Form 8-K

Date: November 2, 2016

CNL LIFESTYLE PROPERTIES, INC.

a Maryland Corporation

/s/ Tammy J. Tipton

Tammy J. Tipton

Chief Financial Officer and Treasurer

0001193125-16-757301.txt : 20161102 0001193125-16-757301.hdr.sgml : 20161102 20161102173055 ACCESSION NUMBER: 0001193125-16-757301 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20161102 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161102 DATE AS OF CHANGE: 20161102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CNL LIFESTYLE PROPERTIES INC CENTRAL INDEX KEY: 0001261159 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51288 FILM NUMBER: 161969174 BUSINESS ADDRESS: STREET 1: CNL CENTER AT CITY COMMONS STREET 2: 450 S ORANGE AVENUE CITY: ORLANDO STATE: FL ZIP: 32801 BUSINESS PHONE: 4076501000 MAIL ADDRESS: STREET 1: CNL CENTER AT CITY COMMONS STREET 2: 450 S ORANGE AVENUE CITY: ORLANDO STATE: FL ZIP: 32801 FORMER COMPANY: FORMER CONFORMED NAME: CNL INCOME PROPERTIES INC DATE OF NAME CHANGE: 20030825 8-K 1 d276295d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 2, 2016

CNL LIFESTYLE PROPERTIES, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland

000-51288

20-0183627

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

450 South Orange Ave.

Orlando, Florida 32801

(Address of Principal Executive Offices; Zip Code)

Registrant’s telephone number, including area code: (407) 650-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☒	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Sale of Properties

On November 2, 2016, CNL Lifestyle Properties, Inc. (the “Company”), its operating partnership, CLP Partners, LP, and certain subsidiaries of the Company entered into a Purchase and Sale Agreement (the “Sale Agreement”) with EPR Properties, a Maryland real estate investment trust (“EPR”) and Ski Resort Holdings LLC, a Delaware limited liability company owned by funds affiliated with Och-Ziff Real Estate (the ‘Ski Purchaser” and, together with EPR, the “Purchasers”), for the sale of the Company’s remaining real estate properties and related assets (the “Sale”) for aggregate consideration of approximately $830 million, which is estimated to be paid in $183 million of cash (less any acquired indebtedness, which is not expected to be material) and $647 million of common shares of beneficial interest of EPR, subject to certain pro-rations and certain other adjustments as described in the Sale Agreement. The Company’s board of directors (the “Board”) has unanimously approved the Company entering into the Sale Agreement.

The number of EPR common shares to be issued to the Company at the closing of the Sale will equal the quotient of (X) approximately $647 million divided by (Y) the volume weighted average price per share of EPR common shares on the New York Stock Exchange for the ten business days ending on the second business day before the closing (the “Closing VWAP’), provided that (i) if the Closing VWAP is less than $68.25, then the calculation will be made as if the Closing VWAP were $68.25 and (ii) if the Closing VWAP is greater than $82.63, then the calculation will be made as if the Closing VWAP were $82.63. The Sale Agreement requires, subject to compliance with applicable laws, that the Company distribute pro rata to the Company’s stockholders all of the EPR common shares received by it in connection with the Sale.

The real properties to be sold include: (i) 20 attractions properties located in the United States, in which the Company owns, directly or indirectly, 100% of the outstanding equity interests; (ii) 15 ski properties located in the United States, in which the Company owns, directly or indirectly, 100% of the outstanding equity interests; and (iii) one ski property located in Canada, in which the Company owns, directly or indirectly, 100% of the outstanding equity interests (collectively, the “Properties”).

The Sale Agreement contains customary representations and warranties of the Company and the Purchasers, which will expire at the closing of the Sale, as well as customary covenants of the Company and the Purchasers. Additionally, the closing of the Sale is subject to the satisfaction or waiver of customary closing conditions set forth in the Sale Agreement, including, among others: (i) the accuracy of the other parties’ representations and warranties and compliance with covenants (most of which are qualified to exclude inaccuracies that have not and would not reasonably be expected to, individually or in the aggregate, have a “material adverse effect” (subject to customary qualification set out in the Sale Agreement)); (ii) approval of the transaction by the Company’s stockholders; (iii) a registration statement on Form S-4 to be filed by EPR in connection with the EPR common shares to be issued to the Company in connection with the Sale becoming effective and no stop order suspending its effectiveness having been issued by the Securities and Exchange Commission (the “SEC”); (iv) the EPR common shares to be issued to the Company being approved for listing on the New York Stock Exchange; (v) termination by the Company of certain management contracts relating to certain of the attractions properties; (vi) the Purchasers obtaining the New Forest Service Permits and Ground Lease Approvals (each as defined in the Sale Agreement) in form and substance reasonably satisfactory to the Purchasers; (vii) the absence of a material adverse effect on the entities and assets being acquired by the Purchasers that is continuing at closing, and the absence of a material adverse effect on either of the Purchasers that is continuing at closing; and (viii) the expiration or termination of all waiting periods applicable to the Sale under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. There can be no assurance that the closing conditions will be satisfied, that the Sale will be consummated, or the timing thereof.

Pursuant to the terms of the Sale Agreement, the Company is also restricted from soliciting offers related to the sale of the Properties or a merger or sale of the Company. The Company may, however, respond to an unsolicited third party written acquisition proposal that the Company’s Board reasonably determines in good faith constitutes (or would reasonably be expected to result in) a superior proposal and enter into discussions with that person regarding the acquisition proposal, provided that prior to providing any non-public information to such third party, the Company (i) receives from the third party executed Acceptable Confidentiality Agreement (as defined in the Sale Agreement) and (ii) notifies the Purchasers promptly (but in no event later than 24 hours) after receipt of a third party acquisition proposal, disclosing such details as are required by the Sale Agreement. The Company has the right to terminate the Sale Agreement in order to enter into an alternative transaction that is considered a superior proposal, following a prescribed process including a period of negotiation with the Purchasers.

