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HomeMy WebLinkAbout1992-159 Ski A Asset Amendment4 AMENDMENT TO ASSET PURCHASE AGREEMENT THIS AMENDMENT TO ASSET PURCHASE AGREEMENT is made and entered into as of the ~ day of May, 1992, by and between SKI ASHLAND, INC., a Washington corporation ("Seller"), and THE CITY OF ASHLAND, OREGON, ("Buyer"), a municipal corporation~ successor by assignment to Mt. Ashland Ski, Inc.,("MASI") the original Buyer under the Asset Purchase Agreement referred to below. RECITALS A. Seller owns and operates a ski resort in Ashland, Oregon. On January 20, 1992, Seller and MASI entered into an Asset Purchase Agreement ("Agreement"), relating to Seller's agreement to sell MASI, and HASI's agreement to purchase from Seller, certain equipment relating to the ski resort, together with various permits, contracts and other tangible and intangible personal property incidental thereto, all under the terms and conditions set forth in such Agreement. By document dated May~!~__, 1992, MASI assigned all rights, duties and obligations MASI had under the Agreement to the Buyer, Seller consented to such assignment, and Buyer received and assumed all rights, duties and obligations of MASI thereunder. B. Since the Agreement was executed, further discussions about, and developments in connection with, the proposed purchase have made it clear that certain modifications to the Agreement need to be made in order for the transaction to proceed, and the parties hereto desire to make the changes set forth herein to accomplish that purpose. C. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, Seller and Buyer hereby agree to the following modifications to the Agreement, as follows: 1. Section 1.3, Purchase Price and Payment. is amended in full to read as follows: 1.3 Purchase Price and Payment. (a) Purchase Price. At Closing, Buyer shall pay to Seller, as full consideration for the Assets, the sum of One Million Three Hundred Thousand Dollars ($1,300,000.00) (the "Purchase Price"). 1 (b) Manner of Payment. On the Closing Date, Buyer shall deliver the Purchase Price to Seller by wire transfer. (c) Deposits in Escrow. The parties hereto recognize that the purchase price to be paid to Seller hereunder has been or will be generated as a result of donations by individuals, groups, government units and other entities in and around the Ashland, Oregon area, and that some or all of the cash consideration will be deposited in escrow with the Buyer between the date of this Amendment and the Closing Date. By execution hereof, the Seller hereby designates Buyer as escrow agent for this purpose and Buyer agrees to hold the deposited funds in that capacity. The escrow agent will invest all cash funds received in escrow in the same interest-bearing pooled investment account(s) it currently uses for investments of this kind, such deposits to remain in such account(s) until the date the last of the conditions precedent referred to in Section 6.3 hereof have been satisfied. All interest accrued on the escrowed funds shall be allocated one-half to the Buyer and one-half to the Seller under the terms of the escrow, and shall be disbursed according to such allocation upon the Closing of the transaction contemplated herein~ provided, however, that in the event all such conditions precedent set out in Section 6.3 of this Amendment have not been satisfied on or before June 30, 1992, and neither party elects to cancel the Agreement thereafter under the terms of Article VIII, all interest accruing on the escrowed funds after June 30, 1992 shall be credited to the account of the Seller~ and provided, further, that in the event the conditions precedent set out in Section 6.3 are not fulfilled prior to such June 30, 1992 date and either party does elect to terminate this Agreement on that basis, all interest earned on the escrowed funds will be distributed to Buyer within five (5) business days after this Agreement is terminated. (d) Allocation of Purchase Price. The Purchase Price shall be allocated for all purposes by the parties as follows: Equipment Permit Business Agreements $1,299,999.00 1.00 -0- TOTAL $1,300,000.00 The portion of the Purchase Price allocated to the Equipment is further allocated among the various items and classes of Equipment as more particularly specified on Schedule I. 2. Section 2.1 of the Agreement, relating to Closing, shall be modified to read as follows: 2.1 Closing. The Closing of the purchase and sale contemplated by this Agreement (the "Closing") shall take place on the fifth business day following the fulfillment of the last of the conditions precedent referred to in Section 6.3 of this Amendment (the "Closing Date") in the business offices of the Mt Ashland Ski Area, 1627 Highway 66, Ashland, Oregon, or at such other time or place as shall be agreed by the parties in writing7 provided that all other conditions to Closing set forth in Article VI have then been satisfied. 