United States
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED OCTOBER 26, 1997
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Commission File Number 333-33483
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American Skiing Company
(Exact name of registrant as specified in its charter)
Maine 04-3373730
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 450
Bethel, Maine 04217
(Address of principal executive office) (Zip Code)
(207) 824-5196
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report.)
Indicated by checkmark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of
common stock were 14,760,530 of Class A common stock $.01 par value and
14,750,000 shares of common stock $.01 par value outstanding as of
December 22, 1997.
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Table of Contents
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Statement of Operations (Unaudited)
for the three months ended October 26, 1997
and October 27, 1996 .......................................1
Condensed Consolidated Balance Sheet
as of October 26, 1997 (Unaudited)and July 27, 1997 ........3
Condensed Consolidated Statement of Cash Flows
(Unaudited) for the three months ended October 26, 1997
and October 27, 1996 .......................................5
Notes to Condensed Consolidated Financial Statements
(Unaudited) ...............................................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General ....................................................9
Liquidity and Capital Resources ............................9
Changes in Results of Operations ..........................12
Changes in Financial Condition ............................14
Subsequent Events .........................................15
Forward-Looking Statements ................................16
Part II - Other Information
Item 2. Changes in Securities and Reports filed
on Form 8K .......................................18
Item 4. Submission of Matters to Vote of Security
Holders ..........................................18
Item 6. Exhibits ..........................................18
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Part I - Financial Information
Item 1
Financial Statements
This Form 10-Q is filed by American Skiing Company ("ASC") for itself
and its following wholly-owned subsidiaries:
Sunday River Skiway Corporation Sunday River, Ltd.
Sunday River Transportation Perfect Turn, Inc.
LBO Holding, Inc. Sugarbush Resort Holdings, Inc.
Mountain Wastewater Treatment, Inc. Sugarbush Leasing Company
Sugarbush Restaurants, Inc. Cranmore, Inc.
Grand Summit Resort Properties, Inc. S-K-I Limited
Killington, Ltd. Mount Snow, Ltd.
Waterville Valley Ski Area, Ltd. Sugarloaf Mountain Corporation
Killington Restaurants, Inc. Dover Restaurants, Inc.
Resort Technologies, Inc. Resort Software Services, Inc.
Mountainside Sugartech
Deerfield Operating Company Pico Ski Area Management Company
SKI Insurance Mountain Water Company
Killington West, Ltd. Club Sugarbush, Inc.
ASC East, Inc. ASC West, Inc.
ASC Utah
As used herein the term the "Company" means and refers to American
Skiing Company and the subsidiary registrants listed above on a
consolidated basis.
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American Skiing Company and Subsidiaries
Part I - Financial Information
Item 1 Financial Statements
Condensed Consolidated Statement of Operations
(In thousands, except share and per share amounts)
For the three months ended
October 26, 1997 October 27, 1996
(unaudited) (unaudited)
Net revenues:
Resort $13,811 $ 11,728
Real estate 810 1,569
Total net revenues 14,621 13,297
Operating expenses:
Resort 17,808 15,034
Real estate 925 1,032
Marketing, general and administrative 6,845 4,792
Stock option charge (note 7) 14,254
Depreciation and amortization 1,506 1,527
Total operating expenses 41,338 22,385
Loss from operations (26,717) (9,088)
Interest expense 7,521 7,514
Loss before benefit for income taxes
and minority interest in loss of subsidiary (34,238) (16,602)
Benefit for income taxes (13,353) (6,309)
Minority interest in loss of subsidiary (456)
Net loss (20,429) (10,293)
Accretion of discount and dividends accrued on
mandatorily redeemable preferred stock $ (2,431) $ -
1
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American Skiing Company and Subsidiaries
Condensed Consolidated Statement of Operations (Continued)
(In thousands, except share and per share amounts)
For the three months ended
October 26, 1997 October 27, 1996
(unaudited) (unaudited)
Net loss available to common shareholders $ (22,860) $ (10,293)
Net loss per Class A common and common
shares outstanding (note 4) $ (1.55) $ (10.52)
Retained earnings, beginning of the period $ 12,305 $ 18,131
Net loss available to Common Shareholders (22,860) (10,293)
Retained earnings, end of period $ (10,555) $ 7,838
Weighted average common shares
outstanding, Class A common and common 14,760,530 978,300
See accompanying notes to condensed consolidated financial statements.
2
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American Skiing Company and Subsidiaries
Condensed Consolidated Balance Sheet
(In thousands, except share and per share amounts)
October 26, 1997 July 27, 1997
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 6,214 $ 15,558
Restricted cash 6,762 2,812
Deposit 11,010
Accounts receivable 4,358 3,801
Inventory 12,102 7,282
Prepaid expenses 2,536 1,579
Deferred tax assets 422 422
Total current assets 43,404 31,454
Property and equipment, net 271,082 252,346
Goodwill 10,595 10,664
Deferred financing costs 9,171 9,431
Long-term investments 3,380 3,507
Other assets 8,997 6,398
Real estate developed for sale 45,478 23,540
Total assets $ 392,107 $ 337,340
3
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American Skiing Company and Subsidiaries
Condensed Consolidated Balance Sheet
(In thousands, except share and per share amounts)
October 26, 1997 July 27, 1997
(unaudited)
Liabilities Mandatorily Redeemable Preferred
Stock, and Shareholders' Equity
Current liabilities
Line of credit and current portion of
long-term debt $ 36,236 $ 39,748
Accounts payable and other
current liabilities 40,719 24,857
Deposits and deferred revenue 14,657 4,379
Demand note, shareholder 1,933 1,933
Due to affiliate 95 -
Total current liabilities 93,640 70,917
Long-term debt, excluding current portion 255,045 196,582
Other long-term liabilities 8,200 8,779
Minority Interest 170 626
Deferred income taxes 15,021 28,514
Total liabilities 372,076 305,418
Mandatorily redeemable preferred stock
Series A, par value $1,000 per share
200,000 shares authorized; 17,500
issued and outstanding; net or
unaccreted issuance costs and
including
accretion or discount and cumulative
dividends in arrears (redemption value 19,252 16,821
of 19,252)
Shareholders' Equity
Common stock, Class A, par value $.01
per share, 15,000,000 shares authorized;
14,760,530 issued and outstanding; 10 10
Additional paid-in capital 11,324 2,786
Retained earnings (10,555) 12,305
Total shareholders' equity 779 15,101
Total liabilities, mandatorily redeemable
preferred stock and shareholders' equity $ 392,107 $ 337,340
See accompanying notes to condensed consolidated financial statements.
4
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American Skiing Company and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(In thousands)
For the three months ended
October 26, 1997 October 27, 1996
(unaudited) (unaudited)
Net loss $ (20,429) $ (10,293)
Adjustments to reconcile net loss to net
cash (used in)provided by operating
activities:
Minority Interest (456)
Depreciation and amortization 3,001 1,527
Deferred income taxes (13,493) (5,789)
Stock option charge 14,254
Decrease (increase) in assets:
Restricted cash and investments
held in escrow (3,950) (177)
Deposits (11,010)
Accounts receivable (557) 71
Inventory (3,520) (562)
Prepaid expenses (957) (457)
Real estate developed for sale (21,938) -
Other current assets 85
Other assets (2,698) 904
Increase (decrease) in liabilities:
Accounts payable and other current 9,897
liabilities 9,381
Deposits and deferred revenue 10,278 7,136
Other long-term liabilities 302 -
Net cash flow (used in) provided by
operating activities (41,792) 2,342
Cash flows from investing activities:
Capital expenditures (19,249) (7,333)
Additions to assets held for resale - (3,285)
Payments for purchases of businesses - (2,492)
Long-term investments 127 (498)
Due to affiliate 95
Net cash used in investing activities $ (19,027) $ (13,608)
5
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American Skiing Company and Subsidiaries
Condensed Consolidated Statement of Cash Flows (continued)
(In thousands)
For the three months ended
October 26, 1997 October 27, 1996
(unaudited) (unaudited)
Cash flows from financing activities:
Net proceeds from senior credit facility $ 1,189 $ -
Payments of long-term debt (935) -
Deferred financing costs (50) -
Reductions on demand note shareholder (621)
Proceeds from long-term debt 17,818 11,689
Proceeds from construction loan 33,453 -
Net cash provided by financing activities 51,475 11,068
Net increase (decrease) in cash and cash
equivalents (9,344) (198)
Cash and cash equivalents, beginning of
period 15,558 4,087
Cash and cash equivalents, end of period $ 6,214 $ 3,889
See accompanying notes to condensed consolidated financial statements.
6
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American Skiing Company and Subsidiaries
Notes to (Unaudited) Condensed Consolidated Financial Statements
1. General. In the opinion of the Company, the accompanying
unaudited condensed consolidated financial statements contain all
adjustments necessary to present fairly the financial position of the
Company as of October 26, 1997 and July 27, 1997, the results of
operations for the three months ended October 26, 1997 and October 27,
1996, and the statement of cash flows for the three months ended October
26, 1997 and October 27, 1996. All adjustments are of a normal
recurring nature. The unaudited condensed consolidated financial
statements should be read in conjunction with the following notes and
the Company's consolidated financial statements in the Form S-1,
Amendment No. 4 filed with the Securities and Exchange Commission on
November 5, 1997.
2. Inventories. Inventories are stated at the lower of cost
(first-in, first-out) or market, and consist primarily of retail goods,
food and beverage products and maintain operating supplies.
3. Income Taxes. The benefit for taxes on income is based on a
projected annual effective tax rate of 39%. The net deferred income tax
liability includes the cumulative reduction in current income taxes
payable resulting principally from the excess of depreciation reported
for income tax purposes over that reported for financial reporting
purposes.
4. Seasonal Business. Results for interim periods are not
indicative of the results expected for the year due to the seasonal
nature of the Company's business which is the development and operation
of ski resorts.
5. Net Income per Common Share. Net income per common share
figures are based on the weighted average number of shares outstanding
during the first quarter of fiscal 1998 and 1997 of 14,760,530 and
978,300 respectively. The shares outstanding are the actual shares
outstanding for both common stock and Class A common stock. On a pro
forma basis using the outstanding shares as of December 22, 1997, loss
per share for the Quarter ended October 26, 1997 including Class A
common and common stock would have been $(.77) per share. This pro
forma loss per share includes the increase in shares outstanding from
the Company's initial public offering that closed on November 12, 1997.
6. Adjustments and Reclassifications. Certain amounts in the
prior unaudited condensed consolidated financial statements and the
audited financial statements filed with the Fourth Amendment to the
Company's Registration Statement on November 5, 1997 with the Securities
and Exchange Commission have been reclassified to conform to the current
presentation.
7. Stock option plan. The Company recorded a compensation expense
charge of $14.3 million in the quarter ended October 26, 1997 to
recognize compensation expense for stock options granted to certain key
members of management. This charge is based on the difference between
the exercise price of $2.00 and the fair market value as of the date of
grant of $18.00. Certain senior management are also being granted a
cash payment on the date the options are exercised to cover individual
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American Skiing Company and Subsidiaries
Federal and State income tax liability generated by exercising the
options. The estimated amount of the tax liability payment of $5.7
million has been fully accrued along with the stock option compensation
charge of $8.6 million.
8. Guarantors of Debt. One of the main subsidiaries of the
Company is ASC East, Inc. ASC East, Inc. files its own Form 10-Q
because of notes and subordinated notes that were registered with
the Securities and Exchange Commission on Form S-4 with the Securities
and Exchange Commission on November 22, 1996. These notes and
subordinated notes are fully and unconditionally guaranteed by ASC
East, Inc. and all of its subsidiaries with the exception of Grand
Summit Resort Properties, Inc., Ski Insurance Company, Killington
West, Ltd., Mountain Water Company and Club Sugarbush. All required
financial information associated with these notes and "non-guarantor"
disclosures are included in the 10-Q for the quarter ended October 26,
1997 for ASC East, Inc. filed with the Securities and Exchange
Commission December 10, 1997.
9. Subsequent events. On November 5, 1997, the Securities and
Exchange Commission declared effective the Company's Form S-1
Registration Statement for purposes of registering the Company's common
stock. On November 12, 1997, the Company settled the sale of (i)
833,333 shares of common stock directly to the Principal Shareholder at
$18.00 a share (ii) 13,916,667 shares of common stock to the public at
$18.00 per share in the public offering by the underwriters. Total
gross proceeds of $265.5 million were received in connection with the
offering.
On November 12, 1997 the Company closed the acquisition of the
Steamboat and Heavenly resorts for a purchase price, including closing
costs and adjustments, of approximately $298 million. On a pro forma
basis including the results from the Steamboat and Heavenly resorts
acquired November 12, 1997, total revenues for the quarters ended
October 26, 1997 and October 27, 1997 would have been $17,699 million
and $16,551 million, respectively; net loss for the quarters ended
October 26, 1997 and October 27, 1996 would have been $34,829 million
and $19,532, respectively; and earnings per share would have been (using
the outstanding shares as of December 22, 1997 of 29,510,530) $(1.18)
and $(.66), respectively.
On November 12, 1997, the Company entered into a new senior secured
credit facility with a group of lenders pursuant to which the Company
may borrow up to $215 million. A portion of the net proceeds of the
common stock offering, together with borrowings under the senior credit
facility, were used to fund the purchase of Steamboat and Heavenly ski
resorts for approximately $290 million, Also on November 12, 1997 a
portion of the proceeds from the common stock offering were used to make
a $35.6 million investment in the common stock of one of the Company's
major subsidiaries, ASC East, Inc. This investment in ASC East, Inc.
will primarily be used to redeem the Subsidiaries' outstanding
subordinated discount notes, on December 30, 1997.
The Company is also in the process of exchanging shares of the
Company's common stock for shares of common stock in a subsidiary of the
Company, ASC East, Inc. This exchange is being made to enable three
beneficial owners of the minority interests to acquire common stock in
the Company at substantially the same exchange ratio as Leslie B. Otten,
the principal shareholder of the Company, exchanged his shares of ASC
East, Inc. common stock for shares of common stock in connection with
the formation of the Company. The Company believes that the
simplification of its organizational structure will enable the Company
to more clearly present its operations to prospective investors and
lenders, thereby enhancing the Company's ability to obtain capital and
expand the markets it serves and will eliminate potential conflicts of
interest between minority holders and shareholders of the Company.
8
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American Skiing Company and Subsidiaries
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
We are pleased to present to you management's discussion and
analysis of financial condition and results of operations for the first
quarter of fiscal 1998. The results reported do not include the
Steamboat and Heavenly resorts acquired after the close of the first
quarter. Pro forma revenue and net loss for the first quarter of fiscal
1997 and 1998, inclusive of Steamboat and Heavenly, are provided under
the discussion of "Subsequent Events." As you read the material below,
we urge you to carefully consider our condensed, consolidated financial
statements and related notes contained elsewhere in this report and the
audited financial statements and related notes contained in our Form S-1
Registration Statement filed November 5, 1997.
Liquidity and Capital Resources
Short Term. The Company's primary short term liquidity needs are
funding seasonal working capital requirements, its summer 1998 capital
improvement program, and servicing indebtedness. The summer 1998
capital improvement program has two primary components (1) skiing
related improvements, such as lifts, trails, snow-making equipment and
base facilities, and (2) development of base area real estate. Cash
requirements for each activity are provided by separate sources. The
Company's primary sources of liquidity for working capital and ski-
related capital improvements are unexpended proceeds from the initial
public offering, cash flow from operations of its subsidiaries and
borrowings under the its senior credit facility. Real estate development
is funded primarily through construction financing facilities
established for each major real estate development project.
The Company established a new credit facility on November 12, 1997
(the "New Credit Facility"). The New Credit Facility is divided into two
sub-facilities, $75 million of which (up to $65 million of which is
currently available) is available for borrowings by ASC East, Inc. and
its subsidiaries (the "East Facility") and $140 million of which is
available for borrowings by the Company excluding ASC East, Inc. and its
subsidiaries (the "West Facility"). The East Facility consists of a
six-year revolving credit facility in the amount of $45 million and an
eighty-year term facility in the amount of $30 million. The West
Facility consists of a six-year revolving facility in the amount of $65
million and an eight-year term facility in the amount of $75 million.
The revolving facilities are subject to annual 30-day clean down
requirements to an outstanding balance of not more than $10 million for
the East Facility and not more than $35 million for the West Facility.
The maximum availability under the revolving facilities will reduce over
the term of the New Credit Facility by certain prescribed amounts. The
9
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American Skiing Company and Subsidiaries
term facilities amortize at a rate of approximately 1.0% of the
principal amount for the first six years with the remaining portion of
the principal due in two substantially equal installments in years seven
and eight. Beginning July 1999, the New Credit Facility requires
mandatory prepayment of 50% of excess cash flows during any period in
which the ratio of the Company's total senior debt to EBITDA exceeds
3.50 to 1. In no event, however, will such mandatory prepayments reduce
either revolving facility commitment below $35 million. The New Credit
Facility contains affirmative, negative and financial covenants
customary for this type of senior credit facility including maintenance
of customary financial ratios. Except for a leverage test, compliance
with financial covenants is determined on a consolidated basis
notwithstanding the bifurcation of the New Credit Facility into sub-
facilities. The East Facility is secured by substantially all the assets
of ASC East and its subsidiaries, except our real estate development
subsidiaries, which are not borrowers under the New Credit Facility.
The West Facility is secured by substantially all the assets of the
Company and its subsidiaries, except ASC East and its subsidiaries.
The Company retained approximately $15 million of unexpended
proceeds from its initial public offering.
ASC East, Inc. is prohibited under the indenture governing its $120
million 12% Senior Subordinated Notes due 2006 from paying dividends or
making other distributions to the Company. Therefore, excess cash flow
from ASC East, Inc. cannot be distributed to the Company for use by the
Company or its other subsidiaries.
The Company issued $17.5 million of convertible, preferred stock
and $17.5 million convertible notes to fund development at its new
resort in Utah called The Canyons. Approximately $20 million was
expended in acquiring and developing the resort since July 3, 1997. The
remaining proceeds are earmarked for funding a portion of summer 1998
improvements at The Canyons.
The combination of unexpended proceeds from its initial public
offering, cash flow from resort operations, the New Credit Facility and
proceeds remaining from the 10 1/2% Convertible, Exchangeable Preferred
Stock will provide sufficient funds to meet short term liquidity needs
for working capital and skiing related capital expenditures.
The Company runs its real estate development through single purpose
subsidiaries. Construction of existing Grand Summit Hotel projects is
financed through an independent construction loan facility with
recourse limited to the real estate development subsidiaries. The
facility is a customary construction lending facility allowing for
periodic draw down as construction progresses. Each advance is subject
to certain conditions, including obtaining certain levels of
preconstruction sales. The loan is secured by first mortgages on the
Grand Summit properties. Principal is repaid from 80% to 85% of the
proceeds generated by quartershare sales. The construction facility
matures December, 2000. This facility, together with funds invested by
the Company, will be sufficient to fund the Grand Summit projects
scheduled for completion for the 1997-1998 ski season.
10
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American Skiing Company and Subsidiaries
The Company intends to continue real estate development at its
eastern resorts, and initiate real estate development projects at its
western resorts during summer 1998. This real estate development is not
currently funded and will require construction financing in order to
proceed. It is anticipated that construction financing will be arranged
on a limited recourse basis similar to our existing real estate
development facilities; however, no commitments are currently in place
for the necessary facilities.
Long Term. The Company's primary long term liquidity needs are to
fund skiing related capital improvements at certain of its resorts,
extensive development of its slopeside real estate and any future
acquisitions of resort properties.
The Canyons resort in Utah represents the Company's largest long-
term capital need. That resort will require an estimated $40 million
over the next four years to fully develop on-mountain facilities in time
for the 2002 Winter Olympic Games.
The investment required at each of the other resorts varies
depending upon the age and condition of its facilities. With the
exception of Killington and Mount Snow, the New England resorts will
generally require less investment due to the investments already made at
those resorts over the last several years. Killington, Mount Snow and
the western resorts will require higher levels of investment over the
next several years to realize their full potential.
There is a considerable degree of flexibility in the timing and, to
a lesser degree, scope of these capital improvements. Although specific
capital expenditures can be deferred for extended periods, continued
growth of skier visits, revenues and profitability will require
continued capital investment in on-mountain improvements. The Company's
practice is to finance on-mountain capital improvements through resort
cash flow and its senior credit facility. The size and scope of the
capital improvement program will generally be determined annually
depending upon future availability of cash flow from each season's
resort operations and future borrowing availability under the senior
credit facility.
Development of Grand Summit hotels at several resorts and alpine
villages at Sunday River, Killington, The Canyons and Steamboat will
require substantial funding. The Company expects to undertake these
projects through special purpose subsidiaries with financing provided
principally on a limited recourse basis. The Company's ability to
guarantee real estate development is limited to $25 million under the
New Credit Facility. Financing commitments for future real estate
development do not currently exist. The Company will be required to
establish construction facilities for these projects before undertaking
each development.
11
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American Skiing Company and Subsidiaries
Changes in Results of Operations
First Quarter of Fiscal 1998 compared to First Quarter of Fiscal 1997.
1. Resort Revenues. Resort revenues increased 17.18% from $11.7
million to $13.8 million. This increase resulted primarily from(i) a
$1.2 million increase in retail sales from the purchase of two retail
ski shop operations with locations in Vermont, New Hampshire, and Maine;
(ii) $.3 million increase from the operation of the Attitash/Bear Peak
Grand Summit Hotel, completed April, 1997; and (iii)a $.6 million
increase from the general operations of the Company.
2. Real Estate Revenues Real estate revenues decreased from
$1.6 million to $.8 million. The decrease is attributable to the
negative impact of timing differences, in sales of Locke Mountain
townhouses at Sunday River offset by the positive impact of quartershare
sales at the Attitash/Bear Peak Grand Summit Hotel.
3. Cost of Resort Operations. Cost of resort operations
increased 18.5% from $15.0 million to $17.8 million. This increase
resulted primarily from: (i) a $1.4 million increase in costs related to
new retail operations, including costs associated with the start up of
the new retail locations; (ii) $.4 million in costs related to the
operation of the Attitash/Bear Peak Grand Summit Hotel and: (iii) $1.0
million increase due to the addition of Pico and The Canyons
operations.
4. Cost of Real Estate Operations Cost of real estate
operations decreased 10% from $1.0 million to $.9 million. The decrease
is primarily attributable to the difference in sales between the two
periods and increased operational costs of its hotel development
subsidiary during the first quarter of fiscal 1998 as the Company nears
completion of three quarter share hotels.
5. Marketing, General and Administrative Marketing, general and
administrative costs increased 42.8% from $4.8 million to $6.8 million.
The primary reason for the increase was the establishment of the
Company's corporate offices, increased costs associated with
coordinating the activities of the various resorts and increased
marketing costs associated with the new Edge program and direct to lift
automated ticketing program.
6. Stock option charge. The company recorded a compensation
charge of $14.3 million in the first quarter attributable to stock
options granted to certain key members of management. This charge
reflects (i) the difference between the $2.00 exercise price and the
$18.00 fair market value as of the date of grant of the Company's common
stock, and an accrual for payments to certain senior management to cover
all individual Federal and State income tax liability generated upon
exercise of the options.
12
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Financial Condition and Results of Operations
American Skiing Company and Subsidiaries
The following discussion and analysis of the financial condition
and results of operations of the Company should be read in conjunction
with consolidated financial statements as of July 27, 1997 and for the
year then ended, as filed in Amendment No. 4 to Form S-1 filed with the
Securities and Exchange Commission on November 5, 1997.
Changes in Financial Condition
First Quarter of Fiscal 1998 Compared to Fiscal Year End 1997
1. Cash and Cash Equivalents. Cash and cash equivalents decreased
$9.3 million. The decrease is attributable to (1) the $11.0 million
earnest money deposit required in connection with the acquisition of
Steamboat and Heavenly, and (2) a $1.7 million increase in cash balances
due to the Company's normal operating cycle.
2. Restricted cash. Restricted cash increased $4.0 million
primarily due to a $3.7 million deposit to secure a land option at The
Canyons.
3. Inventory. Inventory increased approximately 66% or $4.8
million. The increase is attributable primarily to the increase in
retail locations.
4. Prepaid Expenses. Prepaid expenses increased 61% or $1.0
million. $.5 million of the increase is due to the normal operating
cycle of the Company, and $.5 million is related to expense in
developing the quartershare hotel projects.
5. Property & Equipment. Property and equipment, net increased 7%
or $18.7 million. The increase in property and equipment is
attributable to implementation of the Company's capital improvement
program.
6. Other assets. Other assets increased $2.6 million due to the
acquisition of land purchase options at The Canyons.
7. Real Estate Developed for Sale. Real estate developed for sale
increased approximately 93% or $22 million. The increase is
attributable primarily to the construction of three Grand Summit hotels
at Killington, Mount Snow and Sunday River. The hotels will begin
operations during the 1997/1998 ski season.
8. Current Portion of Long-term Debt. Current portion of long-
term debt decreased 9% or $3.5 million. The decrease is due to the
construction financing for the Attitash Grand Summit hotel from
quartershare sale proceeds.
9. Accounts Payable and Accrued Expenses. Accounts payable and
accrued expenses increased 64% or $15.9 million. The increase in
accounts payable and accrued expenses was due to: (i) an approximate
$11.1 million increase in short term payables due to capital projects
and preparation for the ski season; (ii) an increase in accrued
interest of $3.6 million related to the Company's 12% senior
subordinated debentures, (iii) a decrease of $4.5 million related to the
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American Skiing Company and Subsidiaries
timing of construction contract billings for the projects, and (iv) an
increase of $5.7 related to the stock option charge described above.
10. Deposits and Deferred Revenues. Deposits and deferred
revenues increased approximately 235% or $10.3 million. The increase in
deferred revenues is attributable primarily to pre-season sales of
season passes and multiple day ticket products for the 1997-1998 ski
season and lodging deposits for the 1997-1998 ski season.
11. Long-term Debt. Long-term debt increased 30% or $58.5 million.
The increase in long-term debt is principally attributable to: (i) $37.1
drawn down under the Grand Summit Resort Properties, Inc. construction
loan facility to fund Grand Summit construction; (ii) a new $1 million
note established in connection with Killington's purchase of its new
retail operation; and (iii) $.9 million of original issue discount
amortization on the junior subordinated debentures; (iv) the issuance of
a $17.5 million note to fund development at The Canyons; and (v) a $1.4
million increase attributable to an increase in the Company's senior
credit facility due to normal operating cycle.
12. Minority interest. Minority interest decreased 134% or $.8
million due to the first-quarter operating loss.
13. Deferred Income Taxes. Deferred income taxes decreased 47% or
$13.5 million due to the Company's income tax benefit generated by the
first quarter operating loss.
14. Additional paid in capital. Additional paid in capital
increased 306% or $8.5 million due to the recording of the stock option
charge.
15. Retained Earnings. Retained earnings decreased $20.8 million
due to the Company's first quarter net loss.
Subsequent Events
IPO Closing and Acquisition. The Company closed on the initial
public offering of 14.75 million shares of its common stock on November
12, 1997. The proceeds were primarily used to (1) fund the acquisition
of Steamboat and Heavenly in an amount totaling $173.3 million,
(2)redeem ASC East, Inc.'s 13 3/4% subordinated discount notes due 2007
for an aggregate redemption price of approximately $27.7 million, and
(3) repay approximately $7.7 million of a subsidiary's outstanding debt
in connection with the closing of the Company's initial public offering.
The Company has retained approximately $14 million of offering proceeds
in temporary investments.
On a pro forma basis including the results from the Steamboat and
Heavenly resorts acquired November 12, 1997, total revenues for the
quarters ended October 26, 1997 and October 27, 1997 would have been
$17,699 million and $16,551 million, respectively; net loss for the
quarters ended October 26, 1997 and October 27, 1996 would have been
$34,829 million and $19,532, respectively; and earnings per share would
13
<PAGE>
American Skiing Company and Subsidiaries
have been (using the outstanding shares as of December 22, 1997 of
29,510,530) $(1.18) and $(.66), respectively.
New Credit Facility. The Company established the New Credit
Facility described above under the heading "Liquidity and Capital
Resources" contemporaneously with the closing of its initial public
offering and the acquisition of steamboat and Heavenly on November 12,
1997.
10 1/2% Convertible, Exchangeable Preferred Stock.
Contemporaneously with the other November 12, 1998 closings the Company
converted its $17.5 million principal amount of convertible notes and
its $17.5 million face amount of convertible preferred at a conversion
price, including accrued interest and accumulated dividends, of $37.3
million into its 10 1/2% convertible, exchangeable preferred stock.
Consent Solicitation. Contemporaneously with the other November
12, 1997 closings, the Company closed the Consent Solicitation
transaction described in its Registration Statement.
Significant Transactions. The Company consummated a land exchange
with the State of Vermont on December 1, 1997. The exchange results in
the Company coming into ownership of over 1,000 acres of valuable
development real estate at the base of the Killington resort.
Forward-Looking Statements
Certain of the statements contained in this section of the report,
including those under "Financial Condition," are forward-looking. While
the Company believes that these statements are accurate, its business is
highly seasonal and is dependent upon weather and general economic
conditions and various conditions specific to its industry. Future
trends results cannot be predicted with certainty and actual results
could differ materially from any forward-looking statements. In
particular:
1. Ski and resort operations are highly seasonal. Over the
last five fiscal years, the Company realized an average of
approximately 86% of its resort revenues during the period from
November through April and is significant portion of resort
revenues (and approximately 23% of annual skier visits) was
generated during the Christmas and Presidents' Day vacation weeks.
Adverse weather or market conditions during these periods could
materially adversely effect operating results and financial
performance.
2. The development of ski resorts is capital intensive. The
Company's expansion of its resorts is dependent upon availability
of necessary capital. There can be no assurance that the Company
will have adequate funds, from internal or external sources, to
14
<PAGE>
American Skiing Company and Subsidiaries
make all planned and required capital expenditures over the long
term.
3. Real estate development and the Company's ability to
generate revenues therefrom may be adversely affected by numerous
factors, many of which are beyond the control of the Company,
including the national and regional economic climate and the
ability of the company to obtain all necessary zoning, land use,
buildings, occupancy and other required governmental permits and
authorizations and changes in real estate, zoning, land use,
environmental or tax laws. In additional, real estate development
will be dependent upon, among other things, receipt of adequate
financing on suitable terms obtaining and maintaining the requisite
permits and licenses and, in certain circumstances, acquiring
additional real estate. There can be no assurance as to whether,
when or on what terms such financing, permits, licenses and real
estate may be obtained.
15
<PAGE>
American Skiing Company and Subsidiaries
Part II - Other Information
Item 2
Changes in Securities and Use of Proceeds
The New Credit Facility imposes customary prohibitions upon the
declaration of any dividends on Common Stock of the Company.
Item 4
Submission of Matters to Vote of Security Holders
The following matters were submitted to a vote of the shareholders
of the Company during the first quarter on the dates and with the
results reflected below:
Date Matter Result
8/11/97 Special Meeting Fixing Number of Unanimous Approval
Directors at three and
electing Messrs.
Howard and Richardson
as Directors. Mr.
Otten continued as a
director following the
election.
10/9/97 Special Meeting Approval of Stock Unanimous Approval
Option Plan
10/10/97 Special Meeting Authorization of Unanimous Approval
capital stock in
conjunction with
initial public
offering and related
transactions.
Item 6
Exhibits
Included herewith is the Financial Data Schedule submitted as
Exhibit 27 in accordance with Item 601(c) of Regulation S-K. Also
included are the following material agreements entered into since
November 5, 1997, the date of filing of the Company's Form S-1
Registration Statement:
Exhibit No. Description
----------- -----------
1 Amended and Restated Credit Agreement dated November 12,
1997 among ASC East, Inc., Sunday River Skiway
Corporation, Sunday River, Ltd., Perfect Turn, Inc.,
Sunday River Transportation, Inc., L.B.O. Holding, Inc.,
Sugarbush Resort Holdings, Inc., Sugarbush Leasing
Company, Sugarbush Restaurants, Inc., Mountain Wastewater
Treatment, Inc., S-K-I, Ltd., Killington, Ltd., Mount
Snow, Ltd., Pico Ski Area Management Company, Resorts
American Skiing Company and Subsidiaries
Software Services, Inc., Dover Restaurants, Inc.,
16
<PAGE>
Sugarloaf Mountain Corporation, Mountainside, Sugartech
as Borrowers American Skiing Company, as Guarantor, and
BankBoston, N.A. as Agent for the Lenders and DLJ Capital
Funding, Inc. as Documentation Agent for the Lenders
2 Credit Agreement dated as of November 12, 1997 Among ASC
Utah, ASC West, Inc., Steamboat Ski & Resort Corporation,
Steamboat Development Corporation, Heavenly Valley Ski &
Resort Corporation, Heavenly Corporation, Heavenly
Valley, Limited Partnership as Borrowers, American Skiing
Company, as Guarantor, and BankBoston, N.A., as Agent for
the Lenders and DLJ Capital Funding, Inc. as
Documentation Agent for the Lenders.
3 Registration Rights Agreement dated November 10, 1997 by
and between American Skiing Company and ING (U.S.)
Capital Corporation.
4 Contract of Sale by and between Orlando Resort
Corporation and ELW Golf Group, Inc.
5 Real Estate Purchase Agreement dated December 8, 1997 by
and between WMR Investment Company, L.L.C. and Alpine
Resort Properties, Inc.
17
<PAGE>
American Skiing Company and Subsidiaries
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 thereunto duly authorized.
ASC EAST, INC.
Date: December 22, 1997 /s/ Thomas M. Richardson
----------------- ---------------------------------
Thomas M. Richardson
Senior Vice President Finance
Chief Financial Officer
(Principal Financial and Accounting
Officer)
Date: December 22, 1997 /s/ Christopher E. Howard
----------------- --------------------------------
Christopher E. Howard
Chief Administrative Officer and
General Counsel
18
Exhibit 1
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 12, 1997
Among
ASC EAST, INC.
SUNDAY RIVER SKIWAY CORPORATION
SUNDAY RIVER, LTD.
PERFECT TURN, INC.
SUNDAY RIVER TRANSPORTATION, INC.
L.B.O. HOLDING, INC.
SUGARBUSH RESORT HOLDINGS, INC.
SUGARBUSH LEASING COMPANY
SUGARBUSH RESTAURANTS, INC.
MOUNTAIN WASTEWATER TREATMENT, INC.
S-K-I, LTD.
KILLINGTON, LTD.
MOUNT SNOW, LTD.
PICO SKI AREA MANAGEMENT COMPANY
RESORTS SOFTWARE SERVICES, INC.
KILLINGTON RESTAURANTS, INC.
RESORTS TECHNOLOGIES, INC.
DOVER RESTAURANTS, INC.
SUGARLOAF MOUNTAIN CORPORATION
MOUNTAINSIDE
SUGARTECH
as Borrowers,
AMERICAN SKIING COMPANY,
as Guarantor,
THE LENDERS PARTY HERETO,
BANKBOSTON, N.A.,
as Agent for the Lenders
and
DLJ CAPITAL FUNDING, INC.
as Documentation Agent for the Lenders
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS..................................2
Section 1.1 Definitions................................................2
Section 1.2 Accounting Terms..........................................28
ARTICLE 2. THE CREDITS......................................................28
Section 2.1 The Revolving Credit......................................28
Section 2.2 Making of Revolving Credit Advances.......................29
Section 2.3 Interest on Revolving Credit Advances.....................31
Section 2.4 The Term Loans............................................31
Section 2.5 Interest on the Term Loans................................31
Section 2.6 Election of LIBOR Pricing Options.........................31
Section 2.7 Additional Payments.......................................32
Section 2.8 Computation of Interest, Etc..............................32
Section 2.9 Fees......................................................32
Section 2.10 Set-Off...................................................33
Section 2.11 Sharing of Payments.......................................33
Section 2.12 Reduction of Commitment by the Borrowers..................33
Section 2.13 Increased Costs, Etc......................................34
Section 2.14 Changed Circumstances.....................................35
Section 2.15 Use of Proceeds...........................................36
Section 2.16 Letters of Credit.........................................37
Section 2.17 Collection of Accounts....................................41
Section 2.18 Swing Line Commitment.....................................42
Section 2.19 Procedure for Swing Line Borrowing; Interest on
Swing Line Loans..........................................42
Section 2.20 Refunded Swing Line Loans; Swing Line Loan
Participations............................................43
Section 2.21 Release of Certain Liens..................................44
Section 2.22 Guaranty of American Ski..................................46
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES.................................47
Section 3.1 Conditions to the Term Loans and the Initial Revolving
Credit Advance............................................47
Section 3.2 Conditions to All Loans...................................52
ARTICLE 4. PAYMENT AND REPAYMENT.............................................53
Section 4.1 Mandatory Repayments and Prepayment.......................53
Section 4.2 Voluntary Prepayments.....................................56
Section 4.3 Payment and Interest Cutoff...............................57
Section 4.4 Payment or Other Actions on Non-Business Days.............57
(i)
<PAGE>
Page
----
Section 4.5 Method and Timing of Payments.............................57
Section 4.6 Payments Not at End of Interest Period....................58
Section 4.7 Currency..................................................59
Section 4.8 Foreign Lenders...........................................59
ARTICLE 5. REPRESENTATIONS AND WARRANTIES...................................59
Section 5.1 Existence, Charter and Formation Documents, Etc...........59
Section 5.2 Principal Place of Business; Location of Records..........60
Section 5.3 Qualification.............................................60
Section 5.4 Subsidiaries..............................................60
Section 5.5 Power.....................................................60
Section 5.6 Valid and Binding Obligations.............................61
Section 5.7 Other Agreements..........................................61
Section 5.8 Payment of Taxes..........................................61
Section 5.9 Financial Statements......................................62
Section 5.10 Other Materials Furnished.................................62
Section 5.11 Stock.....................................................62
Section 5.12 Changes in Condition......................................63
Section 5.13 Assets, Licenses, Patents, Trademarks, Etc................63
Section 5.14 Litigation................................................64
Section 5.15 Pension Plans.............................................64
Section 5.16 Outstanding Indebtedness..................................64
Section 5.17 Environmental Matters.....................................64
Section 5.18 Foreign Trade Regulations.................................66
Section 5.19 Governmental Regulations..................................66
Section 5.20 Margin Stock..............................................66
Section 5.21 Solvency..................................................66
Section 5.22 Compliance with Other Instruments, Laws, Etc..............66
Section 5.23 Absence of Financing Statements, Etc......................67
Section 5.24 Perfection of Security Interests..........................67
Section 5.25 Bank Accounts.............................................67
Section 5.26 Fiscal Year...............................................67
Section 5.27 Tax Status................................................67
Section 5.28 Consummation of Public Offering...........................67
Section 5.29 Consummation of Kamori Acquisition........................67
Section 5.30 Cerberus Purchase Agreement; Cerberus Amendment
and Waiver Letter Agreement; Certificate of Designation...68
Section 5.31 Wolf Acquisition Agreement................................68
ARTICLE 6. REPORTS AND INFORMATION..........................................68
Section 6.1 Interim Financial Statements and Reports..................68
(ii)
<PAGE>
Page
----
Section 6.2 Annual Financial Statements...............................69
Section 6.3 Annual Budget.............................................69
Section 6.4 Reports of Skier Visits...................................70
Section 6.5 Notice of Defaults........................................70
Section 6.6 Notice of Litigation......................................70
Section 6.7 Communications with Others................................70
Section 6.8 Reportable Events.........................................70
Section 6.9 Reports to other Creditors................................70
Section 6.10 Communications with Independent Public Accountants........71
Section 6.11 Environmental Reports.....................................71
Section 6.12 Notices Under Certain Agreements..........................71
Section 6.13 Miscellaneous.............................................72
ARTICLE 7. FINANCIAL COVENANTS..............................................72
Section 7.1 Ratio of Consolidated Total Debt to Consolidated EBITDA...72
Section 7.2 Ratio of Consolidated Adjusted Cash Flow to
Consolidated Debt Service.................................73
Section 7.3 Ratio of Consolidated EBITDA to Consolidated
Interest Expense..........................................73
Section 7.4 Minimum Consolidated Net Worth............................74
ARTICLE 8. AFFIRMATIVE COVENANTS............................................74
Section 8.1 Existence and Business....................................74
Section 8.2 Taxes and Other Obligations...............................74
Section 8.3 Maintenance of Properties and Leases......................75
Section 8.4 Insurance.................................................75
Section 8.5 Records, Accounts and Places of Business..................75
Section 8.6 Inspection................................................75
Section 8.7 Maintenance of Accounts...................................76
Section 8.8 Maintenance and Assignment of Life Insurance..............76
Section 8.9 Ownership of Restricted Subsidiaries......................76
Section 8.10 Survey and Surveyor's Certificate.........................76
Section 8.11 Appraisals................................................76
Section 8.12 Lease Renewal.............................................77
Section 8.13 Use of IPO Proceeds.......................................77
Section 8.14 Environmental and Land Use Compliance.....................77
Section 8.15 Interest Rate Protection..................................77
Section 8.16 Independence of Unrestricted Subsidiaries.................77
Section 8.17 Redemption or Exchange of Senior Subordinated Notes.......78
Section 8.18 Forest Service Permits....................................78
(iii)
<PAGE>
Page
----
ARTICLE 9. NEGATIVE COVENANTS...............................................78
Section 9.1 Restrictions on Indebtedness..............................78
Section 9.2 Restriction on Liens......................................80
Section 9.3 Investments...............................................82
Section 9.4 Mergers, Acquisitions, Etc................................84
Section 9.5 Transactions with Affiliates..............................84
Section 9.6 Distributions.............................................84
Section 9.7 Capital Expenditures......................................84
Section 9.8 Dispositions of Assets....................................85
Section 9.9 Assumptions, Guaranties, Etc. of Indebtedness
of Other Persons..........................................85
Section 9.10 ERISA.....................................................85
Section 9.11 Sale and Leaseback........................................86
Section 9.12 Restrictive or Inconsistent Agreements....................86
Section 9.13 Limitations on Real Estate Operations.....................86
Section 9.14 Fiscal Year...............................................86
Section 9.15 Limitation on Excess Proceeds.............................86
Section 9.16 No Amendment of Subordinated Notes; Cerberus Purchase
Agreement; Cerberus Amendment and Waiver Letter
Agreement.................................................86
Section 9.17 Exchange of Cerberus 101/2% Repriced Convertible
Exchangeable Preferred Stock and Amended and Restated
Registration Rights Agreement Penalties.............................86
Section 9.18 Limitation on Issuance of Capital Stock...................87
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES..................................87
Section 10.1 Events of Default.........................................87
Section 10.2 Remedies..................................................90
Section 10.3 Distribution of Proceeds..................................91
ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES.........................92
Section 11.1 Actions by Lenders........................................92
Section 11.2 Actions by Borrowers......................................93
ARTICLE 12. SUCCESSORS AND ASSIGNS..........................................93
Section 12.1 General...................................................93
Section 12.2 Assignments...............................................93
Section 12.3 Participations............................................95
ARTICLE 13. THE AGENT.......................................................96
Section 13.1 Authorization and Action..................................96
(iv)
<PAGE>
Page
----
Section 13.2 Agent's Reliance, Etc.....................................96
Section 13.3 Agent as a Lender.........................................97
Section 13.4 Lender Credit Decision....................................97
Section 13.5 Indemnification of Agent..................................97
Section 13.6 Successor Agent...........................................98
Section 13.7 Amendment of Article 13...................................98
Section 13.8 Documentation Agent.......................................99
ARTICLE 14. MISCELLANEOUS...................................................99
Section 14.1 Notices...................................................99
Section 14.2 Merger...................................................100
Section 14.3 Governing Law; Consent to Jurisdiction...................100
Section 14.4 Counterparts.............................................100
Section 14.5 Expenses and Indemnification.............................100
Section 14.6 Confidentiality..........................................101
Section 14.7 Reliance on Representations and Actions of American Ski..102
Section 14.8 Joint and Several Obligations............................102
(v)
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Loan Note
Exhibit A-3 Form of Swing Line Note
Exhibit B Form of Notice of Revolving Credit or Swing Line Borrowing
Exhibit C Form of Compliance Certificate
Exhibit D Form of Pricing Notice
Exhibit E-1 Form of Amended and Restated Security Agreement
Exhibit E-2 Form of Guarantor Security Agreement
Exhibit F Form of Unlimited Guaranty Agreement
Exhibit G Form of Amended and Restated Fee and Leasehold Mortgage,
Assignment of Leases and Rents, Financing Statement and
Security Agreement
Exhibit H Form of Amended and Restated Collateral Assignment of Leases
and Rents
Exhibit I [Intentionally Omitted.]
Exhibit J Form of Assignment in Trust
Exhibit K Form of Assignment of Trademarks
Exhibit L Form of Amended and Restated Assignment of Licenses,
Contracts and Permits
Exhibit M Form of Stock Pledge Agreement
Exhibit N Form of Amended and Restated Hazardous Materials
Indemnification Agreement
Exhibit O Form of Opinions of Borrowers' Counsel
Exhibit P Form of Assignment and Acceptance Agreement
Exhibit Q Form of Amended and Restated Otten Subordination Agreement
Exhibit R Acknowledgment of Unrestricted Subsidiary
Exhibit S Form of Joinder
Exhibit T Cerberus Amendment and Waiver Letter Agreement; Certificate
of Designation; Amended and Restated Registration Rights
Agreement; Cerberus Purchase Agreement
Exhibit U Registration Statement
Exhibit V Kamori Stock Purchase Agreement
Schedule 1 Schedule of Commitment Percentages
Schedule 2 Pricing Schedule
Schedule 2.16 Schedule of Letters of Credit
Schedule 2.17 Schedule of Bank Accounts
Schedule 3.1(q) Schedule of Certain Leases
Schedule 5.2 Schedule of Principal Places of Business
Schedule 5.4(a) Schedule of Subsidiaries and Issued and Outstanding Stock
Schedule 5.4(b) Transactions with Unrestricted Subsidiaries
Schedule 5.8 Schedule of Certain Tax Matters
Schedule 5.9 Schedule of Financial Statements
Schedule 5.14 Schedule of Litigation
Schedule 5.13 Schedule of Licenses, Patents, Copyrights and Trademarks
(vi)
<PAGE>
Schedule 5.13(c) Schedule of Certain Leasehold Personal Property Interests
and Personal Property Lease Agreements
Schedule 5.15 Schedule of Pension Plans
Schedule 5.16 Schedule of Indebtedness, Liens, Charges and Encumbrances
Schedule 5.17 Environmental Matters
Schedule 8.4 Schedule of Insurance
Schedule 8.9 Schedule of Ownership of Restricted Subsidiaries
Schedule 8.12 Schedule of Leases
Schedule 8.14 Schedule of Environmental and Land Use Compliance
Schedule 8.17 Schedule of Forest Service Permits
Schedule 9.3 Investment Policy and Investments
(vii)
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of November
12, 1997 by and among ASC East, Inc., a Maine corporation ("ASC East"), SUNDAY
RIVER SKIWAY CORPORATION, a Maine corporation, SUNDAY RIVER, LTD., a Maine
corporation, PERFECT TURN, INC., a Maine corporation, SUNDAY RIVER
TRANSPORTATION, INC., a Maine corporation, L.B.O. HOLDING, INC., a Maine
corporation, SUGARBUSH RESORT HOLDINGS, INC., a Vermont corporation , SUGARBUSH
LEASING COMPANY, a Vermont corporation, SUGARBUSH RESTAURANTS, INC., a Vermont
corporation, MOUNTAIN WASTEWATER TREATMENT, INC., a Vermont corporation, S-K-I,
LTD., a Delaware corporation ("S-K-I"), KILLINGTON, LTD., a Vermont corporation
("Killington"), MOUNT SNOW, LTD., a Vermont corporation, PICO SKI AREA
MANAGEMENT COMPANY, a Vermont corporation, RESORTS SOFTWARE SERVICES, INC., a
Vermont corporation, KILLINGTON RESTAURANTS, INC., a Vermont corporation,
RESORTS TECHNOLOGIES, INC., a Vermont corporation, DOVER RESTAURANTS, INC., a
Vermont corporation, SUGARLOAF MOUNTAIN CORPORATION, a Maine corporation,
MOUNTAINSIDE, a Maine corporation and SUGARTECH, a Maine corporation (each a
"Borrower" and collectively, the "Borrowers"), AMERICAN SKIING COMPANY, a Maine
corporation ("American Ski"), the lenders from time to time party hereto,
BANKBOSTON, N.A., a national banking association, as Agent for the lenders from
time to time party hereto (the "Agent") and DLJ CAPITAL FUNDING, INC., as
Documentation Agent for the lenders from time to time party hereto (the
"Documentation Agent").
RECITALS
The Borrowers and certain of the lenders party hereto and the Agent (as
successor agent to Fleet National Bank) are parties to a Credit Agreement dated
as of June 28, 1996, as amended (the "1996 Credit Agreement"). The Borrowers,
jointly and severally, desire to arrange for an increase in their existing
credit facilities to $75,000,000, on the terms and conditions set forth herein,
the proceeds of which will be used (a) to refinance certain outstanding
obligations of the Borrowers, (b) to fund certain capital expenditures and (c)
to provide for on-going working capital and other specified needs. The Lenders
are willing to provide such additional financing on the terms and conditions set
forth herein, including, among others, that the Borrowers amend the 1996 Credit
Agreement in certain respects as provided herein and that American Ski become a
guarantor hereunder. The Borrowers conduct their operations on a combined basis
with shared management, purchasing, planning, financial controls and other
functions, and the access of all Borrowers to the credit facilities provided
hereunder benefits all Borrowers in connection with their various businesses.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the Agent and the
Lenders party to the 1996 Credit Agreement hereby amend and restate the 1996
Credit Agreement in its entirety and all the parties hereto agree hereby as
follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and in any note, agreement, certificate, report or other document
made or delivered in connection with this Agreement:
"ADDITIONAL CAPITAL EXPENDITURE AMOUNT" shall mean the product of
(a) Consolidated Excess Cash Flow for the four-quarter period ending each
April 30, multiplied by (b) 50% when the Capital Expenditure Ratio as of
such April 30 equals or exceeds 3.5-to-1 and 100% otherwise.
"AFFILIATE" shall mean (a) any director or executive officer of
American Ski or any of its Subsidiaries or any Person owning more than 5%
of the outstanding common stock of American Ski or any of its Subsidiaries
and (b) any Person that controls, is controlled by or is under common
control with such a Person or any Affiliate of such Person. For purposes
of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" shall mean BankBoston, N.A., in its capacity as agent for the
Lenders, and its successors in that capacity.
"AGGREGATE OUTSTANDING REVOLVING CREDIT EXTENSIONS" shall mean, as to
any Revolving Credit Lender at any time, an amount equal to the sum of
(a) the aggregate principal amount of all Revolving Credit Advances made by
such Lender then outstanding PLUS (b) such Revolving Credit Lender's
Revolving Credit Commitment Percentage of the Letter of Credit Exposure
then outstanding.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement, as
amended or supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement, unless otherwise
indicated, as amended and supplemented from time to time.
"ALPINE PIPELINE" shall mean Alpine Pipeline Company, a Vermont
corporation.
2
<PAGE>
"AMERICAN SKI - WEST BORROWERS" shall mean ASC Utah, ASC West, Inc.,
the Steamboat Subsidiaries and the Heavenly Subsidiaries, collectively.
"AMERICAN SKI - WEST COMMITMENT PERCENTAGE" shall mean the "Commitment
Percentage" under and as defined in the American Ski - West Credit
Agreement.
"AMERICAN SKI - WEST CREDIT AGREEMENT" shall mean the Credit Agreement
of even date herewith by and among the Agent, the Lenders, American Ski and
the American Ski - West Borrowers, as amended, modified and supplemented
from time to time.
"AMERICAN SKI - WEST LENDER AGREEMENTS" shall mean the "Lender
Agreements" under and as defined in the American Ski - West Credit
Agreement.
"AMERICAN SKI - WEST LENDER OBLIGATIONS" shall mean the "Lender
Obligations" under and as defined in the American Ski - West Credit
Agreement.
"AMERICAN SKI - WEST LOAN PARTIES" shall mean the American Ski - West
Borrowers and the American Ski-West Restricted Subsidiaries.
"AMERICAN SKI - WEST MAXIMUM REVOLVING CREDIT AMOUNT" shall mean the
"Maximum Revolving Credit Amount" under and as defined in the American Ski
- West Credit Agreement.
"AMERICAN SKI - WEST RESTRICTED SUBSIDIARIES" shall mean all
Subsidiaries of ASC Utah and ASC West, Inc., other than the American Ski -
West Unrestricted Subsidiaries.
"AMERICAN SKI - WEST REVOLVING CREDIT ADVANCES" shall mean the
"Revolving Credit Advances" under and as defined in the American Ski - West
Credit Agreement.
"AMERICAN SKI - WEST REVOLVING CREDIT NOTES" shall mean the "Revolving
Credit Notes" under and as defined in the American Ski - West Credit
Agreement.
"AMERICAN SKI - WEST SECURITY DOCUMENTS" shall mean the "Security
Documents" under and as defined in the American Ski - West Credit
Agreement.
"AMERICAN SKI - WEST TERM LOAN NOTES" shall mean the "Term Loan Notes"
under and as defined in the American Ski - West Credit Agreement.
"AMERICAN SKI - WEST UNRESTRICTED SUBSIDIARIES" shall mean Walton Pond
Apartments, a Delaware corporation, and such other Subsidiaries as may from
time to
3
<PAGE>
time be designated by American Ski as an Unrestricted Subsidiary and as are
reasonably acceptable to the Agent.
"APPLICABLE BASE RATE" shall mean the sum of (a) the Base Rate PLUS
(b) the Base Rate Margin, as each is in effect from time to time.
"APPLICABLE LIBOR RATE" shall mean the sum of (a) the LIBOR Rate PLUS
(b) the LIBOR Rate Margin, as each is in effect from time to time.
"APPLICABLE MONEY MARKET RATE" shall mean the sum of (a) the Money
Market Rate PLUS (b) the LIBOR Rate Margin, as each is in effect from time
to time.
"APPRAISAL" shall mean an appraisal of the fair market value of
property and business, accepted and approved by the Agent, performed by an
independent appraiser selected by the Agent who is not employed by American
Ski, any of its Subsidiaries or the Agent, the form of such appraisal and
the identity of the appraiser to be acceptable to the Agent.
"APPRAISED VALUE" shall mean the fair market value of the subject
property determined by the most recent Appraisal.
"APPROVED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
affiliate of such investment advisor.
"ASC EAST CONSOLIDATED EBITDA" shall mean for the most recently
completed four fiscal quarters, (a) net income or (loss) of ASC East and
its Restricted Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles without giving
effect to extraordinary gains and losses from sales, exchanges and other
dispositions of property not in the ordinary course of business, and
nonrecurring items and excluding from the calculation of net income all
revenues from Unrestricted Subsidiaries except to the extent received by
ASC East or its Restricted Subsidiaries in cash as a loan repayment,
dividend or other distribution, PLUS, to the extent deducted in calculating
net income, (b) the sum of, without duplication, (i) depreciation expense
of ASC East and its Restricted Subsidiaries, (ii) amortization expense of
ASC East and its Restricted Subsidiaries, (iii) consolidated interest
expense of ASC East and its Restricted Subsidiaries PLUS the non-cash
portion of consolidated interest expense on consolidated funded debt of ASC
East and its Restricted Subsidiaries, (iv) income tax expense of ASC East
and its Restricted Subsidiaries and (v) other non-cash items of ASC East
and its Restricted Subsidiaries.
