EXHIBIT 10.37
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("AGREEMENT"), dated October 6, 1995, is
entered into by and among BEAR MOUNTAIN, INC., a Delaware corporation ("BUYER"),
FIBREBOARD CORPORATION, a Delaware Corporation ("FIBREBOARD"), BEAR MOUNTAIN
LTD., a California corporation ("SELLER"), and S-K-I LTD., the sole shareholder
of Seller ("S-K-I"). Seller and S-K-I are sometimes collectively referred to in
this Agreement as "SELLING PARTIES." Buyer and Fibreboard are sometimes
collectively referred to in this Agreement as "PURCHASING PARTIES."
WITNESSETH:
WHEREAS, Seller is engaged in the operation of a ski resort by the
name of Bear Mountain Ski Resort and a golf course by the name of Bear Mountain
Golf Course, all located in or adjoining the City of Big Bear Lake, California
(the "BUSINESS"); and
WHEREAS, Seller owns and leases certain real property located in the
City of Big Bear Lake, California, and owns and leases certain tangible and
intangible assets used in the Business, including without limitation buildings
and improvements, machinery and equipment, vehicles, retail inventory, non-
retail inventory, intellectual property, contract rights, water rights, and
prepaid expenses and receivables; and
WHEREAS, Seller has obtained a special-use permit from the Department
of Agriculture - Forest Service ("FOREST SERVICE") granting the right to use
certain real property adjacent to Seller's owned real property in order to
operate the Business; and
WHEREAS, Buyer and Seller desire that Buyer purchase from Seller, and
that Seller sell to Buyer, all of the real property and operating and intangible
assets used in the Business, other than the Excluded Assets (as hereinafter
defined), and that Seller transfer and assign to Buyer certain rights and
agreements, including without limitation the special use permit obtained by
Seller from the Forest Service, all on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE 1. PURCHASE AND SALE
1.1 DESCRIPTION OF ASSETS. Subject to the terms and conditions set
forth in this Agreement, Seller (and S-K-I, with respect to the trademarks and
trade names owned by S-K-I and described in Section 1.1.8) agrees to sell,
convey, transfer, assign, and deliver to Buyer, and Buyer agrees to purchase
from Seller (and S-K-I), all the assets, properties, and business of Seller of
every kind, character, and description whether tangible, intangible, real,
personal, or mixed, and wherever located (but excluding the Excluded Assets, as
specifically described in Section 1.2), and the trademarks and trade names of
S-K-I described in Section 1.1.8, all of which are sometimes collectively
referred to in this Agreement as "THE ASSETS," including, but without limitation
to, the following:
1.1.1 OWNED REAL PROPERTY. Those certain parcels of land more fully
described on SCHEDULE 1.1.1, together with all privileges and appurtenances
thereto and all plants, buildings, structures, installations, fixtures,
improvements, betterments and additions situated thereon and together with all
easements used or useful in connection therewith (such land, improvements and
easements together collectively referred to as the "OWNED REAL PROPERTY");
1.1.2 PERMITTED REAL PROPERTY. The special use permit dated June 25,
1990 issued by the Forest Service ("USFS PERMIT"), a conformed copy of which is
attached hereto as SCHEDULE 1.1.2, to the extent that it is assignable with the
consent of the Forest Service and is not replaced with a new permit to be issued
to the Buyer, together with all rights and privileges under the USFS Permit in
and to the land described in the USFS Permit in and to the plants, buildings,
structures, installations, fixtures, improvements, betterments and additions
situated thereon (such land, plants, buildings, structures, installations,
fixtures, improvements, betterments and additions together collectively referred
to as the "USFS PERMITTED PROPERTY");
1.1.3 REAL PROPERTY LEASES. The leases of the real property more
fully described on SCHEDULE 1.1.3 together with all rights and privileges under
such leases (hereinafter referred to as the "REAL PROPERTY LEASES") to the real
property subject to such leases (hereinafter referred to as the "LEASED REAL
PROPERTY" and, together with the Owned Real Property, USFS Permit and USFS
Permitted Property, collectively referred to as the "REAL PROPERTY");
1.1.4 EQUIPMENT AND IMPROVEMENTS. All ski lifts, pylons, towers,
ski-lift machinery and equipment, snow-cats (excluding the items described in
Sections 1.2.10 and 1.2.11), snow-making machinery and equipment, ski trail
improvements, mountain restaurants, signs, snow-making facilities and other
facilities and structures, buildings, installations, fixtures, improvements,
betterments and additions located on or within the Real Property, machinery,
equipment, service trucks, shuttle busses, golf carts, vehicles (excluding the
vehicle described in Section 1.2.11), tractors, spare tires and parts (excluding
the items described in Section 1.2.10), tools, appliances, furniture, office
furniture, fixtures, office supplies and office equipment, computers (other than
the computer described in Section 1.2.11), computer terminals and printers,
telephone systems, telecopiers and photocopiers, and other tangible personal
property of every kind and description that are located upon or within the Real
Property, which are owned or leased by Seller, or are utilized in connection
with Seller's operations upon or within the Real Property, including without
limitation the items listed on SCHEDULE 1.1.4 attached hereto (collectively, the
"EQUIPMENT AND IMPROVEMENTS");
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1.1.5 INVENTORIES. All of Seller's retail inventory (including
without limitation all inventories of food and beverages and "BEAR MOUNTAIN"
logo inventory customarily sold by Seller in new condition to the public, but
excluding the items of slow-moving logo inventory described in Section 1.2.9),
all of Seller's non-retail inventory (including without limitation all
inventories of ski rental equipment and employee and ski patrol jackets, parkas,
pants and other uniform items, other than those which are customarily sold by
Seller in new condition to the public and which are included in Seller's retail
inventory), consumable supplies, spare parts and repair materials and any and
all other inventories of Seller relating to the Business, as described in the
unaudited balance sheet of Seller as of July 2, 1995, included in the Financial
Statements (as hereinafter defined) (the "INTERIM BALANCE SHEET"), an
approximate summary of which items currently on hand is attached hereto as
SCHEDULE 1.1.5, plus any replacements for or additions to such inventories
acquired on or before the Closing Date, and minus any items of inventory sold by
Seller or consumed in the ordinary course of business on or before the Closing
Date (collectively, the "INVENTORIES");
1.1.6 ACCOUNTS RECEIVABLE. All items contained as of the Closing
Date in Seller's General Ledger Account No. 30,000 and identified as an account
receivable, for which Seller has some obligation for performance which extends
beyond the Closing (for example, credit card purchases of season passes for the
1995-1996 Winter Season), including without limitation those items listed on
SCHEDULE 1.1.6 (the "ACCOUNTS RECEIVABLE");
1.1.7 TRANSFERRED AGREEMENTS. All contracts and agreements of Seller
to the extent assignable by Seller, customer agreements, vendor agreements,
purchase orders, installation and maintenance agreements, hardware lease or
rental agreements, contract claims and all other arrangements and understandings
related to the Business which are listed on SCHEDULE 1.1.7, a final version of
which will be attached hereto on the Closing Date (collectively, the
"TRANSFERRED AGREEMENTS");
1.1.8 INTANGIBLES. All assignable trade names, trademarks, service
marks, copyrights, trade secrets, technical know-how and other intellectual
property rights or intangibles used by Seller in (or owned by Seller and useful
in) the operation of the Business and listed on SCHEDULE 6.16 and SCHEDULE 6.18;
1.1.9 BOOKS AND RECORDS. All books of account, forms, records,
files, assignable permits and approvals, licenses, invoices, vendor or supplier
lists, business records (excluding corporate minute books and stock ownership
records), plans and other data which are necessary to the ownership, use,
maintenance or enjoyment of the Assets or the operation of the Business and
which are owned by Seller, including but not limited to all blueprints and
specifications, all personnel, payroll, payroll tax and labor relations records,
all environmental control records, environmental impact reports, statements,
studies and related documents, handbooks, technical manuals and data,
engineering specifications and work papers, ski trail design specifications and
improvement records, all sales records, all accounting and financial records,
all sales and use tax returns, reports, files and records, asset history records
and files, all data entry and accounting systems used to conduct the day-to-day
operations of the Business, all maintenance and repair records, all
correspondence, notices, citations, all assignable permits, approvals, and
licenses and all other documents received from, sent to or in Seller's
possession in connection with governmental agencies (including without
limitation, federal, state, county or regional environmental protection, air or
water quality control, occupational health and safety, land use, planning or
zoning, Forest Service, California Department
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of Alcoholic Beverage Control or fire prevention agencies or governmental
bodies), all plats and surveys of the Real Property, and all plans and designs
of buildings, structures, fixtures and equipment (collectively, the "RECORDS"),
provided however, that Seller may retain copies of such Records as are
reasonably necessary to enable the Selling Parties to fulfill their contractual,
regulatory or statutory obligations after the Closing;
1.1.10 MARKETING INFORMATION. All sales, marketing and resort
development and expansion plans, projections, documents and data (including
without limitation, current and past lists of customers), and all training
materials and marketing brochures related to the Business (collectively, the
"MARKETING INFORMATION");
1.1.11 PREPAID EXPENSES AND DEPOSITS. Subject to Article 3 hereof,
all prepaid expenses and deposits of Seller relating to the Business (other than
any amounts escrowed under this Agreement, if any, Seller's bank deposits and
prepaid insurance), and all rights of Seller to receive discounts, refunds,
rebates, awards and the like (other than those referred to in Section 1.2.6);
1.1.12 NAME. The name "Bear Mountain" to the extent Seller has
proprietary rights thereto in conjunction with the Assets or Business such as
"Bear Mountain Ski Resort" and subject to Buyer's Settlement Agreement with Bear
Mountain Trading Company which shall be considered a Transferred Agreement;
1.1.13 GOODWILL. All Seller's goodwill related to the Business and
to the name "Bear Mountain." Buyer acknowledges that this Agreement confers no
rights nor imposes any limitations on Killington (an Affiliate of S-K-I) use of
the name "Bear Mountain" in connection with the operation of its ski area;
1.1.14 WARRANTY RIGHTS. All of Seller's rights and remedies on and
after the Closing Date, under warranty or otherwise, against a manufacturer,
vendor or other person for any defects in any property described in this
Section 1.1; and
1.1.15 ALL NON-EXCLUDED ASSETS. All other properties, assets and
rights of every kind, character or description which are owned or used by Seller
and used in connection with the Business and which are not Excluded Assets.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, the following rights, properties and assets of
Seller (the "EXCLUDED ASSETS") shall not be included in the Assets:
1.2.1 NON-SKI AREA PROPERTY. The real property described on
SCHEDULE 1.2.1;
1.2.2 CASH AND ACCOUNTS. Cash, cash equivalents and bank accounts on
hand as of the Closing Date;
1.2.3 OTHER ACCOUNTS RECEIVABLE. All accounts receivable of Seller
as of the Closing Date, other than the Accounts Receivable;
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1.2.4 CONTRACTS WITH AFFILIATES. All agreements, oral or in writing,
between Seller and any person that directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, the
Seller (an "Affiliate");
1.2.5 NON-ASSUMED CONTRACTS. All contracts, understandings or
agreements, whether oral or in writing, between Seller and any other party to
the extent not specifically included on SCHEDULE 1.1.7;
1.2.6 TAX RETURNS AND REFUNDS. Seller's tax returns and any benefit,
claim or receivable of Seller for federal, state or local taxes, refunds
described in SCHEDULE 1.2.6 and any refunds due Seller by the Forest Service or
any other tax receivables whether accrued or not;
1.2.7 LITIGATION. Pending lawsuits and administrative proceedings in
which Seller is a plaintiff, defendant, claimant or respondent;
1.2.8 EMPLOYEE BENEFIT PLANS. Any pension plan assets or other
employee benefit plans of Seller;
1.2.9 SLOW MOVING LOGO INVENTORIES. Any obsolete or slow moving
items (defined as either shopworn or older than twenty-four (24) months at
Closing) of inventory bearing the "Bear Mountain" logo; and
1.2.10 BOMBARDIER ASSETS. All assets sold to Bombardier Corporation
by Seller pursuant to that certain Agreement, dated July 26, 1995, among
Bombardier Corporation, Bear Mountain Ltd., Killington Ltd., Mount Snow Ltd.,
Waterville Valley Ski Area Ltd. and Sugarloaf Mountain Corporation (the
"BOMBARDIER CONTRACT").
1.2.11 OTHER EXCLUDED ASSETS. All stock owned by Seller in Arlberg,
a captive insurance company, the Teachers Placement Fee, and the following
equipment and property: (a) one Caterpillar gas generator (Model No. G399),
(b) one 1993 Ford Explorer vehicle, Seller's asset control number 879, and (c)
the personal computer and peripheral computer equipment which is described in
SCHEDULE 1.2.11.
ARTICLE 2. PURCHASE PRICE
2.1 BASE PURCHASE PRICE AND ADJUSTMENT.
(a) The base purchase price shall be Nineteen Million Five Hundred
Twenty-Eight Thousand Seventy Dollars ($19,528,070.00) (the "BASE PURCHASE
PRICE"), adjusted as provided in Section 2.1(b).
(b) The Base Purchase Price shall be increased or decreased, as the
case may be, as specified below, by an amount equal to the difference between
the book value of the following items reflected on the Closing Balance Sheet (as
defined in Section 2.5) and the book value of such items reflected on the
Interim Balance Sheet (the adjustment in this Section 2.1(b) is referred to as
the "ADJUSTMENT TO BASE PURCHASE PRICE"):
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(1) FIXED ASSETS. The Base Purchase Price shall be increased
for increases in, or reduced for decreases in, the aggregate original cost (not
including depreciation or amortization) of Seller's property and equipment which
are identified on SCHEDULE 2.1-1. No adjustment shall be made for the Excluded
Assets;
(2) NON-RETAIL INVENTORIES AND PREPAID EXPENSES. The Base
Purchase Price shall be increased for increases in, or reduced for decreases in,
the net book value of those non-retail inventories, prepaid expenses (excluding
taxes of any nature and insurance) and other current assets from which Buyer
will receive future benefit, other than Excluded Assets and Accounts Receivable
(for which no adjustment to Base Purchase Price will be made), and which are
identified on SCHEDULE 2.1-2; and
(3) DEFERRED REVENUES. The Base Purchase Price shall be reduced
for increases in, or increased for decreases in, the net book value of those
deferred revenue items and other current assets, other than Excluded Assets
(including without limitation advance ticket sales and gift certificates) which
require performance by Buyer after the Closing and which are identified on
SCHEDULE 2.1-3, provided that the deferred revenue event occurs subsequent to
the Closing Date.
