ASSET PURCHASE AGREEMENT

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

BETWEEN

 

CYPRESS BOWL RECREATIONS LIMITED PARTNERSHIP, a limited partnership formed

under the laws of the Province of British Columbia

 

AND

 

GATLINBURG SKYLIFT, LLC, a Michigan limited liability corporation

 

AS SELLERS

 

AND

 

CNL INCOME PARTNERS, LP,

 

a Delaware limited partnership

 

AS PURCHASER

 

DATED AS OF DECEMBER 22, 2005

TABLE OF CONTENTS

 

 

- i -

 

- ii -

 

- iii -

 

- iv -

LIST OF EXHIBITS AND SCHEDULES TO DISCLOSURE DOCUMENT

 

List of Exhibits

 

 

- v -

List of Schedules

 

 

- vi -

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT is made as of December 22, 2005 (the “ Effective Date ”), by and between CYPRESS BOWL RECREATIONS LIMITED PARTNERSHIP , a limited partnership formed under the laws of the Province of British Columbia (“ CBRLP ”), GATLINBURG SKYLIFT, LLC a Michigan limited liability corporation (“ Skylift ”) (each individually a “ Seller ” and collectively and jointly and severally, the “ Sellers ”), and CNL INCOME PARTNERS, LP , a Delaware limited partnership (“ Purchaser ” or “ CNL ”).

 

RECITALS

 

A. CBRLP is the permittee under the “Cypress Permit” (as defined hereinafter) pursuant to which CBRLP possesses certain rights to use and occupy portions of the Cypress Provincial Park in the province of British Columbia for the operation of facilities for skiing, lodging, recreation, and food and beverage service.

 

B. Skylift is the current lessee under the “Skylift Lease” (as defined hereinafter) pursuant to which Skylift possesses a leasehold estate, and easements to use certain lands situated on Crockett Mountain, in Gatlinburg Tennessee, allowing Skylift the right build and operate a chair-lift and other facilities necessary, useful or convenient for the enjoyment of the chair-lift.

 

C. CBRLP and Skylift own various improvements and personal property which support and/or are complementary to the businesses operated by CBRLP and Skylift at Cypress Provincial Park and Gatlinburg, respectively.

 

AGREEMENT

 

In consideration of the mutual covenants and provisions contained in this Agreement, Seller and Purchaser agree as follows:

 

1. DEFINITIONS

 

1.1. Definitions.

 

The following terms will have the following meanings in this Agreement:

 

“ Affiliate ” has the following meaning: two entities are “Affiliates” if (i) one of the entities is a Subsidiary of the other entity; (ii) both of the entities are Subsidiaries of the same Person or entity; or (iii) both of the entities are Controlled by the same Person or entity.

 

“ Agreement ” means this agreement with all schedules attached hereto, as each may be amended in accordance with the terms hereof.

 

“ Applicable Laws ” means (i) all statutes, laws, common law, by-laws, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority, stock exchange, board of fire underwriters and similar quasi-governmental authority, and (ii) any judgment,

 

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injunction, order or other similar requirement of any court or other adjudicatory authority, in effect at the time in question and in each case to the extent the Person or property in question is subject to the same.

 

“ Assets ” means the Cypress Assets and the Skylift Assets, all as more particularly described in Section 2.2 .

 

“ Bankruptcy Code ” has the meaning set forth in Section 5.1.14 .

 

“ Books and Records ” has the meaning set forth in Section 2.2.6(v) .

 

“ Boyne ” means Boyne USA, Inc., a Michigan corporation, its successors and permitted assigns.

 

“ Businesses ” means collectively all of the Cypress Businesses and Skylift Businesses.

 

“ Business Day ” means any day other than a Saturday, Sunday or any statutory or federal legal holiday in any of the Province of British Columbia (including any federal holiday), the State of Tennessee, or any federal holiday in the United States.

 

“ CBRLP ” means Cypress Bowl Recreations Limited Partnership, a limited partnership organized under the laws of the Province of British Columbia, its successors and permitted assigns.

 

“ Closing ” has the meaning set forth in Article 8 .

 

“ Closing Date ” has the meaning set forth in Section 8.1 .

 

“ Closing Escrow ” has the meaning set forth in Section 8.2 .

 

“ Closing Escrow Agreement ” has the meaning set forth in Section 8.2 .

 

“ Closing Statement ” has the meaning set forth in Section 9.1 .

 

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the Internal Revenue Service.

 

“ Condemnation ” has the meaning set forth in Article 11 .

 

“ Contracts ” has the meaning set forth in Section 2.2.6(i) .

 

“ Control” means:

 

A. the right to exercise, directly or indirectly, a majority of the votes which may be voted at a meeting of (i) the shareholders of the corporation, in the case of a corporation, (ii) the shareholders of the general partner, in the case of a limited partnership, or (iii) the equity holders or other voting participants of a Person that is not a corporation or limited partnership; or

 

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B. the right to elect or appoint, directly or indirectly, a majority of (i) the directors of the corporation, in the case of a corporation, (ii) the directors of the general partner, in the case of a limited partnership, or (iii) a majority of the Persons who have the right to manage or supervise the management of the affairs and business of a Person that is not a corporation or limited partnership,

 

and “ Controlled ” has a corresponding meaning.

 

“ Cypress Assets ” means all of the Assets of CBRLP or any CBRLP Affiliate which are located on the Cypress Premises, or which are affiliated with, or used in connection to the Cypress Businesses or the Cypress Premises.

 

“ Cypress Businesses ” means all businesses currently being conducted by CBRLP, or its assigns, sublessees, agents, permittees, licensees, contractors or Affiliates within, at or in connection with, the Cypress Premises, including, without limitation, (i) alpine ski area services, (ii) nordic ski area services (iii) restaurants, lounges and retail, (iv) ski instruction, (v) chair lift services; (vi) bike park services; and (vii) all services and amenities being operated in support of, or in conjunction with, such businesses.

 

“ Cypress Permit ” means Park Use Permit 1506, dated September 13, 1984, as amended by amendments dated February 20, 2001 and October 1, 2001, issued by Her Majesty the Queen in Right of the Province of British Columbia (the “ Province ”) to CBRLP, a complete description of which permit (including all amendments and agreements modifying or supplementing such permit), is attached hereto as Exhibit “A” .

 

“ Cypress Permit Assignment ” means that assignment document pursuant to which the Cypress Permit will be assigned by CBRLP to the Purchaser as set forth in Section 8.3.5 .