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"ASC EAST CONSOLIDATED TOTAL DEBT" shall mean the sum of (a) the
outstanding principal amount of the Revolving Credit Advances, the Term
Loans and the Swing Line Loans, (b) any claim required to be paid pursuant
to Guaranties of ASC East and its Restricted Subsidiaries, (c) the Senior
Subordinated Notes, (d) all other funded Indebtedness of ASC East and its
Restricted Subsidiaries on a consolidated basis and (e) without
duplication, the stated amount of all letters of credit issued for the
account of ASC East or any of its Restricted Subsidiaries.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" -- See Section 12.2(a) hereof.
"ATTITASH DEBENTURES" shall mean the Subordinated Debentures due 2002
issued by L.B.O. Holding, Inc. in the aggregate outstanding principal
amount as of the date hereof as set forth on SCHEDULE 5.16 hereto.
"AVAILABLE REVOLVING CREDIT AMOUNT" shall mean at any time the Maximum
Revolving Credit Amount in effect at such time (including after giving
effect to any mandatory reductions of the Maximum Revolving Credit Amount
under Section 4.1(c)), LESS the Letter of Credit Exposure and LESS the
aggregate principal amount of Swing Line Loans then outstanding.
"AVAILABLE REVOLVING CREDIT COMMITMENT" shall mean, as to any
Revolving Credit Lender at any time, an amount equal to the excess, if any,
of (a) the product of (i) such Revolving Credit Lender's Revolving Credit
Commitment Percentage multiplied by (ii) the Maximum Revolving Credit
Amount over (b) such Revolving Credit Lender's Aggregate Outstanding
Revolving Credit Extensions.
"BASE CAPITAL EXPENDITURE AMOUNT" shall mean $30,000,000.
"BASE RATE" shall mean the greater of (a) the rate of interest
announced from time to time by the Agent at its head office in Boston,
Massachusetts as its Base Rate and (b) the Federal Funds Effective Rate
plus 1/2 of 1% per annum (rounded upwards, if necessary, to the next 1/8 of
1%).
"BASE RATE LOAN" shall mean (a) any Revolving Credit Advance bearing
interest at a fluctuating rate determined by reference to the Applicable
Base Rate, (b) any portion of the Term Loans bearing interest at a
fluctuating rate determined by reference to the Applicable Base Rate and
(c) any portion of a Swing Line Loan bearing interest at a fluctuating rate
determined by reference to the Applicable Base Rate.
"BASE RATE MARGIN" shall mean a rate per annum determined in
accordance with the Pricing Schedule.
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"BUSINESS DAY" shall mean (a) for all purposes other than as covered
by clause (b) below, any day other than a Saturday, Sunday or legal holiday
on which banks in Boston, Massachusetts are open for the conduct of a
substantial part of their commercial banking business and (b) with respect
to all notices and determinations in connection with, and payments of
principal and interest on, LIBOR Rate Loans, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between
banks in U.S. Dollar deposits in the London interbank eurodollar market.
"CAPITAL ASSETS" shall mean fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and goodwill); PROVIDED,
HOWEVER, that Capital Assets shall not include any item customarily charged
directly as an expense or depreciated over a useful life of twelve (12)
months or less in accordance with generally accepted accounting principles.
"CAPITAL EXPENDITURE 1998 ADJUSTMENT AMOUNT" shall mean (a) the sum of
(i) the amount of cash or cash equivalents on the consolidated balance
sheet of American Ski and its Restricted Subsidiaries as of April 30, 1998
and (ii) the amount of permitted investments made by American Ski in
Unrestricted Subsidiaries after the Closing Date from the excess net
proceeds of the IPO Gross Proceeds, LESS $25,000,000 if the sum of (i) and
(ii) is less than $50,000,000 or (b) 50% of the sum of (a)(i) and (ii)
above if the sum of (a)(i) and (ii) above exceeds $50,000,000.
"CAPITAL EXPENDITURE RATIO" shall mean the ratio, as of April 30 of
each fiscal year, of (a) Consolidated Senior Secured Debt PLUS the Unused
Revolving Credit Commitments as of such date to (b) Consolidated EBITDA for
the four-quarter period ending on such date; PROVIDED, HOWEVER, that in
calculating the Capital Expenditure Ratio as of April 30, 1998, there shall
be deducted from Consolidated Senior Secured Debt the Capital Expenditure
1998 Adjustment Amount.
"CAPITAL EXPENDITURE REINVESTMENT AMOUNT" shall mean the amount of
proceeds of Permitted Dispositions that is reinvested in Capital
Expenditures within 365 days of such Permitted Dispositions.
"CAPITAL EXPENDITURES" shall mean amounts paid or incurred, including
indebtedness incurred, by American Ski or any of its Restricted
Subsidiaries in connection with the purchase or lease by American Ski or
any of its Restricted Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of American Ski and its
Restricted Subsidiaries in accordance with generally accepted accounting
principles.
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"CAPITALIZED LEASE" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with generally
accepted accounting principles and Statement of Financial Accounting
Standards No. 13.
"CAPITALIZED LEASE OBLIGATIONS" shall mean the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with generally accepted
accounting principles and Statement of Financial Accounting Standards No.
13.
"CASH INSURANCE PROCEEDS" shall mean the proceeds received by American
Ski or any of its Restricted Subsidiaries under any key man life insurance
or property and casualty insurance policy carried by American Ski or such
Restricted Subsidiary.
"CASH PROCEEDS" shall mean, with respect to any Permitted Disposition,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such
Permitted Disposition, but only as and when received) received by American
Ski or any of its Restricted Subsidiaries from such Permitted Disposition.
"CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT" shall mean the
Cerberus Amendment and Waiver Letter Agreement dated November 3, 1997 by
and between Madeleine LLC and American Ski as amended, modified and
supplemented from time to time and attached hereto as EXHIBIT T relating to
the exchange of the Series A Exchangeable Preferred Stock and the Senior
Exchangeable Notes into the 101/2% Repriced Convertible Exchangeable
Preferred Stock, the Certificate of Designation of American Ski
("Certificate of Designation") also attached hereto as EXHIBIT T, the
Amended and Restated Registration Rights Agreement dated as of November 3,
1997 (the "Amended and Restated Registration Rights Agreement") also
attached hereto as EXHIBIT T and the amendment of certain provisions of the
Cerberus Purchase Agreement on terms and conditions satisfactory to the
Agent.
"CERBERUS INVESTMENT" shall mean the initial purchase by Madeleine LLC
of the Series A Exchangeable Preferred Stock and the Senior Exchangeable
Notes pursuant to the Cerberus Purchase Agreement.
"CERBERUS PURCHASE AGREEMENT" shall mean the Securities Purchase
Agreement dated as of July 2, 1997 between American Ski (f/k/a ASC
Holdings, Inc.) and Madeleine LLC as the purchaser thereunder, as amended
by the First Amendment to Securities Purchase Agreement dated as of July
25, 1997, as further amended, modified and supplemented from time to time
and attached hereto as EXHIBIT T.
"CLOSING DATE" shall mean the date on which all of the conditions set
forth in Section 3.1 have been satisfied.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"COLLATERAL" shall mean all of the property, rights and interests of
American Ski and its Subsidiaries that are subject to the security
interests, pledges, and mortgages created by the Security Agreements.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMMITMENT PERCENTAGE" shall mean as to each Lender, the sum of its
Revolving Credit Commitment Percentage and its Term Loan Commitment
Percentage as set forth on SCHEDULE 1 hereto.
"COMPLIANCE CERTIFICATE" shall mean a certificate in the form of
EXHIBIT C hereto and executed by the chief executive officer or chief
financial officer of American Ski.
"CONSOLIDATED" and "CONSOLIDATING," when used with reference to any
term, mean that term (or the terms "combined" and "combining," as the case
may be, in the case of partnerships, joint ventures and Affiliates that are
not Subsidiaries) as applied to the accounts of American Ski (or other
specified Person) and all of its Restricted Subsidiaries (or other
specified Persons), or such of its Restricted Subsidiaries as may be
specified, consolidated (or combined) in accordance with generally accepted
accounting principles and with appropriate deductions for minority
interests in Subsidiaries, as required by generally accepted accounting
principles.
"CONSOLIDATED ADJUSTED CASH FLOW" shall mean (a) Consolidated
EBITDA (before any adjustments to reflect acquisitions, sales and
exchanges of property during such period) for each fiscal year of
American Ski and its Restricted Subsidiaries LESS (b) the sum of (i)
the lesser of actual total Capital Expenditures or $9,000,000,
representing the estimated Capital Expenditures of American Ski and
its Restricted Subsidiaries required to maintain their existing ski
resorts, and (ii) cash taxes paid.
"CONSOLIDATED DEBT SERVICE" shall mean the sum of (a) Consolidated
Interest Expense, (b) scheduled principal payments on Indebtedness for
borrowed money and (c) without duplication with clause (b), scheduled
reductions in the amount of the Consolidated Maximum Revolving Credit
Amount under clause (b) of the definition thereof, in each case for the
period under review.
"CONSOLIDATED EBITDA" shall mean for the most recently completed four
fiscal quarters, (a) net income or (loss) of American Ski and its
Restricted Subsidiaries on a consolidated basis determined in accordance
with generally accepted accounting
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principles without giving effect to extraordinary gains and losses from
sales, exchanges and other dispositions of property not in the ordinary
course of business, and nonrecurring items and excluding from the
calculation of net income all revenues from Unrestricted Subsidiaries
except to the extent received by American Ski or its Restricted
Subsidiaries in cash as a loan repayment, dividend or other distribution,
PLUS, to the extent deducted in calculating net income, (b) the sum of,
without duplication, (i) depreciation expense of American Ski and its
Restricted Subsidiaries, (ii) amortization expense of American Ski and its
Restricted Subsidiaries, (iii) Consolidated Interest Expense PLUS the
non-cash portion of consolidated interest expense on Consolidated Funded
Debt, (iv) income tax expense of American Ski and its Restricted
Subsidiaries and (v) other non-cash items of American Ski and its
Restricted Subsidiaries including without limitation, the 1998 Stock Option
Grant.
"CONSOLIDATED EXCESS CASH FLOW" shall mean, for any period,
Consolidated EBITDA LESS the sum of (a) Consolidated Interest Expense, (b)
cash taxes paid, (c) required principal payments of Indebtedness and (d)
the Base Capital Expenditure Amount, each determined for such period.
"CONSOLIDATED FUNDED DEBT" means, as of each date of determination,
without duplication (a) all Indebtedness for borrowed money of American Ski
and its Restricted Subsidiaries on that date (including without limitation
all obligations with respect to Capitalized Leases), (b) the aggregate
amount available for drawing under all letters of credit outstanding on
that date (including the Letters of Credit) for which American Ski or any
Restricted Subsidiary is the account party (EXCLUDING HOWEVER, the
aggregate amount available for drawing under letters of credit issued to
lenders and lessors of Indebtedness of the type described in clause (a) in
support of such Indebtedness), and (c) the aggregate amount drawn under all
letters of credit (including the Letters of Credit) for which American Ski
or any Restricted Subsidiary is the account party and for which the issuer
of such letters of credit has not been reimbursed on that date.
"CONSOLIDATED INTANGIBLE ASSETS" shall mean (a) all intercompany loans
(without duplication for exclusions made in accordance with generally
accepted accounting principles) and loans to any employee or officer of
American Ski or any of its Subsidiaries, and all amounts payable to
American Ski or any of its Subsidiaries from any of the aforesaid persons,
(b) all assets which would be classified as intangible assets under
generally accepted accounting principles consistently applied, including,
without limitation, goodwill (whether representing the excess of cost over
book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs, and
research and development costs), (c) treasury stock and minority interests
in other corporations or business organizations, (d) cash set apart and
held in a sinking or other analogous fund established for the purpose of
redemption or other retirement of capital stock and (e) to the extent not
already
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deducted from total assets, reserves for depreciation, depletion,
obsolescence and/or amortization of properties and all other reserves or
appropriations of retained earnings which, in accordance with generally
accepted accounting principles consistently applied, should be established
in connection with the business conducted by American Ski and its
Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" shall mean the cash portion of
consolidated interest expense (including commitment and letter of credit
fees) on Consolidated Funded Debt, as determined in accordance with
generally accepted accounting principles consistently applied.
"CONSOLIDATED LENDER OBLIGATIONS" shall mean the Lender Obligations
and the American Ski - West Lender Obligations.
"CONSOLIDATED MAXIMUM REVOLVING CREDIT AMOUNT" shall mean the Maximum
Revolving Credit Amount PLUS the American Ski - West Maximum Revolving
Credit Amount.
"CONSOLIDATED NET INCOME" shall mean the net income (or deficit) from
operations of American Ski and its Restricted Subsidiaries, after taxes,
determined in accordance with generally accepted accounting principles
consistently applied.
"CONSOLIDATED NET WORTH" shall mean, at any date as of which the
amount thereof shall be determined, (a) the consolidated assets of American
Ski and its Restricted Subsidiaries (excluding from assets investments in
Unrestricted Subsidiaries) LESS (b) the consolidated total liabilities of
American Ski and its Restricted Subsidiaries, determined in accordance with
generally accepted accounting principles consistently applied.
"CONSOLIDATED REVOLVING CREDIT ADVANCES" shall mean the Revolving
Credit Advances PLUS the American Ski - West Revolving Credit Advances.
"CONSOLIDATED SENIOR SECURED DEBT" shall mean the outstanding
principal amount of the Consolidated Term Loans, the Consolidated Revolving
Credit Advances, the Consolidated Swing Line Loans and all other
Consolidated Funded Debt (other than Subordinated Indebtedness).
"CONSOLIDATED SWING LINE LOANS" shall mean the Swing Line Loans PLUS
the "Swing Line Loans" as defined in the American Ski - West Credit
Agreement.
"CONSOLIDATED TERM LOANS" shall mean the Term Loans PLUS the "Term
Loans" as defined in the American Ski - West Credit Agreement.
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"CONSOLIDATED TOTAL DEBT" shall mean the sum of (a) the outstanding
principal amount of the Consolidated Revolving Credit Advances, the
Consolidated Term Loans and the Consolidated Swing Line Loans, (b) any
claim required to be paid pursuant to Guaranties of American Ski and its
Restricted Subsidiaries, (c) the Senior Subordinated Notes, (d) all other
funded Indebtedness of American Ski and its Restricted Subsidiaries on a
consolidated basis and (e) without duplication, the stated amount of all
letters of credit issued for the account of American Ski or any Restricted
Subsidiary.
"CREDIT PARTICIPANTS" -- See Section 12.3 hereof.
"DEFAULT" shall mean an Event of Default or an event or condition
which with the passage of time or giving of notice, or both, would become
such an Event of Default.
"DIRECT UNRESTRICTED SUBSIDIARY INVESTMENTS" shall mean the sum of (a)
Investments made by American Ski and its Restricted Subsidiaries in
Unrestricted Subsidiaries in cash or cash equivalents, PLUS (b) the book
value of assets other than cash and cash equivalents and other than
Indirect Unrestricted Subsidiary Investments contributed to or invested by
American Ski and its Restricted Subsidiaries in Unrestricted Subsidiaries
LESS (c) cash dividends or distributions received by American Ski and its
Restricted Subsidiaries from such Unrestricted Subsidiaries after the date
such Investments described in clauses (a) and (b) were made.
"DISTRIBUTION" shall mean: (a) the declaration or payment of any
dividend on or in respect of any shares of any class of capital stock of
American Ski or any of its Restricted Subsidiaries, other than dividends
payable solely in shares of common stock of the corporation involved, (b)
the purchase, redemption, or other acquisition or retirement of any shares
of any class of capital stock of American Ski or any of its Restricted
Subsidiaries directly or indirectly, (c) any other distribution on or in
respect of any shares of any class of capital stock of American Ski or any
Restricted Subsidiary, (d) any setting apart or allocating any sum for the
payment of any dividend or distribution or for the purchase, redemption or
retirement of any shares of capital stock of American Ski or any Restricted
Subsidiary and (e) any payment of principal on or any retirement or
defeasance of Subordinated Indebtedness.
"EBITDA" shall mean for the most recently completed four fiscal
quarters, (a) net income or (loss) determined in accordance with generally
accepted accounting principles without giving effect to extraordinary gains
and losses from sales, exchanges and other dispositions of property not in
the ordinary course of business, and nonrecurring items and excluding from
the calculation of net income all revenues from Unrestricted Subsidiaries
except to the extent received by American Ski or its Restricted
Subsidiaries in cash as a loan repayment, dividend or other Distribution,
PLUS, to the extent deducted in calculating net income, (b) the sum of,
without
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duplication, (i) depreciation expense, (ii) amortization expense, (iii)
interest expense PLUS the non-cash portion of interest expense on funded
debt, (iv) income tax expense and (v) other non-cash items.
"ENVIRONMENT" means soil, surface waters, groundwaters, land, stream
sediments, surface or subsurface strata, ambient air, and any environmental
medium.
"ENVIRONMENTAL LAW" means any judgment, decree, order, common law
rule, statute, act, law, code, ordinance, permit, license, rule or
regulation pertaining to environmental matters, or any federal, state,
county or local statute, regulation, code, ordinance, order or decree
relating to public health, welfare, the Environment, or to the storage,
handling, treatment, transportation, use or generation of Hazardous
Materials in or at the workplace, or to worker health or safety, whether
now existing or hereafter enacted.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EVENT OF DEFAULT" -- See Section 10.1 hereof.
"EXCESS CASH FLOW LEVERAGE RATIO" shall mean the ratio of (a)
Consolidated Senior Secured Debt PLUS the Unused Revolving Credit
Commitments to (b) Consolidated EBITDA as of the end of the relevant Excess
Cash Payment Period.
"EXCESS CASH PAYMENT DATE" shall mean the earlier of (a) the date of
delivery of the financial statements pursuant to Section 6.2 in respect of
American Ski's fiscal year then ended and (b) the date occurring 90 days
after the last day of each fiscal year of American Ski (in either case,
commencing with its fiscal year ended July 25, 1999).
"EXCESS CASH PAYMENT PERIOD" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal
year of American Ski and its Subsidiaries, PROVIDED that the first Excess
Cash Payment Period hereunder shall be the period from and including July
27, 1998 to and including July 25, 1999.
"EXCESS IPO PROCEEDS" shall mean the sum of (a) the Restricted Excess
IPO Proceeds and (b) the Unrestricted Excess IPO Proceeds.
"EXCESS REAL PROPERTY" shall mean unimproved parcels which constitute
part of any Mortgaged Property and are not then currently used or
contemplated (except with respect to lodging) to be used in connection with
the operation of such Mortgaged Property as a ski resort as then
configured, including lodging, other recreational uses and related
amenities.
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"EXISTING LETTERS OF CREDIT" shall mean the Letters of Credit
described as such on SCHEDULE 2.16 hereto and issued by the Issuing Bank.
"FEE LETTER" -- See Section 2.9 hereof.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Bank of New York or, if such rate is not so published for any day
that is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds brokers of
recognized standing selected by the Agent.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally
accepted accounting principles as defined by controlling pronouncements of
the Financial Accounting Standards Board, as from time to time supplemented
and amended.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GUARANTORS" shall mean each of American Ski, AJT, Inc., WVSAL, Inc.,
ASC Utah, ASC West, Inc., the Heavenly Subsidiaries and the Steamboat
Subsidiaries (other than Orlando Resort Corporation).
"GUARANTY AGREEMENTS" shall mean the Guaranty Agreements of even date
herewith in the form of EXHIBIT F hereto from each of the Guarantors other
than American Ski in favor of the Agent and the Lenders.
"GUARANTY" or "GUARANTEE" or "GUARANTIES" shall include any
arrangement whereby a Person is or becomes liable in respect of any
Indebtedness or other obligation of another and any other arrangement
whereby credit is extended to another obligor on the basis of any promise
of a guarantor, whether that promise is expressed in terms of an obligation
to pay the Indebtedness of such obligor, or to purchase or lease assets
under circumstances that would enable such obligor to discharge one or more
of its obligations, or to maintain the capital, the working capital,
solvency or general financial condition of such obligor, whether or not
such arrangement is listed in the balance sheet of the guarantor or
referred to in a footnote thereto.
"HAZARDOUS MATERIAL" means any pollutant, contaminant, toxic
substance, chemical substance or mixture, hazardous waste, hazardous
material, or hazardous substance, or any oil, petroleum, or petroleum
product, as defined in or pursuant to the
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Resource Conservation and Recovery Act, as amended, the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, the
Superfund Amendment and Reauthorization Act, as amended, the Federal Clean
Water Act, as amended, the Hazardous Materials Transportation Act, as
amended, the Toxic Substances Control Act, as amended, any regulations
promulgated under these Acts, or any other Environmental Law.
"HEAVENLY SUBSIDIARIES" shall mean Heavenly Valley Ski & Resort
Corporation, Heavenly Corporation and Heavenly Valley, Limited Partnership.
"INDEBTEDNESS" shall mean, as to any Person, without duplication: (a)
all obligations of such Person for borrowed money or evidenced by bonds,
debentures, notes or similar instruments; (b) all obligations of such
Person for the deferred purchase price of property or services (including
without limitation deferred payment obligations which are part of the
consideration provided for in agreements not to compete), except trade
accounts payable and accrued liabilities arising in the ordinary course of
business which are not overdue by more than 60 days or which are being
contested in good faith by appropriate proceedings; (c) all capital lease
obligations of such Person; (d) all Indebtedness of others secured by a
lien on any properties, assets or revenues of such Person; (e) all
Indebtedness of others guaranteed by such Person; (f) all net obligations
of such Person under interest rate, commodity, foreign currency and
financial markets swaps, options, futures and other hedging obligations;
and (g) all obligations of such Person, contingent or otherwise, in respect
of letters of credit or bankers' acceptances or similar instruments.
"INDEMNITY AGREEMENTS" the Hazardous Materials Indemnification
Agreements of even date herewith from each Borrower to the Agent, each in
substantially the form of EXHIBIT N hereto.
"INDIRECT UNRESTRICTED SUBSIDIARY INVESTMENTS" shall mean (a) the book
value of Excess Real Property contributed by American Ski or any Restricted
Subsidiary to Unrestricted Subsidiaries LESS (b) cash dividends or
distributions received by American Ski or its Restricted Subsidiaries from
such Unrestricted Subsidiaries after the date such Investments were made in
excess of those referred to in clause (c) of the definition of Direct
Unrestricted Subsidiary Investments in an amount equal to the sum of
Investments described in clauses (a) and (b) of the definition of Direct
Unrestricted Subsidiary Investments.
"INTEREST PERIOD" shall mean with respect to each LIBOR Rate Loan, the
period commencing on the date of such LIBOR Rate Loan and ending one, two,
three or six months thereafter, as the Borrowers may request as provided in
Sections 2.2(a) or 2.6 hereof, PROVIDED that:
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(a) any Interest Period (other than an Interest Period
determined pursuant to clauses (c) or (d) below) that would otherwise end
on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day;
(b) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d) below, end on the last Business Day
of a calendar month;
(c) any Interest Period with respect to a Revolving Credit
Advance that would otherwise end after the Revolving Credit Termination
Date shall end on the Revolving Credit Termination Date;
(d) any Interest Period with respect to any portion of the Term
Loans that would otherwise end after the Term Loan Maturity Date shall end
on the Term Loan Maturity Date; and
(e) notwithstanding clauses (c) and (d) above, no Interest
Period shall have a duration of less than one month, and if any Interest
Period applicable to any LIBOR Rate Loan would be for a shorter period,
such Interest Period shall not be available hereunder.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement, interest rate floor agreement or other
similar agreement or arrangement.
"INVESTMENT" shall mean (a) any stock, evidence of Indebtedness or
other security of another Person, (b) any loan, advance, contribution to
capital, extension of credit (except for current trade and customer
accounts receivable for inventory sold or services rendered in the ordinary
course of business and payable in accordance with customary trade terms) to
another Person, (c) any purchase of (i) stock or other securities of
another Person or (ii) any business or undertaking of another Person
(whether by purchase of assets or securities), any commitment or option to
make any such purchase if, in the case of an option, the aggregate
consideration paid for such option was in excess of $100 or (d) any other
investment, in all cases whether existing on the date of this Agreement or
thereafter made.
"IPO GROSS PROCEEDS" shall mean the gross proceeds of the initial
public offering of common stock of American Ski under the Registration
Statement.
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"ISSUING BANK" shall mean the Agent.
"KAMORI" shall mean Kamori International Corporation, a Delaware
corporation.
"KAMORI ACQUISITION" shall mean the acquisition by ASC West, Inc. of
all of the outstanding stock and partnership interests in the Steamboat
Subsidiaries and the Heavenly Subsidiaries pursuant to the Kamori
Acquisition Documents.
"KAMORI ACQUISITION DOCUMENTS" shall mean (a) the Stock Purchase
Agreement dated August 1, 1997 among Kamori, ASC West, Inc. and American
Ski, including all schedules, exhibits and amendments thereto (the "Kamori
Stock Purchase Agreement") attached hereto as EXHIBIT V and (b) all other
agreements, instruments and documents delivered in connection with the
Kamori Acquisition.
"KAMORI COMBINED ENTITIES" shall mean Kamori, the Heavenly
Subsidiaries and the Steamboat Subsidiaries, collectively.
"LEASES" shall mean all leases and other agreements under which the
Borrowers have rights to use or occupy any real property.
"LENDER AGREEMENTS" shall mean this Agreement, the Term Notes, the
Revolving Credit Notes, the Swing Line Note, the Guaranty Agreements, the
Indemnity Agreements, the Security Agreements, the applications and
reimbursement agreements relating to the Existing Letters of Credit and any
other present or future agreement from time to time entered into between
ASC East or any of its Restricted Subsidiaries and the Agent or any
Lender, each as from time to time amended or supplemented, and all
statements, reports and certificates delivered by ASC East or any of its
Restricted Subsidiaries to the Agent or any Lender in connection therewith.
"LENDER OBLIGATIONS" shall mean all present and future obligations and
Indebtedness of ASC East or any of its Restricted Subsidiaries owing to the
Agent or the Lenders under this Agreement or any other Lender Agreement,
including, without limitation, the obligations to pay the Indebtedness from
time to time evidenced by the Term Notes, the Revolving Credit Notes, the
Swing Line Note, the Reimbursement Obligations and obligations to pay
interest, commitment fees, balance deficiency fees, charges, expenses and
indemnification from time to time owed under any Lender Agreement.
"LENDERS" shall mean (a) initially, each lender listed on the
signature pages hereof, (b) any other Person who becomes a Successor Lender
hereunder in accordance with the terms of Section 12.2 hereof and (c) the
successors and assigns of the Persons described in clauses (a) and (b).
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"LETTER OF CREDIT" shall mean a letter of credit issued by the
Issuing Bank for the account of the Borrowers in accordance with
Section 2.16 hereof.
"LETTER OF CREDIT EXPOSURE" shall mean, at any time, the sum of
(a) the Maximum Drawing Amount with respect to all Letters of Credit and
(b) all unpaid Reimbursement Obligations.
"LETTER OF CREDIT FEE" -- See Section 2.16 hereof.
"LETTER OF CREDIT PARTICIPATION" -- See Section 2.16(i) hereof.
"LEVERAGE RATIO" shall mean as of the end of any fiscal quarter the
ratio of Consolidated Total Debt as of such date to Consolidated EBITDA for
the four-quarter period ending on such date.
"LIBOR PRICING OPTION" shall mean the option granted to the Borrowers
pursuant to Section 2.6 hereof to have interest on all or a portion of the
Loans computed on the basis of the Applicable LIBOR Rate for an applicable
Interest Period.
"LIBOR RATE" shall mean for any Interest Period for any LIBOR Rate
Loan, the quotient of (a) the rate of interest determined by the Agent, at
about 10:00 a.m. (Boston time) on the LIBOR Rate Fixing Day as being the
rate at which deposits in U.S. dollars are offered to it by first-class
banks in the London interbank market for deposit for such Interest Period
in amounts comparable to the aggregate principal amount of LIBOR Rate Loans
to which such Interest Period relates, DIVIDED by (b) the difference
between one (1) minus the Reserve Requirement (expressed as a decimal)
applicable to that Interest Period. The LIBOR Rate shall be adjusted
automatically as of the effective date of any change in the Reserve
Requirement.
"LIBOR RATE FIXING DAY" shall mean, in the case of any LIBOR Rate
Loan, the second Business Day preceding the Business Day on which an
Interest Period begins.
"LIBOR RATE LOAN" shall mean any Loan hereunder upon which interest
will accrue on the basis of a formula including as a component thereof the
LIBOR Rate. The expiration date of any LIBOR Rate Loan shall be the last
day of the Interest Period applicable to such LIBOR Rate Loan.
"LIBOR RATE MARGIN" shall mean a rate per annum determined on the
first day of the applicable Interest Period in accordance with the Pricing
Schedule.
"LIEN" -- See Section 9.2 hereof.
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"LOAN" shall mean all or a portion of the Term Loans, any Revolving
Credit Advance or any Swing Line Loan outstanding hereunder or made to the
Borrowers by the Lenders pursuant to Article 2 of this Agreement, and
"Loans" means all of such loans, collectively.
"MAJORITY LENDERS" shall mean, at any time, any two or more Lenders
holding at least 51% of the sum of the outstanding principal amount of the
Loans hereunder and the Unused Revolving Credit Commitments.
"MANAGEMENT PROJECTIONS" shall mean the Historical pro forma
Consolidated Resort Operations for 1995-1997 and projections for 1998-2002,
as well as individual resort Income Statements for the same periods,
prepared by American Ski and delivered to the Agent by American Ski on
behalf of itself and its Restricted Subsidiaries.
"MATERIAL ADVERSE EFFECT" shall mean any adverse change (or occurrence
or condition reasonably likely to produce an adverse change) in the
financial condition, properties, business, operations or prospects which is
material to (a) American Ski and its Restricted Subsidiaries as a whole or
(b) the Borrowers and their Restricted Subsidiaries as a whole.
"MAXIMUM DRAWING AMOUNT" shall mean the maximum aggregate amount that
the beneficiaries may at any time draw under outstanding Letters of Credit,
as such aggregate amount may be reduced from time to time pursuant to the
terms of the Letters of Credit.
"MAXIMUM REVOLVING CREDIT AMOUNT" shall mean as of any date of
determination, the lesser of (a) the applicable amount set forth below (as
each such amount may be reduced from time to time pursuant to the mandatory
reduction requirements of Section 4.1(c)):
Prior to From and After
Subordinated Subordinated
Notes Release Date Notes Release Date
------------------ ------------------
Closing Date through May 30, 1999 $35,000,000 45,000,000
May 31, 1999 through May 30, 2000 34,850,000 44,850,000
May 31, 2000 through May 30, 2001 34,350,000 44,350,000
May 31, 2001 through May 30, 2002 32,600,000 42,600,000
May 31, 2002 through May 30, 2003 30,450,000 40,450,000
May 31, 2003 through May 30, 2004 28,250,000 38,250,000
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or (b) the amount to which the Maximum Revolving Credit Amount may have
been reduced pursuant to Section 2.12; PROVIDED that if the obligation of
the Lenders to make further Loans is terminated upon the occurrence of an
Event of Default, the Maximum Revolving Credit Amount as of any date of
determination thereafter shall be deemed to be $0.
"MINIMUM IPO GROSS PROCEEDS" shall mean $250,000,000.
"MONEY MARKET RATE" shall mean with respect to Money Market Loans the
interest rate per annum determined by the Agent in its reasonable
discretion with reference to the Federal Funds Effective Rate.
"MONEY MARKET LOANS" shall mean any Loan hereunder bearing interest at
a fluctuating rate determined by reference to the Money Market Rate.
"MORTGAGED PROPERTIES" shall mean all real properties and interests
therein owned by American Ski or any of its Restricted Subsidiaries which
are subject to mortgage liens in favor of the Agent under the Security
Agreements.
"MORTGAGES" -- See definition of Security Agreements.
"NET CASH PROCEEDS" shall mean the Cash Proceeds (with respect to any
Permitted Disposition) or Cash Insurance Proceeds (with respect to any
casualty) net of the sum of (a) the amount of such proceeds required to be
applied to repay Indebtedness (other than the Loans) incurred or secured by
a lien on any asset disposed of in connection with such Permitted
Disposition; (b) brokerage commissions, legal fees, accounting fees,
investment banking fees, trustee's fees, finder's fees and other similar
fees and commissions, all of which amounts under this clause (b) shall be
reasonable and customary; (c) taxes payable within one year in connection
with or as a result of such transaction; (d) amounts held in escrow in
connection with any such Permitted Disposition (prior to the release
thereof); and (e) other reasonable and customary out-of-pocket costs
incurred in connection therewith.
"1998 STOCK OPTION GRANT" shall mean grants of stock options by
American Ski to its employees in fiscal year 1998 (which options may vest
in subsequent years) to purchase an aggregate of 2,475,235 shares of
American Ski's common stock.
"1997 FINANCIAL STATEMENTS" shall mean (a) the Consolidated Balance
Sheet of American Ski and its Subsidiaries as of July 27, 1997 and the
related Consolidated Statements of Operations, Cash Flows and Changes in
Stockholders' Equity for the year then ended, and the notes to such
financial statements, audited by Price Waterhouse LLP and (b) the
Consolidated Balance Sheet of the Kamori Combined Entities as of May 31,
1997 and the related Consolidated Statements of Operations,
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Cash Flows and Changes in Stockholders' Equity for the year then ended, and
the notes to such financial statements, audited by Arthur Andersen LLP.
"NOTES" shall mean the Term Loan Notes, the Revolving Credit Notes and
the Swing Line Note.
"NOTICE OF REVOLVING CREDIT OR SWING LINE BORROWING" -- See Section
2.2(a) hereof.
"OTTEN LIFE INSURANCE POLICIES" -- See Section 8.8 hereof.
"OTTEN SHAREHOLDERS" shall mean Leslie B. Otten, his spouse and
children, and trusts established for his or any or all of their benefit,
collectively.
"OTTEN SUBORDINATION AGREEMENT" shall mean the Subordination Agreement
of even date herewith in substantially the form of EXHIBIT Q hereto by and
among ASC East, Leslie B. Otten and the Agent.
"OTTEN TAX NOTE" shall mean ASC East's Subordinated Demand Promissory
Note dated June 28, 1996 in the outstanding principal amount as of the date
hereof as set forth on SCHEDULE 5.16 hereto.
"PENSION PLAN" shall mean an employee benefit plan or other plan
maintained for the employees of American Ski or any Subsidiary as described
in Section 4021(a) of ERISA.
"PERMITTED ACQUISITIONS" shall mean acquisitions by American Ski or
any Restricted Subsidiary of all of the stock or all or substantially all
of the assets of another domestic (or Canadian) Person engaged in any line
of business substantially similar to any existing line of business of
American Ski and its Restricted Subsidiaries, PROVIDED that the following
terms and conditions are met:
(a) American Ski shall provide the Agent notice of each proposed
acquisition at least 30 days in advance of the proposed closing date,
such notice to include a reasonably detailed information package
outlining the transaction and its pro forma impact on American Ski and
its Restricted Subsidiaries and certification, with supporting
financial statements, that:
(i) no Default or Event of Default shall exist at the time
of or after giving effect to each such acquisition on a pro forma
basis;
(ii) American Ski and its Restricted Subsidiaries will
comply with the financial covenants contained herein on a pro
forma basis,
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based on combined adjusted trailing four-quarter operating
performance, pro forma debt and pro forma debt service based on
scheduled principal payments (including any acquisition loan) and
pro forma interest on total debt at then prevailing borrowing
rates. Any pro forma adjustments to historical EBITDA of the
Person to be acquired shall be acceptable to the Lenders in their
reasonable discretion, PROVIDED that contractual and adequately
documented reductions in the former owner's compensation and/or
rental expense that will be effective as of the acquisition date
and/or other adjustments allowed by the Commission and certified
by the Borrowers' independent auditors as reasonably likely to
occur shall be deemed acceptable; and
(iii) the Board of Directors of the Person to be
acquired has approved such acquisition.
(b) Management of the acquiring Borrower shall reasonably
believe that, as a result of its ownership and management, the Person
to be acquired will achieve positive four-quarter EBITDA not later
than two years after the acquisition.
(c) (i) The maximum purchase price (exclusive of that portion
of the purchase price that may be payable solely in common stock
of American Ski) for any single proposed acquisition shall not
exceed the greater of (A) $50,000,000 or (B) 50% of American
Ski's Consolidated EBITDA for the most recent fiscal year before
giving effect to the proposed acquisition.
(ii) PROVIDED, HOWEVER, that all or any portion of the
Restricted Excess IPO Proceeds may be applied to one or more
acquisitions, the purchase price of which may exceed the
foregoing limits of clause (c)(i), PROVIDED that the purchase
price for any one or a series of related acquisitions pursuant to
this clause (c)(ii) shall in no event exceed an amount equal to
11% of consolidated total assets of American Ski.
(d) The terms and structure of such acquisitions shall be
reasonably acceptable to the Lenders and shall not subject the Agent
or the Lenders to any regulatory approvals in connection with the
exercise of any remedies under the Lender Agreements.
(e) The acquired Person shall be merged into a Restricted
Subsidiary, or if it is to be a Subsidiary of a Borrower, it shall
become an obligor under the
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Lender Agreements on terms acceptable to the Agent and by executing
and delivering to the Agent the joinder in the form attached hereto as
EXHIBIT S.
(f) The assets or the stock so acquired shall be pledged to the
Agent on a first perfected basis, subject only to prior liens and
encumbrances associated with assumed debt otherwise permitted
hereunder, on terms and conditions required by the Agent and
consistent with the pledges of collateral provided to the Agent on the
Closing Date, together with all related appraisals, environmental
reviews, surveys, title insurance, certificates, instruments and
opinions requested by the Agent and consistent with such reviews,
surveys, certificates and opinions provided to the Agent on the
Closing Date.
"PERMITTED CAPITAL EXPENDITURES" shall mean Capital Expenditures of
American Ski and its Restricted Subsidiaries permitted under Section 9.7
hereto.
"PERMITTED DISPOSITIONS" shall mean (a) sales or dispositions of
assets of American Ski and its Restricted Subsidiaries for fair market
value in an amount not in excess of $20,000,000 in the aggregate in any
fiscal year, PROVIDED that (i) 75% of the proceeds of such sales or
dispositions must be in cash, (ii) all non-cash proceeds of such sales or
dispositions must be pledged, mortgaged or assigned to the Agent on terms
acceptable to the Agent and (iii) all cash proceeds thereof must be, within
one year following the date of such sales or dispositions, applied to
permanently reduce the Maximum Revolving Credit Amount or to prepay the
Term Loans, in accordance with their terms, or reinvested in Capital
Expenditures, Real Estate Capital Expenditures or Permitted Acquisitions,
(b) dispositions of Excess Real Property in accordance with the
requirements of Section 2.21, sales of developed real estate units in the
ordinary course of business, (d) the sale of substantially all of the
assets of or the capital stock of Orlando Resort Corporation and (e) the
sale of the Kamori residence pursuant to Section 8(b)(vii) of the Kamori
Stock Purchase Agreement.
"PERMITTED LIENS" -- See Section 9.2 hereof.
"PERSON" shall mean an individual, corporation, partnership, joint
venture, association, estate, joint stock company, trust, organization,
business, or a government or agency or political subdivision thereof.
"PRICING NOTICE" shall mean (a) with respect to a Revolving Credit
Advance which is requested to be a LIBOR Rate Loan, the applicable Notice
of Revolving Credit or Swing Line Borrowing and (b) with respect to any
portion of the Term Loans requested to be a LIBOR Rate Loan, a notice from
American Ski to the Agent in substantially the form of EXHIBIT D hereto and
meeting the requirements of Section 2.6(b) hereof.
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"PRICING SCHEDULE" shall mean the Pricing Schedule attached hereto as
SCHEDULE 2.
"REAL ESTATE CAPITAL EXPENDITURES" shall mean Capital Expenditures
paid or incurred by American Ski or any of its Restricted Subsidiaries for
the purchase, development, marketing or sale of residential real estate or
lodging operations.
"REAL ESTATE GUARANTIES" shall mean Guaranties of American Ski and its
Restricted Subsidiaries of Indebtedness of Unrestricted Subsidiaries. The
amount of any Real Estate Guaranty shall be deemed to be the lesser of (a)
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty is made and (b) the maximum
amount for which the obligor under such Guaranty may be liable pursuant to
the terms of the instrument embodying such Guaranty, unless such primary
obligation and the maximum amount for which such obligor may be liable is
not stated or determinable, in which case the amount of such Guaranty shall
be such obligor's maximum reasonably anticipated liability in respect
thereof, as agreed upon between American Ski and the Agent.
"REFUNDED SWING LINE LOANS" -- See Section 2.20 hereof.
"REFUNDING DATE" -- See Section 2.20 hereof.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-1 (No. 333-33483), as amended of American Ski, as filed with the
Commission and attached hereto as EXHIBIT U.
"REIMBURSEMENT OBLIGATIONS" shall mean (a) the Borrowers' obligations
to reimburse the Issuing Bank on account of any drawing under any Letter of
Credit and (b) any Borrower's obligation to reimburse any Revolving Credit
Lender on account of any drawing under any Existing Letter of Credit.
"REPORTABLE EVENT" shall mean an event reportable to the Pension
Benefit Guaranty Corporation under Section 4043 of Title IV of ERISA.
"RESERVE REQUIREMENT" shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed under Regulation D on the Banks against
"Euro-currency Liabilities" as defined in said Regulation D.
"RESTRICTED EXCESS IPO PROCEEDS" shall mean (a) $0 if IPO Gross
Proceeds are equal to or less than $275,000,000 and (b) 50% of the net
proceeds received by American Ski from IPO Gross Proceeds in excess of
$275,000,000.
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"RESTRICTED SUBSIDIARIES" shall mean Subsidiaries of American Ski, ASC
East, ASC West, Inc. or other specified parent, other than Unrestricted
Subsidiaries of American Ski, ASC East, ASC West, Inc. or other specified
parent.
"REVOLVING COMMITMENT FEE" -- see Section 2.9 hereof.
"REVOLVING CREDIT ADVANCE" shall mean any loan or advance from any
Lender to the Borrower pursuant to Section 2.1 hereof.
REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean as to each
Revolving Credit Lender, its percentage interest in the Maximum Revolving
Credit Amount as set forth on SCHEDULE 1 hereto.
"REVOLVING CREDIT LENDERS" shall mean the Revolving Credit Lenders so
identified on SCHEDULE 1 hereto.
"REVOLVING CREDIT NOTES" shall mean the Revolving Credit Notes
substantially in the form of EXHIBIT A-1 hereto executed by the Borrowers,
jointly and severally, in favor of each Revolving Credit Lender to evidence
the Revolving Credit Advances to be made by the Revolving Credit Lenders
from time to time hereunder.
"REVOLVING CREDIT TERMINATION DATE" shall mean May 31, 2004.
"SECURITY AGREEMENTS" shall mean:
(a) The Security Agreements, as amended on the date hereof from
ASC East and each of its Restricted Subsidiaries to the Agent by which
ASC East and each of its Restricted Subsidiaries has granted to the
Agent, in order to secure the Lender Obligations, a security interest
in substantially all of its assets, each in substantially the form of
EXHIBIT E-1 hereto.
(b) The Security Agreements of even date herewith from the
Guarantors to the Agent by which each of the Guarantors has granted to
the Agent, in order to secure the Lender Obligations, a security
interest in substantially all of its assets, each in substantially the
form of EXHIBIT E-2 hereto.
(c) The Fee and Leasehold Mortgage, Assignment of Leases and
Rents, Financing Statement and Security Agreements, as amended on the
date hereof (the "Mortgages") from each Borrower that owns any real
property to the Agent to secure the Lender Obligations, each in
substantially the form of EXHIBIT G hereto.
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(d) The Collateral Assignments of Leases and Rents, as amended
on the date hereof (the "Collateral Assignments of Leases") from each
Borrower that leases any real property, with respect to all Leases, to
the Agent to secure the Lender Obligations, each in substantially the
form of EXHIBIT H hereto.
(e) The Assignments in Trust, as amended on the date hereof (the
"Assignments in Trust"), from certain Borrowers to the Agent to secure
the Lender Obligations, each in the form of EXHIBIT J hereto.
(f) The Assignment of Trademarks, as amended on the date hereof
(the "Trademark Security Agreements") from each Borrower to the Agent
to secure the Lender Obligations, each in the form of EXHIBIT K
hereto.
(g) The Assignments of Licenses, Contracts and Permits, as
amended on the date hereof (the "Assignments of Licenses") from each
Borrower to the Agent to secure the Lender Obligations, each in the
form of EXHIBIT L hereto.
(h) The Stock Pledge Agreements of even date herewith (the
"Stock Pledges") pledging to the Agent the collateral described
therein (excluding stock of Unrestricted Subsidiaries) to secure the
obligations described therein, each in the form of EXHIBIT M hereto.
(i) The American Ski-West Security Documents.
(j) All other security agreements, pledge agreements, mortgages,
assignments and other instruments by which American Ski or any
Restricted Subsidiary grants or pledges to the Agent a lien on,
security interest in, or pledge or mortgage or assignment of any of
its assets.
"SENIOR EXCHANGEABLE NOTES" shall mean the 14% Senior Exchangeable
Notes due 2002 issued by American Ski under the Cerberus Purchase Agreement
in the original principal amount of $17,500,000.
"SENIOR SUBORDINATED NOTES" shall mean the $120,000,000 Senior
Subordinated Notes of ASC East, due July 16, 2006, issued pursuant to the
Senior Subordinated Notes Indenture.
"SENIOR SUBORDINATED NOTES INDENTURE" shall mean the Indenture of
Trust dated as of June 28, 1996 by and between ASC East and U.S. Trust
Company of New York, as Trustee.
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"SERIES A EXCHANGEABLE PREFERRED STOCK" shall mean the 17,500 shares
of Series A Exchangeable Preferred Stock issued by American Ski under the
Cerberus Purchase Agreement.
"SOLVENT" or "SOLVENCY" shall mean, as to any Person, that such Person
(a) has assets having a fair value in excess of its liabilities, (b) has
assets having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and matured and
(c) has, and expects to continue to have, access to adequate capital for
the conduct of its business and the ability to pay its debts from time to
time incurred in connection with the operation of its business as such
debts mature.
"STEAMBOAT SUBSIDIARIES" shall mean Steamboat Ski & Resort
Corporation, Steamboat Development Corporation and Orlando Resort
Corporation.
"SUBORDINATED NOTES RELEASE DATE" shall mean the date on which either
(a) the Senior Subordinated Notes are exchanged for Subordinated
Indebtedness of American Ski or are paid in full, or (b) ASC East and its
Restricted Subsidiaries may incur Senior Debt (as defined in the Senior
Subordinated Notes Indenture) in an amount equal to or exceeding
$75,000,000 pursuant to Section 4.09 of the Senior Subordinated Notes
Indenture.
"SUBORDINATED INDEBTEDNESS" shall mean (a) the Senior Subordinated
Notes, (b) the Otten Tax Note, (c) the Indebtedness identified as
Subordinated Indebtedness on SCHEDULE 5.16 and (d) all other Indebtedness
of American Ski or any Restricted Subsidiary which is subordinated to the
Indebtedness of American Ski or such Restricted Subsidiary to the Agent and
the Lenders on terms and conditions approved in writing by the Agent.
"SUBSIDIARY" shall mean any Person of which American Ski or any
Restricted Subsidiary or other specified parent shall now or hereafter at
the time own, directly or indirectly through one or more Subsidiaries or
otherwise, sufficient voting stock (or other beneficial interest) to
entitle it to elect at least a majority of the board of directors or
trustees or similar managing body.
"SWING LINE COMMITMENT" shall mean $5,000,000.
"SWING LINE LENDER" -- See Section 2.18 hereof.
"SWING LINE LOANS" -- See Section 2.18 hereof.
"SWING LINE NOTE" shall mean the Swing Line Note substantially in the
form of EXHIBIT A-3 hereto executed by the Borrowers, jointly and
severally, in favor of the
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Swing Line Lender to evidence the Swing Line Loans to be made by the Swing
Line Lender from time to time hereunder.
"SWING LINE PARTICIPATION AMOUNT" -- See Section 2.20 hereof.
"101/2% REPRICED CONVERTIBLE EXCHANGEABLE PREFERRED STOCK" shall mean
the "101/2% Repriced Convertible Exchangeable Preferred Stock" under and as
defined in the Cerberus Amendment and Waiver Letter Agreement and the
Certificate of Designation.
"TERM LOAN COMMITMENT PERCENTAGE" shall mean as to each Term Loan
Lender, its percentage interest in the Term Loans as set forth on SCHEDULE
1 hereto.
"TERM LOAN LENDERS" shall mean those Lenders so identified on SCHEDULE
1 hereto.
"TERM LOAN MATURITY DATE" shall mean May 31, 2006.
"TERM LOAN NOTES" shall mean the Term Loan Notes substantially in the
form of EXHIBIT A-2 hereto executed by the Borrowers, jointly and
severally, in favor of each Term Loan Lender to evidence the Term Loans.
"TERM LOANs" shall mean the term loans made by the Term Loan Lenders
to the Borrowers pursuant to Section 2.4 hereof.
"133/4% SUBORDINATED NOTES" shall mean the "133/4% Subordinated
Discount Notes due 2007" of ASC East as defined and described in the
Registration Statement.
"UCC" shall mean the Uniform Commercial Code in effect in the
applicable jurisdiction, as amended from time to time.
"UNIFORM CUSTOMS AND PRACTICE" shall mean the Uniform Customs and
Practice for Documentary Credits (1993 Revision) International Chamber
of Commerce publication No. 500.
"UNRESTRICTED EXCESS IPO PROCEEDS" shall mean (a) $0 if IPO Gross
Proceeds are equal to or less than $250,000,000, (b) all net proceeds
received by American Ski from any IPO Gross Proceeds in excess of
$250,000,000 but not in excess of $275,000,000 and (c) 50% of the net
proceeds received by American Ski from any IPO Gross Proceeds in excess of
$275,000,000.
"UNRESTRICTED SUBSIDIARIES" shall mean Killington West, Ltd., a
California corporation, Mountain Water Company, a Vermont corporation,
Grand Summit Resort
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Properties, Inc., a Maine corporation, S-K-I Insurance Company, a Vermont
corporation, Club Sugarbush, a Vermont corporation, Uplands Water, Orlando
Resort Corporation, a Delaware corporation, Walton Pond Apartments and such
other Subsidiaries, other than a Borrower or a Guarantor, as may from time
to time be designated by American Ski as an Unrestricted Subsidiary and as
are reasonably acceptable to the Agent.
"UNUSED REVOLVING CREDIT COMMITMENTS" shall mean the Maximum Revolving
Credit Amount in effect at such time LESS the sum of the Aggregate
Outstanding Revolving Credit Extensions for each Revolving Credit Lender
LESS the Letter of Credit Exposure and LESS the aggregate principal amount
of Swing Line Loans then outstanding.
"UPLANDS WATER" shall mean Uplands Water Company, Inc., a Vermont
corporation.
"VIDA BONDS" shall mean (a) the $5,100,000 Vermont Industrial
Development Authority Floating/Fixed Rate Industrial Revenue Bonds
(Sherburne Corporation Issue - 1984 Series) and (b) the $2,130,000 Vermont
Industrial Development Authority Floating/Fixed Rate Industrial Revenue
Bonds (Mount Snow Issue - 1984 Series).
"WHOLLY-OWNED SUBSIDIARY" shall mean any Person of which American Ski;
any Restricted Subsidiary or other specified parent shall now or hereafter
at the time own, directly or indirectly through one or more Subsidiaries or
otherwise, one hundred percent (100%) of such Person's capital stock or
other beneficial interest.
"WOLF ACQUISITION AGREEMENT" shall mean the Purchase and Sale
Agreement by and between Wolf Resorts and ASC Utah dated as of May 30,
1997.
"WOLF RESORTS" shall mean Wolf Mountain Resorts, L.C., a Utah limited
liability company.
Section 1.2 ACCOUNTING TERMS. All accounting terms used and not defined
in this Agreement shall be construed in accordance with generally accepted
accounting principles consistently applied, and all financial data required to
be delivered hereunder shall be prepared in accordance with such principles.
ARTICLE 2. THE CREDITS
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Section 2.1 THE REVOLVING CREDIT.
(a) Subject to the terms and conditions of this Agreement and so long
as no Default exists, at any time prior to the Revolving Credit Termination
Date, each Revolving Credit Lender, severally and not jointly, shall make such
Revolving Credit Advances to the Borrowers as the Borrowers may from time to
time request, by notice to the Agent in accordance with Section 2.2, in an
aggregate amount (i) as to each Revolving Credit Lender, not to exceed at any
time such Lender's Revolving Credit Commitment Percentage of the Available
Revolving Credit Amount and (ii) as to all Revolving Credit Lenders, not to
exceed an amount equal to the Available Revolving Credit Amount. The
outstanding principal amount of the Revolving Credit Advances, together with all
accrued interest and other fees and charges related thereto, shall be repaid in
full on the Revolving Credit Termination Date. On the Closing Date, the
Borrowers, jointly and severally, shall execute and deliver to each Revolving
Credit Lender a Revolving Credit Note to evidence the Revolving Credit Advances
from time to time made by such Revolving Credit Lender to the Borrowers
hereunder. The Revolving Credit Lenders having aggregate Revolving Credit
Commitment Percentages in excess of 50% may from time to time in consultation
with the Borrowers establish sublimits as to the amounts of Revolving Credit
Advances that may be advanced for use by one or more Borrowers that do not
operate ski resorts.
(b) Subject to the foregoing limitations and the provisions of
Section 4.2, the Borrowers shall have the right to make prepayments reducing the
outstanding balance of Revolving Credit Advances and to request further
Revolving Credit Advances, all in accordance with Section 2.2, without other
restrictions hereunder; PROVIDED that each Revolving Credit Lender shall have
the absolute right to refuse to make any Revolving Credit Advances for so long
as there exists any Default or any other condition which would constitute a
Default upon the making of such a Revolving Credit Advance; and PROVIDED FURTHER
that during each fiscal year of the Borrowers, commencing with the fiscal year
ending July 26, 1998, there shall be a period of 30 (thirty) consecutive days,
including April 30 of each year, during which the outstanding principal amount
of all Revolving Credit Advances shall not exceed the Available Revolving Credit
Amount in effect at such time LESS $25,000,000.
Section 2.2 MAKING OF REVOLVING CREDIT ADVANCES.