2.2 DETERMINATION OF TOTAL PURCHASE PRICE. In consideration for the
transfer and assignment by Seller of the Assets and in consideration of the
representations, warranties and covenants of Selling Parties set forth herein,
Buyer shall pay in the manner described in Section 2.3 the sum of the amounts
specified below (the "TOTAL PURCHASE PRICE"):
(a) the Base Purchase Price, as adjusted by the Adjustment to Base
Purchase Price;
(b) an amount equal to the sum of (1) the net book value of the food
and beverage inventory reflected on the Closing Balance Sheet, (2) the net book
value (not to exceed $30,000) of retail inventory purchased bearing the "Bear
Mountain" logo reflected on the Closing Balance Sheet and the net book value of
the non-"Bear Mountain" logo retail inventory reflected on the Closing Balance
Sheet (collectively, the "INVENTORY PAYMENT"); and
(c) the additional amount of consideration, if any, as is required to
be paid in accordance with Section 2.6 (the "ADDITIONAL CONSIDERATION").
The components of the Total Purchase Price described in subparagraphs (a) and
(b) above are collectively referred to as the "CLOSING PURCHASE PRICE".
2.3 PAYMENT OF THE CLOSING PURCHASE PRICE. On the Closing Date:
(a) Buyer will pay to Bank of the West or other financial institution
mutually agreeable to the parties (the "ESCROW AGENT") by wire transfer of
immediately available funds an amount to be agreed upon by the parties, with
instructions to retain, apply and dispose of these funds in accordance with the
time of the Escrow Agreement among Buyer, Seller and Escrow Agent, in the form
of EXHIBIT F to this Agreement in order to provide for the payment of certain
potential liabilities of the Selling Parties to Buyer under this Agreement,
including without limitation those listed on SCHEDULE 2.3.
(b) Buyer will pay to Seller the remaining Base Purchase Price, after
deducting the amount remitted to the Escrow Agent in accordance with
subparagraph (a) above, without adjustment by the
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Adjustment to Base Purchase Price, payable by wire transfer of immediately
available funds to such account as Seller shall designate. If the Closing
Purchase Price exceeds the Base Purchase Price, Buyer shall pay such excess by
delivery to Seller of a certified or bank cashier's check or wire transfer of
immediately available funds, in the amount of such excess within thirty (30)
days after Buyer receives the Closing Balance Sheet, in accordance with
Section 2.5, or, if there is a dispute over the amount of the Closing Purchase
Price, the date upon which such dispute is revolved pursuant to Section 2.5. If
the Base Purchase Price exceeds the Closing Purchase Price, Seller shall pay
such excess by delivery to Buyer of a certified or bank cashier's check or wire
transfer of immediately available funds, in the amount of such excess within
thirty (30) days after Buyer receives the Closing Balance Sheet, or, if there is
a dispute over the amount of the Closing Purchase Price, the date upon which
such dispute is revolved pursuant to Section 2.5.
2.4 ALLOCATION OF TOTAL PURCHASE PRICE. The Total Purchase Price
shall be allocated among the Assets acquired hereunder in a manner to be agreed
upon prior to Closing and described on SCHEDULE 2.4 hereof to be attached to
this Agreement prior to Closing. Seller and Buyer each hereby covenant and
agree that it (i) will not take a position on any income tax return, before any
governmental agency charged with the collection of any income tax, or in any
judicial proceeding that is in any way inconsistent with the allocation
described in SCHEDULE 2.4, and (ii) S-K-I and Fibreboard will each file with its
federal income tax returns IRS Form 8594-Asset Acquisition Statements under
Section 1060, including any required amendments thereto executed by S-K-I and
Fibreboard, if necessary, which shall reflect the allocation described in
SCHEDULE 2.4. Nothing in this Agreement shall impose on Seller or S-K-I the
duty or obligation to contest any action which the Internal Revenue Service
("IRS") may take or any adjustment or change in such allocation which the IRS
may make or propose.
2.5 CLOSING BALANCE SHEET. Seller at its expense shall cause Price
Waterhouse LLP, its independent accountants ("SELLER'S ACCOUNTANTS") to prepare
a balance sheet of the Business at the Closing Date (the "CLOSING BALANCE
SHEET"), and to issue, at Buyer's request, as soon as practicable but in any
event not later than thirty (30) days after the Closing Date, its opinion
thereon to Buyer to the effect that such balance sheet presents fairly the
financial position of Seller as of the Closing Date, in conformity with
generally accepted accounting principles applied on a consistent basis. Such
balance sheet shall specifically identify all assets reflected thereon which are
not included in the Assets and all liabilities reflected thereon which are not
assumed by Buyer under this Agreement, and shall identify the same items as are
identified on SCHEDULE 2.1-1, SCHEDULE 2.1-2 AND SCHEDULE 2.1-3. The
accountants' report shall also include a detailed schedule setting forth the
calculation of the Adjustment to Base Purchase Price described in Section 2.1(b)
and the Inventory Payment described in Section 2.2(b). In rendering the
foregoing review and report, Seller's Accountants shall consult with Buyer's own
accounting staff and, at Buyer's instruction, with Buyer's independent
accountants ("BUYER'S ACCOUNTANTS"), and permit Buyer's Accountants at the
earliest practicable date to review the report of Seller's Accountants,
including all work papers, schedules and calculations related thereto, prior to
the issuance thereof. Buyer's Accountants shall commence their review of said
work papers, schedules and calculations as soon as practicable after Seller's
Accountants have completed the field work phase of their review.
Any dispute which may arise between Seller and Buyer as to such
Closing Balance Sheet or the proper amount of the Adjustment to Base Purchase
Price or Inventory Payment shall be resolved in the following manner:
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(a) Buyer, if it disputes the Closing Balance Sheet or the amount of
the Adjustment to Base Purchase Price or Inventory Payment, shall notify Seller
in writing within fifteen (15) days after the issuance of the report of Seller's
Accountants pursuant hereto that Buyer disputes the Closing Balance Sheet or the
amount of the Adjustment to Base Purchase Price or Inventory Payment and shall
specify in reasonable detail the nature of the dispute;
(b) during the fifteen (15) day period following the date of such
notice, Seller and Buyer shall attempt to resolve such dispute and to determine
the appropriateness of the Closing Balance Sheet or the amount of the Adjustment
to Base Purchase Price or Inventory Payment; and
(c) if at the end of the fifteen (15) day period specified in
subsection (b) above, Seller and Buyer shall have failed to reach a written
agreement with respect to such dispute, the matter shall be referred to a major
international independent public accounting firm selected by Seller and Buyer
which does not provide services for any of the parties hereto (the
"ARBITRATOR"), which shall act as an arbitrator and shall issue its report as to
the Closing Balance Sheet or the amount of the Adjustment to Base Purchase Price
or Inventory Payment within thirty (30) days after such dispute is referred to
the Arbitrator. Each of the parties hereto shall bear all costs and expenses
incurred by it in connection with such arbitration, except that the fees and
expenses of the Arbitrator hereunder shall be borne equally by Seller and Buyer.
This provision for arbitration shall be specifically enforceable by the parties
and the decision of the Arbitrator in accordance with the provisions hereof
shall be final and binding and there shall be no right of appeal therefrom.
References in this Agreement to the Closing Balance Sheet shall mean
the balance sheet of the Business at the Closing Date, prepared, audited and
reviewed as described in this Section 2.5.
2.6 ADDITIONAL CONSIDERATION.
2.6.1 METHOD OF COMPUTATION. As additional consideration for the
Assets, Buyer shall pay to Seller an amount (the "ADDITIONAL CONSIDERATION")
(not less than zero) for each of the applicable winter ski seasons indicated
below (each of such seasons, which shall end on the date that tickets for such
season cease being sold, is hereinafter referred to as a "WINTER SEASON") equal
to the product which results by multiplying the number of Skier Day Visits (as
hereinafter defined) during such Winter Season in excess of Three Hundred
Thousand (300,000) times the Payment Rate specified below. The calculation of
such amount shall be on a non-cumulative basis so that a deficit in Skier Day
Visits in one year will not affect the calculation for a succeeding year.
Winter Season Payment Rate
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1995-1996 $6
1996-1997 6
1997-1998 6
1998-1999 5
1999-2000 4
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2.6.2 PAYMENT OF ADDITIONAL CONSIDERATION. Payments by Buyer to
Seller of Additional Consideration, if any, under this Section 2.6 for any
Winter Season shall be made within forty-five (45) days after the end of such
Winter Season, but in any event not later than June 30th of the year in which
such Winter Season ends.
2.6.3 SKIER DAY VISITS. For purposes of computing Additional
Consideration, "SKIER DAY VISITS" for any Winter Season shall be computed as
follows:
(a) A single skier skiing or a single snowboarder snowboarding at
Bear Mountain Ski Resort for any portion of one day for a fee paid to Buyer
(whether full or discounted) or with a complimentary ticket from Buyer,
excluding employees and their dependents, shall be counted as one (1) Skier Day
Visit.
(b) Each Bear Mountain Ski Resort season pass sold by Buyer (and, in
addition, with respect to the 1995-1996 Winter Season, any such passes sold by
Seller prior to Closing) shall be counted as twenty-five (25) Skier Day Visits
for the applicable Winter Season unless a more accurate measuring technique
(e.g., Club Vertical) is used by Buyer, in which case actual Skier Day Visits
shall be computed using such technique.
(c) For multiple-day Bear Mountain Ski Resort tickets sold by Buyer,
the number of Skier Day Visits for each ticket will equal the maximum number of
days a skier or snowboarder may ski or snowboard using such ticket.
(d) Each single ride ticket sold for Bear Mountain Ski Resort by
Buyer shall be counted a one-tenth (1/10th) of a Skier Day Visit.
(e) In the event that Buyer wishes to sell points tickets, vertical
feet tickets or the like for Bear Mountain Ski Resort, prior to doing so the
parties shall in good faith determine and agree on the Skier Day Visit
equivalencies based on Bear Mountain Ski Resort's skiing and snowboarding
historical data.
(f) In the event that Buyer is presented after the Closing with
tickets, vouchers or coupons sold or issued by Seller under Seller's "Not Fun,
Have Another One", "Frequent Ski" or "Permanent Ticket" programs, Buyer agrees
to honor the terms of such ticket programs and Seller agrees to pay Buyer for
each such ticket, voucher or coupon honored at the price then in effect for a
full-day ski ticket, within thirty (30) days after Buyer's submission to Seller
of copies of the ticket, voucher or coupon, as the case may be. Each such
ticket, voucher or coupon so honored by Buyer shall be deemed to be one Skier
Day Visit.
2.6.4 REVIEW OF CALCULATION OF ADDITIONAL CONSIDERATION.
(a) In connection with the making of each payment by Buyer to Seller
under this Section 2.6, Buyer shall deliver to Seller a schedule setting forth
the computation of the Additional Consideration for the applicable Winter Season
and a copy of the information used in making such computation. Seller shall be
permitted to review any relevant work papers, schedules and calculations of the
Buyer. Buyer's computation of any payment under this Section 2.6 shall be
conclusive and binding upon the parties hereto unless, within forty-five (45)
days following receipt of the afore-described payment, if any, or all
information requested by Seller, whichever is later,
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Seller notifies Buyer in writing (the "SELLER'S NOTICE") that it disagrees with
Buyer's computation of the Additional Consideration. Such notice by Seller
state with specificity the basis for Seller's disagreement with Buyer's
computation.
If Buyer notifies Seller in writing, within forty-five (45) days
following Buyer's receipt of Seller's Notice, that it disagrees with Seller's
recomputation of the Additional Consideration, Buyer and Seller shall request
Arbitrator to determine whether Seller's or Buyer's calculation should be
considered the amount of the Additional Consideration as promptly as possible,
which determination shall be conclusive and binding upon Buyer and Seller. The
expenses of any determination by the Arbitrator shall be borne equally by Buyer
and Seller.
(b) In the event the amount of Additional Consideration to be paid by
Buyer to Seller in accordance with Section 2.6.1 for any Winter Season is
determined to be Seller's calculation in accordance with Section 2.6.4(a), the
additional amount of Additional Consideration shall be paid by Buyer to Seller
within ten (10) days after the date of final determination of such payment.
2.6.5 SALE OF BUSINESS OR CHANGE OF CONTROL. In the event of a
proposed merger, consolidation or other transaction as a result of which
Fibreboard would cease to own, directly or indirectly, more than fifty percent
(50%) of the voting power of Buyer, or in the event of a proposed sale of a
substantial portion of Seller's operating assets to an entity in which
Fibreboard would own, directly or indirectly, fifty percent (50%) or less of the
voting power, then Buyer, prior to effecting any such transaction, shall seek
Seller's approval, which approval shall not be unreasonably withheld or delayed.
If Seller does not provide its approval to the proposed transaction, Buyer
shall, at or prior to the consummation of the proposed transaction, pay to
Seller the difference between One Million Dollars ($1,000,000) and the aggregate
amount of all Additional Consideration previously paid to Seller in accordance
with this Section 2.6.