 

“ Cypress Premises ” means all of those Lands to which CBRLP has been granted rights of use pursuant to the Cypress Permit including, without limitation, the Controlled Recreation Area and those portions thereof referred to as the Alpine Ski Area, the Nordic Ski Area, the Parking Facilities, and the Maintenance Areas, as well as the Surrounding Lands, as described therein.

 

“ Deed ” means the warranty deed to be delivered by Skylift to the Purchaser pursuant to Section 8.3.2 .

 

“ Deposit ” has the meaning set forth in Section 3.2.1 ;

 

“ Disclosure Document ” means that certain Disclosure Schedule of Exhibits and Schedules executed and delivered concurrently herewith, and references to Schedules or Exhibits in this Agreement means and refers to those Exhibits and Schedules that are attached to the Disclosure Document.

 

“ Employees ” means, at the time in question all persons employed full-time and part-time at the Real Property

 

“ Encumbrance ” means any mortgage, charge, trust, lien (including claims for liens or certificates of action registered or recorded pursuant to the relevant construction lien legislation),

 

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assignment, pledge, charge, lease, security interest, restriction, claim, demand, easement, encroachment, leasehold estate, defect, license, encumbrance, right to use or acquire, ownership interest, action or other claims, interests or encumbrance of any nature whatsoever.

 

“ Environmental Laws ” means any Applicable Laws which regulate or affect the manufacture, generation, formulation, processing, use, treatment, handling, storage, disposal, distribution or transportation, or an actual or potential spill, leak, emission, discharge or release of any Hazardous Substances, pollution, contamination or radiation into any water, soil, sediment, air or other environmental media, including, without limitation, in Tennessee (i) the Comprehensive Environmental Response, Compensation and Liability Act, (ii) the Resource Conservation and Recovery Act, (iii) the Federal Water Pollution Control Act, (iv) the Toxic Substances Control Act, (v) the Clean Water Act, (vi) the Clean Air Act, and (vii) the Hazardous Materials Transportation Act, and including, without limitation, in British Columbia (i) the Canada Environmental Assessment Act (Canada), (ii) the Canadian Environmental Protection Act (Canada), (iii) the Fisheries Act (Canada), (iv) the Transportation of Dangerous Goods Act (Canada), (v) the Waste Management Act (British Columbia), and (vi) the Contaminated Sites Regulation (British Columbia), and similar federal, state, provincial, regional and/or local laws, as amended as of the time in question.

 

“ Environmental Reports ” means those certain environmental reports obtained in connection with the Cypress Premises or otherwise in connection with the transactions contemplated herein with respect to certain portions of the Real Property or Premises to the extent specifically identified in Schedule 1.1A hereto.

 

“ ERISA ” means the Employee Retirement Income Security Act, as amended from time to time and any regulations, ratings and guidance issued pursuant thereto.

 

“ Escrow Agent ” means LandAmerica Title Services or such other escrow agent as is mutually acceptable to the Seller and the Purchaser.

 

“ Excluded Assets ” has the meaning set forth in Section 2.3 .

 

“ General Conveyance ” means the General Conveyance documents to be delivered by the Sellers to Purchaser pursuant to Section 8.3.4 .

 

“ Governmental Authority ” means any federal, state, provincial, regional or local government or other political subdivision thereof, including, without limitation, any Person exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.

 

“ GST ” means goods and services tax payable pursuant to the Excise Tax Act (Canada).

 

“ Guaranty Agreement ” means the guaranty agreement in the form executed by Boyne USA, Inc. in favor of the Purchaser of the Skylift Assets, and an Indemnity Agreement to be executed by Boyne USA, Inc. in favor of the Purchaser of the Cypress Assets.

 

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“ Hazardous Substances ” means any hazardous or toxic substances, chemicals, materials or waste, whether in solid, semisolid, liquid or gaseous form, including, without limitation, asbestos, petroleum or petroleum by-products, polychlorinated biphenyls, mold or other biological contaminants that are regulated by any Environmental Laws or which are otherwise dangerous to human health or safety.

 

“ Improvements ” has the meaning set forth in Section 2.2.2 .

 

“ Indemnification Claim ” has the meaning set forth in Section 12.4.1 .

 

“ Indemnification Loss ” means, with respect to any Indemnitee, any Liability, including, without limitation, reasonable attorneys fees and expenses and court costs, incurred by such Indemnitee as a result of the act, omission or occurrence in question.

 

“ Indemnitee ” has the meaning set forth in Section 12.4.1 .

 

“ Indemnitor ” has the meaning set forth in Section 12.4.1 .

 

“ Inspections ” means any inspections, examinations, tests, investigations, or studies of the Real Property or the Businesses conducted by or on behalf of the Purchaser (or any Affiliate thereof).

 

“ Intangible Assets ” has the meaning set forth in Section 2.2.6 .

 

“ Lands ” has the meaning set forth in Section 2.2.1 of this Agreement.

 

“ Liability ” means any claim, liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen and “Liabilities” has a corresponding meaning.

 

“ Licenses and Permits ” has the meaning set forth in Section 2.2.6(iii) .

 

“ New Title Exception ” has the meaning set forth in Section 4.2.4 .

 

“ Notice ” has the meaning set forth in Section 13.1.1 .

 

“ Ordinary Course of Business ” means the ordinary course of business consistent with a Seller’s past custom and practice for the Business, taking into account the facts and circumstances in existence from time to time.

 

“ Party ” or “ Parties ” has the meaning set forth in the first paragraph of this Agreement.

 

“ Permitted Encumbrance” means:

 

A. undetermined or inchoate liens and charges incidental to current construction or current operations which have not been filed or registered in accordance with applicable law or of which written notice has not yet been duly given in accordance with applicable law or that relate to an obligation not yet due or delinquent, which in each case shall remain obligations or liabilities of the Sellers; and

 

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B. with respect to the Cypress Premises, any reservations, limitations, provisions or conditions expressed in any original or other grant from the Crown; and

 

C. liens for Taxes, assessments or governmental charges or levies not at the time due and delinquent; and

 

D. as to the Cypress Premises usual endorsements on certificates of title in favor of Governmental Authorities which are not unique to the particular registered owner and which relate to permitted use of fee simple lands, including, without limitation, drainage and dyking endorsements and charges granted by public utilities in respect of their interests in any lands provided that no such endorsements or charges individually or as a whole materially adversely affect the Real Property or the Assets or materially impair their use in the Businesses as presently conducted by the Sellers; and

 

E. such registered Encumbrances in respect of operating leases of Tangible Personal Property relating to the Businesses as set forth in Schedule 4.4 ; and

 

F. all those Permitted Encumbrance under Section 4.2.2 .

 

“ Person ” means any natural person, firm, corporation, general or limited partnership, limited liability company, association, joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.

