Property or Improvements located within Hook's Lagoon.

(g) If any Party is obligated to pay the cost of remediating or addressing any fact or condition affecting the Business or its operations to satisfy its indemnification obligations under this Agreement:

(i) the Indemnifying Party and the Indemnified Party shall consult with one another as to the design and conduct of any work associated with such remediation; and

(ii) if the parties are unable to agree as to the design and conduct of any such work within 30 days of the initial consultation referred to in clause (i) above, then the Indemnifying Party shall not be responsible for any costs in excess of those required by the design and conduct of such work if undertaken in the most practicable, cost effective and commercially reasonable manner consistent with the use and operation of the assets as an amusement park, and in a commercially reasonable manner that causes the least practicable disruption of the ordinary course of business.

Section 9.6 Tax Treatment of Indemnity Payments. Each of Parent, Sellers and Buyer agree to treat any indemnity payment made pursuant to this Article IX as an adjustment to the Purchase Price for federal, state, local and foreign income tax purposes.

Section 9.7 Calculation of Losses.

(a) The amount of any Losses for which indemnification is provided under this Article IX shall be net of any amounts actually recovered by the Indemnified Party under insurance policies or otherwise with respect to such Losses.

(b) The amount of any Losses for which indemnification is provided under this Article IX shall be increased to take account of any net Tax cost incurred by the Indemnified Party resulting from the receipt of indemnity payments hereunder and reduced to take account of any net Tax benefit realized by the Indemnified Party resulting from the incurrence or payment of any such Loss or that would be realized if the proceeds of such indemnity payment were used to ameliorate the circumstance that gave rise to the Indemnification Claim (in each case, grossed-up and -down as appropriate in respect of changes in the actual amount of the indemnity payment resulting from adjustments pursuant to this Section 9.7). To the extent payment of such Claim does not give rise to a Tax cost currently payable by the Indemnified Party, if payment of the Claim gives rise to a Tax cost subsequently payable by the Indemnified Party, the Indemnifying Party shall pay the Indemnified Party the amount of such Tax cost when, as, and if payable by the Indemnified Party (grossed-up and -down as appropriate in respect of changes in the actual amount of the indemnity payment resulting from adjustments pursuant to this Section 9.7). To the extent such Claim does not give rise to a currently realizable Tax benefit, if the amount with respect to which any Claim is made gives rise to a subsequently realized Tax benefit to the Indemnified Party that made the Claim, such Indemnified Party shall refund to the Indemnifying Party the amount of such Tax benefit when, as and if realized (grossed-up and -down as appropriate in respect of changes in the actual amount of the indemnity payment resulting from adjustments pursuant to this Section 9.7). An Indemnified Party shall use its reasonable efforts to maximize and accelerate Tax benefits and to minimize and defer Tax costs whenever legally permissible. For purposes of this Section 9.7, "Tax cost" means the amount by which the Tax liability of the party (or group of entities including the party) is increased (including by increase in gross income, reduction in deductions by virtue of decreased tax basis or otherwise, reduction of refund or credit to which the party would otherwise be entitled, or otherwise) plus any related interest, penalty, or addition to tax payable to the relevant taxing authority as a result of such Tax cost; and "Tax benefit" means the amount by which the Tax liability of the party (or group of entities including the party) is or could be reduced (including by reduction of gross income, availability of deductions, reduction of income by virtue of increased tax basis or otherwise, entitlement to refund, credit or otherwise) plus any related interest received or reduction of interest payable directly related to such Tax benefit. For purposes of this Section 9.7, "Tax benefits" and "Tax costs" shall be computed as if Buyer were a corporation subject to tax under Section 11 of the Code." In computing the amount of any such Tax cost or Tax benefit, the Indemnified Party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Loss. For purposes of this Section 9.7, a Tax cost is "currently payable" to the extent that such Tax cost relates to the current taxable period or year or any Tax Return with respect thereto or to any taxable period or year prior to the date of the Claim; and a Tax benefit is "currently realizable" to the extent that such Tax benefit could be realized in the current taxable period or year or in any Tax Return with respect thereto (including through a carryback to a prior taxable period) or in any taxable period or year prior to the date of the Claim. The amount of any increase, reduction or payment hereunder shall be adjusted to reflect any final determination with respect to the Indemnified Party's liability for Taxes, and payments between the parties to this Agreement to reflect such adjustment shall be made if necessary. For purposes of determining the amount of any Tax cost or Tax benefit hereunder, the receipt of an indemnity payment shall be treated as an adjustment to the basis of the asset or assets upon which the underlying Claim that gave rise to the indemnity payment was based and payment of an indemnified claim, if required to be capitalized, shall be treated as an adjustment to the basis of the same asset or assets. If the Internal Revenue Service asserts that such basis adjustments were not properly made, the Indemnified Party shall make such additional adjustments as are necessary to minimize and defer Tax costs and maximize and accelerate Tax benefits, unless precluded from doing so by a final determination with respect to the Indemnified Party or any of its affiliates or unless it is advised, by written opinion of a tax adviser reasonably acceptable to the Indemnifying Party, which opinion shall be made available to the Indemnifying Party, that any further adjustment is inappropriate. Notwithstanding anything herein to the contrary, if the application of this Section 9.7(b) to an indemnity payment owed by Sellers hereunder would increase the amount owed by Sellers, Sellers shall be liable to Buyer for such increased amount only if Buyer could not avoid such increased Tax cost by foregoing its payment of the indemnified Claim and instead providing Sellers the opportunity to pay such Claim directly. For the avoidance of doubt, it is understood between the parties that, regardless of against whom a liability is asserted, if it is feasible for the liability to be paid by Sellers, the decision as to whether the liability will be paid directly by Sellers to the claimant or paid by Sellers to Buyer as an indemnity and then paid by Buyer to the claimant shall be made by Sellers, provided that a Seller informs Buyer of this decision in writing before the liability is paid.

Section 9.8 Exclusive Remedy. The sole and exclusive remedy for any breach or inaccuracy or alleged breach or inaccuracy, of any representation or warranty in this Agreement or any covenant or agreement in this Agreement to be performed on or prior to the Closing Date, shall be indemnification in accordance with this Article IX.

ARTICLE X
Employee Matters

Section 10.1 Employees.

(a) The current employees of the Business who are employed on a seasonal basis are referred to herein as "Seasonal Employees" and all other current employees are referred to herein as "Regular Employees." Buyer shall honor the first two thousand (2000) offers of employment made to Seasonal Employees in the ordinary course of preparation for the 2004 season; provided that Buyer shall not be required to honor any offers made to Seasonal Employees to care for the Animal Assets or work in the side of the park that contained the Animal Assets. At least five (5) days prior to the Closing Date, Buyer shall deliver, in writing, an offer of employment to each of the Regular Employees (excluding employees set forth in Schedule 10.1(a)) who Buyer in its discretion wishes to employ after the Closing Date. For one (1) year after the Closing Date, Buyer shall not make an offer of employment or solicit for employment any employee set forth on Schedule 10.1(a) while they are employed by Sellers. Such Regular Employees who accept such offer by the Closing Date or expiration of approved leave will be provided employment by the Buyer commencing immediately following the Closing Date or expiration of approved leave (at such time, such employees are referred to as "Transferred Employees"). Regular Employees who are not granted such offer from the Buyer shall be considered terminated employees and the Buyer shall not employ or otherwise retain the services of such employees for a period of one (1) year from the Closing Date without the prior written consent of Sellers. Sellers agree to transfer to Buyer the employment records of the Transferred Employees to the extent permitted by law and assuming the appropriate employee consents have been obtained.

(b) Pursuant to the "Alternate Procedure" provided in Section 5 of the Revenue Procedure 96-60, 1996-2 C.B. 399, (i) Buyer and Sellers shall report on a predecessor/successor basis as set forth therein, (ii) Sellers shall not be relieved from filing a Form W-2 with respect to any Employees who do not become Transferred Employees, and (iii) Buyer shall undertake to file (or cause to be filed) a Form W-2 for each such Transferred Employee with respect to the portion of the year during which such Employees are employed by Buyer including the portion of such year that such Employee was employed by Sellers.

(c) For a period of two (2) years after the Closing Date, Sellers shall not solicit for employment any of the Transferred Employees, other than any Transferred Employee who (i) is subsequently terminated by Buyer, or (ii) voluntarily leaves the employ of Buyer and with respect to whom Buyer gives prior written consent.

(d) Sellers will provide Buyer with sufficient information to, and Buyer shall, carryover the Federal Insurance Contributions Act (FICA) taxable wage base of all Transferred Employees.

Section 10.2 Paid Time Off. Except for any items shown on Schedule 1.4, Sellers shall be responsible for all Liabilities with respect to all accrued but unused vacation, sick days and personal days due to all Transferred Employees under the Employee Benefit Plans for all periods up to and including the Closing Date.

Section 10.3 Interviews. Sellers and Buyer shall make mutually acceptable arrangements for Buyer to interview the employees whose primary duties are at the Business and to review employee files with the prior written consent of any subject employee.

Section 10.4 Health Insurance. All Transferred Employees who are covered under any group health plan maintained by Sellers on the Closing Date shall be covered under a group health plan maintained by Buyer as of 12:00 a.m. on the day following the Closing Date. Dependents of such Transferred Employees shall also be so covered to the extent dependent coverage is provided under an Employee Benefit Plan on the Closing Date. Buyer's group health plan or plans shall be responsible for any expenses covered thereunder with respect to medical care or services rendered or medical expenditures incurred after the Closing Date without any preexisting condition limitations or exclusions.

Section 10.5 COBRA. Sellers shall be responsible for satisfying obligations under Section 601 et seq. of ERISA and Section 4980B of the Code to provide continuation coverage (commonly referred to as "COBRA Coverage") to or with respect to any Seasonal Employee or Regular Employee and/or dependent thereof on account of any "qualifying event" that occurs on or before the Closing Date. Buyer shall be responsible for satisfying such COBRA coverage obligations to or with respect to any Transferred Employee (and/or a dependent thereof) on account of any "qualifying event" which occurs after the Closing Date.

Section 10.6 Severance. Sellers shall be responsible for any and all severance obligations or Liabilities in connection with the termination of employment of any Seasonal Employee or Regular Employee except as hereinafter provided. Buyer shall be responsible for any and all severance obligations or Liabilities in connection with the termination of employment of any Seasonal Employee or Transferred Employee after the Closing Date.

Section 10.7 WARN Act. Sellers shall be responsible for, assume all liability for and indemnify, defend and hold harmless Buyer from any and all obligations or liabilities, arising as a result of this Transaction, pursuant to the Worker Adjustment and Retraining Notification Act and similar state and local statutes ("WARN") and all WARN obligations, including all notices.

Section 10.8 Past Service Credit. Buyer shall credit each Transferred Employee with his or her years of service with the Sellers or any predecessor entities, to the same extent as such Transferred Employee was entitled immediately prior to the Closing to credit for such service under any Employee Benefit Plan for purposes of eligibility and vesting (but not benefit accrual) under Buyer's similar employee benefit plans.

ARTICLE XI
Termination

Section 11.1 Termination. This Agreement may be terminated prior to the Closing:

(a) by mutual written consent of Sellers and Buyer;

(b) by the non-defaulting party if the other party (i) fails to timely perform or satisfy its obligations or covenants hereunder following written notice of such failure and the expiration of not less than ten (10) business days opportunity to cure any such failure or (ii) is in material breach of a representation or warranty and such breach, if curable, is not cured within thirty (30) days of written notice thereof; or

(c) by either party if the Transaction shall not have been consummated by May 14, 2004.

Section 11.2 Effect of Termination. In the event of termination of this Agreement by either Sellers or Buyer as provided above, this Agreement will forthwith become void and there will be no liability on the part of either Buyer or Sellers to the other party or any third party, except for (i) material breaches of this Agreement prior to the time of such termination; (ii) any provisions hereof which expressly provide for survival after termination including, without limitation, this Section 11.2 and Article XII hereof; and (iii) the parties' continuing obligations under the Confidentiality Agreement. Nothing in this Section 11.2 shall relieve Buyer or Sellers of any liability for a breach of this Agreement prior to the date of termination. The damages recoverable by the non-breaching party shall include all attorneys' fees reasonably incurred by such party in connection with the Transaction contemplated hereby.

ARTICLE XII
Miscellaneous

Section 12.1 Expenses. Unless otherwise expressly provided herein, each of the parties hereto shall bear the expenses incurred by that party incident to this Agreement and the Transaction contemplated hereby including without limitation, all fees and disbursements of counsel, experts and accountants retained by such party, whether or not the Transaction contemplated hereby shall be consummated.

Section 12.2 Entire Agreement. This Agreement and the Schedules and Exhibits attached hereto, together with the Confidentiality Agreement, contain the entire understanding of the parties hereto with respect to the Transaction contemplated hereby and may be amended, modified, supplemented or altered only by a writing duly executed by all of the parties hereto, and any prior agreements, representations, warranties or understandings, whether oral or written, including, without limitation, the Letter of Intent, dated January 19, 2004, between Buyer and Parent, are entirely superseded thereby. All Schedules and Exhibits attached hereto are hereby incorporated by reference herein and made a part hereof as if fully set forth herein. All Schedules and Exhibits not attached hereto at the time of execution hereof shall be incorporated herein and made a part hereof at the time of their attachment.

Section 12.3 Assignment; Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, successors and permitted assigns. This Agreement shall not, however, be assignable or transferable, in whole or in part, by any party hereto except upon the express prior written consent of the other parties hereto. Notwithstanding the foregoing, the parties agree that Buyer may assign any or all of its rights, but not its obligations, to any wholly-owned subsidiary of Buyer, provided that any such assignment shall not relieve the Buyer of its obligations hereunder. Upon any such permitted assignment, the references in this Agreement to Buyer shall also apply to any such designee unless the context otherwise requires. Nothing contained in this Agreement is intended to confer upon any person, other than the parties hereto and their respective successors and permitted assigns, any rights, remedies or obligations under, or by reason of, this Agreement.

Section 12.4 Modification; Waiver and Extensions. Buyer, on the one hand, and Sellers, on the other hand, may, by written instrument, extend the time for the performance of any of the obligations or other acts of the other, waive any inaccuracies of the other in the representations and warranties contained herein or in any document delivered pursuant to this Agreement, waive compliance with any of the covenants of the other contained in this Agreement, and waive the other's performance of any of the obligations set out in this Agreement. No modification, waiver or extension of any of the provisions of this Agreement and no consent by Buyer, on the one hand, or Sellers, on the other hand, to any departure therefrom by the other shall be effective unless such modification, waiver or extension shall be in writing and signed by the party or parties to be bound, and the same shall then be effective only for the period and on the conditions and for the specific instances and purposes specified in such writing. No notice to or demand on any of the parties hereto in any case shall entitle it, them or any of them to any other or further notice or demand in similar or other circumstances.

Section 12.5 Notices. All notices, demands, consents or other communications required or permitted hereunder shall be in writing and shall be deemed to have been given when personally delivered or sent by reputable overnight air courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows: if to Sellers to Six Flags, Inc., 122 East 42nd Street, 49th Floor, New York, New York 10168, Attention: Kieran E. Burke, Chairman and CEO and James M. Coughlin, General Counsel, with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention: Howard Chatzinoff, and, if to Buyer to Cedar Fair, L.P., One Cedar Point Drive, Sandusky, Ohio 44870, Attention Richard L. Kinzel, Chairman, President and CEO and Bruce A. Jackson, Vice President, Finance and CFO, with a copy to Squire, Sanders & Dempsey L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114, Attention Gordon S. Kaiser, or to such other addresses as may hereafter be furnished in writing which is given in the manner required above. Any notice, demand, consent or communication given hereunder in the manner required above shall be deemed to have been effected and received as of the date hand delivered, as of the date received if sent by overnight air courier, or, if mailed, five (5) days after the date so mailed.

Section 12.6 Bulk Sales Waiver. Sellers and Buyer each waive compliance by the other with any bulk sales or similar laws that may be applicable to the Transaction contemplated by this Agreement.

Section 12.7 Press Releases. Buyer and Sellers each agree to coordinate with the other party with respect to any press release or other announcement regarding this Transaction and shall not issue any such press release without prior consent of the other party, unless otherwise required by law; provided that, to the extent required by law, the party intending to make such release shall consult with the other party with respect to the text thereof and shall not include any statement to which the other party reasonably objects unless such statement is required by law on the advice of the releasing party's outside counsel.

Section 12.8 Captions. The captions of the various articles and sections of this Agreement have been inserted for the purpose of convenience of reference only, and such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of the Agreement.

Section 12.9 Counterparts. This Agreement may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which shall together constitute one and the same agreement. This Agreement may be executed by facsimile signature and upon such facsimile execution shall be deemed tantamount to an original execution.

Section 12.10 Severability. If any provision or provisions of this Agreement or of any of the documents or instruments delivered pursuant hereto, or any portion of any provision hereof or thereof, shall be deemed invalid or unenforceable pursuant to a final determination of any court of competent jurisdiction, or as a result of future legislative action, such determination or action shall be construed so as not to affect the validity or enforceability hereof or thereof and shall not affect the validity or effect of any other portion hereof or thereof, unless, as a result of such determination or action, the consideration to be received or enjoyed by any party hereto would be materially impaired or reduced.

Section 12.11 Time. Time is of the essence of all obligations of the parties under this Agreement.

Section 12.12 Choice of Law. This Agreement, and all instruments delivered pursuant hereto or incorporated herein, unless otherwise expressly provided therein shall in all respects be construed in accordance with and governed by the substantive laws of the State of Ohio without giving effect to the conflicts of laws principles thereof, and venue of all actions arising under or related to this Agreement shall be in the courts of that state.

Section 12.13 Confidentiality Agreement. Sellers and Buyer hereby ratify and confirm their respective obligations under that certain confidentiality agreement, dated December 12, 2003 (the "Confidentiality Agreement") between Parent and Buyer.

Section 12.14 No Third Party Beneficiaries. 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 Transaction contemplated hereby.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

 

CEDAR FAIR, L.P. SIX FLAGS, INC.

 

By: By:

Title: __________________________________ Title:

 

FUNTIME INC. AURORA CAMPGROUND INC.

 

By: By:

Title: __________________________________ Title:

 

OHIO HOTEL LLC

OHIO CAMPGROUNDS INC.

