UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
March 26, 2002
Date of Report (Date of earliest event reported)
VAIL RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) |
1-9614 (Commission file number) |
51-0291762 (I.R.S. Employer Identification No.) |
137 Benchmark Road
Avon, Colorado 81620
(Address of principal executive offices)
(970) 845-2500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other events.
On March 26, 2002, Vail Resorts, Inc. issued the press release attached to this Form 8-K as Exhibit 99 and incorporated by reference herein, announcing that it had entered into a contract to acquire Heavenly Ski Resort in the Lake Tahoe area of California and Nevada from American Skiing Company.
The description contained in this Form 8-K of the transactions contemplated by such contract is qualified in its entirety by reference to the full text of the contract, a copy of which is attached to this Form 8-K as Exhibit 2.
Item 7. Financial Statements and Exhibits.
(a) No financial statements are required to be filed with this report.
(b) No pro-forma financial information is required to be filed with this report.
(c) Exhibits. The following exhibits are filed herewith:
Exhibit No. |
Description |
2 |
Purchase Agreement, dated as of March 26, 2002, by and among Heavenly Valley Ski & Resort Corporation, Heavenly Corporation, American Skiing Company, VR Heavenly I, Inc., VR Heavenly II, Inc. and Vail Resorts, Inc. |
99 |
Press Release dated March 26, 2002 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 28, 2002
VAIL RESORTS, INC. |
|
|
|
|
|
By: /s/ James P. Donohue |
|
Name: |
James P. Donohue |
Title: |
Senior Vice President |
|
and Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description |
2 |
Purchase Agreement, dated as of March 26, 2002, by and among Heavenly Valley Ski & Resort Corporation, Heavenly Corporation, American Skiing Company, VR Heavenly I, Inc., VR Heavenly II, Inc. and Vail Resorts, Inc. |
99 |
Press Release dated March 26, 2002 |
EXHIBIT 2
EXECUTION COPY
PURCHASE AGREEMENT
by and among
HEAVENLY VALLEY SKI & RESORT CORPORATION,
HEAVENLY CORPORATION,
AMERICAN SKIING COMPANY,
VR HEAVENLY I, INC.,
VR HEAVENLY II, INC.
and
VAIL RESORTS, INC.
______________________________
March 26, 2002
______________________________
TABLE OF CONTENTS
Page |
||
ARTICLE I CERTAIN DEFINITIONS |
7 |
|
1.01 |
Certain Definitions |
7 |
1.02 |
Other Capitalized Terms |
13 |
ARTICLE II CALCULATION OF PURCHASE PRICE AND PAYMENT |
15 |
|
2.01 |
Sale and Purchase of Interests |
15 |
2.02 |
Payment at the Closing. |
16 |
2.03 |
Working Capital and EBITDA Adjustments |
17 |
2.04 |
Payments in Respect of Real Estate. |
19 |
2.05 |
Escrow. |
20 |
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS |
20 |
|
3.01 |
Organization and Qualification. |
20 |
3.02 |
Title to the Interests; Ownership of Assets. |
20 |
3.03 |
Subsidiaries |
21 |
3.04 |
Binding Obligation |
21 |
3.05 |
No Default or Conflicts |
21 |
3.06 |
No Governmental Authorization or Consent Required. |
22 |
3.07 |
Financial Statements; Undisclosed Liabilities |
22 |
3.08 |
No Material Adverse Effect |
23 |
3.09 |
Intellectual Property. |
23 |
3.10 |
Compliance with Laws |
24 |
3.11 |
Contracts. |
24 |
3.12 |
Litigation |
25 |
3.13 |
Approvals |
25 |
3.14 |
Labor Matters. |
25 |
3.15 |
Employee Benefit Plans. |
26 |
3.16 |
Brokers |
28 |
3.17 |
Environmental Compliance. |
29 |
3.18 |
Insurance. |
30 |
3.19 |
Real Property. |
30 |
3.20 |
Personal Property |
32 |
3.21 |
Tax Matters |
32 |
3.22 |
Powers of Attorney |
33 |
3.23 |
Bank Accounts |
33 |
3.24 |
Passenger Tramway. |
33 |
3.25 |
Water Rights |
33 |
3.26 |
NO OTHER REPRESENTATIONS |
34 |
3.27 |
CONDITION OF THE BUSINESS |
34 |
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER |
35 |
|
4.01 |
Organization of the Purchaser |
35 |
4.02 |
Power and Authority |
35 |
4.03 |
No Conflicts |
35 |
4.04 |
Purchase for Investment |
36 |
4.05 |
Litigation |
36 |
4.06 |
Brokers |
36 |
4.07 |
Availability of Funds |
36 |
4.08 |
No Divestitures |
36 |
4.09 |
NO OTHER REPRESENTATIONS |
36 |
4.10 |
INDEPENDENT INVESTIGATION |
37 |
ARTICLE V EMPLOYEES AND EMPLOYEE-RELATED MATTERS |
37 |
|
5.01 |
Employment Matters |
37 |
5.02 |
Benefit Plans |
38 |
ARTICLE VI CLOSING |
38 |
|
6.01 |
Closing Date |
38 |
ARTICLE VII CONDITIONS TO OBLIGATIONS OF THE PURCHASERS TO CONSUMMATE THE TRANSACTION |
39 |
|
7.01 |
Representations and Warranties; Compliance with Covenants |
39 |
7.02 |
No Material Adverse Effect |
39 |
7.03 |
No Injunction |
39 |
7.04 |
Approvals |
39 |
7.05 |
Release of Liens |
40 |
7.06 |
Assignment |
40 |
7.07 |
Related Documents |
40 |
7.08 |
FIRPTA Affidavit |
40 |
7.09 |
Resignations |
40 |
7.10 |
Outstanding Indebtedness |
41 |
7.11 |
Release of Guarantees |
41 |
7.12 |
Settlement of Accounts |
41 |
7.13 |
Capital Leases |
41 |
7.14 |
Payment of Outstanding Indebtedness |
41 |
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF THE SELLERS TO CONSUMMATE THE TRANSACTION |
41 |
|
8.01 |
Representations and Warranties; Compliance with Covenants |
41 |
8.02 |
No Injunction |
42 |
8.03 |
Approvals |
42 |
8.04 |
Related Documents |
42 |
8.05 |
Substitute Letter of Credit |
42 |
8.06 |
Settlement of Accounts |
42 |
ARTICLE IX COVENANTS |
42 |
|
9.01 |
Regulatory Filings, etc. |
42 |
9.02 |
Injunctions |
43 |
9.03 |
Access to Information |
43 |
9.04 |
No Extraordinary Actions by the Sellers |
43 |
9.05 |
Commercially Reasonable Efforts; Further Assurances. |
45 |
9.06 |
Use of Names; Name Change. |
48 |
9.07 |
Confidentiality; Publicity |
48 |
9.08 |
Transition |
49 |
9.09 |
Access to Records After the Closing |
49 |
9.10 |
Real Estate Purchase |
50 |
9.11 |
Interim Operations of the Parent |
50 |
9.12 |
No Solicitation |
50 |
9.13 |
Tax Matters. |
50 |
9.14 |
Compliance with Laws |
51 |
9.15 |
Updating of the Schedules |
51 |
ARTICLE X SURVIVAL AND INDEMNIFICATION |
52 |
|
10.01 |
Survival |
52 |
10.02 |
Indemnification by the Sellers |
52 |
10.03 |
Indemnification by the Purchasers |
53 |
10.04 |
Limitations on Indemnification; Exclusive Remedy. |
53 |
10.05 |
Defense of Claims. |
54 |
10.06 |
Losses Net of Insurance, etc. |
55 |
10.07 |
Section 9.05(m) Agreement |
56 |
ARTICLE XI TAX MATTERS |
56 |
|
11.01 |
Tax Indemnification. |
56 |
11.02 |
Tax Refunds |
57 |
11.03 |
Preparation and Filing of Tax Returns and Payment of Taxes. |
57 |
11.04 |
Tax Cooperation. |
58 |
11.05 |
Tax Audits |
58 |
11.06 |
Tax Treatment of Indemnification Payment |
60 |
ARTICLE XII TERMINATION |
60 |
|
12.01 |
Termination |
60 |
12.02 |
Other Agreements; Material To Be Returned. |
61 |
12.03 |
Effect of Termination |
61 |
ARTICLE XIII MISCELLANEOUS |
63 |
|
13.01 |
Complete Agreement |
63 |
13.02 |
Waiver, Discharge, etc. |
63 |
13.03 |
Fees and Expenses |
63 |
13.04 |
Amendments |
63 |
13.05 |
Notices |
64 |
13.06 |
Venue |
65 |
13.07 |
GOVERNING LAW; WAIVER OF JURY TRIAL |
65 |
13.08 |
Headings |
65 |
13.09 |
Interpretation |
65 |
13.10 |
Exhibits and Schedules |
65 |
13.11 |
Successors |
65 |
13.12 |
Remedies |
66 |
13.13 |
Third Parties |
66 |
13.14 |
Severability |
66 |
13.15 |
Counterparts; Effectiveness |
66 |
EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B-1 Form of HVSR Assignment
Exhibit B-2 Form of HC Assignment
Exhibit C Form of Surveyor Certificate
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of March 26, 2002 (this "Agreement"), by and among HEAVENLY VALLEY SKI & RESORT CORPORATION, a Delaware corporation ("HVSR"), AMERICAN SKIING COMPANY, a Delaware corporation ("ASC"), HEAVENLY CORPORATION, a Delaware corporation ("HC" and, together with HVSR and ASC the "Sellers"), VR Heavenly I, Inc., a Delaware corporation (the "GP Purchaser"), VR Heavenly II, Inc., a Delaware corporation (the "LP Purchaser"), and VAIL RESORTS, INC., a Delaware corporation (the "Parent" and together with the GP Purchaser and the LP Purchaser, the "Purchasers") for the sale and purchase of all of the general partnership interests and all of the limited partnership interests in Heavenly Valley, Limited Partnership, a Neva da limited partnership (the "Company").