ARTICLE 3. ASSUMPTION OF LIABILITIES
3.1 TRANSFERRED AGREEMENTS. Buyer is not assuming any debt,
liability or obligation of Seller, whether known or unknown, fixed or
contingent, except for any continuing obligations under the Transferred
Agreements. Selling Parties jointly and severally agree to indemnify and hold
Buyer harmless against all debts, claims, liabilities and obligations of Seller
not expressly assumed by Buyer hereunder, and to pay any and all attorneys' fees
and legal costs incurred by Buyer, its successors and assigns in connection
therewith and Buyer agrees to indemnify and hold Selling Parties harmless
against all debts, claims, liabilities and obligations of Seller expressly
assumed by Buyer hereunder, and to pay any and all attorneys' fees and legal
costs incurred by Selling Parties, and their respective successors and assigns
in connection therewith. Buyer shall have the benefit of and shall perform all
contracts, commitments, permits, licenses, registrations and authorizations, if
any, specifically listed on SCHEDULE 1.1.7, in accordance with the terms and
conditions thereof, with such modifications as are specifically disclosed on
such SCHEDULE 1.1.7. All liabilities, costs and expenses arising from or
relating to Seller's operation or ownership of the Assets through the Closing
Date shall remain the responsibility of Seller, except as expressly provided in
Article 5.
3.2 NON-ASSIGNABLE CONTRACTS. Nothing in this Agreement shall be
construed as an attempt or agreement to assign any Transferred Agreement which
is in law or by its terms either non-assignable or non-assignable without the
consent of the other party or parties thereto, unless
10
such consent shall be given. In the event consent cannot be obtained for the
assignment of any such Transferred Agreement, then, in addition to Buyer's
rights under Section 9.12, Seller agrees to make reasonable arrangements
designed to provide for and to Buyer the benefits and burdens of any such
Transferred Agreement as if such Transferred Agreement had been assigned.
ARTICLE 4. EXCISE AND PROPERTY TAXES; LEASE PRORATIONS
Buyer and Seller shall share equally the expense of all sales, use and
transfer taxes arising out of the transfer of the Assets and Seller shall pay
its unpaid portion, prorated as of the Closing Date, of state and local real and
personal property taxes of the Business as well as dues to national, state and
local trade and community service organizations. Buyer shall not be responsible
for any business, occupation, withholding, or other tax, or for any taxes of any
kind related to the Business for any period before the Closing Date. Buyer
shall pay to Seller, or Seller shall pay to Buyer, as the case may be, within
thirty (30) days following the Closing Date, the net amount of the following
items relating to the Real Property to be pro-rated as of the Closing Date:
rent, utilities (including without limitation electricity, gas, water, sewer and
telephone), property taxes, security service and similar items.
ARTICLE 5. THE CLOSING
The transfer of the Assets by Seller to Buyer shall take place at the
offices of McCutchen, Doyle, Xxxxx & Enersen, 0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx,
Xxxxxx Xxxxx, Xxxxxxxxxx, at 10:00 a.m. local time, on October 20, 1995, or
sooner, at such other place and/or time as the parties may agree (the
"CLOSING"). The date on which the closing takes place is referred to herein as
the "CLOSING DATE". In the event that the conditions specified in this
Agreement have not been fulfilled by such date, the parties may extend the
Closing for an additional period or periods by mutual consent. The parties
further agree that time is of the essence in fulfilling the obligations to
consummate the transactions contemplated by this Agreement on or before the
specified date of Closing. If the Closing occurs during the period from
September 15, 1995 through October 6, 1995, Buyer agrees to reimburse Seller,
within seven (7) days after Seller's written request, for fifty percent (50%) of
the amount by which Seller's direct operating expenses (as defined below) exceed
its total revenues during such period (such amounts to be determined in
accordance with generally accepted accounting principles, consistently applied
in accordance with the past practice of Seller). If the Closing occurs during
the period from October 7, 1995 through October 20, 1995, Buyer agrees to
reimburse Seller, within seven (7) days after Seller's written request, for one
hundred percent (100%) of the amount by which Seller's direct operating expenses
exceed its total revenues during such period (such amounts to be determined in
accordance with generally accepted accounting principles, consistently applied
in accordance with the past practice of Seller). "DIRECT OPERATING EXPENSES"
shall mean the direct operating expenses of the Business, and shall specifically
refer to payroll, supplies, licenses, fees, lease rentals payments, utilities,
and sales expenses, but shall not include non-direct operating expenses,
including without limitation depreciation, amortization, accrued taxes,
corporate allocations and overheads, inter-company transfers and inter-company
interest. If the Closing fails to occur for any reason, other than a material
breach of this Agreement by Buyer, Seller agrees to reimburse Buyer, within
thirty (30) days after receipt by Seller of relevant copies of invoices, for
fifty percent (50%) of Buyer's out-of-pocket costs, including without
limitation, the fees and expenses of its counsel, accountants, and consultants,
incurred in connection with the transactions contemplated by this Agreement, up
to a maximum reimbursement amount of
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Fifty Thousand Dollars ($50,000). If there is any dispute between the parties
as to the correct amount of either expense reimbursement described in this
Article 5, the dispute resolution procedures specified in Section 2.5 above for
determining the proper amount of the Adjustment to Base Purchase Price shall
govern.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES.
Except as specifically noted in this Article 6, Selling Parties,
jointly and severally, hereby represent and warrant to Buyer that the following
facts and circumstances are and, except as contemplated hereby, at all times up
to and including the Closing will be true and correct, and hereby acknowledge
that such facts and circumstances constitute the basis upon which Buyer is
induced to enter into and perform this Agreement. Wherever the phrase "SELLING
PARTIES' KNOWLEDGE" is used, it means the actual knowledge of the officers,
managers and controller of Seller and the officers of S-K-I, after due inquiry.
6.1 ORGANIZATION, GOOD STANDING, AND QUALIFICATION. Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of California and has all necessary corporate powers to own its properties
and to carry on its business as now owned and operated by it. Neither the
ownership of its properties nor the nature of its business requires Seller to be
qualified in any jurisdiction other than California. S-K-I is a corporation
duly organized, validly existing, and in good standing under the laws of
Delaware. There are no subsidiaries of Seller and Seller owns no equity
securities or interests of any other entity, other than Arlberg, a captive
insurance company.
6.2 FINANCIAL STATEMENTS. SCHEDULE 6.2-1 to this Agreement sets forth
the Interim Balance Sheet (the date of the Interim Balance Sheet is hereinafter
referred to as the "STUB PERIOD DATE"), together with related unaudited
statement of income and retained earnings for the eleven-month period then
ending. Seller agrees to attach SCHEDULE 6.2-1A (the "ADJUSTED STUB PERIOD DATE
BALANCE SHEET") prior to the Closing to reflect adjustments to the Interim
Balance Sheet deemed appropriate by Seller. Prior to the Closing, Seller shall
furnish Buyer with a certificate of the chief financial officer of S-K-I,
certifying that the Adjusted Stub Period Date Balance Sheet and related
unaudited statement of income and retained earnings, have been prepared in
accordance with generally accepted accounting principles consistently followed
by Seller and present fairly the financial position of Seller as of the Stub
Period Date and the results of its operations for the eleven-month period then
ended. SCHEDULE 6.2-2 to this Agreement sets forth the balance sheet of Seller
as of July 31, 1995 ("LAST FISCAL YEAR END"), and the related statement of
income and retained earnings for the year then ending, reviewed by Price
Waterhouse LLP, Seller's independent public accountants. The financial
statements in SCHEDULES 6.2-1A and 6.2-2 are referred to as the "FINANCIAL
STATEMENTS." The Financial Statements attached hereto as of the Closing shall
have been prepared in accordance with generally accepted accounting principles
consistently followed by Seller throughout the periods indicated, and present
fairly the financial position of Seller as of the respective dates of the
balance sheets included in the Financial Statements, and the results of its
operations for the respective periods indicated.
6.3 DEBTS, OBLIGATIONS AND LIABILITIES; PROJECTIONS, ESTIMATES.
SCHEDULE 6.3 to this Agreement contains a true and complete schedule of all
debts, obligations and liabilities of Seller. Seller has no debts, obligations
or liabilities of any nature (whether known or unknown, absolute,
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accrued, contingent or otherwise and whether due or to become due) that are not
set forth in SCHEDULE 6.3. Selling Parties have prepared in good faith, but
shall have no liability to Buyer or any other party by reason of any failure of
the earnings projections or estimates contained in this Agreement, or in any
schedule, exhibit, or attachment hereto, or in any document delivered to Buyer
or Buyer's representatives in connection with this transaction or otherwise,
including marketing projections and information, to accurately state the future
sales, cost of sales, operating expenses, net operating income or balance sheet
items or prospects of the Business. THE SELLING PARTIES DISCLAIM ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, REGARDING THE ACCURACY OF THE FOREGOING
PROJECTIONS, ESTIMATES OR INFORMATION, IF ANY, OF FUTURE FINANCIAL PERFORMANCE
OF THE BUSINESS OR THE TRUTH OR REASONABLENESS OF SUCH PROJECTIONS, ESTIMATES OR
INFORMATION OR THE ASSUMPTIONS WHICH UNDERLIE SUCH PROJECTIONS, OR ESTIMATES OR
INFORMATION, EXCEPT TO THE EXTENT SUCH PROJECTIONS OR ESTIMATES OR INFORMATION
WERE PREPARED IN GOOD FAITH.
6.4 ABSENCE OF SPECIFIED CHANGES. Since the Stub Period Date, there
has not been any:
(a) transaction by Seller except in the ordinary course of business
as conducted on that date and except as described in the Bombardier Contract;
(b) capital expenditure by Seller exceeding $10,000, except as
previously disclosed to Buyer or as set forth on SCHEDULE 6.4;
(c) adverse change in the financial condition of Seller (other than
operating losses incurred in the ordinary course of business) the Assets or the
Business;
(d) destruction, damage to, or loss of any assets of Seller (whether
or not covered by insurance) that adversely affects the financial condition,
assets, properties, business or prospects of Seller;
(e) labor trouble or other event or condition of any character
adversely affecting the financial condition of Seller (other than operating
losses incurred in the ordinary course of business), the Assets or the Business;
(f) change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates) by
Seller;
(g) revaluation by Seller of any of its assets (other than the
inventory valuation adjustment reflected on the balance sheet of Seller as of
the Last Fiscal Year End);
(h) increase in the salary or other compensation payable or to become
payable by Seller to any of its officers, directors, or employees (other than
merit increases not exceeding five percent (5%) of base salary awarded to any
employee in the ordinary course of Seller's business and consistent with
Seller's past practice or such other merit increases as may have been previously
disclosed to Buyer), or the declaration, payment, or commitment or obligation of
any kind for the payment by Seller of a bonus or other additional salary or
compensation to any such person;
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(i) sale or transfer of any asset of Seller, except in the ordinary
course of business or as described in the Bombardier Contract and except for
sale of the golf maintenance trailer and two grooming tillers;
(j) execution, creation, amendment or termination of any contract,
agreement, or license to which Seller is a party, except in the ordinary course
of business;
(k) loan by Seller to any person or entity or any guaranty by Seller
of any loan;
(l) waiver or release of any right or claim of Seller, except in the
ordinary course of business;
(m) mortgage, pledge, or other encumbrance of any Asset;
(n) other event or condition of any character that has or might
reasonably have an adverse effect on the financial condition of Seller (other
than operating losses incurred in the ordinary course of business), the Assets
or the Business; or
(o) agreement by Seller to do any of the things described in the
preceding clauses (a) through (n).
6.5 TAX RETURNS AND AUDITS. Within the times and in the manner
prescribed by law, Seller and S-K-I, with respect to Seller, has filed all
federal, state and local tax returns required by law and has paid all taxes,
assessments, and penalties shown on such returns as due and payable relating to
Seller, the Assets or the Business. To the best of Selling Parties' knowledge,
the provisions for taxes reflected in Seller's Balance Sheet as of the Stub
Period Date are adequate for any and all federal, state, county and local taxes
for the period ending on the date of that balance sheet, whether or not
disputed. There are no present disputes as to taxes of any nature payable by
Seller, except as described on SCHEDULE 6.5.
6.6 REAL PROPERTY. SCHEDULES 1.1.1 and 1.1.3 to this Agreement
contain complete and accurate legal descriptions of each parcel of real property
owned by or leased to Seller, together with a true and correct survey of that
portion of the Golf Course to which title has accrued to the Seller via adverse
possession. To the best of Selling Parties' knowledge, all of the Real Property
Leases are valid and in full force, and there does not exist any default or
event that with notice or lapse of time, or both, would constitute a default
under any of the Real Property Leases. All the buildings, fixtures and
leasehold improvements used by Seller in the Business are located on the Real
Property. Each parcel of real property owned by or leased to Seller abuts on at
least one side a public street or road in a manner so as to permit reasonable,
customary and adequate vehicular and pedestrian ingress, egress and access to
such parcel, or has adequate easements across intervening property to permit
reasonable, customary and adequate vehicular and pedestrian ingress, egress and
access to such parcel from a public street or road, except as described on
SCHEDULE 6.6. Except as described in SCHEDULE 6.6, there are no restrictions on
entrance to or exit from the Real Property to adjacent public streets and no
conditions which will result in the termination of the present access from the
Real Property to existing highways or roads. Seller has good and marketable fee
simple title to the Owned Real Property, free and clear of all mortgages, liens,
security interests, pledges, encumbrances, restrictions on transferability,
defects of title, charges or claims of any nature whatsoever, except those
matters expressly disclosed in the title reports described in Section 9.9 and
14
the unrecorded Easement Agreement, dated April 29, 1988, between City of Big
Bear Lake and Goldmine Ski Associates, Inc. Except for the Real Property
Leases, to the best of Selling Parties' knowledge, there is no unrecorded or
undisclosed legal or equitable interest in the Real Property owned or claimed by
any person, firm or corporation. Subject to the Real Property Leases, Seller
has enjoyed the continuous and uninterrupted quiet possession, use and operation
of the Real Property without any material complaint or objection by any person
except as described in SCHEDULE 6.6. Seller has legally acquired fee simple
title to the portions of the Real Property set forth on SCHEDULE 6.6 by adverse
possession. There exists no unfulfilled obligation on either of Selling Parties
to dedicate or grant an easement or easements over any portion or portions of
the Real Property to a governmental entity or utility.