 

By:

Title:

 

List of Exhibits, Schedules and Appendices

 

Exhibits

 
   

Exhibit A-1

Limited Warranty Deed (Geauga County)

Exhibit A-2

Limited Warranty Deed (Portage County)

Exhibit B

Bill of Sale

Exhibit C

Permit Assignment

Exhibit D-1

Contracts Assignment

Exhibit D-2

Real Property Leases Assignment

Exhibit E

Initial Objection Letter

Exhibit F

Hook's Lagoon

   

Schedules

 
   

Schedule 1.1(a)

Real Property

Schedule 1.1(e)

Permits

Schedule 1.1(f)

Personal Property Leases

Schedule 1.1(g)

Assumed Real Property Leases

Schedule 1.1(h)

Contracts and Agreements

Schedule 1.1(i)

Intangibles Acquired

Schedule 1.2(a)

Animal Assets

Schedule 1.2(c)

Retained Intellectual Property List

Schedule 1.2(g)

Excluded Computer Software

Schedule 1.2(h)

Warranties, Guarantees and Contracts

Schedule 1.2(k)

Multi-Park Agreements

Schedule 1.2(l)

Excluded Real Property Leases

Schedule 1.2(q)

Excluded Assets

Schedule 1.4

Assumed Liabilities

Schedule 2.3

Conflicts, Consents and Approvals

Schedule 2.4

Title to Tangible Personal Property

Schedule 2.5

Good Condition & Legal Compliance Exceptions

Schedule 2.6

Sellers' Litigation

Schedule 2.8(b)

Environmental Exceptions

Schedule 2.9

Good Condition Exceptions

Schedule 2.10

Trademarks

Schedule 2.11(a)

Financial Statement Exceptions

Schedule 2.11(b)

Attendance at Business (2001, 2002, 2003)

Schedule 2.12

Absence of Certain Changes

Schedule 2.13(a)

Material Contracts

Schedule 2.14(a)

Tax Matters Exceptions

Schedule 2.14(b)

Employee Tax Matters Exception

Schedule 2.14(c)

Additional Tax Exceptions

Schedule 2.14(d)

Tax Agreements

Schedule 2.14(e)

Tax Collection and Withholding Exceptions

Schedule 2.15(a)

Employee-Related Matters

Schedule 2.15(c)

Employee Benefit Plan Exceptions

Schedule 2.16

Insurance

Schedule 2.17

Legal Compliance

Schedule 8.2(e)

Material Consents

Schedule 9.2

Environmental Projects

Schedule 10.1(a)

Excluded Employees

Appendices

 
   

Appendix A

Certain Definitions

 

APPENDIX A

Certain Definitions

"Acquisition Proposal" shall have the meaning defined in Section 4.5 of the Agreement.

"Affirmative Assurance" shall have the meaning defined in Section 4.9(c) of the Agreement.

"Agreement" shall have the meaning defined in the introductory paragraph of the Agreement.

"Allowance" shall have the meaning defined in Section 9.2 of the Agreement.

"ALTA/ACSM Survey" means an ALTA/ACSM survey of the Owned Real Property, in form and substance reasonably acceptable to Buyer, Sellers and to the Title Company in order to allow the Title Company issue the Title Policy as required under this Agreement, with the seal of said surveyor affixed thereto, bearing the date upon which the survey was concluded and superimposed upon an aerial photograph of the Owned Real Property. An ALTA/ACSM Survey shall include a full metes and bounds legal description of each Site and shall be certified by said surveyor in form and substance reasonably satisfactory to Buyer and Sellers, and certified to each of Buyer, Sellers and the Title Company. An ALTA/ACSM Survey shall be made (i) in accordance with "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys," jointly established and adopted by ALTA and ACSM in 1999 and in conformance with those ALTA/ACSM standards customarily met to the extent required by the Title Company to issue the Title Policy hereunder and include Items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11 (excluding (c) and (d)) and 13 of Table A thereof and (ii) pursuant to the Accuracy Standards (as adopted by ALTA and ACSM and in effect on the date of certification and applicable to an Urban Survey).

"Animal Assets" shall have the meaning defined in Section 1.2(a) of the Agreement.

"Assets" shall have the meaning defined in Section 1.1 of the Agreement.

"Assumed Liabilities" shall have the meaning defined in Section 1.4 of the Agreement.

"Aurora Campground" shall have the meaning defined in the introductory paragraph of the Agreement.

"Benefit Arrangement" shall have the meaning defined in Section 2.15(a) of the Agreement.

"Bill of Sale" shall have the meaning defined in Section 8.2(c)(ii) of the Agreement.

"Boundaries" shall mean the perimeter boundaries of each Site of the Owned Real Property (or any portion thereof) and any setback lines.

"Business" shall have the meaning defined in Recital A of the Agreement.

"Business Employee" shall have the meaning defined in Section 2.15(a) of the Agreement.

"Buyer" shall have the meaning defined in the introductory paragraph of the Agreement.

"Buyer's Indemnified Persons" shall have the meaning defined in Section 9.2 of the Agreement.

"Campground Property" shall have the meaning defined in Section 1.1(a) of the Agreement.

"Campground Survey" shall mean, alternatively, (a) a boundary survey of the Campground Property which shall, among other things, have the following items: (i) permanent stakes on the corners of the Campground Property or, if inaccessible, reference pins, (ii) identification caps on permanent stakes indicating the surveyor's name and registration number, (iii) a scaled drawing which shows title indicating the location, a North arrow and the basis of reference for the survey, control monuments used to determine the location of the Campground property, corner stakes, the length and direction of each property line, evidence of occupation along the perimeter of the Campground Property, a list of legal documents used, written and graphic scale of the drawings, the date of the survey, the surveyor's printed name, registration number, signature and seal and (iv) separate legal descriptions, all certified to Buyer, Sellers and the Title Company; or (b) an ALTA/ACSM Survey of the Campground Property, modified as reasonably agreed by the parties hereto in writing, which shall minimally contain the matters set forth above, and show the location of any Encumbrances affecting the Campground Property which are locateable and the location of all Improvements located within five (5) feet of the Boundary or located on, otherwise adversely affecting, any Encumbrance which is located as aforesaid.

"Cap" shall have the meaning defined in Section 9.2 of the Agreement.

"COBRA Coverage" shall have the meaning defined in Section 10.5 of the Agreement.

"Claim" shall have the meaning defined in Section 9.5(a) of the Agreement.

"Claim Notice" shall have the meaning defined in Section 9.5(a) of the Agreement.

"Closing" shall have the meaning defined in Section 1.6 of the Agreement.

"Closing Date" shall have the meaning defined in Section 1.6 of the Agreement.

"Closing Date Liabilities Valuation" shall have the meaning defined in Section 1.7(b) of the Agreement.

"Closing Payment" shall have the meaning defined in Section 1.5 of the Agreement.

"Confidentiality Agreement" shall have the meaning defined in Section 12.13 of the Agreement.

"Contract" means any written contract, indenture, note, bond, concession, lease or other agreement and all written modifications and amendments thereto.

"Contracts and Agreements" shall have the meaning defined in Section 1.1(h) of the Agreement.

"Contracts Assignment" shall have the meaning defined in Section 8.2(c)(iv) of the Agreement.

"Deeds" shall have the meaning defined in Section 8.2(c)(i) of the Agreement.

"Demand" shall have the meaning defined in Section 2.8(a)(i) of the Agreement.

"Dispute Notice" shall have the meaning defined in Section 9.5(e) of the Agreement.

"Employee Benefit Plan" shall have the meaning defined in Section 2.15(a) of the Agreement.

"Encumbrances" means any and all liens, mortgages, pledges, security interests, conditional sales agreements, charges, claims, options, conditions, easements and restrictions of record and any other encumbrance of any kind or nature whatsoever.

"Environmental Claim" shall have the meaning defined in Section 2.8(a)(i) of the Agreement.

"Environmental Condition" shall have the meaning defined in Section 2.8(a)(ii) of the Agreement.

"Environmental Laws" shall have the meaning defined in Section 2.8(a)(iii) of the Agreement.

"Estimated Scheduled Liabilities Valuation" shall have the meaning defined in Section 1.7(a) of the Agreement.

"Exception(s)" shall mean any easements, restrictions, conditions and exceptions to title contained in a Title Document.

"Exception Document(s)" shall mean the instruments referenced in Schedule B, Section II, of the Title Commitment or Title Policy, as the case may be.

"Excluded Assets" shall have the meaning defined in Section 1.2.

"Excluded Contracts" shall have the meaning defined in Section 1.2(p) of the Agreement.

"Excluded Liabilities" shall have the meaning defined in Section 1.3.

"Existing Surveys" shall mean the following described surveys of portions of the Owned Real Property: those three (3) separate Surveys prepared by Seymour D. Weiss & Associates, Inc. dated December 17, 1999 (revised March 6, 2000), September 25, 1998 (last revised October 2, 1998) and August 31, 1999 and covering the portions of the Owned Real Property known (or formerly known), respectively, as Geauga Lake, Aurora Woodlands Hotel and the additional 38 acres; and Survey prepared by Adache Ciuni Lynn Associates Inc. dated February 2, 2001 (last revised April 11, 2001) covering the portions of the Owned Real Property known (or formerly known) as Sea World of Ohio.

"Final Scheduled Liabilities Valuation" shall have the meaning defined in Section 1.7(d) of the Agreement.

"Final Survey" shall mean an ALTA/ACSM Survey showing (i) the location of the Boundaries, (ii) the location of all Exceptions which pursuant to their terms are plottable, (iii) the boundaries of any Prohibited Area and (iv) the location of all Improvements on the Owned Real Property located within five (5) feet of the Boundaries, an Exception or the boundary of any Prohibited Area. Without limiting the generality of the foregoing, the Final Survey shall include aerial photography onto which the ALTA/ACSM Survey of the Owned Real Property shall be mapped, which shall, among other things: (a) locate all Improvements visible from the air, (b) show all points of access from major public streets and dedicated easement areas to the extent locatable, (c) show the location of regular and handicapped parking spaces and (d) contain a modified ALTA/ACSM Standards certification in accordance herewith.

"Financial Statements" shall have the meaning defined in Section 2.11(a) of the Agreement.

"Funtime" shall have the meaning defined in the introductory paragraph of the Agreement.

"Hazardous Materials" shall have the meaning defined in Section 2.8(a)(iv) of the Agreement.

"HSR Act" shall have the meaning defined in Section 2.3 of the Agreement.

"Improvement(s)" shall have the meaning defined in Section 1.1(a) of the Agreement.

"Indemnified Party" shall have the meaning defined in Section 9.5(a) of the Agreement.

"Indemnifying Party" shall have the meaning defined in Section 9.5 of the Agreement.

"Initial Objection Letter" shall have the meaning defined in Section 4.9 of the Agreement.

"Initial Surveys" means the Existing Surveys and the Campground Survey.

"Insurance Policies" shall have the meaning defined in Section 2.16 of the Agreement.

"Intangibles Acquired by Asset Purchase" shall have the meaning defined in Section 1.1(i) of the Agreement.

"Knowledge", "to the Knowledge of" or words of like import mean (i) with respect to Sellers, Kieran E. Burke, James M. Coughlin, James F. Dannhauser, Hue Eichelberger, Herb Gedeon, Walt Hawrylak, Rick McCurley, Gary Story and any director-level employee and (ii) with respect to Buyer, any director level employee, is actually aware of that fact or matter or should have been actually aware of that matter after due inquiry under the circumstances.

"Land" shall have the meaning defined in Section 1.1(a) of the Agreement.

"Leased Real Property" shall have the meaning defined in Section 1.1(a) of the Agreement.

"Liabilities" means any liabilities or obligations of any kind whatsoever, including without limitation, liabilities based on negligence or strict liability whether known or unknown, liquidated or contingent, or any claims or demands based thereon or attributable thereto.

"Losses" means all action, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, interest, expenses, and fees, including court costs and attorneys' fees and expenses.

"Material Adverse Effect" means a material adverse effect on the business, assets, properties, results of operations or financial condition of the Business as currently conducted or the Assets (taken as a whole).

"Material Consents" shall have the meaning defined in Section 8.2(e) of the Agreement.

"Material Contracts" shall have the meaning defined in Section 2.13(a) of the Agreement.

"Monetary Obligations" shall have the meaning defined in Section 4.9.

"Most Recent Financial Statements" shall have the meaning defined in Section 2.11(a) of the Agreement.

"Most Recent Fiscal Month End" shall have the meaning defined in Section 2.11(a) of the Agreement.

"Multiemployer Plan" shall have the meaning defined in Section 2.15(b) of the Agreement.

"Neutral Accountant" shall mean a nationally recognized accounting firm, selected by mutual agreement between the Buyer and Sellers.

"New Surveys" shall mean the Campground Survey and the Final Survey.

"Nonassignable Assets" shall have the meaning defined in Section 1.10 of the Agreement.

"Objection(s)" shall have the meaning defined in Section 4.9 of the Agreement.

"Objection Letters" shall have the meaning defined in Section 4.9 of the Agreement.

"Ohio Campgrounds" shall have the meaning defined in the introductory paragraph of the Agreement.

"Ohio Hotel" shall have the meaning defined in the introductory paragraph of the Agreement.

"Owned Real Property" shall have the meaning defined in Section 1.1(a) of the Agreement.

"PCBs" shall have the meaning defined in Section 2.8(a)(iv) of the Agreement.

"Parent" shall have the meaning defined in the introductory paragraph of the Agreement.

"Pension Plan" shall have the meaning defined in Section 2.15(a) of the Agreement.

"Permit Assignment" shall have the meaning defined in Section 8.2(c)(iii) of the Agreement.

"Permits" shall have the meaning defined in Section 1.1(e) of the Agreement.

"Permitted Exceptions" shall have the meaning defined in Section 2.5 of the Agreement.

"Person" means any individual, partnership, firm, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, any other business entity, or governmental entity (or any department, agency, or political subdivision thereof).

"Personal Property Leases" shall have the meaning defined in Section 1.1(f) of the Agreement.

"Post-Closing Objection(s)" shall have the meaning defined in Section 4.9 of the Agreement.

"Pre-Closing Environmental Liability" shall have the meaning defined in Section 1.3(h) of the Agreement.

"Pre-Closing Objection(s)" shall have the meaning defined in Section 4.9 of the Agreement.

"Prepaid Revenue" means all proceeds from the sale of season passes, any other pre-sold tickets and any sponsorship or promotional payments received with respect to the 2004 operating season of the Business.

"Prohibited Area" shall mean any portion of the Owned Real Property which, pursuant to the terms of an Exception Document, the owner of the Owned Real Property is prohibited from having, building or maintaining any Improvements.

"Purchase" shall have the meaning defined in Recital B of the Agreement.

"Purchase Price" shall have the meaning defined in Section 1.5 of the Agreement.

"Real Property" shall have the meaning defined in Section 1.1(a) of the Agreement.

"Real Property Lease Assignment" shall have the meaning defined in Section 8.2(c)(iv) of the Agreement.

"Real Property Leases" shall have the meaning defined in Section 1.1(g) of the Agreement.

"Records and Manuals" shall have the meaning defined in Section 1.1(d) of the Agreement.

"Regular Employees" shall have the meaning defined in Section 10.1(a) of the Agreement.

"Release" shall have the meaning defined in Section 2.8(a)(v) of the Agreement.

"Resolution Period" shall have the meaning defined in Section 1.7(c) of the Agreement.

"Review Period" shall have the meaning defined in Section 7.2 of the Agreement.

"Sale" shall have the meaning defined in Recital B of the Agreement.

"Scheduled Liabilities" shall have the meaning defined in Section 1.4.

"Seasonal Employees" shall have the meaning defined in Section 10.1(a) of the Agreement.

"Second Objection Letter" shall have the meaning defined in Section 4.9 of the Agreement.

"Sellers" shall have the meaning defined in the introductory paragraph of the Agreement.

"Sellers' Amendment Notice" shall have the meaning defined in Section 1.7(c) of the Agreement.

"Sellers' Indemnified Persons" shall have the meaning defined in Section 9.3 of the Agreement.

"Sellers' Retained Intellectual Property" shall have the meaning defined in Section 1.2(c) of the Agreement.

"Sellers' Review Period" shall have the meaning defined in Section 1.7(c) of the Agreement.

"Scheduled Liabilities" shall have the meaning defined in Section 1.4 of the Agreement.

"Site" shall have the meaning defined in Section 4.6.

"Surveys" shall mean the Initial Surveys and the Final Survey.

"Survival Period" shall have the meaning defined in Section 9.1 of the Agreement.

"Tangible Personal Property" shall have the meaning defined in Section 1.1(b) of the Agreement.

"Tax" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Sec. 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property (including water and sewer rents, and general and special assessments), personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person.

"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

"Taxable Period" means any period for which Taxes are owed to a federal, state, local or foreign taxing authority, or for which a Tax Return is required to be filed by Sellers or Buyer.

"Third-Party Claim" shall have the meaning defined in Section 9.5(b) of the Agreement.

"Title Commitment" shall have the meaning defined in Section 4.6 of the Agreement.

"Title Company" shall have the meaning defined in Section 4.6 of the Agreement.

"Title Policy" shall have the meaning defined in Section 8.2(b) of the Agreement.

"Transaction" shall have the meaning defined in the Agreements section on Page 1.

"Transferred Employee" shall have the meaning defined in Section 10.1(a) of the Agreement.

"VEBA" shall have the meaning defined in Section 2.15(b) of the Agreement.

"WARN" shall have the meaning defined in Section 10.7 of the Agreement.

"WB License" shall have the meaning defined in Section 1.2(m) of the Agreement.

"WB Marks" means all trademarks used by Sellers in connection with the Business pursuant to the WB License.

"Welfare Plan" shall have the meaning defined in Section 2.15(a) of the Agreement.