(a) Each Revolving Credit Advance shall be made on notice given by
the Borrowers, or by ASC East, as agent for the Borrowers, to the Agent not
later than 12:00 noon (Boston time) on the date of the proposed borrowing (a
"Notice of Revolving Credit or Swing Line Borrowing"); PROVIDED, HOWEVER, that
if the Borrowers elect a LIBOR Pricing Option with respect to any Revolving
Credit Advance in accordance with Section 2.6 hereof, such Notice of Revolving
Credit or Swing Line Borrowing shall be given by ASC East, as agent for the
Borrowers, contemporaneously with a Pricing Notice in the manner and within the
time specified in Section 2.6. The Agent shall give the Revolving Credit
Lenders notice of each Notice of Revolving Credit or Swing Line Borrowing in
accordance with the Agent's
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customary practice. Each such Notice of Revolving Credit or Swing Line
Borrowing shall be by telephone or telecopy, in each case confirmed immediately
in writing by ASC East, as agent for the Borrowers, in substantially the form of
EXHIBIT B hereto, specifying therein (i) the requested date of such Revolving
Credit Advance and (ii) the amount of such Revolving Credit Advance, which must
be a minimum of $100,000 and integral multiples thereof; PROVIDED, HOWEVER, that
the Swing Line Lender may request, on behalf of the Borrowers, Revolving Credit
Advances that are Base Rate Loans in other amounts pursuant to Section 2.20(a).
The Borrowers agree, jointly and severally, to indemnify and hold the Revolving
Credit Lenders harmless for any action, including the making of any Revolving
Credit Advances hereunder, or loss or expense, taken or incurred by the Agent or
the Revolving Credit Lenders in good faith reliance upon such telephone request.
At the time of the initial request for a Revolving Credit Advance made under
this Section 2.2, the Borrowers shall have provided the Agent with a Compliance
Certificate. The Borrowers hereby agree (A) that the Revolving Credit Lenders
shall be entitled to rely upon the Compliance Certificate most recently
delivered to the Agent until it is superseded by a more recent Compliance
Certificate and (B) that each request for a Revolving Credit Advance, whether by
telephone or in writing or otherwise, shall constitute a confirmation of the
representations and warranties contained in the most recent Compliance
Certificate then in the Agent's possession.
(b) Subject to the terms and conditions of this Agreement, each
Revolving Credit Lender shall make available on or before 2:00 p.m. (Boston
time) on the date of each proposed Revolving Credit Advance, to the Agent at the
Agent's address and in immediately available funds, such Lender's Revolving
Credit Commitment Percentage of such Revolving Credit Advance. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article 3, the Agent will credit such funds to the Borrowers'
accounts, as directed by ASC East, on the date of the proposed Revolving Credit
Advance.
(c) Unless the Agent shall have received notice from a Revolving
Credit Lender prior to the date of any Revolving Credit Advance that such
Revolving Credit Lender will not make available to the Agent such Lender's
Revolving Credit Commitment Percentage of such Revolving Credit Advance, the
Agent may assume that such Revolving Credit Lender has made such amount
available to the Agent on the date of such Revolving Credit Advance in
accordance with and as provided in this Section 2.2 and the Agent may, in
reliance upon such assumption, make available on such date a corresponding
amount to the Borrowers. If and to the extent such Revolving Credit Lender
shall not have so made its Revolving Credit Commitment Percentage of such
Revolving Credit Advance available to the Agent and the Agent shall have made
available such corresponding amount to the Borrowers, such Revolving Credit
Lender agrees to pay to the Agent forthwith on demand, and the Borrowers agree,
jointly and severally, to repay to the Agent within two Business Days after
demand (but only after demand for payment has first been made to such Revolving
Credit Lender and such Revolving Credit Lender has failed to make such payment),
an amount equal to such corresponding amount together with interest thereon for
each day from the date the Agent shall make such amount available to the
Borrowers until the date such amount is paid or repaid to
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the Agent, at an interest rate equal to the interest rate applicable at the time
to such Revolving Credit Advances. If such Revolving Credit Lender shall pay to
the Agent such corresponding amount, such amount so paid shall constitute such
Revolving Credit Lender's Revolving Credit Advance for purposes of this
Agreement. If the Borrowers make a repayment required by the foregoing
provisions of this Section 2.2(c) and thereafter the applicable Revolving Credit
Lender or Revolving Credit Lenders make the payments to the Agent required by
this Section 2.2(c), the Agent shall promptly refund the amount of the
Borrowers' payment.
(d) The failure of any Revolving Credit Lender to make the Revolving
Credit Advance to be made by it on any date shall not relieve any other
Revolving Credit Lender of its obligation, if any, hereunder to make its
Revolving Credit Advance on such date, but no Revolving Credit Lender shall be
responsible for the failure of any other Revolving Credit Lender to make the
Revolving Credit Advance to be made by such other Revolving Credit Lender.
Section 2.3 INTEREST ON REVOLVING CREDIT ADVANCES. Subject to the terms
of Section 2.6 relating to LIBOR Pricing Options, the Borrowers, jointly and
severally, shall pay interest on the unpaid balance of the Revolving Credit
Advances from time to time outstanding at a per annum rate equal to the
Applicable Base Rate for Revolving Credit Advances. Interest on the Revolving
Credit Advances shall be payable (a) quarterly in arrears on the last day of
each fiscal quarter, commencing January 31, 1998, for Base Rate Loans or (b)
quarterly in arrears on the last day of each fiscal quarter, for LIBOR Rate
Loans, and continuing until all of the Indebtedness of the Borrowers to the
Revolving Credit Lenders under the Revolving Credit Notes shall have been paid
in full.
Section 2.4 THE TERM LOANS. Subject to the terms and conditions of this
Agreement, on the date hereof, the Term Loan Lenders, severally and not jointly,
shall make term loans (the "Term Loans") to the Borrowers in an amount equal to
each Term Loan Lender's Term Loan Commitment Percentage of $30,000,000 as set
forth on SCHEDULE 1 hereto and the Borrowers shall execute and deliver to each
Term Loan Lender a Term Loan Note to evidence the Term Loan made by such Term
Loan Lender to the Borrowers hereunder.
Section 2.5 INTEREST ON THE TERM LOANS. Subject to the terms of Section
2.6 relating to LIBOR Pricing Options, the Borrowers, jointly and severally,
shall pay interest on the unpaid balance of the Term Loans at a per annum rate
equal to the Applicable Base Rate for the Term Loans. Interest on the Term
Loans shall be payable (a) quarterly in arrears on the last day of each fiscal
quarter, commencing January 31, 1998, for Base Rate Loans or (b) quarterly in
arrears on the last day of each fiscal quarter, for LIBOR Rate Loans, and
continuing until all of the Indebtedness of the Borrowers to the Term Loan
Lenders under the Term Loans shall have been paid in full.
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Section 2.6 ELECTION OF LIBOR PRICING OPTIONS.
(a) Subject to all the terms and conditions hereof and so long as no
Default exists, ASC East, as agent for the Borrowers, may, by delivering a
Pricing Notice to the Agent received at or before 10:00 a.m., Boston time, on
the date two Business Days prior to the commencement of the Interest Period
selected in such Pricing Notice, elect to have all or a portion of the Term
Loans or the outstanding Revolving Credit Advances, as ASC East, as agent for
the Borrowers, may specify in such Pricing Notice, accrue and bear daily
interest during the Interest Period so selected at a per annum rate equal to the
Applicable LIBOR Rate for such Interest Period; PROVIDED, HOWEVER, that any such
election made with respect to the Term Loans or the Revolving Credit Advances
shall be in an amount not less than $5,000,000 and in increments of $1,000,000;
and PROVIDED FURTHER that no such election will be made if it would result in
there being more than ten (10) LIBOR Pricing Options in the aggregate
outstanding at any one time under this Agreement and the American Ski - West
Credit Agreement. Interest on Loans bearing interest at the Applicable LIBOR
Rate shall be payable quarterly in arrears on the last day of each fiscal
quarter and when such Loan is due (whether at maturity, by reason of
acceleration or otherwise).
(b) Each Pricing Notice shall be substantially in the form of EXHIBIT
D attached hereto and shall specify: (i) the selection of a LIBOR Pricing
Option; (ii) the effective date and amount of the Term Loan or the Revolving
Credit Advances subject to such LIBOR Pricing Option, subject to the limitations
set forth herein; and (iii) the duration of the applicable Interest Period.
Each Pricing Notice shall be irrevocable.
(c) The Agent will promptly inform each Lender of a Pricing Notice
and the Interest Period specified by the Borrowers therein. Upon determination
by the Agent of the Applicable LIBOR Rate for any Interest Period selected by
the Borrowers, the Agent will promptly inform the Borrowers and each Lender of
such Applicable LIBOR Rate so determined or, if applicable, the reason why the
Borrowers' election will not become effective.
Section 2.7 ADDITIONAL PAYMENTS. Upon the occurrence and during the
continuance of any Event of Default, the Borrowers shall, jointly and severally,
on demand, pay to the Agent, for the account of the Lenders, interest on the
unpaid principal balance of the Term Loans, the Revolving Credit Advances and
the Swing Line Loans and, to the extent permitted by law, on any overdue
installments of interest, at a rate per annum equal to the stated interest rates
applicable thereto plus 2% per annum.
Section 2.8 COMPUTATION OF INTEREST, ETC. Interest hereunder and under
the Loans shall be computed on the basis of a 360-day year for the number of
days actually elapsed. Any increase or decrease in the interest rate on the
Loans resulting from a change in the Base Rate shall be effective immediately
from the date of such change. No interest payment or interest rate charged
hereunder shall exceed the maximum rate authorized from time to time by
applicable law. The outstanding balance of the Term Notes, the Revolving Credit
Notes and
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the Swing Line Note as reflected on the Agent's records from time to time shall
be considered correct and binding on the Borrowers and the Lenders (absent
manifest error) unless within thirty (30) days after receipt of any written
notice by the Agent or any Lender of such outstanding amount, the Borrowers or a
Lender notifies the Agent to the contrary.
Section 2.9 FEES.
(a) The Borrowers, jointly and severally, shall pay to the Agent, for
the account of each Revolving Credit Lender, a commitment fee (the "Revolving
Commitment Fee") on such Revolving Credit Lender's Available Revolving Credit
Commitment from time to time in effect from the date hereof to and including the
Revolving Credit Termination Date computed at the applicable rate set forth on
the Pricing Schedule. The Revolving Commitment Fee shall be payable quarterly
in arrears on the last day of each January, April, July and October, commencing
January 31, 1998, for the period from the date hereof through such date.
(b) The Borrowers, jointly and severally, shall pay to the Agent, for
the Agent's own account, such applicable agency fees and, for the account of the
Lenders, such applicable closing fees as are provided in a letter agreement
dated as of September 18, 1997 between American Ski and the Agent (as such
letter agreement may from time to time be amended or supplemented, the "Fee
Letter").
Section 2.10 SET-OFF. To the extent not prohibited by applicable law,
the Borrowers, jointly and severally, hereby authorize the Agent and each
Lender, without prior notice to the Borrowers, if and to the extent payment is
not promptly made when due pursuant to the Term Loan Notes, the Revolving Credit
Notes or the Swing Line Note or pursuant to any provision hereof or of any other
Lender Agreement, to charge against any account of any Borrower with the Agent
or such Lender, an amount equal to the accrued interest and principal and other
amounts from time to time then due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements, provided that the Agent shall
notify the Borrowers of any such set-off promptly thereafter.
Section 2.11 SHARING OF PAYMENTS. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans made by it in excess of its ratable share
(according to the then outstanding principal amount of the Loans) of payments on
account of the Loans obtained by all the Lenders, such Lender shall purchase
from the other Lenders such participations in the Loans held by such other
Lenders as shall cause such purchasing Lender to share such payment ratably
according to the then outstanding principal amount of the Loans with each of
such other Lenders; PROVIDED, HOWEVER, that if all or any portion of such
payment is thereafter recovered from such purchasing Lender, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
without interest. The Borrowers agree that any Lender so purchasing a
participation in the Loans from another Lender pursuant to this Section 2.11
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may, to the fullest extent permitted by law, exercise all its rights of payment
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
Section 2.12 REDUCTION OF COMMITMENT BY THE BORROWERS. The Borrowers at
their option may, at any time and from time to time, (a) irrevocably reduce in
part (in a minimum amount of $5,000,000 and in integral multiples of $1,000,000)
the unused portion of the Available Revolving Credit Amount or (b) terminate the
entire unused portion of the Available Revolving Credit Amount, in each case on
not less than seven (7) Business Days' prior written notice to the Agent. No
such reduction may be reinstated by the Borrowers.
Section 2.13 INCREASED COSTS, ETC.
(a) Anything herein to the contrary notwithstanding, if any changes
in present or future applicable law (which term "applicable law," as used in
this Agreement, includes statutes and rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise issued
to any Lender by any central bank or other fiscal, monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed schedule of increasing requirements, whether or not
known or in effect as of the date hereof, shall (i) subject such Lender to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement or the payment to such Lender of any amounts due
to it hereunder, or (ii) materially change the basis of taxation of payments to
such Lender of the principal of or the interest on the Loans or any other
amounts payable to such Lender hereunder, or (iii) impose or increase or render
applicable any special or supplemental deposit or reserve or similar
requirements or assessment against assets held by, or deposits in or for the
account of, or any liabilities of, or loans by an office of such Lender in
respect of the transactions contemplated herein, or (iv) impose on such Lender
any other condition or requirement with respect to this Agreement, the Term
Loans, any Revolving Credit Advance or any Swing Line Loan, and the result of
any of the foregoing is (A) to increase the cost to such Lender of making,
funding or maintaining all or any part of the Loans or its commitment hereunder,
or (B) to reduce the amount of principal, interest or other amount payable to
such Lender hereunder, or (C) to require such Lender to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender from the Borrowers
hereunder, then, and in each such case not otherwise provided for hereunder, the
Borrowers, jointly and severally, will upon demand made by such Lender promptly
following such Lender's receipt of notice pertaining to such matters accompanied
by calculations thereof in reasonable detail, pay to such Lender such additional
amounts as will be sufficient to compensate such Lender for such additional
cost, reduction, payment or foregone interest or other sum; PROVIDED that the
foregoing provisions
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of this sentence shall not apply in the case of any additional cost, reduction,
payment or foregone interest or other sum resulting from any taxes charged upon
or by reference to the overall net income, profits or gains of any Lender. In
determining the additional amounts payable hereunder, the Lenders may use any
reasonable method of averaging, allocating or attributing such additional costs,
reductions, payments, foregone interest or other sums among their respective
customers.
(b) Anything herein to the contrary notwithstanding, if, after the
date hereof, any Lender shall have determined that any present or future
applicable law, rule, regulation, guideline, directive or request (whether or
not having force of law), including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not known or in
effect as of the date hereof, regarding capital requirements for banks or bank
holding companies generally, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any of the foregoing, either imposes a requirement upon such
Lender to allocate additional capital resources or increases such Lender's
requirement to allocate capital resources or such Lender's commitment to make,
or to such Lender's maintenance of, the Term Loans, the Revolving Credit
Advances or Swing Line Loans hereunder, which has or would have the effect of
reducing the return on such Lender's capital to a level below that which such
Lender could have achieved (taking into consideration such Lender's then
existing policies with respect to capital adequacy and assuming full utilization
of such Lender's capital) but for such applicability, change, interpretation,
administration or compliance, by any amount deemed by such Lender to be
material, such Lender shall promptly after its determination of such occurrence
give notice thereof to the Borrower accompanied by an opinion of counsel to such
Lender with respect to such matters, the cost of which opinion shall be paid by
the Borrowers. The Borrowers and such Lender shall thereafter attempt to
negotiate in good faith an adjustment to the compensation payable hereunder
which will adequately compensate such Lender for such reduction. If the
Borrowers and such Lender are unable to agree on such adjustment within thirty
(30) days of the date on which the Borrowers receive such notice, then
commencing on the date of such notice (but not earlier than the effective date
of any such applicability, change, interpretation, administration or
compliance), the fees payable hereunder shall increase by an amount which will,
in such Lender's reasonable determination, evidenced by calculations in
reasonable detail furnished to the Borrowers, compensate such Lender for such
reduction, such Lender's determination of such amount to be conclusive and
binding upon the Borrowers, absent manifest error. In determining such amount,
such Lender may use any reasonable methods of averaging, allocating or
attributing such reduction among its customers.
Section 2.14 CHANGED CIRCUMSTANCES. In the event that:
(a) on any date on which the Applicable LIBOR Rate would otherwise be
set the Agent shall have determined in good faith (which determination shall be
final and
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conclusive) that adequate and fair means do not exist for ascertaining the LIBOR
Rate, as applicable; or
(b) at any time the Agent shall have determined in good faith (which
determination shall be final and conclusive) that
(i) the implementation of the LIBOR Pricing Option has been made
impracticable or unlawful by (A) the occurrence of a contingency that
materially and adversely affects the London interbank market or (B)
compliance by any Lender in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change
thereof by any Governmental Authority charged with the interpretation or
administration thereof or with any request or directive of any such
Governmental Authority (whether or not having the force of law); or
(ii) the LIBOR Rate shall no longer represent the effective cost
to the Lenders for U.S. dollar deposits in the London interbank market, as
applicable for deposits in which they regularly participate;
then, and in such event, the Agent shall so notify the Borrowers thereof. Until
the Agent notifies the Borrowers that the circumstances giving rise to such
notice no longer apply, the obligation of the Lenders and the Agent to allow
election by the Borrowers of a LIBOR Pricing Option shall be suspended. If at
the time the Agent so notifies the Borrowers, the Borrowers have previously
given the Agent a Pricing Notice with respect to a LIBOR Pricing Option, but the
LIBOR Pricing Option requested therein has not yet gone into effect, such
Pricing Notice shall automatically be deemed to be withdrawn and be of no force
or effect. Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given), the LIBOR Pricing Option with
respect to all LIBOR Rate Loans shall be terminated.
In the event that the LIBOR Pricing Option is suspended in accordance with
the foregoing provisions for more than sixty (60) days, the Borrowers may
request that the Lenders propose an index, and the spread above such index, for
determining interest on the Loans as an alternative to the LIBOR Rate, which
shall be an index in common usage by United States commercial banks and which
shall adequately reflect the cost of funds to the Lenders. The determination of
whether there is an appropriate index meeting the foregoing requirements, and
the determination of the spread above such index, shall be made by agreement of
all of the Lenders in their sole discretion. In the event the Borrowers and the
Lenders agree on such alternative index, appropriate amendments shall be made to
this Agreement to reflect such agreement and any particular requirements
relating to such alternative index.
Section 2.15 USE OF PROCEEDS. The proceeds of the Term Loans and the
initial Revolving Credit Advances hereunder shall be deposited in a segregated
account of ASC East
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with the Agent and used by the Borrowers: (a) to refinance amounts outstanding,
including accrued interest, under the 1996 Credit Agreement; (b) no more than
$10,000,000 shall be used to repay in full, including accrued interest, certain
indebtedness set forth on SCHEDULE 5.16 as determined by the Borrowers; and (c)
to pay the fees and expenses associated with the transactions contemplated
hereby. The proceeds of all future Revolving Credit Advances and of the Swing
Line Loans shall be used by the Borrowers for (a) Permitted Capital
Expenditures, (b) on-going working capital requirements relating to the
Borrowers' operations and (c) general corporate purposes provided for by this
Agreement. The Borrowers will not, directly or indirectly, use any part of such
proceeds for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or to extend credit to any Person for the purpose of purchasing or carrying any
such margin stock.
Section 2.16 LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof, including
satisfaction of the conditions set forth in Sections 3.1 and 3.2 hereof, and
provided no Default has occurred and that the Issuing Bank is then generally
issuing letters of credit for its banking customers, the Issuing Bank shall at
any time prior to the Revolving Credit Termination Date, upon the request of the
Borrowers pursuant to paragraph (b) below, issue Letters of Credit for the
account of the Borrowers, PROVIDED that the aggregate face amount of all
outstanding Letters of Credit shall not at any time exceed $5,000,000. As of
the date hereof, the Issuing Bank has issued the letters of credit for the
account of the Borrowers described on SCHEDULE 2.16, which from and after the
date hereof shall be deemed to be Letters of Credit issued hereunder, and the
face amount thereof from time to time shall count against the limit set forth
above.
(b) The Borrowers may request that the Issuing Bank issue a Letter of
Credit by written notice (the "Letter of Credit Notice") given by the Borrowers
to the Issuing Bank not less than five (5) Business Days prior to the proposed
date of issuance of such Letter of Credit. The Letter of Credit Notice shall
(i) specify the proposed date of issuance, the beneficiary, amount and the
purpose of such Letter of Credit and (ii) be accompanied by a letter of credit
application furnished by the Issuing Bank.
(c) The Borrowers hereby agree, jointly and severally, to pay to the
Issuing Bank on the date on which the Issuing Bank shall be required to pay any
draft presented under any Letter of Credit, a sum (the "Reimbursement
Obligation") equal to: (i) the amount so paid under such Letter of Credit, PLUS
(ii) interest on any amount remaining unpaid by the Borrowers to the Issuing
Bank under clause (i) from and including the date on which such amount becomes
payable pursuant to clause (i) until payment in full, payable on demand, at a
per annum rate of interest equal to the rate applicable to the Revolving Credit
Advances which are Base Rate Loans under Section 2.7. If the Borrowers shall
fail to pay to the Issuing Bank the Reimbursement Obligation on the date on
which the Issuing Bank shall be required to pay any draft presented under any
Letter of Credit, the Issuing Bank shall, to the extent the
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Borrowers have availability to request a Revolving Credit Advance, consider such
failure to be a request for a Revolving Credit Advance or, with the Agent's
consent, a Swing Line Loan, in the amount of the unpaid Reimbursement Obligation
(which request shall be deemed a confirmation that the conditions set forth in
Section 3.2 have been satisfied), and the Issuing Bank shall apply the proceeds
of such Revolving Credit Advance, or the Agent shall apply the proceeds of such
Swing Line Loan, to reimburse the Issuing Bank for the Reimbursement Obligation.
(d) The Borrowers shall, jointly and severally, quarterly in arrears
on the last day of each calendar quarter for the immediately preceding calendar
quarter or portion thereof, pay (i) a fee (in each case, a "Letter of Credit
Fee") to the Issuing Bank for the account of the Revolving Credit Lenders in
respect of each Letter of Credit issued at the request of the Borrowers equal to
the LIBOR Rate Margin for Revolving Credit Advances in effect at such time,
multiplied by the face amount of each Letter of Credit and (ii) a fronting fee
to the Issuing Bank for its account equal to 1/4% per annum multiplied by the
face amount of each Letter of Credit. The Issuing Bank shall, in turn, remit to
each Revolving Credit Lender its PRO RATA portion of such Letter of Credit Fee.
In addition, the Borrowers shall, jointly and severally, pay to the Issuing
Bank, for its own account, on the date of issuance, or any extension or renewal
of any Letter of Credit and at such other time or times as such charges are
customarily made by the Issuing Bank, the Issuing Bank's standard issuance,
processing, negotiation, amendment and administrative fees, determined in
accordance with customary fees and charges for similar facilities.
(e) Each payment by the Borrowers hereunder shall be made to the
Issuing Bank at the Issuing Bank's head office in Boston, Massachusetts in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this Section 2.16 at any time from the date such amounts
become due and payable (whether as stated in this Section 2.16, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Issuing Bank on demand at the rate specified in Section 2.7 for
the overdue principal on Revolving Credit Advances which are Base Rate Loans.
(f) The obligations of the Borrowers with respect to the Letters of
Credit shall be joint and several, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letters
of Credit;
(ii) any amendment or waiver of or any consent to or actual
departure from this Agreement;
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(iii) the existence of any claim, set-off, defense or
other right which the Borrowers may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons or
entities for which any such beneficiary or any such transferee may be
acting), the Issuing Bank or any other Person or entity, whether in
connection with this Agreement, the transactions contemplated herein
or in any other agreements or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation by the beneficiary thereof of a draft or
certificate which does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
(g) The Uniform Customs and Practice shall be binding on the
Borrowers, the Revolving Credit Lenders and the Issuing Bank. The Borrowers
assume all risks of the acts or omissions of the beneficiary of each Letter of
Credit with respect to such Letter of Credit. In furtherance of, and not in
limitation of the Issuing Bank's rights and powers under the Uniform Customs and
Practice, but subject to all other provisions of this paragraph (g), it is
understood and agreed that the Issuing Bank shall not have any liability for,
and that the Borrowers assume all responsibility for: (i) the genuineness of
any signature; (ii) the form, correctness, validity, sufficiency, genuineness,
falsification and legal effect of any draft, certification or other document
required by a Letter of Credit or the authority of the Person signing the same;
(iii) the failure of any instrument to bear any reference or adequate reference
to a Letter of Credit or the failure of any Persons to note the amount of any
instrument on the reverse of a Letter of Credit or to surrender a Letter of
Credit or otherwise to comply with the terms and condition of a Letter of
Credit; (iv) the good faith or acts of any Person other than the Issuing Bank
and its agents and employees; (v) the existence, form or sufficiency or breach
or default under any agreement or instrument of any nature whatsoever; (vi) any
delay in giving or failure to give any notice, demand or protest; and (vii) any
error, omission, delay in or nondelivery of any notice or other communication,
however sent. The determination as to whether the required documents are
presented prior to the expiration of a Letter of Credit and whether such other
documents are in proper and sufficient form for compliance with a Letter of
Credit shall be made by the Issuing Bank in its sole discretion, which
determination shall be conclusive and binding upon the Borrowers absent manifest
error. It is agreed that the Issuing Bank may honor, as complying with the
terms of a Letter of Credit and this Agreement, any documents otherwise in order
and signed or issued by the beneficiary thereof. Any action, inaction or
omission on the part of the Issuing Bank under or in connection with the Letters
of Credit or any related instruments or documents, if in good faith and in
conformity with such
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laws, regulations or commercial or banking customs as the Issuing Bank may
reasonably deem to be applicable, shall be binding upon the Borrowers, shall not
place the Issuing Bank under any liability to the Borrowers, and shall not
affect, impair or prevent the vesting of any of the Issuing Bank's rights or
powers hereunder or the Borrowers' obligation to make full reimbursement of
amounts drawn under the Letters of Credit.
(h) If the Borrowers, either in writing or orally, request or consent
to any modification or extension of a Letter of Credit or waive failure of any
draft, certificate or other documents to comply with the terms of a Letter of
Credit, the Issuing Bank shall be entitled to rely and shall be deemed to have
relied on such request, consent or waiver with respect to any action taken or
omitted by the Issuing Bank pursuant to any such request, consent or waiver, and
such extension, modification or waiver shall be binding upon the Borrowers.
(i) Each Revolving Credit Lender severally agrees that it shall be
absolutely liable, without regard to the occurrence of any Default or Event of
Default or any other condition precedent whatsoever, to the extent of such
Lender's Revolving Credit Commitment Percentage, to reimburse the Issuing Bank
on demand for the amount of each draft paid by the Issuing Bank under each
Letter of Credit to the extent that such amount is not reimbursed by the
Borrowers pursuant to paragraph (c) above (such agreement for a Revolving Credit
Lender being called herein the "Letter of Credit Participation" of such
Revolving Credit Lender).
(j) If any draft shall be presented or other demand for payment shall
be made under any Letter of Credit, the Issuing Bank shall notify the Borrowers
of the date and amount of the draft presented or demand for payment and of the
date and time when it expects to pay such draft or honor such demand for
payment. If the Borrowers fail to reimburse the Issuing Bank as provided in
paragraph (c) above on or before the date that such draft is paid or other
payment is made by the Issuing Bank, the Issuing Bank may at any time thereafter
notify the Revolving Credit Lenders of the amount of any such unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business
Day next following the receipt of such notice, each Revolving Credit Lender
shall make available to the Issuing Bank, at its head office located in Boston,
Massachusetts, in immediately available funds, such Lender's Revolving Credit
Commitment Percentage of such unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Issuing Bank for federal funds acquired by the Issuing Bank during each day
included in such period, TIMES (ii) the amount equal to such Lender's Revolving
Credit Commitment Percentage of such unpaid Reimbursement Obligation, TIMES
(iii) a fraction, the numerator of which is the number of days that elapse from
and including the date the Issuing Bank paid the draft presented for honor or
otherwise made payment to the date on which such Lender's Revolving Credit
Commitment Percentage of such unpaid Reimbursement Obligation shall become
immediately available to the Issuing Bank, and the denominator of which is 360.
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(k) Neither the Issuing Bank nor any Revolving Credit Lender nor any
of their officers, directors or employees shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts or omissions
of any beneficiary or transferee in connection therewith; (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Issuing Bank against presentation of
documents which do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to a Letter
of Credit; or (iv) any other circumstances whatsoever in making or failure to
make payment under a Letter of Credit; PROVIDED, that, notwithstanding anything
in this Section 2.16 to the contrary, the Borrowers shall have a claim against
the Revolving Credit Lenders, and the Revolving Credit Lenders shall be liable
to the Borrowers, to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by the Borrowers which were caused by
the Issuing Bank's failure to conform to the standards of the Uniform Customs
and Practice. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 2.17 COLLECTION OF ACCOUNTS.
(a) American Ski and the Borrowers shall establish and maintain, at
their expense, deposit account arrangements with the Agent and the other banks
set forth on SCHEDULE 2.17 hereto and after prior written notice to the Agent,
such other banks as any Borrower may hereafter select that are acceptable to the
Agent. The banks set forth on SCHEDULE 2.17 constitute all of the banks with
whom American Ski, any Borrower and any Restricted Subsidiary has deposit
account arrangements as of the date hereof and identifies each of the deposit
accounts at such banks to an operating location of such Borrower or otherwise
describes the nature of the use of such deposit account by such Borrower.
(b) Each Borrower shall deposit all proceeds (other than amounts of
cash, not to exceed $100,000 for any location operated by such Borrower, for
opening cash at such location consistent with past practices so long as no
Default exists or has occurred) from sales of goods or services in every form,
including, without limitation, cash, checks, credit or debit card sales drafts,
credit or debit card sales or charge slips or receipts and other forms of daily
receipts, from each location of each Borrower on each Business Day into the
concentration accounts of the Borrowers identified to each Borrower location as
set forth on SCHEDULE 2.17.
(c) For purposes of calculating interest on the Lender Obligations,
the payments or other funds received pursuant to paragraph (b) above after 2:00
p.m. (Boston time) on any day will be applied (conditional upon final
collection) to the Lender Obligations one (1) Business Day following the date of
receipt of immediately available funds by the Agent from the concentration
accounts identified on SCHEDULE 2.17. For purposes of calculating the amount of
the Revolving Credit Advances or Swing Line Loans available to the Borrowers,
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such payments will be applied (conditional upon final collection) to the Lender
Obligations on the Business Day of receipt by the Agent in the concentration
accounts identified on SCHEDULE 2.17, if such payments are received within
sufficient time (in accordance with the Agent's usual and customary practices as
in effect from time to time) to credit Borrowers' loan account on such day, and
if not, then on the next Business Day. All such payments shall be applied by
the Agent FIRST to any outstanding Swing Line Loans and SECOND, at the Agent's
election and in accordance with the provisions of Section 4.2(a), to any
outstanding Revolving Credit Advances which are Base Rate Loans, and any amounts
not so applied shall be retained in the concentration accounts until they can be
so applied.
Section 2.18 SWING LINE COMMITMENT. Subject to the terms and conditions
hereof, BankBoston, N.A. (in such capacity, the "Swing Line Lender") agrees to
make a portion of the credit otherwise available to the Borrowers hereunder,
from time to time prior to the Revolving Credit Termination Date, by making
swing line loans ("Swing Line Loans") to the Borrowers, jointly and severally,
in an aggregate principal amount not to exceed at any one time outstanding the
Swing Line Commitment; PROVIDED that (a) the aggregate principal amount of Swing
Line Loans outstanding at any time shall not exceed the Swing Line Commitment
then in effect (notwithstanding that the Swing Line Loans outstanding at any
time, when aggregated with the Swing Line Lender's other outstanding Loans
hereunder, may exceed the Swing Line Commitment then in effect) and (b) the
Borrowers shall not request, and the Swing Line Lender shall not make, any Swing
Line Loan if, after giving effect to the making of such Swing Line Loan, the
aggregate amount of the Available Revolving Credit Amount would be less than $0.
Prior to the Revolving Credit Termination Date, the Borrowers may use the Swing
Line Commitment by borrowing, repaying and reborrowing, all in accordance with
the terms and conditions hereof. Swing Line Loans shall be Base Rate Loans or
Money Market Loans only. The Borrowers may use the proceeds of Revolving Credit
Advances from time to time to repay any outstanding Swing Line Loans. The
Borrowers, jointly and severally, shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date. On the Closing Date, the Borrowers
shall deliver to the Swing Line Lender a Swing Line Note to evidence the Swing
Line Loans from time to time made by the Swing Line Lender to the Borrowers
hereunder.
Section 2.19 PROCEDURE FOR SWING LINE BORROWING; INTEREST ON SWING LINE
LOANS. Whenever the Borrowers desire that the Swing Line Lender make Swing Line
Loans under Section 2.18, ASC East shall give the Swing Line Lender irrevocable
telephonic notice confirmed promptly in writing by delivery of a Notice of
Revolving Credit or Swing Line Borrowing (which telephonic notice must be
received by the Swing Line Lender not later than 1:00 P.M., Boston time, on the
proposed borrowing date), specifying (a) the amount to be borrowed, (b) whether
such Swing Line Loan is requested to be a Money Market Loan or a Base Rate Loan
and (c) the requested borrowing date (which shall be a Business Day prior to the
Revolving Credit Termination Date); and not later than 3:00 P.M., Boston time,
on the borrowing date specified in the notice in respect of Swing Line Loans,
the Swing Line Lender shall make the proceeds of such Swing Line Loan available
to ASC East, as agent for the
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Borrowers on such borrowing date in accordance with the instructions of ASC
East; PROVIDED, HOWEVER, that the provisions of the cash management arrangements
between the Borrowers and the Swing Line Lender, including any provisions
relating to automatic Swing Line Loans to fund daily disbursements under a
Borrower's controlled disbursement account shall supersede the foregoing
requirements. The Borrowers, jointly and severally, shall pay interest on the
unpaid balance of the Swing Line Loans from time to time outstanding at a per
annum rate equal to the Applicable Base Rate or the Money Market Rate as agreed
to by the Swing Line Lender and the Borrower at the time of making the Swing
Line Loan. Interest on the Swing Line Loans shall be payable quarterly in
arrears on the last day of each fiscal quarter, commencing January 31, 1998 and
continuing until all of the Indebtedness of the Borrowers to the Swing Line
Lender hereunder shall have been paid in full.
Section 2.20 REFUNDED SWING LINE LOANS; SWING LINE LOAN PARTICIPATIONS.
(a) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, and in any event not less than once each week
shall, on behalf of the Borrowers (which hereby irrevocably direct the Swing
Line Lender to act on their behalf) on one Business Day's notice given by the
Swing Line Lender no later than 12:00 noon, Boston time, request each Revolving
Credit Lender to make, and each Revolving Credit Lender hereby agrees to make, a
Revolving Credit Advance in an amount equal to such Lender's Revolving Credit
Commitment Percentage of the aggregate amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date of such notice, to repay
the Swing Line Lender. Unless any of the events described in Section 10(f)
shall have occurred and be continuing (in which case the procedures of
Section 2.20(c) shall apply), each Revolving Credit Lender shall make the amount
of such Revolving Credit Advance available to the Agent at its office set forth
in Section 14.1 in immediately available funds, not later than 10:00 A.M.,
Boston time, one Business Day after the date of such notice. The proceeds of
such Revolving Credit Advances shall be immediately applied by the Swing Line
Lender to repay the Refunded Swing Line Loans. Effective on the day such
Revolving Credit Advances are made, the portion of the Swing Line Loans so paid
shall no longer be outstanding as Swing Line Loans and shall be outstanding as
Revolving Credit Advances and owed to the Revolving Credit Lenders in accordance
with their respective Revolving Credit Commitment Percentages. The Borrowers
irrevocably authorize the Swing Line Lender to charge the Borrowers' accounts
with the Agent (up to the amount available in each such account) to immediately
pay the amount of such Refunded Swing Line Loans to the extent amounts received
from the Revolving Credit Lenders are not sufficient to repay in full such
Refunded Swing Line Loans.
(b) The making of any Swing Line Loan hereunder shall be subject to
the satisfaction of the applicable conditions precedent thereto set forth in
Section 3.1, in the case of any Swing Line Loan to be made on the Closing Date,
and Section 3.2, in the case of all other Swing Line Loans (unless otherwise
waived in accordance with Section 11.1). The Swing Line Lender shall notify ASC
East of its election not to make Swing Line Loans
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hereunder as a result of the failure to satisfy such conditions precedent,
unless an Event of Default of the type specified in Section 10.1(f) shall have
occurred and be continuing.
(c) If prior to the time a Revolving Credit Advance would have
otherwise been made pursuant to Section 2.20(a) one of the events described in
Section 10(f) shall have occurred and be continuing, each Revolving Credit
Lender shall, on the date such Revolving Credit Advance was to have been made
pursuant to the notice referred to in Section 2.20(a) (the "Refunding Date"),
purchase an undivided participating interest in an amount equal to (i) its
Commitment Percentage times (ii) the aggregate principal amount of Swing Line
Loans then outstanding which were to have been repaid with such Revolving Credit
Advances (the "Swing Line Participation Amount"). On the Refunding Date, each
Revolving Credit Lender shall transfer to the Swing Line Lender, in immediately
available funds, such Revolving Credit Lender's Swing Line Participation Amount
and upon receipt thereof the Swing Line Lender shall deliver to such Revolving
Credit Lender a Swing Line Loan Participation Certificate dated the date of the
Swing Line Lender's receipt of such funds and in such Swing Line Participation
Amount.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Revolving Credit Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment on account of
the Swing Line Loans, the Swing Line Lender will distribute to such Revolving
Credit Lender its Swing Line Participation Amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Revolving Credit Lender's participating interest was outstanding and funded and,
in the case of principal and interest payments, to reflect such Revolving Credit
Lender's PRO RATA portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swing Line Loans then due); PROVIDED,
HOWEVER, that in the event that such payment received by the Swing Line Lender
is required to be returned, such Revolving Credit Lender will return to the
Swing Line Lender any portion thereof previously distributed to it by the Swing
Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.20(a) and to a purchase participating interest pursuant
to Section 2.20(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrowers may have against the Swing Line Lender, the Borrowers or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrowers; (iv) any breach of this Agreement or
any other Lender Agreement by the Borrowers or any other Lender; or (v) any
other circumstances, happening or event whatsoever, whether or not similar to
any of the foregoing.
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Section 2.21 RELEASE OF CERTAIN LIENS. Notwithstanding anything herein
to the contrary, the parties hereto acknowledge that the Borrowers shall have
the right to transfer to any Unrestricted Subsidiary parcels of Excess Real
Property, in each case so long as there is no Default. Upon the transfer of any
such Excess Real Property on request of ASC East, at any time so long as there
is no Default, the Agent shall release any parcel of Excess Real Property from
the Lien of the Mortgage and Security Agreements to which such parcel of Excess
Real Property is subject, provided that such release shall only be granted if
the following conditions have been met or satisfied:
(i) The Borrowers shall reimburse the Agent for any costs and
expenses it incurs arising from the transfer of the parcel of Excess Real
Property and any release of such parcel of Excess Real Property from the
Lien of the Mortgage (including, without limitation, reasonable attorneys'
fees and expenses);
(ii) No Default exists hereunder;
(iii) Each applicable municipal authority exercising
jurisdiction over the parcel of Excess Real Property has approved a lot
split ordinance or other applicable action under local law dividing the
parcel of Excess Real Property from the remainder of the Mortgaged Property
and assigning separate tax identification numbers to each;
(iv) No part of the remaining Mortgaged Property shall be part
of a tax lot affecting any portion of the parcel of Excess Real Property;
(v) All requirements under all laws, statutes, rules and
regulations (including, without limitation, all zoning and subdivision
laws, setback requirements, sideline requirements, parking ratio
requirements, use requirements and building and fire code requirements)
applicable to the Mortgaged Property necessary to accomplish the lot split
shall have been fulfilled;
(vi) As a result of the lot split, the remaining Mortgaged
Property will not be in violation of any applicable law, statute, rule or
regulation (including, without limitation, all zoning and subdivision laws,
setback requirements, sideline requirements, parking ratio requirements,
use requirements and building and fire code requirements) and all necessary
variances, if any, shall have been obtained;
(vii) Appropriate reciprocal easement agreements for the benefit
and burden of the remaining Mortgaged Property and the parcel of Excess
Real Property regarding the use of common facilities of such parcels,
including, but not limited to, open areas, ski lifts, ski trails, roadways,
parking areas, utilities, snowmaking facilities and community facilities by
the occupants of the remaining Mortgaged Property and the
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parcel of Excess Real Property, in a form and substance acceptable to
Agent. shall be declared and recorded;
(viii) ASC East shall have delivered to Agent one or more
endorsements to the title insurance policies insuring the Lien of the
applicable Mortgage or such other evidence reasonably acceptable to the
Lender insuring that, after giving effect to such release, the title
insurance policies insuring the Lien of the applicable Mortgage are in full
force and effect and unaffected by such release; and
(ix) Borrower shall execute such documents and instruments as
Agent shall reasonably require in connection with the foregoing.
Section 2.22 GUARANTY OF AMERICAN SKI. American Ski hereby
unconditionally guaranties to the Agent and the Lenders the full and punctual
payment when due (whether at maturity, by acceleration or otherwise), and the
performance of (a) all liabilities, agreements, obligations and Indebtedness,
direct or indirect, matured or unmatured, primary or secondary, certain or
contingent, secured or unsecured of the Borrowers and their Restricted
Subsidiaries (including without limitation, costs and expenses incurred by the
Agent and the Lenders in attempting to collect or enforce any of the foregoing),
including without limitation the Lender Obligations, accrued in each case to the
date of payment and (b) the performance of all other agreements, covenants and
conditions of the Borrowers and the Restricted Subsidiaries with respect thereto
set forth in this Agreement and all other Lender Agreements. The
responsibilities and obligations of the Borrowers and the Restricted
Subsidiaries to the Agent and the Lenders described in the preceding sentence
are hereinafter referred to collectively as the "Guaranteed Obligations." The
guaranty pursuant to this Section 2.22 is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance by the
Borrowers and the Restricted Subsidiaries of the Guaranteed Obligations and not
of collectability of the Guaranteed Obligations, and is in no way conditioned
upon any requirement that the Agent or the Lenders first attempt to collect any
of the Guaranteed Obligations from the Borrowers and the Restricted Subsidiaries
or resort to any security or other means of obtaining payment of any of the
Guaranteed Obligations which the Agent or the Lenders now has or may acquire
after the date hereof, or upon any other contingency whatsoever. Upon any
default by the Borrowers or the Restricted Subsidiaries in the full and punctual
payment and performance of the Guaranteed Obligations, the liabilities and
obligations of American Ski hereunder shall, at the option of the Agent, become
forthwith due and payable to the Agent and the Lenders without demand or notice
of any nature, all of which are expressly waived by American Ski. Payments by
American Ski under this Section 2.22 may be required by the Agent or the Lenders
on any number of occasions. American Ski waives presentment, demand, protest,
notice of acceptance, notice of Guaranteed Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshaling of assets of the Borrowers and the
Restricted Subsidiaries, and all suretyship defenses generally. Without
limiting the generality of the foregoing, American Ski
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agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Guaranteed Obligations and agrees that the
obligations of American Ski hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by any rescissions, waivers, amendments
or modifications of any of the terms or provisions of any agreement evidencing
securing or otherwise executed in connection with any Guaranteed Obligation.
Until the payment and performance in full of all Guaranteed Obligations and any
and all obligations of the Borrowers and the Restricted Subsidiaries to any
affiliate of the Agent or the Lenders, American Ski shall not exercise any
rights against the Borrowers and the Restricted Subsidiaries arising as a result
of payment by American Ski hereunder, by way of subrogation or otherwise. The
payment of any amounts due with respect to any indebtedness of the Borrowers and
the Restricted Subsidiaries now or hereafter held by American Ski is hereby
subordinated to the prior payment in full of the Guaranteed Obligations.
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES
Section 3.1 CONDITIONS TO THE TERM LOANS AND THE INITIAL REVOLVING
CREDIT ADVANCE. The Lenders' obligations to make the Term Loans and the initial
Revolving Credit Advance shall be subject to compliance by the Borrowers with
their agreements contained in this Agreement, and to the condition precedent
that the Lenders shall have received each of the following, in form and
substance satisfactory to the Agent and its counsel or in the form attached
hereto as an Exhibit, as the case may be:
(a) NOTES. The Term Loan Notes and the Revolving Credit Notes duly
executed by the Borrowers.
(b) GUARANTIES. The Guaranty Agreements duly executed by AJT, Inc.,
WVSAL, Inc., ASC Utah, ASC West, Inc., the Heavenly Subsidiaries and the
Steamboat Subsidiaries.
(c) RESOLUTIONS. Copies of the resolutions of the Board of Directors
of American Ski and its Subsidiaries authorizing the execution, delivery and
performance of this Agreement, the Term Loan Notes, the Revolving Credit Notes,
the Swing Line Note, the Guaranty Agreements, the Security Agreements and the
other Lender Agreements to which the American Ski or any Restricted Subsidiary
is a party, certified by the Secretary or an Assistant Secretary (or Clerk or
Assistant Clerk) of American Ski and each of its Subsidiaries (which certificate
shall state that such resolutions are in full force and effect).
(d) INCUMBENCY. A certificate of the Secretary or an Assistant
Secretary (or Clerk or Assistant Clerk) of American Ski and each of its
Subsidiaries certifying the name and signatures of the officers of American Ski
and each of its Subsidiaries authorized to sign this Agreement, the Term Loan
Notes, the Revolving Credit Notes, the Swing Line Note, the Guaranty Agreements,
the Security Agreements, the other Lender Agreements to which
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American Ski, any Borrower or any Subsidiary is a party and the other documents
to be delivered by American Ski and the Borrowers hereunder.
(e) CERTIFICATES OF EXISTENCE. Certificates of legal existence,
corporate or partnership good standing and foreign qualification for American
Ski, each Borrower and each other Restricted Subsidiary of American Ski of
recent date issued by the appropriate California, Colorado, Delaware, Florida,
Maine, Nevada, New Hampshire, Utah and Vermont Governmental Authorities.
(f) CERTIFICATES OF TAX GOOD STANDING. Certificate of tax good
standing for American Ski, each Borrower and each other Restricted Subsidiary of
American Ski of recent date issued by the appropriate California, Colorado,
Delaware, Maine, Nevada, Utah and Vermont Governmental Authorities.
(g) LEGAL OPINIONS. The opinions of Pierce Atwood, LeBoeuf, Lamb,
Greene & MacRae L.L.P. (Connecticut, California, Colorado), Wadleigh, Starr,
Peters, Dunn & Chiesa, Reiber, Kenlan, Schwiebert, Hall & Facey, Parsons Behle &
Latimer and Scarpello & Alling, counsel to American Ski, the Borrowers and their
Restricted Subsidiaries, dated the date of execution of this Agreement, in
substantially the form of EXHIBIT O attached hereto.
(h) SATISFACTION OF CONDITIONS. A certificate of the chief executive
officer or chief financial officer of American Ski and each Borrower, dated the
Closing Date, to the effect that all conditions precedent on the part of
American Ski and the Borrowers to the execution and delivery hereof and the
making of the Term Loans and the initial Revolving Credit Advance have been
satisfied.
(i) GOVERNMENTAL APPROVALS. Evidence of the receipt of all necessary
governmental authorizations, consents and approvals for the execution, delivery
and performance by American Ski and its Restricted Subsidiaries and their
Subsidiaries party thereto of this Agreement, the Term Loan Notes, the Revolving
Credit Notes, the Swing Line Note, the Guaranty Agreements, the Security
Agreements and the other Lender Agreements.
(j) CONSUMMATION OF PUBLIC OFFERING. Successful completion of
American Ski's initial public offering on terms satisfactory to the Agent and
evidence of IPO Gross Proceeds equal to or exceeding the Minimum IPO Gross
Proceeds.
(k) CONSUMMATION OF KAMORI ACQUISITION. The Kamori Acquisition shall
be consummated in accordance with the terms of the Kamori Stock Purchase
Agreement which terms have not been amended or waived since the date thereof.
(l) CLOSING FEE. Receipt by the Agent for the account of the Lenders
of the closing fees due to it pursuant to the Fee Letter.
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(m) AGENT'S FEE. Receipt by the Agent for its own account of the
fees due to it pursuant to the Fee Letter.
(n) OTTEN LIFE INSURANCE POLICIES. Assignment of the Otten Life
Insurance Policies in an amount of $14,000,000 to the Agent and acknowledgment
of the assignment by the issuer of the policy.
(o) SOLVENCY CERTIFICATES. Receipt of a certificate of the chief
financial officer of American Ski and each Restricted Subsidiary, demonstrating
the solvency of American Ski and each Restricted Subsidiary.
(p) FINANCIAL CONDITION. Receipt of (i) a pro forma consolidated
balance sheet of American Ski and the Borrowers after giving effect to the
making of the Term Loans and the initial Revolving Credit Advance and receipt of
the IPO Gross Proceeds and consummation of the Kamori Acquisition, demonstrating
that at Closing, the ratio of Consolidated Funded Debt to Consolidated EBITDA
for the period ending July 31, 1997 does not exceed 6.0-to-1 and (ii)
satisfactory evidence that the sum of (A) the Unused Revolving Credit
Commitments, PLUS (B) the Unused Revolving Credit Commitments (as defined in the
American Ski - West Credit Agreement), PLUS (C) available cash and cash
equivalents of American Ski, after giving effect to the making of the Term Loans
and the initial Revolving Credit Advance at closing and receipt of the IPO Gross
Proceeds and consummation of the Kamori Acquisition, are at least $30,000,000.
(q) SECURITY AGREEMENTS. Each of the Security Agreements shall have
been duly and properly authorized, executed and delivered by the parties thereto
and shall be in full force and effect, and pursuant to the Security Agreements
the Borrowers shall have granted to the Agent first perfected, valid and binding
security interests, liens and encumbrances on all of the assets of the Borrowers
in favor of the Agent (subject only to Liens permitted under Section 9.2)
including without limitation:
(i) all fee simple and leasehold interests in and to all real
property owned or leased by the Borrowers and their Restricted Subsidiaries
other than those leases set forth on SCHEDULE 3.1(Q), and all buildings and
improvements now located or to be constructed thereon, whether now owned or
hereafter acquired;
(ii) all tangible and intangible assets of the Borrowers, whether
now owned or hereafter acquired, including without limitation all
machinery, equipment, furniture, furnishings, inventory, appliances,
contract rights, deposit accounts, cash collateral, hotel and motel
revenues, instruments, general intangibles, etc., whether now owned or
hereafter acquired, but excluding leasehold personal property interests
which the Borrowers are prohibited by the lessor from assigning and any
interest in any personal property lease agreement which the Borrowers are
prohibited from assigning;
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(iii) all leases, tenancies, purchase and sale agreements for
the sale of condominium units or other property, operating agreements,
contract and rental agreements for the lease, sale (as permitted
hereunder), rental, occupancy, hire or use of any of Borrowers' assets,
including without limitation the Mortgaged Properties, or any portion
thereof together with all income, profits, revenues, cash collateral and
other proceeds thereof; and
(iv) all licenses, permits, trade names, patents, trademarks,
approvals and contracts.
(r) RECORDING OF MORTGAGES, FINANCING STATEMENTS, ETC. All actions
necessary or appropriate to perfect the Agent's liens and security interests in
the assets of the Borrowers and their Restricted Subsidiaries shall have been
fully performed including without limitation:
(i) the due and proper recording and filing of all of the
Mortgages, Collateral Assignments of Leases, Collateral Assignments of
Income, Assignments in Trust and Assignments of Licenses;
(ii) the filing of Uniform Commercial Code financing statements
necessary to perfect the security interests of the Agent in the assets of
the Borrowers; and
(iii) the receipt by the Agent of commitments from Lawyer's
Title Insurance Corporation to issue ALTA standard form mortgage loan
policies insuring the first priority of the Mortgages, subject only to
Permitted Liens, covering all real property of the Borrowers both as owned
in fee or held as a leasehold estate under the Leases or otherwise and
covering the real property described in the Mortgages in an aggregate
amount of not less than $75,000,000, such policies to be in form and
substance satisfactory to the Agent, including without limitation, such
endorsements and affirmative insurance as the Agent shall require with the
standard tenant's and mechanic's liens exceptions deleted and with such
portions of the survey coverage deleted as the Agent may require, and the
Agent shall also have received proof of full payment of all fees and
premiums for said policies and copies of all documents listed as exceptions
on Schedule B to each such policy.
(s) INSURANCE. The Agent shall have received (i) certificates of
insurance as to the liability hazard and other insurance maintained by the
Borrowers and their Restricted Subsidiaries on the Collateral in conformity with
the insurance requirements contained in the Security Agreements (including flood
insurance if necessary) from the insurer or an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms all in accordance with the provisions of the
Security Agreements; (ii) certified copies of all policies evidencing such
insurance (or
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certificates therefor signed by the insurer or an agent authorized to bind the
insurer); and (iii) such further information and certificates from the
Borrowers, their insurers and insurance brokers as the Agent may request.
(t) LEASES. The Agent shall be satisfied with the current form of
the leases to be mortgaged to it pursuant to the Leasehold Mortgages.
(u) SURVEYS. Prior to the Closing Date, the Borrowers shall provide
the Agent with site plans or other maps acceptable to the Agent showing the
Mortgaged Properties, the dimensions and the area thereof, together with a
licensed surveyor's or civil engineer's certificate in a form acceptable to the
Agent, certifying that all existing improvements necessary for the operation of
each Mortgaged Property as presently operated in all material respects (the
"Material Improvements"), including without limitation all utilities, sewer and
water systems, snowmaking equipment (including necessary water delivery
systems), lodges, ski-lifts, parking areas, driveways and any other material
improvements are located within the boundaries of such Mortgaged Property, or if
applicable, within the boundaries of property that the Borrowers have the right
to use pursuant to its rights under United States Forest Service special use
permits. The Borrowers shall provide the Agent with a list of Material
Improvements acceptable to the Agent at least five (5) Business Days prior to
the Closing Date, together with a certificate of the Borrowers in form
acceptable to the Agent certifying that the Material Improvements constitute all
of the improvements necessary to fully operate the Mortgaged Properties as
currently operated and as contemplated to be operated. The certificate shall
also indicate those portions of the Mortgaged Properties, if any, falling within
a federally designated flood hazard area; if any portion falls within such area,
flood hazard insurance will be required by federal regulations.
(v) COMPLIANCE WITH ZONING AND OTHER LAWS. At least five (5)
Business Days prior to the Closing Date, the Borrowers shall provide opinions of
counsel or other evidence in form and substance satisfactory to the Agent's
counsel that the Mortgaged Properties, all existing and proposed improvements
thereon and the use or proposed use thereof, are in compliance in all material
respects with all zoning laws, building codes, environmental laws and other laws
and regulations applicable to the Mortgaged Properties and the use and proposed
use thereof, and that all licenses, permits and certificates of occupancy or
building permits have been issued to permit the lawful use or improvement of the
Mortgaged Properties as contemplated by the Borrowers.
(w) APPRAISALS. At least five (5) Business Days prior to the Closing
Date, the Agent shall have received, at the expense of American Ski, appraisals
in form and substance satisfactory to the Agent showing an aggregate fair market
value of the fee and leasehold interests in all real property owned or leased by
American Ski and its Restricted Subsidiaries and subject to first, perfected
mortgage liens in favor of the Agent of at least Three Hundred Fifty Million
Dollars ($350,000,000.00); PROVIDED, HOWEVER, that the appraisal
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of The Canyons ski resort in form and substance satisfactory to the Agent shall
be received by the Agent from American Ski within twenty (20) Business Days of
the Closing Date.