6.7 IMPROVEMENTS. Except as described on SCHEDULE 6.8, the
improvements located on the Real Property are in compliance with all applicable
laws, ordinances, rules, regulations, and codes, and, to the best of Selling
Parties' knowledge, are in reasonable and serviceable condition and repair,
normal wear and tear excepted. Neither the Real Property nor the use,
occupancy, or transfer to Buyer thereof violates in any way any applicable laws,
ordinances, rules, regulations, codes, judgments, orders or covenants,
conditions and restrictions, whether federal, state, local or private. EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SELLING PARTIES DISCLAIM ALL OTHER
WARRANTIES REGARDING THE PHYSICAL CONDITION OF THE REAL PROPERTY INCLUDED IN THE
ASSETS, EXPRESSED OR IMPLIED.
6.8 ZONING. Except as described in SCHEDULE 6.8, the zoning of each
parcel of property described in SCHEDULES 1.1.1, 1.1.2 and 1.1.3 permits the
presently existing improvements and the continuation of the business presently
being conducted on such parcel. There is no pending or, to the best of Selling
Parties' knowledge, contemplated rezoning. All the Real Property is in
compliance with the California Subdivision Map Act and all applicable local
subdivision ordinances, and no final subdivision or parcel map is required in
connection with the transfer of the Real Property to Buyer.
6.9 NO COMMITMENTS. Except as described in SCHEDULE 6.9, there are
no outstanding, defaulted or unsatisfied contracts, commitments, agreements
(including without limitation developer agreements) or understandings which have
been made to, with or for the benefit of any governmental authorities, utility
companies, school districts, water districts, improvement districts or other
governmental agencies, bodies or authorities which would impose any obligation,
liability or condition on Seller or, following the Closing, on Buyer or its
successors or assigns to grant any easements or to make any payments,
contributions or dedications of money or land or to construct, install or
maintain or to contribute to the construction, installation or maintenance of
any improvements of a public or private nature, whether on or off the Real
Property.
6.10 CONTINUED USE OF REAL PROPERTY. Except as described in SCHEDULE
6.10, there are no claims, governmental investigations, litigation or
proceedings which are pending or, to the best of Selling Parties' knowledge,
threatened against the Real Property, Seller or the Business or which would
affect the continued use or possible development of the Real Property. There
are no presently pending or, to the best of Selling Parties' knowledge,
contemplated or threatened, proceedings to (a) condemn, take or demolish the
Real Property or any part thereof, (b) declare the Real Property or any part of
it a nuisance or (c) exercise the power of eminent domain or a similar power
with respect
15
to all or any part of the Real Property. There are no presently pending or
contemplated special assessments except as described in SCHEDULE 6.9.
6.11 BIG BEAR LAKE PIPELINE. Seller is the owner of the pipeline and
related pumping plant and facilities from Big Bear Lake to the USFS Permitted
Property (the "LAKE PIPELINE"), the location of which is or shall be accurately
set forth in SCHEDULE 6.11 to Buyer's satisfaction prior to the Closing Date.
To the best of Selling Parties' knowledge, the Lake Pipeline is located in
public rights of way, in easements and in the Real Property. The contracts and
agreements permitting Seller to locate the Lake Pipeline in such public rights
of way and easements are valid, binding and enforceable in accordance with their
terms and there are currently no defaults or events that, with notice or lapse
of time, or both, would constitute a default by any party to any of such
contracts and agreements. To the best of Selling Parties' knowledge, the Lake
Pipeline is in good operating condition and repair. Neither of the Selling
Parties has received any written notice or written indication that the Lake
Pipeline would have to be relocated. There are no claims, governmental
investigations, litigation or proceedings which are pending or, to the best of
Selling Parties' knowledge, threatened against the Lake Pipeline, Seller, or any
third party which would affect the operation, continued use or location of the
Lake Pipeline.
6.12 SHUTTLE SYSTEM. Seller has adequate permits, licenses and
approvals to operate its shuttle system between its parking lots and the Owned
Real Property (the "SHUTTLE SYSTEM"). Seller has adequate easements and rights
of way to permit the Shuttle System to be operated for the foreseeable future
along the routes and in the manner that it has historically operated.
6.13 INVENTORIES. The Inventories consist of items of a quality and
quantity useable or saleable in the ordinary course of business by Seller,
except for obsolete or slow moving items and items below standard quality, all
of which have been written down on the books of Seller to net realizable market
value or have been provided for by adequate reserves. All items included in the
Inventories are the property of Seller, except for sales made in the ordinary
course of business; for each of these sales either the purchaser has made full
payment or the purchaser's liability to make payment is reflected in the books
of Seller except as described in SCHEDULE 6.13. Except as described in
SCHEDULE 6.13, no items included in the Inventories have been pledged as
collateral, or are held by Seller on consignment from third parties. Seller's
inventories shown on the balance sheets included in the Financial Statements are
based on quantities determined by physical count or measurement, taken within
the preceding 12 months, and are valued at the lower of cost (determined on a
first-in, first-out basis) or market value and on a basis consistent with prior
years. The quantities of items included in Seller's ski rental inventory,
including without limitation skis, ski boots, bindings, ski poles and snow
boards, (i) are not, and at the Closing shall not be, lower than the quantities
of such items (compared on an item-by-item basis) on hand at the end of the
1994-1995 ski season, and (ii) are sufficient to meet the normal and expected
demand of the 1995-1996 ski season.
6.14 OTHER TANGIBLE PERSONAL PROPERTY. The Equipment and
Improvements described in Section 1.1.4 and SCHEDULE 1.1.4 of this Agreement
constitutes all of the material items of tangible personal property owned by, in
the possession of, or used by Seller in connection with its business, except
Inventories. All the Equipment and Improvements and the Inventories are or, on
the Closing Date, will be located on the Real Property. The maps, plans and
diagrams included within the Equipment and Improvements are correct and accurate
depictions of what they purport to
16
describe and are adequate for the prudent operation and maintenance of the
Seller's business and properties. The Equipment and Improvements listed in
SCHEDULE 1.1.4 plus the Inventories constitute all tangible personal property
necessary for the conduct by Seller of its business as conducted by Seller prior
to the Closing Date. All motor vehicles listed on SCHEDULE 1.1.4 have current
smog certificates. Except as stated in SCHEDULE 1.1.7, no Equipment and
Improvements used by Seller in connection with the Business is held under any
lease, security agreement, conditional sales contract, or other title retention
or security arrangement, or is in the possession of anyone other than Seller.
6.15 ACCOUNTS RECEIVABLE. The Accounts Receivable reflected on the
Interim Balance Sheet, and the Accounts Receivable created after the Stub Period
Date, are valid and genuine and arose from bona fide transactions in the
ordinary course of Seller's business.
6.16 TRADE NAMES, TRADEMARKS AND COPYRIGHTS. SCHEDULE 6.16 to this
Agreement is a true, correct and complete list of all trademarks, service marks,
trade names, and copyrights and their registrations or applications, if any,
owned by the Selling Parties and related to the Business or in which Selling
Parties have any rights or licenses related to the Business, together with a
brief description of each. To the best of Selling Parties' knowledge, there is
no infringement or alleged infringement by others of any such trademark, service
xxxx, trade name or copyright. Seller has not infringed and is not now
infringing on any trademark, service xxxx, trade name or copyright belonging to
any other person, except as set forth on SCHEDULE 6.16. Except as set forth in
SCHEDULE 6.16, Seller is not a party to any license, agreement or arrangement,
whether as licensor, licensee, franchisor, franchisee, or otherwise, with
respect to any trademarks, service marks, trade names, or applications for them,
or any copyrights. Seller owns or holds adequate licenses or other rights to
use all trademarks, service marks, trade names and copyrights necessary for its
business as now conducted, including without limitation those listed on
SCHEDULE 6.16. Selling Parties have the right to sell or assign to Buyer all of
such trademarks, service marks, trade names and copyrights, and all such
registrations, applications, licenses and other rights.
6.17 NO PATENT RIGHTS. Except as described in SCHEDULE 6.16, Seller
neither owns, holds, nor has any rights, licenses or immunities with respect to
any patents, inventions, industrial models, processes, designs, formulas and
applications for patents. Seller has not infringed and is not now infringing on
any patent or other right belonging to any person, firm, or corporation. Except
as described in SCHEDULE 6.16, Seller is not a party to any license, agreement,
or arrangement, whether as licensee, licensor, or otherwise, with respect to any
patent, application for patent, invention, design, model, process, trade secret,
or formula.
6.18 TRADE SECRETS. SCHEDULE 6.18 to this Agreement is a true and
complete list of trade secrets used by Seller in (or owned by Seller and useful
in) the operation of its business, including all customer lists. The specific
location of each trade secret's documentation, including its complete
description, specifications, charts, procedures, and other material relating to
it, is also set forth with it in such SCHEDULE 6.18. Each trade secret's
documentation is current, accurate, and sufficient in detail and content to
identify and explain it, and to allow its full and proper use by Buyer without
reliance on the special knowledge or memory of others. Seller is the sole owner
of each of these trade secrets, free and clear of any liens, encumbrances,
restrictions, or legal or equitable claims of others and has the right to sell
or assign to Buyer all of such trade secrets. Seller has taken all reasonable
security measures to protect the secrecy, confidentiality, and value of these
trade secrets;
17
any of its employees and any other persons who, either alone or in concert with
others, developed, invented, discovered, derived, programmed, or designed these
secrets, or who have knowledge of or access to information relating to them,
have been put on notice and, if appropriate, have entered into agreements that
these secrets are proprietary to Seller and not to be divulged or misused. All
these trade secrets are presently valid and protectible, and are not part of the
public knowledge or literature, nor to the best of Selling Parties' knowledge
have they been used, divulged, or appropriated for the benefit of any past or
present employees or other persons, or to the detriment of Seller.
6.19 TITLE TO ASSETS. Seller has good and marketable title to all
the Assets and interests in the Assets, whether real, personal, mixed, tangible,
and intangible, which constitute all the assets and interests in assets of
Seller that are used in the Business. All these assets or interests are free
and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims,
easements, rights of way, covenants, conditions, or restrictions, except for
(i) those disclosed in the Interim Balance Sheet or in the Schedules to this
Agreement; (ii) the lien of current taxes not yet due and payable; (iii) liens
contemplated by and existing pursuant to the Transferred Agreements; and
(iv) otherwise disclosed in the preliminary title reports for the Owned Real
Property delivered to Buyer prior to Closing. All real property fixtures and
tangible personal property of Seller, including without limitation all
buildings, lifts, snow-making machinery and other Equipment is in reasonable and
serviceable operating condition and repair, ordinary wear and tear excepted, and
has been properly and adequately maintained in accordance with the
manufacturer's specifications where applicable. EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, THE SELLING PARTIES DISCLAIM ALL OTHER WARRANTIES REGARDING THE
CONDITION OF THE TANGIBLE PERSONAL PROPERTY INCLUDED IN THE ASSETS, EXPRESSED OR
IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. Seller is in possession of all premises leased to it from others.
Neither any officer, nor any director or employee of Seller, nor any spouse,
child, or other relative of any of these persons, owns, or has any interest,
directly or indirectly, in any of the real or personal property owned by or
leased to Seller or any copyrights, patents, trademarks, trade names, or trade
secrets licensed by Seller. Seller does not occupy any real property in
violation of any law, regulation, or decree.
6.20 CUSTOMERS AND VENDORS. SCHEDULE 6.20-1 to this Agreement is or
at Closing will be a correct and current list of all season pass, group sales
and other mass purchase customers of Seller during the 1994-1995 ski season.
SCHEDULE 6.20-2 to this Agreement is a correct and current list of all vendors
and suppliers of Seller during the 1994-1995 ski season.
6.21 INSURANCE POLICIES. SCHEDULE 6.21 to this Agreement is a
description of all insurance policies held by Seller concerning the Assets. The
policy limits of each of these policies is set forth in SCHEDULE 6.21.
6.22 OTHER CONTRACTS. SCHEDULE 6.22 is a complete list of all
contracts, agreements, arrangements, leases, commitments, permits, licenses,
registrations and authorizations, oral or written, executed or executory,
entered into or agreed to by Seller in connection with the Business or by which
Seller or the Assets are currently bound which call for consideration of more
than $1,000 or require performance by Seller of any obligation for a period of
time extending beyond one year from the date hereof (the "CONTRACTS"), copies of
which written Contracts have been provided to Buyer or its counsel. Identified
with an asterisk on SCHEDULE 6.22 are those Contracts which are
18
not, by their terms assignable to Buyer. Seller is not a party to, nor are the
Assets bound by, any Contract not entered into in the ordinary course of
business, or unusual in nature, duration, or amount (including, without
limitation, any Contract requiring the performance by Seller of any obligation
for a period of time extending beyond one year from Closing Date or calling for
consideration of more than $1,000) or that is with S-K-I or any Affiliate of
S-K-I. To the best of Selling Parties' knowledge, all Transferred Agreements
are valid and binding upon the parties thereto except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally. There is no default or event that with notice or lapse of time, or
both, would constitute a default by any party to any of the Transferred
Agreements. Seller has not received notice that any party to any of the
Transferred Agreements intends to cancel or terminate any of these agreements or
to exercise or not exercise any options under any of these agreements.
6.23 COMPLIANCE WITH LAWS. Except for its failure to obtain permits
from the South Coast Air Quality Management District to operate air compressors
on the Real Property, and except as described in SCHEDULE 6.23, Seller has
complied with, and is not in violation of, applicable federal, state, or local
statutes, laws, and regulations (including, without limitation, any applicable
building, zoning, environmental protection, water use, occupational health and
safety, employment, disability rights or food service facilities law, ordinance,
or regulation) affecting its properties or the operation of the Business. To
the best of Selling Parties' knowledge, no material capital expenditures will be
required for compliance with applicable federal, state or local laws or
regulations now in force except as described in SCHEDULE 6.23. No California
Department of Alcoholic Beverage Control accusation is pending against Selling
Parties or any of them as a holder of any alcoholic beverage license to be
transferred under this Agreement and, to the best of Selling Parties' knowledge,
no investigation is now in progress by the California Department of Alcoholic
Beverage Control concerning any act or omission that could result in an
accusation, claim or proceeding being filed against Selling Parties or any of
them.