W I T N E S S E T H:
WHEREAS, HC is the sole general partner, and HVSR is the sole limited partner, of the Company;
WHEREAS, ASC owns all of the stock of HC and HVSR;
WHEREAS, each of the GP Purchaser and the LP Purchaser is an indirect wholly-owned Subsidiary of the Parent;
WHEREAS, HC wishes to sell to the GP Purchaser, and the GP Purchaser wishes to purchase from HC, all of HC's general partnership interest in the Company (the "HC Interest") upon the terms and subject to the conditions of this Agreement;
WHEREAS, HVSR wishes to sell to the LP Purchaser, and the LP Purchaser wishes to purchase from HVSR, all of HVSR's limited partnership interest in the Company (the "HVSR Interest" and, together with the HC Interest, the "Interests") upon the terms and subject to the conditions of this Agreement; and
WHEREAS, American Skiing Resort Properties, Inc., a Maine corporation ("ASC Real Estate Affiliate"), owns the parcel of real estate designated as the "California Base Parcel" in Schedule ARTICLE III(mm)(1) of the Seller Disclosure Schedule (the "California Base Parcel") and, as contemplated herein, desires to transfer such real estate to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants contained herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. As used in this Agreement, unless the context requires otherwise, the following terms shall have the meanings indicated:
"Affiliate" of any specified Person means any other Person, existing or future, directly or indirectly Controlling, Controlled by or under common Control with the specified Person.
"Approvals" means franchises, licenses, permits, certificates of occupancy and other required approvals, authorizations and consents, including the U.S. Forest Service Permits.
"Business" means the alpine ski and snowboard resort operated by the Company known as the Heavenly ski area located in Douglas County, Nevada and Eldorado County, California (the "Resort").
"Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close.
"Capital Lease" means any capital equipment lease listed on Schedule 1.01(a) of the Seller Disclosure Schedule.
"Cash Escrow" means $4,000,000.
"Closing" means the closing of the transactions contemplated by this Agreement.
"Closing Date" means the date on which the Closing actually occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Transaction" means an acquisition of beneficial ownership of all or substantially all of the assets of, or any material interest in, the Company (but excluding any transaction involving all or substantially all of the assets or capital stock of ASC or the ASC Real Estate Affiliate) pursuant to a merger, consolidation or other business combination, sale of shares of capital stock, sale of assets, joint venture or other similar transaction (including any single or multi-step transaction or series of related transactions) with respect to the Company.
"Confidentiality Agreement" means that certain letter agreement, dated October 5, 2001, by and among Apollo Management V, L.P. and ASC.
"Contract" means any loan or credit agreement, note, bond, mortgage, indenture, deed of trust, license agreement, franchise, contract, agreement, Lease (including any Real Property Lease), instrument or guarantee (including any amendments, modifications, extensions or replacements thereof).
"Control" means the power to direct or cause the direction of the management and policies of another Person, whether through the ownership of securities, by contract or otherwise.
"Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demand letters, claims, directives, Liens, proceedings, Litigations or written notices of noncompliance or violation by any Person alleging potential liability (including liability for enforcement, investigatory costs, cleanup costs, governmental response costs, removal costs, remedial costs, natural resources damages, property damages, personal injuries or penalties) arising under any Environmental Law, including, without limitation, (i) the presence, or release or threatened release into the environment, of any Hazardous Substances at any location presently or formerly leased or owned by the Company in violation of any Environmental Law, (ii) any violation of Environmental Law other than as described in clause (i) above or (iii) any and all written claims by any Person seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence or release of any Hazardous Substances in violation of any Environmental Law.
"Environmental Law" means any United States federal, state, local or municipal statute, law, rule, regulation, ordinance, code, Environmental Permit, license, approval, common law and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent or judgment, relating to the environment, public health, occupational health and safety, or to any Hazardous Substance, including, without limitation, the presence, use, production, generation, handling, transportation, treatment, storage, disposal, release, control or cleanup of any Hazardous Substance, or to any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Agency.
"Environmental Permit" means any permit, registration, filing, approval or authorization from any Governmental Authority required under, issued pursuant to or authorized by any Environmental Law with respect to the Company.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate" means any entity which is (or at any relevant time was) a member of a "controlled group of corporations" with, under "common control" with, or a member of an "affiliated service group" with the Company as defined in Section 414(b), (c), (m) or (o) of the Code, or under "common control" with the Company, within the meaning of Section 4001(b)(1) of ERISA.
"Escrow Agent" has the meaning set forth in the Escrow Agreement.
"Escrow Agreement" means a duly executed escrow agreement substantially in the form attached as Exhibit A hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
"Financial Statements" means (a) the unaudited balance sheets and statements of earnings and statements of cash flow of the Company as of and for the fiscal years ended July 29, 2001, July 30, 2000, and July 25, 1999 (the "Year-End Financial Statements"), and (b) the unaudited balance sheet and statements of earnings and statement of cash flow of the Company as of and for the six months ended January 27, 2002 (the "Interim Financial Statements").
"GAAP" means United States generally accepted accounting principles in effect at the time in question.
"Gondola Financing" means (a) the Term Loan Agreement, dated as of December 5, 2001, among the Company and the lenders listed on Schedule 1 thereto and Fleet National Bank, as Administrative Agent, as the same may be amended, modified, substituted, extended or restated, and (b) all other documents, instruments, loan agreements, notes, guaranties, pledge agreements, security agreements, financing statements, and other written agreements described or referred to in, or otherwise executed and delivered from time to time pursuant to or in connection with, such Term Loan Agreement.
"Gondola Taxes and Penalties" means the aggregate amount of any prepayment premium or penalty or sales tax or real property transfer tax payable in respect of the payment of the Gondola Financing in connection with the transactions contemplated hereby.
"Governmental Agency" means any federal, state or local governmental body or other regulatory or administrative agency or commission.
"Hazardous Substance" means (a) any chemical, material or substance defined as, or included in the definition of, "hazardous substances," "hazardous wastes," "hazardous materials," "toxic substances or toxic pollutants," "contaminants," "toxic or hazardous chemicals" or "pesticides" in any applicable Environmental Law, or (b) any petroleum or petroleum product, asbestos-containing materials, or lead-based paint.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
"Indebtedness" means (i) any liability, contingent or otherwise, of the Company (a) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of the Company or only to a portion thereof) or (b) evidenced by a note, debenture or similar instrument or letter of credit (including a purchase money obligation or other obligation relating to the deferred purchase price of property); (ii) any liability of others of the kind described in the preceding clause (i) which the Company has guaranteed or which is otherwise its legal liability; (iii) any monetary obligation secured by a lien to which the property or assets of the Company, whether or not the obligations secured thereby shall have been assumed by it or shall otherwise be its legal liability, but not including Liens of the nature described in clauses (ii) and (iii) of the definition of "Permitted Exceptions" and (iv) all capitalized lease obligations of the Company. In no event shall Indebtedness include trade payables or operating lease obligations.
"Judgment" means any judgment, ruling, writ, injunction, order, arbitral award or decree.
"Knowledge of the Company" (and any similar phrases as they relate to the Company) means the actual knowledge of those officers of ASC and the Company listed on Schedule 0(b) of the Seller Disclosure Schedule.
"Law" means any Judgment, law, statute, rule or regulation of any Governmental Agency.
"Lease" means any lease, sublease, easement, license, right-of-way or similar interest in real or personal property.
"Lien" means any lien, encumbrance, security interest, charge, mortgage, title defect or imperfection, encroachment, option or pledge of any nature whatsoever.
"Litigation" means any arbitration, action, suit, claim, proceeding, investigation or written inquiry by or before any Governmental Agency, court or arbitrator.