3. section 2.6(a) of the Agreement shall be modified to reflect the reduction of the Purchase Price from One Million Four Hundred Thousand Dollars ($1,400,000.00) to One Million Three Hundred Thousand Dollars ($1,300,000.00) 4. Section 2.6(c) of the Agreement shall be modified to substitute the phrase "City Council" for the phrase "Board of Directors" therein. 5. Section 3.3 of the Agreement shall be modified to include the phrase "Except as otherwise contemplated in Sections 3.6 and 5.3 hereof" at the beginning of such section. 6. Section 4.1 of the Agreement shall be modified to substitute the term "municipality" for the term "corporation" therein. 7. Section 4.2 of the Agreement shall be modified to substitute the term "requisite" for the term "corporate" in the first sentence thereof, and to delete the term "corporate" in the second. 8. Section 5.1 of the Agreement shall be modified to eliminate the second full sentence thereof. 9. Section 5.2 of the Agreement shall be modified by eliminating the PreClosing Notice provision and substituting a new Section 5.2 to read as follows: 5.2. Operational Commitments. The parties hereto understand and agree that the ski area will not operate between the date of this Amendment and the Closing Date, and that the Seller has no obligation to maintain, improve, change, modify or repair the physical facilities at the ski resort during this period. Seller will, however, do the following in connection with the ski area operations between the date hereof and Closing: (a) continue to rent the downtown office location~ (b) pay the salaries and benefits of regular salaried employees on Seller~s payroll as of the date hereof7 (c) maintain liability insurance on the premises at the current levels~ (d) provide one (1) watchman to maintain security at the ski area~ (e) assist, through existing personnel, in efforts to facilitate transfer of 3 the existing U.S.F.S. permit to the Buyer hereunder~ and (f) render advice, through existing Seller personnel, with respect to ski area administration and insurance issues. 10. Article VI, conditions Precedent to Closinu, shall be modified to delete Section 6.1(d) and add the following Section 6.3: 6.3. Other Conditions. The obligation of either party to close the transaction detailed herein shall be subject to the fulfillment, on or before June 30, 1992, of each of the following conditions: (a) Buyer shall have received a Private Letter Ruling from the National Office (or, if applicable, the District Director) of the Internal Revenue Service to the effect that the donations received by the Buyer described in Section 1.3(b) above are tax deductible by the donors under the provisions of Section 170 of the Internal Revenue Code of 1986, as amended. Promptly after this Amendment is executed, Buyer shall prepare and submit an appropriate Ruling Request (or, if applicable, a Request for Determination) with respect to such deductibility to the Internal Revenue Service. (b) The U.S.F.S. must have consented in writing to the transfer of the permit to operate the ski area from Seller to Buyer in accordance with the provisions of Section 5.3 hereof. 11. Article VIII, Termination, paragraphs (3) and (4), shall be modified to read as follows: (3) If a condition precedent to any party's obligation to close, as set forth in Article VI, has not been satisfied on or before the dates specified in such Article VI. (4) If the Closing has not occurred by the close of business on July 7, 1992. 12. A new Section 9.9 shall be added to Article IX of the Agreement, to read as follows: 9.9 Guaranty Of Obliuations. By execution of this Agreement, Stevens Pass, Inc.("Guarantor"), a Washington corporation and the parent of the Seller, unconditionally guarantees the obligations of Seller set forth in Section 7.2 of this Agreement. 13. Except for such modifications to the Agreement as are set forth in this Amendment, the Agreement continues in full force and effect in accordance with its terms. 14. Section 9.5 Notices shall be modified to delete the last paragraph thereof and add: Wickwire, Greene, Crosby & Seward 1008 Western Avenue, Suite 506 Seattle, Washington 98104 Attn| John B. Greene IN WITNESS WHEREOF, the parties hereto have executed this Amendment or caused this Amendment to be executed by their duly authorized officers on the day and year first above written. SELLER SKI ASHLAND, INC. President BUYER CITY OF ASHLAND, OREGON Its /~F~r GUARANTOR STEVENS PASS, INC. BY Its P~ident f:\jbg\e11T 5