6.24 LITIGATION. SCHEDULE 6.24 sets forth a brief description of all
suits, actions, arbitrations, and legal, administrative, and other proceedings,
and governmental investigation pending and, to the best of Selling Parties'
knowledge, threatened, against or affecting Seller, or any of its business,
assets, financial condition or prospects. None of the matters set forth in
SCHEDULE 6.24 if decided adversely to Seller will result in a material adverse
change on the Business or Assets. Seller has furnished or made available to
Buyer copies of all relevant court papers and other documents relating to the
matters set forth in SCHEDULE 6.24. Seller is not in default with respect to
any order, writ, injunction, or decree of any federal, state, local, or foreign
court, department, agency, or instrumentality. Except as set forth in
SCHEDULE 6.24, Seller is not presently engaged in any legal action to recover
moneys due to it or damages sustained by it.
6.25 AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION. Neither the entry
into this Agreement nor the consummation of the transactions contemplated hereby
will result in or constitute any of the following: (i) a breach of any term or
provision of this Agreement; (ii) a default or an event that, with notice or
lapse of time or both, would be a default, breach, or violation of the articles
of incorporation or bylaws of Selling Parties or any Transferred Agreement;
(iii) an event that would permit any party to terminate any Transferred
Agreement or to accelerate the maturity of any indebtedness evidenced by a
Transferred Agreement; (iv) the creation or imposition of any lien, charge, or
encumbrance on any of the Assets; or (v) the violation of any law, regulation,
ordinance, judgment, order, or decree applicable to or affecting Selling
Parties, the Business or the Assets.
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6.26 AUTHORITY AND CONSENTS. Each of the Selling Parties has the
right, power, legal capacity and authority to enter into, and perform its
obligations under this Agreement, and, except as set forth on SCHEDULE 6.26, no
approvals or consents of any persons other than Selling Parties are necessary in
connection with it. The execution and delivery of this Agreement by each of the
Selling Parties have been duly authorized by all necessary corporate action of
Selling Parties (including all necessary action by security holders), and this
Agreement constitutes a legal, valid and binding obligation of each of the
Selling Parties enforceable in accordance with its terms, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally.
6.27 PERSONNEL IDENTIFICATION AND COMPENSATION. SCHEDULE 6.27 is a
list of the names, addresses and titles of all current officers, directors,
employees, agents, and representatives of Seller and all seasonal employees
employed during the 1994-1995 ski season. Seller 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.
6.28 EXISTING EMPLOYMENT CONTRACTS. SCHEDULE 6.28 to this Agreement
is a list of all employment contracts and collective bargaining agreements, and
all pension, bonus, profit-sharing, stock option, medical, health and welfare
plans, or other agreements or arrangements providing for employee remuneration
or benefits to which Seller is a party or by which Seller is bound. All these
contracts and arrangements are in full force and effect, and neither Seller nor
any other party is in default under them. There have been no claims of defaults
and, to the best of Selling Parties' knowledge, there are no facts or conditions
which if continued, or on notice, will result in a default under these contracts
or arrangements. There is no pending or, to the best of Selling Parties'
knowledge, threatened labor dispute, strike, or work stoppage affecting Seller's
business. Seller has no "EMPLOYEE PENSION BENEFIT PLANS" (as such term is
defined in Section 3(2) of the Employee Retirement Income Security Act).
6.29 ASSETS USED IN THE CONDUCT OF BUSINESS. The Seller has
disclosed to the Buyer in this Agreement or in the schedules hereto all assets,
rights, properties and other assets, including the Excluded Assets, owned or
used by the Seller in the conduct of its business.
6.30 CORPORATE DOCUMENTS; SHAREHOLDERS. Seller has furnished to
Buyer for its examination true, correct and complete copies of (i) the articles
of incorporation and bylaws of Seller; and (ii) the minute books of Seller
containing all records required to be set forth of all proceedings, consents,
actions, and meetings of the shareholders and board of directors of Seller since
August, 1993. The authorized number of shares of Seller ("SHARES") is One
Million Two Hundred Thousand (1,200,000), all of one class, of which Nine
Hundred Eighty-Three Thousand Three Hundred Forty-One and Six Hundred Sixty-Four
One-Thousandths (983,341.664) shares are issued and outstanding, all of which
are owned of record and beneficially by S-K-I. All the Shares are validly
issued, fully paid and unassessable. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating Seller to issue or transfer from treasury any additional
shares.
6.31 AUTHORITY. SCHEDULE 6.31 lists (i) the names and addresses of
all persons holding a power of attorney on behalf of Seller; and (ii) the names
and addresses of all banks or other financial institutions in which Seller has
an account, deposit, or safe-deposit box, with the names of all persons
authorized to draw on these accounts or deposits or who have access to these
boxes.
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6.32 DOCUMENTS DELIVERED. Each copy or original of any Transferred
Agreement, or other instrument or document which is delivered by Selling Parties
or their counsel to Buyer (or its counsel or representatives), whether before or
after the execution hereof, is a true, correct and complete copy and is in fact
what it is purported to be by Selling Parties and has not been amended, canceled
or otherwise modified except as has been noted by Seller on SCHEDULE 1.1.7.
6.33 FOREST SERVICE PERMIT. SCHEDULE 1.1.2 to this Agreement
contains a complete and accurate description of the real property which Seller
is entitled to use to conduct its Business pursuant to and for the term set
forth in the USFS Permit. The USFS Permit is valid and in full force, and there
does not exist any default or event that with notice or lapse of time, or both,
would constitute a default under the USFS Permit. All fees and charges required
to be paid by Seller pursuant to the USFS Permit have been properly computed and
fully paid, and no such fees or charges have been deferred or are now due and
owing.
6.34 ENVIRONMENT.
6.34.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) The term "ENVIRONMENTAL LAW(S)" means each and every federal,
state and local law, statute, ordinance, regulation, rule, judicial or
administrative order or decree, permit, license, approval, authorization or
similar requirement of each and every federal, state and local governmental
agency or other governmental authority, pertaining to the protection of human
health or the environment, including without limitation, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act, the Clean Air Act and the Clean
Water Act.
(b) The term "HAZARDOUS SUBSTANCE" means any substance which is (i)
defined as a hazardous substance, hazardous material, hazardous waste, pollutant
or contaminant under any Environmental Law, (ii) a petroleum hydrocarbon,
including crude oil or any fraction thereof, (iii) hazardous, toxic, corrosive,
flammable, explosive, infectious, radioactive, carcinogenic or a reproductive
toxicant or (iv) regulated pursuant to any Environmental law.
(c) The term "RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including without limitation the abandonment or
discarding of barrels, containers, and other receptacles containing any
Hazardous Substance).
6.34.2 COMPLIANCE WITH LAW. Except as described on SCHEDULE 6.34,
the Real Property, and all existing uses and conditions of the Real Property,
are in compliance with all Environmental Laws, and neither of the Selling
Parties has received any notice of violation issued pursuant to any
Environmental Law with respect to the Real Property or any use or condition
thereof.
6.34.3 HANDLING OF HAZARDOUS SUBSTANCES. Neither Seller, nor to the
best of Selling Parties' knowledge, any other present or former owner, tenant,
occupant or user of the Real Property has used, handled, generated, produced,
manufactured, treated, stored, transported, released, discharged or disposed of
any Hazardous Substance on, under or from the Real Property in violation of any
Environmental Law, except as described on SCHEDULE 6.34.
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6.34.4 NO RELEASE OF HAZARDOUS SUBSTANCES. To the best of the
Selling Parties' knowledge, there is no Release or threatened Release of any
Hazardous Substance existing on, beneath or from or in the surface or ground
water associated with the Real Property, nor, to the best of Selling Parties'
knowledge, is there or has there been any Release or threatened Release of
Hazardous Substances on, beneath or from the Real Property occurring at any time
in the past, except as set forth on SCHEDULE 6.34.
6.34.5 PERMITS. Except as described on SCHEDULE 6.34, all permits,
licenses and authorizations required by or issued pursuant to any Environmental
Law or other law for the ownership or operation of the Real Property or Seller's
business have been obtained and are presently maintained in full force and
effect. SCHEDULE 6.34 is a true and complete listing of all such permits,
licenses and authorizations. The Real Property and the operations of Seller's
business are in full compliance with all terms and conditions of such permits,
licenses and authorizations. Neither of Selling Parties has received any notice
or other communication concerning any alleged violation of any such permits,
licenses or other authorizations.
6.34.6 NO PROCEEDINGS. There exists no writ, injunction, decree,
order or judgment outstanding, nor, except as described on SCHEDULE 6.34, any
lawsuit, claim, proceeding, citation, directive, summons or investigation
pending or (to the best of Selling Parties' knowledge) threatened pursuant to
any Environmental Law relating to (i) the ownership, lease, occupation or use of
the Real Property by Seller, or to the best of Selling Parties' knowledge, any
other present or former owner, tenant, occupant or user of the Real Property,
(ii) any alleged violation of any Environmental Law by Seller, (iii) the
suspected presence, release or threatened Release of any Hazardous Substance on,
under, in or from the Real Property, nor to the best of Selling Parties'
knowledge, does there exist any valid basis for any such lawsuit, claim,
proceeding, citation, directive, summons or investigation.
6.34.7 STORAGE OF HAZARDOUS SUBSTANCES. Except as described on
SCHEDULE 6.34, there are no aboveground or underground tanks located on the Real
Property used or formerly used for the purpose of storing any Hazardous
Substance, to the best of the Selling Parties' knowledge and there are no
Hazardous Substances stored on the Real Property except as needed for use in
maintenance and repair of the Assets.
6.34.8 NO ASBESTOS OR PCB'S. To the best of the Selling Parties'
knowledge, there is no asbestos-containing building material on the Property,
and no asbestos abatement or remediation work has been performed on the
Property. There is no PCB-containing equipment or PCB-containing material
located on the Real Property.
6.35 FULL DISCLOSURE. None of the representations and warranties
made by Selling Parties in this Agreement or in any letter, certificate or
memorandum furnished or to be furnished by Selling Parties, or on their behalf,
contains or will contain any untrue statement of a material fact, or omits any
material fact the omission of which would make the statements made misleading.
There is no fact known to Selling Parties which materially adversely affects, or
in the future may (so far as Seller can now reasonably foresee) materially
adversely affect the condition, assets, business, operations or prospects of
Seller that has not been set forth herein or heretofore communicated to Buyer in
writing pursuant hereto.
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ARTICLE 7. PURCHASING PARTIES' REPRESENTATIONS AND WARRANTIES
The Purchasing Parties jointly and severally represent and warrant
that:
7.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, existing, and in good standing under the laws of the State of
Delaware and Fibreboard is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware.
7.2 CORPORATE AUTHORITY. The execution and delivery of this
Agreement and the consummation of this transaction by the Purchasing Parties
have been, or prior to the Closing will have been, duly authorized, by all
necessary corporate action of the Purchasing Parties, and this Agreement
constitutes a legal, valid and binding obligation of each of the Purchasing
Parties enforceable in accordance with its terms, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally.
7.3 NO VIOLATION OF LAW. Neither the execution of this Agreement by
the Purchasing Parties nor their performance of any of the transactions
contemplated hereby will result in a violation of any law, regulation,
ordinance, judgment, order or decree applicable to or affecting the Purchasing
Parties.
7.4 CONFIDENTIALITY AGREEMENT. The Purchasing Parties have complied
with all terms and conditions of that certain Confidentiality Agreement dated
June 22, 1995, by and between S-K-I Ltd. and Fibreboard Corporation.
7.5 DOCUMENTS DELIVERED. Each copy or original of any instrument or
document which is delivered by Purchasing Parties or their counsel to Seller (or
its counsel or representatives), whether before or after the execution hereof,
is a true, correct and complete copy and is in fact what it is purported to be
by Purchasing Parties and has not been amended, canceled or otherwise modified.
7.6 FULL DISCLOSURE. None of the representations and warranties made
by Purchasing Parties in this Agreement or in any letter, certificate or
memorandum furnished or to be furnished by Purchasing Parties, or on their
behalf, contains or will contain any untrue statement of a material fact, or
omits any material fact the omission of which would make the statements made
misleading.
ARTICLE 8A. SELLING PARTIES' OBLIGATIONS BEFORE CLOSING
Selling Parties covenant that, except as otherwise agreed in writing
by Buyer, from the date of this Agreement until the Closing or termination of
this Agreement:
8A.1 BUYER'S ACCESS TO PREMISES AND INFORMATION. Subject to the
confidentiality provisions of Section 8B.4 hereof, Buyer and its counsel,
accountants, and other representatives shall be entitled to have full access
during normal business hours to all Seller's properties, books, accounts,
records, contracts, and documents of or relating to the Assets. Selling Parties
shall furnish or cause to be furnished to Buyer and its representatives all data
and information concerning the Business, finances, and properties of Seller that
may reasonably be requested.
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8A.2 CONDUCT OF BUSINESS IN NORMAL COURSE. Seller shall carry on its
business and activities diligently and in substantially the same manner as they
previously have been carried on and in conformity with all applicable laws,
rules and regulations, and shall not make or institute any unusual or novel
methods of purchase, sale, lease, management, marketing, accounting or operation
that will vary materially from the methods used by Seller as of the date of this
Agreement. Without limiting the foregoing, Seller shall not enter into any
agreements for the purchase of supplies, raw materials, equipment, spare parts
or the like at prices higher than generally prevailing in the industry or enter
into any agreements for the sale of goods at prices lower than generally
prevailing in the industry, other than a Transferred Agreement or otherwise with
the approval of the Buyer. Selling Parties shall cooperate with Buyer to
facilitate the smooth and efficient transfer of control of the Assets, the
Business and the Transferred Agreements to Buyer on the Closing Date and shall
use their best efforts to cause all of the conditions to the obligations of
Buyer and Seller under this Agreement to be satisfied on or prior to the Closing
Date.
8A.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. Seller shall use
its best efforts, without making any commitments on behalf of Buyer, to preserve
its business organization intact, to keep available to Buyer its present
officers and employees, and to preserve its present relationships with
suppliers, customers, and others having business relationships with it.
8A.4 MAINTENANCE OF INSURANCE. Seller shall continue to carry in
force its existing insurance for the Business and the Assets, subject to
variations in amounts required by the ordinary operations of its business.