"Material Adverse Effect" means a material adverse effect upon the results of operations, properties, assets or condition of the business of a specified Person and its Subsidiaries taken as a whole; provided, however, that "Material Adverse Effect" shall not include any change, effect, condition, event or circumstance (collectively, "Events") arising out of, or attributable to (i) general economic conditions, changes, effects, events or circumstances, except to the extent such Events disproportionately affect (in a manner that is material and adverse) such specified Person and its Subsidiaries, (ii) changes, effects, conditions, events or circumstances that generally affect the ski, resort or hospitality industries, except to the extent such Events disproportionately affect (in a manner that is material and adverse) such specified Person and its Subsidiaries, (iii) in the case of the Company, any effect which the financial condition of AS C may have on the terms and conditions on which inventory or other assets are purchased by the Company (provided that such effect will be taken into account for purposes of this definition of Material Adverse Effect only to the extent such effect would reasonably be expected to have a material adverse effect (taking into account the reasonably expected duration of said effect) on the Company following the Closing), (iv) any bankruptcy or insolvency of, or any other event affecting the service of, any airline conducting business at any airport servicing the Business, or any reduction in or elimination of service by any such airline (or any announcement that any such reduction or elimination is to occur), (v) any acts of terrorism or acts of war, whether occurring within or outside the United States, or any effect of any such acts on general economic or other conditions, except to the extent such acts disproportionately affect (in a manner that is material and adverse) such specified Person or its Su bsidiaries, (vi) any climatic or weather condition, except to the extent of any damage or destruction of the assets of such specified Person or its Subsidiaries which has a material and adverse effect on such Person and its Subsidiaries and which is caused by such damage or destruction or (vii) changes arising from the consummation of the transactions contemplated hereby or the announcement of the execution of this Agreement to the extent such changes relate to the fact that the Purchasers are the acquirors of the Company.
"Material Impairment" means a material impairment of the Company's financial condition or of the Company's ability to operate the Business as currently conducted or of the Company's ability to consummate the transactions contemplated hereby.
"Multiemployer Plan" means an employee pension benefit plan, as defined in Section 3(37) of ERISA, to which the Sellers contribute.
"Outstanding Indebtedness" means the aggregate outstanding principal balance (or imputed outstanding principal balance, in the case of any Capital Lease) of, and accrued and unpaid interest on, all Indebtedness of the Company, calculated as of the close of business on the day immediately preceding the Closing Date, but not including the ASC-Level Financings.
"Permitted Exceptions" means (i) Liens disclosed on any balance sheet included in the Financial Statements or securing liabilities reflected therein (provided that the Liens securing the financings described in Schedule 0(c) of the Seller Disclosure Schedule (the "ASC - Level Financings") shall not be Permitted Exceptions); (ii) Liens for taxes, assessments and similar charges that are not yet due and payable or are being contested in good faith; (iii) mechanic's, materialman's, carrier's, repairer's and other similar Liens arising or incurred in the ordinary course of business (but only to the extent the obligations secured by such Liens are reflected in Working Capital); (iv) non-monetary Liens the existence of which does not materially adversely affect the operation of the Company's business as currently conducted; (v) Liens that would be disclosed by an accurate survey or physical inspection of the Real Property p rovided that the same do not materially adversely affect the operation of the Company's business as currently conducted; (vii) applicable zoning regulations and ordinances, and building, health and other applicable laws or ordinances; (viii) all Space Leases; and (ix) any exceptions to title set forth in the title reports listed on Schedule 3.19(a)(1) of the Seller Disclosure Schedule other than easements, rights of way and other non-monetary Liens the location of which would be disclosed only by an accurate survey or physical inspection of the Real Property and the existence of which materially adversely affects the operation of the Company's business as currently conducted.
"Person" means an individual, a corporation, a limited liability company, a partnership, an unincorporated association, a joint venture, a Governmental Agency or another entity.
"Related Documents" means all other agreements and instruments described in or contemplated by this Agreement that are to be executed and delivered in connection with the transactions contemplated hereby.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
"Seller Disclosure Schedule" means the disclosure letter prepared by the Sellers, dated as of the date hereof, and delivered by the Sellers to the Purchasers.
"Subsidiary" of any specified Person means any other Person (i) more than 50% of whose outstanding shares or securities representing the right to vote for the election of directors or other managing authority of such other Person are owned or Controlled, directly or indirectly, by such specified Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists, or (ii) which does not have outstanding shares or securities with such right to vote, as may be the case in a partnership, limited liability company, joint venture or unincorporated association, but more than 50% of whose ownership interest representing the right to make the decisions for such other Person is owned or Controlled, directly or indirectly, by such specified Person, but such other Person shall be deemed to be a Subsidiary only so long as such ownership or Control exists.
"Substitute Capital Lease" means any Capital Lease with respect to which the obligations and liabilities (including any guaranty) of ASC Leasing, Inc. or any of its Affiliates (other than the Company) are assumed by the Company, the Purchasers or any of the Purchasers' Affiliates in full (together with a concurrent full and unconditional release by the lenders (the "Capital Lease Lenders") with respect to such leases of all liabilities and obligations of ASC Leasing, Inc. and its Affiliates (other than the Company) arising under or in connection with such Capital Leases), all as provided in Section 9.05(h).
"Taxes" means all taxes, charges, fees, duties, levies, imposts, deficiencies or assessments imposed by any federal, state or local taxing authority, including federal, state or local income, profits, franchise, gross receipts, environmental, customs duty, severances, stamp, payroll, sales, use, intangibles, employment, unemployment, disability, property, withholding, backup withholding, excise, production, occupation, service, service use, leasing and lease use, ad valorem, value added, occupancy, transfer, and other taxes, of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions.
"Tax Returns" means all returns and reports, information returns, or payee statements (including, elections, declarations, filings, forms, statements, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.
"WARN Act" means the Worker Adjustment and Retraining Notification Act, as amended.
"Working Capital" means, as of any date of determination, the Company's current assets (excluding cash and any accounts receivable owing from ASC or any of its Affiliates) less current liabilities (excluding Indebtedness and any accounts payable owing to ASC or any of its Affiliates), each as determined in a manner consistent with GAAP; provided the Working Capital shall be calculated without regard to accrued and unpaid interest which is deducted in computing the Purchase Price pursuant to Section 2.01.
Term |
Section |
Accounting Referee |
ARTICLE IX(oo)(iv) |
Agreement |
Preamble |
Allocation Schedule |
ARTICLE IX(oo)(ii) |
ASC |
Preamble |
ASC-Level Financings |
1.01 |
ASC Real Estate Affiliate |
Recitals |
Assignments |
7.06 |
Back-Up Letter of Credit |
8.05 |
California Base Parcel |
Recitals |
Capital Lease Lenders |
1.01 |
Capital Lease Taxes and Penalties |
2.02(c)(ii) |
Clean Water Act |
ARTICLE III(hh) |
Company |
Preamble |
Company Plans |
ARTICLE III(v) |
Company's Budget |
ARTICLE II(f)(ii) |
Company Subject Matter |
0 |
Contest |
ARTICLE XI(j) |
CPA-Determined Differences |
ARTICLE II(i)(ii) |
CPA Firm |
ARTICLE II(i)(ii) |
Current Plan Year |
ARTICLE V(b) |
Differences |
ARTICLE II(i)(ii) |
Disagreement Notice |
ARTICLE II(h) |
EBITDA |
ARTICLE II(f)(ii) |
Employees |
0 |
Enforceability Exceptions |
0 |
Escrow Termination Date |
0 |
Estimated STD EBITDA Amount |
ARTICLE II(f)(ii) |
Estimated Working Capital Amount |
ARTICLE II(f) |
Estimated YTD EBITDA Amount |
ARTICLE II(f)(ii) |
Events |
1.01 |
FCC |
ARTICLE III(e) |
Final Adjustment Certificate |
ARTICLE II(g) |
Final STD EBITDA Amount |
ARTICLE II(g) |
Final Working Capital Amount |
ARTICLE II(g) |
Final YTD EBITDA Amount |
2.03(b) |
404 Water Permits |
ARTICLE III(hh) |
GP Purchaser |
Preamble |
HC |
Preamble |
HC Assignment |
0 |
HC Interest |
Recitals |
HVSR |
Preamble |
HVSR Assignment |
0 |
HVSR Interest |
Recitals |
Indemnifiable Losses |
0 |
Indemnified Party |
ARTICLE X(e) |
Indemnifying Party |
ARTICLE X(e) |
Insurance Policies |
ARTICLE III(kk) |
Intellectual Property |
ARTICLE III(l) |
Intellectual Property Rights |
ARTICLE III(m) |
Interests |
Recitals |
Interim Financial Statements |
1.01 |
Interim Period |