The Sale Agreement may also be terminated under certain other circumstances, including by any of the parties (i) if the Sale has not been consummated on or before the outside date of September 15, 2017; (ii) if a final and non-appealable order of a governmental authority is entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Sale; and (iii) upon a failure of the Company to obtain approval of its stockholders of the Sale. The Sale Agreement provides that the Company will be required to pay a termination fee of $25 million plus reimbursement of expenses incurred after June 10, 2016 (up to $10 million) to the Purchasers if the Sale Agreement is terminated because the Company enters into an alternative definitive agreement in respect of a superior proposal or the Board changes its recommendation to the Company’s stockholders with respect to the Sale. In addition, the Company will be required to pay reimbursement of expenses incurred after June 10, 2016 to the Purchasers if the Sale Agreement is terminated because the Company’s stockholders do not approve the Sale. Reimbursable expenses are generally capped at $10 million under the Sale Agreement; however, these expenses are capped at $6.5 million in the case of a termination because the Company fails to obtain the requisite stockholder approval. The Purchasers, on a joint and several basis, will be required to pay a reverse termination fee of $60 million plus reimbursement of expenses incurred after June 10, 2016 (up to $10 million) to the Company if the Sale Agreement is terminated because the Purchasers fail to close the Sale as required by the Sale Agreement after the conditions to the obligations to close have been satisfied or waived.

The Properties represent substantially all of the assets of the Company. Following the closing of the Sale and subject to the approval of the Company’s stockholders, the Company intends to liquidate and dissolve in compliance with the applicable provisions of the Maryland General Corporation Law (“MGCL”) and to make one or more distributions of its net assets, including the EPR common shares received in connection with the Sale.

The Company expects to file a proxy statement with the SEC to notify stockholders of a special meeting, and to solicit proxies in favor of the transactions contemplated by the Sale Agreement and subsequent liquidation and dissolution of the Company pursuant to the Plan of Dissolution (as defined and described below). Pursuant to the MGCL and the Company’s charter, the proposed Sale must be approved by the affirmative vote of the holders of not less than a majority of the common stock then outstanding and entitled to vote thereon. Subject to certain exceptions, the Sale Agreement requires the Board to recommend the approval of the Sale to the Company’s stockholders.

The foregoing description of the Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sale Agreement, a copy of which will be filed supplementally by the Company with the SEC. The statements embodied in the representations and warranties of the Sale Agreement were made as of a specified date, are modified or qualified by information in confidential disclosure schedules provided by the Company to the Purchasers in connection with the signing of the Sale Agreement, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Sale Agreement are not necessarily characterizations of the actual state of facts about the Company or the Purchasers at the time they were made or otherwise and should only be read in conjunction with the other information that the Company makes publicly available in reports, statements and other documents filed with the SEC.

Jefferies LLC served as financial advisor to the Company in connection with the Sale, and Robert A. Stanger & Co., Inc. served as financial advisor to the Special Committee of the Board of the Company in connection with the Sale.

Plan of Dissolution

In connection with the transactions contemplated by the Sale Agreement, the Company’s Board unanimously approved a plan of liquidation and dissolution (the “Plan of Dissolution”) pursuant to which the Company would be liquidated and dissolved, subject to consummation of the Sale Agreement and approval of the Plan of Dissolution, including the liquidation and dissolution of the Company pursuant thereto, by the Company’s stockholders.

The Company expects to make a distribution of a portion of the net proceeds of the Sale and its other cash on hand promptly after the consummation of the Sale. The Company thereafter expects to make a subsequent distribution or distributions as part of its final dissolution under the Plan of Dissolution upon resolution of, or reservation for, its final liabilities, which the Company anticipates to occur by the end of 2017. Inclusive of the Special Distribution (as defined below) the Company currently estimates that its stockholders will receive, upon

liquidation and dissolution, an amount within the estimated range of $2.60 and $2.75 per share of the Company’s common stock, in cash and EPR common shares. This is based on the cash and share consideration that the Company expects to receive in connection with the Sale of the Properties, the Special Distribution and the amount of cash on hand (including the proceeds of the sale of the Company’s remaining interests in the Retail Villages as discussed in Item 8.01 below and defined therein), less pro-rations, closing costs, transaction costs, costs of operating the Company through final dissolution under the MGCL and other liabilities. The total amount to stockholders upon liquidation and dissolution will be less than the Company’s most recently reported net asset valuation per share as of December 31, 2015 (“NAV”), as reported in the Company’s Current Report on Form 8-K filed on March 16, 2016. The NAV was established in accordance with the Investment Program Association’s Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITS (the “IPA Guidelines”), which the Company and other non-traded REITs use to determine their estimated NAV. The principal factors in the total estimated stockholder distribution being less than NAV are asset based adjustments resulting from the extended sales process and negotiations, a challenging 2015/2016 ski season, and unforeseen capital investment requirements at certain Properties.

Pursuant to the Plan of Dissolution, and as required by the MGCL, the Company expects to commence a formal process whereby it would give notice of its dissolution and allow its creditors an opportunity to come forward to make claims for amounts owed to them. Once the Company has complied with the applicable statutory requirements and either repaid its creditors or reserved amounts for payment to its creditors, including amounts required to cover as-yet unknown or contingent liabilities, the Company expects to distribute any remaining cash, less any reserved amounts for the payment of its ongoing expenses, to its stockholders.

The Plan of Dissolution provides that the proposed dissolution be submitted for consideration by the stockholders at a special meeting. Pursuant to the MGCL and the Company’s charter, the proposed dissolution must be approved by the affirmative vote of the holders of not less than a majority of the common stock then outstanding and entitled to vote thereon. The Plan of Dissolution further provides that the Company’s Board will liquidate its remaining assets in accordance with the MGCL. If the Sale and the Plan of Dissolution, including the liquidation and dissolution of the Company pursuant thereto, are approved by the stockholders, the Company intends to make liquidating distributions of its remaining cash not owed or held as security for creditors or held in reserve, if any, in cash, to the stockholders as soon as practicable after the vote.