 

EXHIBIT 10

 

CEDAR FAIR, L.P.

and

KNOTT'S BERRY FARM
as Co-Issuers

AMENDED AND RESTATED NOTE PURCHASE
AND PRIVATE SHELF AGREEMENT

$50,000,000 6.68% Series B Notes due August 24, 2011
$50,000,000 6.40% Series C Notes due August 24, 2008
$75,000,000 Private Shelf Facility

Dated as of April 7, 2004

 

 

TABLE OF CONTENTS

(Not Part of Agreement)

Page

1. AMENDMENT AND RESTATEMENT; AUTHORIZATION OF ISSUE OF NOTES 2

1A. Amendment and Restatement of Existing Note Agreement 2

1B. Authorization of Issue of Shelf Notes 2

2. PURCHASE AND SALE OF SHELF NOTES 2

2A. [Intentionally Omitted] 2

2B. Purchase and Sale of Shelf Notes 2

2B(1). Facility 2

2B(2). Issuance Period 3

2B(3). Request for Purchase 3

2B(4). Rate Quotes 4

2B(5). Acceptance 4

2B(6). Market Disruption 4

2B(7). Facility Closings 5

2B(8). Fees 5

2B(8)(i). [Intentionally Omitted] 5

2B(8)(ii). [Intentionally Omitted] 5

2B(8)(iii). Delayed Delivery Fee 5

2B(8)(iv). Cancellation Fee 6

3. CONDITIONS OF RESTATEMENT; CONDITIONS OF CLOSING 6

3A. Conditions of Restatement 6

3A(1). Certain Documents 7

3A(2). Opinion of Company's Counsel 8

3A(3). Representations and Warranties; No Default; Satisfaction of Conditions 8

3A(4). Material Adverse Change 9

3A(5). Fees and Expenses 9

3A(6). Proceedings 9

3B. Conditions of Closing 9

3B(1). Certain Documents. 9

3B(2). Opinion of Purchaser's Special Counsel 11

3B(3). Opinion of Company's Counsel 11

3B(4). Representations and Warranties; No Default; Satisfaction of Conditions 11

3B(5). Purchase Permitted by Applicable Laws 11

3B(6). Payment of Fees 12

3B(7). Material Adverse Change 12

3B(8). Proceedings 12

4. PREPAYMENTS 12

4A(1). Required Prepayments of Series B Notes 12

4A(2). Required Prepayments of Series C Notes 12

4A(3). Required Prepayments of Shelf Notes 13

4B(1). Optional Prepayment with Yield-Maintenance Amount 13

4B(2). Prepayment with Yield-Maintenance Amount Pursuant to Intercreditor Agreement 13

4C. Notice of Optional Prepayment 13

4D. Application of Prepayments 13

4E. Retirement of Notes 13

5. AFFIRMATIVE COVENANTS 14

5A. Financial Statements 14

5B. Inspection of Property 15

5C. Covenant to Secure Note Equally 15

5D. Information Required by Rule 144A 16

5E. Compliance With Environmental Laws 16

5F. Maintenance of Insurance 16

5G. [Intentionally Omitted] 16

5H. Most Favored Covenant Status, etc. 16

5I. Senior Debt 17

5J. Guaranty by Subsidiaries 17

5K. Amendment of 1994 Private Shelf Agreement and Knott's Berry Farm Guaranty of 8.43% Notes 17

6. NEGATIVE COVENANTS 18

6A. Lien, Debt and Other Restrictions 18

6A(1). Liens 18

6A(2). Debt 19

6A(3). Loans, Advances, Investments and Contingent Liabilities 19

6A(4). Sale of Stock and Debt of Subsidiaries 20

6A(5). Merger and Sale of Assets 20

6A(6). Transactions with Related Persons 21

6B. Issuance of Stock by Subsidiaries 21

6C. Consolidated EBITDA Ratio 21

6D. Consolidated Owners' Equity 21

7. EVENTS OF DEFAULT 22

7A. Acceleration 22

7B. Notice of Acceleration 25

7C. Other Remedies 25

8. REPRESENTATIONS, COVENANTS AND WARRANTIES 25

8A(1). Company Organization and Qualification 25

8A(2). Knott's Berry Farm Organization and Qualification 25

8B. Financial Statements 26

8C. Actions Pending 26

8D. Outstanding Debt 26

8E. Title to Properties 26

8F. Taxes 27

8G. Conflicting Agreements and Other Matters 27

8H. Offering of Notes 27

8I. Use of Proceeds 28

8J. ERISA 28

8K. Governmental Consent 28

8L. Environmental Compliance 28

8M. Investment Company Status 29

8N. Disclosure 29

8O. Hostile Tender Offers 29

9. REPRESENTATIONS OF THE PURCHASERS 29

9A. Nature of Purchase 29

9B. Source of Funds 30

10. DEFINITIONS 31

10A. Yield-Maintenance Terms 31

10B. Other Terms 32

10C. Accounting Principles, Terms and Determinations 40

11. MISCELLANEOUS 40

11A. Note Payments 40

11B. Expenses 41

11C. Consent to Amendments 41

11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes 42

11E. Persons Deemed Owners; Participations 42

11F. Survival of Representations and Warranties; Entire Agreement 42

11G. Successors and Assigns 43

11H. Notices 43

11I. Descriptive Headings 43

11J. Satisfaction Requirement 43

11K. Payments Due on Non-Business Days 43

11L. Limited Liability of Partners 44

11M. Independence of Covenants 44

11N. Severability 44

11O. Governing Law, Jurisdiction; Consent to Service of Process 44

11P. Counterparts 45

11Q. Binding Agreement 45

12. JOINT AND SEVERAL OBLIGATIONS 45

12.1. Nature of Obligations 45

12.2. Failure of any Co-Issuer to Perform 45

12.3. Additional Undertaking 45

12.4. Joint and Several Obligations Unconditional, etc. 46

12.5. Co-Issuer's Obligations to Remain in Effect; Restoration 46

12.6. Waiver of Acceptance, etc. 47

12.7. Subrogation 47

12.8. Effect of Stay 47

INFORMATION SCHEDULE
PURCHASER SCHEDULE

EXHIBIT A-1 -- FORM OF SERIES B NOTE

EXHIBIT A-2 -- FORM OF SERIES C NOTE

EXHIBIT A-3 -- FORM OF PRIVATE SHELF NOTE

EXHIBIT B -- FORM OF REQUEST FOR PURCHASE

EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE

EXHIBIT D-1 -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL

(RESTATEMENT)

EXHIBIT D-2 -- FORM OF OPINION OF COMPANY'S SPECIAL COUNSEL

(SHELF NOTES)

SCHEDULE 8A(1) -- LIST OF GUARANTORS

SCHEDULE 8G -- LIST OF AGREEMENTS LIMITING DEBT

CEDAR FAIR, L.P.
One Causeway Drive
P.O. Box 5006
Sandusky, Ohio 44871

As of April 7, 2004

Prudential Investment Management, Inc. ("Prudential")

Each holder of Series B Notes and Series C Notes
named in the Purchaser Schedule attached
hereto (the "Existing Holders")

Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential and the
Existing Holders, the "Purchasers")


c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601

Ladies and Gentlemen:

The undersigned, Cedar Fair, L.P., a Delaware limited partnership (herein called the "Company"), and Knott's Berry Farm, a California general partnership ("Knott's Berry Farm"; the Company and Knott's Berry Farm are sometimes hereinafter collectively referred to as the "Co-Issuers" and individually referred to as a "Co-Issuer"), hereby jointly and severally agree with you as set forth below. Reference is made to paragraph 10 hereof for definitions of capitalized terms used herein and not otherwise defined herein.

INTRODUCTION

The Co-Issuers and the Existing Holders are parties to that certain Note Purchase and Private Shelf Agreement, dated as of January 28, 1998 (as heretofore amended, the "Existing Note Agreement"), under which Co-Issuers have issued their 6.68% Series B Notes due August 24, 2011 (collectively, including any Series B Note delivered in substitution or exchange for any other Series B Note pursuant to any provision of the Existing Note Agreement or this Agreement, referred to as the "Series B Notes" and individually as a "Series B Note") in the original aggregate principal amount of $50,000,000 and their 6.40% Series C Notes due August 24, 2008 (collectively, including any Series C Note delivered in substitution or exchange for any other Series C Note pursuant to any provision of the Existing Note Agreement or this Agreement, referred to as the "Series C Notes" and individually as a "Series C Note") in the original aggregate principal amount of $50,000,000.

The Co-Issuers have advised Prudential and the Existing Holders that they wish to amend and restate the Existing Note Agreement as set forth herein and Prudential and the Existing Holders are willing to agree to such amendment and restatement subject to the terms and conditions hereof. Accordingly, Prudential, the Existing Holders and the Co-Issuers agree as follows:

1. AMENDMENT AND RESTATEMENT; AUTHORIZATION OF ISSUE OF NOTES.

1A. Amendment and Restatement of Existing Note Agreement. Subject to the terms and conditions herein set forth, the Co-Issuers, Prudential and the Existing Holders agree that, effective on the Restatement Date, the Existing Note Agreement will be amended and restated in its entirety to read as set forth in this Agreement and the Series B Notes and the Series C Notes will be outstanding under this Agreement.

1B. Authorization of Issue of Shelf Notes. The Co-Issuers shall authorize the issue of additional senior promissory notes of the Co-Issuers (the "Shelf Notes") in the aggregate principal amount of $75,000,000, to be a joint and several obligation of the Co-Issuers, to be dated the date of issue thereof, to mature, in the case of each Shelf Note so issued, no more than 12 years after the date of original issuance thereof, to have an average life, in the case of each Shelf Note so issued, of no more than 10 years after the date of original issuance thereof, to bear interest on the unpaid balance thereof from the date thereof at the rate per annum, and to have such other particular terms, as shall be set forth, in the case of each Shelf Note so issued, in the Confirmation of Acceptance with respect to such Shelf Note delivered pursuant to paragraph 2B(5), and to be substantially in the form of Exhibit A-3 attached hereto. The terms "Shelf Note" and "Shelf Notes" as used herein shall include each Shelf Note delivered pursuant to any provision of this Agreement and each Shelf Note delivered in substitution or exchange for any such Shelf Note pursuant to any such provision. The terms "Note" and "Notes" as used herein shall include each Series B Note, each Series C Note and each Shelf Note delivered pursuant to any provision of this Agreement and each Note delivered in substitution or exchange for any such Note pursuant to any such provision. Notes which have (i) the same final maturity, (ii) the same principal prepayment dates, (iii) the same principal prepayment amounts (as a percentage of the original principal amount of each Note), (iv) the same interest rate, (v) the same interest payment periods and (vi) the same date of issuance (which, in the case of a Note issued in exchange for another Note, shall be deemed for these purposes the date on which such Note's ultimate predecessor Note was issued), are herein called a "Series" of Notes.

2. PURCHASE AND SALE OF SHELF NOTES.

2A. [Intentionally Omitted].

2B. Purchase and Sale of Shelf Notes.

2B(1). Facility. Prudential is willing to consider, in its sole discretion and within limits which may be authorized for purchase by Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to this Agreement. In the event Prudential and the Company agree such additional Notes may be issued by the Company as the sole obligor thereunder. The willingness of Prudential to consider such purchase of Shelf Notes is herein called the "Facility." At any time, the aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the aggregate principal amount of Shelf Notes purchased and sold pursuant to this Agreement prior to such time, minus the aggregate principal amount of Accepted Notes (as hereinafter defined) which have not yet been purchased and sold hereunder prior to such time, is herein called the "Available Facility Amount" at such time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES BY PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.

2B(2). Issuance Period. Shelf Notes may be issued and sold pursuant to this Agreement until the earlier of (i) the third anniversary of the date of this Agreement (or if the date of such anniversary is not a Business Day, the Business Day next preceding such anniversary), (ii) the 30th day after Prudential shall have given to the Co-Issuers, or the Co-Issuers shall have given to Prudential, a written notice stating that it elects to terminate the issuance and sale of Shelf Notes pursuant to this Agreement (or if such 30th day is not a Business Day, the Business Day next preceding such 30th day), (iii) the last Closing Day after which there is no Available Facility Amount, (iv) the termination of the Facility under paragraph 7A of this Agreement, and (v) the acceleration of any Note under paragraph 7A of this Agreement. The period during which Shelf Notes may be issued and sold pursuant to this Agreement is herein called the "Issuance Period".

2B(3). Request for Purchase. The Co-Issuers (or, if Prudential so agrees, the Company) may from time to time during the Issuance Period make requests for purchases of Shelf Notes (each such request being herein called a "Request for Purchase"). Each Request for Purchase shall be made to Prudential by telecopier or overnight delivery service, and shall (i) specify the aggregate principal amount of Shelf Notes covered thereby, which shall not be less than $10,000,000 and not be greater than the Available Facility Amount at the time such Request for Purchase is made, (ii) specify the principal amounts, final maturities (which shall be no more than 12 years from the date of issuance), average life (which shall be no more than 10 years from the date of issuance), principal prepayment dates (if any) and amounts and interest payment periods (quarterly or semi-annually in arrears) of the Shelf Notes covered thereby, (iii) specify the use of proceeds of such Shelf Notes, (iv) specify the proposed day for the closing of the purchase and sale of such Shelf Notes, which shall be a Business Day during the Issuance Period not less than 5 Business Days and not more than 25 Business Days after the making of such Request for Purchase, (v) specify the number of the account and the name and address of the depository institution to which the purchase prices of such Shelf Notes are to be transferred on the Closing Day for such purchase and sale, (vi) certify that the representations and warranties contained in paragraph 8 are true on and as of the date of such Request for Purchase and that there exists on the date of such Request for Purchase no Event of Default or Default, and (vii) be substantially in the form of Exhibit B attached hereto. Each Request for Purchase shall be in writing and shall be deemed made when received by Prudential.

2B(4). Rate Quotes. Not later than five Business Days after the Co-Issuers (or, if Prudential so agrees, the Company) shall have given Prudential a Request for Purchase pursuant to paragraph 2B(3), Prudential may, but shall be under no obligation to, provide to the Issuer by telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M. New York City local time (or such later time as Prudential may elect) interest rate quotes for the several principal amounts, maturities, principal prepayment schedules and interest payment periods of Shelf Notes specified in such Request for Purchase. Each quote shall represent the interest rate per annum payable on the outstanding principal balance of such Shelf Notes at which a Prudential Affiliate or Affiliates would be willing to purchase such Shelf Notes at 100% of the principal amount thereof.

2B(5). Acceptance. Within the Acceptance Window with respect to any interest rate quotes provided pursuant to paragraph 2B(4), the Issuer may, subject to paragraph 2B(6), elect to accept such interest rate quotes as to not less than $10,000,000 aggregate principal amount of the Shelf Notes specified in the related Request for Purchase. Such election shall be made by an Authorized Officer of the Issuer notifying Prudential by telephone or telecopier within the Acceptance Window that the Issuer elects to accept such interest rate quotes, specifying the Shelf Notes (each such Shelf Note being herein called an "Accepted Note") as to which such acceptance (herein called an "Acceptance") relates. The day the Issuer notifies Prudential of an Acceptance with respect to any Accepted Notes is herein called the "Acceptance Day" for such Accepted Notes. Any interest rate quotes as to which Prudential does not receive an Acceptance within the Acceptance Window shall expire, and no purchase or sale of Shelf Notes hereunder shall be made based on such expired interest rate quotes. Subject to paragraph 2B(6) and the other terms and conditions hereof, the Issuer agrees to sell to a Prudential Affiliate or Affiliates, and Prudential agrees to cause the purchase by a Prudential Affiliate or Affiliates of, the Accepted Notes at 100% of the principal amount of such Notes. As soon as practicable following the Acceptance Day, the Issuer and each Prudential Affiliate which is to purchase any such Accepted Notes will execute a confirmation of such Acceptance substantially in the form of Exhibit C attached hereto (herein called a "Confirmation of Acceptance"). If the Issuer should fail to execute and return to Prudential within three Business Days following the Issuer's receipt thereof a Confirmation of Acceptance with respect to any Accepted Notes, Prudential or any Prudential Affiliate may at its election at any time prior to Prudential's receipt thereof cancel the closing with respect to such Accepted Notes by so notifying the Issuer in writing.

2B(6). Market Disruption. Notwithstanding the provisions of paragraph 2B(5), if Prudential shall have provided interest rate quotes pursuant to paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to such quotes shall have been notified to Prudential in accordance with paragraph 2B(5) the domestic market for U.S. Treasury securities or other financial instruments shall have closed or there shall have occurred a general suspension, material limitation, or significant disruption of trading in securities generally on the New York Stock Exchange or in the domestic market for U.S. Treasury securities or other financial instruments, then such interest rate quotes shall expire, and no purchase or sale of Shelf Notes hereunder shall be made based on such expired interest rate quotes. If the Issuer thereafter notifies Prudential of the Acceptance of any such interest rate quotes, such Acceptance shall be ineffective for all purposes of this Agreement, and Prudential shall promptly notify the Issuer that the provisions of this paragraph 2B(6) are applicable with respect to such Acceptance.

2B(7). Facility Closings. Not later than 11:30 A.M. (New York City local time) on the Closing Day for any Accepted Notes, the Issuer will deliver to each Purchaser listed in the Confirmation of Acceptance relating thereto at the offices of Prudential Capital Group, 180 North Stetson Street, Suite 5600, Chicago, Illinois 60601, Attention: Law Department, the Accepted Notes to be purchased by such Purchaser in the form of one or more Notes in authorized denominations as such Purchaser may request for each Series of Accepted Notes to be purchased on the Closing Day, dated the Closing Day and registered in such Purchaser's name (or in the name of its nominee), against payment of the purchase price thereof by transfer of immediately available funds for credit to the Issuer's account specified in the Request for Purchase of such Notes. If the Issuer fails to tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled Closing Day for such Accepted Notes as provided above in this paragraph 2B(7), or any of the conditions specified in paragraph 3 shall not have been fulfilled by the time required on such scheduled Closing Day, the Issuer shall, prior to 1:00 P.M., New York City local time, on such scheduled Closing Day notify Prudential (which notification shall be deemed received by each Purchaser) in writing whether (i) such closing is to be rescheduled (such rescheduled date to be a Business Day during the Issuance Period not less than one Business Day and not more than 10 Business Days after such scheduled Closing Day (the "Rescheduled Closing Day")) and certify to Prudential (which certification shall be for the benefit of each Purchaser) that the Issuer reasonably believes that it will be able to comply with the conditions set forth in paragraph 3 on such Rescheduled Closing Day and that the Issuer will pay the Delayed Delivery Fee in accordance with paragraph 2B(8)(iii) or (ii) such closing is to be canceled. In the event that the Issuer shall fail to give such notice referred to in the preceding sentence, Prudential (on behalf of each Purchaser) may at its election, at any time after 1:00 P.M., New York City local time, on such scheduled Closing Day, notify the Issuer in writing that such closing is to be canceled. Notwithstanding anything to the contrary appearing in this Agreement, the Issuer may not elect to reschedule a closing with respect to any given Accepted Notes on more than one occasion, unless Prudential shall have otherwise consented in writing.

2B(8). Fees.

2B(8)(i). [Intentionally Omitted].

2B(8)(ii). [Intentionally Omitted].