(x) ENVIRONMENTAL ASSESSMENTS. The Agent shall have received site
assessment reports concerning the Mortgaged Properties, dated as of a recent
date, from environmental engineers acceptable to the Agent, such reports to be
in form and substance satisfactory to the Agent.
(y) PERMIT ASSURANCES. The Agent shall have received evidence
satisfactory to the Agent that all activities being conducted on the Mortgaged
Properties which require federal, state or local licenses or permits have been
duly licensed except where the absence of any such license would not have a
Material Adverse Effect and that such licenses or permits are in full force and
effect and have been assigned to the Agent pursuant to the Security Agreements.
(z) LEASES/SERVICE CONTRACTS The Agent shall have received copies of
all material service contracts and leases affecting any portion of the Mortgaged
Properties.
(aa) UNRESTRICTED SUBSIDIARY ACKNOWLEDGMENT. An Acknowledgment from
each Unrestricted Subsidiary in the form attached hereto as EXHIBIT R.
(bb) EXECUTION OF THE AMERICAN SKI - WEST CREDIT AGREEMENT. Execution
of the American Ski-West Credit Agreement simultaneously herewith and the
compliance by the American Ski-West Borrowers with all their agreements
contained in the American Ski-West Credit Agreement, including satisfaction of
all conditions precedent to the Lenders' obligations to extend credit
thereunder.
(cc) CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT. The Agent shall
have received a counterpart original of the Cerberus Amendment and Waiver Letter
Agreement duly executed by all parties thereto and evidence that the
transactions contemplated thereby, including, without limitation, the exchange
of the Series A Exchangeable Preferred Stock and the Senior Exchangeable Notes
into the 101/2% Repriced Convertible Exchangeable Preferred Stock has occurred
on terms satisfactory to the Agent.
(dd) MISCELLANEOUS. The Agent shall have received such other
documents, certificates and opinions as the Agent or the Lenders may reasonably
request.
Section 3.2 CONDITIONS TO ALL LOANS. The Lenders' obligations to make
any Loans pursuant to this Agreement shall be subject to compliance by the
Borrowers and the Guarantors with their agreements contained in this Agreement
and each other Lender Agreement, and to the satisfaction, at or before the
making of each Loan, of all of the following conditions precedent:
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(a) The representations and warranties herein and those made by or on
behalf of the Borrowers in any other Lender Agreement shall be correct as of the
date on which any Loan is made, with the same effect as if made at and as of
such time (except as to representations and warranties made as of a certain
date, which shall be true and correct in all material respects as of such date,
except as to transactions permitted hereunder, and except that the references in
Article 5 to the 1997 Financial Statements shall be deemed to refer to the most
recent annual audited consolidated financial statements of American Ski and its
Subsidiaries furnished to the Agent.)
(b) On the date of any Loan hereunder, there shall exist no Default.
(c) The making of the requested Loan shall not be prohibited by any
law or governmental order or regulation applicable to the Lenders or to the
Borrowers, and all necessary consents, approvals and authorizations of any
Person for any such Loan shall have been obtained.
ARTICLE 4. PAYMENT AND REPAYMENT
Section 4.1 MANDATORY REPAYMENTS AND PREPAYMENTS.
(a) If at any time the sum of the aggregate outstanding principal
balance of all Revolving Credit Advances and all Swing Line Loans made hereunder
exceeds the Available Revolving Credit Amount, the Borrowers, jointly and
severally, shall immediately repay to the Agent for the ratable accounts of the
Revolving Credit Lenders an amount equal to such excess to be applied FIRST to
the Swing Line Loans and SECOND to the Revolving Credit Advances.
(b) The Borrowers will repay the Term Loans in eight annual
installments, with the first six installments in the amount of $300,000 each,
payable on May 31 of each year, commencing May 31, 1999, a seventh installment
of $14,000,000 due May 31, 2005 and the final installment due on the Term Loan
Maturity Date equal to the outstanding principal balance of the Term Loans,
together with accrued interest and all other amounts due hereunder in connection
therewith. The amount of the principal installments of the Term Loans are
subject to adjustment as provided in paragraph (c) below.
(c) The Borrowers shall also make prepayments of the following
amounts:
(i) Ten days following the delivery of the Mandatory Prepayment
Notice (as defined below) by the Agent following each Excess Cash Payment
Date and in connection with the relevant Excess Cash Payment Period, if the
Excess Cash Flow Leverage Ratio for such period exceeded 3.50-to-1, an
amount equal to 50% of the Consolidated Excess Cash Flow shall be applied
as a mandatory repayment of principal
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of outstanding Consolidated Term Loans and a mandatory reduction of the
Consolidated Maximum Revolving Credit Amount in accordance with clause (v)
below; PROVIDED, HOWEVER, that if ASC East is prohibited from having such
payments applied as a mandatory repayment of principal of outstanding
Consolidated Term Loans and a mandatory reduction of the Consolidated
Maximum Revolving Credit Amount because of the terms and conditions of the
Senior Subordinated Notes Indenture, such payments shall be applied as a
mandatory repayment of principal of outstanding Term Loans and a mandatory
reduction of the Maximum Revolving Credit Amount.
(ii) At any time on and after the Closing Date, if American Ski
or ASC East or any of ASC East's Restricted Subsidiaries receives Cash
Proceeds from any Permitted Disposition or receives Cash Insurance
Proceeds, an amount equal to 100% of the Net Cash Proceeds therefrom shall
be applied as a mandatory repayment of principal of outstanding Term Loans
and a mandatory reduction of the Maximum Revolving Credit Amount in
accordance with clause (v) below; PROVIDED, HOWEVER that with respect to no
more than $250,000 in the aggregate of such Net Cash Proceeds in any fiscal
year of ASC East, such Net Cash Proceeds shall not be required to be
so-applied if no Default then exists and American Ski or ASC East delivers
a certificate to the Agent together with the notice referred to in clause
(vii) below stating that such Net Cash Proceeds shall be used for Permitted
Capital Expenditures and Permitted Acquisitions by ASC East and its
Restricted Subsidiaries in compliance with this Agreement within 365 days
following the date of such Permitted Disposition or the date of receipt of
such Cash Insurance Proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended); and PROVIDED FURTHER, that if
all or any portion of such Net Cash Proceeds not so-applied to the
repayment of Term Loans and a mandatory reduction of the Maximum Revolving
Credit Amount are not so used within such 365 day period, such remaining
portion shall be applied on the last day of such period as a mandatory
repayment of principal of outstanding Term Loans and a mandatory reduction
of the Maximum Revolving Credit Amount as provided in clause (v) below.
(iii)(A) At any time on and after the Closing Date upon which
American Ski or any of its Restricted Subsidiaries receives any proceeds
from any issuance of any equity interests, excluding proceeds received from
the sale or issuance of equity interests which are used to effect Permitted
Acquisitions on the date of sale or issuance of such equity interests and
the IPO Gross Proceeds, an amount equal to 100% of the cash proceeds
therefrom (net of underwriting discounts or placement discounts and
commissions and all reasonable and customary fees, costs and expenses
associated with the marketing, sale and issuance of such equity interests
paid to Persons other than Affiliates) shall be applied as a mandatory
repayment of principal of outstanding Consolidated Term Loans and a
mandatory reduction of the Consolidated Maximum Revolving Credit Amount in
accordance with clause (v) below; PROVIDED, HOWEVER that the requirement of
this clause (iii)(A) shall not apply until the proceeds received by
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American Ski or any of its Restricted Subsidiaries from the sale or
issuance of equity interests to which this clause (iii)(A) would otherwise
apply PLUS the proceeds received by ASC East or any of its Restricted
Subsidiaries from the sale or issuance of equity interests pursuant to
clause (iii)(B) PLUS any proceeds from the incurrence of debt referred to
in clause (iv) below exceed $10,000,000 in the aggregate.
(B) At any time on and after the Closing Date upon which ASC
East or any of its Restricted Subsidiaries receives any proceeds from any
issuance of any equity interests, excluding proceeds received from the sale
or issuance of equity interests which are used to effect Permitted
Acquisitions on the date of sale or issuance of such equity interests and
the IPO Gross Proceeds, an amount equal to 100% of the cash proceeds
therefrom (net of underwriting discounts or placement discounts and
commissions paid to Persons other than Affiliates) shall be applied as a
mandatory repayment of principal of outstanding Term Loans and a mandatory
reduction of the Maximum Revolving Credit Amount in accordance with clause
(v) below; PROVIDED, HOWEVER that the requirement of this clause (iii)(B)
shall not apply until the proceeds received by ASC East or any of its
Restricted Subsidiaries from the sale or issuance of equity interests to
which this clause (iii)(B) would otherwise apply PLUS the proceeds received
by American Ski or any of its Restricted Subsidiaries from the sale or
issuance of equity interests to clause (iii)(A) PLUS any proceeds from the
incurrence of debt referred to in clause (iv) below exceed $10,000,000 in
the aggregate.
(iv)(A) At any time after the Closing Date upon which American
Ski or any of its Restricted Subsidiaries receives any proceeds from any
incurrence by American Ski or its Restricted Subsidiaries of Indebtedness,
an amount equal to 100% of the cash proceeds therefrom (net of underwriting
discounts or placement discounts and commissions paid to Persons other than
Affiliates) shall be applied as a mandatory repayment of principal of
outstanding Consolidated Term Loans and a mandatory reduction of the
Consolidated Maximum Revolving Credit Amount in accordance with clause (v)
below; PROVIDED, HOWEVER that the requirement of this clause (iv)(A) shall
not apply until the proceeds received by American Ski or any of its
Restricted Subsidiaries from any incurrence of Indebtedness to which this
clause (iv)(A) would otherwise apply PLUS the proceeds received by ASC East
or any of its Restricted Subsidiaries from any incurrence of Indebtedness
pursuant to clause (iv)(B) PLUS any proceeds from the issuance of equity
interests referred to in clause (iii) above exceed $10,000,000 in the
aggregate.
(B) At any time after the Closing Date upon which ASC East
or any of its Restricted Subsidiaries receives any proceeds from any
incurrence by ASC East or its Restricted Subsidiaries of Indebtedness, an
amount equal to 100% of the cash proceeds therefrom (net of underwriting
discounts or placement discounts and commissions paid to Persons other than
Affiliates) shall be applied as a mandatory repayment of principal of
outstanding Term Loans and a mandatory reduction of the
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Maximum Revolving Credit Amount in accordance with clause (v) below;
PROVIDED, HOWEVER that the requirement of this clause (iv)(B) shall not
apply until the proceeds received by ASC East or any of its Restricted
Subsidiaries from any incurrence of Indebtedness to which this clause
(iv)(B) would otherwise apply PLUS the proceeds received by American Ski or
any of its Restricted Subsidiaries from one or more debt issuances pursuant
to clause (iv)(A) PLUS any proceeds from the issuance of equity interests
referred to in clause (iii) above exceed $10,000,000 in the aggregate.
(v) All mandatory prepayments pursuant to this Section 4.1(c)
will (A) be applied PRO RATA to the outstanding principal amounts of the
Term Loans or the Consolidated Term Loans and the Maximum Revolving Credit
Amount or the Consolidated Maximum Revolving Credit Amount, as applicable,
(B) reduce the remaining scheduled principal payments of the Term Loans or
the Consolidated Term Loans and the scheduled reductions of the Maximum
Revolving Credit Amount or the Consolidated Maximum Revolving Credit
Amount, as applicable, on a PRO RATA basis and (C) be made ten days
following notice from the Agent that such payment is required and
specifying the payment date (the "Mandatory Prepayment Notice."). Nothing
in this Section 4.1(c), however, shall require that the Maximum Revolving
Credit Amount or the American Ski - West Maximum Revolving Credit Amount be
reduced to an amount less than $35,000,000 and to the extent that any
reductions hereunder would have otherwise reduced the Maximum Revolving
Credit Amount or the American Ski - West Maximum Revolving Credit Amount
below $35,000,000, such excess amount shall be applied as a mandatory
prepayment of the Term Loans or the Consolidated Term Loans, as applicable,
unless waived by the Term Loan Lenders as provided in clause (vi) below.
(vi) Notwithstanding anything to the contrary contained in this
Section 4.1(c) or elsewhere in this Agreement, the Term Loan Lenders shall
have the option to waive all or any portion of a mandatory repayment of the
Consolidated Term Loans pursuant to this Section 4.1(c) (each such
repayment, a "Mandatory Repayment") upon the terms and provisions set forth
in this Section 4.1(c)(vi) ratably on the basis of their outstanding
Consolidated Term Loans. In the event any Term Loan Lender desires to
waive its right to receive all or any portion of any such Mandatory
Repayment in whole or in part, such Term Loan Lender shall so advise the
Agent no later than the close of business two Business Days after the date
of the Mandatory Prepayment Notice, which notice shall also include the
amount such Term Loan Lender desires to receive in respect of such
Mandatory Repayment. If any Term Loan Lender does not reply to the Agent
within the two Business Days, it will be deemed not to have waived any part
of such Mandatory Repayment. If any Term Loan Lender does not specify an
amount it wishes to receive, it will be deemed to have accepted 100% of the
total payment. In the event that any such Term Loan Lender waives all or
part of such right to receive all or any portion of any such Mandatory
Repayment, the Agent shall apply 100% of the amount so waived by such Term
Loan
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Lender to a mandatory reduction of the Maximum Revolving Credit Amount or
the Consolidated Maximum Revolving Credit Amount as provided herein.
(vii) American Ski shall, within three (3) Business Days of the
Excess Cash Payment Date and the occurrence of any event described in
clauses (ii), (iii) or (iv) of this Section 4.1(c), provide the Agent with
written notice of the Consolidated Excess Cash Flow for the relevant Excess
Cash Payment Period and/or the proceeds received or to be received in
connection with the occurrence of any event described in clauses (ii),
(iii) or (iv) of this Section 4.1(c).
Section 4.2 VOLUNTARY PREPAYMENTS.
(a) The Borrowers may make prepayments to the Agent for the ratable
accounts of the Term Loan Lenders, the Swing Line Lender and the Revolving
Credit Lenders, respectively, of any outstanding principal amount of the Term
Loans, Swing Line Loans or the Revolving Credit Advances equal to $100,000 or an
integral multiple thereof which are Base Rate Loans in accordance with Section
4.3 at any time prior to 12:00 noon (Boston time) on any Business Day without
premium or penalty; PROVIDED, HOWEVER, that repayment of Revolving Credit
Advances which are Base Rate Loans may be made in other amounts as provided in
Section 2.17(c).
(b) The Borrowers may make prepayments to the Agent for the ratable
accounts of the Term Loan Lenders or the Revolving Credit Lenders, respectively,
of any outstanding principal amount of the Term Loans or any Revolving Credit
Advances equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof which are LIBOR Rate Loans in accordance with Section 4.3 at any time
prior to 12:00 noon (Boston time) on any Business Day subject, however, to the
premiums and penalties set forth in Section 4.6.
(c) Any voluntary prepayments of the Term Loans pursuant to this
Section 4.2 will reduce the remaining scheduled principal payments on the Term
Loans PRO RATA.
Section 4.3 PAYMENT AND INTEREST CUTOFF. Notice of each prepayment
pursuant to Section 4.2 shall be given to the Agent (a) in the case of
prepayment of Base Rate Loans, not later than 12:00 noon (Boston time) one (1)
Business Day prior to the proposed date of payment and (b) in the case of
prepayment of LIBOR Rate Loans on any day other than the last day of the
Interest Period applicable thereto, not later than 12:00 noon (Boston time),
three (3) Business Days, prior to the proposed date of payment, and, in each
case, shall specify the total principal amount of the Term Loans or the
Revolving Credit Advances to be paid on such date. Notice of prepayment having
been given in compliance with this Section 4.3, the amount specified to be
prepaid shall become due and payable on the date specified for prepayment and
from and after said date (unless the Borrowers shall default in the payment
thereof) interest thereon shall cease to accrue. Unpaid interest on the
principal amount of the
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Term Loans or any Revolving Credit Advances so prepaid accrued to the date of
prepayment shall be due on the date of prepayment.
Section 4.4 PAYMENT OR OTHER ACTIONS ON NON-BUSINESS DAYS. Whenever any
payment to be made hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest or fees, as the case may be. In the case of any other
action the last day for performance of which shall be a day other than a
Business Day, the date for performance shall be extended to the next succeeding
Business Day.
Section 4.5 METHOD AND TIMING OF PAYMENTS.
(a) All payments required to be made pursuant to the provisions of
this Agreement and any other Lender Agreement, and all prepayments pursuant to
Section 4.1, may be charged by the Agent against any Borrower's accounts with
the Agent. Each Borrower hereby authorizes the Agent and the Lenders, without
prior notice to the Borrower but with confirming notice to such Borrower
promptly thereafter, to charge against any account of such Borrower with the
Agent or such Lender an amount equal to the accrued interest, principal and
other amounts from time to time due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements.
(b) The Borrowers shall make each payment to be made by them
hereunder not later than 12:00 noon (Boston time) on the day when due in lawful
money of the United States to the Agent at its address set forth in Section 14.1
in immediately available funds. The Agent will, after its receipt thereof,
distribute like funds relating to the payment of principal, interest or any
other amounts payable hereunder ratably to the Lenders in accordance with their
respective Commitment Percentages. Any payment made by the Borrowers to the
Agent under this Agreement or under the Notes in the manner provided in this
Agreement shall be deemed to be a payment to each of the respective Lenders,
unless the provisions of this Agreement expressly provide that any such payment
shall be solely for the account of the Agent or any specific Lender.
Section 4.6 PAYMENTS NOT AT END OF INTEREST PERIOD. If the Borrowers
for any reason make any payment of principal with respect to any LIBOR Rate Loan
on any day other than the last day of the Interest Period applicable to such
LIBOR Rate Loan, including without limitation by reason of acceleration, or fail
to borrow a LIBOR Rate Loan after electing a LIBOR Pricing Option with respect
thereto pursuant to Section 2.6, the Borrowers shall pay to the Agent, jointly
and severally, for the ratable account of the Lenders, any amounts required to
compensate the Lenders for any additional losses, costs or expenses which they
may reasonably incur as a result of such payment or failure to borrow, including
without limitation, any loss, including lost profits, costs or expenses incurred
by reason of the liquidation, reutilization or reemployment of deposits or other
funds acquired by the Lenders to fund or
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maintain such LIBOR Rate Loan. Such compensation may include, without
limitation, an amount equal to (a) the amount of interest which would have
accrued on the amount so paid or not borrowed, for the period from the date of
such payment or failure to borrow, to the last day of the then current Interest
Period for such LIBOR Rate Loan (or, in the case of a failure to borrow, to the
last day of the Interest Period for the LIBOR Rate Loan which would have
commenced on the date of such failure to borrow), at the applicable rate of
interest for such LIBOR Rate Loan provided for herein MINUS (b) the amount of
interest (as reasonably determined by the Agent), which would accrue and become
payable to the Lenders during such period on the principal repaid or not
borrowed if the Lenders, following such repayment or failure to borrow, were to
reinvest such principal in U.S. Treasury securities selected by the Agent in an
amount equal (as nearly as may be) to the principal so repaid or not borrowed
and having a term equal (as near as may be) to such period. The Borrowers,
jointly and severally, shall pay such amount upon presentation by the Agent of
a statement setting forth the amount and the Agent's calculation thereof
pursuant hereto, which statement shall be deemed true and correct absent
manifest error.
Section 4.7 CURRENCY. All payments and prepayments provided for under
this Agreement shall be made in lawful currency of the United States of America
in immediately available funds.
Section 4.8 FOREIGN LENDERS. Each Lender (including any Successor
Lender) that is not a citizen or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under the
laws of the United States of America (or any jurisdiction thereof), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a "Non-U.S. Lender") shall deliver to the Borrowers and
the Agent (or, in the case of a Credit Participant, to the Lender from which the
related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest," a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8, an annual certificate representing that
such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code,
is not a 10% shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of any of the Borrowers and is not a controlled foreign corporation
related to any of the Borrowers (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrowers under this Agreement and the other Lender
Agreements. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any Credit
Participant, on or before the date such Credit Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall
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promptly notify the Borrowers at any time it determines that it is no longer in
a position to provide any previously delivered certificate to the Borrowers (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 4.8, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section 4.8
that such Non-U.S. Lender is not legally able to deliver.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Loans as contemplated hereby, American Ski
and the Borrowers, jointly and severally, hereby make the following
representations and warranties:
Section 5.1 EXISTENCE, CHARTER AND FORMATION DOCUMENTS, ETC. American
Ski and each Restricted Subsidiary other than Heavenly Valley, Limited
Partnership is a corporation, and Heavenly Valley, Limited Partnership is a
limited partnership, and each of them is validly organized, legally existing and
in good standing under the laws of the jurisdiction in which it is organized and
has corporate or partnership power to own its properties and conduct its
business as now conducted and as proposed to be conducted by it. Certified
copies of the charter documents and By-Laws of American Ski and each Restricted
Subsidiary have been delivered to the Lenders and are true, accurate and
complete as of the date hereof.
Section 5.2 PRINCIPAL PLACE OF BUSINESS; LOCATION OF RECORDS. American
Ski's and each Restricted Subsidiary's principal place of business is as
described on SCHEDULE 5.2, and neither American Ski nor any Restricted
Subsidiary has had any other principal place of business during the last six
months. All of the books and records or true and complete copies thereof
relating to the accounts and contracts of American Ski and each Restricted
Subsidiary are and will be kept at such location and at the other locations
designated on SCHEDULE 5.2.
Section 5.3 QUALIFICATION. American Ski and each Restricted Subsidiary
is duly qualified, licensed and authorized to do business and is in good
standing as a foreign corporation or partnership in each jurisdiction where its
ownership or leasing of properties or the conduct of its business requires it to
be so qualified except to the extent that any failure to be so qualified would
not have a Material Adverse Effect.
Section 5.4 SUBSIDIARIES.
(a) American Ski has no Subsidiaries except for those listed on
SCHEDULE 5.4(A). All of the issued and outstanding capital stock of each
Subsidiary listed on SCHEDULE 5.4(A) is owned of record and beneficially as
described therein.
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(b) There are no transactions or relationships between American Ski
or any of its Restricted Subsidiaries, on the one hand, and any Unrestricted
Subsidiary, on the other, except as disclosed on SCHEDULE 5.4(B).
Section 5.5 POWER. The execution, delivery and performance of this
Agreement, the Term Notes, the Revolving Credit Notes, the Guaranty Agreements,
the Security Agreements and all other Lender Agreements and other documents
delivered or to be delivered by American Ski, each Borrower or any Subsidiary to
the Agent or the Lenders, and the incurrence of Indebtedness to the Lenders
hereunder or thereunder, now or hereafter owing:
(a) are within the powers of American Ski, each Borrower and each
Subsidiary party thereto, as the case may be, having been duly authorized by its
Board of Directors or other similar governing body, and, if required by law, by
its charter documents or by its By-Laws, by its stockholders or partners;
(b) do not require any approval or consent of, or filing with, any
governmental agency or other Person (except for such approvals and consents that
have been obtained and delivered to the Lenders) and are not in contravention of
law or the terms of the charter documents or By-Laws of American Ski, each
Borrower and each Subsidiary or any amendment thereof;
(c) do not and will not
(i) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which American Ski, any Borrower or any Subsidiary is a party
or by which American Ski, any Borrower, any Subsidiary or any of their
respective properties are bound or affected, except for those breaches or
defaults which have been waived or consented to in writing or which will
not in the aggregate result in a Material Adverse Effect,
(ii) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature on any property now owned or hereafter acquired
by American Ski, any Borrower or any Subsidiary, except as provided in the
Lender Agreements, or
(iii) result in a violation of or default under any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award having applicability to American Ski, any Borrower or any Subsidiary,
or to any of their respective properties.
Section 5.6 VALID AND BINDING OBLIGATIONS. This Agreement, the Term
Loan Notes, the Revolving Credit Notes, the Guaranty Agreements, the Security
Agreements and all the other Lender Agreements executed in connection herewith
and therewith constitute, or will
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constitute when delivered, the valid and binding obligations of American Ski,
the Borrowers and their Subsidiaries parties thereto, as the case may be,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be subject to bankruptcy, insolvency, moratorium and
other laws affecting the rights and remedies of creditors and secured parties
and to the exercise of judicial discretion in accordance with general equitable
principles.
Section 5.7 OTHER AGREEMENTS. Neither American Ski nor any Restricted
Subsidiary is a party to any indenture, loan or credit agreement, or any lease
or other agreement or instrument, or subject to any charter or corporate
restriction or any judgment, decree, order, rule or regulation, which is likely
to have a Material Adverse Effect, or which restricts the ability of American
Ski, any Borrower or any Subsidiary to carry out any of the provisions of this
Agreement, the Term Loan Notes, the Revolving Credit Notes, the Guaranty
Agreements, the Security Agreements or any of the Lender Agreements executed in
connection herewith and therewith.
Section 5.8 PAYMENT OF TAXES. American Ski and its Subsidiaries have
filed all tax returns which are required to be filed by them and have paid, or
made adequate provision for the payment of, all taxes which have or may become
due pursuant to said returns or to assessments received, except such as are
being contested in good faith by appropriate proceedings. All federal tax
returns of American Ski and its Subsidiaries through their fiscal year ended in
1991 have been audited by the Internal Revenue Service or are not subject to
such audit by virtue of the expiration of the applicable statute of limitation,
and the results of such audits are fully reflected in the balance sheet
contained in the 1997 Financial Statements. American Ski knows of no material
additional assessments since such date for which adequate reserves appearing in
the balance sheet contained in the 1997 Financial Statements have not been
established. American Ski and its Subsidiaries have made adequate provision for
all current taxes, and except as described on SCHEDULE 5.8, to the best of the
American Ski's knowledge there will not be any additional assessments for any
fiscal periods prior to and including that which ended on the date of said
balance sheet in excess of the amounts reserved therefor.
Section 5.9 FINANCIAL STATEMENTS.
(a) All balance sheets, statements and other financial information
furnished to the Agent and the Lenders in connection with this Agreement and the
transactions contemplated hereby (certain of which information is listed on
SCHEDULE 5.9), including, without limitation, the 1997 Financial Statements,
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except for normal year-end
adjustments and for the absence of footnotes with interim statements) and
present fairly the consolidated financial condition of American Ski and its
Subsidiaries reported therein and all such information so furnished was true,
correct and complete as of the date thereof, in all material respects.
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(b) To the best knowledge of American Ski and each Borrower, no facts
exist that (individually or in the aggregate) would result in any material
change in any of such projections. The Management Projections are based upon
estimates and assumptions which the senior executive and financial officers of
American Ski and the Borrowers consider reasonable, have been prepared on the
basis of the assumptions stated therein and reflect the reasonable estimates of
American Ski and the Borrowers of the results of operations and other
information projected therein.
Section 5.10 OTHER MATERIALS FURNISHED. The written information,
exhibits, memoranda or reports furnished to the Agent or the Lenders by or on
behalf of American Ski or any of its Subsidiaries in connection with the
negotiation of this Agreement, taken as a whole, does not contain any material
misstatement of fact or omit to state a material fact necessary to make the
statements contained therein not misleading.
Section 5.11 STOCK. As of the date hereof, the issued and outstanding
capital stock of American Ski is as set forth on SCHEDULE 5.4(A) hereto. There
are presently issued by American Ski's Restricted Subsidiaries and outstanding
the shares of capital stock indicated on SCHEDULE 5.4(A). American Ski and its
Subsidiaries have received the consideration for which such stock was authorized
to be issued and have otherwise complied with all legal requirements relating to
the authorization and issuance of shares of stock and all such shares are
validly issued, fully paid and non-assessable. The Borrowers and their
Restricted Subsidiaries have no other capital stock of any class outstanding.
Section 5.12 CHANGES IN CONDITION. Since the date of the balance sheets
contained in the 1997 Financial Statements, except as described in the
Registration Statement, there has been no material adverse change in the
business or assets or in the condition, financial or otherwise, of American Ski
and its Restricted Subsidiaries taken as a whole, and neither American Ski nor
any Restricted Subsidiary has entered into any transaction outside of the
ordinary course of business which is material to American Ski and its Restricted
Subsidiaries taken as a whole except for the initial public offering of American
Ski. Neither American Ski nor any Restricted Subsidiary had, as of the date
thereof, any contingent liabilities of any material amount which are not
referred to in the 1997 Financial Statements.
Section 5.13 ASSETS, LICENSES, PATENTS, TRADEMARKS, ETC.
(a) American Ski and its Restricted Subsidiaries have good and
marketable title to, or valid leasehold interests in, all of their assets, real
and personal, including the assets carried on their books and reflected in the
1997 Financial Statements, subject to no liens, charges or encumbrances, except
for (i) liens, charges and encumbrances described in SCHEDULE 5.16 and permitted
by Section 9.2 hereof, and (ii) assets sold, abandoned or otherwise disposed of
in the ordinary course of business.
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(b) American Ski and its Restricted Subsidiaries own all material
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, and trade names necessary to continue to conduct their
business as heretofore conducted by them, now conducted by them and proposed to
be conducted by them, each of which is listed, together with Patent and
Trademark Office application or registration numbers, where applicable, on
SCHEDULE 5.13 hereto. American Ski and its Restricted Subsidiaries conduct
their respective businesses without infringement or claim of infringement of any
material license, patent, copyright, service mark, trademark, trade name, trade
secret or other intellectual property right of others. To the best knowledge of
American Ski and the Borrowers, there is no infringement or claim of
infringement by others of any material license, patent, copyright, service mark,
trademark, trade name, trade secret or other intellectual property right of
American Ski and its Restricted Subsidiaries.
(c) Except as set forth on SCHEDULE 5.13(C) hereto, no leasehold
personal property interest which any Borrower is prohibited by the lessor from
assigning and no interest in any personal property lease agreement which any
Borrower is prohibited from assigning is material, or taken as a whole are
material, to the operations of any such Borrower.
Section 5.14 LITIGATION. Except as described on SCHEDULE 5.14 or the
most recent Compliance Certificate, there is no litigation, at law or in equity,
or any proceeding before any federal, state, provincial or municipal board or
other governmental or administrative agency pending or, to the knowledge of
American Ski and the Borrowers, threatened, or any basis therefor, which
involves a material risk of any judgment or liability which could have a
Material Adverse Effect, and no judgment, decree, or order of any federal,
state, provincial or municipal court, board or other governmental or
administrative agency has been issued against American Ski or any of its
Restricted Subsidiaries which has or may have a Material Adverse Effect.
Section 5.15 PENSION PLANS. No employee benefit plan established or
maintained by American Ski or any of its Subsidiaries or any other Person a
member of the same "control group," as American Ski or any of its Subsidiaries
(a "Pension Affiliate"), within the meaning of Section 302(f)(6)(b) of ERISA,
(including any multi-employer plan to which American Ski or any of its
Subsidiaries contributes) which is subject to Part 3 of Subtitle B of Title I of
the ERISA, had a material accumulated funding deficiency (as such term is
defined in Section 302 of ERISA) as of the last day of the most recent fiscal
year of such plan ended prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of such plan to which Part 3 of Subtitle B of Title I of ERISA
applied, and no material liability under Title IV of ERISA has been, or is
expected by American Ski or any of its Subsidiaries to be, incurred with respect
to any such plan by American Ski or any of its Subsidiaries or any Pension
Affiliate. The execution, delivery and performance by American Ski and the
Borrowers of this Agreement and the other Lender Agreements executed on the date
hereof will not involve any prohibited transaction within the
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meaning of ERISA or Section 4975 of the Code. American Ski and its Subsidiaries
have no Pension Plan other than those described on SCHEDULE 5.15.
Section 5.16 OUTSTANDING INDEBTEDNESS. After application of the proceeds
of the Term Loans and the initial Revolving Credit Advance, the outstanding
amount of Consolidated Funded Debt and Guaranties of borrowed money of American
Ski and its Restricted Subsidiaries as of the date hereof is correctly set forth
on SCHEDULE 5.16 hereto, and said Schedule correctly describes the credit
agreements, guaranties, leases and other instruments pursuant to which such
Indebtedness has been incurred and all liens, charges and encumbrances securing
such Indebtedness. Said schedule also describes all agreements and other
arrangements pursuant to which American Ski or any of its Restricted Subsidiary
may borrow any money.
Section 5.17 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
5.17:
(a) Neither American Ski, any Restricted Subsidiary nor any operator
of any of their respective properties is in violation, or to American Ski's or
any Borrower's knowledge is in alleged violation, of any Environmental Law,
which violation would have a Material Adverse Effect.
(b) Neither American Ski, any Restricted Subsidiary nor any operator
of any of their respective properties has received notice from any third party,
including without limitation any federal, state, county, or local governmental
authority, (i) that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 as amended ("CERCLA") or any equivalent state law, with respect to any
site or location; (ii) that any Hazardous Materials which it has generated,
transported or disposed of, has been found at any site at which a federal,
state, county, or local agency or other third party has conducted or has ordered
American Ski, any Restricted Subsidiary or another third party or parties (E.G.
a committee of potentially responsible parties) to conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint (contingent or otherwise) or legal or administrative
proceeding arising out of any actual or alleged release or threatened release of
Hazardous Materials. For purposes of this Agreement, "release" means any past
or present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping of any
Hazardous Material into the Environment, or the uncontained presence of any
Hazardous Material in the Environment.
(c) (i) American Ski, each Restricted Subsidiary and each operator of
any real property owned or operated by any Borrower is in compliance, in all
material respects, with all provisions of the Environmental Laws relating to the
handling, manufacturing, processing, generation, storage or disposal of any
Hazardous Materials; (ii) to the best of American Ski's and each Borrower's
knowledge, no portion of property owned, operated or
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controlled by American Ski or any of its Restricted Subsidiaries has been used
for the handling, manufacturing, processing, generation, storage or disposal of
Hazardous Materials except in accordance with applicable Environmental Laws;
(iii) to the best of American Ski's and each Borrower's knowledge, there have
been no releases or threatened releases of Hazardous Materials on, upon, into or
from any property owned, operated or controlled by American Ski or any
Restricted Subsidiary, which releases could have a Material Adverse Effect; (iv)
to the best of American Ski's and each Borrower's knowledge, there have been no
releases of Hazardous Materials on, upon, from or into any real property in the
vicinity of the real properties owned, operated or controlled by American Ski or
any Restricted Subsidiary which, through soil or groundwater contamination, may
have come to be located on the properties of American Ski or any Restricted
Subsidiary; (v) to the best of American Ski's and each Borrower's knowledge,
there have been no releases of Hazardous Materials on, upon, from or into any
real property formerly but no longer owned, operated or controlled by American
Ski or any Restricted Subsidiary.
(d) None of the properties of American Ski or any Restricted
Subsidiary is or shall be subject to any applicable environmental cleanup
responsibility law or environmental restrictive transfer law or regulation by
virtue of the transactions set forth herein and contemplated hereby.
Section 5.18 FOREIGN TRADE REGULATIONS. Neither American Ski nor any
Restricted Subsidiary is (a) a person included within the definition of
"designated foreign country" or "national" of a "designated foreign country" in
Executive Order No. 8389, as amended, in Executive Order No. 9193, as amended,
in the Foreign Assets Control Regulations (31 C.F.R., Chapter V, Part 500, as
amended), in the Cuban Assets Control Regulations of the United States Treasury
Department (31 C.F.R., Chapter V, Part 515, as amended) or in the Regulations of
the Office of Alien Property, Department of Justice (8 C.F.R., Chapter II, Part
507, as amended) or within the meanings of any of the said Orders or
Regulations, or of any regulations, interpretations, or rulings issued
thereunder, or in violation of said Orders or Regulations or of any regulations,
interpretations or rulings issued thereunder; or (b) an entity listed in Section
520.101 of the Foreign Funds Control Regulations (31 C.F.R., Chapter V, Part
520, as amended).
Section 5.19 GOVERNMENTAL REGULATIONS. Neither American Ski nor any
Restricted Subsidiary or any Affiliate of American Ski is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, or is a common carrier under the Interstate
Commerce Act, or is engaged in a business or activity subject to any statute or
regulation which regulates the incurring by any Borrower of Indebtedness for
borrowed money, including statutes or regulations relating to common or contract
carriers or to the sale of electricity, gas, steam, water, telephone or
telegraph or other public utility services, except for Uplands Water, Alpine
Pipeline, Community Water Company and Mountain Water Company.
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Section 5.20 MARGIN STOCK. Neither American Ski nor any Restricted
Subsidiary owns any "margin stock" within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System, or any regulations,
interpretations or rulings thereunder, nor is American Ski or any Restricted
Subsidiary engaged principally or as one of its important activities in
extending credit which is used for the purpose of purchasing or carrying margin
stock.
Section 5.21 SOLVENCY. American Ski and each Restricted Subsidiary,
before and after giving effect to the transactions contemplated by this
Agreement and the other Lender Agreements, including consummation of American
Ski's initial public offering and the Kamori Acquisition, is Solvent.
Section 5.22 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.
(a) Neither American Ski nor any Restricted Subsidiary is in
violation of any provision of its charter documents, bylaws, or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in a
Material Adverse Effect.
(b) American Ski and its Restricted Subsidiaries have complied in all
respects with the requirements of the Hart-Scott-Rodino Anti-Trust Improvement
Act of 1976, as amended (the "HSR Act"), and have made all filings with all
Governmental Authorities required to be made thereunder in connection with the
Kamori Acquisition. All waiting periods required under the H-S-R Act have
expired in connection with the Kamori Acquisition. Neither American Ski nor any
of its Restricted Subsidiaries has any obligation or duty to take any further
action (or to refrain from taking any action) in order to be in compliance with
the H-S-R Act in connection with the Kamori Acquisition.
Section 5.23 ABSENCE OF FINANCING STATEMENTS, ETC. To the best knowledge
of American Ski and except with respect to Permitted Liens, there is no
financing statement, security agreement, chattel mortgage, real estate mortgage
or other document filed or recorded with any filing records, registry or other
public office, that purports to cover, effect or give notice of any present or
possible future lien on, or security interest in, any assets or property of
American Ski or any Restricted Subsidiary or any rights relating thereto.
Section 5.24 PERFECTION OF SECURITY INTERESTS. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are required under applicable law to establish and
perfect the Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any set-off,
claims, withholdings or other defenses. American Ski or its Restricted
Subsidiaries as specified in the Security Agreements, own the Collateral free
from any lien, security interest, encumbrance and any other claim or demand
except for Permitted Liens.
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Section 5.25 BANK ACCOUNTS. SCHEDULE 2.17 sets forth the account
numbers, location and description of all bank accounts of American Ski and each
Restricted Subsidiary.
Section 5.26 FISCAL YEAR. American Ski and each Restricted Subsidiary
other than the Heavenly Subsidiaries and the Steamboat Subsidiaries has a fiscal
year which is the twelve-months ending on the last Sunday of July of each year;
the Heavenly Subsidiaries and the Steamboat Subsidiaries had a fiscal year which
was the twelve-months ending on May 31 of each year and effective with the
current fiscal year will have a fiscal year which is the twelve-months ending on
the last Sunday of July of each year.
Section 5.27 TAX STATUS. Each Borrower is a "C" corporation for all
purposes under the Code.
Section 5.28 CONSUMMATION OF PUBLIC OFFERING. American Ski has
successfully completed its initial public offering, the gross proceeds of which
are equal to or greater than the Minimum IPO Gross Proceeds.
Section 5.29 CONSUMMATION OF KAMORI ACQUISITION. The Kamori Acquisition
has been consummated in accordance with the terms of the Kamori Acquisition
Documents. American Ski hereby confirms and restates to the Agent and the
Lenders as if set forth herein in full the representations and warranties set
forth in Sections 4 and 5 of the Kamori Stock Purchase Agreement.
Section 5.30 CERBERUS PURCHASE AGREEMENT; CERBERUS AMENDMENT AND WAIVER
LETTER AGREEMENT; CERTIFICATE OF DESIGNATION. A true and complete copy of the
Cerberus Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement
and the Certificate of Designation has been delivered to the Agent. The
Cerberus Purchase Agreement, Series A Exchangeable Preferred Shares, the Senior
Exchangeable Notes, the Cerberus Amendment and Waiver Letter Agreement and the
101/2% Repriced Convertible Exchangeable Preferred Stock constitute the entire
agreement between Cerberus, Madeleine LLC and their affiliates, on the one hand,
and American Ski and its Restricted Subsidiaries and other Affiliates, on the
other hand, and there are no other agreements, instruments or understandings by
or between them. The Cerberus Purchase Agreement has not been modified, amended
or supplemented and no consents or waivers have been granted thereunder except
for the Cerberus Amendment and Waiver Letter Agreement. The Cerberus Amendment
and Waiver Letter Agreement has been duly executed and delivered by Madeleine
LLC and is enforceable against Madeleine LLC in accordance with its terms. The
Certificate of Designation has been duly authorized and filed by American Ski
and is enforceable against American Ski in accordance with its terms.
Section 5.31 WOLF ACQUISITION AGREEMENT. A true and complete copy of the
Wolf Acquisition Agreement has been delivered to the Agent. The Wolf
Acquisition Agreement has not been modified, amended or supplemented and no
consents or waivers have been granted thereunder.
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ARTICLE 6. REPORTS AND INFORMATION
Section 6.1 INTERIM FINANCIAL STATEMENTS AND REPORTS.
(a) As soon as available, and in any event within forty-five (45)
days after the end of each quarter of each fiscal year of American Ski, American
Ski shall furnish to the Agent and each Lender: (i) consolidated and
consolidating balance sheets of (A) American Ski and its Restricted
Subsidiaries, (B) ASC East and its Restricted Subsidiaries and (C) ASC West,
Inc. and its Restricted Subsidiaries, as of the end of such quarter and
consolidated and consolidating statements of operations, shareholders' equity
and cash flow of American Ski and its Restricted Subsidiaries for such quarter
and for the period commencing at the end of the previous fiscal year and ending
with the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal year,
all in reasonable detail; (ii) a Compliance Certificate; and (iii)
unconsolidated financial statements of the Unrestricted Subsidiaries similar to
the financial statements described in clause (i) above.
(b) As soon as available, but in any event not more than thirty (30)
days after the end of each month, American Ski shall furnish to the Agent and
each Lender (i) consolidated and consolidating profit and loss statements of
American Ski and each of its Restricted Subsidiaries for the period then ended
all in reasonable detail and (ii) unconsolidated profit and loss statements of
the Unrestricted Subsidiaries similar to the profit and loss statements
described in clause (i) above.
(c) Not more than seven (7) days after the end of each month, the
Borrowers shall furnish to the Agent and each Lender its then current
year-to-date internally prepared, unaudited profit plan report in the form
currently prepared by the Borrowers.
Section 6.2 ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within ninety (90) days after the end of each fiscal year of the
Borrowers, American Ski shall furnish to the Agent and each Lender: (a) audited
consolidated and consolidating balance sheets of (i) American Ski and its
Restricted Subsidiaries, (ii) ASC East and its Restricted Subsidiaries, (iii)
ASC West, Inc. and its Restricted Subsidiaries and (iv) American Ski and its
Subsidiaries, as of the end of such fiscal year, and consolidated and
consolidating statements of operations, shareholders' equity and cash flow of
(A) American Ski and its Restricted Subsidiaries and (B) American Ski and its
Subsidiaries, for such fiscal year, in each case (other than the consolidating
statements) reported on by Price Waterhouse LLP, or other independent certified
public accountants of recognized national standing acceptable to the Agent,
which report shall express, without reliance upon others, a positive opinion
regarding the fairness of the presentation of such financial statements in
accordance with generally accepted accounting principles consistently applied,
said report to be without qualification, except in cases of unresolved
litigation and accounting changes with which such accountants concur, together
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with the statement of such accountants that they have caused the provisions of
this Agreement and the other Lender Agreements to be reviewed and that nothing
has come to their attention to lead them to believe that any Default exists
hereunder or specifying any Default and the nature thereof; (b) a Compliance
Certificate; and (c) unconsolidated audited financial statements of the
Unrestricted Subsidiaries similar to the financial statements described in
clause (a) above. At the time of delivery of the annual audited financial
statements, American Ski shall furnish to the Agent and each Lender copies of
the written recommendations concerning the management, finances, financial
controls, or operations of any Borrower or any Restricted Subsidiary received
from American Ski's independent public accountants.
Section 6.3 ANNUAL BUDGET. On or before June 1 of each year, American
Ski shall furnish to the Agent and each Lender (a) consolidated and
consolidating projections of American Ski and its Restricted Subsidiaries and
(b) consolidated and consolidating projections of the proposed Capital
Expenditures (which proposed expenditures shall be consistent with the
limitations set forth in Section 9.7 hereof) of American Ski and its Restricted
Subsidiaries, in each case, for the immediately following fiscal year, prepared
on a month-by-month and quarter-by-quarter basis in accordance with generally
accepted accounting principles consistently applied to the extent applicable to
such projections and in such detail as the Agent may reasonably request.
Section 6.4 REPORTS OF SKIER VISITS. At the time of each delivery by
American Ski of (a) interim financial statements and reports under Section 6.1
hereof and (b) annual financial statements under Section 6.2 hereof shall
furnish to the Agent and the Lenders information setting forth (i) the number of
paid skier visits and unpaid skier visits to each ski resort or skiing facility
owned or operated by American Ski or any Restricted Subsidiary during each month
of the applicable fiscal period and for the fiscal year-to-date and (ii) in
comparative form the corresponding figures for the corresponding fiscal period
of the previous fiscal and for the corresponding year-to-date of such previous
fiscal year.
Section 6.5 NOTICE OF DEFAULTS. As soon as possible, and in any event
within five (5) days after the occurrence of each Default, American Ski shall
furnish to the Agent and each Lender the statement of their chief executive
officers or chief financial officers setting forth details of such Default and
the action which American Ski has taken or propose to take with respect thereto.
Section 6.6 NOTICE OF LITIGATION. Promptly after the commencement
thereof, American Ski shall furnish to the Agent and each Lender written notice
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting American Ski or any Restricted Subsidiary, which, if
adversely determined, would have a Material Adverse Effect.
Section 6.7 COMMUNICATIONS WITH OTHERS. If and when any debt or equity
security of American Ski or any Restricted Subsidiary is or is proposed to be
traded publicly, promptly
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after filing the same, American Ski shall furnish to the Agent and each Lender
copies of all regular, periodic and special reports and all registration
statements which American Ski or such Borrower files with the Commission or any
Governmental Authority which may be substituted therefor, or with any national
or regional securities exchange.
Section 6.8 REPORTABLE EVENTS. At any time that American Ski or any
Pension Affiliate has a Pension Plan, American Ski shall furnish to the Agent
and each Lender, as soon as possible, but in any event within thirty (30) days
after American Ski knows or has reason to know that any Reportable Event with
respect to any Pension Plan has occurred, the statement of the chief executive
officers or chief financial officers of American Ski setting forth the details
of such Reportable Event and the action which American Ski or any Pension
Affiliate has taken or proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event to the Pension Benefit Guaranty
Corporation.
Section 6.9 REPORTS TO OTHER CREDITORS. Promptly after filing the same,
American Ski shall furnish to the Agent and each Lender copies of any compliance
certificate and other information furnished to any other holder of the
securities (including the Senior Subordinated Notes, the Series A Exchangeable
Preferred Stock and the Senior Exchangeable Notes and any other debt
obligations) of American Ski or any Restricted Subsidiary pursuant to the terms
of any indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Agent or the Lenders pursuant to any other provision of
this Agreement.
Section 6.10 COMMUNICATIONS WITH INDEPENDENT PUBLIC ACCOUNTANTS. At any
reasonable time and from time to time upon reasonable request, American Ski
shall provide the Agent and the Lenders and any agents or representatives of the
Agent and the Lenders access to the independent public accountants of American
Ski and its Restricted Subsidiaries to discuss their financial condition,
including, without limitation any recommendations of such independent public
accountants concerning the management, finances, financial controls or
operations of American Ski and its Restricted Subsidiaries.
Section 6.11 ENVIRONMENTAL REPORTS. In the event that and to the extent
that any of the following provides notice of circumstances, occurrences or
events that have or could reasonably be expected to have a material impact on
the operations of any Borrower, American Ski or the Borrowers shall furnish to
the Agent and each Lender: (a) not later than seven (7) days after notice
thereof, notice of any enforcement actions, or, to the knowledge of American Ski
or any Borrower, threatened enforcement actions affecting American Ski or any
Restricted Subsidiary by any Governmental Authority related to Environmental
Laws; (b) copies, promptly after they are received, of all orders, notices of
responsibility, notices of violation, notices of enforcement actions, and
assessments, and other written communications pertaining to any such orders,
notices, claims and assessments received by American Ski or any Restricted
Subsidiary from any Governmental Authority; (c) not later than seven (7) days
after notice thereof, notice of any civil claims or threatened civil claims
affecting American Ski or any Restricted Subsidiary by any third party alleging
any violation of Environmental Laws or
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harm to human health, safety or the environment; (d) copies of all cleanup
plans, site assessment reports, response plans, remedial proposals, or other
submissions of American Ski or any Restricted Subsidiary, other third party
(e.g., committee of potentially responsible parties at a Superfund site), or any
combination of same, submitted to a Governmental Authority in response to any
communication referenced in subsections (a) and (b) herein simultaneously with
their submission to such Governmental Authority; and (e) from time to time, on
reasonable request of the Agent, evidence satisfactory to the Agent of American
Ski's and its Restricted Subsidiaries' insurance coverage, if any, for any
environmental liabilities.
Section 6.12. NOTICES UNDER CERTAIN AGREEMENTS. American Ski and its
Restricted Subsidiaries will provide the Agent with copies of all notices and
other written communications given or received by them under the Cerberus
Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement, the
Kamori Stock Purchase Agreement and the Wolf Acquisition Agreement to the extent
such notices relate to (a) defaults of American Ski or any Restricted Subsidiary
or any other party under such agreements, (b) events which with the giving of
notice or passage of time or both would constitute a default of American Ski or
any Restricted Subsidiary or any other party under such agreements, (c)
indemnification claims of American Ski or any Restricted Subsidiary under such
agreements or (d) other material transactions under such agreements. Without
limiting the generality of the foregoing, American Ski shall provide the Agent
with copies of the Preliminary September 30 Balance Sheets, the Cash Flow Notice
and the Capital Expenditure Notice (as such terms are defined in the Kamori
Stock Purchase Agreement) and written notice of any indemnification claims
pursuant to Section 10(b) of the Kamori Stock Purchase Agreement.
Section 6.13 MISCELLANEOUS. American Ski shall provide the Agent and the
Lenders with such other information as the Agent or the Lenders may from time to
time reasonably request respecting the business, properties, prospects,
condition or operations, financial or otherwise, of American Ski and its
Restricted Subsidiaries.
ARTICLE 7. FINANCIAL COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and its Restricted Subsidiaries shall
observe the following covenants:
Section 7.1 RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA.
(a) American Ski and its Restricted Subsidiaries shall maintain as of
the end of each fiscal quarter a ratio of (i) Consolidated Total Debt as of such
date to (ii) Consolidated EBITDA for the four-quarter period ending on such date
of not more than the following levels as of the fiscal quarters indicated:
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FISCAL QUARTER RATIO FISCAL QUARTER RATIO
-------------- ----- -------------- -----
1998 Quarter 1 6.00-to-1.00 2000 Quarter 3 4.00-to-1.00
1998 Quarter 2 6.00-to-1.00 2000 Quarter 4 4.50-to-1.00
1998 Quarter 3 5.50-to-1.00 2001 Quarter 1 4.50-to-1.00
1998 Quarter 4 5.50-to-1.00 2001 Quarter 2 4.50-to-1.00
1999 Quarter 1 5.50-to-1.00 2001 Quarter 3 4.00-to-1.00
1999 Quarter 2 5.50-to-1.00 2001 Quarter 4 4.00-to-1.00
1999 Quarter 3 4.50-to-1.00 Thereafter 4.00-to-1.00
1999 Quarter 4 5.00-to-1.00
2000 Quarter 1 5.00-to-1.00
2000 Quarter 2 5.00-to-1.00
(b) Until the Subordinated Notes Release Date, ASC East and its
Restricted Subsidiaries shall maintain as of the end of each fiscal quarter a
ratio of (i) ASC East Consolidated Total Debt as of such date to (ii) ASC East
Consolidated EBITDA for the four-quarter period ending on such date of not more
than the following levels as of the fiscal quarters indicated:
FISCAL QUARTER RATIO FISCAL QUARTER RATIO
-------------- ----- -------------- -----
1998 Quarter 1 6.00-to-1.00 2000 Quarter 3 4.00-to-1.00
1998 Quarter 2 6.00-to-1.00 2000 Quarter 4 4.50-to-1.00
1998 Quarter 3 5.50-to-1.00 2001 Quarter 1 4.50-to-1.00
1998 Quarter 4 5.50-to-1.00 2001 Quarter 2 4.50-to-1.00
1999 Quarter 1 5.50-to-1.00 2001 Quarter 3 4.00-to-1.00
1999 Quarter 2 5.50-to-1.00 2001 Quarter 4 4.00-to-1.00
1999 Quarter 3 4.50-to-1.00 Thereafter 4.00-to-1.00
1999 Quarter 4 5.00-to-1.00
2000 Quarter 1 5.00-to-1.00
2000 Quarter 2 5.00-to-1.00
Section 7.2 RATIO OF CONSOLIDATED ADJUSTED CASH FLOW TO CONSOLIDATED DEBT
SERVICE. American Ski and its Restricted Subsidiaries shall maintain as of the
end of each fiscal quarter for the four-quarter period ending on such date a
ratio of (a) Consolidated Adjusted Cash Flow to (b) Consolidated Debt Service of
not less than the following levels as of the end of any fiscal quarter during
the year indicated:
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Fiscal Year
Ending July Ratio
----------- -----
1998 1.05-to-1.00
1999 1.10-to-1.00
2000 1.20-to-1.00
2001 and Thereafter 1.25-to-1.00
Section 7.3 RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST
EXPENSE. American Ski and its Restricted Subsidiaries shall maintain as of the
end of each fiscal quarter for the four-quarter period ending on such date a
ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense of not
less than the following levels as of the end of any fiscal quarter during the
year indicated:
Fiscal Year
Ending July Ratio
----------- -----
1998 1.75-to-1.00
1999 2.25-to-1.00
2000 and Thereafter 2.50-to-1.00
Section 7.4 MINIMUM CONSOLIDATED NET WORTH.
(a) American Ski and its Restricted Subsidiaries shall maintain
minimum Consolidated Net Worth at all times of not less than the sum of
(a) $240,000,000 PLUS (b) 75% of cumulative Consolidated Net Income of American
Ski and its Restricted Subsidiaries for the period after July 31, 1997 PLUS
(c) all amounts received by American Ski or the Borrowers after the Closing Date
from the issuance of equity interests.
(b) ASC East and its Restricted Subsidiaries shall maintain at all
times minimum consolidated net worth (excluding from assets investments in
Unrestricted Subsidiaries) determined in accordance with generally accepted
accounting principles, of not less than $50,000,000.