8A.5 EMPLOYEES AND COMPENSATION. Seller shall not do, or agree to
do, any of the following acts: (i) grant any increase in salaries payable or to
become payable to any officer, employee, sales agent, or representative,
(ii) increase benefits payable to any officer, employee, sales agent, or
representative under any bonus or pension plan or other contract or commitment,
or (iii) modify any collective bargaining agreement to which it is a party or by
which it may be bound. Seller shall permit Buyer free access to communicate and
meet with Seller's employees at all reasonable times for the purpose of
discussing with such employees the possible employment of such persons by Buyer
in connection with the operation of the Business on or after the Closing Date.
8A.6 NEW TRANSACTIONS. Seller shall not do or agree to do any of the
following acts, without the prior written consent of Buyer except as described
on SCHEDULE 8A.6:
(a) enter into any contract, commitment, or transaction or incur any
liabilities not in the usual and ordinary course of its business, consistent
with past practice; or
(b) enter into any contract, commitment, or transaction in the usual
and ordinary course of business involving an amount exceeding $1,000,
individually, or $10,000 in the aggregate; or
(c) make any capital expenditures in excess of $5,000 for any single
item or $20,000 in the aggregate, or enter into any leases of capital equipment
or property under which the annual lease charge is in excess of $1,000; or
(d) sell, lease or dispose of, or subject to any lien, security
interest or encumbrance, any Assets or any part of the Business, other than in
the usual and ordinary course of business, consistent with past practice; or
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(e) initiate or participate in any discussions or negotiations or
enter into any agreement to do any of the actions described in the foregoing
subparagraphs (a)-(d).
8A.7 PAYMENT OF LIABILITIES AND WAIVER OF CLAIMS. Seller shall not
do, or agree to do, any of the following acts: (i) pay any obligation or
liability, fixed or contingent, other than current liabilities; (ii) waive or
compromise any right or claim; or (iii) cancel, without full payment, any note,
loan, or other obligation owing to Seller.
8A.8 EXISTING AGREEMENTS. Seller shall not modify, amend, cancel, or
terminate any of its existing contracts or agreements to be assumed by Buyer, or
agree to do any of those acts.
8A.9 CONSENT OF OTHERS. As soon as reasonably practical after the
execution and delivery of this Agreement, and in any event on or before the
Closing Date, Seller shall obtain the written consent of the persons described
in SCHEDULE 6.26 to this Agreement and will furnish to Buyer executed copies of
those consents.
8A.10 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Selling
Parties shall use their best efforts to assure that all representations and
warranties of Selling Parties set forth in this Agreement and in any written
statements delivered to Buyer by Selling Parties under this Agreement will also
be true and correct as of the Closing Date as if made on that date and that all
conditions precedent to Purchasing Parties' obligation to close shall have been
met. Without limiting its obligations under the preceding sentence, Seller
agrees that in the event all mortgages, liens, pledges, charges, encumbrances,
equities, claims, easements, rights of way, covenants, conditions or
restrictions (other than those referred to in Section 6.19) are not eliminated
from the preliminary title report for the parcels of real property described in
Item Numbers 2C and 2D of SCHEDULE 1.1.1 and commonly referred to as the Xxxxxx
Property, Seller shall propose for Buyer's consideration an escrow of a portion
of the Base Purchase Price in an amount sufficient to satisfy such exceptions.
Buyer shall consider Seller's proposal in good faith, but shall be under no
obligation to accept such proposal or waive this condition.
8A.11 SALES AND USE TAX ON PRIOR SALES. Seller agrees to furnish to
Buyer a clearance certificate from the California Board of Equalization and any
related certificates that Buyer may reasonably request as evidence that all
sales and use and other tax liabilities of Seller (other than income tax
liabilities) accruing before the Closing Date have been fully satisfied or
provided for.
8A.12 STATUTORY FILINGS. Seller shall cooperate fully with Buyer in
preparing and filing all information and documents deemed necessary or desirable
by Buyer under any statutes or governmental rules or regulations pertaining to
the transactions contemplated by this Agreement, including but not limited to
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules
promulgated thereunder.
8A.13 MAINTENANCE OF INVENTORIES. Seller shall maintain normal
quantities of consumable manufacturing supplies, spare parts, repair materials
and other inventories.
8A.14 EXCLUSIVITY OF NEGOTIATIONS. Selling Parties agree that
neither of the Selling Parties nor any director, officer, employee, agent or
representative of either of the Selling Parties will, directly or indirectly,
initiate contact with, solicit or encourage any inquiries or proposals by,
participate in any discussions or negotiations with, disclose any information
concerning Seller to, or
25
afford any access to the properties, books or records of Seller to, any
corporation, person or other entity, other than Buyer and its authorized agents,
concerning the sale of any equity interest in Seller or any merger,
consolidation or other business combination or sale of any assets or businesses
of Seller. Selling Parties shall promptly notify Buyer if any such proposal or
offer, or any inquiry or contact with any person, corporation or entity with
respect thereto, is made and shall furnish a copy thereof to Buyer.
8A.15 DISPOSAL OF DEBRIS. Seller shall remove from the Real
Property to Buyer's reasonable satisfaction the items described on
SCHEDULE 8A.15.
ARTICLE 8B. PURCHASING PARTIES' OBLIGATIONS BEFORE CLOSING
Purchasing Parties covenant that, except as otherwise agreed in
writing by Seller, from the date of this Agreement until the Closing or
termination of this Agreement.
8B.1 EMPLOYEES OF SELLER. Buyer shall use its best efforts before
the Closing Date to interview and communicate at reasonable times with Seller's
officers and employees for the purpose of discussing with such officers and
employees the possible employment of such persons by Buyer.
8B.2 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Purchasing
Parties shall use their best efforts to assure that all representations and
warranties of Purchasing Parties set forth in this Agreement and in any written
statements delivered to Selling Parties under this Agreement will also be true
and correct as of the Closing Date as if made on that date and that all
conditions precedent to Seller's obligation to close shall have been met.
8B.3 STATUTORY FILINGS. Purchasing Parties shall cooperate fully
with Seller in preparing and filing all information and documents deemed
necessary or desirable by Seller under any statutes or governmental rules or
regulations pertaining to the transactions contemplated by this Agreement,
including but not limited to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 and the rules promulgated thereunder.
8B.4 CONFIDENTIALITY. In the event the transactions contemplated by
this Agreement are not consummated for any reason, all copies of non-public
proprietary documents and information provided to Buyer by Selling Parties
hereunder shall be returned to Selling Parties by Buyer or destroyed by Buyer,
and Buyer shall maintain all proprietary and confidential data and information,
including without limitation customer lists that the Buyer has obtained
regarding Selling Parties' business in confidence and shall not disclose or
utilize the same except with the consent, or for the benefit, of the Selling
Parties.
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer to purchase the Assets under this Agreement
are subject to the satisfaction, at or before the Closing, of all the conditions
set out below in this Article 9. Buyer may waive any or all of these conditions
in accordance with Section 14.2 hereof; provided, however, that no such waiver
of a condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Selling Parties shall be in default of any of
its representations, warranties, or covenants under this Agreement, unless the
waiver explicitly provides otherwise.
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9.1 PREMERGER NOTIFICATION COMPLIANCE. All requirements under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules promulgated
thereunder applicable to the transactions contemplated hereby shall have been
met, including without limitation all necessary filing and waiting requirements,
and neither the United States Department of Justice nor the Federal Trade
Commission shall have raised objection to the transactions contemplated hereby.
9.2 ACCURACIES OF SELLING PARTIES' REPRESENTATIONS AND WARRANTIES.
All representations and warranties by Selling Parties in this Agreement or in
any written statement that shall be delivered to Buyer by Selling Parties under
this Agreement shall be true on and as of the Closing Date as though made at
that time.
9.3 ABSENCE OF LIENS. At or prior to the Closing, Buyer shall have
received a UCC search report dated as of a date not more than five days before
Closing issued by the California Secretary of State indicating that there are no
filings under the Uniform Commercial Code on file with such Secretary of State
which name Seller as debtor or otherwise indicating any lien on the Assets,
except for those leases and liens to be assumed by the Buyer and the liens
described in Section 6.19 as to which UCC Termination Statements have been
obtained from lienholders subject only to Seller's payment of specified dollar
amounts at Closing or as to which Seller has obtained pay-off letters and UCC
Termination Statements.
9.4 SELLING PARTIES' PERFORMANCE. Selling Parties shall have each
performed, satisfied, and complied with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by
Selling Parties on or before the Closing Date.
9.5 CERTIFICATION BY SELLER. Buyer shall have received a
certificate, dated the Closing Date, signed and verified by an officer of Seller
and S-K-I, respectively, certifying, in such detail as Buyer and its counsel may
reasonably request, that the conditions specified in Sections 9.2 and 9.4 have
been fulfilled.
9.6 OPINIONS OF SELLING PARTIES' COUNSEL.
9.6.1 XXXXXXX & XXXXXXX. Buyer shall have received from Xxxxxxx &
Xxxxxxx, counsel for Selling Parties, an opinion dated the Closing Date, to the
effect that:
(a) Each of Selling Parties is a corporation duly organized, validly
existing and in good standing under the laws of the its respective state of
incorporation and has all necessary corporate power to own its properties as now
owned and operate its business as now operated and to perform its obligations
under this Agreement;
(b) This Agreement has been duly and validly authorized and, when
executed and delivered by each of the Selling Parties, will be valid and binding
on each of Selling Parties and enforceable against each of the Selling Parties
in accordance with its terms, except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally;
(c) Except as set forth in SCHEDULE 6.24 to this Agreement, such
counsel does not know of any suit, action, arbitration, or legal,
administrative, or other proceeding or governmental investigation pending or
threatened against Seller; and
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(d) Neither the execution nor delivery of this Agreement nor the
consummation of the transactions contemplated by this Agreement will constitute
(i) a default, or an event that would with notice or lapse of time or both
constitute a default under, or violation or breach of, Seller's articles of
incorporation, bylaws, or any Contract identified in a schedule attached to the
legal opinion, or any law, regulation, ordinance, judgment, order, or decree
applicable to or affecting Seller or the Assets, or (ii) an event that, in the
absence of the consents described in SCHEDULE 6.26, would permit any party to
any agreement or instrument to terminate it or to accelerate the maturity of any
indebtedness or other obligation of either or both of Selling Parties.
In rendering its opinion, such counsel for Seller may rely on certificates of
governmental authorities and certificates of officers of either of the Selling
Parties.
9.6.2 XXXXXXX. Buyer shall have received from Gresham, Varner,
Xxxxxx, Xxxxx & Xxxxxx, counsel for Selling Parties, an opinion dated the
Closing Date, to the effect that:
(a) Except as set forth in SCHEDULE 6.24 to this Agreement, such
counsel does not know of any suit, action, arbitration, or legal,
administrative, or other proceeding or governmental investigation pending or
threatened against or affecting the Assets, Seller, the Business, or the
properties or financial condition of Seller;
(b) To the best of such counsel's knowledge, after due inquiry, no
consent, approval, authorization or order of, or filing with, any court or any
federal, state, regional or local governmental agency or body is required and
remains to be obtained on the part of Seller in order for the transactions
anticipated by this Agreement to be consummated; and
(c) To the best of such counsel's knowledge, Seller has good and
marketable title to its assets, including those described in the Schedules to
this Agreement, free and clear of all liens, encumbrances, equities, conditional
sales contracts, security interests, charges, and restrictions, except as set
forth in this Agreement or the Schedules hereto.
In rendering its opinion, counsel for Selling Parties may rely on certificates
of governmental authorities and certificates of officers of either of the
Selling Parties.
9.6.3 XXXXXXX. Buyer shall have received from Hancock, Rothert &
Bunshoft, counsel for Selling Parties an opinion dated the Closing Date, to the
effect that:
(a) Except as set forth in SCHEDULE 6.24 to this Agreement, such
counsel does not know of any suit, action, arbitration, or legal,
administrative, or other proceeding or governmental investigation pending or
threatened against or affecting the Assets, Seller, the Business, or the
properties or financial condition of Seller.
In rendering its opinion, such counsel for Selling Parties may rely on
certificates of governmental authorities and certificates of officers of either
of the Selling Parties.
9.7 ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
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9.8 CORPORATE APPROVAL. The execution and delivery by Selling
Parties of this Agreement and the other documents, instruments and agreements
referred to or provided for herein, and the performance by Selling Parties of
their respective covenants and obligations hereunder, shall have been duly
authorized by all necessary corporate action, including without limitation
approval by Selling Parties' respective Boards of Directors, which Buyer
acknowledges will require a satisfactory opinion from S-K-I's financial
advisers, Xxxxxxxx Xxxxxxxx & Co. Incorporated as to the fairness of the Total
Purchase Price from a financial point of view, and Buyer shall have received
copies of all resolutions pertaining to that corporate authorizations, certified
by the secretary or assistant secretary of Seller or S-K-I, as the case may be.
9.9 TITLE POLICIES. Buyer shall have received title insurance
policies, dated as of the Closing Date, issued by First American Title Insurance
and Trust Company, insuring fee simple title in Buyer to all the Owned Real
Property subject only to (i) the lien, if any, of current real property taxes,
payment of which is not delinquent, (ii) liens and encumbrances referred to in
the Interim Balance Sheet attached as part of SCHEDULE 6.2-1, (iii) liens and
encumbrances described in Section 6.19; and (iv) objections and exceptions noted
in these title insurance policies, which shall have been approved in writing by
Buyer. Liability coverage under those title insurance policies shall be at
least equal to the greater of the book value of such real property as reflected
in the Interim Balance Sheet and the amount allocated to such Real Property on
SCHEDULE 2.4.
9.10 CORPORATION TAX CLEARANCE. Buyer shall have received a
corporation tax clearance certificate for Seller as of a date not more than
three (3) days before the Closing Date, issued by the appropriate California tax
authorities.
9.11 DEPARTMENT OF EMPLOYMENT DEVELOPMENT RELEASE. Buyer shall have
received a Certificate of Release from the Department of Employment Development
of the State of California stating that, as of a date not more than thirty
(30) days before the Closing Date, no contributions, interest, or penalties are
due to the Department of Employment Development from Seller to which Buyer would
succeed upon consummation of the transactions contemplated hereby.