Under the Plan of Dissolution, the Company’s Board may modify, amend or abandon the Plan of Dissolution, notwithstanding stockholder approval, to the extent permitted by the MGCL. However, the Company will not amend or modify the Plan of Dissolution under circumstances that would require additional stockholder solicitations under the MGCL or the federal securities laws without complying with the MGCL and the federal securities laws. The Company has no present plans or intentions to modify, amend or abandon the Plan of Dissolution.

The Plan of Dissolution, including the liquidation and dissolution of the Company pursuant thereto, is contingent upon the stockholders’ approval of the Sale of the Properties.

The foregoing description of terms of the Plan of Dissolution is qualified in its entirety by reference to the full text of the plan, which is attached hereto as Exhibit 2.1 and incorporated by reference herein.

Item 7.01 Regulation FD Disclosure.

The Company has posted to its website (http://www.cnllifestylereit.com/), and will mail to its stockholders, a letter notifying them that the Board has approved and is recommending to the stockholders the transactions contemplated by the Sale Agreement and the Plan of Dissolution, and advising stockholders of related matters, including the decision to suspend the Company’s cash distributions. A copy of the stockholder letter is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference solely for the purposes of this Item 7.01 disclosure.

The Company also posted to its website and will mail to its stockholders, a Q&A pertaining to the proposed Sale and the Plan of Dissolution. A copy of the Q&A is filed herewith as Exhibit 99.2 and is incorporated herein solely for purposes of this Item 7.01 disclosure.

In addition, the Company sent a correspondence to financial advisors and broker dealers that sold shares of the Company’s common stock in the Company’s public offering, notifying them, among other things, that (i) a special distribution will be made to the stockholders of record as of November 1, 2016; (ii) the Board approved and is recommending to the Company’s stockholders the Sale and the Plan of Dissolution; and (iii) the Company’s cash distributions will be suspended effective fourth quarter 2016 in connection with the Sale and the subsequent liquidation and dissolution of the Company. A copy of the Company’s correspondence to financial advisors and broker dealers is filed herewith as Exhibit 99.3 and is incorporated herein by reference solely for purposes of this Item 7.01 disclosure.

Pursuant to the rules and regulations of the SEC, the information contained in this Item 7.01 disclosure, including Exhibits 99.2 and 99.3 and the information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall any of such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

By furnishing the information contained in this Item 7.01 disclosure, including Exhibits 99.1, 99.2 and 99.3, the Company makes no admission as to the materiality of such information.

Item 8.01 Other Events.

Special Distribution; Suspension of Cash Distributions

On November 1, 2016, the Company’s Board declared a special distribution in the amount of $0.50 per share, payable to the holders of record of the Company’s common stock as of the close of business on November 1, 2016, for an aggregate total distribution of approximately $163 million (the “Special Distribution”). The Special Distribution is payable in cash and will be funded from the net proceeds of prior dispositions of certain of the Company’s assets. The Company expects to pay the Special Distribution on or about November 10, 2016.

In light of the pending Sale and the Plan of Dissolution and the Special Distribution, on November 1, 2016, the Board voted to suspend the Company’s cash distribution on its common stock effective as of the fourth quarter distributions. Accordingly, the Company will not declare or issue any further distributions on the Company’s common stock after the effective date of the suspension.

The Special Distribution will be reflected in each stockholder’s Form 1099 for the year ending December 31, 2016. The tax determination of the Special Distribution is expected to be based on the Company’s taxable results for the year ending December 31, 2016. Stockholders are advised to consult their tax advisors regarding the tax consequences of the Special Distribution in light of his or her particular investment or tax circumstances. The subsequent distributions relating to the Sale and Plan of Dissolution are expected to be reflected in each stockholder’s Form 1099 for 2017. The tax consequences of the Sale and Plan of Dissolution to each stockholder will be based on his or her tax cost basis in his or her investment in the Company.

Sale of Interests in Retail Villages

As previously reported in a Current Report on Form 8-K filed with the SEC on July 7, 2016, the Company, through its various operating subsidiaries, entered into related agreements, on May 31, 2016 and June 30, 2016, for the sale of certain condominium units and other related assets at ski resort villages in the United States and Canada (the “Retail Villages”) with Imperium Blue Ski Villages, LLC (“Imperium”). On October 28, 2016, the Company completed the sale of the Retail Villages to affiliates of Imperium. In connection with the sale of the Retail Villages, the Company received net sales proceeds of approximately $85.6 million.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits



2.1		Plan of Liquidation and Dissolution of CNL Lifestyle Properties, Inc.



99.1		Letter to the Company’s Stockholders dated November 2, 2016.

99.2		Stockholder Q&A dated November 2, 2016.

99.3		Communication with Financial Advisors and Broker Dealers dated November 2, 2016.

Additional Information about the Proposed Transactions and Where to Find It

The Company plans to file with the SEC a preliminary proxy statement for the proposed transactions, which will be a part of a registration statement on Form S-4 filed by EPR in connection with the proposed transactions and include EPR’s preliminary prospectus. A definitive proxy statement will be mailed to the Company’s stockholders. THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, EPR, THE PROPOSED SALE OF THE PROPERTIES, THE PLAN OF DISSOLUTION, AND RELATED MATTERS. BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE TRANSACTIONS, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE PROXY MATERIALS CAREFULLY WHEN THEY ARE AVAILABLE. The registration statement, the proxy statement/prospectus and other documents, when filed with the SEC, can be obtained free of charge through the website maintained by the SEC at http://www.sec.gov, at the Company’s website at http://www.cnllifestylereit.com/ under the tab “Investor Relations” and then “SEC Filings” and on EPR’s website at http://www.eprkc.com under the tab “Investor Center” and then “SEC Filings.”

Participants in the Solicitation

The Company and its directors and executive officers and EPR and its trustees and executive officers and other members of their respective management and employees may be deemed participants in the solicitation of proxies from the Company’s stockholders in connection with the proposed transactions. Information regarding the special interests of these directors, trustees and executive officers in the proposed transactions will be included in the definitive proxy statement/prospectus referred to above. Additional information regarding the Company’s directors and executive officers is also included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which was filed with the SEC on March 28, 2016. Additional information regarding EPR’s trustees and executive officers is also included in EPR’s proxy statement for its 2016 Annual Meeting of Shareholders, which was filed with the SEC on April 1, 2016, and in Form 4s of EPR’s trustees and executive officers filed with the SEC. The filed documents are available free of charge at the SEC’s website at sec.gov and from the Company and EPR by contacting them as described above. Other information about the participants in the proxy solicitation will be contained in the proxy statement/prospectus.

