1
EXHIBIT 10.4
Execution copy
STOCK PURCHASE AND INDEMNIFICATION AGREEMENT
AMONG
BOOTH CREEK SKI HOLDINGS, INC.,
FIBREBOARD CORPORATION,
TRIMONT LAND COMPANY, SIERRA-AT-TAHOE, INC. AND
BEAR MOUNTAIN, INC.
DATED AS OF NOVEMBER 26, 1996
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TABLE OF CONTENTS
Page(s)
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Section 1 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2 BASIC TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Purchase and Sale of Acquired Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Purchase Price Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Deliveries and Actions Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Deliveries and Instructions at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.6 Personal Property Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.7 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.9 Assets Used in the Conduct of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.10 Customers' Passes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.11 Personnel Identification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.12 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.13 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.14 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.15 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.16 Non-Foreign Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Organization of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Authorization of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6 PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Operation of Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Access to Employees and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Employees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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Section 7 CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Conditions to Obligation of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Conditions to Obligation of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Termination of Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Disposition of the Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9 POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.3 Litigation Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.5 Corporate Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10 INDEMNIFICATION AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1 Survival; Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Indemnification Provisions for Buyer's Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Indemnification Provisions for Seller's Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.4 Purchase "AS IS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.5 Cross-indemnifications and Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Indemnification of Buyer and Acquired Corporations by Seller . . . . . . . . . . . . . . . . . . . 31
(b) Indemnification and Release of Seller by Acquired Corporations and Buyer . . . . . . . . . . . . . 31
10.6 Matters Involving Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.7 Determination of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.8 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.1 No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.3 Succession and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.8 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.11 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.12 Incorporation of Exhibits, Schedules and Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.13 Employee Benefits Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.14 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.15 Taxes and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.16 Payment of BML Earn-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.17 Promotional Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.18 Nonsolicitation of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.19 Guarantee by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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APPENDICES, EXHIBITS AND SCHEDULES
APPENDICES
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1 . . . . . . . . . . . . . . . Defined Terms
2 . . . . . . . . . . . . . . . Disclosure Schedule
3 . . . . . . . . . . . . . . . Acquired Assets
4 . . . . . . . . . . . . . . . Excluded Assets
5 . . . . . . . . . . . . . . . Consents
6 . . . . . . . . . . . . . . . Calculation of Net Working Capital at
October 26, 1996
EXHIBITS
--------
A . . . . . . . . . . . . . . . Allocation Schedule
B . . . . . . . . . . . . . . . Escrow Agreement
C . . . . . . . . . . . . . . . Financial Statements
D . . . . . . . . . . . . . . . Opinion of Seller's Counsel
E . . . . . . . . . . . . . . . Form of Withholding Certificate
F . . . . . . . . . . . . . . . Opinion of Buyer's Counsel
G . . . . . . . . . . . . . . . Employment Agreements
SCHEDULES
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2.3 . . . . . . . . . . . . . . Adjustments to Net Working Capital
4.10 . . . . . . . . . . . . . . Customer Passes
4.11-A . . . . . . . . . . . . . Personnel Identification
4.11-B . . . . . . . . . . . . . Personnel on Leave
4.12 . . . . . . . . . . . . . . Employee Benefits Matters
11.16 . . . . . . . . . . . . . BML Earn-Out
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THIS STOCK PURCHASE AND INDEMNIFICATION AGREEMENT (this "Purchase
Agreement") is entered into as of November 26, 1996 (the "Effective Date"), by
and among BOOTH CREEK SKI HOLDINGS, INC., a Delaware corporation ("Buyer"),
FIBREBOARD CORPORATION, a Delaware corporation ("Fibreboard" or "Seller"),
TRIMONT LAND COMPANY, a California corporation doing business as
Northstar-at-Tahoe ("Northstar"), SIERRA-AT-TAHOE, INC., a Delaware corporation
("Sierra"), and BEAR MOUNTAIN, INC., a Delaware corporation ("Bear Mountain").
Northstar, Sierra and Bear Mountain are referred to collectively herein as the
"Acquired Corporations" or the "Resort Group," and Buyer, Fibreboard and
Acquired Corporations are referred to collectively herein as the "Parties."
WHEREAS, each of the Acquired Corporations is a wholly owned subsidiary
of Fibreboard; and
WHEREAS, Northstar is engaged in the ownership and operation of a ski
resort by the name of "Northstar-at-Tahoe," a golf course, a conference center
and other facilities and properties, all located near the City of Truckee,
California (the "Northstar Business"); and
WHEREAS, Bear Mountain is engaged in the ownership and operation of a
ski resort by the name of "Bear Mountain Ski Resort," a golf course by the name
of "Bear Mountain Golf Course" and other facilities and properties, all located
near the City of Big Bear Lake, California (the "Bear Mountain Business"); and
WHEREAS, Sierra is engaged in the ownership and operation of a ski
resort by the name of "Sierra-at-Tahoe Ski Resort" and other facilities and
properties, all located near the City of South Lake Tahoe, California (the
"Sierra Business"; together with the Northstar Business and the Bear Mountain
Business, the "Businesses"); and
WHEREAS, each Acquired Corporation owns or leases real property and
certain tangible and intangible assets used in its Business, including without
limitation, buildings and improvements, machinery and equipment, vehicles,
retail inventory, non-retail inventory, intellectual property, contract rights,
timber and water rights and prepaid expenses and receivables; and
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WHEREAS, each of Bear Mountain and Sierra has obtained a special use
permit (or permits) from the Department of Agriculture--Forest Service granting
the right to use certain real property in order to operate its Business; and
WHEREAS, Buyer desires to purchase all of the issued and outstanding
shares of capital stock of each of the Acquired Corporations ("Acquired
Shares") and to assume certain Liabilities associated with the Businesses, and
Fibreboard desires to sell and transfer to Buyer the Acquired Shares and to
accept responsibility for certain Liabilities associated with the Businesses,
all as more fully set forth below:
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows.
SECTION 1
DEFINED TERMS
-------------
Terms in this Purchase Agreement with initial letters capitalized shall
have their respective meanings as set forth in Appendix 1 attached hereto.
SECTION 2
BASIC TRANSACTION
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2.1 Purchase and Sale of Acquired Shares. On and subject to the terms
and conditions of this Purchase Agreement, Buyer agrees to purchase from
Fibreboard, and Fibreboard agrees to sell, transfer, convey and deliver to
Buyer all of the Acquired Shares at the Closing in exchange for the Purchase
Price, as adjusted pursuant to Section 2.3 of this Purchase Agreement.
2.2 Purchase Price. Buyer agrees to pay to Fibreboard (pursuant to
the provisions of Section 3) One Hundred Fourteen
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Million dollars ($114,000,000.00) (the "Purchase Price") by delivery of
cash payable by wire transfer or delivery of other funds which shall be
immediately available to Fibreboard as of the Closing. The Purchase Price
reflects reimbursement to Fibreboard for prior real estate development costs in
the amount of Five Hundred Thousand Dollars ($500,000.00). Fibreboard
acknowledges receipt on September 6, 1996 (the "Deposit Date"), in accordance
with the terms of the Letter of Intent, of the deposit on behalf of Buyer with
Fibreboard of One Million Dollars ($1,000,000.00) (the "Deposit"), which sum,
together with simple interest thereon at six and one-half percent (6 1/2%) per
annum (beginning on the Deposit Date and ending on the Closing Date) shall be
applied in partial satisfaction of Buyer's obligations hereunder. The Purchase
Price shall also be subject to adjustment as provided in Section 2.3 below.
2.3 Purchase Price Adjustments.
--------------------------
(i) The Purchase Price shall be increased or decreased as the
case may be, on a dollar-for-dollar basis, to reflect a positive or negative
amount for Net Working Capital on the Closing Date. In addition if, but only
to the extent that, the calculation of Net Working Capital does not reflect the
following items the Purchase Price shall be reduced or increased, as
appropriate, by the amount not reflected in such calculation: (A) the full
remaining liability of Sierra to Doppelmayr USA, Inc. under that certain Sales
and Installation Contract, dated May 28, 1996 (the "Doppelmayr Contract"), with
respect to the installation of three detachable quad lifts at Sierra, (B) the
liability, on a discounted basis, for certain promotional items which Buyer is
obligated to honor under Section 11.17 of this Purchase Agreement, (C) an
allocation reflecting the cost of new uniforms for Resort Group employees as
born equally by Fibreboard and Buyer, and (D) the amount established by Sierra
as a reserve for environmental liability as of June 30, 1996, less any amounts
drawn on such reserve prior to Closing. In addition, if (for reasons of
impracticality of transferring assets prior to the Closing from an Acquired
Corporation to Fibreboard or a third party designated by Fibreboard) at the
Closing any Acquired Corporations own any Excluded Assets, after the
Closing,(I) Buyer agrees to cause, at Fibreboard's expense, such Acquired
Corporations to take all actions reasonably requested
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by Fibreboard to convey such Excluded Assets to Fibreboard (or its designee)
without payment by Fibreboard of any consideration therefor and (II) at all
times prior to such conveyance, to cause the Acquired Corporations to hold any
such Excluded Assets in trust for the benefit of Fibreboard (with all benefits
of such Excluded Assets being conveyed by such Acquired Corporations to
Fibreboard and all Liabilities relating thereto being assumed by Fibreboard).