ARTICLE XI(a) |
Leased Real Property |
ARTICLE III(mm) |
Letter of Credit |
2.05 |
LP Certificate |
ARTICLE III(a) |
LP Purchaser |
Preamble |
Material Contracts |
ARTICLE III(p) |
Materiality Terms |
ARTICLE X(b) |
MDDA |
7.04(a) |
New U.S. Forest Service Permits |
ARTICLE VII(b) |
Notice of Claim |
ARTICLE X(e) |
Objections Notice |
ARTICLE IX(oo)(iii) |
Outstanding Capital Lease Amount |
2.02(c)(ii) |
Owned Real Property |
ARTICLE III(mm) |
Parent |
Preamble |
Plans |
ARTICLE III(v) |
Pre-Closing Periods |
ARTICLE XI(a) |
Promotional Contracts |
3.11(b) |
Purchase Price |
2.01 |
Purchasers |
Preamble |
Purchaser Indemnitees |
0 |
Purchaser Trade Names |
ARTICLE IX(ii) |
Real Property |
ARTICLE III(mm) |
Real Property Leases |
ARTICLE III(mm) |
Release |
9.05(m) |
Remaining Post-Season Budgeted Amount |
ARTICLE II(f)(ii) |
Remaining Seasonal Budgeted Amount |
ARTICLE II(f)(ii) |
Representatives |
0 |
Resolved Objections |
ARTICLE II(i)(i) |
Resort |
1.01 |
Response Period |
ARTICLE IX(oo)(iii) |
Review Period |
ARTICLE II(h) |
Section 9.05(m) Agreement |
9.05(m) |
Section 9.05 Losses |
10.03 |
Seller Indemnitees |
0 |
Sellers |
Preamble |
Seller Trade Names |
ARTICLE IX(hh) |
Sierra Pacific |
ARTICLE IX(y) |
Sierra Pacific Letter of Credit |
ARTICLE IX(y) |
Space Leases |
ARTICLE III(ss) |
Straddle Contest |
ARTICLE XI(k) |
Substitute Letter of Credit |
ARTICLE IX(y) |
Surveyor Certificate |
3.19(i) |
Tax Indemnifying Parties |
ARTICLE XI(a) |
Tax Notice |
ARTICLE XI(i) |
Tramway Authorities |
ARTICLE III(bbb) |
U.S. Forest Service Permits |
ARTICLE III(rr) |
U.S. Forest Service Properties |
ARTICLE III(rr) |
Vail 401(k) Plan |
ARTICLE V(a) |
Year-End Financial Statements |
1.01 |
ARTICLE II
CALCULATION OF PURCHASE PRICE AND PAYMENT
2.01 Sale and Purchase of Interests. At the Closing, upon the terms and subject to the conditions of this Agreement, HC and HVSR shall sell to the GP Purchaser and the LP Purchaser, and the GP Purchaser and the LP Purchaser shall purchase from HC and HVSR, the GP Interest and the LP Interest, respectively. The aggregate purchase price for the Interests shall equal the difference between (as further adjusted pursuant to Section 2.03, the "Purchase Price"):
2.03 Working Capital and EBITDA Adjustments. The Purchase Price shall be adjusted as follows:
2.04 Payments in Respect of Real Estate. The parties acknowledge that (i) at or prior to the Closing, and as further provided in Section 9.10, the California Base Parcel shall be transferred to the Company by ASC Real Estate Affiliate and (ii) $2,000,000 of the Purchase Price is attributable to the value of such real estate.
2.05 Escrow. Subject to Article X and the terms and conditions of the Escrow Agreement, the Cash Escrow shall be retained by the Escrow Agent to satisfy indemnity claims until eighteen months following the Closing Date (the "Escrow Termination Date"). Upon the Escrow Termination Date, the Escrow Agent shall deliver to Sellers, allocated in the respective percentages set forth on Schedule 0(a) of the Seller Disclosure Schedule, all remaining cash held in escrow; provided, however, that the amounts may be withheld with respect to unsatisfied claims until the resolution of such claims in accordance with Articles X and XI and the Escrow Agreement. At any time on or prior to the Closing and at any time and from time to time following the Closing, the Sellers may deliver to the Escrow Agent one or more irrevocable and unconditional let ters of credit in a form reasonably satisfactory to the Parent (each, a "Letter of Credit") issued by a commercial bank organized under the laws of the United States of America of recognized good standing and reasonably acceptable to the Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SELLERS
The Sellers jointly and severally represent and warrant to the Purchasers as follows:
3.01 Organization and Qualification.
3.02 Title to the Interests; Ownership of Assets.
3.04 Binding Obligation. The Sellers have all requisite corporate authority and power to execute and deliver this Agreement and the Related Documents to be executed by them in connection herewith. This Agreement and such Related Documents have been or will be duly and validly authorized by all required corporate or stockholder action on the part of the Sellers and no other corporate or stockholder proceedings on the part of any of them are necessary to authorize this Agreement or the Related Documents. This Agreement has been duly executed and delivered by the Sellers and, assuming that this Agreement constitutes a legal, valid and binding obligation of the Purchaser, constitutes the legal, valid and binding obligation of the Sellers, enforceable against them in accordance with its terms, except to the extent that the enforceability thereof may be limited by: (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, morator ium or similar laws from time to time in effect affecting generally the enforcement of creditors' rights and remedies; and (ii) general principles of equity (the exceptions set forth in (i) and (ii), the "Enforceability Exceptions").
3.05 No Default or Conflicts. The execution and delivery of this Agreement and the Related Documents by the Sellers and the performance by them of their respective obligations hereunder and thereunder (a) does not and will not result in any violation of the certificate of incorporation or by-laws of any of the Sellers or ASC Real Estate Affiliate or the LP Certificate or the agreement of limited partnership of the Company; (b) except as set forth in Schedule 0 of the Seller Disclosure Schedule, does not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under any Material Contract (as defined below) to which the Company or any Seller or ASC Real Estate Affiliate is a party or by which it may be bound or to which its properties may be subject; and (c) assuming compliance with the matters referred t o in Section 3.06(a), does not and will not violate any existing applicable Law material to the business of the Company or any Judgment of any Governmental Agency having jurisdiction over any of the Sellers or the Company or any of their respective properties in any material respect.
3.06 No Governmental Authorization or Consent Required.
3.07 Financial Statements; Undisclosed Liabilities.
3.10 Compliance with Laws. Since July 30, 2001 the Business has not been, and is not being, conducted in violation of applicable Laws in any material respect. As of the date hereof, no investigation or material review by any Governmental Agency with respect to the Company is pending or, to the Knowledge of the Company, threatened. To the Knowledge of the Company, the Company has not, as of the date hereof, received any notice or communication of any noncompliance with any such Laws in any material respect that has not been cured as of the date hereof; provided, however, that the Sellers make no representation or warranty in this Section 3.10 with respect to labor matters and ERISA and employee benefit laws or environmental matters or Tax Laws, which are addressed specifically and exclusively in Sections 3.14 and 3.15, Section 3.17 and Section&nb sp;3.21, respectively.
With respect to all Material Contracts, neither the Company nor, to the Knowledge of the Company, any other party to any such contract is in breach thereof or default thereunder in any material respect and the Company has not received written claim of material breach or default or written notice of termination thereunder, except for such breaches and defaults as to which requisite waivers or consents have been obtained.
3.12 Litigation. Except as disclosed in Schedule 0 of the Seller Disclosure Schedule, there are no Litigations pending or, to the Knowledge of the Company, threatened against the Company, any of the Sellers or ASC Real Estate Affiliate or their respective properties or assets that, with respect to each such Litigation (a) in the case of the Company (i) is not covered by insurance or (ii) is covered by insurance and would reasonably be expected to result in a liability to the Company in excess of $100,000 or $250,000 in the aggregate for all such Litigation or (b) in the case of any of the Sellers or ASC Real Estate Affiliate, would reasonably be expected to result in a material and adverse effect on such Person's ability to consummate the transactions contemplated by this Agreement. Except as set forth on Schedule 0 of the Seller Discl osure Schedule, none of the Sellers, ASC Real Estate Affiliate, or the Company has received written notice that the Company is subject to any material order, Judgment, injunction or decree of any Governmental Authority.
3.16 Brokers. No broker, finder or similar intermediary has acted for or on behalf of any of the Sellers, the Company or ASC Real Estate Affiliate in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker's, finder's or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with the Sellers, the Company or ASC Real Estate Affiliate or any action taken by any such Person, except that Main Street Advisors, Inc. is acting as a financial advisor to ASC in connection with the transactions contemplated hereby. ASC shall pay all amounts owing to Main Street Advisors, Inc.
3.17 Environmental Compliance.
3.20 Personal Property. To the Knowledge of the Company, the Company owns, or has a valid lease or license with respect to, the material tangible personal property (including without limitation ski lift systems and snowmaking equipment and systems) which is necessary for the operation of the Business substantially in the same manner as currently conducted, free and clear of all Liens other than Permitted Exceptions.
3.22 Powers of Attorney. Except as set forth on Schedule 0 of the Seller Disclosure Schedule, the Company has no outstanding revocable or irrevocable powers of attorney or similar authorizations issued to any individual who is not one of the Company's employees or officers.