 

“ Plans and Specifications ” has the meaning set forth in Section 2.2.6(vi) .

 

“ Post-Execution Disclosure ” has the meaning set forth in Section 13.12 .

 

“ PPSA ” means the Personal Property Security Act (British Columbia) as amended from time to time.

 

“ Premises ” means the collective real property parcels included within the Cypress Premises and the Skylift Premises.

 

“ Property Condition Evaluations ” means the property condition evaluations obtained by the Purchaser in connection with the transaction contemplated herein with respect to certain of the Real Property.

 

“ Purchase Price ” has the meaning set forth in Section 3.1 .

 

“ Purchaser ” means CNL Income Partners, LP, a Delaware limited partnership, its successors and permitted assignees.

 

“ Purchaser’s Closing Deliveries ” has the meaning set forth in Section 8.4 .

 

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“ Purchaser’s Default ” has the meaning set forth in Section 10.2 .

 

“ Purchaser’s Documents ” has the meaning set forth in Section 5.2.2 .

 

“ Purchaser’s Due Diligence Reports ” means all studies, reports and assessments prepared by any Person for or on behalf of the Purchaser (other than any internal studies, reports and assessments prepared by any of the Purchaser’s employees, attorneys or accountants) in connection with the Inspections.

 

“ Purchaser’s Indemnitees ” means the Purchaser and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, assigns, legal representatives, heirs and devisees of each of the foregoing.

 

“ Purchaser’s Inspectors ” means any Person that conducted any Inspections for or on behalf of the Purchaser or any Affiliate thereof.

 

“ Real Property ” means the leasehold estate, the easement interests, and the permit to use the Skylift Premises and the Cypress Premises, as applicable, together with the Lands and the Improvements.

 

“ Retained Business Assets ” has the meaning set forth in Section 2.3.2 .

 

“ Retained Liabilities ” has the meaning set forth in Section 2.4 .

 

“ Seller ” and “ Sellers ” have the meaning set forth in the first paragraph of this Agreement.

 

“ Seller’s Closing Deliveries ” has the meaning set forth in Section 8.3 .

 

“ Seller’s Default ” has the meaning set forth in Section 10.1 .

 

“ Seller’s Documents ” has the meaning set forth in Section 5.1.2 .

 

“ Sellers’ Due Diligence Materials ” means all documents and materials provided by the Sellers to the Purchaser, this Agreement or otherwise, together with any copies or reproductions of such documents or materials, or any summaries, abstracts, compilations, or other analyses made by the Purchaser or any Purchaser representative or agent, based on the information in such documents or materials.

 

“ Sellers’ Indemnitees ” means the Seller, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, assigns, legal representatives, heirs and devisees of each of the foregoing.

 

“ Sellers’ Knowledge ” or similar expression, including “best of Seller’s Knowledge”, means the actual knowledge of Maureen Collins and Bobby Swain as to the Cypress Assets, and Ed Grice, Ed Dembek, and Randy Watson as to the Skylift Premises, and Roland Andreeason and Steve Kircher with respect to both Premises, without the requirement for independent verification and expressly excluding the knowledge of any other shareholder, partner, member, trustee, beneficiary, director, officer, manager, employee, agent or representative of the Sellers or any of their Affiliates.

 

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“ Skylift ” means Gatlinburg Skylift, LLC, a Michigan limited liability company, its successors and permitted assigns.

 

“ Skylift Assets ” means all of the Assets of Skylift or any Affiliate of Skylift which are located on the Skylift Premises, or affiliated with, or used in connection to the Skylift Leasehold Interest or Skylift Businesses.

 

“ Skylift Businesses ” means all businesses currently being conducted by Seller, or its assigns, sublessees, agents, permittees, licensees, contractors or Affiliates within, at or in connection with, the Skylift Premises, including, without limitation, (i) a chair lift facility and (ii) all services and amenities being operated in support or conjunction with the chair lift facility.

 

“ Skylift Closing” means the closing of the acquisition of the Skylift Assets and related transactions.

 

“ Skylift Leasehold Interest ” All rights, title and interests granted to the permittee under and pursuant to the Skylift Lease.

 

“ Skylift Lease ” means that lease agreement dated September 1, 1953, as amended, by and between Skylift, as lessee, and the Residuary Trust of Rellie Louis Maples under trust agreement created in the Will of Rellie Louis Maple dated May 5, 1983, as lessor (the “ Skylift Fee Owner ”) (as successor in interest to original fee owner Electrical Appliance Company), a complete description of which lease and all amendments and agreement modifying or supplementing such lease is attached as Exhibit “B” .

 

“ Skylift Lease Assignment ” means that assignment document pursuant to which the Skylift Lease will be assigned by the Seller to the Purchaser as set forth in Section 8.3.5 .

 

“ Skylift Premises ” means all of those lands to which Skylift has been granted rights of use pursuant to the Skylift Lease, including a leasehold estate in Tract One and easement rights in Tracts Two and Three, as described therein.

 

“ Sublease ” or “ SubPermit ” means the sublease, or subpermit, to be executed and delivered by Seller and Purchaser at the Skylift Closing or Closing pursuant to Section 7.1.4 . as the case may be.

 

“ Subsidiary ” means, in respect of any Person:

 

A. any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect the majority of the board of directors of such corporation is at the time directly or indirectly owned by (i) such Person, (ii) such person and one or more subsidiaries of such person, or (iii) one or more subsidiaries of such Person; or

 

B. any limited or general partnership, trust, joint venture, limited liability company or other entity as to which (i) such Person, (ii) such Person and one or more of its subsidiaries, or

 

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(iii) one or more subsidiaries of such Person owns, more than a 50% ownership, equity or similar interest or has power to direct or cause the direction of management and policies, or the power to elect the general partner or managing partner (or equivalent thereof), of such limited or general partnership, joint venture, limited liability company or other entity, as the case may be.

 

“ Surveys ” means the ALTA Surveys provided by the Seller, in connection with the Skylift Premises, in a form and with such information as may be required by the Title Company to enable the Title Company to delete the standard survey-related exceptions.

 

“ Tangible Personal Property ” means all Assets which are not Real Property or Intangible Assets.