If after the Closing the Parties agree that it is not possible, on commercially
reasonable terms, to convey any such Excluded Assets form the Acquired
Corporations to Fibreboard (or its designee), the Parties shall endeavor to
agree to a value to be paid by the respective Acquired Corporations to
Fibreboard for such assets. In the event the Parties are unable to agree on a
value for any such assets, they shall submit the matter to Arbitration.
(ii) The Purchase Price shall be increased by the Seasonal
Adjustment.
(iii) Three (3) business days prior to the Closing Date,
Fibreboard shall deliver to Buyer (A) an estimated unaudited balance sheet of
the Resort Group as of the Closing Date (the "Estimated Closing Balance Sheet")
and (B) an estimate available at such time of the adjustments to the Purchase
Price required by clauses (i) and (ii) of this Section 2.3 (the "Price
Adjustment"), as determined on the basis of the Estimated Closing Balance
Sheet. Except as provided on Schedule 2.3 with respect to the calculation of
the Net Working Capital, the Estimated Closing Balance Sheet and the
calculations of the Estimated Price Adjustment shall be prepared and computed
in a manner consistent with the application of the accounting principles
applied in the preparation of the Financial Statements (the "Accounting
Principles"). Such estimate of the Price Adjustment is hereinafter referred to
as the "Estimated Price Adjustment." The Estimated Price Adjustment shall be
added to the Purchase Price set forth in Section 2.2 and the resulting amount
shall be paid by Buyer at the Closing (the "Closing Amount").
(iv) Fibreboard will prepare and deliver to Buyer, within
forty-five (45) days following the Closing Date, a statement certified by the
chief financial officer of Fibreboard (the "Closing Statement") of (A) a
balance sheet of the Resort Group
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as of the Closing Date (the "Final Closing Balance Sheet"), (B) the Price
Adjustment, as determined on the basis of the Final Closing Balance Sheet, and
(C) the difference between the Price Adjustment and the Estimated Price
Adjustment (the "Final Adjustment"). The Final Closing Balance Sheet and
calculation of the Price Adjustment shall be prepared and computed in a manner
consistent with the application of the Accounting Principles. Buyer shall,
upon request, be allowed access to the working papers of Fibreboard (or its
accountants) used in preparing the Closing Statement. If the Final Adjustment
is a positive number, then Buyer will pay the difference to Fibreboard, and if
the Final Adjustment is a negative number then Fibreboard will pay the
difference to Buyer, with payment due prior to the expiration of thirty (30)
days following Fibreboard's delivery to Buyer of the Closing Statement.
Notwithstanding the foregoing, Buyer may object to the Closing Statement by
notifying Fibreboard within such 30-day period, which notice must contain a
statement of the basis of Buyer's objection(s). Buyer's failure to so object
shall be deemed Buyer's acceptance of the Closing Statement. If Buyer gives
such notice of objection, then the issues in dispute will be submitted for
resolution to Arbitration, and any required payment will be made prior to the
tenth business day following resolution of issues in dispute by Arbitration.
(v) Any payment of the Final Adjustment will be made together
with simple interest thereon at six and one-half percent (6 1/2%) per annum
(beginning on the Closing Date and ending on the date of payment). Payment
must be made in immediately available funds and shall result in appropriate
adjustments to the Purchase Price allocation schedule provided for in Section
11.15 below and to be attached hereto as Exhibit A.
SECTION 3
THE CLOSING
-----------
3.1 The Closing. The closing of the transactions contemplated by this
Purchase Agreement (the "Closing") shall take place at the offices of Winston &
Xxxxxx in New York, New York,
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commencing at 9:00 a.m. local time on (i) the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby or (ii) such other date as the
Parties may mutually agree in writing (the "Closing Date").
3.2 Deliveries and Actions Prior to Closing. Prior to the Closing:
(i) Fibreboard shall cause the Acquired Corporations to
distribute or otherwise assign to Fibreboard the Excluded Assets; provided,
however, if the Parties determine that an Excluded Asset cannot be transferred,
such asset shall remain within the Acquired Corporations in accordance with the
provisions of Section 2.3(i) above;
(ii) Fibreboard shall request that Lender deliver to
Fibreboard certificates representing the Acquired Shares in which Lender has a
Security Interest (the "Old Certificates"); and
(iii) Fibreboard shall (A) transfer to the applicable Acquired
Corporations all Acquired Assets owned by Fibreboard or to which Fibreboard is
a party, (B) cause all amounts owing to or from any Acquired Corporation by or
to Fibreboard or any Affiliate of Fibreboard (other than any other Acquired
Corporation) to be satisfied, waived or otherwise canceled and (C) repay or
cause to be repaid any and all long- term debts of the Acquired Corporations.
3.3 Deliveries and Instructions at Closing. At the Closing:
(i) Buyer shall deliver to Lender (A) the Closing Amount (less
$1,000,000) and (B) the Estimated Proration Amount, and Buyer shall deliver to
Escrow Holder $1,000,000 to be held in accordance with the Escrow Agreement;
(ii) Fibreboard shall cause the Lender to release the Old
Certificates;
(iii) Fibreboard shall deliver to Buyer certificates
representing all of the Acquired Shares (including the Old
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Certificates) duly endorsed to Buyer or accompanied by stock powers duly
executed;
(iv) The Acquired Corporations shall issue to Buyer new
certificates representing the Acquired Shares registered in the name of Buyer,
cancel the Old Certificates, and register the Acquired Shares in Buyer's name
as appropriate in the stock records of the Acquired Corporations;
(v) Fibreboard shall deliver to Buyer properly executed
releases (including termination statements on Form UCC-3) necessary or which
Buyer and its counsel reasonably may request in respect of the termination of
any Security Interest (other than Permitted Exceptions) on the Acquired Assets;
(vi) Fibreboard shall deliver to Buyer the certificate and
opinion referred to in Sections 7.1(v) and 7.1(viii) below, respectively;
(vii) Buyer shall deliver to Fibreboard the certificate and
opinion referred to in Sections 7.2(v) and 7.2(vii) below, respectively;
(viii) Fibreboard shall deliver to Buyer a certificate of its
Secretary or Assistant Secretary and of each Acquired Corporation's Secretary
or Assistant Secretary (A) certifying and attaching a true and complete copy of
each of the following: (x) such Person's certificate or articles of
incorporation; (y) such Person's By-Laws; and (z) resolutions duly adopted by
such Person's board of directors approving the execution, delivery and
performance of this Purchase Agreement, (B) certifying as to the incumbency and
specimen signature of the officers of such corporation who have executed this
Purchase Agreement and (C) with respect only to each Acquired Corporation,
certifying as to the incumbency of all of the officers of such corporation;
(ix) Fibreboard and each Acquired Corporation shall deliver to
Buyer a good standing certificate from the Secretary of State of California and
the jurisdiction of its incorporation, if different;
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(x) Buyer shall deliver to Fibreboard a certificate of its
Secretary or Assistant Secretary (A) certifying and attaching a true and
complete copy of each of the following: (x) certificate of incorporation; (y)
By-Laws; and (z) resolutions duly adopted by Buyer's board of directors
approving the execution, delivery and performance of this Purchase Agreement
and the consummation of the transactions contemplated by this Purchase
Agreement, and (B) certifying as to the incumbency and specimen signatures of
the officers of Buyer who have executed this Purchase Agreement;
(xi) Buyer shall deliver to Fibreboard a good standing
certificate for Buyer from the Secretary of State of Delaware;
(xii) Fibreboard shall deliver to Buyer the resignations of
the directors and officers of the Acquired Corporations, such resignations to
take effect immediately after the Closing, and
(xiii) Buyer and Seller shall enter into an escrow agreement
in the form of Exhibit B (the "Escrow Agreement").
3.4 Timing. Closing shall be deemed to have occurred when all
deliveries contemplated by Section 3.3 have been made.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Fibreboard represents and warrants to Buyer that the statements
contained in this Section 4 are correct and complete as of the Effective Date
and will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the Effective Date
throughout this Section 4), except as set forth in the disclosure schedule
accompanying this Purchase Agreement as Appendix 2 (the "Disclosure Schedule").
4.1 Organization. Each of Fibreboard and the Acquired Corporations is
a corporation duly organized, validly existing
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and in good standing under the laws of its jurisdiction of incorporation. Each
of Fibreboard and the Acquired Corporations is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
requires such qualification and the failure to so qualify would reasonably be
expected to have a material adverse effect on the Value of the Acquired Assets.
4.2 Authorization. Each of Fibreboard and the Acquired Corporations
has full corporate power and authority to execute and deliver this Purchase
Agreement and to perform its obligations hereunder, and such execution and
delivery have been approved by all necessary corporate action. This Purchase
Agreement constitutes the valid and legally binding obligation of each of the
Acquired Corporations and Fibreboard, enforceable in accordance with its terms
and conditions, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
4.3 Noncontravention.
(i) To the Knowledge of the Officers, neither the execution
and delivery of this Purchase Agreement nor the performance of Fibreboard's or
any of the Acquired Corporations' obligations hereunder will (A) violate any
law, statute, regulation, rule, judgment, order, decree, stipulation,
injunction, charge or other restriction of any government, governmental agency
or court to which Fibreboard or any of the Acquired Corporations is subject or
any provision of the charter or bylaws of any of Fibreboard or the Acquired
Corporations, or (B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel or require any consent or notice
under, any contract, lease, sublease, license, sublicense, franchise, permit,
indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest or other arrangement to which any of the
Acquired Corporations is a party or by which any of the Acquired Corporations
is bound or to which any of their assets are subject (or result in the
imposition of any Security Interest upon any of the assets of any of the
Acquired Corporations).