Cautionary Note Regarding Forward-Looking Statements

The information above contains “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbor created by Section 21E of the Exchange Act. Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of the Company’s business and its performance, the economy, and other future conditions and forecasts of future events, and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual results could differ materially from those set forth in the forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the ability of the Company to obtain the requisite stockholder approval to consummate the proposed Sale and the Plan of Dissolution, the satisfaction or waiver of other conditions in the Sale Agreement; the outcome of legal proceedings that may be instituted against the Company and others related to the Sale Agreement; the ability of third parties to fulfill their obligations relating to the proposed transactions; the risk that the Sale or the other transactions contemplated by the Sale Agreement may not be completed in the time frame expected by the parties or at all; the ability of the Company to implement its operating strategy; changes in economic cycles; the impact of changes in accounting rules; the impact of regulations requiring periodic valuation of the Company on a per share basis; inaccuracies of the Company’s accounting estimates; unknown liabilities of acquired properties or liabilities caused by property managers or operators; risks associated with the Company’s tax structuring; failure to maintain the Company’s REIT qualification; and the Company’s inability to protect its intellectual property and the value of its brand.

Given these uncertainties, the Company cautions you not to place undue reliance on such statements. For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s documents filed from time to time with the SEC, including, but not limited to, the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained from the Company’s website at http://www.cnllifestylereit.com/. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX


Exhibit No.		Exhibit Description

2.1		Plan of Liquidation and Dissolution of CNL Lifestyle Properties, Inc.

99.1		Letter to the Company’s Stockholders dated November 2, 2016.

99.2		Stockholder Q&A dated November 2, 2016.

99.3		Communication with Financial Advisors and Broker Dealers dated November 2, 2016.

EX-2.1 2 d276295dex21.htm PLAN OF LIQUIDATION AND DISSOLUTION Plan of Liquidation and Dissolution

Exhibit 2.1

CNL LIFESTYLE PROPERTIES, INC.

PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION

1. Approval and Effectiveness of Plan. This Plan of Complete Liquidation and Dissolution (the “Plan”) of CNL Lifestyle Properties, Inc., a Maryland corporation (the “Corporation”), has been approved by the Board of Directors of the Corporation (the “Board”) as being advisable and in the best interests of the Corporation and its stockholders (the “Stockholders”). The Board has directed that the Plan be submitted to the Stockholders for approval. The Plan shall become effective upon approval of the Plan by the Stockholders. The date of the Stockholders’ approval is hereinafter referred to as the “Effective Date.”

2. Voluntary Liquidation and Dissolution. On and after the Effective Date, the Corporation shall voluntarily liquidate and dissolve in accordance with Section 331 of the Internal Revenue Code of 1986, as amended, and the Maryland General Corporation Law (the “MGCL”). Pursuant to the Plan, the proper officers of the Corporation shall perform such acts, execute and deliver such documents, and do all things as may be reasonably necessary or advisable to complete the liquidation and dissolution of the Corporation, including, but not limited to, the following: (a) promptly wind up the Corporation’s affairs, collect its assets and pay or provide for its liabilities (including contingent liabilities); (b) sell or exchange any and all property of the Corporation at public or private sale; (c) prosecute, settle or compromise all claims or actions of the Corporation or to which the Corporation is subject; (d) declare and pay to or for the account of the Stockholders, at any one or more times as they may determine, liquidating distributions in cash, kind or both; (e) cancel all outstanding shares of stock of the Corporation upon the payment of such liquidating distributions; (f) execute for or on behalf of the Corporation, in its corporate name and under its corporate seal, those contracts of sale, deeds, assignments, notices and other documents as may be necessary, desirable or convenient in connection with the carrying out of the liquidation and dissolution of the Corporation; (g) execute for or on behalf of the Corporation, in its corporate name and under its corporate seal, such forms and documents as are required by the State of Maryland, any jurisdiction in which the Corporation has been qualified to business and the Federal government, including tax returns; and (h) pay all costs, fees and expenses, taxes and other liabilities incurred by the Corporation and/or its officers in carrying out the liquidation and dissolution of the Corporation.

3. Sales of Assets.

(a) The Corporation is authorized to sell, and to cause its subsidiaries to sell, upon such terms as may be deemed advisable, any or all of their respective assets for cash, notes, redemption of equity or such other assets as may be conveniently liquidated or distributed to the Stockholders.

(b) The Corporation shall not authorize or transfer assets pursuant to any sale agreement between the Corporation or its subsidiaries, on the one hand, and an affiliate of the Corporation or its subsidiaries, on the other hand, unless a majority of directors, including a majority of independent directors, not otherwise interested in the transaction determine that the transaction is fair and reasonable to the Corporation or its subsidiaries, as the case may be.

4. Reserve Fund. The Corporation is authorized, but not required, to establish one or more reserve funds, in a reasonable amount and as may be deemed advisable, to meet known liabilities and liquidating expenses and estimated, unascertained or contingent liabilities and expenses. Creation of a reserve fund may be accomplished by a recording in the Corporation’s accounting ledgers of any accounting or bookkeeping entry which indicates the allocation of funds so set aside for payment. The Corporation is also authorized, but not required, to create a reserve fund by placing cash or property in escrow with an escrow agent for a specified term together with payment instructions. Any undistributed amounts remaining in such an escrowed reserve fund at the end of its term shall be returned to the Corporation, the liquidating trust referred to below or such other successor-in-interest to the Corporation as may then exist or, if no such entity is then in existence, shall be delivered to the abandoned property unit of the Maryland State Comptroller’s office. The Corporation may also create a reserve fund by any other reasonable means.

6. Insurance Policies. The Corporation is authorized, but not required, to procure one or more insurance policies, in a reasonable amount and as may be deemed advisable, to cover unknown or unpaid liabilities and liquidating expenses and unascertained or contingent liabilities and expenses.