 

“ Taxes ” means any federal, state, provincial, regional, local or foreign, real property, personal property, sales, use, room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by any Governmental Authority on the Seller with respect to the Assets or the Businesses, including, without limitation, any interest, penalty or fine with respect thereto, but expressly excluding any (i) federal, state, provincial, regional, local or foreign income, capital gain, gross receipts, capital stock, capital, succession, franchise, profits, estate, gift or generation skipping tax, or (ii) transfer, documentary stamp, registration, recording or similar tax, levy, charge or fee incurred with respect to the transactions described in this Agreement.

 

“ Third-Party Claim ” means, with respect to the Person in question, any claim, demand, lawsuit, arbitration or other legal or administrative action or proceeding against the Person in question by any other Person which is not an Affiliate of the Person in question.

 

“ Title Commitment ” has the meaning set forth in Section 4.2.2 .

 

“ Title Company ” means LandAmerica Commercial Services.

 

“ Title Exceptions ” has the meaning set forth in Section 4.2.2 .

 

“ Title Notice ” has the meaning set forth in Section 4.2.2 .

 

“ Title Policy ” and “Title Policies” have the meanings set forth in Section 4.2.5 .

 

“ Trade Payables ” means amounts payable to vendors or other suppliers of goods or services for the Businesses.

 

“ Turnover Agreement ” means an agreement between Seller and Purchasers to be executed at each of the Skylift Closing and at the Closing pursuant to which Seller agrees to turn over certain assets to the Purchaser at the expiration or termination of the Skylift Sublease, or the Cypress Leases, as described in Section 2.3.2 of the Agreement.

 

“ UCC ” means the Uniform Commercial Code in effect in the States of Tennessee and Michigan, as amended from time to time.

 

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“ VANO C” means the Vancouver Organizing Committee For The 2010 Olympic Paralympic Winter Games, a Part II Canada Corporations Act corporation organized under the laws of Canada.

 

“ VANOC Agreement ” means that certain Games Venue Agreement dated December 10, 2002, by and between CBRLP and Vancouver 2010 Bid Corporation, as amended by an Amending Agreement dated May 26, 2003, which VANOC Agreement was assumed by VANOC.

 

“ Warranties ” has the meaning set forth in Section 2.2.6(viii) .

 

2. PURCHASE AND SALE, ASSETS AND LIABILITIES

 

2.1. Purchase and Sale.

 

The Sellers agree to sell the Assets to the Purchaser free and clear of all Encumbrances save and except for the Permitted Encumbrances and the Purchaser agrees to buy the Assets from the Sellers, all in accordance with the terms and conditions set out in this Agreement.

 

2.2. Description of the Assets.

 

In this Agreement, the “Assets” means all of the following (but expressly excluding only the Excluded Assets):

 

2.2.1 Lands . The exclusive rights to use the Cypress Premises under the Cypress Permit, and to use the Skylift Premises under the Skylift Lease, together with all appurtenant easements and any other licenses, rights, benefits and interests appurtenant thereto (the “ Lands ”).

 

2.2.2 Improvements . All buildings, structures and improvements located on or affixed to the Premises and all fixtures on the Premises which constitute real property under Applicable Law (collectively, referred to as the “ Improvements ”: the Lands and the Improvements are collectively referred to as the “ Real Property ”).

 

2.2.3 Fixtures . All fixtures attached to and forming a part of the Real Property, other than those which constitute Improvements (collectively, the “ Fixtures ”).

 

2.2.4 Tangible Personal Property . All Tangible Personal Property, including without limitation any and all furniture, equipment, machinery, tools, appliances and vehicles, including without limitation snow plow trucks, loaders, graders, and snowmobiles, whether owned or leased by a Seller (free of any liens or encumbrances) located at or used in connection with the Businesses as well as items that a Seller has ordered but has not yet received. Attached as Schedule 2.2.4 is a complete and accurate list of all Tangible Personal Property.

 

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2.2.5 Intangible Assets . Subject to the provisions of Section 2.3.2 , any and all of the following items which collectively shall be referred to as the “ Intangible Assets ”:

 

i. Contracts. All of a Seller’s right, title and interest in and to any contracts and agreements benefiting the Assets or the Businesses (collectively, the “ Contracts ”) to the extent that such contracts are transferable and Purchaser chooses to accept an assignment thereof, a complete list of which Contracts is set forth in Schedule 5.1.13, together with all deposits made or held by a Seller thereunder, all to the extent that such deposits are transferable, together with all security deposits held by a Seller thereunder.

 

ii. Marketing Materials. All of a Seller’s right, title and interest in and to any phone and facsimile numbers, customer and supplier lists, credit records, labels and promotional literature with respect to the Businesses.

 

iii. Licenses and Permits. All of a Seller’s right, title and interest in and to any licenses, permits, consents, authorizations, approvals, registrations and certificates issued by any Governmental Authority which are held by the Seller with respect to the Real Property or the Businesses, including, without limitation, those necessary for the use, operation, or occupancy of the Real Property or the Businesses, a complete listing of which is attached hereto as Schedule 5.1.10 (collectively, the “ Licenses and Permits ”), together with any deposits made by a Seller thereunder.

 

iv. Intellectual Property. All of a Seller’s right, title and interest in and to any Intellectual Property as defined in Section 5.1.4, including all registered and unregistered symbols, logos, intellectual property, tradenames, trademarks and variations thereof used in connection with either of the Premises (but excluding any of the foregoing items to the extent relating to a specific Tenant) (collectively, the “ Trademarks ”); provided that, in the case of data including customer and employee data, Sellers shall only sell and assign to the Purchaser hereunder a copy of such data for use by Purchaser and Sellers shall retain full right and title to use such data without restriction. A true and accurate list of all Trademarks which are the subject of registration or application for registration is attached hereto as Schedule 2.2.6 (iv).

 

v. Books and Records. All of a Seller’s books and records which relate to the Real Property or the Businesses, but expressly excluding all documents and other materials which are legally privileged or constitute attorney work product (collectively, the “ Books and Records ”).

 

vi. Plans and Specifications. All of a Seller’s right, title and interest in and to any plans and specifications, blue prints, architectural plans, engineering diagrams and similar items, if any, within the control of the Seller which specifically relate to the Real Property to the extent that the foregoing are transferable (collectively, the “ Plans and Specifications ”).

 

vii. Property Reports. All of a Seller’s right, title and interest in and to any Environmental Reports, soil reports, and property condition reports.

 

viii. Warranties. All warranties and guaranties held by a Seller with respect to any Improvements, to the extent that such warranties are transferable (collectively, the “ Warranties ”).

 

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2.3. Excluded Assets.

