UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF SEPTEMBER 2006
Commission File Number _______________
INTRAWEST CORPORATION
(Registrant's name)
SUITE 800, 200 BURRARD STREET
VANCOUVER, BRITISH COLUMBIA, CANADA V6C 3L6
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _______
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101 (b)(7): _______
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_______________
SIGNATURE
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, thereunto duly authorized.
Date: September 20, 2006
INTRAWEST CORPORATION
By: /s/ ROSS MEACHER
-----------------------------------------------------
Name: Ross Meacher
Title: Corporate Secretary and Chief Privacy Officer
(INTRAWEST LOGO)
ARRANGEMENT
INVOLVING
INTRAWEST CORPORATION
AND
WINTERGAMES ACQUISITION ULC
AND WINTERGAMES S.A.R.L.,
ENTITIES THAT ARE OWNED BY FUNDS MANAGED BY AFFILIATES OF
FORTRESS INVESTMENT GROUP LLC
SPECIAL MEETING OF SECURITYHOLDERS
OF INTRAWEST CORPORATION
TO BE HELD ON OCTOBER 17, 2006
NOTICE OF SPECIAL MEETING AND
MANAGEMENT INFORMATION CIRCULAR
SEPTEMBER 20, 2006
These materials require shareholders and optionholders of Intrawest to make
important decisions and require immediate attention. If you are in doubt as to
how to make such decisions, please contact your financial, legal or other
professional advisors. If you have any questions or require more information
with regard to voting your Common Shares or Intrawest Options, please contact
Georgeson Shareholder Communications Canada Inc. toll-free at 1-866-390-5292.
NONE OF THE CANADIAN SECURITIES REGULATORY AUTHORITIES, THE U.S. SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS CIRCULAR.
THE INFORMATION CONCERNING FORTRESS, ACQUISITIONCO AND PARENT CONTAINED IN
THIS CIRCULAR HAS BEEN TAKEN FROM PUBLIC SOURCES OR HAS BEEN PROVIDED BY
FORTRESS FOR INCLUSION IN THIS CIRCULAR. ALTHOUGH INTRAWEST HAS NO KNOWLEDGE
THAT WOULD INDICATE THAT ANY STATEMENTS CONTAINED HEREIN TAKEN FROM OR BASED ON
SUCH PUBLIC SOURCES OR ON DOCUMENTS, RECORDS OR INFORMATION PROVIDED BY FORTRESS
ARE UNTRUE OR INCOMPLETE, INTRAWEST ASSUMES NO RESPONSIBILITY FOR THE ACCURACY
OF THE INFORMATION CONTAINED IN SUCH PUBLIC SOURCES, DOCUMENTS, RECORDS OR
INFORMATION OR FOR ANY FAILURE BY FORTRESS TO DISCLOSE EVENTS THAT MAY HAVE
OCCURRED OR MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF ANY SUCH INFORMATION BUT
WHICH ARE UNKNOWN TO INTRAWEST.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS CIRCULAR, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS CIRCULAR DOES NOT CONSTITUTE A SOLICITATION OF A PROXY IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS CIRCULAR WILL NOT, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION OR BE TREATED AS A REPRESENTATION THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN SINCE THE DATE OF
THIS CIRCULAR.
(INTRAWEST LOGO)
September 20, 2006
Dear Shareholders and Optionholders:
On behalf of the Board of Directors, we cordially invite you to attend the
Special Meeting of Securityholders of Intrawest Corporation to be held
commencing at 10:00 a.m. (Vancouver time) on Tuesday, October 17, 2006 in the
Ballroom of The Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver,
British Columbia. The meeting is for holders of Common Shares of Intrawest and
holders of options to acquire Common Shares.
At the Meeting, you will be asked to approve a statutory arrangement under
which holders of Common Shares will receive US$35.00 in cash for each of their
Common Shares and the holders of Intrawest Options will receive the difference
between US$35.00 and the applicable exercise price under each Intrawest Option
held, net of applicable withholdings. The accompanying Notice of Special Meeting
and Management Information Circular provide a full description of the
Arrangement and include certain additional information to assist you in
considering how to vote on the Arrangement. YOU ARE URGED TO READ THIS
INFORMATION CAREFULLY AND, IF YOU REQUIRE ASSISTANCE, TO CONSULT YOUR FINANCIAL,
LEGAL OR OTHER PROFESSIONAL ADVISOR.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE ARRANGEMENT, HAS
DETERMINED THAT THE ARRANGEMENT IS IN THE BEST INTERESTS OF INTRAWEST AND IS
FAIR TO INTRAWEST'S SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS AND
OPTIONHOLDERS VOTE FOR THE RESOLUTIONS APPROVING THE ARRANGEMENT. The
recommendation of the Board of Directors is based on various factors, including
the opinion dated August 10, 2006 of Goldman, Sachs & Co., financial advisor to
the Board of Directors, which states that, as of the date of the opinion and
based on and subject to the assumptions, limitations and qualifications set
forth therein, the consideration to be received by Shareholders under the
Arrangement Agreement was fair from a financial point of view to such
Shareholders. A copy of the Goldman, Sachs & Co. opinion is included as Appendix
D to the accompanying Management Information Circular.
The Arrangement must be approved by a resolution passed by at least
two-thirds of the votes cast at the Meeting by the Shareholders and
Optionholders (including by at least two-thirds of the votes cast at the Meeting
by Shareholders), and also satisfy a "minority approval" requirement imposed by
securities law under which the Arrangement must be approved by a simple majority
of the Common Shares voted, where the Common Shares owned or controlled by Mr.
Houssian, Intrawest's Chairman and Chief Executive Officer, will not be counted.
The Arrangement is also subject to certain customary conditions, including the
approval of the Supreme Court of British Columbia. Subject to obtaining Court
approval and satisfying such other conditions, it is anticipated that the
Arrangement will be completed later in October 2006.
Your vote is important regardless of the number of Common Shares or
Intrawest Options you own. If you are unable to be present at the Meeting in
person, we encourage you to take the time to complete, sign, date and return the
appropriate form of proxy (the white form of proxy in the case of Registered
Shareholders, the applicable voting instruction form in the case of
Non-Registered Shareholders and the green form of proxy in the case of
Optionholders) so that your securities can be voted at the Meeting in accordance
with your instructions. We also encourage Registered Shareholders and
Optionholders to complete, sign, date and return the appropriate Letter of
Transmittal so that, if the proposed Arrangement is approved, payment for your
Common Shares or Intrawest Options can be sent to you as soon as possible
following the implementation of the Arrangement.
If you have any questions, please contact our proxy solicitation agent,
Georgeson Shareholder Communications Canada Inc., toll-free at 1-866-390-5292.
On behalf of Intrawest, we would like to thank you for your continued
support as we prepare to take this important step in Intrawest's history.
Yours very truly,
/s/ Joe S. Houssian
Joe S. Houssian
Chairman and Chief Executive Officer
/s/ Gordon H. MacDougall
Gordon H. MacDougall
Director of Intrawest
INTRAWEST CORPORATION
NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS
NOTICE IS HEREBY GIVEN that a special meeting (the "MEETING") of holders
("SHAREHOLDERS") of common shares (the "COMMON SHARES") and holders
("OPTIONHOLDERS" and, together with Shareholders, the "SECURITYHOLDERS") of
options (the "INTRAWEST OPTIONS") to acquire Common Shares of Intrawest
Corporation (the "CORPORATION" or "INTRAWEST") will be held commencing at 10:00
a.m. (Vancouver time) on Tuesday, October 17, 2006 in the Ballroom of The
Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver, British Columbia,
for the following purposes:
1. to consider, pursuant to an interim order of the Supreme Court of
British Columbia dated September 19, 2006 (the "INTERIM ORDER") and,
if deemed advisable, to pass, with or without variation, resolutions
(the "ARRANGEMENT RESOLUTIONS") to approve an arrangement (the
"ARRANGEMENT") under section 192 of the Canada Business Corporations
Act involving the Corporation, its shareholders and optionholders,
Wintergames S.a.r.l. ("PARENT"), a Luxembourg company that is
indirectly owned by 18 private equity funds managed by Fortress
Investment Group LLC or one of its affiliates, and its wholly-owned
subsidiary, Wintergames Acquisition ULC ("ACQUISITIONCO"), involving,
among other things, (a) the acquisition by Acquisitionco of all of
the outstanding Common Shares for US$35.00 in cash for each Common
Share and (b) the transfer by the Optionholders to the Corporation of
all of the outstanding Intrawest Options in exchange for a cash
amount per Optionholder equal to (i) the product of the number of
Common Shares underlying the Intrawest Options held by such
Optionholder and US$35.00, less (ii) the aggregate exercise price
payable under such Intrawest Options by the Optionholder to acquire
the Common Shares underlying such Intrawest Options, net of
applicable withholdings, all as more particularly described in the
accompanying management information circular of the Corporation (the
"CIRCULAR"); and
2. to transact such further business as may properly come before the
Meeting or any adjournment or postponement thereof.
The Board of Directors of the Corporation has fixed the close of business
on September 18, 2006 as the record date for determining Securityholders who are
entitled to receive notice of and vote at the Meeting. Only Securityholders
whose names have been entered in the registers of Intrawest on the close of
business on that date are entitled to receive notice of and to vote at the
Meeting.
The Arrangement and the Arrangement Resolutions are described in the
Circular and the full text of the Arrangement Resolutions is set out in Appendix
A to the Circular. The Circular, forms of proxy and a form of Letter of
Transmittal that can be used by Shareholders accompany this Notice of Meeting. A
form of Letter of Transmittal that can be used by Optionholders will be provided
separately to Optionholders.
Registered Shareholders and Optionholders unable to attend the Meeting in
person are requested to complete, date, sign and return in the envelope provided
for that purpose the white form of proxy in the case of Registered Shareholders
and the green form of proxy in the case of Optionholders. To be used at the
Meeting, proxies must be received by the Corporation's transfer agent, CIBC
Mellon Trust Company, 1066 West Hastings Street, Suite 1600, The Oceanic Plaza,
Vancouver, British Columbia, Canada, V6E 3X1 (Attention: Proxy Department)
before 5:00 p.m. (Vancouver time) on Friday, October 13, 2006 or, in the case of
any adjournment or postponement of the Meeting, no later than 48 hours before
the date of the reconvened Meeting. Non-Registered Shareholders of the
Corporation should carefully follow the voting instructions received from the
Corporation or their intermediary.
Pursuant to the Interim Order, Registered Shareholders have a right to
dissent in respect of the Arrangement Resolutions and to be paid an amount equal
to the fair value of their Common Shares. This right is described in the
Circular. The dissent procedures require that a Registered Shareholder who
wishes to dissent must send to Intrawest a written notice of objection to the
Arrangement Resolutions (i) at Suite 800, 200 Burrard Street, Vancouver, British
Columbia, Canada, V6C 3L6 (Attention: General Counsel) or (ii) by facsimile
transmission to 604-669-0605 (Attention: General Counsel), to be received not
later than 5:00 p.m. (Vancouver time) on Monday, October 16, 2006 (or 5:00 p.m.
(Vancouver time) on the day that is one business day immediately preceding any
adjourned or postponed Meeting), and must otherwise strictly comply with the
dissent procedures described in the Circular. FAILURE TO COMPLY STRICTLY WITH
THESE DISSENT PROCEDURES MAY RESULT IN THE LOSS OR UNAVAILABILITY OF THE RIGHT
TO DISSENT. See the section entitled "DISSENTING SHAREHOLDERS' RIGHTS" in the
Circular and Appendix G to the Circular. Beneficial owners of Common Shares
registered in the name of an intermediary who wish to dissent should
be aware that ONLY REGISTERED SHAREHOLDERS ARE ENTITLED TO DISSENT AND,
ACCORDINGLY, THEY NEED TO CONTACT SUCH INTERMEDIARY IN ORDER TO EXERCISE DISSENT
RIGHTS.
Dated at Vancouver, British Columbia on September 20, 2006.
By Order of the Board of Directors,
/s/ Joe S. Houssian
Joe S. Houssian
Chairman and Chief Executive Officer
TABLE OF CONTENTS
NOTICE TO SECURITYHOLDERS IN THE U.S..... 1
CURRENCY................................. 1
CAUTIONARY STATEMENT WITH RESPECT TO 1
FORWARD-LOOKING STATEMENTS.............
INFORMATION CONTAINED IN THIS CIRCULAR... 2
SUMMARY OF MANAGEMENT INFORMATION 3
CIRCULAR...............................
The Arrangement........................ 3
Recommendation of the Board............ 3
Reasons for the Arrangement............ 3
Fairness Opinion....................... 5
Arrangement Mechanics.................. 5
Sources of Funds for the Arrangement... 5
Superior Proposals..................... 6
Non-Solicitation Obligations of 6
Intrawest...........................
Conditions to the Arrangement Becoming 6
Effective...........................
Court Approval......................... 6
Regulatory Matters..................... 6
Closing................................ 7
Termination of the Arrangement 7
Agreement...........................
Termination Fees....................... 7
Reimbursement of Expenses.............. 7
Meeting of Securityholders............. 7
Dissenting Shareholders' Rights........ 7
Intrawest, Fortress, Fortress Funds, 8
Acquisitionco and Parent............
Certain Tax Considerations of the 8
Arrangement.........................
INFORMATION CONCERNING THE MEETING AND 9
VOTING.................................
THE ARRANGEMENT.......................... 14
Background to the Arrangement 14
Agreement...........................
Recommendation of the Board............ 18
Reasons for the Arrangement............ 18
Fairness Opinion....................... 21
Required Securityholder Approval....... 21
Arrangement Mechanics.................. 22
Interests of Senior Management and 24
Others in the Arrangement...........
Intentions of Intrawest Directors and 29
Officers............................
Sources of Funds for the Arrangement... 29
Notes Offers........................... 30
OTHER TERMS OF THE ARRANGEMENT 31
AGREEMENT..............................
Conditions Precedent to the 31
Arrangement.........................
Representations and Warranties......... 32
Covenants of Intrawest................. 32
Covenants of Acquisitionco............. 36
Covenants of Intrawest Regarding Non- 36
Solicitation........................
Consideration of Alternative 37
Transactions........................
Right to Match......................... 37
Termination Fees....................... 38
Expense Reimbursement.................. 39
Termination Rights..................... 39
Pre-Acquisition Reorganizations........ 40
PRINCIPAL LEGAL MATTERS.................. 41
Court Approval of the Arrangement and 41
Completion of the Arrangement.......
Regulatory Matters..................... 41
Canadian Securities Law Matters........ 43
Stock Exchange Delisting and Reporting 43
Issuer Status.......................
Judicial Developments.................. 43
DISSENTING SHAREHOLDERS' RIGHTS.......... 44
INFORMATION CONCERNING INTRAWEST......... 47
Principal Shareholders................. 47
Auditors and Audit Committee........... 47
Documents Incorporated by Reference.... 47
INFORMATION CONCERNING FORTRESS, 48
ACQUISITIONCO AND PARENT...............
INTRAWEST MARKET PRICE AND TRADING VOLUME 48
DATA...................................
CERTAIN TAX CONSIDERATIONS FOR 50
SHAREHOLDERS...........................
Certain Canadian Federal Income Tax 50
Considerations......................
Certain U.S. Federal Income Tax 52
Considerations......................
Optionholders.......................... 55
LEGAL MATTERS............................ 55
ADDITIONAL INFORMATION................... 55
QUESTIONS AND FURTHER ASSISTANCE......... 55
APPROVAL OF INTRAWEST.................... 55
CONSENT OF GOLDMAN, SACHS & CO........... 56
CONSENT OF MCCARTHY TETRAULT LLP......... 56
GLOSSARY OF TERMS........................ 57
APPENDIX A ARRANGEMENT RESOLUTIONS....... A-1
APPENDIX B ARRANGEMENT AGREEMENT......... B-1
APPENDIX C PLAN OF ARRANGEMENT........... C-1
APPENDIX D FAIRNESS OPINION OF GOLDMAN, D-1
SACHS & CO.............................
APPENDIX E INTERIM ORDER................. E-1
APPENDIX F NOTICE OF APPLICATION FOR F-1
FINAL ORDER............................
APPENDIX G SECTION 190 OF THE CANADA G-1
BUSINESS CORPORATIONS ACT..............
INTRAWEST CORPORATION
MANAGEMENT INFORMATION CIRCULAR
THIS CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY AND ON BEHALF OF THE MANAGEMENT OF INTRAWEST CORPORATION (THE "CORPORATION"
OR "INTRAWEST"). THE ACCOMPANYING FORM OF PROXY IS FOR USE AT THE MEETING AND AT
ANY ADJOURNMENT OR POSTPONEMENT THEREOF AND FOR THE PURPOSES SET FORTH IN THE
ACCOMPANYING NOTICE OF MEETING. A GLOSSARY OF CERTAIN TERMS USED IN THIS
CIRCULAR CAN BE FOUND ON PAGES 57 TO 63 OF THIS CIRCULAR.
NOTICE TO SECURITYHOLDERS IN THE U.S.
Intrawest is a corporation existing under the laws of Canada. The
solicitation of proxies and the transaction contemplated in this Circular
involve securities of a Canadian issuer and are being effected in accordance
with Canadian corporate and securities laws. The proxy solicitation rules under
the U.S. Securities Exchange Act of 1934, as amended, are not applicable to
Intrawest or this solicitation and therefore this solicitation is not being
effected in accordance with U.S. securities laws. Securityholders should be
aware that disclosure requirements under Canadian laws may be different from
such requirements under U.S. securities laws. Securityholders should also be
aware that requirements under Canadian laws may differ from requirements under
U.S. corporate and securities laws relating to U.S. corporations.
The enforcement by investors of civil liabilities under U.S. federal
securities laws may be affected adversely by the fact that Intrawest exists
under the laws of Canada and Acquisitionco exists under the laws of the Province
of Alberta, that some or all of their respective officers and directors are not
residents of the U.S. and that all or a substantial portion of their respective
assets may be located outside the U.S. You may not be able to sue a Canadian
company or its officers or directors in a Canadian court for violations of U.S.
securities laws. It may be difficult to compel a Canadian company and its
affiliates to subject themselves to a judgment by a U.S. court.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY ANY SECURITIES
REGULATORY AUTHORITY NOR HAS ANY SECURITIES REGULATORY AUTHORITY PASSED UPON THE
FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENCE.
Certain information concerning tax consequences of the Arrangement for
Shareholders who are U.S. taxpayers is set forth in "Certain Tax Considerations
for Shareholders -- Certain Canadian Federal Income Tax Considerations --
Shareholders Not Resident in Canada" and "Certain Tax Considerations for
Shareholders -- Certain U.S. Federal Income Tax Considerations." Shareholders
should be aware that the transactions contemplated herein may have tax
consequences both in Canada and in the U.S. Such consequences may not be
described fully herein.
CURRENCY
All currency amounts referred to in this Circular are expressed in U.S.
dollars, unless otherwise indicated. On September 18, 2006, the Bank of Canada
noon exchange rate was $0.8952 for C$1.00.
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS
This Circular contains or incorporates forward-looking information based on
the best estimates of Intrawest with respect to the current operating
environment. These forward-looking statements are related to, but not limited
to, Intrawest's operations, anticipated financial performance, business
prospects and strategies. Forward-looking information typically contains
statements with words such as "anticipate," "believe," "expect," "plan,"
"guidance," "judgment" or similar words suggesting future outcomes. There is
significant risk that Intrawest's predictions and other forward-looking
statements will not prove to be accurate. Such forward-looking statements are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from future results expressed, projected or implied
by such forward-looking statements. Such factors include, but are not limited
to, Intrawest's ability to implement its business strategies, seasonality,
weather conditions, competition, general economic conditions, world events,
currency fluctuations and other risks detailed in Intrawest's Annual Information
Form dated September 20, 2006 starting at page 42 in the section entitled "Risk
Factors." Readers are cautioned not to
1
place undue reliance on forward-looking information because it is possible that
predictions, forecasts, projections and other forms of forward-looking
information will not be achieved by Intrawest. In addition to other factors and
matters contained or incorporated in this document, Intrawest believes the
following factors could cause actual results to differ materially from those
discussed in the forward-looking statements: failure to satisfy the conditions
to complete the Arrangement, including the receipt of the required shareholder,
court or regulatory approvals; the occurrence of any event, change or other
circumstances that could give rise to the termination of the Arrangement
Agreement; the failure to complete the Arrangement for any other reason; and the
amount of the costs, fees, expenses and charges relating to the Arrangement.
Intrawest disclaims any intention or obligation to update or revise any such
forward-looking statements, whether as a result of new information, future
events or otherwise.
INFORMATION CONTAINED IN THIS CIRCULAR
No person has been authorized to give information or to make any
representations in connection with the Arrangement other than those contained or
incorporated by reference in this Circular and, if given or made, any such
information or representations should not be relied upon in making a decision as
to how to vote on the Arrangement Resolutions or be considered to have been
authorized by Intrawest, Fortress, Acquisitionco or Parent.
This Circular does not constitute an offer to buy, or a solicitation of an
offer to sell, any securities, or the solicitation of a proxy, by any person in
any jurisdiction in which such an offer or solicitation is not authorized or in
which the person making such an offer or solicitation is not qualified to do so
or to any person to whom it is unlawful to make such an offer or solicitation.
SECURITYHOLDERS SHOULD NOT CONSTRUE THE CONTENTS OF THIS CIRCULAR AS LEGAL,
TAX OR FINANCIAL ADVICE AND SHOULD CONSULT WITH THEIR OWN PROFESSIONAL ADVISORS
AS TO THE RELEVANT LEGAL, TAX, FINANCIAL OR OTHER MATTERS IN CONNECTION
HEREWITH.
2
SUMMARY OF MANAGEMENT INFORMATION CIRCULAR
The following is a summary of the contents of this Circular. This summary
is provided for convenience only and should be read in conjunction with, and is
qualified in its entirety by, the more detailed information appearing or
referred to elsewhere in this Circular, including the Appendices and documents
incorporated by reference herein. Certain capitalized words and terms used in
this summary and the Circular are defined in the Glossary of Terms found on
pages 57 to 63.
THE ARRANGEMENT
Pursuant to the Arrangement, among other things, (a) the Common Shares will
be transferred by the Shareholders to Acquisitionco for $35.00 per Common Share,
(b) the Intrawest Options will be transferred by the holders thereof to
Intrawest in exchange for a cash amount per holder equal to (i) the product of
the number of Common Shares underlying Intrawest Options held by such holder and
$35.00, less (ii) the aggregate exercise price payable under such Intrawest
Options by the holder to acquire the Common Shares underlying such Intrawest
Options, and (c) DSUs and RSUs (as more fully described herein) will be
cancelled upon payment by Intrawest to the holders thereof of $35.00 per DSU and
RSU; in each case net of applicable withholdings. See "The Arrangement --
Arrangement Mechanics." If the Arrangement Resolutions are approved by the
Securityholders at the Meeting and all of the other conditions to closing of the
Arrangement are satisfied or waived, the Arrangement will be implemented by way
of a court-approved plan of arrangement under the CBCA.
As at the close of business on September 18, 2006, there were outstanding
49,066,926 Common Shares and Intrawest Options to purchase an aggregate of
2,823,600 Common Shares.
RECOMMENDATION OF THE BOARD
THE BOARD HAS UNANIMOUSLY DETERMINED THAT THE ARRANGEMENT IS IN THE BEST
INTERESTS OF INTRAWEST AND IS FAIR TO THE SHAREHOLDERS AND UNANIMOUSLY
RECOMMENDS THAT THE SECURITYHOLDERS VOTE FOR THE ARRANGEMENT RESOLUTIONS. SEE
"THE ARRANGEMENT -- RECOMMENDATION OF THE BOARD."
REASONS FOR THE ARRANGEMENT
In reaching its decision to approve the Arrangement Agreement and to
recommend to Securityholders that they vote for the Arrangement Resolutions, the
Board consulted with management of Intrawest and obtained advice from its
financial and legal advisors. The Board carefully considered all aspects of the
Arrangement Agreement and the Arrangement and considered a number of factors in
concluding that the Arrangement is in the best interests of Intrawest and is
fair to Shareholders, including the following:
- the price to be paid for each Common Share under the Arrangement
represents a substantial premium to the historic trading prices for the
Common Shares including (i) a premium of approximately 20% over $29.12
per share, being the closing trading price of the Common Shares on the
NYSE on February 27, 2006, the last trading day on the NYSE prior to
Intrawest's public announcement of its intention to review its strategic
options, and (ii) a premium of approximately 32% over $26.51 per share,
being the closing trading price of the Common Shares on the NYSE on
August 10, 2006, the last trading day on the NYSE prior to the public
announcement of the proposed Arrangement;
- the fact that the Arrangement is the result of a publicly disclosed
strategic review process conducted by Intrawest over a six-month period,
that included an extensive investigation of third-party interest in
transactions with Intrawest, as well as initiatives that Intrawest
itself could undertake;
- the determination by the Board that the Arrangement is superior to all
other proposals received by Intrawest pursuant to the strategic review
process and is superior to the other possible strategic alternatives
developed by Intrawest management to maximize shareholder value as part
of this process;
- the Fairness Opinion to the Board to the effect that, as of the date of
the opinion and based on and subject to the assumptions, limitations and
qualifications set forth therein, the consideration to be received by
Shareholders under the Arrangement Agreement was fair from a financial
point of view to the Shareholders. See "The Arrangement -- Fairness
Opinion;"
3
- the advice received by the Board from Capital West Partners regarding
the process undertaken by Goldman Sachs and management of Intrawest in
connection with the Arrangement and the range of values that might be
attached to the other possible strategic alternatives developed by
Intrawest management;
- the financial aspects of the Arrangement, including the facts that the
consideration to be received by the Securityholders is to be paid in
cash, the obligations of Acquisitionco and Parent under the Arrangement
Agreement are not subject to a financing condition and that financing
commitments obtained by Acquisitionco should provide Acquisitionco with
sufficient resources to finance the transactions contemplated under the
Arrangement Agreement;
- the evaluation by the Board of other possible strategic alternatives to
maximize shareholder value, and the perceived risks to Intrawest
associated with achieving any of these strategic alternatives;
- the potential disadvantages of a sale of a principal business unit of
Intrawest compared to the sale of the entire company;
- the Arrangement Agreement allows Intrawest to consider other Acquisition
Proposals, to change its recommendation to the Intrawest Securityholders
in certain circumstances and to terminate the Arrangement Agreement to
enter into a Superior Proposal (subject to payment of the Termination
Fee of $60 million), and other terms and conditions, including the
representations, warranties and covenants of Intrawest, Parent and
Acquisitionco, the reasonable restrictions on the conduct of Intrawest's
business until completion of the Arrangement and the conditions to the
respective obligations of the parties, are reasonable, in the judgment
of Intrawest, and the product of extensive negotiations between the
parties;
- the Arrangement Resolutions must, subject to the approval of the Court,
be approved by not less than two-thirds of the votes cast on the
Arrangement Resolutions by Securityholders, and the fact that if a
higher offer is made to Shareholders prior to the Meeting,
Securityholders are free to support such a higher offer and vote against
the Arrangement Resolutions (subject to payment of the Termination Fee
of $60 million in certain circumstances);
- the Arrangement must be approved by the Court, which will consider,
among other things, the fairness and reasonableness of the Arrangement
to Shareholders; and
- the right that will be provided to Registered Shareholders to dissent.
The Board also considered a number of potential adverse factors relating to
the Arrangement, including:
- the risks to Intrawest if the Arrangement is not completed in a timely
manner, or at all, resulting in uncertainty which might result in
Intrawest's strategic partners, lenders and others delaying or deferring
decisions concerning Intrawest;
- the fact that Parent and Acquisitionco are both newly formed entities
with limited assets;
- if the Arrangement Agreement is terminated and the Board decides to seek
another acquisition transaction, there can be no assurance that
Intrawest will be able to find a party willing to pay an equivalent or
more attractive price than the consideration to be paid under the
Arrangement;
- the fact that the Arrangement will be a taxable transaction to
Shareholders; and
- the limitations contained in the Arrangement Agreement on Intrawest's
ability to solicit additional interest from third parties,
Acquisitionco's right to match a Superior Proposal, and the requirement
to pay the Termination Fee of $60 million may discourage other parties
from offering to acquire the Common Shares.
In reaching its determination, the Board also considered and evaluated,
among other things:
- current industry, economic and market conditions and trends; and
- the fact that some of Intrawest's directors and officers have interests
in the Arrangement and may have circumstances that are different from,
or in addition to, those of Intrawest Securityholders generally, as
described under "The Arrangement -- Interests of Senior Management and
Others in the Arrangement."
See "The Arrangement -- Reasons for the Arrangement."
4
FAIRNESS OPINION
Goldman Sachs has delivered a fairness opinion to the Board to the effect
that, as of the date of the opinion and based on and subject to the assumptions,
limitations and qualifications set forth therein, the consideration to be
received by Shareholders pursuant to the Arrangement Agreement was fair from a
financial point of view to such Shareholders. The full text of the Fairness
Opinion is attached as Appendix D to this Circular. Shareholders should read the
Fairness Opinion carefully in its entirety for a description of the assumptions
made, procedures followed, matters considered and limitations on the review
undertaken. The opinion was provided to the Board in connection with the Board's
evaluation of the Arrangement and does not constitute a recommendation to
Shareholders as to how Shareholders should vote with respect to the Arrangement.
See "The Arrangement -- Fairness Opinion."
ARRANGEMENT MECHANICS
Pursuant to the Plan of Arrangement, upon the Arrangement becoming
effective, the following transactions, among others, will occur in the order and
at the times set out in the Plan of Arrangement:
- all of the Intrawest Options granted and outstanding immediately prior
to the Effective Time will be automatically transferred by the holders
thereof to Intrawest without any act or formality on its or their part
in exchange for a cash amount equal to the excess, if any, of (a) the
product of the number of Common Shares underlying Intrawest Options held
by the holder and $35.00, less (b) the aggregate exercise price payable
under such Intrawest Options by the holder to acquire the Common Shares
underlying such Intrawest Options (or, if the exercise price of such
Intrawest Options under the terms of such Intrawest Options is expressed
in Canadian currency, the U.S. dollar equivalent of such exercise price
determined by using the Exchange Rate);
- all Common Shares outstanding immediately prior to the Effective Time,
other than Common Shares held by a Dissenting Shareholder who is
entitled to be paid the fair value of its Common Shares, will be and be
deemed to be transferred by the Shareholders to Acquisitionco for $35.00
in cash per Common Share;
- all Common Shares held by Dissenting Shareholders in respect of which
the holders have exercised Dissent Rights and not withdrawn their notice
of dissent will be deemed to have been transferred to Acquisitionco and
will be cancelled and cease to be outstanding and such holders will
cease to have any rights as Shareholders other than the right to be paid
the fair value of their Common Shares; and
- all vested and unvested DSUs and RSUs will be deemed to be vested, and
will without any further action by the holders of the DSUs and RSUs be
cancelled and terminated by Intrawest and each holder thereof will be
entitled to receive from Intrawest, in exchange therefor, $35.00 in cash
per DSU and RSU, and each of the Intrawest DSU Plans, the Performance
RSU Agreement and the Restricted Share Unit Agreement will be cancelled.
In addition, each of the Intrawest Share Purchase Plans will be
cancelled;
in each case net of applicable withholdings.
See "The Arrangement -- Arrangement Mechanics."
In order to receive the cash consideration for the Common Shares or
Intrawest Options described above, a Securityholder must complete, sign, date
and return the appropriate Letter of Transmittal in accordance with the
instructions set out therein. The form of Common Share Letter of Transmittal is
being sent to Shareholders with this Circular. The form of Option Letter of
Transmittal will be sent separately to Optionholders by Intrawest.
SOURCES OF FUNDS FOR THE ARRANGEMENT
Under the terms of the Arrangement and related transactions, an aggregate
amount of approximately $2.9 billion, including transaction costs, is expected
to be paid to acquire or repay outstanding Intrawest indebtedness (including the
outstanding Intrawest Notes), acquire all of the Common Shares (assuming no
Shareholders exercise their Dissent Rights) and Intrawest Options and satisfy
all outstanding DSUs and RSUs. Acquisitionco, directly or indirectly, intends to
finance the amounts payable with debt and equity financing as contemplated by
the Commitment Letter and the Equity Commitment Letter, respectively. See "The
Arrangement -- Sources of Funds for the Arrangement."
5
SUPERIOR PROPOSALS
The Board is permitted to consider a Superior Proposal under certain
conditions. Acquisitionco is entitled to a five-Business Day period within which
to exercise a right to match any Superior Proposal. If the Board accepts a
Superior Proposal, Intrawest will be required to pay to Parent the Termination
Fee of $60 million. See "Other Terms of the Arrangement Agreement --
Consideration of Alternative Transactions."
NON-SOLICITATION OBLIGATIONS OF INTRAWEST
In the Arrangement Agreement, Intrawest has agreed not to, directly or
indirectly, among other things, solicit, initiate, knowingly facilitate or
encourage any inquiry, proposal or offer relating to or constituting an
Acquisition Proposal from any person. See "Other Terms of the Arrangement
Agreement -- Covenants of Intrawest Regarding Non-Solicitation."
CONDITIONS TO THE ARRANGEMENT BECOMING EFFECTIVE
Implementation of the Arrangement is subject to conditions being satisfied
or waived by one or both of Intrawest and Parent by the Effective Date,
including:
- that the representations and warranties of Intrawest, Parent and
Acquisitionco contained in the Arrangement Agreement are true and
correct in all respects as of the Effective Date (except for breaches by
Intrawest that do not, individually or in the aggregate, have a Material
Adverse Effect on Intrawest and breaches by Parent and Acquisitionco
that individually or in the aggregate do not prevent or materially delay
the consummation of the transactions contemplated in the Arrangement
Agreement or significantly impair the ability of Parent or Acquisitionco
to perform its obligations under the Plan of Arrangement);
- performance by Intrawest, Parent and Acquisitionco of specified
covenants and agreements;
- all Appropriate Regulatory Approvals having been obtained or concluded
or, in the case of waiting or suspensory periods, expired or been
terminated;
- the absence of any Law that makes the Arrangement illegal or otherwise
directly or indirectly enjoins, restrains or otherwise prohibits
consummation of the Arrangement or other transactions contemplated by
the Arrangement Agreement; and
- there will not exist or have occurred (or been threatened) any change
(or any condition, event or development involving a prospective change)
that, individually or in the aggregate, has had, or would reasonably be
expected to have, a Material Adverse Effect on Intrawest.
See "Other Terms of the Arrangement Agreement -- Conditions Precedent to
the Arrangement."
COURT APPROVAL
The Arrangement requires approval by the Court. Prior to the mailing of
this Circular, Intrawest obtained the Interim Order, which provides for the
calling and holding of the Meeting, the Dissent Rights and other procedural
matters. A copy of the Interim Order is attached as Appendix E to this Circular.
Subject to the approval of the Arrangement Resolutions by Securityholders at the
Meeting and all Appropriate Regulatory Approvals being obtained or concluded,
the hearing in respect of the Final Order is currently scheduled to take place
on October 24, 2006.
At the hearing, the Court will consider, among other things, the fairness
and reasonableness of the Arrangement. The Court may approve the Arrangement in
any manner the Court may direct, subject to compliance with any terms and
conditions the Court deems fit. See "Principal Legal Matters -- Court Approval
of the Arrangement and Completion of the Arrangement."
REGULATORY MATTERS
The Arrangement is conditional upon the filing of all required
notifications, the receipt of all required approvals and the satisfaction of
other regulatory requirements, or the expiration of applicable waiting periods,
under the Competition Act (Canada) and the HSR Act. The Arrangement is also
conditional upon approval under the Investment Canada Act. See "Principal Legal
Matters -- Regulatory Matters."
6
CLOSING
The Arrangement Agreement provides, in effect, that the closing of the
Arrangement Agreement transactions is to occur on the second Business Day after
satisfaction or waiver of the conditions to closing. The closing is currently
expected to occur some time in October 2006.
TERMINATION OF THE ARRANGEMENT AGREEMENT
Intrawest and Parent may agree in writing to terminate the Arrangement
Agreement at any time prior to the Effective Time. In addition, either Intrawest
or Parent may terminate the Arrangement Agreement at any time prior to the
Effective Time if certain specified events occur. See "Other Terms of the
Arrangement Agreement -- Termination Rights."
TERMINATION FEES
The Arrangement Agreement provides that Intrawest will pay to Parent, in
certain circumstances, the Termination Fee of $60 million, less any amounts
actually paid by Intrawest to Parent for reimbursement of expenses (as described
below), including if the Arrangement Agreement is terminated by Intrawest in
connection with its acceptance of a Superior Proposal. The Arrangement Agreement
also provides that Parent and Acquisitionco will pay to Intrawest the
Termination Fee of $60 million if the Arrangement Agreement is terminated by
Intrawest or Parent in certain circumstances. See "Other Terms of the
Arrangement Agreement -- Termination Fees."
REIMBURSEMENT OF EXPENSES
The Arrangement Agreement also provides that Intrawest will pay to Parent
reasonable documented expenses of Parent and Acquisitionco incurred in
connection with the transactions contemplated by the Arrangement Agreement (up
to a maximum of $10 million in certain circumstances) if the Arrangement
Agreement is terminated in certain circumstances. See "Other Terms of the
Arrangement Agreement -- Expense Reimbursement."
MEETING OF SECURITYHOLDERS
The Meeting will be held commencing at 10:00 a.m. (Vancouver time) on
Tuesday, October 17, 2006 in the Ballroom of The Fairmont Waterfront Hotel, 900
Canada Place Way, Vancouver, British Columbia. The purpose of the Meeting is to
consider the Arrangement Resolutions.
The approval of the Arrangement Resolutions will require the affirmative
vote of at least two-thirds of the votes cast by Securityholders present in
person or represented by proxy at the Meeting, including at least two-thirds of
the votes cast on the Arrangement Resolutions by Shareholders present in person
or represented by proxy at the Meeting. In addition, the Arrangement Resolutions
will require the affirmative vote of at least a simple majority of the votes
cast by Shareholders present in person or represented by proxy at the Meeting,
excluding the votes attached to Common Shares that are beneficially owned or
over which control or direction is exercised by Joe S. Houssian, Intrawest's
Chairman and Chief Executive Officer. See "The Arrangement -- Required
Securityholder Approval" and "Principal Legal Matters -- Canadian Securities Law
Matters."
Securityholders of record at the close of business on September 18, 2006
will be entitled to attend and vote at the Meeting or any adjournment or
postponement thereof.
DISSENTING SHAREHOLDERS' RIGHTS
Registered Shareholders are entitled to exercise Dissent Rights by
providing written notice to Intrawest at or before 5:00 p.m. (Vancouver time) on
October 16, 2006 (or on the day that is one Business Day immediately preceding
any adjourned or postponed Meeting) in the manner described under the heading
"Dissenting Shareholders' Rights." If a Registered Shareholder dissents, and the
Arrangement is completed, the Dissenting Shareholder is entitled to be paid by
Acquisitionco the fair value of its Dissenting Common Shares as of the close of
business on the day before the day the Arrangement Resolutions are adopted. This
amount may be the same as, more than or less than the $35.00 in cash per Common
Share offered under the Arrangement. Registered Shareholders should carefully
read the section in this Circular entitled "Dissenting Shareholders' Rights" if
they wish to exercise Dissent Rights. See "Dissenting Shareholders' Rights."
7
INTRAWEST, FORTRESS, FORTRESS FUNDS, ACQUISITIONCO AND PARENT
Intrawest Corporation. Intrawest is one of the world's leading destination
resort and adventure-travel companies. The company has a network of nine
mountain resorts throughout North America, including Whistler Blackcomb, a host
venue for the 2010 Winter Olympic and Paralympic Games. Intrawest owns a 15%
interest in Mammoth Mountain in California, 100% of Canadian Mountain Holidays
Inc., a leader in the heli-skiing industry, and a 67% interest in Abercrombie &
Kent Group of Companies, S.A., a leader in luxury adventure travel. The
Intrawest network also includes Sandestin Golf and Beach Resort in Florida and
Club Intrawest -- a private resort club with nine locations throughout North
America. Intrawest develops real estate at its resorts and at other locations
across North America and in Europe.
Fortress. Fortress Investment Group LLC is a leading global investment and
asset management firm with approximately $23 billion in equity capital under
management. Fortress is headquartered in New York, and its affiliates have
offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Rome, San Diego, Sydney
and Toronto.
Fortress manages capital for a diverse group of investors including
approximately 300 leading pension funds, endowments and foundations, financial
institutions, funds of funds and high net worth individuals.
Fortress Funds. The Fortress Funds are 18 private equity funds that are
managed by Fortress Investment Group LLC or by an affiliate of Fortress
Investment Group LLC. The Fortress Funds primarily make long-term investments in
cash-flowing businesses and asset portfolios in North America and Western
Europe. These funds have grown to become leading private equity funds by
acquiring businesses and building them in partnership with management. The
Fortress Funds focus on acquiring cash-flowing asset-based businesses that offer
(i) downside protection in the form of tangible collateral and diversified cash
flows, (ii) upside potential from improvements to the operations, and (iii)
opportunities for growth and strategic development of the underlying businesses.
Acquisitionco. Acquisitionco is an Alberta unlimited liability company
owned by Parent.
Parent. Parent is a Luxembourg company owned by the Fortress Funds.
CERTAIN TAX CONSIDERATIONS OF THE ARRANGEMENT
The following is a brief summary only of the Canadian and U.S. income tax
considerations under "Certain Tax Considerations for Shareholders." Shareholders
should read carefully the information under "Certain Tax Considerations for
Shareholders" which qualifies the summary set forth below. Shareholders should
consult their own tax advisors to determine the particular tax consequences to
them of the Arrangement. No advance income tax rulings have been sought or
obtained with respect to any of the transactions described in this Circular.
CANADIAN TAX CONSIDERATIONS
Generally, a Shareholder who is a Canadian resident for the purposes of the
Tax Act and who holds Common Shares as capital property will realize a capital
gain (or a capital loss) equal to the amount by which the cash received by such
Shareholder for the Common Shares under the Arrangement, net of any reasonable
costs of disposition, exceeds (or is less than) the adjusted cost base to the
holder of such Common Shares.
Generally, a Shareholder who is not a Canadian resident for purposes of the
Tax Act whose Common Shares do not constitute "taxable Canadian property" for
purposes of the Tax Act will not be subject to tax under the Tax Act on any gain
realized on the disposition of such Common Shares for cash under the
Arrangement.
See "Certain Tax Considerations for Shareholders -- Certain Canadian
Federal Income Tax Considerations."
U.S. TAX CONSIDERATIONS
A Shareholder who is a "U.S. Holder" will recognize gain or loss equal to
the difference, if any, between (a) the amount of cash received in exchange for
the U.S. Holder's Common Shares in the Arrangement, and (b) the U.S. Holder's
adjusted tax basis in such Common Shares. Unless certain rules applicable to
"passive foreign investment companies" apply, such gain or loss will be a
capital gain or loss if the U.S. Holder holds such Common Shares as capital
assets (as defined for U.S. tax purposes). See "Certain Tax Considerations for
Shareholders -- Certain U.S. Federal Income Tax Considerations."
OPTIONHOLDERS
Optionholders should consult their own tax advisors with respect to the
Canadian and U.S. federal income tax consequences of the Arrangement having
regarding to their own particular circumstances.
8
INFORMATION CONCERNING THE MEETING AND VOTING
FREQUENTLY ASKED QUESTIONS ON VOTING AND THE ARRANGEMENT
Q: WHO IS SOLICITING MY PROXY?
A: YOUR PROXY IS BEING SOLICITED BY MANAGEMENT OF INTRAWEST. This Circular is
furnished in connection with that solicitation. It is expected that the
solicitation will be made primarily by mail, but proxies may also be
solicited personally or by telephone or other communication by directors,
officers and employees of Intrawest without special compensation. Georgeson
Shareholder Communications Canada Inc. ("GEORGESON") is acting as
Intrawest's proxy solicitation agent, for which it will be paid a fee of up
to approximately Cdn. $125,000, plus a "per call" fee for each telephone
call made by Shareholders to Georgeson and reimbursement of Georgeson's
costs and expenses in connection with the solicitation. The total cost of
the solicitation will be borne by Intrawest.
Q: WHAT AM I VOTING ON?
A: You are being asked to consider and vote on the Arrangement Resolutions
approving the Arrangement that, among other things, and if all other
conditions are satisfied or waived, will result in the acquisition by
Acquisitionco of all of the outstanding Common Shares and the acquisition
by Intrawest of all of the outstanding Intrawest Options.
Q: WHAT WILL I RECEIVE IN THE ARRANGEMENT?
A: If the Arrangement is completed, you will be entitled to receive $35.00 in
cash for each outstanding Common Share that you own as of the Effective
Date of the Arrangement. If you are an Intrawest Optionholder, you will be
entitled to receive the difference between $35.00 and the applicable
exercise price in respect of each Common Share underlying each Intrawest
Option you hold as of the Effective Date, net of applicable withholdings.
Cash payments will be made net of applicable withholdings and are payable
in U.S. dollars.
Q: AM I ENTITLED TO RECEIVE NOTICE OF THE MEETING AND ATTEND THE MEETING?
A: Yes, if you were a Securityholder as of the close of business on September
18, 2006, which is the record date for the Meeting. All such
Securityholders are entitled to receive notice of, attend and be heard at
the Meeting.
Q: AM I ENTITLED TO VOTE?
A: Yes, if you were a Securityholder as of the close of business on September
18, 2006, you are entitled to one vote per Common Share held or Common
Share underlying any Intrawest Option held. As at the close of business on
September 18, 2006, there were outstanding 49,066,926 Common Shares and
Intrawest Options to purchase 2,823,600 Common Shares.
Q: WHAT VOTE IS REQUIRED TO APPROVE THE ARRANGEMENT RESOLUTIONS?
A: The Arrangement Resolutions must be passed by at least two-thirds of the
votes cast at the Meeting, including by at least two-thirds of the votes
cast by Shareholders at the Meeting.
Q: HOW DOES INTRAWEST'S BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A: The Board has unanimously determined that the Arrangement is in the best
interests of Intrawest and is fair to the Shareholders and recommends that
Shareholders vote FOR the Arrangement Resolutions. See "The Arrangement --
Recommendation of the Board."
Q: HOW CAN I VOTE MY COMMON SHARES OR INTRAWEST OPTIONS?
A: You can vote your Common Shares or Intrawest Options by either attending
and voting at the Meeting or, if you cannot attend the Meeting, by having
your Common Shares or Intrawest Options voted by proxy. The manner in which
you exercise your vote of your Common Shares depends on whether you are a
Registered or Non-Registered Shareholder:
- You are a Registered Shareholder if you have a share certificate
registered in your name.
- You are a Non-Registered Shareholder if your Common Shares are
registered in the name of an Intermediary (for example, a broker, a
trustee, a financial institution or other nominee) or the name of a
clearing agency of which the Intermediary is a participant.
9
VOTING BY ATTENDING THE MEETING
If you are a Registered Shareholder (or an Optionholder), you are entitled
to attend the Meeting and cast your vote in person.
If you are a Non-Registered Shareholder, you are entitled to attend the
Meeting and cast your vote in person, provided you have submitted a
properly executed voting instruction form ("VIF") or proxy, inserting your
name in the blank space provided and returning it in the envelope provided.
When you arrive at the Meeting, advise the registration staff that you are
a proxy appointee. If you have received a voting instruction form, please
follow the instructions on the form.
VOTING BY PROXY OR VOTING INSTRUCTION FORM
How you vote depends on whether you are a Registered Shareholder (or an
Optionholder) or a Non-Registered Shareholder.
1. VOTING BY PROXY -- REGISTERED SHAREHOLDERS (OR OPTIONHOLDERS)
To be valid, proxies must be signed, dated and either deposited with the
Transfer Agent of Intrawest, CIBC Mellon Trust Company, 1066 West Hastings
Street, Suite 1600, The Oceanic Plaza, Vancouver, British Columbia, Canada,
V6E 3X1 (Attention: Proxy Department) before 5:00 p.m. (Vancouver time) on
Friday, October 13, 2006 or, in the event the Meeting is adjourned or
postponed, no later than 48 hours before the date the adjourned Meeting is
reconvened or the postponed Meeting is convened (the "PROXY DEPOSIT
DEADLINE"). An undated but executed proxy will be deemed to be dated the
date of mailing by or on behalf of Intrawest of the enclosed form of proxy.
If you hold both Common Shares and Intrawest Options, you must complete and
submit both applicable proxy forms.
2. VOTING BY PROXY -- NON-REGISTERED SHAREHOLDERS
In accordance with the requirements of Canadian Securities Administrators
National Instrument 54-101 -- Communication with Beneficial Owners of
Securities of a Reporting Issuer ("NI 54-101"), Intrawest is both directly
delivering the Meeting Materials to certain Non-Registered Shareholders and
distributing copies of the Meeting Materials to clearing agencies and
Intermediaries for onward distribution to Non-Registered Shareholders.
Intermediaries are required to forward Meeting Materials to Non-Registered
Shareholders unless a Non-Registered Shareholder has waived the right to
receive them. Very often, Intermediaries will use service companies to:
- be given a form of proxy that has already been signed by the Intermediary
(typically by a facsimile, stamped signature) which is restricted as to
the number of securities beneficially owned by the Non-Registered
Shareholder but which is otherwise uncompleted. This form of proxy need
not be signed by the Non-Registered Shareholder and the Non-Registered
Shareholder who wishes to submit a proxy should properly complete the
form of proxy and deposit it with the Transfer Agent as described above;
or
- more typically, be given a VIF, which must be completed, signed and
returned to the Intermediary by the Non-Registered Shareholder in
accordance with the directions on the VIF (which may in some cases permit
the completion of the VIF by telephone or Internet).
There are two kinds of beneficial owners -- those who object to their name
being made known to the issuers of securities that they own (called OBOs
for "Objecting Beneficial Owners") and those who do not object to the
issuers of the securities they own knowing who they are (called NOBOs for
"Non-Objecting Beneficial Owners"). Intrawest has decided to take advantage
of those provisions of NI 54-101 that permit it to directly deliver
proxy-related materials to its NOBOs. As a result, NOBOs can expect to
receive a VIF from the Transfer Agent. These VIFs are to be completed and
returned to the Transfer Agent in the envelope provided or by facsimile.
The Transfer Agent will tabulate the results of the VIFs it receives from
NOBOs and will provide appropriate instructions with respect to the Common
Shares represented by the VIFs it receives.
The Meeting Materials are being sent to both Registered and Non-Registered
Shareholders. If you are a Non-Registered Shareholder and Intrawest or its
agent has sent these materials directly to you, your name and address and
information about your holdings of Common Shares have been obtained in
accordance with applicable securities regulatory requirements from the
Intermediary holding Common Shares on your behalf.
10
By choosing to send these materials to you directly, Intrawest has assumed
responsibility for (i) delivering these materials to you, and (ii)
executing your proper voting instructions. Please return your VIF as
specified in the VIF.
The purpose of these procedures is to permit Non-Registered Shareholders to
direct the voting of the Common Shares they beneficially own. Should a
Non-Registered Shareholder who receives either a VIF from the Corporation
wish to attend and vote at the Meeting in person (or have another person
attend and vote on behalf of the Non-Registered Shareholder), the
Non-Registered Shareholder should complete and return the VIF that you
should have received, including inserting the Non-Registered Shareholder's
(or such other person's) name in the blank space provided. If you are an
OBO, you should receive or have already received from your Intermediary
either a VIF or a proxy form. Intermediaries have their own mailing
procedures and provide their own instructions. These procedures may allow
providing voting instructions by telephone, on the Internet, by mail or by
fax. If you wish to vote in person at the Meeting you should follow the
procedure in the directions and instructions provided by or on behalf of
your Intermediary and insert your name in the space provided on the request
for voting instructions or proxy form or request a form of legal proxy that
will grant you the right to attend the Meeting and vote in person.
NON-REGISTERED SHAREHOLDERS SHOULD CAREFULLY FOLLOW THE INSTRUCTIONS
RECEIVED FROM THE CORPORATION OR THEIR INTERMEDIARIES OR SERVICE COMPANIES
TO ENSURE THAT THEIR COMMON SHARES ARE VOTED.
Q: WHO VOTES MY INTRAWEST SECURITIES?
A: Each person named in the enclosed forms of proxy is a director of Intrawest
and will represent you at the Meeting. You can appoint some other person to
represent you at the Meeting by inserting the name of the person proposed
in the blank space provided in the appropriate enclosed form of proxy or by
completing another acceptable form of proxy. Such other person need not be
a Securityholder. If you are not an individual, you must have the proxy
executed by a duly authorized officer or properly appointed attorney.
Securityholders who require assistance in completing their proxy or proxies
should contact Georgeson toll-free at 1-866-390-5292.
Q: HOW WILL MY SECURITIES BE VOTED IF I RETURN A PROXY?
A: By completing and returning a proxy, you are authorizing the person named
in the proxy to attend the Meeting and vote your Securities on each item of
business on which you are entitled to vote, according to your instructions.
IF THERE ARE NO INSTRUCTIONS WITH RESPECT TO YOUR PROXY, YOUR SECURITIES
WILL BE VOTED FOR THE ARRANGEMENT RESOLUTIONS.
The person you appoint to vote on your behalf may vote as he or she sees
fit on any amendment or variation to any of the matters identified in the
Notice of Special Meeting and any other matters that may properly be
brought before the Meeting. As of September 19, 2006, neither the Board nor
management of Intrawest is aware of any variation, amendment or other
matter to be presented for a vote at the Meeting.
Q: MAY I REVOKE A PROXY?
A: Yes, if you are a Registered Shareholder or Optionholder and have submitted
a proxy, you may revoke it by delivering a duly executed proxy with a later
date or a form of revocation of proxy or other instrument in writing signed
by you or by your attorney authorized in writing (or if you are a
corporation, by a duly authorized officer or attorney). These instruments
can be delivered to the Transfer Agent up to 5:00 p.m. (Vancouver time) on
October 16, 2006, or if the Meeting is adjourned or postponed, no later
than 5:00 p.m. (Vancouver time) on the Business Day preceding the date of
the reconvened Meeting.
Alternatively, you may revoke your proxy and vote in person, by delivering
a form of revocation of proxy or a signed instrument in writing to the
chair of the Meeting at the Meeting or any adjournment or postponement
thereof. You may also revoke your proxy in any other manner permitted by
law.
Only Registered Shareholders have the right to revoke a proxy.
Non-Registered Shareholders who wish to change their vote must, in
sufficient time in advance of the Meeting, arrange for their Intermediaries
to change the vote and, if necessary, revoke their proxy.
Q: IN ADDITION TO THE APPROVAL OF SECURITYHOLDERS, ARE THERE ANY OTHER
APPROVALS REQUIRED FOR THE ARRANGEMENT?
A: Yes, the Arrangement requires the approval of the Court and is also subject
to the receipt of certain anti-trust, competition and other regulatory
approvals in Canada and the U.S.
11
Q: WILL THE COMMON SHARES CONTINUE TO BE LISTED ON THE NYSE AND THE TSX AFTER
THE ARRANGEMENT?
A: No. The Common Shares will be owned by Acquisitionco and will be delisted
from the NYSE and the TSX soon after the Arrangement is completed.
Q: IF I AM A REGISTERED SHAREHOLDER, SHOULD I SEND MY SHARE CERTIFICATES NOW?
A: If you are a Registered Shareholder, you are not required to send your
certificates representing Common Shares to cast your vote validly in
respect of the Arrangement Resolutions. However, you are encouraged to
complete, sign, date and return the enclosed Common Share Letter of
Transmittal so that, if the proposed Arrangement is approved, payment for
your Common Shares can be sent to you as soon as possible following the
implementation of the Arrangement. An Option Letter of Transmittal will be
sent to Optionholders separately and Optionholders are also encouraged to
promptly complete and return such Letter of Transmittal.
The payments to be made under the Arrangement may be reduced by the amount
of any withholding tax required to be deducted and withheld under
applicable Laws.
Interest will not accrue or be payable by Acquisitionco, Parent, Intrawest
or the Transfer Agent to holders of Common Shares (other than Dissenting
Shareholders) or Intrawest Options in respect of consideration payable
under the Arrangement, regardless of any delay in making such payment.
Any use of the mail to transmit certificates for Common Shares or Letters
of Transmittal is at the risk of the relevant Securityholder. If these
documents are mailed, it is recommended that registered mail be used, with
a return receipt requested and with proper insurance obtained.
Q: WHAT IF OWNERSHIP OF SECURITIES HAS BEEN TRANSFERRED AFTER SEPTEMBER 18,
2006?
A: Only persons on the list of Registered Shareholders and Optionholders
prepared by or on behalf of Intrawest as of the close of business on
September 18, 2006 are entitled to vote at the Meeting. However, all
Registered Shareholders and Optionholders at the Effective Time will
participate in the Arrangement.
Q: HOW WILL THE VOTES BE COUNTED?
A: The Transfer Agent counts the proxies, in order to ensure unbiased
counting.
Q: WHEN WILL THE ARRANGEMENT BE IMPLEMENTED?
A: Intrawest, Acquisitionco and Parent will implement the Arrangement when all
of the conditions to closing have been satisfied or waived (where
permitted), but in any event not earlier than October 24, 2006. The closing
is currently expected to occur later in October 2006. Because the
Arrangement is subject to a number of conditions, some of which are beyond
Intrawest's and Acquisitionco's control, the exact timing of implementation
of the Arrangement cannot be predicted.
Q: WHEN CAN I EXPECT TO RECEIVE CONSIDERATION FOR MY COMMON SHARES AND
INTRAWEST OPTIONS?
A: If you hold your Common Shares through a broker, trustee, financial
institution or other nominee, your broker or other nominee will surrender
your Common Shares in exchange for your portion of the consideration
following completion of the Arrangement. As soon as practicable after the
completion of the Arrangement and the receipt by the Depositary (i) from a
Registered Shareholder of a properly completed Common Share Letter of
Transmittal together with your certificates representing Common Shares, or
(ii) from an Optionholder of a properly completed Option Letter of
Transmittal, and all other required documents, the Depositary will pay to
you your portion of the Arrangement payment.
Q: AM I ENTITLED TO DISSENT?
A: Only Registered Shareholders may exercise Dissent Rights. Pursuant to the
Interim Order, Registered Shareholders have a right to dissent in respect
of the Arrangement Resolutions. Registered Shareholders who properly
exercise their Dissent Rights will be entitled to be paid by Acquisitionco
the fair value of their Common Shares. This amount may be the same as, more
than or less than the $35.00 in cash per Common Share offered under the
Arrangement. If you wish to dissent, you must provide written notice to
Intrawest at or before 5:00 p.m. (Vancouver time) on October 16, 2006 (or
on the day that is one Business Day immediately preceding any adjourned or
postponed Meeting) in the manner described under the heading "Dissenting
Shareholders' Rights." It is important that you comply strictly with this
requirement, otherwise your Dissent
12
Rights may not be recognized. You must also comply strictly with the other
requirements of the dissent procedure.
Q: WHAT ARE THE TAX CONSEQUENCES OF THE ARRANGEMENT TO ME?
A: Your receipt of the consideration under the Arrangement in exchange for
your Securities will be a taxable transaction. For further information on
certain tax consequences of the Arrangement for Shareholders, see "Certain
Tax Considerations for Shareholders." Your tax consequences will depend on
your particular situation. You should consult your own tax advisor for a
full understanding of the applicable federal, provincial, state, local,
foreign and other tax consequences to you resulting from the Arrangement.
Optionholders should consult their own tax advisors with respect to the tax
consequences of the Arrangement having regard to their own particular
circumstances.
Q: WHO CAN I CONTACT IF I HAVE QUESTIONS?
A: Securityholders who have additional questions about the Arrangement,
including the procedures for voting, should contact Georgeson toll-free at
1-866-390-5292. Securityholders who have questions about deciding how to
vote should contact their professional advisors.
13
THE ARRANGEMENT
BACKGROUND TO THE ARRANGEMENT AGREEMENT
The Arrangement Agreement is the result of arm's length negotiations
between representatives of Intrawest and Fortress and their respective advisors.
The following is a summary of the events leading up to the negotiation of the
Arrangement Agreement and the meetings, negotiations, discussions and actions
between the parties that preceded the execution and public announcement of the
Arrangement Agreement.
REVIEW OF STRATEGIC OPTIONS
Management of Intrawest and the Board regularly review the strategic
alternatives available to Intrawest to maximize shareholder value. In connection
with its review, management and the Board have considered how best to align
Intrawest's leisure and travel business and its resort-focused real estate
development and sales business. In 2004, in connection with such review,
Intrawest management consulted with a number of investment banking firms,
including Goldman Sachs, regarding possible shareholder value maximization
alternatives. In addition, from time to time in recent years management of
Intrawest has been informally approached by a number of parties indicating that,
if Intrawest were to entertain proposals for business combinations, such parties
would be interested in discussing potential transactions. At various Board
meetings in 2004 and 2005 a number of investment banking firms, as well as
Intrawest management, made presentations or reported to the Board regarding
possible strategic alternatives for Intrawest. Over the course of these
meetings, the Board reviewed management's assessment of Intrawest's current
position, including Intrawest's strategic plans, financial results and prospects
and the risks inherent in the businesses conducted by Intrawest
At a regularly scheduled meeting of the Board on February 6, 2006, the
Board received a presentation from Goldman Sachs which included preliminary
advice regarding strategic alternatives available to Intrawest, including
approaching potentially interested parties in relation to a possible merger or
acquisition transaction, or sale of significant assets of Intrawest, internal
reorganizations and leveraging transactions involving a return of capital and
possible strategic alliances or similar transactions. On February 24, 2006,
Intrawest formally engaged Goldman Sachs to assist Intrawest with its review of
strategic alternatives. At a Board meeting held on February 27, 2006, at which
certain members of Intrawest management were present, the Board considered
generally various possible strategic alternatives that Intrawest could pursue to
maximize the value of Intrawest for its Shareholders, including a capital
structure review, strategic partnerships and business combinations. The Board
determined that Intrawest should publicly announce that it was initiating a
review of strategic options, prepare a confidential information memorandum which
could be delivered to interested parties and open a data room to facilitate a
review on a confidential basis of documents and information by interested
parties. On February 28, 2006, Intrawest issued a news release announcing that
it had initiated a review of strategic options available to Intrawest for
enhancing shareholder value.
Following the February 28, 2006 news release, Intrawest, in consultation
with Goldman Sachs, prepared a confidential information memorandum for parties
interested in acquiring Intrawest or one of its significant business units, or
pursuing a strategic alliance or other similar transaction. In addition,
Intrawest began to assemble information that could be reviewed by interested
parties. Commencing in March 2006, Goldman Sachs approached a broad range of
potentially interested strategic and financial purchasers. Between February 28,
2006 and May 8, 2006, Goldman Sachs contacted approximately 100 parties that
might be interested in acquiring Intrawest or one of its significant business
units.
Intrawest entered into confidentiality and standstill agreements with 65
parties and a confidential information memorandum was sent to all such parties.
During this period, Goldman Sachs, with the assistance of Intrawest
management, held meetings and communicated with the third parties that had
entered into confidentiality and standstill agreements with Intrawest.
Commencing April 15, 2006, some of those parties were given access to the
Intrawest data room which was supplemented from time to time until August 10,
2006 with additional documents and confidential information relating to the
business, operations and plans of Intrawest.
At meetings of the Board held on March 6, 2006 and March 20, 2006, the
Board was updated by Intrawest management with respect to Goldman Sachs'
progress in contacting and canvassing potentially interested parties and the
discussions with such parties.
14
On or about April 28, 2006, Goldman Sachs, on behalf of Intrawest,
requested some of the parties that had entered into confidentiality and
standstill agreements and had received the confidential information memorandum
to submit non-binding proposals for a transaction involving Intrawest. These
parties were provided with access to additional information and documents in the
Intrawest data room. In response to this request, Goldman Sachs received
multiple expressions of interest from interested parties regarding transactions
involving all of the Common Shares and various proposals to acquire one or more
of Intrawest's assets or business units.
In March 2006, Intrawest had also engaged Capital West Partners to provide
advice in relation to the strategic review process. The Board held a meeting on
May 8, 2006 at which representatives of Goldman Sachs and Capital West Partners,
as well as certain members of Intrawest management, were present. At the
meeting, Intrawest management and Goldman Sachs reported to the Board regarding
the status of the communications Goldman Sachs was having with interested
parties on behalf of Intrawest. Goldman Sachs made a presentation, and
management made recommendations, to the Board as to the next steps in relation
to the review of strategic options. The Board also discussed possible internal
restructuring and reorganization alternatives.
Based on the review and recommendations by Goldman Sachs and management's
assessment of the expressions of interest received by Goldman Sachs, commencing
May 15, 2006, Intrawest provided some of the interested parties with access to
more detailed due diligence material. During the period between May 18, 2006 and
June 7, 2006, some of the parties that had expressed an interest in a
transaction involving Intrawest received detailed presentations from Intrawest's
management, including presentations from senior management of each of
Intrawest's principal business units. Representatives of Goldman Sachs also
participated in, and representatives of Capital West Partners were present
during some of, the management presentations. Gordon MacDougall, Lead Director
of Intrawest, was also present at one of these presentations at the request of
the Board. During these presentations, and through access to the Intrawest data
room and otherwise, Intrawest presented the interested parties with detailed
information regarding its operations and significant additional due diligence
materials. Goldman Sachs regularly reported between Board meetings to Intrawest
management and Mr. MacDougall concerning the progress of talks with interested
parties.
On or about June 2, 2006, Goldman Sachs, on behalf of Intrawest, requested
some of the parties that had expressed an interest in a transaction with
Intrawest to provide more definitive written proposals. The request for more
definitive proposals set out, among other things, certain terms and conditions
that Intrawest required to be included in any proposal.
At a meeting of the Board held on June 9, 2006, the Board formed a Special
Committee consisting of Gordon MacDougall, David King, Marti Morfitt, Paul
Novelly and Bernard Roy to assist the Board in connection with the strategic
review, to oversee and review the process being undertaken by Intrawest and its
financial advisors and to consider and review alternatives to a sale of
Intrawest. The mandate of the Special Committee included authority to engage
independent legal counsel and financial advisors. At the end of the June 9, 2006
Board meeting the Special Committee met, considered various law firms that might
advise it and determined to engage Farris, Vaughn, Wills & Murphy LLP as
independent legal counsel to the Special Committee.
On June 14, 2006, the Special Committee held its initial full meeting
without any members of Intrawest management present. The Special Committee
discussed its mandate. At the invitation of the Special Committee, a
representative of Goldman Sachs joined the meeting to describe the process that
Goldman Sachs was undertaking on behalf of Intrawest and the discussions that
were taking place with various interested parties. Mr. MacDougall was appointed
Chair of the Special Committee. At its meeting held on September 11, 2006, the
Board approved the payment of a fee of $20,000 to each member of the Special
Committee for his or her services as such, other than to Mr. MacDougall, as
Chair of the Special Committee, for whom the payment of a fee of $35,000 was
approved.
On June 26, 2006, the Board held a meeting to provide directors with an
update regarding the strategic review process. Representatives of management,
Goldman Sachs, Capital West Partners and legal counsel to Intrawest and the
Special Committee also attended the meeting. Intrawest management and Goldman
Sachs provided an update regarding the status of discussions that were taking
place with various interested parties. In addition, Goldman Sachs reported that
it had provided these parties with a draft form of an arrangement agreement
prepared by McCarthy Tetrault LLP, Intrawest's legal counsel, and invited each
potential bidder to submit a mark-up of the arrangement agreement with its
indicative offer to reflect the terms on which the bidder would be prepared to
proceed with an acquisition transaction. The draft form of arrangement agreement
set forth customary
15
representations, warranties, covenants (including non-solicitation and
"fiduciary out" provisions), closing conditions and termination rights and
remedies, but did not include pricing terms or termination fee thresholds.
In response to this invitation, on or about July 13, 2006, Goldman Sachs
received several indications of interest with respect to various transactions,
including one from Fortress.
On July 13, 2006, the Board met again with management to receive
information regarding the strategic review process and the status of the
proposals that Intrawest had received from the third parties potentially
interested in a transaction involving all of the shares of Intrawest, or one of
its principal business units. At this meeting, the Board reviewed the further
steps that it would take in its consideration of the strategic review process
and the proposals that might be received.
On July 17, 2006 and July 18, 2006, the Board met to review and consider
the offers received and other strategic alternatives potentially available to
provide value to Shareholders. Representatives of Capital West Partners,
McCarthy Tetrault LLP and Farris, Vaughn, Wills & Murphy LLP were also present
at these meetings, and representatives of Goldman Sachs were present for
portions of the meetings. Goldman Sachs provided a summary of the financial
terms and an assessment of each of the offers received, including whether
financing would likely be available for the proposed transaction and conditions
applicable to the proposal.
At this meeting management delivered to the Board the presentations that
had been made to the third parties who had made proposals to Intrawest. These
presentations included a review and analysis of the business, the results of
operations and the prospects for the business. During the course of the
presentations, senior management responded to questions asked by members of the
Board.
At this meeting the Board also received a presentation and detailed
analysis from Intrawest management regarding other strategic alternatives that
Intrawest could potentially pursue, including a possible sale by Intrawest of
only its real estate assets. The Board also had considerable discussion
regarding the proposal from Fortress and the strategy for negotiation of the
terms of its proposal, including the proposed price. After considering and
evaluating the proposals received, in conjunction with advice from Goldman Sachs
and Capital West Partners about the terms of the proposal received from
Fortress, and from legal counsel for Intrawest and the Special Committee, the
Board concluded that, subject to discussion and negotiation with Fortress
regarding certain terms of its proposal, including confirmation that the
financing required by Fortress to complete the proposed transaction was
available to it, the proposal received from Fortress was significantly more
favourable to Intrawest than the proposals received from the other interested
parties. The Board authorized Goldman Sachs, together with the Chair of the
Special Committee, to contact Fortress to seek clarification regarding certain
terms and issues relating to the Fortress proposal, including the financing for
the proposal, and authorized Intrawest management and legal counsel to proceed
with negotiations with Fortress for the transaction being proposed by Fortress,
which would include extensive additional due diligence and negotiation of the
definitive terms and conditions of the Arrangement Agreement. At the same time,
the Board authorized and instructed management of Intrawest to continue working
on alternatives Intrawest could pursue to maximize value for Shareholders.
On July 20, 2006, the Chair of the Special Committee, together with
representatives of Goldman Sachs, contacted Mr. Wesley R. Edens, the Chief
Executive Officer of Fortress, to discuss the proposal made by Fortress.
On July 21, 2006, the Board held a meeting to review the progress of the
strategic review process and the discussions with Fortress. Representatives of
Intrawest management, legal counsel to Intrawest and legal counsel to the
Special Committee also attended the meeting.
During the period between July 18, 2006 and August 10, 2006, Fortress and
its advisors continued their due diligence investigations of Intrawest and its
business, including reviewing public and non-public documents, meetings with
various members of Intrawest management and visiting Intrawest's head office in
Vancouver, British Columbia and various Intrawest resorts, facilities and
development projects in Canada, the United States and elsewhere. Concurrently,
discussions continued on legal documentation in relation to the transaction.
On July 28, 2006, the Board held a meeting at which representatives of
management, Capital West Partners and legal counsel to the Special Committee
were present. The meeting was primarily held to discuss the strategic
alternatives to a sale of Intrawest being considered by Intrawest management.
Management reviewed financial considerations relating to the sale of Intrawest's
real estate assets or continuing with the business operating as a single entity.