2B(8)(iii). Delayed Delivery Fee. If the closing of the purchase and sale of any Accepted Note is delayed for any reason beyond the original Closing Day for such Accepted Note (other than the failure of a Purchaser to fund the purchase of an Accepted Note after all conditions to closing specified in paragraph 3 have been timely satisfied), the Issuer will pay to the Purchaser which shall have agreed to purchase such Accepted Note (a) on the Cancellation Date or actual closing date of such purchase and sale and (b) if earlier, the next Business Day following 90 days after the Acceptance Day for such Accepted Note and on each Business Day following 90 days after the prior payment hereunder, a fee (herein called the "Delayed Delivery Fee") calculated as follows:

(BEY - MMY) X DTS/360 X PA

where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per annum of such Accepted Note; "MMY" means Money Market Yield, i.e., the yield per annum on a commercial paper investment of the highest quality selected by Prudential and having a maturity date or dates the same as, or closest to, the Rescheduled Closing Day or Rescheduled Closing Days for such Accepted Note (a new alternative investment being selected by Prudential each time such closing is delayed); "DTS" means Days to Settlement, i.e., the number of actual days elapsed from and including the original Closing Day for such Accepted Note (in the case of the first such payment with respect to such Accepted Note) or from and including the date of the next preceding payment (in the case of any subsequent Delayed Delivery Fee payment with respect to such Accepted Note) to but excluding the date of such payment; and "PA" means Principal Amount, i.e., the principal amount of the Accepted Note for which such calculation is being made. In no case shall the Delayed Delivery Fee be less than zero. Nothing contained herein shall obligate any Purchaser to purchase any Accepted Note on any day other than the Closing Day for such Accepted Note, as the same may be rescheduled from time to time in compliance with paragraph 2B(7).

2B(8)(iv). Cancellation Fee. If the Issuer at any time notifies Prudential in writing that the Issuer is canceling the closing of the purchase and sale of any Accepted Note, or if Prudential notifies the Issuer in writing under the circumstances set forth in the last sentence of paragraph 2B(5) or the penultimate sentence of paragraph 2B(7) that the closing of the purchase and sale of such Accepted Note is to be canceled, or if the closing of the purchase and sale of such Accepted Note is not consummated on or prior to the last day of the Issuance Period (other than the failure of a Purchaser to fund the purchase of an Accepted Note after all conditions to closing specified in paragraph 3 have been timely satisfied) (the date of any such notification or the last day of the Issuance Period, as the case may be, being herein called the "Cancellation Date"), the Issuer will pay to the Purchaser which shall have agreed to purchase such Accepted Note in immediately available funds an amount (the "Cancellation Fee") calculated as follows:

PI X PA

where "PI" means Price Increase, i.e., the quotient (expressed in decimals) obtained by dividing (a) the excess of the ask price (as determined by Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid price (as determined by Prudential) of the Hedge Treasury Notes(s) on the Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask prices shall be as reported by TradeWeb LLC (or, if such data for any reason ceases to be available through TradeWeb LLC, any publicly available source of similar market data). Each price shall be rounded to the second decimal place. In no case shall the Cancellation Fee be less than zero.

3. CONDITIONS OF RESTATEMENT; CONDITIONS OF CLOSING.

3A. Conditions of Restatement. The amendment and restatement of the Existing Note Agreement pursuant to this Agreement shall become effective on the date (the "Restatement Date") upon which the following conditions have been satisfied:

3A(1). Certain Documents. Each Existing Holder shall have received original counterparts or, if satisfactory to such Existing Holder, certified or other copies of all of the following, each duly executed and delivered by the party or parties thereto, in form and substance satisfactory to such Purchaser dated the Restatement Date unless otherwise indicated, and, on the Restatement Date, in full force and effect with no event having occurred and being then continuing that would constitute a default thereunder or constitute or provide the basis for the termination thereof:

(i) a Secretary's Certificate signed by the Secretary or Assistant Secretary and one other officer of each of the General Partner or the general partner of Knott's Berry Farm, as the case may be, certifying, among other things (a) as to the name, titles and true signatures of the officers of General Partner or the general partner of Knott's Berry Farm, as the case may be, authorized to sign on behalf of each Co-Issuer this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents to be delivered in connection with this Agreement, (b) that attached thereto is a true, accurate and complete copy of the Certificate of Formation of such General Partner or the general partner of Knott's Berry Farm, as the case may be, certified by the Secretary of State of the state its formation as of a recent date, (c) that attached thereto is a true, accurate and complete copy of the By-laws, operating agreement or other organization document of such General Partner or the general partner of Knott's Berry Farm, as the case may be, in effect as of such Closing Day and as has been in effect immediately prior to and at all times since the adoption of the resolutions referred to in clause (d) below, (d) that attached thereto is a true, accurate and complete copy of the resolutions of the Board of Directors or other managing body of such General Partner or the general partner of Knott's Berry Farm, as the case may be, or other managing body, duly adopted at a meeting or by unanimous written consent of such Board of Directors or other managing body, authorizing the execution, delivery and performance on behalf of each of the Co-Issuers of this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents to be delivered in connection with this Agreement, and that such resolutions have not been amended, modified, revoked or rescinded, and are in full force and effect and are the only resolutions of the partners of the Issuer or of such Board of Directors or any committee thereof relating to the subject matter thereof, (e) that this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents executed and delivered on behalf of each of the Co-Issuers to such Purchaser are in the form approved by its Board of Directors in the resolutions referred to in clause (d), above, and (f) that no dissolution or liquidation proceedings as to such General Partner or the general partner of Knott's Berry Farm, as the case may be, have been commenced or are contemplated;

(ii) a certificate of good standing for the Company and each of the Subsidiaries from the Secretary of State of the state of formation of the Company and each such Subsidiary and of each state in which the Company or any such Subsidiary is required to be qualified to transact business as a foreign partnership or corporation, in each case dated as of a recent date;

(iii) a confirmation of Guaranty Agreement in form and substance satisfactory to Prudential and the Existing Holders executed by each Guarantor party to a Guaranty Agreement immediately prior to the Restatement Date and a Guaranty Agreement, substantially in the form of the Guaranty Agreements in effect immediately prior to the Restatement Date, executed by each Guarantor, if any, not a party to a Guaranty Agreement immediately prior to the Restatement Date, together with the documents relating thereto described in paragraph 5J hereof;

(iv) a certificate of good standing for each of the General Partner or the general partner of Knott's Berry Farm, as the case may be, from the Secretary of State of the state of its formation and of each state in which such General Partner or the general partner of Knott's Berry Farm, as the case may be, is required to be qualified to transact business as a foreign corporation, in each case dated as of a recent date; and

(v) such other certificates, documents and agreements as such Existing Holder may reasonably request.

3A(2). Opinion of Company's Counsel. Prudential and each Existing Holder shall have received from Squire, Sanders & Dempsey L.L.P., special counsel to the Co-Issuers, a favorable opinion satisfactory to Prudential and each Existing Holder, dated such Restatement Date, and substantially in the form of Exhibit D-1 attached hereto and as to such other matters as Prudential or Existing Holder may reasonably request. The Co-Issuers, by their execution hereof, hereby request and authorize such special counsel to render such opinions, agree that the issuance and sale of any Notes will constitute a reconfirmation of such request and authorization, and understand and agree that Prudential and each Existing Holder receiving such an opinion will and is hereby authorized to rely on such opinion.

3A(3). Representations and Warranties; No Default; Satisfaction of Conditions. The representations and warranties contained in paragraph 8 shall be true on and as of the Restatement Date, both before and immediately after giving effect to the consummation of the transactions contemplated hereby; there shall exist on the Restatement Date no Event of Default or Default, both before and immediately after giving effect to the consummation of the transactions contemplated hereby; the Co-Issuers shall have performed all agreements and satisfied all conditions required under this Agreement to be performed or satisfied on or before the Restatement Date; and such Co-Issuer shall have delivered to Prudential and each Existing Holder an Officer's Certificate, dated as of the Restatement Date, to each such effect.

3A(4). Material Adverse Change. No material adverse change in the business, condition (financial or otherwise), operations or prospects of the Company and its Subsidiaries, taken as a whole, since December 31, 2003 shall have occurred or be threatened, as determined by such Purchaser in its sole judgment.

3A(5). Fees and Expenses. Without limiting the provisions of paragraph 11B hereof, the Company shall have paid the reasonable fees, charges and disbursements of any special counsel to the Purchasers.

3A(6). Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to such Purchaser, and such Purchaser shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request.

    1. 3B. Conditions of Closing. Each Purchaser's obligation to purchase and pay for the Shelf Notes to be purchased by such Purchaser hereunder on any Closing Day is subject to the satisfaction, on or before such Closing Day, of the following conditions:

3B(1). Certain Documents. Such Purchaser shall have received original counterparts or, if satisfactory to such Purchaser, certified or other copies of all of the following, each duly executed and delivered by the party or parties thereto, in form and substance satisfactory to such Purchaser dated the date of the applicable Closing Day unless otherwise indicated, and, on the applicable Closing Day, in full force and effect with no event having occurred and being then continuing that would constitute a default thereunder or constitute or provide the basis for the termination thereof:

(i) The Shelf Note(s) to be purchased by such Purchaser on such Closing Day in the form of Exhibit A-3 hereto, as applicable;

(ii) a Secretary's Certificate signed by the Secretary or Assistant Secretary and one other officer of each of the General Partner or the general partner of Knott's Berry Farm, as the case may be, certifying, among other things (a) as to the name, titles and true signatures of the officers of such General Partner or the general partner of Knott's Berry Farm, as the case may be, authorized to sign on behalf of each Co-Issuer this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents to be delivered in connection with this Agreement, (b) that attached thereto is a true, accurate and complete copy of the Certificate of Formation of such General Partner or the general partner of Knott's Berry Farm, as the case may be, certified by the Secretary of State of the state its formation as of a recent date, (c) that attached thereto is a true, accurate and complete copy of the By-laws, operating agreement or other organization document of such General Partner or the general partner of Knott's Berry Farm, as the case may be, in effect as of such Closing Day and as has been in effect immediately prior to and at all times since the adoption of the resolutions referred to in clause (d) below, (d) that attached thereto is a true, accurate and complete copy of the resolutions of the Board of Directors or other managing body of such General Partner or the general partner of Knott's Berry Farm, as the case may be, or other managing body, duly adopted at a meeting or by unanimous written consent of such Board of Directors or other managing body, authorizing the execution, delivery and performance on behalf of each of the Co-Issuers of this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents to be delivered in connection with this Agreement, and that such resolutions have not been amended, modified, revoked or rescinded, and are in full force and effect and are the only resolutions of the partners of the Issuer or of such Board of Directors or any committee thereof relating to the subject matter thereof, (e) that this Agreement, the Shelf Notes being delivered on such Closing Day and the other documents executed and delivered on behalf of each of the Co-Issuers to such Purchaser are in the form approved by its Board of Directors in the resolutions referred to in clause (d), above, and (f) that no dissolution or liquidation proceedings as to such General Partner or the general partner of Knott's Berry Farm, as the case may be, have been commenced or are contemplated;

(iii) a certificate of good standing for the Issuer (if applicable) and each of its Subsidiaries from the Secretary of State of the state of formation and of each state in which the Issuer or any such Subsidiary is required to be qualified to transact business as a foreign corporation or partnership, in each case dated as of a recent date;

(iv) a confirmation of Guaranty Agreement in form and substance satisfactory to such Purchaser executed by each Guarantor party to a Guaranty Agreement immediately prior to such Closing Day and a Guaranty Agreement, substantially in the form of the Guaranty Agreements in effect immediately prior to such Closing Day, executed by each Guarantor, if any, not a party to a Guaranty Agreement immediately prior to such Closing Day, together with the documents relating thereto described in paragraph 5J hereof;

(v) a certificate of good standing for each of the General Partner or the general partner of Knott's Berry Farm, as the case may be, from the Secretary of State of the state of its formation and of each state in which such General Partner or is required to be qualified to transact business as a foreign corporation, in each case dated as of a recent date; and

(vi) such other certificates, documents and agreements as such Purchaser may reasonably request.

3B(2). Opinion of Purchaser's Special Counsel. Such Purchaser shall have received from Wiley S. Adams, Vice President and Corporate Counsel of Prudential or such other counsel who is acting as special counsel for it in connection with this transaction, a favorable opinion satisfactory to such Purchaser as to such matters incident to the matters herein contemplated as it may reasonably request.

3B(3). Opinion of Company's Counsel. Such Purchaser shall have received from Squire Sanders & Dempsey L.L.P, special counsel to the Issuer (or such other counsel designated by the Issuer and acceptable to such Purchaser), a favorable opinion satisfactory to such Purchaser, dated such Closing Day, and substantially in the form of Exhibit D-2 attached hereto and as to such other matters as such Purchaser may reasonably request. The Co-Issuers, by their execution hereof, hereby request and authorize such special counsel to render such opinions, agree that the issuance and sale of any Shelf Notes will constitute a reconfirmation of such request and authorization, and understand and agree that each Purchaser receiving such an opinion will and is hereby authorized to rely on such opinion.

3B(4). Representations and Warranties; No Default; Satisfaction of Conditions. The representations and warranties contained in paragraph 8 shall be true on and as of such Closing Day, both before and immediately after giving effect to the issuance of the Shelf Notes to be issued on such Closing Day and to the consummation of any other transactions contemplated hereby; there shall exist on such Closing Day no Event of Default or Default, both before and immediately after giving effect to the issuance of the Shelf Notes to be issued on such Closing Day and to the consummation of any other transactions contemplated hereby; the Issuer shall have performed all agreements and satisfied all conditions required under this Agreement to be performed or satisfied on or before such Closing Day; and the Issuer shall have delivered to such Purchaser an Officer's Certificate, dated such Closing Day, to each such effect.

3B(5). Purchase Permitted by Applicable Laws. The purchase of and payment for the Shelf Notes to be purchased by such Purchaser on such Closing Day on the terms and conditions herein provided (including the use of the proceeds of such Shelf Notes by the Company) shall not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject such Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation, and such Purchaser shall have received such certificates or other evidence as it may request to establish compliance with this condition. All necessary authorizations, consents, approvals, exceptions or other actions by or notices to or filings with any court or administrative or governmental body or other Person required in connection with the execution, delivery and performance of this Agreement and the Shelf Notes to be issued on such Closing Day or the consummation of the transactions contemplated hereby or thereby shall have been issued or made, shall be final and in full force and effect and shall be in form and substance satisfactory to such Purchaser.

3B(6). Payment of Fees. The Issuer shall have paid to such Purchaser (directly in immediately available funds) any fees due it pursuant to or in connection with this Agreement, including any Delayed Delivery Fee due pursuant to paragraph 2B(8)(iii).

3B(7). Material Adverse Change. No material adverse change in the business, condition (financial or otherwise), operations or prospects of the Company and its Subsidiaries, taken as a whole, since the date of the most recent audited financial statements delivered pursuant to paragraph 5A(ii) hereof, shall have occurred or be threatened, as determined by such Purchaser in its sole judgment.

3B(8). Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to such Purchaser, and such Purchaser shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request.

4. PREPAYMENTS. The Series B Notes, the Series C Notes and any Shelf Notes shall be subject to required prepayment as and to the extent provided in paragraphs 4A and 4B, respectively. The Series B Notes, the Series C Notes and any Shelf Notes shall also be subject to prepayment under the circumstances set forth in paragraph 4C. Any prepayment made by the Issuer pursuant to any other provision of this paragraph 4 shall not reduce or otherwise affect its obligation to make any required prepayment as specified in paragraph 4A or 4B.

4A(1). Required Prepayments of Series B Notes. Until the Series B Notes shall be paid in full, the Co-Issuers jointly and severally agree to apply to the prepayment of the Series B Notes, without Yield-Maintenance Amount, the sum of $10,000,000 on August 24 of each year commencing on August 24, 2007 and continuing through and including August 24, 2010 and such principal amounts of the Series B Notes, together with interest thereon to the payment dates, shall become due on such payment dates. The remaining unpaid principal amount of the Series B Notes together with any accrued and unpaid interest, shall become due on the maturity date of the Series B Notes on August 24, 2011.

4A(2). Required Prepayments of Series C Notes. The Series C Notes shall be subject to required prepayments set forth in the form of the Series C Notes.

4A(3). Required Prepayments of Shelf Notes. Each Series of Shelf Notes shall be subject to required prepayments, if any, set forth in the Notes of such Series.

4B(1). Optional Prepayment with Yield-Maintenance Amount. The Notes of each Series shall be subject to optional prepayment, in whole or in part, in increments of $100,000, and in a minimum amount of $1,000,000, at the option of the Company, at 100% of the principal amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Amount, if any, with respect to each such Note. Any partial prepayment of a Series of Notes pursuant to this paragraph 4B shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates.

4B(2). Prepayment with Yield-Maintenance Amount Pursuant to Intercreditor Agreement. If amounts are to be applied to the principal of the Notes pursuant to the terms of the Intercreditor Agreement, interest owing thereon to the prepayment date and the Yield-Maintenance Amount, if any, with respect to each Note shall be due and payable on such date. Any partial prepayment on the Notes pursuant to this paragraph 4B(2) shall be applied in satisfaction of required payments of principal in inverse order of their scheduled due dates.

4C. Notice of Optional Prepayment. The Issuer shall give notice to the holder of each Note of a Series irrevocable written notice of any optional prepayment to be made pursuant to paragraph 4B(1) with respect to such Series not less than 10 Business Days prior to the prepayment date, specifying (i) such prepayment date, (ii) the aggregate principal amount of the Notes of such Series to be prepaid on such date, (iii) the principal amount of the Notes of such holder to be prepaid on that date, and (iv) stating that such optional prepayment is to be made pursuant to paragraph 4B(1). Notice of optional prepayment having been given as aforesaid, the principal amount of the Notes specified in such notice, together with interest thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, herein provided, shall become due and payable on such prepayment date. The Issuer shall, on or before the day on which it gives written notice of any prepayment pursuant to paragraph 4B(1), give telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to each Significant Holder which shall have designated a recipient for such notices in the purchaser schedule attached to the applicable Confirmation of Acceptance or by notice in writing to the Issuer.

4D. Application of Prepayments. In the case of each prepayment pursuant to paragraphs 4A or 4B of less than the entire unpaid principal amount of all outstanding Notes of any Series, the amount to be prepaid shall be applied pro rata to all outstanding Notes of such Series (including, for the purpose of this paragraph 4D only, all Notes of such Series prepaid or otherwise retired or purchased or otherwise acquired by the Issuer or any of its Subsidiaries or Affiliates other than by prepayment pursuant to paragraphs 4A or 4B) according to the respective unpaid principal amounts thereof.