 

Notwithstanding anything to the contrary in Section 2.2 , the following property, assets, rights and interests are excluded from the Assets that will be conveyed to Purchaser (collectively, the “ Excluded Assets ”):

 

2.3.1 Cash . Except for deposits expressly included in Section 2.2.5(i) , all cash on hand or on deposit in any operating account or other account or reserve maintained in connection with the Real Property or the Businesses, short-term deposits, treasury bills, certificates of deposit, investments in short-term commercial paper, guaranteed investment certificates or other deposit securities, refunds in respect of reassessments for Taxes pertaining to the Businesses or Assets including any claims for refunds of Taxes paid or Taxes reimbursed from Governmental Authorities.

 

2.3.2 Certain Intangible Assets; Consumables and Inventory . Subject to the provisions of this Section 2.3.2 and the Turnover Agreement, all food, liquor, wine, consumable supplies, rental equipment, retail inventory (collectively, the “ Consumables and Inventory ”). Purchaser is a passive investor in real estate assets and related personal property and has no intent to be the purchaser or operator of the Businesses. The parties intend to negotiate and enter into, at the Skylift Closing, a Sublease Agreement (the “ Skylift Sublease ”) by which Purchaser or its nominee subleases the Skylift Premises and certain personal property to Skylift, and at the Closing, a Sub-Permit and Lease Agreement (the “ Cypress Lease ”) (being the Subpermit and Sublease referred to in Section 7.1.4) pursuant to which Purchaser or its nominee grants a sub-permit and lease of the Cypress Premises and certain of the personal property to CBRLP, each of whom will be obligated thereby to continue the operation of the Businesses throughout the term of the Skylift Sublease and Cypress Lease respectively. The parties recognize that all Consumables and Inventory and many of the Intangible Assets are important for the continued operation of the Businesses, but, because of the requirement that Purchaser and its nominees be passive investors, will be excluded assets and shall be retained by Sellers so long as they are operating the Businesses, but that upon termination of the Skylift Sublease and the Cypress Lease, the Consumables and Inventory and the Intangible Assets will be turned over to the Purchaser or the replacement operator designated by the Purchaser in accordance with the Skylift Sublease or the Cypress Lease and the Turnover Agreement. Purchaser will pay Seller the value of such Consumables and Inventory at the time of turnover with a credit for the value of the existing Consumables and Inventory, all as described and as determined by the Turnover Agreement. Consequently, the Consumables and Inventory will be excluded from the transfer and will be retained by the Sellers, for use in the operation of the Businesses, subject to the terms of each of the Turnover Agreements, as applicable, to be entered into at each of the Skylift Closing and the Closing. Similarly, the Sellers and Purchaser have identified those specific Intangible Assets which will be retained by the Sellers for continued use in the operation of the Businesses, subject to the terms of each of the Turnover Agreements. The Consumables and Inventory and the retained Intangible Assets are identified on Schedule 2.3.2 attached hereto (the “ Retained Business Assets ”).

 

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2.4. Retained Liabilities.

 

At Closing, the Sellers shall retain all Liabilities for, and the Purchaser shall not have any obligation or Liability concerning (collectively, the “ Retained Liabilities ”):

 

i. any Liabilities under the Retained Business Assets and otherwise Liabilities which have arisen or accrued and pertain to a period prior to the Closing Date, including, without limitation, the Liability for the payment of any amounts due and payable or accrued but not yet due or payable prior to the Closing Date under the Contracts and Licenses and Permits; and

 

ii. the payment of all Taxes and assessments; and

 

iii. the employment of any Employees of the Seller and/or in connection with the Assets, including the payment of any compensation, accrued paid time off, sick time, personal days and any amounts accrued under any Employee benefit or welfare plan and all pension plan Liabilities, in each and every case whether pertaining to the period prior to, on or after the Closing Date as the Purchaser will not be hiring any Employees and the Seller will continue to employ each and every one of the Employees on terms and conditions as good or better than those in existence as of the date hereof; and

 

iv. any claim for personal injury or property damage to a Person which is based on any event which occurred at the Real Property prior to the Closing Date and thereafter while the Skylift Sublease or Cypress Lease remain in effect; and

 

v. any Liabilities (including costs of cleanup, containment of other remediation) arising from or in connection with any Environmental Laws, or any environmental, health and safety liabilities arising out of or relating to (i) the ownership or operation by any Person of any of the facilities, Assets or the Businesses of Sellers, or (ii) any bodily injury (including illness, disability and death, regardless of when any bodily injury occurred, was incurred or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction and deprivation of the use of real property) or other damage of or to any Person or any assets in any way arising from or allegedly arising from any hazardous activity conducted by any Person with respect to the Assets or the Businesses of Sellers that was present or suspected to be present on or before the Closing Date or thereafter while any Sublease or Subpermit remains in effect, on, within or at the Real Property (or present or suspected to be present on any other property, if such Hazardous Material emanated or allegedly emanated from any property and was present or suspected to be present on the Real Property or the Premises, on or prior to the Closing Date or thereafter while any Sublease or SubPermit remains in effect), or (iii) any Hazardous Substance released or allegedly released by any Person on or at the Premises at any time on or prior to the Closing Date or thereafter while any Sublease or Sub-permit remains in effect, it being acknowledged that Liability for any Hazardous Materials first appearing after the date of the closing of each of the Skylift Assets and of the Cypress Assets shall be governed by the terms of the Subpermit or Sublease as appropriate.

 

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vi. The rights and obligations of the Parties under this Section 2.4 shall survive the Skylift Closing or the Closing, as applicable, for the period set forth in Section 12.1 and subject to the limitations of liability set out in Section 12.5 .

 

3. PURCHASE PRICE

 

3.1. Purchase Price.

 

The purchase price for the Assets is US $47,440,000.00 (the “ Purchase Price ”). This purchase price shall be adjusted at Closing as expressly provided in Article 9 of this Agreement.

 

3.2. Payment of Purchase Price.

 

3.2.1 Deposit . US $1,000,000.00 (the “ Deposit ”) which amount was paid by wire transfer to Escrow Agent, in trust, upon the execution of this Agreement, and which shall be held by the Escrow Agent in an interest bearing account and shall be released: (i) to the Sellers on the Closing Date and credited against the amount of the Purchase Price owing to the Sellers; or (ii) to the Sellers if this Agreement is terminated due to a Purchaser default pursuant to Section 10.2 ; or (iii) to the Purchaser if this Agreement is terminated for any reason other than a default of the Purchaser under Section 10.2 .

 

3.2.2 Payment at Closing . At the Skylift Closing and at the Closing, the Purchaser shall pay to the appropriate Seller by wire transfer, an amount equal to the Purchase Price allocable to the Assets being purchased (as adjusted pursuant to credits and debits provided for hereunder). The Purchaser shall cause the wire transfer of funds to be received by the Escrow Agent no later than 3:00 p.m. (Eastern Time) on the Closing Date.