7. Articles of Dissolution. Upon assignment and conveyance of the assets of the Corporation to the Stockholders, in complete liquidation of the Corporation as contemplated by Sections 2 and 3 above, and the taking of all actions required under the laws of the State of Maryland in connection with the liquidation and dissolution of the Corporation, the proper officers of the Corporation are authorized and directed to file articles of dissolution with the State Department of Assessments and Taxation of Maryland (the “Department”) pursuant to Section 3-407 of the MGCL and to take all other appropriate and necessary action to dissolve the Corporation under Maryland law. Prior to filing articles of dissolution, the Corporation shall give notice to its known creditors and employees as required by Section 3-404 of MGCL (alternatively, the Board may determine that the Corporation has no employees or known creditors) and satisfy all other prerequisites to such filing under Maryland law. Upon the Department’s acceptance of the articles of dissolution for record, as provided by Section 3-408(a) of the MGCL, the Corporation shall be dissolved.

8. Effect and Timing of Distributions. Upon the complete distribution of all assets of the Corporation (the “Final Distribution”) to the holders of outstanding shares of common stock, par value $0.01 per share, of the Corporation (the “Common Stock”) and the dissolution of the Corporation as contemplated by Section 6 above, all such shares of Common Stock shall be canceled and no longer deemed outstanding and all rights of the holders thereof as Stockholders shall cease and terminate. The Corporation shall use commercially reasonable efforts to cause the liquidation and dissolution of the Corporation to occur and to make the Final Distribution to holders of outstanding shares of Common Stock no later than the second anniversary of the Effective Date.

9. Final Distribution as Distribution in Kind of Liquidating Trust Beneficial Interests. In the event that the Board deems it necessary or advisable in order to preserve the Corporation’s status as a REIT or otherwise avoid the payment of income tax, the Board deems it necessary or advisable in order to enable the Corporation to terminate its obligation to file quarterly reports and audited annual financial statements with the Securities and Exchange Commission (the “Commission”) or the Board determines it is otherwise advantageous or appropriate to do so, the Board may cause the Corporation to make the Final Distribution as a distribution in kind of beneficial interests in a trust (the “Liquidating Trust”), at such time as the Board deems appropriate in its sole discretion, substantially as follows:

(a) The Corporation may create the Liquidating Trust under Maryland statutory or common law and may transfer and assign to the Liquidating Trust all of the assets of the Corporation and its subsidiaries of every sort whatsoever, including their unsold properties, assets, claims, contingent claims and causes of action, subject to all of their unsatisfied debts, liabilities and expenses, known or unknown, contingent or otherwise. From and after the date of such transfer and assignment of assets (subject to liabilities) to the Liquidating Trust, the Corporation and its subsidiaries shall have no interest of any character in and to any such assets and all of such assets shall thereafter by held by the Liquidating Trust.

(b) Simultaneously with such transfer and assignment, shares of beneficial interest in the Liquidating Trust shall be deemed to be distributed to each holder of shares of Common Stock, all of whom shall automatically and without any need for notice or presentment be deemed to hold corresponding shares of beneficial interest in the Liquidating Trust. Such distribution of shares of beneficial interest in the Liquidating Trust shall constitute the Final Distribution of all of the assets of the Corporation to the Stockholders under Section 8 above.

(d) The declaration of trust or other instrument governing the Liquidating Trust (the “Declaration of Trust”) shall provide, among other things, that, immediately following such transfer, assignment and distribution, each share of beneficial interest in the Liquidating Trust shall have a claim upon the assets of the Liquidating Trust that is the substantial economic equivalent of the claims each share of Common Stock had upon the assets of the Corporation immediately prior to the transfer, assignment and distribution. The Declaration of Trust shall further provide that the Liquidating Trust’s activities shall be limited to conserving, protecting and selling the assets transferred to it and distributing the proceeds therefrom, including holding such assets for the benefit of the holders of beneficial interests in the Liquidating Trust, temporarily investing such proceeds and collecting income therefrom, providing for the debts, liabilities and expenses of the Corporation, making liquidating distributions to the holders of shares of beneficial interest in the Liquidating Trust and taking other actions as may be deemed necessary or appropriate by the trustees to conserve and protect the assets of the Liquidating Trust and provide for the orderly liquidation thereof.

(e) Approval of the Plan shall constitute the approval by the Stockholders of the transfer and assignment to the Liquidating Trust, the form and substance of the Declaration of Trust as approved by the Board and the appointment of trustees selected by the Board.

10. Termination of Exchange Act Registration. Immediately prior to any transfer to the Liquidating Trust, or at such other time as the Board considers appropriate, the Board and the proper officers of the Corporation are authorized to cause the Corporation to file a Form 15 (or take other appropriate action) to terminate the registration of the Common Stock under the Securities Exchange Act of 1934, as amended.

11. Interpretation; General Authority. The Board, the trustees of the Liquidating Trust and the proper officers of the Corporation are hereby authorized to interpret the provisions of the Plan and are hereby authorized and directed to take such actions, to give such notices to creditors, stockholders and governmental entities, to make such filings with governmental entities and to execute such agreements, conveyances, assignments, transfers, certificates and other documents, as may, in their judgment, be necessary or advisable in order to wind up expeditiously the affairs of the Corporation and complete the liquidation and dissolution thereof, including, without limitation: (a) the execution of any contracts, deeds, assignments or other instruments necessary or appropriate to sell or otherwise dispose of any or all property of the Corporation, its subsidiaries or the Liquidating Trust, whether real or personal, tangible or intangible; (b) the appointment of other persons to carry out any aspect of the Plan; and (c) the temporary investment of funds in such medium as the Board or the trustees of the Liquidating Trust may deem appropriate.

12. Director Compensation. The independent members of the Board shall continue to receive compensation until the Final Distribution, provided that they remain members of the Board.