4E. Retirement of Notes. The Issuer shall not, and shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated final maturity (other than by prepayment pursuant to paragraphs 4A or 4B or upon acceleration of such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or indirectly, any Notes of any Series unless the Issuer or such Subsidiary or Affiliate shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of the Notes of such Series held by each holder of Notes of such Series at the time outstanding upon the same terms and conditions. Any Notes prepaid or otherwise retired or purchased or otherwise acquired by the Issuer or any of its Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under this Agreement, except as provided in paragraph 4D.

5. AFFIRMATIVE COVENANTS.

5A. Financial Statements. The Company covenants that it will deliver to each Significant Holder in triplicate:

(i) as soon as practicable and in any event within 60 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, consolidated statements of income, partners' equity or shareholders' equity (as the case may be) and cash flows of the Company and its Subsidiaries for (a) such quarterly period and (b) the period of four consecutive fiscal quarters ended on the last day of such quarterly period, and a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year or years, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments; provided, however, that delivery pursuant to clause (iii) below of copies of the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (i);

(ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, consolidated statements of income, partners' equity and cash flows of the Company and its Subsidiaries for such year, and a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and satisfactory in form to the Required Holder(s), and reported on by independent public accountants of recognized national standing selected by the Company whose report shall be without limitation as to scope of the audit and satisfactory in substance to the Required Holder(s); provided, however, that delivery pursuant to clause (iii) below of copies of the Annual Report on Form 10-K of the Company for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this clause (ii);

(iii) promptly upon transmission thereof, copies of all such financial statements, proxy statements, notices and reports as the Company shall send to its Limited Partners generally and copies of all registration statements (without exhibits), other than registration statements on Form S-8 or any successor form, and all reports which it files with the Securities and Exchange Commission (or any governmental body or agency succeeding to the functions of the Securities and Exchange Commission); and

(iv) with reasonable promptness, such other financial data (including, without limitation, consolidating financial statements and a copy of each other report submitted to the Company or any Subsidiary by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company or any Subsidiary) as such Significant Holder may reasonably request.

Together with each delivery of financial statements required by clauses (i) and (ii) above, the Company will deliver to each Significant Holder an Officer's Certificate (a) setting forth (except to the extent specifically set forth in such financial statements) the aggregate amounts of interest accrued on Funded Debt and Current Debt of the Company and Subsidiaries during the fiscal period covered by such financial statements, and the aggregate amounts of depreciation on physical property charged on the books of the Company and Subsidiaries (if any) during such fiscal period, (b) demonstrating (with computations in reasonable detail) compliance by the Company and its Subsidiaries with paragraph 6A(2), 6A(3)(viii), 6A(5), 6C and 6D and, to the extent Debt secured by Liens described in clauses (v) and (vi) of paragraph 6A(1) exceeds $5,000,000, demonstrating compliance with clauses (v) and (vi) of paragraph 6A(1), in each case during and at the end of such fiscal period and (c) stating that there exists no Event of Default or Default or, if any Event of Default or Default exists, specifying the nature thereof, the period of existence thereof and what action the Company proposes to take with respect thereto. Together with each delivery of financial statements required by clause (ii) above, the Company will deliver to each Significant Holder a certificate of such accountants stating that, in making the audit necessary to the certification of such financial statements, they have obtained no knowledge of any Event of Default or Default, or, if they have obtained knowledge of any Event of Default or Default, specifying the nature and period of existence thereof (provided that such accountants shall not be liable to anyone by reason of their failure to obtain knowledge of any such Event of Default or Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards).

The Company also covenants that forthwith upon any Responsible Officer obtaining knowledge of an Event of Default or Default, it will deliver to each Significant Holder an Officer's Certificate specifying the nature and period of existence thereof and what action the Company proposes to take with respect thereto. Immediately after a Responsible Officer becomes aware of or the Company receives notice of any Event of Default under the Credit Agreement, the 2002 Note Purchase Agreement or the 2003 Note Purchase Agreement, the Company will give each holder of any Note notice thereof.

5B. Inspection of Property. The Company covenants that it will permit any Person designated by any Significant Holder in writing, at such Significant Holder's expense, to visit and inspect any of the properties of the Company and its Subsidiaries, to examine the corporate books and financial records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and to discuss the affairs, finances and accounts of any of such entities with the officers and directors of the General Partner or the general partner of Knott's Berry Farm, as the case may be, and the directors, officers and independent accountants of the Co-Issuers, all at such reasonable times and as often as such Significant Holder may reasonably request.

5C. Covenant to Secure Note Equally. The Company covenants that, if it or any Subsidiary shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, other than Liens permitted by the provisions of paragraph 6A(1) (unless prior written consent to the creation or assumption thereof shall have been obtained pursuant to paragraph 11C), it will make or cause to be made effective provision whereby the Notes will be secured by such Lien equally and ratably with any and all other Debt thereby secured so long as any such other Debt shall be so secured.

5D. Information Required by Rule 144A. The Company covenants that it will, upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph 5D, the term "qualified institutional buyer" shall have the meaning specified in Rule 144A under the Securities Act.

5E. Compliance With Environmental Laws. The Company will, and will cause each of its Subsidiaries to, comply in a timely fashion with, or operate pursuant to valid waivers of the provisions of, all Environmental Laws, except where noncompliance would not materially adversely affect the business, condition (financial or other) or operations of the Company and its Subsidiaries taken as a whole.

5F. Maintenance of Insurance. The Company covenants that it and each of its Subsidiaries will maintain insurance in such amounts and against such casualties, liabilities, risks, contingencies and hazards as is customarily maintained by other similarly situated companies operating similar businesses and, upon request of a Significant Holder, it will deliver an Officers' Certificate specifying the details of such insurance then in effect.

5G. [Intentionally Omitted].

5H. Most Favored Covenant Status, etc. Should the Company or its Subsidiaries at any time after the date hereof, issue or guarantee any unsecured indebtedness denominated in U.S. dollars for money borrowed or represented by bonds, notes, debentures or similar securities in an aggregate amount exceeding $5,000,000 to any lender or group of lenders acting in concert with one another or one or more institutional investors, pursuant to a loan agreement, credit agreement, note purchase agreement, indenture, guaranty or other similar instrument, which agreement, indenture, guaranty or instrument, includes affirmative or negative business or financial covenants (or any events of default or other type of restriction which would have the practical effect of any affirmative or negative business or financial covenant, including, without limitation, any "put" or mandatory prepayment or redemption of any such indebtedness upon the occurrence of a designated event) which are applicable to the Company or any Significant Subsidiary, other than those set forth herein, the Company shall promptly so notify the holders of the Notes and, if the Required Holder(s) shall so request by written notice to the Company (after a determination has been made by the Required Holder(s) that any of the above-referenced documents or instruments contain any such provisions, which either individually or in the aggregate, are more favorable to the holders of such unsecured Indebtedness than any of the provisions set forth herein), the Co-Issuers and the Required Holder(s) shall promptly amend this Agreement to incorporate some or all of such provisions, in the discretion of the Required Holder(s), into this Agreement and, to the extent necessary and reasonably desirable to the Required Holder(s), all at the election of the Required Holder(s).

5I. Senior Debt. The Co-Issuers will at all times ensure that (a) the claims of the holders of the Notes under this Agreement and the Notes will not be subordinate to, and will in all respects at least rank pari passu with, the claims of every other senior unsecured creditor of such Co-Issuer and (b) any Indebtedness subordinated in any manner to the claims of any other senior unsecured creditor of either Co-Issuer will be subordinated in like manner to such claims of the holders of the Notes.

5J. Guaranty by Subsidiaries. The Company will cause each Subsidiary which becomes obligated, directly or indirectly (including as a "Co-Borrower," "Obligor" or "Subsidiary Guarantor") under the Credit Agreement, the 2002 Note Purchase Agreement or the 2003 Note Purchase Agreement, to concurrently enter into a Guaranty Agreement for the benefit of the holders of the Notes, substantially in the form of the Guaranty Agreement as in effect on the Restatement Date, and within three Business Days thereafter shall deliver to each of the holders of the Notes the following items:

(a) an executed counterpart of such Guaranty Agreement;

(b) a certificate signed by the President, a Vice President or another authorized Responsible Officer of such Subsidiary making representations and warranties to the effect of those contained in paragraphs 8A(1) and 8B, but with respect to such Subsidiary and such Guaranty Agreement, as applicable;

(c) such documents and evidence with respect to such Subsidiary as any holder of the Notes may reasonably request in order to establish the existence and good standing of such Subsidiary and the authorization of the transactions contemplated by such Guaranty Agreement;

(d) any amendment or modification to the Intercreditor Agreement requested by the Required Holders relating to the inclusion of such new Guaranty Agreement thereunder; and

(e) an opinion of counsel satisfactory to the Required Holders to the effect that such Guaranty Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding contract and agreement of such Subsidiary enforceable in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.

5K. Amendment of 1994 Private Shelf Agreement and Knott's Berry Farm Guaranty of 8.43% Notes. On or before the 30th day after the Restatement Date (i) the Company shall execute and deliver to the holders of the Company's 8.43% Series A Notes due August 24, 2006 an amendment, in form and substance reasonably satisfactory to the holders of such 8.43% Series A Notes, of that certain Private Shelf Agreement, dated as of August 24, 1994, as amended (the "1994 Private Shelf Agreement"), which amendment shall cause the 1994 Private Shelf Agreement to conform the covenants, events of default and related definitions therein to the covenants, Events of Default and related definitions set forth in this Agreement and (ii) Knott's Berry Farm shall execute and deliver to the holders of the Company's 8.43% Series A Notes due August 24, 2006 a Guarantee of the Company's obligations under such 8.43% Series A Notes and the Private Shelf Agreement, under which such 8.43% Series A Notes were issued, which Guarantee will be in form and substance reasonably satisfactory to the holders of such 8.43% Series A Notes.

6. NEGATIVE COVENANTS. The provisions of this paragraph 6 shall remain in effect so long as any Note shall remain outstanding or any other amount shall be owing hereunder.

6A. Lien, Debt and Other Restrictions. The Company covenants that it will not and will not permit any Subsidiary to (and Knott's Berry Farm covenants that it will not take any action that will cause non-compliance with any of the following):

6A(1). Liens. Create, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired (whether or not provision is made for the equal and ratable securing of the Notes in accordance with the provisions of paragraph 5C), except

(i) Liens for taxes not yet due or which are being actively contested in good faith by appropriate proceedings,

(ii) other Liens incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business,

(iii) subject to the limitation set forth in clause (iii) of paragraph 6A(2), Liens on property or assets of a Subsidiary to secure obligations of such Subsidiary to the Company or another Subsidiary,

(iv) Liens consisting of Capitalized Leases if the Funded Debt represented by the related Capitalized Lease Obligations is permitted by paragraph 6A(2),

(v) any Lien existing on any property of any corporation at the time it becomes a Subsidiary, or existing prior to the time of acquisition upon any property acquired by the Company or any Subsidiary through purchase, merger or consolidation or otherwise, whether or not assumed by the Company or such Subsidiary, or placed upon property at the time of acquisition by the Company or any Subsidiary to secure all or a portion of (or to secure Debt incurred to pay all or a portion of) the purchase price thereof, provided that (a) such property is not and shall not thereby become encumbered in an amount in excess of 80% of the lesser of the cost thereof or the fair value (as determined in good faith by the board of directors of the General Partner) thereof at the time such corporation becomes a Subsidiary or at the time of acquisition of such property by the Company or a Subsidiary, as the case may be, (b) any such Lien shall not encumber any other property (except related replacement parts) of the Company or such Subsidiary, and (c) the aggregate amount of Debt secured by all such Liens and any Liens permitted by clause (iv) above and clause (vi) below at any one time outstanding shall be permitted by paragraph 6A(2), and

(vi) any Lien renewing, extending or refunding any Lien permitted by clause (v) above if the aggregate amount of Debt secured by all such Liens and any Lien permitted by clauses (iv) and (v) above at any one time outstanding shall be permitted by paragraph 6A(2), provided that the principal amount secured is not increased, and the Lien is not extended to other property;

6A(2). Debt. Create, incur, assume, guarantee, suffer to exist, or otherwise be or become directly or indirectly liable for, any Funded or Current Debt, except

(i) Funded Debt of the Company represented by the Notes,

(ii) Funded or Current Debt of any Subsidiary to the Company,

(iii) Funded or Current Debt of any Subsidiary to any other Subsidiary, provided that no Subsidiary shall become liable for or suffer to exist any Debt permitted by this clause (iii) unless the Subsidiary to which such Debt is owed shall be free from any Debt to any Person other than the Company, and

(iv) other Debt of the Company or any Subsidiary; provided that Priority Debt shall at no time exceed 20% of Consolidated Owners Equity (notwithstanding the foregoing, the basket in this subclause (iv) shall not be used to secure the lender(s) under the Credit Agreement (or any credit facility which replaces the Credit Agreement);

6A(3). Loans, Advances, Investments and Contingent Liabilities. Make or permit to remain outstanding any loan or advance to, or guarantee, endorse or otherwise be or become contingently liable, directly or indirectly, in connection with the obligations, stock, or dividends of, or own, purchase or acquire any stock, obligations or securities of, or any other interest in, or make or maintain any capital contribution to, any Person, except that the Company and its Subsidiaries may

(i) subject to paragraph 6A(2), make or permit to remain outstanding loans or advances to the Company or any Subsidiary,

(ii) subject to paragraph 6A(2), own, purchase or acquire stock, obligations or securities of a Subsidiary or of a corporation which immediately after such purchase or acquisition will be a Subsidiary,

(iii) acquire and own stock, obligations or securities received in settlement of debts (created in the ordinary course of business) owing to the Company or any Subsidiary,

(iv) own, purchase or acquire commercial paper rated Prime-1 by Moody's Investors Service, Inc. or A-1 or better by Standard & Poor's Corporation on the date of acquisition and certificates of deposit of, bankers' acceptances issued by, and eurodollar deposits with United States commercial banks (having capital resources in excess of $100,000,000, and, in the case of eurodollar deposits, issued by such bank through its head office or a branch office in London or Tokyo), in each case due within one year from the date of acquisition and payable in the United States in United States dollars, obligations of the United States Government or any agency thereof backed by the full faith and credit of the United States Government, obligations guaranteed by the United States Government, and repurchase agreements of such banks for terms of less than one year in respect of the foregoing certificates and obligations,

(v) endorse negotiable instruments for collection in the ordinary course of business,

(vi) guarantee or otherwise become directly or indirectly liable for Debt to the extent the Debt is permitted by paragraph 6A(2) (including, without limitation, the limitation on Priority Debt set forth therein),

(vii) make or permit to remain outstanding travel, relocation and other like advances to officers and employees in the ordinary course of business, and

(viii) make or permit to remain outstanding any loans or advances to, any guarantees for the benefit of, or any investments in, any Person not otherwise permitted by this paragraph 6A(3) up to an aggregate amount outstanding which shall not exceed an amount equal to 15% of Consolidated Owners' Equity at any time;

6A(4). Sale of Stock and Debt of Subsidiaries. Except to the Company or a 75%-owned Subsidiary, sell or otherwise dispose of, or part with control of, any shares of stock or Debt of any (i) Significant Subsidiary, or (ii) other Subsidiary, if at the time of such sale or other disposition, such other Subsidiary owns, directly or indirectly, any shares of stock or Debt of any Significant Subsidiary or any Debt of the Company;

6A(5). Merger and Sale of Assets. Merge or consolidate with any corporation or sell, lease, transfer or otherwise dispose, in any single transaction or series of related transactions, of assets which shall have contributed 10% or more to Consolidated Pre-Tax Income for any of the three fiscal years then most recently ended, or assets whose aggregate fair value (as determined in good faith by the board of directors of the General Partner, as the case may be) shall exceed 10% of Consolidated Net Assets, to any Person, except that

(i) any 75%-owned Subsidiary which is free from any Debt to any Person other than the Company may merge with any one or more other 75%-owned Subsidiaries which are free from any Debt to any Person other than the Company,

(ii) any Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets to the Company or a 75%-owned Subsidiary,

(iii) any Subsidiary may sell or otherwise dispose of all or substantially all of its assets subject to the conditions specified in paragraph 6A(4) with respect to a sale of the stock of such Subsidiary,

(iv) the Company may enter into any merger in which it is the surviving entity, provided that no Default or Event of Default would exist immediately after giving effect thereto,

(v) the Company may, in the ordinary course of business, sell or otherwise dispose of (a) buildings and parcels of land not used in connection with the business of the Company or any Subsidiary and (b) vehicles,

(vi) any Subsidiary (other than Knott's Berry Farm) may merge or consolidate with any other corporation, provided that, immediately after giving effect to such merger or consolidation, the continuing or surviving corporation of such merger or consolidation shall constitute a Subsidiary and no Default or Event of Default would exist, and

(vii) Knott's Berry Farm may merge or consolidate with any other corporation, provided that, (a) it is the continuing and surviving entity in the case of any merger or consolidation with any Person other than the Company and (b) immediately after giving effect to such merger or consolidation no Default or Event of Default would exist;

6A(6). Transactions with Related Persons. Directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise deal with, in the ordinary course of business or otherwise, any Related Person, except (i) pursuant to the terms of the Partnership Agreement or (ii) on an arm's-length basis and on terms no less favorable to the Company and its Subsidiaries (as determined in good faith by the board of directors of the General Partner or the Company, as the case may be) than terms which would have been obtainable from a Person other than a Related Person.

6B. Issuance of Stock by Subsidiaries. The Company covenants that it will not permit any Subsidiary (either directly, or indirectly by the issuance of rights or options for, or securities convertible into, such shares or other equity interest) to issue, sell or otherwise dispose of any shares of any class of its stock or other equity interest (other than directors' qualifying shares) except to the Company or a 75%-owned Subsidiary.

6C. Consolidated EBITDA Ratio. The Company will not at any time permit the ratio of (i) the amount of its Consolidated Debt at such time to (ii) its Consolidated EBITDA for the Testing Period most recently ended, to exceed the Maximum Permitted Debt Coverage Ratio for such Testing Period. The "Maximum Permitted Debt Coverage Ratio" shall mean (1) 3.00 to 1.00 for Testing Periods ending before June 27, 2004, (2) 3.50 to 1.00 for the Testing Period ending June 27, 2004 and (3) 3.00 to 1.00 for Testing Periods ending after June 27, 2004; provided, however, that on and after the earlier to occur of (a) August 8, 2011, and (b) the date upon which the maximum ratio of Consolidated Debt to Consolidated EBITDA (or similar concepts) permitted under the Credit Agreement or under any other primary bank facility of either Co-Issuer is less than or equal to 3.25 to 1.00, then the "Maximum Permitted Debt Coverage Ratio" shall be 3.25 to 1.00.