The Board discussed, among other matters, the risks and benefits of the
strategic alternatives presented by management compared to the entire company
transaction then under discussion with Fortress, and compared the
16
entire company transaction with the values that might be anticipated to be
obtained for Shareholders in connection with the strategic alternatives.
Management also reviewed the risks and opportunities relating to maintaining the
status quo and the strategic alternatives, and responded to questions from
members of the Board.
On July 31, 2006, the Special Committee met with its legal counsel and
General Counsel for Intrawest. General Counsel for Intrawest provided an update
to the Special Committee regarding the status of the negotiations with Fortress
in relation to the Arrangement Agreement and issues that were being negotiated.
The Special Committee confirmed the formal engagement of Capital West Partners
to provide advice regarding the transaction being proposed by Fortress and the
strategic alternatives developed by management.
APPROVAL OF THE ARRANGEMENT AGREEMENT
On August 4, 2006, the Special Committee met to review a presentation by
Capital West Partners. Also present, by invitation, were the other members of
the Board, legal counsel to the Special Committee, legal counsel to Intrawest
and certain members of Intrawest management. Representatives of Capital West
Partners made a presentation summarizing its analysis regarding the transaction
proposed by Fortress, the process undertaken by Goldman Sachs and management of
Intrawest, and the alternative strategies developed by management. Legal counsel
to Intrawest summarized the principal terms of the Arrangement Agreement and the
issues remaining subject to negotiation, and members of the Special Committee
and other Board members were provided an opportunity to question counsel and
Intrawest management on the definitive terms of the Arrangement Agreement as
well as the issues being negotiated. Legal counsel to Intrawest and legal
counsel to the Special Committee provided advice to the directors regarding the
duties and responsibilities of the Board in considering and deliberating on the
Arrangement Agreement.
On August 7, 2006, the Board met to consider further the proposal received
from Fortress and the negotiations regarding the terms and conditions of the
Arrangement Agreement. The Board received a briefing from legal counsel and
Intrawest management on the status of the negotiations with Fortress. Goldman
Sachs, Capital West Partners and legal counsel for Intrawest and legal counsel
for the Special Committee provided advice to the Board regarding the proposed
transaction and issues that remained subject to negotiation.
On August 9, 2006, the Board met to consider further the proposal received
from Fortress and the negotiations regarding the terms and conditions of the
Arrangement Agreement. The Board again received a briefing from legal counsel
and Intrawest management on the terms and conditions of the Arrangement
Agreement and the status of the negotiations with Parent and Acquisitionco.
Drafts of the Equity Commitment Letter and the Commitment Letter had been
received and were being reviewed by management and the advisors to Intrawest.
Goldman Sachs, Capital West Partners and legal counsel to Intrawest and legal
counsel to the Special Committee provided advice to the Board regarding the
proposed transaction and issues remaining subject to negotiation, including the
amount of the termination fee. Goldman Sachs reviewed and analyzed, among other
matters, the financial aspects of the proposed transaction with Fortress.
Goldman Sachs delivered to the Board its oral opinion, subsequently confirmed by
delivery of the written opinion dated August 10, 2006, to the effect that, as of
the date of its opinion and based upon and subject to the assumptions,
limitations and qualifications set forth therein, the consideration to be
received by Shareholders pursuant to the Arrangement Agreement, being $35.00 in
cash per Common Share, was fair from a financial point of view to such
Shareholders. During the presentation and rendering of their opinion,
representatives of Goldman Sachs responded to questions from members of the
Board confirming or clarifying their understanding of the opinion of and the
analysis performed by Goldman Sachs.
Following further discussion and deliberation, the Board concluded that the
Arrangement was in the best interests of Intrawest and fair to the holders of
Common Shares and authorized the execution and delivery of the Arrangement
Agreement. In determining whether to approve the Arrangement, the Board
considered, among other things, the advice received from the legal counsel to
Intrawest, legal counsel to the Special Committee and Intrawest's financial
advisors, the Fairness Opinion and the other factors set forth herein and the
reasons for the Arrangement as set forth under "Reasons for the Arrangement."
On August 9, 2006 and August 10, 2006, legal counsel to Intrawest and legal
counsel to the Special Committee and Fortress continued to negotiate the terms
and conditions of the Arrangement Agreement.
The Lead Director, the Chairman and Chief Executive Officer and the
President and Chief Operating Officer of Intrawest met on August 10, 2006 to
approve changes to the Arrangement Agreement, including the insertion of
17
the $35.00 share consideration and amount of $60 million as the amount of the
termination fee payable in certain events under the Arrangement Agreement.
EQUITY AND DEBT COMMITMENT LETTERS
On or about August 9, 2006, Intrawest management and legal counsel to
Intrawest received and reviewed drafts of the Equity Commitment Letter and the
Commitment Letter in order to determine whether and on what terms the financing
required to complete the Arrangement would be available to Parent and
Acquisitionco and requested certain changes to such commitment letters that
became the subject of negotiation. On August 10, 2006, Fortress delivered to
Intrawest executed copies of the Equity Commitment Letter and the Commitment
Letter which, collectively, provide for the advance, on fulfilment of the terms
and subject to the conditions contained therein, of the funds necessary for the
completion of the Arrangement.
EXECUTION AND DELIVERY OF THE ARRANGEMENT AGREEMENT
The Arrangement Agreement was executed and delivered by the parties on
August 10, 2006. Prior to the opening of trading in the Common Shares on August
11, 2006, a joint news release was issued by Intrawest and Fortress announcing
the proposed Arrangement and the execution of the Arrangement Agreement.
RECOMMENDATION OF THE BOARD
THE BOARD HAS UNANIMOUSLY DETERMINED THAT THE ARRANGEMENT IS IN THE BEST
INTERESTS OF INTRAWEST AND THE SHAREHOLDERS AND IS FAIR TO SHAREHOLDERS.
ACCORDINGLY, THE BOARD HAS APPROVED THE ARRANGEMENT AND UNANIMOUSLY RECOMMENDS
THAT THE SECURITYHOLDERS VOTE FOR THE ARRANGEMENT RESOLUTIONS.
REASONS FOR THE ARRANGEMENT
In reaching its decision to approve the Arrangement Agreement and to
recommend to Securityholders that they vote for the Arrangement Resolutions, the
Board consulted with management of Intrawest and obtained advice from the
financial and legal advisors to Intrawest and the Special Committee. The Board
carefully considered all aspects of the Arrangement Agreement and the
Arrangement and considered a number of factors in concluding that the
Arrangement is in the best interests of Intrawest and is fair to Shareholders,
including the following:
- the price to be paid for each Common Share under the Arrangement
represents a substantial premium to the historic trading prices for the
Common Shares including (i) a premium of approximately 20% over $29.12
per share, being the closing trading price of the Common Shares on the
NYSE on February 27, 2006, the last trading day on the NYSE prior to
Intrawest's public announcement of its intention to review its strategic
options, and (ii) a premium of approximately 32% over $26.51 per share,
being the closing trading price of the Common Shares on the NYSE on
August 10, 2006, the last trading day on the NYSE prior to the public
announcement of the proposed Arrangement;
- the fact that the Arrangement is the result of a publicly disclosed
strategic review process conducted by Intrawest over a six-month period,
that included an extensive investigation of third-party interest in
transactions with Intrawest (in which over 100 potential strategic
partners or financial buyers were contacted, of which 65 entered into
confidentiality and standstill agreements with Intrawest and many of
which made proposals to acquire Intrawest or one of its principal
business units), as well as initiatives that Intrawest itself could
undertake;
- the determination by the Board that the Arrangement is superior to all
other proposals received by Intrawest pursuant to the strategic review
process and is superior to the other possible strategic alternatives
developed by Intrawest management to maximize shareholder value;
- the Fairness Opinion to the Board to the effect that, as of the date of
the opinion and based on and subject to the assumptions, limitations and
qualifications set forth therein, the consideration to be received by
Shareholders pursuant to the Arrangement Agreement was fair from a
financial point of view to such Shareholders. See "The Arrangement --
Fairness Opinion";
- the advice received by the Board from Capital West Partners regarding
the process undertaken by Goldman Sachs and management of Intrawest in
the solicitation of proposals for the sale of the Corporation or its
principal business units, the Arrangement and the range of values that
might be attached to the other possible strategic alternatives developed
by Intrawest management;
18
- the financial aspects of the Arrangement including the facts that the
consideration to be received by the Securityholders is to be paid in
cash, that the obligations of Acquisitionco and Parent under the
Arrangement Agreement are not subject to a financing condition and that
the Equity Commitment Letter and the Commitment Letter, which contain
only limited customary conditions, should, subject to the terms thereof,
provide Acquisitionco with sufficient resources to finance the
transactions contemplated under the Arrangement Agreement;
- the evaluation by the Board of other possible strategic alternatives to
maximize shareholder value, and the perceived risks to Intrawest (many
of which are beyond Intrawest's control) associated with achieving any
of these strategic alternatives and the Board's conclusion that none of
these alternatives was reasonably likely to present superior
opportunities for Intrawest, or reasonably likely to create greater
value for Shareholders at this time than the Arrangement;
- the potential disadvantages of a sale of a principal business unit of
Intrawest compared to the sale of the entire company, including the
additional time that would likely be required to complete the sale of a
significant business unit, the potential tax liabilities to Intrawest of
such a transaction, the complexity of separating the significant
business units of Intrawest and the loss of synergies from operating
these business units together;
- the terms and conditions of the Arrangement Agreement that allow
Intrawest, upon compliance with the conditions of the Arrangement
Agreement, to furnish information and to conduct negotiations with other
third parties making an unsolicited proposal to purchase all of the
Common Shares or substantially all of the assets of Intrawest, to change
its recommendation to the Intrawest Securityholders in certain
circumstances and to terminate the Arrangement Agreement to enter into a
Superior Proposal (subject to payment of the Termination Fee);
- the Board's determination that both the Termination Fee and the
circumstances under which it is payable and the requirement to reimburse
Parent and Acquisitionco for certain expenses up to a limit of $10
million (including in the circumstances where the Securityholders fail
to approve the Arrangement Resolutions) are reasonable in the light of
the benefits of the Arrangement Agreement, the process conducted by
Intrawest that resulted in the Arrangement Agreement and commercial
practice;
- the reasonableness of the terms and conditions of the Arrangement
Agreement, including the representations, warranties and covenants of
Intrawest, and Parent and Acquisitionco, the reasonable restrictions on
the conduct of Intrawest's business until completion of the Arrangement
and the conditions to the respective obligations of the parties, the
fact that they were the product of extensive negotiations between
Intrawest and its advisors (including legal counsel to Intrawest and
legal counsel to the Special Committee) and Parent and Acquisitionco and
their advisors, including negotiation of the events potentially
triggering the Termination Fee and the reduction of the termination fee
amount proposed by Fortress;
- the Board's determination, based on certain factors including advice
from Goldman Sachs as to its familiarity with Fortress and the Fortress
Funds and their financial position, as to the commitment and ability of
Acquisitionco and Parent to close the transactions contemplated by the
Arrangement and the likelihood of completion of the Arrangement,
considering the totality of the terms of the Arrangement Agreement,
including the absence of significant closing conditions other than
approval by Intrawest Securityholders of the Arrangement Resolutions,
obtaining of Appropriate Regulatory Approvals and other customary
closing conditions;
- the fact that the Arrangement Resolutions must, subject to the approval
of the Court, be approved by not less than two-thirds of the votes cast
on the Arrangement Resolutions by Securityholders present in person or
represented by proxy at the Meeting and entitled to vote (including by
two-thirds of the votes cast on the Arrangement Resolutions by
Shareholders present in person or represented by proxy at the Meeting
and entitled to vote) and the fact that, if a higher offer is made to
Shareholders prior to the Meeting, Intrawest Securityholders are free to
support such a higher offer and vote against the Arrangement Resolutions
(subject to the payment by Intrawest of a termination fee in certain
circumstances);
- the Arrangement must be approved by the Court, which will consider,
among other things, the fairness and reasonableness of the Arrangement
to Shareholders; and
19
- the right that will be provided to Registered Shareholders to dissent
and apply to Court to have the Court determine the fair value of their
Common Shares.
The Board also considered a number of potential adverse factors relating to
the Arrangement, including:
- the risks to Intrawest if the Arrangement is not completed, in a timely
manner or at all, including the costs to Intrawest in pursuing the
Arrangement and the required devotion of significant management time and
attention to implementing the Arrangement, the diversion of management
attention away from the conduct of Intrawest's business in the ordinary
course, the uncertainty that might result in Intrawest's strategic
partners, lenders and others delaying or deferring decisions concerning
Intrawest, and the uncertainty that current and prospective Intrawest
employees may experience concerning their future roles with Intrawest
following successful completion of the Arrangement, which may adversely
affect Intrawest's ability to attract or retain key management and other
personnel;
- the fact that Parent and Acquisitionco are both newly formed entities
with limited assets and the rights of Intrawest in the event of any
failure by Parent or Acquisitionco to perform may be limited to
Intrawest seeking, as a third-party beneficiary, to exercise rights and
remedies against the Fortress Funds to enforce the Equity Commitment
Letter;
- if the Arrangement Agreement is terminated and the Board decides to seek
another acquisition transaction, there can be no assurance that
Intrawest will be able to find a party willing to pay an equivalent or
more attractive price than the consideration to be paid under the
Arrangement or that Shareholders would be able to receive cash or other
consideration for their Common Shares equal to or greater than the
consideration payable under the Arrangement in any other future
transaction that Intrawest may effect;
- the fact that the Arrangement will be a taxable transaction to
Shareholders and, as a result, taxes generally required to be paid on
any gains that result from receipt of the consideration in the
Arrangement will be accelerated; and
- the limitations contained in the Arrangement Agreement on Intrawest's
ability to solicit additional interest from third parties, and
Acquisitionco's right to match a Superior Proposal, may discourage other
parties from offering to acquire the Common Shares, even if those other
parties might be willing to offer greater value than the consideration
under the Arrangement, as well as the requirement to pay the Termination
Fee to Parent in order to accept a Superior Proposal and the requirement
to reimburse Parent for certain expenses, as described in "Other Terms
of the Arrangement Agreement -- Termination Fees" and "Other Terms of
the Arrangement Agreement -- Expense Reimbursement."
In reaching its determination, the Board also considered and evaluated,
among other things:
- current industry, economic and market conditions and trends; and
- the fact that some of Intrawest's directors and officers have interests
in the Arrangement and may have circumstances that are different from,
or in addition to, those of Intrawest Securityholders generally, as
described under "The Arrangement -- Interests of Senior Management and
Others in the Arrangement."
The foregoing discussion of the information and factors considered by the
Board is not intended to be exhaustive but summarizes the material factors
considered by the Board. The Board collectively reached its unanimous decision
with respect to the Arrangement in light of the factors described above and
other factors that each Board member considered were appropriate. In reaching
its determination to approve and recommend the Arrangement, the Board did not
find it useful or practicable to, and did not, quantify, rank or otherwise
attempt to make any specific assessments of or otherwise assign any relative or
specific weight to the factors that were considered. The Board's determination
and recommendation were made after consideration of all of the factors relating
to the Arrangement and in light of their own knowledge of the business,
financial condition and prospects of Intrawest and were based upon the advice of
the financial and legal advisors to Intrawest and the Special Committee.
Individual directors may have assigned or given different weights to different
factors. The Board was, however, unanimous in its determination that the
Arrangement be approved and in its recommendation that the Securityholders vote
FOR the Arrangement Resolutions.
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FAIRNESS OPINION
Goldman Sachs was retained to act as financial advisor to Intrawest in
connection with, among other things, a potential sale of Intrawest.
At the meeting of the Board on August 9, 2006, Goldman Sachs orally
delivered its Fairness Opinion to the Board (subsequently confirmed in writing
on August 10, 2006) that, as of the date of the opinion and based on and subject
to the assumptions, limitations and qualifications set forth therein, the
consideration to be received by Shareholders pursuant to the Arrangement
Agreement was fair from a financial point of view to such Shareholders.
The Fairness Opinion does not address the relative merits of the
Arrangement as compared to other business strategies or transactions that might
be available with respect to Intrawest or Intrawest's underlying business
decision to effect the Arrangement. The Fairness Opinion does not address any
terms of the Arrangement Agreement or the Plan of Arrangement, except as
specifically set forth in the Fairness Opinion.
In connection with the Fairness Opinion, Goldman Sachs, among other things:
(i) reviewed certain publicly available business and historical financial and
other information relating to Intrawest; (ii) reviewed certain internal
financial analyses and forecasts for Intrawest prepared by management of
Intrawest; (iii) held discussions with members of the senior management of
Intrawest regarding their assessment of the past and current business
operations, financial condition and future prospects of Intrawest; (iv) reviewed
the reported price and trading activity for the Common Shares; (v) compared
certain financial and stock market information for Intrawest with similar
information for certain other companies the securities of which are publicly
traded; (vi) reviewed the financial terms of certain recent business
combinations in the lodging and leisure industry specifically and in other
industries generally; and (vii) performed such other studies and analyses, and
considered such other factors, as it deemed necessary or appropriate.
The full text of the Fairness Opinion, which sets forth, among other
things, assumptions made, procedures followed, matters considered and
limitations on the review undertaken by Goldman Sachs in rendering its opinion,
is attached as Appendix D to this Circular. The Fairness Opinion was provided
for the information and assistance of the Board in connection with its
consideration of the Arrangement. Such opinion does not constitute a
recommendation to any Securityholder as to how such Securityholder should vote
with respect to the Arrangement. Securityholders are urged to read the Fairness
Opinion in its entirety. The summary of this opinion described in this Circular
is qualified in its entirety by reference to the full text of such opinion.
Goldman Sachs has acted as financial advisor to Intrawest in connection
with the Arrangement and will receive a fee for its services that is contingent
upon the completion of the Arrangement. Intrawest has also agreed to reimburse
Goldman Sachs' expenses and to indemnify Goldman Sachs and certain related
persons against certain liabilities in connection with its engagement, including
certain liabilities under securities legislation. In addition, Goldman Sachs has
provided, and currently provides, certain investment banking services to
Intrawest and Fortress and its affiliates and portfolio companies for which
Goldman Sachs has received, and may in the future receive, compensation. In the
ordinary course of business, Goldman Sachs and its affiliates may hold or trade,
for their own accounts and for the accounts of their customers, securities of
Intrawest and the portfolio companies and affiliates of Fortress and,
accordingly, may at any time hold a long or short position in such securities.
REQUIRED SECURITYHOLDER APPROVAL
At the Meeting, Securityholders will be asked to vote to approve the
Arrangement Resolutions. The approval of the Arrangement Resolutions will
require the affirmative vote of at least two-thirds of the votes cast by
Securityholders present in person or represented by proxy at the Meeting,
provided that as part of such approval the Arrangement Resolutions are approved
by at least two-thirds of the votes cast on the Arrangement Resolutions by
Shareholders present in person or represented by proxy at the Meeting. In
addition, the Arrangement Resolutions will require the affirmative vote of at
least a simple majority of the votes cast by Shareholders present in person or
represented by proxy at the Meeting, excluding the votes attached to Common
Shares that are beneficially owned or over which control or direction is
exercised by Joe S. Houssian, Intrawest's Chairman and Chief Executive Officer.
The Arrangement Resolutions must be passed by the requisite two-thirds and
simple majority in order for Intrawest to seek the Final Order and implement the
Arrangement in accordance with the Final Order. Notwithstanding the approval by
Securityholders of the Arrangement Resolutions, Intrawest reserves the right not
to proceed with the Arrangement subject to the terms of the Arrangement
Agreement.
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ARRANGEMENT MECHANICS
The following description is qualified in its entirety by reference to the
full text of the Plan of Arrangement, which is attached as Appendix C to this
Circular. Upon the Arrangement becoming effective, the following transactions,
among others, will occur and will be deemed to occur in the order and at the
times set out in the Plan of Arrangement:
- Intrawest has currently outstanding an aggregate principal amount of
Cdn. $125,000,000 of 6.875% Notes and $575,000,000 of 7.50% Notes, which
Acquisitionco intends to offer to acquire immediately prior to the
Effective Time. See "The Arrangement -- Notes Offers." Under the Plan of
Arrangement, Acquisitionco will be deemed to have entered into an
agreement with Intrawest pursuant to which Acquisitionco will transfer
or cause to be transferred to Intrawest those Intrawest Notes, if any,
then owned by it or any of its subsidiaries and acquired pursuant to an
offer made to all holders of each of the 6.875% Notes and the 7.50%
Notes at substantially the same price as Acquisitionco or any of its
subsidiaries paid for such Notes (the "PURCHASE AMOUNT"), and the
Intrawest Notes that are thereby transferred to Intrawest by
Acquisitionco will be treated as having been repaid and will be
immediately cancelled at such time, in each case without further act or
formality. Intrawest may, in full and absolute satisfaction of the
Purchase Amount, pay the Purchase Amount through the issuance of a
demand promissory note;
- all of the Intrawest Options granted and outstanding immediately prior
to the Effective Time will, without any further action on behalf of any
holder of Intrawest Options, be transferred by the holders thereof to
Intrawest without any act or formality on its or their part in exchange
for a cash amount payable to each holder thereof equal to the excess, if
any, of (a) the product of the number of Common Shares underlying
Intrawest Options held by the holder and $35.00, less (b) the aggregate
exercise price payable under such Intrawest Options by the holder to
acquire the Common Shares underlying such Intrawest Options (or, if the
exercise price of such Intrawest Options under the terms of such
Intrawest Options is expressed in Canadian currency, the U.S. dollar
equivalent of such exercise price determined by using the Exchange Rate
for U.S. dollars), net of applicable withholdings;
- with respect to each Intrawest Option, the holder thereof will cease to
be the holder of such Intrawest Option, will cease to have any rights as
a holder in respect of such Intrawest Option or under the Intrawest
Stock Option Plan and the holder's name will be removed from the
registers of Intrawest Options with respect to such Intrawest Option;
- the Intrawest Stock Option Plan will be cancelled;
- all Common Shares held by Dissenting Shareholders in respect of which
such Dissenting Shareholders have exercised Dissent Rights and not
withdrawn their notice of dissent will be deemed to have been
transferred to Acquisitionco and such holders will cease to have any
rights as Shareholders other than the right to be paid the fair value of
their Common Shares;
- all Common Shares outstanding immediately prior to the Effective Time,
other than Common Shares held by a Dissenting Shareholder who is
entitled to be paid the fair value of its Common Shares, will be and be
deemed to be transferred by the Shareholders to Acquisitionco, free and
clear of any Liens, for $35.00 in cash per Common Share;
- with respect to each Common Share transferred to Acquisitionco described
above (including by Dissenting Shareholders): (a) the holder of each
such Common Share will cease to be the holder of such Common Share and
such holder's name will be removed from the register of Common Shares
with respect to such Common Share; (b) legal and beneficial title to
such Common Share will vest in Acquisitionco and Acquisitionco will be
and be deemed to be the transferee of such Common Share and will be
entered in the register of Common Shares as the sole holder thereof, and
(c) the former holder of such Common Share will cease to have any rights
as a Shareholder in respect of such Common Share;
- notwithstanding the terms of the Intrawest DSU Plans, all vested and
unvested DSUs will be deemed to be vested and will without any further
action by the holders of the DSUs be cancelled and terminated by
Intrawest and each holder thereof will be entitled to receive from
Intrawest, in exchange therefor, $35.00 in cash per DSU, net of
applicable withholdings;
22
- notwithstanding the terms of the Performance RSU Agreement and the
Restricted Share Unit Agreement, all vested and unvested RSUs will be
deemed to be vested and will without any further action by the holder of
the RSUs be cancelled and terminated by Intrawest and the holder thereof
will be entitled to receive from Intrawest, in exchange therefor, $35.00
in cash per RSU, net of applicable withholdings;
- each of the Intrawest DSU Plans will be cancelled;
- each of the Performance RSU Agreement and the Restricted Share Unit
Agreement will be cancelled; and
- each of the Intrawest Share Purchase Plans will be cancelled.
In addition, the Arrangement Agreement provides that, at the election of
Parent, all of the Senior Employee RSUs will be acquired or cancelled by
Intrawest for cash equal to $35.00 per Senior Employee RSU. As at the date of
this Circular, this election has not been exercised. If this election is
exercised, the Arrangement Agreement states that the Plan of Arrangement will be
amended accordingly.
LETTER OF TRANSMITTAL
If you are a Registered Shareholder, you should have received with this
Circular a Common Share Letter of Transmittal printed on blue paper. If you are
an Optionholder, you should receive from Intrawest an Option Letter of
Transmittal printed on yellow paper. In order to receive their portion of the
Intrawest Share Consideration, Registered Shareholders must complete and sign
the Common Share Letter of Transmittal enclosed with this Circular and deliver
it and the other documents required by it to the Depositary in accordance with
the instructions contained in the Common Share Letter of Transmittal. In order
to obtain their portion of the Option Consideration, Optionholders must complete
and sign the Option Letter of Transmittal and deliver it and the other documents
required by it to the Depositary in accordance with the instructions contained
in the Option Letter of Transmittal. In order to obtain the consideration
payable for DSUs or RSUs under the Arrangement, the holders of DSUs or RSUs must
complete and sign the appropriate letter of transmittal that will be made
available by Intrawest to holders of DSUs and RSUs and the other documents
required by such letter of transmittal to the Depositary in accordance with the
instructions contained in the applicable letter of transmittal. You can request
additional copies of the applicable letter of transmittal by contacting the
Depositary. The Common Share Letter of Transmittal and Option Letter of
Transmittal are also available at the website maintained by CDS at www.sedar.com
and at the website maintained by the SEC at www.sec.gov.
The applicable letters of transmittal contain procedural information
relating to the Arrangement and should be reviewed carefully. If you are a
Non-Registered Shareholder, you should carefully follow the instructions from
the Intermediary that holds Common Shares on your behalf in order to submit your
Common Shares.
DELIVERY OF CONSIDERATION
At or prior to the filing of Articles of Arrangement in connection with the
Plan of Arrangement, Acquisitionco will deposit the aggregate Intrawest Share
Consideration with the Depositary and will deposit, on behalf of Intrawest, with
the Depositary the aggregate Option Consideration together with the aggregate
amount required to satisfy the payment obligations of Intrawest to the holders
of DSUs and RSUs.
As soon as practicable following the later of the Effective Date and the
surrender to the Depositary for cancellation of a certificate that immediately
prior to the Effective Time represented one or more Common Shares that were
exchanged under the Arrangement, together with a duly completed and executed
Common Share Letter of Transmittal and such additional documents and instruments
as the Depositary may reasonably require, the holder of such surrendered
certificate(s) will be entitled to receive in exchange therefor, and Parent will
cause the Depositary to deliver to such holder, the payment that such holder has
the right to receive, and the certificate so surrendered shall forthwith be
cancelled. On and after the Effective Time, all certificates that represented
Common Shares immediately prior to the Effective Time will cease to represent
any rights with respect to Common Shares and will only represent the right to
receive the applicable portion of the Intrawest Share Consideration payable
pursuant to the Plan of Arrangement.
As soon as practicable following the later of the Effective Date and the
delivery to the Depositary of a duly completed Option Letter of Transmittal and
such additional documents and instruments as the Depositary may reasonably
require, Acquisitionco will cause the Depositary to deliver, on behalf of
Intrawest, to each holder of
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Intrawest Options a payment representing the net cash payment, if any, payable
to such holder of Intrawest Options in accordance with the provisions of the
Plan of Arrangement.
Any use of mail to transmit certificate(s) for Common Shares or Letters of
Transmittal is at the risk of the relevant Securityholder. If these documents
are mailed, it is recommended that registered mail with return receipt
requested, and with proper insurance, be used.
In the event of a transfer of ownership of Common Shares prior to the
Effective Time that is not registered in the transfer records of Intrawest, a
cheque representing the proper amount of cash may be delivered to the transferee
if the certificate representing such Common Shares is presented to the
Depositary, accompanied by all documents required to evidence and effect such
transfer prior to the Effective Time.
Interest on the consideration payable in connection with the Arrangement
will not accrue or be paid by Intrawest, Parent, Acquisitionco or the Depositary
to holders of Common Shares (other than Dissenting Shareholders), Intrawest
Options, RSUs or DSUs in connection with the Arrangement, regardless of any
delay in making such payment.
The Depositary will act as the agent of persons who are entitled to receive
payment under the Arrangement for the purpose of receiving payment from
Acquisitionco or Intrawest and transmitting payment from Acquisitionco or
Intrawest to such persons, and receipt of payment by the Depositary will be
deemed to constitute receipt of payment by persons entitled thereto.
Unless otherwise directed in the Common Share Letter of Transmittal, the
cheque to be issued pursuant to the Arrangement will be issued in the name of
the Registered Shareholder of the Common Shares deposited. Unless the person who
deposits the certificates representing the Common Shares instructs the
Depositary to hold the cheque for pick up by checking the appropriate box in the
Common Share Letter of Transmittal, cheques payable in U.S. funds will be
forwarded by first class mail to the addresses supplied in the Common Share
Letter of Transmittal. If no address is provided, cheques will be forwarded to
the address of the Shareholder as shown on the register maintained by the
Transfer Agent.
If any Shareholder fails for any reason to surrender to the Depositary for
cancellation the certificates formerly representing Common Shares, together with
such other documents or instruments required to entitle the holder to receive
the cash payment described above, on or before the sixth anniversary of the
Effective Date, such certificates will cease to represent a claim by or interest
of any former Shareholder of any kind or nature. On such anniversary date, all
certificates representing Common Shares and cash to which such former holder was
entitled, together with any entitlements to dividends, distributions and
interest thereon, will be deemed to have been donated and forfeited to
Acquisitionco.
Cheques to be issued pursuant to the Arrangement to Optionholders or
holders of DSUs or RSUs will be issued as directed by Optionholders in the
Option Letter of Transmittal or by holders of DSUs or RSUs in such letter of
transmittal as is delivered to such holders by Intrawest.
Intrawest, Acquisitionco and the Depositary will be entitled to deduct and
withhold from any consideration otherwise payable to a holder of Common Shares,
Intrawest Options, DSUs or RSUs such amounts as Intrawest, Acquisitionco or the
Depositary is required or permitted to deduct and withhold with respect to such
payment under applicable laws.
The Depositary will receive reasonable and customary compensation for its
services in connection with the Arrangement, will be reimbursed for certain out
of pocket expenses and will be indemnified by Intrawest against certain
liabilities under applicable securities laws and expenses in connection
therewith.
INTERESTS OF SENIOR MANAGEMENT AND OTHERS IN THE ARRANGEMENT
In considering the recommendation of the Board with respect to the
Arrangement, Securityholders should be aware that certain members of the Board
and Intrawest's executive and other officers have certain interests in
connection with the Arrangement that may be perceived as conflicts of interest
with respect to the Arrangement. The members of the Board, including the members
of the Special Committee, are aware of these interests and considered them along
with other matters described above.
The directors and officers of Intrawest beneficially own, directly and
indirectly, or exercise control or direction over, in the aggregate 2,053,879
Common Shares, representing approximately 4.0% of the Securities eligible to be
24
voted at the Meeting. All of the Common Shares held by the directors and
officers of Intrawest will be treated in the same fashion under the Arrangement
as Common Shares held by any other Shareholder. The aggregate consideration
payable to the directors and officers of Intrawest under the Arrangement in
respect of their Common Shares will be approximately $71.9 million (before
applicable withholdings).
The directors and officers of Intrawest hold in the aggregate Intrawest
Options entitling them to acquire in the aggregate 2,395,950 Common Shares,
representing approximately 4.6% of the Securities eligible to be voted at the
Meeting. All of the Intrawest Options held by the directors and officers of
Intrawest will be treated in the same manner under the Arrangement as Intrawest
Options held by any other Optionholder. The aggregate consideration payable to
the directors and officers of Intrawest under the Arrangement in respect of
their Intrawest Options, net of the aggregate exercise price in respect of such
Intrawest Options, will be approximately $31.0 million (before applicable
withholdings).
As of September 19, 2006, the directors and executive officers of Intrawest
held in the aggregate 1,621,134 DSUs and RSUs. Assuming that the Arrangement
Agreement becomes effective prior to the end of October 2006, it is anticipated
that, at the Effective Date, the directors and executive officers of Intrawest
will hold in the aggregate approximately 1,625,000 DSUs and RSUs.
Notwithstanding the terms of the Intrawest DSU Plans, the Performance RSU
Agreement and the Restricted Share Unit Agreement, all vested and unvested DSUs
and RSUs will be deemed to be vested pursuant to the Arrangement, and will be
cancelled and terminated by Intrawest and each holder thereof will be entitled
to receive from Intrawest, in exchange therefor, $35.00 in cash per DSU and RSU,
net of applicable withholdings. Based on the assumption referred to above, the
aggregate consideration payable to all directors and executive officers of
Intrawest upon completion of the Arrangement in respect of DSUs and RSUs held by
them will be approximately $56.9 million (before applicable withholdings).
The Arrangement Agreement also provides that, at the election of Parent,
all of the Senior Employee RSUs (which do not form part of the DSUs or RSUs
described above) will be acquired or cancelled by Intrawest for cash equal to
$35.00 per Senior Employee RSU. As at the date of this Circular this election
has not been exercised. If this election is exercised, an additional $0.5
million in the aggregate will be payable to officers of Intrawest in respect of
Senior Employee RSUs held by them.
Each of Joe S. Houssian, Intrawest's Chairman and Chief Executive Officer,
Alex Wasilov, Intrawest's President and Chief Operating Officer, John E. Currie,
Intrawest's Chief Financial Officer, Daniel O. Jarvis, Intrawest's Chief
Corporate Development Officer, Hugh R. Smythe, Intrawest's President, Mountain
Operations, and Michael F. Coyle, Intrawest's Chief Strategy Officer is a party
to an employment agreement with Intrawest under which each of these executives
is entitled to receive severance benefits if the executive's employment with
Intrawest is terminated by the executive following a good faith determination by
the executive that he is unable to carry out the power, authority, functions,
duties or reporting responsibilities attached to his position with Intrawest as
a result of a change in circumstances significantly affecting his position with
Intrawest as a result of or within 24 months after the occurrence of a "change
in control," and in certain other circumstances not related to a "change in
control", including a significant change in the executive's responsibilities
which is not remedied within 30 days after notice thereof. In such event, the
executive will generally receive the following for the severance period (the
severance period being (a) the greater of 36 months or the period commencing the
date of termination and ending 42 months after the occurrence of a "change in
control" for Mr. Houssian, (b) 24 months for Mr. Wasilov, and (c) for all of the
other executive officers referred to above, the greater of 24 months or the
period commencing the date of termination and ending 30 months after the
occurrence of a "change in control"):
- annual base salary and amounts in lieu of the continued opportunity to
earn annual incentive awards (as such annual incentive awards are
described in Intrawest's Annual Information Form dated September 20,
2006 under the section entitled "Report on Executive Compensation --
Annual Incentives," which section is incorporated by reference herein)
plus, in the case of Mr. Wasilov, the additional amount equal to
$1,500,000 less, if the date of termination occurs prior to June 30,
2008, the amount obtained by multiplying $750,000 by the fraction the
numerator of which is the number of days in the period commencing the
day next following the date of termination and ending June 30, 2008 and
the denominator of which is 365;
- continuing rights under all benefit plans and arrangements and other
perquisites in which the executive was entitled to participate or which
the executive was entitled to enjoy immediately prior to the date of
termination (other than disability insurance, any long-term incentive
plan, deferred share unit or other pension or retirement or supplemental
pension plan and any stock option or share purchase plan or
25
arrangement) or, if such participation is not possible, substantially
similar benefits (provided the executive may elect to be paid a lump sum
amount equal to Intrawest's cost of providing such benefits);
- an amount equal to the loss incurred or projected to be incurred by the
executive with respect to the Intrawest Corporation Employee Pension
Plan by reason of the termination of his employment prior to the
expiration of the severance period, as applicable;
- recognition of the severance period as a period of service for the
calculation of pension benefits to which the executive or his spouse
will be entitled under the Intrawest Corporation Designated Executives'
Pension Plan (Non-Registered Portion) (as such plan is described in
Intrawest's Annual Information Form dated September 20, 2006 under the
section entitled "Statement of Executive Compensation -- Executive
Pension Plan," which section is incorporated by reference herein), as
applicable; and
- a lump sum amount equal to the present value of the interest payments
that would be payable on any outstanding loans to the executive under
any share purchase plan or arrangement of Intrawest during the severance
period (or, if applicable, such earlier date on which any such loan
would have matured by its terms if the executive's employment had not
terminated) if interest were payable on such loans at the "prime rate"
of interest of The Bank of Nova Scotia on the date of termination, as
applicable.
In addition to the foregoing, Intrawest has entered into or authorized a
retention agreement with each of Andrew D. Stotesbury, Intrawest's President,
Placemaking, Andrew Voysey, Intrawest's Executive Vice President, Acquisitions,
Sally Dennis, Intrawest's General Counsel, David Blaiklock, Intrawest's Vice
President and Corporate Controller and Ross J. Meacher, Intrawest's Corporate
Secretary and Chief Privacy Officer under which each of such officers is
entitled to receive severance benefits if a "change in control" occurs prior to
July 1, 2007 and the officer's employment with Intrawest is terminated after the
"change in control", either (i) by Intrawest for any reason prior to the expiry
of 12 months after the "change in control" or (ii) by the officer in defined
circumstances that occur after the "change in control," including relocation, a
significant change in power, authority or functions and a reduction in salary or
benefits, within such 12-month period. In such event, the officer will receive
the following for the applicable severance period, which varies between 6 months
and 24 months, depending on the individual:
- a lump sum amount in lieu of salary and the continued opportunity to
earn an annual incentive award;
- a lump sum amount equal to Intrawest's cost of providing continued
participation in the benefit plans and arrangements and other benefits
and perquisites in which the officer was entitled to participate or
which the officer was entitled to enjoy immediately prior to the date of
termination (other than any pension or retirement plan or arrangement or
any stock option or share purchase plan or arrangement); and
- a lump sum equal to the loss incurred or projected to be incurred by the
officer with respect to any pension or retirement plan or arrangement of
which the officer is a member by reason of the termination of the
officer's employment prior to the expiration of the severance period, as
applicable.
None of these officers is required under the employment or retention
agreements to mitigate the amount of any payment provided for by seeking other
employment or otherwise, nor will the amount of any payment or benefit be
reduced by any compensation earned by the individual with another employer or
self-employment. Completion of the Arrangement will constitute a "change in
control" under these agreements.
As part of the Arrangement, Parent and Acquisitionco have required that the
Intrawest LTIP be cancelled and, as described above, the DSUs thereunder be
cancelled and terminated. In addition to entitlement in respect of the DSUs
which are to be cancelled and terminated as part of the Arrangement, the
participants in the Intrawest LTIP have certain entitlements, including certain
termination rights expressed as an additional grant of notional Common Shares,
in respect of which the executive will receive an additional cash payment, for
the reasonable notice period applicable on termination of the executive. The
Arrangement Agreement provides for the continuation of these rights by providing
that, immediately prior to the Effective Time, Intrawest will amend the
employment agreements between Intrawest and each of Messrs. Houssian, Currie,
Jarvis, Smythe and Coyle, in form reasonably acceptable to the respective
executive party thereto (or deliver a written undertaking to each of them to do
so) to provide that in the event of termination of employment of the relevant
executive within 180 days after the Effective Date for any reason whatsoever, or
thereafter if such executive is entitled to severance under such executive's
employment agreement (as described above), Intrawest will pay to such executive,
in addition to all other amounts to which such executive may be entitled under
such executive's employment agreement or otherwise, an amount equal to the
26
product obtained by multiplying $35.00 by the number of notional Common Shares
that such executive would be entitled to pursuant to the Intrawest LTIP in
respect of the reasonable notice period applicable to such executive if the
Intrawest LTIP were in full force and effect at such time and such termination
occurred after June 30, 2006 and prior to July 1, 2007. The reasonable notice
period applicable to each executive is the same as the severance period under
the executive's employment agreement. Intrawest has determined that the
aggregate number of notional Common Shares which may be granted to all of the
foregoing executives collectively in respect of their reasonable notice periods
will range from 487,167 to 575,359 notional Common Shares, in respect of which
they would collectively be paid from $17,050,845 to $20,137,565 depending upon
when termination might occur.
Intrawest may, in recognition of their performance, pay bonuses to certain
officers, other than executive officers, who make a significant contribution to
effecting the transactions contemplated under the Arrangement Agreement. Any
such payments will be made in the discretion of Intrawest senior management.
The officers of Intrawest are also generally entitled to benefits, rights
and payments under Intrawest's various retirement and pension plans. These
benefits arise as normal incidents of employment for the officers of Intrawest
and are not materially altered by the completion of the Arrangement.
Additional information respecting director and executive compensation,
including the Intrawest LTIP, is found in Intrawest's Annual Information Form
dated September 20, 2006 under the sections entitled "Report on Executive
Compensation," "Statement of Executive Compensation," "Compensation of
Directors," "Securities Authorized for Issuance Under Equity Compensation
Plans," and "Indebtedness of Directors and Executive Officers," which sections
are incorporated by reference herein.
A copy of the Annual Information Form can be found on Intrawest's website
at www.Intrawest.com or on SEDAR at www.sedar.com and on EDGAR at www.sec.gov
and is available upon request to the Corporate Secretary of Intrawest.
As is described in the Annual Information Form, Intrawest has a Human
Resources Committee composed entirely of independent directors. The mandate of
the Human Resources Committee includes annually reviewing and determining the
base salary, incentive compensation and long-term compensation of the Chief
Executive Officer and Chief Financial Officer and authorizing, approving,
adopting and overseeing Intrawest's compensation plans and equity-based plans.
The incentive plans described above, and the Intrawest Options, DSUs and RSUs
granted thereunder were not adopted or granted in connection with the
Arrangement. Instead they were adopted and granted by the Human Resources
Committee or the Board as part of the executive compensation strategy and
policies adopted by the Human Resources Committee and reported to Shareholders
annually by the Human Resources Committee in its report on executive
compensation.
INDEMNIFICATION AND INSURANCE
The Arrangement Agreement provides that Intrawest will, and Parent and
Acquisitionco will cause Intrawest and any successor to Intrawest (including any
Surviving Corporation) to, continue and maintain in effect without any gaps,
lapses or reduction in scope or coverage for six years from the Effective Time
policies of directors' and officers' liability insurance providing protection
comparable to the protection provided by the policies maintained by Intrawest
and its subsidiaries that are in effect immediately prior to the Effective Time
and providing protection in respect of claims arising from facts or events that
occurred on or prior to the Effective Time. The Arrangement Agreement also
provides that Parent and Acquisitionco will, after the expiration of such
six-year period, use all commercially reasonable efforts to cause such directors
and officers to be covered under Parent's existing directors' and officers'
insurance policy, if any. Prior to the Effective Time Intrawest may, in the
alternative, at its option, purchase prepaid non-cancellable run-off directors'
and officers' liability insurance providing coverage for a period of up to six
years from the Effective Date provided that the premiums payable for such
insurance do not exceed 200% of the premiums currently payable by Intrawest for
directors' and officers' liability insurance.
The Arrangement Agreement also provides that Parent and Acquisitionco will
cause Intrawest and any successor to Intrawest (including any Surviving
Corporation) and its subsidiaries to honour all rights to indemnification
existing in favour of present and former officers and directors of Intrawest and
its subsidiaries (including any Surviving Corporation) as of the Effective Time,
which will survive the completion of the Arrangement and shall continue in full
force and effect for a period of not less than six years from the Effective
Time.
27
OWNERSHIP OF SECURITIES AND OTHER INTERESTS OF DIRECTORS AND OFFICERS
The following table sets out the names and positions of all directors and
officers of Intrawest (and persons who were officers of Intrawest during
Intrawest's most recently completed financial year) and the number, designation
and percentage of outstanding securities, DSUs and RSUs beneficially owned or
over which control or direction is exercised, or any other interests held, by
each such director and officer (or former officer) of Intrawest and, where known
after reasonable enquiry, by their respective associates.
INTRAWEST SECURITIES OWNED OR OVER
WHICH
CONTROL OR DIRECTION IS EXERCISED
-----------------------------------
COMMON INTRAWEST DSUS AND
NAME POSITION(S) HELD SHARES(1) OPTIONS(2) RSUS
---- ---------------- ---------- ---------- ---------
Joe S. Houssian Chairman and Chief Executive Officer and
Director.................................. 1,894,206 1,306,500 1,226,821
Alex Wasilov President and Chief Operating Officer and
Director.................................. 3,000 -- 79,537
John E. Currie Chief Financial Officer................... 1,500 94,000 33,742
Daniel O. Jarvis Chief Corporate Development Officer....... 30,874 458,350 117,048
Hugh R. Smythe President, Mountain Operations............ 55,590 213,000 68,041
James J. Gibbons President, Resort Club Group.............. 1,990 39,200 49,244
Michael F. Coyle Chief Strategy Officer.................... 17,750 138,500 29,994
Andrew D. Stotesbury President, Placemaking.................... 3,041 23,000 --
Andrew P. Voysey Executive Vice President, Acquisitions and
Joint Ventures............................ 1,651 55,000 --
Michael Hannan President, Abercrombie & Kent............. -- 20,500 --
David B. Yellowlees Executive Vice President, Marketing and
Sales..................................... 1,473 20,000 --
Sally Dennis General Counsel........................... 200 -- --
David Blaiklock Vice President and Corporate Controller... 719 20,400 --
Ross J. Meacher Corporate Secretary and Chief Privacy
Officer................................... 1,557 7,500 --
Steve Sammut Senior Vice President, Project and
Corporate Finance......................... 339 -- --
Gary L. Raymond (Formerly) President and Chief Executive
Officer, Intrawest Placemaking(3)......... -- -- --
Jeff Stipec (Formerly) Executive Vice President and
Chief Operating Officer, Lodging(4)....... 544 15,100 --
David A. King Director.................................. 6,000 -- 1,945
Gordon H. MacDougall Director.................................. 3,000 -- 4,177
Paul M. Manheim Director.................................. 4,000 -- 1,648
Marti Morfitt Director.................................. 2,000 -- 669
Paul A. Novelly Director.................................. 15,201 -- 2,555
Bernard A. Roy Director.................................. 2,923 -- 1,201
Khaled C. Sifri Director.................................. 3,700 -- 2,060
Nicholas C.H. Director..................................
Villiers 3,165 -- 2,451
---------------
(1) The information as to Common Shares beneficially owned, directly or
indirectly or over which control or direction is exercised, not being within
the knowledge of Intrawest, has been furnished by the respective directors
and officers.
(2) Numbers indicated represent the Common Shares underlying vested and unvested
Intrawest Options held.
(3) Mr. Raymond resigned as an officer effective November 18, 2005. Information
regarding Mr. Raymond's ownership of Common Shares is not known to
Intrawest.
(4) Mr. Stipec resigned as an officer effective July 31, 2006.
28
In addition to the foregoing, certain of the officers hold Senior Employee
RSUs under the Senior Employee Restricted Share Unit Plan of Intrawest, as
follows:
Hugh R. Smythe 4,000 Senior Employee RSUs
James J. Gibbons 2,083 Senior Employee RSUs
Andrew D. Stotesbury 2,083 Senior Employee RSUs
Andrew P. Voysey 3,333 Senior Employee RSUs
Michael Hannan 2,083 Senior Employee RSUs
David B. Yellowlees 2,083 Senior Employee RSUs
Except as disclosed herein, none of the directors or officers (or such
former officers) of Intrawest, no person or company who beneficially owns,
directly or indirectly, Securities or who exercised control or direction over
Securities or a combination of both carrying more than 10% of the voting rights
attached to Securities entitled to vote at the Meeting and no associate or
affiliate of any of the foregoing, has or had any material interest, direct or
indirect, in any transaction or proposed transaction since the beginning of
Intrawest's most recently completed financial year that has materially affected
or would or could materially affect Intrawest or any of its subsidiaries.
INTENTIONS OF INTRAWEST DIRECTORS AND OFFICERS
The directors and officers of Intrawest, who beneficially own, directly or
indirectly, or exercise control or direction over, in the aggregate, 2,053,879
Common Shares and Intrawest Options to acquire 2,395,950 Common Shares as at
September 18, 2006, which represent 4.2% and 84.9% of the outstanding Common
Shares and Intrawest Options, respectively, and 8.6% of the outstanding
Securities eligible to be voted at the Meeting, have indicated that they intend
to vote their Securities in favour of the Arrangement Resolutions.
SOURCES OF FUNDS FOR THE ARRANGEMENT
Under the terms of the Arrangement and related transactions, an aggregate
amount of approximately $2.9 billion, including transaction costs, is expected
to be paid to acquire or repay outstanding Intrawest indebtedness (including the
outstanding Intrawest Notes), acquire all of the Common Shares (assuming no
Registered Shareholders exercise their Dissent Rights) and Intrawest Options and
satisfy payment in respect of all outstanding DSUs and RSUs. The following
arrangements are intended to provide the necessary funding for the Arrangement
and related transactions. Notwithstanding such arrangements, the obligations of
Parent and Acquisitionco under the Arrangement Agreement are not subject to any
financing condition.
DEBT FINANCING
Fortress has received the Commitment Letter dated August 10, 2006 made by
Lehman Brothers Inc., Lehman Commercial Paper Inc., Deutsche Bank Securities
Inc., Deutsche Bank AG, Cayman Islands Branch, Bear, Stearns & Co. Inc. and Bear
Stearns Corporate Lending Inc. (collectively, the "LENDERS"), for loan
facilities (the "LOANS"). The Lenders have the option of arranging to have other
financial institutions provide portions of the Loans.
The obligation of the Lenders to provide the debt financing on the terms
outlined in the Commitment Letter is subject to the following conditions, among
others:
- consummation of the transactions contemplated by the Arrangement
Agreement contemporaneously with closing of the Loans;
- the Fortress Funds having contributed equity of a minimum specified
amount (it is expected that this condition will be satisfied by the
equity commitment described below);
- simultaneous termination of existing indebtedness of the borrowers after
giving effect to the transactions, with certain exceptions;
- receipt by the lenders of certain historical and pro forma financial
statements, solvency certificate of an executive officer and customary
legal opinions; and
- other customary conditions for financings of this type.
Notwithstanding the foregoing financing commitment, Acquisitionco may elect
to pursue alternative means of financing.
29
EQUITY FINANCING
Acquisitionco has received the Equity Commitment Letter dated August 10,
2006 pursuant to which the Fortress Funds have agreed to provide, or cause to be
provided, equity financing to Acquisitionco as a source of funds required to
consummate the Arrangement. The obligations of the Fortress Funds to provide the
equity financing on the terms outlined in the Equity Commitment Letter are
subject to the satisfaction or waiver of the conditions to the obligations of
Parent set forth in Article 7 of the Arrangement Agreement. See "Other Terms of
the Arrangement Agreement -- Conditions Precedent to the Arrangement."
NOTES OFFERS
The Arrangement Agreement provides that Acquisitionco will make an offer to
purchase and consent solicitation with respect to the outstanding Intrawest
Notes to purchase such Intrawest Notes and adopt a supplemental indenture that
has the effect of eliminating covenants and other provisions in the applicable
indentures governing the Intrawest Notes. Intrawest has agreed to cooperate with
Acquisitionco as reasonably requested by Acquisitionco with respect to preparing
for and effecting the offers, including taking the actions required by the
indentures governing the Intrawest Notes in connection with the adoption of
supplemental indentures. The offers are expected to be commenced on or around
September 25, 2006 and to expire on October 24, 2006, or such later date to
which each offer may be extended in Acquisitionco's sole discretion.
30
OTHER TERMS OF THE ARRANGEMENT AGREEMENT
The following description of certain material provisions of the Arrangement
Agreement is a summary only, is not comprehensive and is qualified in its
entirety by reference to the full text of the Arrangement Agreement, a copy of
which is attached as Appendix B to this Circular. The Arrangement Agreement was
filed on SEDAR on August 18, 2006 and on the Electronic Data Gathering,
Analysis, and Retrieval System ("EDGAR") on August 22, 2006.
Except for the Arrangement Agreement's status as a contractual document
that establishes and governs the legal relations among the parties thereto with
respect to the Arrangement, its text is not intended to be, and should not be
interpreted as, a source of factual, business or operational information about
Intrawest, Parent, Acquisitionco, the Fortress Funds or Fortress, or any of
their respective affiliates. The Arrangement Agreement contains representations,
warranties and covenants that are qualified and limited, including by
information in the documents referenced in the Arrangement Agreement that the
parties delivered in connection with the execution of the Arrangement Agreement,
certain other information provided by the parties thereto to the other parties,
or disclosed in public filings with the U.S. Securities and Exchange Commission
and the Canadian securities regulatory authorities. Representations and
warranties may be used as a tool to allocate risks between the respective
parties to the Arrangement Agreement, including where the parties do not have
complete knowledge of all facts, instead of establishing such matters as facts.
Furthermore, the representations and warranties may be subject to different
standards of materiality applicable to the contracting parties, which may differ
from what may be viewed as material to Securityholders. These representations
may or may not have been accurate as of any specific date and do not purport to
be accurate as of the date of this Circular. Moreover, information concerning
the subject matter of the representations and warranties may have changed since
the date of the Arrangement Agreement and subsequent developments or new
information qualifying a representation or warranty may have been included in
this Circular. Except for the parties themselves, under the terms of the
Arrangement Agreement only certain other specifically identified persons are
third-party beneficiaries of the Arrangement Agreement who may enforce it and
rely on its terms. Securityholders are not third-party beneficiaries of the
Arrangement Agreement and therefore may not directly enforce or rely upon its
terms and conditions and should not rely on its representations, warranties or
covenants as characterizations of the actual state of facts or condition of
Intrawest, Parent, Acquisitionco, the Fortress Funds or Fortress, or any of
their respective affiliates.
On August 10, 2006, Intrawest, Parent and Acquisitionco entered into the
Arrangement Agreement, under which it was agreed, among other things, that,
subject to the terms and conditions set forth in the Arrangement Agreement,
Acquisitionco would acquire all of the issued and outstanding Common Shares for
a price equal to $35.00 in cash per Common Share pursuant to the Arrangement. On
September 20, 2006, 3167113 Nova Scotia Company assigned its right, title and
interest in and to the Arrangement Agreement to Wintergames Acquisition ULC, and
Wintergames Acquisition LLC assigned its right, title and interest in and to the
Arrangement Agreement to Wintergames S.a.r.l.
CONDITIONS PRECEDENT TO THE ARRANGEMENT
MUTUAL CONDITIONS PRECEDENT
The Arrangement Agreement provides that the obligations of the parties to
complete the transactions contemplated by the Arrangement Agreement are subject
to the satisfaction or mutual waiver by Parent and Intrawest, on or before the
Effective Date, of certain conditions precedent, including:
- the Interim Order will have been obtained and will not have been set
aside or modified in any manner unacceptable to either Parent or
Intrawest;
- the Arrangement Resolutions will have been passed by Securityholders and
Shareholders at the Meeting;
- the Final Order will have been obtained and will not have been set aside
or modified in any manner unacceptable to either Parent or Intrawest;
- all Appropriate Regulatory Approvals will have been obtained or
concluded or, in the case of waiting or suspensory periods, expired or
been terminated;
- no Governmental Authority will have enacted, issued, promulgated,
enforced, made, entered, issued or applied any Law that makes the
Arrangement illegal or otherwise directly or indirectly enjoins,
restrains or
31
otherwise prohibits consummation of the Arrangement or the other
transactions contemplated in the Arrangement Agreement;
- no person will have filed any notice of appeal of the Final Order, and
no person will have communicated in writing to Intrawest or Parent any
intention to appeal the Final Order; and
- the Arrangement Agreement will not have been terminated in accordance
with its terms.
ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT AND ACQUISITIONCO
The Arrangement Agreement provides that the obligations of Parent and
Acquisitionco to complete the transactions contemplated by the Arrangement
Agreement are also subject to the satisfaction or waiver by Parent on its own
behalf and on behalf of Acquisitionco of certain conditions precedent,
including:
- Intrawest will have complied in all material respects with its
obligations, covenants and agreements in the Arrangement Agreement to be
performed and complied with on or before the Effective Date;
- the representations and warranties of Intrawest will be true and correct
in all respects (except for breaches that do not, individually or in the
aggregate, have a Material Adverse Effect on Intrawest) as of the
Effective Date;
- there will not exist or have occurred (or been threatened) any change
(or any condition, event or development involving a prospective change)
which, individually or in the aggregate, has had, or would reasonably be
expected to have, a Material Adverse Effect on Intrawest; and
- the Board shall not have amended its affirmative recommendation to the
holders of Common Shares in a manner adverse to Parent or Acquisitionco
or withdrawn its affirmative recommendation to the Securityholders to
vote in favour of the Arrangement Resolutions.
ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF INTRAWEST
The obligations of Intrawest to complete the transactions contemplated by
the Arrangement Agreement are also subject to certain conditions precedent,
including:
- each of Parent and Acquisitionco will have complied in all material
respects with its obligations, covenants and agreements in the
Arrangement Agreement to be performed and complied with on or before the
Effective Date;
- the representations and warranties of Parent and Acquisitionco will be
true and correct in all material respects (except for breaches that
individually or in the aggregate do not prevent or materially delay the
consummation of the transactions contemplated in the Arrangement
Agreement or significantly impair the ability of Parent or Acquisitionco
to performs its obligations) as of the Effective Date; and
- Acquisitionco will have deposited with the Transfer Agent sufficient
funds to complete the transactions contemplated by the Plan of
Arrangement.
REPRESENTATIONS AND WARRANTIES
The Arrangement Agreement contains customary representations and warranties
on the part of Intrawest relating to the following matters, among others: Board
approval; organization and qualification; authority relative to the Arrangement
Agreement; no violation; compliance with laws; consents; litigation;
capitalization; ownership of subsidiaries; financial statements; books, records
and disclosure controls; absence of certain changes; reporting status and
securities law matters; taxes; property; material contracts; permits; pension
and employee benefits; restrictions on business activities; intellectual
property; insurance; environment; employment arrangements and collective
agreements; and financial advisors and brokers.
The Arrangement Agreement also contains customary representations and
warranties of Parent and Acquisitionco relating to matters that include:
authority relative to the Arrangement Agreement; no violations; and financing.
COVENANTS OF INTRAWEST
The Arrangement Agreement also contains customary negative and affirmative
covenants on the part of both parties.
32
In the Arrangement Agreement, Intrawest has agreed, among other things,
that, until the earlier of the Effective Time and the time that the Arrangement
Agreement is terminated in accordance with its terms, unless Parent will
otherwise consent in writing (to the extent that such consent is permitted by
applicable Law), which consent will not be unreasonably withheld or delayed, or
as is otherwise expressly permitted or specifically contemplated by the
Arrangement Agreement or as is otherwise required by applicable Law:
(a) the business of Intrawest will be conducted only in the ordinary
course of business or pursuant to plans or proposals previously
disclosed by Intrawest to Parent;
(b) Intrawest will not directly or indirectly, except pursuant to plans
and proposals previously disclosed by Intrawest to Parent:
- alter or amend the constating documents of Intrawest, any
subsidiary of Intrawest or any Joint Ventures;
- declare, set aside or pay any dividend on or make any distribution
or payment or return of capital in respect of the Common Shares,
other than pursuant to plans or proposals previously disclosed by
Intrawest to Parent, and the regularly scheduled quarterly cash
dividends with respect to the Common Shares consistent with past
practice;
- adjust, split, divide, consolidate, combine, exchange or
reclassify any of the shares, voting securities or equity
interests of Intrawest, any of the subsidiaries of Intrawest or
Joint Ventures or issue or authorize the issuance of any other
securities in lieu of, or in substitution for, any of such shares,
voting securities or equity interests;
- issue, grant, sell or pledge or agree to issue, grant, sell or
pledge any shares of Intrawest or shares, voting securities or
equity interests of any of the subsidiaries of Intrawest or Joint
Ventures, or securities convertible into or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, such
shares of Intrawest or shares or voting securities or equity
interests of any of the subsidiaries of Intrawest or Joint
Ventures, other than in certain circumstances;
- issue or grant any Intrawest Options;
- create any new phantom stock or deferred compensation plan,
program or arrangement or materially modify or change any of the
Intrawest DSU Plans or issue any securities or make any payments
under any of the Intrawest DSU Plans other than pursuant to
obligations existing as of the date of the Arrangement Agreement
that have been previously disclosed;
- redeem, purchase or otherwise acquire any of the outstanding
shares of Intrawest or any of the shares or voting securities or
equity interests of any subsidiary of Intrawest or securities
convertible or exchangeable for any such securities;
- amend or modify the terms of any of the shares of Intrawest or
amend or modify in any material respect any of the shares, voting
securities or equity interests of any subsidiary of Intrawest or
any securities convertible or exchangeable for any such
securities;
- adopt a plan of liquidation or resolution providing for the
liquidation or dissolution of Intrawest or any of its material
subsidiaries;
- make any changes to its existing accounting policies and
principles or adopt new accounting policies or principles or make
any material changes to any of its accounting methods, practices
or procedures;
- make, change or rescind any material election relating to Taxes,
amend any tax return, surrender any right to claim a Tax refund,
offset or other reduction in Tax liability, consent to any
extension or waiver of the limitations period applicable to any
Tax claim or assessment, or settle or compromise any material
claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes; or
- enter into, modify or terminate any Contract with respect to any
of the foregoing;
(c) Intrawest will promptly notify Parent in writing of (i) any
circumstance or development occurring after the date of the
Arrangement Agreement that, to the knowledge of Intrawest, has, or
would reasonably be expected to have, a Material Adverse Effect on
Intrawest and (ii) the occurrence of any loss, breakage or
33
damage to a property or asset owned or managed by Intrawest or any of
its subsidiaries in excess of $10 million (irrespective of insurance
or third-party proceeds which have been or may be received in
connection with such loss, breakage or damage);
(d) Intrawest will not, and will not permit any of its subsidiaries and,
to the extent it is within the control of Intrawest or a subsidiary of
Intrawest, the Joint Ventures, to, directly or indirectly, except in
the ordinary course of business consistent with past practice or
pursuant to any Contract existing as at the date of the Arrangement
Agreement or pursuant to plans or proposals previously disclosed by
Intrawest to Parent:
- sell, pledge, lease, licence or dispose of any properties or
assets of Intrawest or of any subsidiary of Intrawest or Joint
Venture;
- acquire any corporation, partnership or other business
organization or division thereof, or any property or asset, or
make any investment in any real property or commence construction
of, or enter into any Contract to develop or construct any, real
estate projects or developments, in each case if such transaction
would reasonably be expected to be material to Intrawest and its
subsidiaries, taken as a whole;
- incur any Indebtedness, or issue any debt securities or assume,
guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other person, in each case,
in excess of $25 million;
- make any loans, advances or capital contributions to, or
investments in, any other person, other than to wholly owned
subsidiaries of Intrawest, in excess of $10 million;
- authorize or make, or become obligated to make, capital
expenditures unless such capital expenditures (i) are reflected in
the Intrawest fiscal 2007 budget that was provided to Parent, or
(ii) do not exceed $5 million in respect of any single transaction
or series of transactions constituting part of an overall
transaction;
- dispose of, grant, or permit to lapse any rights to any material
Intellectual Property Rights as defined in the Arrangement
Agreement;
- waive or release any rights of material value;
- engage in any new business, enterprise or other activity that is
material to Intrawest and its subsidiaries, taken as a whole, and
that is inconsistent with the existing businesses of Intrawest and
its subsidiaries in the manner such existing businesses generally
have been carried on prior to the date of the Arrangement
Agreement;
- except pursuant to any Contract existing as at the date of the
Arrangement Agreement, pay, discharge or satisfy any claim,
liability or obligation that is material to Intrawest and its
subsidiaries, taken as a whole, or voluntarily waive, release,
assign, settle or compromise certain types of Proceedings; or
- authorize any of the foregoing or enter into or modify any
Contract to do any of the foregoing;
(e) Intrawest will not, and will not permit any of its subsidiaries to,
directly or indirectly, except in the ordinary course of business or
pursuant to plans or proposals previously disclosed by Intrawest to
Parent and except for transactions between two or more wholly owned
subsidiaries of Intrawest or between Intrawest and one or more wholly
owned subsidiaries of Intrawest:
- except in certain circumstances, enter into, or amend in any
material respect, any Contract or series of related Contracts
resulting in a new Contract or series of related new Contracts or
modifications to an existing Contract or series of related
existing Contracts that would result in any Contract having a term
in excess of 12 months from the date of the Arrangement Agreement
and which is not terminable by Intrawest or its subsidiary or
Joint Venture upon notice of 90 days or less or would impose
payment or other obligations on Intrawest or any of its
subsidiaries or Joint Ventures in excess of $10 million;
- enter into any Contract that would limit or otherwise restrict
Intrawest or any of its subsidiaries or Joint Ventures or any of
their successors or that would, after the Effective Time, limit or
otherwise
34
restrict Parent or any of its subsidiaries or any of their
successors, from engaging or competing in any line of business or
in any geographic area in any material respect; or
- terminate, cancel or amend in any material respect any Material
Contract if such termination, cancellation or amendment would
reasonably be expected to have a Material Adverse Effect on
Intrawest;
(f) except in the ordinary course of business and consistent with past
practices or pursuant to plans or proposals previously disclosed by
Intrawest to Parent or pursuant to any obligation existing as at the
date of the Arrangement Agreement, including pursuant to the Intrawest
DSU Plans, any benefit plans of Intrawest or any other employment,
compensation or termination policy, program or arrangement in effect
on the date of the Arrangement Agreement, and except as is necessary
to comply with applicable Laws, neither Intrawest nor any of its
subsidiaries will:
- grant to any officer or director of Intrawest or any of its
subsidiaries an increase in compensation;
- grant any general salary increase to the employees of Intrawest or
any of its subsidiaries;
- grant any retention, severance or termination pay or amend or
modify any such grant previously made;
- enter into any employment agreement with any officer or director
of Intrawest or any of its subsidiaries;
- increase any benefits payable under its current retention,
severance or termination pay policies;
- adopt, materially amend or make any contribution to any bonus,
profit sharing, compensation, incentive compensation, pension,
retirement, deferred compensation, stock option, benefit plan of
Intrawest or other similar plan, agreement, trust, fund or
arrangement for the benefit of directors, officers or employees or
former directors, officers or employees of Intrawest or any of its
subsidiaries;
- make any loan to any officer or director of Intrawest or any of
its subsidiaries; or
- voluntarily enter into any collective bargaining or union
agreement or agree to voluntarily recognize any union, bargaining
agent or association for the purpose of employee representation,
or agree to, whether orally or in writing, any new terms of any
existing collective bargaining agreement to which Intrawest or any
subsidiary is bound or to any agreement that would serve as an
estoppel to the enforcement of any term of any such collective
bargaining agreement; and
(g) Intrawest will use its commercially reasonable efforts to cause the
current insurance (or re insurance) policies maintained by Intrawest
or any of its subsidiaries not to be cancelled or terminated or any of
the coverage thereunder to lapse.
In addition Intrawest is required:
(h) subject to compliance by the directors and officers of Intrawest with
their fiduciary duties, to use all commercially reasonable efforts to
obtain the approval by the Securityholders of the Arrangement
Resolutions at the Meeting;
(i) to apply for and use commercially reasonable efforts to obtain all
Appropriate Regulatory Approvals;
(j) to apply for and use commercially reasonable efforts to obtain such
other consents, approvals and authorizations reasonably requested by
Parent or Acquisitionco that are necessary or desirable in connection
with the consummation of the Arrangement and the other transactions
contemplated in the Arrangement Agreement;
(k) to use commercially reasonable efforts to oppose, lift or rescind any
injunction or restraining or other order against it seeking to stop,
or otherwise adversely affecting its ability to consummate, the
Arrangement and to defend, or cause to be defended any Proceedings to
which it is a party or brought against it or its directors or officers
challenging the Arrangement Agreement or the consummation of the
transactions contemplated in the Arrangement Agreement; and
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(l) as soon as is reasonably practicable, to carry out the terms of the
Interim Order and Final Order applicable to it and use commercially
reasonable efforts to comply promptly with all Laws applicable to the
Arrangement.
COVENANTS OF ACQUISITIONCO
In the Arrangement Agreement, each of Parent and Acquisitionco have agreed
to perform all their obligations under the Arrangement Agreement, cooperate with
Intrawest in connection therewith, and do all such other acts and things as may
be necessary or desirable in order to consummate and make effective, as soon as
reasonably practicable, the transactions contemplated in the Arrangement
Agreement and, without limiting the generality of the foregoing, each of Parent
and Acquisitionco will:
- apply for and use commercially reasonable efforts to obtain all
Applicable Regulatory Approvals;
- cooperate with Intrawest and its subsidiaries in connection with, and
use commercially reasonable efforts to assist Intrawest and its
subsidiaries in obtaining, all other consents, approvals and
authorizations referred to in the Arrangement Agreement;
- use commercially reasonable efforts to oppose, lift or rescind any
injunction or restraining or other order against it seeking to stop, or
otherwise adversely affecting its ability to perform and comply with its
obligations under the Plan of Arrangement and to defend, or cause to be
defended any Proceedings to which it is a party or brought against it or
its directors or officers challenging the Arrangement Agreement or the
consummation of the transactions contemplated thereby;
- designate one individual from whom Intrawest may seek approval to
undertake any actions not permitted to be taken under the terms of the
Arrangement Agreement and will ensure that such person will respond, on
behalf of Parent, to Intrawest's requests in an expeditious manner; and
- forthwith carry out the terms of the Interim Order and Final Order to
the extent applicable to it and use commercially reasonable efforts to
comply promptly with all Laws applicable to the Arrangement.
COVENANTS OF INTRAWEST REGARDING NON-SOLICITATION
Intrawest has agreed, except as expressly contemplated by the Arrangement
Agreement until the Arrangement Agreement is terminated, that none of Intrawest
nor its subsidiaries will, directly or indirectly, through any Representative of
it take any action that might, directly or indirectly, interfere with the
consummation of the Arrangement and, will not (and Intrawest will not permit its
subsidiaries to), without the consent in writing of Parent (which consent may be
unreasonably withheld), directly or indirectly, through any subsidiary or
Representative of it or any of its subsidiaries:
- solicit, initiate or knowingly facilitate or encourage any inquiry,
proposal or offer relating to or constituting an Acquisition Proposal
from any person;
- enter into or participate in any discussions or negotiations or other
activities with any person (other than Acquisitionco, Parent or their
affiliates) regarding an Acquisition Proposal;
- withdraw, modify, qualify, or propose publicly to withdraw, modify or
qualify, in any manner adverse to Parent or Acquisitionco the approval
or recommendation of the Board or any committee thereof of the
Arrangement;
- approve, endorse, recommend or remain neutral with respect to, or
propose to publicly approve, endorse, recommend or remain neutral with
respect to, any Acquisition Proposal; or
- accept or enter into, or propose publicly to accept or enter into, any
letter of intent, agreement in principle, understanding, undertaking,
arrangement or Contract in respect of or relating to an Acquisition
Proposal.
Intrawest has agreed, and has agreed to cause the Representatives of
Intrawest and its subsidiaries and their Representatives to, immediately cease
and cause to be terminated any existing solicitations, discussions, negotiations
or activities with any person (other than Parent and Acquisitionco) with respect
to any Acquisition Proposal or any proposal that may reasonably be expected to
constitute an Acquisition Proposal.
Intrawest also agreed to discontinue access by any third party (other than
Parent and Acquisitionco or their representatives) to any data room (virtual or
otherwise) and to promptly request the return or deletion from retrieval systems
and data bases or destruction of all information provided to any third party
which, at any time since
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February 28, 2006, has entered into a confidentiality agreement with Intrawest
relating to a potential Acquisition Proposal to the extent that such information
has not previously been returned or destroyed, and to use commercially
reasonable efforts to ensure that such requests are honoured in accordance with
the terms of such agreement.