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(ii) To the Knowledge of the Officers and except as
contemplated by this Purchase Agreement with respect to USFS Permits and the
Xxxx-Xxxxx-Xxxxxx Act or as otherwise described on the Disclosure Schedule,
neither Fibreboard nor any of the Acquired Corporations need give any notice
to, make any filing with or obtain any authorization, consent or approval of
any government or governmental agency in order for Fibreboard and the Acquired
Corporations to perform their obligations under this Purchase Agreement.
4.4 Financial Statements. Attached hereto as Exhibit C are the
following combined financial statements for the Resort Group (collectively, the
"Financial Statements"):
(i) combined financial statements as of December 31, 1995 and
December 31, 1994 together with report of Xxxxxx Xxxxxxxx, independent public
accountants, which financial statements include balance sheets as of December
31, 1995 and December 31, 1994 and statements of operations for each of the
years ended December 31, 1993, 1994 and 1995;
(ii) interim balance sheet at June 30, 1996 (the "Interim Balance Sheet"); and
(iii) a statement of the combined operating results for the
six-month period ended June 30, 1996.
The Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
covered thereby, and present fairly the financial position of the Resort Group
as of the dates thereof and the results of operations for the periods
indicated, with the exceptions noted in the Disclosure Schedule.
4.5 Disclosure. To the Knowledge of the Officers, Fibreboard has
disclosed or made available to representatives of Buyer all material
information in any Acquired Corporation's or Fibreboard's possession regarding
all Adverse Consequences, including Liabilities and obligations relating to or
arising in connection with Environmental Conditions, which could reasonably be
expected to have a material adverse effect on the Value of the Acquired Assets.
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4.6 Personal Property Assets. Except as discussed in the Disclosure
Schedule: The Acquired Corporations have good and marketable title to, or a
valid leasehold interest in, the Tangible Personal Property assets which
constitute a portion of the Acquired Assets free and clear of any Security
Interest.
4.7 Real Property. Appendix 3 attached hereto lists and describes
briefly all parcels of real property comprising the Real Property. With
respect to each such parcel:
(i) There are no pending or, to the Knowledge of the Officers,
threatened condemnation proceedings relating thereto;
(ii) There are no leases, subleases, licenses, concessions or
other agreements, written or oral, granting to any party or parties the right
of use or occupancy of any portion thereof which could reasonably be expected
to have a material adverse effect on the Value of the Acquired Assets;
(iii) There are no outstanding options or rights of first
refusal to purchase such parcel, or any portion thereof or interest therein,
exercise of which could reasonably be expected to have a material adverse
effect on the Value of the Acquired Assets; and
(iv) There are no Security Interests except for Permitted
Exceptions.
4.8 Insurance. Each of the Acquired Corporations has been covered
during the past five years by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged during the aforementioned
period.
4.9 Assets Used in the Conduct of the Business. All of the assets,
real properties, tangible personal properties and intangible properties used in
the conduct of the Businesses as presently conducted, other than the Excluded
Assets or as described on the Disclosure Schedule, are Acquired Assets and
neither Fibreboard nor any other affiliate of Fibreboard has any ownership
interest therein except through the Acquired Shares, provided that, without
qualifying any other representation by Fibreboard in this Purchase Agreement,
no representation is made hereby as to the Acquired Corporations' title to any
such asset.
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4.10 Customer Passes. Schedule 4.10 contains a correct list of all
persons holding lifetime passes or other passes for skiing, golf or other
recreational activities provided by any Acquired Corporation, in any case
extending beyond the 1996-1997 ski season.
4.11 Personnel Identification. Schedule 4.11-A contains a list of the
names and titles of all current officers, directors, employees, agents and
representatives of Acquired Corporations or any of them. Fibreboard has
previously delivered to Buyer a true and correct schedule stating the rates of
compensation payable (or paid, as the case may be) to each such person.
Schedule 4.11-B contains a list of all employees of the Acquired Corporations
who are on disability leave or other approved leaves of absence.
4.12 Employee Benefits.
(i) Schedule 4.12 contains a true, complete and correct list of
each pension, retirement, profit sharing, savings, stock option, restricted
stock, severance, termination, bonus, fringe benefit, insurance, supplemental
benefit, medical, education reimbursement or other employee benefit plan,
program, agreement or arrangement, including each "employee benefit plan" as
defined in Section 3(3) of ERISA sponsored, maintained or contributed to or
required to be contributed to by the Acquired Corporations or any other member
of the Controlled Group for the benefit of current or former employees of the
Businesses or in which the Acquired Corporations participate at any time prior
to the Closing (each a "Plan").
(ii) None of the Plans is a multi-employer plan (as defined in
Section 3(37) of ERISA), and none provides any post-retirement medical or life
insurance benefits (other than COBRA continuation coverage).
(iii) Each Plan complies, in form and in operation in all material
respects, with all applicable requirements of any laws, including, to the
extent applicable, sections 401(a), 501(a) and 4980B of the Code, and, to
Fibreboard's knowledge, no event has occurred which will or could cause any
such Plan to fail to comply in all material respects with such requirements.
Seller and the Acquired Corporations have complied, and will comply for
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all periods (or parts thereof) ending or prior to the Closing, in all material
respects with all applicable requirements of ERISA and all other laws
applicable to the Plans.
(iv) There are no actions (other than routine claims for benefits)
pending or to Fibreboard's knowledge threatened in writing involving any such
Plan or the assets thereof and, to Fibreboard's knowledge, no facts exist which
could give rise to any such actions (other than routine claims for benefits).
(v) Neither the Acquired Corporations nor any other member of the
Controlled Group has any liability (or material contingent liability) with
respect to a plan termination under Title IV of ERISA, a funding deficiency
under Section 412 of the Code or a withdrawal from a multi-employer plan (as
defined in Section 3(37) of ERISA) or a plan described in section 4063 of
ERISA.
4.13 Capitalization. The authorized capital stock of Northstar
consists of 10,000 shares of common stock, par value $100.00 per share, of
which 250 shares are issued and outstanding and constitute the "Northstar
Shares." The authorized capital stock of Sierra consists of 1,000 shares of
common stock, par value $.01 per share, of which 100 shares are issued and
outstanding and constitute the "Sierra Shares." The authorized capital stock of
Bear Mountain consists of 1,000 shares of common stock, par value $.01 per
share, of which 100 shares are issued and outstanding and constitute the "Bear
Mountain Shares." Taken together, the Northstar Shares, Sierra Shares and Bear
Mountain Shares constitute the Acquired Shares. Fibreboard is and will be on
the Closing Date the record and sole beneficial owner and holder of the
Acquired Shares, free and clear of all liens and encumbrances (other than those
security interests in favor of Lender which are to be released upon the Closing
as contemplated by this Purchase Agreement). Upon delivery to Buyer by Seller
of certificates representing the Acquired Shares and payment by Buyer to Seller
of the Purchase Price and assuming Buyer is acquiring the Acquired Shares as a
bona fide purchaser without notice of an adverse claim, Buyer will be the owner
of the Acquired Shares free and clear of all liens and encumbrances. There are
no options, warrants, calls, subscriptions or other rights or other agreements
or commitments obligating Fibreboard or any Acquired
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Corporation to issue, transfer or sell any of the Acquired Shares or any other
securities convertible into or evidencing the right to subscribe for any such
shares or any obligation of Fibreboard or any Acquired Corporation to grant,
extend or enter into any such option, warrant, call, subscription, right or
agreement. All of the issued and outstanding shares of each Acquired
Corporation have been duly authorized and validly issued and are fully paid and
nonassessable. There are no shares of any Acquired Corporation held as
treasury stock. No Acquired Corporation owns, or on the Closing Date will own,
any securities or any other direct or indirect interest in any other Person,
except that Sierra owns, and on the Closing Date will own, twenty-five (25)
fully paid and non-assessable shares of Tahoe Airline Guarantee Corp.
4.14 Tax Matters.
-----------
(i) For the purposes of this Section 4.14, Acquired Corporations
shall be deemed to include (a) any predecessor to any Acquired Corporation or
any Person from which an Acquired Corporation incurs a liability for Taxes as a
result of transferee liability and (b) Fibreboard and any predecessor to
Fibreboard and any Person from which Fibreboard incurs a liability for Taxes as
a result of transferee liability.
(ii) Each Acquired Corporation has duly and timely filed (and prior to
the Closing Date will duly and timely file) true, correct and complete tax
returns, reports or estimates, all prepared in accordance with applicable
federal, state or local tax laws, for all years and periods (and portions
thereof), for all jurisdictions (whether federal, state, local or foreign) in
which any such returns, reports or estimates were due, and for all such
returns, reports and estimates which are required to be filed by any applicable
law on or prior to the Closing Date. All Taxes shown as due and payable on
such returns, reports and estimates have been paid (or will be paid), and there
is no current liability for any Taxes due and payable in connection with any
such returns. All applicable sales taxes, to the extent due, were paid by the
Acquired Corporations or Fibreboard when the Acquired Assets were acquired by
the Acquired Corporations or Fibreboard.
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(iii) Each Acquired Corporation has (a) withheld all required amounts
from its employees, agents, contractors and nonresidents and remitted such
amounts to the proper authorities; (b) paid all employer contributions and
premiums; and (c) filed all federal, state, local and foreign returns and
reports with respect to employee income tax withholding, and social security
and unemployment taxes and premiums, all in compliance with the withholding
provisions of the Code, or any prior provision of the Code and other applicable
laws.