6D. Consolidated Owners' Equity. The Company will not, at any time, permit Consolidated Owners' Equity to be less than an amount equal to the sum of (a) $270,000,000 plus (b) 100% of the net proceeds of any equity offering by the Obligors plus (c) 100% of the net proceeds of any debt offering of the Obligors, to the extent such debt is converted into equity; provided, however, that notwithstanding the foregoing, (i) for any fiscal quarter of the Company ending on or about March 31 of any year, the Company shall not permit Consolidated Owners' Equity to be less than an amount equal to 60% of Consolidated Owners' Equity for the most recently completed fiscal year of the Company, and (ii) for any fiscal quarter of the Company ending on or about June 30 of any year, the Company shall not permit Consolidated Owners' Equity to be less than an amount equal to 70% of Consolidated Owners' Equity for the most recently completed fiscal year of the Company.

7. EVENTS OF DEFAULT.

7A. Acceleration. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise):

(i) the Issuer defaults in the payment of any principal of or Yield-Maintenance Amount on any Note when the same shall become due, either by the terms thereof or otherwise as herein provided; or

(ii) the Issuer defaults in the payment of any interest on any Note for more than 10 days after the date due; or

(iii) either Co-Issuer or any Subsidiary defaults in any payment of principal of or interest on any other obligation for money borrowed (or any Capitalized Lease Obligation, any obligation under a conditional sale or other title retention agreement, any obligation issued or assumed as full or partial payment for property whether or not secured by a purchase money mortgage or any obligation under notes payable or drafts accepted representing extensions of credit) beyond any period of grace provided with respect thereto, or either Co-Issuer or any Subsidiary fails to perform or observe any other agreement, term or condition contained in any agreement under which any such obligation is created (or if any other event thereunder or under any such agreement shall occur and be continuing) and the effect of such failure or other event is to cause, or to permit the holder or holders of such obligation (or a trustee on behalf of such holder or holders) to cause, such obligation to become due (or to be repurchased by either Co-Issuer or any Subsidiary) prior to any stated maturity, provided that the aggregate amount of all obligations as to which such a payment default shall occur and be continuing or such a failure or other event permitting acceleration (or sale to either Co-Issuer or any Subsidiary) shall occur and be continuing exceeds $15,000,000; or

(iv) any representation or warranty made by either Co-Issuer herein or in any writing furnished in connection with or pursuant to this Agreement shall be false in any material respect on the date as of which made; or

(v) either Co-Issuer fails to perform or observe any agreement contained in paragraph 6 hereof; or

(vi) either Co-Issuer fails to perform or observe any other agreement, term or condition contained herein and such failure shall not be remedied within 30 days after any Responsible Officer has actual knowledge thereof; or

(vii) either Co-Issuer or any Significant Subsidiary makes an assignment for the benefit of creditors or is generally not paying its debts as such debts become due; or

(viii) any decree or order for relief in respect of either Co-Issuer or any Significant Subsidiary is entered under any bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in effect (herein called the "Bankruptcy Law"), of any jurisdiction; or

(ix) either Co-Issuer or any Significant Subsidiary petitions or applies to any tribunal for, or consents to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of either Co-Issuer or any Significant Subsidiary, or of any substantial part of the assets of either Co-Issuer or any Significant Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United States or any proceedings (other than proceedings for the voluntary liquidation and dissolution of a Subsidiary) relating to either Co-Issuer or any Significant Subsidiary under the Bankruptcy Law of any other jurisdiction; or

(x) any such petition or application is filed, or any such proceedings are commenced, against either Co-Issuer or any Significant Subsidiary and either Co-Issuer or such Significant Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein, or an order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(xi) any order, judgment or decree is entered in any proceedings against either Co-Issuer decreeing the dissolution of either Co-Issuer and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(xii) any order, judgment or decree is entered in any proceedings against either Co-Issuer or any Significant Subsidiary decreeing a split-up of either Co-Issuer or such Significant Subsidiary which requires the divestiture of assets representing a substantial part, or the divestiture of the stock of a Significant Subsidiary whose assets represent a substantial part, of the consolidated assets of the Company and its Significant Subsidiaries (determined in accordance with generally accepted accounting principles) or which requires the divestiture of assets, or stock of a Significant Subsidiary, which shall have contributed a substantial part of the consolidated net income of the Company and its Significant Subsidiaries (determined in accordance with generally accepted accounting principles) for any of the three fiscal years then most recently ended, and such order, judgment or decree remains unstayed and in effect for more than 60 days; or

(xiii) one or more final judgments for the payment of money, the uninsured portion of which in aggregate amount exceeds $5,000,000, is rendered against either Co-Issuer or any Subsidiary and, within 60 days after entry thereof, any such judgment is not discharged or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, such judgment is not discharged; or

(xiv) either Co-Issuer or any ERISA Affiliate, in its capacity as an employer under a Multiemployer Plan, makes a complete or partial withdrawal from such Multiemployer Plan resulting in the incurrence by such withdrawing employer of a withdrawal liability in an amount exceeding $5,000,000; or

(xv) (1) any "Event of Default" under the Credit Agreement shall have occurred as a result of the violation of Section 5.7, 5.8, 5.9, 5.10, 5.11, 5.12 or 5.13 of the Credit Agreement (and irrespective of any waiver thereof under the terms of the Credit Agreement or any amendment to the Credit Agreement which amendment is entered into after the occurrence thereof) while the Credit agreement is in effect, (2) any "Event of Default" under the 2002 Note Purchase Agreement shall have occurred as a result of the violation of any subsection of Section 10 of the 2002 Note Purchase Agreement (and irrespective of any waiver thereof under the terms of the 2002 Note Purchase Agreement or any amendment to the 2002 Note Purchase Agreement which amendment is entered into after the occurrence thereof) while the 2002 Note Purchase Agreement is in effect or (3) any "Event of Default" under the 2003 Note Purchase Agreement shall have occurred as a result of the violation of any subsection of Section 10 of the 2003 Note Purchase Agreement (and irrespective of any waiver thereof under the terms of the 2003 Note Purchase Agreement or any amendment to the 2003 Note Purchase Agreement which amendment is entered into after the occurrence thereof) while the 2003 Note Purchase Agreement is in effect, unless, in either case, such Event of Default has been waived by the Required Holder(s) hereunder pursuant to paragraph 11C hereof;

then (a) if such event is an Event of Default specified in clause (i) or (ii) of this paragraph 7A, the holder of any Note (other than Knott's Berry Farm, the Company or any of its Subsidiaries or Affiliates) may at its option, by notice in writing to the Issuer, declare such Note to be, and such Note shall thereupon be and become, immediately due and payable at par together with interest accrued thereon, without presentment, demand, protest or additional notice of any kind, all of which are hereby waived by the Issuer, (b) if such event is an Event of Default specified in clause (viii), (ix) or (x) of this paragraph 7A with respect to the Issuer, all of the Notes at the time outstanding shall automatically become immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each Note, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Co-Issuers, and (c) with respect to any event constituting an Event of Default hereunder, the Required Holder(s) of the Notes of any Series may at its or their option, by notice in writing to the Issuer, declare all of the Notes of such Series to be, and all of such Notes shall thereupon be and become, immediately due and payable together with interest accrued thereon and together with the Yield-Maintenance Amount, if any, with respect to each such Note, without presentment, demand, protest or additional notice of any kind, all of which are hereby waived by the Co-Issuers.

7B. Notice of Acceleration. Whenever any Note shall be declared immediately due and payable pursuant to paragraph 7A the Issuer shall forthwith give written notice thereof to the holder of each Note of each Series at the time outstanding.

7C. Other Remedies. If any Event of Default or Default shall occur and be continuing, the holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note by exercising such remedies as are available to such holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.

8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Co-Issuers represent, covenant and warrant as follows:

8A(1). Company Organization and Qualification. The Company is a limited partnership duly organized and existing in good standing under the laws of the State of Delaware, has the power to own its properties and to carry on its business as now being conducted and is duly qualified to do business as a foreign limited partnership and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it requires it to be so qualified under applicable law, except where the failure to be so qualified would not have a material adverse effect upon the Company and its Subsidiaries taken as a whole. Each Subsidiary is a corporation duly organized and existing in good standing under the laws of its state of incorporation, has the corporate power to own its properties and to carry on its business as now being conducted and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it requires it to be so qualified under applicable law, except where the failure to be so qualified would not have a material adverse effect upon such Subsidiary. Schedule 8A(1) hereto identifies each Guarantor in existence as of the Restatement Date. The Co-Issuers have the power and authority to enter into, execute, deliver and perform this Agreement and the Notes; this Agreement constitutes the Company's valid and binding obligation; and each Note will upon its issuance constitute the Company's valid and binding obligation. The Partnership Agreement has been duly authorized, executed and delivered by the Partners, is a valid, legal and binding agreement of the Partners, and has been duly filed in all places where such filing is required.

8A(2). Knott's Berry Farm Organization and Qualification. Knott's Berry Farm is a general partnership duly organized and existing in good standing under the laws of California, has the power to own its properties and to carry on its business as now being conducted and is duly qualified to do business as a foreign partnership and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business transacted by it requires it to be so qualified under applicable law, except where the failure to be so qualified would not have a material adverse effect upon the Company and its Subsidiaries taken as a whole. Knott's Berry Farm has the power and authority to enter into, execute, deliver and perform this Agreement and the Notes executed by it; this Agreement constitutes Knott's Berry Farm's valid and binding obligation; and each Note executed by Knott's Berry Farm will upon its issuance constitute Knott's Berry Farm's valid and binding obligation The KBF Partnership Agreement has been duly authorized; executed and delivered by the parties thereto, is a valid legal and binding agreement of such parties, and has been duly filed in all places where such filing is required.

8B. Financial Statements. The Company has furnished each Purchaser of any Accepted Notes with the following financial statements, identified by a principal financial officer of the Company: (i) consolidated balance sheets of the Company and its Subsidiaries as at the last day in each of the five fiscal years of the Company most recently completed prior to the date as of which this representation is made or repeated to such Purchaser (other than fiscal years completed within 120 days prior to such date for which audited financial statements have not been released) and consolidated statements of income, partners' equity and cash flows of the Company and its Subsidiaries for each such year, reported on by independent public accountants of recognized national standing; and (ii) consolidated balance sheets of the Company and its Subsidiaries as at the end of the quarterly period (if any) most recently completed prior to such date and after the end of such fiscal year (other than quarterly periods completed within 60 days prior to such date for which financial statements have not been released) and the comparable quarterly period in the preceding fiscal year and consolidated statements of income, partners' equity and cash flows for (a) such quarterly periods and (b) the period of four consecutive fiscal quarters ended on the last day of such quarterly periods, prepared by the Company. Such financial statements (including any related schedules and/or notes) are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and normal year-end adjustments), have been prepared in accordance with generally accepted accounting principles consistently followed throughout the periods involved and show all liabilities, direct and contingent, of the Company and its Subsidiaries required to be shown in accordance with such principles. The balance sheets fairly present the condition of the Company and its Subsidiaries as at the dates thereof, and the statements of income, partners' equity and cash flows fairly present the results of the operations of the Company and its Subsidiaries for the periods indicated. There has been no material adverse change in the business, condition or operations (financial or otherwise) of the Company and its Subsidiaries taken as a whole since the end of the most recent fiscal year for which such audited financial statements have been furnished.

8C. Actions Pending. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the elected officers of the Co-Issuers or the General Partner, threatened against the Co-Issuers or any of the Company's Subsidiaries, or any properties or rights of the Co-Issuers or any of the Company's Subsidiaries, by or before any court, arbitrator or administrative or governmental body which individually or in aggregate might result in any material adverse change in the business, condition or operations of the Company and its Subsidiaries taken as a whole.

8D. Outstanding Debt. Neither the Co-Issuer nor any of the Company's Subsidiaries has outstanding any Debt except as permitted by paragraph 6A(2). There exists no default under the provisions of any instrument evidencing such Debt or of any agreement relating thereto.

8E. Title to Properties. Each Co-Issuer has and each of the Company's Subsidiaries has good and marketable title to its respective real properties (other than properties which it leases) and good title to all of its other respective properties and assets, including the properties and assets reflected in the most recent audited balance sheet referred to in paragraph 8B (other than properties and assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by paragraph 6A(1). All leases necessary in any material respect for the conduct of the business of the Co-Issuers and the Company's Subsidiaries taken as a whole are valid and subsisting and are in full force and effect.

8F. Taxes. Each Co-Issuer has and each of the Company's Subsidiaries has filed all Federal, State and other income tax returns which, to the best knowledge of the elected officers of the Co-Issuers or the General Partner, are required to be filed, and each has paid all taxes as shown on such returns and on all assessments received by it to the extent that such taxes have become due, except such taxes as are being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles.

8G. Conflicting Agreements and Other Matters. Neither Co-Issuer nor any of the Company's Subsidiaries is a party to any contract or agreement or subject to any partnership agreement, charter or other partnership or corporate restriction which materially and adversely affects the business (as presently conducted), property, assets or financial condition of the Company and its Subsidiaries taken as a whole. Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof and of the Notes will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any Lien upon any of the properties or assets of the Co-Issuers or any of the Company's Subsidiaries pursuant to, the Partnership Agreement, the KBF Partnership Agreement or the charter, by-laws or code of regulations of any Subsidiaries, any award of any arbitrator or any agreement (including any agreement with partners or stockholders), instrument, order, judgment, decree, statute, law, rule or regulation to which either Co-Issuer or any of the Company's Subsidiaries is a party or otherwise subject. Neither Co-Issuer nor any of the Company's Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of either Co-Issuer or any Subsidiary, any agreement relating thereto or any other contract or agreement (including the Partnership Agreement, the KBF Partnership Agreement and, in the case of any Subsidiary, its charter) which limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of either Co-Issuer of the type to be evidenced by the Notes except (i) as of the date of this Agreement, as set forth in the agreements listed in Schedule 8G attached hereto and (ii) as of any date subsequent to the date of this Agreement when this representation is repeated, as set forth in the agreements listed in Schedule 8G or as theretofore disclosed to Prudential in a writing which by its terms modifies Schedule 8G.

8H. Offering of Notes. Neither Co-Issuer nor any agent acting on their behalf has, directly or indirectly, offered the Notes or any similar security of the Issuer for sale to, or solicited any offers to buy the Notes or any similar security of the Issuer from, or otherwise approached or negotiated with respect thereto with, any Person other than institutional investors, and neither the Co-Issuer nor any agent acting on their behalf has taken or will take any action which would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities Act or to the provisions of any securities of Blue Sky law of any applicable jurisdiction.

8I. Use of Proceeds. Neither the Co-Issuer nor any Subsidiary owns or has any present intention of acquiring any "margin stock" as defined in Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve System (herein called "margin stock"). None of the proceeds of the sale of any Notes will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock or for the purpose of maintaining, reducing or retiring any Indebtedness which was originally incurred to purchase or carry any stock that is then a margin stock or for any other purpose which might constitute the sale or purchase of any Notes a "purpose credit" within the meaning of such Regulation U. Neither Co-Issuer is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock. Neither Co-Issuer nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or any Note to violate Regulation T, Regulation U or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Exchange Act, in each case as in effect now or as the same may hereafter be in effect.

8J. ERISA. No accumulated funding deficiency (as defined in section 302 of ERISA and section 412 of the Code), whether or not waived, exists with respect to any Plan (other than a Multiemployer Plan). No liability to the Pension Benefit Guaranty Corporation has been or is expected by either Co-Issuer or any ERISA Affiliate to be incurred with respect to any Plan (other than a Multiemployer Plan) by either Co-Issuer or any Subsidiary or any ERISA Affiliate which is or would be materially adverse to the Company and its Subsidiaries taken as a whole. Neither Co-Issuer, any Subsidiary nor any ERISA Affiliate has incurred or presently expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan which is or would be materially adverse to the Company and its Subsidiaries taken as a whole. The execution and delivery of this Agreement and the issuance and sale of the Notes will not involve any transaction which is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975 of the Code. The representation by the Co-Issuers in the next preceding sentence is made in reliance upon and subject to the accuracy of the representation in paragraph 9B as to the source of the funds to be used to pay the purchase price of the Notes to be purchased.

8K. Governmental Consent. Neither the nature of either Co-Issuer or of any Subsidiary, nor any of their respective businesses or properties, nor any relationship between either Co-Issuer or any Subsidiary and any other Person, nor any circumstance in connection with the offering, issuance, sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than routine filings after the date of closing with the Securities and Exchange Commission and/or state Blue Sky authorities) in connection with the execution and delivery of this Agreement, the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the terms and provisions hereof or of the Notes.

8L. Environmental Compliance. The Co-Issuers and the Company's Subsidiaries are in substantial compliance with any and all Environmental Laws including, without limitation, all Environmental Laws in all jurisdictions in which any of them owns or operates, or has owned or operated, a facility or site, arranges or has arranged for disposal or treatment of hazardous substances, solid waste or other wastes, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise. No material litigation or proceeding arising under, relating to or in connection with any Environmental Law is pending or, to the best knowledge of the Co-Issuers, threatened against either Co-Issuer or any Subsidiary, any real property in which any thereof holds or has held an interest or any past or present operation of any thereof. No release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or has occurred, on, under or to any real property in which either Co-Issuer or any Subsidiary holds any interest or performs any of its operations, in violation of any Environmental Law the violation of which could reasonably be expected to have a material adverse effect on the Company or its Subsidiaries. As used in this paragraph, "litigation or proceeding" means any demand, claim, notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by any governmental authority, private person or entity or otherwise, and "material" means the measure of a matter or matters the exposure with respect to which individually or together with all other matters described exceeds or can reasonably be expected to exceed $2,500,000.

8M. Investment Company Status. Neither Co-Issuer nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended or an "investment adviser" within the meaning of the Investment Advisers Act of 1940, as amended.

8N. Disclosure. Neither this Agreement nor any other document, certificate or statement furnished to any Purchaser by or on behalf of the Co-Issuers in connection herewith contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. There is no fact peculiar to the Co-Issuers or any of the Company's Subsidiaries which materially adversely affects or in the future may (so far as the Co-Issuers can now foresee) materially adversely affect the business, property, assets or financial condition of the Company and its Subsidiaries taken as a whole and which has not been set forth in this Agreement or in the other documents, certificates and statements furnished to any Purchaser by or on behalf of the Company prior to the date hereof in connection with the transactions contemplated hereby.