ARTICLE 8. AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and its Restricted Subsidiaries will,
comply with the following covenants and provisions:
Section 8.1 EXISTENCE AND BUSINESS. American Ski and each Restricted
Subsidiary will (a) preserve and maintain its corporate or partnership existence
and qualify and remain
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qualified as a foreign corporation or partnership in each jurisdiction in which
such qualification is required except to the extent that any failure to remain
qualified as a foreign corporation or partnership would not have a Material
Adverse Effect, (b) preserve and maintain in full force and effect all material
rights, licenses, patents and franchises, (c) comply in all material respects
with all valid and applicable statutes, rules and regulations necessary for the
conduct of business and (d) engage only in the businesses which they are
conducting on the date of this Agreement (operation of all-season resort
properties, including related restaurant and retail operations, but excluding
the real estate development prohibited by Section 9.13 hereof); PROVIDED,
HOWEVER that a Restricted Subsidiary may merge into another Restricted
Subsidiary.
Section 8.2 TAXES AND OTHER OBLIGATIONS. American Ski and each
Restricted Subsidiary (a) will duly pay and discharge, or cause to be paid and
discharged, before the same shall become in arrears, all material taxes,
assessments and other governmental charges, imposed upon each of them and its
properties, sales and activities, or upon the income or profits therefrom, as
well as the claims for labor, materials, or supplies which if unpaid might by
law result in a lien or charge upon any of its properties; PROVIDED, HOWEVER,
that American Ski and any Restricted Subsidiary may contest any such charges or
claims in good faith so long as (i) an adequate reserve therefor has been
established and is maintained if and as required by generally accepted
accounting principles and (ii) no action to foreclose any such lien has been
commenced and (b) will promptly pay or cause to be paid when due, or in
conformance with customary trade terms (but not later than 60 days from the due
date in the case of trade debt), all material lease obligations, trade debt and
all other Indebtedness incident to its operations. American Ski and each
Restricted Subsidiary shall cause all applicable tax returns and all amounts due
thereunder to be filed and paid, as the case may be, in order to maintain its
good standing with the Internal Revenue Service and state, local and foreign tax
authorities.
Section 8.3 MAINTENANCE OF PROPERTIES AND LEASES. American Ski and each
Restricted Subsidiary shall maintain, keep and preserve all of its material
properties (tangible and intangible) in good repair and working order, ordinary
wear and tear excepted. American Ski and each Restricted Subsidiary shall
replace and improve its material properties as necessary for the conduct of its
business. American Ski and each Restricted Subsidiary shall comply in all
material respects with all leases naming it as lessee.
Section 8.4 INSURANCE. American Ski and each Restricted Subsidiary (a)
will keep its principal assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by fire,
explosion or hazards, by extended coverage in an amount sufficient to avoid
co-insurance liability and (b) will maintain with financially sound and
reputable insurers insurance against other hazards and risks and liability to
persons and property to the extent and in a manner satisfactory to the Lenders,
and in any event as customary for companies in similar businesses similarly
situated; PROVIDED, HOWEVER, that on prior notice to the Agent and the Lenders
it may effect workmen's compensation and general liability insurance through an
insurance fund operated by such state or jurisdiction and may also be a
self-insurer with respect to workmen's compensation and with respect to group
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medical benefits under any medical benefit plan. The provisions of the Security
Agreements relating to insurance shall not be limited by the provisions of this
Section 8.4. On request of the Agent from time to time, American Ski will
render to the Agent and the Lenders a statement in reasonable detail as to all
insurance coverage required by this Section 8.4. A description of the material
elements of insurance coverage of American Ski and its Restricted Subsidiaries
as of the date hereof is set forth on SCHEDULE 8.4.
Section 8.5 RECORDS, ACCOUNTS AND PLACES OF BUSINESS. American Ski and
each Restricted Subsidiary shall maintain comprehensive and accurate records and
accounts in accordance with generally accepted accounting principles
consistently applied. American Ski and each Restricted Subsidiary shall
maintain adequate and proper reserves. American Ski and each Restricted
Subsidiary shall promptly notify the Agent of (a) any changes in the places of
business of American Ski and any Restricted Subsidiary and (b) any additional
places of business which may arise hereafter.
Section 8.6 INSPECTION. At any reasonable time and from time to time,
American Ski and the Borrowers shall permit the Agent and the Lenders and any of
the Agent's and the Lenders' agents or representatives to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, American Ski and its Subsidiaries and to discuss the affairs,
finances and accounts of American Ski and any Subsidiary with any of their
officers or directors and with American Ski's and its Subsidiaries' independent
accountants. In addition, the Agent shall be entitled, and American Ski shall
permit the Agent, to conduct field examinations of American Ski and its
Restricted Subsidiaries, at the Borrowers' sole expense and at any time or times
in the Agent's sole discretion.
Section 8.7 MAINTENANCE OF ACCOUNTS. American Ski and its Restricted
Subsidiaries shall maintain their principal concentration and disbursement
accounts with the Agent.
Section 8.8 MAINTENANCE AND ASSIGNMENT OF LIFE INSURANCE. The
Restricted Subsidiaries shall maintain in full force and effect one or more life
insurance policies issued by insurers acceptable to the Agent (the "Otten Life
Insurance Policies") on the life of Leslie B. Otten in a minimum amount of
$14,000,000 and on other terms and conditions approved by the Agent, and such
policies shall be assigned to the Agent as security for the Lender Obligations.
Section 8.9 OWNERSHIP OF RESTRICTED SUBSIDIARIES. American Ski will
maintain legal and beneficial ownership, directly or indirectly, of 100% of the
equity interests of each of the Restricted Subsidiaries as described on SCHEDULE
8.9 hereto and with such exceptions as described on SCHEDULE 8.9 hereto.
Section 8.10 SURVEY AND SURVEYOR'S CERTIFICATE. Upon request of the
Agent upon a Default not cured within any applicable cure period, or in the
event that the Agent determines in its reasonable judgment that a survey is
required to assure the location of future
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improvements constructed by American Ski or a Restricted Subsidiary on the
Mortgaged Properties, American Ski shall provide the Agent with an instrument
survey of the affected Mortgaged Property, such survey to be satisfactory to the
Agent in form and substance and with respect to each survey, a certificate
executed by the surveyor who prepares such survey dated as of a recent date and
containing such information relating to the affected Mortgaged Property as the
Agent or the title insurance company may require, such certificate to be
satisfactory to the Agent in form and substance and sufficient to obtain the
deletion of the survey exception in the title insurance policy furnished to the
Agent with respect to the affected Mortgage Property.
Section 8.11 APPRAISALS.
(a) The sum of (i) the Term Loans, (ii) the Maximum Revolving Credit
Amount, (iii) the Letter of Credit Exposure and (iv) the outstanding amount of
all other Indebtedness secured by any assets of the Borrowers (including secured
Subordinated Indebtedness) shall not at any time exceed seventy-five percent
(75%) of the Appraised Value of the Collateral (the "Loan to Value Ratio"). If
at any time the Loan to Value Ratio exceeds 75%, then the Borrowers, jointly and
severally, shall promptly (but no later than sixty (60) days thereafter, either
(i) reduce the sum of such outstanding commitments or Indebtedness to a point
where the Loan to Value Ratio is less than 75% or (ii) provide the Agent with
additional Collateral satisfactory to the Agent in its discretion, and at the
expense of American Ski, such that the 75% Loan to Value Ratio is satisfied.
(b) Upon the occurrence of and during any continuance of an Event of
Default, the Agent shall have the right to obtain, at the cost and expense of
the Borrowers and American Ski, updated appraisals of the Collateral, PROVIDED
that the Borrowers and American Ski shall not be obligated to pay for the costs
and expenses associated with more than one such appraisal during any twelve (12)
month period. The costs and expenses incurred by the Agent in obtaining such
appraisals shall be paid by the Borrowers and American Ski, jointly and
severally, forthwith upon billing or request by the Agent for reimbursement
therefor.
Section 8.12 LEASE RENEWAL. The Borrowers will renew all leases set
forth on SCHEDULE 8.12 in accordance with their terms.
Section 8.13 USE OF IPO PROCEEDS. American Ski will use all net proceeds
of the Minimum IPO Gross Proceeds and will use all Restricted Excess IPO
Proceeds (a) to make Investments in its Restricted Subsidiaries for use by them
in their ski and lodging operations including, without limitation, the
consummation of the Kamori Acquisition and (b) to redeem the 133/4% Subordinated
Notes in full on or before December 30, 1997. American Ski may use Unrestricted
Excess IPO Proceeds for any lawful purpose not expressly prohibited hereunder
with respect to use of Unrestricted Excess IPO Proceeds.
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Section 8.14 ENVIRONMENTAL AND LAND USE COMPLIANCE. American Ski and the
Borrowers, jointly and severally, will undertake and diligently pursue to
completion the environmental and land use cleanup, compliance and permit
requirements described on SCHEDULE 8.14 attached hereto and incorporated herein
by reference and will provide the Agent with documentation confirming the
completion of the specified tasks by the dates specified for each task
referenced on said SCHEDULE 8.14. In addition, with each Compliance
Certificate, American Ski shall provide the Agent with a report as to the status
of their compliance and their efforts to comply with the obligations specified
on SCHEDULE 8.14, and any information relevant to their ability or inability to
obtain compliance with a particular obligation by the requisite scheduled date,
any other environmental or land use cleanup, compliance or permit related matter
which arises subsequent to the date hereof and which remains unresolved to the
satisfaction of the Agent as of the date of the applicable Compliance
Certificate.
Section 8.15 INTEREST RATE PROTECTION. No later than 90 days after the
Closing Date, American Ski will enter into Interest Rate Protection Agreements
on notional amounts for not less than $52,500,000 at a rate and on terms
satisfactory to the Agent.
Section 8.16 INDEPENDENCE OF UNRESTRICTED SUBSIDIARIES. American Ski and
its Restricted Subsidiaries will conduct their business and operations
separately from that of the Unrestricted Subsidiaries and will cause the
Unrestricted Subsidiaries to conduct their business and operations separately
from that of American Ski and its Restricted Subsidiaries, by (a) not
commingling funds or other assets, (b) maintaining separate corporate and
financial records and observing all corporate formalities, (c) paying their
respective liabilities from their respective assets, except pursuant to any
guarantees extended by the Restricted Subsidiaries of obligations of
Unrestricted Subsidiaries and permitted hereunder, (d) maintaining
capitalization adequate to meet their respective business needs and (e)
conducting contractual dealings with third parties in their respective names and
as separate and independent entities.
Section 8.17 REDEMPTION OR EXCHANGE OF SENIOR SUBORDINATED NOTES. In the
event that the Senior Subordinated Notes are redeemed or exchanged on terms
reasonably acceptable to the Majority Lenders, the Security Agreements will be
amended to provide that they secure all Lender Obligations and all American
Ski - West Lender Obligations and the Borrowers will execute security agreements
in substantially the form of EXHIBIT E-2 hereto securing all American Ski - West
Lender Obligations and all other necessary and related documents.
Section 8.18 FOREST SERVICE PERMITS. The Borrowers hold certain rights
under and by virtue of the Term Special Use Permits issued to the applicable
Borrower by the Forest Service of the United States Department of Agriculture
listed on SCHEDULE 8.18 hereto (individually a "Forest Service Permit" and
collectively the "Forest Service Permits"). The Borrowers will make no changes,
alterations or amendments to any Forest Service Permit without the prior written
consent of the Agent and except as would not have or reasonably be expected to
have a material impact on the operations of any Borrower; PROVIDED, HOWEVER,
that changes or alterations in any master plan provided under or incorporated by
reference in any Forest
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Service Permit will not constitute changes, alterations or amendments under this
Section 8.18. Each Borrower will well and truly perform, or cause to be
performed, all of its material obligations and agreements under the Forest
Service Permits and under any renewals or extensions thereof and will not do or
suffer anything which will impair any Forest Service Permit or which would be a
Default hereunder.
Section 8.19 FURTHER ASSURANCES. American Ski and each Restricted
Subsidiary will cooperate with the Agent and the Lenders and execute such
further instruments and documents as the Agent or the Lenders shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Lender Agreements.
ARTICLE 9. NEGATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and the Borrowers, jointly and
severally, covenant that neither American Ski nor any Restricted Subsidiary
will:
Section 9.1 RESTRICTIONS ON INDEBTEDNESS. Create, incur, suffer or
permit to exist, or assume or guarantee, either directly or indirectly, or
otherwise become or remain liable with respect to, any Indebtedness, except the
following:
(a) Indebtedness to the Lenders and the Agent under this Agreement,
the Term Loan Notes, the Revolving Credit Notes, the other Lender Agreements and
the American Ski - West Credit Agreement, the notes issued thereunder and the
American Ski - West Security Documents.
(b) Indebtedness (i) described on SCHEDULE 5.16 hereto and (ii) any
renewals, extensions and refundings thereof which do not increase the amount
thereof, extend the weighted average maturity of any thereof by more than 25%,
provide any collateral in excess of collateral currently securing such
Indebtedness or grant, modify or amend any rights, remedies or interests of the
holders thereof in a manner materially adverse to the interests of the Agent or
the Lenders.
(c) The Senior Subordinated Notes and the subordinated guaranties of
the Borrowers with respect thereto.
(d) The Series A Exchangeable Preferred Stock, the Senior
Exchangeable Notes and the 101/2% Repriced Convertible Exchangeable Preferred
Stock.
(e) Subordinated Indebtedness incurred to the sellers of assets or
stock in connection with Permitted Acquisitions, PROVIDED that such Indebtedness
is unsecured, has a
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cash interest rate of not greater than 12% per annum, has no scheduled
amortization until after payment in full of all Lender Obligations and is
subordinated to the prior payment in full in cash of all Lender Obligations on
terms and conditions approved in writing by the Agent.
(f) (i) Real Estate Guaranties; provided that the sum of Real Estate
Guaranties and Direct Unrestricted Subsidiary Investments shall not exceed
$25,000,000 at any time;
(ii) (A) Capitalized Lease Obligations and (B) Indebtedness of
the Borrowers to purchase tangible assets to be used in the Borrower's
operations in an amount not to exceed 100% of the purchase price of such
assets, which Indebtedness may be secured by the assets so purchased but by
no other assets; PROVIDED, HOWEVER, that the aggregate amount under clauses
(A) and (B) of this Section 9.1(f)(ii) shall not exceed $50,000,000;
(iii) Indebtedness of Persons that become Restricted
Subsidiaries in connection with Permitted Acquisitions and not incurred in
anticipation of such Permitted Acquisitions in an aggregate amount not to
exceed $50,000,000; and
(iv) Other unsecured Indebtedness in an amount not to exceed
$25,000,000;
PROVIDED, HOWEVER, that the total amount of all Indebtedness outstanding at any
time under this clause (f) shall not exceed $100,000,000.
(g) Indebtedness consisting of indemnification and price adjustment
obligations incurred in connection with Permitted Acquisitions.
(h) Indebtedness on account of consolidated current liabilities
(other than for money borrowed) incurred in the normal and ordinary course of
business.
(i) Indebtedness in respect of (i) taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment thereof shall not at the time be required to be made in accordance
with the provisions of Section 8.2 hereof, (ii) judgments or awards which have
been in force for less than the applicable appeal period so long as execution is
not levied thereunder or in respect of which American Ski or the Restricted
Subsidiary subject to such judgment or award shall at the time in good faith be
prosecuting an appeal or proceedings for review in a manner satisfactory to the
Agent and in respect of which a stay of execution shall have been obtained
pending such appeal or review and for which adequate reserves have been
established in accordance with generally accepted accounting principles and
(iii) endorsements made in connection with the deposit of items for credit or
collection in the ordinary course of business.
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(j) Indebtedness consisting of intercompany loans among (i) ASC East
and its Restricted Subsidiaries and (ii) ASC West, Inc. and any Restricted
Subsidiaries of American Ski, provided that the aggregate outstanding principal
amount of all such loans shall not exceed $5,000,000 and no such loan shall be
evidenced by a promissory note or other instrument unless such note has been
pledged and delivered to the Agent as security for the Lender Obligations on
terms and conditions acceptable to the Agent.
(k) Indebtedness of American Ski and its Restricted Subsidiaries
under Interest Rate Protection Agreements entered into to protect American Ski
and its Restricted Subsidiaries against fluctuations in interest rates so long
as management of American Ski and its Restricted Subsidiaries has determined
that the entering into of such Interest Rate Protection Agreements are bona fide
hedging activities and the notional amount thereof does not exceed the principal
amount of the Consolidated Term Loans.
(l) Payment and performance bonds entered into in the ordinary course
of business in support of the activities of ASC East, ASC Utah, ASC West, Inc.
and their Restricted Subsidiaries.
Section 9.2 RESTRICTION ON LIENS. Create or incur or suffer to be
created or incurred or permit to exist any encumbrance, mortgage, pledge, lien,
charge or other security interest of any kind upon any of its property or assets
of any character, whether now owned or hereafter acquired, or transfer any of
such property or assets for the purposes of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to payment of
its general creditors, or acquire or agree or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement (including Capitalized Leases) or suffer to exist for a
period of more than 30 days after the same shall have been incurred any
Indebtedness against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over the claims of
its general creditors, or sell, assign, pledge or otherwise transfer for
security any of its accounts, contract rights, general intangibles, or chattel
paper (as those terms are defined in the UCC) with or without recourse (each of
the foregoing, a "Lien"); PROVIDED, HOWEVER, that any Borrower or any Restricted
Subsidiary may create or incur or suffer to be created or incurred or permit to
exist the following (the "Permitted Liens"):
(a) Liens described on SCHEDULE 5.16 securing certain existing
Indebtedness and any renewals, extensions and refundings thereof which do not
increase the amount thereof, extend such lien to any other property or assets of
American Ski or the Borrowers or grant, modify or amend any rights, remedies or
interests of the holders thereof in a manner materially adverse to the interests
of the Agent or the Lenders.
(b) Purchase money security interests (which term shall include
mortgages, conditional sale contracts, Capitalized Leases and all other title
retention or deferred purchase devices) to secure the purchase price of property
acquired hereafter by any Borrower or any
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Restricted Subsidiary, or to secure Indebtedness incurred solely for the purpose
of financing such acquisitions; PROVIDED, HOWEVER, that no such purchase money
security interests shall extend to or cover any property other than the property
the purchase price of which is secured by it, and that the principal amount of
Indebtedness (whether or not assumed) with respect to each item of property
subject to such a security interest shall not exceed the fair value of such item
on the date of its acquisition; and liens securing Indebtedness permitted under
Section 9.1(f)(iii) on assets acquired in connection with Permitted Acquisitions
and subject to such liens from the incurrence of such Indebtedness.
(c) Deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or other
social security; liens in respect of judgments or awards to the extent such
judgments or awards are permitted as Indebtedness by the provisions of Section
9.1(i); and liens for taxes, assessments or governmental charges or levies and
liens to secure claims for labor, material or supplies and liens securing
obligations to carriers, warehousemen and mechanics to the extent that payment
thereof shall not at the time be required to be made in accordance with Section
8.2.
(d) Encumbrances in the nature of zoning restrictions, easements, and
rights or restrictions of record on the use of real property which do not
materially detract from the value of such property or impair its use in the
business of the owner or lessee.
(e) Liens (other than judgments and awards) created by or resulting
from any litigation or legal proceeding which has not yet resulted in an Event
of Default, PROVIDED that the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being actively contested
in good faith by appropriate proceedings satisfactory to the Agent.
(f) Liens arising by operation of law to secure landlords, lessors or
renters under leases or rental agreements made in the ordinary course of
business and confined to the premises or property rented.
(g) Liens in favor of the Agent for the benefit of the Lenders
securing the Lender Obligations and the obligations of the American Ski West
Loan Parties to the Lenders and the Agent, as and when such Liens are
established.
(h) Other Liens not otherwise permitted hereunder securing
Indebtedness in an amount not to exceed $5,000,000.
Nothing contained in this Section 9.2 shall permit American Ski, the Borrowers
or any Restricted Subsidiary to incur any Indebtedness or take any other action
or permit to exist any other condition which would be in contravention of any
other provision of this Agreement.
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Section 9.3 INVESTMENTS. Have outstanding or hold or acquire or make or
commit itself to acquire or make any Investment except the following:
(a) Existing Investments in Subsidiaries described on SCHEDULE 5.4
and other existing Investments described on SCHEDULE 9.3.
(b) Investments having a maturity of less than one year from the date
thereof by the Borrower or any Restricted Subsidiary in: (i) obligations of the
Agent or any of the Lenders; (ii) obligations of the United States of America or
any agency or instrumentality thereof; (iii) repurchase agreements involving
securities described in clauses (i) and (ii) with the Agent or any of the
Lenders; and (iv) commercial paper which is rated not less than prime-one or A-1
or their equivalents by Moody's Investor Service, Inc. or Standard & Poor's
Corporation, respectively, or their successors.
(c) Investments of Unrestricted Excess IPO Proceeds in accordance
with the investment policy attached hereto as SCHEDULE 9.3 on or before May 12,
1998 and any reinvestments thereof.
(d) Investments in Restricted Subsidiaries or other assets as a
result of Permitted Acquisitions.
(e) Investments received as consideration from the sale of assets
otherwise permitted hereunder, which Investments are pledged to the Agent on
terms and conditions acceptable to the Agent.
(f) Investments consisting of advances to employees in the ordinary
course of business in an amount not to exceed $2,000,000 in the aggregate at any
time outstanding.
(g) Investments consisting of Interest Rate Protection Agreements to
the extent permitted under Section 9.1(k).
(h) Guaranties to the extent permitted under Section 9.1(f)(i) and
(iv) and Section 9.5.
(i) Investments of American Ski in Unrestricted Subsidiaries, as
follows:
(i) Direct Unrestricted Subsidiary Investments; PROVIDED that
the sum of Direct Unrestricted Subsidiary Investments and Real Estate
Guaranties shall not exceed $25,000,000 at any time;
(ii) Indirect Unrestricted Subsidiary Investments in an amount
not to exceed $25,000,000; PROVIDED that the aggregate amount of the
Investments under clauses (i) above and this clause (ii) shall not exceed
$40,000,000, except that if
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American Ski has Consolidated EBITDA in any immediately preceding fiscal
year of $75,000,000, this restriction shall not apply to Investments made
in the then current fiscal year; and
(iii) Investments in Unrestricted Subsidiaries, on or before May
12, 1998, made from Unrestricted Excess IPO Proceeds in accordance with the
investment policy attached hereto as SCHEDULE 9.3.
(j) Investments acquired in connection with the bankruptcy or workout
of account debtors.
(k) Investments consisting of (i) Pico's ownership of (A) 2001 shares
of the capital stock of Uplands Water, constituting approximately 95% of the
issued and outstanding capital stock thereof and (B) 61 shares of the capital
stock of Alpine Pipeline and all related wastewater disposal units, (ii)
Sugarloaf Mountain Corporation's ownership of a 10% interest in Sugarloaf Land
Partners I and a 10% interest in Sugarloaf Land Partners II, (iii) Steamboat
Ski & Resort Corporation's ownership of a 50% interest in Country Club Highlands
Partnership and (iv) ASC Utah's rights to acquire stock in Community Water
Company.
(l) Investments of American Ski in its Restricted Subsidiaries.
(m) Other Investments in an aggregate amount not to exceed
$5,000,000.
Section 9.4 MERGERS, ACQUISITIONS, ETC. Enter into any merger or
consolidation with or acquire all or substantially all of the assets of any
Person, or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, except for (a)
the merger of a Restricted Subsidiary into another Restricted Subsidiary, (b)
acquisitions approved in writing by the Majority Lenders and (c) Permitted
Acquisitions.
Section 9.5 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate, except that American Ski and its
Restricted Subsidiaries (a) may pay reasonable salaries, fees and bonuses to
their directors, officers and employees as are usual and customary in American
Ski's or its Restricted Subsidiaries' business, (b) may enter into transactions
among each other on terms that are not materially less favorable to American Ski
or any Restricted Subsidiary than those which could be obtained at the time from
Persons who are not Affiliates and which transactions (to the extent in excess
of $250,000 for each transaction or a series of related transactions) are
disclosed to the Agent in Compliance Certificates, (c) may enter into
Investments permitted under Section 9.3(i) hereof and Real Estate Guaranties
permitted under Section 9.1(h) hereof, and (d) American Ski and its Restricted
Subsidiaries may enter into and perform their obligations under the Lender
Agreements and the American Ski - West Lender Agreements.
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Section 9.6 DISTRIBUTIONS. Make any Distribution or make any other
payment on account of the purchase, acquisition, redemption, or other retirement
of any shares of stock, whether now or hereafter outstanding, except that (a)
American Ski may make Distributions not to exceed, in the aggregate, 50% of
cumulative Consolidated Net Income after July 31, 1997 PROVIDED, that after
giving pro forma effect to such Distribution, the ratio of Consolidated Total
Debt to Consolidated EBITDA does not exceed 4.0-to-1 and ASC East, ASC West,
Inc. and ASC Utah may make lawful Distributions to American Ski in an aggregate
amount equal to the Distributions which American Ski is entitled to make under
this clause (a) and PROVIDED further that no Default shall exist at the time of
or be caused by any such Distribution; (b) ASC East may pay the principal amount
of the Otten Tax Note and accrued interest thereon in accordance with its terms
at the times and to the extent permitted under the Otten Subordination
Agreement; and (c) Restricted Subsidiaries of American Ski may make
Distributions to other Restricted Subsidiaries of American Ski.
Section 9.7 CAPITAL EXPENDITURES. Make any Capital Expenditure except
that:
(a) For the period commencing on the Closing Date and ending on April
30, 1998, American Ski and its Restricted Subsidiaries may make or commit to
make Capital Expenditures of not more than $25,000,000, of which not more than
25% may be used for Real Estate Capital Expenditures.
(b) For the trailing four-quarter period ending on April 30, 1999 and
each April 30 thereafter, the following limits shall apply to the Capital
Expenditures of American Ski and its Restricted Subsidiaries:
(i) If the Capital Expenditure Ratio as of April 30, 1998 and
any April 30 thereafter is less than 3.0-to-1, no overall limit shall
apply, except that Real Estate Capital Expenditures shall be limited to 25%
of the Additional Capital Expenditure Amount.
(ii) If the Capital Expenditure Ratio as of April 30, 1998 and
any April 30 thereafter is equal to or greater than 3.0-to-1, the limit
shall be the sum of (A) the Base Capital Expenditure Amount PLUS (B) the
Capital Expenditure Reinvestment Amount PLUS (C) the Additional Capital
Expenditure Amount.
(c) American Ski and its Restricted Subsidiaries may use the
Unrestricted Excess IPO Proceeds to make any Capital Expenditures.
Section 9.8 DISPOSITIONS OF ASSETS. Sell, lease or otherwise dispose of
any assets except for (a) the sale, lease or other disposition of inventory,
including residential real property held for resale, in the ordinary course of
business and (b) the Permitted Dispositions.
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Section 9.9 ASSUMPTIONS, GUARANTIES, ETC. OF INDEBTEDNESS OF OTHER
PERSONS. Assume, guarantee, endorse or otherwise be or become directly or
contingently liable (including, without limitation, by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection with any Indebtedness of any other Person,
except for (a) Real Estate Guaranties and (b) Guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
Section 9.10 ERISA. At any time while American Ski or any of its
Subsidiaries has a Pension Plan, permit any accumulated funding deficiency to
occur with respect to any Pension Plan or other employee benefit plans
established or maintained by American Ski or any of its Subsidiaries or to which
contributions are made by the American Ski or any of its Subsidiaries (the
"Plans"), and which are subject to the "Pension Reform Act" and the rules and
regulations thereunder or to Section 412 of the Internal Revenue Code, and at
all times comply in all material respects with the provisions of the Act and
Code which are applicable to the Plans. American Ski will not permit the
Pension Benefit Guaranty Corporation to cause the termination of any Pension
Plan under circumstances which would cause the lien provided for in Section 4068
of the Pension Reform Act to attach to the assets of American Ski or any of its
Subsidiaries.
Section 9.11 SALE AND LEASEBACK. Sell or transfer any of its properties
with the intention of taking back a lease of the same property or leasing other
property for substantially the same use as the property being sold or
transferred.
Section 9.12 RESTRICTIVE OR INCONSISTENT AGREEMENTS. Enter into any
agreement (a) other than the Lender Agreements, the ASC - West Lender
Agreements, the Senior Subordinated Notes Indentures, the Cerberus Purchase
Agreement and the Cerberus Amendment and Waiver Letter Agreement which, directly
or indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining or otherwise imposes any materially adverse or burdensome condition
upon, the declaration or payment of dividends or distributions, the incurrence
of Indebtedness, the granting of liens, the making of loans or advances to
American Ski or any of its Restricted Subsidiaries or the amendment or
modification of any of the Lender Agreements or (b) containing any provision
that would be violated or breached by any Loan or the performance by American
Ski or any of its Restricted Subsidiaries of its obligations hereunder or under
any of the Lender Agreements.
Section 9.13 LIMITATIONS ON REAL ESTATE OPERATIONS. Engage in any real
estate development activities involving acquisition of land intended for resale
(except incident to a Permitted Acquisition) or development of residential
subdivisions, condominium units, hotels or related infrastructure and utilities,
except through the Unrestricted Subsidiaries and except for the permitted Real
Estate Capital Expenditures.
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Section 9.14 FISCAL YEAR. Change their fiscal year from the twelve-month
period ending on the last Sunday of July of each year.
Section 9.15 LIMITATION ON EXCESS PROCEEDS. So long as applicable,
permit Excess Proceeds (as defined in the Senior Subordinated Notes Indentures)
at any time to exceed $7,500,000.
Section 9.16 NO AMENDMENT OF SUBORDINATED NOTES; CERBERUS PURCHASE
AGREEMENT; CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT. Enter into any
amendment, modification or waiver of any of the terms or provision of Senior
Subordinated Notes or the Senior Subordinated Notes Indentures without the prior
written consent of the Majority Lenders. American Ski will not modify, amend or
supplement, or agree to any consent or waiver of any of the provisions of, the
Cerberus Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement
and the Certificate of Designation without the prior written consent of the
Majority Lenders.
Section 9.17 EXCHANGE OF CERBERUS 101/2% REPRICED CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK AND AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT PENALTIES. Exercise its rights under Section 7 of the Certificate of
Designation to convert the Cerberus 101/2% Repriced Convertible Exchangeable
Preferred Stock into 101/2% Repriced Subordinated Debentures (as defined in the
Certificate of Designation) without the prior written consent of the Majority
Lenders or incur any Registration Delay Fees (as defined in the Amended and
Restated Registration Rights Agreement) pursuant to Section 2.1(b) of the
Amended and Restated Registration Rights Agreement without the prior written
consent of the Agent.
Section 9.18 LIMITATION ON ISSUANCE OF CAPITAL STOCK. American Ski will
not, and will not permit any of its Restricted Subsidiaries to, issue (a) any
class of preferred stock (other than the Series A Exchangeable Preferred Stock
or the 101/2% Repriced Convertible Exchangeable Preferred Stock) or (b) any
class of redeemable (except at the sole option of American Ski or such
Restricted Subsidiary) common stock.
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES
Section 10.1 EVENTS OF DEFAULT. Each of the following events shall be
deemed to be Events of Default hereunder:
(a) American Ski or any Restricted Subsidiary shall fail to make any
payment in respect of (i) the principal of any of the Lender Obligations as the
same shall become due, whether at the stated payment dates, required prepayment
or by acceleration, demand or otherwise, or (ii) interest or commitment fees on
or in respect of any of the Lender Obligations as the same shall become due, and
such failure shall continue for a period of five (5) days.
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(b) American Ski or any Restricted Subsidiary shall fail to perform
or observe any of the terms, covenants, conditions or provisions of Articles 6,
7, 8 or 9 hereof; PROVIDED, HOWEVER, that with respect to the terms, covenants,
conditions and provisions of Article 6 only (except for Sections 6.5, 6.6 and
6.11), the Agent shall notify American Ski of American Ski's failure to provide
the required reports when due and the Agent shall allow American Ski five (5)
days to comply with the terms, covenants, conditions and provisions of Article
6.
(c) American Ski or any Restricted Subsidiary shall fail to perform
or observe any other term, covenant, condition or provision to be performed or
observed by American Ski or any Restricted Subsidiary under this Agreement or
any other Lender Agreement, and such failure shall not be rectified or cured to
the Agent's satisfaction within thirty (30) days after written notice thereof to
American Ski.
(d) Any representation or warranty of American Ski or any Restricted
Subsidiary herein or in any other Lender Agreement or any amendment to any
thereof shall have been materially false or misleading at the time made or
intended to be effective.
(e) American Ski or any Restricted Subsidiary (i) shall fail to make
any payment of principal of or interest on Indebtedness for money borrowed of
American Ski or any Restricted Subsidiary with an outstanding principal amount
of greater than $2,000,000 or any Guaranty of money borrowed with an outstanding
principal amount of greater than $2,000,000 when such payment is due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) or
shall fail to perform or observe any provision of any agreement or instrument
relating to such Indebtedness, and such failure shall permit the holder thereof
to accelerate such Indebtedness or (ii) shall fail to observe or perform its
covenants, agreements and obligations under any other material lease or other
agreement by which it is bound.
(f) American Ski or any Restricted Subsidiary shall be involved in
financial difficulties as evidenced:
(i) by its commencement of a voluntary case under Title 11 of
the United States Code as from time to time in effect, or by its
authorizing, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case;
(ii) by its filing an answer or other pleading admitting or
failing to deny the material allegations of a petition filed against it
commencing an involuntary case under said Title 11, or seeking, consenting
to or acquiescing in the relief therein provided, or by its failing to
controvert timely the material allegations of any such petition;
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(iii) by the entry of an order for relief in any involuntary
case commenced under said Title 11;
(iv) by its seeking relief as a debtor under any applicable law,
other than said Title 11, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or acquiescing in such relief;
(v) by the entry of an order by a court of competent
jurisdiction (1) finding it to be bankrupt or insolvent, (2) ordering or
approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors or (3) assuming custody of, or appointing a
receiver or other custodian for all or a substantial part of its property
and such order shall not be vacated or stayed on appeal or otherwise stayed
within 30 days;
(vi) by the filing of a petition against American Ski or any
Restricted Subsidiary under said Title 11 which shall not be vacated within
30 days; or
(vii) by its making an assignment for the benefit of, or
entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all or a
substantial part of its property.
(g) There shall have occurred a judgment against American Ski or any
Restricted Subsidiary in any court (i) for an amount in excess of $2,000,000 and
from which no appeal has been taken or with respect to which all appeal periods
have expired, unless such judgment is, to the Agent's satisfaction, insured
against in full (less the applicable policy deductible) or (ii) which shall have
a Material Adverse Effect.
(h) Leslie B. Otten shall cease to serve actively as a director and
full-time chief executive officer of American Ski and each Borrower, whether by
reason of death, disability, resignation, action by the Board of Directors, or
otherwise, and in the case of his death or disability only, the passage of 120
days after such event.
(i) The Otten Shareholders shall cease to own of record and
beneficially at least 25% of the issued and outstanding capital stock of
American Ski, on a fully diluted basis.
(j) Any person or group of persons within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended, other than the Otten
Shareholders, shall own of record or beneficially more than 35% of the issued
and outstanding capital stock of American Ski.
(k) The Otten Shareholders shall cease to have the power to elect
two-thirds of the directors of American Ski.
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(l) American Ski shall cease to own, directly or indirectly, of
record and beneficially all of the issued and outstanding capital stock of any
Material Restricted Subsidiary, except as a result of a Permitted Disposition or
the exercise of the Sugarloaf warrants described on SCHEDULE 8.9 hereto. For
purposes of this Section 10.1(l), a "Material Restricted Subsidiary" shall mean
a Restricted Subsidiary (i) whose assets constitute greater than 5% of the
consolidated assets of American Ski and its Restricted Subsidiaries or (b) whose
revenues contributed greater than 5% of the consolidated revenues of American
Ski and its Restricted Subsidiaries for any fiscal year during the preceding
three fiscal years.
(m) Any "Event of Default" under any other Lender Agreement or any of
the American Ski - West Lender Agreements shall have occurred.
(n) Any of the Lender Agreements or the American Ski - West Lender
Agreements shall be canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Agent; or any Lender Agreement, or any Lien granted
thereunder, shall (except in accordance with its terms or the terms of this
Agreement), in whole or in part, terminate, cease to be effective or cease to be
the legally valid, binding and enforceable obligation of any Borrower or
Guarantor; or any Lien securing any Lender Obligation shall, in whole or in
part, cease to be a perfected first priority Lien, subject only to those
exceptions expressly permitted by a Lender Agreement or the terms of this
Agreement and except to the extent that any such Lien has ceased to be a
perfected first priority Lien solely due to an act or omission by the Agent or a
Lender; or any action at law suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Lender Agreements or the American Ski -
West Lender Agreements shall be commenced by or on behalf of American Ski or any
Restricted Subsidiary, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a determination that,
or issue a judgment, order, decree or ruling to the effect that, any one or more
of the Lender Agreements or American Ski - West Lender Agreements is illegal,
invalid or unenforceable in accordance with the terms thereof.
(o) American Ski or any Restricted Subsidiary shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any assets
of American Ski or such Restricted Subsidiary.
(p) American Ski or ASC West, Inc. shall make a claim for
indemnification under the Kamori Stock Purchase Agreement in an amount in excess
of $250,000.
(q) The subordination provisions relating to any Subordinated
Indebtedness shall fail to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms thereof,
or the principal or interest on any Lender Obligation shall fail to constitute
Senior Indebtedness (or similar term, as defined in any such Subordinated
Indebtedness) or any Borrower, Guarantor, Restricted Subsidiary or any holder of
Subordinated Indebtedness shall, directly or indirectly, disavow or contest in
any manner (i)
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the effectiveness, validity or enforceability of any of the provisions of the
Subordinated Indebtedness, (ii) that any of such provisions of Subordinated
Indebtedness exist for the benefit of the Agent and each Lender or (iii) that
all payments of principal or interest with respect to any such Subordinated
Indebtedness made by the Borrower, any Guarantor or any Restricted Subsidiary,
or realized from the liquidation of any property of the Borrower, any Guarantor
or any Restricted Subsidiary, shall be subject to any of such provisions of
Subordinated Indebtedness.
Section 10.2 REMEDIES. Upon the occurrence of an Event of Default, in
each and every case, the Agent may, and upon the request of the Majority Lenders
shall, proceed to protect and enforce the rights of the Agent and the Lenders by
suit in equity, action at law and/or other appropriate proceeding either for
specific performance of any covenant or condition contained in this Agreement or
any other Lender Agreement or in any instrument delivered to the Agent or the
Lenders pursuant hereto or thereto, or in aid of the exercise of any power
granted in this Agreement, any Lender Agreement or any such instrument, and
(unless there shall have occurred an Event of Default under Section 10.1(f), in
which case the unpaid balance of the Lender Obligations shall automatically
become due and payable without notice or demand) by notice in writing to the
Borrowers (a) declare the obligations of the Lenders to make Revolving Credit
Advances, the obligation of the Swing Line Lender to make Swing Line Loans and
the obligations of the Issuing Bank to issue, extend or renew Letters of Credit
to be terminated, whereupon such obligations shall be terminated, (b) declare
all or any part of the unpaid balance of the Lender Obligations then outstanding
to be forthwith due and payable, whereupon such unpaid balance or part thereof
shall become so due and payable without presentation, protest or further demand
or notice of any kind, all of which are hereby expressly waived, and the Agent
may proceed to enforce payment of such balance or part thereof in such manner as
the Agent may elect, and the Agent and each Lender may offset and apply toward
the payment of such balance or part thereof any Indebtedness of the Agent or any
Lender to any Borrower or to any Subsidiary, or to any obligor of the Lender
Obligations, including any Indebtedness represented by deposits in any general
or special account maintained with the Agent or any Lender or with any other
Person controlling, controlled by or under common control with the Agent or any
Lender and (c) demand that the Borrowers provide cash collateral to the Agent as
security for the Revolving Credit Lenders in an amount equal to 105% of the
Letter of Credit Exposure which the Borrowers shall provide to the Agent
immediately upon such demand.
Section 10.3 DISTRIBUTION OF PROCEEDS. Notwithstanding anything to the
contrary contained herein, in the event that following the occurrence or during
the continuance of any Event of Default, the Agent or any Lender receives any
monies on account of the Lender Obligations from the Borrowers or otherwise,
such monies shall be distributed for application as follows:
(a) First, to the payment of or the reimbursement of, the Agent for
or in respect of all costs, expenses, disbursements and losses which shall have
been incurred or
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sustained by the Agent in connection with the collection of such monies by the
Agent, or in connection with the exercise, protection or enforcement by the
Agent of all or any of the rights, remedies, powers and privileges of the Agent
or the Lenders under this Agreement or any other Lender Agreement;
(b) Second, to the payment of all interest, including interest on
overdue amounts, and late charges, then due and payable with respect to the
Loans, allocated among the Lenders in proportion to their respective Commitment
Percentages;
(c) Third, to the payment of the outstanding principal balance of the
Loans, allocated among the Lenders in proportion to their respective Commitment
Percentages;
(d) Fourth, to any other outstanding Lender Obligations, allocated
among the Lenders in proportion to their respective Commitment Percentages; and
(e) Fifth, to the extent that the Agent receives any monies pursuant
to the American Ski - West Lender Agreements, to the payment of the American
Ski - West Lender Obligations in accordance with the provisions of Section 10.3
of the American Ski - West Credit Agreement.
(f) Sixth, the excess, if any, shall be returned to the Borrowers or
to such other Persons as are entitled thereto.
ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES
Section 11.1 ACTIONS BY LENDERS. Except as otherwise expressly set forth
in any particular provision of this Agreement, any consent or approval required
or permitted by this Agreement to be given by the Lenders, including without
limitation under Section 11.2, may be given, and any term of this Agreement or
of any other instrument related hereto or mentioned herein may be amended, and
the performance or observance by American Ski or any Restricted Subsidiary of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of American Ski, the Borrowers and the Majority Lenders;
PROVIDED, HOWEVER, that (a) no amendment of Section 2.18 may be made without the
consent of the Swing Line Lender, (b) no amendment of Article 13 may be made
without the consent of the Agent and (c) without the written consent of all
Lenders:
(i) no reduction in the interest rates on or any fees or
refinancing premium relating to the Loans shall be made;
(ii) no extension or postponement shall be made of the stated
time of payment of the principal amount of, interest on, or fees payable to
the Lenders or the
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Swing Line Lender relating to the Term Loans and the Revolving Credit
Advances or the Swing Line Loans, respectively;
(iii) no change in the Maximum Revolving Credit Amount or the
principal amount of the Term Loans and extension of the Revolving Credit
Termination Date or the Term Loan Maturity Date shall be made;
(iv) no release of all or substantially all of the collateral
security for, or any guarantor of, the Lender Obligations shall be made;
(v) no change in the definition of the term "Majority Lenders"
shall be made; and
(vi) no change in the provisions of Section 12.1(a) or this
Section 11.1 shall be made.
Section 11.2 ACTIONS BY BORROWERS. No delay or omission on the Agent's
or the Lenders' part in exercising their rights and remedies against American
Ski, the Borrowers or any other interested party shall constitute a waiver. A
breach by American Ski or any Borrower of its obligations under this Agreement
may be waived only by a written waiver executed by the Agent and the Lenders in
accordance with Section 11.1. The Agent's and the Lenders' waiver of American
Ski's or a Borrower's breach in one or more instances shall not constitute or
otherwise be an implicit waiver of subsequent breaches. To the extent permitted
by applicable law, American Ski and the Borrowers, jointly and severally, hereby
agree to waive, and do hereby absolutely and irrevocably waive, (a) all
presentments, demands for performance, notices of protest and notices of
dishonor in connection with any of the Indebtedness evidenced by the Term Loan
Notes, the Revolving Credit Notes and the Swing Line Note (b) any requirement of
diligence or promptness on the Agent's or the Lenders' part in the enforcement
of their rights under the provisions of this Agreement or any Lender Agreement
and (c) any and all notices of every kind and description which may be required
to be given by any statute or rule of law with respect to its liability (i)
under this Agreement or in respect of the Indebtedness evidenced by the Term
Loan Notes, the Revolving Credit Notes and the Swing Line Note, or any other
Lender Obligation or (ii) under any other Lender Agreement. No course of
dealing between any American Ski or any Borrower or American Ski and the
Borrowers collectively and the Agent or the Lenders shall operate as a waiver of
any of the Agent's or the Lenders' rights under this Agreement or any Lender
Agreement or with respect to any of the Lender Obligations. This Agreement
shall be amended only by a written instrument executed by the Agent and the
Lenders in accordance with Section 11.1 making explicit reference to this
Agreement. The Agent's and the Lenders' rights and remedies under this
Agreement and under all subsequent agreements between the Agent, the Lenders,
American Ski and the Borrowers shall be cumulative and any rights and remedies
expressly set forth herein shall be in addition to, and not in limitation of,
any other rights and remedies which may be applicable to the Agent and the
Lenders in law or at equity.
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ARTICLE 12. SUCCESSORS AND ASSIGNS
Section 12.1 GENERAL. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
(which shall include in the case of the Agent or any Lender any entity resulting
from a merger or consolidation) and assigns, except that (a) neither American
Ski nor any Borrower may assign its rights or obligations under this Agreement
and (b) each Lender may assign its rights in this Agreement only as set forth
below in this Article 12.
Section 12.2 ASSIGNMENTS.
(a) ASSIGNMENTS. In compliance with applicable laws with respect to
such assignment and with the consent of the Agent and, so long as no Event of
Default has occurred and except for assignments between and among the Lenders,
affiliates of the Lenders or an Approved Fund, American Ski on behalf of the
Borrowers (which consents shall not be unreasonably withheld), a Lender may
assign to one or more financial institutions (each a "Successor Lender") a
proportionate part of its rights and obligations in connection with this
Agreement, its Term Loan Note, its Revolving Credit Note and the related Lender
Agreements and its American Ski - West Term Loan Note, American Ski - West
Revolving Credit Note and the related American Ski - West Lender Agreements and
each such Successor Lender shall assume such rights and obligations pursuant to
an Assignment and Acceptance Agreement ("Assignment and Acceptance Agreement")
duly executed by such Successor Lender and such assigning Lender and
acknowledged and consented to by the Agent and, so long as no Event of Default
has occurred and except for assignments between and among the Lenders,
affiliates of the Lenders or an Approved Fund, American Ski on behalf of the
Borrowers, substantially in the form of EXHIBIT P attached hereto. Any
assignment under this Section 12.2(a) shall be of the Consolidated Maximum
Revolving Credit Amount and the Consolidated Term Loans in an aggregate minimum
amount of $5,000,000 except that there shall be no minimum assignment amount in
the case of (i) assignments between and among the Lenders, affiliates of the
Lenders or an Approved Fund and (ii) an assignment of a Lender's total remaining
interest that is in an amount less than $5,000,000. In connection with any
assignment under this Section 12.2(a) there shall be paid to the Agent by the
assigning Lender or the Successor Lender an administrative processing fee in the
amount of $2,500.
(b) ASSIGNMENT PROCEDURES. In the event of an assignment in
accordance with Section 12.2(a), upon execution and delivery of such an
assignment at least five (5) Business Days prior to the proposed assignment
date, and payment by such Successor Lender to the assigning Lender of an amount
equal to the purchase price agreed between such assigning Lender and such
Successor Lender, such Successor Lender shall become party to this Agreement as
a signatory hereto and shall have all the rights and obligations of a Lender
under this Agreement and the other Lender Agreements with an interest therein as
set forth in such assignment, and such assignor making such assignment shall be
released from its obligations
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hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any such assignment, the
assigning Lender, the Successor Lender and the Borrowers shall make appropriate
arrangements so that, if required, a new Term Loan Note, American Ski - West
Term Loan Note, Revolving Credit Note and American Ski - West Revolving Credit
Note, as appropriate, is issued to the Successor Lender and a replacement Term
Loan Note and/or Revolving Credit Note is issued to the assigning Lender in
principal amounts reflecting their respective revised interests.
(c) REGISTER. The Agent shall maintain a register (the "Register")
for the recordation of (i) the names and addresses of all Successor Lenders that
enter into Assignment and Acceptance Agreements, (ii) the interests of each
Lender, (iii) the principal amount of the Term Loans owing to each Term Loan
Lender from time to time, (iv) the amounts of the Revolving Credit Advances
owing to each Revolving Credit Lender from time to time and (v) the amounts of
the Swing Line Loans owing to the Swing Line Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Lenders may treat each Person whose name is
registered therein for all purposes as a party to this Agreement. The Register
shall be available for inspection by the Borrowers and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) FURTHER ASSURANCES. American Ski and the Borrowers shall sign
such documents and take such other actions from time to time reasonably
requested by the Agent or a Lender to enable any Successor Lender to share in
the benefits and rights created by the Lender Agreements.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender at any time may
assign all or any portion of its rights under this Agreement, its Term Loan Note
and/or its Revolving Credit Note to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
(f) ASSIGNMENTS OF SECURITY AGREEMENTS/ENDORSEMENTS TO TITLE
POLICIES. In connection with the assignment by a Lender of its rights under
this Agreement, its Term Loan Note and/or its Revolving Credit Note, such Lender
shall assign all of its rights under the Security Agreements to the applicable
Successor Lender. In connection with the assignment of the Mortgages and the
Collateral Assignment of Leases from such Lender to such Successor Lender,
American Ski and the Borrowers shall provide the Agent with appropriate and
acceptable endorsements to the title policies insuring the Lien of the Mortgages
reflecting the Assignment of the Mortgages and the Assignment of Leases to such
Successor Lender in form and substance acceptable to the Agent and the Successor
Lender.
Section 12.3 PARTICIPATIONS. Any Lender may, without the consent of the
Borrowers or the Agent, at any time grant or offer to grant to one or more
financial institutions ("Credit Participants") participating interests in such
Lender's rights and obligations in this Agreement,
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its Term Loan Note, its Revolving Credit Note and the related Lender Agreements,
and each such Credit Participant shall acquire such participation subject to the
terms set forth below.
(a) PROCEDURE. Each Lender granting such participation shall comply
with all applicable laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Lender Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of American Ski and the Borrowers
hereunder and under the other Lender Agreements, including the right to consent
to any amendment, modification or waiver of any provision of any Lender
Agreement, except for those matters referred to in Section 11.1 which require
the consent of all Lenders and which may also require the consent of each Credit
Participant.
(b) DEALING WITH LENDERS. American Ski and the Borrowers shall
continue to deal solely and directly with the Lenders in connection with their
rights and obligations under this Agreement and the other Lender Agreements.
(c) RIGHTS OF CREDIT PARTICIPANTS. The Borrowers agree that each
Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Sections 2.9, 2.10, 2.11, 2.13, 2.14
and 14.5, and the set-off rights in Section 10.2 with respect to its
participating interest; PROVIDED, HOWEVER, that no Credit Participant shall be
entitled to receive any greater payment under such Sections than the Lender
granting such participation would have been entitled to receive with respect to
the interests transferred.
(d) NOTICE. At the time of granting any participation, the Lender
granting such participation shall notify the Agent and the Borrowers.
ARTICLE 13. THE AGENT
Section 13.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Lender Agreements as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement and the other Lender Agreements (including, without limitation,
enforcement or collection of the Term Loan Notes and the Revolving Credit
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action which
exposes the Agent to liability or which is contrary to this Agreement or the
other Lender Agreements or applicable law. Subject to the foregoing provisions
and to the other provisions of this Article 13, the Agent shall, on behalf of
the Lenders: (a) execute any documents on behalf of the Lenders providing
collateral for or guarantees of the Lender
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Obligations; (b) hold and apply any collateral for the Lender Obligations, and
the proceeds thereof, at any time received by it, in accordance with the
provisions of this Agreement and the other Lender Agreements; (c) exercise any
and all rights, powers and remedies of the Lenders under this Agreement or any
of the other Lender Agreements, including the giving of any consent or waiver or
the entering into of any amendment, subject to the provisions of Section 11.1;
(d) at the direction of the Lenders, execute, deliver and file UCC financing
statements, mortgages, deeds of trust, lease assignments and such other
agreements in respect of any collateral for the Lender Obligations, and possess
instruments included in the collateral on behalf of the Lenders; and (e) in the
event of acceleration of American Ski's or the Borrowers' Indebtedness
hereunder, act at the direction of the Majority Lenders to exercise the rights
of the Lenders hereunder and under the other Lender Agreements.
Section 13.2 AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Lenders for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the payee of any Term Loan Note or any
Revolving Credit Note as the holder thereof until the Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
required under Article 12 hereof; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representations to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Lender Agreements; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Lender
Agreements on the part of American Ski or the Borrowers or any other Person or
to inspect the property (including the books and records) of American Ski or the
Borrowers or any other Person; (e) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Lender Agreements or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall incur
no liability under or in respect of this Agreement or the other Lender
Agreements by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopy or telegram) believed by the Agent to be
genuine and signed or sent by the proper party or parties.
Section 13.3 AGENT AS A LENDER. With respect to its interest in its
Commitment Percentage of the Loans hereunder, BankBoston, N.A. shall have the
same rights and powers under this Agreement and the other Lender Agreements as
any other Lender and may exercise the same as though it were not the Agent; and
the term "Lender" or "Lender(s)" shall, unless otherwise expressly indicated,
include BankBoston, N.A. in its individual capacity. BankBoston, N.A. and its
affiliates may lend money to, and generally engage in any kind of business with,
American Ski, any Borrower, any Affiliate of American Ski and any Person
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who may do business with or own securities of American Ski or any such Affiliate
of American Ski, all as if BankBoston, N.A. were not the Agent and without any
duty to account therefor to the Lenders.
Section 13.4 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 5.9 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 13.5 INDEMNIFICATION OF AGENT. Each Lender agrees to indemnify
the Agent and its directors, officers, employees and agents (to the extent that
the Agent is not reimbursed by American Ski or the Borrowers), ratably according
to each Lender's Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent or its directors,
officers, employees or agents in any way relating to or arising out of this
Agreement or any other Lender Agreement or any action taken or omitted by the
Agent in such capacity under this Agreement; PROVIDED that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or wilful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Lender
Agreement, to the extent that the Agent is not reimbursed for such expenses by
American Ski the Borrowers.
Section 13.6 SUCCESSOR AGENT. Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and American
Ski. Upon any such resignation, the Lenders shall have the right to appoint a
successor Agent which shall be reasonably acceptable to American Ski. If no
successor Agent shall have been so appointed by the Lenders (other than the
resigning Agent), and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial institution organized under the laws of the United
States of America or of any state thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
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of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the other Lender Agreements.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 13 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Lender
Agreements.
Section 13.7 AMENDMENT OF ARTICLE 13. American Ski and the Borrowers
hereby agree that the foregoing provisions of this Article 13 constitute an
agreement among the Agent and the Lenders (and the Agent and the Lenders
acknowledge that except for the provisions of Section 13.6, American Ski and the
Borrowers are not parties to or bound by such foregoing provisions) and that any
and all of the provisions of this Article 13 (excepting Section 13.6) may be
amended at any time by the Lenders and the Agent without the consent or approval
of, or notice to, American Ski and the Borrowers (other than the requirement of
notice to American Ski and the Borrowers of the resignation of the Agent and the
appointment of a successor Agent).