13. Indemnification. The Corporation shall reserve sufficient assets and/or obtain or maintain such insurance (including, without limitation, directors and officers insurance) as shall be necessary or advisable to provide the continued indemnification of the directors, officers and agents of the Corporation and such other parties whom the Corporation has agreed to indemnify, to the maximum extent provided by the charter and bylaws of the Corporation, any existing indemnification agreement to which the Corporation is a party and applicable law. At the discretion of the Board, such insurance may include coverage for the periods after the dissolution of the Corporation, including periods after the termination of any Liquidating Trust, and may include coverage for trustees, officers, employees and agents of such Liquidating Trust.

14. Governing Law. The validity, interpretation and performance of the Plan shall be controlled by and construed under the laws of the State of Maryland.

15. Abandonment of Plan of Liquidation; Amendment. The Board may terminate the Plan for any reason. Notwithstanding approval of the Plan by the Stockholders, the Board or the trustees of the Liquidating Trust may modify or amend the Plan without further action by or approval of the Stockholders to the extent permitted under then current law.

EX-99.1 3 d276295dex991.htm COMPANY STOCKHOLDER LETTER Company Stockholder Letter

Exhibit 99.1

Nov. 2, 2016

Dear Fellow Stockholder,

We are writing with important information regarding your investment in CNL Lifestyle Properties. As you know, our board of directors, management team and third-party financial advisor, Jefferies LLC, have been working diligently on strategic liquidity alternatives. Since this process formally began nearly three years ago, we have successfully sold 120 properties for nearly $1.9 billion, including the recent sale of our seven ski villages to Imperium Ski Villages on Oct. 28. We are now pleased to announce that we have signed a definitive agreement to sell our remaining assets for $830 million and move toward the dissolution of the company. We expect this will result in total distributions between $2.60 to $2.75 per share. As you know, we previously distributed $1.30 at the end of 2015.

This letter includes details about the sale, distributions from the sale and plans for dissolution of CNL Lifestyle Properties. It also includes important information about a special distribution later this month driven by a recently closed transaction. We encourage you to read this letter, along with the enclosed list of frequently asked questions, very carefully.

This sale and the proposed dissolution will require stockholder approval.

Assets Sale

CNL Lifestyle Properties has entered into a purchase and sale agreement with EPR Properties (NYSE: EPR) and Ski Resort Holdings LLC for the sale of the final 36 ski and attractions assets in our real estate portfolio. The consideration for the transaction is $183 million in cash and an estimated $647 million in shares of EPR unrestricted common stock. Importantly, the amount of stock to be received by stockholders is governed by a two-way “collar” mechanism covering a prescribed trading range in which the value of EPR shares to be received by stockholders will be fixed within the range during the time between signing of the definitive agreement and ultimate closing date of the transaction. The final price is subject to adjustments based on the NYSE weighted average closing price of EPR common stock for the ten business days prior to the transaction closing.

EPR Properties, based in Kansas City, Missouri, is a specialty-traded REIT that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. EPR has a total investment portfolio that currently exceeds $5 billion within their three primary investment segments of entertainment, recreation and education. As of Nov. 1, 2016, EPR pays a $0.32 monthly cash dividend to common stockholders. This dividend represents an annualized dividend of $3.84 and is currently paying a yield of 5.4 percent.

Ski Resort Holdings LLC, a Delaware Limited Liability Company, is owned by funds affiliated with Och-Ziff Real Estate.

The sale is subject to customary closing conditions, including governmental and third-party consents. We anticipate that, with stockholder approval, the sale could be completed early in the second quarter of 2017.

Because this transaction represents the sale of the final assets in our portfolio, the board of directors of CNL Lifestyle Properties has also approved a plan of liquidation and dissolution, whereby all of the company’s assets will be liquidated and the company dissolved after the proposed sale. As we indicated previously, and as is standard with a sale and liquidation, our board of directors has also approved the suspension of regular distributions on our common stock effective fourth quarter 2016.

Upcoming Stockholder Events & Distributions

As we near the liquidity and dissolution of CNL Lifestyle Properties, there are several key events that will be important to you as a stockholder. Our board of directors has approved a special distribution of approximately $163 million, or $0.50 per share. This distribution will be sent to you on or around Nov. 10, 2016. In addition, upon sale and liquidation of the ski and attractions assets, we expect to send you two additional, separate liquidating distributions.

The interim liquidating distribution will be comprised of all of the EPR common stock received by the company from the sale and some cash. As mentioned, the value of the EPR stock to be issued and the number of shares to be received is governed by a “collar” mechanism and is subject to change based on the trading price of the EPR stock on the ten days prior to the date we close the transaction. We anticipate sending you that payment approximately two weeks after we close the transaction.

A third, and final, cash distribution is expected to occur later in 2017 after we settle all post-closing obligations and reconcile all expenses related to the liquidation and dissolution of the company.

As mentioned above, the total range of these three distributions is expected to be between $2.60 to $2.75 per share.

The three combined distributions will be lower than our estimated net asset value (NAV) per share of $3.05 as of December 2015. The difference in expected range and the estimated NAV is primarily driven by market-based values that materialized through our extended sales process and negotiations, a challenging 2015/16 ski season, particularly at our Eastern U.S. resorts, and very recent and unforeseen capital investment requirements at certain properties.

Looking Ahead

In the coming weeks, we will prepare and file a proxy statement with the Securities & Exchange Commission (SEC) that will contain detailed information about the proposed transaction, and the process for voting your shares. In the meantime, we have provided answers to some frequently asked questions with this letter. Once the final proxy statement is approved by the SEC, we will mail it to you. Once you receive the proxy statement, you will need to review it carefully and vote your shares because these transactions cannot occur without your vote. Voting your shares early will help us reduce the expenses related to the proxy solicitation. The documents will also be posted on our website at cnllifestylereit.com.

Our management team and board of directors have worked tirelessly on behalf of our stockholders to drive performance at the asset level, while actively exploring the best liquidity opportunities available. We have taken very seriously our obligation to explore all liquidity options and determine the best alternative for our stockholders. We firmly believe this sale and these distributions represent the most favorable outcome for stockholders.

We look forward to filing and mailing the proxy statement for this important transaction. In the meantime, if you have questions regarding this letter, please contact CNL Client Services, 866-650-0650, option 3, or your financial advisor.