3.25 Water Rights. Schedule 0 of the Seller Disclosure Schedule lists, as of the date hereof, all of the water rights (whether decreed or undecreed, tributary, non-tributary, surface, underground or water authority or company stock) owned by, used in connection with the business of the Company or appurtenant to real property owned by the Company as of the date hereof. Schedule 0 of the Seller Disclosure Schedule also identifies, as of the date hereof, all sources of water (other than natural snowfall) used by the Company for snowmaking purposes during the 2001-2002 ski season setting forth the estimated annual amounts used from each source. For each of the fiscal years ended July 25, 1999, July 30, 2000 and July 29, 2001, the Company had all necessary rights, titles and interests in and to sufficient water rights other than as would not be reasonably be expected to result in a Material Impairment.
3.26 NO OTHER REPRESENTATIONS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLERS SPECIFICALLY CONTAINED IN THIS ARTICLE III OR IN ANY CERTIFICATE DELIVERED BY THE SELLERS PURSUANT TO THIS AGREEMENT, NEITHER HVSR, ASC, ASC REAL ESTATE AFFILIATE NOR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION, MAIN STREET ADVISORS, INC. AND ITS REPRESENTATIVES) MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO EITHER THE TRANSACTIONS CONTEMPLATED HEREBY OR THE CONDITION (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING, THE BUSINESS, THE COMPANY, THE SELLERS, ASC REAL ESTATE AFFILIATE OR HC. IN ADDITION, EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE III, NONE OF HVSR, ASC, ASC REAL ESTATE AFFILIATE NOR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION, MAIN STREET ADVISORS, INC. AND ITS REPRESENTATIVES) MAKES A NY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE PURCHASERS, INCLUDING IN ANY "DATA ROOMS," IN CONNECTION WITH ANY MANAGEMENT PRESENTATIONS, OR IN CONNECTION WITH ANY OTHER MATTER (INCLUDING, WITHOUT LIMITATION, THE PROVISION OF ANY BUSINESS OR FINANCIAL ESTIMATES AND PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS UNDERLYING SUCH ESTIMATES, PROJECTIONS OR FORECASTS)).
3.27 CONDITION OF THE BUSINESS. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE III AND WITHOUT LIMITING THE PROVISIONS OF SECTION 3.26, THE COMPANY IS BEING SOLD WITH ITS ASSETS AND THE BUSINESS IN THEIR "AS IS" CONDITION, AND NEITHER HVSR, ASC, ASC REAL ESTATE AFFILIATE NOR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION, MAIN STREET ADVISORS, INC. AND ITS REPRESENTATIVES) MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, WHATSOEVER, EXPRESS OR IMPLIED, RELATING TO SUCH ASSETS, INCLUDING ANY REPRESENTATION OR WARRANTY (A) AS TO THE FUTURE SALES OR PROFITABILITY OF THE BUSINESS AS IT WILL BE CONDUCTED BY THE PURCHASER OR (B) ARISING BY STATUTE OR OTHERWISE IN LAW, FROM A COURSE OF DEALING OR USAGE OF TRADE. ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED BY THE SELLERS.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
The Purchasers jointly and severally represent and warrant to the Sellers as follows:
4.01 Organization of the Purchaser. Each Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own, operate and lease its properties and to carry on its business as presently owned or conducted.
4.02 Power and Authority. Each Purchaser has the requisite corporate authority and power to execute and deliver this Agreement and the Related Documents and to perform the transactions contemplated hereby. All corporate and stockholder action on the part of the Purchasers necessary to approve or to authorize the execution and delivery of this Agreement and the Related Documents and the performance by the Purchasers of the transactions contemplated hereby and thereby has been duly taken. This Agreement has been duly executed and delivered by the Purchasers and constitutes the legal, valid and binding obligation of the Purchasers, enforceable against the Purchasers in accordance with its terms, except to the extent that the enforceability thereof may be limited by the Enforceability Exceptions.
4.03 No Conflicts. Except as may be required under the HSR Act, neither the execution or delivery by the Purchasers of this Agreement and the Related Documents nor the performance by the Purchaser of the transactions contemplated hereby and thereby, shall:
4.04 Purchase for Investment. Each of the GP Purchaser and the LP Purchaser is purchasing the HC interest and the HVSR Interest, respectively, for its own account for investment and not for resale or distribution in any transaction that would be in violation of the securities laws of the United States of America or any state thereof. Each of the GP Purchaser and the LP Purchaser is an "accredited investor" as that term is defined in Rule 501 of the Regulation D promulgated under the Securities Act.
4.05 Litigation. There are no Litigations pending or, to the knowledge of the Parent, threatened against any Purchaser or any of its properties or assets which seeks to restrain, enjoin or prevent the consummation of this Agreement or any of the transactions contemplated hereby.
4.09 NO OTHER REPRESENTATIONS. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS SPECIFICALLY CONTAINED IN THIS ARTICLE IV OR IN ANY CERTIFICATE DELIVERED PURSUANT TO THIS AGREEMENT BY THE PURCHASERS, NEITHER THE PARENT, GP PURCHASER, LP PURCHASER NOR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO EITHER THE TRANSACTIONS CONTEMPLATED HEREBY OR THE CONDITION (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING, THE PARENT OR THE PURCHASERS. IN ADDITION, EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE IV, NONE OF THE PARENT, GP PURCHASER, LP PURCHASER NOR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE TO THE SELLERS, INCLUDING IN ANY "DATA ROOMS," IN CONNECTION WITH ANY MANAGEMENT PRESENTATIONS, OR IN CONNECTION WITH ANY OTHER MATTER (INCLUDING, WITHOUT LIMITATION, THE PROVISION OF ANY BUSINESS OR FINANCIAL ESTIMATES AND PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS UNDERLYING SUCH ESTIMATES, PROJECTIONS OR FORECASTS)).
4.10 INDEPENDENT INVESTIGATION. EACH PURCHASER HEREBY ACKNOWLEDGES AND AFFIRMS THAT IT HAS CONDUCTED AND COMPLETED ITS OWN INVESTIGATION, ANALYSIS AND EVALUATION OF THE COMPANY, THE ASSETS OF THE COMPANY (INCLUDING THE CALIFORNIA BASE PARCEL) AND THE BUSINESS, THAT IT HAS MADE ALL SUCH REVIEWS AND INSPECTIONS OF THE RESULTS OF OPERATIONS, CONDITION (FINANCIAL AND OTHERWISE) AND PROSPECTS OF THE BUSINESS, SUCH ASSETS AND THE COMPANY (INCLUDING THE CALIFORNIA BASE PARCEL) AS IT HAS DEEMED NECESSARY OR APPROPRIATE, THAT IT HAS HAD THE OPPORTUNITY TO REQUEST ALL INFORMATION IT HAS DEEMED RELEVANT TO THE FOREGOING FROM THE COMPANY AND THE SELLERS AND HAS RECEIVED RESPONSES IT DEEMS ADEQUATE AND SUFFICIENT TO ALL SUCH REQUESTS FOR INFORMATION, AND THAT IN MAKING ITS DECISION TO ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY IT HAS RELIED SOLELY ON (A) ITS OWN INVESTIGATION, ANALYSIS AND EVALUAT ION OF THE BUSINESS AND (B) THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS CONTAINED IN THIS AGREEMENT.
ARTICLE V
EMPLOYEES AND EMPLOYEE-RELATED MATTERS
5.01 Employment Matters. The Sellers (except for ASC), jointly and severally, shall be responsible for all retention payments payable to the employees listed in Schedule 0 of the Seller Disclosure Schedule in the event they are terminated by the Company in connection with the transactions contemplated hereby, but only to the extent such amounts are payable pursuant to employment agreements entered into with such employees prior to the Closing Date. The Purchasers agree that for a period of 60 days after the Closing Date, the compensation paid and benefits provided to the employees of the Company as of the Closing Date (the "Employees") will be at least comparable to the aggregate compensation and benefits under the Company's compensation benefit plans immediately prior to the Closing Date.
ARTICLE VI
CLOSING
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF
THE PURCHASERS TO CONSUMMATE THE TRANSACTION
The obligations of the Purchasers to be performed at the Closing shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions:
7.01 Representations and Warranties; Compliance with Covenants. The representations and warranties of the Sellers and the Company contained herein shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for those representations and warranties that are expressly limited by their terms to dates or times other than the Closing Date, which representations and warranties need only be true and correct as of such other date or time), except where the failure to be true and correct would not, individually or in the aggregate with all other such failures, have a Material Adverse Effect on the Company. The Sellers and the Company shall have performed and complied in all material respects with all material covenants and agreements required hereby to be performed or complied with by them on or prior to the Closing Date; provided, however, that the failure of the Sellers to comply with the covenants set forth in Section 9.15 shall only constitute a failure of this Section 7.01 in the event that such failure results in the non-disclosure of an event, fact or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. ASC shall have delivered to the Parent a certificate, dated the date of the Closing and signed by an officer of ASC, to the foregoing effect.
7.03 No Injunction. No Judgment shall have been rendered in any Litigation which has the effect of enjoining the consummation of the transactions contemplated by this Agreement and no Litigation shall be pending that, in the opinion of counsel to the Parent (to be provided to ASC in writing if ASC so requests), would reasonably be expected to result in such a Judgment.