8O. Hostile Tender Offers. None of the proceeds of the sale of any Notes will be used to finance a Hostile Tender Offer.

9. REPRESENTATIONS OF THE PURCHASERS.

Each Purchaser represents as follows:

9A. Nature of Purchase. Such Purchaser is not acquiring the Notes purchased by it hereunder with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act, provided that the disposition of such Purchaser's property shall at all times be and remain within its control.

9B. Source of Funds. At least one of the following statements is an accurate representation as to each source of funds (a "Source") to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(i) the Source is an "insurance company general account" (as the term is defined in the United States Department of Labor's Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the "NAIC Annual Statement")) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser's state of domicile; or

(ii) the Source is a separate account that is maintained solely in connection with such Purchaser's fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(iii) the Source is either (a) an insurance company pooled separate account, within the meaning of PTE 90-1, or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (iii), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(iv) the Source constitutes assets of an "investment fund" (within the meaning of Part V of PTE 84-14 (the "QPAM Exemption")) managed by a "qualified professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and (a) the identity of such QPAM and (b) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this clause (iv); or

(v) the Source constitutes assets of a "plan(s)" (within the meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an "in-house asset manager" or "INHAM" (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more interest in the Company and (a) the identity of such INHAM and (b) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (v); or

(vi) the Source is a governmental plan; or

(vii) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (vii); or

(viii) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this paragraph 9B, the terms "employee benefit plan", "governmental plan", and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA.

10. DEFINITIONS. For the purpose of this Agreement, the terms defined in the text of any paragraph shall have the respective meanings specified therein, and the following terms shall have the meanings specified with respect thereto below:

10A. Yield-Maintenance Terms.

"Called Principal" shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to paragraph 4B (any partial prepayment being applied in satisfaction of required payments of principal in inverse order of their scheduled due dates) or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires.

"Discounted Value" shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (as converted to reflect the periodic basis on which interest on such Note is payable, if interest is payable other than on a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.

"Reinvestment Yield" shall mean, with respect to the Called Principal of any Note, .50% plus the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City local time) on the Business Day next preceding the Settlement Date with respect to such Called Principal for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date on the display designated as "Page PX1" on the Bloomberg Financial Services Screen (or such other display as may replace Page PX1 on the Bloomberg Financial Services Screen or, if Bloomberg Financial Services shall cease to report such yields or shall cease to be Prudential Capital Group's customary source of information for calculating yield-maintenance amounts on privately placed notes, then such source as is then Prudential Capital Group's customary source of such information), or if such yields shall not be reported as of such time or the yields reported as of such time shall not be ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for the latest day for which such yields shall have been so reported as of the Business Day next preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between yields reported for various maturities. The Reinvestment Yield shall be rounded to that number of decimal places as appears in the coupon of the applicable Note.

"Remaining Average Life" shall mean, with respect to the Called Principal of any Note, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled Payment of such Called Principal (but not of interest thereon) by (b) the number of years (calculated to the nearest one-twelfth year) which will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

"Remaining Scheduled Payments" shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due on or after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date.

"Settlement Date" shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to paragraph 4B or is declared to be immediately due and payable pursuant to paragraph 7A, as the context requires.

"Yield-Maintenance Amount" shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i) such Called Principal plus (ii) interest accrued thereon as of (including interest due on) the Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no event be less than zero.

10B. Other Terms.

"Acceptance" shall have the meaning specified in paragraph 2B(5).

"Acceptance Day" shall have the meaning specified in paragraph 2B(5).

"Acceptance Window" shall mean, with respect to any interest rate quotes provided by Prudential pursuant to paragraph 2B(4), the time period after the time Prudential shall have provided such interest rate quotes to the Issuer designated by Prudential as the time period during which the Issuer may elect to accept such interest rate quotes. If no such time period is designated by Prudential with respect to any such interest rate quotes, then the Acceptance Window for such interest rate quotes will be 10 minutes after the time Prudential shall have provided such interest rate quotes to the Issuer.

"Accepted Note" shall have the meaning specified in paragraph 2B(5).

"Affiliate" shall mean (i) with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such first Person, and (ii) with respect to Prudential, shall include any managed account, investment fund or other vehicle for which Prudential Financial, Inc. or any Affiliate of Prudential Financial, Inc. acts as investment advisor or portfolio manager. A Person shall be deemed to control a corporation or other entity if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or other entity, whether through the ownership of voting securities, by contract or otherwise.

"Authorized Officer" shall mean (i) in the case of the Co-Issuers, the chief executive officer, the chief financial officer and the treasurer of the Co-Issuers or the General Partner, as well as any vice president thereof designated as an "Authorized Officer" in the Information Schedule attached hereto or any vice president thereof designated as an "Authorized Officer" for the purpose of this Agreement in an Officer's Certificate executed by the Co-Issuers' or General Partner's chief executive officer or chief financial officer and delivered to Prudential, and (ii) in the case of Prudential, any officer of Prudential designated as its "Authorized Officer" in the Information Schedule or any officer of Prudential designated as its "Authorized Officer" for the purpose of this Agreement in a certificate executed by one of its Authorized Officers. Any action taken under this Agreement on behalf of either Co-Issuer by any individual who on or after the date of this Agreement shall have been an Authorized Officer of such Co-Issuer or the General Partner and whom Prudential in good faith believes to be an Authorized Officer of such Co-Issuer or the General Partner at the time of such action shall be binding on the Company even though such individual shall have ceased to be an Authorized Officer of such Co-Issuer or the General Partner, and any action taken under this Agreement on behalf of Prudential by any individual who on or after the date of this Agreement shall have been an Authorized Officer of Prudential, and whom the Co-Issuers in good faith believe to be an Authorized Officer of Prudential at the time of such action shall be binding on Prudential even though such individual shall have ceased to be an Authorized Officer of Prudential.

"Available Facility Amount" shall have the meaning specified in paragraph 2B(1).

"Bankruptcy Law" shall have the meaning specified in clause (viii) of paragraph 7A.

"Business Day" shall mean any day other than (i) a Saturday or a Sunday, (ii) a day on which commercial banks in New York City are required or authorized to be closed and (iii) for purposes of paragraph 2B(3) hereof only, a day on which Prudential is not open for business.

"Cancellation Date" shall have the meaning specified in paragraph 2B(8)(iv).

"Cancellation Fee" shall have the meaning specified in paragraph 2B(8)(iv).

"Capitalized Lease" shall mean any lease if the obligation to make rental payments thereunder constitutes a Capitalized Lease Obligation.

"Capitalized Lease Obligation" shall mean any rental obligation which, under generally accepted accounting principles, is or will be required to be capitalized on the books of the Company or any Subsidiary, taken at the amount thereof accounted for as indebtedness (net of interest expense) in accordance with such principles.

"Closing Day" for any Accepted Note shall mean the Business Day specified for the closing of the purchase and sale of such Note in the Request for Purchase of such Note, provided that (i) if the Company and the Purchaser which is obligated to purchase such Note agree on an earlier Business Day for such closing, the "Closing Day" for such Accepted Note shall be such earlier Business Day, and (ii) if the closing of the purchase and sale of such Accepted Note is rescheduled pursuant to paragraph 2B(7), the Closing Day for such Accepted Note, for all purposes of this Agreement except paragraph 2B(8)(iii), shall mean the Rescheduled Closing Day with respect to such Closing.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Confirmation of Acceptance" shall have the meaning specified in paragraph 2B(5).

"Consolidated Debt" shall mean, as of any time of determination thereof, the sum of (i) Debt of the Company and Subsidiaries determined on a consolidated basis and (ii) to the extent in excess of $5,000,000, Debt of the Company owed to Subsidiaries.

"Consolidated EBITDA" shall mean "Consolidated EBITDA" as defined in the Credit Agreement as in effect on the date hereof and with such modifications to such definition as the Required Holder(s) may consent to in writing. No modification or termination of the Credit Agreement shall affect the continued applicability of the foregoing reference thereto.

"Consolidated Net Assets" shall mean, as of any time of determination thereof, with respect to the Company and Subsidiaries on a consolidated basis, their assets less, without duplication, all of their (i) current liabilities, (ii) asset, liability, contingency and other appropriate reserves, including reserves for depreciation and amortization expense and for deferred income taxes and (iii) other liabilities.

"Consolidated Owners' Equity" shall mean, as of any time of determination thereof, the aggregate amount of partners' equity (or similar equity interests) of the Company and its Subsidiaries determined on a consolidated basis.

"Consolidated Pre-Tax Income" shall mean, for any period, the consolidated gross revenues of the Company and its Subsidiaries less all operating and non-operating expenses of the Company and its Subsidiaries including current additions to reserves and all other charges of a proper character except current and deferred taxes on income, but not including in gross revenues any gains (nor in expenses any expenses or taxes applicable thereto) in excess of losses resulting from the sale, conversion or other disposition of capital assets (i.e., assets other than current assets), any gains resulting from the write-up of assets, any equity of the Company or any Subsidiary in the unremitted earnings of any corporation which is not a Subsidiary, any earnings of any Person acquired by the Company or any Subsidiary through purchase, merger or consolidation or otherwise for any year prior to the year of acquisition, or any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of the investment in such Subsidiary.

"Credit Agreement" shall mean the Credit Agreement among Cedar Fair, L.P., Cedar Fair, Magnum Management Corporation, and Knott's Berry Farm, as borrowers, the financial institutions named therein as Banks, and Keybank National Association, as lead arranger and Administrative Agent, dated as of December 22, 2003, as amended from time to time.

"Current Debt" shall mean, with respect to any Person, all Indebtedness of such Person for borrowed money which by its terms or by the terms of any instrument or agreement relating thereto matures on demand or within one year from the date of the creation thereof and is not directly or indirectly renewable or extendible at the option of the debtor to a date more than one year from the date of the creation thereof, provided that Indebtedness for borrowed money outstanding under a revolving credit or similar agreement which obligates the lender or lenders to extend credit over a period of more than one year shall constitute Funded Debt and not Current Debt, even though such Indebtedness by its terms matures on demand or within one year from the date of the creation thereof.

"Debt" shall mean Funded Debt and Current Debt.

"Delayed Delivery Fee" shall have the meaning specified in paragraph 2B(8)(iii).

"Environmental Laws" shall mean all federal, state, local and foreign laws relating to pollution or protection of the environment, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including 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, chemicals, or industrial, toxic or hazardous substances or wastes, and any and all rules, regulations, codes, plans, orders, decrees, judgments, injunctions, notices or demand letters issued, entered, promulgated or approved thereunder.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

"ERISA Affiliate" shall mean any corporation which is a member of the same controlled group of corporations as either Co-Issuer within the meaning of section 414(b) of the Code, or any trade or business which is under common control with either Co-issuer within the meaning of section 414(c) of the Code.

"Event of Default" shall mean any of the events specified in paragraph 7A, provided that there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further condition, event or act, and "Default" shall mean any of such events, whether or not any such requirement has been satisfied.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Existing Holders" shall have the meaning given in the address block to this Agreement.

"Facility" shall have the meanings specified in paragraph 2B(1).

"Funded Debt" shall mean with respect to any Person, all Indebtedness of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, more than one year from, or is directly or indirectly renewable or extendible at the option of the debtor to a date more than one year (including an option of the debtor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year) from, the date of the creation thereof.

"General Partner" and "General Partners" shall mean the general partner of the Company, and any Person substituted for or who succeeds either of them as a general partner pursuant to the terms of the Partnership Agreement, in each case in such capacity.

"Gross Worth" shall mean, as of any time of determination thereof, the sum of Consolidated Owners' Equity and Consolidated Debt.

"Guarantee" shall mean, with respect to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including, without limitation, any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation, or to make payment for any products, materials or supplies or for any transportation or service, regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof. The amount of any Guarantee shall be equal to the outstanding principal amount of the obligation guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited.

"Guarantors" shall mean each Subsidiary which is obligated, directly or indirectly (including as "Co-Borrower," "Obligor" or "Subsidiary Guarantor") under the Credit Agreement, the 2002 Note Purchase Agreement or the 2003 Note Purchase Agreement and each other Person which may from time to time execute a Guaranty Agreement.

"Guaranty Agreements" shall mean each Guaranty of Payment of Debt, each dated February 7, 2002, executed by Michigan's Adventure, Inc., Magnum Management Corporation and Cedar Fair, an Ohio general partnership, and any other guaranty pursuant to which the Notes are guarantied, as the same may be amended, modified or supplemented from time to time.

"Hedge Treasury Note(s)" shall mean, with respect to any Accepted Note, the United States Treasury Note or Notes whose duration (as determined by Prudential) most closely matches the duration of such Accepted Note.

"Hostile Tender Offer" shall mean, with respect to the use of proceeds of any Note, any offer to purchase, or any purchase of, shares of capital stock of any corporation or equity interests in any other entity, or securities convertible into or representing the beneficial ownership of, or rights to acquire, any such shares or equity interests, if such shares, equity interests, securities or rights are of a class which is publicly traded on any securities exchange or in any over-the-counter market, other than purchases of such shares, equity interests, securities or rights representing less than 5% of the equity interests or beneficial ownership of such corporation or other entity for portfolio investment purposes, and such offer or purchase has not been duly approved by the board of directors of such corporation or the equivalent governing body of such other entity prior to the date on which the Issuer makes the Request for Purchase of such Note.

"Indebtedness" shall mean, with respect to any Person, without duplication, (i) all items (excluding deferred compensation, items of contingency reserves and reserves for deferred income taxes) which in accordance with generally accepted accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet of such Person as of the date on which Indebtedness is to be determined, (ii) all indebtedness secured by any Lien on any property or asset owned or held by such Person subject thereto, whether or not the indebtedness secured thereby shall have been assumed, and (iii) all indebtedness of others with respect to which such Person has become liable by way of Guarantee.

"Intercreditor Agreement" shall mean the Second Amended and Restated Intercreditor Agreement, dated as of December 22, 2003, among the agent and banks parties to the Credit Agreement, the purchasers under the 2002 Note Purchase Agreement, the purchasers under the 2003 Note Purchase Agreement and the holders of the Notes, as amended from time to time..

"Interest Coverage Ratio" shall mean "Interest Coverage Ratio" as defined in the Credit Agreement as in effect on the date hereof and with such modifications to such definition as the Required Holder(s) may consent to in writing. No modification or termination of the Credit Agreement shall affect the continued applicability of the foregoing reference thereto.

"Issuance Period" shall have the meaning specified in paragraph 2B(2).

"Issuer" shall mean the Co-Issuers or the Company, as the case may be or the context requires.

"KBF Partnership Agreement" shall mean the partnership agreement of Knott's Berry Farm.

"Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction) or any other type of preferential arrangement for the purpose, or having the effect, of protecting a creditor against loss or securing the payment or performance of an obligation.

"Limited Partner" shall mean any Person who is or shall become a limited partner of the Company, in such capacity.

"Multiemployer Plan" shall mean any Plan which is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).

"Note" and "Notes" shall have the meaning specified in paragraph 1.

"Obligors" shall mean each of the Co-Issuers, Cedar Fair, an Ohio general partnership, and Magnum Management Corporation, an Ohio corporation.

"Officer's Certificate" shall mean a certificate signed in the name of the Company by an Authorized Officer of the Company.

"Partner" shall mean any General Partner or any Limited Partner.

"Partnership Agreement" shall mean the Fourth Amended and Restated Agreement of Limited Partnership of the Company, dated as of March 5, 2004, among Cedar Fair Management Company, as General Partner, and the limited partners named therein, as the same has been and may be amended or supplemented from time to time.

"Person" shall mean and include an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

"Plan" shall mean any "employee pension benefit plan" (as such term is defined in section 3 of ERISA) which is or has been established or maintained, or to which contributions are or have been made, by the Company or by any trade or business, whether or not incorporated which, together with the Company, is under common control, as described in section 414(b) or (c) of the Code.

"Priority Debt" shall mean, as of any time of determination thereof, (i) Debt of any Subsidiary, excluding however (a) Debt owed to the Company or another Subsidiary and (b) Indebtedness which is subject to the terms of the Intercreditor Agreement and (ii) Debt of the Company secured by any Lien.

"Prudential" shall have the meaning given in the address block of this Agreement.

"Prudential Affiliate" shall mean any Affiliate of Prudential.

"Purchaser(s)" shall mean each Existing Holder and each Prudential Affiliate as purchaser of any Note.

"Related Person" shall mean (i) any General Partner, (ii) any Person owning 10% or more of the depository units representing limited partnership interests in the Company or (iii) any Affiliate of any Person described in clause (i) or (ii).

"Request for Purchase" shall have the meaning specified in paragraph 2B(3).

"Required Holder(s)" shall mean the holder or holders of at least 51% of the aggregate principal amount of the Notes or of a Series of Notes, as the context may require, from time to time outstanding.

"Rescheduled Closing Day" shall have the meaning specified in paragraph 2B(7).

"Responsible Officer" shall mean the chief executive officer, chief operating officer, treasurer, chief financial officer or chief accounting officer of the Company, general counsel of the Company or any other officer of the Company involved principally in its financial administration or its controllership function.

"Restatement Date" shall have the meaning given in paragraph 3A.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Series" shall have the meaning specified in paragraph 1.

"Series B Notes" shall have the meaning given in the Introduction.

"Series C Notes" shall have the meaning given in the Introduction.

"Significant Holder" shall mean (i) Prudential, (ii) each Purchaser, so long as such Purchaser or any of its Affiliates shall hold (or be committed under this Agreement to purchase) any Note, or (iii) any other Person which, together with its Affiliates, is the holder of at least 5% of the aggregate principal amount of the Notes of any Series from time to time outstanding.

"Significant Subsidiary" shall mean any Subsidiary of the Company or any of its Subsidiaries, (i) having assets which shall have contributed 10% or more of Consolidated Pre-Tax Income for any of the three fiscal years then most recently ended, (ii) having assets whose aggregate fair value (as determined in good faith by the board of directors of the General Partner, as the case may be) shall exceed 10% of the Consolidated Net Assets or (iii) the sale of which shall have a material adverse effect on the Company.

"Subsidiary" shall mean any corporation or partnership the majority of the stock of every class of which, except directors' qualifying shares, or the majority of equity interest in which shall, at the time as of which any determination is being made, be owned by the Company either directly or through Subsidiaries and "75%-owned Subsidiary" shall mean any corporation or partnership 75% of the stock of every class of which, except directors' qualifying shares, or 75% of the equity interest in which shall, at the time as of which any determination is being made, be owned by the Company either directly or through a 75%-owned Subsidiary.