CONSIDERATION OF ALTERNATIVE TRANSACTIONS
Prior to the approval of the Arrangement Resolutions, nothing contained in
the Arrangement Agreement will prevent the Board from entering into an agreement
or engaging in discussions or negotiations with or furnishing information to
(subject to compliance with the non-solicitation provisions) any person who has
made an unsolicited bona fide, Acquisition Proposal that (a) did not result from
a breach of the provisions of the Arrangement Agreement relating to
non-solicitation; and (b) in respect of which the Board determines in good faith
after consultation with its financial advisors and its outside legal counsel
that the Acquisition Proposal would be reasonably likely to result in a Superior
Proposal.
Intrawest must promptly (and in any event within 24 hours of receipt by
Intrawest) notify Parent, at first orally and thereafter in writing, of any
inquiry, proposal or offer relating to or constituting an Acquisition Proposal
or an inquiry that could reasonably be expected to lead to an Acquisition
Proposal, in each case received after August 10, 2006, of which any of its
directors or officers are or become aware, including the renewal of any
Acquisition Proposal made prior to August 10, 2006.
If, prior to the approval of the Arrangement Resolutions, Intrawest
receives a request for material non-public information from a person who
proposes an unsolicited bona fide Acquisition Proposal where Intrawest is not in
breach of the non-solicitation provisions of the Arrangement Agreement and the
Board determines in good faith after consultation with its financial advisors
and its outside legal counsel that such proposal would be reasonably likely, if
consummated, to lead to a Superior Proposal, then, and only in such case, the
Board may, subject to the execution by such person of a confidentiality
agreement having terms not less favourable to Intrawest than the Confidentiality
Agreement, provide such person with access to information regarding Intrawest.
Nothing contained in the non-solicitation provisions prohibits the Board
from making any disclosure to Intrawest's Shareholders prior to the Effective
Time if, in the good faith judgment of the Board, after consultation with
outside legal counsel, such disclosure is necessary for the directors and
officers of Intrawest to act in a manner consistent with their duties or is
otherwise required under applicable Law.
RIGHT TO MATCH
The Arrangement Agreement provides Acquisitionco with a right to match any
Superior Proposal during a response period (the "RESPONSE PERIOD") of five
Business Days from the later of (i) the date on which Parent receives a written
notice from Intrawest advising that the Board has determined, subject only to
compliance with the right to match provisions, to enter into an agreement,
understanding, arrangement or Contract in respect of, or to proceed with, or
recommend, a Superior Proposal; and (ii) the date Parent receives a copy of the
Superior Proposal. In the event that Intrawest provides Parent with the notice
on a date that is less than seven Business Days prior to the Meeting, Intrawest
is entitled to adjourn and will, at the request of Parent, adjourn the Meeting
to a date that is not less than seven Business Days and not more than 15
Business Days after the date of such notice.
During the Response Period, Parent and Acquisitionco have the right, but
not the obligation, to offer to amend the terms of the Arrangement Agreement and
the Plan of Arrangement. The Board will review in good faith any such proposal
by Parent and Acquisitionco to amend the terms of the Arrangement Agreement or
the Plan of Arrangement, to determine (after receipt of advice, to the extent
considered appropriate by the Board, from its financial advisors and outside
legal counsel) whether the Acquisition Proposal to which Parent and
Acquisitionco are responding would be a Superior Proposal when assessed against
the Arrangement and the Plan of Arrangement as it is proposed by Parent and
Acquisitionco to be amended.
Intrawest may enter into any agreement to proceed with a Superior Proposal
only if: (i) Parent and Acquisitionco do not, prior to the expiry of the
Response Period, propose to amend the terms of the Arrangement Agreement and the
Plan of Arrangement; or (ii) Parent and Acquisitionco deliver to Intrawest,
prior to the expiry of the Response Period, a proposal to amend the terms of the
Arrangement Agreement and the Plan of Arrangement, and the Board determines in
good faith, after, among other things, consultation (to the extent considered
appropriate by the Board) with Intrawest's financial advisors and outside legal
counsel, taking into account the proposal by Parent and Acquisitionco to amend
the Arrangement Agreement and the Plan of Arrangement, that the
37
Acquisition Proposal remains a Superior Proposal; and (iii) and Intrawest
concurrently terminates the Arrangement Agreement pursuant to its terms and pays
to Parent the termination fee (as described below) under "Termination Fees."
If Parent and Acquisitionco propose to amend the terms of the Arrangement
Agreement and the Plan of Arrangement, and the Board does not determine that the
Acquisition Proposal remains a Superior Proposal when compared to the proposed
amendment to the Arrangement Agreement and the Plan of Arrangement, Intrawest
and Parent and Acquisitionco will promptly execute and deliver an amending
agreement amending the Arrangement Agreement and the Plan of Arrangement,
incorporating or reflecting the terms of the amendment to the terms of the
Arrangement Agreement and Plan of Arrangement as proposed by Parent and
Acquisitionco and Intrawest will publicly announce that the Board has reaffirmed
its recommendation of the Arrangement by news release, the form of which shall
be provided to Parent for its review and comment prior to publication.
Each successive amendment to any Acquisition Proposal that results in any
change in, or modification of, the consideration to be received by the holders
of Common Shares or any other material change in the terms or conditions of such
Acquisition Proposal will constitute a new Acquisition Proposal for the purposes
of the right to match provisions and Parent will be afforded a new Response
Period in respect of each such Acquisition Proposal.
TERMINATION FEES
The Arrangement Agreement provides that Intrawest will pay to Parent (or as
it may direct) $60 million less any amounts actually paid by Intrawest to Parent
for reimbursement of expenses (as described below) under "Expense
Reimbursement":
- if Intrawest terminates the Arrangement Agreement by providing written
notice to Parent, in order to enter into a definitive agreement
providing for the implementation of a Superior Proposal, subject to
compliance with the terms of the Arrangement Agreement;
- if Parent terminates the Arrangement Agreement by providing written
notice to Intrawest at any time before the Effective Time if (i) the
Effective Date does not occur on or before the Termination Deadline, and
the failure of the Effective Time to occur by such date is not the
result of the failure on the part of Parent or Acquisitionco to fulfill
any of their obligations; or (ii) if the Meeting is not held and the
Arrangement Resolutions are not submitted to the Securityholders at the
Meeting, at least seven days prior to the Termination Deadline;
- in the event that a bona fide written Acquisition Proposal has been made
by any person other than Parent or Acquisitionco after August 10, 2006
but before the termination of the Arrangement Agreement and (i) either
Intrawest or Parent terminates the Arrangement Agreement by providing
written notice to the other at any time before the Effective Time if (A)
the Effective Date does not occur on or before the Termination Deadline,
and the failure of the Effective Time to occur by such date is not the
result of the failure on the part of Parent or Acquisitionco to fulfill
any of their obligations; or (B) the Meeting is held and the Arrangement
Resolutions are not passed by the Securityholders in accordance with
applicable legislation and the Interim Order; and (ii) within 365 days
after the date of such termination (A) an Acquisition Proposal is
consummated with the offeror of such Acquisition Proposal, or any other
person; or (B) the Board approves or recommends such Acquisition
Proposal or any other Acquisition Proposal, or Intrawest or any of its
subsidiaries enters into a definitive agreement with respect to such
Acquisition Proposal or any other Acquisition Proposal and thereafter
(whether or not within 365 days after the termination of the Arrangement
Agreement) such Acquisition Proposal is consummated;
- if Parent terminates the Arrangement Agreement by written notice to
Intrawest at any time before the Effective Time and (i) the Board shall
have failed to recommend the Arrangement Agreement or the Arrangement;
(ii) the Board or any committee thereof shall have (A) withdrawn,
qualified or otherwise modified in a manner adverse to Parent and
Acquisitionco, or proposed publicly to withdraw or so qualify or
otherwise modify, the approval or recommendation of the Board or any
committee thereof of the Arrangement Agreement or the Arrangement, or
(B) approved or recommended, or proposed publicly to approve or
recommend, any Acquisition Proposal; or (iii) following any Acquisition
Proposal that is made or publicly announced, the Board or the Special
Committee fails to publicly affirm its approval or recommendation of the
Arrangement within five Business Days of any written request to do so
from Parent; and
38
- in the event that neither Parent or Acquisitionco is in material breach
of its obligations under the Arrangement Agreement, and Parent
terminates the Arrangement Agreement after, in accordance with the
Arrangement Agreement, it gives written notice to Intrawest that
Intrawest has breached any of its representations, warranties, covenants
or agreements contained in the Arrangement Agreement, that would give
rise to the failure of certain conditions to closing.
The Arrangement Agreement also provides that in the event the Arrangement
Agreement is:
- terminated by Intrawest upon written notice to Parent if Acquisitionco
does not provide the Depositary with sufficient funds to complete the
transactions contemplated by the Plan of Arrangement or if Acquisitionco
or Parent has breached any of its representations, warranties, covenants
or agreements contained in the Arrangement Agreement, or
- terminated by either Intrawest or Parent if the Effective Date does not
occur by the Termination Date following any failure by Acquisitionco and
Parent to obtain financing as contemplated by the Arrangement Agreement,
or a failure by Parent or Acquisitionco to perform or comply with their
obligations under the Arrangement Agreement to carry out the terms of
the Interim Order and the Final Order,
then Parent and Acquisitionco will pay to Intrawest an amount equal to $60
million.
EXPENSE REIMBURSEMENT
The Arrangement Agreement also provides that if (a) Parent terminates the
Arrangement Agreement because the Meeting is held and the Arrangement
Resolutions are not passed by the Securityholders in accordance with applicable
legislation and the Interim Order, and no Termination Fee is payable by
Intrawest to Parent, or (b)(i) the Arrangement Agreement is terminated because
the Effective Date does not occur on or before the Termination Deadline, or is
terminated by Parent after Parent gives written notice to Intrawest that
Intrawest has breached any of its representations, warranties, covenants or
agreements contained in the Arrangement Agreement that would give rise to the
failure of certain conditions to closing, (ii) no Termination Fee is payable by
Intrawest to Parent, and (iii) the Meeting is not held for any reason prior to
such termination, or such termination was caused as a result of breaches by
Intrawest of the Arrangement Agreement, Intrawest will pay to Parent an amount
equal to Parent and Acquisitionco's (without duplication) actual out of pocket
costs and expenses, including reasonable fees and expenses of their counsel,
accountants, financial advisors and other experts and advisors, incidental to
the preparation, negotiation and execution of the Arrangement Agreement and
related documentation, up to a maximum of $10 million (less the amount of any
withholding required by applicable Laws relating to all Taxes that are
concurrently remitted by Intrawest to the relevant Governmental Authority and
receipted) as payment in respect of such costs and expenses (the amount of such
costs and expenses to be certified by a senior officer of Parent in writing in
reasonable detail).
In no event will Intrawest be required to pay in respect of the termination
fee and reimbursement of expenses, in the aggregate, an amount in excess of $60
million.
TERMINATION RIGHTS
The Arrangement Agreement may be terminated at any time prior to the
Effective Time:
- by agreement in writing executed by Parent and Intrawest;
- by either Intrawest or Parent, upon written notice by either one to the
other if: (i) the Effective Date does not occur on or before the
Termination Deadline, and the failure of the Effective Time to occur by
such date is not the result of the failure on the part of the party
wishing to terminate the Arrangement Agreement to fulfill any of their
obligations; (ii) the Meeting is held and the Arrangement Resolutions
are not passed by the Securityholders in accordance with applicable
legislation and the Interim Order; or (iii) any Law makes the
consummation of the Arrangement or the transactions contemplated by the
Arrangement Agreement illegal or otherwise prohibited and such Law has
become final and non appealable;
- by Intrawest upon written notice to Parent, in order to enter into a
definitive agreement providing for the implementation of a Superior
Proposal, subject to compliance with the terms of the Arrangement
Agreement;
39
- by Intrawest upon written notice to Parent if Acquisitionco does not
provide the Transfer Agent with sufficient funds to complete the
transactions contemplated by the Plan of Arrangement;
- by Parent upon written notice to Intrawest if: (i) the Board has failed
to recommend the Arrangement Agreement or the Arrangement, or (ii) the
Board or any committee thereof has (A) withdrawn, qualified or otherwise
modified in a manner adverse to Parent and Acquisitionco, or proposed
publicly to withdraw or so qualify or otherwise modify, the approval or
recommendation of the Board or any committee thereof of the Arrangement
Agreement or the Arrangement, or (B) approved or recommended, or
proposed publicly to approve or recommend, any Acquisition Proposal;
- by Parent upon written notice to Intrawest if, following any Acquisition
Proposal that is made or publicly announced, the Board or the Special
Committee fails to publicly affirm its approval or recommendation of the
Arrangement within five Business Days of any written request to do so
from Parent;
- neither Parent or Acquisitionco is in material breach of its obligations
under the Arrangement Agreement, and Parent gives written notice to
Intrawest that Intrawest has breached any of its representations,
warranties, covenants or agreements contained in the Arrangement
Agreement, that would give rise to the failure of certain conditions to
closing; or
- Intrawest is not in material breach of its obligations under the
Arrangement Agreement, and Intrawest gives written notice to Parent,
that Parent or Acquisitionco has breached any of its representations,
warranties, covenants or agreements contained in the Arrangement
Agreement, that would give rise to the failure of certain conditions to
closing.
PRE-ACQUISITION REORGANIZATIONS
Intrawest agreed in the Arrangement Agreement that, upon request by Parent,
Intrawest will, and will cause its subsidiaries to, at the expense of Parent,
use its commercially reasonable efforts to (i) effect such reorganizations of
its business, operations and assets and the integration of other affiliated
businesses as Parent may request, acting reasonably (each a "PRE-ACQUISITION
REORGANIZATION") and (ii) cooperate with Parent and its advisors to determine
the nature of the Pre-Acquisition Reorganizations that might be undertaken and
the manner in which they can be undertaken most effectively. Parent and
Acquisitionco acknowledged and agreed in the Arrangement Agreement that the
Pre-Acquisition Reorganizations will not impede, delay or prevent consummation
of the Arrangement, prejudice the Securityholders, require Intrawest to obtain
the approval of the Shareholders, or be considered in determining whether a
representation or warranty of Intrawest under the Arrangement Agreement has been
breached. Parent must provide written notice to Intrawest of any proposed
Pre-Acquisition Reorganization at least ten days prior to the Effective Date.
Upon receipt of such notice, Parent and Intrawest have agreed, at the expense of
Parent, to work cooperatively and use commercially reasonable efforts to prepare
prior to the Effective Time all documentation necessary and do such other acts
and things as are necessary to give effect to such Pre-Acquisition
Reorganization immediately prior to the Effective Date. If the Arrangement is
not completed, Parent has agreed to reimburse Intrawest for all reasonable fees
and expenses (including any professional fees and expenses) incurred by
Intrawest and its subsidiaries in considering and effecting a Pre-Acquisition
Reorganization and Parent will be responsible for any costs of Intrawest and its
subsidiaries in reversing or unwinding any Pre-Acquisition Reorganization that
was effected prior to termination of the Arrangement Agreement at Parent's
request.
40
PRINCIPAL LEGAL MATTERS
COURT APPROVAL OF THE ARRANGEMENT AND COMPLETION OF THE ARRANGEMENT
An arrangement under the CBCA requires Court approval. Prior to the mailing
of this Circular, Intrawest obtained the Interim Order, which provides for the
calling and holding of the Meeting, the Dissent Rights and other procedural
matters. A copy of the Interim Order is attached as Appendix E to this Circular.
Subject to the approval of the Arrangement Resolutions by Securityholders
at the Meeting and to obtaining all Appropriate Regulatory Approvals, the
hearing in respect of the Final Order is currently scheduled to take place on
October 24, 2006 in the Court at 800 Smithe Street, Vancouver, British Columbia.
Any Securityholder who wishes to appear, or to be represented, and to present
evidence or arguments must serve and file a notice of appearance (a "NOTICE OF
APPEARANCE") as set out in the Notice of Application for Final Order and satisfy
any other requirements of the Court. The Court will consider, among other
things, the fairness and reasonableness of the Arrangement. The Court may
approve the Arrangement in any manner the Court may direct, subject to
compliance with any terms and conditions that the Court deems fit. In the event
that the hearing is postponed, adjourned or rescheduled then, subject to further
order of the Court, only those persons having previously served a Notice of
Appearance in compliance with the Notice of Application and the Interim Order
will be given notice of the postponement, adjournment or rescheduled date. A
copy of the Notice of Application for Final Order is attached as Appendix F to
this Circular.
Assuming the Final Order is granted and the other conditions to closing
contained in the Arrangement Agreement are satisfied or waived to the extent
legally permissible, then Articles of Arrangement will be filed with the
Director to give effect to the Arrangement.
REGULATORY MATTERS
The Arrangement is conditional upon the filing of all required
notifications and the receipt of all required approvals under the Competition
Act (Canada) (described below) and the HSR Act (described below), and the
satisfaction of other regulatory requirements or the expiration of applicable
waiting periods under such laws. The Arrangement is also conditional upon the
applicable Minister responsible for the Investment Canada Act (Canada) being
satisfied or deemed to be satisfied, that the acquisition of control of
Intrawest is likely to be of net benefit to Canada (described below).
COMPETITION ACT
The Competition Act (Canada) requires that parties to certain merger
transactions that exceed specified size thresholds ("NOTIFIABLE TRANSACTIONS")
provide to the Commissioner of Competition (the "COMMISSIONER") appointed under
the Competition Act prior notice of, and information relating to, the merger
transaction. Notification must be made either on the basis of a short-form
filing (in respect of which there is a 14-day statutory waiting period from the
time a complete notification is made) or a long-form filing (in respect of which
there is a 42-day waiting period from the time a complete notification is made).
A merger transaction is exempt from the foregoing notification requirements if
the Commissioner issues a certificate (an "ADVANCE RULING CERTIFICATE") that she
is satisfied that she would not have grounds to challenge the merger transaction
under the merger law, or if the Commissioner waives the notification
requirements.
The Commissioner's review of a Notifiable Transaction may take longer than
the statutory waiting period. Upon completion of the Commissioner's review, the
Commissioner may decide to (i) challenge the Notifiable Transaction, if the
Commissioner concludes that it is likely to substantially lessen or prevent
competition, or (ii) issue a "no action" letter stating that the Commissioner
does not intend to challenge the Notifiable Transaction at that time but retains
the authority to do so for three years after completion of the Notifiable
Transaction.
Intrawest and Acquisitionco submitted a request on September 14, 2006 that
the Commissioner issue an advance ruling certificate in respect of the
acquisition of Intrawest contemplated by the Arrangement. It is a condition to
the completion of the Arrangement (i) that Intrawest and Acquisitionco receive
an advance ruling certificate, (ii) the waiting period under Part IX of the
Competition Act will have expired or been reduced by the Commissioner and the
Commissioner will not have given notice that she intends to challenge the
acquisition on merger grounds, or (iii) the Commissioner will have waived the
notification requirements.
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HSR ACT
Under the HSR Act, the Arrangement may not be completed until the required
HSR notifications have been filed with the Antitrust Division of the U.S.
Department of Justice and the U.S. Federal Trade Commission, and the required
waiting period has expired or been earlier terminated. Under the HSR Act, the
Arrangement may not be completed until 30 days after the initial filings (unless
early termination of this waiting period is granted) or, if the Antitrust
Division of the Department of Justice or the Federal Trade Commission issues a
request for additional information, 30 days after the parties have substantially
complied with that request for additional information (unless the waiting period
is terminated earlier by the reviewing agency or extended with the parties'
consent). Each of the parties filed the required Notification and Report Form
under the HSR Act with the U.S. Department of Justice and the Federal Trade
Commission on August 30, 2006. Early termination of the HSR Act waiting period
was granted by the Federal Trade Commission effective as of September 14, 2006.
INVESTMENT CANADA ACT
Under the Investment Canada Act, certain transactions involving the
acquisition of control of a Canadian business by a non-Canadian that exceed
prescribed monetary thresholds are subject to review and cannot be implemented
unless the applicable Minister responsible for the Investment Canada Act is
satisfied that the acquisition is likely to be of net benefit to Canada. The
Minister of Canadian Heritage (for cultural activities) and the Minister of
Industry (for all other activities) are the two Ministers who are responsible
for reviewing transactions. Where a transaction is subject to the review
requirement (a "REVIEWABLE TRANSACTION"), an application for review must be
filed with the applicable Director of Investments appointed by the responsible
Minister prior to the implementation of the Reviewable Transaction. The
responsible Minister is then required to determine whether the Reviewable
Transaction is likely to be of net benefit to Canada.
The prescribed factors of assessment to be considered by the responsible
Minister include, among other things, the effect of the investment on the level
and nature of economic activity in Canada (including the effect on employment,
utilization of Canadian products and services, and exports), the degree and
significance of participation by Canadians in the acquired business, the effect
of the investment on productivity, industrial efficiency, technological
development, product innovation and product variety in Canada, the effect of the
investment on competition within any industry in Canada, the compatibility of
the investment with national industrial, economic and cultural policies (taking
into consideration corresponding provincial policies) and the contribution of
the investment to Canada's ability to compete in world markets.
The Investment Canada Act contemplates an initial review period of 45 days
after filing; however, if the responsible Minister has not completed the review
by that date, the responsible Minister may unilaterally extend the review period
by up to 30 days (or such longer period as the Minister and the applicant may
agree) to permit completion of the review. In determining whether a Reviewable
Transaction is of net benefit to Canada, the responsible Minister can take into
account, among other things, the previously noted factors specified in the
Investment Canada Act, as well as any written undertakings that may be given by
the applicant. If a notice that a Reviewable Transaction is determined not to be
of net benefit to Canada is sent to the applicant, it may not be implemented
(although the applicant would have an additional 30 days to make representations
and submit undertakings in an effort to secure approval). If no notice is sent
to the applicant by the responsible Minister within the 45-day period or the
extended period, as the case may be, the Reviewable Transaction is deemed to be
approved by such Minister.
The acquisition of control of Intrawest contemplated by the Arrangement
exceeds the relevant monetary thresholds and is therefore a Reviewable
Transaction. The Arrangement is conditional upon Parent being advised in writing
that the applicable Minister responsible for the Investment Canada Act is
satisfied, or the Minister is deemed to be satisfied, that the acquisition of
Intrawest contemplated by the Arrangement is likely to be of net benefit to
Canada. An application for review under the Investment Canada Act was filed with
the Director of Investments appointed by the Minister of Industry on September
5, 2006. Acquisitionco is in discussions with the Department of Canadian
Heritage to determine whether an application for review under the Investment
Canada Act is also required to be filed with the Director of Investments
appointed by the Minister of Canadian Heritage.
Intrawest expects that each of the foregoing regulatory approvals, to the
extent required, will be obtained without undue delay.
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CANADIAN SECURITIES LAW MATTERS
Intrawest is a reporting issuer (or the equivalent) under applicable
Canadian securities legislation in each Canadian province and is, among other
things, subject to applicable securities laws of Ontario and Quebec, including
Ontario Securities Commission Rule 61-501 -- Insider Bids, Issuer Bids, Business
Combinations and Related Party Transactions ("OSC RULE 61-501") and Regulation
Q-27 -- Respecting Protection of Minority Securityholders in the Course of
Certain Transactions ("REGULATION Q-27") of the Autorite des marches-financiers.
Each of OSC Rule 61-501 and Regulation Q-27 is intended to regulate certain
transactions to ensure equality of treatment to securityholders generally by
requiring enhanced disclosure, approval by a majority of securityholders
excluding interested or related parties and independent valuations. In certain
circumstances, approval and oversight by a special committee of independent
directors are recommended thereunder. The protections of OSC Rule 61-501 and
Regulation Q-27 generally apply to, among others, "business combinations" or
"going private transactions" that terminate the interests of securityholders
without their consent.
The Arrangement may be considered a "business combination" under OSC Rule
61-501 because Joe S. Houssian, Intrawest's Chief Executive Officer,
beneficially owns more than 1% of the outstanding Common Shares and is entitled
to receive, as a consequence of the Arrangement, certain payments in respect of
Intrawest Options and DSUs held by him pursuant to pre-existing compensation
agreements or plans described in this Circular. Such payments will be made as
described in this Circular on the same basis as to other holders of Intrawest
Options and DSUs. The Arrangement Resolutions must be approved by at least
two-thirds of the votes cast by Securityholders (and Shareholders) present in
person or represented by proxy at the Meeting, and Mr. Houssian is entitled and
intends to vote his Securities. In addition, OSC Rule 61-501 requires that the
Arrangement Resolutions be approved by a majority of the Shareholders other than
Mr. Houssian. Accordingly, votes attached to Common Shares beneficially owned by
Mr. Houssian will be excluded in determining whether the Arrangement Resolutions
have received such approval.
As the Arrangement may also be considered a "going private transaction" for
the purposes of Regulation Q-27, certain exemptions from the valuation and
certain aspects of the minority approval requirements have been obtained from
the Autorite des marches-financiers on the basis of compliance with the
requirements of OSC Rule 61-501.
In addition, OSC Rule 61-501 and Regulation Q-27 require Intrawest to
disclose any "prior valuations" (as defined in OSC Rule 61-501 and Regulation
Q-27) of Intrawest or its material assets or securities made within the 24-month
period preceding the date of this Circular. After reasonable inquiry, neither
Intrawest nor any director or senior officer of Intrawest has knowledge of any
such "prior valuation."
STOCK EXCHANGE DELISTING AND REPORTING ISSUER STATUS
The Common Shares are expected to be de-listed from the NYSE and TSX upon
completion of the Arrangement. Intrawest will also seek to be deemed to have
ceased to be a reporting issuer under the securities legislation of each of the
provinces in Canada under which it is currently a reporting issuer (or
equivalent) and to have the Common Shares de-registered under the U.S.
Securities Exchange Act of 1934.
JUDICIAL DEVELOPMENTS
Prior to the adoption of OSC Rule 61-501 (or its predecessor) and
Regulation Q-27, Canadian courts had in few instances granted preliminary
injunctions to prohibit transactions involving going private transactions
(currently referred to as "business combinations" in OSC Rule 61-501). The trend
both in legislation and jurisprudence in Canada has been towards permitting
business combinations to proceed subject to compliance with technical procedures
and disclosure requirements designed to ensure substantive fairness to minority
shareholders. Shareholders should consult their legal advisors for a
determination of their legal rights.
43
DISSENTING SHAREHOLDERS' RIGHTS
The Plan of Arrangement provides that Registered Shareholders will have the
rights of dissent contained in Section 190 of the CBCA. Section 190 of the CBCA
provides registered shareholders of a corporation with the right to dissent from
certain resolutions that effect extraordinary corporate transactions or
fundamental corporate changes. The Interim Order expressly provides Registered
Shareholders with the right to dissent from the Arrangement Resolutions pursuant
to section 190 of the CBCA, with modifications to the provisions of section 190
as provided in the Plan of Arrangement and the Interim Order. Any Registered
Shareholder who dissents from the Arrangement Resolutions in compliance with
section 190 of the CBCA, as modified by the Plan of Arrangement and the Interim
Order, will be entitled, in the event the Arrangement becomes effective, to be
paid the fair value of Common Shares held by such Dissenting Shareholder
determined as of the close of business on the day before the day the Arrangement
Resolutions are adopted. Shareholders are cautioned that fair value could be
determined to be less than the $35.00 payable pursuant to the terms of the
Arrangement.
Section 190 of the CBCA provides that a shareholder may only make a claim
under that section with respect to all of the shares of a class held by the
shareholder on behalf of any one beneficial owner and registered in the
shareholder's name. ONE CONSEQUENCE OF THIS PROVISION IS THAT ONLY A REGISTERED
SHAREHOLDER MAY EXERCISE THE DISSENT RIGHTS IN RESPECT OF COMMON SHARES THAT ARE
REGISTERED IN THAT SHAREHOLDER'S NAME.
In many cases, shares beneficially owned by a Non-Registered Shareholder
are registered either (a) in the name of an Intermediary or (b) in the name of a
clearing agency (such as CDS) of which the Intermediary is a participant.
Accordingly, a Non-Registered Shareholder will not be entitled to exercise its
Dissent Rights directly (unless the shares are re-registered in the
Non-Registered Shareholder's name). A Non-Registered Shareholder who wishes to
exercise Dissent Rights should immediately contact the Intermediary with whom
the Non-Registered Shareholder deals in respect of its shares and either (i)
instruct the Intermediary to exercise the Dissent Rights on the Non-Registered
Shareholder's behalf (which, if the Common Shares are registered in the name of
CDS or other clearing agency, may require that such Common Shares first be
re-registered in the name of the Intermediary), or (ii) instruct the
Intermediary to re-register such Common Shares in the name of the Non-Registered
Shareholder, in which case the Non-Registered Shareholder would be able to
exercise the Dissent Rights directly.
A REGISTERED SHAREHOLDER WHO WISHES TO DISSENT MUST PROVIDE A DISSENT
NOTICE TO INTRAWEST AT SUITE 800, 200 BURRARD STREET, VANCOUVER, BRITISH
COLUMBIA, V6C 3L6 (ATTENTION: GENERAL COUNSEL) AT OR BEFORE 5:00 P.M. (VANCOUVER
TIME) ON MONDAY, OCTOBER 16, 2006 (OR 5:00 P.M. (VANCOUVER TIME) ON THE DAY THAT
IS ONE BUSINESS DAY IMMEDIATELY PRECEDING ANY ADJOURNED OR POSTPONED MEETING).
IT IS IMPORTANT THAT REGISTERED SHAREHOLDERS STRICTLY COMPLY WITH THIS
REQUIREMENT, WHICH IS DIFFERENT FROM THE STATUTORY DISSENT PROVISIONS OF THE
CBCA.
The filing of a Dissent Notice does not deprive a Registered Shareholder of
the right to vote at the Meeting. However, the CBCA provides, in effect, that a
Registered Shareholder who has submitted a Dissent Notice and who votes in
favour of the Arrangement Resolutions will no longer be considered a Dissenting
Shareholder with respect to that class of shares voted in favour of the
Arrangement Resolutions, being the Common Shares. The CBCA does not provide, and
Intrawest will not assume, that a proxy submitted instructing the proxyholder to
vote against the Arrangement Resolutions, that a vote against the Arrangement
Resolutions or that an abstention constitutes a Dissent Notice, but a Registered
Shareholder need not vote its Common Shares against the Arrangement Resolutions
in order to dissent. Similarly, the revocation of a proxy conferring authority
on the proxyholder to vote in favour of the Arrangement Resolutions does not
constitute a Dissent Notice. However, any proxy granted by a Registered
Shareholder who intends to dissent, other than a proxy that instructs the
proxyholder to vote against the Arrangement Resolutions, must be validly revoked
in order to prevent the proxyholder from voting such Common Shares in favour of
the Arrangement Resolutions and thereby causing the Registered Shareholder to
forfeit its Dissent Rights. See "Information Concerning the Meeting and Voting."
A Dissenting Shareholder who has not withdrawn its Dissent Notice prior to
the Meeting must, within 20 days after receipt of notice that the Arrangement
Resolutions have been adopted, or if the Dissenting Shareholder does not receive
such notice, within 20 days after learning that the Arrangement Resolutions have
been adopted, send to Intrawest care of the Transfer Agent a written notice (a
"DEMAND FOR PAYMENT") containing its name and address, the number of Common
Shares in respect of which it dissents (the "DISSENTING COMMON SHARES") and a
demand for payment of the fair value of such Common Shares. Within 30 days after
sending the Demand for Payment, the Dissenting Shareholder must send to
Intrawest or the Transfer Agent certificates representing its Dissenting Common
Shares. The Transfer Agent will endorse on share certificates received from a
Dissenting Shareholder a
44
notice that the holder is a Dissenting Shareholder and will forthwith return the
share certificates to the Dissenting Shareholder. A Dissenting Shareholder who
fails to make a Demand for Payment in the time required or to send certificates
representing Dissenting Common Shares has no right to make a claim under section
190 of the CBCA.
Under section 190 of the CBCA, after sending a Demand for Payment, a
Dissenting Shareholder ceases to have any rights as a Shareholder in respect of
its Dissenting Common Shares other than the right to be paid the fair value of
the Dissenting Common Shares as determined pursuant to the Interim Order, unless
(i) the Dissenting Shareholder withdraws its Dissent Notice before Intrawest
makes an Offer to Pay, or (ii) Intrawest fails to make an Offer to Pay in
accordance with subsection 190(12) of the CBCA and the Dissenting Shareholder
withdraws the Demand for Payment, in which case the Dissenting Shareholder's
rights as a Shareholder will be reinstated. Pursuant to the Plan of Arrangement,
in no case will Intrawest or any other person be required to recognize any
Dissenting Shareholder as a Shareholder after the Effective Date, and the names
of such Shareholders shall be deleted from the list of Registered Shareholders
at the Effective Date.
Pursuant to the Plan of Arrangement, Dissenting Shareholders who are
ultimately determined to be entitled to be paid fair value for their Dissenting
Common Shares will be deemed to have transferred such Dissenting Common Shares
to Acquisitionco at the time set forth in the Plan of Arrangement.
Pursuant to the Plan of Arrangement, Dissenting Shareholders who are
ultimately determined not to be entitled, for any reason, to be paid fair value
for their Dissenting Common Shares, will be deemed to have participated in the
Arrangement on the same basis as any non-Dissenting Shareholder as at and from
the Effective Date.
Intrawest is required, not later than seven days after the later of the
Effective Date and the date on which a Demand for Payment is received from a
Dissenting Shareholder, to send to each Dissenting Shareholder who has sent a
Demand for Payment an Offer to Pay for its Dissenting Common Shares an amount
considered by the Board to be the fair value of the Common Shares, accompanied
by a statement showing the manner in which the fair value was determined. Every
Offer to Pay must be on the same terms. Intrawest must pay for the Dissenting
Common Shares of a Dissenting Shareholder within ten days after an Offer to Pay
has been accepted by a Dissenting Shareholder, but any such offer lapses if
Intrawest does not receive an acceptance within 30 days after the Offer to Pay
has been made.
If Intrawest fails to make an Offer to Pay for a Dissenting Shareholder's
Common Shares, or if a Dissenting Shareholder fails to accept an Offer to Pay
that has been made, Intrawest may, within 50 days after the Effective Date or
within such further period as a court may allow, apply to a court to fix a fair
value for the Common Shares of Dissenting Shareholders. If Intrawest fails to
apply to a court, a Dissenting Shareholder may apply to a court for the same
purpose within a further period of 20 days or within such further period as a
court may allow. A Dissenting Shareholder is not required to give security for
costs in such an application.
Before making any such application to a court itself after receiving a
notice that a Dissenting Shareholder has made an application to a court,
Intrawest will be required to notify each affected Dissenting Shareholder of the
date, place and consequences of the application and of its right to appear and
be heard in person or by counsel. Upon an application to a court, all Dissenting
Shareholders who have not accepted an Offer to Pay will be joined as parties and
be bound by the decision of the court. Upon any such application to a court, the
court may determine whether any person is a Dissenting Shareholder who should be
joined as a party, and the court will then fix a fair value for the Dissenting
Common Shares of all Dissenting Shareholders. The final order of a court will be
rendered against Intrawest in favour of each Dissenting Shareholder for the
amount of the fair value of its Dissenting Common Shares as fixed by the court.
The court may, in its discretion, allow a reasonable rate of interest on the
amount payable to each Dissenting Shareholder from the Effective Date until the
date of payment. Registered Shareholders who are considering exercising Dissent
Rights should be aware that there can be no assurance that the fair value of
their Common Shares as determined under the applicable provisions of the CBCA
(as modified by the Plan of Arrangement and the Interim Order) will be more than
or equal to the consideration under the Arrangement. In addition, any judicial
determination of fair value will result in delay of receipt by a Dissenting
Shareholder of consideration for such Dissenting Shareholder's Dissenting Common
Shares.
45
THE FOREGOING IS ONLY A SUMMARY OF THE DISSENTING SHAREHOLDER PROVISIONS OF
THE CBCA (AS MODIFIED BY THE PLAN OF ARRANGEMENT AND THE INTERIM ORDER), WHICH
ARE TECHNICAL AND COMPLEX. A COMPLETE COPY OF SECTION 190 OF THE CBCA IS
ATTACHED AS APPENDIX G TO THIS CIRCULAR. IT IS RECOMMENDED THAT ANY REGISTERED
SHAREHOLDER WISHING TO AVAIL ITSELF OF ITS DISSENT RIGHTS UNDER THOSE PROVISIONS
SEEK LEGAL ADVICE, AS FAILURE TO COMPLY STRICTLY WITH THE PROVISIONS OF THE CBCA
(AS MODIFIED BY THE PLAN OF ARRANGEMENT AND THE INTERIM ORDER) MAY PREJUDICE ITS
DISSENT RIGHTS.
For a general summary of certain income tax implications to a Dissenting
Shareholder, see "Certain Tax Considerations for Shareholders."
46
INFORMATION CONCERNING INTRAWEST
Intrawest is one of the world's leading destination resort and
adventure-travel companies. The company has a network of nine mountain resorts
throughout North America, including Whistler Blackcomb, a host venue for the
2010 Winter Olympic and Paralympic Games. Intrawest owns a 15% interest in
Mammoth Mountain in California, 100% of Canadian Mountain Holidays Inc., a
leader in the heli-skiing industry, and a 67% interest in Abercrombie & Kent
Group of Companies, S.A., a leader in luxury adventure travel. The Intrawest
network also includes Sandestin Golf and Beach Resort in Florida and Club
Intrawest, a private resort club with nine locations throughout North America.
Intrawest develops real estate at its resorts and at other locations across
North America and in Europe. Additional information about Intrawest can be found
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
PRINCIPAL SHAREHOLDERS
According to securities filings made by Pirate Capital LLC, as at August
10, 2006, Pirate Capital exercised control or direction over 8,928,570 Common
Shares, representing approximately 18.2% of Common Shares as of that date. This
represents approximately 17.2% of the Securities eligible to be voted at the
Meeting. Other than Pirate Capital LLC, the directors and executive officers of
Intrawest are not aware of any Shareholder that, directly or indirectly,
beneficially owns or exercises control over 10% or more of the Common Shares,
based on information available as at September 20, 2006.
AUDITORS AND AUDIT COMMITTEE
KPMG LLP has served as the auditors of Intrawest since 1997. Intrawest is
required to have an audit committee. The directors who are members of the
committee are David King, Gordon MacDougall and Paul Manheim.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of Intrawest, filed with the securities commissions
or similar authorities in each of the provinces of Canada, are specifically
incorporated by reference into and form an integral part of this Circular:
- the Annual Information Form of Intrawest dated September 20, 2006 for
the fiscal year ended June 30, 2006;
- the audited consolidated financial statements of Intrawest for the
fiscal year ended June 30, 2006, together with the notes thereto and the
auditors' report thereon;
- management's discussion and analysis for the fiscal year ended June 30,
2006; and
- the material change report of Intrawest dated August 18, 2006, regarding
the execution and delivery of the Arrangement Agreement.
All documents of the type referred to above (other than any confidential
material change reports) that are filed by Intrawest with a securities
commission or any similar authority in Canada after the date of this Circular
and prior to the Meeting will be deemed to be incorporated by reference into
this Circular.
Any statement contained in this Circular or in a document incorporated or
deemed to be incorporated by reference herein will be deemed to be modified or
superseded for the purposes of this Circular to the extent that a statement
contained herein, or in any other subsequently filed document that also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. The modifying or superseding statement need not state that it has
modified or superseded a prior statement or include any other information set
forth in the document that it modifies or supersedes.
The making of a modifying or superseding statement will not be deemed an
admission for any purposes that the modified or superseded statement, when made,
constituted a misrepresentation, an untrue statement of a material fact or an
omission to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the circumstances in
which it was made. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Circular.
Copies of the documents incorporated by reference into this Circular may be
obtained on request without charge from Intrawest's Corporate Secretary at Suite
800, 200 Burrard Street, Vancouver, British Columbia, Canada V6C 3L6 (telephone:
(604) 669-9777), and are also available electronically at www.sedar.com.
47
INFORMATION CONCERNING FORTRESS, ACQUISITIONCO AND PARENT
The following information about Fortress, the Fortress Funds, Acquisitionco
and Parent is a general summary only and is not intended to be comprehensive.
FORTRESS INVESTMENT GROUP LLC
Fortress Investment Group LLC is a leading global investment and asset
management firm with approximately $23 billion in equity capital under
management. Fortress is headquartered in New York, and its affiliates have
offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Rome, San Diego, Sydney
and Toronto.
Fortress manages capital for a diverse group of investors, including
approximately 300 leading pension funds, endowments and foundations, financial
institutions, funds of funds and high net worth individuals. Fortress'
businesses include, among others, private equity, special opportunities and a
Canadian income trust vehicle.
THE FORTRESS FUNDS
The Fortress Funds are 18 private equity funds that are managed by Fortress
Investment Group LLC or by an affiliate of Fortress Investment Group LLC. The
Fortress Funds primarily make long-term investments in cash flowing businesses
and asset portfolios in North America and Western Europe. These funds have grown
to become leading private equity funds by acquiring businesses and building them
in partnership with management. The Fortress Funds focus on acquiring cash
flowing asset-based businesses that offer (i) downside protection in the form of
tangible collateral and diversified cash flows, (ii) upside potential from
improvements to the operations, and (iii) opportunities for growth and strategic
development of the underlying businesses.
ACQUISITIONCO
Acquisitionco is an Alberta unlimited liability company owned by Parent.
PARENT
Parent is a Luxembourg company owned by the Fortress Funds.
The Arrangement was entered into between Wintergames Acquisition LLC, a
Delaware limited liability company owned by the Fortress Funds, 3167113 Nova
Scotia Company, a Nova Scotia unlimited liability company owned by Wintergames
Acquisition LLC, and Intrawest. On September 20, 2006, 3167113 Nova Scotia
Company assigned all of its right, title and interest in and to the Arrangement
Agreement to Wintergames Acquisition ULC and Wintergames Acquisition ULC assumed
all of the obligations of 3167113 Nova Scotia Company under the Arrangement
Agreement. In addition, on September 20, 2006, Wintergames Acquisition LLC
assigned to Wintergames S.a.r.l. all of its right, title and interest in and to
the Arrangement Agreement and Wintergames S.a.r.l. assumed all of the
obligations of Wintergames Acquisition LLC under the Arrangement Agreement.
INTRAWEST MARKET PRICE AND TRADING VOLUME DATA
The Common Shares are listed and posted for trading on the NYSE and the TSX
under the symbols "IDR" and "ITW," respectively. As of September 18, 2006, there
were 49,066,926 Common Shares issued and outstanding.
48
The following table summarizes the market price and volumes of trading of
the Common Shares on the NYSE for each of the periods indicated:
PRICE RANGE
-------------
HIGH LOW VOLUME
----- ----- ----------
($) ($)
FISCAL 2006/2007
July........................................................ 32.02 27.58 4,027,500
August...................................................... 34.63 25.80 16,296,100
September (to September 18)................................. 34.62 34.41 4,431,800
FISCAL 2005/2006
First Quarter............................................... 27.45 23.30 7,706,100
Second Quarter.............................................. 29.45 23.19 9,449,900
Third Quarter............................................... 34.29 26.31 14,157,600
Fourth Quarter.............................................. 37.69 30.52 18,246,000
FISCAL 2004/2005
First Quarter............................................... 19.04 14.46 4,627,000
Second Quarter.............................................. 23.02 18.16 6,914,000
Third Quarter............................................... 23.41 18.32 9,563,500
Fourth Quarter.............................................. 24.32 18.63 9,649,000
FISCAL 2003/2004
First Quarter............................................... 14.48 12.34 3,123,000
Second Quarter.............................................. 19.52 14.00 5,437,600
Third Quarter............................................... 19.29 16.27 6,570,900
Fourth Quarter.............................................. 17.92 13.57 4,614,600
The following table summarizes the market prices and volumes of trading of
the Common Shares on the TSX for each of the periods indicated:
PRICE RANGE
-----------------
HIGH LOW VOLUME
------- ------- ---------
(CDN.$) (CDN.$)
FISCAL 2006/2007
July........................................................ 37.00 31.15 876,559
August...................................................... 38.71 29.10 2,936,235
September (to September 18)................................. 38.85 37.28 331,836
FISCAL 2005/2006
First Quarter............................................... 32.48 28.17 3,641,506
Second Quarter.............................................. 34.97 25.26 4,186,234
Third Quarter............................................... 39.88 30.31 4,281,225
Fourth Quarter.............................................. 41.94 33.69 3,277,917
FISCAL 2004/2005
First Quarter............................................... 24.00 18.90 4,719,364
Second Quarter.............................................. 27.62 21.75 3,278,241
Third Quarter............................................... 27.59 22.43 5,032,704
Fourth Quarter.............................................. 30.19 22.57 6,202,535
FISCAL 2003/2004
First Quarter............................................... 19.40 17.10 5,043,186
Second Quarter.............................................. 25.41 18.86 6,075,748
Third Quarter............................................... 25.62 21.25 5,717,880
Fourth Quarter.............................................. 23.48 18.69 2,687,314
On February 27, 2006, the last trading day on the NYSE and the TSX prior to
the announcement that Intrawest was reviewing strategic options for enhancing
shareholder value, the closing price of the Common Shares on the NYSE was $29.12
and on the TSX was Cdn. $33.20 per Common Share. On August 10, 2006, the last
trading day on the NYSE and the TSX prior to the announcement of the
Arrangement, the closing price of the Common Shares on the NYSE was $26.51 and
on the TSX was Cdn. $29.79.
49
CERTAIN TAX CONSIDERATIONS FOR SHAREHOLDERS
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of McCarthy Tetrault LLP, Canadian counsel to Intrawest, the
following summary describes the principal Canadian federal income tax
considerations generally applicable to a Shareholder who, for the purposes of
the Tax Act and at all relevant times, holds Common Shares as capital property,
deals at arm's length with Intrawest and Acquisitionco, and is not affiliated
with Intrawest or Acquisitionco. Generally, Common Shares will be capital
property to a Shareholder unless the Common Shares are held or were acquired in
the course of carrying on a business of buying and selling securities or as part
of an adventure or concern in the nature of trade. Certain Shareholders who are
residents of Canada for purposes of the Tax Act and whose Common Shares might
not otherwise be capital property may, in some circumstances, be entitled to
make an irrevocable election in accordance with subsection 39(4) of the Tax Act
to have such Common Shares and every other "Canadian security" (as defined in
the Tax Act) owned by them deemed to be capital property in the taxation year of
the election and in all subsequent taxation years. Such Shareholders should
consult their own tax advisors for advice with respect to whether an election
under subsection 39(4) of the Tax Act is available or advisable in their
particular circumstances.
This summary is based upon the current provisions of the Tax Act, the
regulations thereunder (the "REGULATIONS") and counsel's understanding of the
current administrative policies and assessing practices of the CRA made publicly
available prior to the date hereof. This summary also takes into account all
specific proposals to amend the Tax Act and the Regulations publicly announced
by or on behalf of the Minister of Finance (Canada) prior to the date hereof
(the "PROPOSED AMENDMENTS") and assumes that all Proposed Amendments will be
enacted in the form proposed. However, no assurances can be given that the
Proposed Amendments will be enacted as proposed, or at all. This summary does
not otherwise take into account or anticipate any changes in law or
administrative policies or assessing practices, whether by legislative,
regulatory, administrative or judicial action or decision, nor does it take into
account provincial, territorial or foreign tax legislation or considerations,
which may be different from those discussed in this summary. This summary
assumes that the Common Shares will be listed on the TSX at the time that the
Common Shares are acquired by Acquisitionco under the Arrangement. No advance
income tax ruling has been sought or obtained from CRA with respect to any of
the transactions forming part of the Arrangement.
THIS SUMMARY IS NOT APPLICABLE TO A SHAREHOLDER (I) THAT IS, FOR THE
PURPOSES OF CERTAIN RULES IN THE TAX ACT APPLICABLE TO SECURITIES HELD BY
FINANCIAL INSTITUTIONS, A "FINANCIAL INSTITUTION" (AS DEFINED IN THE TAX ACT),
OR (II) WHO ACQUIRED COMMON SHARES UPON THE EXERCISE OF AN INTRAWEST OPTION.
HOLDERS OF INTRAWEST OPTIONS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE TAX CONSEQUENCES OF THE ARRANGEMENT FOR HOLDERS OF INTRAWEST
OPTIONS.
THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT, AND IS NOT INTENDED TO
BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER. THIS SUMMARY IS NOT
EXHAUSTIVE OF ALL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS. ACCORDINGLY,
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE CANADIAN
FEDERAL INCOME TAX CONSEQUENCES OF THE ARRANGEMENT HAVING REGARD TO THEIR OWN
PARTICULAR CIRCUMSTANCES.
CURRENCY TRANSLATION
All amounts relevant to the computation of income under the Tax Act must be
reported in Canadian dollars. Any amount that is expressed or denominated in a
currency other than Canadian dollars, including adjusted cost base and proceeds
of disposition, must be converted into Canadian dollars based on the spot
currency exchange rate prevailing on the date each such amount arises.
SHAREHOLDERS RESIDENT IN CANADA
The following portion of this summary is generally applicable to a
Shareholder who is a resident of Canada for purposes of the Tax Act (a "RESIDENT
SHAREHOLDER").
Disposition of Common Shares
A Resident Shareholder who disposes of Common Shares under the Arrangement
will realize a capital gain (or a capital loss) equal to the amount by which the
cash received by the Resident Shareholder under the Arrangement
50
exceeds (or is less than) the aggregate of the adjusted cost base of the Common
Shares to the Resident Shareholder and any reasonable costs of disposition.
Generally, a Resident Shareholder is required to include in computing its
income for a taxation year one-half of the amount of any capital gain (a
"TAXABLE CAPITAL GAIN") realized by the Resident Shareholder in the year. A
Resident Shareholder is required to deduct one-half of the amount of any capital
loss (an "ALLOWABLE CAPITAL LOSS") realized in a taxation year from taxable
capital gains realized in the year, and allowable capital losses in excess of
taxable capital gains may be carried back and deducted in any of the three
preceding taxation years or carried forward and deducted in any subsequent
taxation year against net taxable capital gains realized by the Resident
Shareholder in such years, to the extent and in the circumstances prescribed by
the Tax Act.
The amount of any capital loss realized by a Resident Shareholder that is a
corporation on the disposition of a Common Share may be reduced by the amount of
any dividends received (or deemed to be received) by it on such Common Share to
the extent and under the circumstances prescribed by the Tax Act. Similar rules
may apply where the corporation is a member of a partnership or a beneficiary of
a trust that owns Common Shares or where a partnership or trust of which a
corporation is a member or a beneficiary is a member of a partnership or a
beneficiary of a trust that owns Common Shares. Resident Shareholders to whom
these rules may apply should consult their own tax advisors.
A Resident Shareholder that is throughout the year a "Canadian-controlled
private corporation" (as defined in the Tax Act) may be liable for a refundable
tax of 6 2/3% on its "aggregate investment income," which is defined to include
an amount in respect of taxable capital gains.
Capital gains realized by an individual or a trust, other than certain
trusts, may give rise to alternative minimum tax under the Tax Act. Resident
Shareholders should consult their own tax advisors with respect to the
alternative minimum tax provisions.
Dissenting Shareholders
A Resident Shareholder who exercises Dissent Rights (a "RESIDENT DISSENTING
SHAREHOLDER") will transfer such holder's Common Shares to Acquisitionco in
exchange for payment by Acquisitionco of the fair value of such Common Shares.
In general, a Resident Dissenting Shareholder will realize a capital gain (or
capital loss) equal to the amount by which the cash received in respect of the
fair value of the holder's Common Shares (other than in respect of interest
awarded by a court) exceeds (or is less than) the aggregate of the adjusted cost
base of such Common Shares and any reasonable costs of disposition. See
"Disposition of Common Shares" above.
Interest awarded by a court to a Resident Dissenting Shareholder will be
included in the shareholder's income for the purposes of the Tax Act. Resident
Dissenting Shareholders should consult their own tax advisors.
SHAREHOLDERS NOT RESIDENT IN CANADA
The following portion of this summary is applicable to a Shareholder who is
not a resident of Canada for purposes of the Tax Act (a "NON-RESIDENT
SHAREHOLDER") and holds Common Shares as capital property. Special rules, which
are not discussed in this summary, may apply to a Non-Resident Shareholder that
is either an insurer carrying on business in Canada and elsewhere or an
authorized foreign bank. Such Non-Resident Shareholders should consult their own
tax advisors.
Disposition of Common Shares
A Non-Resident Shareholder will not be subject to tax under the Tax Act on
any capital gain realized on the disposition of Common Shares under the
Arrangement unless the Common Shares are "taxable Canadian property" (within the
meaning of the Tax Act) to the Non-Resident Shareholder at the time of the
disposition and such gain is not otherwise exempt from tax under the Tax Act
pursuant to the provisions of an applicable income tax treaty.
Generally, Common Shares will not be taxable Canadian property to a
Non-Resident Shareholder at the time of disposition under the Arrangement
provided that (i) the Common Shares are listed on a prescribed stock exchange
(which includes the TSX) at that time, and (ii) the Non-Resident Shareholder,
persons with whom the Non-Resident Shareholder does not deal at arm's length, or
the Non-Resident Shareholder together with all such persons, has not owned 25%
or more of the issued shares of any class or series of the capital stock of
Intrawest (including the Non-Resort Preferred Shares, the last redemption of
which occurred in November 2002) at any time during the 60-month period that
ends at the time of disposition under the Arrangement. Notwithstanding the
51
foregoing, Common Shares may be deemed to be taxable Canadian property in
certain circumstances specified in the Tax Act.
Even if Common Shares are considered to be taxable Canadian property of a
Non-Resident Shareholder at the time of disposition under the Arrangement, the
Non-Resident Shareholder may be exempt from tax under the Tax Act pursuant to
the terms of any applicable income tax treaty. Non-Resident Shareholders should
consult their own tax advisors with respect to the availability of any relief
under the terms of any applicable income tax treaty in their particular
circumstances.
In the event that the Common Shares constitute taxable Canadian property to
a Non-Resident Shareholder and any capital gain realized by the Non-Resident
Shareholder on the disposition of Common Shares under the Arrangement is not
exempt from tax under the Tax Act by virtue of an applicable income tax treaty,
then the tax consequences described above under the heading "Shareholders
Resident in Canada -- Disposition of Common Shares" will generally apply. A
Non-Resident Shareholder disposing of taxable Canadian property must file a
Canadian tax return reporting such gain and pay the requisite Canadian tax
thereon or where relief under an income tax treaty is available, assert a claim
for such relief in the return.
Dissenting Shareholders
A Non-Resident Shareholder who exercises Dissent Rights (a "NON-RESIDENT
DISSENTING SHAREHOLDER") will transfer such holder's Common Shares to
Acquisitionco in exchange for payment by Acquisitionco of the fair value of such
Common Shares. In general, the tax treatment of a Non-Resident Dissenting
Shareholder will be similar to that of a Non-Resident Shareholder who
participates in the Arrangement. See "Shareholders Not Resident in Canada --
Disposition of Common Shares" above.
The amount of any interest awarded by a court to a Non-Resident Dissenting
Shareholder will be subject to Canadian withholding tax at a rate of 25% unless
the rate is reduced under the provisions of an applicable income tax treaty.
Non-Resident Dissenting Shareholders should consult their own tax advisors with
respect to the availability of any relief under the terms of an applicable
income tax treaty in their particular circumstances.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
IRS CIRCULAR 230 DISCLOSURE: TO ENSURE COMPLIANCE WITH REQUIREMENTS
IMPOSED BY THE INTERNAL REVENUE SERVICE (THE "IRS"), YOU ARE HEREBY NOTIFIED
THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS DOCUMENT IS NOT
INTENDED OR WRITTEN BY US TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY YOU,
FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE U.S.
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"); (B) SUCH DISCUSSION IS
WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR
MATTERS ADDRESSED HEREIN; AND (C) YOU SHOULD SEEK ADVICE BASED ON YOUR
PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
The following is a summary of the material U.S. federal income tax
considerations applicable to U.S. Holders and Non-U.S. Holders (as defined
below) arising from and relating to the Arrangement. This summary is based on
the provisions of the Code, existing, temporary and proposed regulations
promulgated under the Code and administrative and judicial interpretations of
the Code, as of the date of this Circular and all of which are subject to
change, possibly with retroactive effect. No advance income tax ruling has been
sought or obtained from the IRS regarding the tax consequences of the
transactions described in this Circular.
This summary does not discuss all U.S. federal income tax considerations
that may be relevant to Shareholders in light of their particular circumstances
or to certain Shareholders that may be subject to special treatment under U.S.
federal income tax laws (for example, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities, persons that hold
Common Shares as part of a straddle, hedging, constructive sale or conversion
transaction, U.S. Holders whose functional currency is not the U.S. dollar,
persons that own or have owned, actually or constructively, 10% or more of the
Common Shares, and other than as specifically provided below, Shareholders who
acquired Common Shares through exercise of employee stock options or otherwise
as compensation for services). This summary is limited to Shareholders that hold
their Common Shares as capital assets as defined in Section 1221 of the Code and
does not consider the tax treatment of Shareholders that hold Common Shares
through a partnership or other pass through entity. Furthermore, other than as
specifically provided below, this summary does not discuss aspects of U.S.
federal income taxation that may be applicable to holders of
52
Intrawest Options or any other interests in Intrawest that were acquired in
connection with the performance of services resulting from the Arrangement, nor
does it address any aspects of foreign, state or local taxation.
SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO
THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS, AS WELL AS THE TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY
FOREIGN, STATE OR LOCAL TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
As used herein, "U.S. Holder" means a beneficial owner of Common Shares
that for U.S. federal income tax purposes is (i) a citizen or resident of the
U.S., (ii) a corporation, limited liability company or partnership created or
organized in or under the laws of the U.S. or any political subdivision thereof
(including the States and the District of Columbia), (iii) an estate the income
of which is subject to U.S. federal income taxation regardless of its source,
(iv) a trust if a court within the U.S. is able to exercise primary jurisdiction
over its administration and one or more U.S. persons, as defined in Section
7701(a)(3) of the Code, have authority to control all substantial decisions of
the trust, or (v) any other person that is subject to U.S. federal income tax on
its worldwide income. If a partnership or other flow-through entity holds Common
Shares, the U.S. federal income tax treatment of a partner or other owner
generally will depend on the status of the partner or other owner and the
activities of the partnership or other flow-through entity. A Shareholder that
is a partner of the partnership or an owner of another flow-through entity
holding Common Shares should consult its own tax advisors. As used herein, the
term "Non-U.S. Holder" means a beneficial owner of Common Shares that is not a
U.S. Holder.
U.S. HOLDERS
DISPOSITION OF COMMON SHARES PURSUANT TO THE ARRANGEMENT
The exchange by a U.S. Holder of Common Shares for cash pursuant to the
Arrangement will be treated as a taxable sale for U.S. federal income tax
purposes. Consequently, a U.S. Holder will recognize a gain or loss in an amount
equal to the difference, if any, between (a) the amount of cash received (at its
U.S. dollar equivalent determined by reference to the spot rate of exchange on
the date of disposition and including the amount of any Canadian withholding
tax) in exchange for the U.S. Holder's Common Shares in the Arrangement and (b)
the U.S. Holder's adjusted tax basis in such Common Shares. In the case of a
U.S. Holder (that is a Shareholder) that dissents from the Arrangement, the gain
or loss will be equal to the difference between the amount of cash received (at
its U.S. dollar equivalent determined by reference to the spot rate of exchange
on the date of disposition, if the amount received is denominated in Canadian
dollars and including the amount of any Canadian withholding tax) and the U.S.
Holder's adjusted tax basis in its Common Shares surrendered in the exchange.
Assuming Intrawest was not at any relevant time classified as a PFIC, as defined
below under "Passive Foreign Investment Company Considerations," a gain or loss
on the exchange of Common Shares will be a capital gain or loss if such shares
were held by a U.S. Holder as a capital asset. Further, the gain or loss will be
a long-term capital gain or loss if the U.S. Holder has held its Common Shares
for more than one year at the time of the exchange. Any such gain or loss will
generally be gain or loss from sources within the U.S. for foreign tax credit
purposes unless the gain is attributable to an office or other fixed place of
business maintained by the U.S. Holder outside the U.S. and certain other
conditions are met.
Preferential U.S. federal income tax rates apply to long-term capital gains
of U.S. Holders other than corporations. The current maximum tax rate is 15%.
There are currently no preferential U.S. federal income tax rates for long-term
capital gains of U.S. Holders that are corporations. The deductibility of
capital losses is subject to limitations.
PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS
For U.S. federal income tax purposes, a corporation is classified as a
passive foreign investment company ("PFIC") for each taxable year in which
either (i) 75% or more of its gross income is passive income (as defined for
U.S. federal income tax purposes), or (ii) on average for such taxable year, 50%
or more in value of its assets produce passive income or are held for the
production of passive income. In determining whether it is a PFIC, a foreign
corporation is required to take into account a pro rata portion of the income
and assets of each corporation in which it owns, directly or indirectly, at
least a 25% interest.
Special, generally adverse, rules would apply to a U.S. Holder if Intrawest
were classified as a PFIC during any taxable year in such Shareholder's holding
period for its Common Shares. Under those rules, unless the U.S. Holder timely
and validly made certain elections (either a "qualifying electing fund" election
or a "mark to market"
53
election), the U.S. Holder may be subject to the imposition of additional tax
and an interest charge when its Common Shares are disposed of. Historically,
Intrawest has not completed, and Intrawest does not currently intend to
complete, the actions necessary for U.S. holders to make a qualifying electing
fund election. This conclusion is a factual determination that is made annually.
Intrawest has not made a determination of its PFIC status for each of its past
tax years. It did consider its PFIC status in 1997 and 2002, and concluded that,
based on the nature of its income, assets and activities, it was not a PFIC in
1997 or 2002, and that it did not expect to be classified as a PFIC for any
future taxable year. Other than as described above, Intrawest has not made any
determinations regarding its PFIC status.
While there can be no assurance with respect to the classification of
Intrawest as a PFIC, Intrawest does not believe that it is currently a PFIC.
U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE
POTENTIAL APPLICATION OF THE PFIC RULES.
FOREIGN TAX CREDITS FOR CANADIAN TAXES PAID OR WITHHELD
A U.S. Holder that pays (whether directly or through withholding) Canadian
income tax in connection with the Arrangement may be entitled, at the election
of such U.S. Holder, to receive either a deduction or a credit for U.S. federal
income tax purposes. Generally, a credit will reduce a U.S. Holder's U.S.
federal income tax liability on a dollar-for-dollar basis, whereas a deduction
will reduce a U.S. Holder's income subject to U.S. federal income tax.
The foreign tax credit rules are complex, and each U.S. Holder should
consult its own financial advisor, legal counsel or accountant regarding the
foreign tax credit rules and the application of the foreign tax credit rules to
the Arrangement.
NON-U.S. HOLDERS
DISPOSITION OF COMMON SHARES PURSUANT TO THE ARRANGEMENT
Non-U.S. Holders will not be subject to U.S. federal income tax on gain
realized as a result of the exchange by such Shareholder of Common Shares for
cash pursuant to the Arrangement, unless the gain or income, if any, is
effectively connected with a U.S. trade or business of the Non-U.S. Holder or,
in the case of gain realized by an individual Non-U.S. Holder, the individual is
present in the U.S. for 183 days or more during the taxable year of disposition
and certain other conditions are satisfied.
BACK-UP WITHHOLDING AND INFORMATION REPORTING
Back-up withholding tax is not a separate tax. Any amounts withheld under
the back-up withholding rules are generally allowable as a credit against a
Shareholder's U.S. federal income tax liability (if any), which may entitle the
Shareholder to a refund, provided that the required information is furnished to
the IRS.
U S. HOLDERS
Payments of cash received by a U.S. Holder in exchange for Common Shares
(including Common Shares received by U.S. Holders exercising Intrawest Options
pursuant to the Arrangement) pursuant to the Arrangement generally may be
subject to the information reporting requirements of the Code and may be subject
to back-up withholding tax, at the rate of 28%, unless the U.S. Holder (i)
establishes that it is a corporation or other exempt holder, or (ii) provides an
accurate taxpayer identification number on a properly completed Internal Revenue
Service Form W-9 and certifies that no loss of exemption from back-up
withholding has occurred.
NON-U.S. HOLDER
In general, a Non-U.S. Holder will not be subject to back-up withholding
and information reporting with respect to payments of cash received by such
Non-U.S. Holder in exchange for Common Shares if such Non-U.S. Holder provides a
properly completed Internal Revenue Service Form W-8BEN or such other applicable
certification in order to establish its exemption from information reporting and
back-up withholding.
Shareholders should consult their own financial advisor, legal counsel or
accountant regarding the information reporting and back-up withholding tax
rules, and the application of the information reporting and back-up withholding
tax rules to the Arrangement.
54
THE DISCUSSION OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS
FOR GENERAL INFORMATION ONLY AND DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OR
LISTING OF ALL POTENTIAL TAX EFFECTS THAT MAY APPLY TO A SHAREHOLDER. EACH
SHAREHOLDER IS STRONGLY ENCOURAGED TO CONSULT ITS OWN TAX ADVISOR TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES TO IT OF THE ARRANGEMENT, INCLUDING THE
APPLICATION AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
OPTIONHOLDERS
OPTIONHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
CANADIAN AND U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ARRANGEMENT HAVING
REGARD TO THEIR OWN PARTICULAR CIRCUMSTANCES.
LEGAL MATTERS
Certain legal matters in connection with the Arrangement will be passed
upon by McCarthy Tetrault LLP, Fried, Frank Harris, Shriver & Jacobson LLP and
Morrison & Foerster LLP on behalf of Intrawest and by Goodmans LLP and Skadden,
Arps, Slate, Meagher & Flom LLP on behalf of Parent and Acquisitionco. As at the
date of this Circular, partners and associates of McCarthy Tetrault LLP own
beneficially, directly or indirectly, less than 1% of the outstanding securities
of Intrawest and its associates and affiliates.
ADDITIONAL INFORMATION
Information contained herein is given as of September 20, 2006, except as
otherwise noted.
Additional information relating to Intrawest, including Intrawest's most
current Annual Information Form (together with documents incorporated therein by
reference), the comparative consolidated financial statements of Intrawest for
the financial year ended June 30, 2006, together with the report of the auditors
thereon, management's discussion and analysis of Intrawest's financial condition
and results of operations for fiscal 2006 which provide financial information
concerning Intrawest can be found on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov. Copies of those documents, as well as any additional copies of this
Circular, are available without charge upon written request to Intrawest's
Corporate Secretary.
QUESTIONS AND FURTHER ASSISTANCE
If you have any questions about the information contained in this Circular
or require assistance in completing your proxy form, please contact Georgeson,
Intrawest's proxy solicitation agent, toll-free at 1-866-390-5292.
APPROVAL OF INTRAWEST
The contents and mailing to Securityholders of this Circular have been
approved by the Board.
/s/ Joe S. Houssian
Vancouver, British Columbia Joe S. Houssian
September 20, 2006 Chairman and Chief Executive Officer
55
CONSENT OF GOLDMAN, SACHS & CO.
September 20, 2006
Board of Directors
Intrawest Corporation
200 Burrard Street, Suite 800
Vancouver, BC V6C 3L6
Canada
Re: Notice of Special Meeting and Management Information Circular dated
September 20, 2006
Madame and Gentlemen:
Reference is made to our opinion letter, dated August 10, 2006, with
respect to the fairness from a financial point of view to the holders of the
outstanding common shares, without par value (the "Common Shares"), of Intrawest
Corporation (the "Company") of the $35.00 per Common Share in cash to be
received by such holders pursuant to the Agreement (as defined in the opinion
letter).
The foregoing opinion letter was provided for the information and
assistance of the Board of Directors of the Company in connection with its
consideration of the transaction contemplated therein and is not to be used,
circulated, quoted or otherwise referred to for any other purpose, nor is it to
be filed with, included in or referred to in whole or in part in any
registration statement, proxy statement, directors' circular or any other
document, except in accordance with our prior written consent. We understand
that the Company has determined to include our opinion in the above-referenced
Notice of Special Meeting and Management Information Circular.
In that regard, we hereby consent to the reference to our opinion under the
captions "Summary of Management Information Circular -- Reasons for the
Arrangement," "Summary of Management Information Circular -- Fairness Opinion,"
"The Arrangement -- Background to the Arrangement Agreement," "The Arrangement
-- Reasons for the Arrangement" and "The Arrangement -- Fairness Opinion" and to
the inclusion of the foregoing opinion in the Management Information Circular.
GOLDMAN, SACHS & CO.
[GOLDMAN SACHS & CO.]
CONSENT OF MCCARTHY TETRAULT LLP
We hereby consent to the reference to our opinion contained under "Certain
Canadian Federal Income Tax Considerations" in the management information
circular of Intrawest Corporation dated September 20, 2006 (the "CIRCULAR") and
to the inclusion of the foregoing opinion in the Circular.
Dated September 20, 2006 MCCARTHY TETRAULT LLP
[MCCARTHY TETRAULT LLP]
56
GLOSSARY OF TERMS
The following glossary of terms used in this Circular, including the
Summary, but not including the Appendices, is provided for ease of reference:
"6.875% NOTES" means the 6.875% Senior Notes due October 15, 2009 issued by
Intrawest pursuant to an indenture dated as of October 6, 2004 between Intrawest
and JPMorgan Chase Bank and CIBC Mellon Trust Company.
"7.50% NOTES" means the 7.50% Senior Notes due October 15, 2013 issued by
Intrawest on each of October 9, 2003 and October 6, 2004 pursuant to an
indenture dated as of October 9, 2003 between Intrawest and JPMorgan Chase Bank
and CIBC Mellon Trust Company.
"ACQUISITIONCO" means (a) 3167113 Nova Scotia Company, an unlimited
liability company incorporated under the laws of the Province of Nova Scotia,
prior to the assignment by 3167113 Nova Scotia Company of its rights under the
Arrangement Agreement and the assumption by Wintergames Acquisition ULC of the
obligations of 3167113 Nova Scotia Company under the Arrangement Agreement, and
(b) Wintergames Acquisition ULC, an Alberta unlimited liability company,
following such assignment and assumption.
"ACQUISITION PROPOSAL" means, at any time, any proposal or offer (written
or oral) relating to the acquisition by any person, or two or more persons
acting "jointly or in concert" (within the meaning of that expression as used in
the Securities Act (British Columbia)), of more than 20% of the Common Shares
outstanding at such time or assets (including shares of subsidiaries) of
Intrawest or any of its subsidiaries at such time representing more than 20% of
the book value or fair market value (each on a consolidated basis) of the total
assets of Intrawest and its subsidiaries, taken as a whole (including a lease
having the same economic effect as a purchase of assets), whether by way of plan
of arrangement, amalgamation, merger, consolidation, recapitalization,
liquidation, dissolution or other business combination, sale of assets, take
over bid, tender offer, share exchange, exchange offer or otherwise, other than
the Arrangement and the other transactions contemplated by the Arrangement
Agreement.
"AFFILIATE" has the meaning ascribed to it in the Securities Act (British
Columbia).
"APPROPRIATE REGULATORY APPROVALS" means those sanctions, rulings, orders,
determinations, exemptions, licences, permits, certificates and other consents,
approvals and authorizations (including the lapse, without objection, of a
prescribed time under a statute or regulation that states that a transaction may
be implemented if a prescribed time lapses following the giving of notice
without an objection being made) of, and notifications to and filings and
registrations with, Governmental Authorities set forth in Schedule B to the
Arrangement Agreement.