(iv) None of the Acquired Assets is tax exempt use property under
Section 168(h) of the Code. None of the Acquired Assets is property that
Fibreboard is required to treat as being owned by any other Person pursuant to
the safe harbor lease provision of former Section 168(f) of the Code.
(v) No portion of the cost of any of the Acquired Assets was financed
directly or indirectly from the proceeds of any tax exempt state or local
government obligation described in Section 103(a) of the Code.
(vi) None of the Acquired Corporations (other than Fibreboard) has
entered into an agreement relating to Taxes which affects any taxable year
ending after the Closing Date other than this Purchase Agreement.
(vii) None of the Acquired Corporations (other than Fibreboard) will
have any obligations under any tax sharing agreement or similar arrangement
after the Closing Date other than this Purchase Agreement.
(viii) None of the Acquired Corporations has ever been part of a
consolidated, combined or unitary group for federal, state, local or foreign
tax purposes other than the group controlled by Fibreboard.
4.15 Brokers' Fees. Neither any Acquired Corporation nor Fibreboard
has any liability or obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this Purchase
Agreement.
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4.16 Non-Foreign Persons. Neither any Acquired Corporation nor
Fibreboard is a "foreign person" as defined in Section 1445 of the Code.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Fibreboard that the statements
contained in this Section 5 are correct and complete as of the Effective Date
and will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the Effective Date
throughout this Section 5). Buyer also covenants with Fibreboard as set forth
in this Section 5.
5.1 Organization of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
5.2 Authorization of Transaction. Buyer has full corporate power and
authority to execute and deliver this Purchase Agreement and to perform its
obligations hereunder. This Purchase Agreement constitutes the valid and
legally binding obligation of Buyer, enforceable in accordance with its terms
and conditions, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
5.3 Noncontravention.
(i) To the Knowledge of Buyer, neither the execution and the
delivery of this Purchase Agreement nor the performance by Buyer of its
obligations hereunder will (A) violate any material statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge or other restriction
of any government, governmental agency or court to which Buyer is subject or
any provision of Buyer's certificate of incorporation or bylaws or (B) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in
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any party the right to accelerate, terminate, modify or cancel or require any
consent or notice under any material contract, lease, sublease, license,
sublicense, franchise, permit, indenture, agreement or mortgage for borrowed
money, instrument of indebtedness, Security Interest or other material
arrangement to which Buyer is a party or by which it is bound or to which any
of its material assets is subject.
(ii) To the Knowledge of Buyer, except as contemplated by this
Purchase Agreement with respect to the USFS Permits and the Xxxx-Xxxxx-Xxxxxx
Act, Buyer does not need to give any notice to, make any filing with, or obtain
any authorization, consent or approval of any government or governmental agency
in order for the Buyer to perform its obligations under this Purchase
Agreement.
5.4 Brokers' Fees. Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Purchase Agreement for which Fibreboard could
become liable or obligated.
5.5 Financing. Buyer has furnished Fibreboard with evidence of
binding commitments from Canadian Imperial Bank of Commerce ("CIBC") and Xxxx
Xxxxxxx Mutual Life Insurance Company ("Xxxx Xxxxxxx") to finance in full the
Purchase Price, as it may be increased by the maximum possible Seasonal
Adjustment. Such commitments shall remain in full force and effect through the
Closing Date. In the event Buyer, Acquired Corporations or Fibreboard is
notified as required by Section 6.5, verbally or in writing, by CIBC, Xxxx
Xxxxxxx or Buyer that (i) CIBC or Xxxx Xxxxxxx has withdrawn its financing
commitment or otherwise does not intend to provide financing for any reason,
(ii) the terms of either of the commitment letters are amended in a manner that
results in a delay of the Closing or in a manner otherwise materially adverse
to Fibreboard, or (iii) the aggregate amount committed to under both of the
commitment letters is reduced, Fibreboard or Acquired Corporations may
terminate this Purchase Agreement and retain the Deposit pursuant to Section
8.3.
5.6 Investment Intent. Buyer is acquiring the Acquired Shares for its
own account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act of 1933, as amended.
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SECTION 6
PRE-CLOSING COVENANTS
---------------------
The Parties agree as set forth in this Section 6 with respect to the
period between the Effective Date and the Closing.
6.1 General. Each of the Parties shall use its reasonable efforts to
take all action and to do all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Purchase
Agreement (including satisfying the Closing conditions set forth in Section 7
below) so as to enable the Closing Date to occur at the earliest possible time.
6.2 Notices and Consents.
--------------------
(a) Buyer and Fibreboard shall cooperate in the giving of
notice to, and/or the seeking of the reissuance or transfer to the Acquired
Corporations on or prior to the Closing Date of the USFS Permits and all other
licenses, permits, franchises, certifications and other consents and approvals
of, any third parties, including the Forest Service and all other governmental
agencies and parties to Contracts with the Acquired Corporations, that may be
required in connection with the change in ownership of the Acquired Shares from
Fibreboard to Buyer, in order that the Acquired Corporations may continue to
conduct the Businesses without an adverse effect on the value of the Acquired
Assets.
(b) Each of Fibreboard and Buyer has prior to the date
hereof filed a Notification and Report Form and related material required to be
filed with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx Act. Each of
the Parties shall (i) use its reasonable efforts to obtain an early termination
of the applicable waiting period, and (ii) make any further filings pursuant
thereto that may be necessary, proper or advisable.
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6.3 Operation of Businesses. Except as contemplated by this Purchase
Agreement (including, without limitation, Sections 2.3(i), 3.2(i) and 11.13) or
instructions delivered from Buyer to Fibreboard, Fibreboard shall not permit
the Resort Group, insofar as the Acquired Assets are concerned, to engage in
any practice, take any action, embark on any course of inaction or enter into
any transaction outside the Ordinary Course of Business. Fibreboard shall not
cause or permit any Acquired Corporation to (a) amend or modify its articles or
certificate of incorporation or bylaws, (b) issue, sell or otherwise dispose of
any of its capital stock, stock options, bond, notes or other securities, (c)
merge or consolidate with any Person or (d) purchase or redeem any shares of
its capital stock or other outstanding securities.
6.4 Preservation of Business.
------------------------
(a) Except as contemplated by this Purchase Agreement
(including, without limitation, Sections 2.3(i), 3.2(i) and 11.13) or
instructions delivered from Buyer to Fibreboard, Fibreboard shall cause the
Resort Group, insofar as the Acquired Assets are concerned, to keep its
business and properties substantially intact, including its present
organization, operations, physical facilities, working conditions and
relationships with governmental authorities, lessors, licensors, suppliers,
customers, officers and employees.
(b) Fibreboard has furnished to Buyer an unaudited combined
balance sheet for the Resort Group at October 26, 1996 and a statement of the
combined operating results for the Resort Group for the ten-month period ended
October 26, 1996, in each case prepared in a manner consistent with the
preparation of the Financial Statements (subject to normal year-end
adjustments).
6.5 Notice of Developments. Fibreboard shall give prompt written
notice to Buyer of any material development adversely affecting the Value of
the Acquired Assets. Each Party shall give prompt written notice to the other
of any material development affecting the ability of such Party to consummate
the transactions contemplated by this Purchase Agreement, including
notification of any changes in the financing commitment as set forth in
Sections 5.5 and 8.1(iii). Any written notice provided by any Acquired
Corporation or Fibreboard to Buyer after the
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Effective Date and prior to the Closing shall be deemed to supplement, and
thereby become a part of, the Disclosure Schedule.
6.6 Exclusivity. Fibreboard covenants and agrees with Buyer that it
shall not, and shall not authorize or direct any of its Related Parties to,
solicit proposals or offers from any Person (other than Buyer or its
Affiliates) relating to any acquisition of all or a substantial part of any
Business, the Acquired Assets or any Acquired Corporation or any acquisition of
the capital stock of any Acquired Corporation, including, without limitation,
any merger, consolidation, recapitalization or restructuring of any Acquired
Corporation (an "Alternative Transaction"), or participate in any discussions
or negotiations regarding, or furnish to any Person (other than Buyer or its
Affiliates or representatives) any information with respect to, an Alternative
Transaction. Fibreboard shall immediately notify Buyer if any proposal or
offer is received, or inquiry or contact with any Person is made, regarding an
Alternative Transaction.
6.7 Access to Employees and Information. Upon reasonable notice,
Fibreboard shall, and shall cause each of its and each of the Acquired
Corporations' officers, directors, employees, auditors and agents employed in
connection with the Businesses to: (i) afford the officers, employees and
authorized agents and representatives of Buyer reasonable access, during normal
business hours, to the offices, properties, books and records of the Businesses
and (ii) furnish to the officers, employees and authorized agents and
representatives of Buyer such additional financial and operating data and other
information regarding the assets, properties, goodwill and business of the
Businesses as Buyer may from time to time reasonably request; provided,
however, that such investigation shall not unreasonably interfere with any of
the businesses or operations of Fibreboard or any Acquired Corporation.
6.8 Employees and Compensation. Fibreboard shall permit Buyer free
access to communicate and meet with Acquired Corporations' employees at all
reasonable times for the purpose of discussing with such employees the
continued employment of such persons by the Acquired Corporations in connection
with the operation of the Businesses after the Closing.