Sincerely,


James M. Seneff		Stephen H. Mauldin
Chairman of the Board		Chief Executive Officer & President

cc: Financial Representatives

Enclosure

Cautionary Note Regarding Forward-Looking Statements

Forward-looking statements are based on current expectations and may be identified by words such as “believes,” “anticipates,” “expects,” “may,” “could” and terms of similar substance, and speak only as of the date made. Actual results could differ materially due to risks and uncertainties that are beyond the Company’s ability to control or accurately predict, including the amount and timing of anticipated future distributions, estimated per share net asset value of the Company’s stock and/or other matters. The Company’s forward-looking statements are not guarantees of future performance. Stockholders and financial advisors should not place undue reliance on forward-looking statements.

Additional Information about the Proposed Transactions and Where to Find It

Participants in the Solicitation

EX-99.2 4 d276295dex992.htm STOCKHOLDER Q&A Stockholder Q&A

Exhibit 99.2

CNL Lifestyle Properties Plan of Liquidation & Distribution, Purchase & Sale Agreement and Special Distribution,

Nov. 2, 2016

1.	What happens now that the sale agreement has been signed?

Both the sale of the remaining assets in our portfolio and the liquidation and dissolution of CNL Lifestyle Properties need stockholder approval. This requires us to file a joint registration statement/proxy statement with the SEC and respond to their comments. We are working to prepare a preliminary proxy statement for the proposed transactions. A final proxy statement will be mailed to you once it has been approved by the SEC. It will also be available on our website. Please take time to vote.

2.	What is the required vote?

A majority of the outstanding shares of common stock of CNL Lifestyle Properties must approve both the proposed sale and the liquidation and dissolution in order for the transactions to take place.

3.	Why suspend quarterly distributions?

This is very common within the industry once liquidation and dissolution are being considered. We have suspended fourth quarter distributions because our board of directors believes it is in the best interest of our stockholders to protect the company’s financial position in preparation for the dissolution of the company.

4.	What will happen to my CNL Lifestyle Properties shares after the sale is complete?

Once the sale is complete, you will receive an interim distribution comprised of unrestricted, freely tradeable EPR stock and cash. Once the company settles all post-closing obligations, any remaining cash will be paid to you as a final distribution. Upon final dissolution of the company, your shares of CNL Lifestyle Properties common stock will be canceled.

5.	How long will all this take? When will I receive my liquidating distributions?

Due to the uncertainties of the SEC’s review process with respect to the proxy statement and the process to close this complex transaction, the exact timing of the special stockholder meeting is not yet known. Completion of the sale, payment of the interim and final liquidating distributions, and dissolution of the CNL Lifestyle Properties will take place afterward, as quickly and efficiently as possible. Assuming a timely SEC review and stockholders’ approval of the sale, which is subject to customary closing conditions, we anticipate the closing could take place early in the second quarter of 2017.

6.	What is the “collar” mechanism?

The amount of stock to be received by stockholders is governed by a two-way “collar” mechanism covering a prescribed trading range in which the value of EPR shares to be received by stockholders will be fixed within a certain range during the time between signing of the definitive agreement and ultimate closing date of the transaction.

This means that the actual number of shares, within the range of the collar, will be calculated based on EPR’s volume weighted average price over the ten trading days ending on the second trading day prior to close (the Average EPR Share Price). The ultimate number of EPR shares will depend on the Average EPR Share Price between the time the agreement is signed and when the transaction closes. The stock consideration is subject to a two-way collar between Average EPR Share Prices of $68.25 and $82.63. Within this range, we expect no economic impact to stockholders.

7.	Can I sell my EPR shares?

Yes. Once distributed, all EPR shares received by our stockholders will be non-restricted common stock and will be freely tradeable immediately upon your receipt through a brokerage account.

8.	Why is the liquidating per share amount less than the estimated net asset value as of Dec. 31, 2015?

The difference in expected liquidating distributions and the estimated net asset value is driven by market-based values that materialized through our extended sales process and negotiations, a challenging 2015/16 ski season, particularly at our Eastern U.S. resorts, and very recent and unforeseen capital investment requirements at certain properties.

Our management team and board of directors have worked tirelessly on behalf of our stockholders to drive performance at the asset level, while actively exploring the best liquidity opportunities available. We have taken our obligation to explore all liquidity options very seriously and determine the best alternative for our stockholders. In this current environment, we firmly believe this sale and these distributions represent the most favorable outcome for stockholders.

9.	Will I have a tax consequence as a result of the proposed transactions?

The special distribution will be reflected in your Form 1099 for the year ending Dec. 31, 2016. The tax determination of the special distribution is expected to be based on the company’s taxable results for the year ending Dec. 31, 2016.

The final liquidating distributions will be reflected in your 2017 Form 1099. The tax consequences to you will be based on your tax cost basis in your investment.

10.

What will happen if the sale is not approved?

If the sale is not approved by stockholders, the liquidation and dissolution of CNL Lifestyle Properties cannot occur. We will not make liquidating distributions to stockholders and we will continue to operate CNL Lifestyle Properties and thoughtfully pursue alternative strategic options.

11.

What do I need to do?

As a stockholder, your vote will be required for all these transactions to take place. You will need to review the proxy statement and vote your shares once you receive your proxy statement. Voting your shares early will help us reduce the expenses related to the proxy solicitation and special stockholders meeting.

For additional information, please read our Current Report on Form 8-K, filed with the SEC on Nov. 2, 2016.

Cautionary Note Regarding Forward-Looking Statements

Additional Information about the Proposed Transactions and Where to Find It

Participants in the Solicitation

EX-99.3 5 d276295dex993.htm COMMUNICATION WITH FINANCIAL ADVISORS AND BROKER DEALERS DATED NOVEMBER 2, 2016. Communication with Financial Advisors and Broker Dealers dated November 2, 2016.

Exhibit 99.3

FA Email

CNL Lifestyle Properties News: Plan of Liquidation & Dissolution, Purchase & Sale Agreement

and Special Cash Distribution

Nov. 2, 2016

FOR BROKER-DEALER AND RIA USE ONLY.