Section 13.8 DOCUMENTATION AGENT. Each Lender hereby designates and
appoints DLJ Capital Funding, Inc. as the documentation agent (the
"Documentation Agent") under this Agreement. The Documentation Agent shall
undertake such responsibilities with respect to the credits extended under this
Agreement as directed from time to time by the Agent. In administering its
duties hereunder, the Documentation Agent shall be entitled to the provisions of
this Article 13 governing the actions of the Agent.
ARTICLE 14. MISCELLANEOUS
Section 14.1 NOTICES. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail, postage prepaid, or sent by hand, by telecopy or
by nationally-recognized overnight carrier service, addressed as follows:
(a) If to the Agent, at 100 Federal Street, Boston, MA 02110,
Telecopier No. 617/434-8102, Attention: Mr. Carlton F. Williams, Director, with
a copy to: Goodwin, Procter & Hoar LLP, Exchange Place, Boston, MA 02109,
Telecopier No. 617/523-1231, Attention: Edward Matson Sibble, Jr., P.C., or at
such other address(es) or to the attention of such other Person(s) as the Agent
shall from time to time designate in writing to American Ski and the Lenders.
(b) If to American Ski or the Borrowers, c/o American Skiing Company,
P.O. Box 450, Bethel, ME 04217, or for overnight delivery service, Sunday River
Road, Bethel, ME 04217, Telecopier No. 207/824-0192, Attention: Christopher E.
Howard, Esq., Senior Vice President and Chief Administrative Officer and Thomas
M. Richardson, Chief
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Financial Officer, with a copy to: David J. Champoux, Esq., Pierce Atwood, One
Monument Square, Portland, ME 04101 or at such other address(es) or to the
attention of such other Person(s) as American Ski shall from time to time
designate in writing to the Agent and the Lenders.
(c) If to any Lender, at the address(es) and to the attention of the
Person(s) specified below such Lender's name on the execution page of this
Agreement (or in the case of a Successor Lender, at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance Agreement
executed by such Successor Lender), or at such other address(es) and to the
attention of such other Person(s) as any Lender shall from time to time
designate in writing to the Agent and American Ski.
Any notice so addressed and mailed by registered or certified mail shall be
deemed to have been given when mailed. Any notice so addressed and sent by
hand, by telecopy or by overnight carrier service shall be deemed to have been
given when received.
A notice from the Agent stating that it has been given on behalf of the
Lenders shall be relied upon by American Ski and the Borrowers as having been
given by the Lenders.
Section 14.2 MERGER. This Agreement and the other Lender Agreements and
documents contemplated hereby constitute the entire agreement of American Ski,
the Borrowers, the Agent and the Lenders and express their entire understanding
with respect to credits advanced or to be advanced by the Lenders to the
Borrowers.
Section 14.3 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed and enforced under the laws of The
Commonwealth of Massachusetts. American Ski, each of its Subsidiaries and each
Lender hereby irrevocably submits itself to the non-exclusive jurisdiction of
the courts of The Commonwealth of Massachusetts and to the non-exclusive
jurisdiction of any Federal court of the United States located in the District
of Massachusetts for the purpose of any suit, action or other proceeding arising
out of this Agreement or any other Lender Agreement or any of the transactions
contemplated hereby or thereby.
Section 14.4 COUNTERPARTS. This Agreement and all amendments to this
Agreement may be executed in several counterparts, each of which shall be an
original. The several counterparts shall constitute a single Agreement.
Section 14.5 EXPENSES AND INDEMNIFICATION.
(a) American Ski and the Borrowers agree, jointly and severally, to
pay, on demand, all of the Agent's reasonable expenses in preparing, executing,
delivering and administering this Agreement, the Lender Agreements, all related
instruments and documents and any requested amendment, waiver or consent
relating hereto or thereto, including, without
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limitation, the reasonable fees and out-of-pocket expenses of the Agent's
third-party consultants, special counsel, Goodwin, Procter & Hoar LLP, and
local counsel in each jurisdiction in which American Ski or any Restricted
Subsidiary has assets and the Agent's and Lenders' reasonable expenses in
connection with periodic audits of American Ski and its Restricted Subsidiaries.
American Ski and the Borrowers also agree, jointly and severally, to pay, on
demand, all reasonable out-of-pocket expenses incurred by the Agent and the
Lenders, including, without limitation, reasonable legal, accounting and
third-party consultant fees, in connection with the collection of amounts due
hereunder and under all other Lender Agreements upon the occurrence of a Default
hereunder, the revision, protection or enforcement of any of the Agent's or the
Lenders' rights against American Ski and the Borrowers under this Agreement, the
Notes, the Guaranty Agreements, the Security Agreements, and all other Lender
Agreements and the administration of special problems that may arise under this
Agreement or any other Lender Agreement. American Ski and the Borrowers also
agree, jointly and severally, to pay all stamp and other taxes in connection
with the execution and delivery of this Agreement and related instruments and
documents.
(b) Without limitation of any other obligation or liability of
American Ski and the Borrowers or right or remedy of the Agent or the Lenders
contained herein, American Ski and the Borrowers hereby covenant and agree,
jointly and severally, to indemnify and hold the Agent, the Lenders, and the
directors, officers, subsidiaries, shareholders, agents, affiliates and Persons
controlling the Agent and the Lenders, harmless from and against any and all
damages, losses, settlement payments, obligations, liabilities, claims,
including, without limitation, claims for finder's or broker's fees, actions or
causes of action, and reasonable costs and expenses incurred, suffered,
sustained or required to be paid by any such indemnified party in each case by
reason of or resulting from any claim, investigation, litigation or other
proceeding related to the entering into of this Agreement or any other Lender
Agreement, the use of any Letter of Credit or the proceeds of any Loans, the
consummation of the transactions contemplated herein, the exercise by the Agent
and the Lenders of their rights and remedies, or otherwise relating to the
transactions contemplated hereby, other than any such claims which are
determined by a final, non-appealable judgment or order of a court of competent
jurisdiction to be the result of the gross negligence or willful misconduct of
such indemnified party. Promptly upon receipt by any indemnified party
hereunder of notice of the commencement of any action against such indemnified
party for which a claim is to be made against American Ski and the Borrowers
hereunder, such indemnified party shall notify American Ski in writing of the
commencement thereof, although the failure to provide such notice shall not
affect the indemnification rights of any such indemnified party hereunder unless
and only to the extent American Ski demonstrates to the reasonable satisfaction
of such party that such failure to provide notice prejudiced American Ski and
the Borrowers in their defense of such claim. American Ski and the Borrowers
shall have the right, at their option upon notice to the indemnified parties, to
defend any such matter at their own expense and with their own counsel, except
as provided below, which counsel must be reasonably acceptable to the
indemnified parties. The indemnified party shall cooperate with American Ski
and the Borrowers in the defense of such matter. The
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indemnified party shall have the right to employ separate counsel and to
participate in the defense of such matter at its own expense. In the event that
(a) the employment of separate counsel by an indemnified party has been
authorized in writing by American Ski, (b) American Ski and the Borrowers have
failed to assume the defense of such matter within fifteen (15) days of notice
thereof from the indemnified party, or (c) the named parties to any such action
(including impleaded parties) include any indemnified party who has been advised
by counsel that there may be one or more legal defenses available to it or
prospective bases for liability against it, which are different from those
available to or against American Ski and the Borrowers, then American Ski and
the Borrowers shall not have the right to assume the defense of such matter with
respect to such indemnified party. American Ski and he Borrowers shall not
compromise or settle any such matter against an indemnified party without the
written consent of the indemnified party, which consent may not be unreasonably
withheld or delayed.
Section 14.6 CONFIDENTIALITY. The Agent and the Lenders agree to use
commercially reasonable efforts to keep in confidence all financial data and
other information relative to the affairs of American Ski and its Subsidiaries
heretofore furnished or which may hereafter be furnished to them pursuant to the
provisions of this Agreement; PROVIDED, HOWEVER, that this Section 14.6 shall
not be applicable to information otherwise disseminated to the public by
American Ski or any of its Subsidiaries or any of their Affiliates; and PROVIDED
FURTHER, that such obligation of the Agent and the Lenders shall be subject to
the Agent's or the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and regulations
or pursuant to a subpoena or other legal process, (b) right to disclose any such
information to bank or other regulatory examiners, affiliates, auditors,
accountants and counsel or to any Person who evaluates, approves, structures or
administers the Loans on behalf of a Lender who agree to keep such information
confidential and (c) right to disclose any such information (i) in connection
with the transactions set forth herein including assignments or the sale of
participation interests pursuant to Article 12, so long as such potential
assignees or participants shall agree in writing to be bound by the terms of
this Section 14.6 or (ii) in connection with any litigation or dispute involving
the Agent or any transfer or other disposition by the Agent or the Lenders, as
the case may be, of any of the Lender Obligations; PROVIDED that information
disclosed pursuant to this provision shall be so disclosed subject to such
procedures as are reasonably calculated to maintain the confidentiality thereof.
Section 14.7 RELIANCE ON REPRESENTATIONS AND ACTIONS OF AMERICAN SKI.
The Borrowers hereby appoint American Ski as the Borrowers' agent to execute,
deliver and perform, on behalf of the Borrowers, any and all notices,
certificates, documents and actions to be executed, delivered or performed
hereunder or under any of the other Lender Agreements, and the Borrowers hereby
agree that the Agent and the Lenders may rely upon any representation, warranty,
certificate, notice, document or telephone request which purports to be executed
or made or which the Agent or the Lenders in good faith believe to have been
executed or made by American Ski or any of its executive officers, and the
Borrowers hereby
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further, jointly and severally, agree to indemnify and hold the Agent and the
Lenders harmless for any action, including the making of the Term Loans, the
Revolving Credit Advances or the Swing Line Loans hereunder, and any loss or
expense, taken or incurred by any of them as a result of their good faith
reliance upon any such representation, warranty, certificate, notice, document
or telephone request.
Section 14.8 JOINT AND SEVERAL OBLIGATIONS. All obligations of the
Borrowers hereunder and under the Notes and all other Lender Agreements shall be
joint and several obligations. The Borrowers waive presentment, demand,
protest, notice of acceptance, notice of indebtedness incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshaling of assets of the Borrowers and their
Restricted Subsidiaries, and all suretyship defenses generally.
Section 14.9 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS, AMERICAN SKI
AND THE BORROWERS AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL
(A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
ACTION INVOLVING THE AGENT OR ANY LENDER AS A PARTY BASED UPON OR ARISING OUT
OF, THIS AGREEMENT, THE TERM LOAN NOTES, THE REVOLVING CREDIT NOTES, THE SWING
LINE NOTE, ANY LENDER AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE
DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
DISCUSSED BY EACH OF THE AGENT, THE LENDERS, AMERICAN SKI AND THE BORROWERS WITH
THEIR RESPECTIVE COUNSEL, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NONE OF THE AGENT, THE LENDERS, AMERICAN SKI OR THE BORROWERS HAVE
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
103
<PAGE>
IN WITNESS WHEREOF, American Ski, the Borrowers, the Agent and the Lenders
have caused this Agreement to be executed by their duly authorized officers as
of the date set forth above.
AMERICAN SKIING COMPANY
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
ASC EAST, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUNDAY RIVER SKIWAY CORPORATION
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUNDAY RIVER, LTD.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
PERFECT TURN, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUNDAY RIVER TRANSPORTATION, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
L.B.O. HOLDING, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUGARBUSH RESORT HOLDINGS, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUGARBUSH LEASING COMPANY
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUGARBUSH RESTAURANTS, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
MOUNTAIN WASTEWATER TREATMENT, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
S-K-I, LTD.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
KILLINGTON, LTD.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
MOUNT SNOW, LTD.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
PICO SKI AREA MANAGEMENT COMPANY
By: /s/ Christopher E. Howard
----------------------------
Name: Christopher E. Howard
Title: Senior Vice President
RESORTS SOFTWARE SERVICES, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
KILLINGTON RESTAURANTS, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
RESORTS TECHNOLOGIES, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
DOVER RESTAURANTS, INC.
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUGARLOAF MOUNTAIN CORPORATION
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
MOUNTAINSIDE
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
SUGARTECH
By: /s/ Christopher E. Howard
---------------------------
Name: Christopher E. Howard
Title: Senior Vice President
BANKBOSTON, N.A., as Agent
By: /s/ Carlton F. Williams
----------------------------
Name: Carlton F. Williams
Title: Director
100 Federal Street
Boston, MA 02110
Telecopier: (617) 434-8102
Attention: Mr. Carlton F. Williams,
Director
DLJ CAPITAL FUNDING, INC.,
as Documentation Agent
By: /s/ Harold J. Philipps
---------------------------
Name: Harold J. Philipps
Title: Managing Director
277 Park Ave., 17th Floor
New York, NY 10172
Telecopier: (212) 892-5286
Attention: Ms. Tania Holman
BANKBOSTON, N.A.
By: /s/ Carlton F. Williams
----------------------------
Name: Carlton F. Williams
Title: Director
100 Federal Street
Boston, MA 02110
Telecopier: (617) 434-8102
Attention: Mr. Carlton F. Williams,
Director
DLJ CAPITAL FUNDING, INC.
By: /s/ Harold J. Philipps
---------------------------
Name: Harold J. Philipps
Title: Managing Director
277 Park Ave., 17th Floor
New York, NY 10172
Telecopier: (212) 892-5286
Attention: Ms. Tania Holman
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION
By: /s/ Sandra A. Sauer
----------------------------
Name: Sandra A. Sauer
Title: Vice President
1740 Broadway
Denver, CO 80274-8673
Telecopier: (303) 863-6670
Attention: Ms. Sandra A. Sauer, Vice
President
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Dan Adams
----------------------------
Name: Dan Adams
Title: Vice President
400 Capital Mall, 7th Floor
Sacramento, CA 95814
Telecopier: (916) 444-2869
Attention: Mr. Dan Adams, Vice President
U.S. BANK NATIONAL ASSOCIATION d/b/a
COLORADO NATIONAL BANK
By: /s/ William J. Sullivan
----------------------------
Name: William J. Sullivan
Title: Vice President
918 17th Street
Denver, CO 80202
Telecopier: (303) 585-4135
Attention: Mr. William J. Sullivan, Vice
President
FIRST SECURITY BANK, N.A.
By: /s/ Dick van Klaveren
----------------------------
Name: Dick van Klaveren
Title: Vice President
15 East 100 South, 2nd Floor
Salt Lake City, Utah 84111
Telecopier: (801) 246-5532
Attention: Mr. Dick Van Klaveren, Vice
President
FLOATING RATE PORTFOLIO
By: CHANCELLOR LGT SENIOR SECURED
MANAGEMENT, INC., as Attorney in
Fact
By: /s/ Timothy Daileader
----------------------------
Name: Timothy Daileader
Title: Assistant Vice President
ADDRESS FOR ADMINISTRATIVE NOTICES:
-----------------------------------
Chancellor LGT Asset Management, Inc.
50 California Street, 27th Floor
San Francisco, CA 94111-4624
Telecopier: (415) 296-0511
Attention: Ms. Linda DiNapoli
ADDRESS FOR NOTICES REGARDING AMENDMENT
AND WAIVERS:
---------------------------------------
GT Global Floating Rate Fund, Inc.
c/o Chancellor LGT Senior Secured
Management, Inc.
1166 Avenue of the Americas
New York, NY 10036
Telecopier: (212) 278-9847
Attention: Ms. Susan McKofke
KZH HOLDING CORPORATION III
By: /s/ Virginia R. Conway
----------------------------
Name: Virginia R. Conway
Title: Authorized Agent
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Telecopier: (212) 946-7776
Attention: Ms. Virginia Conway
MERRILL LYNCH SENIOR FLOATING RATE FUND,
INC.
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By: /s/ Gilles Marchand
----------------------------
Name: Gilles Marchand
Title: Authorized Signatory
800 Scudders Mill Road, Area 1B
Plainsboro, NJ 08536
Telecopier: (609) 282-3542
Attention: Ms. Jill Montanye
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ Jeffrey W. Maillet
----------------------------
Name: Jeffrey W. Maillet
Title: Sr. Vice President & Director
c/o Van Kampen American Capital
One Parkview Plaza, 5th Floor
Oakbrook Terrace, IL 60181
Telecopier: (630) 684-6740
Attention: Mr. Jeffrey W. Maillet
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company, as
Attorney in Fact
By: /s/ Jonathan R. Insull
----------------------------
Name: Jonathan R. Insull
Title: Vice President
By: /s/ Justin L. Driscoll
----------------------------
Name: Justin L. Driscoll
Title: Senior Vice President
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Telecopier: (212) 297-4159
Attention: Mr. Justin L. Driscoll, Vice
President
Exhibit 2
================================================================================
CREDIT AGREEMENT
Dated as of November 12, 1997
Among
ASC UTAH
ASC WEST, INC.
STEAMBOAT SKI & RESORT CORPORATION
STEAMBOAT DEVELOPMENT CORPORATION
HEAVENLY VALLEY SKI & RESORT CORPORATION
HEAVENLY CORPORATION
HEAVENLY VALLEY, LIMITED PARTNERSHIP
as Borrowers,
AMERICAN SKIING COMPANY,
as Guarantor,
THE LENDERS PARTY HERETO,
BANKBOSTON, N.A.,
as Agent for the Lenders
and
DLJ CAPITAL FUNDING, INC.
as Documentation Agent for the Lenders
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS..................................1
Section 1.1 Definitions.........................................1
Section 1.2 Accounting Terms...................................26
ARTICLE 2. THE CREDITS......................................................26
Section 2.1 The Revolving Credit...............................26
Section 2.2 Making of Revolving Credit Advances................27
Section 2.3 Interest on Revolving Credit Advances..............28
Section 2.4 The Term Loans.....................................29
Section 2.5 Interest on the Term Loans.........................29
Section 2.6 Election of LIBOR Pricing Options..................29
Section 2.7 Additional Payments................................30
Section 2.8 Computation of Interest, Etc.......................30
Section 2.9 Fees...............................................30
Section 2.10 Set-Off............................................30
Section 2.11 Sharing of Payments................................31
Section 2.12 Reduction of Commitment by the Borrowers...........31
Section 2.13 Increased Costs, Etc...............................31
Section 2.14 Changed Circumstances..............................33
Section 2.15 Use of Proceeds....................................34
Section 2.16 Letters of Credit..................................34
Section 2.17 Collection of Accounts.............................38
Section 2.18 Swing Line Commitment..............................39
Section 2.19 Procedure for Swing Line Borrowing; Interest on
Swing Line Loans...................................39
Section 2.20 Refunded Swing Line Loans; Swing Line Loan
Participations.....................................40
Section 2.21 Release of Certain Liens...........................41
Section 2.22 Guaranty of American Ski...........................42
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES.................................44
Section 3.1 Conditions to the Term Loans and the Initial
Revolving Credit Advance...........................44
Section 3.2 Conditions to All Loans............................49
ARTICLE 4. PAYMENT AND REPAYMENT............................................49
Section 4.1 Mandatory Repayments and Prepayment................49
Section 4.2 Voluntary Prepayments..............................52
Section 4.3 Payment and Interest Cutoff........................53
Section 4.4 Payment or Other Actions on Non-Business Days......53
Section 4.5 Method and Timing of Payments......................53
Section 4.6 Payments Not at End of Interest Period.............54
(i)
<PAGE>
Page
----
Section 4.7 Currency...........................................54
Section 4.8 Foreign Lenders....................................54
ARTICLE 5. REPRESENTATIONS AND WARRANTIES...................................55
Section 5.1 Existence, Charter Documents, Etc..................55
Section 5.2 Principal Place of Business; Location of Records...55
Section 5.3 Qualification......................................55
Section 5.4 Subsidiaries.......................................56
Section 5.5 Power..............................................56
Section 5.6 Valid and Binding Obligations......................57
Section 5.7 Other Agreements...................................57
Section 5.8 Payment of Taxes...................................57
Section 5.9 Financial Statements...............................57
Section 5.10 Other Materials Furnished..........................58
Section 5.11 Stock..............................................58
Section 5.12 Changes in Condition...............................58
Section 5.13 Assets, Licenses, Patents, Trademarks, Etc.........58
Section 5.14 Litigation.........................................59
Section 5.15 Pension Plans......................................59
Section 5.16 Outstanding Indebtedness...........................59
Section 5.17 Environmental Matters..............................60
Section 5.18 Foreign Trade Regulations..........................61
Section 5.19 Governmental Regulations...........................61
Section 5.20 Margin Stock.......................................61
Section 5.21 Solvency...........................................61
Section 5.22 Compliance with Other Instruments, Laws, Etc.......62
Section 5.23 Absence of Financing Statements, Etc...............62
Section 5.24 Perfection of Security Interests...................62
Section 5.25 Bank Accounts......................................62
Section 5.26 Fiscal Year........................................62
Section 5.27 Tax Status.........................................63
Section 5.28 Consummation of Public Offering....................63
Section 5.29 Consummation of Kamori Acquisition.................63
Section 5.30 Cerberus Purchase Agreement; Cerberus Amendment
and Waiver Letter Agreement; Certificate of
Designation........................................63
Section 5.31 Wolf Acquisition Agreement.........................63
ARTICLE 6. REPORTS AND INFORMATION..........................................63
Section 6.1 Interim Financial Statements and Reports...........63
Section 6.2 Annual Financial Statements........................64
Section 6.3 Annual Budget......................................64
(ii)
<PAGE>
Page
----
Section 6.4 Reports of Skier Visits............................65
Section 6.5 Notice of Defaults.................................65
Section 6.6 Notice of Litigation...............................65
Section 6.7 Communications with Others.........................65
Section 6.8 Reportable Events..................................65
Section 6.9 Reports to other Creditors.........................66
Section 6.10 Communications with Independent Public
Accountants........................................66
Section 6.11 Environmental Reports..............................66
Section 6.12 Notices Under Certain Agreements...................66
Section 6.13 Miscellaneous......................................67
ARTICLE 7. FINANCIAL COVENANTS..............................................67
Section 7.1 Ratio of Consolidated Total Debt to Consolidated
EBITDA.............................................67
Section 7.2 Ratio of Consolidated Adjusted Cash Flow to
Consolidated Debt Service..........................68
Section 7.3 Ratio of Consolidated EBITDA to Consolidated
Interest Expense................................68
Section 7.4 Minimum Consolidated Net Worth.....................68
ARTICLE 8. AFFIRMATIVE COVENANTS............................................69
Section 8.1 Existence and Business.............................69
Section 8.2 Taxes and Other Obligations........................69
Section 8.3 Maintenance of Properties and Leases...............70
Section 8.4 Insurance..........................................70
Section 8.5 Records, Accounts and Places of Business...........70
Section 8.6 Inspection.........................................70
Section 8.7 Maintenance of Accounts............................70
Section 8.8 Maintenance and Assignment of Life Insurance.......71
Section 8.9 Ownership of Restricted Subsidiaries...............71
Section 8.10 Survey and Surveyor's Certificate..................71
Section 8.11 Appraisals.........................................71
Section 8.12 Lease Renewal......................................72
Section 8.13 Use of IPO Proceeds................................72
Section 8.14 Environmental and Land Use Compliance..............72
Section 8.15 Interest Rate Protection...........................72
Section 8.16 Independence of Unrestricted Subsidiaries..........72
Section 8.17 Forest Service Permits.............................72
ARTICLE 9. NEGATIVE COVENANTS...............................................73
Section 9.1 Restrictions on Indebtedness.......................73
Section 9.2 Restriction on Liens...............................75
(iii)
<PAGE>
Page
----
Section 9.3 Investments........................................76
Section 9.4 Mergers, Acquisitions, Etc.........................78
Section 9.5 Transactions with Affiliates.......................78
Section 9.6 Distributions......................................78
Section 9.7 Capital Expenditures...............................79
Section 9.8 Dispositions of Assets.............................79
Section 9.9 Assumptions, Guaranties, Etc. of Indebtedness of
Other Persons......................................79
Section 9.10 ERISA..............................................79
Section 9.11 Sale and Leaseback.................................80
Section 9.12 Restrictive or Inconsistent Agreements.............80
Section 9.13 Limitations on Real Estate Operations..............80
Section 9.14 Fiscal Year........................................80
Section 9.15 No Amendment of Subordinated Notes; Cerberus
Purchase Agreement; Cerberus Amendment and
Waiver Letter Agreement............................80
Section 9.16 Exchange of Cerberus 101/2% Repriced Convertible
Exchangeable Preferred Stock and Amended and
Restated Registration Rights Agreement Penalties...80
Section 9.17 Limitation on Issuance of Capital Stock............81
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES..................................81
Section 10.1 Events of Default..................................81
Section 10.2 Remedies...........................................84
Section 10.3 Distribution of Proceeds...........................85
ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES.........................85
Section 11.1 Actions by Lenders.................................85
Section 11.2 Actions by Borrowers...............................86
ARTICLE 12. SUCCESSORS AND ASSIGNS..........................................87
Section 12.1 General............................................87
Section 12.2 Assignments........................................87
Section 12.3 Participations.....................................89
ARTICLE 13. THE AGENT.......................................................89
Section 13.1 Authorization and Action...........................89
Section 13.2 Agent's Reliance, Etc..............................90
Section 13.3 Agent as a Lender..................................91
Section 13.4 Lender Credit Decision.............................91
Section 13.5 Indemnification of Agent...........................91
(iv)
<PAGE>
Page
----
Section 13.6 Successor Agent....................................91
Section 13.7 Amendment of Article 13............................92
Section 13.8 Documentation Agent................................92
ARTICLE 14. MISCELLANEOUS...................................................92
Section 14.1 Notices............................................92
Section 14.2 Merger.............................................93
Section 14.3 Governing Law; Consent to Jurisdiction.............93
Section 14.4 Counterparts.......................................93
Section 14.5 Expenses and Indemnification.......................93
Section 14.6 Confidentiality....................................95
Section 14.7 Reliance on Representations and Actions of
American Ski.......................................95
Section 14.8 Joint and Several Obligations......................96
(v)
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Loan Note
Exhibit A-3 Form of Swing Line Note
Exhibit B Form of Notice of Revolving Credit Borrowing
Exhibit C Form of Compliance Certificate
Exhibit D Form of Pricing Notice
Exhibit E-1 Form of Security Agreement
Exhibit E-2 Form of Guarantor Security Agreement
Exhibit F [Intentionally Omitted.]
Exhibit G Form of Deed of Trust, Assignment of Leases and Rents,
Financing Statement and Security Agreement
Exhibit H Form of Collateral Assignment of Leases and Rents
Exhibit I [Intentionally Omitted.]
Exhibit J Form of Assignment in Trust
Exhibit K Form of Assignment of Trademarks
Exhibit L Form of Assignment of Licenses, Contracts and Permits
Exhibit M Form of Stock Pledge Agreement
Exhibit N Form of Hazardous Materials Indemnification Agreement
Exhibit O Form of Opinions of Borrowers' Counsel
Exhibit P Form of Assignment and Acceptance Agreement
Exhibit Q [Intentionally Omitted.]
Exhibit R Acknowledgment of Unrestricted Subsidiary
Exhibit S Form of Joinder
Exhibit T Cerberus Amendment and Waiver Letter Agreement; Certificate
of Designation; Amended and Restated Registration Rights
Agreements; Cerberus Purchase Agreement
Exhibit U Registration Statement
Exhibit V Kamori Stock Purchase Agreement
Schedule 1 Schedule of Commitment Percentages
Schedule 2 Pricing Schedule
Schedule 2.16 Schedule of Letters of Credit
Schedule 2.17 Schedule of Bank Accounts
Schedule 3.1 Schedule of Post-Closing Conditions
Schedule 3.1(q) Schedule of Certain Leases
Schedule 5.2 Schedule of Principal Places of Business
Schedule 5.4(a) Schedule of Subsidiaries and Issued and Outstanding Stock
Schedule 5.4(b) Transactions with Unrestricted
Subsidiaries
Schedule 5.8 Schedule of Certain Tax Matters
Schedule 5.9 Schedule of Financial Statements
Schedule 5.13(c) Schedule of Certain Leasehold Personal Property Interests
and Personal Property Lease Agreements
Schedule 5.14 Schedule of Litigation
Schedule 5.13 Schedule of Licenses, Patents, Copyrights and Trademarks
Schedule 5.15 Schedule of Pension Plans
(vi)
<PAGE>
Schedule 5.16 Schedule of Indebtedness, Liens, Charges and Encumbrances
Schedule 5.17 Schedule of Environmental Matters
Schedule 8.4 Schedule of Insurance
Schedule 8.9 Schedule of Ownership of Restricted Subsidiaries
Schedule 8.12 Schedule of Material Leases
Schedule 8.14 Schedule of Environmental and Land Use Compliance
Schedule 8.17 Schedule of Forest Service Permits
Schedule 9.3 Investment Policy and Investments
(vii)
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of November 12, 1997 by and among
ASC UTAH, a Maine corporation ("ASC Utah"), ASC WEST, INC., a Maine corporation
("ASC West"), STEAMBOAT SKI & RESORT CORPORATION, a Delaware corporation,
STEAMBOAT DEVELOPMENT CORPORATION, a Delaware corporation, HEAVENLY VALLEY SKI &
RESORT CORPORATION, a Delaware corporation, HEAVENLY CORPORATION, a Delaware
corporation, HEAVENLY VALLEY, LIMITED PARTNERSHIP, a Nevada limited partnership
of which Heavenly Valley Ski & Resort Corporation and Heavenly Corporation own
all of the partnership interests (each a "Borrower" and collectively, the
"Borrowers"), AMERICAN SKIING COMPANY, a Maine corporation ("American Ski"), the
lenders from time to time party hereto, BANKBOSTON, N.A., a national banking
association, as Agent for the lenders from time to time party hereto (the
"Agent") and DLJ CAPITAL FUNDING, INC., as Documentation Agent for the lenders
from time to time party hereto (the "Documentation Agent").
RECITALS
The Borrowers, jointly and severally, desire to arrange for credit
facilities of $140,000,000, on the terms and conditions set forth herein, the
proceeds of which will be used (a) to finance the Kamori Acquisition (as defined
below), (b) to pay certain existing obligations of the Borrowers, (c) to fund
certain capital expenditures and (d) to provide for on-going working capital and
other specified needs. The Lenders are willing to provide such financing on the
terms and conditions set forth herein, including, among others, that American
Ski become a guarantor hereunder. The Borrowers conduct their operations on a
combined basis with shared management, purchasing, planning, financial controls
and other functions, and the access of all Borrowers to the credit facilities
provided hereunder benefits all Borrowers in connection with their various
businesses.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, American Ski, the Borrowers, the
Agent and the Lenders party hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement, unless otherwise specifically provided herein, the following
terms shall have the following meanings for all purposes when used in this
Agreement, and in any note, agreement, certificate, report or other document
made or delivered in connection with this Agreement:
"ADDITIONAL CAPITAL EXPENDITURE AMOUNT" shall mean the product of
(a) Consolidated Excess Cash Flow for the four-quarter period ending each
April 30, multiplied by (b) 50% when the Capital Expenditure Ratio as of
such April 30 equals or exceeds 3.5-to-1 and 100% otherwise.
"AFFILIATE" shall mean (a) any director or executive officer of
American Ski or any of its Subsidiaries or any Person owning more than 5%
of the outstanding common stock of American Ski or any of its Subsidiaries
and (b) any Person that controls, is controlled by or is under common
control with such a Person or any Affiliate of such Person. For purposes
of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
its management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" shall mean BankBoston, N.A., in its capacity as agent for the
Lenders, and its successors in that capacity.
<PAGE>
"AGGREGATE OUTSTANDING REVOLVING CREDIT EXTENSIONS" shall mean, as to
any Revolving Credit Lender at any time, an amount equal to the sum of
(a) the aggregate principal amount of all Revolving Credit Advances made by
such Lender then outstanding PLUS (b) such Revolving Credit Lender's
Revolving Credit Commitment Percentage of the Letter of Credit Exposure
then outstanding.
"AGREEMENT" shall mean this Credit Agreement, as amended or
supplemented from time to time. References to Articles, Sections,
Exhibits, Schedules and the like refer to the Articles, Sections, Exhibits,
Schedules and the like of this Agreement, unless otherwise indicated, as
amended and supplemented from time to time.
"ALPINE PIPELINE" shall mean Alpine Pipeline Company, a Vermont
corporation.
"AMERICAN SKI - WEST" shall mean ASC Utah and ASC West, collectively.
"AMERICAN SKI - WEST CONSOLIDATED EBITDA" shall mean for the most
recently completed four fiscal quarters, (a) net income or (loss) of
American Ski - West and its Restricted Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting principles
without giving effect to extraordinary gains and losses from sales,
exchanges and other dispositions of property not in the ordinary course of
business, and nonrecurring items and excluding from the calculation of net
income all revenues from Unrestricted Subsidiaries except to the extent
received by American Ski - West or its Restricted Subsidiaries in cash as a
loan repayment, dividend or other distribution, PLUS, to the extent
deducted in calculating net income, (b) the sum of, without duplication,
(i) depreciation expense of American Ski - West and its Restricted
Subsidiaries, (ii) amortization expense of American Ski - West and its
Restricted Subsidiaries, (iii) consolidated interest expense of American
Ski - West and its Restricted Subsidiaries PLUS the non-cash portion of
consolidated interest expense on consolidated funded debt of American Ski -
West and its Restricted Subsidiaries, (iv)
2
<PAGE>
income tax expense and (v) other non-cash items of American Ski - West and
its Restricted Subsidiaries.
"AMERICAN SKI - WEST CONSOLIDATED TOTAL DEBT" shall mean the sum of
(a) the outstanding principal amount of the Revolving Credit Advances, the
Term Loans and the Swing Line Loans, (b) any claim required to be paid
pursuant to Guaranties of American Ski - West and its Restricted
Subsidiaries, (c) all other funded Indebtedness of American Ski - West and
its Restricted Subsidiaries on a consolidated basis and (d) without
duplication, the stated amount of all letters of credit issued for the
account of American Ski - West or any of its Restricted Subsidiaries.
"APPLICABLE BASE RATE" shall mean the sum of (a) the Base Rate PLUS
(b) the Base Rate Margin, as each is in effect from time to time.
"APPLICABLE LIBOR RATE" shall mean the sum of (a) the LIBOR Rate PLUS
(b) the LIBOR Rate Margin, as each is in effect from time to time.
"APPLICABLE MONEY MARKET RATE" shall mean the sum of (a) the Money
Market Rate PLUS (b) the LIBOR Rate Margin, as each is in effect from time
to time.
"APPRAISAL" shall mean an appraisal of the fair market value of
property and business, accepted and approved by the Agent, performed by an
independent appraiser selected by the Agent who is not employed by American
Ski, any of its Subsidiaries or the Agent, the form of such appraisal and
the identity of the appraiser to be acceptable to the Agent.
"APPRAISED VALUE" shall mean the fair market value of the subject
property determined by the most recent Appraisal.
"APPROVED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
affiliate of such investment advisor.
"ASC EAST BORROWERS" shall mean ASC East, Inc. and the ASC East
Restricted Subsidiaries that are party to the ASC East Credit Agreement,
collectively.
"ASC EAST COMMITMENT PERCENTAGE" shall mean the "Commitment
Percentage" under and as defined in the ASC East Credit Agreement.
"ASC EAST CREDIT AGREEMENT" shall mean the Credit Agreement of even
date herewith by and among the Agent, the Lenders, American Ski and the ASC
East Borrowers, as amended, modified and supplemented from time to time.
3
<PAGE>
"ASC EAST LENDER AGREEMENTS" shall mean the "Lender Agreements" under
and as defined in the ASC East Credit Agreement.
"ASC EAST LENDER OBLIGATIONS" shall mean the "Lender Obligations"
under and as defined in the ASC East Credit Agreement.
"ASC EAST LOAN PARTIES" shall mean the ASC East Borrowers and the ASC
East Restricted Subsidiaries that are party to the ASC East Credit
Agreement.
"ASC EAST MAXIMUM REVOLVING CREDIT AMOUNT" shall mean the "Maximum
Revolving Credit Amount" under and as defined in the ASC East Credit
Agreement.
"ASC EAST RESTRICTED SUBSIDIARIES" shall mean all Subsidiaries of ASC
East, Inc. other than the ASC East Unrestricted Subsidiaries.
"ASC EAST REVOLVING CREDIT ADVANCES" shall mean the "Revolving Credit
Advances" under and as defined in the ASC East Credit Agreement.
"ASC EAST REVOLVING CREDIT NOTES" shall mean the "Revolving Credit
Notes" under and as defined in the ASC East Credit Agreement.
"ASC EAST SECURITY DOCUMENTS" shall mean the "Security Documents"
under and as defined in the ASC East Credit Agreement.
"ASC EAST TERM LOAN NOTES" shall mean the "Term Loan Notes" under and
as defined in the ASC East Credit Agreement.
"ASC EAST UNRESTRICTED SUBSIDIARIES" shall mean Killington West, Ltd.,
a California corporation, Mountain Water Company, a Vermont corporation,
Grand Summit Resort Properties, Inc., a Maine corporation, S-K-I Insurance
Company, a Vermont corporation, Club Sugarbush, a Vermont corporation,
Uplands Water and such other Subsidiaries as may from time to time be
designated by American Ski as an Unrestricted Subsidiary and as are
reasonably acceptable to the Agent.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" -- See Section 12.2(a) hereof.
"AVAILABLE REVOLVING CREDIT AMOUNT" shall mean at any time the Maximum
Revolving Credit Amount in effect at such time (including after giving
effect to any mandatory reductions of the Maximum Revolving Credit Amount
under Section 4.1(c)), LESS the Letter of Credit Exposure and LESS the
aggregate principal amount of Swing Line Loans then outstanding.
"AVAILABLE REVOLVING CREDIT COMMITMENT" shall mean, as to any
Revolving Credit Lender at any time, an amount equal to the excess, if any,
of (a) the product of (i) such Revolving Credit Lender's Revolving Credit
Commitment Percentage
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multiplied by (ii) the Maximum Revolving Credit Amount over (b) such
Revolving Credit Lender's Aggregate Outstanding Revolving Credit
Extensions.
"BASE CAPITAL EXPENDITURE AMOUNT" shall mean $30,000,000.
"BASE RATE" shall mean the greater of (a) the rate of interest
announced from time to time by the Agent at its head office in Boston,
Massachusetts as its Base Rate and (b) the Federal Funds Effective Rate
plus 1/2 of 1% per annum (rounded upwards, if necessary, to the next 1/8 of
1%).
"BASE RATE LOAN" shall mean (a) any Revolving Credit Advance bearing
interest at a fluctuating rate determined by reference to the Applicable
Base Rate, (b) any portion of the Term Loans bearing interest at a
fluctuating rate determined by reference to the Applicable Base Rate and
(c) any portion of a Swing Line Loan bearing interest at a fluctuating rate
determined by reference to the Applicable Base Rate.
"BASE RATE MARGIN" shall mean a rate per annum determined in
accordance with the Pricing Schedule.
"BUSINESS DAY" shall mean (a) for all purposes other than as covered
by clause (b) below, any day other than a Saturday, Sunday or legal holiday
on which banks in Boston, Massachusetts are open for the conduct of a
substantial part of their commercial banking business and (b) with respect
to all notices and determinations in connection with, and payments of
principal and interest on, LIBOR Rate Loans, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between
banks in U.S. Dollar deposits in the London interbank eurodollar market.
"CAPITAL ASSETS" shall mean fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and goodwill); PROVIDED,
HOWEVER, that Capital Assets shall not include any item customarily charged
directly as an expense or depreciated over a useful life of twelve (12)
months or less in accordance with generally accepted accounting principles.
"CAPITAL EXPENDITURE 1998 ADJUSTMENT AMOUNT" shall mean (a) the sum of
(i) the amount of cash or cash equivalents on the consolidated balance
sheet of American Ski and its Restricted Subsidiaries as of April 30, 1998
and (ii) the amount of permitted investments made by American Ski in
Unrestricted Subsidiaries after the Closing Date from the excess net
proceeds of the IPO Gross Proceeds, LESS $25,000,000 if the sum of (i) and
(ii) is less than $50,000,000 or (b) 50% of the sum of (a)(i) and (ii)
above if the sum of (a)(i) and (ii) above exceeds $50,000,000.
"CAPITAL EXPENDITURE RATIO" shall mean the ratio, as of April 30 of
each fiscal year, of (a) Consolidated Senior Secured Debt PLUS the Unused
Revolving Credit Commitments as of such date to (b) Consolidated EBITDA for
the four-quarter period
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ending on such date; PROVIDED, HOWEVER, that in calculating the Capital
Expenditure Ratio as of April 30, 1998, there shall be deducted from
Consolidated Senior Secured Debt the Capital Expenditure 1998 Adjustment
Amount.
"CAPITAL EXPENDITURE REINVESTMENT AMOUNT" shall mean the amount of
proceeds of Permitted Dispositions that is reinvested in Capital
Expenditures within 365 days of such Permitted Dispositions.
"CAPITAL EXPENDITURES" shall mean amounts paid or incurred, including
indebtedness incurred, by American Ski or any of its Restricted
Subsidiaries in connection with the purchase or lease by American Ski or
any of its Restricted Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of American Ski and its
Restricted Subsidiaries in accordance with generally accepted accounting
principles.
"CAPITALIZED LEASE" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with generally
accepted accounting principles and Statement of Financial Accounting
Standards No. 13.
"CAPITALIZED LEASE OBLIGATIONS" shall mean the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with generally accepted
accounting principles and Statement of Financial Accounting Standards No.
13.
"CASH INSURANCE PROCEEDS" shall mean the proceeds received by American
Ski or any of its Restricted Subsidiaries under any key man life insurance
or property and casualty insurance policy carried by American Ski or such
Restricted Subsidiary.
"CASH PROCEEDS" shall mean, with respect to any Permitted Disposition,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such
Permitted Disposition, but only as and when received) received by American
Ski or any of its Restricted Subsidiaries from such Permitted Disposition.
"CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT" shall mean the
Cerberus Amendment and Waiver Letter Agreement dated November 3, 1997 by
and between Madeleine LLC and American Ski, as amended, modified and
supplemented from time to time and attached hereto as EXHIBIT T relating to
the exchange of the Series A Exchangeable Preferred Stock and the Senior
Exchangeable Notes into the 101/2% Repriced Convertible Exchangeable
Preferred Stock, the Certificate of Designation of American Ski
("Certificate of Designation") also attached hereto as EXHIBIT T, the
Amended and Restated Registration Rights Agreement dated as of November 3,
1997 (the "Amended and Restated Registration Rights Agreement") also
attached hereto as Exhibit T and the amendment of certain provisions of the
Cerberus Purchase Agreement on terms and conditions satisfactory to the
Agent.
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"CERBERUS INVESTMENT" shall mean the initial purchase by Madeleine LLC
of the Series A Exchangeable Preferred Stock and the Senior Exchangeable
Notes pursuant to the Cerberus Purchase Agreement.
"CERBERUS PURCHASE AGREEMENT" shall mean the Securities Purchase
Agreement dated as of July 2, 1997 between American Ski (f/k/a ASC
Holdings, Inc.) and Madeleine LLC as the purchaser thereunder, as amended
by the First Amendment to Securities Purchase Agreement dated as of July
25, 1997, as further amended, modified and supplemented from time to time
and attached hereto as EXHIBIT T.
"CLOSING DATE" shall mean the date on which all of the conditions set
forth in Section 3.1 have been satisfied.
"CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"COLLATERAL" shall mean all of the property, rights and interests of
American Ski and its Subsidiaries that are subject to the security
interests, pledges, and mortgages created by the Security Agreements.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COMMITMENT PERCENTAGE" shall mean as to each Lender, the sum of its
Revolving Credit Commitment Percentage and its Term Loan Commitment
Percentage as set forth on SCHEDULE 1 hereto.
"COMPLIANCE CERTIFICATE" shall mean a certificate in the form of
EXHIBIT C hereto and executed by the chief executive officer or chief
financial officer of American Ski.
"CONSOLIDATED" and "CONSOLIDATING," when used with reference to any
term, mean that term (or the terms "combined" and "combining," as the case
may be, in the case of partnerships, joint ventures and Affiliates that are
not Subsidiaries) as applied to the accounts of American Ski (or other
specified Person) and all of its Restricted Subsidiaries (or other
specified Persons), or such of its Restricted Subsidiaries as may be
specified, consolidated (or combined) in accordance with generally accepted
accounting principles and with appropriate deductions for minority
interests in Subsidiaries, as required by generally accepted accounting
principles.
"CONSOLIDATED ADJUSTED CASH FLOW" shall mean (a) Consolidated
EBITDA (before any adjustments to reflect acquisitions, sales and
exchanges of property during such period) for each fiscal year of
American Ski and its Restricted Subsidiaries LESS (b) the sum of (i)
the lesser of actual total Capital Expenditures or $9,000,000,
representing the estimated Capital Expenditures of
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American Ski and its Restricted Subsidiaries required to maintain their
existing ski resorts, and (ii) cash taxes paid.
"CONSOLIDATED DEBT SERVICE" shall mean the sum of (a) Consolidated
Interest Expense, (b) scheduled principal payments on Indebtedness for
borrowed money and (c) without duplication with clause (b), scheduled
reductions in the amount of the Consolidated Maximum Revolving Credit
Amount under clause (b) of the definition thereof, in each case for the
period under review.
"CONSOLIDATED EBITDA" shall mean for the most recently completed four
fiscal quarters, (a) net income or (loss) of American Ski and its
Restricted Subsidiaries on a consolidated basis determined in accordance
with generally accepted accounting principles without giving effect to
extraordinary gains and losses from sales, exchanges and other dispositions
of property not in the ordinary course of business, and nonrecurring items
and excluding from the calculation of net income all revenues from
Unrestricted Subsidiaries except to the extent received by American Ski or
its Restricted Subsidiaries in cash as a loan repayment, dividend or other
distribution, PLUS, to the extent deducted in calculating net income, (b)
the sum of, without duplication, (i) depreciation expense of American Ski
and its Restricted Subsidiaries, (ii) amortization expense of American Ski
and its Restricted Subsidiaries, (iii) Consolidated Interest Expense PLUS
the non-cash portion of consolidated interest expense on Consolidated
Funded Debt, (iv) income tax expense and (v) other non-cash items of
American Ski and its Restricted Subsidiaries including, without limitation,
the 1998 Stock Option Grant.
"CONSOLIDATED EXCESS CASH FLOW" shall mean, for any period,
Consolidated EBITDA LESS the sum of (a) Consolidated Interest Expense, (b)
cash taxes paid, (c) required principal payments of Indebtedness and (d)
the Base Capital Expenditure Amount, each determined for such period.
"CONSOLIDATED FUNDED DEBT" means, as of each date of determination,
without duplication (a) all Indebtedness for borrowed money of American Ski
and its Restricted Subsidiaries on that date (including without limitation
all obligations with respect to Capitalized Leases), (b) the aggregate
amount available for drawing under all letters of credit outstanding on
that date (including the Letters of Credit) for which American Ski or any
Restricted Subsidiary is the account party (EXCLUDING HOWEVER, the
aggregate amount available for drawing under letters of credit issued to
lenders and lessors of Indebtedness of the type described in clause (a) in
support of such Indebtedness), and (c) the aggregate amount drawn under all
letters of credit (including the Letters of Credit) for which American Ski
or any Restricted Subsidiary is the account party and for which the issuer
of such letters of credit has not been reimbursed on that date.
"CONSOLIDATED INTANGIBLE ASSETS" shall mean (a) all intercompany loans
(without duplication for exclusions made in accordance with generally
accepted accounting principles) and loans to any employee or officer of
American Ski or any of its
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Subsidiaries, and all amounts payable to American Ski or any of its
Subsidiaries from any of the aforesaid persons, (b) all assets which would
be classified as intangible assets under generally accepted accounting
principles consistently applied, including, without limitation, goodwill
(whether representing the excess of cost over book value of assets acquired
or otherwise), patents, trademarks, trade names, copyrights, franchises,
and deferred charges (including, without limitation, unamortized debt
discount and expense, organization costs, and research and development
costs), (c) treasury stock and minority interests in other corporations or
business organizations, (d) cash set apart and held in a sinking or other
analogous fund established for the purpose of redemption or other
retirement of capital stock and (e) to the extent not already deducted from
total assets, reserves for depreciation, depletion, obsolescence and/or
amortization of properties and all other reserves or appropriations of
retained earnings which, in accordance with generally accepted accounting
principles consistently applied, should be established in connection with
the business conducted by American Ski and its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" shall mean the cash portion of
consolidated interest expense (including commitment and letter of credit
fees) on Consolidated Funded Debt, as determined in accordance with
generally accepted accounting principles consistently applied.
"CONSOLIDATED LENDER OBLIGATIONS" shall mean the Lender Obligations
and the ASC East Lender Obligations.
"CONSOLIDATED MAXIMUM REVOLVING CREDIT AMOUNT" shall mean the Maximum
Revolving Credit Amount PLUS the ASC East Maximum Revolving Credit Amount.
"CONSOLIDATED NET INCOME" shall mean the net income (or deficit) from
operations of American Ski and its Restricted Subsidiaries, after taxes,
determined in accordance with generally accepted accounting principles
consistently applied.
"CONSOLIDATED NET WORTH" shall mean, at any date as of which the
amount thereof shall be determined, (a) the consolidated assets of American
Ski and its Restricted Subsidiaries (excluding from assets investments in
Unrestricted Subsidiaries) LESS (b) the consolidated total liabilities of
American Ski and its Restricted Subsidiaries, determined in accordance with
generally accepted accounting principles consistently applied.
"CONSOLIDATED REVOLVING CREDIT ADVANCES" shall mean the Revolving
Credit Advances PLUS the ASC East Revolving Credit Advances.
"CONSOLIDATED SENIOR SECURED DEBT" shall mean the outstanding
principal amount of the Consolidated Term Loans, the Consolidated Revolving
Credit Advances, the Consolidated Swing Line Loans and all other
Consolidated Funded Debt (other than Subordinated Indebtedness).
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"CONSOLIDATED SWING LINE LOANS" shall mean the Swing Line Loans PLUS
the "Swing Line Loans" as defined in the ASC East Credit Agreement.
"CONSOLIDATED TERM LOANS" shall mean the Term Loans PLUS the "Term
Loans" as defined in the ASC East Credit Agreement.
"CONSOLIDATED TOTAL DEBT" shall mean the sum of (a) the outstanding
principal amount of the Consolidated Revolving Credit Advances, the
Consolidated Term Loans and the Consolidated Swing Line Loans, (b) any
claim required to be paid pursuant to Guaranties of American Ski and its
Restricted Subsidiaries, (c) the Senior Subordinated Notes, (d) all other
funded Indebtedness of American Ski and its Restricted Subsidiaries on a
consolidated basis and (e) without duplication, the stated amount of all
letters of credit issued for the account of American Ski or any Restricted
Subsidiary.
"CREDIT PARTICIPANTS" -- See Section 12.3 hereof.
"DEFAULT" shall mean an Event of Default or an event or condition
which with the passage of time or giving of notice, or both, would become
such an Event of Default.
"DIRECT UNRESTRICTED SUBSIDIARY INVESTMENTS" shall mean the sum of (a)
Investments made by American Ski and its Restricted Subsidiaries in
Unrestricted Subsidiaries in cash or cash equivalents, PLUS (b) the book
value of assets other than cash and cash equivalents and other than
Indirect Unrestricted Subsidiary Investments contributed to or invested by
American Ski and its Restricted Subsidiaries in Unrestricted Subsidiaries
LESS (c) cash dividends or distributions received by American Ski and its
Restricted Subsidiaries from such Unrestricted Subsidiaries after the date
such Investments described in clauses (a) and (b) were made.
"DISTRIBUTION" shall mean: (a) the declaration or payment of any
dividend on or in respect of any shares of any class of capital stock of
American Ski or any of its Restricted Subsidiaries, other than dividends
payable solely in shares of common stock of the corporation involved, (b)
the purchase, redemption, or other acquisition or retirement of any shares
of any class of capital stock of American Ski or any of its Restricted
Subsidiaries directly or indirectly, (c) any other distribution on or in
respect of any shares of any class of capital stock of American Ski or any
Restricted Subsidiary, (d) any setting apart or allocating any sum for the
payment of any dividend or distribution or for the purchase, redemption or
retirement of any shares of capital stock of American Ski or any Restricted
Subsidiary and (e) any payment of principal on or any retirement or
defeasance of Subordinated Indebtedness.
"EBITDA" shall mean for the most recently completed four fiscal
quarters, (a) net income or (loss) determined in accordance with generally
accepted accounting principles without giving effect to extraordinary gains
and losses from sales, exchanges and other dispositions of property not in
the ordinary course of business, and
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nonrecurring items and excluding from the calculation of net income all
revenues from Unrestricted Subsidiaries except to the extent received by
American Ski or its Restricted Subsidiaries in cash as a loan repayment,
dividend or other Distribution, PLUS, to the extent deducted in calculating
net income, (b) the sum of, without duplication, (i) depreciation expense,
(ii) amortization expense, (iii) interest expense PLUS the non-cash portion
of interest expense on funded debt, (iv) income tax expense and (v) other
non-cash items.
"ENVIRONMENT" means soil, surface waters, groundwaters, land, stream
sediments, surface or subsurface strata, ambient air, and any environmental
medium.
"ENVIRONMENTAL LAW" means any judgment, decree, order, common law
rule, statute, act, law, code, ordinance, permit, license, rule or
regulation pertaining to environmental matters, or any federal, state,
county or local statute, regulation, code, ordinance, order or decree
relating to public health, welfare, the Environment, or to the storage,
handling, treatment, transportation, use or generation of Hazardous
Materials in or at the workplace, or to worker health or safety, whether
now existing or hereafter enacted.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EVENT OF DEFAULT" -- See Section 10.1 hereof.
"EXCESS CASH FLOW LEVERAGE RATIO" shall mean the ratio of (a)
Consolidated Senior Secured Debt PLUS the Unused Revolving Credit
Commitments to (b) Consolidated EBITDA as of the end of the relevant Excess
Cash Payment Period.
"EXCESS CASH PAYMENT DATE" shall mean the earlier of (a) the date of
delivery of the financial statements pursuant to Section 6.2 in respect of
American Ski's fiscal year then ended and (b) the date occurring 90 days
after the last day of each fiscal year of American Ski (in either case,
commencing with its fiscal year ended July 25, 1999).
"EXCESS CASH PAYMENT PERIOD" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal
year of American Ski and its Subsidiaries, PROVIDED that the first Excess
Cash Payment Period hereunder shall be the period from and including July
27, 1998 to and including July 25, 1999.
"EXCESS IPO PROCEEDS" shall mean the sum of (a) the Restricted Excess
IPO Proceeds and (b) the Unrestricted Excess IPO Proceeds.
"EXCESS REAL PROPERTY" shall mean unimproved parcels which constitute
part of any Mortgaged Property and are not then currently used or
contemplated (except with respect to lodging) to be used in connection with
the operation of such Mortgaged
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Property as a ski resort as then configured, including lodging, other
recreational uses and related amenities.
"EXISTING LETTERS OF CREDIT" shall mean the Letters of Credit
described as such on SCHEDULE 2.16 hereto and issued by the Issuing Bank.
"FEE LETTER" -- See Section 2.9 hereof.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Bank of New York or, if such rate is not so published for any day
that is a Business Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds brokers of
recognized standing selected by the Agent.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean generally
accepted accounting principles as defined by controlling pronouncements of
the Financial Accounting Standards Board, as from time to time supplemented
and amended.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GUARANTOR" shall mean American Ski.