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SECTION 7
CONDITIONS TO OBLIGATION TO CLOSE
---------------------------------
7.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions unless, in the
case of the conditions set forth in paragraphs (i), (ii), (iii), (v) or (ix) of
this Section 7.1, the failure of one or more of such conditions does not
result, in the aggregate, in an adverse effect on, or an adverse change in, the
Value of the Acquired Assets in an amount in excess of One Million dollars
($1,000,000):
(i) the representations and warranties set forth in Section 4
above shall be true and correct at and as of the Closing Date;
(ii) Fibreboard shall have performed and complied with all of
its covenants hereunder through the Closing;
(iii) all consents and approvals of third parties including
the Forest Service and all other governmental agencies required on or before
the Closing in connection with the change in ownership of the Acquired Shares
from Fibreboard to Buyer and listed on Appendix 5 shall have been obtained and
such consents and approvals shall not impose conditions that make it
impracticable for the Acquired Corporations to continue to conduct the
Businesses or result in an adverse effect on the Value of the Acquired Assets;
(iv) no action, suit or proceeding shall be overtly threatened
or pending before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge could reasonably be expected
to (A) prevent consummation of any of the transactions contemplated by this
Purchase Agreement, (B) cause any of the transactions contemplated by this
Purchase Agreement to be rescinded following consummation, or (C) affect
materially and adversely the right of Buyer to own the Acquired Shares and the
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right of any Acquired Corporation to own, operate or control the Acquired
Assets (and no such judgment, order, decree, stipulation, injunction or charge
shall be in effect);
(v) Fibreboard shall have delivered to Buyer on and dated as
of the Closing Date a certificate to the effect that each of the conditions
specified above in Sections 7.1(i), (ii) and (iv) is satisfied in all material
respects;
(vi) all applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated;
(vii) the Title Agent shall be prepared to deliver to Buyer an
ALTA owner's title insurance policy (10-17-92 Form) dated the Closing Date,
covering the Owned Real Property, issued by the Title Agent insuring the fee
simple title of the Acquired Corporations in such real estate, subject only to
Permitted Exceptions;
(viii) Buyer shall have received from counsel to Fibreboard an
opinion addressed to Buyer and dated as of the Closing Date in the form
attached as Exhibit D;
(ix) except as set forth in the Disclosure Schedule as of the
Effective Date, there shall have been no adverse change in the Value of the
Acquired Assets as compared to the Effective Date;
(x) Fibreboard shall have delivered to Buyer an executed
withholding certificate in the form of Exhibit E;
(xi) Fibreboard shall have delivered to Buyer a pay-off letter
from Lender, in a form reasonably satisfactory to Buyer;
(xii) all actions to be taken by Fibreboard in connection with
the consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Buyer.
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Buyer may waive any condition specified in this Section 7.1 (other than Section
7.1(vi)) if Buyer executes and delivers to Fibreboard a writing so stating at
or prior to the Closing.
7.2 Conditions to Obligation of Seller. The obligation of Fibreboard
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 5
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) all consents and approvals of third parties including
the Forest Service and all other governmental agencies required on or before
the Closing in connection with the change in ownership of the Acquired Shares
from Fibreboard to Buyer and listed on Appendix 5 shall have been obtained or
the Buyer and the Acquired Corporations shall have waived their rights to
indemnification pursuant to Section 10.2 of this Purchase Agreement with regard
to those agreements for which such consents and approvals were not obtained;
(iv) no action, suit or proceeding shall be overtly threatened
or pending before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction or charge could reasonably be expected
to (A) prevent consummation of any of the transactions contemplated by this
Purchase Agreement or (B) cause any of the transactions contemplated by this
Purchase Agreement to be rescinded following consummation (and no such
judgment, order, decree, stipulation, injunction or charge shall be in effect);
(v) Buyer shall have delivered to Fibreboard a certificate on
and dated as of the Closing Date to the effect that each of the conditions
specified above in Sections 7.2(i)-(iii) is satisfied in all material respects;
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(vi) all applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated;
(vii) Fibreboard shall have received from counsel to Buyer an
opinion addressed to Fibreboard and dated as of the Closing Date in the form
attached as Exhibit F;
(viii) Buyer shall have extended offers of continued
employment to the persons identified in Exhibit G attached hereto in accordance
with, at a minimum, the terms set forth in such Exhibit G; and
(ix) all actions to be taken by Buyer in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Fibreboard.
Fibreboard may waive any condition specified in this Section 7.2 (other than
Section 7.2(vi)) if Fibreboard executes and delivers to Buyer a writing so
stating at or prior to the Closing.
SECTION 8
TERMINATION
-----------
8.1 Termination of Purchase Agreement. The Parties may terminate this
Purchase Agreement as provided below:
(i) Buyer and Fibreboard may terminate this Purchase Agreement
by mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Purchase Agreement by giving
written notice to Fibreboard at any time prior to the Closing in the event that
Fibreboard is in breach, and Fibreboard may terminate this Purchase Agreement
by giving written notice to Buyer at any time prior to the Closing in the event
that Buyer is in breach, of any material representation, warranty or covenant
contained in this Purchase Agreement in any
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material respect and such breach is not substantially cured within ten business
days of the breaching Party's receipt of such notice; provided, however, that
if a Party is attempting to cure such breach with commercially reasonable
diligence on the tenth (10th) business day after receipt of such notice, such
period shall be extended to twenty (20) business days after receipt of such
notice so long as the breach is curable and the Party continues to attempt to
cure with commercially reasonable diligence;
(iii) As set forth in Section 5.5, Fibreboard may terminate
this Purchase Agreement and retain the Deposit pursuant to Section 8.3 if any
of the Acquired Corporations, Fibreboard or Buyer is notified, verbally or in
writing as required by Section 11.6, by CIBC, Xxxx Xxxxxxx or Buyer that (A)
CIBC or Xxxx Xxxxxxx has withdrawn its financing commitment or otherwise does
not intend to provide financing, for any reason, (B) the terms of either of the
commitment letters are amended in a manner that results in a delay of the
Closing or in a manner otherwise materially adverse to Fibreboard, or (C) the
aggregate amount committed to under both of the commitment letters is reduced;
(iv) Buyer may terminate this Purchase Agreement by giving
written notice to Fibreboard at any time prior to the Closing if the Closing
shall not have occurred on or before December 3, 1996 by reason of the failure
of any condition precedent under Section 7.1 hereof (unless the failure results
primarily from Buyer itself breaching any representation, warranty or covenant
contained in this Purchase Agreement); or
(v) Fibreboard may terminate this Purchase Agreement by giving
written notice to Buyer at any time prior to the Closing if the Closing shall
not have occurred on or before December 3, 1996 by reason of the failure of any
condition precedent under Section 7.2 hereof (unless the failure results
primarily from Fibreboard breaching any representation, warranty or covenant
contained in this Purchase Agreement).
8.2 Effect of Termination. If any Party terminates this Purchase
Agreement pursuant to Section 8.1 above, all obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any
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Liability of any Party then in breach of this Purchase Agreement for such
breach of this Purchase Agreement).
8.3 Disposition of the Deposit. Notwithstanding Section 8.2 of
this Purchase Agreement, upon termination of this Purchase Agreement by either
party for any reason (except as set forth below), Fibreboard shall retain the
Deposit; provided, however, that in the event Buyer terminates this Purchase
Agreement under Section 8.1(ii) above as a result of a breach by Fibreboard or
an Acquired Corporation of its covenants under this Purchase Agreement or if
the Closing does not occur solely because Fibreboard failed to obtain the
consent of Bank of America NT & SA with regard to that certain financing
facility described in Appendix 2 or the Lender fails to deliver its pay-off
letter and the Old Certificates, then, and in such event, Fibreboard shall
deliver to Buyer the Deposit, together with interest thereon at the rate
specified in Section 2.2 of this Purchase Agreement (for the period beginning
on the Deposit Date and ending on the date paid).
SECTION 9
POST-CLOSING COVENANTS
----------------------
Fibreboard and Buyer agree as set forth in this Section 9 with respect
to the period following the Closing.
9.1 General.
-------
(a) In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Purchase
Agreement, each Party shall take such further action (including the execution
and delivery of such further instruments and documents) as any Party reasonably
may request, all at the sole cost and expense of the requesting Party (unless
the requesting Party is entitled to indemnification therefor under Section 10
below).
(b) If Buyer shall, at any time after the Closing, receive
any Excluded Asset or any payment with respect thereto, it shall promptly
deliver such Excluded Asset or payment to
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Fibreboard unless Fibreboard shall have received value for same at Closing. If
Fibreboard shall, at any time after the Closing, receive any Acquired Asset or
any payment with respect thereto, Fibreboard shall promptly deliver such
Acquired Asset or payment to Buyer.
(c) If requested by Buyer, Fibreboard agrees to prosecute
or otherwise enforce in its own name for the benefit of Buyer any claims,
rights or benefits that are intended to be transferred to Buyer by its
acquisition of the Acquired Corporations pursuant to this Purchase Agreement
and that require prosecution or enforcement in Fibreboard's name, provided
Buyer or any Acquired Corporation is legally prevented from prosecuting or
otherwise enforcing such claim. In the event Buyer or any Acquired Corporation
makes such a request of Fibreboard, Buyer will defend, indemnify and hold
Fibreboard harmless for any liabilities arising from such prosecution or
enforcement, unless the prosecution or enforcement is made necessary by a
breach of this Purchase Agreement by Fibreboard. Any prosecution or
enforcement of claims, rights or benefits under this Section shall be solely at
Buyer's expense, unless the prosecution or enforcement is made necessary by a
breach of this Purchase Agreement by Fibreboard.