"Testing Period" shall mean for any determination a single period consisting of the four consecutive fiscal quarters of the Company then last ended (whether or not such quarters are all within the same fiscal year).

"Transferee" shall mean any direct or indirect transferee of all or any part of any Note purchased under this Agreement.

"Treasury Manager" shall mean Magnum Management Corporation, a Ohio corporation.

"2003 Note Purchase Agreement" shall mean the Note Purchase Agreement, dated as of December 22, 2003, among Cedar Fair, L.P., Cedar Fair, Magnum Management Corporation and Knott's Berry Farm, on the one hand, and the purchasers listed on Schedule A thereto, on the other hand, as amended from time to time.

"2002 Note Purchase Agreement" shall mean the Note Purchase Agreement, dated as of February 8, 2002, among Cedar Fair, L.P., Cedar Fair, Magnum Management Corporation and Knott's Berry Farm, on one hand, and the purchasers listed on Schedule A thereto, on the other hand, as amended from time to time.

"Voting Stock" shall mean, with respect to any corporation, any shares of stock of such corporation whose holders are entitled under ordinary circumstances to vote for the election of directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

10C. Accounting Principles, Terms and Determinations. All references in this Agreement to "generally accepted accounting principles" shall be deemed to refer to generally accepted accounting principles in effect in the United States at the time of application thereof. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished hereunder shall be prepared, in accordance with generally accepted accounting principles applied, in the case of any such unaudited financial statements, certificates and reports, on a basis consistent with the most recent audited consolidated financial statements of the Company and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such statements have been so delivered, the most recent audited financial statements referred to in clause (i) of paragraph 8B.

11. MISCELLANEOUS.

11A. Note Payments. The Issuer of each Note agrees that, so long as any Purchaser shall hold any Note, it will make payments of principal thereof and Yield-Maintenance Amount, if any, and interest thereon, which comply with the terms of this Agreement, by wire transfer of immediately available funds for credit to (i) the account or accounts of Prudential specified in the Purchaser Schedule attached hereto in the case of any Series B Note or Series C Note, (ii) the account or accounts as specified in the purchaser schedule attached to the applicable Confirmation of Acceptance or (iii) such other account or accounts in the United States as any Purchaser may designate in writing, notwithstanding any contrary provision herein or in any Note with respect to the place of payment. Each Purchaser agrees that, before disposing of any Note, it will make a notation thereon (or on a schedule attached thereto) of all principal payments previously made thereon and of the date to which interest thereon has been paid. The Co-Issuers agree to afford the benefits of this paragraph 11A to any Transferee which shall have made the same agreement as you have made in this paragraph 11A.

11B. Expenses. The Co-Issuers jointly and severally agree, whether or not the transactions contemplated hereby shall be consummated, to pay, and save each Purchaser and any Transferee harmless against liability for the payment of, all out-of-pocket expenses arising in connection with such transactions, including (i) all document production and duplication charges and the fees and expenses of any special counsel engaged by the Purchasers or any Transferee in connection with this Agreement, the transactions contemplated hereby and any subsequent proposed modification of, or proposed consent under, this Agreement, whether or not such proposed modification shall be effected or proposed consent granted, and (ii) the costs and expenses, including attorneys' fees, incurred by each Purchaser or any Transferee in enforcing (or in determining whether or in what manner to enforce) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process issued in connection with this Agreement or the transactions contemplated hereby or by reason of any Purchaser's or any Transferee's having acquired any Note, including without limitation costs and expenses incurred in any bankruptcy case. The obligations of the Co-Issuers under this paragraph 11B shall survive the transfer of any Note or portion thereof or interest therein by any Purchaser or any Transferee and the payment of any Note.

11C. Consent to Amendments. This Agreement may be amended, and the Co-Issuers and the Company's Subsidiaries may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if the Co-Issuers shall obtain the written consent to such amendment, action or omission to act, of the Required Holder(s) of the Notes of each Series except that, (i) with the written consent of the holders of all Notes of a particular Series, and if an Event of Default shall have occurred and be continuing, of the holders of all Notes of all Series, at the time outstanding (and not without such written consents), the Notes of such Series may be amended or the provisions thereof waived to change the maturity thereof, to change or affect the principal thereof, or to change or affect the rate or time of payment of interest or Yield-Maintenance Amount payable with respect to the Notes of such Series, (ii) without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to or waiver of the provisions of this Agreement shall change or affect the provisions of paragraph 7A or this paragraph 11C insofar as such provisions relate to proportions of the principal amount of the Notes of any Series, or the rights of any individual holder of Notes, required with respect to any declaration of Notes to be due and payable or with respect to any consent, (iii) with the written consent of Prudential (and not without the written consent of Prudential) the provisions of paragraph 2 may be amended or waived (except insofar as any such amendment or waiver would affect any rights or obligations with respect to the purchase and sale of Notes which shall have become Accepted Notes prior to such amendment or waiver) and (iv) with the written consent of all of the Purchasers which shall have become obligated to purchase Accepted Notes of any Series (and not without the written consent of all such Purchasers), any of the provisions of paragraphs 2 and 3 may be amended or waived insofar as such amendment or waiver would affect only rights or obligations with respect to the purchase and sale of the Accepted Notes of such Series or the terms and provisions of such Accepted Notes. Each holder of any Note at the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11C, whether or not such Note shall have been marked to indicate such consent, but any Notes issued thereafter may bear a notation referring to any such consent. No course of dealing between the Co-Issuers and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein and in the Notes, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The Notes are issuable as registered notes without coupons in denominations of at least $1,000,000, except as may be necessary to reflect any principal amount not evenly divisible by $1,000,000. The Treasury Manager shall keep at its principal office a register in which the Treasury Manager shall provide for the registration of Notes and of transfers of Notes. Upon surrender for registration of transfer of any Note at the principal office of the Treasury Manager, the Issuer shall, at its expense, execute and deliver one or more new Notes of like tenor and of a like aggregate principal amount, registered in the name of such transferee or transferees, and substantially in the form of Exhibit A-1 hereto, in the case of Series B Notes, Exhibit A-2 hereto, in the case of Series C Notes, or Exhibit A-3 hereto, in the case of Shelf Notes. At the option of the holder of any Note, such Note may be exchanged for other Notes of like tenor and of any authorized denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the Treasury Manager. Whenever any Notes are so surrendered for exchange, the Issuer shall, at its expense, execute and deliver the Notes which the holder making the exchange is entitled to receive. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer duly executed, by the holder of such Note or such holder's attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon transfer thereof shall carry the rights to unpaid interest and interest to accrue which were carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall result from any such transfer or exchange. Upon receipt of written notice from the holder of any Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss, theft or destruction, upon receipt of such holder's unsecured indemnity agreement, or in the case of any such mutilation upon surrender and cancellation of such Note, the Issuer will make and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.

11E. Persons Deemed Owners; Participations. Prior to due presentment for registration of transfer, the Issuer may treat the Person in whose name any Note is registered as the owner and holder of such Note for the purpose of receiving payment of principal of and Yield-Maintenance Amount, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note shall be overdue, and the Issuer shall not be affected by notice to the contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant participations in all or any part of such Note to any Person on such terms and conditions as may be determined by such holder in its sole and absolute discretion.

11F. Survival of Representations and Warranties; Entire Agreement. All representations and warranties contained herein or made in writing by or on behalf of the Co-Issuers in connection herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf of any Purchaser or any Transferee. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

11G. Successors and Assigns. All covenants and other agreements in this Agreement contained by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including, without limitation, any Transferee) whether so expressed or not.

11H. Notices. All written communications provided for hereunder (other than communications provided for under paragraph 2) shall be sent by first class mail or nationwide overnight delivery service (with charges prepaid) and (i) if to any Purchaser, addressed as specified for such communications in the purchaser schedule attached to the applicable Confirmation of Acceptance, or at such other address as any Purchaser shall have specified to the Co-Issuers in writing, (ii) if to any other holder of any Note, addressed to such other holder at such address as such other holder shall have specified to the Co-Issuers in writing or, if any such other holder shall not have so specified an address to the Co-Issuers, then addressed to such other holder in care of the last holder of such Note which shall have so specified an address to the Company, and (iii) if to either Co-Issuer, addressed to it c/o Treasury Manager at One Cedar Point Drive, Sandusky, Ohio 44870, Attention: Treasurer, or at such other address as such Co-Issuer shall have specified to the holder of each Note in writing. Any communication pursuant to paragraph 2 shall be made by the method specified for such communication in paragraph 2, and shall be effective to create any rights or obligations under this Agreement only if, in the case of a telephone communication, an Authorized Officer of the party conveying the information and of the party receiving the information are parties to the telephone call, and in the case of a telecopier communication, the communication is signed by an Authorized Officer of the party conveying the information, addressed to the attention of an Authorized Officer of the party receiving the information, and in fact received at the telecopier terminal the number of which is set forth on the Information Schedule attached hereto or at such other telecopier terminal as the party receiving the information shall have specified in writing to the party sending such information.

11I. Descriptive Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

11J. Satisfaction Requirement. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to any Purchaser, to any holder of Notes or to the Required Holder(s), the determination of such satisfaction shall be made by such Purchaser, such holder or the Required Holder(s), as the case may be, in the sole and exclusive judgment (exercised in good faith) of the Person or Persons making such determination.

11K. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day. If the date for any payment is extended to the next succeeding Business Day by reason of the preceding sentence, the period of such extension shall be included in the computation of the interest payable on such Business Day.

11L. Limited Liability of Partners. Anything in this Agreement or the Notes to the contrary notwithstanding, no recourse under or in respect of this Agreement or the Notes shall be had against any Partner, shareholder of a Partner or partner of a Partner by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of statute or otherwise, whether based on agency, deputization or otherwise, it being expressly agreed that no personal liability whatsoever shall attach to or be incurred by the Partners, shareholders of Partners or partners of Partners or any of them under or by reason of this Agreement or the Notes; provided that the foregoing limitation of liability shall in no way constitute a limitation on the right of the holders of the Notes to enforce their remedies against the Company's assets for the collection of amounts due and owing under the Notes or any other obligation of the Company contemplated by this Agreement. Each of the Notes shall contain a statement to the effect that the obligations of the Partners are limited as provided in this paragraph 11L.

11M. Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is prohibited by any one of such covenants, the fact that it would be permitted by an exception to, or otherwise be in compliance within the limitations of, another covenant shall not avoid the occurrence of a Default or Event of Default if such action is taken or such condition exists.

11N. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11O. Governing Law, Jurisdiction; Consent to Service of Process. (1) This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal law of the State of Illinois; (2) Each of the parties hereto hereby irrevocably and unconditionally submits to the nonexclusive jurisdiction of any Illinois State court or Federal court of the United States of America sitting in the Northern District of Illinois, and any appellate court of any of the foregoing, in any action or proceeding arising out of or relating to this Agreement or the Notes or for recognition or enforcement of any judgment entered in any such action or proceeding, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Illinois State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agree that any summons, complaint or other process with respect to any proceeding initiated in any such court may be made by any means permitted by Illinois law or federal law. Each of the parties hereto agrees that a final judgment in any such action or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto otherwise may have to bring any action or proceeding relating to this Agreement or the Notes against any other party hereto in the courts of any jurisdiction; (3) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the Notes in any Illinois State or Federal court of the United States of America sitting in the Northern District of Illinois. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court; (4) Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any manner permitted by law.

11P. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

11Q. Binding Agreement. When this Agreement is executed and delivered by the Co-Issuers, Prudential and the Existing Holders, it shall become a binding agreement between the Co-Issuers, on one hand, and Prudential and the Existing Holders, on the other hand. This Agreement shall also inure to the benefit of each other Purchaser which shall have executed and delivered a Confirmation of Acceptance, and each such other Purchaser shall be bound by this Agreement to the extent provided in such Confirmation of Acceptance.

12. JOINT AND SEVERAL OBLIGATIONS.

12.1. Nature of Obligations. The obligations of the Co-Issuers under this Agreement, the Series B Notes, the Series C Notes, any other Notes executed by the Co-Issuers hereunder are joint and several primary obligations of each Co-Issuer regardless of which Co-Issuer actually receives the proceeds of any Notes or the manner in which Prudential, any Purchaser or Transferee accounts for such Notes on its books and records.

12.2. Failure of any Co-Issuer to Perform. In the event either Co-Issuer fails to make full and punctual payment of any obligation due hereunder, the other Co-Issuer shall forthwith on demand by the Required Holder(s) pay the entire amount not so paid at the place and in the currency and otherwise in the manner specified in this Agreement or any other applicable agreement or instrument delivered in connection herewith.

12.3. Additional Undertaking. As a separate, additional and continuing obligation, each Co-Issuer unconditionally and irrevocably undertakes and agrees for the benefit of the holders from time to time of the Notes that, should any amounts not be recoverable from the other Co-Issuer under paragraph 12.2 for any reason whatsoever (including, without limitation, by reason of any provision of this Agreement, any Note or other agreement delivered in connection herewith being or becoming void, unenforceable, or otherwise invalid under any applicable law) then, notwithstanding any notice or knowledge thereof by any holder of any Note or any other Person, at any time, such Co-Issuer as sole, original and independent obligor, upon demand by the Required Holder(s), will make payment to the applicable holders of the Notes, of all such obligations not so recoverable by way of full indemnity, in such currency and otherwise in such manner as is provided in this Agreement or any other applicable agreement or instrument delivered in connection herewith.

12.4. Joint and Several Obligations Unconditional, etc. The obligations of each Co-Issuer under this Agreement shall be unconditional and absolute and, without limiting the generality of the foregoing shall not be released, discharged or otherwise affected by the occurrence, one or more times, of any of the following:

(i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Co-Issuers under any agreement or instrument, by operation of law or otherwise;

(ii) any modification, restatement or amendment of or supplement to this Agreement, any Note, or any other agreement or instrument evidencing or relating to any obligation of the Co-Issuers;

(iii) any release, non-perfection or invalidity of any direct or indirect security for any obligation of the Co-Issuers under any agreement or instrument evidencing or relating to any such obligation;

(iv) any change in the corporate existence, structure or ownership of any Co-Issuer or Subsidiary of the Company or any insolvency, bankruptcy, reorganization or other similar proceeding affecting either Co-Issuer or Subsidiary of the Company or its assets or any resulting release or discharge of any obligation contained in any agreement or instrument evidencing or relating to any obligation of the Co-Issuers;

(v) the existence of any claim, set-off or other rights which either Co-Issuer may have at any time against the other Co-Issuer, any holder of any Note, or any other Person, whether in connection herewith or any unrelated transactions;

(vi) any invalidity or unenforceability relating to or against either Co-Issuer for any reason of any agreement or instrument evidencing or relating to any obligation of the Co-Issuers, or any provision of applicable law or regulation purporting to prohibit the payment by either Co-Issuer of any obligation of the Co-Issuers; or

(vii) any other act or omission to act, or delay of any kind by either Co-Issuer, any holder of any Note or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of such Co-Issuer's obligations under this paragraph or the other provisions of this Agreement and the documents delivered in connection herewith.

12.5. Co-Issuer's Obligations to Remain in Effect; Restoration. Each Co-Issuer's obligations under this paragraph and the other provisions of this Agreement and the documents delivered in connection herewith shall remain in full force and effect until the principal of and interest on the Notes and other obligations hereunder (including, without limitation, the Yield-Maintenance Amount, if any), and all other amounts payable by the Co-Issuers, under this Agreement or any other agreement or instrument evidencing or relating to any of the obligations of the Co-Issuers, shall have been paid in full. If at any time any payment of any of the obligations of Co-Issuer in respect of any obligations hereunder is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of a Co-Issuer, the Co-Issuers' obligations under this paragraph and the other provisions of this Agreement and the documents delivered in connection herewith with respect to such payment shall be reinstated at such time as though such payment had been due but not made at such time.

12.6. Waiver of Acceptance, etc. Each Co-Issuer irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that any time any action be taken by any Person against the other Co-Issuer or any other Person, or against any collateral or guaranty of any other Person.

12.7. Subrogation. Until the indefeasible payment in full of all of the Co-Issuer's obligations to the holders of the Notes, no Co-Issuer shall have any rights, by operation of law or otherwise, upon making any payment under this paragraph 12 or the other provisions of this Agreement or the documents delivered in connection herewith to be subrogated to the rights of the payee against the other Co-Issuer with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the other Co-Issuer in respect thereof.

12.8. Effect of Stay. In the event that acceleration of the time for payment of any amount payable by either Co-Issuer with respect to any of the Co-Issuers' obligations is stayed upon insolvency, bankruptcy or reorganization of the other Co-Issuer, all such amounts otherwise subject to acceleration under the terms of any applicable agreement or instrument evidencing or relating to any such obligation shall nonetheless be payable by the other Co-Issuer under this paragraph 12 and the other provisions of this Agreement and the documents delivered in connection herewith forthwith on demand by the Required Holder(s).

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

Very truly yours,

CEDAR FAIR, L.P.,
as a Co-Issuer

By: CEDAR FAIR MANAGEMENT COMPANY,

General Partner

 

 

By:

Bruce A. Jackson

Vice President & Chief Financial Officer

KNOTT'S BERRY FARM,

as a Co-Issuer

By: Magnum Management Corporation

one of its general partners

 

 

By:

Bruce A. Jackson

Vice President & Chief Financial Officer

The foregoing Agreement is hereby accepted

as of the date first above written.

PRUDENTIAL INVESTMENT
MANAGEMENT COMPANY

 

 

By:

Vice President

 

 

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

 

 

By:

Title: Vice President

HARTFORD LIFE INSURANCE COMPANY
By: Prudential Private Placement Investors,
L.P., (as Investment Advisor)
By: Prudential Private Placement
Investors, Inc. (as its General Partner)



By:
Vice President

MEDICA HEALTH PLAN
By: Prudential Private Placement Investors,
L.P. (as Investment Advisor)
By: Prudential Private Placement
Investors, Inc. (as its General Partner)



By:
Vice President

683:

 

CH2\ 1099953.7

EXHIBIT 10.1

 

====================================================================

 

CEDAR FAIR, L.P.

CEDAR FAIR,

MAGNUM MANAGEMENT CORPORATION,

and

KNOTT'S BERRY FARM,

as Borrowers,

and

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as Banks,

and

KEYBANK NATIONAL ASSOCIATION,

====================================================================