"ARRANGEMENT" means an arrangement under the provisions of section 192 of
the CBCA on the terms and conditions set forth in the Plan of Arrangement, as
amended, varied or supplemented from time to time.
"ARRANGEMENT AGREEMENT" means the arrangement agreement dated August 10,
2006, between Parent, Acquisitionco and Intrawest as the same may be amended
from time to time.
"ARRANGEMENT RESOLUTIONS" means the resolutions to be considered and, if
thought fit, passed by the Securityholders at the Meeting and set out in
Appendix A to this Circular.
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Intrawest in
respect of the Arrangement required by the CBCA to be sent to the Director after
the Final Order is made.
"ASSOCIATE" has the meaning ascribed to it in the Securities Act (British
Columbia).
"BOARD" means the Board of Directors of Intrawest.
"BUSINESS DAY" means any day on which commercial banks are generally open
for business in Vancouver, British Columbia and New York, NY other than a
Saturday, a Sunday or a day observed as a holiday in Vancouver, British Columbia
under the laws of the Province of British Columbia or the federal laws of Canada
or in New York, NY under the laws of the State of New York.
"CBCA" means the Canada Business Corporations Act and the regulations made
thereunder, as promulgated or amended from time to time.
"CDS" means The Canadian Depository for Securities Limited.
"CERTIFICATE OF ARRANGEMENT" means the certificate of arrangement giving
effect to the Arrangement issued pursuant to subsection 192(7) of the CBCA.
57
"CIRCULAR" means this management information circular of Intrawest,
including the Notice of Special Meeting and all schedules, appendices and
exhibits and all documents incorporated by reference herein.
"COMMISSIONER" has the meaning ascribed thereto under "Principal Legal
Matters -- Regulatory Matters -- Competition Act."
"COMMITMENT LETTER" means the commitment letter dated August 10, 2006 made
by Lehman Brothers Inc., Lehman Commercial Paper Inc., Deutsche Bank Securities
Inc., Deutsche Bank AG, Cayman Islands Branch, Bear, Stearns & Co. Inc. and Bear
Stearns Corporate Lending Inc. in favour of Fortress.
"COMMON SHARES" means the issued and outstanding common shares in the
capital of Intrawest.
"COMMON SHARE LETTER OF TRANSMITTAL" means the letter of transmittal to be
sent by Intrawest to Shareholders for use in connection with the Arrangement.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement dated March
29, 2006 between Fortress and Intrawest, as amended.
"CONTRACT" means any contract, agreement, licence, franchise, lease,
arrangement, commitment or understanding to which Intrawest or any of its
subsidiaries is a party or by which Intrawest or any of its subsidiaries is
bound.
"CORPORATION" means Intrawest Corporation, a corporation continued under
the CBCA.
"COURT" means the Supreme Court of British Columbia.
"CRA" means the Canada Revenue Agency.
"DEMAND FOR PAYMENT" has the meaning ascribed to it under "Dissenting
Shareholders' Rights."
"DEPOSITARY" means CIBC Mellon Trust Company or such other person as is
appointed by Acquisitionco, with the consent of Intrawest, not to be
unreasonably refused, to act as depositary for the purposes of the Arrangement.
"DIRECTOR" means the Director appointed pursuant to Section 260 of the
CBCA.
"DISSENT NOTICE" means the written objection of a Registered Shareholder to
the Arrangement Resolutions, submitted to Intrawest in accordance with the
Dissent Procedures.
"DISSENT PROCEDURES" means the dissent procedures, as described under the
heading "Dissenting Shareholders' Rights."
"DISSENT RIGHTS" means the rights of dissent of a Registered Shareholder in
respect of the Arrangement Resolutions described in the Plan of Arrangement.
"DISSENTING COMMON SHARES" means the Common Shares in respect of which a
Dissenting Shareholder dissents.
"DISSENTING SHAREHOLDER" means a Shareholder who properly exercises Dissent
Rights in respect of the Arrangement in strict compliance with the Dissent
Rights and who has not withdrawn their notice of dissent.
"DSU" means:
(a) in the case of the Intrawest Director DSU Plan, all of the
deferred share units credited to the participants thereunder
immediately prior to the Effective Time;
(b) in the case of the Intrawest Key Executive DSU Plan, all of the
deferred share units credited to the participants thereunder
immediately prior to the Effective Time;
(c) in the case of the Intrawest Return on Capital Plan, the "Target
Allocation" in respect of each of the participants thereunder
(being a total of 337,950 notional Common Shares); and
(d) in the case of the Intrawest LTIP, all of the notional Common
Shares that would be allotted to each participant thereunder in
the event of the termination of the employment of each of them
with Intrawest after July 1, 2006 and before September 30, 2006
in circumstances which do not entitle any of them to a
"Reasonable Notice Period Allotment" thereunder.
"EFFECTIVE DATE" means the date on which all conditions to the completion
of the Arrangement as set out in the Arrangement Agreement have been satisfied
or waived in accordance with the provisions of the Arrangement Agreement and all
documents agreed to be delivered thereunder have been delivered to the
satisfaction of the
58
parties hereto, acting reasonably, which will be the date shown on the
Certificate of Arrangement giving effect to the Arrangement.
"EFFECTIVE TIME" means the time on the Effective Date as specified in
writing by Intrawest in a notice delivered to the parties to the Arrangement
Agreement.
"ELIGIBLE EMPLOYEE" means an Optionholder who is a current or former
employee of Intrawest (or any subsidiary thereof) and who, for purposes of the
Tax Act, received his or her Intrawest Options in respect of, in the course of,
or by virtue of, his or her employment with Intrawest (or any subsidiary
thereof).
"EQUITY COMMITMENT LETTER" means the equity commitment letter dated August
10, 2006 made by Fortress in favour of Acquisitionco.
"EXCHANGE RATE" means the Bank of Canada's published rate of exchange for
U.S. dollars at noon on the Business Day prior to the Effective Date.
"EXCHANGES" means the TSX and NYSE.
"FAIRNESS OPINION" means the fairness opinion delivered by Goldman Sachs to
the Board dated August 10, 2006, a copy of which is attached as Appendix D to
this Circular.
"FINAL ORDER" means the order of the Court approving the Arrangement under
section 192 of the CBCA, as such order may be affirmed, amended or modified by
the Court at any time prior to the Effective Date or, if appealed, unless such
appeal is withdrawn, abandoned or denied, as affirmed or amended on appeal.
"FORTRESS" means Fortress Investment Group LLC and, where applicable,
includes Fortress Investment Group LLC acting for and on behalf of the Fortress
Funds.
"FORTRESS FUNDS" means, collectively, the 18 private equity funds managed
by Fortress or an affiliate of Fortress, each of which is a party to the Equity
Commitment Letter.
"FUNDED SHARE PURCHASE PLAN" means the Intrawest "2002 Funded Senior
Employee Share Purchase Plan."
"GOLDMAN SACHS" means Goldman, Sachs & Co., which acted as financial
advisor to Intrawest in respect of the Arrangement.
"GOVERNMENTAL AUTHORITY" means any multinational, federal, provincial,
state, regional, municipal, local or other government or governmental body and
any division, agent, agency, commission, board or authority of any government,
governmental body, quasi-governmental or private body exercising any statutory,
regulatory, expropriation or taxing authority under the authority of any of the
foregoing and any domestic, foreign or international judicial, quasi-judicial or
administrative court, tribunal, commission, board, panel or arbitrator acting
under the authority of any of the foregoing.
"HSR ACT" means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"INDEBTEDNESS" means, without duplication, with respect to any person (a)
every obligation of such person for borrowed money, secured or unsecured, (b)
every obligation of such person evidenced by bonds, debentures, notes or other
similar instruments, (c) every obligation of such person under purchase money
mortgages, conditional sale agreements or other similar instruments relating to
purchased property or assets, (d) every capitalized lease obligation of such
person, (e) every obligation of such person under interest rate cap, swap,
collar or similar transactions or currency hedging transactions (valued at the
termination value thereof) and (f) every obligation of the type referred to
above of any other person, the payment of which such person has guaranteed or
for which such person is otherwise responsible or liable.
"INSIDER" has the meaning ascribed to it in the Securities Act (British
Columbia).
"INTERIM ORDER" means the interim order of the Court issued following the
application therefor contemplated by the Arrangement Agreement and containing
declarations and directions with respect to the Arrangement and the holding of
the Meeting, as such order may be amended, modified, supplemented or varied by
the Court.
"INTERMEDIARY" means an intermediary with which a Non-Registered
Shareholder may deal, including banks, trust companies, securities dealers or
brokers and trustees or administrators of self-directed trusts governed by
registered retirement savings plans, registered retirement income funds,
registered education savings plans (collectively, as defined in the Tax Act) and
similar plans, and their nominees.
"INTRAWEST" means Intrawest Corporation, a corporation continued under the
CBCA.
59
"INTRAWEST DIRECTOR DSU PLAN" means the "Director Deferred Share Unit Plan"
of Intrawest, as amended from time to time.
"INTRAWEST DSU PLANS" means the Intrawest LTIP, the Intrawest Return on
Capital Plan, the Intrawest Key Executive DSU Plan and the Intrawest Director
DSU Plan.
"INTRAWEST EMPLOYEE SHARE PURCHASE PLAN" means the "Intrawest Employee
Share Purchase Plan," as amended from time to time.
"INTRAWEST KEY EXECUTIVE DSU PLAN" means the "Key Executive Deferred Share
Unit Plan -- 2001" of Intrawest, as amended from time to time.
"INTRAWEST LTIP" means the Executive Long Term Incentive Plan, as amended
from time to time.
"INTRAWEST NOTES" means, collectively, the 6.875% Notes and the 7.50%
Notes.
"INTRAWEST OPTIONS" at any time means options to acquire Common Shares
granted pursuant to the Intrawest Stock Option Plan that are, at such time,
outstanding and unexercised, whether or not vested.
"INTRAWEST RETURN ON CAPITAL PLAN" means the "Key Executive Long Term
Incentive Plan" of Intrawest, as amended from time to time.
"INTRAWEST SHARE CONSIDERATION" means the aggregate consideration payable
to holders of Common Shares pursuant to the Plan of Arrangement.
"INTRAWEST SHARE PURCHASE PLANS" means, collectively, the
Whistler/Blackcomb Employee Savings and Share Purchase Plan, the 2002 Funded
Senior Employee Share Purchase Plan and the Intrawest Employee Share Purchase
Plan.
"INTRAWEST STOCK OPTION PLAN" means the "Stock Option Plan" of Intrawest,
as amended from time to time.
"JOINT VENTURE" means:
(a) any corporation, partnership, limited liability company, joint
venture or similar entity in which Intrawest or any subsidiary of
Intrawest owns voting shares or equity interests but which is not
a subsidiary of Intrawest if such voting shares or equity
interests have a book value which exceeds $10,000,000; and
(b) any subsidiary of a person referred to in subparagraph (a) of
this definition.
"LAWS" means all laws, statutes, codes, ordinances, decrees, rules,
regulations, by laws, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, injunctions, orders, decisions, rulings,
determinations or awards or other requirements of any Governmental Authority
having the force of law, and any legal requirements or bases for liability
arising under the common law and the term "APPLICABLE" with respect to such Laws
in the context that refers to any person means such Laws as are applicable to
such person or its business, undertaking, property or securities and that
emanate from a Governmental Authority having jurisdiction over the person or its
business, undertaking, property or securities.
"LEGISLATION" at any time means (a) the CBCA, (b) the applicable securities
legislation of each province and territory of Canada and (c) applicable U.S.
federal and state securities laws, the respective rules and regulations and
published policies made or promulgated under that legislation, and the blanket
rulings and orders issued by the regulatory authorities administering that
legislation in effect at such time, in each case as amended and in force from
time to time.
"MATERIAL ADVERSE EFFECT" has the meaning ascribed to it in the Arrangement
Agreement.
"MEETING" means the special meeting of Securityholders, and all
adjournments and postponements thereof, to be called and held pursuant to the
Interim Order for the purpose of considering and, if thought fit, approving the
Arrangement Resolutions.
"MEETING MATERIALS" means this Circular and the forms of proxy for use in
connection with the Meeting.
"NON-REGISTERED SHAREHOLDER" means a non-registered beneficial holder of
Common Shares whose shares are held through an Intermediary.
"NOTICE OF APPEARANCE" has the meaning ascribed thereto in "Principal Legal
Matters -- Court Approval of the Arrangement and Completion of the Agreement."
60
"NOTICE OF MEETING" means the Notice of Special Meeting of Securityholders
of Intrawest dated September 20, 2006.
"NOTIFIABLE TRANSACTIONS" has the meaning ascribed thereto under "Principal
Legal Matters -- Regulatory Matters -- Competition Act."
"NYSE" means the New York Stock Exchange.
"OFFER TO PAY" means the written offer of Intrawest to each Dissenting
Shareholder that has sent a Demand for Payment to pay for its Common Shares in
an amount considered by the Board to be the fair value of the shares, all in
compliance with the Dissent Procedures.
"OPTION CONSIDERATION" means the aggregate consideration payable to holders
of Intrawest Options pursuant to the Plan of Arrangement.
"OPTIONHOLDERS" at any time means the holders of Intrawest Options at that
time.
"OPTION LETTER OF TRANSMITTAL" means the letter of transmittal to be sent
by Intrawest to Optionholders for use in connection with the Arrangement.
"PARENT" means (a) Wintergames Acquisition LLC, a limited liability company
incorporated under the laws of the State of Delaware, prior to the assignment by
Wintergames Acquisition LLC of its rights under the Arrangement Agreement and
the assumption by Wintergames S.a.r.l. of the obligations of Wintergames
Acquisition LLC under the Arrangement Agreement, and (b) Wintergames S.a.r.l., a
Luxembourg company, following such assignment and assumption.
"PERFORMANCE RSU AGREEMENT" means the Performance Based Restricted Share
Unit Agreement made as of the 24th day of April, 2006 between Intrawest and Alex
Wasilov.
"PERSON" includes an individual, sole proprietorship, corporation, body
corporate, incorporated or unincorporated association, syndicate, partnership,
limited partnership, limited liability company, unlimited liability company,
joint venture, joint stock company, trust, natural person in his or her capacity
as trustee, executor, administrator or other legal representative, Governmental
Authority or other entity, whether or not having legal status.
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form attached as Appendix C hereto as amended or varied pursuant to its terms
and the terms of the Arrangement Agreement.
"PRE-ACQUISITION REORGANIZATION" means such reorganizations of the
business, operations and assets of Intrawest and the integration of other
affiliated businesses of Intrawest or its subsidiaries as Parent may request,
acting reasonably, as referred to in the Arrangement Agreement.
"PROCEEDING" means any court, administrative, regulatory or similar
proceeding (whether civil, quasi-criminal or criminal), arbitration or other
dispute settlement procedure, or any claim, action, suit, demand, arbitration,
charge, indictment, hearing or other similar civil, quasi-criminal or criminal,
administrative or investigative material matter or proceeding, or to the
knowledge of Intrawest, any investigation or inquiry by or complaint before any
Governmental Authority.
"PROPOSED AMENDMENTS" means all specific proposals to amend the Tax Act and
the Regulations publicly announced by or on behalf of the Minister of Finance
(Canada) prior to the date hereof.
"RECORD DATE" means the close of business on September 18, 2006.
"REGISTERED SHAREHOLDER" means a registered holder of Common Shares as
recorded in the Common Shareholders' register maintained by the Transfer Agent.
"REGULATIONS" means the regulations under the Tax Act.
"REPRESENTATIVES" of any person means its officers, directors, employees,
investment bankers, legal counsel and financial and other advisors and other
representatives and agents of such person.
"RESPONSE PERIOD" means, as set forth in the Arrangement Agreement, a
response period of five Business Days after the date on which Acquisitionco
receives a written notice from the Board that the Board has determined, subject
only to compliance with the right to match provisions, to accept, approve,
recommend or enter into a binding agreement to proceed with a Superior Proposal.
61
"RESTRICTED SHARE UNIT AGREEMENT" means the Restricted Share Unit Agreement
made as of the 24th day of April, 2006 between Intrawest and Alex Wasilov.
"RSUS" means:
(a) in the case of the Performance RSU Agreement, the "Target
Allocation" thereunder (being 48,270 notional Common Shares); and
(b) in the case of the Restricted Share Units Agreement, all the
29,439 notional Common Shares granted thereunder;
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES" means, collectively, the Common Shares and the Intrawest
Options.
"SECURITIES ACT" means the Securities Act (British Columbia), as amended.
"SECURITYHOLDERS" at any time means, collectively, the Shareholders and
Optionholders at that time.
"SEDAR" means the System for Electronic Document Analysis and Retrieval of
the Canadian Securities Administrators.
"SENIOR EMPLOYEE RSUS" means all of the notional Common Shares that would
be allocated to each participant under the Senior Employee Restricted Share Unit
Plan of Intrawest in the event of termination of the employment of each of them
by Intrawest after July 1, 2006 and before September 30, 2006 and on or after
the occurrence of a "change of control".
"SHAREHOLDERS" at any time means the holders of Common Shares at that time.
"SPECIAL COMMITTEE" means the special committee of the Board referred to
under "The Arrangement -- Background to the Arrangement Agreement."
"SUBSIDIARY" means, with respect to a specified entity, any: (a)
corporation of which issued and outstanding voting securities of such
corporation to which are attached more than 50% of the votes that may be cast to
elect directors of the corporation (whether or not shares of any other class or
classes will or might be entitled to vote upon the happening of any event or
contingency) are at the time owned by such specified entity and the votes
attached to those voting securities are sufficient, if exercised, to elect a
majority of the directors of such corporation; (b) partnership, limited
liability company, joint venture or other similar entity in which such specified
entity has more than 50% of the equity interests and the power to direct the
policies, management and affairs thereof; and (c) a subsidiary (as defined in
clauses (a) or (b) hereof) of any subsidiary (as so defined) of such specified
entity.
"SUPERIOR PROPOSAL" means an unsolicited bona fide written Acquisition
Proposal made by a third party to Intrawest after the date hereof (a) that
involves not less than 100% of the outstanding Common Shares (excluding any
Common Shares held by the person making such Acquisition Proposal or its
affiliates) or assets of Intrawest or any of its subsidiaries representing not
less than substantially all of the consolidated assets of Intrawest and its
subsidiaries, taken as a whole, and (b) which the Board determines, in its good
faith judgment after, among other things, consultation, to the extent considered
appropriate by the Board, with Intrawest's financial advisors including Goldman
Sachs and after taking into account the terms and conditions of the Acquisition
Proposal and the Arrangement (but not assuming away any risk of non completion
of either the Acquisition Proposal or the Arrangement), (i) is reasonably
capable of being completed without undue delay, taking into account, to the
extent considered appropriate by the Board, all legal, financial, regulatory and
other aspects of such proposal and the person making such proposal, (ii) is on
terms and conditions more favourable from a financial point of view to the
Shareholders than those contemplated by the Arrangement Agreement (including any
proposal in writing that as of that time has been received by Intrawest from
Parent and Acquisitionco to amend the Arrangement Agreement and the Plan of
Arrangement pursuant to the terms of the Arrangement Agreement and not
withdrawn) and (iii) for which financing is then committed to at least the
extent that the financing for the transactions contemplated in the Arrangement
Agreement is committed as at the date of the Arrangement Agreement, and (c) in
respect of which the Board determines in good faith (after receipt of advice
from its outside legal counsel) that failure to recommend such Acquisition
Proposal to the Shareholders would be inconsistent with its fiduciary duties,
and (d) that, subject to compliance with the requirements of the Arrangement
Agreement, the Board has determined to recommend to the Shareholders.
62
"SURVIVING CORPORATION" means any corporation or other entity continuing
following the amalgamation, merger, consolidation or winding up of Intrawest
with or into one or more other entities (pursuant to a statutory procedure or
otherwise).
"TAX" or "TAXES" means all federal, state, provincial, municipal, local and
foreign taxes, assessments and other governmental charges, levies, duties,
impositions and liabilities lawfully imposed by any Governmental Authority,
including taxes based on or measured by gross receipts, income, profits, sales,
capital, use, occupation, net worth, goods and services, value added, ad
valorem, withholding, payroll or employment, franchise, premium, land transfer
and excise or property taxes, Canada or Quebec pension plan premiums, social
security premiums, workers' compensation premiums, employment or unemployment
insurance premiums, stamp taxes, alcohol taxes and custom duties together with
all interest, penalties, fines and additions imposed with respect to such
amounts.
"TAX ACT" means the Income Tax Act (Canada), as amended.
"TERMINATION DEADLINE" means March 31, 2007.
"TERMINATION FEE" means the $60 million termination fee payable by
Intrawest or Parent in certain circumstances under the terms of the Arrangement
Agreement.
"TRANSFER AGENT" means CIBC Mellon Trust Company.
"TSX" means the Toronto Stock Exchange.
"WHISTLER/BLACKCOMB EMPLOYEE SHARE PURCHASE PLAN" means the
"Whistler/Blackcomb Employee Registered Savings and Share Purchase Plan," as
amended from time to time.
63
APPENDIX A
ARRANGEMENT RESOLUTIONS
RESOLUTIONS OF THE SECURITYHOLDERS
OF INTRAWEST CORPORATION
("INTRAWEST")
BE IT RESOLVED THAT:
1. The arrangement (as the same may be modified or amended, the
"ARRANGEMENT") under Section 192 of the Canada Business
Corporations Act involving Intrawest and its securityholders,
all as more particularly described and set forth in the plan of
arrangement (as may be modified or amended, the "PLAN OF
ARRANGEMENT") attached as Appendix C to the Management
Information Circular of Intrawest dated September 20, 2006, (the
"Circular") accompanying the notice of this meeting, is hereby
authorized, approved and agreed to.
2. The Plan of Arrangement, as the same may be modified or amended
from time to time, attached as Schedule A to the Arrangement
Agreement is hereby approved and adopted.
3. The Arrangement Agreement dated August 10, 2006 between Parent
(as defined in the Circular), Acquisitionco (as defined in the
Circular) and Intrawest, as may be amended from time to time
(the "ARRANGEMENT AGREEMENT"), the actions of the directors of
Intrawest in approving the Arrangement and the Arrangement
Agreement, and the actions of the directors and officers of
Intrawest in executing and delivering the Arrangement Agreement
and causing the performance by Intrawest of its obligations
thereunder be, and they are hereby confirmed, ratified,
authorized and approved.
4. Notwithstanding that these resolutions have been passed (and the
Arrangement approved and agreed to) by the securityholders of
Intrawest or that the Arrangement has been approved by the
Supreme Court of British Columbia (the "COURT"), the directors
of Intrawest be, and they are hereby, authorized and empowered
without further approval of the securityholders of Intrawest (i)
to amend the Arrangement Agreement or the Plan of Arrangement to
the extent permitted by the Arrangement Agreement or Plan of
Arrangement, and (ii) to not proceed with the Arrangement at a
time prior to the Effective Time (as defined in the Arrangement
Agreement).
5. Any one director or officer of Intrawest be, and is hereby,
authorized, empowered and instructed, acting for, in the name
and on behalf of Intrawest, to execute or cause to be executed,
under the seal of Intrawest or otherwise, and to deliver or to
cause to be delivered, all such other documents and to do or to
cause to be done all such other acts or things as in such
person's opinion may be necessary or desirable in order to carry
out the intent of the foregoing resolutions and the matters
authorized thereby, such determination to be conclusively
evidenced by the execution and delivery of such document or the
doing of such act or thing.
A-1
APPENDIX B
ARRANGEMENT AGREEMENT
ARRANGEMENT AGREEMENT
WINTERGAMES ACQUISITION LLC
-AND -
3167113 NOVA SCOTIA COMPANY
-AND -
INTRAWEST CORPORATION
AUGUST 10, 2006
B-1
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 INTERPRETATION.......................................... B-4
1.1 Definitions................................................. B-4
1.2 Currency.................................................... B-15
1.3 Interpretation Not Affected by Headings..................... B-15
1.4 Knowledge................................................... B-16
1.5 Disclosure.................................................. B-16
1.6 Number and Gender........................................... B-16
1.7 Date of any Action.......................................... B-16
1.8 Accounting Principles....................................... B-16
1.9 Statutory References........................................ B-17
1.10 Legal, Valid and Binding.................................... B-17
1.11 Schedules................................................... B-17
ARTICLE 2 THE ARRANGEMENT......................................... B-17
2.1 The Arrangement............................................. B-17
2.2 Intrawest Meeting........................................... B-18
2.3 Interim Order............................................... B-20
2.4 Court Proceedings........................................... B-20
2.5 Preparation of Filings...................................... B-20
2.6 Plan of Arrangement and Closing............................. B-21
2.7 Withholding................................................. B-22
2.8 Registrar and Transfer Agent................................ B-22
ARTICLE 3 REPRESENTATIONS AND WARRANTIES.......................... B-22
3.1 Representations and Warranties of Intrawest................. B-22
3.2 Disclaimer of Additional Representations and Warranties..... B-33
3.3 Representations and Warranties of Acquisitionco and
Parent...................................................... B-33
3.4 Disclaimer of Additional Representations and Warranties..... B-35
3.5 Survival of Representations and Warranties.................. B-35
ARTICLE 4 COVENANTS............................................... B-35
4.1 Covenants of Intrawest Regarding the Conduct of Business.... B-35
4.2 Pre-Acquisition Reorganization.............................. B-39
4.3 Access to Information....................................... B-40
4.4 Access for Financial Advisor................................ B-41
4.5 Privacy Matters............................................. B-41
4.6 Covenants of Intrawest Regarding the Arrangement............ B-42
4.7 Covenants of Acquisitionco and Parent Regarding the
Performance of Obligations.................................. B-42
4.8 Acquisitionco and Parent Financing.......................... B-43
4.9 Mutual Covenants............................................ B-45
4.10 Employment Arrangements..................................... B-46
4.11 Indemnification............................................. B-47
4.12 Notes Offers................................................ B-48
ARTICLE 5 ADDITIONAL AGREEMENTS................................... B-49
5.1 Permitted Activities........................................ B-49
5.2 Non-Solicitation............................................ B-49
5.3 Notification of Acquisition Proposal........................ B-50
5.4 Right to Match.............................................. B-51
5.5 Value....................................................... B-52
5.6 Payments to Parent.......................................... B-52
B-2
PAGE
----
5.7 Reimbursement of Expenses to Parent and Acquisitionco....... B-53
5.8 Effect of Payments.......................................... B-53
5.9 Payment to Intrawest........................................ B-54
ARTICLE 6 TERMINATION OF AGREEMENT................................ B-54
6.1 Termination................................................. B-54
6.2 Void upon Termination....................................... B-55
6.3 Notice of Unfulfilled Conditions............................ B-55
ARTICLE 7 CONDITIONS PRECEDENT.................................... B-55
7.1 Mutual Conditions Precedent................................. B-55
7.2 Additional Conditions Precedent to the Obligations of
Intrawest................................................... B-56
7.3 Additional Conditions Precedent to the Obligations of Parent
and Acquisitionco........................................... B-56
ARTICLE 8 GENERAL................................................. B-57
8.1 Notices..................................................... B-57
8.2 Fees and Expenses........................................... B-58
8.3 No Assignment............................................... B-58
8.4 Binding Effect.............................................. B-59
8.5 Parent and Acquisitionco.................................... B-59
8.6 Time of Essence............................................. B-59
8.7 Public Announcements........................................ B-59
8.8 Governing Law............................................... B-59
8.9 Entire Agreement............................................ B-59
8.10 No Third-Party Beneficiaries................................ B-60
8.11 Amendment................................................... B-60
8.12 Waiver and Modifications.................................... B-60
8.13 Severability................................................ B-61
8.14 Mutual Interest............................................. B-61
8.15 Further Assurances.......................................... B-61
8.16 Injunctive Relief........................................... B-61
8.17 No Personal Liability....................................... B-61
8.18 Counterparts................................................ B-62
SCHEDULE A PLAN OF ARRANGEMENT....................................
SCHEDULE B APPROPRIATE REGULATORY APPROVALS.......................
B-3
ARRANGEMENT AGREEMENT
THIS AGREEMENT made the 10th day of August, 2006,
BETWEEN:
WINTERGAMES ACQUISITION LLC, a limited liability company
incorporated under the laws of the State of Delaware
("Parent")
AND:
3167113 NOVA SCOTIA COMPANY, an unlimited liability company
incorporated under the laws of the Province of Nova Scotia
("Acquisitionco")
AND:
INTRAWEST CORPORATION, a corporation continued under the Canada
Business Corporations Act
("Intrawest")
WHEREAS:
A. Acquisitionco is prepared to acquire all of the outstanding common shares
of Intrawest pursuant to the Arrangement as provided in this Agreement;
B. Parent has taken the initiative in incorporating and organizing
Acquisitionco and is the legal and beneficial owner of all of the issued
and outstanding shares of Acquisitionco; and
C. The Board of Directors has determined that it is in the best interests of
Intrawest and its shareholders for Intrawest to enter into this Agreement
and to recommend that holders of Common Shares vote in favour of the
Arrangement Resolutions;
NOW THEREFORE in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by each of the parties hereto, the parties
hereto hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless the context otherwise requires:
"6.875% NOTES" means the 6.875% Senior Notes due October 15, 2009 issued by
Intrawest pursuant to an indenture dated as of October 6, 2004 between Intrawest
and JPMorgan Chase Bank and CIBC Mellon Trust Company;
"7.50% NOTES" means the 7.50% Senior Notes due October 15, 2013 issued by
Intrawest on each of October 9, 2003 and October 6, 2004 pursuant to an
indenture dated as of October 9, 2003 between Intrawest and JPMorgan Chase Bank
and CIBC Mellon Trust Company;
"ACQUISITIONCO" means 3167113 Nova Scotia Company, an unlimited liability
company incorporated under the laws of the Province of Nova Scotia;
"ACQUISITION PROPOSAL" means, at any time, any proposal or offer (written
or oral) relating to the acquisition by any person, or two or more persons
acting "jointly or in concert" (within the meaning of that expression as used in
the Securities Act (British Columbia)), of more than 20% of the Common Shares
outstanding at such time or assets (including shares of subsidiaries) of
Intrawest or any of its subsidiaries at such time representing more than 20% of
the book value or fair market value (each on a consolidated basis) of the total
assets of Intrawest and its subsidiaries, taken as a whole (including a lease
having the same economic effect as a purchase of assets), whether by way of plan
of arrangement, amalgamation, merger, consolidation, recapitalization,
liquidation, dissolution or
B-4
other business combination, sale of assets, take over bid, tender offer, share
exchange, exchange offer or otherwise, other than the Arrangement and the other
transactions contemplated by this Agreement;
"AFFILIATE" has the meaning of such term as used in the Securities Act
(British Columbia);
"AGREEMENT" means this agreement (including the Schedules attached hereto)
as the same may be amended from time to time;
"AMALGAMATION" means the amalgamation of Acquisitionco and Intrawest which
Acquisitionco anticipates will occur following the Effective Time;
"APPLICABLE PRIVACY LAWS" means any and all applicable Laws relating to
privacy and the collection, use and disclosure of Personal Information in all
applicable jurisdictions, including the Personal Information Protection and
Electronic Documents Act (Canada) and any comparable provincial law (including
the Personal Information Protection Act (British Columbia) and An Act Respecting
the Protection of Personal Information in the Private Sector (Quebec));
"APPROPRIATE REGULATORY APPROVALS" means those sanctions, rulings, orders,
determinations, exemptions, licences, permits, certificates and other consents,
approvals and authorizations (including the lapse, without objection, of a
prescribed time under a statute or regulation that states that a transaction may
be implemented if a prescribed time lapses following the giving of notice
without an objection being made) of, and notifications to and filings and
registrations with, Governmental Authorities set forth in Schedule B hereto or
under the heading "Appropriate Regulatory Approvals" in the Intrawest Disclosure
Letter;
"ARRANGEMENT" means an arrangement under the provisions of section 192 of
the CBCA, on the terms and conditions set forth in the Plan of Arrangement;
"ARRANGEMENT RESOLUTIONS" means the resolutions to be considered and, if
thought fit, passed, by the Intrawest Securityholders at the Intrawest Meeting
to approve the Arrangement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Intrawest in
respect of the Arrangement required by the CBCA to be sent to the Director after
the Final Order is made;
"ASSOCIATE" has the meaning attributed to such term under the Securities
Act (British Columbia);
"BOARD OF DIRECTORS" means the board of directors of Intrawest;
"BUSINESS DAY" means any day on which commercial banks are generally open
for business in Vancouver, British Columbia and New York, NY, other than a
Saturday, a Sunday or a day observed as a holiday in Vancouver, British Columbia
under the laws of the Province of British Columbia or the federal laws of Canada
or in New York, NY under the laws of the State of New York;
"CERTIFICATE OF ARRANGEMENT" means the certificate giving effect to the
Arrangement issued pursuant to section 192(7) of the CBCA;
"CBCA" means the Canada Business Corporations Act (Canada);
"CIRCULAR" means the notice of the Intrawest Meeting and accompanying
information circular (including all schedules, appendices and exhibits thereto)
to be sent to the Intrawest Securityholders in connection with the Intrawest
Meeting, including any amendments or supplements thereto;
"CODE" means the United States Internal Revenue Code of 1986;
"COMMERCIALLY REASONABLE EFFORTS" with respect to any party hereto means
the agreement of such party to cooperate and to use its reasonable efforts
consistent with commercial practice without payment or incurrence of any
liability or obligation, other than reasonable expenses, or the requirement to
engage in litigation;
"COMMITMENT LETTER" has the meaning defined in section 3.3(e);
"COMMON SHAREHOLDERS" at any time means the holders at that time of Common
Shares;
"COMMON SHARES" means common shares without par value in the capital of
Intrawest;
"COMPETITION ACT" means the Competition Act (Canada);
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement dated March
29, 2006 between Fortress Investment Group LLC and Intrawest;
B-5
"CONSTATING DOCUMENTS" means, with respect to any person, the certificate
and articles of incorporation, amalgamation or continuation, by-laws, articles
of organization, limited liability company agreement, partnership agreement,
formation agreement, joint venture agreement, shareholder agreement or
declaration or similar governing document of such person;
"CONTRACT" means any contract, agreement, licence, franchise, lease,
arrangement, commitment or understanding to which Intrawest or any of its
subsidiaries is a party or by which Intrawest or any of its subsidiaries is
bound;
"COURT" means the Supreme Court of British Columbia;
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA;
"DSUS" means:
(a) in the case of the Intrawest Director DSU Plan, all of the deferred
share units credited to the participants thereunder immediately prior
to the Effective Time;
(b) in the case of the Intrawest Key Executive DSU Plan, all of the
deferred share units credited to the participants thereunder
immediately prior to the Effective Time;
(c) in the case of the Intrawest Return on Capital Plan, the "Target
Allocation" in respect of each of the participants thereunder (being a
total of 337,950 notional Common Shares); and
(d) in the case of the Intrawest LTIP, all of the notional Common Shares
that would be allotted to each participant thereunder in the event of
the termination of the employment of each of them with Intrawest after
July 1, 2006 and before September 30, 2006 in circumstances which do
not entitle any of them to a "Reasonable Notice Period Allotment"
thereunder;
"EFFECTIVE DATE" means the date on which all conditions to the completion
of the Arrangement as set out in Article 7 have been satisfied or waived in
accordance with the provisions of this Agreement and all documents agreed to be
delivered hereunder have been delivered to the satisfaction of the parties
hereto, acting reasonably, which will be the date shown on the Certificate of
Arrangement giving effect to the Arrangement;
"EFFECTIVE TIME" has the meaning defined in the Plan of Arrangement;
"ENVIRONMENT" means the natural environment, including soil, land surface,
subsurface strata, surface water, groundwater, sediment, ambient air (including
all layers of the atmosphere), organic and inorganic matter and living
organisms, and any other environmental medium or natural resource;
"ENVIRONMENTAL LAWS" means all applicable Laws (including, in the United
States, the Comprehensive Environmental Response, Compensation and Liability
Act) relating to occupational and human health and safety, noise control,
pollution or the protection of the Environment or to the generation, production,
installation, use, storage, disposal, treatment, transportation, packaging,
handling, containment, clean-up, remediation or corrective action, Release or
threatened Release of Hazardous Substances;
"ENVIRONMENTAL PERMIT" means any permit, approval, authorization, license,
certificate, registration, or consent issued by any Governmental Authority
pursuant to any Environmental Laws;
"EQUITY COMMITMENT LETTER" has the meaning defined in section 3.3(e);
"EQUITY INTERESTS" means any security of a subsidiary or Joint Venture of
Intrawest that carries a residual right to participate in the earnings of such
subsidiary or Joint Venture, and on the liquidation or winding up of such
subsidiary or Joint Venture, in its properties or assets;
"EXCHANGE" means the Toronto Stock Exchange or the New York Stock Exchange,
and "EXCHANGES" means both of them;
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934;
"EXECUTIVE EMPLOYMENT AGREEMENTS" means the Amended and Restated Executive
Employment Agreements dated April 1, 2006 between Intrawest and each of Joseph
S. Houssian, Daniel O. Jarvis, Michael F. Coyle, John E. Currie and Hugh R.
Smythe;
"FAIRNESS OPINION" means the opinion of the Financial Advisor to the effect
that the consideration to be received under the Arrangement is fair, from a
financial point of view, to the Common Shareholders;
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"FINANCIAL ADVISOR" means the person engaged by the Board of Directors, or
the Special Committee, on behalf of Intrawest, to provide the Fairness Opinion;
"FINAL ORDER" means the order of the Court approving the Arrangement under
section 192 of the CBCA, as such order may be affirmed, amended or modified by
the Court at any time prior to the Effective Date or, if appealed, unless such
appeal is withdrawn, abandoned or denied, as affirmed or amended on appeal;
"FORTRESS" means, collectively, the entities party to the Equity Commitment
Letter, each of which is a private equity fund managed by Fortress Investment
Group LLC or an affiliate of Fortress Investment Group LLC;
"FUNDED SHARE PURCHASE PLAN" means the Intrawest 2002 Funded Senior
Employee Share Purchase Plan;
"GOVERNMENTAL AUTHORITY" means any multinational, federal, provincial,
state, regional, municipal, local or other government or governmental body and
any division, agent, agency, commission, board or authority of any government,
governmental body, quasi-governmental or private body exercising any statutory,
regulatory, expropriation or taxing authority under the authority of any of the
foregoing and any domestic, foreign or international judicial, quasi-judicial or
administrative court, tribunal, commission, board, panel or arbitrator acting
under the authority of any of the foregoing;
"HAZARDOUS SUBSTANCES" means any waste or other substance that is alone or
in any combination regulated, prohibited, listed, defined, designated or
classified as dangerous, hazardous, radioactive, explosive or toxic, a hazardous
waste, a deleterious substance, or a contaminant or pollutant, under or pursuant
to any applicable Environmental Laws, including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials or any substance which is deemed under Environmental Laws to be
deleterious to natural resources or worker or public health and safety;
"HSR ACT" means the United States Hart-Scott-Rodino Antitrust Improvements
Act of 1976;
"INDEBTEDNESS" means, without duplication, with respect to any person (a)
every obligation of such person for borrowed money, secured or unsecured, (b)
every obligation of such person evidenced by bonds, debentures, notes or other
similar instruments, (c) every obligation of such person under purchase money
mortgages, conditional sale agreements or other similar instruments relating to
purchased property or assets, (d) every capitalized lease obligation of such
person, (e) every obligation of such person under interest rate cap, swap,
collar or similar transactions or currency hedging transactions (valued at the
termination value thereof) and (f) every obligation of the type referred to
above of any other person, the payment of which such person has guaranteed or
for which such person is otherwise responsible or liable;
"INTELLECTUAL PROPERTY RIGHTS" has the meaning defined in section 3.1(w);
"INTERIM ORDER" means the interim order of the Court to be issued following
the application therefor contemplated by section 2.1 and containing declarations
and directions with respect to the Arrangement and the holding of the Intrawest
Meeting, as such order may be amended, modified, supplemented or varied by the
Court;
"INTRAWEST" means Intrawest Corporation, a corporation continued under the
CBCA;
"INTRAWEST BENEFIT PLANS" means all employee, officer or director, health,
dental, prescription drug or other medical, life, disability or other insurance,
death or survivor benefits, fringe benefits, bonus, stock compensation, deferred
compensation, stock option, phantom stock option, incentive pay or compensation,
stock purchase, profit sharing, severance or termination pay, vacation pay,
employee assistance, supplementary unemployment benefit, pension, retirement and
supplementary retirement plans, programs or arrangements and other similar
employee, officer or director plans, programs or arrangements maintained or
contributed to by Intrawest or any of its subsidiaries (or under which Intrawest
or any of its subsidiaries has any actual or contingent liability) for the
benefit of employees, officers or directors, or former employees, officers or
directors, of Intrawest or any of its subsidiaries, or the dependents or
beneficiaries of such employees, officers or directors, but excluding (a) any
pension, health, prescription drug or other medical, workers' compensation,
unemployment insurance or other comparable plan or program established or
maintained by any Governmental Authority, and (b) any multi-employer pension or
welfare benefit plan;
"INTRAWEST DIRECTOR DSU PLAN" means the "Director Deferred Share Unit Plan"
of Intrawest, as amended from time to time;
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"INTRAWEST DISCLOSURE LETTER" means the letter of disclosure dated as of
the date of this Agreement and signed by one or more officers of Intrawest and
delivered by Intrawest to Parent;
"INTRAWEST DSU PLANS" means the Intrawest LTIP, the Intrawest Return on
Capital Plan, the Intrawest Key Executive DSU Plan and the Intrawest Director
DSU Plan;
"INTRAWEST EMPLOYEE SHARE PURCHASE PLAN" means the "Intrawest Employee
Share Purchase Plan", as amended from time to time;
"INTRAWEST FINANCIAL STATEMENTS" means the audited consolidated financial
statements of Intrawest as at, and for the year ended, June 30, 2005 and the
unaudited consolidated financial statements of Intrawest as at, and for the nine
months ended March 31, 2006, including, in each case, the notes thereto;
"INTRAWEST KEY EXECUTIVE DSU PLAN" means the "Key Executive Deferred Share
Unit Plan -- 2001" of Intrawest, as amended from time to time;
"INTRAWEST LTIP" means the "Executive Long Term Incentive Plan" of
Intrawest, as amended from time to time;
"INTRAWEST MEETING" means the special meeting of the Intrawest
Securityholders, including any adjournment or postponement thereof, to be called
pursuant to the Interim Order for the purpose of considering, and if thought fit
approving the Arrangement Resolutions;
"INTRAWEST OPTIONS" at any time means options to acquire Common Shares
granted pursuant to the Intrawest Stock Option Plan which are, at such time,
outstanding and unexercised, whether or not vested;
"INTRAWEST PUBLIC DISCLOSURE RECORD" means all documents and information
filed by Intrawest under the applicable securities Legislation since June 30,
2003, including the Intrawest financial statements filed since such date, the
management's discussion and analysis relating to such Intrawest financial
statements filed since such date, the Annual Information Forms of Intrawest for
the years ended June 30, 2003, June 30, 2004 and June 30, 2005, the information
circular relating to Intrawest's annual meetings of shareholders held on
November 10, 2003, November 8, 2004 and November 7, 2005 and all material change
reports and news releases filed since June 30, 2003;
"INTRAWEST RETURN ON CAPITAL PLAN" means the "Key Executive Long Term
Incentive Plan" of Intrawest, as amended from time to time;
"INTRAWEST SECURITYHOLDERS" at any time means the Common Shareholders and
holders of Intrawest Options at that time;
"INTRAWEST SENIOR EMPLOYEE RSU PLAN" means the "Senior Employee Restricted
Share Unit Plan" of Intrawest;
"INTRAWEST SENIOR MANAGEMENT" means the Chief Executive Officer, the
President and Chief Operating Officer, the Chief Financial Officer, the Chief
Corporate Development Officer and the Corporate Secretary of Intrawest;
"INTRAWEST STOCK OPTION PLAN" means the "Stock Option Plan" of Intrawest,
as amended from time to time;
"JOINT VENTURE" means:
(a) any corporation, partnership, limited liability company, joint venture
or similar entity in which Intrawest or any subsidiary of Intrawest
owns voting shares or equity interests but which is not a subsidiary
of Intrawest if such voting shares or equity interests have a book
value which exceeds $10,000,000; and
(b) any subsidiary of a person referred to in subparagraph (a) of this
definition;
"JOINT VENTURE INTEREST" means, with respect to any Joint Venture, the
voting shares or equity interests owned by Intrawest or any subsidiary of
Intrawest or Joint Venture in such Joint Venture;
"LAWS" means all laws, statutes, codes, ordinances, decrees, rules,
regulations, by-laws, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, injunctions, orders, decisions, rulings,
determinations or awards or other requirements of any Governmental Authority
having the force of law, and any legal requirements or bases for liability
arising under the common law and the term "APPLICABLE" with respect to such Laws
in the context that refers to any person means such Laws as are applicable to
such person or its business,
B-8
undertaking, property or securities and that emanate from a Governmental
Authority having jurisdiction over the person or its business, undertaking,
property or securities;
"LEGISLATION" at any time means (a) the CBCA, (b) the applicable securities
legislation of each province and territory of Canada and (c) applicable United
States federal and state securities laws, the respective rules and regulations
and published policies made or promulgated under that legislation, and the
blanket rulings and orders issued by the regulatory authorities administering
that legislation in effect at such time, in each case as amended and in force
from time to time;
"LENDERS" has the meaning defined in section 3.3(e);
"LIEN" means any mortgage, lien, hypothec, security interest, pledge or
other encumbrance, charge or adverse right or claim, defect of title,
restriction or other rights of third parties;
"LUXCO" has the meaning defined in section 8.3;
"MATERIAL ADVERSE EFFECT" means, with respect to any person, a fact,
circumstance, change, effect, matter, action, condition, event, occurrence or
development that, individually or in the aggregate, is, or would reasonably be
expected to be, material and adverse to the business, affairs, results of
operations or financial condition of that person and its subsidiaries, taken as
a whole provided that a Material Adverse Effect will not include or be deemed to
result from any effect (whether alone or in combination with any other effect),
directly or indirectly, arising out of, relating to, resulting from or
attributable to (and none of the following will be taken into account in
determining whether there has been or will be a Material Adverse Effect):
(a) changes or developments in general international political, economic
or financial conditions, or the economy or political conditions in any
jurisdiction in which such person or its subsidiaries operates or
carries on business, including any changes or developments in the
Canadian or United States economies or the global economy or
financial, credit, banking, currency or securities markets in general,
including any reduction in major market indices, except to the extent
such changes or developments adversely affect such person or any of
its subsidiaries in a manner distinct from and with materially
disproportionate effect than it affects other persons, including other
persons carrying on the business being carried on by such person or
any of its subsidiaries in the industry or industries in which such
person or any of its subsidiaries operates in any jurisdiction
affected by such changes or developments;
(b) changes or developments resulting from any act of sabotage or
terrorism or any outbreak of hostilities or war, or any escalation of
such acts of sabotage or terrorism or hostilities or war, except to
the extent such sabotage or terrorism or hostilities or war adversely
affect such person or any of its subsidiaries in a manner distinct
from and with a materially disproportionate effect than it affects
other persons, including other persons carrying on the business being
carried on by such person or any of its subsidiaries in the industry
or industries in which such person or any of its subsidiaries operates
in any jurisdiction affected by such sabotage or terrorism or
hostilities or war;
(c) changes or developments in or relating to currency exchange rates;
(d) changes or developments generally affecting or relating to the
industries in which such person operates except to the extent such
changes or developments adversely affect such person or any of its
subsidiaries in a manner distinct from and with a materially
disproportionate effect than it affects other persons carrying on the
business being carried on by such person or any of its subsidiaries in
such industries;
(e) any natural disaster, or weather conditions adverse to the business
being carried on by such person or any of its subsidiaries, except to
the extent such natural disaster or adverse weather conditions
directly or indirectly and adversely affect such person or any of its
subsidiaries in a manner distinct from and with a materially
disproportionate effect on such person as compared to other persons
carrying on the business being carried on by such person or any of its
subsidiaries in the industry or industries in which such person or any
of its subsidiaries operates in any jurisdiction subject to such
natural disaster or adverse weather conditions;
(f) the announcement of the execution of this Agreement or the
transactions contemplated hereby or the acceleration of any
Indebtedness of Intrawest or any subsidiary of Intrawest or any Joint
Venture, provided that such Indebtedness has been previously disclosed
to Parent, as a result of the completion of any of the transactions
contemplated herein, including any Pre-Acquisition Reorganization, the
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Amalgamation and any financing contemplated in section 4.8 or any
contravention, breach, violation, default, right, cancellation,
suspension, alteration or Lien that would result as a result of any
Pre-Acquisition Reorganization contemplated in section 4.2 or any
financing contemplated in section 4.8;
(g) any changes in any Laws or the interpretation, application or
non-application of any Laws by any Governmental Authority or
self-regulatory authority (other than orders, judgments or decrees
against Intrawest or any of its subsidiaries), including any changes
in applicable accounting requirements or principles, except to the
extent such changes in Laws or interpretation, application or non
application of Laws adversely affect such person or any of its
subsidiaries in a manner distinct from and with a materially
disproportionate effect than it affects other persons, including other
persons carrying on the business being carried on by such person or
any of its subsidiaries in the industry or industries in which such
person or any of its subsidiaries operates in any jurisdiction subject
to such Laws; or
(h) any action taken by any person or any of its subsidiaries to which the
other party hereto has consented to in writing;
and provided further that no failure to meet any earnings estimates
previously made public by Intrawest, or included as part of the information
disclosed or made available by Intrawest to Parent prior to the date of this
Agreement, and no decrease in the market price or trading volume of Common
Shares on either of the Exchanges will, in and of itself (where such failure
or decrease is not as a result of other facts, circumstances, changes,
matters, actions, conditions, events, occurrences, developments, terms or
effects, individually or in the aggregate, that constitute a Material
Adverse Effect), constitute a Material Adverse Effect on Intrawest;
"MATERIAL CONTRACT" means:
(a) any Contract which, if terminated, would reasonably be expected to
have a Material Adverse Effect on Intrawest;
(b) any lease of real property by Intrawest or any of its subsidiaries
with third parties under which Intrawest or any of its subsidiaries is
required to pay, or entitled to receive, annual rents in excess of
$2,500,000;
(c) any partnership agreement, limited liability company agreement, joint
venture agreement or other similar agreement or arrangement relating
to the formation, creation or operation of any partnership, limited
liability company or joint venture the properties and assets of which
exceed $10,000,000 in which Intrawest or any of its subsidiaries is a
partner, member or joint venturer and in which the interest of
Intrawest and its subsidiaries has a value which exceeds $10,000,000
other than any such partnership, limited liability company or joint
venture which is a wholly-owned subsidiary of Intrawest;
(d) any shareholder agreement, voting trust, right to require registration
under any applicable securities Laws (including the securities Laws
forming part of the Legislation) or other arrangement or commitment to
which Intrawest or any of its subsidiaries the properties and assets
of which exceed $10,000,000 is a party or bound with respect to the
voting, disposition or registration of any outstanding shares in
Intrawest or any such subsidiaries;
(e) any Contract under which Indebtedness (other than indebtedness of the
type referred to in clause (f) of the definition of "Indebtedness" in
respect of Indebtedness of Intrawest or any wholly-owned subsidiary of
Intrawest) in excess of $10,000,000 is outstanding or may be incurred
or pursuant to which any property or asset of Intrawest or any of its
subsidiaries having a fair market value in excess of $10,000,000 is
mortgaged, pledged or otherwise subject to a Lien (other than a
Permitted Lien) other than any such Contract between two or more
wholly owned subsidiaries of Intrawest or between Intrawest and one or
more wholly owned subsidiaries of Intrawest;
(f) any Contract providing for the sale or exchange of, or option to sell
or exchange, any property or asset where the sale price or agreed
value (or, where the Contract does not specify a sale price or agreed
value for the property or asset expressed in terms of money, the fair
market value) of such property or asset is in excess of $10,000,000,
or the purchase or exchange of, or option to purchase or exchange, any
property or asset where the purchase price or agreed value (or, where
the Contract does not specify a purchase price agreed value for the
property or asset expressed in terms of money, the fair market value)
of such property or asset is in excess of $10,000,000 entered into in
the past 12 months (or entered into more than 12 months prior to the
date hereof in respect of which the applicable transaction has not
been
B-10
consummated) other than any such Contract between two or more
wholly-owned subsidiaries of Intrawest or between Intrawest and one or
more wholly-owned subsidiaries of Intrawest;
(g) any Contract pursuant to which Intrawest or any of its subsidiaries
manages or operates any real property on behalf of any third party
under which such third party is obliged to make annual payments in
excess of an aggregate of $2,500,000, and any Contract pursuant to
which Intrawest or any of its subsidiaries grants any rights to a
third party to manage or operate any real property on behalf of
Intrawest or any such subsidiaries under which Intrawest or any such
subsidiaries are obliged to make annual payments in excess of an
aggregate of $2,500,000;
(h) any Contract to which Intrawest or any of its subsidiaries is a party
or otherwise bound (i) granting or obtaining any right to use any
material Intellectual Property Rights (other than any Contract
granting rights to use readily available commercial software that is
generally available on non-discriminatory pricing terms) or (ii)
restricting the rights of Intrawest or any of its subsidiaries, or
permitting other persons, to use or register any material Intellectual
Property Rights, except any such Contract which, if terminated, would
not reasonably be expected to have a Material Adverse Effect on
Intrawest;
(i) any Contract restricting the incurrence of Indebtedness by Intrawest
or any subsidiary of Intrawest or the incurrence of Liens on any
properties or assets of Intrawest or any wholly-owned subsidiary of
Intrawest which are material to Intrawest and its subsidiaries, taken
as a whole, or restricting the payment of dividends by Intrawest or
the transfer by Intrawest or any subsidiary of Intrawest of any real
property of Intrawest or any subsidiary of Intrawest which is
material to Intrawest and its subsidiaries, taken as a whole, in each
case other than any such Contract between two or more wholly-owned
subsidiaries of Intrawest or between Intrawest and one or more
wholly-owned subsidiaries of Intrawest;
(j) any Contract that purports to limit the right of Intrawest or any of
its subsidiaries (i) to engage in any line of business or (ii) to
compete with any person or operate in any location, except any such
Contract that does not have a Material Adverse Effect on Intrawest;
(k) any Contract under which Intrawest or any of its subsidiaries is
obliged to make annual payments in excess of an aggregate of
$2,500,000 other than any Contract of the types referred to in clauses
(b) through (g) of this definition (without regard to the dollar
amounts set forth in such clauses) and other than any such Contract
between two or more wholly-owned subsidiaries of Intrawest or between
Intrawest and one or more wholly-owned subsidiaries of Intrawest; and
(l) any Contract entered into in the past 12 months or in respect of
which the applicable transaction has not yet been consummated for the
acquisition or disposition, directly or indirectly (by merger or
otherwise), of assets or capital stock or other equity interests of
another person for aggregate consideration in excess of $10,000,000;
"MATERIAL SUBSIDIARY", at any time, means each subsidiary of Intrawest, the
total assets of which constitute more than five percent of the consolidated
assets of Intrawest and its subsidiaries at such time or the total revenues of
which constitute more than five percent of the consolidated revenues of
Intrawest and its subsidiaries at such time and including each subsidiary of
Intrawest that directly or indirectly holds an equity interest in each such
subsidiary;
"MISREPRESENTATION" means (a) an untrue statement of a material fact or (b)
an omission to state a material fact that is (i) required to be stated or (ii)
necessary to prevent a statement that is made from being false or misleading in
light of the circumstances in which it was made;
"NOTES" means, collectively, the 6.875% Notes and the 7.50% Notes;
"PARENT" means Wintergames Acquisition LLC, a limited liability company
incorporated under the laws of the State of Delaware;
"PARTIES" means, collectively, the parties to this Agreement, and "PARTY"
means any one of them and "OTHER PARTY", with respect to Intrawest, means Parent
and Acquisitionco, and, with respect to either of Parent or Acquisitionco, or
both of them, means Intrawest;
"PERFORMANCE RSU AGREEMENT" means the Performance Based Restricted Share
Unit Agreement made as of the 24th day of April, 2006 between Intrawest and Alex
Wasilov;
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"PERMITTED LIEN" means, in respect of any property or asset of any person
at any time, any one or more of the following:
(a) Liens for Taxes not at the time due and payable or the validity of
which is being contested at such time by such person in good faith by
proper Proceedings, and which contested Liens would not reasonably be
expected to have a Material Adverse Effect on Intrawest and in respect
of which Intrawest has made adequate provisions in accordance with
generally accepted accounting principles;
(b) the Lien of any judgment rendered or claim filed against such person
which such person is contesting at such time in good faith by proper
Proceedings, and which contested Lien would not reasonably be expected
to have a Material Adverse Effect on Intrawest; and in respect of
which Intrawest has made adequate provisions in accordance with
generally accepted accounting principles;
(c) Liens or privileges imposed by Law such as carriers, warehousemen's,
mechanics, builder's and materialmen's Liens for construction in
progress and (i) privileges arising in the ordinary course of business
of such person not at such time due and payable or which are being
contested at such time by such person in good faith by proper
Proceedings, (ii) which do not individually or in the aggregate render
the title to any real estate asset invalid or unmarketable, (iii)
which would not materially interfere with the conduct of the business
of such person, and (iv) which contested Liens or privileges would not
reasonably be expected to have an Material Adverse Effect on
Intrawest;
(d) undetermined or inchoate Liens incidental to current operations which
have not at such time been filed and which do not secure Indebtedness;
(e) restrictions, covenants, land use contracts, rent charges, building
schemes, declarations of covenants, conditions and restrictions,
servicing agreements in favour of any Governmental Authority,
easements, rights-of-way, servitudes or other similar rights in or
with respect to real property (including open space and conservation
easements. restrictions or similar agreements and rights of way and
servitudes for railways, water, sewer, drainage, gas and oil
pipelines, electricity, light, power, telephone, telegraph, internet
or cable television services and utilities) granted to or reserved by
other persons or properties, which in the aggregate do not materially
impair the use of or the operation of the business of such person or
the property subject thereto and provided that same have been complied
with;
(f) subdivision plans, site plans, subdivision plats, maps, surveys and
similar instruments registered or recorded in the ordinary course of
business which do not materially impair the use of or the operation of
the business or the property subject thereto and provided the same
have been complied with;
(g) any right reserved to or vested in any Governmental Authority, by the
terms of any permit, licence, certificate, order, grant,
classification (including any zoning laws and ordinances and similar
legal requirements), registration or other consent, approval or
authorization acquired by such person from any Governmental Authority
or by any Law, to terminate any such permit, licence, certificate,
order, grant, classification, registration or other consent, approval
or authorization or to require annual or other payments as a condition
to the continuance thereof and which in the aggregate do not
materially impair the use of or the operation of the business or the
property subject thereto;
(h) any Lien resulting from the deposit of cash or securities in
connection with any of the Liens referred to in clauses (a), (b) or
(c) of this definition or in connection with contracts, tenders,
leases or expropriation Proceedings or to secure workmen's
compensation, surety or appeal bonds, costs of litigation when
required by Law and public and statutory obligations;
(i) any security given to a public or private utility or other service
provider or any other Governmental Authority when required by such
utility or other Governmental Authority in connection with the
operations of such person in the ordinary course of its business;
(j) Liens imposed by any metro district, special district or similar
district encumbering purchased properties or assets, which would not
reasonably be expected to have a Material Adverse Effect on Intrawest
and provided the same have been complied with;
(k) any agreement to lease, option to lease, licence, sub-lease or other
right of use or occupancy assumed or entered into by or on behalf of
such person in the ordinary course of its business, which do not
B-12
individually or in the aggregate render the title to any real estate
asset invalid or unmarketable and which would not materially interfere
with the conduct of the business of such person;
(l) the reservations, limitations, provisos and conditions, if any,
expressed in any grants from the Crown or similar Governmental
Authority;
(m) title defects or irregularities which are of a minor nature and in the
aggregate will not materially impair the use of the property for the
purposes for which it is held by such person;
(n) any right of set-off, refund or charge-back available to any bank or
other financial institution;
(o) Liens securing (i) reimbursement obligations of Intrawest or any of
its subsidiaries or Specified Joint Ventures under letters of credit,
letters of guarantee or similar instruments, (ii) obligations of
Intrawest or any of its subsidiaries or Specified Joint Ventures in
respect of surety bonds, performance bonds and similar instruments
provided in the ordinary course of business (iii) indemnities in
respect of liabilities of directors and officers and (iv) obligations
of Intrawest or any of its subsidiaries or Specified Joint Ventures in
respect of guarantees, indemnities, surety or performance bonds and
the like given in respect of purchase price adjustments or otherwise
in connection with the acquisition or disposition of properties or
assets, and Liens incurred or deposits made in the ordinary course of
business in connection with workers compensation, unemployment
insurance and other types of social security benefits;
(p) Liens granted under purchase money mortgages, conditional sale
agreements and other similar instruments relating to purchased
properties or assets;
(q) Liens in existence on the date hereof securing any Indebtedness of
Intrawest or any of its subsidiaries or Specified Joint Ventures (in
the case of outstanding Indebtedness that exceeds $10,000,000 (other
than Indebtedness arising under a Contract between two or more
wholly-owned subsidiaries of Intrawest or between Intrawest and one or
more wholly-owned subsidiaries of Intrawest) which Contract under
which such Indebtedness arises has been previously disclosed to
Parent) and Liens granted after the date hereof to secure any
Indebtedness of Intrawest or any of its subsidiaries or Specified
Joint Ventures arising under existing Contracts for or in respect of
any Indebtedness of Intrawest or any of its subsidiaries or Specified
Joint Ventures or to secure any other Indebtedness incurred by
Intrawest or any of its subsidiaries or Specified Joint Ventures after
the date hereof which incurrence is not prohibited by section 4.1;
(r) Liens on any properties or assets acquired by Intrawest or any of its
subsidiaries or Specified Joint Ventures after the date hereof which
are existing at the time of such acquisition, provided such
acquisition is not prohibited pursuant to section 4.1;
(s) Liens granted in the ordinary course of business to partners, limited
liability company members, shareholders, joint venturers or co-owners
securing obligations under partnership, limited liability company,
shareholders', joint venture or co-ownership agreements disclosed
pursuant to the Intrawest Disclosure Letter or under any such
agreement which is not a Material Contract and any Liens contained in
or arising under the constating documents of any person; and
(t) other non-financial Liens in existence on the date hereof, which do
not materially impair or encumber the use or the value of the property
subject thereto, and provided the same have been complied with;
"PERSON" includes an individual, sole proprietorship, corporation, body
corporate, incorporated or unincorporated association, syndicate, partnership,
limited partnership, limited liability company, unlimited liability company,
joint venture, joint stock company, trust, natural person in his or her capacity
as trustee, executor, administrator or other legal representative, Governmental
Authority or other entity, whether or not having legal status;
"PERSONAL INFORMATION" means information about an identifiable individual
collected, used or disclosed by Intrawest or any of its subsidiaries, such as an
individuals' name, address, age, gender, identification number, income, family
status, citizenship, employment, assets, liabilities, source of funds, payment
records, credit information, personal references and health records;
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form and content set out in Schedule A, as amended, varied or supplemented from
time to time in accordance with Article 6 of the Plan of Arrangement or made at
the direction of the Court in the Final Order;
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"PROCEEDING" has the meaning defined in section 3.1(h);
"RELEASE" means any sudden, intermittent or gradual release, spill, leak,
pumping, addition, pouring, emission, emptying, discharge, migration, injection,
escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment,
incineration, seepage, placement or introduction of a Hazardous Substance,
whether accidental or intentional, into the Environment, including the threat of
any such Release, and when used as a noun has a corresponding meaning;
"REPRESENTATIVES" of any person means its officers, directors, employees,
investment bankers, legal counsel and financial and other advisors and other
representatives and agents of such person;
"RESTRICTED SHARE UNIT AGREEMENT" means the Restricted Share Unit Agreement
made as of the 24th day of April, 2006 between Intrawest and Alex Wasilov;
"RSUS" means:
(a) in the case of the Performance RSU Agreement, the "Target Allocation"
thereunder (being 48,270 notional Common Shares);
(b) in the case of the Restricted Share Unit Agreement, all the 29,439
notional Common Shares granted thereunder; and
(c) in the case of the Intrawest Senior Employee RSU Plan, all of the
notional Common Shares that would be allocated to each participant
thereunder in the event of the termination of the employment of each
of them with Intrawest after July 1, 2006 and before September 30,
2006 in circumstances which would result in section 4.2(a) of the
Intrawest Senior Employee RSU Plan applying to them;
"SARBANES-OXLEY ACT" means the United States Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated under such act;
"SECURITIES AUTHORITIES" means the applicable securities commissions and
other securities regulatory authorities in Canada and the United States;
"SHARE CONSIDERATION" has the meaning defined in section 2.6(b);
"SPECIAL COMMITTEE" means the special committee of the Board of Directors
formed in relation to the Strategic Review;
"SPECIFIED JOINT VENTURES" means (i) A Storied Place At Snowmass LLC, (ii)
Futura I Developments LLC, (iii) Futura II Developments LLC, (iv)
Intrawest/Brush Creek Development Company LLC, (v) Leisura II Developments LLC,
(vi) Leisura III Developments LLC, (vii) CNL Village Retail Partnership, LP,
(viii) Maui Beach Resort Limited Partnership, (ix) Orlando Village Development
Limited Partnership, (x) Intrastar Mammoth LLC, and (xi) Blue Mountain Resorts
Limited, and each subsidiary of each of the foregoing Joint Ventures;
"STRATEGIC REVIEW" means the review by Intrawest of strategic options
available to Intrawest for enhancing shareholder value announced by Intrawest on
February 28, 2006, including the review of the capital structure of Intrawest,
possible strategic partnerships, possible business combinations or acquisitions
of the shares or properties or assets of Intrawest and solicitations of interest
in relation thereto;
"SUBSIDIARY" means, with respect to a specified entity, any:
(a) corporation of which issued and outstanding voting securities of such
corporation to which are attached more than 50% of the votes that may
be cast to elect directors of the corporation (whether or not shares
of any other class or classes will or might be entitled to vote upon
the happening of any event or contingency) are at the time owned by
such specified entity and the votes attached to those voting
securities are sufficient, if exercised, to elect a majority of the
directors of such corporation;
(b) partnership, limited liability company, joint venture or other similar
entity in which such specified entity has more than 50% of the equity
interests and the power to direct the policies, management and affairs
thereof; and
(c) a subsidiary (as defined in clauses (a) or (b) hereof) of any
subsidiary (as so defined) of such specified entity;
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"SUPERIOR PROPOSAL" means an unsolicited bona fide written Acquisition
Proposal made by a third party to Intrawest after the date hereof (a) that
involves not less than 100% of the outstanding Common Shares (excluding any
Common Shares held by the person making such Acquisition Proposal or its
affiliates) or assets of Intrawest or any of its subsidiaries representing not
less than substantially all of the consolidated assets of Intrawest and its
subsidiaries, taken as a whole, and (b) which the Board of Directors determines,
in its good faith judgment after, among other things, consultation, to the
extent considered appropriate by the Board of Directors, with Intrawest's
financial advisors (including the Financial Advisor) and after taking into
account the terms and conditions of the Acquisition Proposal and the Arrangement
(but not assuming away any risk of non-completion of either the Acquisition
Proposal or the Arrangement), (i) is reasonably capable of being completed
without undue delay, taking into account, to the extent considered appropriate
by the Board of Directors, all legal, financial, regulatory and other aspects of
such proposal and the person making such proposal, (ii) is on terms and
conditions more favourable from a financial point of view to the Common
Shareholders than those contemplated by this Agreement (including any proposal
in writing that as of that time has been received by Intrawest from Parent and
Acquisitionco to amend this Agreement and the Plan of Arrangement pursuant to
section 5.4(c) and not withdrawn) and (iii) for which financing is then
committed to at least the extent that the financing for the transactions
contemplated herein is committed as at the date of this Agreement, and (c) in
respect of which the Board of Directors determines in good faith (after receipt
of advice from its outside legal counsel) that failure to recommend such
Acquisition Proposal to the Common Shareholders would be inconsistent with its
fiduciary duties, and (d) that, subject to compliance with the requirements of
sections 5.3 and 5.4, the Board of Directors has determined to recommend to
Common Shareholders;
"SURVIVING CORPORATION" means any corporation or other entity continuing
following the amalgamation, merger, consolidation or winding up of Intrawest
with or into one or more other entities (pursuant to a statutory procedure or
otherwise);
"TAX ACT" means the Income Tax Act (Canada);
"TAX" or "TAXES" means all federal, state, provincial, municipal, local and
foreign taxes, assessments and other governmental charges, levies, duties,
impositions and liabilities lawfully imposed by any Governmental Authority,
including taxes based on or measured by gross receipts, income, profits, sales,
capital, use, occupation, net worth, goods and services, value added, ad
valorem, withholding, payroll or employment, franchise, premium, land transfer
and excise or property taxes, Canada or Quebec pension plan premiums, social
security premiums, workers' compensation premiums, employment or unemployment
insurance premiums, stamp taxes, alcohol taxes and custom duties together with
all interest, penalties, fines and additions imposed with respect to such
amounts;
"TERMINATION DEADLINE" means March 31, 2007;
"TRANSFER AGENT" means CIBC Mellon Trust Company;
"UNITED STATES" means the United States of America;
"VOTING SECURITY" means a security that:
(a) is not a debt security; and
(b) carries a voting right either under all circumstances or under some
circumstances that have occurred and are continuing; and
"WHISTLER/BLACKCOMB EMPLOYEE SHARE PURCHASE PLAN" means the
"Whistler/Blackcomb Employee Registered Savings and Share Purchase Plan", as
amended from time to time.
1.2 CURRENCY
Except where otherwise specified, all references to sums of money in this
Agreement are expressed in lawful money of the United States and "$" refers to
United States dollars.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement into Articles, sections, paragraphs and
subparagraphs and the insertion of headings are for convenience of reference
only and will not affect the construction or interpretation of this Agreement.
The terms "HEREOF ", "HEREIN", "HEREUNDER" and similar expressions refer to this
Agreement, including the Schedules hereto, and not to any particular Article,
section, subsection or other subdivision hereof. Unless the
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contrary intention appears, references in this Agreement to an Article, section,
subsection or other subdivision hereof by number or letter or both refer to that
Article, section, subsection or other subdivision, respectively, bearing that
designation in this Agreement. Any references to the date of this Agreement,
"the date hereof" or similar expressions or references will mean August 10,
2006.
1.4 KNOWLEDGE
Any reference in this Agreement to the "KNOWLEDGE" of Intrawest means the
actual knowledge that any of the Intrawest Senior Management or other management
or other employees of Intrawest or one of its subsidiaries specified in the
Intrawest Disclosure Letter has or would have after reasonable inquiry within
Intrawest as to the subject matter, including without limitation with respect to
compliance with Applicable Laws. In addition, "knowledge" means such knowledge
as at the date of this Agreement, except, with respect to references to
"knowledge" in representations and warranties in section 3.1 which are not
specified to be as at a specified date and pursuant to the terms of this
Agreement are to be true and correct as of the Effective Date as if made on and
as of such date, in order for the condition set out in section 7.3(b) to be
satisfied, will include knowledge obtained (or which after due enquiry should
have been obtained) at any time after the date hereof and prior to the Effective
Time.