Dear Financial Advisor:

We would like to let you know that CNL Lifestyle Properties has announced that it will make a special cash distribution, sell its remaining assets, suspend its regular cash distributions and liquidate and dissolve the company.

•

A special cash distribution of approximately $163 million, or $0.50 per share, will be made to stockholders of record as of Nov. 1. 2016. The special distribution will be funded by the $85.6 million net sales proceeds from seven ski resort villages that were sold on Oct. 28, 2016, and net sales proceeds and cash on hand from prior dispositions. Payment will be made on or about Nov. 10, 2016. As a reminder, stockholders received a special cash distribution of $1.30 per share in December 2015.

•

A purchase and sale agreement has been signed with EPR Properties (NYSE: EPR) and Ski Resort Holdings LLC for the sale of the 36 remaining ski and attractions properties in our real estate portfolio. The gross sale consideration is projected to be $830 million in a combined stock and cash transaction, subject to certain adjustments and pro-rations. The $830 million is comprised of approximately $647 million of non-restricted EPR common stock (78 percent) and $183 million cash (22 percent), subject to a “collar” mechanism relative to the trading price of EPR stock prior to closing.

◾

Our board of directors has suspended regular distributions effective fourth quarter 2016, due to the pending sale and subsequent liquidation and dissolution. As a result, no further regular distributions will be declared or issued. This is very common within the industry once liquidation and dissolution are being considered.

◾

In connection with the sale to EPR and Ski Resort Holdings LLC, our board of directors approved the liquidation and dissolution of CNL Lifestyle Properties after stockholders consent to the sale and the assets are sold. Our board of directors concluded that this course of action will result in the most favorable outcome for our stockholders.

◾

The sale to EPR and Ski Resort Holdings LLC, and the liquidation and dissolution of CNL Lifestyle Properties require stockholders’ approval at a special meeting. A proxy statement will be filed as soon as possible with the SEC and, once approved, will be mailed to stockholders. Until then, and due to the nature of this transaction, we are limited to the amount of information we can share until the SEC approves the proxy statement. A majority of the outstanding shares of common stock must approve both the proposed sale of assets and the liquidation and dissolution in order for the transactions to occur. Once stockholders receive their proxy statement, it will be important for them to vote early to help reduce corporate expenses related to the proxy solicitation and special stockholders meeting.

THE SALE AGREEMENT

◾

EPR Properties (NYSE: EPR) states that it is a specialty traded REIT, based in Kansas City, Missouri, that invests in properties in select market segments which require unique industry knowledge, while offering the potential for positive returns. EPR has a total investment portfolio that currently exceeds $5 billion within their primary investment segments of entertainment, recreation and education. As of Nov. 1, 2016, EPR pays a $0.32 monthly cash dividend to common stockholders. This dividend represents an annualized dividend of $3.84 and is currently paying a yield of 5.4 percent.

◾

Ski Resort Holdings LLC, a Delaware Limited Liability Company, is owned by funds affiliated with Och-Ziff Real Estate.

◾

The decision to enter into agreements with EPR & Ski Resort Holdings LLC is the result of a thorough review of our strategic alternatives, which began almost three years ago in 2014 when we engaged Jefferies LLC to assist management and the board of directors in evaluating various strategic alternatives.

◾

The sale is subject to customary closing conditions, approval by our stockholders at a special meeting and governmental and other third-party consents. As such, there is no assurance if or when the sale will close; however, assuming a timely SEC review and the conditions mentioned earlier, we anticipate that the closing could occur early in the second quarter of 2017. The sale agreement may be terminated by either party under certain circumstances including if the sale has not been completed on or before the outside date of Sept. 15, 2017, failure to get stockholders approval or if an order to restrain or otherwise prohibit the sale is received from a government authority.

LIQUIDATION AND DISSOLUTION & ESTIMATED NET ASSET VALUE (NAV)

◾

In aggregate, we currently expect that stockholders will receive three distributions, including the special distribution. The total range for the three distributions is expected to be between $2.60 and $2.75 per share of CNL Lifestyle Properties common stock. This includes the approximate cash and stock consideration for the liquidation sale, the special cash distribution, and the cash on hand, including sales proceeds from the seven retail villages, less pro-rations, closing and transaction costs.

◾

We anticipate making two liquidating distributions: (1) an interim liquidating distribution approximately two weeks after the sale closes, and (2) once we settle all post-closing obligations and reconcile all expenses related to the liquidation and dissolution, any remaining cash would be distributed to stockholders as a final liquidating distribution. We estimate this final distribution to occur by year-end 2017.

◾

The combined distribution to stockholders is expected to be less than our estimated net asset value (NAV)¹ per share of $3.05 as of Dec. 31, 2015. This is primarily due to market-based values that materialized through our extended asset sales process and negotiations, a challenging 2015/16 ski season performance particularly at our Eastern U.S. resorts, and very recent and unforeseen capital investment requirements at certain properties.

If the sale and the liquidation and dissolution are not approved by stockholders, the liquidation and dissolution cannot occur and we will continue to operate CNL Lifestyle Properties and thoughtfully pursue alternative strategic options.

For complete information, please read our Current Report on Form 8-K, filed with the SEC on Nov. 2, 2016. We have communicated this information to our stockholders in a letter and frequently asked questions to be mailed on Nov. 4, 2016, posted to our website at cnllifestylereit.com, and filed as exhibits to the Form 8-K.

¹ The estimated NAV per share was established in accordance with the Investment Program Association’s Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITS (IPA Guidelines), which the REIT and other non-traded REITs use to determine their estimated NAV. The estimated NAV per share is a snapshot in time and is not necessarily indicative of the value the company or stockholders may receive if the company were to list its shares or liquidate its assets, now or in the future. There is no assurance that the IPA Guidelines are acceptable to the SEC, FINRA or under ERISA for compliance with reporting requirements.

Cautionary Note Regarding Forward-Looking Statements

Additional Information about the Proposed Transactions and Where to Find It

Participants in the Solicitation

FOR BROKER-DEALER AND RIA USE ONLY.

CLP-1116-00086-001-BD