 

3.2.3 Method of Payment . All amounts to be paid by the Purchaser to the Seller pursuant to this Agreement shall be paid by wire transfer of immediately available U.S. federal funds.

 

3.3. Allocation of Purchase Price.

 

3.3.1 The Parties agree that the Purchase Price shall be allocated among the Cypress Assets and the Skylift Assets, the Real Property and the Personal Property as set forth in Schedule 3.3 . The Parties acknowledge and agree that the allocation set forth in Schedule 3.3 represents an arm’s length agreement based on the Parties’ best judgment as to the fair market value of the Real Property. The Parties shall file all federal, state, provincial and local or municipal tax returns and related tax documents consistent with the allocation set forth in Schedule 3.3 , as the same may be adjusted pursuant to Article 9 or any other provision in this Agreement.

 

3.4. Goods and Services and Social Service Tax.

 

The Purchaser will pay all GST and all Provincial sales tax payable pursuant to the Social Service Tax Act, in each case, to the extent payable on the Purchase Price for the Cypress Assets directly to the appropriate Government Authority and provide evidence of said payment to the Seller; provided that if the Purchaser is registered for the purposes of the payment of GST, to the

 

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extent permitted by law, the Purchaser may self assess for GST purposes in lieu of paying the GST to the Seller, provided that prior to Closing, the Purchaser provides to the Seller with reasonable evidence as to such GST registration.

 

4. DUE DILIGENCE AND INSPECTION

 

4.1. Right to Inspect.

 

4.1.1 The Purchaser and the Purchaser’s Inspectors shall have the right to enter upon the Real Property from time to time on not less than two (2) Business Days’ notice, at the risk of the Purchaser, and to perform, at the Purchaser’s expense, such inspections of and concerning the Assets and other tests, studies, reviews and investigations, as the Purchaser may deem appropriate in the Purchaser’s sole discretion from time to time. In addition, the Purchaser shall have the right but not the obligation to contact such Governmental Authorities and other interested parties as the Purchaser may elect in its sole discretion in connection with this transaction. To the extent in the Seller’s possession or control, Seller has furnished to the Purchaser copies of the following, each of which, to the Seller’s Knowledge, is or will be a true, correct and complete copy of the document it purports to be, as at the date hereof:

 

i. The Cypress Permit;

 

ii. The Skylift Lease;

 

iii. (All material Licenses and Permits affecting the Real Property, Premises or the Businesses in any material respect;

 

iv. The most recent real estate tax statements with respect to the Real Property and notices of assessed value for the Real Property issued by applicable authorities;

 

v. All Contracts affecting the Real Property, the Premises or the Businesses in any material respect;

 

vi. All tenant leases and all agreements for real estate commissions, brokerage fees, finder’s fees or other compensation payable in connection therewith which will be binding on the Purchaser; and

 

vii. The VANOC Agreement.

 

4.2. Matters Relating to Title.

 

4.2.1 Title . At the Skylift Closing or on the Closing Date, as applicable, the Sellers shall convey to the Purchaser good and marketable licensed or leasehold title to the Assets, free and clear of all Encumbrances, save and except for the Permitted Encumbrances (provided each of said Permitted Encumbrances are in good standing, if applicable). The Sellers covenant and agree, on or before the Skylift Closing or the Closing Date, to discharge at its sole cost and expense, any Encumbrances affecting title to each of the Premises other than the Permitted Encumbrances and to remedy work orders or deficiency notices affecting each of the Premises.

 

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4.2.2 State of Title . Purchaser has undertaken to obtain the following title information regarding the Assets:

 

i. Land America Title Insurance Commitment No. 82595 issued by Tennessee Valley Title Insurance Co. dated September 1, 2005 (the “ Title Commitment ”), evidencing those Permitted Encumbrances described in Schedule 4.2 . Seller agrees that it will satisfy all Schedule B-1 requirements for issuance of the title policy (“ Title Policy ”) as set forth in the Title Commitment (including delivery of a release of satisfaction of the mortgage described therein);

 

ii. UCC searches in Tennessee and Michigan with respect to Skylift, evidencing that there are no UCC Financing Statements filed affecting the Skylift Premises;

 

iii. A search of the records under the Personal Property Security Act in British Columbia with respect to CBRLP and the Premises and evidencing the filings described on Schedule 4.2.2 , all of which shall be considered Permitted Encumbrances; and

 

iv. A survey of the Skylift Premises prepared by Gatlinburg Land Surveying dated November 7, 2005.

 

4.2.3 Failure of Title . If at the Skylift Closing or on the Closing Date, as applicable, title to the Real Property is not insurable or if the Assets are subject to any Encumbrance or title defect which is not a Permitted Encumbrance, and the Seller is unable to cure the same, the Purchaser may elect, as its sole right and remedy, either (i) to take such title to the Assets as the Seller can convey, with no abatement of the Purchase Price (except to the extent of monetary liens and security interests of a definite, fixed and ascertainable amount not in excess of the Purchase Price), or (ii) to terminate this Agreement. Seller shall obtain a release of all mortgages, liens and security interests encumbering the Real Property or the Tangible Personal Property, other than Permitted Encumbrances, prior to the Skylift Closing with respect to the Skylift Assets and prior to Closing with respect to the Cypress Assets. Seller and Purchaser acknowledge the existence of certain survey defects with respect to the Skylift Premises which the Purchaser and Seller have agreed to resolve in the manner described in Section 4.2.7 of this Agreement.

 

4.2.4 Updated Title Commitment or Survey . If prior to either the Skylift Closing or the Closing, any update of the Title Commitment or UCC/PPSA searches, as applicable, disclose any Title Exception which is not disclosed in the original Title Commitment or UCC/PPSA searches previously obtained by the Purchaser (a “ New Title Exception ”) (copies of which have been timely provided to the Sellers), or any update of the Surveys delivered to the Purchaser discloses any Survey Defect which is not disclosed in a Survey previously delivered to the Purchaser (a “ New Survey Defect ”), the Seller shall exercise commercially reasonable diligent efforts to remove or cure such New Title Exception or New Survey Defect at or prior to the relevant closing. If Seller fails to remove or cure such New Title Exception or New Survey Defect in its entirety by the relevant closing, then Purchaser shall have the right, in its absolute discretion, to elect, upon written notice to the Seller to either (A) defer the Closing Date for a reasonable period not exceeding sixty (60) days to give the Seller an opportunity, at the Sellers’ sole option and at the Sellers’ sole cost and expense, to either (i) remove any Encumbrance or

 

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other title objection which is not a Permitted Encumbrance, or (ii) provide the Title Company and the Purchaser such assurances as the Title Company and the Purchaser requires to insure the Purchaser at the Sellers’ sole cost and expense in a manner acceptable to the Purchaser against any loss arising from such encumbrances or other title objections, or (B) to do neither (i) nor (ii) of clause (A) above, in which event the Purchaser shall have the option available to it in Section 4.2.3 . In addition if the New Title Exception or New Survey Defect is caused by Seller, the right to sue for damages. The Seller will not create or permit to exist any New Title Exception or New Survey Defect.