7.05 Release of Liens. On or prior to Closing, the Sellers shall have effected the release of (i) all Liens securing the ASC-Level Financings and (ii) all Liens (other than Permitted Exceptions) securing monetary obligations to the extent such obligations are not included in the calculation of the Estimated Working Capital Amount. In the event that at the Closing any Lien shall exist that (a) is not a Permitted Exception, (b) would result in the failure of the conditions of the Purchasers to consummate the transactions contemplated hereby as set forth in Section 7.01 or this Section 7.05 and (c) can be removed immediately by the payment of a liquidated sum of money, at the option of the Sellers, the Purchasers shall be obligated to consummate the Closing, notwithstanding the existence of such Lien, so long as the Sellers shall apply s uch portion of the Purchase Price as may be necessary to discharge such Lien.
7.06 Assignment. HVSR shall have delivered to the LP Purchaser an executed assignment of limited partnership interest in the form annexed hereto as Exhibit B-1 (the "HVSR Assignment") and HC shall have delivered to the GP Purchaser an executed assignment of general partnership interest in the form annexed hereto as Exhibit B-2 (the "HC Assignment" and together with the HVSR Assignment, the "Assignments").
7.08 FIRPTA Affidavit. The Purchasers shall have received an affidavit from each of HC and HVSR, sworn to under penalty of perjury, setting forth such party's name, address and federal tax identification number and stating that such Person, is not a "foreign person" within the meaning of Section 1445 of the Code.
7.11 Release of Guarantees. On or prior to the Closing Date, the Purchasers shall have received reasonably satisfactory evidence of the release of the Company from all of its obligations (including all guarantee and security obligations) with respect to any Indebtedness of ASC or any of its Affiliates (other than the Company) (including under ASC's Indenture, dated as of June 28, 1996, with United States Trust Company of New York, as trustee, and under each of the other ASC-Level Financings).
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF
THE SELLERS TO CONSUMMATE THE TRANSACTION
The obligations of the Sellers to be performed at the Closing shall be subject to the satisfaction or waiver, at or prior to the Closing, of the following conditions:
8.01 Representations and Warranties; Compliance with Covenants. The representations and warranties of the Purchasers contained herein shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for those representations and warranties that are expressly limited by their terms to dates or times other than the Closing Date, which representations and warranties need only be true and correct as of such other date or time), except where the failure to be true and correct would not, individually or in the aggregate with all other such failures, have a Material Adverse Effect on the Parent. The Purchasers shall have performed and complied in all material respects with all material covenants and agreements required hereby to be performed or complied with by them on or prior to the Closing Date. The Parent shall have delivered to ASC, a certificate, dated the date of the Closing and signed by an officer of the Parent, to the foregoing effect.
8.02 No Injunction. No Judgment shall have been rendered in any Litigation which has the effect of enjoining the consummation of the transactions contemplated by this Agreement and no Litigation shall be pending that, in the opinion of counsel to ASC (to be provided to the Parent if the Parent so requests), would reasonably be expected to result in such a Judgment.
8.05 Substitute Letter of Credit. Either (a) the Purchasers shall have delivered or caused to be delivered to Sierra Pacific, the Substitute Letter of Credit, and the holder of the Sierra Pacific Letter of Credit (as defined below) shall have returned the same to ASC or (b) the Purchasers shall have delivered to the Sellers a letter of credit securing the Company's obligation pursuant to the Sierra Pacific Letter of Credit (the "Back-Up Letter of Credit"). The Back-Up Letter of Credit shall be in form, and issued by a bank, reasonably acceptable to ASC.
ARTICLE IX
COVENANTS
9.01 Regulatory Filings, etc. As soon as practicable after the date hereof (and, except with respect to any filings with the South Tahoe Redevelopment Agency, in any event no later than 5 Business Days after the date hereof), the parties hereto shall (and ASC shall cause the Company to) make all filings with the appropriate Governmental Agencies of the information and documents (a) required or contemplated by the HSR Act and the FCC and make application for all required Approvals thereunder with respect to the transactions contemplated by this Agreement, (b) required to obtain from the U.S. Forest Service its consent to the transfer of the Interests in the Company or the issuance of the New U.S. Forest Service Permits and (c) required to obtain from the South Tahoe Redevelopment Agency its consent, if applicable, to the sale of the Interests to the Purchasers pursuant to the MDDA. The part ies hereto shall (and ASC shall cause the Company to) keep each other apprised of the status of any communications with, and inquiries or requests for information from, such Governmental Agencies, including the U.S. Forest Service, in each case, relating to the transactions contemplated hereby. The parties hereto shall (and ASC shall cause the Company to) each use their respective commercially reasonable best efforts to comply as expeditiously as possible in good faith with all lawful requests of the Governmental Agencies for additional information and documents pursuant to such Laws and to secure the aforesaid approval of the U.S. Forest Service or the issuance of the New U.S. Forest Service Permits prior to the Closing Date.
9.02 Injunctions. If any court having jurisdiction over any of the parties hereto issues or otherwise promulgates any restraining order, injunction, decree or similar order which prohibits the consummation of any of the transactions contemplated hereby or by any Related Document, the parties hereto shall (and ASC shall cause the Company to) use their respective commercially reasonable efforts in good faith to have such restraining order, injunction, decree or similar order dissolved or otherwise eliminated as promptly as possible and to pursue the underlying Litigation diligently and in good faith; provided, however, that notwithstanding anything to the contrary contained in this Agreement, the Parent shall not be required to divest itself of or hold or operate separately any of its or the Company's assets or accept any other materially burdensome condition. Notwithstanding anything to the contrary contained in t his Agreement, nothing contained in this Section 9.02 shall limit the respective rights of the parties to terminate this Agreement pursuant to Section 12.01 or shall limit or otherwise affect the respective conditions to the obligations of the parties set forth in Articles VII and VIII hereof.
9.03 Access to Information. Between the date of this Agreement and the Closing Date, the Sellers shall, and shall cause their Affiliates (to the extent reasonably required) to, upon reasonable request by the Purchasers, provide the Purchasers and their employees, counsel, accountants and other representatives and advisors (collectively, the "Representatives") full access, during normal business hours on reasonable notice (and at such other times as any Purchaser reasonably requests) and under reasonable circumstances, to any and all premises, properties, Contracts, commitments, books and records and other information exclusively of or relating exclusively to the Interests, the Company, the California Base Parcel or to the officers, employees and agents of the Company (the "Company Subject Matter"); provided, howev er, that the Sellers shall use their respective commercially reasonable efforts to provide to the Purchasers any such information that does not relate exclusively to the Company Subject Matter to the extent such information can be segregated without undue effort from information relating to the Sellers or their Affiliates and that is not otherwise confidential or of a competitive nature; provided, further, that such access may be limited to the location at which the relevant information is normally maintained and shall not unreasonably interfere with the operations of the Company or its Affiliates.
9.04 No Extraordinary Actions by the Sellers. In each case except as disclosed on Schedule 0 of the Seller Disclosure Schedule, or consented to or approved in writing by the Parent (which consent or approval shall not be unreasonably withheld, conditioned, delayed), or (y) contemplated by this Agreement or the Related Documents from the date hereof until the Closing, the Sellers shall:
9.05 Commercially Reasonable Efforts; Further Assurances.
9.06 Use of Names; Name Change.
9.07 Confidentiality; Publicity. Each party shall (and ASC shall cause the Company to) hold, and shall use its commercially reasonable efforts to cause its employees and agents to hold, in strict confidence all information concerning the other parties or their Affiliates furnished to it by such other Persons, all in accordance with the Confidentiality Agreement, as if originally a party thereto who was required to keep information confidential except that the Sellers shall maintain such information with respect to the Company as confidential only to the extent such information is specific to the Company and does not relate to the operations of the Sellers or any of their Affiliates following the Closing Date. Any release to the public of information with respect to the matters contemplated by this Agreement (including any termination of this Agreement) shall be made only in the form and manner approved jointly by ASC and the Parent, provided that if a party is required by law to make any disclosure concerning such matters, such party shall discuss in good faith with the other party the form and content of such disclosure prior to its release (but such release shall not require the prior approval of the other parties).
9.08 Transition. Without limiting the agreements set forth in Sections 9.09, and Article XI, for a period of six (6) months following the Closing Date, the Sellers shall, and the Purchasers shall and shall cause the Company to, cooperate in good faith to effect an orderly transition in the operation of the Business (including, subject to the consent of ASC's applicable software licensors (which Sellers shall use their commercially reasonable efforts to obtain), permitting the Purchasers' use of the Sellers' general ledger), provided, that neither party shall be required to expend any funds or enter into any contractual commitments in performing its obligations under this Section 9.08.