1.5 DISCLOSURE
(a) The phrase "AS PREVIOUSLY DISCLOSED" and similar expressions used in
this Agreement will be construed for all purposes of this Agreement as
referring solely to disclosure pursuant to the Intrawest Disclosure
Letter and any such disclosure made to Fortress Investment Group LLC
will be deemed to be made to Parent for all purposes of this
Agreement. Disclosure by Intrawest in the Intrawest Disclosure Letter
will be deemed to be disclosure for all purposes of this Agreement,
where reasonably apparent, whether or not such disclosure refers to
one or more Articles, sections, subsections or other subdivisions of
this Agreement.
(b) The inclusion of any information or disclosure in the Intrawest
Disclosure Letter may be for greater certainty and the fact of the
inclusion of such information or disclosure in the Intrawest
Disclosure Letter will not affect the construction or interpretation
of this Agreement, including the expression "ordinary course of
business", "material" or the definition of "Material Adverse Effect".
1.6 NUMBER AND GENDER
Unless the context otherwise requires, words importing the singular number
only will include the plural and vice versa; words importing the use of any
gender will include all genders; and words importing persons will include firms
and corporations and vice versa. Whenever used in this Agreement, the words
"INCLUDING" or "INCLUDES" and similar terms of inclusion will not, unless
expressly modified by the words "only" or "solely", be construed as terms of
limitation, but rather will mean "including but not limited to" and "includes
but is not limited to", so that references to included matters will be regarded
as illustrative without being either characterizing or exhaustive.
1.7 DATE OF ANY ACTION
In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a business day, such action will
be required to be taken on the next succeeding day which is a business day.
1.8 ACCOUNTING PRINCIPLES
Whenever in this Agreement reference is made to generally accepted
accounting principles, such reference will be deemed to be the Canadian
generally accepted accounting principles from time to time approved by the
Canadian Institute of Chartered Accountants, or any successor thereto,
applicable as at the date on which any applicable calculation is made or
required to be made in accordance with generally accepted accounting principles.
Unless otherwise stated, or the context otherwise requires, all accounting terms
used in this Agreement in respect of Intrawest will have the meanings
attributable thereto under generally accepted accounting principles and all
determinations of an accounting nature in respect of Intrawest required to be
made will be made in a manner consistent with generally accepted accounting
principles consistently applied.
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1.9 STATUTORY REFERENCES
References to any statute, enactment or legislation or to any section or
provision thereof include a reference to any order, ordinance, regulation, rule
or by-law or proclamation made under or pursuant to that statute, enactment or
legislation and all amendments, modifications, consolidations, re-enactments or
replacements thereof or substitutions therefor from time to time.
1.10 LEGAL, VALID AND BINDING
All representations, warranties and covenants in this Agreement as to any
covenant, agreement or document being legal, valid and binding are subject to
the qualification that enforceability of such covenant, agreement or document is
subject to bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other Laws relating to or affecting the availability of equitable
remedies and the enforcement of creditors' rights generally and general
principles of equity and public policy and to the qualification that equitable
remedies such as specific performance and injunction may be granted only in the
discretion of a court of competent jurisdiction and that enforcement may
otherwise be limited under applicable Laws.
1.11 SCHEDULES
The following are the Schedules to this Agreement, which are incorporated
by reference into and form an integral part hereof:
Schedule A -- Plan of Arrangement
Schedule B -- Appropriate Regulatory Approvals
ARTICLE 2
THE ARRANGEMENT
2.1 THE ARRANGEMENT
(a) Intrawest, Parent and Acquisitionco agree that the Arrangement will be
implemented in accordance with and subject to the terms and conditions
contained in this Agreement and the Plan of Arrangement.
(b) Subject to the terms of this Agreement, as soon as reasonably
practicable, but in any event not later than September 29, 2006 or
such other date as is agreed to by Parent and Intrawest, Intrawest
will apply to the Court pursuant to the provisions of section 192 of
the CBCA for the Interim Order.
(c) Subject to the terms of this Agreement and in accordance with the
Interim Order and applicable Legislation, Intrawest will convene and
use commercially reasonable efforts to hold the Intrawest Meeting on
or before October 31, 2006 or as soon as reasonably practicable
thereafter.
(d) Except as required for quorum purposes or a postponement or
adjournment not exceeding five business days for the purpose of
attempting to obtain the requisite approval of the Arrangement
Resolutions, and except as otherwise permitted under this Agreement or
agreed to by Parent in writing, Intrawest will not cancel, postpone or
adjourn the Intrawest Meeting.
(e) Subject to the terms of this Agreement and compliance by the directors
and officers of Intrawest with their fiduciary duties, Intrawest will
use commercially reasonable efforts to solicit from the Intrawest
Securityholders proxies in favour of the approval of the Arrangement
Resolutions, including, if so requested by Parent, using the services
of dealers and proxy solicitation services.
(f) Subject to the terms of this Agreement and compliance by the directors
and officers of Intrawest with their fiduciary duties, and obtaining
such approvals as required by the Interim Order, Intrawest will make
and diligently pursue an application to the Court for the Final Order.
(g) Subject to the terms of this Agreement, Acquisitionco and Parent will
cooperate with, assist and consent to Intrawest seeking the Interim
Order and the Final Order.
(h) Subject to obtaining the Final Order and the satisfaction or waiver
(subject to applicable Laws) of the conditions (excluding conditions
that by their terms cannot be satisfied until the Effective Date, but
subject to the satisfaction or, where permitted, waiver of those
conditions as of the Effective Date) set
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forth in Article 7 (as confirmed by each party hereto to the others in
writing) as soon as reasonably practicable thereafter Acquisitionco
will, and Parent will cause Acquisitionco to, provide the Transfer
Agent with sufficient funds to complete the transactions contemplated
by sections 3.1(b), (f), (h) and (i) of the Plan of Arrangement and
Intrawest will, in consultation with Parent, send to the Director, for
endorsement and filing by the Director, the Articles of Arrangement
and such other documents as may be required in connection therewith
under the CBCA to give effect to the Arrangement and Parent,
Acquisitionco and Intrawest will forthwith carry out the terms of the
Plan of Arrangement applicable to each of them, respectively.
(i) Parent and Acquisitionco acknowledge and agree that Intrawest will
take all such steps as may be necessary or desirable to allow all
holders of Intrawest Options to participate in the Arrangement in
respect of all vested and unvested unexercised Intrawest Options so
that each holder of Intrawest Options will be entitled to receive
from Intrawest, under the Arrangement, a cash amount in respect of
each Intrawest Option equal to the difference between the Share
Consideration and the applicable exercise price under such Intrawest
Option.
(j) In the event that Parent concludes that it is necessary or desirable
to deal with the unexercised Intrawest Options in a different manner
than described above, having consequences to the holders thereof
which are equivalent to or better than those contemplated in this
Agreement (an "ALTERNATIVE PLAN"), and which gives those holders of
Intrawest Options the election to participate in the Alternative Plan
or to receive a cash amount as provided in section 2.1(i), and so
advises Intrawest in writing prior to September 1, 2006 (or such
later date as Intrawest may agree), Intrawest agrees to cooperate
with Parent in implementing such Alternative Plan.
2.2 INTRAWEST MEETING
(a) Subject to Parent and Acquisitionco complying with section 2.2(d), as
soon as reasonably practicable after the execution of this Agreement
but in any event not later than September 29, 2006, Intrawest will
prepare the Circular. Subject to the issuance of the Interim Order, as
promptly as practicable after the completion of the Circular,
Intrawest will cause the Circular to be sent to the Intrawest
Securityholders as required by the Legislation and the Interim Order
and filed with the appropriate Securities Authorities in accordance
with the Legislation. The Circular will include the unanimous
recommendation of the Board of Directors that the Intrawest
Securityholders vote in favour of the Arrangement Resolutions unless
such recommendation has been withdrawn, modified or amended in
accordance with the terms of this Agreement and will include a copy of
the Fairness Opinion.
(b) Parent, Acquisitionco and Intrawest will cooperate in the preparation,
filing and mailing of the Circular. Intrawest will provide Parent and
its representatives with a reasonable opportunity to review and
comment on the Circular, including by Parent providing in a timely and
expeditious manner any information required to be supplied by Parent
and Acquisitionco for inclusion in the Circular, prior to filing and
mailing to Intrawest Securityholders in accordance with the Interim
Order and the Legislation. Parent and Acquisitionco acknowledge that
whether or not such comments are appropriate, or any revisions will be
made as a result thereof to the Circular, will be determined solely by
Intrawest acting reasonably.
(c) Intrawest will ensure that the Circular complies with all applicable
requirements under the Legislation including to ensure that the
Circular complies with applicable requirements of National Instrument
51-102 -- Continuous Disclosure Requirements and Form 51-102F5
thereunder adopted by the Securities Authorities in Canada and (other
than information relating to or provided by Acquisitionco and Parent,
which will be the responsibility of Parent and Acquisitionco), does
not contain any misrepresentation and provides Intrawest
Securityholders with information in sufficient detail to permit them
to form a reasoned judgment concerning the matters to be placed before
them at the Intrawest Meeting.
(d) Acquisitionco and Parent will, in a timely and expeditious manner,
furnish Intrawest with all such information regarding Acquisitionco
and Parent and its affiliates as may reasonably be required to be
included in the Circular pursuant to the Legislation or any other Laws
and any other filings required to be made by Intrawest under the
Legislation or any other Laws in connection with the transactions
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contemplated herein. If requested by Intrawest, Parent and
Acquisitionco will provide to Intrawest a certificate of Parent and
Acquisitionco, signed by a senior officer of Parent and Acquisitionco,
certifying that the information relating to Acquisitionco and Parent
and its affiliates that is contained in the Circular or contained in
other filings (a copy of which have been provided to Parent) to be
made by or on behalf of Intrawest in compliance or intended compliance
with requirements under the Legislation or any other applicable Laws
does not contain any misrepresentation.
(e) Parent and Acquisitionco will indemnify and save harmless Intrawest
and the directors, officers, employees and agents of Intrawest from
and against any and all liabilities, claims, demands, losses, costs,
damages and expenses (not including loss of profits or consequential
damages) to which Intrawest or any director, officer, employee or
agent of Intrawest may be subject or which Intrawest or any director,
officer, employee or agent of Intrawest may suffer, whether under the
provisions of the Legislation or any other Laws or otherwise, in any
way caused by, or arising, directly or indirectly, from or in
consequence of (i) any misrepresentation or alleged misrepresentation
in any information relating to Acquisitionco or Parent provided by
Parent or Acquisitionco or their affiliates and included in the
Circular or other filings made by or on behalf of Intrawest in
compliance or intended compliance with requirements under the
Legislation or other applicable Laws in connection with the
transactions contemplated herein and (ii) any order made, or any
inquiry, investigation or proceeding by any Securities Authority or
other competent authority, based on any misrepresentation or any
alleged misrepresentation in any information relating to Acquisitionco
or Parent or their affiliates provided by Parent or Acquisitionco and
included in the Circular or in any filing by or on behalf of Intrawest
in compliance or intended compliance with applicable Legislation or
other applicable Laws; provided that Parent and Acquisitionco will not
be liable in any such case to the extent that any such liabilities,
claims, demands, losses, costs, damages and expenses do not arise out
of or are not based upon any information provided by Parent or
Acquisitionco.
(f) Intrawest will promptly inform Parent of any requests or comments made
by Securities Authorities in connection with the Circular.
(g) Intrawest will advise Parent as Parent may reasonably request, and at
least on a daily basis on each of the last seven business days prior
to the Intrawest Meeting, as to the aggregate tally of the proxies
received by Intrawest in respect of the Arrangement Resolutions and
any other matters to be considered at the Intrawest Meeting.
(h) Intrawest will promptly advise Parent of any written notice of dissent
or purported exercise by any Common Shareholder of dissent rights
received by Intrawest in relation to the Intrawest Meeting and the
Arrangement Resolutions and any withdrawal of dissent rights received
by Intrawest and, subject to applicable Laws, any written
communications sent by or on behalf of Intrawest to any Common
Shareholder exercising or purporting to exercise dissent rights in
relation to the Arrangement Resolutions.
(i) If, at any time before the Effective Date, Parent or Acquisitionco
becomes aware that the information relating to it and its
subsidiaries which is contained in the Circular or any filing by or
on behalf of Intrawest in compliance or intended compliance with
applicable Legislation or other applicable Laws contains a
misrepresentation or if, for any reason, before the Effective Date
the information relating to Acquisitionco and Parent and its
subsidiaries that is contained in the Circular or any such filing no
longer fails to contain any misrepresentation or otherwise requires
an amendment or supplement to the Circular or such filing, Parent and
Acquisitionco will promptly deliver written notice thereof to
Intrawest setting out full particulars thereof. In such event Parent
and Acquisitionco and Intrawest will cooperate in the preparation of
a supplement or amendment to the Circular or filing, as required
under the Legislation or any other Laws, and, if required under the
Legislation or by the Court, cause the same to be distributed to the
Intrawest Securityholders or filed with the relevant Securities
Authorities.
(j) Intrawest will give notice to Parent of the Intrawest Meeting and
allow Parent's representatives and legal counsel to attend the
Intrawest Meeting.
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2.3 INTERIM ORDER
The application referred to in section 2.1(b) will include a request that
the Interim Order provide, among other things:
(a) for the class of persons to whom notice is to be provided in respect
of the Arrangement and the Intrawest Meeting and for the manner in
which such notice is to be provided;
(b) that, subject to the approval of the Court, the requisite approval of
the Arrangement Resolutions will be 66 2/3% of the vote cast on the
Arrangement Resolutions by Intrawest Securityholders present in person
or by proxy at the Intrawest Meeting with Common Shareholders and
holders of Intrawest Options voting together (with each Common
Shareholder being entitled to one vote for each Common Share held and
each holder of Intrawest Options being entitled to one vote for each
Common Share subject to the Intrawest Options held by such holder that
they would be entitled to acquire if they exercised all Intrawest
Options held by them, without reference to any vesting provisions or
exercise price) provided that as part of such approval the Arrangement
Resolutions are approved by 66 2/3% of the votes cast on the
Arrangement Resolution by Common Shareholders present in person or by
proxy at the Intrawest Meeting;
(c) for the grant of rights of dissent as provided in the Plan of
Arrangement; and
(d) for the notice requirements with respect to the presentation of the
application to the Court for the Final Order.
2.4 COURT PROCEEDINGS
Intrawest will provide legal counsel to Parent with reasonable opportunity
to review and comment upon drafts of all material to be filed with the Court in
connection with the Arrangement, including by providing on a timely basis any
information required to be supplied by Parent and Acquisitionco for inclusion in
such material, prior to the service and filing of that material and will accept
the reasonable comments of Parent and its counsel. In addition, Intrawest will
not object to legal counsel to Parent and Acquisitionco making such submissions
on the hearing of the motion for the Interim Order and the application for the
Final Order as such counsel considers appropriate, provided that Intrawest is
advised of the nature of any submissions prior to the hearing. Intrawest will
also provide legal counsel to Parent and Acquisitionco on a timely basis with
copies of any notice of appearance and evidence served on Intrawest or its legal
counsel in respect of the application for the Final Order or any appeal
therefrom. Subject to the terms of this Agreement, Parent and Acquisitionco will
cooperate with, assist and consent to Intrawest seeking and obtaining the
Interim Order and Final Order. Subject to applicable Laws, Intrawest will not
file any material with the Court in connection with the Arrangement or serve any
such material, and not agree to modify or amend materials so filed or served
except as contemplated hereby or with Parent's prior written consent, such
consent not to be unreasonably withheld or delayed.
2.5 PREPARATION OF FILINGS
(a) Parent, Acquisitionco and Intrawest will as promptly as practicable
hereafter cooperate in:
(i) the preparation of any application for the Appropriate Regulatory
Approvals;
(ii) the preparation of any filings and documents and submissions of
information required or requested by any Governmental Authority
from the parties or any of their subsidiaries relating to the
Arrangement (including filings, documents and submissions of
information requested in respect of the Appropriate Regulatory
Approvals) the failure to effect which, individually or in the
aggregate, would prevent or materially delay the consummation of
the Arrangement or would reasonably be expected to have a Material
Adverse Effect on Intrawest; and
(iii) in connection with the foregoing, subject to applicable Laws
relating to access to and exchange of information, keep the other
party reasonably informed as to the status of the proceedings
relating to obtaining the Appropriate Regulatory Approvals,
including providing the other party with copies of all related
applications and notifications (other than confidential
information contained in such applications and notifications), in
draft form, in order for the other party to provide its comments
thereon and providing the other party or, if the information is
competitively sensitive, the other party's outside legal counsel,
with all information it reasonably requests for purposes of
obtaining
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the Appropriate Regulatory Approvals, and if a party hereto
intends to participate in any meeting with any Governmental
Authority with respect to any such Appropriate Regulatory
Approval, it shall give the other parties reasonable prior notice
of, and an opportunity to participate in, such meeting.
(b) Each party will promptly notify the other party if at any time before
the Effective Time it becomes aware that:
(i) any application for an Appropriate Regulatory Approval or any
registration statement, circular or other filing under applicable
Laws made in connection with this Agreement and the transactions
contemplated herein contains a misrepresentation; or
(ii) any Appropriate Regulatory Approval or other sanction, ruling,
consent, order, exemption, permit, no-action letter or other
approval applied for as contemplated herein which has been
obtained contains or reflects or was obtained following submission
of any application, filing, document or submission as contemplated
herein that contained a misrepresentation;
such that an amendment or supplement to such application, registration
statement, circular, filing, document or submission or sanction, ruling,
consent, order, exemption, permit or approval or no-action letter may be
necessary or advisable. Parent, Acquisitionco and Intrawest will
cooperate in the preparation of such amendment or supplement as
required.
(c) If the Arrangement becomes effective, Acquisitionco and Intrawest will
use reasonable commercial efforts to cause the Common Shares to be
delisted from the Exchanges and de-registered under the Exchange Act
promptly, with effect immediately following the acquisition by
Acquisitionco of all of the Common Shares pursuant to the Plan of
Arrangement.
2.6 PLAN OF ARRANGEMENT AND CLOSING
(a) Subject to the terms and conditions of this Agreement, pursuant to the
Arrangement, each holder of Intrawest Options, whether vested or
unvested, will be entitled to receive from Intrawest an amount equal
to the Share Consideration less the exercise price per share under the
applicable Intrawest Option, in respect of each Common Share which
such holder has the right to acquire under the Intrawest Options.
(b) Subject to the terms and conditions of this Agreement, pursuant to the
Arrangement, each holder of Common Shares (other than any "Dissenting
Shareholder" (as defined in the Plan of Arrangement)) will be entitled
to receive $35.00 (the "SHARE CONSIDERATION") for each Common Share
held.
(c) Subject to the terms and conditions of this Agreement, pursuant to the
Arrangement, all DSUs under the Intrawest DSU Plans and all RSUs under
the Performance RSU Agreement, the Restricted Share Unit Agreement
and, at the election of Parent, the Intrawest Senior Employee RSU Plan
will be acquired or cancelled by Intrawest for cash equal to the Share
Consideration per DSU or RSU, as the case may be and, at the election
of Parent, all of the RSUs under the Intrawest Senior Employee RSU
Plan will be acquired or cancelled by Intrawest for cash equal to the
Share Consideration per RSU (it being acknowledged and agreed by the
parties that, if Parent exercises such election, the Plan of
Arrangement will be amended accordingly).
(d) Subject to obtaining the Final Order, on the second business day after
the satisfaction or waiver (subject to applicable Laws) of the
conditions (excluding conditions that, by their terms, cannot be
satisfied until the Effective Date, but subject to the satisfaction
or, where permitted, waiver of those conditions as of the Effective
Date) set out in Article 7, the Articles of Arrangement will be filed
with the Director. Upon such filing, unless otherwise provided in the
Plan of Arrangement, the events set out in section 3.1 of the Plan of
Arrangement will occur in the order or sequence indicated therein and
each Common Share outstanding immediately prior to the Effective Time
will be transferred to Acquisitionco as provided in the Plan of
Arrangement. Acquisitionco will make arrangements for all payments
required to be made by it as contemplated pursuant to section 3.1 of
the Plan of Arrangement to be made at the time of completion of the
transactions contemplated in the Plan of Arrangement. The Arrangement
will, from and after the Effective Time, have all of the effects
provided by applicable Laws, including the CBCA and Intrawest, Parent
and Acquisitionco will be bound by the provisions of the Plan of
Arrangement as provided therein. The closing of the transactions
contemplated by the Plan of Arrangement will take
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place at the Vancouver, British Columbia offices of McCarthy Tetrault
LLP at the Effective Time (or such other time as may be agreed by
Parent and Intrawest).
2.7 WITHHOLDING
Intrawest, Parent or Acquisitionco, as the case may be, will deduct and
withhold or cause to be deducted and withheld, as appropriate, from the amount
otherwise payable pursuant to this Agreement or the Plan of Arrangement to any
Intrawest Securityholder (including any consideration payable to holders of
Common Shares or of Intrawest Options or any payments to Common Shareholders
that exercise dissent rights with respect to the exercise of such rights) or to
any person in respect of DSUs under the Intrawest DSU Plans or RSUs under the
Performance RSU Agreement, the Restricted Share Unit Agreement and, if
applicable, the Intrawest Senior Employee RSU Plan such amounts as are required
to be deducted and withheld with respect to any such payment by the Tax Act or
the Code and will be entitled to deduct and withhold such amounts as may be
required by any other Law relating to Taxes as counsel may advise is required to
be made by Intrawest, Parent or Acquisitionco, as the case may be. To the extent
any amounts are so deducted and withheld and remitted or caused to be deducted,
withheld or remitted to the appropriate Governmental Authority by Intrawest,
Parent or Acquisitionco, as the case may be, such amount will be treated for all
purposes of this Agreement as having been paid to the particular Intrawest
Securityholder on account of the obligation to make any payments to such
Intrawest Securityholder hereunder.
2.8 REGISTRAR AND TRANSFER AGENT
Intrawest will permit the Transfer Agent to act as depositary in connection
with the Arrangement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF INTRAWEST
Intrawest represents and warrants to and in favour of Parent and
Acquisitionco as follows and acknowledges that Parent and Acquisitionco are
relying upon such representations and warranties in entering into this
Agreement:
(a) Board Approval. As of the date hereof, the Board of Directors, after,
among other things, consultation with and receiving advice from its
legal advisors and consultation with and receiving advice from
Intrawest's financial advisors (including the Financial Advisor), and
after receiving the Fairness Opinion, has approved this Agreement and
the Arrangement, has unanimously determined that the Arrangement is
fair to the Common Shareholders and is in the best interests of
Intrawest and its shareholders and has resolved to recommend that
Common Shareholders vote in favour of the Arrangement Resolutions.
(b) Organization and Qualification. Intrawest and each of its
subsidiaries (i) is a corporation duly incorporated, continued or
amalgamated or an entity duly formed and validly existing under the
laws of its jurisdiction of incorporation, continuance, amalgamation
or formation, (ii) has the requisite corporate or other power and
capacity to own its properties and assets as now owned and to carry on
its business as it is now being carried on and (iii) is duly
registered or otherwise authorized to do business and is in good
standing in each jurisdiction in which the nature of its properties
and assets, or the nature of its activities, makes such registration
necessary; except, in each case, where the failure to satisfy the
foregoing does not have a Material Adverse Effect on Intrawest.
(c) Authority. Intrawest has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and to
consummate the transactions contemplated herein.
(d) Execution and Delivery. The execution and delivery of this Agreement
and, subject to obtaining the approval of the Intrawest
Securityholders of the Arrangement and the Final Order as contemplated
in section 2.1 and subject to approval of the Circular by the Board of
Directors, and subject to the approval of the directors and
shareholders of Intrawest of the Amalgamation, the consummation by
Intrawest of the transactions contemplated by this Agreement, have
been duly authorized by the Board of Directors and no other corporate
proceedings on the part of Intrawest are necessary to authorize the
execution and delivery by it of this Agreement or the Arrangement or
the consummation by Intrawest of the
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transactions contemplated hereby. This Agreement has been duly
executed and delivered by Intrawest and constitutes a legal, valid and
binding obligation of Intrawest enforceable against Intrawest in
accordance with its terms.
(e) No Violation. Except as previously disclosed by Intrawest to Parent,
and subject to obtaining the Appropriate Regulatory Approvals, the
execution and delivery by Intrawest of this Agreement and the
performance by Intrawest of its obligations hereunder and the
consummation of the transactions contemplated herein do not and will
not (nor will they with the giving of notice or the lapse of time or
both) (i) result in a contravention, breach, violation or default
under any Law applicable to Intrawest or any of its subsidiaries or,
to the knowledge of Intrawest, Specified Joint Ventures or any of
their respective properties or assets, (ii) result in a contravention,
breach, violation or default under the constating documents of
Intrawest or any of its subsidiaries or, to the knowledge of
Intrawest, Specified Joint Ventures, (iii) result in a breach or
default under, or give to any person any right of purchase or sale,
termination, cancellation or acceleration under, or to require any
payment from, or reduce any payment to, Intrawest or any of its
subsidiaries or, to the knowledge of Intrawest, Specified Joint
Ventures under, any Contract, (iv) result in the cancellation,
suspension or alteration in the terms of any permit, licence,
certificate, order, grant, classification, registration or any other
consent, approval or authorization of any Governmental Authority held
by Intrawest or any of its subsidiaries or, to the knowledge of
Intrawest, Specified Joint Ventures other than those which are in the
normal course or of a purely administrative nature and which will
either be obtained or completed prior to the Effective Date or which
can reasonably be expected to be obtained or completed after the
Effective Date without adverse effect on the conduct of the operations
of Intrawest or such subsidiaries or, to the knowledge of Intrawest,
Specified Joint Ventures or (v) result in the creation of any Lien
upon any properties or assets of Intrawest or any of its subsidiaries,
except, in the case of clauses (i), (iii), (iv) and (v) above, for any
such contravention, breach, violation, default, right, cancellation,
suspension, alteration or Lien which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Intrawest.
(f) Compliance with Laws. Except as previously disclosed by Intrawest to
Parent, Intrawest and each of its subsidiaries and, to the knowledge
of Intrawest, Specified Joint Ventures is currently conducting its
business, and has since at least June 30, 2003 conducted its business,
in compliance with all applicable Laws, except for any non-compliance
which does not have, and would not be reasonably expected to have, a
Material Adverse Effect on Intrawest and, to the knowledge of
Intrawest, there have been no actions taken by any of Intrawest or any
of its subsidiaries that would cause it to be in violation of the
Foreign Corrupt Practices Act of the United Sates of America or the
Corruption of Foreign Public Officials (Canada) Act.
(g) Consents. Except as previously disclosed, no material consent,
approval, order or authorization of, or declaration or filing with,
any Governmental Authority is required to be obtained by Intrawest or
any of its subsidiaries in connection with the execution and delivery
of this Agreement, other than those which are contemplated by this
Agreement and other than those which are in the normal course or of a
purely administrative nature and which will either be obtained or
completed prior to the Effective Date or which can reasonably be
expected to be obtained or completed after the Effective Date without
adverse effect on the conduct of the operations of Intrawest or such
subsidiaries, except any of the foregoing the failure to obtain or
make does not have, and would not be reasonably expected to have, a
Material Adverse Effect on Intrawest.
(h) Litigation. Except as previously disclosed by Intrawest to Parent,
there is no court, administrative, regulatory or similar proceeding
(whether civil, quasi-criminal or criminal), arbitration or other
dispute settlement procedure, or any claim, action, suit, demand,
arbitration, charge, indictment, hearing or other similar civil,
quasi-criminal or criminal, administrative or investigative material
matter or proceeding, or to the knowledge of Intrawest, any
investigation or inquiry by or complaint before any Governmental
Authority, (collectively, "PROCEEDINGS") against or involving
Intrawest or any of its subsidiaries or, Specified Joint Ventures or
any of their respective properties or assets pending or, to the
knowledge of Intrawest, threatened and, to the knowledge of Intrawest,
no event has occurred which would reasonably be expected to give rise
to any Proceeding, in each case which, if adversely determined, would
reasonably
B-23
be expected to have a Material Adverse Effect on Intrawest. There is no
judgment, decree, injunction, rule, award or order of any Governmental Authority
outstanding against Intrawest or any of its subsidiaries or Specified Joint
Ventures that has had, or would reasonably be expected to have, a
Material Adverse Effect on Intrawest.
(i) Capitalization. Under its articles of continuance Intrawest is
authorized to issue an unlimited number of common shares without par
value, 50,000,000 Non-Resort Preferred Shares without par value (of
which a total of 25,143,436 Non-Resort Preferred Shares were issued
by Intrawest and subsequently redeemed by Intrawest and cancelled)
and an unlimited number of Preferred Shares without par value. As at
the date of this Agreement there are 49,063,126 Common Shares issued
and outstanding and non-assessable, and no Non-Resort Preferred
Shares or Preferred Shares are issued or outstanding. As at the date
of this Agreement there are outstanding Intrawest Options to acquire
an aggregate of 2,853,400 Common Shares and, except for such
Intrawest Options, there are no outstanding options, warrants,
subscriptions, puts, calls or other rights, entitlements, agreements,
understandings or commitments (pre-emptive, contingent or otherwise)
of any nature whatsoever requiring or which may require Intrawest to
issue or sell any shares of Intrawest (including Common Shares) or
any securities convertible into, or exchangeable or exercisable for,
or otherwise evidencing a right to acquire, any shares of Intrawest
(including Common Shares). All outstanding Common Shares have been
duly authorized and validly issued, are fully paid and
non-assessable. All Common Shares issuable on exercise of the
outstanding Intrawest Options in accordance with their terms, upon
issuance, will be validly issued as fully paid and non-assessable.
All shares and bonds, debentures or other evidences of indebtedness
of Intrawest that constitute securities, or other securities of
Intrawest that are convertible into, or exchangeable or exercisable
for, or otherwise evidencing a right to acquire, any shares of
Intrawest have been issued in compliance, in all material respects,
with all applicable securities Laws. There are no outstanding
options, warrants, puts, calls or other rights, entitlements,
agreements, arrangements, understandings or commitments requiring or
which may require Intrawest or any of its subsidiaries to redeem,
repurchase or otherwise acquire any of the shares of Intrawest. Other
than Intrawest Options, there are no bonds, debentures or other
evidences of indebtedness, or other securities, of Intrawest or any
of its subsidiaries outstanding which have the right to vote
generally (or are convertible into or exchangeable for or otherwise
evidence a right to acquire, securities which have the right to vote
generally) with the Common Shareholders on the election of directors
of Intrawest or other matters in respect of which Common Shareholders
are entitled to vote at general meetings of Intrawest. There is no
outstanding shareholder agreement, voting trust, right to require
registration under any applicable securities Laws (including the
Legislation) or any other arrangement or commitment to which
Intrawest or any of its subsidiaries is a party or by which it is
bound with respect to the voting, transfer or registration of any
outstanding shares of Intrawest under any securities laws.
(j) Subsidiaries. Except as previously disclosed by Intrawest to Parent,
(i) Intrawest, directly or indirectly, beneficially owns all of the
outstanding shares, voting securities or equity interests, as the
case may be, of all of the subsidiaries of Intrawest, and (ii) all of
the outstanding shares which are owned directly or indirectly by
Intrawest in the capital of the subsidiaries of Intrawest which are
corporations are validly issued, fully paid and non-assessable and
all such outstanding shares, voting securities and equity interests
in subsidiaries of Intrawest owned directly or indirectly by
Intrawest are owned free and clear of any Liens other than Permitted
Liens and there are no outstanding options, warrants, puts, calls or
other rights, entitlements, agreements, understandings or commitments
(pre-emptive, contingent or otherwise) of any nature whatsoever
(other than any Permitted Lien) giving any other person the right to
acquire any such shares or voting securities or equity interests
owned directly or indirectly by Intrawest and there are no
outstanding options, warrants, subscriptions, puts, calls or other
rights, entitlements, agreements, understandings or commitments
(pre-emptive, contingent or otherwise) requiring or which may require
any subsidiary of Intrawest to issue or sell any shares or voting
securities or equity interests of such subsidiary or any securities
convertible into or exchangeable or exercisable for, or otherwise
evidencing a right to acquire, any shares or voting securities or
equity interests of any such subsidiary.
Except as previously disclosed by Intrawest to Parent, and except
pursuant to the provisions of the constating documents of the
subsidiaries of Intrawest or the constating documents of Joint
Ventures, there are no outstanding contractual or other obligations
of any subsidiaries of Intrawest (A) to
B-24
repurchase, redeem or otherwise acquire any of the outstanding
securities of such subsidiary, (B) with respect to the voting or
disposition of any outstanding securities of any subsidiaries of
Intrawest, (C) other than in the ordinary course of business, to make
any loan, capital contribution or equity investment in any subsidiary
of Intrawest, other than a wholly-owned subsidiary of Intrawest, or
any Joint Venture or (D) other than in the ordinary course of
business, to provide any guarantee with respect to Indebtedness in
excess of $10,000,000 of any subsidiary of Intrawest, other than a
wholly-owned subsidiary of Intrawest, or Joint Venture, other than
any replacement guarantee which does not increase the amount of the
guarantee being replaced. All Joint Ventures are listed in the
Intrawest Disclosure Letter other than any Joint Venture (the
"SUBSIDIARY JV") which is a subsidiary of a Joint Venture (the
"PARENT JV") if all or substantially all of the Joint Venture
Interests of the Subsidiary JV are owned by the Parent JV or the
general partner or member thereof. Except as previously disclosed by
Intrawest to Parent, all Joint Venture Interests are owned free and
clear of any Liens other than Permitted Liens, and, except as
contained in the constating documents of any Joint Venture, there are
no outstanding options, warrants, puts, calls or other rights,
entitlements, agreements, understandings or commitments (pre-
emptive, contingent or otherwise) of any nature whatsoever (other
than any Lien) giving any other person the right to acquire any such
Joint Venture Interests. Except as previously disclosed by Intrawest,
as at June 30, 2006 there was no indebtedness (other than
indebtedness of the type referred to in clause (f) of the definition
of "Indebtedness" in respect of Indebtedness of Intrawest or any
wholly-owned subsidiary of Intrawest) of Intrawest or any
wholly-owned subsidiary of Intrawest to Intrawest or any wholly-owned
subsidiary of Intrawest in excess of $10,000,000.
(k) Financial Statements. The Intrawest Financial Statements have been
prepared in accordance with generally accepted accounting principles
applied on a basis consistent with those of previous years except (i)
as otherwise stated in the notes to such statements or in the
auditor's report thereon and (ii) the unaudited interim consolidated
financial statements are subject to normal period-end adjustments and
may omit notes which are not required by applicable Laws in the
unaudited financial statements, and the Intrawest Financial
Statements, together with the related management's discussion and
analysis, present fairly, in all material respects, the financial
position of Intrawest and its subsidiaries as at the respective dates
thereof and the results of operations and changes in financial
position of Intrawest and its subsidiaries on a consolidated basis for
the periods covered thereby (subject, in the case of any unaudited
interim consolidated financial statements, to normal period-end
adjustments that are not material).
(l) Books, Records and Disclosure Controls. Intrawest and each of its
officers and directors are in compliance in all material respects
with and have complied in all material respects with the provisions
of the Sarbanes-Oxley Act, the Exchange Act and applicable
requirements of the Exchanges that are applicable to Intrawest as at
the date of this Agreement. To the knowledge of Intrawest, the
records, systems, controls, data and information of Intrawest and
each of its subsidiaries are recorded, stored, maintained and
operated under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are under the
exclusive ownership and direct control of Intrawest or such
subsidiary, except for any non-exclusive ownership or non-direct
control that would not have a material adverse effect on the system
of internal accounting control described in the following sentence.
Intrawest and its subsidiaries have devised and maintain a system of
internal controls over financial reporting sufficient to provide
reasonable assurance regarding the reliability of financial reporting
and preparation of financial statements in accordance with generally
accepted accounting principles. Intrawest:
(i) has designed disclosure controls and procedures to ensure that
material information is made known to its management by others
within Intrawest and its subsidiaries; and
(ii) has devised and maintains a system of internal accounting controls
sufficient to provide reasonable assurances that:
A. transactions are executed in accordance with management's
general or specific authorization; and
B. transactions are recorded as necessary (1) to permit
preparation of financial statements in conformity with
generally accepted accounting procedures, or any other criteria
applicable to such statements and (2) to maintain
accountability for assets.
B-25
Intrawest and its subsidiaries' corporate records and minute books have
been maintained substantially in compliance with applicable Laws and are
complete and accurate in all material respects.
(m) Absences of Certain Changes or Events. Except as previously disclosed
by Intrawest to Parent, and except in connection with the Strategic
Review and the transactions contemplated herein:
(i) Intrawest and its subsidiaries have no liability or obligation of
any nature (whether accrued, absolute, contingent or otherwise)
which is material to Intrawest and its subsidiaries, taken as a
whole, including any agreement, contract or commitment to create,
assume or issue any bond, debenture, note or other similar
instrument or any agreement, contract or commitment providing for
the guarantee, indemnification, assumption or endorsement or any
similar commitment with respect to the obligations, liabilities
(contingent or otherwise) or indebtedness of any other person,
required by generally accepted accounting principles to be set
forth in a consolidated balance sheet of Intrawest and its
subsidiaries or in the notes thereto, which individually or in the
aggregate has not been reflected in the consolidated balance sheet
of Intrawest and its subsidiaries dated March 31, 2006 forming
part of the unaudited consolidated financial statements of
Intrawest as at, and for the nine months ended March 31, 2006,
including the notes thereto and the related management's
discussion and analysis filed under the Legislation (or, in the
case of contingent liabilities, indebtedness or obligations, in
the consolidated balance sheet of Intrawest and its subsidiaries
dated June 30, 2005 forming part of the audited consolidated
financial statements of Intrawest as at, and for the year ended,
June 30, 2005, and the notes thereto and the related management's
discussion and analysis filed under the Legislation), other than
liabilities, indebtedness or obligations incurred by Intrawest and
its subsidiaries in the ordinary course of business since March
31, 2006 (and, in the case of contingent liabilities, indebtedness
or obligations, incurred by Intrawest and its subsidiaries in the
ordinary course of business since June 30, 2005); and
(ii) during the period from March 31, 2006 to the date of this
Agreement:
A. each of Intrawest and each of its material subsidiaries and
Specified Joint Ventures has conducted its business only in the
ordinary course;
B. there has not occurred (or been threatened) any change, or any
condition or event, which individually or in the aggregate, has
had, or would reasonably be expected to have, a Material
Adverse Effect on Intrawest;
C. there has been no amendment to the articles of continuation or
other constating documents of Intrawest;
D. there has been no action taken which, if it had been taken
after the date hereof, would have required Parent's agreement
in writing pursuant to section 4.1 hereof; and
E. there has been no agreement or commitment by Intrawest or any
of its subsidiaries or Joint Ventures to do any of the
foregoing.
(n) Reporting Issuer Status and Securities Laws Matters. Intrawest is a
"reporting issuer" within the meaning of the Legislation and not on
the list of reporting issuers in default under the Legislation in the
provinces and territories of Canada and is a "foreign private issuer"
as defined in Rule 405 of the United States Securities Act of 1933,
and no securities commission or similar regulatory authority has
issued any order preventing or suspending trading of any securities of
Intrawest, Intrawest is not in default of any material applicable
provision of the Legislation, and, to the knowledge of Intrawest, no
inquiry or investigation (formal or informal) of any Securities
Authority is in effect or ongoing or, to the knowledge of Intrawest,
expected to be implemented or undertaken and which would reasonably be
expected to have a Material Adverse Effect on Intrawest. Intrawest is
in compliance in all material respects with the Legislation. The
Common Shares are listed on the Exchanges and trading in the Common
Shares is not currently halted or suspended. Intrawest is not an
investment company registered or required to be registered under the
U.S. Investment Company Act of 1940. No subsidiary of Intrawest is
subject to the continuous disclosure requirements under any of the
Legislation. The documents and information comprising the Intrawest
Public Disclosure Record, as at the respective date they were filed,
or, as applicable, the time of becoming effective, were in compliance
in all material respects with the
B-26
Legislation and, where applicable, the rules and policies of the Exchanges and
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and Intrawest is up-to-date in all forms, reports,
statements and documents, including financial statements and
management's discussion and analysis, required to be filed by it under
the Legislation and, where applicable, the rules and policies of the
Exchanges.
(o) Property. Except as previously disclosed by Intrawest, all real
property owned in fee simple (or equivalent title) by Intrawest or any
subsidiary of Intrawest or Specified Joint Venture (the "REAL
PROPERTY") is listed in the Intrawest Disclosure Letter and (i)
Intrawest or one of its subsidiaries or Specified Joint Ventures, as
the case may be, has good and marketable title to the Real Property
and good and sufficient title to all other property owned or leased or
otherwise held by Intrawest or any subsidiary of Intrawest or
Specified Joint Venture, in the case of Intrawest or any of its
subsidiaries and, to the knowledge of Intrawest, in the case of the
Specified Joint Ventures, free and clear of all Liens other than
Permitted Liens, and Intrawest and its subsidiaries and Specified
Joint Ventures hold all such real and personal property as is
necessary for them to conduct their business as presently conducted,
(ii) there are no pending, or to the best of the knowledge of
Intrawest, threatened condemnation or expropriation proceedings with
respect to any real property owned or leased or otherwise held by
Intrawest or any subsidiary of Intrawest or Specified Joint Venture,
(iii) there are no outstanding options or rights of first refusal to
purchase any real property (or any portion thereof or interest
therein) owned or leased or otherwise held by Intrawest or any
subsidiary of Intrawest or Specified Joint Venture, (iv) to the
knowledge of Intrawest all of the material buildings, fixtures,
systems and utilities on the real property owned or leased or
otherwise held by Intrawest or any subsidiary of Intrawest or
Specified Joint Venture (A) were constructed and are maintained in
accordance with all applicable Laws; (B) are in good operating
condition and in a state of good maintenance and repair, reasonable
wear and tear excepted and (C) are adequate and suitable for the
conduct of the business being conducted by Intrawest or any of its
subsidiaries or Specified Joint Ventures thereon and (v) there is no
material default by Intrawest or any of its subsidiaries or Specified
Joint Ventures, nor to the best of the knowledge of Intrawest is there
any event that with the passage of time or the giving of notice would
constitute a material default by Intrawest or any of its subsidiaries
or Specified Joint Ventures, in the performance or observance of the
terms and provisions of the Permitted Liens, each of which has been
complied with in all material respects; except, in each case, for any
such failure of title, proceeding, option or right of first refusal,
defect or default as individually or taken cumulatively would not
reasonably be expected to have a Material Adverse Effect on Intrawest.
Each of Intrawest and its subsidiaries and Specified Joint Ventures
has good and sufficient title to such other real property interests,
licenses, easements and rights of way permitting the use of land or
premises by Intrawest and its subsidiaries and Specified Joint
Ventures, which, together with its interest in the Real Property and
any real property leased by Intrawest or any of its subsidiaries or
Specified Joint Ventures (the "LEASED REAL PROPERTY"), is necessary to
permit the operation of its current business, as it is now being
conducted, except for such failure of title in respect of such other
real property interests, licenses, easements, and rights of way as
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Intrawest.
(p) Employment Arrangements and Collective Agreements. Except as
previously disclosed by Intrawest to Parent, none of Intrawest or any
of its subsidiaries is:
(i) a party to or bound by any written employment, retention or change
of control agreement or other arrangement or understanding with
any President, Senior Vice President or Executive Vice President
or any person to whom they report that provides for any retention,
severance or termination payments to any such officer or employee
of Intrawest;
(ii) a party to or bound by any collective bargaining or union
agreement, any actual or, to the knowledge of Intrawest,
threatened application for certification or bargaining rights in
respect of Intrawest or any of its subsidiaries; or
(iii) subject to any notice to bargain or ongoing collective bargaining
negotiations, mediation or conciliation, any ongoing labour
dispute, strike or lock-out relating to or involving any employees
of
B-27
Intrawest or any of its subsidiaries that is having, or would
reasonably be expected to have, a Material Adverse Effect on
Intrawest.
(q) Financial Advisers or Brokers. Neither Intrawest nor any of its
subsidiaries has incurred any obligation or liability, contingent or
otherwise, or agreed to pay or reimburse any broker, finder, financial
adviser or investment banker for any brokerage, finder's, advisory or
other fee or commission, or for the reimbursement of expenses, in
connection with this Agreement or the transactions contemplated herein
other than Goldman, Sachs & Co. and Capital West Partners.
(r) Taxes. Except as previously disclosed by Intrawest to Parent, (i)
Intrawest and each of its subsidiaries has, in respect of all taxation
years which are open for review by the relevant Governmental Authority
and which have not been reviewed at the date hereof, (A) duly and
timely filed, or caused to be filed, all material Tax returns required
to be filed by it prior to the date hereof, other than those which
have been administratively waived and all such Tax returns are true
and correct in all material respects; (B) paid on a timely basis all
Taxes and all assessments and reassessments of Taxes due on or before
the date hereof, other than Taxes which are being or have been
contested in good faith and in respect of which, in the reasonable
opinion of Intrawest, for which adequate reserves have been provided
in the Intrawest Financial Statements, and other than Taxes the
failure to pay which does not have, and would not reasonably be
expected to have, a Material Adverse Effect on Intrawest; (C) duly and
timely withheld, or caused to be withheld, all Taxes and other amounts
required by Law to be withheld by it (including Taxes and other
amounts required to be withheld by it in respect of any amount paid or
credited or deemed to be paid or credited by it to or for the account
of any person, including any employees, officers or directors and any
non-resident person) and duly and timely remitted, or caused to be
remitted, to the appropriate Tax authority such Taxes and other
amounts required by Law to be remitted by it, except to the extent
that such failure has or would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Intrawest;
and (D) duly and timely collected, or caused to be collected, all
amounts on account of any sales or transfer taxes, including goods and
services, harmonized sales and provincial or territorial sales taxes,
required by Law to be collected by it and duly and timely remitted to
the appropriate Tax authority any such amounts required by Law to be
remitted by it, except to the extent that such failure has or would
not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect; (ii) reserves and provisions for Taxes
accrued but not yet due as reflected in Intrawest Financial Statements
are adequate as of the date of the Intrawest Financial Statements, in
accordance with Canadian generally accepted accounting principles, and
Taxes payable by Intrawest and its subsidiaries through the Effective
Date will not exceed such reserve as adjusted through the Effective
Date in accordance with the past custom and practice of Intrawest and
its subsidiaries in filing their Tax returns; (iii) no deficiencies,
litigation, proposed adjustments or matters in controversy with
respect to Taxes exist or have been asserted which remain unresolved
at the date hereof, and no action or Proceeding for assessment or
collection of Taxes has been taken, asserted, or to the knowledge of
Intrawest, threatened, against Intrawest or any of its subsidiaries or
any of their respective assets, except, in each case, as disclosed or
provided for in the Intrawest Financial Statements or except such
deficiencies, litigation, proposed adjustments, confirmations, actions
or proceedings that would not reasonably be expected to have a
Material Adverse Effect on Intrawest; (iv) there are no outstanding
elections, agreements or waivers extending the statutory period or
providing for an extension of time with respect to the assessment or
reassessment of any Taxes of, or the filing of any Tax return or any
payment of any Taxes by, Intrawest or any of its subsidiaries; and (v)
Intrawest is a "taxable Canadian corporation" as defined in the Tax
Act.
(s) Material Contracts.
(i) Except as previously disclosed by Intrawest to Parent, neither
Intrawest nor any of its subsidiaries is a party to or bound by
any Material Contracts.
(ii) Except as previously disclosed by Intrawest to Parent and except
as does not have, and would not reasonably be expected to have, a
Material Adverse Effect on Intrawest, none of Intrawest, its
subsidiaries or Joint Ventures or, to the knowledge of Intrawest,
any of the other parties thereto, is in breach or violation of, or
default (in each case, with or without notice or lapse of time or
both) under, any Material Contract and none of Intrawest or any of
its subsidiaries or Joint Ventures has
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received or given any notice of default under any Material
Contract which remains uncured, and, to the knowledge of
Intrawest, there exists no state of facts which after notice or
lapse of time or both would constitute a default or breach in any
material respect under any Material Contract. Except as previously
disclosed by Intrawest to Parent, true copies of the Material
Contracts (or, in the case of oral Material Contracts, accurate
summaries of the material terms of such Material Contracts) have
been made available to Parent or its Representatives.
(t) Permits. Intrawest and each of its subsidiaries and, to the knowledge
of Intrawest, Specified Joint Ventures has obtained and is in
compliance with all permits, licences, certificates, orders, grants,
classifications, registrations and any other consents, approvals or
authorizations of any Governmental Authority required by applicable
Laws that are necessary for Intrawest or each of its subsidiaries or,
to the knowledge of Intrawest, Specified Joint Ventures to own its
respective properties and conduct its business as presently conducted
(for greater certainty, excluding any consent, approval or
authorization of any Governmental Authority which is required to
complete the development of any land held for development but not yet
developed or any real estate project which is under development, until
such time as the failure to obtain such consent, approval or
authorization would unduly delay or hinder the completion of the
development of such land or real estate project), other than where the
absence of any such consent, approval or authorization or the failure
to comply does not have and would not reasonably be expected to have a
Material Adverse Effect on Intrawest.
(u) Restrictions on Business Activities. Except as previously disclosed
by Intrawest to Parent, there is no judgment, injunction, order or
decree binding upon Intrawest or any of its subsidiaries that has had
or could reasonably be expected to have the effect of prohibiting,
restricting or impairing any business of theirs, where such
prohibition, restriction or impairment has had or would reasonably be
expected to have a Material Adverse Effect on Intrawest.
(v) Benefits and Pensions.
Except as previously disclosed by Intrawest to Parent:
(i) the Intrawest Disclosure Letter contains a complete and correct
list of each Intrawest Benefit Plan and Intrawest has no formal
plans or commitments, legally binding or otherwise, to create any
additional pension, benefit or compensation plan or modify or
change any such existing Intrawest Benefit Plan;
(ii) there are no unfunded liabilities in respect of any Intrawest
Benefit Plan that is a pension, retirement or supplementary
retirement plan (not including the Intrawest DSU Plans) that
provides pensions, superannuation benefits or retirement savings,
including going concern unfunded liabilities, solvency
deficiencies or wind-up deficiencies;
(iii) to the knowledge of Intrawest, none of Intrawest, any of its
subsidiaries, any administrator or fiduciary in respect of one or
more of the Intrawest Benefit Plans or any agent of any of the
foregoing have been in breach in any material respect of any
fiduciary obligation with respect to the administration of the
Intrawest Benefit Plans or have engaged in any transaction or have
acted or failed to act in a manner which would subject such person
to any liability for breach of fiduciary duty under applicable
Laws;
(iv) no event has occurred respecting any registered Intrawest Benefit
Plan which would result in the revocation of the registration of
such Intrawest Benefit Plan (where applicable) or entitle any
person or entity (without the consent of Intrawest) to wind-up or
terminate any such Intrawest Benefit Plan, in whole or in part, or
which could otherwise reasonably be expected to adversely affect
the tax status of any such Intrawest Benefit Plan;
(v) any payments, distributions or withdrawals from or transfers of
assets to or from any Intrawest Benefit Plan have been made in all
material respects in accordance with the terms of such Intrawest
Benefit Plan, applicable Laws and any applicable collective
agreements, and occurred with the consent of any applicable
Governmental Authority (where required);
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(vi) none of Intrawest or any of its subsidiaries participates in or
makes contributions on behalf of any employees or former employees
to any multi-employer pension plan (as defined under the provisions
of any applicable Law) or any multi-employer welfare benefit plan;
(vii) to the knowledge of Intrawest, neither Intrawest nor any of its
subsidiaries has any liabilities or contingent liabilities which
are material to Intrawest and its subsidiaries taken as a whole in
respect of any pension, benefit or compensation plan that was
previously in effect that has been discontinued;
(viii) all contributions and premiums required to be paid by Intrawest
or any of its subsidiaries under any pension, health,
prescription drug or other medical, workers' compensation,
unemployment insurance or comparable plan or program established
or maintained by any Governmental Authority have been paid by
Intrawest or its subsidiaries in accordance with applicable Law
or have been accrued by Intrawest and its subsidiaries, as
applicable, in accordance with generally accepted accounting
principles;
(ix) all of the Intrawest Benefit Plans are and have been established,
registered (where required), qualified, funded (to the extent
applicable), invested (to the extent applicable) and administered,
in all material respects, in accordance with all applicable Laws
and in accordance with their terms and the terms of agreements
between Intrawest or any of its subsidiaries and their respective
employees and former employees who are participants in the
Intrawest Benefit Plans;
(x) all current obligations of Intrawest or any of its subsidiaries
regarding the Intrawest Benefit Plans have been satisfied except as
have not had, and would not reasonably be expected to have, a
Material Adverse Effect on Intrawest; all contributions or premiums
required to be made by Intrawest or any of its subsidiaries under
the terms of each Intrawest Benefit Plan or by applicable Laws have
been made in a timely fashion in accordance with applicable Laws
and the terms of the Intrawest Benefit Plans;
(xi) each Intrawest Benefit Plan is, in all material respects, insured
or funded as may be required by applicable Laws and in good
standing with such Governmental Authorities as may be applicable
and, as of the date hereof, no currently outstanding notice of non
compliance has been received by Intrawest or any of its
subsidiaries from any such Governmental Authorities;
(xii) no Intrawest Benefit Plan provides any non pension post retirement
or post employment benefits;
(xiii) to the knowledge of Intrawest, no Intrawest Benefit Plan is
subject to any pending investigation, examination or other
Proceeding, action or claim initiated by any Governmental
Authority, or by any other person (other than routine claims for
benefits), and, to the knowledge of Intrawest, there exists no
state of facts which after notice or lapse of time or both would
reasonably be expected to give rise to any such investigation,
examination or other proceeding, action or claim or affect the
registration or qualification of any Intrawest Benefit Plan
required to be registered or qualified; and
(xiv) neither the execution and delivery of this Agreement by Intrawest
nor the consummation of the Arrangement nor the compliance by
Intrawest with any of the provisions hereof will result in any
payment becoming due to any director or employee of Intrawest or
any of its subsidiaries or result in any increase or acceleration
of contributions, liabilities or benefits, or acceleration of
vesting, under any Intrawest Benefit Plan.
(w) Intellectual Property.
Except as previously disclosed by Intrawest to Parent:
(i) Intrawest and its subsidiaries own, or have validly licensed (and
are not in material breach of such licences), free and clear of
all Liens other than Permitted Liens, all patents, trade-marks,
trade names, service marks, domain names, logos, slogans, trade
dress, and other copyrights, know how trade secrets, software,
technology, inventions, rights of publicity, rights of privacy and
rights to personal information, and all other intellectual
property and proprietary rights that are material to the conduct
of the business, as presently conducted, of Intrawest and its
subsidiaries taken as a whole (all such rights that are owned
being collectively referred to as the "OWNED IP RIGHTS" and
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the Owned IP Rights together with all such rights that are
licensed being collectively referred to as the "INTELLECTUAL
PROPERTY RIGHTS");
(ii) (A) Intrawest and its subsidiaries are the sole and exclusive
owners of all Owned IP Rights, (B) to the knowledge of Intrawest,
the Owned IP Rights are valid and enforceable and the conduct of
the business of Intrawest and its subsidiaries (including the
Owned IP Rights and the products and services of Intrawest and its
subsidiaries) does not infringe upon, misappropriate, or otherwise
violate any third parties' intellectual property and proprietary
rights, and the entering into of this Agreement and completion of
the transactions contemplated hereby will not render invalid or
unenforceable, or result in the loss of or require additional
payment with respect to, any Intellectual Property Rights, except
as would not reasonably be expected to have a Material Adverse
Effect on Intrawest;
(iii) to the knowledge of Intrawest, no third party is infringing upon
the Owned IP Rights except as does not have a Material Adverse
Effect on Intrawest;
(iv) Intrawest and its subsidiaries own, or have validly licensed (and
are not in material breach of such licences), all hardware,
software and firmware, processed data, technology infrastructure
and other computer systems that are material to the conduct of the
business, as presently conducted, of Intrawest and its subsidiaries
taken as a whole (collectively, the "TECHNOLOGY") and have taken
commercially reasonable steps to implement and maintain appropriate
virus protection and security measures in relation to the
Technology;
(v) Intrawest and its subsidiaries have reasonable back-up systems and
a disaster recovery plan adequate to ensure the continuing
availability of the functionality provided by the Technology except
for such unavailability as would not reasonably be expected to have
a Material Adverse Effect on Intrawest, and have ownership of, or a
valid licence to, the Intellectual Property Rights necessary to
allow them to continue to provide the functionality provided by the
Technology in the event of any malfunction of the Technology or
other form of disaster affecting the Technology; and
(vi) except for any claims which do not have, and would not reasonably
be expected to have, a Material Adverse Effect on Intrawest, no
claims have been asserted which are outstanding against Intrawest
or its subsidiaries or, to the knowledge of Intrawest, threatened
against Intrawest or its subsidiaries alleging a violation of any
person's privacy or personal information rights, nor, to the
knowledge of Intrawest, does there exist a substantial basis for
any material claim therefor and, except for any non-performance
which does not have, and would not reasonably be expected to have,
a Material Adverse Effect on Intrawest, Intrawest and its
subsidiaries have taken commercially reasonable measures consistent
with industry standard practices to ensure that such personal
information is protected against unauthorized access, use,
modification, or other misuse.
(x) Insurance. Intrawest and its subsidiaries maintain the policies or
binders of insurance listed in the Intrawest Disclosure Letter and
Intrawest and its subsidiaries are in compliance in all material
respects with all requirements with respect thereto.
(y) Environment. Except as previously disclosed by Intrawest to Parent
and except as would not reasonably be expected to have a Material
Adverse Effect on Intrawest:
(i) there is not any presence of any Hazardous Substances (except in
quantities or concentrations below applicable criteria, standards
or concentrations and in respect of which Intrawest has received
no written notice from a Governmental Authority requiring the
removal or remediation thereof, or otherwise in compliance with
applicable Environmental Laws) or Release of any Hazardous
Substances on, at, in, under or from any of the real property
(including the workplace environment) currently, or, to the
knowledge of Intrawest, on, at, in, under or from any of the real
property (including the work place environment) previously, owned,
leased or operated by Intrawest or any of its subsidiaries or
Specified Joint Ventures;
(ii) none of Intrawest or its subsidiaries or Specified Joint Ventures
nor any of their respective directors or officers in such capacity
has ever (A) been convicted of any offence for non-compliance with
any Environmental Law; (B) been fined or otherwise penalized for
non-compliance with any
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Environmental Law; or (C) settled any prosecution for
non-compliance with an Environmental Law short of conviction;
(iii) none of Intrawest or its subsidiaries or Specified Joint Ventures
has any liability pursuant to any Environmental Law, including any
liability arising as a result of Hazardous Substances and there is
no past or present fact, condition or circumstance that could
result in any claim of liability against Intrawest or its
subsidiaries or Specified Joint Ventures under any Environmental
Law. None of Intrawest or its subsidiaries has received written
notice of, or raising concerns in respect of, any liability
pursuant to any Environmental Law for any reason and there are no
grounds which would give rise to the issuance of any such notice
concerning liability pursuant to any Environmental Law;
(iv) to the knowledge of Intrawest, (A) none of the real property or
other assets currently or previously owned, operated, or leased by
Intrawest or its subsidiaries or Specified Joint Ventures has ever
been used by any person as a landfill site, a waste disposal site,
or as a location for the disposal of Hazardous Substances; or
contains any urea formaldehyde foam insulation, asbestos,
polychlorinated biphenyl waste, non-natural radioactive substances
or above ground or underground storage tanks, active or abandoned,
located thereon; and (B) there are at present no Hazardous
Substances migrating onto or off of any of such real property;
(v) no employee of Intrawest or its subsidiaries or Specified Joint
Ventures or other Person has notified Intrawest that Intrawest or
its subsidiaries or Specified Joint Ventures is liable for alleged
injury or illness resulting from an alleged exposure to a Hazardous
Substance;
(vi) true and correct copies of all environmental reports requested by
Parent and in the possession or control of Intrawest and its
subsidiaries relating to any of its real property or the business
of Intrawest have been made available to Parent;
(vii) there are no pending claims of which Intrawest or its subsidiaries
or Specified Joint Ventures have been provided notice or, to the
knowledge of Intrawest, threatened claims, against Intrawest or
any of its subsidiaries or Specified Joint Ventures arising out of
any Environmental Laws;
(viii) no Lien in favour of any Governmental Authority arising under
Environmental Laws affecting Intrawest or any of its subsidiaries
or Specified Joint Ventures or any real or personal property of
Intrawest or any of its subsidiaries or Specified Joint Ventures
is pending, or to the knowledge of Intrawest, threatened;
(ix) the real property and business carried on by Intrawest and its
subsidiaries and Specified Joint Ventures have all Environmental
Permits necessary to be in compliance with Environmental Laws. All
such Environmental Permits are validly issued, in full force and
effect, have been materially complied with and there are no pending
proceedings of which Intrawest or its subsidiaries have been
provided notice or, to the knowledge of Intrawest, threatened
proceedings by any Governmental Authority, which may result in the
cancellation, revocation, suspension or modification of any such
Environmental Permit; and
(x) none of Intrawest or its subsidiaries or Specified Joint Ventures
has received any written request for information, complaint,
demand, administrative inquiry, notice of claim, notice of
responsibility, notice of violation or notice of intent to bring a
"citizens suit" under any Environmental Laws or any other written
notice stating that it is or may be liable or held responsible
under Environmental Laws, and there are no pending civil,
administrative, or criminal proceedings of which Intrawest or its
subsidiaries have been provided notice or, to the knowledge of
Intrawest, threatened proceedings, against Intrawest or any of its
subsidiaries or Specified Joint Ventures under any Environmental
Laws.
The parties agree that the representations and warranties contained in
section 3.1(y) are the sole representations and warranties of Intrawest
relating to the Environment, including compliance with Environmental
Laws, contained in this section 3.1. The parties further agree that all
representations contained in section 3.1 which are made in respect of
Specified Joint Ventures, to the extent that such representations relate
to (i) Intrastar Mammoth LLC, and (ii) Blue Mountain Resorts Limited,
and each subsidiary of Intrastar Mammoth LLC or Blue Mountain Resorts
Limited, are made, and shall be
B-32
deemed to be made to the knowledge of Intrawest, whether or not such
representation and warranty is expressly qualified and stated to be the
knowledge of Intrawest.
3.2 DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND WARRANTIES
Acquisitionco and Parent acknowledge and agree that, except as set forth in
this Agreement, Intrawest makes no representation or warranty, express or
implied, at law or in equity, with respect to Intrawest, its subsidiaries, its
Joint Ventures, their respective businesses, their past, current or future
financial condition, their properties, assets, liabilities or operations, their
past, current or future profitability or performance, or any other matter,
individually or in the aggregate, and any such other representations or
warranties are hereby expressly disclaimed. Without limiting the generality of
the foregoing, Intrawest expressly disclaims any representation or warranty that
is not set forth in this Agreement.
3.3 REPRESENTATIONS AND WARRANTIES OF ACQUISITIONCO AND PARENT
Each of Acquisitionco and Parent represents and warrants to Intrawest as
follows and acknowledges that Intrawest is relying upon these representations
and warranties in entering into this Agreement:
(a) Organization and Corporate Capacity. Parent has been duly
incorporated and is validly existing under the laws of Delaware and
has the requisite corporate power and capacity to own its properties
and assets as now owned and to carry on its business as it is now
being carried on. Acquisitionco has been duly incorporated and is
validly existing under the laws of the Province of Nova Scotia.
Acquisitionco is a wholly-owned subsidiary of Parent and has been
incorporated for the purpose of acquiring the Common Shares pursuant
to the Arrangement and has not carried on any business or operations
of any kind. Acquisitionco does not have any liabilities or
obligations of any kind whatsoever and, as at the date of this
Agreement, does not have any material assets. Subject to section 8.3,
all of the outstanding shares of Acquisitionco are held and
beneficially owned, directly or indirectly, by Parent. Following the
assignment referred to in section 8.3, Acquisitionco will be a
wholly-owned subsidiary of Luxco. At the Effective Time, Luxco will be
duly incorporated and validly existing under the laws of Luxembourg
and will have the requisite corporate power and capacity to own its
properties and assets as owned at the Effective Time and to carry on
its business as it is being carried on at the Effective Time. Parent
is wholly-owned by Fortress. Parent has been incorporated for the
purpose of participating in the transactions contemplated in this
Agreement and has not carried on any business or operations of any
kind. Parent does not have any liabilities or obligations of any kind
whatsoever and, as at the date of this Agreement, does not have any
material assets. All of the outstanding membership interests of Parent
are held and beneficially owned, directly or indirectly, by Fortress.
At the time of the assignment referred to in section 8.3, Luxco will
be wholly-owned by Fortress. At the time of the assignment referred to
in section 8.3, Luxco will not have carried on any business or
operations of any kind and will not have any liabilities or
obligations of any kind whatsoever and, as at the time of such
assignment, will not have any material assets. As at the time of the
assignment referred to in section 8.3, and as at the Effective Time,
all of the outstanding shares of Luxco will be held as beneficially
owned, directly or indirectly, by Fortress.
(b) Authority. Each of Parent and Acquisitionco has the requisite
corporate power and authority to enter into and perform its
obligations under this Agreement and to consummate the transactions
contemplated herein. Immediately prior to the assignment to Luxco
referred to in section 8.3, and at the Effective Time, Luxco will have
the requisite corporate power and authority to enter into and perform
its obligations under this Agreement and to consummate the
transactions contemplated herein.
(c) Execution and Delivery. The execution and delivery of this Agreement
and the consummation by Parent and Acquisitionco of the transactions
contemplated by this Agreement, including, in the case of Parent, the
assignment contemplated in section 8.3, have been duly authorized by
the manager and directors of Parent and Acquisitionco, respectively,
and no other corporate proceedings on the part of Parent or
Acquisitionco are necessary to authorize the execution and delivery by
it of this Agreement or the Arrangement or the consummation by it of
the transactions contemplated hereby or, in the case of Parent, the
assignment contemplated in section 8.3. This Agreement has been duly
executed and delivered by each of Parent and Acquisitionco and
constitutes a legal, valid and binding obligation of each of Parent
and Acquisitionco enforceable against each of Parent and Acquisitionco
in accordance with its terms. The consummation by Luxco of the
transactions contemplated by this Agreement will, at
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the Effective Time, have been duly authorized by the directors of
Luxco and no other corporate proceedings on the part of Luxco will, at
the Effective Time, be necessary to authorize the execution and
delivery by it of the assignment of this Agreement or the Arrangement
or the consummation by it of the transactions contemplated hereby. The
assignment contemplated in section 8.3 will, prior to such assignment
being effected, have been duly authorized by all necessary corporate
proceedings on the part of Parent and Luxco and, following such
assignment, this Agreement will constitute a legal, valid and binding
obligation of Luxco enforceable against Luxco in accordance with its
terms.
(d) No Violation. Subject to obtaining the Appropriate Regulatory
Approvals the execution and delivery by each of Parent and
Acquisitionco of this Agreement and the performance by each of Parent
and Acquisitionco of its obligations hereunder, including, in the case
of Parent, the assignment contemplated in section 8.3, and the
completion of the transactions contemplated herein do not and will not
(nor will they with the giving of notice or the lapse of time or both)
(i) result in a material contravention, breach, violation or default
under any Law applicable to it or any of its properties or assets,
(ii) result in a material contravention, breach, violation or default
under its constating documents or (iii) result in a material breach or
default under, or give to any person any right of purchase or sale,
termination, cancellation or acceleration under, or to require any
payment from, or reduce any payment to, it under any material contract
or other material instrument or obligation to which it is bound or to
which any of its properties or assets are subject; except, in each
case, where such contravention, breach, violation, right or
requirement would not impair the ability of Parent or Acquisitionco to
perform its obligations hereunder or effect the Arrangement. Subject
to obtaining the Appropriate Regulatory Approvals the acquisition by
Luxco of rights under this Agreement pursuant to the assignment
contemplated in section 8.3 and the performance by Luxco of its
obligations hereunder and the completion of the transactions
contemplated herein do not and will not (nor will they with the giving
of notice or the lapse of time or both) (i) result in a material
contravention, breach, violation or default under any Law applicable
to it or any of its properties or assets, (ii) result in a material
contravention, breach, violation or default under its constating
documents or (iii) result in a material breach or default under, or
give to any person any right of purchase or sale, termination,
cancellation or acceleration under, or to require any payment from, or
reduce any payment to, it under any material contract or other
material instrument or obligation to which it is bound or to which any
of its properties or assets are subject; except, in each case, where
such contravention, breach, violation, right or requirement would not
impair the ability of Luxco to perform its obligations hereunder or
effect the Arrangement.
(e) Availability of Debt and Equity Financing. Parent and Acquisitionco
have made adequate arrangements to ensure that required funds are and
will be available to provide to Acquisitionco the amount required for
Acquisitionco and Parent (and, following the assignment contemplated
in section 8.3, Luxco) to carry out their obligations under this
Agreement and for Acquisitionco to carry out the terms of the Plan of
Arrangement applicable to it and to pay all related fees and expenses.
Prior to the execution and delivery of this Agreement, Parent has
provided to Intrawest evidence of (i) the availability of committed
credit facilities pursuant to an executed commitment letter (the
"COMMITMENT LETTER") dated August 10, 2006 made by Lehman Brothers
Inc., Lehman Commercial Paper Inc., Deutsche Bank Securities Inc.,
Deutsche Bank AG. Cayman Islands Branch, Bear Stearns & Co. Inc. and
Bear Stearns Corporate Lending Inc. (collectively the "LENDERS") in
favour of Fortress and (ii) equity commitments pursuant to an executed
equity commitment letter (the "EQUITY COMMITMENT LETTER") dated August
10, 2006 made by Fortress in favour of Acquisitionco, pursuant to
which the Lenders, in the case of the Commitment Letter, and Fortress,
in the case of the Equity Commitment Letter, have committed to provide
Acquisitionco with debt and equity financing in the amounts of
$1,775,000,000 and $1,250,000,000, respectively. The commitments
described in the Commitment Letter and the Equity Commitment Letter
are not subject to any condition precedent other than the conditions
set forth therein. As of the date hereof each of the Commitment Letter
and the Equity Commitment Letter is in full force and effect and is a
legal, valid and binding obligation of Fortress and Acquisitionco,
respectively, and, to the knowledge of the senior officers of Parent
and Acquisitionco, after due enquiry, the other parties thereto, and
no event has occurred which, with or without notice, lapse of time or
both, would constitute a default or breach on the part of Fortress or
Acquisitionco under the Commitment Letter or the Equity Commitment
Letter, respectively. The senior officers of Parent and Acquisitionco,
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after due enquiry, have no reason to believe that Acquisitionco and
Parent will be unable to satisfy on a timely basis any term or
condition of closing of the financing to be satisfied by them
contained in the Commitment Letter or the Equity Commitment Letter and
are not aware of any fact, occurrence or condition that may cause
either of such financing commitments to terminate or be ineffective or
any of the terms or conditions of closing of such financings not to be
met or of any impediment to the funding of the cash payment
obligations of Acquisitionco under the Arrangement. Acquisitionco will
have at the Effective Time cash funds sufficient to consummate the
Arrangement upon the terms contemplated by this Agreement and the Plan
of Arrangement.