9.2 Access. Without limiting the provisions of Section 9.1, upon
reasonable notice, Buyer shall cause the employees or former employees of the
Acquired Corporations who were previously responsible for preparing the
financial information of the Resort Group (to the extent such individuals
continue to be employed by the Acquired Corporations, Buyer or any Affiliate of
Buyer) to assist in the preparation of (i) the Final Adjustment and (ii) any
financial reports, audited financial statements and tax returns of any Acquired
Corporation, and Buyer shall permit Fibreboard and its representatives to have
such access (during normal business hours) to the premises, assets, records and
employees of the Acquired Corporations, Buyer and any Affiliate of Buyer as
shall be reasonably necessary for the preparation of (i) the Final Adjustment
and (ii) any financial reports, audited financial statements and tax returns
for periods prior to or including the Closing Date, all without cost to
Fibreboard and without material disruption to Buyer's or any Acquired
Corporation's operations.
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9.3 Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any charge, complaint, action,
suit, proceeding, hearing, investigation, claim or demand in connection with
(i) any transaction contemplated under this Purchase Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction prior to the
Closing Date involving the Acquired Corporations or the Acquired Assets
(including, without limitation, any Adverse Consequences), each Party will
cooperate with the contesting or defending Party and its counsel in the contest
or defense, make available its personnel and provide such testimony and access
to its books and records as shall be requested and reasonable in connection
with the contest or defense and which shall not cause any material disruption
to such Party's operations, with all out-of-pocket costs to be borne by the
contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Section 10, 11.13, 11.14 or 11.15
below).
9.4 Transition. Except upon instructions delivered from Buyer to
Fibreboard, Fibreboard will refrain from taking any action that is designed or
intended to have the effect of discouraging any governmental authority, lessor,
licensor, customer, supplier or other business associate of any Business,
insofar as the Acquired Assets are concerned, from maintaining the same
business relationships with Buyer and the Acquired Corporations after the
Closing as it maintained with such Business prior to the Closing. Fibreboard
will promptly refer all customer inquiries relating to the businesses of the
Acquired Corporations, insofar as the Acquired Corporations and the Acquired
Assets are concerned, to Buyer from and after the Closing.
9.5 Corporate Names. Without limitation, Buyer expressly acknowledges
and agrees that the name "Fibreboard," and any derivation thereof shall not
constitute an Acquired Asset and shall remain the exclusive property of
Fibreboard. Neither Buyer nor any Affiliate of Buyer shall, in any way,
infringe upon Fibreboard's use or rights to such name (and any derivation
thereof).
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SECTION 10
INDEMNIFICATION AND REMEDIES
----------------------------
10.1 Survival; Exclusivity. All of the representations and warranties
of the Parties contained in this Purchase Agreement shall survive the Closing
(unless Buyer, on the one hand, or Fibreboard, on the other hand, knew of any
misrepresentation or breach of warranty or covenant of Fibreboard or Buyer, as
the case may be, at the time of Closing in which event the affected
representation(s) or warranty(ies), or relevant portion(s) thereof, shall not
survive the Closing), but shall continue in force and effect solely for a
period of one year thereafter (the "Survival Period"). The Parties hereto
agree that the sole recourse from and after the Closing for a breach of a
representation or warranty made in this Purchase Agreement shall be the
indemnities provided for in Sections 10.2 and 10.3 of this Purchase Agreement,
but nothing in such sections restricts any Party from enforcing other covenants
or agreements made in this Purchase Agreement.
10.2 Indemnification Provisions for Buyer's Benefit. In the event
that any of the representations or warranties of Fibreboard contained in this
Purchase Agreement are not true, and provided that (A) the particular
representation or warranty (or portion thereof) survives the Closing, (B) Buyer
makes a written claim for indemnification against Fibreboard within the
Survival Period, and (C) each such discrete claim has a value of at least Ten
Thousand Dollars ($10,000), then Fibreboard agrees to indemnify Buyer (and, as
of the Closing, any relevant Acquired Corporation) from and against any Adverse
Consequences Buyer (or, as of the Closing, any relevant Acquired Corporation)
reasonably may suffer through and after the date of the claim for
indemnification resulting from or caused by the breach; provided, however, that
Buyer shall not be entitled to indemnification under this Section 10.2 for any
indemnification claims until the amount of the aggregate claims required to be
indemnified by Fibreboard pursuant to this Section 10.2 exceeds Five Hundred
Thousand Dollars ($500,000) (said amount is hereinafter referred to as the
"Threshold"), whereupon Buyer shall be entitled to indemnification hereunder
from Fibreboard only for Adverse Consequences in excess of the Threshold. As
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used herein "discrete claim" means any claim involving a discrete or single
occurrence, site specific condition, act or other event, which causes Adverse
Consequences.
10.3 Indemnification Provisions for Seller's Benefit. In the event
Buyer breaches any of its representations or warranties contained in this
Purchase Agreement, and provided that the particular representation or warranty
(or portion thereof) survives the Closing and Fibreboard makes a written claim
for indemnification against Buyer within the Survival Period, then Buyer agrees
to indemnify Fibreboard from and against any Adverse Consequences it reasonably
may suffer through and after the date of the claim for indemnification
resulting from or caused by the breach.
10.4 Purchase "AS IS".
(i) Buyer acknowledges and agrees that Buyer has had the
opportunity to thoroughly inspect and review the Businesses, including the
Acquired Assets.
(ii) Buyer acknowledges and agrees that (A) Buyer (through its
officers and Affiliates) has substantial experience with the types of
businesses conducted by the Acquired Corporations, assets such as the Acquired
Assets (including the Real Property) and issues such as the Purchase
Considerations, and (B) except as otherwise expressly provided in this Section
10 of this Purchase Agreement, Buyer is acquiring the Acquired Shares
representing ownership of the Acquired Corporations containing the Acquired
Assets.
"AS-IS, WHERE-IS, WITH ALL FAULTS,"
---------------------------------
in their current condition, and solely in reliance on Buyer's own due
diligence, inspections and examinations of the Acquired Assets.
(iii) Buyer acknowledges and agrees that (A) except as
expressly set forth in Section 4 of this Purchase Agreement, neither Fibreboard
nor any Acquired Corporation nor any agent, representative or employee of
Fibreboard or any Acquired Corporation has made any representations or
warranties on which Buyer shall be in any way entitled to rely with respect to
the
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Acquired Corporations, Acquired Assets or the Purchase Considerations, whether
direct or implied, verbal or written, including any warranty of merchantability
or fitness for a particular purpose, and (B) each of the Acquired Corporations
and Fibreboard may disclaim and has hereby expressly disclaimed any and all
representations and warranties which are not expressly set forth in Section 4
above.
(iv) Having taken into account the possibility that its
inspection of the Businesses, including the Acquired Assets, may not have
revealed adverse or undesirable Environmental Conditions, and except as
otherwise expressly provided in Section 10 of this Purchase Agreement, Buyer
hereby waives, releases and discharges forever Fibreboard and Fibreboard's
Related Parties from all present and future Adverse Consequences arising out of
or in any way connected with any Environmental Conditions (including, without
limitation, any Environmental Conditions resulting from the use, maintenance,
ownership or operation of the businesses by any of the Acquired Corporations or
Fibreboard). Buyer hereby waives the benefits of Section 1542 of the
California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
10.5 Cross-indemnifications and Release. The Parties agree as
follows:
(a) Indemnification of Buyer and Acquired Corporations by
Seller. Fibreboard shall defend, indemnify and hold Buyer (and as of the
Closing, any relevant Acquired Corporation) harmless from any Adverse
Consequences Buyer (or, after the Closing, any Acquired Corporation) reasonably
may suffer resulting from or caused by Seller's Liabilities.
(b) Indemnification and Release of Seller by Acquired
Corporations and Buyer. Buyer and Acquired Corporations agree jointly and
severally to defend, indemnify and hold Fibreboard harmless from and against
any Adverse Consequences Fibreboard
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reasonably may suffer resulting from or caused by the Assumed Liabilities.
Furthermore, Buyer and Acquired Corporations hereby waive, release and
discharge forever Fibreboard and Fibreboard's Related Parties from all present
and future Adverse Consequences arising out of or in any way connected with any
Environmental Conditions, except to the extent that any such Adverse
Consequences are indemnifiable by Seller in accordance with Section 10.2
hereof.