"GUARANTY" or "GUARANTEE" or "GUARANTIES" shall include any
arrangement whereby a Person is or becomes liable in respect of any
Indebtedness or other obligation of another and any other arrangement
whereby credit is extended to another obligor on the basis of any promise
of a guarantor, whether that promise is expressed in terms of an obligation
to pay the Indebtedness of such obligor, or to purchase or lease assets
under circumstances that would enable such obligor to discharge one or more
of its obligations, or to maintain the capital, the working capital,
solvency or general financial condition of such obligor, whether or not
such arrangement is listed in the balance sheet of the guarantor or
referred to in a footnote thereto.
"HAZARDOUS MATERIAL" means any pollutant, contaminant, toxic
substance, chemical substance or mixture, hazardous waste, hazardous
material, or hazardous substance, or any oil, petroleum, or petroleum
product, as defined in or pursuant to the Resource Conservation and
Recovery Act, as amended, the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, the Superfund Amendment and
Reauthorization Act, as amended, the Federal Clean Water Act, as amended,
the Hazardous Materials Transportation Act, as amended, the Toxic
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Substances Control Act, as amended, any regulations promulgated under these
Acts, or any other Environmental Law.
"HEAVENLY SUBSIDIARIES" shall mean Heavenly Valley Ski & Resort
Corporation, Heavenly Corporation and Heavenly Valley, Limited Partnership.
"INDEBTEDNESS" shall mean, as to any Person, without duplication: (a)
all obligations of such Person for borrowed money or evidenced by bonds,
debentures, notes or similar instruments; (b) all obligations of such
Person for the deferred purchase price of property or services (including
without limitation deferred payment obligations which are part of the
consideration provided for in agreements not to compete), except trade
accounts payable and accrued liabilities arising in the ordinary course of
business which are not overdue by more than 60 days or which are being
contested in good faith by appropriate proceedings; (c) all capital lease
obligations of such Person; (d) all Indebtedness of others secured by a
lien on any properties, assets or revenues of such Person; (e) all
Indebtedness of others guaranteed by such Person; (f) all net obligations
of such Person under interest rate, commodity, foreign currency and
financial markets swaps, options, futures and other hedging obligations;
and (g) all obligations of such Person, contingent or otherwise, in respect
of letters of credit or bankers' acceptances or similar instruments.
"INDEMNITY AGREEMENTS" the Hazardous Materials Indemnification
Agreements of even date herewith from each Borrower to the Agent, each in
substantially the form of EXHIBIT N hereto.
"INDIRECT UNRESTRICTED SUBSIDIARY INVESTMENTS" shall mean (a) the book
value of Excess Real Property contributed by American Ski or any Restricted
Subsidiary to Unrestricted Subsidiaries LESS (b) cash dividends or
distributions received by American Ski or its Restricted Subsidiaries from
such Unrestricted Subsidiaries after the date such Investments were made in
excess of those referred to in clause (c) of the definition of Direct
Unrestricted Subsidiary Investments in an amount equal to the sum of
Investments described in clauses (a) and (b) of the definition of Direct
Unrestricted Subsidiary Investments.
"INTEREST PERIOD" shall mean with respect to each LIBOR Rate Loan, the
period commencing on the date of such LIBOR Rate Loan and ending one, two,
three or six months thereafter, as the Borrowers may request as provided in
Sections 2.2(a) or 2.6 hereof, PROVIDED that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clauses (c) or (d) below) that would otherwise end
on a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day;
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(b) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d) below, end on the last Business Day
of a calendar month;
(c) any Interest Period with respect to a Revolving Credit
Advance that would otherwise end after the Revolving Credit Termination
Date shall end on the Revolving Credit Termination Date;
(d) any Interest Period with respect to any portion of the Term
Loans that would otherwise end after the Term Loan Maturity Date shall end
on the Term Loan Maturity Date; and
(e) notwithstanding clauses (c) and (d) above, no Interest
Period shall have a duration of less than one month, and if any Interest
Period applicable to any LIBOR Rate Loan would be for a shorter period,
such Interest Period shall not be available hereunder.
"INTEREST RATE PROTECTION AGREEMENT" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement, interest rate floor agreement or other
similar agreement or arrangement.
"INVESTMENT" shall mean (a) any stock, evidence of Indebtedness or
other security of another Person, (b) any loan, advance, contribution to
capital, extension of credit (except for current trade and customer
accounts receivable for inventory sold or services rendered in the ordinary
course of business and payable in accordance with customary trade terms) to
another Person, (c) any purchase of (i) stock or other securities of
another Person or (ii) any business or undertaking of another Person
(whether by purchase of assets or securities), any commitment or option to
make any such purchase if, in the case of an option, the aggregate
consideration paid for such option was in excess of $100 or (d) any other
investment, in all cases whether existing on the date of this Agreement or
thereafter made.
"IPO GROSS PROCEEDS" shall mean the gross proceeds of the initial
public offering of common stock of American Ski under the Registration
Statement.
"ISSUING BANK" shall mean the Agent.
"KAMORI" shall mean Kamori International Corporation, a Delaware
corporation.
"KAMORI ACQUISITION" shall mean the acquisition by ASC West of all of
the outstanding stock and partnership interests in the Steamboat
Subsidiaries and the Heavenly Subsidiaries pursuant to the Kamori
Acquisition Documents.
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"KAMORI ACQUISITION DOCUMENTS" shall mean (a) the Stock Purchase
Agreement dated August 1, 1997 among Kamori, ASC West and American Ski,
including all schedules, exhibits and amendments thereto (the "Kamori Stock
Purchase Agreement") attached hereto as EXHIBIT V and (b) all other
agreements, instruments and documents delivered in connection with the
Kamori Acquisition.
"KAMORI COMBINED ENTITIES" shall mean Kamori, the Heavenly
Subsidiaries and the Steamboat Subsidiaries, collectively.
"LEASES" shall mean all leases and other agreements under which the
Borrowers have rights to use or occupy any real property.
"LENDER AGREEMENTS" shall mean this Agreement, the Term Notes, the
Revolving Credit Notes, the Swing Line Note, the Indemnity Agreements, the
Security Agreements, the applications and reimbursement agreements relating
to the Existing Letters of Credit and any other present or future agreement
from time to time entered into between American Ski - West or any of its
Restricted Subsidiaries and the Agent or any Lender, each as from time to
time amended or supplemented, and all statements, reports and certificates
delivered by American Ski - West or any of its Restricted Subsidiaries to
the Agent or any Lender in connection therewith.
"LENDER OBLIGATIONS" shall mean all present and future obligations and
Indebtedness of American Ski - West or any of its Restricted Subsidiaries
owing to the Agent or the Lenders under this Agreement or any other Lender
Agreement, including, without limitation, the obligations to pay the
Indebtedness from time to time evidenced by the Term Notes, the Revolving
Credit Notes, the Swing Line Note, the Reimbursement Obligations and
obligations to pay interest, commitment fees, balance deficiency fees,
charges, expenses and indemnification from time to time owed under any
Lender Agreement.
"LENDERS" shall mean (a) initially, each lender listed on the
signature pages hereof, (b) any other Person who becomes a Successor Lender
hereunder in accordance with the terms of Section 12.2 hereof and (c) the
successors and assigns of the Persons described in clauses (a) and (b).
"LETTER OF CREDIT" shall mean a letter of credit issued by the
Issuing Bank for the account of the Borrowers in accordance with
Section 2.16 hereof.
"LETTER OF CREDIT EXPOSURE" shall mean, at any time, the sum of
(a) the Maximum Drawing Amount with respect to all Letters of Credit and
(b) all unpaid Reimbursement Obligations.
"LETTER OF CREDIT FEE" -- See Section 2.16 hereof.
"LETTER OF CREDIT PARTICIPATION" -- See Section 2.16(i) hereof.
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"LEVERAGE RATIO" shall mean as of the end of any fiscal quarter the
ratio of Consolidated Total Debt as of such date to Consolidated EBITDA for
the four-quarter period ending on such date.
"LIBOR PRICING OPTION" shall mean the option granted to the Borrowers
pursuant to Section 2.6 hereof to have interest on all or a portion of the
Loans computed on the basis of the Applicable LIBOR Rate for an applicable
Interest Period.
"LIBOR RATE" shall mean for any Interest Period for any LIBOR Rate
Loan, the quotient of (a) the rate of interest determined by the Agent, at
about 10:00 a.m. (Boston time) on the LIBOR Rate Fixing Day as being the
rate at which deposits in U.S. dollars are offered to it by first-class
banks in the London interbank market for deposit for such Interest Period
in amounts comparable to the aggregate principal amount of LIBOR Rate Loans
to which such Interest Period relates, DIVIDED by (b) the difference
between one (1) minus the Reserve Requirement (expressed as a decimal)
applicable to that Interest Period. The LIBOR Rate shall be adjusted
automatically as of the effective date of any change in the Reserve
Requirement.
"LIBOR RATE FIXING DAY" shall mean, in the case of any LIBOR Rate
Loan, the second Business Day preceding the Business Day on which an
Interest Period begins.
"LIBOR RATE LOAN" shall mean any Loan hereunder upon which interest
will accrue on the basis of a formula including as a component thereof the
LIBOR Rate. The expiration date of any LIBOR Rate Loan shall be the last
day of the Interest Period applicable to such LIBOR Rate Loan.
"LIBOR RATE MARGIN" shall mean a rate per annum determined on the
first day of the applicable Interest Period in accordance with the Pricing
Schedule.
"LIEN" -- See Section 9.2 hereof.
"LOAN" shall mean all or a portion of the Term Loans, any Revolving
Credit Advance or any Swing Line Loan outstanding hereunder or made to the
Borrowers by the Lenders pursuant to Article 2 of this Agreement, and
"Loans" means all of such loans, collectively.
"MAJORITY LENDERS" shall mean, at any time, any two or more Lenders
holding at least 51% of the sum of the outstanding principal amount of the
Loans hereunder and the Unused Revolving Credit Commitments.
"MANAGEMENT PROJECTIONS" shall mean the Historical pro forma
Consolidated Resort Operations for 1995-1997 and projections for 1998-2002,
as well as individual resort Income Statements for the same periods,
prepared by American Ski and
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delivered to the Agent by American Ski on behalf of itself and its
Restricted Subsidiaries.
"MATERIAL ADVERSE EFFECT" shall mean any adverse change (or occurrence
or condition reasonably likely to produce an adverse change) in the
financial condition, properties, business, operations or prospects which is
material to (a) American Ski and its Restricted Subsidiaries as a whole or
(b) the Borrowers and their Restricted Subsidiaries as a whole.
"MAXIMUM DRAWING AMOUNT" shall mean the maximum aggregate amount that
the beneficiaries may at any time draw under outstanding Letters of Credit,
as such aggregate amount may be reduced from time to time pursuant to the
terms of the Letters of Credit.
"MAXIMUM REVOLVING CREDIT AMOUNT" shall mean as of any date of
determination, the lesser of (a) the applicable amount set forth below (as
each such amount may be reduced from time to time pursuant to the mandatory
reduction requirements of Section 4.1(c)):
Closing Date through May 30, 1999 $65,000,000
May 31, 1999 through May 30, 2000 64,650,000
May 31, 2000 through May 30, 2001 63,650,000
May 31, 2001 through May 30, 2002 58,150,000
May 31, 2002 through May 30, 2003 52,400,000
May 31, 2003 through May 30, 2004 46,550,000
or (b) the amount to which the Maximum Revolving Credit Amount may have
been reduced pursuant to Section 2.12; PROVIDED that if the obligation of
the Lenders to make further Loans is terminated upon the occurrence of an
Event of Default, the Maximum Revolving Credit Amount as of any date of
determination thereafter shall be deemed to be $0.
"MINIMUM IPO GROSS PROCEEDS" shall mean $250,000,000.
"MONEY MARKET RATE" shall mean with respect to Money Market Loans the
interest rate per annum determined by the Agent in its reasonable
discretion with reference to the Federal Funds Effective Rate.
"MONEY MARKET LOANS" shall mean any Loan hereunder bearing interest at
a fluctuating rate determined by reference to the Money Market Rate.
"MORTGAGED PROPERTIES" shall mean all real properties and interests
therein owned by American Ski or any of its Restricted Subsidiaries which
are subject to mortgage liens in favor of the Agent under the Security
Agreements.
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"MORTGAGES" -- See definition of Security Agreements.
"NET CASH PROCEEDS" shall mean the Cash Proceeds (with respect to any
Permitted Disposition) or Cash Insurance Proceeds (with respect to any
casualty) net of the sum of (a) the amount of such proceeds required to be
applied to repay Indebtedness (other than the Loans) incurred or secured by
a lien on any asset disposed of in connection with such Permitted
Disposition; (b) brokerage commissions, legal fees, accounting fees,
investment banking fees, trustee's fees, finder's fees and other similar
fees and commissions, all of which amounts under this clause (b) shall be
reasonable and customary; (c) taxes payable within one year in connection
with or as a result of such transaction; (d) amounts held in escrow in
connection with any such Permitted Disposition (prior to the release
thereof); and (e) other reasonable and customary out-of-pocket costs
incurred in connection therewith.
"1998 STOCK OPTION GRANT" shall mean grants of stock options by
American Ski to its employees in fiscal year 1998 (which options may vest
in subsequent years) to purchase an aggregate of 2,475,235 shares of
American Ski's common stock.
"1997 FINANCIAL STATEMENTS" shall mean (a) the Consolidated Balance
Sheet of American Ski and its Subsidiaries as of July 27, 1997 and the
related Consolidated Statements of Operations, Cash Flows and Changes in
Stockholders' Equity for the year then ended, and the notes to such
financial statements, audited by Price Waterhouse LLP and (b) the
Consolidated Balance Sheet of the Kamori Combined Entities as of May 31,
1997 and the related Consolidated Statements of Operations, Cash Flows and
Changes in Stockholders' Equity for the year then ended, and the notes to
such financial statements, audited by Arthur Andersen LLP.
"NOTES" shall mean the Term Loan Notes, the Revolving Credit Notes and
the Swing Line Note.
"NOTICE OF REVOLVING CREDIT OR SWING LINE BORROWING" -- See Section
2.2(a) hereof.
"OTTEN LIFE INSURANCE POLICIES" -- See Section 8.8 hereof.
"OTTEN SHAREHOLDERS" shall mean Leslie B. Otten, his spouse and
children, and trusts established for his or any or all of their benefit,
collectively.
"OTTEN TAX NOTE" shall mean ASC East's Subordinated Demand Promissory
Note dated June 28, 1996 in the outstanding principal amount set forth on
SCHEDULE 5.16 hereto.
"PENSION PLAN" shall mean an employee benefit plan or other plan
maintained for the employees of American Ski or any Subsidiary as described
in Section 4021(a) of ERISA.
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"PERMITTED ACQUISITIONS" shall mean acquisitions by American Ski or
any Restricted Subsidiary of all of the stock or all or substantially all
of the assets of another domestic (or Canadian) Person engaged in any line
of business substantially similar to any existing line of business of
American Ski and its Restricted Subsidiaries, PROVIDED that the following
terms and conditions are met:
(a) American Ski shall provide the Agent notice of each proposed
acquisition at least 30 days in advance of the proposed closing date,
such notice to include a reasonably detailed information package
outlining the transaction and its pro forma impact on American Ski and
its Restricted Subsidiaries and certification, with supporting
financial statements, that:
(i) no Default or Event of Default shall exist at the
time of or after giving effect to each such acquisition on a pro
forma basis;
(ii) American Ski and its Restricted Subsidiaries will
comply with the financial covenants contained herein on a pro
forma basis, based on combined adjusted trailing four-quarter
operating performance, pro forma debt and pro forma debt service
based on scheduled principal payments (including any acquisition
loan) and pro forma interest on total debt at then prevailing
borrowing rates. Any pro forma adjustments to historical EBITDA
of the Person to be acquired shall be acceptable to the Lenders
in their reasonable discretion, PROVIDED that contractual and
adequately documented reductions in the former owner's
compensation and/or rental expense that will be effective as of
the acquisition date and/or other adjustments allowed by the
Commission and certified by the Borrowers' independent auditors
as reasonably likely to occur shall be deemed acceptable; and
(iii) the Board of Directors of the Person to be acquired
has approved such acquisition.
(b) Management of the acquiring Borrower shall reasonably
believe that, as a result of its ownership and management, the Person
to be acquired will achieve positive four-quarter EBITDA not later
than two years after the acquisition.
(c) (i) The maximum purchase price (exclusive of that portion
of the purchase price that may be payable solely in common stock
of American Ski) for any single proposed acquisition shall not
exceed the greater of (A) $50,000,000 or (B) 50% of American
Ski's Consolidated EBITDA for the most recent fiscal year before
giving effect to the proposed acquisition.
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(ii) PROVIDED, HOWEVER, that all or any portion of the
Restricted Excess IPO Proceeds may be applied to one or more
acquisitions, the purchase price of which may exceed the
foregoing limits of clause (c)(i), PROVIDED that the purchase
price for any one or a series of related acquisitions pursuant to
this clause (c)(ii) shall in no event exceed an amount equal to
11% of consolidated total assets of American Ski.
(d) The terms and structure of such acquisitions shall be
reasonably acceptable to the Lenders and shall not subject the Agent
or the Lenders to any regulatory approvals in connection with the
exercise of any remedies under the Lender Agreements.
(e) The acquired Person shall be merged into a Restricted
Subsidiary, or if it is to be a Subsidiary of a Borrower, it shall
become an obligor under the Lender Agreements on terms acceptable to
the Agent and by executing and delivering to the Agent the joinder in
the form attached hereto as EXHIBIT S.
(f) The assets or the stock so acquired shall be pledged to the
Agent on a first perfected basis, subject only to prior liens and
encumbrances associated with assumed debt otherwise permitted
hereunder, on terms and conditions required by the Agent and
consistent with the pledges of collateral provided to the Agent on the
Closing Date, together with all related appraisals, environmental
reviews, surveys, title insurance, certificates, instruments and
opinions requested by the Agent and consistent with such reviews,
surveys, certificates and opinions provided to the Agent on the
Closing Date.
"PERMITTED CAPITAL EXPENDITURES" shall mean Capital Expenditures of
American Ski and its Restricted Subsidiaries permitted under Section 9.7
hereto.
"PERMITTED DISPOSITIONS" shall mean (a) sales or dispositions of
assets of American Ski and its Restricted Subsidiaries for fair market
value in an amount not in excess of $20,000,000 in the aggregate in any
fiscal year, PROVIDED that (i) 75% of the proceeds of such sales or
dispositions must be in cash, (ii) all non-cash proceeds of such sales or
dispositions must be pledged, mortgaged or assigned to the Agent on terms
acceptable to the Agent and (iii) all cash proceeds thereof must be, within
one year following the date of such sales or dispositions, applied to
permanently reduce the Maximum Revolving Credit Amount or to prepay the
Term Loans, in accordance with their terms, or reinvested in Capital
Expenditures, Real Estate Capital Expenditures or Permitted Acquisitions,
(b) dispositions of Excess Real Property in accordance with the
requirements of Section 2.21, sales of developed real estate units in the
ordinary course of business, (d) the sale of substantially all of the
assets of or the capital stock of Orlando Resort Corporation and (e) the
sale of the Kamori residence pursuant to Section 8(b)(vii) of the Kamori
Stock Purchase Agreement.
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"PERMITTED LIENS" -- See Section 9.2 hereof.
"PERSON" shall mean an individual, corporation, partnership, joint
venture, association, estate, joint stock company, trust, organization,
business, or a government or agency or political subdivision thereof.
"PRICING NOTICE" shall mean (a) with respect to a Revolving Credit
Advance which is requested to be a LIBOR Rate Loan, the applicable Notice
of Revolving Credit or Swing Line Borrowing and (b) with respect to any
portion of the Term Loans requested to be a LIBOR Rate Loan, a notice from
American Ski to the Agent in substantially the form of EXHIBIT D hereto and
meeting the requirements of Section 2.6(b) hereof.
"PRICING SCHEDULE" shall mean the Pricing Schedule attached hereto as
SCHEDULE 2.
"REAL ESTATE CAPITAL EXPENDITURES" shall mean Capital Expenditures
paid or incurred by American Ski or any of its Restricted Subsidiaries for
the purchase, development, marketing or sale of residential real estate or
lodging operations.
"REAL ESTATE GUARANTIES" shall mean Guaranties of American Ski and its
Restricted Subsidiaries of Indebtedness of Unrestricted Subsidiaries. The
amount of any Real Estate Guaranty shall be deemed to be the lesser of (a)
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty is made and (b) the maximum
amount for which the obligor under such Guaranty may be liable pursuant to
the terms of the instrument embodying such Guaranty, unless such primary
obligation and the maximum amount for which such obligor may be liable is
not stated or determinable, in which case the amount of such Guaranty shall
be such obligor's maximum reasonably anticipated liability in respect
thereof, as agreed upon between American Ski and the Agent.
"REFUNDED SWING LINE LOANS" -- See Section 2.20 hereof.
"REFUNDING DATE" -- See Section 2.20 hereof.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-1 (No. 333-33483), as amended of American Ski, as filed with the
Commission and attached hereto as EXHIBIT U.
"REIMBURSEMENT OBLIGATIONS" shall mean (a) the Borrowers' obligations
to reimburse the Issuing Bank on account of any drawing under any Letter of
Credit and (b) any Borrower's obligation to reimburse any Revolving Credit
Lender on account of any drawing under any Existing Letter of Credit.
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"REPORTABLE EVENT" shall mean an event reportable to the Pension
Benefit Guaranty Corporation under Section 4043 of Title IV of ERISA.
"RESERVE REQUIREMENT" shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed under Regulation D on the Banks against
"Euro-currency Liabilities" as defined in said Regulation D.
"RESTRICTED EXCESS IPO PROCEEDS" shall mean (a) $0 if IPO Gross
Proceeds are equal to or less than $275,000,000 and (b) 50% of the net
proceeds received by American Ski from IPO Gross Proceeds in excess of
$275,000,000.
"RESTRICTED SUBSIDIARIES" shall mean Subsidiaries of American Ski, ASC
East, Inc., ASC West or other specified parent, other than Unrestricted
Subsidiaries of American Ski, ASC East, Inc., ASC West or other specified
parent.
"REVOLVING COMMITMENT FEE" -- see Section 2.9 hereof.
"REVOLVING CREDIT ADVANCE" shall mean any loan or advance from any
Lender to the Borrower pursuant to Section 2.1 hereof.
REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean as to each
Revolving Credit Lender, its percentage interest in the Maximum Revolving
Credit Amount as set forth on SCHEDULE 1 hereto.
"REVOLVING CREDIT LENDERS" shall mean the Revolving Credit Lenders so
identified on SCHEDULE 1 hereto.
"REVOLVING CREDIT NOTES" shall mean the Revolving Credit Notes
substantially in the form of EXHIBIT A-1 hereto executed by the Borrowers,
jointly and severally, in favor of each Revolving Credit Lender to evidence
the Revolving Credit Advances to be made by the Revolving Credit Lenders
from time to time hereunder.
"REVOLVING CREDIT TERMINATION DATE" shall mean May 31, 2004.
"SECURITY AGREEMENTS" shall mean:
(a) The Security Agreements, of even date herewith from American
Ski - West and each of its Restricted Subsidiaries to the Agent by
which American Ski - West and each of its Restricted Subsidiaries has
granted to the Agent, in order to secure the Lender Obligations, a
security interest in substantially all of its assets, each in
substantially the form of EXHIBIT E-1 hereto.
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(b) The Security Agreements of even date herewith from the
Guarantors to the Agent by which each of the Guarantors has granted to
the Agent, in order to secure the Lender Obligations, a security
interest in substantially all of its assets, each in substantially the
form of EXHIBIT E-2 hereto.
(c) The Deed of Trust, Assignment of Leases and Rents, Financing
Statement and Security Agreements, of even date herewith (the
"Mortgages") from each Borrower that owns any real property to the
Agent to secure the Lender Obligations, each in substantially the form
of EXHIBIT G hereto.
(d) The Collateral Assignments of Leases and Rents, of even date
herewith (the "Collateral Assignments of Leases") from each Borrower
that leases any real property, with respect to all Leases, to the
Agent to secure the Lender Obligations, each in substantially the form
of EXHIBIT H hereto.
(e) The Assignments in Trust, of even date herewith (the
"Assignments in Trust"), from certain Borrowers to the Agent to secure
the Lender Obligations, each in the form of EXHIBIT J hereto.
(f) The Assignment of Trademarks, of even date herewith (the
"Trademark Security Agreements") from each Borrower to the Agent to
secure the Lender Obligations, each in the form of EXHIBIT K hereto.
(g) The Assignments of Licenses, Contracts and Permits, of even
date herewith (the "Assignments of Licenses") from each Borrower to
the Agent to secure the Lender Obligations, each in the form of
EXHIBIT L hereto.
(h) The Stock Pledge Agreements of even date herewith (the
"Stock Pledges") pledging to the Agent the collateral described
therein (excluding stock of Unrestricted Subsidiaries) to secure the
obligations described therein, each in the form of EXHIBIT M hereto.
(i) The ASC East Security Documents.
(j) All other security agreements, pledge agreements, mortgages,
assignments and other instruments by which American Ski or any
Restricted Subsidiary grants or pledges to the Agent a lien on,
security interest in, or pledge or mortgage or assignment of any of
its assets.
"SENIOR EXCHANGEABLE NOTES" shall mean the 14% Senior Exchangeable
Notes due 2002 issued by American Ski under the Cerberus Purchase Agreement
in the original principal amount of $17,500,000.
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"SENIOR SUBORDINATED NOTES" shall mean the $120,000,000 Senior
Subordinated Notes of ASC East, Inc., due July 16, 2006, issued pursuant to
the Senior Subordinated Notes Indenture.
"SENIOR SUBORDINATED NOTES INDENTURE" shall mean the Indenture of
Trust dated as of June 28, 1996 by and between ASC East, Inc. and U.S.
Trust Company of New York, as Trustee.
"SERIES A EXCHANGEABLE PREFERRED STOCK" shall mean the 17,500 shares
of Series A Exchangeable Preferred Stock issued by American Ski under the
Cerberus Purchase Agreement.
"SOLVENT" or "SOLVENCY" shall mean, as to any Person, that such Person
(a) has assets having a fair value in excess of its liabilities, (b) has
assets having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and matured and
(c) has, and expects to continue to have, access to adequate capital for
the conduct of its business and the ability to pay its debts from time to
time incurred in connection with the operation of its business as such
debts mature.
"STEAMBOAT SUBSIDIARIES" shall mean Steamboat Ski & Resort
Corporation, Steamboat Development Corporation and Orlando Resort
Corporation.
"SUBORDINATED INDEBTEDNESS" shall mean (a) the Senior Subordinated
Notes, (b) the Otten Tax Note, (c) the Indebtedness identified as
Subordinated Indebtedness on SCHEDULE 5.16 and (d) all other Indebtedness
of American Ski or any Restricted Subsidiary which is subordinated to the
Indebtedness of American Ski or such Restricted Subsidiary to the Agent and
the Lenders on terms and conditions approved in writing by the Agent.
"SUBSIDIARY" shall mean any Person of which American Ski or any
Restricted Subsidiary or other specified parent shall now or hereafter at
the time own, directly or indirectly through one or more Subsidiaries or
otherwise, sufficient voting stock (or other beneficial interest) to
entitle it to elect at least a majority of the board of directors or
trustees or similar managing body.
"SWING LINE COMMITMENT" shall mean $5,000,000.
"SWING LINE LENDER" -- See Section 2.18 hereof.
"SWING LINE LOANS" -- See Section 2.18 hereof.
"SWING LINE NOTE" shall mean the Swing Line Note substantially in the
form of EXHIBIT A-3 hereto executed by the Borrowers, jointly and
severally, in favor of the Swing Line Lender to evidence the Swing Line
Loans to be made by the Swing Line Lender from time to time hereunder.
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"SWING LINE PARTICIPATION AMOUNT" -- See Section 2.20 hereof.
"10 1/2% REPRICED CONVERTIBLE EXCHANGEABLE PREFERRED STOCK" shall mean
the "10 1/2% Repriced Convertible Exchangeable Preferred Stock" under and
as defined in the Cerberus Amendment and Waiver Letter Agreement and the
Certificate of Designation.
"TERM LOAN COMMITMENT PERCENTAGE" shall mean as to each Term Loan
Lender, its percentage interest in the Term Loans as set forth on SCHEDULE
1 hereto.
"TERM LOAN LENDERS" shall mean those Lenders so identified on SCHEDULE
1 hereto.
"TERM LOAN MATURITY DATE" shall mean May 31, 2006.
"TERM LOAN NOTES" shall mean the Term Loan Notes substantially in the
form of EXHIBIT A-2 hereto executed by the Borrowers, jointly and
severally, in favor of each Term Loan Lender to evidence the Term Loans.
"TERM LOANs" shall mean the term loans made by the Term Loan Lenders
to the Borrowers pursuant to Section 2.4 hereof.
"13 3/4% SUBORDINATED NOTES" shall mean the "13 3/4% Subordinated
Discount Notes due 2007" of ASC East, Inc. as defined and described in the
Registration Statement.
"UCC" shall mean the Uniform Commercial Code in effect in the
applicable jurisdiction, as amended from time to time.
"UNIFORM CUSTOMS AND PRACTICE" shall mean the Uniform Customs and
Practice for Documentary Credits (1993 Revision) International Chamber
of Commerce publication No. 500.
"UNRESTRICTED EXCESS IPO PROCEEDS" shall mean (a) $0 if IPO Gross
Proceeds are equal to or less than $250,000,000, (b) all net proceeds
received by American Ski from any IPO Gross Proceeds in excess of
$250,000,000 but not in excess of $275,000,000 and (c) 50% of the net
proceeds received by American Ski from any IPO Gross Proceeds in excess of
$275,000,000.
"UNRESTRICTED SUBSIDIARIES" shall mean Killington West, Ltd., a
California corporation, Mountain Water Company, a Vermont corporation,
Grand Summit Resort Properties, Inc., a Maine corporation, S-K-I Insurance
Company, a Vermont corporation, Club Sugarbush, a Vermont corporation,
Uplands Water, Orlando Resort Corporation, a Delaware corporation, Walton
Pond Apartments, a Delaware corporation, and such other Subsidiaries, other
than a Borrower or a Guarantor, as may
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from time to time be designated by American Ski as an Unrestricted
Subsidiary and as are reasonably acceptable to the Agent.
"UNUSED REVOLVING CREDIT COMMITMENTS" shall mean the Maximum Revolving
Credit Amount in effect at such time LESS the sum of the Aggregate
Outstanding Revolving Credit Extensions for each Revolving Credit Lender
LESS the Letter of Credit Exposure and LESS the aggregate principal amount
of Swing Line Loans then outstanding.
"UPLANDS WATER" shall mean Uplands Water Company, Inc., a Vermont
corporation.
"WHOLLY-OWNED SUBSIDIARY" shall mean any Person of which American Ski,
any Restricted Subsidiary or other specified parent shall now or hereafter
at the time own, directly or indirectly through one or more Subsidiaries or
otherwise, one hundred percent (100%) of such Person's capital stock or
other beneficial interest.
"WOLF ACQUISITION AGREEMENT" shall mean the Purchase and Sale
Agreement by and between Wolf Resorts and ASC Utah dated as of May 30,
1997.
"WOLF RESORTS" shall mean Wolf Mountain Resorts, L.C., a Utah limited
liability company.
Section 1.2 ACCOUNTING TERMS. All accounting terms used and not defined
in this Agreement shall be construed in accordance with generally accepted
accounting principles consistently applied, and all financial data required to
be delivered hereunder shall be prepared in accordance with such principles.
ARTICLE 2. THE CREDITS
Section 2.1 THE REVOLVING CREDIT.
(a) Subject to the terms and conditions of this Agreement and so
long as no Default exists, at any time prior to the Revolving Credit Termination
Date, each Revolving Credit Lender, severally and not jointly, shall make such
Revolving Credit Advances to the Borrowers as the Borrowers may from time to
time request, by notice to the Agent in accordance with Section 2.2, in an
aggregate amount (i) as to each Revolving Credit Lender, not to exceed at any
time such Lender's Revolving Credit Commitment Percentage of the Available
Revolving Credit Amount and (ii) as to all Revolving Credit Lenders, not to
exceed an amount equal to the Available Revolving Credit Amount. The
outstanding principal amount of the Revolving Credit Advances, together with all
accrued interest and other fees and charges related thereto, shall be repaid in
full on the Revolving Credit Termination Date. On the Closing Date, the
Borrowers, jointly and severally, shall execute and deliver to each Revolving
Credit Lender a Revolving Credit Note to evidence the Revolving Credit Advances
from time
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to time made by such Revolving Credit Lender to the Borrowers hereunder. The
Revolving Credit Lenders having aggregate Revolving Credit Commitment
Percentages in excess of 50% may from time to time in consultation with the
Borrowers establish sublimits as to the amounts of Revolving Credit Advances
that may be advanced for use by one or more Borrowers that do not operate ski
resorts.
(b) Subject to the foregoing limitations and the provisions of
Section 4.2, the Borrowers shall have the right to make prepayments reducing the
outstanding balance of Revolving Credit Advances and to request further
Revolving Credit Advances, all in accordance with Section 2.2, without other
restrictions hereunder; PROVIDED that each Revolving Credit Lender shall have
the absolute right to refuse to make any Revolving Credit Advances for so long
as there exists any Default or any other condition which would constitute a
Default upon the making of such a Revolving Credit Advance; and PROVIDED FURTHER
that during each fiscal year of the Borrowers, commencing with the fiscal year
ending July 26, 1998, there shall be a period of 30 (thirty) consecutive days,
including April 30 of each year, during which the outstanding principal amount
of all Revolving Credit Advances shall not exceed the Available Revolving Credit
Amount in effect at such time LESS $30,000,000.
Section 2.2 MAKING OF REVOLVING CREDIT ADVANCES.
(a) Each Revolving Credit Advance shall be made on notice given
by the Borrowers, or by ASC West, as agent for the Borrowers, to the Agent not
later than 12:00 noon (Boston time) on the date of the proposed borrowing (a
"Notice of Revolving Credit or Swing Line Borrowing"); PROVIDED, HOWEVER, that
if the Borrowers elect a LIBOR Pricing Option with respect to any Revolving
Credit Advance in accordance with Section 2.6 hereof, such Notice of Revolving
Credit or Swing Line Borrowing shall be given by ASC West, as agent for the
Borrowers, contemporaneously with a Pricing Notice in the manner and within the
time specified in Section 2.6. The Agent shall give the Revolving Credit
Lenders notice of each Notice of Revolving Credit or Swing Line Borrowing in
accordance with the Agent's customary practice. Each such Notice of Revolving
Credit or Swing Line Borrowing shall be by telephone or telecopy, in each case
confirmed immediately in writing by ASC West, as agent for the Borrowers, in
substantially the form of EXHIBIT B hereto, specifying therein (i) the requested
date of such Revolving Credit Advance and (ii) the amount of such Revolving
Credit Advance, which must be a minimum of $100,000 and integral multiples
thereof; PROVIDED, HOWEVER, that the Swing Line Lender may request, on behalf of
the Borrowers, Revolving Credit Advances that are Base Rate Loans in other
amounts pursuant to Section 2.20(a). The Borrowers agree, jointly and
severally, to indemnify and hold the Revolving Credit Lenders harmless for any
action, including the making of any Revolving Credit Advances hereunder, or loss
or expense, taken or incurred by the Agent or the Revolving Credit Lenders in
good faith reliance upon such telephone request. At the time of the initial
request for a Revolving Credit Advance made under this Section 2.2, the
Borrowers shall have provided the Agent with a Compliance Certificate. The
Borrowers hereby agree (A) that the Revolving Credit Lenders shall be entitled
to rely upon the Compliance Certificate most recently delivered to the Agent
until it is superseded by a more recent Compliance Certificate and (B) that each
request for a Revolving Credit Advance, whether by telephone or in writing
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or otherwise, shall constitute a confirmation of the representations and
warranties contained in the most recent Compliance Certificate then in the
Agent's possession.
(b) Subject to the terms and conditions of this Agreement, each
Revolving Credit Lender shall make available on or before 2:00 p.m. (Boston
time) on the date of each proposed Revolving Credit Advance, to the Agent at the
Agent's address and in immediately available funds, such Lender's Revolving
Credit Commitment Percentage of such Revolving Credit Advance. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article 3, the Agent will credit such funds to the Borrowers'
accounts, as directed by ASC West, on the date of the proposed Revolving Credit
Advance.
(c) Unless the Agent shall have received notice from a Revolving
Credit Lender prior to the date of any Revolving Credit Advance that such
Revolving Credit Lender will not make available to the Agent such Lender's
Revolving Credit Commitment Percentage of such Revolving Credit Advance, the
Agent may assume that such Revolving Credit Lender has made such amount
available to the Agent on the date of such Revolving Credit Advance in
accordance with and as provided in this Section 2.2 and the Agent may, in
reliance upon such assumption, make available on such date a corresponding
amount to the Borrowers. If and to the extent such Revolving Credit Lender
shall not have so made its Revolving Credit Commitment Percentage of such
Revolving Credit Advance available to the Agent and the Agent shall have made
available such corresponding amount to the Borrowers, such Revolving Credit
Lender agrees to pay to the Agent forthwith on demand, and the Borrowers agree,
jointly and severally, to repay to the Agent within two Business Days after
demand (but only after demand for payment has first been made to such Revolving
Credit Lender and such Revolving Credit Lender has failed to make such payment),
an amount equal to such corresponding amount together with interest thereon for
each day from the date the Agent shall make such amount available to the
Borrowers until the date such amount is paid or repaid to the Agent, at an
interest rate equal to the interest rate applicable at the time to such
Revolving Credit Advances. If such Revolving Credit Lender shall pay to the
Agent such corresponding amount, such amount so paid shall constitute such
Revolving Credit Lender's Revolving Credit Advance for purposes of this
Agreement. If the Borrowers make a repayment required by the foregoing
provisions of this Section 2.2(c) and thereafter the applicable Revolving Credit
Lender or Revolving Credit Lenders make the payments to the Agent required by
this Section 2.2(c), the Agent shall promptly refund the amount of the
Borrowers' payment.
(d) The failure of any Revolving Credit Lender to make the
Revolving Credit Advance to be made by it on any date shall not relieve any
other Revolving Credit Lender of its obligation, if any, hereunder to make its
Revolving Credit Advance on such date, but no Revolving Credit Lender shall be
responsible for the failure of any other Revolving Credit Lender to make the
Revolving Credit Advance to be made by such other Revolving Credit Lender.
Section 2.3 INTEREST ON REVOLVING CREDIT ADVANCES. Subject to the terms
of Section 2.6 relating to LIBOR Pricing Options, the Borrowers, jointly and
severally, shall pay interest on the unpaid balance of the Revolving Credit
Advances from time to time outstanding at a per
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annum rate equal to the Applicable Base Rate for Revolving Credit Advances.
Interest on the Revolving Credit Advances shall be payable (a) quarterly in
arrears on the last day of each fiscal quarter, commencing January 31, 1998, for
Base Rate Loans or (b) quarterly in arrears on the last day of each fiscal
quarter, for LIBOR Rate Loans, and continuing until all of the Indebtedness of
the Borrowers to the Revolving Credit Lenders under the Revolving Credit Notes
shall have been paid in full.
Section 2.4 THE TERM LOANS. Subject to the terms and conditions of this
Agreement, on the date hereof, the Term Loan Lenders, severally and not jointly,
shall make term loans (the "Term Loans") to the Borrowers in an amount equal to
each Term Loan Lender's Term Loan Commitment Percentage of $75,000,000 as set
forth on SCHEDULE 1 hereto and the Borrowers shall execute and deliver to each
Term Loan Lender a Term Loan Note to evidence the Term Loan made by such Term
Loan Lender to the Borrowers hereunder.
Section 2.5 INTEREST ON THE TERM LOANS. Subject to the terms of Section
2.6 relating to LIBOR Pricing Options, the Borrowers, jointly and severally,
shall pay interest on the unpaid balance of the Term Loans at a per annum rate
equal to the Applicable Base Rate for the Term Loans. Interest on the Term
Loans shall be payable (a) quarterly in arrears on the last day of each fiscal
quarter, commencing January 31, 1998, for Base Rate Loans or (b) quarterly in
arrears on the last day of each fiscal quarter, for LIBOR Rate Loans, and
continuing until all of the Indebtedness of the Borrowers to the Term Loan
Lenders under the Term Loans shall have been paid in full.
Section 2.6 ELECTION OF LIBOR PRICING OPTIONS.
(a) Subject to all the terms and conditions hereof and so long
as no Default exists, ASC West, as agent for the Borrowers, may, by delivering a
Pricing Notice to the Agent received at or before 10:00 a.m., Boston time, on
the date two Business Days prior to the commencement of the Interest Period
selected in such Pricing Notice, elect to have all or a portion of the Term
Loans or the outstanding Revolving Credit Advances, as ASC West, as agent for
the Borrowers, may specify in such Pricing Notice, accrue and bear daily
interest during the Interest Period so selected at a per annum rate equal to the
Applicable LIBOR Rate for such Interest Period; PROVIDED, HOWEVER, that any such
election made with respect to the Term Loans or the Revolving Credit Advances
shall be in an amount not less than $5,000,000 and in increments of $1,000,000;
and PROVIDED FURTHER that no such election will be made if it would result in
there being more than ten (10) LIBOR Pricing Options in the aggregate
outstanding at any one time under this Agreement and the ASC East Credit
Agreement. Interest on Loans bearing interest at the Applicable LIBOR Rate
shall be payable quarterly in arrears on the last day of each fiscal quarter and
when such Loan is due (whether at maturity, by reason of acceleration or
otherwise).
(b) Each Pricing Notice shall be substantially in the form of
EXHIBIT D attached hereto and shall specify: (i) the selection of a LIBOR
Pricing Option; (ii) the effective date and amount of the Term Loan or the
Revolving Credit Advances subject to such
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LIBOR Pricing Option, subject to the limitations set forth herein; and (iii) the
duration of the applicable Interest Period. Each Pricing Notice shall be
irrevocable.
(c) The Agent will promptly inform each Lender of a Pricing
Notice and the Interest Period specified by the Borrowers therein. Upon
determination by the Agent of the Applicable LIBOR Rate for any Interest Period
selected by the Borrowers, the Agent will promptly inform the Borrowers and each
Lender of such Applicable LIBOR Rate so determined or, if applicable, the reason
why the Borrowers' election will not become effective.
Section 2.7 ADDITIONAL PAYMENTS. Upon the occurrence and during the
continuance of any Event of Default, the Borrowers shall, jointly and severally,
on demand, pay to the Agent, for the account of the Lenders, interest on the
unpaid principal balance of the Term Loans, the Revolving Credit Advances and
the Swing Line Loans and, to the extent permitted by law, on any overdue
installments of interest, at a rate per annum equal to the stated interest rates
applicable thereto plus 2% per annum.
Section 2.8 COMPUTATION OF INTEREST, ETC. Interest hereunder and under
the Loans shall be computed on the basis of a 360-day year for the number of
days actually elapsed. Any increase or decrease in the interest rate on the
Loans resulting from a change in the Base Rate shall be effective immediately
from the date of such change. No interest payment or interest rate charged
hereunder shall exceed the maximum rate authorized from time to time by
applicable law. The outstanding balance of the Term Notes, the Revolving Credit
Notes and the Swing Line Note as reflected on the Agent's records from time to
time shall be considered correct and binding on the Borrowers and the Lenders
(absent manifest error) unless within thirty (30) days after receipt of any
written notice by the Agent or any Lender of such outstanding amount, the
Borrowers or a Lender notifies the Agent to the contrary.
Section 2.9 FEES.
(a) The Borrowers, jointly and severally, shall pay to the
Agent, for the account of each Revolving Credit Lender, a commitment fee (the
"Revolving Commitment Fee") on such Revolving Credit Lender's Available
Revolving Credit Commitment from time to time in effect from the date hereof to
and including the Revolving Credit Termination Date computed at the applicable
rate set forth on the Pricing Schedule. The Revolving Commitment Fee shall be
payable quarterly in arrears on the last day of each January, April, July and
October, commencing January 31, 1998, for the period from the date hereof
through such date.
(b) The Borrowers, jointly and severally, shall pay to the
Agent, for the Agent's own account, such applicable agency fees and, for the
account of the Lenders, such applicable closing fees as are provided in a letter
agreement dated as of September 18, 1997 between American Ski and the Agent (as
such letter agreement may from time to time be amended or supplemented, the "Fee
Letter").
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Section 2.10 SET-OFF. To the extent not prohibited by applicable law,
the Borrowers, jointly and severally, hereby authorize the Agent and each
Lender, without prior notice to the Borrowers, if and to the extent payment is
not promptly made when due pursuant to the Term Loan Notes, the Revolving Credit
Notes or the Swing Line Note or pursuant to any provision hereof or of any other
Lender Agreement, to charge against any account of any Borrower with the Agent
or such Lender, an amount equal to the accrued interest and principal and other
amounts from time to time then due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements, provided that the Agent shall
notify the Borrowers of any such set-off promptly thereafter.
Section 2.11 SHARING OF PAYMENTS. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans made by it in excess of its ratable share
(according to the then outstanding principal amount of the Loans) of payments on
account of the Loans obtained by all the Lenders, such Lender shall purchase
from the other Lenders such participations in the Loans held by such other
Lenders as shall cause such purchasing Lender to share such payment ratably
according to the then outstanding principal amount of the Loans with each of
such other Lenders; PROVIDED, HOWEVER, that if all or any portion of such
payment is thereafter recovered from such purchasing Lender, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
without interest. The Borrowers agree that any Lender so purchasing a
participation in the Loans from another Lender pursuant to this Section 2.11
may, to the fullest extent permitted by law, exercise all its rights of payment
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
Section 2.12 REDUCTION OF COMMITMENT BY THE BORROWERS. The Borrowers at
their option may, at any time and from time to time, (a) irrevocably reduce in
part (in a minimum amount of $5,000,000 and in integral multiples of $1,000,000)
the unused portion of the Available Revolving Credit Amount or (b) terminate the
entire unused portion of the Available Revolving Credit Amount, in each case on
not less than seven (7) Business Days' prior written notice to the Agent. No
such reduction may be reinstated by the Borrowers.
Section 2.13 INCREASED COSTS, ETC.
(a) Anything herein to the contrary notwithstanding, if any
changes in present or future applicable law (which term "applicable law," as
used in this Agreement, includes statutes and rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time heretofore or hereafter made upon or otherwise issued
to any Lender by any central bank or other fiscal, monetary or other authority,
whether or not having the force of law), including without limitation any change
according to a prescribed schedule of increasing requirements, whether or not
known or in effect as of the date hereof, shall (i) subject such Lender to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement or the payment to such Lender of any amounts due
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to it hereunder, or (ii) materially change the basis of taxation of payments to
such Lender of the principal of or the interest on the Loans or any other
amounts payable to such Lender hereunder, or (iii) impose or increase or render
applicable any special or supplemental deposit or reserve or similar
requirements or assessment against assets held by, or deposits in or for the
account of, or any liabilities of, or loans by an office of such Lender in
respect of the transactions contemplated herein, or (iv) impose on such Lender
any other condition or requirement with respect to this Agreement, the Term
Loans, any Revolving Credit Advance or any Swing Line Loan, and the result of
any of the foregoing is (A) to increase the cost to such Lender of making,
funding or maintaining all or any part of the Loans or its commitment hereunder,
or (B) to reduce the amount of principal, interest or other amount payable to
such Lender hereunder, or (C) to require such Lender to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender from the Borrowers
hereunder, then, and in each such case not otherwise provided for hereunder, the
Borrowers, jointly and severally, will upon demand made by such Lender promptly
following such Lender's receipt of notice pertaining to such matters accompanied
by calculations thereof in reasonable detail, pay to such Lender such additional
amounts as will be sufficient to compensate such Lender for such additional
cost, reduction, payment or foregone interest or other sum; PROVIDED that the
foregoing provisions of this sentence shall not apply in the case of any
additional cost, reduction, payment or foregone interest or other sum resulting
from any taxes charged upon or by reference to the overall net income, profits
or gains of any Lender. In determining the additional amounts payable
hereunder, the Lenders may use any reasonable method of averaging, allocating or
attributing such additional costs, reductions, payments, foregone interest or
other sums among their respective customers.
(b) Anything herein to the contrary notwithstanding, if, after
the date hereof, any Lender shall have determined that any present or future
applicable law, rule, regulation, guideline, directive or request (whether or
not having force of law), including without limitation any change according to a
prescribed schedule of increasing requirements, whether or not known or in
effect as of the date hereof, regarding capital requirements for banks or bank
holding companies generally, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any of the foregoing, either imposes a requirement upon such
Lender to allocate additional capital resources or increases such Lender's
requirement to allocate capital resources or such Lender's commitment to make,
or to such Lender's maintenance of, the Term Loans, the Revolving Credit
Advances or Swing Line Loans hereunder, which has or would have the effect of
reducing the return on such Lender's capital to a level below that which such
Lender could have achieved (taking into consideration such Lender's then
existing policies with respect to capital adequacy and assuming full utilization
of such Lender's capital) but for such applicability, change, interpretation,
administration or compliance, by any amount deemed by such Lender to be
material, such Lender shall promptly after its determination of such occurrence
give notice thereof to the Borrower accompanied by an opinion of counsel to such
Lender with respect to such matters, the cost of which opinion shall be paid by
the Borrowers.
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The Borrowers and such Lender shall thereafter attempt to negotiate in good
faith an adjustment to the compensation payable hereunder which will adequately
compensate such Lender for such reduction. If the Borrowers and such Lender are
unable to agree on such adjustment within thirty (30) days of the date on which
the Borrowers receive such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such applicability, change,
interpretation, administration or compliance), the fees payable hereunder shall
increase by an amount which will, in such Lender's reasonable determination,
evidenced by calculations in reasonable detail furnished to the Borrowers,
compensate such Lender for such reduction, such Lender's determination of such
amount to be conclusive and binding upon the Borrowers, absent manifest error.
In determining such amount, such Lender may use any reasonable methods of
averaging, allocating or attributing such reduction among its customers.
Section 2.14 CHANGED CIRCUMSTANCES. In the event that:
(a) on any date on which the Applicable LIBOR Rate would
otherwise be set the Agent shall have determined in good faith (which
determination shall be final and conclusive) that adequate and fair means do not
exist for ascertaining the LIBOR Rate, as applicable; or
(b) at any time the Agent shall have determined in good faith
(which determination shall be final and conclusive) that
(i) the implementation of the LIBOR Pricing Option has
been made impracticable or unlawful by (A) the occurrence of a contingency
that materially and adversely affects the London interbank market or (B)
compliance by any Lender in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change
thereof by any Governmental Authority charged with the interpretation or
administration thereof or with any request or directive of any such
Governmental Authority (whether or not having the force of law); or
(ii) the LIBOR Rate shall no longer represent the
effective cost to the Lenders for U.S. dollar deposits in the London
interbank market, as applicable for deposits in which they regularly
participate;
then, and in such event, the Agent shall so notify the Borrowers thereof. Until
the Agent notifies the Borrowers that the circumstances giving rise to such
notice no longer apply, the obligation of the Lenders and the Agent to allow
election by the Borrowers of a LIBOR Pricing Option shall be suspended. If at
the time the Agent so notifies the Borrowers, the Borrowers have previously
given the Agent a Pricing Notice with respect to a LIBOR Pricing Option, but the
LIBOR Pricing Option requested therein has not yet gone into effect, such
Pricing Notice shall automatically be deemed to be withdrawn and be of no force
or effect. Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given), the LIBOR Pricing Option with
respect to all LIBOR Rate Loans shall be terminated.
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In the event that the LIBOR Pricing Option is suspended in accordance with
the foregoing provisions for more than sixty (60) days, the Borrowers may
request that the Lenders propose an index, and the spread above such index, for
determining interest on the Loans as an alternative to the LIBOR Rate, which
shall be an index in common usage by United States commercial banks and which
shall adequately reflect the cost of funds to the Lenders. The determination of
whether there is an appropriate index meeting the foregoing requirements, and
the determination of the spread above such index, shall be made by agreement of
all of the Lenders in their sole discretion. In the event the Borrowers and the
Lenders agree on such alternative index, appropriate amendments shall be made to
this Agreement to reflect such agreement and any particular requirements
relating to such alternative index.
Section 2.15 USE OF PROCEEDS. The proceeds of the Term Loans and the
initial Revolving Credit Advances hereunder shall be deposited in a segregated
account of ASC West with the Agent and used by the Borrowers (a) for the Kamori
Acquisition and (b) to pay the fees and expenses associated with the
transactions contemplated hereby. The proceeds of all future Revolving Credit
Advances and of the Swing Line Loans shall be used by the Borrowers for (a)
Permitted Capital Expenditures, (b) on-going working capital requirements
relating to the Borrowers' operations and (c) general corporate purposes
provided for by this Agreement. The Borrowers will not, directly or indirectly,
use any part of such proceeds for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to any Person for the purpose of
purchasing or carrying any such margin stock.
Section 2.16 LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof, including
satisfaction of the conditions set forth in Sections 3.1 and 3.2 hereof, and
provided no Default has occurred and that the Issuing Bank is then generally
issuing letters of credit for its banking customers, the Issuing Bank shall at
any time prior to the Revolving Credit Termination Date, upon the request of the
Borrowers pursuant to paragraph (b) below, issue Letters of Credit for the
account of the Borrowers, PROVIDED that the aggregate face amount of all
outstanding Letters of Credit shall not at any time exceed $7,000,000. As of
the date hereof, the Issuing Bank has issued the letters of credit for the
account of the Borrowers described on SCHEDULE 2.16, which from and after the
date hereof shall be deemed to be Letters of Credit issued hereunder, and the
face amount thereof from time to time shall count against the limit set forth
above.
(b) The Borrowers may request that the Issuing Bank issue a
Letter of Credit by written notice (the "Letter of Credit Notice") given by the
Borrowers to the Issuing Bank not less than five (5) Business Days prior to the
proposed date of issuance of such Letter of Credit. The Letter of Credit Notice
shall (i) specify the proposed date of issuance, the beneficiary, amount and the
purpose of such Letter of Credit and (ii) be accompanied by a letter of credit
application furnished by the Issuing Bank.
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(c) The Borrowers hereby agree, jointly and severally, to pay to
the Issuing Bank on the date on which the Issuing Bank shall be required to pay
any draft presented under any Letter of Credit, a sum (the "Reimbursement
Obligation") equal to: (i) the amount so paid under such Letter of Credit, PLUS
(ii) interest on any amount remaining unpaid by the Borrowers to the Issuing
Bank under clause (i) from and including the date on which such amount becomes
payable pursuant to clause (i) until payment in full, payable on demand, at a
per annum rate of interest equal to the rate applicable to the Revolving Credit
Advances which are Base Rate Loans under Section 2.7. If the Borrowers shall
fail to pay to the Issuing Bank the Reimbursement Obligation on the date on
which the Issuing Bank shall be required to pay any draft presented under any
Letter of Credit, the Issuing Bank shall, to the extent the Borrowers have
availability to request a Revolving Credit Advance, consider such failure to be
a request for a Revolving Credit Advance or, with the Agent's consent, a Swing
Line Loan, in the amount of the unpaid Reimbursement Obligation (which request
shall be deemed a confirmation that the conditions set forth in Section 3.2 have
been satisfied), and the Issuing Bank shall apply the proceeds of such Revolving
Credit Advance, or the Agent shall apply the proceeds of such Swing Line Loan,
to reimburse the Issuing Bank for the Reimbursement Obligation.