 

4.2.5 Title Policies . At the Skylift Closing or Closing, as applicable, the Seller shall take such steps as may be necessary to cause the Title Company to issue unconditional commitments to issue the Title Policies to the Purchaser, which have been pre-approved by the Purchaser in all respects subject only to the Permitted Encumbrances, or alternatively, to commit in writing to issue such Title Policies to the Purchaser post-Closing.

 

4.2.6 Conveyance of the Assets . At the Skylift Closing or Closing, as applicable, the Sellers shall convey to the Purchaser good and marketable title to the Assets as follows: (A) the Real Property subject only to Permitted Encumbrances, and (B) the remainder of the Assets, free and clear of all Encumbrances.

 

4.2.7 Survey Defects Affecting the Skylift Premises . To the extent the survey described in Section 4.2.2 (iv) above evidences certain survey defects and required improvements to the Skylift Premises which remain outstanding following the Skylift Closing, the Seller and Purchaser have agreed that such matters will be addressed pursuant to that certain post-closing agreement executed by the parties and dated concurrently herewith (the ”Skylift Post-closing Agreement”).

 

4.3. Equipment Leases.

 

If any equipment used by Sellers in connection with Sellers’ operation of the Businesses on the Premises is leased or lease-financed, then Sellers, subject to the consent of the equipment lessor, assign the Sellers’ rights under such leases (including any purchase option) to Purchaser, [reserving in such assignment the obligation to make all payments on a timely basis for the benefit of Purchaser and the obligation to pay the purchase price for such equipment at the conclusion of the lease term, with such security for Seller’s obligation as Purchaser may reasonably require as a condition for Purchaser’s acceptance of such assignment.] A complete list of all such equipment leases is attached hereto as Schedule 4.4 .

 

4.4. Contracts Requiring Consent.

 

If a consent or approval of a third party is required to permit the transfer or assignment to the Purchaser of the Sellers’ interest in any of the Contracts (including leases for equipment) is not received on or before the Closing, and if, notwithstanding such non-receipt, the Sellers and the Purchaser proceed to complete the sale and the purchase of the Assets contemplated by this Agreement, the transfer or assignment of those Contracts (including leases for equipment) in respect of which the required consent has not been received on or before the Closing will not be effective in each case until the applicable consent or approval has been received and such

 

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Contract (including leases for equipment) will be held by the Sellers following the Closing in trust for the benefit and exclusive use of the Purchaser. The Sellers shall continue to use all reasonable efforts to obtain the required consents and approvals and shall only make use of such Contracts (including leases for equipment) for the benefit of the Purchaser provided such use does not conflict with the terms of such Contracts (including leases for equipment). Seller will apply for and request consent within ten (10) days after the date of the Agreement.

 

4.5. Tangible Personal Property Review.

 

Prior to the Skylift Closing and Closing Date, as applicable, Purchaser and its representatives shall be permitted to enter the Premises on reasonable advance notice (in accordance with Section 4.1 for the purpose of taking an inventory of all Tangible Personal Property related to the Businesses.

 

4.6. Audited Financial Statements and Appraisals.

 

To the extent that the Sellers do not have audited financial statements with respect to the Businesses for the three calendar years preceding the date of this Agreement, Seller and Purchaser will make arrangements for the completion of such audited financial statements prior to the Closing, all at Purchaser’s sole cost and expense. Sellers will cooperate with the appraisers retained by the Purchaser for purposes of appraising the value of the Assets and promptly provide such information as may be reasonably required by such appraisers.

 

4.7. Release and Indemnification.

 

The Purchaser (for itself and all the Purchaser’s Indemnitees) hereby releases the Sellers’ Indemnitees for any Indemnification Loss incurred by any Purchaser Indemnitee arising from or in connection with the Inspections, except to the extent resulting from the gross negligence or willful misconduct of any Sellers’ Indemnitee. The Purchaser shall defend, indemnify and hold harmless the Sellers’ Indemnitees in accordance with Article 12 from and against any Indemnification Loss incurred by the Sellers’ Indemnitees arising from or in connection with the Inspections, except to the extent resulting from the gross negligence or willful misconduct of any Sellers’ Indemnitee.

 

5. REPRESENTATIONS AND WARRANTIES

 

5.1. The Seller’s Representations and Warranties.

 

To induce the Purchaser to enter into this Agreement and to consummate the transactions described in this Agreement, each Seller hereby makes the following representations and warranties in this Section 5.1 each as to its respective Assets and Business and concerning the respective Seller only, upon which the Sellers each acknowledge and agree that the Purchaser is entitled to rely, and as of the Skylift Closing and the Closing shall provide a certificate reconfirming that all such representations and warranties remain true and correct as of the Skylift Closing and Closing, as applicable, concerning their respective Assets and Business.

 

5.1.1 Organization and Power . The Seller is duly incorporated or formed (as the case may be), validly existing, in good standing in the jurisdiction of its incorporation or

 

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formation, and is qualified to do business in the jurisdiction in which its Assets are located, and has all requisite power and authority to own the Assets and conduct its Businesses as currently owned and conducted. Cypress Bowl ULC is the only general partner of CBRLP and Boyne Canada ULC is the only limited partner of CBRLP.

 

5.1.2 Authority and Binding Obligation . The Seller has full power and authority to execute and deliver this Agreement and all other documents to be executed and delivered by it pursuant to this Agreement (collectively, the “ Seller’s Documents ”), and to perform all obligations required of it under this Agreement and each of the Seller’s Documents. The execution and delivery by Seller of this Agreement and, when executed and delivered, each of the Seller’s Documents, and the performance by Seller of its obligations under this Agreement and, when executed and delivered, each of the Seller’s Documents, have been, or will have been, duly and validly authorized by all necessary action by the Seller. This Agreement and when executed and delivered the Seller’s Documents, constitute or will constitute legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with its and their terms, except to the extent the Purchaser itself is in default hereunder or thereunder.

