Freed Developments Ltd. entered into a definitive agreement to acquire Canadian Resort Assets and Surrounding Development Lands at Deerhurst and Horseshoe Valley Resort from Skyline Investments Inc. (TASE:SKLN) on September 19, 2021. In a related transaction, Freed Developments Ltd. also entered into a definitive agreement to acquire remaining development lands at Blue Mountain Resort from Skyline Investments. The aggregate purchase price for both agreements is CAD 210 million. Upon closing, Skyline will receive a cash payment of approximately CAD 109.299 million, and after debt repayment including the company's Series A bonds, payment of taxes and minority interest payouts, is expected to have between approximately CAD 30-35 million. Freed has provided a CAD 7.0 million non-refundable deposit to Skyline. A further CAD 80 million in payments (including approximately CAD 12 million in interest) is expected to follow over a two-to-four-year period, and approximately CAD 33 million will be received in the form of a 29% equity stake in Resort LP. Skyline will provide a vendor-take back mortgage loan (“VTB”) in the amount of CAD 59.984 million, bearing annual interest at 5%. Interest will accrue and be paid quarterly, with the exception of interest related to Deerhurst, which will accrue quarterly and be paid in early 2024 on the 28th month after closing in conjunction with the first scheduled principal repayment, and will paid monthly thereafter. Assuming the closing of transaction is completed on October 31, 2021, the principal portion of the VTB will be repaid over four years based on the following schedule: (i) CAD 10.0 million due on February 29, 2024; (ii) CAD 25.0 million on April 30, 2025; and (iii) CAD 24.984 million on October 31, 2025. Skyline will also provide a two-year bridge loan to Freed in the amount of CAD 8 million, which will have a guarantee from both Freed and Freed's Resort LP holding entity (the 71% owner of Resort LP), which will accrue interest at 12% until it is repaid. Both the VTB and the Bridge Loan are pre-payable by Freed at any time prior to maturity without penalty. As part of the transaction, Freed will roll its interest in Muskoka Bay into Resort LP at a CAD 90 million valuation. Resort LP will have an option until December 31, 2022 to purchase Skyline's 29% interest in Resort LP along with a 12% annualized return on this amount in cash (the “Purchase Option”). If Freed does not exercise the Purchase Option, Skyline will have a put option and Freed will have a call option at the end of years' four and five (from closing) to sell/buy up to 50% of Skyline's equity holding in Resort LP based on the fair market value at that time. Skyline will have minority rights in Resort LP, including the right to approve certain major decisions such as acquisitions and the issuance of equity or debt.

The transaction remains subject to customary closing conditions and is expected to close on or about October 31, 2021. As of November 12, 2021, the transaction is expected to close during fourth quarter of 2021. As of December 1, 2021, the closing date had been postponed beyond December 2, 2021. Freed will have the right to extend the closing date by 17 days. Beechwood Real Estate Advisors advised Skyline on the transaction.