3.4 DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND WARRANTIES
Intrawest acknowledges and agrees that, except as set forth in this
Agreement and in the Confidentiality Agreement, Parent and Acquisitionco make no
representation or warranty, express or implied, at law or in equity, with
respect to Parent, Acquisitionco or their respective subsidiaries, their
respective businesses, their past, current or future financial condition, their
properties, assets, liabilities or operations, their past, current or future
profitability or performance, or any other matter, individually or in the
aggregate, and any such other representations or warranties are hereby expressly
disclaimed. Without limiting the generality of the foregoing, Parent and
Acquisitionco expressly disclaim any representation or warranty that is not set
forth in this Agreement or in the Confidentiality Agreement.
3.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
No investigation by or on behalf of any party hereto prior to the execution
of this Agreement will mitigate, diminish or affect the representations and
warranties made by the other parties. The representations and warranties of the
parties contained in this Agreement will not survive the completion of the
Arrangement and will expire and be terminated on the earlier of the Effective
Time and the date on which this Agreement is terminated in accordance with its
terms. This section 3.5 will not limit any covenant or agreement of any of the
parties which, by its terms, contemplates performance after the Effective Time
or date on which this Agreement is terminated, as the case may be.
ARTICLE 4
COVENANTS
4.1 COVENANTS OF INTRAWEST REGARDING THE CONDUCT OF BUSINESS
Intrawest covenants and agrees that, until the earlier of the Effective
Time and the time that this Agreement is terminated in accordance with its
terms, unless Parent will otherwise consent in writing (to the extent that such
consent is permitted by applicable Law), which consent will not be unreasonably
withheld or delayed, or as is otherwise expressly permitted or specifically
contemplated by this Agreement or as is otherwise required by applicable Law:
(a) the business of Intrawest and its subsidiaries and, to the extent it
is within the control of Intrawest or a subsidiary of Intrawest, the
Joint Ventures, will be conducted only, and Intrawest and its
subsidiaries and, to the extent it is within the control of Intrawest
or a subsidiary of Intrawest, the Joint Ventures, will not take any
action except, and Intrawest will use commercially reasonable efforts
to maintain and preserve its and its subsidiaries' and Joint Ventures'
business organization, properties, assets, properties, employees,
goodwill and business relationships, in each case, in the ordinary
course of business or pursuant to plans or proposals previously
disclosed by Intrawest to Parent;
(b) Intrawest will not, and, where applicable, will not permit any of its
subsidiaries or, to the extent it is within the control of Intrawest
or a subsidiary of Intrawest, the Joint Ventures, to, directly or
indirectly, except pursuant to plans and proposals previously
disclosed by Intrawest to Parent:
(i) alter or amend the articles or by-laws of Intrawest or materially
alter or amend the articles, charter, by-laws or other constating
documents of any subsidiary of Intrawest or Joint Venture;
(ii) declare, set aside or pay any dividend on or make any distribution
or payment (whether in cash, shares or property) or return of
capital in respect of the Common Shares, other than pursuant to
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plans or proposals previously disclosed by Intrawest to Parent,
and the regularly scheduled quarterly cash dividends with respect
to the Common Shares consistent with past practice;
(iii) adjust, split, divide, consolidate, combine, exchange or
reclassify any of the shares of Intrawest or any of the shares or
voting securities or equity interests of any of the subsidiaries
of Intrawest or Joint Ventures or issue or authorize the issuance
of any other securities in lieu of, or in substitution for, any of
such shares, voting securities or equity interests (other than any
such action taken by any wholly-owned subsidiary of Intrawest);
(iv) issue, grant, sell or pledge or agree to issue, grant, sell or
pledge any shares of Intrawest or shares, voting securities or
equity interests of any of the subsidiaries of Intrawest or Joint
Ventures, or securities convertible into or exchangeable or
exercisable for, or otherwise evidencing a right to acquire, such
shares of Intrawest or shares or voting securities or equity
interests of any of the subsidiaries of Intrawest or Joint
Ventures, other than (A) the issuance of Common Shares issuable
pursuant to the terms of Intrawest Options, (B) transactions
between two or more wholly-owned subsidiaries of Intrawest or
between Intrawest and one or more wholly-owned subsidiaries of
Intrawest and (C) pursuant to pledge commitments contained in any
written agreement previously disclosed by Intrawest to Parent;
(v) issue or grant any Intrawest Options;
(vi) create any new phantom stock or deferred compensation plan, program
or arrangement or materially modify or change any of the Intrawest
DSU Plans or issue any securities or make any payments under any of
the Intrawest DSU Plans other than pursuant to obligations existing
as of the date of this Agreement that have been previously
disclosed;
(vii) redeem, purchase or otherwise acquire any of the outstanding
shares of Intrawest or any of the shares or voting securities or
equity interests of any subsidiary of Intrawest or securities
convertible or exchangeable into or exercisable for any such
shares, voting securities or equity interests, unless otherwise
required by the terms of such securities and other than
transactions between two or more wholly-owned subsidiaries of
Intrawest or between Intrawest and one or more wholly-owned
subsidiaries of Intrawest;
(viii) amend or modify the terms of any of the shares of Intrawest or
amend or modify in any material respect any of the shares, voting
securities or equity interests of any subsidiary of Intrawest or
any securities convertible or exchangeable into or exercisable
for any such shares, voting securities or equity interests or any
of the instruments or agreements governing such shares, voting
securities or equity interests;
(ix) adopt a plan of liquidation or resolution providing for the
liquidation or dissolution of Intrawest or any of its material
subsidiaries;
(x) make any changes to its existing accounting policies and principles
or adopt new accounting policies or principles or make any material
changes to any of its accounting methods, practices or procedures
(including by adopting any material new accounting methods,
practices or procedures), except, in each case, as previously
disclosed by Intrawest to Parent or required by applicable Laws or
in accordance with generally accepted accounting principles;
(xi) make, change or rescind any material election relating to Taxes,
amend any tax return, surrender any right to claim a Tax refund,
offset or other reduction in Tax liability, consent to any
extension or waiver of the limitations period applicable to any Tax
claim or assessment, or settle or compromise any material claim,
action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes; or
(xii) enter into, modify or terminate any Contract with respect to any
of the foregoing;
provided that nothing herein will restrict or prevent the dissolution,
liquidation or winding-up of any subsidiary of Intrawest that does not
own any assets or carry on any business and any such subsidiary taking
any action of a type contemplated in this section 4.1(b) in connection
with such dissolution, liquidation or winding-up or Intrawest or any of
its subsidiaries causing or permitting such dissolution, liquidation or
winding-up in the ordinary course of business of Intrawest and its
subsidiaries;
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(c) Intrawest will promptly notify Parent in writing of (i) any
circumstance or development occurring after the date of this Agreement
that, to the knowledge of Intrawest, has, or would reasonably be
expected to have, a Material Adverse Effect on Intrawest and (ii) the
occurrence of any loss, breakage or damage to a property or asset
owned or managed by Intrawest or any of its subsidiaries in excess of
$10,000,000 (irrespective of insurance or third party proceeds which
have been or may be received in connection with such loss, breakage or
damage);
(d) Intrawest will not, and will not permit any of its subsidiaries and,
to the extent it is within the control of Intrawest or a subsidiary of
Intrawest, the Joint Ventures, to, directly or indirectly, except in
the ordinary course of business consistent with past practice or
pursuant to any Contract existing as at the date of this Agreement or
pursuant to plans or proposals previously disclosed by Intrawest to
Parent:
(i) sell, pledge, lease, licence or dispose of any properties or
assets (including the shares or voting securities or equity
interests of or in any subsidiary of Intrawest or Joint Venture)
of Intrawest or of any subsidiary of Intrawest or Joint Venture;
(ii) acquire (by merger, amalgamation, consolidation or acquisition of
shares or other equity securities or interests or properties or
assets or otherwise) any corporation, partnership or other
business organization or division thereof, or any property or
asset, or make any investment (either by the purchase of
securities, contributions of capital, property transfer, or
purchase of any properties or assets of any other person) or enter
into or extend any option to acquire, or exercise an option to
acquire any real property or commence construction of, or enter
into any Contract to develop or construct any, real estate
projects or developments, in each case if such transaction would
reasonably be expected to be material to Intrawest and its
subsidiaries, taken as a whole (provided that any such transaction
will be deemed not to be material for this purpose if the
consideration paid or payable has a value of less than $10,000,000
and is otherwise not in the ordinary course of business);
(iii) incur any Indebtedness, or issue any debt securities or assume,
guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other person, in each case,
in excess of $25,000,000, except refinancing, renewal or
replacement of existing debt on substantially market terms;
(iv) make any loans, advances or capital contributions to, or
investments in, any other person, other than to wholly-owned
subsidiaries of Intrawest, in excess of $10,000,000;
(v) authorize or make, or become obligated to make, capital
expenditures unless such capital expenditures (i) are reflected in
the Intrawest fiscal 2007 budget that was provided to Parent, or
(ii) do not exceed $5,000,000 in respect of any single transaction
or series of transactions constituting part of an overall
transaction;
(vi) dispose of, grant, or permit to lapse any rights to any material
Intellectual Property Rights;
(vii) waive or release any rights of material value;
(viii) engage in any new business, enterprise or other activity that is
material to Intrawest and its subsidiaries, taken as a whole, and
that is inconsistent with the existing businesses of Intrawest
and its subsidiaries in the manner such existing businesses
generally have been carried on prior to the date of this
Agreement;
(ix) except pursuant to any Contract existing as at the date of this
Agreement, (or, in the case of payment, discharge or satisfaction
of any claims, liabilities or obligations, except the payment,
discharge or satisfaction of liabilities reflected or reserved
against in the Intrawest Financial Statements), pay, discharge or
satisfy any claim, liability or obligation which is material to
Intrawest and its subsidiaries, taken as a whole, or voluntarily
waive, release, assign, settle or compromise any Proceeding where
such Proceeding is:
A. material to Intrawest and its subsidiaries taken as a whole; or
B. brought by any current, former or purported holder of any
shares of Intrawest in its capacity as such;
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where such payment, discharge, satisfaction, waiver, release,
assignment, settlement or compromise:
C. requires any payment to any person by Intrawest or any
subsidiary of Intrawest; or
D. would reasonably be expected to have a Material Adverse Effect
on Intrawest; or
(x) authorize any of the foregoing or enter into or modify any Contract
to do any of the foregoing;
provided that nothing herein will restrict the entering into of any
transaction described above between two or more wholly-owned
subsidiaries of Intrawest or between Intrawest and one or more
wholly-owned subsidiaries of Intrawest involving property or assets
having a value, or an amount, of $10,000,000 or less;
(e) Intrawest will not, and will not permit any of its subsidiaries or, to
the extent it is within the control of Intrawest or a subsidiary of
Intrawest, the Joint Ventures, to, directly or indirectly, except in
the ordinary course of business or pursuant to plans or proposals
previously disclosed by Intrawest to Parent and except for
transactions between two or more wholly-owned subsidiaries of
Intrawest or between Intrawest and one or more wholly-owned
subsidiaries of Intrawest:
(i) except for the incurrence of Indebtedness, or issuance of debt
securities or the assumption, guarantee, endorsement or otherwise
becoming responsible for the obligations of any person in amounts
not in excess of $25,000,000 which is not restricted pursuant to
section 4.1(d)(iii), enter into, or amend in any material respect,
any Contract or series of related Contracts resulting in a new
Contract or series of related new Contracts or modifications to an
existing Contract or series of related existing Contracts that
would result in any Contract having a term in excess of 12 months
from the date hereof and which is not terminable by Intrawest or
its subsidiary or Joint Ventures upon notice of 90 days or less
(without the payment of any penalty or like amount) or would
impose payment or other obligations on Intrawest or any of its
subsidiaries or Joint Ventures in excess of $10,000,000;
(ii) enter into any Contract that would limit or otherwise restrict
Intrawest or any of its subsidiaries or Joint Ventures or any of
their successors or that would, after the Effective Time, limit or
otherwise restrict Parent or any of its subsidiaries or any of
their successors, from engaging or competing in any line of
business or in any geographic area in any material respect; or
(iii) terminate, cancel or amend in any material respect any Material
Contract if such termination, cancellation or amendment would
reasonably be expected to have a Material Adverse Effect on
Intrawest;
(f) except in the ordinary course of business and consistent with past
practices or pursuant to plans or proposals previously disclosed by
Intrawest to Parent or pursuant to any obligation existing as at the
date of this Agreement, including pursuant to the Intrawest DSU Plans,
the Intrawest Benefit Plans or any other employment, compensation or
termination policy, program or arrangement in effect on the date
hereof, and except as is necessary to comply with applicable Laws,
neither Intrawest nor any of its subsidiaries will:
(i) grant to any officer or director of Intrawest or any of its
subsidiaries an increase in compensation;
(ii) grant any general salary increase to the employees of Intrawest or
any of its subsidiaries;
(iii) grant any retention, severance or termination pay or amend or
modify any such grant previously made;
(iv) enter into any employment agreement with any officer or director of
Intrawest or any of its subsidiaries;
(v) increase any benefits payable under its current retention,
severance or termination pay policies;
(vi) adopt, materially amend or make any contribution to any bonus,
profit sharing, compensation, incentive compensation, pension,
retirement, deferred compensation, stock option, Intrawest Benefit
Plan or other similar plan, agreement, trust, fund or arrangement
for the benefit of directors, officers or employees or former
directors, officers or employees of Intrawest or any of its
subsidiaries;
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(vii) make any loan to any officer or director of Intrawest or any of
its subsidiaries; or
(viii) voluntarily enter into any collective bargaining or union
agreement or agree to voluntarily recognize any union, bargaining
agent or association for the purpose of employee representation,
or agree to, whether orally or in writing, any new terms of any
existing collective bargaining agreement to which Intrawest or
any subsidiary is bound or to any agreement that would serve as
an estoppel to the enforcement of any term of any such collective
bargaining agreement; and
(g) Intrawest will use its commercially reasonable efforts to cause the
current insurance (or re-insurance) policies maintained by Intrawest
or any of its subsidiaries, including directors' and officers'
insurance, not to be cancelled or terminated or any of the coverage
thereunder to lapse, unless at the time of such termination,
cancellation or lapse, replacement policies underwritten by insurance
or re-insurance companies of nationally recognized standing having
comparable deductibles and providing coverage comparable to or greater
than the coverage under the cancelled, terminated or lapsed policies
for substantially similar premiums are in full force and effect;
provided that none of Intrawest or any of its subsidiaries will obtain
or renew any material insurance (or re-insurance) policy for a term
exceeding a reasonable period based on business needs.
For purposes of this section 4.1, the parties agree that the power to
restrict or prevent any of (i) Intrastar Mammoth LLC, or (ii) Blue Mountain
Resorts Limited, or any subsidiary of either of the foregoing Joint Ventures,
from taking any actions will be deemed to not be within the control of Intrawest
or a subsidiary of Intrawest to the extent that such power is derived from a
veto right contained in a shareholder agreement or other constating document
relating to such Joint Venture.
4.2 PRE-ACQUISITION REORGANIZATION
Intrawest agrees that, upon request by Parent, Intrawest shall, and shall
cause its subsidiaries to, in each case, at the expense of Parent, use its
commercially reasonable efforts to:
(a) effect such reorganizations of its business, operations and assets and
the integration of other affiliated businesses of Intrawest or its
subsidiaries as Parent may request, acting reasonably (each a "PRE-
ACQUISITION REORGANIZATION"); and
(b) cooperate with Parent and its advisors to determine the nature of the
Pre-Acquisition Reorganizations that might be undertaken and the
manner in which they most effectively be undertaken. Parent and
Acquisitionco acknowledge and agree that the Pre-Acquisition
Reorganizations shall (i) not impede, delay or prevent consummation of
the Arrangement (including by giving rise to litigation by third
parties), (ii) be such that, in the opinion of Intrawest, acting
reasonably, would not prejudice the Intrawest Securityholders, (iii)
not require Intrawest to obtain the approval of the Common
Shareholders, and (iv) not be considered in determining whether a
representation, warranty or covenant of Intrawest hereunder has been
breached, it being acknowledged by Parent that these actions could
require the consent of third parties under applicable Contracts.
Parent shall provide written notice to Intrawest of any proposed
Pre-Acquisition Reorganization at least ten days prior to the
Effective Date. Upon receipt of such notice, Parent and Intrawest
shall, at the expense of Parent, work cooperatively and use
commercially reasonable efforts to prepare prior to the Effective Time
all documentation necessary and do such other acts and things as are
necessary to give effect to such Pre-Acquisition Reorganizations. The
parties shall seek to have any such Pre-Acquisition Reorganization
made effective as of the last moment of the day ending immediately
prior to the Effective Date, or such other time as Parent reasonably
requests (but after Parent shall have waived (subject to applicable
Laws) or confirmed that all conditions referred to in sections 7.1,
7.2 and 7.3 have been satisfied) and provided that no such Pre-
Acquisition Reorganization will be made effective unless (i) it is
reasonably certain that the Arrangement will become effective; or (ii)
such Pre-Acquisition Reorganization can be reversed or unwound without
adversely affecting Intrawest and its subsidiaries in the event the
Arrangement does not become effective and this Agreement is terminated
or (iii) Intrawest otherwise agrees. If the Arrangement is not
completed, Parent will forthwith reimburse Intrawest for all
reasonable fees and expenses (including any professional fees and
expenses) incurred by Intrawest and its subsidiaries in considering
and effecting a Pre-Acquisition Reorganization and shall be
responsible for any costs of Intrawest and its subsidiaries in
reversing or unwinding any Pre-Acquisition Reorganization that was
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effected prior to termination of the Agreement at Parent's request.
The obligation of Parent to reimburse Intrawest for fees and expenses
and be responsible for costs as set out in this section will be in
addition to any other payment Parent may be obligated to make
hereunder and will survive termination of this Agreement.
4.3 ACCESS TO INFORMATION
(a) Subject to compliance with applicable Laws (including pre-merger
notification and other competition law requirements and other laws
relating to the exchange of information) and the terms of any Contract
existing as at the date of this Agreement (including any
confidentiality obligation or undertaking binding on Intrawest), and
except where disclosure would undermine or void any applicable legal
privilege, Intrawest will, and will cause its subsidiaries to, afford
to Parent and its officers, employees and other representatives
reasonable access, during normal business hours, until the earlier of
the Effective Time or the termination of this Agreement, to their
respective businesses, properties, books and records, as well as to
their respective management personnel, including in order to
facilitate the ability to grant the collateral package required by the
Lenders in connection with the financing contemplated by the
Commitment Letter and the definitive agreements contemplated therein,
subject, however, to such access not interfering with the ordinary
conduct of the businesses of Intrawest and its subsidiaries. Parent
will not contact employees of Intrawest or its subsidiaries except
after prior consultation with the Chief Financial Officer, the General
Counsel or the Corporate Secretary of Intrawest.
(b) Notwithstanding the foregoing, except as expressly provided for
herein, Intrawest will not be obligated to make available to Parent
any materials relating to the Strategic Review or the assessment or
evaluation of the transactions contemplated hereby or any alternative
transaction considered in connection with the Strategic Review nor any
information supplied by any of its officers, directors, employees,
financial advisors, legal advisors, auditors, representatives or
agents or other advisors in connection therewith or any
confidentiality agreement made between Intrawest and any other person
in connection with the Strategic Review or any such alternative
transaction.
(c) Without limiting the generality of the provisions of the
Confidentiality Agreement, Parent acknowledges that all information
provided to it under section 4.3(a) of this Agreement or otherwise
pursuant to this Agreement or in connection with the transactions
contemplated hereby (including the Disclosed Personal Information
referred to in section 4.5(a)) is subject to the Confidentiality
Agreement, which will remain in full force and effect notwithstanding
any other provision of this Agreement or any termination of this
Agreement. If any provision of this Agreement conflicts or is
inconsistent with any provision of the Confidentiality Agreement, the
provisions of this Agreement will supersede those of the
Confidentiality Agreement but only to the extent of the conflict or
inconsistency and all other provisions of the Confidentiality
Agreement will remain in full force and effect.
(d) Without limiting the generality of the foregoing, each of Parent and
Acquisitionco acknowledges and agrees that the Intrawest Disclosure
Letter and all information contained in it is confidential and may not
be disclosed to any other person unless (i) such disclosure is
required under applicable Law, unless such Law permits it to refrain
from disclosing such information for confidentiality or other reasons
or (ii) such disclosure is required in order to enforce its rights
under this Agreement.
(e) Nothing in this section 4.3 will require Intrawest or its subsidiaries
to disclose information subject to a written confidentiality
agreement, covenant or obligation or undertaking with a third party
(provided that, at the request of Parent, Intrawest will use
commercially reasonable efforts to obtain the consent of the other
party thereto to the disclosure of any information reasonably
requested by Parent which is material to Intrawest and its
subsidiaries, taken as a whole) or customer specific or competitively
sensitive information ("CONFIDENTIAL DATA"). For greater certainty,
until the Effective Date, access to and exchange of Confidential Data
as between the parties will be limited to what is reasonably necessary
for the purposes of securing all necessary regulatory approvals, the
preparation and settlement of definitive documents and the advancement
of the Arrangement and will be limited such that the dissemination of
Confidential Data will be confined to the Representatives of the
parties and their counsel who have a need to know such information for
such purposes and who agree to respect such confidentiality in their
dealings with Confidential Data. In particular, with reference to
access to and the sharing of Confidential
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Data of one party with Representatives of the other party for purposes
of preparing any filings or submissions in respect of the Appropriate
Regulatory Approvals, the general principle which will be applied is
that such information will be made available to, exchanged or shared
with counsel to the parties rather than the parties or their
Representatives.
4.4 ACCESS FOR FINANCIAL ADVISOR
Until the earlier of the Effective Time and the time that this Agreement is
terminated in accordance with its terms, Intrawest, Parent and Acquisitionco
will each, and will cause their subsidiaries and their respective management
personnel to, allow the Financial Advisor and its representatives to conduct all
due diligence investigations and examinations which the Financial Advisor may
reasonably require, and Intrawest, Parent and Acquisitionco will each promptly
provide to the Financial Advisor all information relating to its respective
financial condition, results of operation, business, properties, assets,
operations or prospects reasonably requested by the Financial Advisor in order
to permit the Financial Advisor to prepare the Fairness Opinion pursuant to its
engagement.
4.5 PRIVACY MATTERS
(a) Parent, Acquisitionco and Intrawest acknowledge and agree that:
(i) certain information provided by Intrawest to Parent or
Acquisitionco in connection with the transactions contemplated
hereunder constitutes Personal Information (the "DISCLOSED
PERSONAL INFORMATION") which is necessary in connection with
completion of the Arrangement;
(ii) that the disclosure of the Disclosed Personal Information relates
solely to the carrying on of the business of Intrawest or the
completion of the Arrangement; and
(iii) that such Disclosed Personal Information is subject to the
Confidentiality Agreement and:
A. may not be used for any purpose other than those related to the
performance of this Agreement;
B. must be kept strictly confidential and Parent and Acquisitionco
will ensure that access to such Personal Information will be
restricted to those officers, employees and other authorized
representatives and advisors of Parent and Acquisitionco who
have a bona fide need for access to such information and will
instruct those representatives to protect the confidentiality
of such information in a manner consistent with the obligations
of Parent and Acquisitionco hereunder; and
C. upon the termination of this Agreement, or otherwise upon the
request of Intrawest, Parent and Acquisitionco will forthwith
cease all use of the Disclosed Personal Information acquired by
Parent and Acquisitionco in connection with this Agreement and
will return to Intrawest or, at Intrawest's request, destroy in
a secure manner the Disclosed Personal Information (and any
copies).
(b) In addition to the foregoing obligations:
(i) Parent and Acquisitionco agree to employ appropriate technology
and procedures to prevent accidental loss or corruption of the
Disclosed Personal Information, unauthorized input or access to
the Disclosed Personal Information, or unauthorized or unlawful
collection, storage, disclosure, recording, copying, alteration,
removal, deletion, use or other processing of the Disclosed
Personal Information;
(ii) each of Intrawest, Parent and Acquisitionco agree to promptly
notify the other of all inquiries, complaints, requests for access
and claims of which the party is made aware in connection with the
Disclosed Personal Information, and the parties will fully
cooperate with one another, with the persons to whom the Disclosed
Personal Information relates, and any Governmental Authority
charged with enforcement of applicable privacy laws, in responding
to such inquiries, complaints, requests for access, and claims;
and
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(iii) if the Arrangement is completed Intrawest may disclose additional
Personal Information regarding its employees, customers, directors
and officers to Parent or Acquisitionco and their Representatives
on condition that:
A. except as otherwise permitted by Intrawest, Parent and
Acquisitionco and their Representatives must use or disclose
such Personal Information only for the same purposes for which
it was collected, used or disclosed by Intrawest, and
B. except as otherwise reasonably directed by Intrawest, the
employees, customers, directors, officers and shareholders to
whom the Personal Information which is disclosed relates are
notified that:
(1) the Arrangement has been completed, and
(2) the Personal Information about them has been disclosed to
Parent and Acquisitionco and their Representatives.
4.6 COVENANTS OF INTRAWEST REGARDING THE ARRANGEMENT
Subject to the terms and conditions of this Agreement, Intrawest will, and,
where applicable, will cause its subsidiaries to, perform all of the obligations
required or desirable to be performed by Intrawest and its subsidiaries under
this Agreement, co-operate with Acquisitionco and Parent in connection
therewith, and do all such other acts and things as may be necessary or
desirable in order to consummate and make effective, as soon as reasonably
practicable, the Arrangement contemplated in this Agreement and use commercially
reasonable efforts to consummate the transactions contemplated in this
Agreement, and without limiting the generality of the foregoing, Intrawest will,
and, where appropriate will cause its subsidiaries to:
(a) subject to compliance by the directors and officers of Intrawest with
their fiduciary duties, use all commercially reasonable efforts to
obtain the approval by the Intrawest Securityholders of the
Arrangement Resolutions at the Intrawest Meeting, including, if
requested by Parent participating, together with representatives of
Parent, in joint presentations to selected individual Intrawest
Securityholders;
(b) apply for and use commercially reasonable efforts to obtain all
Appropriate Regulatory Approvals;
(c) apply for and use commercially reasonable efforts to obtain such other
consents, approvals and authorizations reasonably requested by Parent
or Acquisitionco which are necessary or desirable in connection with
the consummation of the Arrangement and the other transactions
contemplated herein (which, for greater certainty, will include
consents, approvals or authorizations required in connection with the
Amalgamation as well as consents, approvals or authorizations which
may be necessary or desirable in connection with Parent or
Acquisitionco's financing of the transactions contemplated herein as
contemplated in, and subject to, section 4.8(i));
(d) use commercially reasonable efforts to oppose, lift or rescind any
injunction or restraining or other order against it seeking to stop,
or otherwise adversely affecting its ability to consummate, the
Arrangement and to defend, or cause to be defended any Proceedings to
which it is a party or brought against it or its directors or officers
challenging this Agreement or the consummation of the transactions
contemplated hereby; and
(e) as soon as is reasonably practicable, carry out the terms of the
Interim Order and Final Order applicable to it and use commercially
reasonable efforts to comply promptly with all requirements which
applicable Laws may impose on Intrawest or its subsidiaries with
respect to the transactions contemplated hereby.
4.7 COVENANTS OF ACQUISITIONCO AND PARENT REGARDING THE PERFORMANCE OF
OBLIGATIONS
Each of Acquisitionco and Parent will perform all its obligations under
this Agreement, cooperate with Intrawest in connection therewith, and do all
such other acts and things as may be necessary or desirable in order to
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consummate and make effective, as soon as reasonably practicable, the
transactions contemplated in this Agreement and, without limiting the generality
of the foregoing, each of Acquisitionco and Parent will:
(a) apply for and use commercially reasonable efforts to obtain all
Applicable Regulatory Approvals;
(b) cooperate with Intrawest and its subsidiaries in connection with, and
use commercially reasonable efforts to assist Intrawest and its
subsidiaries in obtaining, all other consents, approvals and
authorizations referred to in section 4.6(c) or which Intrawest may
otherwise determine are necessary or desirable in connection with
Intrawest and Parent and Acquisitionco performing and complying with
their respective obligations hereunder and consummating the
Arrangement and the other transactions contemplated herein;
(c) use commercially reasonable efforts to oppose, lift or rescind any
injunction or restraining or other order against it seeking to stop,
or otherwise adversely affecting its ability to perform and comply
with its obligations under the Plan of Arrangement and to defend, or
cause to be defended any Proceedings to which it is a party or brought
against it or its directors or officers challenging this Agreement or
the consummation of the transactions contemplated hereby;
(d) designate one individual from whom Intrawest may seek approval to
undertake any actions not permitted to be taken under section 4.1 and
will ensure that such person will respond, on behalf of Parent, to
Intrawest's requests in an expeditious manner; and
(e) forthwith carry out the terms of the Interim Order and Final Order to
the extent applicable to it and use commercially reasonable efforts to
comply promptly with all requirements which applicable Laws may impose
on Acquisitionco or Parent or its subsidiaries with respect to the
transactions contemplated herein.
4.8 ACQUISITIONCO AND PARENT FINANCING
(a) Without limiting the generality of section 4.7, Acquisitionco and
Parent will make arrangements to borrow or otherwise be in possession
of all funds required to be provided by Acquisitionco to the Transfer
Agent pursuant to section 2.1(h) prior to the Effective Date and
otherwise carry out its obligations under this Agreement and the terms
of the Plan of Arrangement applicable to it and to pay all related
fees and expenses. To the extent that Parent does not presently have
sufficient funded capital to provide, from internal resources, funds
required to be provided by Acquisitionco to the Transfer Agent
pursuant to section 2.1(h), Acquisitionco will obtain such funds
pursuant to the Commitment Letter, which has been executed and
delivered by or on behalf of the Lenders and by Fortress prior to the
date of this Agreement and the Equity Commitment Letter which has been
executed and delivered by Fortress prior to the date of this Agreement
and Parent and Acquisitionco each represent and warrant that as at the
date of this Agreement each of the Commitment Letter and Equity
Commitment Letter is in full force and effect and are legal, valid and
binding obligations of Fortress, in the case of the Commitment Letter
and Acquisitionco, in the case of the Equity Commitment Letter and, to
the knowledge of Parent and Acquisitionco, the other parties thereto
on a basis that is not subject to any condition precedent other than
the conditions set out therein.
(b) Acquisitionco and Parent will satisfy, on a timely basis, all
covenants, terms, representations and warranties applicable to
Acquisitionco and Parent in the Commitment Letter and Equity
Commitment Letter that are within their control and enforce their
rights under the Commitment Letter and Equity Commitment Letter.
(c) Each of Acquisitionco and Parent will use its best efforts to
negotiate and enter into definitive credit or loan or other agreement
and all other documentation with respect to the financings
contemplated in this section 4.8 as may be necessary for Acquisitionco
to obtain such funds, on the basis described in this section 4.8 and
otherwise on terms and conditions no less favourable than the
Commitment Letter and the Equity Commitment Letter, and otherwise (i)
subject only to such other conditions precedent as are acceptable to
Intrawest or (ii) on terms and conditions which do not impair the
ability of Parent or Acquisitionco to perform its obligations
hereunder or effect the Arrangement, as soon as reasonably practicable
but in any event prior to the Termination Deadline. Parent will
deliver to Intrawest correct
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and complete copies of such executed definitive agreements and
documentation promptly upon request by Intrawest.
(d) Parent will keep Intrawest informed with respect to all material
activity concerning the status of the financings referred to in this
section 4.8 and will give Intrawest prompt notice of any material
change with respect to any such financing. Without limiting the
generality of the foregoing, Parent agrees to notify Intrawest
promptly, and in any event within 24 hours, if at any time prior to
the Effective Time (i) the Commitment Letter or the Equity Commitment
Letter referred to in this section 4.8 will expire or be terminated
for any reason, (ii) any event occurs that, with or without notice,
lapse of time or both, would individually or in the aggregate,
constitute a default or breach on the part of Acquisitionco or Parent
under any material term or condition of the Commitment Letter or the
Equity Commitment Letter or definitive agreement or documentation
referred to in this section 4.8 or if Parent has any reason to believe
Acquisitionco or Parent will be unable to satisfy, on a timely basis,
any term or condition of any funding referred to in this section 4.8
to be satisfied by it contained in the Commitment Letter or the Equity
Commitment Letter or (iii) any financing source that is a party to the
Commitment Letter or the Equity Commitment Letter that such source
either no longer intends to provide or underwrite any financing
referred to in this section 4.8 on the terms set forth in the
Commitment Letter or requests amendments or waivers that are or may be
materially adverse to the timely completion by Acquisitionco of the
transactions contemplated by this Agreement.
(e) Other than in connection with and as contemplated in this Agreement,
neither Parent nor Acquisitionco will, nor will Parent permit
Acquisitionco or any of the other affiliates of Parent to, without the
prior written consent of Intrawest, take any action or enter into any
transaction, including any merger, acquisition, joint venture,
disposition, lease, contract or debt or equity financing, that would
reasonably be expected to materially and adversely impair, delay or
prevent Acquisitionco or Parent obtaining any of the financings
referred to in this section 4.8.
(f) Neither Parent nor Acquisitionco will, nor will Parent permit
Acquisitionco to, amend or alter, or agree to amend or alter, the
Commitment Letter or the Equity Commitment Letter or any definitive
agreement or documentation referred to in this section 4.8 in any
manner that could materially and adversely impair, delay or prevent
the consummation of the transactions contemplated by this Agreement
without the prior written consent of Intrawest.
(g) If the Commitment Letter or the Equity Commitment Letter referred to
in this section 4.8 is terminated or modified in a manner materially
adverse to Parent or Acquisitionco for any reason, or if any portion
of the credit facilities or other source of funding referred to in
section 4.8(a) ceases to be available, Parent and Acquisitionco will,
and Parent will cause Acquisitionco to, use its best efforts to (i)
obtain, as promptly as practicable, and, once obtained, provide
Intrawest with a copy of, a new financing commitment that provides for
at least the same amount of financing as contemplated by the
Commitment Letter, or the Equity Commitment Letter, as the case may
be, on a basis that is not subject to any condition precedent other
than the conditions precedent contained in the Commitment Letter, or
the Equity Commitment Letter, as the case may be, and, if applicable,
such other conditions as have been approved in writing by Intrawest
prior to the date of this Agreement and otherwise on terms and
conditions acceptable to Intrawest, (ii) negotiate and enter into
definitive credit, loan or other agreements and all required
documentation with such third parties as may be necessary for
Acquisitionco to obtain such funds (to the extent reasonably
practicable, on terms and conditions no less favourable than the
Commitment Letter or the Equity Commitment Letter, as the case may be,
being replaced) and on the basis described in this section 4.8 and
otherwise on terms and conditions acceptable to Intrawest, as soon as
reasonably practicable but in any event prior to the Termination
Deadline, and deliver to Intrawest correct and complete copies of such
executed definitive agreements and documentation promptly upon request
by Intrawest, (iii) satisfy, on a timely basis, all covenants, terms,
representations and warranties applicable to Acquisitionco and Parent
in the Commitment Letter and the Equity Commitment Letter and all
other required documentation referred to in this section 4.8(g) that
are within their control and enforce their rights under the Commitment
Letter and the Equity Commitment Letter and agreements and
documentation, and (iv) obtain funds under such commitment to the
extent necessary to consummate the transactions contemplated by this
Agreement.
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(h) Parent will agree to guarantee Acquisitionco's obligations under the
Commitment Letter and the Equity Commitment Letter and under the
definitive agreements entered into pursuant to the Commitment Letter
or the Equity Commitment Letter.
(i) Intrawest will, and will cause its subsidiaries to provide, and use
its commercially reasonable efforts to have its and their
Representatives cooperate with Parent and Acquisitionco in connection
with the arrangements by Parent and Acquisitionco to obtain the
advance of the financing referred to in this section 4.8 as
contemplated in the Commitment Letter as may be reasonably requested
by Parent (provided that such requested cooperation does not
unreasonably interfere with the ongoing operations of Intrawest and
its subsidiaries or interfere with or hinder or delay the performance
by Intrawest of its other obligations hereunder), including (i)
participation in meetings, drafting sessions and due diligence
sessions, (ii) furnishing Parent and Acquisitionco and their
financing sources with financial and other pertinent information
regarding Intrawest as may be reasonably requested by Parent, (iii)
assisting Parent and Acquisitionco and their financing sources in the
preparation of (A) an offering document for any debt raised to
complete the Arrangement and (B) materials for rating agency
representations, (iv) cooperating with Parent and Acquisitionco in
connection with applications to obtain such consents, approvals or
authorizations which may be necessary or desirable in connection with
such financing, (v) using commercially reasonable efforts to seek to
take advantage of Intrawest's existing lending relationships,
including attempting to persuade Intrawest's existing lenders to
participate in the syndicate organized by the Lenders, (vi)
reasonably cooperating with the marketing efforts of Parent and
Acquisitionco and their financing sources for any debt raised by
Parent to complete the Arrangement, (vii) forming new direct or
indirect subsidiaries, (viii) having officers execute, without
personal liability, any reasonably necessary officers' certificates
or management representation letters to Intrawest's accountants to
issue unqualified reports with respect to the financial statements to
be included in any offering documents, and (ix) using best efforts to
permit Parent and Acquisitionco to be able to provide the Lenders
with the collateral package required by the Lenders in connection
with the financing contemplated by the Commitment Letter and the
definitive agreements contemplated therein, in a form reasonably
satisfactory to the Lender (it being acknowledged by the parties that
such collateral package will include the same collateral, but not
necessarily be limited to the same collateral, as is in place in
connection with Intrawest's current banking arrangements (it being
understood that such banking arrangements will need to be repaid in
connection therewith)); provided that none of Intrawest nor any
subsidiary of Intrawest will be required to pay any commitment or
other similar fee or incur any other liability in connection with any
such financing prior to the Effective Time. Parent will, promptly
upon request by Intrawest, reimburse Intrawest for all reasonable
out-of-pocket costs (including legal fees) incurred by Intrawest or
its subsidiaries and their respective advisers, agents and
representatives in connection with such cooperation.
(j) All non-public or otherwise confidential information regarding
Intrawest obtained by Parent or its representatives pursuant to
section 4.8(i) is information which is subject to the Confidentiality
Agreement and will be kept confidential in accordance with the
Confidentiality Agreement unless Intrawest otherwise agrees.
(k) For the avoidance of doubt, if any financing referred to in this
section 4.8 is not obtained, Acquisitionco will continue to be
obligated to consummate the Arrangement, and Parent will continue to
be obligated to cause Acquisitionco to consummate the Arrangement,
subject to and on the terms contemplated by this Agreement. Any
failure to consummate the Arrangement as a result of the failure by
Acquisitionco and Parent to obtain the financing referred to in this
section 4.8 will constitute a breach by Acquisitionco and Parent
hereunder.
4.9 MUTUAL COVENANTS
Each of the parties covenants and agrees that, subject to the terms and
conditions of this Agreement, except as contemplated in this Agreement, until
the earlier of the Effective Time and the time that this Agreement is terminated
in accordance with its terms:
(a) it will use, and, where appropriate, cause its subsidiaries to use,
commercially reasonable efforts to satisfy (or cause the satisfaction
of) the conditions precedent to its obligations hereunder as set forth
in Article 7
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to the extent the same is within its control and to take, or cause to
be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable and commercially reasonable to
permit the completion of the transactions contemplated in this
Agreement in accordance with its obligations under this Agreement, the
Plan of Arrangement and the Legislation and cooperate with the other
parties in connection therewith, including using its commercially
reasonable efforts to:
(i) cooperate with the other party in connection with the performance
by it of its obligations hereunder; and
(ii) if any takeover Law or statute that purports to limit or restrict
business combinations or the ability to acquire or vote shares is
or becomes applicable to this Agreement or the Arrangement, take
necessary action to consummate the transactions contemplated
herein as promptly as practicable upon the terms and subject to
the conditions set forth in this Agreement and (subject to
applicable Laws) otherwise act to attempt to minimize the effects
of such takeover Law or statute;
(b) it will use commercially reasonable efforts within its control to
ensure that the representations and warranties in section 3.1, in the
case of Intrawest, and section 3.3, in the case of Acquisitionco and
Parent, remain true and correct as of the Effective Date (or in the
case of such representations and warranties which refer to another
date, remain true and correct as at such date) as if such
representations and warranties were made at and as of such date; and
(c) it will not knowingly take or cause to be taken any action which is
inconsistent with this Agreement or which would reasonably be expected
to prevent, significantly impede or materially delay the consummation
of the Arrangement except as permitted by this Agreement.
4.10 EMPLOYMENT ARRANGEMENTS
(a) Parent and Acquisitionco covenant and agree that, from and after the
Effective Time, Parent and Acquisitionco will cause Intrawest, and any
successor to Intrawest (including any Surviving Corporation), to agree
to honour, perform or cause to be performed all existing employment,
retention and change of control agreements of Intrawest as are
disclosed in the Intrawest Disclosure Letter and all arrangements for
the benefit of the officers or employees of Intrawest party thereto,
provided for therein or contemplated thereby and will make available
to Intrawest or any successor to Intrawest (including any Surviving
Corporation) any financing required in order to make payment of
amounts payable under any employment and retention agreements and
incentive and deferred compensation plans or arrangements as are
disclosed in the Intrawest Disclosure Letter.
(b) Parent and Acquisitionco acknowledge that, pursuant to the provisions
of the Intrawest Stock Option Plan, Intrawest may facilitate as
necessary the acceleration of vesting of any unvested Intrawest
Options as may be necessary or desirable to allow the persons holding
Intrawest Options to exercise their Intrawest Options for the purpose
of participating in the Arrangement as holders of Common Shares.
(c) In the event the Arrangement becomes effective, the Intrawest Employee
Share Purchase Plan, the Whistler/Blackcomb Employee Share Purchase
Plan and the Funded Share Purchase Plan will each be terminated as of
and from the Effective Time. Intrawest will take such actions as may
be necessary to suspend the Intrawest Employee Share Purchase Plan,
the Whistler/Blackcomb Employee Share Purchase Plan and Funded Share
Purchase Plan so that employees participating in the plans will not
make further contributions under the plans after the last day of the
calendar month in which this Agreement is executed, provided that the
plans may be reinstated if this Agreement shall have been terminated
in accordance with its terms.
(d) Prior to the Effective Date, and effective as of the Effective Date,
Intrawest shall amend the Intrawest Supplemental Retirement Plan for
Designated U.S. Executives so that the plan benefits shall not become
payable in a single sum upon a Change of Control (as defined in the
plan), but shall continue to become payable in accordance with the
plan's provisions in equal monthly installments for the life of the
respective plan participant.
(e) Immediately prior to the Effective Time, Intrawest shall amend each of
the Executive Employment Agreements, in form reasonably acceptable to
the respective executives party thereto (or deliver a written
undertaking to each of them to do so), to preserve certain termination
rights the executives are currently
B-46
entitled to pursuant to the Intrawest LTIP (which is being cancelled
in connection with the completion of the Arrangement) by providing
that:
(i) in the event of the termination of the employment of the relevant
executive with Intrawest or any Surviving Corporation for any
reason whatsoever within 180 days after the Effective Date,
Intrawest or the Surviving Corporation, as the case may be, will
pay to such executive, in addition to all other amounts to which
such executive may be entitled pursuant to such executive's
Executive Employment Agreement or otherwise, an amount equal to
the product obtained by multiplying the Share Consideration by the
number of notional Common Shares to which such executive would be
entitled pursuant to the Intrawest LTIP in respect of a
"Reasonable Notice Period Allotment" if the Intrawest LTIP were in
full force and effect at such time and such executive were
entitled to a "Reasonable Notice Period Allotment" thereunder in
respect of an "Event of Termination" occurring after June 30, 2006
and before July 1, 2007; and
(ii) in the event of the termination of the employment of the relevant
executive with Intrawest or any Surviving Corporation at any time
after clause (i) above ceases to apply and such executive is
entitled to the compensation provided for in section 5.4(b) of
such executive's Executive Employment Agreement (whether pursuant
to section 5.4, 5.6 or 5.7 thereof), Intrawest will pay to such
executive, in addition to all other amounts to which such
executive may be entitled pursuant to such executive's Executive
Employment Agreement or otherwise, an amount equal to the product
obtained by multiplying the Share Consideration by the number of
notional Common Shares to which such executive would be entitled
pursuant to the Intrawest LTIP in respect of a "Reasonable Notice
Period Allotment" if the Intrawest LTIP were in full force and
effect at such time and such executive were entitled to a
"Reasonable Notice Period Allotment" thereunder in respect of an
"Event of Termination" occurring after June 30, 2006 and before
July 1, 2007;
4.11 INDEMNIFICATION
(a) Parent and Acquisitionco will ensure that (i) the bylaws of Intrawest,
and the constating documents of any successor to Intrawest (including
any Surviving Corporation) and (ii) the constating documents of the
subsidiaries of Intrawest (or any successor to any such subsidiary),
will contain provisions with respect to indemnification now set forth
in the articles or bylaws of Intrawest and the constating documents of
the subsidiaries of Intrawest (or equivalent provisions), as the case
may be, such that all rights to indemnification existing in favour of
the present and former directors and officers of Intrawest or of any
of the subsidiaries of Intrawest and present and former directors and
officers of Intrawest or of any of the subsidiaries of Intrawest
serving or who served at the request of Intrawest or any subsidiary of
Intrawest as a director, officer, employee, agent or representative of
another corporation, partnership, joint venture, trust, employee
benefit plan or other entity or enterprise (each such present or
former director or officer of Intrawest or of any subsidiary of
Intrawest being herein referred to as an "Indemnified Party" and such
persons collectively being referred to as the "Indemnified Parties")
as provided in the articles or bylaws of Intrawest or constating
documents of any of the subsidiaries of Intrawest, or equivalent
provisions, will survive and continue in full force and effect and
without modification, with respect to actions or omissions of the
Indemnified Parties occurring prior to the Effective Time in
accordance with the terms of such bylaws and constating documents, or
equivalent provisions, as at the Effective Time.
(b) Intrawest, Parent and Acquisitionco agree that all rights to
indemnification existing in favour of the Indemnified Parties as
provided by any agreement to which Intrawest or any of its
subsidiaries is a party and in effect as of the date hereof (including
all provisions relating to advances for the funding of costs and
expenses in connection with indemnification arrangements) will survive
the completion of the Arrangement and will continue in full force and
effect and without modification, and Parent and Acquisitionco will
cause Intrawest, and any successor to Intrawest (including any
Surviving Corporation), and its subsidiaries (including any successors
thereto), to honour such rights of indemnification and indemnify the
Indemnified Parties pursuant thereto, with respect to actions or
omissions of the Indemnified Parties occurring prior to the Effective
Time, for a period of not less than six years from the Effective Time.
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(c) Provided the Arrangement becomes effective, for a period of not less
than six years after the Effective Date Intrawest will, and Parent and
Acquisitionco will cause Intrawest and any successor to Intrawest
(including any Surviving Corporation) to, continue and maintain in
effect policies of directors' and officers' liability insurance,
without any gaps, lapses or reduction in scope or coverage, for the
benefit of the Indemnified Parties in such amounts, and with such
deductibles, retained amounts, coverages and exclusions and otherwise
on terms and conditions no less advantageous or favourable to the
Indemnified Parties, than such insurance maintained by Intrawest
immediately prior to the Effective Time and providing protection in
respect of claims arising from or related to facts or events which
occurred on or prior to the Effective Date. Parent and Acquisitionco
also agree that after the expiration of such six year period they will
use all commercially reasonable efforts to cause such directors and
officers to be covered under the Parent's existing directors' and
officers' insurance policy, if any. Notwithstanding any other
provision of this Agreement, prior to the Effective Time Intrawest
may, in the alternative, at its option, purchase prepaid
non-cancellable run-off directors' and officers' liability insurance
providing coverage (on terms comparable to those contained in
Intrawest's current insurance policies) for a period of up to six
years from the Effective Date with respect to claims arising from or
related to facts or events which occur on or prior to the Effective
Date in the same manner as such claims would have been covered if they
arose prior to the Effective Date and any such policy purchased by
Intrawest will cover the interest of Intrawest in respect of its
indemnification obligations under this section 4.11, provided,
however, that the premiums payable for such insurance do not exceed
200% of the premiums currently payable by Intrawest for directors' and
officers' liability insurance (which, for greater certainty shall be
over and above any refunded premium for any unused portion of the
current directors' and officers' liability insurance).
(d) In the event that Parent or Acquisitionco or any of its successors or
assigns (i) consolidates with or merges into any other person and is
not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then,
and in each such case, proper provision will be made so that the
successor or assignee of Parent or Acquisitionco (as the case may be)
assumes the obligations set forth in this section 4.11.
4.12 NOTES OFFERS
(a) On a date reasonably in advance of the Effective Date, as agreed to by
Parent and Intrawest, Acquisitionco shall, in accordance with
applicable securities Laws and the applicable Indenture, effect an
offer to purchase and consent solicitation with respect to each of the
6.875% Notes (the "6.875% NOTES OFFER") and the 7.50% Notes (the
"7.50% NOTES OFFER" and, together with the 6.875% Notes Offer, the
"NOTES OFFERS"). The purpose of each of the Notes Offers shall be to
purchase the Notes and to adopt a supplemental indenture that has the
effect of eliminating covenants and other provisions in the applicable
Indenture as reasonably required by Acquisitionco. The initial
settlement date of each of the Notes Offer shall be the Effective Date
but prior to the Effective Time; provided, that Acquisitionco may, at
its option, set an initial settlement date for any or all of the Notes
Offers prior to the Effective Date provided that the terms of any
Notes Offer with an earlier initial settlement date than the Effective
Date shall provide that Acquisitionco shall extend such Notes Offer as
necessary so that the initial settlement date of such Notes Offer
occurs on the Effective Date but prior to the Effective Time.
(b) Notwithstanding anything to the contrary in section 4.12(a), if
Acquisitionco notifies Intrawest within seven business days after the
date hereof that it wants Intrawest to effect the Notes Offers instead
of Acquisitionco, then Intrawest will effect the Notes Offers in the
manner contemplated by section 4.12(a), provided that such Notes
Offers effected by Intrawest will be conditional upon the Arrangement
becoming effective, and otherwise at the reasonable direction of
Acquisitionco; provided, however, that Acquisitionco shall prepare all
documentation relating to the Notes Offer, subject to the approval of
Intrawest, not to be unreasonably withheld or delayed. Intrawest shall
cooperate with Acquisitionco as reasonably requested by Acquisitionco
with respect to preparing for, and effecting, the Notes Offers
including, without limitation, taking the actions required by Section
903 of each of the Indentures applicable to the 6.875% Notes and the
7.50% Notes in connection with adoption of the supplemental indenture
contemplated by the Note Offers and section 4.12(a). If Acquisitionco
elects to have Intrawest effect the Notes Offers, then on settlement
for such Notes Offers Acquisitionco shall, on
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behalf of Intrawest, pay to the applicable tender agent the amounts
necessary to purchase all tendered Notes.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 PERMITTED ACTIVITIES
Nothing contained in this Agreement shall (a) prohibit or prevent Intrawest
or its Board of Directors or officers from (i) making any disclosure of or in
relation to an Acquisition Proposal to the Common Shareholders or holders of
Intrawest Options prior to the Effective Time if, in the good faith judgment of
the Board of Directors, after consultation with outside legal counsel, such
disclosure is necessary for the directors or officers of Intrawest to act in a
manner consistent with their duties or is otherwise required under applicable
Laws, including obligations under Rule 14e 2 under the Exchange Act; or (ii)
taking any other action in relation to an Acquisition Proposal to the extent
required under applicable securities Laws or ordered or otherwise mandated by
any court of competent jurisdiction, or (b) prior to the date on which the
Arrangement Resolutions are passed by the Intrawest Securityholders at the
Intrawest Meeting in accordance with the Interim Order and the applicable
Legislation, prevent Intrawest or its Board of Directors or officers or other
representatives from engaging in discussions or negotiations with any person in
respect of an unsolicited bona fide Acquisition Proposal (including any
unsolicited Acquisition Proposal made after the date of this Agreement by any
person that made an Acquisition Proposal prior to the date of the Agreement), or
providing information (subject to compliance with section 5.3) in respect of or
otherwise responding to such an unsolicited Acquisition Proposal or entering
into an agreement (subject to compliance with sections 5.3 and 5.4), where (i)
the Acquisition Proposal does not result from a breach of section 5.2, and (ii)
the Board of Directors determines in good faith after, among other things,
consultation, to the extent considered appropriate by the Board of Directors,
with Intrawest's financial advisors (including the Financial Advisor) and
outside legal counsel that the Acquisition Proposal would be reasonably likely
to result in a Superior Proposal.
5.2 NON-SOLICITATION
(a) Intrawest agrees with Parent and Acquisitionco that, except as
expressly contemplated by this Agreement, until this Agreement is
terminated none of Intrawest nor its subsidiaries will, directly or
indirectly, through any Representative of it take any action that
might, directly or indirectly, interfere with the consummation of the
Arrangement and, without limitation, will not (and Intrawest will not
permit its subsidiaries to), except as contemplated by this Article 5,
without the consent in writing of Parent (which consent may be
unreasonably withheld), directly or indirectly, through any subsidiary
or Representative of it or any of its subsidiaries:
(i) solicit, initiate or knowingly facilitate or encourage (including
by way of furnishing confidential information or facilitating or
permitting any visit to any facilities or properties of Intrawest
or any of its subsidiaries by any person with the intention or for
the purpose of encouraging such person to make or propose an
Acquisition Proposal, or entering into any form of agreement,
arrangement or understanding) any inquiry, proposal or offer
relating to or constituting an Acquisition Proposal from any
person;
(ii) enter into or participate in any discussions or negotiations or
other activities with any person (other than Acquisitionco, Parent
or its affiliates) regarding an Acquisition Proposal;
(iii) withdraw, modify, qualify, or propose publicly to withdraw, modify
or qualify, in any manner adverse to Parent or Acquisitionco the
approval or recommendation of the Board of Directors or any
committee thereof of the Arrangement;
(iv) approve, endorse, recommend or remain neutral with respect to, or
propose to publicly approve, endorse, recommend or remain neutral
with respect to, any Acquisition Proposal; or
(v) accept or enter into, or propose publicly to accept or enter into,
any letter of intent, agreement in principle, understanding,
undertaking, arrangement or Contract in respect of or relating to
an Acquisition Proposal.
B-49
(b) Intrawest will, and will cause the Representatives of Intrawest and
its subsidiaries and their Representatives to, immediately cease and
cause to be terminated any existing solicitations, discussions,
negotiations or activities with any person (other than Parent and
Acquisitionco) with respect to any Acquisition Proposal or any
proposal that may reasonably be expected to constitute an Acquisition
Proposal. Parent and Acquisitionco acknowledge that standstill
covenants or provisions contained in various confidentiality
agreements entered into by Intrawest with other parties relating to a
potential Acquisition Proposal will terminate in accordance with the
terms thereof (without any further action on the part of any party
thereto, including Intrawest or any of subsidiaries) upon Intrawest
entering into this Agreement. Except to the extent such standstill
covenants or provisions will so terminate pursuant to their terms,
Intrawest agrees not to release, and to cause its subsidiaries not to
release, any third party from any standstill or confidentiality
agreement (or any term or condition of any such agreement) that
Intrawest entered into prior to the date hereof with any person that
was considering any Acquisition Proposal or to amend or waive any
provision of any such agreement.
(c) Intrawest will discontinue access by any third party (other than
Parent or Acquisitionco or their representatives) to any data room
(virtual or otherwise) and promptly request the return or deletion
from retrieval systems and data bases or destruction of all
information provided to any third party which, at any time since
February 28, 2006, has entered into a confidentiality agreement with
Intrawest relating to a potential Acquisition Proposal to the extent
that such information has not previously been returned or destroyed,
and will use commercially reasonable efforts to ensure that such
requests are honoured in accordance with the terms of such agreement.
(d) Intrawest will ensure that its officers and directors and its
investment bankers and financial or other advisors are aware of the
provisions of this Article 5, and Intrawest will be responsible for
any breach of this Article 5 by any of its officers, directors,
investment bankers or financial or other advisors.
5.3 NOTIFICATION OF ACQUISITION PROPOSAL
(a) Intrawest will promptly (and in any event within 24 hours after
receipt of such inquiry, proposal, offer or request) notify Parent, at
first orally and then in writing, of any inquiry, proposal or offer
received by Intrawest after the date of this Agreement relating to or
constituting an Acquisition Proposal or that could reasonably be
expected to lead to an Acquisition Proposal (whether or not relating
to any Acquisition Proposal or inquiry that may have been received
prior to the date hereof), including the renewal of any Acquisition
Proposal made prior to the date hereof, or any amendments to the
foregoing, or any written request for material non-public information
relating to Intrawest or any of its subsidiaries or for access to the
properties, books or records of Intrawest or any of the subsidiaries
by any person. Such written notice will include a copy of any written
Acquisition Proposal (and any amendment thereof) which has been
received by Intrawest or any of its subsidiaries or, if no written
Acquisition Proposal has been received, a description of the material
terms and conditions of any inquiry, proposal, offer or request and
the identity of the person making such inquiry, proposal, offer or
request. Intrawest will also provide such further details of the
inquiry, proposal, offer or request (and any amendment thereof) as
Parent may reasonably request. Intrawest will keep Parent informed of
any change to the material terms of any such inquiry, proposal, offer
or request and provide to Parent at the option of Intrawest, either
copies of all correspondence and other written material sent or
provided to Intrawest by any person in connection with such inquiry,
proposal or request or sent or provided by Intrawest to any person in
connection with such inquiry, proposal or request or a description of
the material terms of such correspondence or material promptly after
receipt or delivery thereof.
(b) If, prior to the approval of the Arrangement Resolutions by the
Intrawest Securityholders at the Intrawest Meeting, Intrawest receives
an inquiry, proposal or offer relating to or constituting an
Acquisition Proposal or a request for material non-public information
from a person who has made or is proposing to make an unsolicited bona
fide Acquisition Proposal where Intrawest is not in breach of section
5.2 and the Board of Directors determines in good faith after, among
other things, consultation, to the extent considered appropriate by
the Board of Directors, with Intrawest's financial advisors (including
the Financial Advisor) and outside legal counsel that such proposal
would be reasonably likely to result in a Superior Proposal, then, and
only in such case, Intrawest may, subject to the execution by such
person of a confidentiality agreement having substantially the same
terms as the Confidentiality
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Agreement and, taken as a whole, being no less favourable to Intrawest
than the Confidentiality Agreement, provide such person with, or
access to, non-public information regarding Intrawest, provided that:
(i) notwithstanding the foregoing, the confidentiality agreement with
such person will not restrict such person from making the
Acquisition Proposal, or announcing the intention to make the
Acquisition Proposal without the approval of Intrawest, and will
not restrict Intrawest from disclosing such agreement and
providing a copy thereof to Parent as set out below (and for this
purpose Intrawest may agree with the other party to amend any
confidentiality agreement that was entered into prior to the date
of this Agreement to provide for the foregoing); and
(ii) Intrawest will send a copy of any such confidentiality agreement
to Parent promptly following its execution and will promptly
advise Parent regarding all non-public information provided to
such other person or to which such other person has been provided
access and will promptly provide Parent with, or access to, all
such information provided to such other person and not previously
provided to Parent and provide Parent with access to all further
non-public information regarding Intrawest provided to such other
person not previously provided to Parent.
(c) If Intrawest receives a written Acquisition Proposal that the Board of
Directors in good faith determines constitutes a Superior Proposal, or
any amendment or modification to any such Superior Proposal, in each
case Intrawest will provide a copy of the Superior Proposal or such
amendment or modification promptly to Parent and in any event within
24 hours after such receipt.
5.4 RIGHT TO MATCH
(a) Subject to section 5.4(b), Intrawest covenants that it will not
accept, approve or recommend or enter into any agreement,
understanding, arrangement or Contract in respect of, or proceed with
or recommend, a Superior Proposal (other than a confidentiality
agreement permitted by section 5.3(b), the execution of which will not
be subject to the conditions of this section 5.4) unless:
(i) Intrawest has complied with its obligations under sections 5.2 and
5.3 and this section 5.4;
(ii) Intrawest has provided Parent with a copy of the Superior
Proposal; and
(iii) a period (the "RESPONSE PERIOD") of five business days will have
elapsed from the later of (A) the date on which Parent received
written notice from Intrawest advising that the Board of Directors
has determined, subject only to compliance with this section 5.4,
that Intrawest enter into an agreement, understanding, arrangement
or Contract in respect of, or to proceed with, or recommend, such
Superior Proposal and (B) the date Parent receives a copy of the
Superior Proposal.
(b) In the event that Intrawest provides Parent with a notice as
contemplated in section 5.4(a), on a date that is less than seven
business days prior to the date the Intrawest Meeting is scheduled to
be held, Intrawest will be entitled to postpone or adjourn, and will,
at the request of Parent, postpone or adjourn, the Intrawest Meeting
to a date (specified by Parent in the case of a postponement or
adjournment requested by Parent) that is not less than seven business
days and not more than 15 business days after the date of such notice.
(c) During the Response Period (or such longer period as Intrawest may
agree), Parent and Acquisitionco will have the right, but not the
obligation, to propose in writing to amend the terms of the Agreement
and the Plan of Arrangement. Intrawest will cause the Board of
Directors to review in good faith any such proposal received by
Intrawest from Parent and Acquisitionco during the Response Period to
determine (after receipt of advice, to the extent considered
appropriate by the Board of Directors, from its financial advisors and
outside legal counsel) whether the Acquisition Proposal in respect of
which the Parent and Acquisitionco are proposing to amend this
Agreement and Plan of Arrangement would be a Superior Proposal when
assessed against this Agreement and Plan of Arrangement as it is
proposed to be amended.
(d) Intrawest may enter into any agreement, understanding, arrangement or
Contract in respect of, or to proceed with, or recommend, a Superior
Proposal if, and only if, and may not enter into any agreement,
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undertaking, arrangement or Contract in respect of, or to proceed
with, or recommend, a Superior Proposal (with the exception of a
confidentiality agreement referred to in section 5.3(b)) unless:
(i) Parent and Acquisitionco do not, prior to the expiry of the
Response Period, propose to amend the terms of this Agreement and
the Plan of Arrangement; or
(ii) Parent and Acquisitionco deliver to Intrawest, prior to the expiry
of the Response Period, a proposal to amend the terms of this
Agreement and the Plan of Arrangement as contemplated in section
5.4(c), and the Board of Directors determines in good faith,
after, among other things, consultation, to the extent considered
appropriate by the Board of Directors, with Intrawest's financial
advisors (including the Financial Advisor) and outside legal
counsel, taking into account the proposal by Parent and
Acquisitionco to amend this Agreement and the Plan of Arrangement,
that the Acquisition Proposal remains a Superior Proposal; and
(iii) Intrawest concurrently terminates this Agreement pursuant to
section 6.1(c) and Intrawest has previously or concurrently paid
to Parent the fee payable under section 5.6, Intrawest
acknowledging and agreeing that payment of the fee payable under
section 5.6 is a condition to valid termination of this Agreement
under section 6.1(c) and this section 5.4.
(e) If, in the circumstances described in section 5.4(d)(ii), the Board of
Directors does not determine that the Acquisition Proposal remains a
Superior Proposal when compared to the proposed amendment to this
Agreement and the Plan of Arrangement, Intrawest and Parent and
Acquisitionco will promptly execute and deliver an amending agreement
amending this Agreement and the Plan of Arrangement, or an amended
Agreement, incorporating or reflecting the terms of the amendment to
the terms of this Agreement and Plan of Arrangement as proposed by
Parent and Acquisitionco and Intrawest will publicly announce that the
Board of Directors has reaffirmed its recommendation of the
Arrangement by news release, the form of which shall be provided to
Parent for its review and comment prior to publication.
(f) Each successive modification or amendment to any Acquisition Proposal
that results in any change in, or modification of, the consideration
to be received under, or any other material change in the terms and
conditions of, such Acquisition Proposal will constitute a new
Acquisition Proposal for the purposes of this section 5.4 and Parent
will be afforded a new Response Period in respect of each such
Acquisition Proposal.
5.5 VALUE
For purposes of this Agreement, the value of any non-cash consideration
forming part of the consideration proposed to be paid, delivered or issued under
any Acquisition Proposal or by Acquisitionco or Parent will be determined by the
Board of Directors (having, among other things, consulted with Intrawest's
financial advisors (including the Financial Advisor) or obtained other financial
advice).
5.6 PAYMENTS TO PARENT
If at any time after the execution of this Agreement:
(a) Intrawest terminates this Agreement pursuant to section 6.1(c);
(b) Parent terminates this Agreement pursuant to section 6.1(b)(i) or (ii)
if the Intrawest Meeting is not held and the Arrangement Resolutions
are not submitted to the Intrawest Securityholders at the Intrawest
Meeting, at least seven days prior to the Termination Deadline; or
(c) in the event:
(i) a bona fide written Acquisition Proposal has been made by any
person (the "ACQUISITION PROPOSAL OFFEROR") other than Parent or
Acquisitionco after the date hereof and prior to the termination
of this Agreement;
(ii) either Intrawest or Parent terminates this Agreement pursuant to
section 6.1(b)(i) or 6.1(b)(ii); and
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(iii) within 365 days after the date of such termination:
A. an Acquisition Proposal is consummated with the Acquisition
Proposal Offeror, or any other person; or
B. the Board of Directors approves or recommends such Acquisition
Proposal or any other Acquisition Proposal, or Intrawest or any
of its subsidiaries enters into a definitive agreement with
respect to such Acquisition Proposal or any other Acquisition
Proposal and thereafter (whether or not within 365 days after
the termination of this Agreement) such Acquisition Proposal is
consummated;
(d) Parent terminates this Agreement pursuant to section 6.1(e) or 6.1(f);
or
(e) Parent terminates this Agreement pursuant to section 6.1(g) as a
result of a breach of covenant or agreement on the part of Intrawest
contained in this Agreement;
then in any such case Intrawest will pay to Parent (or as it may direct) $60
million (less the amount of any withholding required by applicable Laws relating
to Taxes which is concurrently remitted by Intrawest to the relevant Government
Authority and receipted) by wire transfer in immediately available funds to an
account designated by Parent. Such payment will be due (A) in the case of a
termination specified in section 5.6(a), before or concurrently with such
termination of this Agreement, (B) in the case of a termination specified in
section 5.6(b) or 5.6(d), within two business days following receipt by
Intrawest of written notice of termination by Parent, and (C) in the case of the
occurrence of the events specified in section 5.6(c), on the day of the
consummation of the transaction referred to therein. Intrawest will not be
obligated to make more than one payment pursuant to this section 5.6.
5.7 REIMBURSEMENT OF EXPENSES TO PARENT AND ACQUISITIONCO
If (a) this Agreement is terminated by Parent pursuant to section
6.1(b)(ii) and no amount is payable by Intrawest to Parent pursuant to section
5.6, or (b) this Agreement is terminated pursuant to section 6.1(b)(i) or 6.1(g)
and no amount is payable by Intrawest to Parent pursuant to section 5.6 and (i)
the Intrawest Meeting is not held for any reason prior to such termination, or
(ii) such termination was caused as a result of the condition precedent in
section 7.3(a), (b) or (c) not being satisfied as a result of any breach by
Intrawest of this Agreement, including from any inaccuracy in its
representations and warranties and any non-performance by it of its covenants
and agreements made herein, then, in any such case, within five business days
following receipt by Intrawest of the certificate of a senior officer of Parent
hereafter referred to, Intrawest will pay to Parent by wire transfer in
immediately available funds to an account designated by Parent an amount equal
to Parent and Acquisitionco's (without duplication) actual out of pocket costs
and expenses, including reasonable fees and expenses of their counsel,
accountants, financial advisors and other experts and advisors, incidental to
the preparation, negotiation and execution of this Agreement and related
documentation, up to a maximum of $10,000,000 (less the amount of any
withholding required by applicable Laws relating to Taxes which is concurrently
remitted by Intrawest to the relevant Governmental Authority and receipted) as
payment in respect of such costs and expenses (the amount of such costs and
expenses to be certified by a senior officer of Parent in writing in reasonable
detail). Intrawest will not be obligated to make payment pursuant to this
section 5.7 if Intrawest has paid or is required to pay the fee referred to in
section 5.6, and any fees paid by Intrawest under this section 5.7 will be
credited against any fee payable in section 5.6 to the extent that it
subsequently becomes payable by Intrawest.
5.8 EFFECT OF PAYMENTS
Each of the parties acknowledges that the agreements contained in sections
5.6, 5.7 and 5.9 are an integral part of the transactions contemplated in this
Agreement and that, without those agreements, the parties would not enter into
this Agreement. Each party acknowledges that all of the payment amounts set out
in sections 5.6, 5.7 and 5.9 are payments of liquidated damages which are a
genuine pre-estimate of the damages which the party entitled to such damages
will suffer or incur as a result of the event giving rise to such payment and
the resultant termination of this Agreement and are not penalties. Each party
irrevocably waives any right that it may have to raise as a defence that any
such liquidated damages are excessive or punitive. For greater certainty, the
parties agree that the payment of an amount pursuant to sections 5.6, 5.7 and
5.9, subject to section 4.2, is the sole monetary remedy of the party receiving
such payment. Nothing contained herein will preclude a party from seeking
injunctive relief to restrain any
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breach or threatened breach of the covenants or agreements set forth in this
Agreement or the Confidentiality Agreement or otherwise to obtain specific
performance of any such acts, covenants or agreements.
5.9 PAYMENT TO INTRAWEST
In the event that this Agreement is:
(a) terminated by Intrawest pursuant to sections 6.1(d), 6.1(h) or:
(b) terminated by either Intrawest or Parent pursuant to section 6.1(b)(i)
following any failure by Acquisitionco and Parent to obtain the
financing referred to in section 4.8 or a failure by Parent or
Acquisitionco to perform or comply with their obligations in sections
2.1(h) or 4.7(e), then, in any such case, Parent and Acquisitionco
will pay to Intrawest by wire transfer in immediately available funds
to an account designated by Intrawest an amount equal to $60 million.
Such payment will be due within two business days of such termination.
ARTICLE 6
TERMINATION OF AGREEMENT
6.1 TERMINATION
This Agreement may be terminated at any time before the Effective Time:
(a) by agreement in writing executed by Parent and Intrawest;
(b) by either Intrawest or Parent, upon written notice by either one to
the other:
(i) if the Effective Date does not occur on or before the Termination
Deadline, except that the right to terminate this Agreement under
this section 6.1(b)(i) shall not be available to any party to this
Agreement whose failure to fulfil any of its obligations has been
a significant cause of, or resulted in, the failure of the
Effective Time to occur by such date;
(ii) if the Intrawest Meeting is held and the Arrangement Resolutions
are not passed by the Intrawest Securityholders in accordance with
applicable Legislation and the Interim Order; or
(iii) if any Law makes the consummation of the Arrangement or the
transactions contemplated by this Agreement illegal or otherwise
prohibited and such Law has become final and non-appealable;
(c) by Intrawest upon written notice to Parent, in order to enter into a
definitive agreement providing for the implementation of a Superior
Proposal, subject to compliance with sections 5.2, 5.3 and 5.4;
(d) by Intrawest upon written notice to Parent if Acquisitionco does not
provide the Transfer Agent with sufficient funds to complete the
transactions contemplated by sections 3.1(b), (f), (h)and (i) of the
Plan of Arrangement as required pursuant to section 2.1(h);
(e) by Parent upon written notice to Intrawest if (i) the Board of
Directors shall have failed to recommend this Agreement or the
Arrangement, or (ii) if the Board of Directors or any committee
thereof shall have (A) withdrawn, qualified or otherwise modified in a
manner adverse to Parent and Acquisitionco, or proposed publicly to
withdraw or so qualify or otherwise modify, the approval or
recommendation of the Board of Directors or any committee thereof of
this Agreement or the Arrangement or (B) approved or recommended, or
proposed publicly to approve or recommend, any Acquisition Proposal;
(f) by Parent upon written notice to Intrawest if, following any
Acquisitionco Proposal that is made or publicly announced, the Board
of Directors or the Special Committee fails to publicly affirm its
approval or recommendation of the Arrangement within five business
days of any written request to do so from Parent;
(g) subject to compliance with section 6.3 neither Parent or Acquisitionco
is in material breach of its obligations under this Agreement, by
Parent upon written notice to Intrawest if Intrawest has breached any
of its representations, warranties, covenants or agreements contained
in this Agreement, which breach would give rise to the failure of a
condition set forth in section 7.3(a) or 7.3(b); and
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(h) subject to compliance with section 6.3 Intrawest is not in material
breach of its obligations under this Agreement, by Intrawest on
written notice to Parent, if Acquisitionco or Parent has breached any
of its representations, warranties, covenants or agreements contained
in this Agreement, which breach would give rise to the failure of a
condition set forth in section 7.2(a)or 7.2(b).