 

5.1.3 Title to the Lands and Personal Property . CBRLP is the absolute owner and holder of the rights to use the Cypress Premises under the Cypress Permit. Skylift is the absolute owner and holder of the rights to use the Skylift Premises under the Skylift Lease. Each Seller is the absolute owner of the Improvements and the undisputed owner of all of the Personal Property (other than Personal Property that is leased pursuant to the equipment leases described in Schedule 4.3), free and clear of all Encumbrances other than Permitted Encumbrances, excepting such Encumbrances as shall be paid off and released at or prior to Closing.

 

5.1.4 Intellectual Property . To the Seller’s Knowledge, Seller owns all rights in, and has all rights necessary to transfer those Assets constituting Intellectual Property to be sold and conveyed hereunder. For the purposes of this Agreement, “Intellectual Property” means (i) any patent, copyright, trademark, service marks, trade name, licenses, franchises or domain name (regardless of whether such rights have been registered), (ii) registrations and applications for registration of any of the foregoing rights listed in clause (i) of this definition, (iii) data of any kind, subject to existing applicable privacy laws, including rights to use personally-identifiable information relating to any natural person or any e-mail address, and (iv) any other proprietary or intellectual property rights of any kind. Without limiting the forgoing, Seller has the right to use those Trademarks shown on the attached Schedule 2.2.6(iv) , and Seller has not received notification of any claims or actions by any party disputing or challenging Seller’s right to use such name.

 

5.1.5 Consents and Approvals; No Conflicts . Subject to the recording of any of the Seller’s Documents as appropriate, no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or other Person is necessary for execution or delivery by the Seller of any of the Seller’s Documents, or the performance by the Seller of any of its obligations under this Agreement or any of the Seller’s Documents or the consummation by the Seller of the transactions described in this Agreement, except to the extent such permit, authorization, consent or approval has been or will be obtained by the Seller prior to Closing other than with respect to those Contracts for which consent to assignment has not been obtained prior to Closing and which will be subject to the provisions of Section 4.4 . The foregoing

 

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representation is qualified in that Seller will use diligent reasonable commercial efforts to obtain: (a) with the assistance and cooperation of the Purchaser, the consent and approval of the Minister of Environment to the assignment to Purchaser (or a Purchaser Affiliate), and a Subpermit back to Seller (or a Seller Affiliate) of the Cypress Permit, and (b) a waiver by the existing fee owner of the Skylift Premises of its purchase option under the Skylift Lease. Neither the execution and delivery by the Seller of this Agreement or any of the Seller’s Documents, nor the performance by the Seller of any of their obligations under this Agreement or any of the Seller’s Documents, nor the consummation by the Seller of the transactions described in this Agreement, will (A) violate any provision of the Seller’s organizational or governing documents, (B) violate any Applicable Law to which the Seller are subject, (C) to the Seller’s Knowledge, result in a violation or breach of, or constitute a default under any of the Contracts that affect any of the Assets or Businesses, or Seller in any respect, subject to obtaining consent to assignment and transfer of same in accordance with their terms, including without limitation the Cypress Permit, or (D) result in the creation or imposition of any lien or encumbrance on any of the Assets or any portion thereof.

 

5.1.6 Compliance with Applicable Law and Permitted Encumbrances . The Seller has not received any written notice, of and to Seller’s Knowledge there is no, violation of any Applicable Law with respect to any of the Assets which has not been cured or dismissed, including, but not limited to, those of environmental agencies, with respect to the ownership, operation, use, maintenance or condition of the Assets. The Seller has neither received, nor given, any written notice of any violation of any Permitted Encumbrance which is material to the ownership, value or operation of any of the Assets, which has not been cured or dismissed.

 

5.1.7 Litigation . Other than as set out in Schedule 5.1.7 , the Seller has not (i) been served with any court filing in any litigation with respect to any Assets or the Businesses in which the Seller is named a party which has not been resolved, settled or dismissed and which could otherwise reasonably result in an adverse affect on the Assets, the Businesses, or Seller’s title to any of the Assets or (ii) received written notice of any claim, charge or complaint from any Governmental Authority or other Person pursuant to any administrative, arbitration or similar adjudicatory proceeding with respect to any Assets or the Businesses which has not been resolved, settled or dismissed and which could reasonably result in an adverse affect on the Businesses or Seller’s Assets. Attached as Schedule 5.1.7 is a true and complete list and description of all such litigation matters presently affecting the Assets or Businesses, including any matters or incidents which, though not presently pending, will likely result in litigation which could materially affect the Assets and Businesses.

 

5.1.8 Condemnation . The Seller has not received any written notice of any pending condemnation or expropriation proceeding or other proceeding in eminent domain, and to the Seller’s Knowledge, no such condemnation or expropriation proceeding or eminent domain proceeding is threatened affecting any of the Real Property or any portion thereof.

 

5.1.9 Taxes and Assessments . Other than as disclosed on Schedule 5.1.9 attached hereto: (i) all Taxes which would be delinquent if unpaid have been, or will at the Closing Date, to the extent that such Taxes at such date would be delinquent if not paid; (ii) the Seller has not received any written notice for an audit or delinquency of any Taxes with respect to any Assets which has not been resolved or completed; (iii) the Seller is not currently

 

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contesting any Taxes with respect to any Assets; (iv) all sales, use and payroll taxes to which the Businesses are subject have been paid as required and all tax returns and reports have been duly filed; and (v) to the Seller’s Knowledge, there are not outstanding unpaid assessment notices against the Assets.

 

5.1.10 Licenses and Permits . The Seller has made available to the Purchaser a true and complete copy of the Licenses and Permits material to ownership and operation of the Assets or Businesses, a complete listing of which is attached hereto as Schedule 5.1.10 . Except as set forth on Schedule 5.1.10 , the Seller has not received any written notice from any Governmental Authority or other Person of (i) any violation, suspension, revocation or non-renewal of any Licenses and Permits that materially affect an Asset or the Businesses that have not been cured or dismissed, or (ii) any failure by the Seller to obtain any Licenses and Permits that materially affect an Asset or the Businesses that have not been cured or dismissed.

 

5.1.11 Real Property Leases . The Seller has not granted to any party any license, lease, easement or other right relating to the use or possession of the Real Property or any part thereof, and there are no leases, subleases, licenses, permits, concessions, or other similar agreements encumbering the Skylift Premises or the Cypress Premises, except as set out in Schedule 5.1.13 . The Seller has made available to the Purchaser a true and complete copy of all such