9.12 CONSENTS. The consent of the Forest Service to the transfer of
the USFS Permit to Buyer which the parties hereto contemplate will be
accomplished by the filing by Seller and Buyer of a Request for Termination and
Application for Special-Use Permit with the Forest Service and the issuance to
Buyer of a Ski Area Term Special-Use Permit by the Forest Service containing the
same terms and conditions as set forth in the USFS Permit, the consent of The
First National Bank of Boston and Teachers Insurance and Annuity Association of
America, as lenders to S-K-I, to the extent that their consent to the
consummation of the transactions contemplated hereby is required by their
respective debt instruments with S-K-I, and all other necessary authorizations,
agreements and consents of any parties to the consummation of the transactions
contemplated by this Agreement, or otherwise pertaining to the matters covered
by it, shall have been obtained by Seller and delivered to Buyer, and no such
authorizations, agreements and consents shall impose any burdensome or, in
Buyer's reasonable determination, unsatisfactory conditions or requirements on
Buyer or Buyer shall have entered into new contracts or agreements which permit
the continued use or supply of the property, products, technology or services
provided for by Seller's existing contracts or agreements on terms no less
favorable to Buyer than the prior contract or agreement of Seller as to such
products, technology or services.
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9.13 XXXX OF SALE. Seller shall have executed and delivered to Buyer
a Xxxx of Sale, in the form of EXHIBIT A hereto.
9.14 ASSIGNMENT AND ASSUMPTION AGREEMENT. Seller shall have executed
and delivered to Buyer an Assignment and Assumption Agreement in the form of
EXHIBIT B hereto.
9.15 REAL PROPERTY LEASES. Seller and Buyer shall have entered into
an Assignment and Assumption of Lease Agreements in the form attached hereto as
EXHIBIT C regarding each of the real property leases described on SCHEDULE
1.1.3, and the respective landlords with respect to such real property shall
also have consented in writing thereto.
9.16 GRANT DEEDS. Seller shall have executed and delivered to Buyer
for all the Owned Real Property grant deeds in the form of EXHIBIT D hereto.
9.17 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, opinions, and other documents delivered to Buyer
under this Agreement shall be satisfactory in all reasonable respects to Buyer
and its counsel.
9.18 CHANGE OF CORPORATE NAME. Seller shall have taken and caused to
be taken all necessary action by Seller's Board of Directors, stockholders, and
any other persons in order to change its corporate name to a name reasonably
approved by Buyer on or before the Closing Date and shall have effected such
name change by filing an Amendment to its Articles of Incorporation with the
California Secretary of State concurrently with the Closing. In addition,
Seller shall have furnished to Buyer a letter signed by an authorized officer of
Seller, undated, addressed to the California Secretary of State, consenting to
the Buyer's use of the corporate name "Bear Mountain, Inc." in its qualification
to do business as a foreign corporation in California. The foregoing actions
and deliveries shall be conditioned upon, and shall occur concurrently with, the
Closing and shall be without prejudice to Seller's rights under Section 12.1.
9.19 CONTINUITY OF MANAGEMENT. Buyer shall have made arrangements
reasonably suitable for the employment by Buyer of sufficient of Seller's
employees to continue the operation of the Business without disruption thereto.
9.20 CONDITION OF ASSETS. The Assets shall not have been materially
or adversely affected in any way as a result of any fire, accident, storm or
other casualty or labor or civil disturbance or act of God or the public enemy.
9.21 WATER APPROVALS. Either (a) S-K-I shall have assigned all its
right, title and interest in and to that certain Agreement for Water Service
dated January 4, 1988 by Big Bear Municipal Water District and S-K-I (the "WATER
AGREEMENT") to Buyer pursuant to a form of assignment and assumption agreement
reasonably satisfactory to Buyer in its sole discretion and Big Bear Municipal
Water District shall have consented to such assignment and assumption agreement
without imposing any burdensome or, in Buyer's reasonable determination,
unsatisfactory conditions on Buyer in connection with such consent; or (b) at
Buyer's election, Buyer shall have entered into a new contract with Big Bear
Municipal Water District (the "NEW WATER AGREEMENT") which contains the same
right to water deliveries as under the Water Agreement and on terms and
conditions no less favorable to Buyer than under the Water Agreement. If the
Water Agreement is assigned by S-K-I, S-K-I shall provide documentation
satisfactory to Buyer of the requisite approvals of the California
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State Water Resources Control Board and the Watermaster for the Upper Santa Xxx
Watershed, and the requisite agreement of the San Bernardino Valley Municipal
Water District, with respect to the Water Agreement, together with duly executed
forms transferring S-K-I's rights thereunder to Buyer in form and substance
satisfactory to Buyer. If a New Water Agreement is to be executed, S-K-I shall
have obtained prior to the Closing Date for the benefit of Buyer the requisite
approvals of the California State Water Resources Control Board and the
Watermaster for the Upper Santa Xxx Watershed, and the requisite agreement of
the San Bernardino Valley Municipal Water District, with respect to the New
Water Agreement.
9.22 COMPLETION OF DUE DILIGENCE. Buyer shall have completed, with
results to its satisfaction, a financial, legal and business due diligence
investigation of Seller, the Assets and the Business. Such investigation shall
include, without limitation, an environmental assessment of the Real Property.
9.23 NO ADVERSE CHANGE. There shall not have occurred, and there
shall not be threatened, any material adverse change in the Assets, the Business
or Seller's financial condition, assets or liabilities (actual or contingent) or
prospects since the Stub Period Date.
9.24 LICENSE AGREEMENT. Seller shall have executed and delivered to
Buyer a License Agreement in the form of EXHIBIT E.
9.25 ESCROW AGREEMENT. Seller and Escrow Agent shall have executed
and delivered to Buyer an Escrow Agreement in the form of EXHIBIT F.
9.26 APPROVAL OF ADJUSTED STUB PERIOD DATE BALANCE SHEET. Buyer shall
have reviewed and approved in its sole discretion the Adjusted Stub Period Date
Balance Sheet set forth in SCHEDULE 6.2-1A.
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller to sell and transfer the Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
following conditions set out below in this Article 10, any or all of which may
be waived by Seller in accordance with Section 14.2 hereof:
10.1 ACCURACY OF PURCHASING PARTIES' REPRESENTATIONS AND WARRANTIES.
All representations and warranties by Purchasing Parties contained in this
Agreement or in any written statement delivered by Purchasing Parties under this
Agreement shall be true on and as of the Closing as though such representations
and warranties were made on and as of that date.
10.2 PURCHASING PARTIES' PERFORMANCE. Purchasing Parties shall each
have performed and complied with all covenants and agreements, and satisfied all
conditions that each of them is required by this Agreement to perform, comply
with, or satisfy, before or at the Closing.
10.3 PURCHASING PARTIES' CORPORATE APPROVAL. Each of the Purchasing
Parties shall have received corporate authorization and approval for the
execution and delivery of this Agreement by each of them and all corporate
action necessary or proper to fulfill the obligations of each of them to be
performed under this Agreement on or before the Closing Date, including without
limitation the approval by the respective Board of Directors of each of the
Purchasing Parties.
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10.4 FAIRNESS OPINION. Seller shall have received a satisfactory
opinion from Seller's financial advisers, Xxxxxxxx Xxxxxxxx & Co. Incorporated,
addressed to its Board of Directors, as to the fairness of the Total Purchase
Price from a financial point of view.
10.5 CONSENTS. The consent of the Forest Service to the transfer of
the USFS Permit to Buyer which the parties hereto contemplate will be
accomplished by the filing by Seller and Buyer of a Request for Termination and
Application for Special-Use Permit with the Forest Service and the issuance to
Buyer of a Ski Area Term Special-Use Permit by the Forest Service containing the
same terms and conditions as set forth in the USFS Permit, the consent of The
First National Bank of Boston and Teachers Insurance and Annuity Association of
America, as lenders to S-K-I, to the extent that their consent to the
consummation of the transactions contemplated hereby is required by their
respective debt instruments with S-K-I, and all other necessary authorizations,
agreements and consents of any parties to the consummation of the transactions
contemplated by this Agreement, or otherwise pertaining to the matters covered
by it, shall have been obtained by Seller and delivered to Buyer, and no such
authorizations, agreements and consents shall impose any burdensome or, in
Buyer's reasonable determination, unsatisfactory conditions or requirements on
Buyer, or Buyer shall have entered into new contracts or agreements which permit
the continued use or supply of the products, technology or services provided for
by Seller's existing contracts or agreements on terms no less favorable to Buyer
than the prior contract or agreement of Seller as to such products, technology
or services.
10.6 PREMERGER NOTIFICATION COMPLIANCE. All requirements under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules promulgated
thereunder applicable to the transactions contemplated hereby shall have been
met, including without limitation all necessary filing and waiting requirements,
and neither the United States Department of Justice nor the Federal Trade
Commission shall have raised any objection to the transactions contemplated
hereby.
10.7 CERTIFICATION BY BUYER. Seller shall have received a
certificate, dated the Closing Date, signed and verified by an officer of Buyer
and Fibreboard, respectively, certifying, in such detail as Seller and its
counsel may reasonably request, that the conditions specified in Sections 10.1
and 10.2 have been fulfilled.
10.8 OPINION OF PURCHASING PARTIES' COUNSEL. Seller shall have
received from counsel for Purchasing Parties an opinion dated the Closing Date,
to the effect that:
(a) Each of Purchasing Parties is a corporation duly organized,
validly existing and in good standing under the laws of its respective state of
incorporation and has all necessary corporate power to own its properties as now
owned and operate its business as now operated and to perform its obligations
under this Agreement; and
(b) This Agreement has been duly and validly authorized and, when
executed and delivered by each of the Purchasing Parties, will be valid and
binding on each of Purchasing Parties and enforceable against each of the
Purchasing Parties in accordance with its terms, except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally.
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10.9 ABSENCE OF LITIGATION. No action, suit, or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
10.10 CORPORATE APPROVAL. The execution and delivery by Purchasing
Parties of this Agreement and the other documents, instruments and agreements
referred to or provided for herein, and the performance by Purchasing Parties of
their covenants and obligations hereunder, shall have been duly authorized by
all necessary corporate action.
10.11 ASSIGNMENT AND ASSUMPTION AGREEMENT. Buyer shall have executed
and delivered to Seller an Assignment and Assumption Agreement in the form of
EXHIBIT B hereto.
10.12 REAL PROPERTY LEASES. Buyer shall have entered into an
Assignment and Assumption of Lease Agreement in the form attached hereto as
EXHIBIT C regarding each of the real property leases described on SCHEDULE
1.1.3, and the respective landlords with respect to such real property shall
also have consented in writing thereto.
10.13 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments, opinions, and other documents delivered to Seller
under this Agreement shall be satisfactory in all reasonable respects to Seller
and its counsel.
10.14 LICENSE AGREEMENT. Buyer shall have executed and delivered to
Seller a License Agreement in the form of EXHIBIT E.
10.15 ESCROW AGREEMENT. Buyer and Escrow Agent shall have executed
and delivered to Seller an Escrow Agreement in the form of EXHIBIT F.
ARTICLE 11. OBLIGATIONS AT CLOSING
11.1 SELLING PARTIES' OBLIGATIONS AT THE CLOSING. At the Closing,
Seller shall deliver or cause to be delivered to Buyer:
(a) For all the Owned Real Property and interests in the Owned Real
Property, general warranty deeds in recordable form, properly executed and
acknowledged, conforming to and conveying the agreed state of the title;
(b) Assignments in recordable form of all the Real Property Leases,
properly executed and acknowledged by Seller, and accompanied by all consents of
lessors required by this Agreement and the leases being assigned;
(c) Instruments of assignment and transfer of all of the other Assets
of Seller and S-K-I to be transferred hereunder with appropriate warranties of
title, in form and substance satisfactory to Buyer's counsel;
(d) Licenses for the trademarks and trade names to be licensed to
Buyer by S-K-I, properly executed and acknowledged by S-K-I; and
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(e) Such other instruments, certificates and documents as Buyer or
its counsel may reasonably require to convey and transfer all of the Assets,
implement the terms of this Agreement and memorialize the satisfaction of the
closing conditions of Buyer set forth in Article 9.
Simultaneously with the consummation of the transfer, Seller, through
its officers, agents, and employees, shall put Buyer into full possession and
enjoyment of all the Assets to be conveyed and transferred by this Agreement.
Selling Parties, at any time before or after the Closing Date, shall
execute, acknowledge, and deliver any further deeds, assignments, conveyances,
and other assurances, documents, and instruments of transfer, reasonably
requested by Buyer and shall take any other action consistent with the terms of
this Agreement that may reasonably be requested by Buyer for the purpose of
assigning, transferring, granting, conveying, and confirming to Buyer, or
reducing to possession, any or all property and assets to be conveyed and
transferred by this Agreement. If requested by Buyer, Selling Parties further
agree to prosecute or otherwise enforce in their own names for the benefit of
Buyer any claims, rights, or benefits that are transferred to Buyer by this
Agreement and that require prosecution or enforcement in either of the Selling
Parties' name. 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 Agreement by Selling Parties.
11.2 BUYER'S OBLIGATIONS AT THE CLOSING. At the Closing, Buyer shall
deliver to Seller against delivery of the items specified in Section 11.1
immediately available funds, by wire transfer, in the amount of the Base
Purchase Price, and such other instruments, certificates and documents as Seller
or its counsel may reasonably require to implement the terms of this Agreement;
and to memorialize satisfaction of the closing conditions of Seller set forth in
Article 10.
ARTICLE 12. THE PARTIES' OBLIGATIONS AFTER THE CLOSING
12.1 NO USE OF NAME. Selling Parties agree that after the Closing
Date they shall not use or employ in any manner directly or indirectly the name
"BEAR MOUNTAIN", or any variation thereof in the State of California or in any
states contiguous to the State of California or in a manner inconsistent with
the terms of Sections 1.1.12 or 1.1.13.