10.6 Matters Involving Third Parties. If any third party shall notify
Fibreboard, on the one hand, or Buyer on the other hand (the notified party is
hereinafter referred to as the "Indemnified Party") with respect to any matter
which may give rise to a claim for indemnification against the other (such
other party is hereinafter referred to as the "Indemnifying Party") under this
Section 10, then the Indemnified Party shall notify the Indemnifying Party
thereof promptly; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder unless (and then
solely to the extent) the Indemnifying Party is thereby damaged. Seller hereby
agrees that it is defending, and will continue to defend, in accordance with
the terms of this Purchase Agreement all litigation and actions pending against
Seller or any Acquired Corporation, including, without limitation, the actions
described in the Disclosure Schedule. In the event the Indemnifying Party
notifies the Indemnified Party within fifteen (15) days after the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming
the defense thereof, (A) the Indemnifying Party will defend the Indemnified
Party against the matter with counsel of the Indemnifying Party's choice
reasonably satisfactory to the Indemnified Party, (B) the Indemnified Party may
retain separate co-counsel at the Indemnified Party's sole cost and expense
(except that the Indemnifying Party will be responsible for the reasonable fees
and expenses of the separate co-counsel to the extent the Indemnified Party
concludes reasonably that the Indemnified Party has an actual conflict of
interest with other parties represented by the counsel selected by the
Indemnifying Party, or such counsel otherwise has a conflict in its
representation of the Indemnified Party such that representation of the
Indemnified Party by such counsel would be inappropriate), and (C) neither the
Indemnified Party nor the Indemnifying Party
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will consent to the entry of any judgment or enter into any settlement with
respect to the matter without the written consent of the other Party (not to be
withheld unreasonably). In the event the Indemnifying Party does not notify
the Indemnified Party within fifteen (15) days after the Indemnified Party has
given notice of the matter that the Indemnifying Party is assuming the defense
thereof, then the Indemnified Party may defend against, or enter into any
settlement with respect to, the matter in any manner it reasonably may deem
appropriate (with the Indemnifying Party bearing responsibility for all Adverse
Consequences as set forth herein).
10.7 Determination of Loss. The Parties shall make appropriate
adjustments for Tax benefits (and losses) and insurance proceeds (reasonably
certain of receipt and utility in each case) and for the time value of money
(using the prime lending rate of Bank of America National Trust and Savings
Association as the discount rate) in determining the amount of Adverse
Consequences for purposes of this Section 10.
10.8 Payment. Except for third-party claims being defended in good
faith by the Indemnifying Party in accordance with Section 10.6, the
Indemnifying Party shall satisfy its obligations hereunder within fifteen (15)
days after its receipt of notice of a claim. Any amount not paid to the
Indemnified Party by such date shall bear interest at a rate equal to six and
one-half percent (6 1/2%) per annum from the date due until the date paid.
SECTION 11
MISCELLANEOUS
-------------
11.1 No Third-Party Beneficiaries. Except as expressly provided
herein, this Purchase Agreement shall not confer any rights or remedies upon
any Person other than the Parties and their respective successors and permitted
assigns.
11.2 Entire Agreement. This Purchase Agreement (including the
Exhibits, Schedules and Appendices referred to herein) constitutes the entire
agreement between the Parties and super-
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sedes any prior understandings, agreements or representations by or between the
Parties, written or oral, that may have related in any way to the subject
matter hereof, including without limitation, the Letter of Intent; provided,
however, that the terms and provisions of that certain confidentiality letter
dated August 16, 1996 between Buyer and Fibreboard and executed in connection
with Buyer's due diligence review of the Resort Group shall remain in full
force and effect and shall not be amended as a result of this Purchase
Agreement.
11.3 Succession and Assignment. This Purchase Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign either this Purchase
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of the other Parties; provided, however, that, Buyer may
collaterally assign its rights under this Purchase Agreement to any Person or
Persons providing financing to Buyer with respect to the acquisition of the
Acquired Shares and such Person or Persons may, upon any foreclosure resulting
from such financing, further assign this Purchase Agreement and its rights
hereunder to any other Person.
11.4 Counterparts. This Purchase Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
11.5 Headings. The section headings contained in this Purchase
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Purchase Agreement.
11.6 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
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If to Seller (or the Acquired Corporations
------------------------------------------
before the Closing Date):
------------------------
Fibreboard Corporation
Texas Commerce Tower
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Senior Vice
President, General Counsel and
Secretary
Copy to:
-------
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxx
If to Buyer (or the Acquired Corporations on or
-----------------------------------------------
after the Closing Date):
-----------------------
Booth Creek Ski Holdings, Inc.
000 Xxxxx Xxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
Copy to:
-------
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended. Any Party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
11.7 Governing Law. This Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of California.
11.8 Amendments and Waivers. No amendment of any provision of this
Purchase Agreement shall be valid unless the same
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shall be in writing and signed by the Parties. No waiver by any Party of any
default, misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
11.9 Severability. Any term or provision of this Purchase Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Purchase Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
11.10 Expenses. Each Party shall bear its own costs and expenses
(including legal fees and expenses) incurred in connection with the negotiation
of this Purchase Agreement and the transactions contemplated hereby; provided,
however, that the costs of any preliminary title reports and any title insurance
premiums contemplated by Section 7.1(vii) of this Purchase Agreement will be
shared equally by Fibreboard and Buyer; and provided, further, that the filing
fees associated with the Xxxx-Xxxxx-Xxxxxx Act (as contemplated by Section 6.2
above) shall be borne by Buyer. Each Party shall bear its own costs and
expenses (including legal fees and expenses), associated with any further
filings or requests for information with respect to the Xxxx-Xxxxx-Xxxxxx Act.
11.11 Construction. The language used in this Purchase Agreement will
be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict
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construction shall be applied against any Party. Any reference to any federal,
state, local or foreign statute or law shall be deemed also to refer to all
amendments thereto and rules and regulations promulgated thereunder, unless the
context requires otherwise.
11.12 Incorporation of Exhibits, Schedules and Appendices. The
Exhibits, Schedules and Appendices identified in this Purchase Agreement are
incorporated herein by reference and made a part hereof.
11.13 Employee Benefits Matters.
(a) Effective immediately prior to the Closing, and contingent
on the Closing, Fibreboard shall terminate the participation of employees of
the Acquired Corporations in any Plan maintained by Fibreboard and fully vest
them in all profit sharing or pension plans. Effective immediately prior to
the Closing, and contingent on the Closing, Fibreboard shall cause Acquired
Corporations to terminate any Plan (and the participation of employees of the
Acquired Corporations in such Plan) maintained by the Acquired Corporations and
fully vest employees in all profit sharing or pension plans.
(b) Buyer shall ensure that (i) employees of the Acquired
Corporations who are employees of the Acquired Corporations, Buyer or any
Affiliate of Buyer from and after the Closing (collectively, "Affected
Employees") shall be entitled to participate fully in the employee benefit
plans of Buyer and (ii) such plans shall treat employment with (or within) the
Acquired Corporations (or the Controlled Group) prior to the Closing Date the
same as employment with any of Buyer or its ERISA affiliated group from and
after the Closing Date for purposes of eligibility and vesting, but not benefit
accrual.
(c) Prior to the Closing Date, Fibreboard shall cause the
Acquired Corporations to have paid (i), except to the extent such Liability or
obligation is reflected in calculation of the Net Working
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Capital, all bonuses earned by Affected Employees for all periods prior to the
Closing Date; and (ii) all contributions to all profit sharing and pension
Plans for all periods prior to the Closing Date. Except to the extent such
Liability or obligation is reflected in the calculation of the Net Working
Capital, Fibreboard shall be responsible for paying the Affected Employees for
any vacation, holiday and sick pay accrued prior to the Closing.
(d) Except to the extent such Liability or obligation is
reflected in the calculation of the Net Working Capital, Fibreboard shall
remain responsible for all labor and employment obligations of Fibreboard or
any Acquired Corporation, for the period prior to the Closing, including all
Liability or obligations arising from (A) workers' compensation claims and
coverage, both medical and disability, or other government-mandated programs,
which are associated with any employees of Fibreboard or the Acquired
Corporations for periods prior to the Closing or based on injuries occurring on
or prior to the Closing regardless of when such claims are filed and (B)
amounts owed to any employees of Fibreboard or any Acquired Corporation for
compensation for any period prior to the Closing or any termination by
Fibreboard or any Acquired Corporation of the employment of such employees
prior to the Closing. Buyer and the Acquired Corporations shall be solely
responsible for claims based on injuries occurring after the Closing. In
addition, except to the extent such Liability or obligation is reflected in
calculation of the Net Working Capital, Fibreboard shall remain responsible in
accordance with all Plans for the satisfaction of all claims for benefits,
including medical, dental, life insurance, health insurance, health, accident
or disability or severance benefits brought by or in respect of employees of
the Businesses under any Plan, and shall remain responsible for all Liability
arising under the Consolidated Omnibus Budget Reconciliation Act of 1985 with
respect to any employee terminated prior to the Closing or otherwise with
respect to any Plan that is covered thereby; provided, however, that the Buyer
shall cause the Acquired Corporations to reimburse Fibreboard for its actual
costs in providing continuing coverage for medical and dental benefits for
employees of the Acquired Corporations from and after the Closing and until the
end of the year.
(e) Except to the extent such Liability or obligation is
reflected in the calculation of the Net Working Capital, Fibreboard shall
indemnify and hold Buyer (and, as of the Closing, the Acquired Corporations)
harmless for all Liabilities arising under Title I or IV of ERISA or Chapter 43
of the Code
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by reason of all or any part of the Acquired Corporations having at some date
prior to the Closing been a part of Seller or the Seller's Controlled Group.
11.14 Employment. The Acquired Corporations and Buyer also agree to
extend offers of continued employment as of the Closing to the persons
identified in Exhibit G in accordance with, at a minimum, the terms set forth in
such Exhibit G. Nothing in this Purchase Agreement shall affect any of the
Acquired Corporations' rights to terminate the employment of any Affected
Employee after the Closing, with or without cause, provided that Buyer and the
Acquired Corporations shall indemnify and hold Fibreboard harmless from any
Liability to the extent arising out of (a) such a termination, (b) allegations
of discrimination as a result of or arising out of Buyer's employment of the
Affected Employees, or (c) the absence of any notice by Fibreboard, Buyer or
Acquired Corporations under Section 3(a) of the WARN Act with respect to the
transactions contemplated by this Purchase Agreement.