9.09 Access to Records After the Closing. The Sellers and the Purchasers recognize that subsequent to the Closing they may have information and documents which relate to the Company, the Business, its employees, its properties and Taxes and to which the other party may need access subsequent to the Closing. Each such party shall provide the other such party and its Representatives full access, during normal business hours on reasonable notice (and at such other times as such other party reasonably requests) and under reasonable circumstances, to all such information and documents, and to furnish copies thereof, which such other party reasonably requests. The Purchasers and the Sellers agree that prior to the destruction or disposition of any such books or records pertaining to the Company at any time within five (5) years (or, in any matter involving Taxes without the prior written consent of all other parties to this Agreemen t) after the Closing Date, each such party shall provide not less than thirty (30) calendar days prior written notice to the other such party of any such proposed destruction or disposal. If the recipient of such notice desires to obtain any such documents, it may do so by notifying the other party in writing at any time prior to the scheduled date for such destruction or disposal. Such notice must specify the documents which the requesting party wishes to obtain. The parties shall then promptly arrange for the delivery of such documents. All out-of-pocket costs associated with the delivery of the requested documents shall be paid by the requesting party. Notwithstanding any provision of this Agreement or the Related Documents to the contrary, in no event shall the Sellers, their Affiliates be required to provide the Purchasers with access to or copies of the Sellers', or their Affiliates' Tax Returns to the extent such Tax Returns do not rela te to the Company and in no case shall the Purchasers have any right to review any Tax Returns other than pro forma Tax Returns of the Company.
9.12 No Solicitation. Unless and until this Agreement shall have been terminated pursuant to Section 12.01, none of the Sellers or the Company shall directly or indirectly through any partner, officer, director, employee, agent, affiliate or otherwise solicit, initiate or encourage the submission of any proposal or offer from any Person (including any of its officers, directors, employees and agents) relating to any Competing Transaction, nor participate in any discussions or negotiations regarding a Competing Transaction. The Sellers and the Company shall immediately cease any and all contacts, discussions and negotiations with third parties regarding any Competing Transaction. ASC shall promptly notify the Parent if any written proposal regarding a Competing Transaction is made and shall provide the Parent with copies thereof.
9.15 Updating of the Schedules. Prior to Closing, the Sellers shall be obligated to update all of the Schedules promptly to correct any material inaccuracy in any such Schedule (other than to reflect actions or omissions which do not constitute a violation of the covenants contained in this Agreement occurring after the date of this Agreement and that would not reasonably be expected to have a Material Adverse Effect on the Company). Notwithstanding the foregoing, any such modification or update of the Schedules shall be disregarded and have no effect (a) for the purpose of determining whether any condition to the Closing set forth in Article VII of this Agreement has been satisfied or (b) for the purpose of determining whether the Purchasers are entitled to indemnification under Article X.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.01 Survival. The representations and warranties contained in Articles III and IV hereof and the covenants and agreements of the parties contained herein to be performed on or prior to the Closing shall terminate eighteen months following the Closing Date, except that (a) the representations and warranties contained in Sections 3.15 and 3.21 shall continue in full force and effect thereunder subject to any applicable statute of limitation, (b) the representation and warranties contained in Sections 3.07(c) and 3.11(b)(ii) shall survive indefinitely, (c) the representations and warranties contained in Section 3.11(b)(i) shall survive until the earlier of (i) the termination of the applicable Promotional Contract or (ii) receipt by the Parent of evidence reasonably satisfactory to the Parent certifying to the release of the Company's obligations under such Promotional Contract, and (d) claims asserted (in writing) prior to the end of such 18 month period shall survive until the earlier of (i) resolution by the parties or by a court of competent jurisdiction or (ii) if no action is brought before a court of competent jurisdiction, the expiration of the applicable statute of limitation. The agreements of the Sellers and the Purchasers contained in this Agreement which by their terms require action following the Closing shall survive until the expiration of the applicable statute of limitation or, to the extent such agreements are expressly limited to other dates or times, such agreements shall survive only to such dates or times.
10.02 Indemnification by the Sellers. Subject to the terms and limitations set forth herein, the Sellers, jointly and severally, shall indemnify, defend and hold harmless the Purchasers and the Company and each of their respective past, present and future directors, officers, employees, agents and representatives (together, the "Purchaser Indemnitees") from and against any and all losses, liabilities, obligations, claims, suits, damages, civil and criminal penalties and fines, costs and expenses, Taxes, levies, imposts, duties, deficiencies, assessments, charges, penalties, and interest, including any reasonable attorneys' fees ("Indemnifiable Losses"), resulting from or arising out of any breach of any representation, warranty, covenant or undertaking (to the extent the same survive the Closing pursuant to Section 10. 01) of the Sellers contained in this Agreement; provided, however, that for purposes of this Agreement and subject to the other terms and limitations contained in this Article X, to the extent the matters set forth on Schedule 3.17(a) of the Seller Disclosure Schedule would, absent disclosure thereof, constitute a breach of Section 3.17, (a) the matters set forth on Schedule 3.17(a) of the Seller Disclosure Schedule shall, to the extent that they concern the presence of Hazardous Substances in the soil, groundwater or surface water at the Resort and the investigation and remediation thereof, be deemed to constitute a breach of Section 3.17, (b) notwithstanding clause (a), as to the Wetlands Restoration matter disclosed in Item 13 of Schedule 3.17(a) of the Seller Disclosure Schedule, the Sellers shall be liable to indemnify the Purchaser Indemnitees pursuant to this Section 10. 02 only for 50% of any otherwise Indemnifiable Losses incurred by the Purchaser Indemnitees in connection therewith and (c) notwithstanding clause (a), if the environmental remediation referenced in Item 1(b) of Schedule 3.17(a) of the Seller Disclosure Schedule is required prior to the demolition of the Upper Vehicle Maintenance Shop, the presence of Hazardous Substances in the soil and groundwater below the foundation of the Upper Vehicle Maintenance Shop shall be deemed a breach of Section 3.17 and if such remediation is not required prior to the demolition of the Upper Vehicle Maintenance Shop, such presence of Hazardous Substances shall not be deemed a breach of Section 3.17 (it being understood that this clause (c) shall not otherwise limit clause (a) to the extent such Hazardous Substances are not located under the foundation of the Upper Vehicle Maintenance Shop).
10.03 Indemnification by the Purchasers. Subject to the terms and limitations set forth herein, the Purchasers, jointly and severally, shall indemnify, defend and hold harmless the Sellers, each of their respective Subsidiaries and Affiliates, and each of the respective past, present and future directors, officers, employees, agents and representatives of the Sellers and such Affiliates (together, the "Seller Indemnitees"), from and against any and all Indemnifiable Losses resulting from or arising out of (a) any breach of any representation, warranty, covenant or undertaking (to the extent the same survive the Closing pursuant to Section 10.01) of the Purchasers contained in this Agreement, (b) any liabilities of the Company for which HC is liable that arise solely and exclusively as a result of HC being the general partner of the Company (other than any such liabilities with respect to which the Sellers are indemnifying the Purchasers pursuant to Section 10.02) and (c) any of the agreements, covenants or understandings contained in Section 9.05(i) (the "Section 9.05 Losses").
10.04 Limitations on Indemnification; Exclusive Remedy.
10.06 Losses Net of Insurance, etc. The amount of any loss, liability, cost or expense for which indemnification is provided under this Article X shall be net of any amounts actually recovered (after taking into account any increase in the premium payable pursuant to such policy, to the extent, if any, such increase results from the action or inaction for which the Indemnified Party is being indemnified) by the Indemnified Party under an insurance policy with respect to such loss, liability, cost or expense and shall be reduced to take account of the aggregate Tax benefit(s) realized by the Indemnified Party arising from the incurrence or payment of any such loss, liability, cost or expense.
ARTICLE XI
TAX MATTERS
11.03 Preparation and Filing of Tax Returns and Payment of Taxes.
ARTICLE XII
TERMINATION
12.01 Termination. This Agreement may be terminated at any time prior to the Closing:
12.02 Other Agreements; Material To Be Returned.
12.03 Effect of Termination. In the event that this Agreement shall be terminated pursuant to Section 12.01 hereof, all obligations of the parties hereto under this Agreement shall terminate and become void and of no further effect and there shall be no liability of any party hereto to any other party except (a) for the obligations with respect to confidentiality and publicity contained in Section 9.07 hereof, (b) as set forth in Section 13.03 in respect of certain fees and expenses, (c) the obligations with respect to brokers contained in Sections 3.16 and 4.06 and (d) this Article XII; provided, however, that no party hereto shall be relieved from liabilities arising out of any willful breach of its covenants or agreements contained in this Agreement. P>
ARTICLE XIII
MISCELLANEOUS
13.03 Fees and Expenses. Except as otherwise expressly provided in this Agreement, ASC shall pay all of the fees and expenses incurred by the Sellers, ASC Real Estate Affiliate and the Company, and the Parent shall pay all of the fees and expenses incurred by the Purchasers, in connection with this Agreement, the Related Documents and the transactions contemplated hereby and thereby. Notwithstanding the foregoing, (a) the Parent, on the one hand, and ASC, on the other hand, shall each be responsible for 50% of (i) the fees related to obtaining title insurance policies in respect of the Owned Real Property in aggregate coverage amounts not to exceed $15 million (excluding any endorsements thereto, which shall be paid for by the Purchasers), (ii) all real estate transfer taxes and sales taxes payable as a result of the consummation of the transaction contemplated hereby and (iii) the HSR Act filing fee. The P urchasers shall be responsible for the costs associated with obtaining the New U.S. Forest Service Permits.