12.2 COLLECTION OF ACCOUNTS RECEIVABLE. Buyer shall exert its best
commercially reasonable efforts with the full cooperation of Seller to collect
the Accounts Receivable described in Section 1.1.6 as soon as possible after the
Closing Date. If more than one invoice is outstanding for any customer the
"first in, first out" principle shall be applied in determining the invoice to
which a payment relates, unless the payment by its terms specifies or clearly
indicates the invoice to which it relates. Should any Accounts Receivable
remain unpaid after one year from the Closing Date, Selling Parties will pay to
Buyer the full amount of such unpaid receivables within 30 days after delivery
to Selling Parties of a schedule of such unpaid Accounts Receivable. If there
is any dispute between the parties as to the correct amount of unpaid
receivables, the dispute resolution procedures specified in Section 2.5 above
for determining the proper amount of the Adjustment to Base Purchase Price shall
govern.
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12.3 SELLING PARTIES' INDEMNITIES.
12.3.1 WARRANTY CLAIMS. From and after the Closing, Selling Parties,
jointly and severally, shall reimburse, indemnify, defend, and hold harmless on
an after-tax basis each of the Purchasing Parties and their respective
successors and assigns (an "INDEMNIFIED PARTY") against and in respect of claims
and demands of third parties, and all losses, costs, expenses, fines, judgment
obligations, liabilities, damages (excluding consequential and punitive
damages), recoveries, and deficiencies, including without limitation settlement
costs, interest, penalties, and reasonable attorneys', accountants' and experts'
fees and expenses ("COSTS"), that an Indemnified Party shall incur or suffer,
which arise, result from, or relate to any breach of a representation or
warranty set forth in Article 6 of this Agreement including any Schedule related
thereto ("WARRANTY CLAIM") only if such Warranty Claim (excluding a Warranty
Claim based upon the Selling Parties' fraud or knowing misrepresentation or
omission) meets the following criteria:
(i) it is the proximate cause of Costs to an Indemnified Party,
provided that an Indemnified Party may not recover for the same Costs as
are recovered hereunder by another Indemnified Party;
(ii) such Costs related thereto exceed $25,000 individually or,
together with all Warranty Claims, exceeds $100,000;
(iii) such Costs related thereto exceed the proceeds from any
insurance policy in favor of an Indemnified Party which may be paid on
account of the Warranty Claim; and
(iv) it is presented by an Indemnified Party to the Selling Parties in
writing on or prior to the first anniversary of the Closing Date.
The Purchasing Parties' exclusive remedy for Warranty Claims (other than a
Warranty Claim arising from the Selling Parties' fraud or knowing
misrepresentation or omission) shall be an offset against the amounts, if any,
owed by the Purchasing Parties pursuant to Section 2.6 of this Agreement. Any
disputes arising among the parties regarding the right to make such an offset
shall be resolved in a manner substantially similar to that described in Section
2.5 hereof unless the parties cannot agree thereto in which case all judicial
remedies shall be preserved.
12.3.2 SELLERS' LIABILITIES. Without regard to the limitations set
forth in Section 12.3.1 hereof, each of the Selling Parties, jointly and
severally, for itself, its successors and assigns, hereby assumes and agrees to
pay or cause to be paid, to perform or cause to be performed or otherwise to
discharge or cause to be discharged, as they become due and payable, and to
indemnify and hold harmless an Indemnified Party against any and all Costs
arising out of, the Sellers' Liabilities, as hereinafter defined. For purposes
of this section, "SELLERS' LIABILITIES" means all Costs attributable to the
operation of the Business on or before the Closing Date and not expressly
assumed by Buyer pursuant to Article 3 hereof, arising from, related to or
otherwise concerning (A) taxes based on income, franchise, sales, use or
otherwise imposed on Seller with respect to periods ending prior to or on the
Closing Date; (B) amounts owed to any employees of Seller for periods prior to
the Closing Date for compensation and benefits or any termination by Seller of
the employment of such employees including, without limitation, any severance or
other termination pay or benefits required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), if applicable;
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(C) the Excluded Assets; (D) Warranty Claims or other claims arising from the
Selling Parties' fraud or knowing misrepresentation or knowing omission; (E) any
claim by a third party for breach of contract resulting from Seller's failure to
obtain any required consent referred to in Sections 9.12 and 9.21; (F) any
legal, governmental or administrative action, suit or proceeding against Buyer,
including without limitation those required to be included in SCHEDULE 6.24
hereto, which legal, governmental or administrative action, suit or proceeding
arises from the conduct of the Business of the Seller or the ownership or
condition of the properties owned or leased by Seller prior to the Closing Date,
other than (i) any such proceeding seeking to enforce the Seller's payment
obligations imposed under Paragraph 41 of the Conditions to Seller's Site Plan
Approval relating to the establishment of an emergency reserve fund and
(ii) Seller's failure to obtain necessary permits from the South Coast Air
Quality Management District to conduct the Business in the manner that it has
been conducted by Seller; (G) any obligation to pay additional assessments under
Sections 301 and 600 of the Developer Agreement dated December 14, 1983
identified in SCHEDULE 6.22 which may be imposed in the future subject to the
following limitations (i) should Fibreboard be able to postpone such assessments
by additional extensions of the construction date, it shall do so unless it
decides to make use of the development rights accruing to its benefit therein in
which case all of Seller's Liabilities as expressed in this subsection (G) shall
terminate, or (ii) once the obligation to pay the additional assessments
referred to in Sections 301 and 600 of the aforementioned Developer Agreement is
imposed on Buyer, the Selling Parties shall pay to the Buyer an amount equal to
a reasonable present value calculation of such future costs in an amount not to
exceed One Hundred Thousand Dollars ($150,000); (H) the disposal or transport by
Seller of any Hazardous Substances other than on the Real Property; and (I) any
breach of or failure by Selling Parties to perform any of their covenants or
agreements in this Article 12 or in any schedule, certificate, exhibit, or other
instrument furnished or to be furnished by Selling Parties under Article 12.
With respect to any liabilities of a continuing nature, Sellers' Liabilities
shall include only amounts attributable to Seller's operation of the Business on
or prior to the Closing Date.
12.4 BUYER'S INDEMNITY. Buyer agrees to indemnify and hold harmless,
on an after-tax basis, Seller and S-K-I and their respective successors and
assigns against and in respect of any Costs which arise out of or result from
the failure of Buyer to pay or perform any liabilities expressly assumed by
Buyer pursuant to this Agreement.
12.5 NOTICE OF CLAIM. Upon obtaining knowledge thereof, any party
with an indemnity claim under Section 12.3 or 12.4 shall notify the indemnitor,
in writing of any damage, claim, loss, liability or expense which such party has
determined has given or could give rise to a claim under Section 12.3 or 12.4
(such written notice being hereinafter referred to as a "NOTICE OF CLAIM"). A
Notice of Claim shall contain a brief description of the nature and estimate of
the amount of any such claim giving rise to a right of indemnification.
12.6 DEFENSE OF THIRD PARTY CLAIMS. With respect to any claim or
demand set forth in a Notice of Claim relating to a third party claim, the
indemnifying party may defend, in good faith and at its expense, any such claim
or demand, and indemnified party, at its expense, shall have the right to
participate in the defense of any such third party claim. So long as the
indemnifying party is defending in good faith any such third party claim, the
indemnified party shall not settle or compromise such third party claim. If the
indemnifying party does not so elect to defend any such third party claim, the
indemnified party shall have no obligation to do so.
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12.7 ACCESS TO RECORDS. From and after the Closing, the parties
shall allow each other, and the counsel, accountants and other representatives
of each other, such access to records which after the Closing are in the custody
or control of a party as is reasonably required in order to comply with its
obligations under the law or under contracts and obligations assumed pursuant to
this Agreement.
12.8 NONSOLICITATION OF EMPLOYEES. None of the Selling Parties
shall, prior to the one hundred and eightieth (180th) day after the Closing,
solicit any employee of Buyer or of any direct or indirect subsidiary of Buyer
to leave such employment if such employee was at any time between the date
hereof and the Closing an employee of Seller.
12.9 DEPOSIT OF CHECKS. Seller shall cooperate with Buyer in making
all necessary or desirable arrangements so that checks and other payments on
accounts receivable purchased by Buyer pursuant to this Agreement may be
deposited into Buyer's bank accounts without endorsement by Seller.
12.10 INSURANCE COVERAGE. From and after the Closing, Selling
Parties shall maintain their current insurance coverage (including such self
insurance as is currently in effect) to protect Selling Parties against the
liabilities of the Business which relate to the period prior to the Closing.
12.11 BUYER'S POST-CLOSING SUPPORT. For a period not to exceed sixty
(60) days after the Closing, Buyer shall provide to Seller such clerical support
and assistance as Seller may reasonably request to enable Seller to discharge
its obligations after Closing, to make an orderly transition in the sale of the
Assets, as contemplated by this Agreement, and to retain such records as may
reasonably be required, provided however, that Seller shall reimburse Buyer for
all of its out-of-pocket costs incurred in providing such services.
12.12 PAYMENT OF ADDITIONAL CONSIDERATION. Buyer shall pay the
Additional Consideration as specified in Section 2.6.
ARTICLE 13. COSTS
13.1 FINDER'S OR BROKER'S FEES. Each of the parties represents and
warrants that it has dealt with no broker or finder in connection with any of
the transactions contemplated by this Agreement, and, insofar as it knows, no
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions except to the extent that S-K-I may be
obligated to pay a commission or fee to Xxxxxxxx Xxxxxxxx & Co. Incorporated for
which Seller is solely responsible.
13.2 EXPENSES. Except as otherwise expressly provided in this
Agreement, each of the parties shall pay all costs and expenses incurred or to
be incurred by it in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement, provided however,
that Seller and Buyer shall share equally the escrow, title and closing costs
associated with the conveyance of the real property (including the cost of the
preliminary title report and title insurance).
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ARTICLE 14. FORM OF AGREEMENT
14.1 HEADINGS. The subject headings of the Articles and Sections of
this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
14.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement,
modification, or amendment of this Agreement shall be binding unless executed in
writing by all the parties. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver.
14.3 COUNTERPARTS. This Agreement may be executed simultaneously 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.
ARTICLE 15. PARTIES
15.1 PARTIES IN INTEREST. Nothing in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective
shareholders, successors and assigns, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party to this Agreement.
15.2 ASSIGNMENT. This Agreement shall be binding on and shall inure
to the benefit of the parties to it and their respective heirs, legal
representatives, successors, and assigns.
ARTICLE 16. REMEDIES; TERMINATION
16.1 RECOVERY OF LITIGATION COSTS. Except as otherwise expressly
provided in this Agreement, if any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
16.2 CONDITIONS PERMITTING TERMINATION. Subject to the provisions of
Article 5, either party may on or prior to the Closing Date terminate this
Agreement by written notice to the other, if any bona fide action or proceeding
shall be pending against either party on the Closing Date that could result in
an unfavorable judgment, decree, or order that would prevent or make unlawful
the carrying out of this Agreement.
16.3 DEFAULTS PERMITTING TERMINATION. If either Buyer or Seller
materially defaults in the due and timely performance of any of its warranties,
covenants, or agreements under this
38
Agreement, the non-defaulting party or parties may on or prior to the Closing
Date give notice of termination of this Agreement, in the manner provided in
Article 18. The notice shall specify with particularity the default or defaults
on which the notice is based. The termination shall be effective seven days
after giving of such notice, unless the specified default or defaults have been
cured on or before the effective date for termination.
ARTICLE 17. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
No representations and warranties set forth in Article 6 of this
Agreement shall survive beyond the first anniversary of the Closing, except as
expressly provided in Article 12. No covenants or agreements of the parties
contained in this Agreement shall survive the Closing, other than Articles 1, 2,
3, 4, 5, 12, 13, 14, 15, 16.1, 17, 18 and 19 and other than any instrument,
certificate, or opinion provided for in this Agreement, all of which shall
survive the Closing subject to the expiration of any applicable statute of
limitations.
ARTICLE 18. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail registered or certified, postage prepaid, and
properly addressed as follows:
To Seller and S-K-I at: S-K-I Ltd.
x/x Xxxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
VP & Corporate Counsel
Fax No.: (000) 000-0000
with copy to: Xxxxxxx & Xxxxxxx
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
Attn.: Xxxx Xxxxx, Esq.
Fax No.: (000) 000-0000
To Buyer and Fibreboard at: Fibreboard Corporation
0000 X. Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax No.: (000) 000-0000
39
with copy to: McCutchen, Doyle, Xxxxx & Xxxxxxx
Market Post Tower, Suite 1500
00 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
Any party may change its address for purposes of this Article by giving the
other parties written notice of the new address in the manner set forth above.
ARTICLE 19. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of California, except that this Agreement shall be given a
fair and reasonable construction in accordance with the intention of the parties
and without regard to, or aid of, Section 1654 of the California Civil Code.
ARTICLE 20. MISCELLANEOUS
20.1 ANNOUNCEMENTS. None of the parties will make any announcements
to the public or to employees of the other parties concerning this Agreement or
the transactions contemplated hereby without the prior approval of the other
parties, which will not be unreasonably withheld. Notwithstanding any failure
of Buyer to approve it, the parties may make an announcement of substantially
the same information as theretofore announced to the public by the other
parties, or any announcement required by applicable law, but the parties shall
in either case notify the other parties of the contents thereof reasonably
promptly in advance of its issuance.
20.2 REFERENCES. Unless otherwise specified, references to Sections
or Articles are to Sections or Articles in this Agreement.
20.3 CURRENCY. All dollar amounts set forth herein are expressed in
terms of United States dollars.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it as of the day and year first above written.
BEAR MOUNTAIN, INC.
By /s/ Xxxxx X. Xxxxxxx
---------------------------
Its Duly Authorized Agent
40
BEAR MOUNTAIN LTD.
By /s/ Xxxxx X. Xxxx
---------------------------
Its Duly Authorized Agent
S-K-I LTD
By /s/ Xxxxx X. Xxxx
---------------------------
Its Duly Authorized Agent
FIBREBOARD CORPORATION
By /s/ Xxxxx X. Xxxxxxx
---------------------------
Its Duly Authorized Agent
41