11.15 Taxes and Related Matters.
(i) Seller and Buyer shall jointly make the elections provided for by
Sections 338(g) and 338(h)(10) of the Code and any corresponding elections
under state, local, or foreign tax law (collectively, "Section 338 Elections")
with respect to the purchase and sale of the Acquired Shares, and Buyer shall
have the option, in its sole discretion, to make the election provided for by
Section 338(g) of the Code with respect to any Affiliate which is an eligible
target affiliate under Section 338 of the Code and applicable treasury
regulations. Buyer and Seller shall cooperate with each other to take all
actions necessary and appropriate (including executing and filing such forms,
returns, elections, schedules and other documents as may be required) to effect
and preserve timely Section 338 Elections. Seller and Buyer shall report the
purchase by Buyer of the Shares pursuant to this Purchase Agreement consistent
with the Section 338 Elections and shall take no Income Tax position
inconsistent therewith in any Income Tax return, any proceeding before any
taxing authority or otherwise.
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(ii) The Purchase Price shall be allocated among the Acquired Shares
by Buyer as set forth in Exhibit A, which will be completed by mutual agreement
of the Parties and attached to this Purchase Agreement. Within 180 days of the
Closing Date, but in all events no later than 60 days prior to the last date
(determined without regard to extensions) on which a Section 338 Election may
be filed with any applicable federal, state or local governmental authority,
Buyer shall prepare and deliver to Seller a schedule (the "Shares Price
Allocation Schedule") allocating with the consent of the Seller (which consent
shall not be unreasonably withheld) the Modified Aggregate Deemed Sale Price
(as defined in Treasury Regulation section 1.338(h)(10)-1(e)(5)) among the
assets of the Acquired Corporations in accordance with the applicable treasury
regulations promulgated under Section 338 of the Code. At the time of delivery
of the Shares Price Allocation Schedule, Buyer shall provide Seller with a copy
of any appraisal report utilized by Buyer in the preparation of such schedule.
The costs of any appraisal shall be borne by the Buyer. Exhibit A and the
Shares Price Allocation Schedule shall be binding on the Buyer and Seller and
their Affiliates and all Parties agree to act in accordance with such Exhibit
and Schedule in the preparation, filing and audit of any Income Tax return.
(iii) Whenever it is necessary for purposes of this Purchase
Agreement to determine the Tax liability (or assessments, utilities, and
similar charges and expenses with respect to the Acquired Assets), of an entity
for a taxable year or period that begins before and ends on or after the
Closing Date, the determination shall be made as follows:
(A) in the case of Income Taxes, by apportioning the total
Tax liability for such taxable year or period on the assumption that
the taxable year or period includes and ends on the Closing Date, as
provided for in Treasury Regulation 1.1502-76(b)(1) (with respect to
any federal Income Tax liability), and with income (or other
applicable measure) apportioned as provided in Treasury Regulation
1.1502-76(b)(2) (or in the same manner, with respect to Income Taxes
other than federal Income Taxes), it being understood that Buyer is
responsible for all Income Taxes of the Resort Group attributable to
the periods (or portions thereof) beginning after the Closing Date
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(or deemed, pursuant to this section, to begin after the Closing Date), and
that Seller is responsible for all Income Taxes of the Resort Group
attributable to the periods (or portions thereof) ending on or prior to the
Closing Date (or deemed, pursuant to this section, to end on or prior to the
Closing Date), including specifically, without limitation, any Income Taxes
attributable to the Section 338 Elections;
(B) in the case or real or personal property, lease or license Taxes,
and in the case of any assessments, utilities, and similar charges and expenses
with respect to the Acquired Assets, by prorating between Fibreboard, on the one
hand, and Buyer, on the other hand, by apportioning such items on a per diem
basis, with Fibreboard liable for the period prior to and including the Closing
Date, and Buyer responsible for the period after the Closing Date (it being
understood that Buyer is responsible only for the portion of each such
obligation attributable to the number of days after the Closing in the relevant
assessment period and Seller is only responsible for the portion of each such
obligation attributable to the number of days prior to (and including) the
Closing in the relevant assessment period). Fibreboard and Buyer shall use
their respective best efforts to prepare a schedule of prorations, prior to the
Closing Date, which shall cover as many items to be prorated as practicable so
that such prorations can be made at the Closing (the resulting amount owed by
Buyer to Fibreboard is herein referred to as the "Estimated Proration Amount").
Such prorations shall be adjusted, if necessary, and completed after the Closing
as soon as final information becomes available. Fibreboard and Buyer agree to
cooperate and to use their best efforts to complete such prorations no later
than thirty (30) days after the Closing Date;
(C) in the case of any Taxes not specifically covered by subsections
(A) or (B) above, by apportioning the total Tax liability for such taxable year
or period on the assumption that the taxable year or period includes and ends on
the Closing Date, with income (or other applicable measure) apportioned in the
same manner as provided in Treasury Regulation 1.1502-76(b)(2), it being
understood
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that Buyer is responsible for all such Taxes of the Resort Group
attributable to the periods (or portions thereof) beginning after the
Closing Date (or deemed, pursuant to this section, to begin after the
Closing Date), and that Seller is responsible for all such Taxes of the
Resort Group attributable to the periods (or portions thereof) ending on or
prior to the Closing Date (or deemed, pursuant to this section, to end on or
prior to the Closing Date), provided, however, that any transfer, stamp,
sales or use Taxes assessed or imposed solely as a result of the
transactions contemplated by this Purchase Agreement shall be borne solely
by Buyer.
(iv) In connection with tax returns and information reports:
(A) Seller shall be responsible for the timely filing (taking
into account any extensions received from the relevant Tax authorities) of
all Tax returns and information reports required by law to be filed in any
jurisdiction in respect of the Resort Group on or prior to the Closing, and
shall promptly deliver copies of all such returns and reports to Buyer, and
Buyer shall be responsible for the timely filing (taking into account any
extensions received from the relevant Tax authorities) of all Tax returns
and information reports required by law to be filed in such jurisdiction in
respect of the Resort Group after the Closing;
(B) Control of any legal or administrative proceedings
concerning any such Taxes, and entitlement to any refunds or awards with
respect to any such Taxes, shall rest with the Party responsible for
payment therefor under this Purchase Agreement.
(C) In the event that any refund, rebate or similar payment is
received by Seller or Buyer in respect of the Resort Group, and which
payment pertains to the assessment period in which the Closing falls, the
Parties agree that such payment will be apportioned between Seller or Buyer
in accordance with the provisions of Section 11.15(iii); Seller shall
notify Buyer in writing within thirty (30) days as to any examination by or
disputes with taxing
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authorities that relate to periods of operating through and including
the Closing Date and relate to the Resort Group which would affect the
liability for Taxes of Buyer or the Acquired Corporations for any
period after the Closing Date or that could result in Buyer owing
money to Seller under any provisions in this Purchase Agreement.
Buyer shall notify Seller in writing within thirty (30) days as to any
examination by or disputes with taxing authorities that relate to the
Resort Group which would affect the liability for Taxes of Seller or
the Resort Group for any period on or prior to the Closing Date or
that could result in Seller owing money to Buyer or the Resort Group
under any provisions in this Purchase Agreement; and
(D) The Parties shall cooperate, including, without
limitation, in connection with any audits by Tax authorities and in
the preparation of Tax returns, to avoid payment of duplicate or
inappropriate Taxes in respect of the Acquired Corporations, and each
party shall furnish, at the request of the other, proof of payment of
such Taxes and any other documentation that may be a prerequisite to
avoiding payment of a duplicate or inappropriate Tax.
11.16 Payment of BML Earn-Out. Buyer shall pay (or cause Bear
Mountain to pay) to Fibreboard the BML Earn-Out to the extent provided in the
terms set forth in Schedule 11.16.
11.17 Promotional Programs. From and after Closing Buyer will
cause the Acquired Corporations to honor all passes, discount coupons, Vertical
Plus program awards and other similar promotional items previously issued by
any of the Acquired Corporations (or their respective predecessors) prior to
the Closing Date (except to the extent indemnifiable by Seller in accordance
with Section 10.2 hereof).
11.18 Nonsolicitation of Employees. None of Fibreboard or any
Affiliates thereof shall, prior to the third anniversary of the Closing Date,
solicit any employee of Buyer, any Acquired Corporation or any Affiliate
thereof or of any successor or assign of Buyer to leave such employment if such
employee was at any time between the date hereof and the Closing an employee of
any Acquired Corporation or Fibreboard.
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11.19 Guarantee by Buyer. Subject to Section 11.1 hereof, Buyer
hereby guarantees to Fibreboard the due and punctual payment and performance
of obligations owing to Fibreboard by Acquired Corporations after Closing under
this Purchase Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Stock
Purchase and Indemnification Agreement as of the Effective Date.
BUYER:
BOOTH CREEK SKI HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: Vice President
-------------------------
SELLER:
FIBREBOARD CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxxxxx
----------------------------
Title: Vice President
-------------------------
NORTHSTAR:
TRIMONT LAND COMPANY,
a California corporation
By: /s/ Xxxxxx X. XxXxxxxxx
---------------------------
Title: Vice President
-------------------------
SIERRA:
SIERRA-AT-TAHOE, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxxxxx
---------------------------
Title: Vice President
------------------------
BEAR MOUNTAIN:
BEAR MOUNTAIN, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxxxxx
---------------------------
Title: Vice President
------------------------
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