13.05 Notices. All notices, requests, consents and demands to or upon the respective parties hereto shall be in writing, and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) if delivered by hand (including by overnight courier), when delivered, (b) on the day after delivery to a nationally recognized overnight carrier service if sent by overnight delivery for next morning delivery, and (c) in the case of facsimile transmission, upon receipt of a legible copy. In each case: (x) if delivery is not made during normal business hours at the place of receipt, receipt and due notice under this Agreement shall be deemed to have been made on the immediately following Business Day, and (y) notice shall be sent to the address of the par ty to be notified, as follows, or to such other address as may be hereafter designated by the respective parties hereto in accordance with these notice provisions:
If to the Purchasers, to: |
||
c/o Vail Resorts, Inc. |
||
137 Benchmark Road |
||
Avon, Colorado 81620 |
||
Attention: |
Martha D. Rehm, Esq. |
|
Facsimile: |
(970) 845-2928 |
|
With a copy to: |
||
Cahill Gordon & Reindel |
||
80 Pine Street |
||
New York, New York 10005 |
||
Attention: |
James J. Clark, Esq. |
|
Facsimile: |
(212) 269-5420 |
|
If to the Sellers, to: |
||
c/o American Skiing Company |
||
One Monument Way |
||
Portland, ME 04101 |
||
Attention: |
Foster A. Stewart, Jr., Esq. |
|
|
General Counsel |
|
Facsimile: |
(207) 791-2607 |
|
and a copy to: |
||
Paul, Weiss, Rifkind, Wharton & Garrison |
||
1285 Avenue of the Americas |
||
New York, New York 10019-6064 |
||
Attention: |
Mitchell L. Berg, Esq. |
|
Facsimile: |
(212) 757-3990 |
13.06 Venue. Any legal suit, action or proceeding arising out of or relating to this Agreement may be instituted in any federal or state court in New York County, New York, New York, pursuant to Section 5-1402 of the New York General Obligation Law and each party hereto waives any objection which it may now have or hereafter have to the laying of venue of any such suit, action or proceeding in New York County, New York, New York, and each party hereto hereby irrevocably submits to the jurisdiction of any such court in New York County, New York, New York in any action, suit or proceeding.
13.07 GOVERNING LAW; WAIVER OF JURY TRIAL
(A) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
(B) EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
13.09 Interpretation. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. All terms defined in this Agreement in one form have correlative meanings when used herein in any other form. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement. When a reference is made in this Agreement to a Section, Article, Exhibit or Schedule, such reference shall be to a Section or Article of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. For all purposes hereof, the terms "include", "includes" and "including" shall be deemed to be followed by the words "without limitation".
13.10 Exhibits and Schedules. The Exhibits and Schedules are a part of this Agreement as if fully set forth herein. Matters reflected on any Schedule are not necessarily limited to matters required by this Agreement to be reflected therein and the inclusion of such matters shall not be deemed an admission that such matters were required to be reflected on such Schedules. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized representatives as of the day and year first above written.
HEAVENLY VALLEY SKI & RESORT CORPORATION |
By: /s/William J. Fair |
AMERICAN SKIING COMPANY |
By: /s/ William J. Fair |
HEAVENLY CORPORATION |
By: /s/ William J. Fair |
VAIL RESORTS, INC. |
By: /s/ Adam Aron |
VR HEAVENLY I, INC. |
By: /s/ Martha D. Rehm |
VR HEAVENLY II, INC. |
By: /s/ Martha D. Rehm |
EXHIBIT 99
For Immediate Release
Media Relations: Kelly Ladyga, (970) 845-5720, kladyga@vailresorts.com
Investor Relations: Leslie Roubos, (970) 845-2958, lroubos@vailresorts.com
VAIL RESORTS TO EXPAND ITS PORTFOLIO OF PREMIER NORTH AMERICAN SKI RESORTS WITH ACQUISITION OF HEAVENLY SKI RESORT
VAIL, Colo. - March 26, 2002 - Vail Resorts, Inc. (NYSE: MTN) announced that it has entered into a contract today to acquire Heavenly Ski Resort in the Lake Tahoe area of California and Nevada from American Skiing Company. The acquisition of Heavenly, in addition to bringing greater diversification to its winter resort business, enables Vail Resorts to further advance its reputation as the leading mountain resort operator in the United States. The transaction is expected to close in 30-90 days for cash consideration of $102 million (including approximately $3 million of assumed debt), less a cash adjustment at closing of as much as $6 million depending upon the exact closing date. Therefore, the total net consideration is expected to be between $96 and $99 million. Heavenly's current EBITDA in fiscal '02 ending July is expected to be between $14.5 and $16.0 million.
With an existing bed base in the South Lake Tahoe area of 20,000 and nearly 800 additional Marriott-branded fractional and quarter-share ownership keys scheduled to be completed by November 2002 in the heart of South Lake Tahoe, Heavenly offers opportunity for growth for Vail Resorts. In anticipation of this expanded bed base, Heavenly opened a new $25-million gondola into South Lake Tahoe within the past 12 months.
"Heavenly is considered to be among the top ski and snowboard resorts in the United States. It offers tremendous winter and summer growth opportunity with its proximity to major metropolitan areas and has the potential to become much more of a national destination resort. This transaction will enable Vail Resorts to significantly increase our presence in the North American ski and snowboard resort industry, as well as to geographically diversify our winter revenues. Additionally, we are excited to be acquiring Heavenly at what we believe is an attractive price relative to its inherent and potential value," explained Adam M. Aron, chairman and chief executive officer of Vail Resorts.
Ranked in the top 10 most visited ski and snowboard resorts in North America and rated the 15th best overall resort in the 2002 SKI Magazine Reader Survey, Heavenly will become the fifth in Vail Resorts' portfolio of premier U.S. ski
-more-
HEAVENLY ACQUISITION
2-2-2
resorts - all of which are counted among the 15 best resorts in the SKI Magazine survey. Vail Resorts owns and operates Vail, Beaver Creek, Breckenridge and Keystone, four of the best and most visited ski resorts in North America.
Heavenly operates 29 lifts, including six high-speed lifts and the new $25-million, eight-passenger gondola that runs year-round; a snowmaking system that covers 69 percent of its mountain trails; seven dining facilities; a terrain park and a half-pipe; and six year-round and nine seasonal retail/rental shops. A complimentary shuttle system and ample parking serve the resort's four separate base areas, two of which are located in California and two in Nevada. Heavenly has long been known for its staggeringly beautiful vistas and miles upon miles of cruising runs, steeps and bowls. Over the years, its superlative races and events made Heavenly a magnet for professional ski racers, celebrities and other colorful characters.
Over the next five years, Vail Resorts plans to invest approximately $25 million in on-mountain improvements, above an estimated $3 million per year in annual maintenance capital. Improvements will include upgrading existing facilities, building new on-mountain restaurant facilities, upgrading and replacing lifts and snowmaking systems and enhancing the resort's environmental efforts.
"Heavenly is the most visited ski and snowboard resort in the Lake Tahoe area. Given Vail Resorts' expertise in aggressively marketing and packaging our resorts and enhancing the guest experience through strategic capital investment, smart management and our commitment to quality, we believe we can grow Heavenly's skier visits in a relatively short period of time," said Andrew P. Daly, president of Vail Resorts.
Vail Resorts was advised in this transaction by Deutsche Banc Alex. Brown, which also issued a fairness opinion as to the consideration being paid.
Vail Resorts, Inc. is the leading mountain resort operator in the United States. The Company operates the Colorado mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone, and the Grand Teton Lodge Company in Jackson Hole, Wyo. The Company also holds a majority interest in Rockresorts, a luxury
-more-
HEAVENLY ACQUISITION
3-3-3
resort hotel company with 11 distinctive properties across the United States. Vail Resorts Development Company is the real estate planning, development, construction, retail leasing and management subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly held company traded on the New York Stock Exchange (NYSE: MTN). The Vail Resorts company website is www.vailresorts.com and consumer website is www.snow.com.
***
Statements in this press release, other than statements of historical information, are forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Such risks and uncertainties include but are not limited to general business and economic conditions, competitive factors in the ski and resort industries, failure to close announced transactions on time or at all, failure to successfully integrate acquisitions, failure to achieve the expected results, the impact of the September 11 terrorist attacks on the travel industry and the company and/or misinterpretation of same, the possibility of additional terrorist attacks, and the weather. Investors are also di rected to other risks discussed in documents filed by the Company with the Securities and Exchange Commission.
###