6.2 VOID UPON TERMINATION
If this Agreement is terminated, it will, except as provided in sections
4.2, 5.6, 5.7, 5.8, 5.9 and this section 6.2 and except for obligations of
confidentiality in sections 4.3, 4.5 and 5.4, become void and of no force and
effect and no party will have any liability or further obligation to the other
party hereunder, provided that neither the termination of this Agreement nor
anything contained in sections 5.6, 5.7 or 5.8 or this section 6.2 will relieve
any party from any liability for any wilful breach by it of this Agreement,
including its representations and warranties and its covenants and agreements
made herein.
6.3 NOTICE OF UNFULFILLED CONDITIONS
If either Intrawest, on the one hand, or Parent and Acquisitionco, on the
other hand, determines at any time prior to the Effective Date that it intends
to refuse to complete the transactions contemplated hereby because of any
unfulfilled or unperformed condition contained in this Agreement, such party
will so notify the other party forthwith upon making such determination in order
that the other party will have the right and opportunity to take such steps, at
its own expense, as may be necessary for the purpose of fulfilling or performing
such condition within a reasonable period of time, but in no event later than
the Termination Deadline. Neither Intrawest nor Parent and Acquisitionco may
exercise any termination right arising therefrom and no payments will be payable
as a result of such election pursuant to section 5.6, 5.7 or 5.9 unless
forthwith and in any event prior to the filing on the Effective Date of Articles
of Arrangement for the purpose of giving effect to the Arrangement, the party
intending to rely thereon has given a written notice to the other party
specifying in reasonable detail all breaches of covenants, representations and
warranties or other matters which the party giving such notice is asserting as
the basis for the nonfulfillment of the applicable condition precedent or the
exercise of the termination right, as the case may be. If any such notice is
given, provided that the other party is proceeding diligently to cure such
matter, if such matter is susceptible to being cured, the party giving such
notice may not terminate this Agreement as a result thereof until the later of
the Termination Deadline and the expiration of a period of 30 days from such
notice. If such notice has been given prior to the date of the Intrawest
Meeting, such meeting, unless the parties otherwise agree, will be postponed or
adjourned and will not be held until such time as is reasonably practicable
after the earlier of (i) the matter to which the notice relates being cured and
(ii) the expiry of such period. If such notice has been given prior to the
making of application for the Final Order, such application will be postponed
and will not be made until such time as is reasonably practicable after the
earlier of (i) the matter to which the notice relates being cured and (ii) the
expiry of such period. For greater certainty, in the event that such matter is
cured within the time period referred to herein, the Agreement may not be
terminated as a result thereof.
ARTICLE 7
CONDITIONS PRECEDENT
7.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the parties hereto to complete the
Arrangement are subject to the satisfaction of, or mutual waiver by Parent and
Intrawest on or before the Effective Date of, each of the following conditions,
which are for the mutual benefit of Parent and Acquisitionco, on the one hand,
and Intrawest, on the other hand, and which may be waived, in whole or in part,
by Parent (on its own behalf, and on behalf of Acquisitionco) and Intrawest at
any time:
(a) the Interim Order will have been obtained in form and substance
satisfactory to each of Parent and Intrawest, acting reasonably, and
such Interim Order will not have been set aside or modified in any
manner unacceptable to either Parent or Intrawest, acting reasonably,
on appeal or otherwise;
(b) the Arrangement Resolutions, in form and substance acceptable to
Parent and Intrawest, acting reasonably, will have been passed by the
Intrawest Securityholders and Common Shareholders at the Intrawest
Meeting in accordance with the Interim Order and the applicable
Legislation;
B-55
(c) the Final Order will have been obtained in form and substance
satisfactory to each of Parent and Intrawest, acting reasonably, and
will not have been set aside or modified in any manner unacceptable to
either Parent or Intrawest, acting reasonably, on appeal or otherwise;
(d) all Appropriate Regulatory Approvals will have been obtained or
concluded or, in the case of waiting or suspensory periods, expired or
been terminated;
(e) no Governmental Authority will have enacted, issued, promulgated,
enforced, made, entered, issued or applied any Law (whether temporary,
preliminary or permanent) that makes the Arrangement illegal or
otherwise directly or indirectly enjoins, restrains or otherwise
prohibits consummation of the Arrangement or the other transactions
contemplated herein;
(f) no person will have filed any notice of appeal of the Final Order, and
no person will have communicated in writing to Intrawest or Parent any
intention to appeal the Final Order which, in the reasonable opinion
of Parent or Intrawest (on the advice of legal counsel), would make it
inadvisable to proceed with the implementation of the Arrangement; and
(g) this Agreement will not have been terminated pursuant to Article 6.
7.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF INTRAWEST
The obligation of Intrawest to complete the Arrangement will be subject to
the satisfaction of, or waiver by Intrawest, on or before the Effective Date of
the following conditions, each of which is for the exclusive benefit of
Intrawest and which may be waived by Intrawest at any time, in whole or in part,
in its sole discretion and without prejudice to any other rights that Intrawest
may have:
(a) each of Parent and Acquisitionco will have complied in all material
respects with its obligations, covenants and agreements in this
Agreement to be performed and complied with on or before the Effective
Date;
(b) the representations and warranties of Parent and Acquisitionco in
section 3.3 (which for the purposes of this section 7.2 will be read
as though none of them contained any Material Adverse Effect
qualification or other materiality qualification) will be true and
correct in all material respects as of the Effective Date as if made
on and as of such date (except for such representations and warranties
which refer to or are made as of another specified date, in which case
such representations and warranties will have been true and correct in
all respects as of that date) except for breaches of representations
and warranties which individually or in the aggregate do not prevent
or materially delay the consummation of the transactions contemplated
herein or significantly impair the ability of Parent or Acquisitionco
to perform its obligations hereunder or under the Plan of Arrangement;
(c) Intrawest will have received a certificate of Parent and
Acquisitionco, signed by a senior officer of Parent and Acquisitionco
and dated the Effective Date, certifying that the conditions set out
in section 7.2(a) and (b) have been satisfied (provided that Parent
and Acquisitionco will not have any actual knowledge to the contrary),
which certificate will cease to have any force and effect after the
Effective Time; and
(d) Acquisitionco will have deposited with the Transfer Agent sufficient
funds to complete the transactions contemplated by sections 3.1(b),
(f), (h)and (i) of the Plan of Arrangement and the Transfer Agent will
have confirmed to Intrawest the receipt of such funds, which will be
held by the Transfer Agent in an escrow or restricted account
agreement among Acquisitionco, Acquisitionco's lenders, if applicable,
Intrawest and the Transfer Agent, reasonably satisfactory to all
parties thereto, pursuant to which, among other things, the Transfer
Agent will be irrevocably authorized and instructed to release the
funds to the Transfer Agent, in its capacity as depositary in respect
of the Arrangement upon the Arrangement becoming effective.
7.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT AND
ACQUISITIONCO
The obligation of Parent and Acquisitionco to complete the Arrangement will
be subject to the satisfaction of, or waiver by Parent, on or before the
Effective Date of the following conditions, each of which is for the exclusive
benefit of Parent and Acquisitionco and which may be waived by Parent (on its
own behalf and on behalf of
B-56
Acquisitionco) at any time, in whole or in part, in its sole discretion and
without prejudice to any other rights that Parent and Acquisitionco may have:
(a) Intrawest will have complied in all material respects with its
obligations, covenants and agreements in this Agreement to be
performed and complied with on or before the Effective Date;
(b) the representations and warranties of Intrawest in section 3.1 (which
for the purposes of this section 7.3 will be read as though none of
them contained any Material Adverse Effect qualification or other
materiality qualification) will be true and correct in all respects as
of the Effective Date as if made on and as of such date (except for
such representations and warranties which refer to or are made as of
another specified date, in which case such representations and
warranties will have been true and correct in all respects as of that
date) except for breaches of representations and warranties which
individually or in the aggregate reflect conditions or events which do
not have, and would not reasonably be expected to have, a Material
Adverse Effect on Intrawest;
(c) Parent will have received a certificate of Intrawest signed by a
Senior Officer of Intrawest and dated the Effective Date certifying
that the conditions set out in sections 7.3(a) and (b) have been
satisfied (provided that Intrawest will not have any actual knowledge
to the contrary) which certificate will cease to have any force and
effect after the Effective Time;
(d) there will not exist or have occurred (or been threatened) any change
(or any condition, event or development involving a prospective
change) which, individually or in the aggregate, has had, or would
reasonably be expected to have, a Material Adverse Effect on
Intrawest; and
(e) the Board of Directors shall not have (i) amended its affirmative
recommendation to the holders of Common Shares in a manner adverse to
Parent or Acquisitionco, or (ii) withdrawn its affirmative
recommendation to the holders of Common Shares to vote in favour of
the Arrangement Resolutions.
ARTICLE 8
GENERAL
8.1 NOTICES
All notices and other communications hereunder will be in writing and will
be delivered by courier to the particular party hereto at the following address
or sent by telecopy or facsimile transmission (provided that receipt of such
telecopy or transmission is confirmed or such telecopy or transmission is
recorded as having been transmitted successfully) at the following number or
delivered by electronic mail transmission at the following e-mail address or at
such other address, telecopier number or e-mail address which any party may,
from time to time, notify the other by notice given in accordance with this
section:
(a) if to Parent or Acquisitionco, to them at:
1345 Avenue of the Americas, 46th Floor
New York, New York, 10105
Attention: Randal A. Nardone
Facsimile No.: (212)798-6120
E-mail: rnardone@fortressinv.com
with a copy (which will not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Joseph A. Coco, Esq.
Facsimile No.: (917)777-3050
E-mail: jcoco@skadden.com
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- and -
Goodmans LLP
250 Yonge Street, Suite 2400
Toronto, Ontario M5B 2M6
Attention: Stephen Halperin/Robert Vaux
Facsimile No.: (416)979-1234
E-mail: shalperin@goodmans.ca/rvaux@goodmans.ca
(b) and if to Intrawest, to it at:
Intrawest Corporation
Suite 800 -- 200 Burrard Street
Vancouver, BC
V6C 3L6
Attention: Corporate Secretary
Facsimile No.: (604) 669-0605
E-mail: rmeacher@intrawest.com
with a copy (which will not constitute notice) to:
Intrawest Corporation
Suite 800 -- 200 Burrard Street
Vancouver, BC
V6C 3L6
Attention: General Counsel
Facsimile No.: (604) 683-1862
E-mail: sdennis@intrawest.com
Notice or other communication will be deemed to have been given when it is
delivered by courier or, in the case of notice or communication sent by telecopy
during regular business hours on a business day in the recipient's city, upon
the successful transmission thereof, with transmission confirmed or in the case
of notice or communication by e-mail transmission during regular business hours
on a business day in the recipient's city, upon successful transmission thereof
or at 9:00 a.m. on the next business day in the place of receipt if transmission
is received during regular business hours in the recipient's city and on the
next business day in the place of receipt, if successful transmission is
received outside regular business hours in the recipient's city).
8.2 FEES AND EXPENSES
Subject to sections 4.2 and 5.7, each party will be responsible for and
bear all of its own costs and expenses incurred at any time in connection with
entering into this Agreement and completing the Arrangement and the other
transactions contemplated herein, including legal fees, accounting fees,
financial advisory fees and all disbursements by advisors. Parent on the one
hand, and Intrawest, on the other hand, will each pay 50% of all requisite
filing fees and applicable Taxes in relation to any filing or application made
in respect of the Competition Act and in respect of the HSR Act.
8.3 NO ASSIGNMENT
Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any party hereto, in whole or in part (whether by
operation of law or otherwise). Notwithstanding the foregoing, Intrawest
acknowledges that Parent intends to transfer all of the outstanding common
shares of Acquisitionco to a Luxembourg company ("LUXCO") to be established by
Fortress and, upon such assignment, Parent will, and will be permitted to,
assign the Agreement to Luxco and, upon such assignment, Luxco will assume all
of Parent's rights
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and obligations under this Agreement and all references in this Agreement to
Parent shall be deemed to refer to Luxco unless the context otherwise requires.
8.4 BINDING EFFECT
This Agreement will be binding upon the parties hereto and will enure to
the benefit of and be binding upon their respective successors (including any
successor by reason of amalgamation or statutory arrangement).
8.5 PARENT AND ACQUISITIONCO
Parent, as the sole shareholder of Acquisitionco, covenants and agrees to
cause Acquisitionco to take all steps, to do and perform all such acts and
things, to execute and deliver all such agreements, documents and other
instruments, and to pay such amounts, as are necessary or desirable to comply
with all covenants and agreements of Acquisitionco contained herein and, upon
the Arrangement becoming effective, under the Plan of Arrangement, in accordance
with the terms and conditions hereof and thereof. The agreements, covenants,
representations and warranties and other obligations herein (including the
representations and warranties in section 3.3) which are expressed to be made by
Acquisitionco and Parent are joint and several agreements, covenants,
representations and warranties and obligations.
8.6 TIME OF ESSENCE
Except as otherwise expressly provided in this Agreement, time will be of
the essence of this Agreement, both in respect of the dates and periods
mentioned and in respect of any dates or periods which may be substituted for
them in accordance with the provisions of this Agreement or by agreement in
writing between the parties.
8.7 PUBLIC ANNOUNCEMENTS
Parent and Intrawest will consult with each other as to the general nature
of any news release, public announcement or public statement with respect to
this Agreement or the Arrangement and, subject to applicable Laws, will not
issue any news release, public announcement or public statement inconsistent
with the results of such consultation. Subject to applicable Laws, neither
Parent nor Intrawest will make any news release, public announcement or public
statement about this Agreement, the Arrangement and the transactions
contemplated herein which has not been previously approved by the other, except
(a) a material change report in respect of this Agreement and the transactions
contemplated herein to be filed by Intrawest as required pursuant to the
Legislation (it being understood that Intrawest will provide a draft of such
report to Parent and its legal counsel prior to filing and consider in good
faith any comments and revisions requested by Parent) and filing of a copy of
this Agreement as required pursuant to the Legislation and other applicable Laws
and (b) as may be required under the Legislation or other applicable Laws, or
the rules, regulations, policies or other requirements of, or listing agreement
with, either of the Exchanges, including any requirement to issue any news
release, as determined in the good faith judgment of the party and file such
release with a regulatory authority (in which case such party will first make a
reasonable effort to consult with the other party and obtain such approval and
to enable the other party to review and comment on such news release it proposes
to issue or file prior to the release thereof, other than with respect to any
confidential information contained in such disclosure), and, if such prior
consultation or review and approval is not possible, to provide a copy of such
release immediately following the making of such disclosure or filing, and
provided that Intrawest will have no obligation to consult with Parent prior to
any disclosure by Intrawest with respect to any Acquisition Proposal. Intrawest
and Parent will consult with one another regarding the initial news release with
respect to this Agreement and the transactions contemplated herein, which will
be in a form acceptable to both parties and will be issued and filed as soon as
practicable following execution of this Agreement.
8.8 GOVERNING LAW
This Agreement will be governed by and construed in accordance with the
laws of British Columbia and the federal laws of Canada applicable therein. Each
party hereto irrevocably submits and attorns to the non-exclusive jurisdiction
of the courts of British Columbia with respect to any matter arising under or in
relation to this Agreement and the Arrangement.
8.9 ENTIRE AGREEMENT
This Agreement (qualified by and subject to, to the extent applicable as
provided herein, the disclosures made in the Intrawest Disclosure Letter,
together with the Confidentiality Agreement, constitutes the entire agreement
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between the parties hereto pertaining to the subject matter hereof and cancels
and supersedes all other prior agreements, arrangements, understandings,
undertakings, negotiations and discussions of any nature, whether oral or
written, between the parties hereto with respect to the subject matter hereof.
There are no representations, warranties, covenants, terms, conditions,
undertakings or collateral agreements, expressed, implied or statutory, between
the parties hereto with respect to the subject matter hereof except as expressly
set forth in this Agreement and the Confidentiality Agreement. Without limiting
the generality of the foregoing, Acquisitionco and Parent acknowledge and agree
that no representation, warranty or other assurance has been given by Intrawest
in respect of any projection, forecast or other forward-looking information.
8.10 NO THIRD-PARTY BENEFICIARIES
Except for the rights of the Common Shareholders and holders of Intrawest
Options to receive the consideration for their Common Shares or Intrawest
Options following the Effective Time pursuant to the Plan of Arrangement, this
Agreement is not intended to confer any rights or remedies upon any other
person, provided however that section 4.10 is intended for the benefit of the
officers and employees of Intrawest that are or will be party to or participants
in the employment, retention or change of control agreements and arrangements
referred to in section 4.10 and section 4.11 is intended for the benefit of the
directors and officers of Intrawest or its subsidiaries and such sections will
be enforceable by each of such persons and his or her heirs, executors,
administrators and other legal representatives (collectively, the "INTRAWEST
BENEFICIARIES") and Intrawest and any successors to Intrawest (including any
Surviving Corporation) will hold the rights and benefits of sections 4.10 and
4.11 and this section 8.10 in trust for and on behalf of the Intrawest
Beneficiaries and Intrawest hereby accepts such trust and agrees to hold the
benefit of and enforce performances of such covenants on behalf of the Intrawest
Beneficiaries and such rights are in addition to, and not in substitution for,
any other rights that any Intrawest Beneficiary may have by contract or
otherwise, provided however that no approval of any beneficiary of such trust
will be required in connection with an amendment or variation of sections 4.10
and 4.11 or this section 8.10 prior to the Effective Date.
8.11 AMENDMENT
Subject to any requirements imposed by applicable Laws or by the Court,
this Agreement and the Plan of Arrangement may, at any time and from time to
time before or after the holding of the Intrawest Meeting but not later than the
Effective Time, be amended by written agreement of the parties hereto, and any
such amendment may, without limitation:
(a) change the time for performance of any of the obligations or acts of
the parties;
(b) waive any inaccuracies or modify any representation, term or provision
contained herein or in any document delivered pursuant hereto; or
(c) waive compliance with or modify any of the conditions precedent
referred to in Article 7 or any of the covenants herein contained or
waive or modify performance of any of the obligations of the parties
hereto;
provided, however, that no such amendment may reduce or materially affect the
consideration to be received by the Intrawest Securityholders under the
Arrangement without their approval at the Intrawest Meeting or, following the
Intrawest Meeting, without their approval given in the same manner as required
by applicable Legislation for the approval of the Arrangement as may be required
by the Court and provided further that Intrawest shall agree to any amendments
proposed by Parent to section 3.1 of the Plan of Arrangement (and shall take
such steps as are necessary to effect such amendments of the Plan of Arrangement
in accordance with the terms thereof), including the ordering of the steps set
out therein, but only to the extent that such amendments have consequences to
each of Intrawest, the Intrawest Securityholders, the DSU Holders and the RSU
holders which are equivalent to or better than those contemplated in the Plan of
Agreement.
8.12 WAIVER AND MODIFICATIONS
Intrawest, on the one hand, and Parent and Acquisitionco, on the other
hand, may (i) waive or consent to the modification of, in whole or in part, any
inaccuracy of any representation or warranty made to them hereunder or in any
document to be delivered pursuant hereto, (ii) extend the time for the
performance of any of the obligations or acts of the other party, (iii) waive or
consent to the modification of any of the covenants herein contained for their
respective benefit or waive or consent to the modification of any of the
obligations of the other hereto or (iv) waive the fulfillment of any condition
to its own obligations contained herein. Any waiver or consent to the
modifications
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of any of the provisions of this Agreement, to be effective, must be in writing
executed by the party or parties granting such waiver or consent and, unless
otherwise provided in such written waiver, will be limited to the specific
breach or condition waived. No delay or omission by any party to this Agreement
in exercising any right, power or remedy provided by Law or under this
Agreement, or failure of any party to assent to any of the rights provided by
Law or under this Agreement will affect that right, power or remedy or
constitute or operate as a waiver thereof. The single or partial exercise of any
right, power or remedy provided by Law or under this Agreement will not preclude
any further exercise of such right, power or remedy or the exercise of any
further exercise of such right, power or remedy or the exercise of any other
right, power or remedy. No waiver or partial waiver of any nature, in any one or
more instances, will be deemed or construed a continued waiver of any condition
or breach of any other term, representation or warranty in this Agreement.
8.13 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any Law or public policy, all other terms and
provisions of this Agreement will nevertheless remain in full force and effect
and will in no way be affected, impaired or invalidated so long as the economic
or legal substance of the transactions contemplated herein is not affected in
any manner which has a Material Adverse Effect on either Intrawest or Parent.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the Arrangement is
consummated as originally contemplated to the greatest extent possible.
8.14 MUTUAL INTEREST
Notwithstanding the fact that any part of this Agreement has been drafted
or prepared by or on behalf of one of the parties hereto, all parties confirm
that they and their respective counsel have reviewed and negotiated this
Agreement and that the parties hereto have adopted this Agreement as the joint
agreement and understanding of the parties, and the language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and the parties hereto waive the application of any Laws or
rule or construction providing that ambiguities in any agreement or other
document will be construed against the party drafting such agreement or other
document and agree that no rule of construction providing that a provision is to
be interpreted in favour of the person who contracted the obligation and against
the person who stipulated it will be applied against any party hereto.
8.15 FURTHER ASSURANCES
Subject to the conditions of this Agreement, the parties hereto will, from
time to time and at all times hereafter, at the request of the other party, do
all such further acts and things, including executing and delivering all such
further deeds, agreements, transfers, documents, assurances and instruments, as
will be reasonably necessary in order to fully perform and carry out the terms
and intent of this Agreement and, in the event the Arrangement becomes
effective, to document or evidence any of the transactions or events set out in
the Plan of Arrangement and, where appropriate, the parties hereto will
cooperate with each other in doing those acts and things.
8.16 INJUNCTIVE RELIEF
The Parties agree that irreparable harm would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached for which money damages would not be
an adequate remedy at law. It is accordingly agreed that the Parties will be
entitled to an injunction or injunctions and other equitable relief to prevent
breaches of this Agreement, any requirement for the securing or posting of any
bond in connection with the obtaining of any such injunctive or other equitable
relief hereby being waived.
8.17 NO PERSONAL LIABILITY
(a) No director, officer or employee of Parent or Acquisitionco will have
any personal liability to Intrawest under this Agreement or any other
document delivered in connection with this Agreement or the
Arrangement on behalf of Parent or Acquisitionco.
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(b) No director, officer or employee of Intrawest will have any personal
liability to Parent or Acquisitionco under this Agreement or any other
document delivered in connection with this Agreement or the
Arrangement on behalf of Intrawest.
8.18 COUNTERPARTS
This Agreement may be executed and delivered (including by facsimile
transmission) by the different parties hereto in separate counterparts, each of
which will when executed be deemed an original and all of which taken together
will constitute one and the same agreement. The exchange of copies of this
Agreement and of signature pages by facsimile or electronic transmission will
constitute effective execution and delivery of this Agreement as to the parties
and may be used in lieu of the original Agreement for all purposes. Signatures
of the authorized signatories of the parties transmitted by facsimile or
electronic transmission will be deemed to be their original signatures for all
purposes.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the date first set out above.
WINTERGAMES ACQUISITION LLC
Per: "Randal A. Nardone"
-------------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
3167113 NOVA SCOTIA COMPANY
Per: "Randal A. Nardone"
-------------------------------------
Name: Randal A. Nardone
Title: Chief Operating Officer
INTRAWEST CORPORATION
Per: "Joe S. Houssian"
-------------------------------------
Name: Joe S. Houssian
Title: Chief Executive Officer
Per: "Gordon H. MacDougall"
-------------------------------------
Name: Gordon H. MacDougall
Title: Lead Director
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APPENDIX C
PLAN OF ARRANGEMENT
PLAN OF ARRANGEMENT
UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Plan of Arrangement, unless there is something in the subject
matter or context inconsistent therewith, the following terms will have the
respective meanings set out below and grammatical variations of such terms will
have corresponding meanings:
"6.875% NOTES" means the 6.875% Senior Notes due October 15, 2009 issued by
Intrawest pursuant to an indenture dated as of October 6, 2004 between Intrawest
and JPMorgan Chase Bank and CIBC Mellon Trust Company;
"7.50% NOTES" means the 7.50% Senior Notes due October 15, 2013 issued by
Intrawest on each of October 9, 2003 and October 6, 2004 pursuant to an
indenture dated as of October 9, 2003 between Intrawest and JPMorgan Chase Bank
and CIBC Mellon Trust Company;
"ACQUISITIONCO" means Wintergames Acquisition ULC, an unlimited liability
company incorporated under the laws of the Province of Alberta;
"AFFILIATE" has the meaning of such term as used in the Securities Act
(British Columbia);
"ARRANGEMENT" means an arrangement under the provisions of section 192 of
the CBCA on the terms and conditions set forth in this Plan of Arrangement, as
amended, varied or supplemented from time to time in accordance with Section
8.11 of the Arrangement Agreement or Article 6 hereof or made at the direction
of the Court in the Final Order;
"ARRANGEMENT AGREEMENT" means the arrangement agreement dated August 10,
2006, between Wintergames Acquisition LLC (which has assigned its right, title
and interest to Parent), 3167113 Nova Scotia Company (which has assigned its
right, title and interest to Acquisitionco) and Intrawest as the same may be
amended from time to time;
"ARRANGEMENT RESOLUTIONS" means the resolutions to be considered and, if
thought fit, passed, by the Intrawest Securityholders at the Intrawest Meeting;
"BUSINESS DAY" means any day on which commercial banks are generally open
for business in Vancouver, British Columbia and New York, NY other than a
Saturday, a Sunday or a day observed as a holiday in Vancouver, British Columbia
under the laws of the Province of British Columbia or the federal laws of Canada
or in New York, NY under the laws of the State of New York;
"CBCA" means the Canada Business Corporations Act (Canada);
"CERTIFICATE OF ARRANGEMENT" means the certificate giving effect to the
Arrangement issued pursuant to subsection 192(7) of the CBCA;
"COMMON SHARE LETTER OF TRANSMITTAL" means the letter of transmittal to be
sent by Intrawest to Common Shareholders for use in connection with the
Arrangement;
"COMMON SHAREHOLDERS" at any time means the holders at the time of Common
Shares;
"COMMON SHARES" means common shares without par value in the capital of
Intrawest;
"COURT" means the Supreme Court of British Columbia;
"CRA" means the Canada Revenue Agency;
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"DEPOSITARY" means CIBC Mellon Trust Company or such other person as is
appointed by Acquisitionco, with the consent of Intrawest, not to be
unreasonably refused, to act as depositary for the purposes of the Arrangement;
"DEPOSITARY AGREEMENT" means an agreement entered into between Intrawest,
Acquisitionco and the Depositary in respect of the Arrangement and the deposit
and disbursement of the amounts required to be paid by Acquisitionco pursuant to
section 3.1(f) and by Intrawest pursuant to sections 3.1(b), 3.1(h) and 3.1(i);
"DIRECTOR" means the Director appointed pursuant to section 260 of the
CBCA;
"DISSENT RIGHTS" has the meaning ascribed thereto in section 4.1;
"DISSENTING COMMON SHAREHOLDER" means a Common Shareholder who properly
exercises Dissent Rights in respect of the Arrangement in strict compliance with
the Dissent Rights and who has not withdrawn their notice of dissent;
"DSUS" means:
(a) in the case of the Intrawest Director DSU Plan, all of the deferred
share units credited to the participants thereunder immediately prior
to the Effective Time;
(b) in the case of the Intrawest Key Executive DSU Plan, all of the
deferred share units credited to the participants thereunder
immediately prior to the Effective Time;
(c) in the case of the Intrawest Return on Capital Plan, the "Target
Allocation" in respect of each of the participants thereunder (being a
total of 337,950 notional Common Shares); and
(d) in the case of the Intrawest LTIP, all of the notional Common Shares
that would be allotted to each participant thereunder in the event of
the termination of the employment of each of them with Intrawest after
July 1, 2006 and before September 30, 2006 in circumstances which do
not entitle any of them to a "Reasonable Notice Period Allotment"
thereunder;
"DSU TRANSMITTAL LETTER" means the letter of transmittal to be provided by
Intrawest to holders of DSUs for use in connection with the Arrangement;
"EFFECTIVE DATE" means the date on which all conditions to the completion
of the Arrangement as set out in the Arrangement Agreement have been satisfied
or waived in accordance with the provisions of the Arrangement Agreement and all
documents agreed to be delivered under the Arrangement Agreement have been
delivered to the satisfaction of the parties thereto, acting reasonably, which
will be the date shown on the Certificate of Arrangement, giving effect to the
Arrangement;
"EFFECTIVE TIME" means the time on the Effective Date as specified in
writing by Intrawest in a notice delivered to the parties to the Arrangement
Agreement;
"FINAL ORDER" means the order of the Court approving the Arrangement under
section 192 of the CBCA, as such order may be affirmed, amended or modified by
the Court at any time prior to the Effective Date or, if appealed, unless such
appeal is withdrawn, abandoned or denied, as affirmed or amended on appeal;
"GOVERNMENTAL AUTHORITY" means any multinational, federal, provincial,
state, regional, municipal, local or other government or governmental body and
any division, agent, agency, commission, board or authority of any government,
governmental body, quasi-governmental or private body exercising any statutory,
regulatory, expropriation or taxing authority under the authority of any of the
foregoing and any domestic, foreign or international judicial, quasi-judicial or
administrative court, tribunal, commission, board, panel or arbitrator acting
under the authority of any of the foregoing;
"HOLDER", when used with reference to (a) any Common Shares, means the
holder of such shares shown from time to time in the securities register
maintained by or on behalf of Intrawest in respect of the Common Shares; (b) any
Intrawest Option, means the holder of such Intrawest Option shown from time to
time in the register maintained by or on behalf of Intrawest in respect of the
Intrawest Options; (c) any DSUs, means the holders of such DSUs shown from time
to time in the books and records maintained by or on behalf of Intrawest in
respect of the applicable Intrawest DSU Plan; and (d) any RSUs, means the
holders of such RSUs shown from time to time in the books and records maintained
by or on behalf of Intrawest in respect of the Performance RSU Agreement and/or
the Restricted Share Unit Agreement;
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"INTERIM ORDER" means the interim order of the Court to be issued following
the application therefor contemplated by the Arrangement Agreement and
containing declarations and directions with respect to the Arrangement and the
holding of the Intrawest Meeting, as such order may be amended, modified,
supplemented or varied by the Court;
"INTRAWEST DIRECTOR DSU PLAN" means the "Director Deferred Share Unit Plan"
of Intrawest, as amended from time to time;
"INTRAWEST DSU PLANS" means the Intrawest LTIP, the Intrawest Return on
Capital Plan, the Intrawest Key Executive DSU Plan and the Intrawest Director
DSU Plan;
"INTRAWEST EMPLOYEE SHARE PURCHASE PLAN" means the "Intrawest Employee
Share Purchase Plan", as amended from time to time;
"INTRAWEST KEY EXECUTIVE DSU PLAN" means the "Key Executive Deferred Share
Unit Plan -- 2001" of Intrawest, as amended from time to time;
"INTRAWEST LTIP" means the "Executive Long Term Incentive Plan" of
Intrawest, as amended from time to time;
"INTRAWEST" means Intrawest Corporation, a corporation continued under the
CBCA;
"INTRAWEST MEETING" means the special meeting of the Intrawest
Securityholders, including any adjournment or postponement thereof, to be called
pursuant to the Interim Order for the purpose of considering and, if thought
fit, approving the Arrangement Resolutions;
"INTRAWEST OPTIONS" at any time means options to acquire Common Shares
granted pursuant to the Intrawest Stock Option Plan which are, at such time,
outstanding and unexercised, whether or not vested;
"INTRAWEST OPTION LETTER OF TRANSMITTAL" means the letter of transmittal to
be sent by Intrawest to holders of Intrawest Options for use in connection with
the Arrangement;
"INTRAWEST RETURN ON CAPITAL PLAN" means the "Key Executive Long Term
Incentive Plan" of Intrawest, as amended from time to time;
"INTRAWEST SECURITYHOLDERS" at any time means the Common Shareholders and
holders of Intrawest Options at that time;
"INTRAWEST SHARE PURCHASE PLANS" means, collectively, the
Whistler/Blackcomb Employee Savings and Share Purchase Plan, the 2002 Funded
Senior Employee Share Purchase Plan and the Intrawest Employee Share Purchase
Plan;
"INTRAWEST STOCK OPTION PLAN" means the "Stock Option Plan" of Intrawest,
as amended from time to time;
"LIEN" means any mortgage, lien, hypothec, security interest, pledge or
other encumbrance, charge or adverse right or claim, defect of title,
restriction or other rights of third parties;
"NOTES" means, collectively, the 6.875% Notes and the 7.50% Notes;
"PARENT" means Wintergames S.a.r.l., a Luxembourg company;
"PERSON" includes an individual, sole proprietorship, corporation, body
corporate, incorporated or unincorporated association, syndicate, partnership,
limited partnership, limited liability company, unlimited liability company,
joint venture, joint stock company, trust, natural person in his or her capacity
as trustee, executor, administrator or other legal representative, Governmental
Authority or other entity, whether or not having legal status;
"PERFORMANCE RSU AGREEMENT" means the Performance Based Restricted Share
Unit agreement made as of the 24th day of April, 2006 between Intrawest and Alex
Wasilov;
"RESTRICTED SHARE UNIT AGREEMENT" means the Restricted Share Unit Agreement
made as of the 24th day of April, 2006 between Intrawest and Alex Wasilov;
"RSUS" means:
(a) in the case of the Performance RSU Agreement, the "Target Allocation"
thereunder (being 48,270 notional Common Shares); and
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(b) in the case of the Restricted Share Unit Agreement, all the 29,439
notional Common Shares granted thereunder;
"RSU TRANSMITTAL LETTER" means the letter of transmittal to be provided by
Intrawest to holders of RSUs for use in connection with this Arrangement; and
"TAX ACT" means the Income Tax Act (Canada).
1.2 CURRENCY
Except where otherwise specified, all references to sums of money in this
Plan of Arrangement are expressed in lawful money of the United States and "$"
refers to United States dollars.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Plan of Arrangement into Articles, sections,
paragraphs and subparagraphs and the insertion of headings are for convenience
of reference only and will not affect the construction or interpretation of this
Plan of Arrangement. The terms "HEREOF", "HEREIN", "HEREUNDER" and similar
expressions refer to this Plan of Arrangement and not to any particular Article,
section, subsection or other subdivision hereof. Unless the contrary intention
appears, references in this Plan of Arrangement to an Article, section,
subsection or other subdivision hereof by number or letter or both refer to that
Article, section, subsection or other subdivision, respectively, bearing that
designation in this Plan of Arrangement.
1.4 NUMBER AND GENDER
Unless the context otherwise requires, words importing the singular number
only will include the plural and vice versa; words importing the use of any
gender will include all genders; and words importing persons will include firms
and corporations and vice versa. Whenever used in this Plan of Arrangement, the
words "INCLUDING" or "INCLUDES" and similar terms of inclusion will not, unless
expressly modified by the words "only" or "solely", be construed as terms of
limitation, but rather will mean "including but not limited to" and "includes
but is not limited to", so that references to included matters will be regarded
as illustrative without being either characterizing or exhaustive.
1.5 DATE OF ANY ACTION
In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action will
be required to be taken on the next succeeding day which is a Business Day.
1.6 TIME
Time will be of the essence in every matter or action contemplated
hereunder.
1.7 STATUTORY REFERENCES
References to any statute, enactment or legislation or to any section or
provision thereof include a reference to any order, ordinance, regulation, rule
or by-law or proclamation made under or pursuant to that statute, enactment or
legislation and all amendments, modifications, consolidations, re-enactments or
replacements thereof or substitutions therefor from time to time.
ARTICLE 2
BINDING EFFECT
2.1 ARRANGEMENT AGREEMENT
This Plan of Arrangement is made pursuant to, is subject to the provisions
of and forms a part of the Arrangement Agreement.
2.2 BINDING EFFECT
This Plan of Arrangement will become effective on, and be binding at and
after, the Effective Time on (i) Intrawest, (ii) Parent and Acquisitionco, (iii)
all Common Shareholders and all beneficial owners of Common Shares, (iv) all
holders of Intrawest Options, (v) all holders of DSUs and (vi) all holders of
RSUs.
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2.3 CONCLUSIVE EVIDENCE
The issuance of the Certificate of Arrangement will be conclusive evidence
that the Arrangement has become effective and that each of the provisions of
Article 3 has become effective in the sequence and at the times set out therein.
ARTICLE 3
ARRANGEMENT
3.1 ARRANGEMENT
Commencing at the Effective Time, the following will occur and will be
deemed to occur in the following order and be effective at the times stated, in
each case without any further authorization, act or formality:
(a) at the Effective Time, Acquisitionco will be deemed to have entered
into an agreement with Intrawest pursuant to which Acquisitionco will
at such time transfer or cause to be transferred to Intrawest those
Notes, if any, then owned by it or any of its subsidiaries and
acquired pursuant to an offer made to all holders of each of the
6.875% Notes and the 7.50% Notes at substantially the same price as
Acquisitionco or any of its subsidiaries paid for such Notes (the
"Purchase Amount"), and the Notes that are thereby transferred to
Intrawest by Acquisitionco will be treated as having been repaid and
will be immediately cancelled at such time, in each case without
further act or formality. Intrawest may, in full and absolute
satisfaction of the Purchase Amount, pay the Purchase Amount through
the issuance of a demand promissory note;
(b) five minutes following the step contemplated in section 3.1(a), all of
the Intrawest Options granted and outstanding immediately prior to the
Effective Time will, without any further action on behalf of any
holder of Intrawest Options, be transferred by the holders thereof to
Intrawest without any act or formality on its or their part in
exchange for a cash amount payable to each holder thereof equal to the
excess, if any, of (i) the product of the number of Common Shares
underlying Intrawest Options held by such holder and $35.00 over (ii)
the aggregate exercise price payable under such Intrawest Options by
the holder to acquire the Common Shares underlying such Intrawest
Options (or if the exercise price of such Intrawest Option under the
terms of such Intrawest Option is expressed in Canadian currency, the
U.S. dollar equivalent of such exercise price determined by using the
U.S. Dollar/Canadian Dollar Daily Noon Rate as published by the Bank
of Canada on the Business Day prior to the Effective Date);
(c) at the time of the step contemplated in section 3.1(b), with respect
to each Intrawest Option, the holder thereof will cease to be the
holder of such Intrawest Option, will cease to have any rights as a
holder in respect of such Intrawest Option or under the Intrawest
Stock Option Plan, and such holder's name will be removed from the
registers of Intrawest Options with respect to such Intrawest Options;
(d) at the time of the step contemplated in section 3.1(b), the Intrawest
Stock Option Plan will be cancelled;
(e) five minutes following the step contemplated in section 3.1(b), the
Common Shares held by the Dissenting Common Shareholders in respect of
which such Dissenting Common Shareholders have exercised Dissent
Rights and have not withdrawn their notice of dissent will be deemed
to have been transferred to Acquisitionco and such holders will cease
to have any rights as shareholders other than the right to be paid the
fair value of their Common Shares as set out in section 4.1;
(f) at the time of the step contemplated in section 3.1(e), all Common
Shares outstanding immediately prior to the Effective Time (including
(i) Common Shares issued pursuant to the exercise of any Intrawest
Option duly exercised prior to the Effective Time in accordance with
the provisions of the Intrawest Stock Option Plan and the option
agreement evidencing any such Intrawest Option and (ii) Common Shares
outstanding pursuant to the Intrawest Share Purchase Plans) other than
Common Shares held by a Dissenting Common Shareholder who is entitled
to be paid the fair value of its Common Shares (as determined in
accordance with section 4.1), will be and be deemed to be transferred
by the Common Shareholders to Acquisitionco (free and clear of any
Liens) in exchange for $35.00 in cash per Common Share; and
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(g) at the time of the step contemplated in section 3.1(e) with respect to
each Common Share transferred pursuant to sections 3.1(e) or 3.1(f):
(i) the holder of such Common Share will cease to be the holder of
such Common Share;
(ii) the holder's name will be removed from the register of Common
Shares with respect to such Common Shares; and
(iii) legal and beneficial title to such Common Share will vest in
Acquisitionco, and Acquisitionco will be and be deemed to be the
transferee and legal and beneficial owner of all Common Shares
(free and clear of any Liens) and will be entered in the register
for the Common Shares as the sole holder thereof, and the former
holder and beneficial owner of such Common Share will cease to
have any rights as a shareholder in respect of such Common Share;
(h) five minutes following the step contemplated in section 3.1(e),
notwithstanding the terms of the Intrawest DSU Plans, all vested and
unvested DSUs under each Intrawest DSU Plan will be deemed to be
vested, and will without any further action by the holders of DSUs be
cancelled and terminated by Intrawest and each holder thereof will be
entitled to receive from Intrawest, in exchange therefor, $35.00 in
cash per DSU;
(i) at the time of the step contemplated in section 3.1(h),
notwithstanding the terms of the Performance RSU Agreement and the
Restricted Share Unit Agreement, all vested and unvested RSUs
thereunder will be deemed to be vested and will without any further
action by the holder of the RSUs be cancelled and terminated by
Intrawest and the holder thereof will be entitled to receive from
Intrawest, in exchange therefor, $35.00 in cash per RSU;
(j) at the time of the step contemplated in section 3.1(h), each of the
Intrawest DSU Plans will be cancelled;
(k) at the time of the step contemplated in section 3.1(i), each of the
Performance RSU Agreement and the Restricted Share Unit Agreement will
be cancelled; and
(l) at the time of the step contemplated in 3.1(f), each of the Intrawest
Share Purchase Plans will be cancelled.
provided that none of the foregoing will occur or will be deemed to occur unless
all of the foregoing occurs.
3.2 ADJUSTMENTS TO CONSIDERATION
The consideration payable by Acquisitionco with respect to each Common
Share transferred pursuant to section 3.1(f), each Intrawest Option terminated
and cancelled pursuant to section 3.1(b), each DSU terminated and cancelled
pursuant to section 3.1(h) and each RSU terminated and cancelled pursuant to
section 3.1(i), will be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of
securities convertible into Common Shares other than stock dividends paid in
lieu of ordinary course dividends), consolidation, reorganization,
recapitalization or other like change with respect to Common Shares effected in
accordance with the terms of the Arrangement Agreement occurring after the date
of the Arrangement Agreement and prior to the Effective Time.
ARTICLE 4
RIGHTS OF DISSENT
4.1 RIGHTS OF DISSENT
Common Shareholders may exercise rights of dissent with respect to Common
Shares held by them pursuant to and in the manner set forth in section 190 of
the CBCA as modified by this section 4.1, as the same may be modified by the
Interim Order or the Final Order ("DISSENT RIGHTS") in connection with the
Arrangement; provided that, notwithstanding subsection 190(5) of the CBCA, the
written objection to the Arrangement Resolutions referred to in subsection
190(5) of the CBCA must be received by Intrawest not later than 5:00 p.m.
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(Vancouver time) on the Business Day preceding the Intrawest Meeting. Common
Shareholders who duly exercise such rights of dissent and who:
(a) are ultimately determined to be entitled to be paid fair value for the
Common Shares in respect of which they have exercised Dissent Rights
will be deemed to have irrevocably transferred such Common Shares to
Acquisitionco pursuant to section 3.1(e); or
(b) are ultimately not entitled, for any reason, to be paid fair value for
the Common Shares in respect of which they have exercised Dissent
Rights will be deemed to have participated in the Arrangement on the
same basis as a Common Shareholder that has not exercised Dissent
Rights, as at and from the time specified in section 3.1(f), and will
receive, and be entitled to receive, only the consideration for each
Common Share on the basis set forth in section 3.1(f);
but in no case will Parent, Acquisitionco, Intrawest or any other Person be
required to recognize such holders as holders of Common Shares after the
completion of the step set forth in section 3.1(e), and each Dissenting Common
Shareholder will cease to be entitled to the rights of a Common Shareholder in
respect of the Common Shares in relation to which such Dissenting Common
Shareholder has exercised Dissent Rights and the register for the Common Shares
will be amended to reflect that such former holder is no longer the holder of
such Common Shares as and from the completion of the step set forth in section
3.1(e).
ARTICLE 5
CERTIFICATES AND PAYMENTS
5.1 PAYMENTS OF CONSIDERATION
(a) At or before the filing of the Articles of Arrangement, Acquisitionco
will deposit, and Parent will cause Acquisitionco to deposit, with the
Depositary in escrow for the benefit of the Common Shareholders, cash
in the aggregate amount equal to the payments contemplated by section
3.1(f) (calculated without reference to whether any Common
Shareholders have exercised or may exercise Dissent Rights). As soon
as practicable following the later of the Effective Date and the
surrender to the Depositary for cancellation of a certificate which
immediately prior to the Effective Time represented outstanding Common
Shares that were exchanged for cash, together with a duly completed
and executed Common Share Letter of Transmittal and such additional
documents and instruments as the Depositary may reasonably require,
the Common Shareholder of such surrendered certificate will be
entitled to receive in exchange therefor, and the Parent will cause
the Depositary to deliver to such Common Shareholder, the cash which
such Common Shareholder has the right to receive under the Arrangement
for such Common Shares, less any amounts withheld pursuant to section
5.4 and any certificate so surrendered will forthwith be cancelled.
The cash deposited with the Depositary will be held in an
interest-bearing account, and any interest earned on such funds will
be for the account of Acquisitionco.
(b) Until surrendered as contemplated by this section 5.1, each
certificate which immediately prior to the Effective Time represented
Common Shares will be deemed after the time described in section
3.1(f) to represent only the right to receive upon such surrender a
cash payment in lieu of such certificate as contemplated in this
section 5.1, less any amounts withheld pursuant to section 5.4. Any
such certificate formerly representing Common Shares not duly
surrendered on or before the sixth anniversary of the Effective Date
will cease to represent a claim by or interest of any former Common
Shareholder of any kind or nature against or in Intrawest, Parent or
Acquisitionco. On such date, all cash to which such former holder was
entitled will be deemed to have been surrendered to Acquisitionco.
(c) Subject to section 5.3, Acquisitionco will cause the Depositary, as
soon as practicable following the later of the Effective Date and the
date of deposit by any former holder of Common Shares with the
Depositary of the documentation required pursuant to section 5.1(a),
to:
(i) forward or cause to be forwarded by first class mail (postage
paid) to such former holder at the address specified in the Common
Share Letter of Transmittal; or
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(ii) if requested by such former holder in the Common Share Letter of
Transmittal, make available at the offices of the Depositary
specified in the Common Share Letter of Transmittal for pick-up by
such former holder; or
(iii) if the Common Share Letter of Transmittal neither specifies an
address nor contains a request as described in section 5.1(c)(ii),
forward or cause to be forwarded by first class mail (postage
paid) to such former holder at the address of such former holder
as shown on the securities register maintained by or on behalf of
Intrawest in respect of Common Shares immediately prior to the
Effective Time;
a cheque representing the net cash payment, if any, payable to such
former holder in accordance with the provisions hereof.
(d) No former holder of Common Shares that were acquired by Acquisitionco
pursuant to section 3.1(f) will be entitled to receive any
consideration with respect to such Common Shares, other than the net
cash payment, if any, which they are entitled to receive in accordance
with section 3.1(f) and, for greater certainty, no such former holder
will be entitled to receive any interest, dividends, premium or other
payment in connection therewith.
(e) Until such time as a former holder of Common Shares that were acquired
by Acquisitionco pursuant to section 3.1(f) complies with the
provisions of section 5.1(a), the cash payment, to which such former
holder is entitled will, subject to section 5.3, be paid to and held
by the Depositary to be held in trust for such former holder for
delivery to such former holder, without interest, upon deposit with
the Depositary of the documentation required pursuant to section
5.1(a).
(f) Subject to section 5.3, until surrendered as contemplated by this
section 5.1, each certificate which immediately prior to the Effective
Date represented Common Shares that were acquired by Acquisitionco
under the Arrangement will be deemed at all times after the time
described in section 3.1(f) to represent only the right to receive
upon such surrender the net cash payment from the Depositary which
such former holder is entitled to receive pursuant to section 3.1(f)
in accordance with the provisions of this Plan of Arrangement.
(g) At or before the Effective Time, Acquisitionco will deposit, on behalf
of Intrawest and Parent will cause Acquisitionco to deposit, on behalf
of Intrawest with the Depositary in escrow the amount of cash required
to satisfy the payment obligations of Intrawest pursuant to sections
3.1(b), 3.1(h) and 3.1(i) such amount to be held for purposes of such
obligations. The cash shall be held in a separate interest-bearing
account and any interest earned on such funds will be for the account
of Intrawest.
(h) As soon as practicable following the later of the Effective Date and
the delivery to the Depositary by or on behalf of a former holder of
any Intrawest Option, DSUs or RSUs, of a duly completed Intrawest
Option Letter of Transmittal, DSU Transmittal Letter or RSU
Transmittal Letter, as the case may be, and such additional documents
and instruments as the Depositary may reasonably require, the former
holder of such Intrawest Option, DSUs or RSUs, as reflected on the
registers maintained by or on behalf of Intrawest in respect of
Intrawest Options, or in the books and records of Intrawest maintained
in connection with the Intrawest DSU Plans or the Performance RSU
Agreement or the Restricted Share Unit Agreement, as the case may be,
will be entitled to receive the cash payment which such former holder
is entitled to receive pursuant to sections 3.1(b), 3.1(h) and 3.1(i),
as the case may be, less any amounts withheld pursuant to section 5.4.
(i) Subject to section 5.3, Acquisitionco will, on behalf of Intrawest,
cause the Depositary, as soon as practicable following the later of
the Effective Date and the date of deposit by any former holder of
any Intrawest Option, DSUs or RSUs, with the Depositary of the
documentation required pursuant to section 5.1(h), to:
(i) forward or cause to be forwarded by first class mail (postage
prepaid) to such former holder at the address specified in the
Intrawest Option Letter of Transmittal, DSU Transmittal Letter or
RSU Transmittal Letter, as the case may be; or
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(ii) if requested by such former holder in the Intrawest Option Letter
of Transmittal, DSU Transmittal Letter or RSU Transmittal Letter,
as the case may be, make available at the offices of the
Depositary specified therein for pick-up by such former holder; or
(iii) if the Intrawest Option Letter of Transmittal, DSU Transmittal
Letter or RSU Transmittal Letter, as the case may be, neither
specifies an address nor contains a request as described in
section 5.1(i)(ii), forward or cause to be forwarded by first
class mail (postage prepaid) to such former holder at the address
of such former holder as shown on the registers of Intrawest
Options, or in the books and records of Intrawest, in respect of
the DSUs and RSUs, as the case may be, immediately prior to the
Effective Time;
a cheque representing the net cash payment, if any, payable to such
former holder in accordance with the provisions hereof.
5.2 LOST CERTIFICATES
In the event any certificate which immediately prior to the Effective Time
represented any outstanding Common Shares that were acquired by Acquisitionco
pursuant to section 3.1(e) or 3.1(f) has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such certificate
to be lost, stolen or destroyed, the Depositary will pay in relation to for such
lost, stolen or destroyed certificate, the net cash payment which the former
holder of such Common Shares is entitled to receive pursuant to section 3.1(e)
or 3.1(f). When authorizing such payment in relation to any lost, stolen or
destroyed certificate, the Person to whom the payment is made will, as a
condition precedent to the delivery thereof, give a bond satisfactory to
Acquisitionco, Intrawest and the Depositary in such sum as Acquisitionco may
direct or otherwise indemnify Acquisitionco and Intrawest in a manner
satisfactory to Acquisitionco and Intrawest against any claim that may be made
against Acquisitionco and Intrawest with respect to the certificate alleged to
have been lost, stolen or destroyed.
5.3 EXTINCTION OF RIGHTS
If (i) any former holder of Common Shares that are acquired by
Acquisitionco pursuant to section 3.1(f) fails for any reason to deliver to the
Depositary for cancellation the certificates formerly representing Common Shares
(or an affidavit of loss and bond or other indemnity pursuant to section 5.2),
together with such other documents or instruments required for such former
holder to receive the cash payment which such former holder is entitled to
receive pursuant to section 3.1(f), or (ii) any former holder of any Intrawest
Option, DSU or RSU fails for any reason to deliver to the Depositary the
documents or instruments required for such former holder to receive the cash
payment which such former holder is entitled to receive pursuant to section
3.1(b), 3.1(h) or 3.1(i), as the case may be, in each case on or before the
sixth anniversary of the Effective Date, on such sixth anniversary such former
holder will be deemed to have donated and forfeited to Acquisitionco, in the
case of the Common Shares, and to Intrawest, in the case of the Intrawest
Options, DSUs and RSUs, any cash, net of any applicable withholding or other
taxes, held by the Depositary in trust for such former holder to which such
former holder is entitled. At and after the Effective Time, any certificate
formerly representing Common Shares will represent only the right to receive
from the Depositary the consideration provided in the Plan of Arrangement;
provided that such certificates will, on the sixth anniversary of the Effective
Date, cease to represent a claim of any nature whatsoever and will be deemed to
have been surrendered to Acquisitionco and will be cancelled. Neither Intrawest
nor Acquisitionco (or any of their respective successors) will be liable to any
Person in respect of any cash (including any cash previously held by the
Depositary in trust for any such former holder) which is delivered to any public
official pursuant to any applicable abandoned property, escheat or similar law.
5.4 WITHHOLDING RIGHTS
Intrawest, Parent, Acquisitionco and the Depositary will be entitled to
deduct and withhold from any consideration otherwise payable to any Intrawest
Securityholder or holder of DSUs or RSUs under this Plan of Arrangement
(including any payment to Dissenting Common Shareholders), such amounts as
Intrawest, Acquisitionco or the Depositary is required to deduct and withhold
with respect to such payment under the Tax Act, the United States Internal
Revenue Code of 1986 or any provision of provincial, state, local or foreign tax
law as counsel may advise is required to be so deducted and withheld by
Intrawest, Acquisitionco or the Depositary, as the case may be. To the extent
that any amounts are so deducted and withheld such withheld amounts will be
treated for all purposes hereof as having been paid to the Intrawest
Securityholder or holder of DSUs or RSUs, as the case
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may be, in respect of which such deduction and withholding was made on account
of the obligation to make payment to such Intrawest Securityholder or holder of
DSUs or RSUs hereunder, provided that such deducted or withheld amounts are
actually remitted to the appropriate Governmental Authority by or on behalf of
Intrawest, Acquisitionco or the Depositary, as the case may be.
ARTICLE 6
AMENDMENTS
6.1 AMENDMENTS TO PLAN OF ARRANGEMENT
(a) Intrawest reserves the right to amend, modify or supplement this Plan
of Arrangement at any time and from time to time prior to the
Effective Date, provided that each such amendment, modification or
supplement must be (i) set out in writing, (ii) approved by Parent and
Acquisitionco, (iii) filed with the Court and, if made following the
Intrawest Meeting, approved by the Court and (iv) communicated to
Intrawest Securityholders in the manner required by the Court (if so
required).
(b) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Intrawest at any time prior to the Intrawest
Meeting (provided that Parent and Acquisitionco have consented
thereto) with or without any other prior notice or communication, and
if so proposed and accepted by the Persons voting at the Intrawest
Meeting (other than as may be required under the Interim Order), will
become part of this Plan of Arrangement for all purposes.
(c) Any amendment, modification or supplement to this Plan of Arrangement
that is approved or directed by the Court following the Intrawest
Meeting will be effective only if (i) it is consented to by each of
Intrawest, Parent and Acquisitionco and (ii) if required by the Court
or applicable law, it is consented to by Intrawest Securityholders
voting in the manner directed by the Court.
(d) Any amendment, modification or supplement to this Plan of Arrangement
may be made following the Effective Date unilaterally by Acquisitionco
provided that it concerns a matter which, in the reasonable opinion of
Acquisitionco, is of an administrative nature required to better give
effect to the implementation of this Plan of Arrangement and is not
adverse to the financial or economic interests of any former Intrawest
Securityholder.
ARTICLE 7
FURTHER ASSURANCES
Notwithstanding that the transactions and events set out herein will occur
and be deemed to occur at the times and in the order set out in this Plan of
Arrangement, within the meaning of Section 192 of the CBCA and, in particular,
that the share exchanges, within the meaning of Subsection 192(1)(f) of the
CBCA, will become effective in accordance with Section 192(8) of the CBCA,
without any further act or formality, each of the parties to the Arrangement
Agreement will make, do and execute, or cause to be made, done and executed, all
such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them in order further to
document or evidence any of the transactions or events set out herein.
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APPENDIX D
FAIRNESS OPINION OF GOLDMAN, SACHS & CO.
(GOLDMAN SACHS LETTERHEAD)
PERSONAL AND CONFIDENTIAL
August 10, 2006
Board of Directors
Intrawest Corporation
200 Burrard Street, Suite 800
Vancouver BC V6C 3L6
Canada
Madame and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding common shares, without par value (the
"Shares"), of Intrawest Corporation (the "Company") of the $35.00 per Share in
cash to be received by such holders pursuant to the Arrangement Agreement, dated
as of August 10, 2006 (the "Agreement"), among Wintergames Acquisition LLC
("Parent"), an affiliate of Fortress Investment Group LLC ("Fortress"), 3167113
Nova Scotia Company, a wholly owned subsidiary of Parent, and the Company.
Goldman, Sachs & Co. and its affiliates, as part of their investment
banking business, are continually engaged in performing financial analyses with
respect to businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and other
transactions as well as for estate, corporate and other purposes. We have acted
as financial advisor to the Company in connection with, and have participated in
certain of the negotiations leading to, the transaction contemplated by the
Agreement (the "Transaction"). We expect to receive fees for our services in
connection with the Transaction, all of which are contingent upon consummation
of the Transaction, and the Company has agreed to reimburse our expenses and
indemnify us against certain liabilities arising out of our engagement. In
addition, we have provided, and are currently providing, certain investment
banking services to the Company, including having acted as co-manager in a high
yield financing (aggregate principal amount $400,000,000) by the Company in
October 2004. We have provided, and are currently providing, certain investment
banking services to Fortress and its affiliates and portfolio companies,
including having acted as joint lead manager in the initial public offering of
shares of common stock of Brookdale Senior Living Inc. ("Brookdale") in November
2005, joint lead manager in a secondary offering of ordinary shares of
Eurocastle Investment Limited in January 2006 and co-financial advisor to
Brookdale in its acquisition of American Retirement Corporation in July 2006. We
also may provide investment banking services to the Company and its affiliates
and Fortress and its affiliates and portfolio companies in the future. In
connection with the above-described investment banking services we have
received, and may receive, compensation.
Goldman, Sachs & Co. is a full service securities firm engaged, either
directly or through its affiliates, in securities trading, investment
management, financial planning and benefits counseling, risk management,
hedging, financing and brokerage activities for both companies and individuals.
In the ordinary course of these activities, Goldman, Sachs & Co. and its
affiliates may provide such services to the Company and its affiliates and
Fortress and its affiliates and portfolio companies, may actively trade the debt
and equity securities (or related derivative securities) of the Company and the
portfolio companies and affiliates of Fortress for their own account and for the
accounts of their customers and may at any time hold long and short positions of
such securities.
D-1
Board of Directors
Intrawest Corporation
August 10, 2006
Page Two
In connection with this opinion, we have reviewed, among other things, the
Agreement; annual reports to shareholders and Annual Reports on Form 40-F of the
Company for the five fiscal years ended June 30, 2005; certain interim reports
to shareholders of the Company; certain other communications from the Company to
its shareholders; and certain internal financial analyses and forecasts for the
Company prepared by its management. We also have held discussions with members
of the senior management of the Company regarding their assessment of the past
and current business operations, financial condition and future prospects of the
Company. In addition, we have reviewed the reported price and trading activity
for the Shares, compared certain financial and stock market information for the
Company with similar information for certain other companies the securities of
which are publicly traded, reviewed the financial terms of certain recent
business combinations in the lodging and leisure industry specifically and in
other industries generally and performed such other studies and analyses, and
considered such other factors, as we considered appropriate.
We have relied upon the accuracy and completeness of all of the financial,
accounting, legal, tax and other information discussed with or reviewed by us
and have assumed such accuracy and completeness for purposes of rendering this
opinion. In that regard, we have assumed with your consent that the internal
financial forecasts prepared by the management of the Company have been
reasonably prepared on a basis reflecting the best currently available estimates
and judgments of the Company. In addition, we have not made an independent
evaluation or appraisal of the assets and liabilities (including any contingent,
derivative or off-balance-sheet assets and liabilities) of the Company or any of
its subsidiaries and we have not been furnished with any such evaluation or
appraisal.
Our opinion does not address the underlying business decision of the
Company to engage in the Transaction. Our opinion is necessarily based on
economic, monetary, market and other conditions as in effect on, and the
information made available to us as of, the date hereof. Our advisory services
and the opinion expressed herein are provided for the information and assistance
of the Board of Directors of the Company in connection with its consideration of
the Transaction and such opinion does not constitute a recommendation as to how
any holder of Shares should vote with respect to the Transaction.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the $35.00 per Share in cash to be received by the holders of
Shares pursuant to the Agreement is fair from a financial point of view to such
holders.
Very truly yours,
GOLDMAN SACHS & CO.
---------------------------------
(GOLDMAN, SACHS & CO.)
D-2
SUPREME COURT APPENDIX E
OF BRITISH COLUMBIA
VANCOUVER REGISTRY INTERIM ORDER
SEP 19 2006 NO. S065971
VANCOUVER REGISTRY
(SEAL)
IN THE SUPREME COURT OF BRITISH COLUMBIA
IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT
R.S.C. 1985, c. C-44, as amended
AND
IN THE MATTER OF A PROPOSED ARRANGEMENT
INVOLVING INTRAWEST CORPORATION
ORDER
) )
) ) TUESDAY THE 19th
BEFORE ) MASTER CALDWELL ) DAY OF SEPTEMBER, 2006
) -------- )
) )
THE APPLICATION of the petitioner, INTRAWEST CORPORATION, coming on for
hearing this day at Vancouver, British Columbia; and UPON HEARING Warren B.
Milman, counsel for the Petitioner, and on being advised of the letter of
non-appearance delivered by the Director appointed under section 260 of the
Canada Business Corporations Act; and on reading the Petition and the Affidavit
of John E. Currie sworn September 18, 2006, and the Affidavit of Karen MacMillan
sworn September 18, 2006.
THIS COURT ORDERS THAT:
DEFINITIONS
1. As used in this Order, unless otherwise defined, terms beginning with
capital letters shall have the respective meanings set out in the Notice of
Special Meeting of Securityholders (the "Notice") and accompanying management
proxy circular of the Petitioner
E-1
(the "Circular"), attached as Exhibit B to the Currie Affidavit (including the
respective meanings set out in the Plan of Arrangement that is attached as
Appendix C to the Circular).
SPECIAL MEETING
2. The Petitioner (hereinafter referred to as the "Corporation") shall be at
liberty to convene a special meeting (the "Meeting") of the holders (the
"Shareholders") of common shares in the capital of the Corporation (the "Common
Shares") and the holders (the "Optionholders") of options (the "Options") to
purchase Common Shares (the Common Shares and the Options collectively referred
to as the "Securities", and the Optionholders and Shareholders collectively
referred to as the "Securityholders"), to be held at 10:00 a.m. (Vancouver time)
on Tuesday, October 17, 2006 in the Ballroom of The Fairmont Waterfront Hotel,
900 Canada Place Way, Vancouver, British Columbia, Canada, for the
Securityholders to consider and, if deemed advisable, to pass, with or without
variation, resolutions (the "Arrangement Resolutions") to approve an arrangement
(the "Arrangement") under section 192 of the Canada Business Corporations Act,
R.S.C. 1985, c. C-44, as amended (the "CBCA"), substantially as contemplated in
the Plan of Arrangement (the "Plan of Arrangement"), a draft of which Plan of
Arrangement is attached as Schedule A to the Petition.
3. The Meeting shall be called, held and conducted in accordance with the
CBCA, the Notice, the articles and by-laws of the Corporation and applicable
securities laws, subject to the terms of this Interim Order and any further
Order of this Court, and the rulings and directions of the Chair of the Meeting,
such rulings and directions not to be inconsistent with this Interim Order, and
to the extent of any inconsistency or discrepancy between this Interim Order and
the articles or by-laws of the Corporation, or the terms of any instrument
creating, governing or collateral to the Securities, this Interim Order shall
govern.
4. At the Meeting, the Corporation may also transact such other business as
is contemplated by the Circular or as otherwise may be properly brought before
the Meeting.
AMENDMENTS
5. The Corporation is authorized to make, in the manner contemplated by and
subject to the Arrangement Agreement, such amendments, revisions or supplements
to the Plan
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of Arrangement as it may determine without any additional notice to the
Securityholders. The Plan of Arrangement as so amended, revised or supplemented,
shall be the Plan of Arrangement to be submitted to the Meeting and the subject
of the Arrangement Resolutions.
ADJOURNMENTS AND POSTPONEMENTS
6. Notwithstanding the articles and by-laws of the Corporation, the Board by
resolution shall be entitled to adjourn or postpone the Meeting on one or more
occasions without the necessity of first convening the Meeting or first
obtaining any vote of the Securityholders respecting the adjournment or
postponement, subject to the terms of the Arrangement Agreement. Notice of any
such adjournment shall be given by press release, news release, newspaper
advertisement, or by notice sent to the Securityholders by one of the methods
specified in paragraph 8 of this Interim Order, as determined to be the most
appropriate method of communication by the Board.
RECORD DATE
7. The record date for determining Securityholders entitled to receive the:
(a) Notice and Circular, substantially in the form attached as Exhibit B
to the Currie Affidavit; and
(b) the applicable form of proxy, substantially in one of the forms
attached as Exhibit C to the Currie Affidavit.
(collectively, the "Meeting Materials")
shall be September 18, 2006 (the "Record Date").
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NOTICE OF SPECIAL MEETING
8. The Meeting Materials, with such amendments or additional communications
or documents as counsel for the Corporation may advise are necessary or
desirable, and as are not inconsistent with the terms of this Interim Order,
shall be sent to:
(a) the Securityholders determined as at the Record Date, at least
twenty-one (21) days prior to the date of the Meeting, excluding the
date of mailing and the date of the Meeting, by one or more of the
following methods:
(i) by prepaid ordinary mail, addressed to the registered
Shareholder at his, her or its address as it appears on the
security registers of the Corporation as at the Record Date;
(ii) in the case of beneficial owners of Common Shares that are
"non-objecting beneficial owners" (as defined in National
Instrument 54-101 - Communications with Beneficial Owners of
Securities of a Reporting Issuer ("NI 54-101")), by prepaid
ordinary mail, addressed to such non-objecting beneficial
owner at the address of such non-objecting beneficial owners
on the "non-objecting beneficial owner lists" (as defined in
NI 54-101) received by the Corporation in response to its
request for beneficial ownership information sent pursuant to
NI 54-101 in connection with the Meeting;
(iii) in the case of beneficial owners of Common Shares that are
"objecting beneficial owners" (as defined in NI 54-101) to
whom the Corporation does not mail directly, by providing, at
least three business days before the twenty-first day prior to
the Meeting, to each "proximate intermediary" (as defined in
NI 54-101) that responded to the request for beneficial
ownership information sent pursuant to NI 54-101 in connection
with the Meeting the number
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of sets of the Meeting Materials specified by the proximate
intermediary;
(iv) by prepaid ordinary mail, addressed to the holders of Options
at his or her address as it appears on the records of the
Corporation as at the Record Date;
(v) by e-mail or facsimile transmission to any Optionholder who is
an active employee or director of the Corporation, or by
posting the Meeting Materials with such amendments or
additional communications or documents to the Corporation's
intranet and directing such Optionholders to the Corporation's
intranet by e-mail; or
(vi) by delivery, in person or by recognized courier service, to
any Shareholder, Optionholder or holder of DSUs or RSUs at the
address of such Securityholder or holder referred to in
paragraph 8(a)(i), 8(a)(iv) or 8(b)as applicable;
(b) to any holder of "DSUs" or "RSUs" (as such terms are defined in the
Plan of Arrangement) by e-mail or facsimile transmission to such
holders or by posting the Meeting Materials, with such amendments or
additional communications or documents, to the Corporation's
intranet and directing such holders to the Corporation's intranet by
e-mail, with such distribution made to the addresses of such holders
(whether electronic or not) as they appear on the books and records
of the Corporation;
(c) the Director appointed under section 260 of the CBCA (the
"Director") by prepaid ordinary mail, by facsimile, by courier or by
delivery in person to the Director;
(d) the directors and auditors of the Corporation by mailing the Meeting
Materials by prepaid ordinary mail, or by e-mail or facsimile
transmission, to such persons at least twenty-one (21) days prior to
the date of the
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Meeting, excluding the date of mailing or transmission and the date
of the Meeting;
and that substantial compliance with this paragraph shall constitute good and
sufficient notice of the Meeting.
9. The accidental failure or omission to give notice of the Meeting to, or
the non-receipt of such notice by, one or more of the persons specified in the
preceding paragraph shall not constitute a breach of this Order or a defect in
the calling of the Meeting and shall not invalidate any resolution passed or
proceedings taken at the Meeting, but if any such accidental failure or omission
is brought to the attention of the Corporation, then it shall use reasonable
best efforts to rectify it by the method and in the time most reasonably
practicable in the circumstances.
10. The Corporation is authorized to make, in the manner contemplated by and
subject to the Arrangement Agreement, such amendments, revisions or supplements
(the "Additional Information") to the Meeting Materials or any other
communications determined by the Corporation to be necessary or desirable as the
Corporation may determine, and the Corporation shall distribute such Additional
Information by such method and in the time most reasonably practicable in the
circumstances.
PERMITTED ATTENDEES
11. The only persons entitled to attend the Meeting shall be:
(a) the Securityholders as of the Record Date, or their respective
proxyholders or representatives;
(b) the Corporation's directors, officers, auditors and advisors;
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(c) representatives of Wintergames Acquisition ULC, Wintergames S.a.r.l.
and Fortress Investment Group LLC, and any of their subsidiaries or
affiliates or advisors;
(d) the Director; and
(e) other persons with the prior permission of the Chair of the Meeting;
and that the only persons entitled to vote at the Meeting in respect of the
Arrangement Resolutions shall be the Securityholders as at the close of business
on the Record Date, or their respective proxyholders or representatives.
SOLICITATION OF PROXIES
12. The Corporation is authorized to use the forms of proxy for Shareholders
and Optionholders, respectively, in substantially the same form as is attached
as Exhibit C to the Currie Affidavit, and the Corporation is authorized, at its
expense, to solicit proxies directly and through its officers, directors and
employees, and through such agents or representatives as it may retain for that
purpose and by mail, telephone or such other form of personal or electronic
communication as it may determine.
13. The procedures for the use of proxies at the Meeting shall be as set out
in the Circular.
14. The Corporation may, in its discretion with the consent of Acquisitionco,
generally waive the time limits for the deposit of proxies by Securityholders,
if the Corporation deems it advisable to do so, such waiver to be endorsed by
the initials of the Chair of the Meeting on any proxy to which such waiver
relates.
QUORUM AND VOTING
15. The quorum at the Meeting shall be two persons present in person, each
being a Shareholder entitled to vote thereat or a duly appointed proxyholder for
or representative of such Shareholder together holding or representing in the
aggregate not less than 5% of the outstanding Common Shares entitled to be voted
at the Meeting.
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16. In respect of the vote on the Arrangement Resolutions:
(a) the Shareholders be entitled to vote on the Arrangement Resolutions
at the Meeting either in person or by proxy, and be entitled to one
vote for each Common Share held; and
(b) the Optionholders be permitted to vote on the Arrangement
Resolutions at the Meeting either in person or by proxy, and be
entitled to one vote for each Common Share which such Optionholder
is entitled to receive on a valid exercise of the Options held by
such Optionholder.
17. The vote required to pass the Arrangement Resolutions at the Meeting shall
be:
(a) the affirmative vote of not less than two-thirds of the votes cast
by the Securityholders in respect of the Arrangement Resolutions,
voting together, in person or by proxy at such Meeting, provided
that as part of such approval the Arrangement Resolutions are
approved by the affirmative vote of not less than two-thirds of the
votes cast by Shareholders, in person or by proxy, at such Meeting;
and
(b) the affirmative vote of at least simple majority of the votes cast
by Shareholders, after excluding the votes attached to Common Shares
that are beneficially owned or over which control or direction is
exercised by Mr. Joe S. Houssian, the Chairman and Chief Executive
Officer of the Corporation.
18. In respect of matters properly brought before the Meeting pertaining to
items of business affecting the Corporation (other than the approval of the
Arrangement Resolutions) each Shareholder be entitled to one vote for each
Common Share held.
DISSENT RIGHTS
19. Each Registered Shareholder is granted the following right to dissent (the
"Dissent Rights") in respect of the Arrangement Resolutions provided such
Registered
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Shareholder otherwise complies strictly with the requirements of section 190 of
the CBCA and Article 4 of the Plan of Arrangement:
(a) a Registered Shareholder intending to exercise the Dissent Rights
must give a written objection to the Arrangement Resolutions to the
Corporation at Suite 800, 200 Burrard Street, Vancouver, British
Columbia, Canada V6C 3L6, Attention: General Counsel, to be received
by the Corporation no later than 5:00 pm (Vancouver time) on the
Business Day preceding the Meeting and must otherwise comply with
this paragraph 19, notwithstanding subsection 190(5) of the CBCA;
(b) any Registered Shareholder (a "Dissenting Shareholder") who
exercises Dissent Rights in respect of the Arrangement Resolutions
in strict compliance with section 190 of the CBCA (as modified by
this Order and the terms of the Plan of Arrangement) (the "Dissent
Procedures") will be entitled, in the event that the Arrangement
becomes effective, to be paid by Acquisitionco the fair value of the
Common Shares held by such Dissenting Shareholder in respect of
which the Dissenting Shareholder has exercised Dissent Rights
determined as at the point in time immediately before the passing of
the Arrangement Resolutions;
(c) a Dissenting Shareholder shall, on the "Effective Date" (as defined
in the Plan of Arrangement) and notwithstanding any provision of
section 190 of the CBCA, be deemed to have transferred the Common
Shares in respect of which the Dissenting Shareholder has exercised
Dissent Rights to Acquisitionco pursuant to the Plan of Arrangement
and shall cease to be entitled to the rights as Shareholder in
respect of such Common Shares other than the right to be paid the
fair value of such Common Shares in accordance with the Dissent
Procedures and in no case will Parent, Acquisitionco, the
Corporation or any other person be required to recognize the
Dissenting Shareholder as a holder of Common Shares after the
completion of such transfer;
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(d) if a Registered Shareholder who exercises Dissent Rights is
ultimately not entitled, for any reason, to be paid fair value for
the Common Shares in respect of which they have exercised Dissent
Rights, the Registered Shareholder will be deemed pursuant to the
Plan of Arrangement to have participated in the Arrangement on the
same basis as a Registered Shareholder that has not exercised
Dissent Rights; and
(e) Registered Shareholders shall be the only persons with a right to
dissent in respect of the Arrangement Resolutions.
APPLICATION FOR FINAL ORDER
20. The Corporation be at liberty to give notice of these proceedings,
including the application for the final approval of the Arrangement (the "Final
Application"):
(a) to the Securityholders by including a notice, substantially in the
form of Appendix F to the Circular which is attached as Exhibit B to
the Currie Affidavit, as part of the Meeting Materials, mailed in
the manner contemplated in paragraph 8, and that service of such
notice shall be deemed to be effected on the 5th day following the
day on which the Meeting Materials are so mailed, and
(b) in the case of the Director, by delivering a copy of the Petition,
the affidavit(s) filed in support, a copy of any motions filed and a
copy of any orders made, to the Director in accordance with the
provisions of Policy Statement 15.1 - Policy Concerning Arrangements
Under Section 192 of the CBCA, dated November 7, 2003,
and except as provided herein, the Corporation is not required to serve the
Petition, any affidavits filed in support of the Petition, any motions filed by
the Corporation in this proceeding (including affidavits filed in support of
such motions), or any orders made on application by the Corporation, including
this Order, on any person, except such persons who have filed an Appearance
pursuant to paragraph 23 below.
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21. The Corporation be at liberty to give notice of this application to
persons outside the jurisdiction of this Honourable Court in the manner
specified in the preceding paragraph.
22. The Final Application be set down for hearing before the presiding Judge
in Chambers at the Courthouse at 800 Smithe Street, Vancouver, British Columbia,
at 9:45 a.m. on October 24, 2006, or such other date following the date of the
Meeting as the Corporation may determine, and that, upon approval of the
Arrangement Resolutions at the Meeting in the manner set forth in this Order and
the Appropriate Regulatory Approvals having been obtained or concluded or, in
the case of waiting or suspensory periods, expired or been terminated, the
Corporation be at liberty to proceed with the Final Application on such date.
23. Any Security holder or any other interested person has the right to appear
(either in person or by counsel) and make submissions at the Final Application,
provided that such Securityholder or person shall file an Appearance, in the
form prescribed by the Rules of Court of the Supreme Court of British Columbia,
with this Court, and deliver a copy of the filed appearance, together with a
copy of all material on which such Securityholder or person intends to rely at
the Final Application, including an outline of such Securityholder's or person's
proposed submissions, to the solicitors for the Corporation at the address for
delivery set out in the Notice of Application by 4:00 p.m. on October 23, 2006
(or, in the event the Corporation does not proceed with the Final Application on
October 24, 2006, by 4:00 p.m. on the date preceding the date on which the Final
Application is set to be heard), subject to other direction of the Court.
24. Wintergames Acquisition ULC, Wintergames S.a.r.l. and Fortress Investment
Group LLC have the right to appear and make submissions at the Final
Application, subject to the provisions of the Arrangement Agreement.
25. The Director has, in accordance with the provisions of the CBCA, the right
to appear (either in person or by counsel) and make submissions at the Final
Application.
26. If the Final Application is adjourned, only those persons who have filed
and delivered an Appearance in accordance with the preceding paragraph need be
served with notice of the adjourned date.
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27. Any materials to be filed by the Corporation in support of the Final
Application may be filed up to one day prior to the hearing of the Final
Application without further order of this Court.
VARIANCE
28. The Corporation shall be entitled, at any time, to apply to vary this
Interim Order.
29. Rules 44 and 51A will not apply to any further applications in respect of
this proceeding, including the application for the Final Order and any
application to vary this Interim Order. Subject to further court order.
BY THE COURT
/s/ Caldwell, M.
DEPUTY DISTRICT REGISTRAR
APPROVED AS TO FORM:
--------------------------------------
Counsel for the Petitioner
SUPREME COURT
OF BRITISH COLUMBIA
VANCOUVER REGISTRY
(SEAL)
ENTERED
SEP 19 2006
VANCOUVER REGISTRY
VOL S1409 FOL 101
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APPENDIX F
NOTICE OF APPLICATION FOR FINAL ORDER
NO.
VANCOUVER REGISTRY
IN THE SUPREME COURT OF BRITISH COLUMBIA
IN THE MATTER OF THE CANADA BUSINESS CORPORATIONS ACT
R.S.C. 1985, c. C-44, as amended
AND
IN THE MATTER OF A PROPOSED ARRANGEMENT INVOLVING INTRAWEST CORPORATION
NOTICE OF APPLICATION
NOTICE IS HEREBY GIVEN that a petition (the "Petition") has been filed with
the Supreme Court of British Columbia, (the "Court") by Intrawest Corporation
(the "Corporation") with respect to a proposed arrangement (the "Arrangement")
under section 192 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44,
as amended (the "CBCA"), involving the Corporation, its Shareholders and
Optionholders (the Shareholders and the Optionholders are collectively referred
to as "the Securityholders") and Wintergames Acquisition ULC, which Arrangement
is described in greater detail in the Management Information Circular (the
"Circular") of the Corporation dated September 20, 2006 accompanying this Notice
of Application.
AND NOTICE IS FURTHER GIVEN that the Court, by Interim Order dated
September 19, 2006, has given directions as to the calling and holding of a
special meeting of the Securityholders (the "Meeting") for the purpose of
considering and voting upon the Arrangement, and, in particular, has directed
that Shareholders shall have the right to dissent under the provisions of
section 190 of the CBCA in compliance with the terms of the Interim Order.
NOTICE IS FURTHER GIVEN that if the Arrangement is approved at the Meeting
and the "Appropriate Regulatory Approvals" (as defined in the Circular) have
been obtained or concluded or, in the case of waiting or suspensory periods,
expired or been terminated, the Corporation intends to apply for a Final Order
approving the Arrangement pursuant to the provisions of section 192 of the CBCA
(the "Final Application"), and declaring the Arrangement fair and reasonable to
the persons affected, which Final Application shall be made before the presiding
Judge in Chambers at the Courthouse, 800 Smithe Street, Vancouver, British
Columbia, on October 24, 2006 at 9:45 a.m. or so soon thereafter as counsel may
be heard.
IF YOU WISH TO BE HEARD AT THE HEARING OF THE FINAL APPLICATION OR WISH TO
BE NOTIFIED OF ANY ADJOURNMENT THEREOF, YOU MUST GIVE NOTICE OF YOUR INTENTION
by filing an Appearance, in the form prescribed by the Rules of Court of the
Supreme Court of British Columbia, with this Court and delivering a copy of the
filed appearance, together with a copy of all material on which you intend to
rely at the Final Application, including an outline of the proposed submissions,
to the solicitors for the Corporation at their address for delivery set out
below, on or before 4:00 p.m. (Vancouver time) on October 23, 2006 subject to
other direction of the Court. You or your solicitor may obtain a form of
Appearance at the Court Registry, 800 Smithe Street, Vancouver, British
Columbia, Canada, V6Z 2E1.
AND NOTICE IS FURTHER GIVEN that, at the hearing of the Final Application
and subject to the foregoing, Securityholders and any other interested persons
will be entitled to make representations as to, and the Court will be requested
to consider, the fairness of the Arrangement. If you do not attend, either in
person or by counsel, at that time, the Court may approve or refuse to approve
the Arrangement as presented, or may approve it subject to such terms and
conditions as the Court may deem fit, without any further notice.
A copy of the Petition and other documents filed with the Court on behalf
of the Corporation can be obtained on written request to the solicitors for the
Corporation to the attention of Warren B. Milman at:
McCarthy Tetrault LLP
1300-777 Dunsmuir Street
Vancouver, British Columbia
V7Y 1K2
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APPENDIX G
SECTION 190 OF THE CANADA BUSINESS CORPORATIONS ACT
190.(1) RIGHT TO DISSENT -- Subject to sections 191 and 241, a holder of
shares of any class of a corporation may dissent if the corporation is subject
to an order under paragraph 192(4)(d) that affects the holder or if the
corporation resolves to
(a) amend its articles under section 173 or 174 to add, change or
remove any provisions restricting or constraining the issue,
transfer or ownership of shares of that class;
(b) amend its articles under section 173 to add, change or remove
any restriction on the business or businesses that the
corporation may carry on;
(c) amalgamate otherwise than under section 184;
(d) be continued under section 188;
(e) sell, lease or exchange all or substantially all its property
under subsection 189(3); or
(f) carry out a going-private transaction or a squeeze-out
transaction.
(2) FURTHER RIGHT -- A holder of shares of any class or series of shares
entitled to vote under section 176 may dissent if the corporation
resolves to amend its articles in a manner described in that section.
(2.1) IF ONE CLASS OF SHARES -- The right to dissent described in
subsection (2) applies even if there is only one class of shares.
(3) PAYMENT FOR SHARES -- In addition to any other right the shareholder
may have, but subject to subsection (26), a shareholder who complies
with this section is entitled, when the action approved by the
resolution from which the shareholder dissents or an order made under
subsection 192(4) becomes effective, to be paid by the corporation the
fair value of the shares in respect of which the shareholder dissents,
determined as of the close of business on the day before the
resolution was adopted or the order was made.
(4) NO PARTIAL DISSENT -- A dissenting shareholder may only claim under
this section with respect to all the shares of a class held on behalf
of any one beneficial owner and registered in the name of the
dissenting shareholder.
(5) OBJECTION -- A dissenting shareholder shall send to the corporation,
at or before any meeting of shareholders at which a resolution
referred to in subsection (1) or (2) is to be voted on, a written
objection to the resolution, unless the corporation did not give
notice to the shareholder of the purpose of the meeting and of their
right to dissent.
(6) NOTICE OF RESOLUTION -- The corporation shall, within ten days after
the shareholders adopt the resolution, send to each shareholder who
has filed the objection referred to in subsection (5) notice that the
resolution has been adopted, but such notice is not required to be
sent to any shareholder who voted for the resolution or who has
withdrawn their objection.
(7) DEMAND FOR PAYMENT -- A dissenting shareholder shall, within twenty
days after receiving a notice under subsection (6) or, if the
shareholder does not receive such notice, within twenty days after
learning that the resolution has been adopted, send to the corporation
a written notice containing
(a) the shareholder's name and address;
(b) the number and class of shares in respect of which the
shareholder dissents; and
(c) a demand for payment of the fair value of such shares.
(8) SHARE CERTIFICATE -- A dissenting shareholder shall, within thirty
days after sending a notice under subsection (7), send the
certificates representing the shares in respect of which the
shareholder dissents to the corporation or its transfer agent.
(9) FORFEITURE -- A dissenting shareholder who fails to comply with
subsection (8) has no right to make a claim under this section.
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(10) ENDORSING CERTIFICATE -- A corporation or its transfer agent shall
endorse on any share certificate received under subsection (8) a
notice that the holder is a dissenting shareholder under this section
and shall forthwith return the share certificates to the dissenting
shareholder.
(11) SUSPENSION OF RIGHTS -- On sending a notice under subsection (7), a
dissenting shareholder ceases to have any rights as a shareholder
other than to be paid the fair value of their shares as determined
under this section except where
(a) the shareholder withdraws that notice before the corporation
makes an offer under subsection (12),
(b) the corporation fails to make an offer in accordance with
subsection (12) and the shareholder withdraws the notice, or
(c) the directors revoke a resolution to amend the articles under
subsection 173(2) or 174(5), terminate an amalgamation agreement
under subsection 183(6) or an application for continuance under
subsection 188(6), or abandon a sale, lease or exchange under
subsection 189(9), in which case the shareholder's rights are
reinstated as of the date the notice was sent.
(12) OFFER TO PAY -- A corporation shall, not later than seven days after
the later of the day on which the action approved by the resolution is
effective or the day the corporation received the notice referred to
in subsection (7), send to each dissenting shareholder who has sent
such notice
(a) a written offer to pay for their shares in an amount considered
by the directors of the corporation to be the fair value,
accompanied by a statement showing how the fair value was
determined; or
(b) if subsection (26) applies, a notification that it is unable
lawfully to pay dissenting shareholders for their shares.
(13) SAME TERMS -- Every offer made under subsection (12) for shares of the
same class or series shall be on the same terms.
(14) PAYMENT -- Subject to subsection (26), a corporation shall pay for the
shares of a dissenting shareholder within ten days after an offer made
under subsection (12) has been accepted, but any such offer lapses if
the corporation does not receive an acceptance thereof within thirty
days after the offer has been made.
(15) CORPORATION MAY APPLY TO COURT -- Where a corporation fails to make an
offer under subsection (12), or if a dissenting shareholder fails to
accept an offer, the corporation may, within fifty days after the
action approved by the resolution is effective or within such further
period as a court may allow, apply to a court to fix a fair value for
the shares of any dissenting shareholder.
(16) SHAREHOLDER APPLICATION TO COURT -- If a corporation fails to apply to
a court under subsection (15), a dissenting shareholder may apply to a
court for the same purpose within a further period of twenty days or
within such further period as a court may allow.
(17) VENUE -- An application under subsection (15) or (16) shall be made to
a court having jurisdiction in the place where the corporation has its
registered office or in the province where the dissenting shareholder
resides if the corporation carries on business in that province.
(18) NO SECURITY FOR COSTS -- A dissenting shareholder is not required to
give security for costs in an application made under subsection (15)
or (16).
(19) PARTIES -- On an application to a court under subsection (15) or (16),
(a) all dissenting shareholders whose shares have not been purchased
by the corporation shall be joined as parties and are bound by
the decision of the court; and
(b) the corporation shall notify each affected dissenting
shareholder of the date, place and consequences of the
application and of their right to appear and be heard in person
or by counsel.
(20) POWERS OF COURT -- On an application to a court under subsection (15)
or (16), the court may determine whether any other person is a
dissenting shareholder who should be joined as a party, and the court
shall then fix a fair value for the shares of all dissenting
shareholders.
(21) APPRAISERS -- A court may in its discretion appoint one or more
appraisers to assist the court to fix a fair value for the shares of
the dissenting shareholders.
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(22) FINAL ORDER -- The final order of a court shall be rendered against
the corporation in favour of each dissenting shareholder and for the
amount of his shares as fixed by the court.
(23) INTEREST -- A court may in its discretion allow a reasonable rate of
interest on the amount payable to each dissenting shareholder from the
date the action approved by the resolution is effective until the date
of payment.
(24) NOTICE THAT SUBSECTION (26) APPLIES -- If subsection (26) applies, the
corporation shall, within ten days after the pronouncement of an order
under subsection (22), notify each dissenting shareholder that it is
unable lawfully to pay dissenting shareholders for their shares.
(25) EFFECT WHERE SUBSECTION (26) APPLIES -- If subsection (26) applies, a
dissenting shareholder, by written notice delivered to the corporation
within thirty days after receiving a notice under subsection (24), may
(a) withdraw their notice of dissent, in which case the corporation is
deemed to consent to the withdrawal and the shareholder is reinstated
to their full rights as a shareholder, or (b) retain a status as a
claimant against the corporation, to be paid as soon as the
corporation is lawfully able to do so or, in a liquidation, to be
ranked subordinate to the rights of creditors of the corporation but
in priority to its shareholders.
(26) LIMITATION -- A corporation shall not make a payment to a dissenting
shareholder under this section if there are reasonable grounds for
believing that (a) the corporation is or would after the payment be
unable to pay its liabilities as they become due; or (b) the
realizable value of the corporation's assets would thereby be less
than the aggregate of its liabilities.
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YOU ARE STRONGLY URGED TO READ THE ACCOMPANYING MANAGEMENT
INFORMATION CIRCULAR BEFORE COMPLETING THIS LETTER OF TRANSMITTAL
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL. THE DEPOSITARY (SEE LAST
PAGE FOR ADDRESSES AND TELEPHONE NUMBER) OR YOUR BROKER OR OTHER FINANCIAL
ADVISOR WILL ASSIST YOU IN COMPLETING THIS LETTER OF TRANSMITTAL.
LETTER OF TRANSMITTAL -- COMMON SHARES
TO ACCOMPANY CERTIFICATES FOR COMMON SHARES OF
INTRAWEST CORPORATION
TO BE DEPOSITED IN CONNECTION WITH THE PLAN OF ARRANGEMENT INVOLVING
INTRAWEST CORPORATION, WINTERGAMES ACQUISITION ULC AND
WINTERGAMES S.A.R.L.
This Letter of Transmittal, duly completed and signed in accordance with
the instructions set out below, together with all other required documents, must
accompany your certificates for common shares ("COMMON SHARES") in the capital
of Intrawest Corporation ("INTRAWEST") submitted in connection with the proposed
arrangement under section 192 of the Canada Business Corporations Act (the
"ARRANGEMENT") pursuant to which, subject to receiving all required approvals
and the satisfaction of certain closing conditions, all of the issued and
outstanding Common Shares will be acquired by Wintergames Acquisition ULC, a
corporation that is indirectly owned by 18 private equity funds managed by
Fortress Investment Group LLC or one of its affiliates. Shareholders are
strongly urged to read the Management Information Circular of Intrawest dated
September 20, 2006 accompanying this Letter of Transmittal (the "CIRCULAR"). All
capitalized terms not defined in this Letter of Transmittal have the meanings
ascribed to them in the Circular.
THE ARRANGEMENT IS ANTICIPATED TO CLOSE LATE IN OCTOBER 2006. AT THE
EFFECTIVE TIME, SHAREHOLDERS WILL BE ENTITLED TO RECEIVE, IN EXCHANGE FOR EACH
COMMON SHARE, US$35.00. In order for Shareholders to receive payment for their
Common Shares, Shareholders are required to deposit certificates representing
the Common Shares held by them with the Depositary.
TO INTRAWEST CORPORATION
AND TO: CIBC MELLON TRUST COMPANY (THE "DEPOSITARY")
The undersigned registered holder(s) of Common Shares (the "SHAREHOLDER")
hereby represents that: (i) the Shareholder is the owner of the Common Shares
represented by the certificate(s) described below; (ii) the Shareholder has good
title to those Common Shares free and clear of all mortgages, liens, charges,
encumbrances, security interests and adverse interests; (iii) the undersigned
has full power and authority to execute and deliver this Letter of Transmittal
and to deposit, sell, assign, transfer and deliver such Common Shares; (iv) all
information inserted by the undersigned into this Letter of Transmittal is
accurate; and (v) the undersigned will not, before the Effective Time, transfer
or permit to be transferred any of those Common Shares.
The covenants, representations and warranties of the undersigned contained
in this Letter of Transmittal survive the completion of the Arrangement.
The undersigned revokes any and all authority, other than as granted in
this Letter of Transmittal and in any proxy granted for use at the Meeting,
whether as agent, attorney, attorney-in-fact, proxy or otherwise, previously
conferred or agreed to be conferred by the undersigned at any time with respect
to the Common Shares being deposited. No subsequent authority, whether as agent,
attorney, attorney-in-fact, proxy or otherwise, except a proxy granted for use
at the Meeting, will be granted with respect to the deposited Common Shares.
Each authority conferred or agreed to be conferred by the undersigned in this
Letter of Transmittal survives the death or incapacity of the undersigned and
any obligation of the undersigned in this Letter of Transmittal is binding upon
the heirs, legal representatives, successors and assigns of the undersigned.
The certificate(s) described below in Block A are enclosed. The Shareholder
transmits the certificate(s) described below representing the Common Shares to
be dealt with in accordance with this Letter of Transmittal (the "TRANSMITTED
SHARES"). Upon (i) receipt of this Letter of Transmittal and the certificate(s)
described below by the Depositary, and (ii) completion of the Arrangement, the
Depositary will, as soon as practicable, send to the
Shareholder a cheque representing the amount of US$35.00 multiplied by the
number of Transmitted Shares (the "CONSIDERATION"), all on the basis described
in the Circular.
Unless otherwise indicated in Block D, the Shareholder requests that the
Depositary mail the Consideration by first-class mail to the Shareholder at the
address specified in Block C. If no address is specified in Block C, the
Shareholder acknowledges that the Depositary will mail the Consideration to the
address of the Shareholder as shown on the share register maintained by
Intrawest.
In the event that the Arrangement is not completed for any reason, the
certificate(s) that accompany this Letter of Transmittal and all ancillary
documents will be returned to the Shareholder at the address specified in Block
C or held for pick-up if no address is indicated in Block C or a request is made
to hold cheques for pick-up in Block D.
By reason of the use by the undersigned of an English language form of
Letter of Transmittal, the undersigned shall be deemed to have required that any
contract evidenced by this Letter of Transmittal, as well as all documents
related thereto, be drawn exclusively in the English language. En raison de
l'usage d'une lettre d'envoi en langue anglaise par le soussigne, le soussigne
et les destinataires sont presumes avoir requis que tout contrat atteste par
cette lettre d'envoi, de meme que tous les documents qui s'y rapportent, soient
rediges exclusivement en langue anglaise.
2
--------------------------------------------------------------------------------------------------
A. THE FOLLOWING ARE THE DETAILS OF THE ENCLOSED CERTIFICATE(S):
--------------------------------------------------------------------------------------------------
NUMBER OF NAME IN WHICH
CERTIFICATE NUMBER(S) COMMON SHARES COMMON SHARES ARE REGISTERED
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
B. ISSUE CHEQUE IN THE NAME OF:
---------------------------------------------------
Name
---------------------------------------------------
---------------------------------------------------
Street Address and Number
---------------------------------------------------
City and Province or State
---------------------------------------------------
Country and Postal (Zip) Code
---------------------------------------------------
Telephone -- Business Hours
---------------------------------------------------
SOCIAL INSURANCE NUMBER/TAXPAYER IDENTIFICATION NUMBER
C. SEND CHEQUE TO:
---------------------------------------------------
Name
---------------------------------------------------
---------------------------------------------------
Street Address and Number
---------------------------------------------------
City and Province or State
---------------------------------------------------
Country and Postal (Zip) Code
---------------------------------------------------
Telephone -- Business Hours
3
D. [ ] HOLD CHEQUE FOR PICK-UP
E. SHAREHOLDER SIGNATURE
THIS BOX MUST BE SIGNED BY THE INTRAWEST SHAREHOLDER EXACTLY AS HIS OR HER NAME
APPEARS IN THE DOCUMENT EVIDENCING THE COMMON SHARES HELD.
---------------------------------------------------
Name of Shareholder (Please print)
---------------------------------------------------
Signature of Shareholder or Authorized Signatory
(See Instruction 5)
---------------------------------------------------
Name and Capacity of Authorized Representative or Attorney (If applicable)
---------------------------------------------------
Date
SIGNATURE GUARANTEED BY:
(If required under Instruction 2 or 4)
---------------------------------------------------------
Authorized Signature
---------------------------------------------------------
Name of Guarantor (Please print)
(STAMP)
4
SUBSTITUTE FORM W-9
THE FOLLOWING INFORMATION IS TO BE COMPLETED BY U.S. REGISTERED SHAREHOLDERS
ONLY
(SEE INSTRUCTION 6)
Under penalties of perjury, I certify that:
1. The social security or other taxpayer identification number stated below
is my correct taxpayer identification number (or I am waiting for a number
to be issued to me, in which case I will complete the "Additional
Certification" below);
2. I am not subject to back-up withholding because: (a) I am exempt from
back-up withholding, or (b) I have not been notified by the United States
Internal Revenue Service (the "IRS") that I am subject to back-up
withholding as a result of a failure to report interest or dividends, or
(c) the IRS has notified me that I am no longer subject to back-up
withholding; and
3. I am a U.S. person (including a U.S. resident alien).
CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to back-up withholding
because of under reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you are subject to back-up withholding you
receive another notification from the IRS that you are no longer subject to
back-up withholding, do not cross out item 2 above. The IRS does not require
your consent to any provision of this document other than the certification
required to avoid back-up withholding.
---------------------------------------- ----------------------------------------
Name of Shareholder (Please print) Signature of Shareholder
---------------------------------------- ----------------------------------------
Social Security Number or Taxpayer Identification Date
Number
NOTE: FAILURE TO COMPLETE THE FOREGOING INFORMATION OR TO PROVIDE INTRAWEST OR
CIBC MELLON TRUST COMPANY WITH A SOCIAL SECURITY NUMBER OR TAXPAYER
IDENTIFICATION NUMBER MAY RESULT IN BACK-UP WITHHOLDING OF 28% OF ANY PAYMENT TO
YOU UNDER THE PLAN OF ARRANGEMENT.
ADDITIONAL CERTIFICATION
IF YOU ARE CURRENTLY AWAITING THE ISSUANCE OF A TAXPAYER IDENTIFICATION NUMBER,
YOU MUST COMPLETE THE FOLLOWING ADDITIONAL CERTIFICATION.
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me and either: (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate IRS Center or
Social Security Administration Office; or (b) I intend to mail or deliver an
application in the near future. I understand that if I do not provide a taxpayer
identification number within 60 days, 28% of all reportable payments made to me
thereafter will be withheld until I provide a number.
---------------------------------------- ----------------------------------------
Signature of Shareholder Date
5
INSTRUCTIONS
1. USE OF THE LETTER OF TRANSMITTAL
This Letter of Transmittal is to be completed by a Shareholder holding
Common Shares. A properly completed and duly executed Letter of Transmittal in
the appropriate form (or a manually signed facsimile thereof) should be received
by the Depositary at the appropriate address set out on the back page of this
Letter of Transmittal in order to facilitate prompt delivery of a cheque in
respect of the Consideration. The method used to deliver this Letter of
Transmittal and the share certificates in respect of the Common Shares is at the
option and risk of the Shareholder, and delivery will be deemed effective only
when such documents are actually received by the Depositary. Intrawest
recommends that the necessary documentation be hand delivered to the Depositary,
at the address set out on the back page of this Letter of Transmittal, and a
receipt obtained; otherwise the use of registered mail with return receipt
requested, properly insured, is recommended.
SHAREHOLDERS WHOSE COMMON SHARES ARE REGISTERED IN THE NAME OF A BROKER,
INVESTMENT DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE SHOULD CONTACT THAT
NOMINEE FOR ASSISTANCE IN DEPOSITING THOSE COMMON SHARES.
2. SIGNATURES
This Letter of Transmittal must be filled in and signed by the Shareholder
of Transmitted Shares or by the Shareholder's duly authorized representative (in
accordance with Instruction 5).
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the accompanying certificate(s), such signature(s) on this Letter of
Transmittal must correspond with the name(s) as registered or as
written on the face of such certificate(s) without any change
whatsoever, and the certificate(s) need not be endorsed. If such
deposited certificate(s) are owned of record by two or more joint
owners, all such owners must sign the Letter of Transmittal.
(b) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the accompanying certificate(s):
(i) such deposited certificate(s) must be endorsed or be accompanied
by appropriate share transfer power of attorney duly and properly
completed by the registered holder(s); and
(ii) the signature(s) on such endorsement or share transfer power of
attorney must correspond exactly to the name(s) of the registered
owner(s) as registered or as appearing on the certificate(s) and
must be guaranteed as noted in Instruction 4.
3. DEFECTS OR IRREGULARITIES
Intrawest reserves the right, if it so elects, in its absolute discretion,
to waive any defect or irregularity contained in the Letter of Transmittal
received by the Depositary.
4. GUARANTEE OF SIGNATURES
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Transmitted Shares, or if the payment is to be made
in a name other than the registered holder(s), or if the Arrangement is not
completed and the Transmitted Shares are to be returned to a person other than
such registered holder(s), or sent to an address other than the address of the
registered holder(s) as shown on the registers of Intrawest, such signature must
be guaranteed by an Eligible Institution, or in some other manner satisfactory
to the Depositary (except that no guarantee is required if the signature is that
of an Eligible Institution).
An "Eligible Institution" means a Canadian Schedule I chartered bank, a
major trust company in Canada, a member of the Securities Transfer Agent
Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program
(SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature
Program (MSP). Members of these programs are usually members of a recognized
stock exchange in Canada or the United States, members of the Investment Dealers
Association of Canada, members of the National Association of Securities Dealers
or banks and trust companies in the United States.
5. FIDUCIARIES, REPRESENTATIVES AND AUTHORIZATIONS
Where this Letter of Transmittal is executed by a person on behalf of an
executor, administrator, trustee, guardian, corporation, partnership or
association or is executed by any other person acting in a representative or
6
fiduciary capacity, this Letter of Transmittal must be accompanied by
satisfactory evidence of such person's proof of appointment and authority to
act. Either Intrawest or the Depositary, at their discretion, may require
additional evidence of appointment or authority or additional documentation.
6. SUBSTITUTE FORM W-9
Each U.S. Shareholder is required to provide CIBC Mellon Trust Company with
a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9,
which is provided on page 5 hereof, and to certify whether such Shareholder is
subject to back-up withholding of U.S. federal income tax. If a U.S. Shareholder
has been notified by the Internal Revenue Service that such Shareholder is
subject to back-up withholding, such Shareholder must cross out Item 2 of the
Substitute Form W-9, unless such Shareholder has since been notified by the
Internal Revenue Service that such holder is no longer subject to back-up
withholding. Failure to provide the information in the Substitute Form W-9 may
subject a U.S. Shareholder to 28% federal income tax withholding on any payment
to such holder made in connection with the purchase of such holder's securities.
If a U.S. Shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such holder should write "Applied
For" in the space provided for the TIN in the Substitute Form W-9, and sign and
date the Substitute Form W-9 and the Additional Certification immediately below
the Substitute Form W-9. If "Applied For" is written in the Substitute Form W-9
and CIBC Mellon Trust Company is not provided with a TIN within 60 days, CIBC
Mellon Trust Company will withhold 28% on all payments to such Shareholder made
in connection with the Plan of Arrangement until a TIN is provided.
7. MISCELLANEOUS
(a) If the space on this Letter of Transmittal is insufficient to list all
certificates for Transmitted Shares, additional certificate numbers
and number of Transmitted Shares may be included on a separate signed
list affixed to this Letter of Transmittal.
(b) If Transmitted Shares are registered in different names, however
different (e.g., "JOHN DOE" and "J. DOE"), a separate Letter of
Transmittal should be signed for each different registration.
(c) No alternative, conditional or contingent deposits will be accepted.
(d) Additional copies of the Circular and this Letter of Transmittal may
be obtained from the Depositary at the address set forth on the last
page of this Letter of Transmittal.
8. LOST CERTIFICATES
If a certificate representing Common Shares has been lost or destroyed,
this Letter of Transmittal should be completed as fully as possible and
forwarded, together with a letter describing the loss, to the Depositary.
7
OFFICES OF THE DEPOSITARY, CIBC MELLON TRUST COMPANY,
FOR THE ARRANGEMENT:
BY MAIL
CIBC Mellon Trust Company
PO Box 1036
Adelaide Street Postal Station
Toronto, Ontario
M5C 2K4
BY HAND, REGISTERED MAIL OR COURIER
CIBC Mellon Trust Company
199 Bay Street Suite 1600
Commerce Court West 1066 West Hastings Street
Securities Level Vancouver, British Columbia
Toronto, Ontario V6E 3X1
M5L 1G9
Attn: Courier Window
Telephone: (416) 643-5500
Toll Free: (800) 387-0825
E-Mail: inquiries@cibcmellon.com
Any questions and requests for assistance may be directed by
Shareholders to the Depositary at the telephone number
and locations set out above.
8
INTRAWEST CORPORATION
PROXY -- COMMON SHARES
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF INTRAWEST CORPORATION
("INTRAWEST") PURSUANT TO THE MANAGEMENT INFORMATION CIRCULAR OF INTRAWEST DATED
SEPTEMBER 20, 2006. THIS PROXY IS FOR USE BY HOLDERS ("SHAREHOLDERS") OF COMMON
SHARES ("COMMON SHARES") OF INTRAWEST AT THE SPECIAL MEETING OF HOLDERS OF
COMMON SHARES AND HOLDERS OF OPTIONS TO ACQUIRE COMMON SHARES SCHEDULED TO BE
HELD ON TUESDAY, OCTOBER 17, 2006, TO SEEK INTRAWEST SECURITYHOLDER APPROVAL OF
RESOLUTIONS APPROVING AN ARRANGEMENT UNDER SECTION 192 OF THE CANADA BUSINESS
CORPORATIONS ACT (THE "CBCA") AS MORE FULLY DESCRIBED BELOW.
The undersigned Shareholder hereby appoints Joe S. Houssian, Chief Executive
Officer and a Director of Intrawest, or in his absence, Gordon H. MacDougall,
Lead Director of Intrawest, OR IN LIEU OF SAID PERSONS, hereby appoints
------------------------------------ as his, her or its true and lawful
proxyholder with full power of substitution, in the same manner, to the same
extent and with the same power as if the undersigned was present, to attend and
act on his, her or its behalf at the special meeting (the "MEETING") of holders
of Common Shares and holders of options to acquire Common Shares to be held
commencing at 10:00 a.m. (Vancouver time) on Tuesday October 17, 2006 in the
Ballroom of The Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver,
British Columbia, and at any adjournments or postponements thereof, and to vote
all Common Shares that the undersigned is entitled to vote thereat.
SHAREHOLDERS HAVE THE RIGHT TO APPOINT A PERSON, OTHER THAN THE NOMINEES
DESIGNATED ABOVE, TO ATTEND AND ACT ON THEIR BEHALF AT THE MEETING AND MAY
EXERCISE SUCH RIGHT BY INSERTING THE NAME OF THEIR NOMINEE IN THE BLANK SPACE
PROVIDED FOR THAT PURPOSE ABOVE OR BY COMPLETING ANOTHER PROPER FORM OF PROXY
AND, IN EITHER CASE, BY RETURNING THE COMPLETED PROXY TO CIBC MELLON TRUST
COMPANY IN THE MANNER SET OUT IN THE NOTES TO THIS FORM, PRIOR TO 5:00 P.M.
(VANCOUVER TIME) ON FRIDAY, OCTOBER 13, 2006 OR, IN THE CASE OF ANY ADJOURNMENT
OR POSTPONEMENT OF THE MEETING, NO LATER THAN 48 HOURS BEFORE THE DATE OF THE
RECONVENED MEETING.
Without limiting the general authorization and power hereby given, the
proxyholder named above is specifically directed on any ballot that may be
called for to:
VOTE FOR [ ] or VOTE AGAINST [ ] resolutions in the form set forth in Appendix
"A" of the management information circular of Intrawest dated September 20, 2006
(the "CIRCULAR") to approve an arrangement (the "ARRANGEMENT") under Section 192
of the Canada Business Corporations Act involving, among other things, the
acquisition by Wintergames Acquisition ULC, a corporation that is indirectly
owned by 18 private equity funds managed by Fortress Investment Group LLC or one
of its affiliates, of all of the issued and outstanding Common Shares in
exchange for US$35.00 in cash per share all as more particularly described in
the Circular.
THE COMMON SHARES REPRESENTED BY THIS PROXY WILL, IF THE INSTRUCTIONS ARE
CERTAIN, BE VOTED ON ANY BALLOT OR POLL IN ACCORDANCE WITH THE SPECIFICATIONS
MADE BY THE SHAREHOLDER. IN THE ABSENCE OF SUCH DIRECTION, IT IS INTENDED THAT
SUCH COMMON SHARES WILL BE VOTED FOR THE ABOVE REFERENCED MATTER.
THIS PROXY CONFERS AUTHORITY TO VOTE IN THE PROXYHOLDER'S DISCRETION WITH
RESPECT TO AMENDMENTS OR VARIATIONS OF MATTERS IDENTIFIED IN THE ACCOMPANYING
NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS AND WITH RESPECT TO OTHER MATTERS
THAT PROPERLY MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF. AS OF THE DATE OF THE CIRCULAR, MANAGEMENT KNOWS OF NO SUCH MATTERS TO
COME BEFORE THE MEETING OTHER THAN THE MATTERS REFERRED TO ON THIS FORM OF PROXY
AND IN THE NOTICE OF SPECIAL MEETING.
The undersigned hereby revokes any proxy previously given by the undersigned
in the undersigned's capacity as a Shareholder in respect of the Common Shares
referred to below in connection with the above referenced matter and
acknowledges receipt of the Circular relating thereto.
DATED this --------- day of ---------------------, 2006.
-------------------------------------------------------- --------------------------------------------------------
Name of Shareholder Address of Shareholder
-------------------------------------------------------- --------------------------------------------------------
Signature of Shareholder/Authorized Signatory Number of Common Shares held
--------------------------------------------------------
Name of Authorized Signatory (if applicable)
NOTES:
1. Reference is made to the Circular for further information regarding the
completion and use of this proxy, and other information pertaining to the
Meeting. All capitalized terms not otherwise defined in this proxy shall
have the meaning ascribed thereto in the Circular.
2. A person appointed as your proxyholder need not be a Shareholder. A person
appointed as your proxyholder must be present at the Meeting to vote.
3. If the proxy form is not dated in the space provided, it is deemed to be
dated the date of its mailing by or on behalf of Intrawest.
4. If the Shareholder is an individual, please sign exactly as your Common
Shares are registered. If the Shareholder is a company or similar entity,
this proxy must be executed by a duly authorized officer or attorney of the
Shareholder. If the Shareholder is a trust, this proxy must be executed by
all trustees or other duly authorized person. If Common Shares are
registered in the name of an executor, administrator, general partner or
trustee, please sign exactly as the Common Shares are registered and
evidence of authority to sign must be attached to the proxy. If the Common
Shares are registered in the name of a deceased, the name of the deceased
must be printed in the space provided, the proxy must be signed by the legal
representative with his/her name printed below his/her signature, and
evidence of authority to sign must be attached to the proxy.
5. To be valid, proxies must be signed, dated and either deposited with the
Transfer Agent of Intrawest, CIBC Mellon Trust Company, Suite 1600, 1066
West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1
(Attention: Proxy Department) before 5:00 p.m. (Vancouver time) on Friday,
October 13, 2006 or, in the event the Meeting is adjourned or postponed, no
later than 48 hours before the date the adjourned Meeting is reconvened or
the postponed Meeting is convened.
6. Once this form of proxy has been signed by the appropriate signatory or
signatories and deposited in accordance with note 5 above, any proxy
previously delivered by the signatory hereto shall be revoked.
7. In accordance with the CBCA, Intrawest will prepare a list of
Securityholders as of the Record Date. The only Shareholders that will be
entitled to vote, in person or by proxy, at the Meeting, will be the
Shareholders of record at the close of business on the Record Date.
8. A Shareholder who has given a proxy has the right to revoke it as to any
matter on which a vote has not already been cast pursuant to the authority
conferred by that proxy and may do so by delivering a duly executed proxy
with a later date or a form of revocation of proxy or other instrument in
writing signed by you or by your attorney authorized in writing (or if you
are a corporation, by a duly authorized officer or attorney). These
instruments can be delivered to the Transfer Agent up to 5:00 p.m.
(Vancouver time) on October 16, 2006, or if the Meeting is adjourned or
postponed, no later than 5:00 p.m. (Vancouver time) on the Business Day
preceding the date of the reconvened Meeting or (ii) by delivering a form of
revocation of proxy or a signed instrument in writing to the Chair of the
Meeting at the Meeting or any adjournment or postponement thereof. You may
also revoke your proxy in any other manner permitted by law.
2
YOU ARE STRONGLY URGED TO READ THE MANAGEMENT
INFORMATION CIRCULAR BEFORE COMPLETING THIS LETTER OF TRANSMITTAL
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL. THE DEPOSITARY (SEE LAST
PAGE FOR ADDRESSES AND TELEPHONE NUMBER) OR YOUR BROKER OR OTHER FINANCIAL
ADVISOR WILL ASSIST YOU IN COMPLETING THIS LETTER OF TRANSMITTAL.
LETTER OF TRANSMITTAL -- OPTIONS
FOR HOLDERS OF OPTIONS TO PURCHASE COMMON SHARES OF
INTRAWEST CORPORATION
TO BE DEPOSITED IN CONNECTION WITH THE PLAN OF ARRANGEMENT INVOLVING
INTRAWEST CORPORATION, WINTERGAMES ACQUISITION ULC AND
WINTERGAMES S.A.R.L.
This Letter of Transmittal, duly completed and signed in accordance with
the instructions set out below, is required to be submitted by holders
("INTRAWEST OPTIONHOLDERS") of options ("INTRAWEST OPTIONS") to purchase common
shares ("COMMON SHARES") in the capital of Intrawest Corporation ("INTRAWEST")
in connection with the proposed arrangement under section 192 of the Canada
Business Corporations Act (the "ARRANGEMENT") pursuant to which, subject to
receiving all required approvals and the satisfaction of certain closing
conditions, all of the issued and outstanding Common Shares will be acquired by
Wintergames Acquisition ULC, a corporation that is indirectly owned by 18
private equity funds managed by Fortress Investment Group LLC or one of its
affiliates. Pursuant to the Arrangement, each unexercised Intrawest Option,
whether vested or unvested in accordance with its terms, will be transferred by
the Intrawest Optionholder to Intrawest and be cancelled in exchange for a cash
payment from Intrawest equal to (i) the product of the number of Common Shares
underlying Intrawest Options held by such Intrawest Optionholder as of
immediately prior to the Effective Time and US$35.00, less (ii) the aggregate
exercise price payable under such Intrawest Options by the holder to acquire the
Common Shares underlying such Intrawest Options. Intrawest Optionholders are
strongly urged to read the Management Information Circular of Intrawest dated
September 20, 2006, sent separately to Intrawest Optionholders (the "CIRCULAR").
All capitalized terms not defined in this Letter of Transmittal have the
meanings ascribed to them in the Circular.
The Arrangement is anticipated to close late in October 2006.
TO: INTRAWEST CORPORATION
AND TO: CIBC MELLON TRUST COMPANY (THE "DEPOSITARY")
The undersigned Intrawest Optionholder hereby represents that: (i) the
undersigned is the owner of the Intrawest Options disclosed and described below;
(ii) the undersigned has good title to those Intrawest Options free and clear of
all mortgages, liens, charges, encumbrances, security interests and adverse
interests; (iii) the undersigned has full power and authority to execute and
deliver this Letter of Transmittal and to transfer such Intrawest Options; and
(iv) all information inserted by the undersigned into this Letter of Transmittal
is accurate.
The covenants, representations and warranties of the undersigned contained
in this Letter of Transmittal survive the completion of the Arrangement.
The undersigned revokes any and all authority, other than as granted in
this Letter of Transmittal and in any proxy granted for use at the Meeting,
whether as agent, attorney, attorney-in-fact, proxy or otherwise, previously
conferred or agreed to be conferred by the undersigned at any time with respect
to the Intrawest Options. No subsequent authority, whether as agent, attorney,
attorney-in-fact, proxy or otherwise, except a proxy granted for use at the
Meeting, will be granted with respect to the Intrawest Options. Each authority
conferred or agreed to be conferred by the undersigned in this Letter of
Transmittal survives the death or incapacity of the undersigned and any
obligation of the undersigned in this Letter of Transmittal is binding upon the
heirs, legal representatives, successors and assigns of the undersigned.
Provided the Intrawest Optionholder has not opted to exercise the Intrawest
Options prior to the Effective Time of the Arrangement, upon (i) receipt of this
completed Letter of Transmittal by the Depositary and (ii) completion of the
Arrangement, the Depositary will, as soon as practicable, send to each Intrawest
Optionholder in respect of the Intrawest Options held by the undersigned and
which are disclosed below, a payment
equal to (a) the product of the number of Common Shares underlying Intrawest
Options held by such Intrawest Optionholder and US$35.00, less (b) the aggregate
exercise price payable under such Intrawest Options by the holder to acquire the
Common Shares underlying such Intrawest Options (the "OPTION AMOUNT"). Pursuant
to the Plan of Arrangement, payment of the Option Amount will be made net of
applicable withholdings as determined by Intrawest and as required by applicable
law.
The undersigned acknowledges that, at and after the Effective Time, his or
her Intrawest Options will be cancelled and that his or her rights will be
limited to the right to receive the Option Amount payable by Intrawest pursuant
to the Plan of Arrangement. In the event that the Arrangement is not completed
for any reason, the Intrawest Optionholder's election under this Letter of
Transmittal will not take effect and the Intrawest Optionholder will continue to
hold the Intrawest Options.
Unless otherwise indicated in Block D, the Intrawest Optionholder requests
that the Depositary mail the Option Amount by first-class mail to the Intrawest
Optionholder at the address specified in Block C.
By reason of the use by the undersigned of an English language form of
Letter of Transmittal, the undersigned shall be deemed to have required that any
contract evidenced by this Letter of Transmittal, as well as all documents
related thereto, be drawn exclusively in the English language. En raison de
l'usage d'une lettre d'envoi en langue anglaise par le soussigne, le soussigne
et les destinataires sont presumes avoir requis que tout contrat atteste par
cette lettre d'envoi, de meme que tous les documents qui s'y rapportent, soient
rediges exclusivement en langue anglaise.
2
---------------------------------------------------------------------------------------------------
THE FOLLOWING ARE THE DETAILS OF THE INTRAWEST OPTIONS HELD BY THE
UNDERSIGNED:
---------------------------------------------------------------------------------------------------
NUMBER OF COMMON
NAME OF SHARES UNDERLYING THE
INTRAWEST OPTIONHOLDER DATE OF GRANT INTRAWEST OPTIONS EXERCISE PRICE
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
B. ISSUE CHEQUE IN THE NAME OF:
---------------------------------------------------
Name
---------------------------------------------------
---------------------------------------------------
Street Address and Number
---------------------------------------------------
City and Province or State
---------------------------------------------------
Country and Postal (Zip) Code
---------------------------------------------------
Telephone -- Business Hours
---------------------------------------------------
SOCIAL INSURANCE NUMBER/TAXPAYER IDENTIFICATION NUMBER
C. SEND CHEQUE TO:
---------------------------------------------------
Name
---------------------------------------------------
---------------------------------------------------
Street Address and Number
---------------------------------------------------
City and Province or State
---------------------------------------------------
Country and Postal (Zip) Code
---------------------------------------------------
Telephone -- Business Hours
D. [ ] HOLD CHEQUE FOR PICK-UP
E. INTRAWEST OPTIONHOLDER SIGNATURE
THIS BOX MUST BE SIGNED BY THE INTRAWEST OPTIONHOLDER EXACTLY AS HIS OR HER NAME
APPEARS IN THE DOCUMENT EVIDENCING THE INTRAWEST OPTIONS HELD.
---------------------------------------------------
Name of Intrawest Optionholder (Please print)
---------------------------------------------------
Signature of Intrawest Optionholder or Authorized Signatory (See Instruction 4)
---------------------------------------------------
Name and Capacity of Authorized Representative or Attorney (If applicable)
---------------------------------------------------
Date
3
SUBSTITUTE FORM W-9
THE FOLLOWING INFORMATION IS TO BE COMPLETED BY U.S. INTRAWEST OPTIONHOLDERS
ONLY
(SEE INSTRUCTION 5)
Under penalties of perjury, I certify that:
1. The social security or other taxpayer identification number stated below is
my correct taxpayer identification number (or I am waiting for a number to
be issued to me, in which case I will complete the "Additional
Certification" below);
2. I am not subject to back-up withholding because: (a) I am exempt from
back-up withholding, or (b) I have not been notified by the United States
Internal Revenue Service (the "IRS") that I am subject to back-up
withholding as a result of a failure to report interest or dividends, or (c)
the IRS has notified me that I am no longer subject to back-up withholding;
and
3. I am a U.S. person (including a U.S. resident alien).
CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to back-up withholding
because of under reporting interest or dividends on your tax return. However, if
after being notified by the IRS that you are subject to back-up withholding you
receive another notification from the IRS that you are no longer subject to
back-up withholding, do not cross out item 2 above. The IRS does not require
your consent to any provision of this document other than the certification
required to avoid back-up withholding.
--------------------------------------------------------- ---------------------------------------------------------
Name of Intrawest Optionholder (Please print) Signature of Intrawest Optionholder
--------------------------------------------------------- ---------------------------------------------------------
Social Security Number or Taxpayer Identification Number Date
NOTE: FAILURE TO COMPLETE THE FOREGOING INFORMATION OR TO PROVIDE INTRAWEST OR
CIBC MELLON TRUST COMPANY WITH A SOCIAL SECURITY NUMBER OR TAXPAYER
IDENTIFICATION NUMBER MAY RESULT IN BACK-UP WITHHOLDING OF 28% OF ANY PAYMENT TO
YOU UNDER THE PLAN OF ARRANGEMENT.
ADDITIONAL CERTIFICATION
IF YOU ARE CURRENTLY AWAITING THE ISSUANCE OF A TAXPAYER IDENTIFICATION NUMBER,
YOU MUST COMPLETE THE FOLLOWING ADDITIONAL CERTIFICATION.
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me and either: (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate IRS Center or
Social Security Administration Office; or (b) I intend to mail or deliver an
application in the near future. I understand that if I do not provide a taxpayer
identification number within 60 days, 28% of all reportable payments made to me
thereafter will be withheld until I provide a number.
--------------------------------------------------------- ---------------------------------------------------------
Signature of Intrawest Optionholder Date
4
INSTRUCTIONS
1. USE OF THE LETTER OF TRANSMITTAL
This Letter of Transmittal is to be completed by an Intrawest Optionholder
holding Intrawest Options. A properly completed and duly executed Letter of
Transmittal in the appropriate form (or a manually signed facsimile thereof)
should be received by the Depositary at the appropriate address set out on the
back page of this Letter of Transmittal in order to facilitate prompt delivery
of a cheque in respect of the Option Amount. The method used to deliver this
Letter of Transmittal is at the option and risk of the Intrawest Optionholder,
and delivery will be deemed effective only when such documents are actually
received by the Depositary. Intrawest recommends that the necessary
documentation be hand delivered to the Depositary, at the address set out on the
back page of this Letter of Transmittal, and a receipt obtained; otherwise the
use of registered mail with return receipt requested, properly insured, is
recommended.
2. SIGNATURES
This Letter of Transmittal must be filled in and signed by the Intrawest
Optionholder or by such holder's duly authorized representative or attorney (in
accordance with Instruction 4).
3. DEFECTS OR IRREGULARITIES
Intrawest reserves the right, if it so elects, in its absolute discretion,
to waive any defect or irregularity contained in the Letter of Transmittal
received by the Depositary.
4. FIDUCIARIES, REPRESENTATIVES AND AUTHORIZATIONS
Where this Letter of Transmittal is executed by a person on behalf of an
Intrawest Optionholder or by any other person acting in a representative or
fiduciary capacity, this Letter of Transmittal must be accompanied by
satisfactory evidence of such person's proof of appointment and authority to
act. Either Intrawest or the Depositary, at their discretion, may require
additional evidence of appointment or authority or additional documentation.
5. SUBSTITUTE FORM W-9
Each U.S. Intrawest Optionholder is required to provide CIBC Mellon Trust
Company with a correct Taxpayer Identification Number ("TIN") on the Substitute
Form W-9, which is provided on page 4 hereof, and to certify whether such
Intrawest Optionholder is subject to back-up withholding of U.S. federal income
tax. If a U.S. Intrawest Optionholder has been notified by the Internal Revenue
Service that such Intrawest Optionholder is subject to back-up withholding, such
Intrawest Optionholder must cross out Item 2 of the Substitute Form W-9, unless
such Intrawest Optionholder has since been notified by the Internal Revenue
Service that such holder is no longer subject to back-up withholding. Failure to
provide the information in the Substitute Form W-9 may subject a U.S. Intrawest
Optionholder to 28% federal income tax withholding on any payment to such holder
made in connection with the purchase of such holder's securities. If a U.S.
Intrawest Optionholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such holder should write "Applied
For" in the space provided for the TIN in the Substitute Form W-9, and sign and
date the Substitute Form W-9 and the Additional Certification immediately below
the Substitute Form W-9. If "Applied For" is written in the Substitute Form W-9
and CIBC Mellon Trust Company is not provided with a TIN within 60 days, CIBC
Mellon Trust Company will withhold 28% on all payments to such Intrawest
Optionholder made in connection with the Plan of Arrangements until a TIN is
provided.
6. MISCELLANEOUS
(a) If the space on this Letter of Transmittal is insufficient to list all
the Intrawest Options held by the Intrawest Optionholder, additional
Intrawest Options may be included on a separate signed list affixed to
this Letter of Transmittal.
(b) If the Intrawest Options are registered in different names (e. g.,
"JOHN DOE" and "J. DOE") a separate Letter of Transmittal should be
signed for each different registration.
(c) No alternative, conditional or contingent deposits will be accepted.
(d) Additional copies of the Circular and the Letter of Transmittal may be
obtained from the Depositary at the address set forth on the last page
of this Letter of Transmittal.
5
OFFICES OF THE DEPOSITARY, CIBC MELLON TRUST COMPANY,
FOR THE ARRANGEMENT:
BY MAIL
CIBC Mellon Trust Company
PO Box 1036
Adelaide Street Postal Station
Toronto, Ontario
M5C 2K4
BY HAND, REGISTERED MAIL OR COURIER
CIBC Mellon Trust Company
199 Bay Street Suite 1600
Commerce Court West 1066 West Hastings Street
Securities Level Vancouver, British Columbia
Toronto, Ontario V6E 3X1
M5L 1G9
Attn: Courier Window
Telephone: (416) 643-5500
Toll Free: (800) 387-0825
E-Mail: inquiries@cibcmellon.com
Any questions and requests for assistance may be directed by
Intrawest Optionholders to the Depositary at the telephone number
and locations set out above.
6
INTRAWEST CORPORATION
PROXY -- OPTIONS
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF INTRAWEST CORPORATION
("INTRAWEST") PURSUANT TO THE MANAGEMENT INFORMATION CIRCULAR OF INTRAWEST DATED
SEPTEMBER 20, 2006. THIS PROXY IS FOR USE BY HOLDERS ("INTRAWEST OPTIONHOLDERS")
OF OPTIONS ("INTRAWEST OPTIONS") TO PURCHASE COMMON SHARES ("COMMON SHARES") OF
INTRAWEST AT THE SPECIAL MEETING OF HOLDERS OF COMMON SHARES AND HOLDERS OF
OPTIONS TO ACQUIRE COMMON SHARES SCHEDULED TO BE HELD ON TUESDAY, OCTOBER 17,
2006, TO SEEK INTRAWEST SECURITYHOLDER APPROVAL OF RESOLUTIONS APPROVING AN
ARRANGEMENT UNDER SECTION 192 OF THE CANADA BUSINESS CORPORATIONS ACT (THE
"CBCA") AS MORE FULLY DESCRIBED BELOW.
The undersigned Intrawest Optionholder hereby appoints Joe S. Houssian,
Chief Executive Officer and a Director of Intrawest, or in his absence, Gordon
H. MacDougall, Lead Director of Intrawest, OR IN LIEU OF SAID PERSONS, hereby
appoints
------------------------------------ as his, her or its true and lawful
proxyholder with full power of substitution, in the same manner, to the same
extent and with the same power as if the undersigned was present, to attend and
act on his, her or its behalf at the special meeting (the "MEETING") of holders
of Common Shares and holders of Intrawest Options to be held commencing at 10:00
a.m. (Vancouver time) on Tuesday October 17, 2006 in the Ballroom of The
Fairmont Waterfront Hotel, 900 Canada Place Way, Vancouver, British Columbia,
and at any adjournments or postponements thereof, and to vote all Intrawest
Options that the undersigned is entitled to vote thereat.
INTRAWEST OPTIONHOLDERS HAVE THE RIGHT TO APPOINT A PERSON, OTHER THAN THE
NOMINEES DESIGNATED ABOVE, TO ATTEND AND ACT ON THEIR BEHALF AT THE MEETING AND
MAY EXERCISE SUCH RIGHT BY INSERTING THE NAME OF THEIR NOMINEE IN THE BLANK
SPACE PROVIDED FOR THAT PURPOSE ABOVE OR BY COMPLETING ANOTHER PROPER FORM OF
PROXY AND, IN EITHER CASE, BY RETURNING THE COMPLETED PROXY TO CIBC MELLON TRUST
COMPANY IN THE MANNER SET OUT IN THE NOTES TO THIS FORM, PRIOR TO 5:00 P.M.
(VANCOUVER TIME) ON FRIDAY, OCTOBER 13, 2006 OR, IN THE CASE OF ANY ADJOURNMENT
OR POSTPONEMENT OF THE MEETING, NO LATER THAN 48 HOURS BEFORE THE DATE OF THE
RECONVENED MEETING.
Without limiting the general authorization and power hereby given, the
proxyholder named above is specifically directed on any ballot that may be
called for to:
VOTE FOR [ ] or VOTE AGAINST [ ] resolutions in the form set forth in Appendix
"A" of the management information circular of Intrawest dated September 20, 2006
(the "CIRCULAR") to approve an arrangement (the "ARRANGEMENT") under Section 192
of the Canada Business Corporations Act involving, among other things, the
acquisition by Wintergames Acquisition ULC of all of the outstanding Common
Shares for US$35.00 in cash for each Common Share and the transfer by the
Intrawest Optionholders to Intrawest of all outstanding Intrawest Options for
the positive difference, if any, between US$35.00 and the applicable exercise
price under each Intrawest Option.
THE INTRAWEST OPTIONS REPRESENTED BY THIS PROXY WILL, IF THE INSTRUCTIONS
ARE CERTAIN, BE VOTED ON ANY BALLOT OR POLL IN ACCORDANCE WITH THE
SPECIFICATIONS MADE BY THE INTRAWEST OPTIONHOLDER. IN THE ABSENCE OF SUCH
DIRECTION, IT IS INTENDED THAT SUCH INTRAWEST OPTIONS WILL BE VOTED FOR THE
ABOVE REFERENCED MATTER.
THIS PROXY CONFERS AUTHORITY TO VOTE IN THE PROXYHOLDER'S DISCRETION WITH
RESPECT TO AMENDMENTS OR VARIATIONS OF MATTERS IDENTIFIED IN THE ACCOMPANYING
NOTICE OF SPECIAL MEETING OF SECURITYHOLDERS AND WITH RESPECT TO OTHER MATTERS
THAT PROPERLY MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF. AS OF THE DATE OF THE CIRCULAR, MANAGEMENT KNOWS OF NO SUCH MATTERS TO
COME BEFORE THE MEETING OTHER THAN THE MATTERS REFERRED TO ON THIS FORM OF PROXY
AND IN THE NOTICE OF SPECIAL MEETING.
The undersigned hereby revokes any proxy previously given by the undersigned
in the undersigned's capacity as an Intrawest Optionholder in respect of the
Intrawest Options referred to below in connection with the above referenced
matter and acknowledges receipt of the Circular relating thereto.
DATED this --------- day of ---------------------- , 2006
---------------------------------------------------------- ------------------------------------------------
Name of Intrawest Optionholder Address of Intrawest Optionholder
---------------------------------------------------------- ------------------------------------------------
Signature of Intrawest Optionholder/Authorized Signatory Number of Common Shares underlying Intrawest
Options held
----------------------------------------------------------
Name of Authorized Signatory (if applicable)
NOTES:
1. Reference is made to the Circular for further information regarding the
completion and use of this proxy, and other information pertaining to the
Meeting. All capitalized terms not otherwise defined in this proxy shall
have the meaning ascribed thereto in the Circular.
2. A person appointed as your proxyholder need not be an Intrawest
Optionholder. A person appointed as your proxyholder must be present at the
Meeting to vote.
3. If the proxy form is not dated in the space provided, it is deemed to be
dated on the date of its mailing by or on behalf of Intrawest.
4. If the Intrawest Optionholder is an individual, please sign exactly as your
Intrawest Options are registered. If the Intrawest Optionholder is a
company or similar entity, this proxy must be executed by a duly authorized
officer or attorney of the Intrawest Optionholder. If the Intrawest
Optionholder is a trust, this proxy must be executed by all trustees or
other duly authorized person. If Intrawest Options are registered in the
name of an executor, administrator, general partner or trustee, please sign
exactly as the Intrawest Options are registered and evidence of authority
to sign must be attached to the proxy. If the Intrawest Options are
registered in the name of a deceased, the name of the deceased must be
printed in the space provided, the proxy must be signed by the legal
representative with his/her name printed below his/her signature, and
evidence of authority to sign must be attached to the proxy.
5. To be valid, proxies must be signed, dated and either deposited with the
Transfer Agent of Intrawest, CIBC Mellon Trust Company, Suite 1600, 1066
West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X1
(Attention: Proxy Department) before 5:00 p.m. (Vancouver time) on Friday,
October 13, 2006 or, in the event the Meeting is adjourned or postponed, no
later than 48 hours before the date the adjourned Meeting is reconvened or
the postponed Meeting is convened.
6. Once this form of proxy has been signed by the appropriate signatory or
signatories and deposited in accordance with note 5 above, any proxy
previously delivered by the signatory hereto shall be revoked.
7. In accordance with the CBCA, Intrawest will prepare a list of
Securityholders as of the Record Date. The only Intrawest Optionholders
that will be entitled to vote, in person or by proxy, at the Meeting, will
be the Intrawest Optionholders of record at the close of business on the
Record Date.
8. An Intrawest Optionholder who has given a proxy has the right to revoke it
as to any matter on which a vote has not already been cast pursuant to the
authority conferred by that proxy and may do so by delivering a duly
executed proxy with a later date or a form of revocation of proxy or other
instrument in writing signed by you or by your attorney authorized in
writing (or if you are a corporation, by a duly authorized officer or
attorney). These instruments can be delivered to the Transfer Agent up to
5:00 p.m. (Vancouver time) on October 16, 2006, or if the Meeting is
adjourned or postponed, no later than 5:00 p.m. (Vancouver time) on the
Business Day preceding the date of the reconvened Meeting or (ii) by
delivering a form of revocation of proxy or a signed instrument in writing
to the Chair of the Meeting at the Meeting or any adjournment or
postponement thereof. You may also revoke your proxy in any other manner
permitted by law.
2
INTRAWEST CORPORATION
REQUEST FOR VOTING INSTRUCTIONS AND PROXY
MANAGEMENT OF INTRAWEST CORPORATION (THE
"CORPORATION") IS SENDING TO CERTAIN NON-REGISTERED
SHAREHOLDERS PROXY-RELATED MATERIALS THAT RELATE TO
THE SPECIAL MEETING OF HOLDERS OF COMMON SHARES
("COMMON SHARES") OF THE CORPORATION AND OPTIONS TO
ACQUIRE COMMON SHARES TO BE HELD ON TUESDAY, OCTOBER
17, 2006. The name and address and information about
such non-registered shareholders' holdings of Common
Shares have been obtained in accordance with
applicable securities regulatory requirements from the
intermediary holding on their behalf (which is
identified by name, code or identifier in the
information on the right).
Unless the non-registered shareholder attends the
meeting and votes in person, such holder's Common
Shares can be voted only by management, as proxyholder
of the registered holder, in accordance with such
non-registered shareholder's instructions.
Management of the Corporation has executed an
omnibus legal proxy appointing "non-objecting
beneficial owners" ("NOBOs") as proxy holders to vote
the shares beneficially held by them. Should a NOBO
wish to attend the meeting and vote in person, such
omnibus legal proxy will permit them to do so. If a
NOBO wishes to designate another person to attend and
vote at the meeting on their behalf, they may complete
and submit this form appointing someone else as proxy
holder.
MANAGEMENT OF THE CORPORATION ARE PROHIBITED FROM
VOTING THE SECURITIES HELD BY A NOBO ON ANY OF THE
MATTERS TO BE ACTED UPON AT THE MEETING WITHOUT THE
NOBO'S SPECIFIC VOTING INSTRUCTIONS. As a result, if a
NOBO is completing this form to appoint someone to
attend the meeting as a proxy holder and Mr. Houssian
or Mr. MacDougall have been appointed as proxy holder,
in order for the NOBO's Common Shares to be voted at
the meeting, IT WILL BE NECESSARY FOR THE NOBO TO
PROVIDE SPECIFIC VOTING INSTRUCTIONS.
The undersigned beneficial owner of Common Shares
of the Corporation hereby appoints Mr. Joe Houssian,
Chief Executive Officer and a Director of the
Corporation, or in his absence, Mr. Gordon MacDougall,
Lead Director of the Corporation, or in lieu of said
persons
--------------------------------------------------------------------
the true and lawful proxy of the undersigned to
attend, act and vote all the Common Shares that the
undersigned may be entitled to vote at the Special
Meeting of Securityholders of the Corporation (the
"Meeting"), to be held on Tuesday, October 17, 2006,
notice of which Meeting has been received by the
undersigned, and at any adjournment or postponement
thereof, and at every poll that may take place in
consequence thereof with full power of substitution
and with all the powers which the undersigned could
exercise if personally present:
Indicate your voting choice with a check mark (X) in the appropriate box.
VOTE FOR [ ] or VOTE AGAINST [ ] resolutions in the form set forth in
Appendix "A" of the management information circular of the Corporation dated
September 20, 2006 (the "CIRCULAR") to approve an arrangement (the
"ARRANGEMENT") under Section 192 of the Canada Business Corporations Act
involving, among other things, the acquisition by Wintergames Acquisition ULC, a
corporation that is indirectly owned by 18 private equity funds managed by
Fortress Investment Group LLC or one of its affiliates, of all of the issued and
outstanding Common Shares in exchange for US$35.00 in cash per share all as more
particularly described in the Circular.
Subject to the discussion above, the person exercising this proxy has
discretionary authority and may vote the Common Shares represented hereby as
such person considers best with respect to amendments or variations to the
matters identified in the Notice of Meeting or other matters that may properly
may come before the Meeting where such amendments, variations or matters were
not known to management of the Corporation a reasonable time prior to the
solicitation of this proxy.
All Common Shares represented at the Meeting by properly executed proxies
will be voted in accordance with the instructions of the undersigned on any
ballot that may be called for, and where a choice with respect to any matter to
be acted upon has been specified in the proxy.
The undersigned hereby revokes any proxy previously given and does further
hereby ratify all that said proxy may lawfully do in the premises.
Date: --------------------------------------------- , 2006
-----------------------------------------------------
Print Name
Number of Common Shares held: ----------------------
-----------------------------------------------------
Signature of Holder
NOTES
(a) The proxy must be signed by the beneficial owner of Common Shares or the
holder's attorney duly authorized in writing and the power of attorney need
not be attached. Where the holder is a corporation, the proxy must be
executed under its corporate seal or by an officer or attorney thereof duly
authorized and should set out the full legal name of the corporation, the
name and position of the person executing and the address for service of the
corporation.
(b) The proxy must be delivered to CIBC Mellon Trust Company by 5:00 p.m.
(Vancouver time) on Friday, October 13, 2006 or, in the case of any
adjournment or postponement of the Meeting, no later than 48 hours before
the date of the reconvened Meeting. Please use the envelope accompanying
these materials or mail the proxy to Proxy Department, CIBC Mellon Trust
Company, Suite 1600, 1066 West Hastings Street, Vancouver, British Columbia,
Canada V6E 3X1 or fax it to (604) 688-4301.
(c) A holder of Common Shares has the right to appoint a person (who need not be
a holder of Common Shares) other than those persons named above to represent
him, her or it at the Meeting and may exercise this right by inserting the
name of such person in the blank space provided above.
(d) If the proxy is not dated in the space provided, it is deemed to be dated
the date of its mailing by or on behalf of Intrawest.
(e) By providing this proxy, you are acknowledging that you are the beneficial
owner of, and are entitled to instruct the proxy holders with respect to the
voting of, these securities.
2