(d) The Borrowers shall, jointly and severally, quarterly in
arrears on the last day of each calendar quarter for the immediately preceding
calendar quarter or portion thereof, pay (i) a fee (in each case, a "Letter of
Credit Fee") to the Issuing Bank for the account of the Revolving Credit Lenders
in respect of each Letter of Credit issued at the request of the Borrowers equal
to the LIBOR Rate Margin for Revolving Credit Advances in effect at such time,
multiplied by the face amount of each Letter of Credit and (ii) a fronting fee
to the Issuing Bank for its account equal to 1/4% per annum multiplied by the
face amount of each Letter of Credit. The Issuing Bank shall, in turn, remit to
each Revolving Credit Lender its PRO RATA portion of such Letter of Credit Fee.
In addition, the Borrowers shall, jointly and severally, pay to the Issuing
Bank, for its own account, on the date of issuance, or any extension or renewal
of any Letter of Credit and at such other time or times as such charges are
customarily made by the Issuing Bank, the Issuing Bank's standard issuance,
processing, negotiation, amendment and administrative fees, determined in
accordance with customary fees and charges for similar facilities.
(e) Each payment by the Borrowers hereunder shall be made to the
Issuing Bank at the Issuing Bank's head office in Boston, Massachusetts in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this Section 2.16 at any time from the date such amounts
become due and payable (whether as stated in this Section 2.16, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Issuing Bank on demand at the rate specified in Section 2.7 for
the overdue principal on Revolving Credit Advances which are Base Rate Loans.
(f) The obligations of the Borrowers with respect to the Letters
of Credit shall be joint and several, unconditional and irrevocable, and shall
be paid strictly in
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accordance with the terms of this Agreement under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of the
Letters of Credit;
(ii) any amendment or waiver of or any consent to or
actual departure from this Agreement;
(iii) the existence of any claim, set-off, defense or
other right which the Borrowers may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons or
entities for which any such beneficiary or any such transferee may be
acting), the Issuing Bank or any other Person or entity, whether in
connection with this Agreement, the transactions contemplated herein
or in any other agreements or any unrelated transaction;
(iv) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation by the beneficiary thereof of a draft or
certificate which does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
(g) The Uniform Customs and Practice shall be binding on the
Borrowers, the Revolving Credit Lenders and the Issuing Bank. The Borrowers
assume all risks of the acts or omissions of the beneficiary of each Letter of
Credit with respect to such Letter of Credit. In furtherance of, and not in
limitation of the Issuing Bank's rights and powers under the Uniform Customs and
Practice, but subject to all other provisions of this paragraph (g), it is
understood and agreed that the Issuing Bank shall not have any liability for,
and that the Borrowers assume all responsibility for: (i) the genuineness of
any signature; (ii) the form, correctness, validity, sufficiency, genuineness,
falsification and legal effect of any draft, certification or other document
required by a Letter of Credit or the authority of the Person signing the same;
(iii) the failure of any instrument to bear any reference or adequate reference
to a Letter of Credit or the failure of any Persons to note the amount of any
instrument on the reverse of a Letter of Credit or to surrender a Letter of
Credit or otherwise to comply with the terms and condition of a Letter of
Credit; (iv) the good faith or acts of any Person other than the Issuing Bank
and its agents and employees; (v) the existence, form or sufficiency or breach
or default under any agreement or instrument of any nature whatsoever; (vi) any
delay in giving or failure to give any notice, demand or protest; and (vii) any
error, omission, delay in or nondelivery of any notice or other communication,
however sent. The determination as to whether the required documents are
presented prior to the expiration of a Letter of Credit and
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whether such other documents are in proper and sufficient form for compliance
with a Letter of Credit shall be made by the Issuing Bank in its sole
discretion, which determination shall be conclusive and binding upon the
Borrowers absent manifest error. It is agreed that the Issuing Bank may honor,
as complying with the terms of a Letter of Credit and this Agreement, any
documents otherwise in order and signed or issued by the beneficiary thereof.
Any action, inaction or omission on the part of the Issuing Bank under or in
connection with the Letters of Credit or any related instruments or documents,
if in good faith and in conformity with such laws, regulations or commercial or
banking customs as the Issuing Bank may reasonably deem to be applicable, shall
be binding upon the Borrowers, shall not place the Issuing Bank under any
liability to the Borrowers, and shall not affect, impair or prevent the vesting
of any of the Issuing Bank's rights or powers hereunder or the Borrowers'
obligation to make full reimbursement of amounts drawn under the Letters of
Credit.
(h) If the Borrowers, either in writing or orally, request or
consent to any modification or extension of a Letter of Credit or waive failure
of any draft, certificate or other documents to comply with the terms of a
Letter of Credit, the Issuing Bank shall be entitled to rely and shall be deemed
to have relied on such request, consent or waiver with respect to any action
taken or omitted by the Issuing Bank pursuant to any such request, consent or
waiver, and such extension, modification or waiver shall be binding upon the
Borrowers.
(i) Each Revolving Credit Lender severally agrees that it shall
be absolutely liable, without regard to the occurrence of any Default or Event
of Default or any other condition precedent whatsoever, to the extent of such
Lender's Revolving Credit Commitment Percentage, to reimburse the Issuing Bank
on demand for the amount of each draft paid by the Issuing Bank under each
Letter of Credit to the extent that such amount is not reimbursed by the
Borrowers pursuant to paragraph (c) above (such agreement for a Revolving Credit
Lender being called herein the "Letter of Credit Participation" of such
Revolving Credit Lender).
(j) If any draft shall be presented or other demand for payment
shall be made under any Letter of Credit, the Issuing Bank shall notify the
Borrowers of the date and amount of the draft presented or demand for payment
and of the date and time when it expects to pay such draft or honor such demand
for payment. If the Borrowers fail to reimburse the Issuing Bank as provided in
paragraph (c) above on or before the date that such draft is paid or other
payment is made by the Issuing Bank, the Issuing Bank may at any time thereafter
notify the Revolving Credit Lenders of the amount of any such unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business
Day next following the receipt of such notice, each Revolving Credit Lender
shall make available to the Issuing Bank, at its head office located in Boston,
Massachusetts, in immediately available funds, such Lender's Revolving Credit
Commitment Percentage of such unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Issuing Bank for federal funds acquired by the Issuing Bank during each day
included in such period, TIMES (ii) the amount equal to such Lender's Revolving
Credit Commitment Percentage of such unpaid Reimbursement Obligation, TIMES
(iii) a fraction, the numerator of which is the number of
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days that elapse from and including the date the Issuing Bank paid the draft
presented for honor or otherwise made payment to the date on which such Lender's
Revolving Credit Commitment Percentage of such unpaid Reimbursement Obligation
shall become immediately available to the Issuing Bank, and the denominator of
which is 360.
(k) Neither the Issuing Bank nor any Revolving Credit Lender nor
any of their officers, directors or employees shall be liable or responsible
for: (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (iii) payment by the Issuing Bank
against presentation of documents which do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to a Letter of Credit; or (iv) any other circumstances whatsoever in
making or failure to make payment under a Letter of Credit; PROVIDED, that,
notwithstanding anything in this Section 2.16 to the contrary, the Borrowers
shall have a claim against the Revolving Credit Lenders, and the Revolving
Credit Lenders shall be liable to the Borrowers, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Borrowers which were caused by the Issuing Bank's failure to conform to the
standards of the Uniform Customs and Practice. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
Section 2.17 COLLECTION OF ACCOUNTS.
(a) American Ski and the Borrowers shall establish and maintain,
at their expense, deposit account arrangements with the Agent and the other
banks set forth on SCHEDULE 2.17 hereto and after prior written notice to the
Agent, such other banks as any Borrower may hereafter select that are acceptable
to the Agent. The banks set forth on SCHEDULE 2.17 constitute all of the banks
with whom American Ski, any Borrower and any Restricted Subsidiary has deposit
account arrangements as of the date hereof and identifies each of the deposit
accounts at such banks to an operating location of such Borrower or otherwise
describes the nature of the use of such deposit account by such Borrower.
(b) Each Borrower shall deposit all proceeds (other than amounts
of cash, not to exceed $100,000 for any location operated by such Borrower, for
opening cash at such location consistent with past practices so long as no
Default exists or has occurred) from sales of goods or services in every form,
including, without limitation, cash, checks, credit or debit card sales drafts,
credit or debit card sales or charge slips or receipts and other forms of daily
receipts, from each location of each Borrower on each Business Day into the
concentration accounts of the Borrowers identified to each Borrower location as
set forth on SCHEDULE 2.17.
(c) For purposes of calculating interest on the Lender
Obligations, the payments or other funds received pursuant to paragraph (b)
above after 2:00 p.m. (Boston time) on any day will be applied (conditional upon
final collection) to the Lender Obligations
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one (1) Business Day following the date of receipt of immediately available
funds by the Agent from the concentration accounts identified on SCHEDULE 2.17.
For purposes of calculating the amount of the Revolving Credit Advances or Swing
Line Loans available to the Borrowers, such payments will be applied
(conditional upon final collection) to the Lender Obligations on the Business
Day of receipt by the Agent in the concentration accounts identified on
SCHEDULE 2.17, if such payments are received within sufficient time (in
accordance with the Agent's usual and customary practices as in effect from time
to time) to credit Borrowers' loan account on such day, and if not, then on the
next Business Day. All such payments shall be applied by the Agent FIRST to any
outstanding Swing Line Loans and SECOND, at the Agent's election and in
accordance with the provisions of Section 4.2(a), to any outstanding Revolving
Credit Advances which are Base Rate Loans, and any amounts not so applied shall
be retained in the concentration accounts until they can be so applied.
Section 2.18 SWING LINE COMMITMENT. Subject to the terms and conditions
hereof, BankBoston, N.A. (in such capacity, the "Swing Line Lender") agrees to
make a portion of the credit otherwise available to the Borrowers hereunder,
from time to time prior to the Revolving Credit Termination Date, by making
swing line loans ("Swing Line Loans") to the Borrowers, jointly and severally,
in an aggregate principal amount not to exceed at any one time outstanding the
Swing Line Commitment; PROVIDED that (a) the aggregate principal amount of Swing
Line Loans outstanding at any time shall not exceed the Swing Line Commitment
then in effect (notwithstanding that the Swing Line Loans outstanding at any
time, when aggregated with the Swing Line Lender's other outstanding Loans
hereunder, may exceed the Swing Line Commitment then in effect) and (b) the
Borrowers shall not request, and the Swing Line Lender shall not make, any Swing
Line Loan if, after giving effect to the making of such Swing Line Loan, the
aggregate amount of the Available Revolving Credit Amount would be less than $0.
Prior to the Revolving Credit Termination Date, the Borrowers may use the Swing
Line Commitment by borrowing, repaying and reborrowing, all in accordance with
the terms and conditions hereof. Swing Line Loans shall be Base Rate Loans or
Money Market Loans only. The Borrowers may use the proceeds of Revolving Credit
Advances from time to time to repay any outstanding Swing Line Loans. The
Borrowers, jointly and severally, shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date. On the Closing Date, the Borrowers
shall deliver to the Swing Line Lender a Swing Line Note to evidence the Swing
Line Loans from time to time made by the Swing Line Lender to the Borrowers
hereunder.
Section 2.19 PROCEDURE FOR SWING LINE BORROWING; INTEREST ON SWING LINE
LOANS. Whenever the Borrowers desire that the Swing Line Lender make Swing Line
Loans under Section 2.18, ASC West shall give the Swing Line Lender irrevocable
telephonic notice confirmed promptly in writing by delivery of a Notice of
Revolving Credit or Swing Line Borrowing (which telephonic notice must be
received by the Swing Line Lender not later than 1:00 P.M., Boston time, on the
proposed borrowing date), specifying (a) the amount to be borrowed, (b) whether
such Swing Line Loan is requested to be a Money Market Loan or a Base Rate Loan
and (c) the requested borrowing date (which shall be a Business Day prior to the
Revolving Credit Termination Date); and not later than 3:00 P.M., Boston time,
on the borrowing date specified in the notice in respect of Swing Line Loans,
the Swing Line Lender
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shall make the proceeds of such Swing Line Loan available to ASC West, as agent
for the Borrowers on such borrowing date in accordance with the instructions of
ASC West; PROVIDED, HOWEVER, that the provisions of the cash management
arrangements between the Borrowers and the Swing Line Lender, including any
provisions relating to automatic Swing Line Loans to fund daily disbursements
under a Borrower's controlled disbursement account shall supersede the foregoing
requirements. The Borrowers, jointly and severally, shall pay interest on the
unpaid balance of the Swing Line Loans from time to time outstanding at a per
annum rate equal to the Applicable Base Rate or the Money Market Rate as agreed
to by the Swing Line Lender and the Borrower at the time of making the Swing
Line Loan. Interest on the Swing Line Loans shall be payable quarterly in
arrears on the last day of each fiscal quarter, commencing January 31, 1998 and
continuing until all of the Indebtedness of the Borrowers to the Swing Line
Lender hereunder shall have been paid in full.
Section 2.20 REFUNDED SWING LINE LOANS; SWING LINE LOAN PARTICIPATIONS.
(a) The Swing Line Lender, at any time and from time to time in
its sole and absolute discretion may, and in any event not less than once each
week shall, on behalf of the Borrowers (which hereby irrevocably direct the
Swing Line Lender to act on their behalf) on one Business Day's notice given by
the Swing Line Lender no later than 12:00 noon, Boston time, request each
Revolving Credit Lender to make, and each Revolving Credit Lender hereby agrees
to make, a Revolving Credit Advance in an amount equal to such Lender's
Revolving Credit Commitment Percentage of the aggregate amount of the Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date of such notice,
to repay the Swing Line Lender. Unless any of the events described in
Section 10(f) shall have occurred and be continuing (in which case the
procedures of Section 2.20(c) shall apply), each Revolving Credit Lender shall
make the amount of such Revolving Credit Advance available to the Agent at its
office set forth in Section 14.1 in immediately available funds, not later than
10:00 A.M., Boston time, one Business Day after the date of such notice. The
proceeds of such Revolving Credit Advances shall be immediately applied by the
Swing Line Lender to repay the Refunded Swing Line Loans. Effective on the day
such Revolving Credit Advances are made, the portion of the Swing Line Loans so
paid shall no longer be outstanding as Swing Line Loans and shall be outstanding
as Revolving Credit Advances and owed to the Revolving Credit Lenders in
accordance with their respective Revolving Credit Commitment Percentages. The
Borrowers irrevocably authorize the Swing Line Lender to charge the Borrowers'
accounts with the Agent (up to the amount available in each such account) to
immediately pay the amount of such Refunded Swing Line Loans to the extent
amounts received from the Revolving Credit Lenders are not sufficient to repay
in full such Refunded Swing Line Loans.
(b) The making of any Swing Line Loan hereunder shall be subject
to the satisfaction of the applicable conditions precedent thereto set forth in
Section 3.1, in the case of any Swing Line Loan to be made on the Closing Date,
and Section 3.2, in the case of all other Swing Line Loans (unless otherwise
waived in accordance with Section 11.1). The Swing Line Lender shall notify ASC
West of its election not to make Swing Line Loans hereunder as a result of the
failure to satisfy such conditions precedent, unless an Event of Default of the
type specified in Section 10.1(f) shall have occurred and be continuing.
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(c) If prior to the time a Revolving Credit Advance would have
otherwise been made pursuant to Section 2.20(a) one of the events described in
Section 10(f) shall have occurred and be continuing, each Revolving Credit
Lender shall, on the date such Revolving Credit Advance was to have been made
pursuant to the notice referred to in Section 2.20(a) (the "Refunding Date"),
purchase an undivided participating interest in an amount equal to (i) its
Commitment Percentage times (ii) the aggregate principal amount of Swing Line
Loans then outstanding which were to have been repaid with such Revolving Credit
Advances (the "Swing Line Participation Amount"). On the Refunding Date, each
Revolving Credit Lender shall transfer to the Swing Line Lender, in immediately
available funds, such Revolving Credit Lender's Swing Line Participation Amount
and upon receipt thereof the Swing Line Lender shall deliver to such Revolving
Credit Lender a Swing Line Loan Participation Certificate dated the date of the
Swing Line Lender's receipt of such funds and in such Swing Line Participation
Amount.
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Revolving Credit Lender's Swing
Line Participation Amount, the Swing Line Lender receives any payment on account
of the Swing Line Loans, the Swing Line Lender will distribute to such Revolving
Credit Lender its Swing Line Participation Amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Revolving Credit Lender's participating interest was outstanding and funded and,
in the case of principal and interest payments, to reflect such Revolving Credit
Lender's PRO RATA portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swing Line Loans then due); PROVIDED,
HOWEVER, that in the event that such payment received by the Swing Line Lender
is required to be returned, such Revolving Credit Lender will return to the
Swing Line Lender any portion thereof previously distributed to it by the Swing
Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.20(a) and to a purchase participating interest pursuant
to Section 2.20(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrowers may have against the Swing Line Lender, the Borrowers or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrowers; (iv) any breach of this Agreement or
any other Lender Agreement by the Borrowers or any other Lender; or (v) any
other circumstances, happening or event whatsoever, whether or not similar to
any of the foregoing.
Section 2.21 RELEASE OF CERTAIN LIENS. Notwithstanding anything herein
to the contrary, the parties hereto acknowledge that the Borrowers shall have
the right to transfer to any Unrestricted Subsidiary parcels of Excess Real
Property, in each case so long as there is no Default. Upon the transfer of any
such Excess Real Property on request of ASC West, at any time so long as there
is no Default, the Agent shall release any parcel of Excess Real Property from
the Lien of the Mortgage and Security Agreements to which such parcel of
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Excess Real Property is subject, provided that such release shall only be
granted if the following conditions have been met or satisfied:
(i) The Borrowers shall reimburse the Agent for any costs
and expenses it incurs arising from the transfer of the parcel of Excess
Real Property and any release of such parcel of Excess Real Property from
the Lien of the Mortgage (including, without limitation, reasonable
attorneys' fees and expenses);
(ii) No Default exists hereunder;
(iii) Each applicable municipal authority exercising
jurisdiction over the parcel of Excess Real Property has approved a lot
split ordinance or other applicable action under local law dividing the
parcel of Excess Real Property from the remainder of the Mortgaged Property
and assigning separate tax identification numbers to each;
(iv) No part of the remaining Mortgaged Property shall be
part of a tax lot affecting any portion of the parcel of Excess Real
Property;
(v) All requirements under all laws, statutes, rules and
regulations (including, without limitation, all zoning and subdivision
laws, setback requirements, sideline requirements, parking ratio
requirements, use requirements and building and fire code requirements)
applicable to the Mortgaged Property necessary to accomplish the lot split
shall have been fulfilled;
(vi) As a result of the lot split, the remaining Mortgaged
Property will not be in violation of any applicable law, statute, rule or
regulation (including, without limitation, all zoning and subdivision laws,
setback requirements, sideline requirements, parking ratio requirements,
use requirements and building and fire code requirements) and all necessary
variances, if any, shall have been obtained;
(vii) Appropriate reciprocal easement agreements for the
benefit and burden of the remaining Mortgaged Property and the parcel of
Excess Real Property regarding the use of common facilities of such
parcels, including, but not limited to, open areas, ski lifts, ski trails,
roadways, parking areas, utilities, snowmaking facilities and community
facilities by the occupants of the remaining Mortgaged Property and the
parcel of Excess Real Property, in a form and substance acceptable to
Agent. shall be declared and recorded;
(viii) American Ski - West shall have delivered to Agent one
or more endorsements to the title insurance policies insuring the Lien of
the applicable Mortgage or such other evidence reasonably acceptable to the
Lender insuring that, after giving effect to such release, the title
insurance policies insuring the Lien of the applicable Mortgage are in full
force and effect and unaffected by such release; and
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(ix) Borrower shall execute such documents and instruments
as Agent shall reasonably require in connection with the foregoing.
Section 2.22 GUARANTY OF AMERICAN SKI. American Ski hereby
unconditionally guaranties to the Agent and the Lenders the full and punctual
payment when due (whether at maturity, by acceleration or otherwise), and the
performance of (a) all liabilities, agreements, obligations and Indebtedness,
direct or indirect, matured or unmatured, primary or secondary, certain or
contingent, secured or unsecured of the Borrowers and their Restricted
Subsidiaries (including without limitation, costs and expenses incurred by the
Agent and the Lenders in attempting to collect or enforce any of the foregoing),
including without limitation the Lender Obligations, accrued in each case to the
date of payment and (b) the performance of all other agreements, covenants and
conditions of the Borrowers and the Restricted Subsidiaries with respect thereto
set forth in this Agreement and all other Lender Agreements. The
responsibilities and obligations of the Borrowers and the Restricted
Subsidiaries to the Agent and the Lenders described in the preceding sentence
are hereinafter referred to collectively as the "Guaranteed Obligations." The
guaranty pursuant to this Section 2.22 is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance by the
Borrowers and the Restricted Subsidiaries of the Guaranteed Obligations and not
of collectability of the Guaranteed Obligations, and is in no way conditioned
upon any requirement that the Agent or the Lenders first attempt to collect any
of the Guaranteed Obligations from the Borrowers and the Restricted Subsidiaries
or resort to any security or other means of obtaining payment of any of the
Guaranteed Obligations which the Agent or the Lenders now has or may acquire
after the date hereof, or upon any other contingency whatsoever. Upon any
default by the Borrowers or the Restricted Subsidiaries in the full and punctual
payment and performance of the Guaranteed Obligations, the liabilities and
obligations of American Ski hereunder shall, at the option of the Agent, become
forthwith due and payable to the Agent and the Lenders without demand or notice
of any nature, all of which are expressly waived by American Ski. Payments by
American Ski under this Section 2.22 may be required by the Agent or the Lenders
on any number of occasions. American Ski waives presentment, demand, protest,
notice of acceptance, notice of Guaranteed Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshaling of assets of the Borrowers and the
Restricted Subsidiaries, and all suretyship defenses generally. Without
limiting the generality of the foregoing, American Ski agrees to the provisions
of any instrument evidencing, securing or otherwise executed in connection with
any Guaranteed Obligations and agrees that the obligations of American Ski
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by any rescissions, waivers, amendments or modifications of any of the
terms or provisions of any agreement evidencing securing or otherwise executed
in connection with any Guaranteed Obligation. Until the payment and performance
in full of all Guaranteed Obligations and any and all obligations of the
Borrowers and the Restricted Subsidiaries to any affiliate of the Agent or the
Lenders, American Ski shall not exercise any rights against the Borrowers and
the Restricted Subsidiaries arising as a result of payment by American Ski
hereunder, by way of subrogation or otherwise. The payment of any amounts due
with respect to any indebtedness
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of the Borrowers and the Restricted Subsidiaries now or hereafter held by
American Ski is hereby subordinated to the prior payment in full of the
Guaranteed Obligations.
ARTICLE 3. CONDITIONS TO LOANS AND ADVANCES
Section 3.1 CONDITIONS TO THE TERM LOANS AND THE INITIAL REVOLVING
CREDIT ADVANCE. The Lenders' obligations to make the Term Loans and the initial
Revolving Credit Advance shall be subject to compliance by the Borrowers with
their agreements contained in this Agreement, and to the condition precedent
that the Lenders shall have received each of the following, in form and
substance satisfactory to the Agent and its counsel or in the form attached
hereto as an Exhibit, as the case may be:
(a) NOTES. The Term Loan Notes and the Revolving Credit Notes
duly executed by the Borrowers.
(b) RESOLUTIONS. Copies of the resolutions of the Board of
Directors of American Ski and its Subsidiaries authorizing the execution,
delivery and performance of this Agreement, the Term Loan Notes, the Revolving
Credit Notes, the Swing Line Note, the Security Agreements and the other Lender
Agreements to which the American Ski or any Restricted Subsidiary is a party,
certified by the Secretary or an Assistant Secretary (or Clerk or Assistant
Clerk) of American Ski and each of its Subsidiaries (which certificate shall
state that such resolutions are in full force and effect).
(c) INCUMBENCY. A certificate of the Secretary or an Assistant
Secretary (or Clerk or Assistant Clerk) of American Ski and each of its
Subsidiaries certifying the name and signatures of the officers of American Ski
and each of its Subsidiaries authorized to sign this Agreement, the Term Loan
Notes, the Revolving Credit Notes, the Swing Line Note, the Security Agreements,
the other Lender Agreements to which American Ski, any Borrower or any
Subsidiary is a party and the other documents to be delivered by American Ski
and the Borrowers hereunder.
(d) CERTIFICATES OF EXISTENCE. Certificates of legal existence,
corporate or partnership good standing and foreign qualification for American
Ski, each Borrower and each other Restricted Subsidiary of American Ski of
recent date issued by the appropriate California, Colorado, Delaware, Florida,
Maine, Nevada, New Hampshire, Utah and Vermont Governmental Authorities.
(e) CERTIFICATES OF TAX GOOD STANDING. Certificate of tax good
standing for American Ski, each Borrower and each other Restricted Subsidiary of
American Ski of recent date issued by the appropriate California, Colorado,
Delaware, Maine, Nevada, Utah and Vermont Governmental Authorities.
(f) LEGAL OPINIONS. The opinions of Pierce Atwood, LeBoeuf,
Lamb, Greene & MacRae L.L.P. (Connecticut, California, Colorado), Wadleigh,
Starr, Peters, Dunn
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& Chiesa, Reiber, Kenlan, Schwiebert, Hall & Facey, Parsons Behle & Latimer and
Scarpello & Alling, counsel to American Ski, the Borrowers and their Restricted
Subsidiaries, dated the date of execution of this Agreement, in substantially
the form of EXHIBIT O attached hereto.
(g) SATISFACTION OF CONDITIONS. A certificate of the chief
executive officer or chief financial officer of American Ski and each Borrower,
dated the Closing Date, to the effect that all conditions precedent on the part
of American Ski and the Borrowers to the execution and delivery hereof and the
making of the Term Loans and the initial Revolving Credit Advance have been
satisfied.
(h) GOVERNMENTAL APPROVALS. Evidence of the receipt of all
necessary governmental authorizations, consents and approvals for the execution,
delivery and performance by American Ski and its Restricted Subsidiaries and
their Subsidiaries party thereto of this Agreement, the Term Loan Notes, the
Revolving Credit Notes, the Swing Line Note, the Security Agreements and the
other Lender Agreements.
(i) CONSUMMATION OF PUBLIC OFFERING. Successful completion of
American Ski's initial public offering on terms satisfactory to the Agent and
evidence of IPO Gross Proceeds equal to or exceeding the Minimum IPO Gross
Proceeds.
(j) CONSUMMATION OF KAMORI ACQUISITION. The Kamori Acquisition
shall be consummated in accordance with the terms of the Kamori Stock Purchase
Agreement which terms have not been amended or waived since the date thereof.
(k) CLOSING FEE. Receipt by the Agent for the account of the
Lenders of the closing fees due to it pursuant to the Fee Letter.
(l) AGENT'S FEE. Receipt by the Agent for its own account of
the fees due to it pursuant to the Fee Letter.
(m) OTTEN LIFE INSURANCE POLICIES. Assignment of the Otten Life
Insurance Policies in an amount of $14,000,000 to the Agent and acknowledgment
of the assignment by the issuer of the policy.
(n) SOLVENCY CERTIFICATES. Receipt of a certificate of the
chief financial officer of American Ski and each Restricted Subsidiary,
demonstrating the solvency of American Ski and each Restricted Subsidiary.
(o) FINANCIAL CONDITION. Receipt of (i) a pro forma
consolidated balance sheet of American Ski and the Borrowers after giving effect
to the making of the Term Loans and the initial Revolving Credit Advance and
receipt of the IPO Gross Proceeds and consummation of the Kamori Acquisition,
demonstrating that at Closing, the ratio of Consolidated Funded Debt to
Consolidated EBITDA for the period ending July 31, 1997 does not exceed 6.0-to-1
and (ii) satisfactory evidence that the sum of (A) the Unused Revolving Credit
Commitments, PLUS (B) the Unused Revolving Credit Commitments (as defined in the
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ASC East Credit Agreement), PLUS (C) available cash and cash equivalents of
American Ski, after giving effect to the making of the Term Loans and the
initial Revolving Credit Advance at closing and receipt of the IPO Gross
Proceeds and consummation of the Kamori Acquisition, are at least $30,000,000.
(p) SECURITY AGREEMENTS. Each of the Security Agreements shall
have been duly and properly authorized, executed and delivered by the parties
thereto and shall be in full force and effect, and pursuant to the Security
Agreements the Borrowers shall have granted to the Agent first perfected, valid
and binding security interests, liens and encumbrances on all of the assets of
the Borrowers in favor of the Agent (subject only to Liens permitted under
Section 9.2) including without limitation:
(i) all fee simple and leasehold interests in and to all
real property owned or leased by the Borrowers and their Restricted
Subsidiaries other than those leases set forth on SCHEDULE 3.1(Q), and all
buildings and improvements now located or to be constructed thereon,
whether now owned or hereafter acquired;
(ii) all tangible and intangible assets of the Borrowers,
whether now owned or hereafter acquired, including without limitation all
machinery, equipment, furniture, furnishings, inventory, appliances,
contract rights, deposit accounts, cash collateral, hotel and motel
revenues, instruments, general intangibles, etc., whether now owned or
hereafter acquired, but excluding leasehold personal property interests
which the Borrowers are prohibited by the lessor from assigning and any
interest in any personal property lease agreement which the Borrowers are
prohibited from assigning;
(iii) all leases, tenancies, purchase and sale agreements
for the sale of condominium units or other property, operating agreements,
contract and rental agreements for the lease, sale (as permitted
hereunder), rental, occupancy, hire or use of any of Borrowers' assets,
including without limitation the Mortgaged Properties, or any portion
thereof together with all income, profits, revenues, cash collateral and
other proceeds thereof; and
(iv) all licenses, permits, trade names, patents,
trademarks, approvals and contracts.
(q) RECORDING OF MORTGAGES, FINANCING STATEMENTS, ETC. All
actions necessary or appropriate to perfect the Agent's liens and security
interests in the assets of the Borrowers and their Restricted Subsidiaries shall
have been fully performed including without limitation:
(i) the due and proper recording and filing of all of the
Mortgages, Collateral Assignments of Leases, Collateral Assignments of
Income, Assignments in Trust and Assignments of Licenses;
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(ii) the filing of Uniform Commercial Code financing
statements necessary to perfect the security interests of the Agent in the
assets of the Borrowers; and
(iii) the receipt by the Agent of commitments from Lawyer's
Title Insurance Corporation to issue ALTA standard form mortgage loan
policies insuring the first priority of the Mortgages, subject only to
Permitted Liens, covering all real property of the Borrowers both as owned
in fee or held as a leasehold estate under the Leases or otherwise and
covering the real property described in the Mortgages in an aggregate
amount of not less than $140,000,000, such policies to be in form and
substance satisfactory to the Agent, including without limitation, such
endorsements and affirmative insurance as the Agent shall require with the
standard tenant's and mechanic's liens exceptions deleted and with such
portions of the survey coverage deleted as the Agent may require, and the
Agent shall also have received proof of full payment of all fees and
premiums for said policies and copies of all documents listed as exceptions
on Schedule B to each such policy.
(r) INSURANCE. The Agent shall have received (i) certificates
of insurance as to the liability hazard and other insurance maintained by the
Borrowers and their Restricted Subsidiaries on the Collateral in conformity with
the insurance requirements contained in the Security Agreements (including flood
insurance if necessary) from the insurer or an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms all in accordance with the provisions of the
Security Agreements; (ii) certified copies of all policies evidencing such
insurance (or certificates therefor signed by the insurer or an agent authorized
to bind the insurer); and (iii) such further information and certificates from
the Borrowers, their insurers and insurance brokers as the Agent may request.
(s) LEASES. The Agent shall be satisfied with the current form
of the leases to be mortgaged to it pursuant to the Leasehold Mortgages.
(t) SURVEYS. Prior to the Closing Date, the Borrowers shall
provide the Agent with site plans or other maps acceptable to the Agent showing
the Mortgaged Properties, the dimensions and the area thereof, together with a
licensed surveyor's or civil engineer's certificate in a form acceptable to the
Agent, certifying that all existing improvements necessary for the operation of
each Mortgaged Property as presently operated in all material respects (the
"Material Improvements"), including without limitation all utilities, sewer and
water systems, snowmaking equipment (including necessary water delivery
systems), lodges, ski-lifts, parking areas, driveways and any other material
improvements are located within the boundaries of such Mortgaged Property, or if
applicable, within the boundaries of property that the Borrowers have the right
to use pursuant to its rights under United States Forest Service special use
permits. The Borrowers shall provide the Agent with a list of Material
Improvements acceptable to the Agent at least five (5) Business Days prior to
the Closing Date, together with a certificate of the Borrowers in form
acceptable to the Agent certifying that the Material Improvements constitute all
of the improvements necessary to fully
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operate the Mortgaged Properties as currently operated and as contemplated to be
operated. The certificate shall also indicate those portions of the Mortgaged
Properties, if any, falling within a federally designated flood hazard area; if
any portion falls within such area, flood hazard insurance will be required by
federal regulations.
(u) COMPLIANCE WITH ZONING AND OTHER LAWS. At least five (5)
Business Days prior to the Closing Date, the Borrowers shall provide opinions of
counsel or other evidence in form and substance satisfactory to the Agent's
counsel that the Mortgaged Properties, all existing and proposed improvements
thereon and the use or proposed use thereof, are in compliance in all material
respects with all zoning laws, building codes, environmental laws and other laws
and regulations applicable to the Mortgaged Properties and the use and proposed
use thereof, and that all licenses, permits and certificates of occupancy or
building permits have been issued to permit the lawful use or improvement of the
Mortgaged Properties as contemplated by the Borrowers.
(v) APPRAISALS. At least five (5) Business Days prior to the
Closing Date, the Agent shall have received, at the expense of American Ski,
appraisals in form and substance satisfactory to the Agent showing an aggregate
fair market value of the fee and leasehold interests in all real property owned
or leased by American Ski and its Restricted Subsidiaries and subject to first,
perfected mortgage liens in favor of the Agent of at least Three Hundred Fifty
Million Dollars ($350,000,000.00); PROVIDED, HOWEVER, that the appraisal of The
Canyons ski resort in form and substance satisfactory to the Agent shall be
received by the Agent from American Ski within twenty (20) Business Days of the
Closing Date.
(w) ENVIRONMENTAL ASSESSMENTS. The Agent shall have received
site assessment reports concerning the Mortgaged Properties, dated as of a
recent date, from environmental engineers acceptable to the Agent, such reports
to be in form and substance satisfactory to the Agent.
(x) PERMIT ASSURANCES. The Agent shall have received evidence
satisfactory to the Agent that all activities being conducted on the Mortgaged
Properties which require federal, state or local licenses or permits have been
duly licensed except where the absence of any such license would not have a
Material Adverse Effect and that such licenses or permits are in full force and
effect and have been assigned to the Agent pursuant to the Security Agreements.
(y) LEASES/SERVICE CONTRACTS The Agent shall have received
copies of all material service contracts and leases affecting any portion of the
Mortgaged Properties.
(z) UNRESTRICTED SUBSIDIARY ACKNOWLEDGMENT. An Acknowledgment
from each Unrestricted Subsidiary in the form attached hereto as EXHIBIT R.
(aa) EXECUTION OF THE ASC EAST CREDIT AGREEMENT. Execution of
the ASC East Credit Agreement simultaneously herewith and the compliance by the
ASC East
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Borrowers with all their agreements contained in the ASC East Credit Agreement,
including satisfaction of all conditions precedent to the Lenders' obligations
to extend credit thereunder.
(bb) CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT. The Agent
shall have received a counterpart original of the Cerberus Amendment and Waiver
Letter Agreement duly executed by all parties thereto and evidence that the
transactions contemplated thereby, including, without limitation, the exchange
of the Series A Exchangeable Preferred Stock and the Senior Exchangeable Notes
into the 101/2% Repriced Convertible Exchangeable Preferred Stock has occurred
on terms satisfactory to the Agent.
(cc) MISCELLANEOUS. The Agent shall have received such other
documents, certificates and opinions as the Agent or the Lenders may reasonably
request.
Notwithstanding the foregoing, the Agent, American Ski, the Borrowers and their
Restricted Subsidiaries acknowledge that certain conditions listed above have
not or may not have been satisfied on the date hereof; accordingly, set forth on
SCHEDULE 3.1 hereto is a list of actions and items to be undertaken by American
Ski and the Borrowers that American Ski and the Borrowers agree to exercise
their best efforts to accomplish.
Section 3.2 CONDITIONS TO ALL LOANS. The Lenders' obligations to make
any Loans pursuant to this Agreement shall be subject to compliance by the
Borrowers and the Guarantors with their agreements contained in this Agreement
and each other Lender Agreement, and to the satisfaction, at or before the
making of each Loan, of all of the following conditions precedent:
(a) The representations and warranties herein and those made by
or on behalf of the Borrowers in any other Lender Agreement shall be correct as
of the date on which any Loan is made, with the same effect as if made at and as
of such time (except as to representations and warranties made as of a certain
date, which shall be true and correct in all material respects as of the such
date, except as to transactions permitted hereunder, and except that the
references in Article 5 to the 1997 Financial Statements shall be deemed to
refer to the most recent annual audited consolidated financial statements of
American Ski and its Subsidiaries furnished to the Agent.)
(b) On the date of any Loan hereunder, there shall exist no
Default.
(c) The making of the requested Loan shall not be prohibited by
any law or governmental order or regulation applicable to the Lenders or to the
Borrowers, and all necessary consents, approvals and authorizations of any
Person for any such Loan shall have been obtained.
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ARTICLE 4. PAYMENT AND REPAYMENT
Section 4.1 MANDATORY REPAYMENTS AND PREPAYMENTS.
(a) If at any time the sum of the aggregate outstanding
principal balance of all Revolving Credit Advances and all Swing Line Loans made
hereunder exceeds the Available Revolving Credit Amount, the Borrowers, jointly
and severally, shall immediately repay to the Agent for the ratable accounts of
the Revolving Credit Lenders an amount equal to such excess to be applied FIRST
to the Swing Line Loans and SECOND to the Revolving Credit Advances.
(b) The Borrowers will repay the Term Loans in eight annual
installments, with the first six installments in the amount of $700,000 each,
payable on May 31 of each year, commencing May 31, 1999, a seventh installment
of $34,800,000 due May 31, 2005 and the final installment due on the Term Loan
Maturity Date equal to the outstanding principal balance of the Term Loans,
together with accrued interest and all other amounts due hereunder in connection
therewith. The amount of the principal installments of the Term Loans are
subject to adjustment as provided in paragraph (c) below.
(c) The Borrowers shall also make prepayments of the following
amounts:
(i) Ten days following the delivery of the Mandatory
Prepayment Notice (as defined below) by the Agent following each Excess
Cash Payment Date and in connection with the relevant Excess Cash Payment
Period, if the Excess Cash Flow Leverage Ratio for such period exceeded
3.50-to-1, an amount equal to 50% of the Consolidated Excess Cash Flow
shall be applied as a mandatory repayment of principal of outstanding
Consolidated Term Loans and a mandatory reduction of the Consolidated
Maximum Revolving Credit Amount in accordance with clause (v) below.
(ii) At any time on and after the Closing Date, if
American Ski - West or any of its Restricted Subsidiaries receives Cash
Proceeds from any Permitted Disposition or receives Cash Insurance
Proceeds, an amount equal to 100% of the Net Cash Proceeds therefrom shall
be applied as a mandatory repayment of principal of outstanding
Consolidated Term Loans and a mandatory reduction of the Consolidated
Maximum Revolving Credit Amount in accordance with clause (v) below;
PROVIDED, HOWEVER that with respect to no more than $250,000 in the
aggregate of such Net Cash Proceeds in any fiscal year of American Ski -
West, such Net Cash Proceeds shall not be required to be so-applied if no
Default then exists and ASC West delivers a certificate to the Agent
together with the notice referred to in clause (vii) below stating that
such Net Cash Proceeds shall be used for Permitted Capital Expenditures and
Permitted Acquisitions by American Ski - West and its Restricted
Subsidiaries in compliance with this Agreement within 365 days following
the date of such Permitted Disposition or the date of receipt of such Cash
Insurance Proceeds (which certificate shall set forth the estimates of the
proceeds to be so expended); and PROVIDED FURTHER, that if all or any
portion of such Net Cash Proceeds not so-applied to the repayment of
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Consolidated Term Loans and a mandatory reduction of the Consolidated
Maximum Revolving Credit Amount are not so used within such 365 day period,
such remaining portion shall be applied on the last day of such period as a
mandatory repayment of principal of outstanding Consolidated Term Loans and
a mandatory reduction of the Consolidated Maximum Revolving Credit Amount
as provided in clause (v) below.
(iii) At any time on and after the Closing Date upon which
American Ski or any of its Restricted Subsidiaries receives any proceeds
from any issuance of any equity interests, excluding proceeds received from
the sale or issuance of equity interests which are used to effect Permitted
Acquisitions on the date of sale or issuance of such equity interests and
the IPO Gross Proceeds, an amount equal to 100% of the cash proceeds
therefrom (net of underwriting discounts or placement discounts and
commissions and all reasonable and customary fees, costs and expenses
associated with the marketing, sale and issuance of such equity interests
paid to Persons other than Affiliates) shall be applied as a mandatory
repayment of principal of outstanding Consolidated Term Loans and a
mandatory reduction of the Consolidated Maximum Revolving Credit Amount in
accordance with clause (v) below; PROVIDED, HOWEVER that the requirements
of this clause (iii) shall not apply until the proceeds received by
American Ski or any of its Restricted Subsidiaries from the sale or
issuance of equity interests to which this clause (iii) would otherwise
apply PLUS any proceeds from the incurrence of debt referred to in clause
(iv) below exceed $10,000,000 in the aggregate.
(iv) At any time after the Closing Date upon which
American Ski or any of its Restricted Subsidiaries receives any proceeds
from any incurrence by American Ski or its Restricted Subsidiaries of
Indebtedness, an amount equal to 100% of the cash proceeds therefrom (net
of underwriting discounts or placement discounts and commissions paid to
Persons other than Affiliates) shall be applied as a mandatory repayment of
principal of outstanding Consolidated Term Loans and a mandatory reduction
of the Consolidated Maximum Revolving Credit Amount in accordance with
clause (v) below; PROVIDED, HOWEVER that the requirement of this clause
(iv) shall not apply until the proceeds received by American Ski or any of
its Restricted Subsidiaries from any incurrence of Indebtedness to which
this clause (iv) would otherwise apply PLUS any proceeds from the issuance
of equity interests referred to in clause (iii) above exceed $10,000,000 in
the aggregate.
(v) All mandatory prepayments pursuant to this Section
4.1(c) will (A) be applied PRO RATA to the outstanding principal amounts of
the Consolidated Term Loans and the Consolidated Maximum Revolving Credit
Amount, (B) reduce the remaining scheduled principal payments of the
Consolidated Term Loans and the scheduled reductions of the Consolidated
Maximum Revolving Credit Amount, on a PRO RATA basis and (C) be made ten
days following notice from the Agent that such payment is required and
specifying the payment date (the "Mandatory Prepayment Notice"). Nothing
in this Section 4.1(c), however, shall require that the Maximum Revolving
Credit Amount or the ASC East Maximum Revolving Credit Amount be
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reduced to an amount less than $35,000,000 and to the extent that any
reductions hereunder would have otherwise reduced the Maximum Revolving
Credit Amount or the ASC East Maximum Revolving Credit Agreement below
$35,000,000, such excess amount shall be applied as a mandatory prepayment
of the Consolidated Term Loans, unless waived by the Term Loan Lenders as
provided in clause (vi) below.
(vi) Notwithstanding anything to the contrary contained in
this Section 4.1(c) or elsewhere in this Agreement, the Term Loan Lenders
shall have the option to waive all or any portion of a mandatory repayment
of the Consolidated Term Loans pursuant to this Section 4.1(c) (each such
repayment, a "Mandatory Repayment") upon the terms and provisions set forth
in this Section 4.1(c)(vi) ratably on the basis of their outstanding
Consolidated Term Loans. In the event any Term Loan Lender desires to
waive its right to receive all or any portion of any such Mandatory
Repayment in whole or in part, such Term Loan Lender shall so advise the
Agent no later than the close of business two Business Days after the date
of the Mandatory Prepayment Notice, which notice shall also include the
amount such Term Loan Lender desires to receive in respect of such
Mandatory Repayment. If any Term Loan Lender does not reply to the Agent
within the two Business Days, it will be deemed not to have waived any part
of such Mandatory Repayment. If any Term Loan Lender does not specify an
amount it wishes to receive, it will be deemed to have accepted 100% of the
total payment. In the event that any such Term Loan Lender waives all or
part of such right to receive all or any portion of any such Mandatory
Repayment, the Agent shall apply 100% of the amount so waived by such Term
Loan Lender to a mandatory reduction of the Consolidated Maximum Revolving
Credit Amount as provided herein.
(vii) American Ski shall, within three (3) Business Days of
the Excess Cash Payment Date and the occurrence of any event described in
clauses (ii), (iii) or (iv) of this Section 4.1(c), provide the Agent with
written notice of the Consolidated Excess Cash Flow for the relevant Excess
Cash Payment Period and/or the proceeds received or to be received in
connection with the occurrence of any event described in clauses (ii),
(iii) or (iv) of this Section 4.1(c).
Section 4.2 VOLUNTARY PREPAYMENTS.
(a) The Borrowers may make prepayments to the Agent for the
ratable accounts of the Term Loan Lenders, the Swing Line Lender and the
Revolving Credit Lenders, respectively, of any outstanding principal amount of
the Term Loans, Swing Line Loans or the Revolving Credit Advances equal to
$100,000 or an integral multiple thereof which are Base Rate Loans in accordance
with Section 4.3 at any time prior to 12:00 noon (Boston time) on any Business
Day without premium or penalty; PROVIDED, HOWEVER, that repayment of Revolving
Credit Advances which are Base Rate Loans may be made in other amounts as
provided in Section 2.17(c).
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(b) The Borrowers may make prepayments to the Agent for the
ratable accounts of the Term Loan Lenders or the Revolving Credit Lenders,
respectively, of any outstanding principal amount of the Term Loans or any
Revolving Credit Advances equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof which are LIBOR Rate Loans in accordance with
Section 4.3 at any time prior to 12:00 noon (Boston time) on any Business Day
subject, however, to the premiums and penalties set forth in Section 4.6.
(c) Any voluntary prepayments of the Term Loans pursuant to this
Section 4.2 will reduce the remaining scheduled principal payments on the Term
Loans PRO RATA.
Section 4.3 PAYMENT AND INTEREST CUTOFF. Notice of each prepayment
pursuant to Section 4.2 shall be given to the Agent (a) in the case of
prepayment of Base Rate Loans, not later than 12:00 noon (Boston time) one (1)
Business Day prior to the proposed date of payment and (b) in the case of
prepayment of LIBOR Rate Loans on any day other than the last day of the
Interest Period applicable thereto, not later than 12:00 noon (Boston time),
three (3) Business Days, prior to the proposed date of payment, and, in each
case, shall specify the total principal amount of the Term Loans or the
Revolving Credit Advances to be paid on such date. Notice of prepayment having
been given in compliance with this Section 4.3, the amount specified to be
prepaid shall become due and payable on the date specified for prepayment and
from and after said date (unless the Borrowers shall default in the payment
thereof) interest thereon shall cease to accrue. Unpaid interest on the
principal amount of the Term Loans or any Revolving Credit Advances so prepaid
accrued to the date of prepayment shall be due on the date of prepayment.
Section 4.4 PAYMENT OR OTHER ACTIONS ON NON-BUSINESS DAYS. Whenever any
payment to be made hereunder shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest or fees, as the case may be. In the case of any other
action the last day for performance of which shall be a day other than a
Business Day, the date for performance shall be extended to the next succeeding
Business Day.
Section 4.5 METHOD AND TIMING OF PAYMENTS.
(a) All payments required to be made pursuant to the provisions
of this Agreement and any other Lender Agreement, and all prepayments pursuant
to Section 4.1, may be charged by the Agent against any Borrower's accounts with
the Agent. Each Borrower hereby authorizes the Agent and the Lenders, without
prior notice to the Borrower but with confirming notice to such Borrower
promptly thereafter, to charge against any account of such Borrower with the
Agent or such Lender an amount equal to the accrued interest, principal and
other amounts from time to time due and payable to the Agent and the Lenders
hereunder and under all other Lender Agreements.
(b) The Borrowers shall make each payment to be made by them
hereunder not later than 12:00 noon (Boston time) on the day when due in lawful
money of the United
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States to the Agent at its address set forth in Section 14.1 in immediately
available funds. The Agent will, after its receipt thereof, distribute like
funds relating to the payment of principal, interest or any other amounts
payable hereunder ratably to the Lenders in accordance with their respective
Commitment Percentages. Any payment made by the Borrowers to the Agent under
this Agreement or under the Notes in the manner provided in this Agreement shall
be deemed to be a payment to each of the respective Lenders, unless the
provisions of this Agreement expressly provide that any such payment shall be
solely for the account of the Agent or any specific Lender.
Section 4.6 PAYMENTS NOT AT END OF INTEREST PERIOD. If the Borrowers
for any reason make any payment of principal with respect to any LIBOR Rate Loan
on any day other than the last day of the Interest Period applicable to such
LIBOR Rate Loan, including without limitation by reason of acceleration, or fail
to borrow a LIBOR Rate Loan after electing a LIBOR Pricing Option with respect
thereto pursuant to Section 2.6, the Borrowers shall pay to the Agent, jointly
and severally, for the ratable account of the Lenders, any amounts required to
compensate the Lenders for any additional losses, costs or expenses which they
may reasonably incur as a result of such payment or failure to borrow, including
without limitation, any loss, including lost profits, costs or expenses incurred
by reason of the liquidation, reutilization or reemployment of deposits or other
funds acquired by the Lenders to fund or maintain such LIBOR Rate Loan. Such
compensation may include, without limitation, an amount equal to (a) the amount
of interest which would have accrued on the amount so paid or not borrowed, for
the period from the date of such payment or failure to borrow, to the last day
of the then current Interest Period for such LIBOR Rate Loan (or, in the case of
a failure to borrow, to the last day of the Interest Period for the LIBOR Rate
Loan which would have commenced on the date of such failure to borrow), at the
applicable rate of interest for such LIBOR Rate Loan provided for herein MINUS
(b) the amount of interest (as reasonably determined by the Agent), which would
accrue and become payable to the Lenders during such period on the principal
repaid or not borrowed if the Lenders, following such repayment or failure to
borrow, were to reinvest such principal in U.S. Treasury securities selected by
the Agent in an amount equal (as nearly as may be) to the principal so repaid or
not borrowed and having a term equal (as near as may be) to such period. The
Borrowers, jointly and severally, shall pay such amount upon presentation by
the Agent of a statement setting forth the amount and the Agent's calculation
thereof pursuant hereto, which statement shall be deemed true and correct absent
manifest error.
Section 4.7 CURRENCY. All payments and prepayments provided for under
this Agreement shall be made in lawful currency of the United States of America
in immediately available funds.
Section 4.8 FOREIGN LENDERS. Each Lender (including any Successor
Lender) that is not a citizen or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under the
laws of the United States of America (or any jurisdiction thereof), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a "Non-U.S. Lender") shall deliver to the Borrowers and
the Agent (or, in the case of a Credit Participant, to the Lender from which the
related
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participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender
claiming exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest," a Form W-8,
or any subsequent versions thereof or successors thereto (and, if such Non-U.S.
Lender delivers a Form W-8, an annual certificate representing that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is
not a 10% shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of any of the Borrowers and is not a controlled foreign corporation related to
any of the Borrowers (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrowers under this Agreement and the other Lender Agreements.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Credit Participant, on
or before the date such Credit Participant purchases the related participation).
In addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrowers at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrowers (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 4.8(b), a Non-U.S. Lender shall not be required
to deliver any form pursuant to this Section 4.8(b) that such Non-U.S. Lender is
not legally able to deliver.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Loans as contemplated hereby, American Ski
and the Borrowers, jointly and severally, hereby make the following
representations and warranties:
Section 5.1 EXISTENCE, CHARTER DOCUMENTS, ETC. American Ski and each
Restricted Subsidiary other than Heavenly Valley, Limited Partnership is a
corporation, and Heavenly Valley, Limited Partnership is a limited partnership,
and each of them is validly organized, legally existing and in good standing
under the laws of the jurisdiction in which it is organized and has corporate or
partnership power to own its properties and conduct its business as now
conducted and as proposed to be conducted by it. Certified copies of the
charter documents and By-Laws of American Ski and each Restricted Subsidiary
have been delivered to the Lenders and are true, accurate and complete as of the
date hereof.
Section 5.2 PRINCIPAL PLACE OF BUSINESS; LOCATION OF RECORDS. American
Ski's and each Restricted Subsidiary's principal place of business is as
described on SCHEDULE 5.2, and neither American Ski nor any Restricted
Subsidiary has had any other principal place of business during the last six
months. All of the books and records or true and complete copies thereof
relating to the accounts and contracts of American Ski and each Restricted
Subsidiary are and will be kept at such location and at the other locations
designated on SCHEDULE 5.2.
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Section 5.3 QUALIFICATION. American Ski and each Restricted Subsidiary
is duly qualified, licensed and authorized to do business and is in good
standing as a foreign corporation or partnership in each jurisdiction where its
ownership or leasing of properties or the conduct of its business requires it to
be so qualified except to the extent that any failure to be so qualified would
not have a Material Adverse Effect.
Section 5.4 SUBSIDIARIES.
(a) American Ski has no Subsidiaries except for those listed on
SCHEDULE 5.4(A). All of the issued and outstanding capital stock of each
Subsidiary listed on SCHEDULE 5.4(A) is owned of record and beneficially as
described therein.
(b) There are no transactions or relationships between American
Ski or any of its Restricted Subsidiaries, on the one hand, and any Unrestricted
Subsidiary, on the other, except as disclosed on SCHEDULE 5.4(B).
Section 5.5 POWER. The execution, delivery and performance of this
Agreement, the Term Notes, the Revolving Credit Notes, the Security Agreements
and all other Lender Agreements and other documents delivered or to be delivered
by American Ski, each Borrower or any Subsidiary to the Agent or the Lenders,
and the incurrence of Indebtedness to the Lenders hereunder or thereunder, now
or hereafter owing:
(a) are within the powers of American Ski, each Borrower and
each Subsidiary party thereto, as the case may be, having been duly authorized
by its Board of Directors or other similar governing body, and, if required by
law, by its charter documents or by its By-Laws, by its stockholders or
partners;
(b) do not require any approval or consent of, or filing with,
any governmental agency or other Person (except for such approvals and consents
that have been obtained and delivered to the Lenders) and are not in
contravention of law or the terms of the charter documents or By-Laws of
American Ski, each Borrower and each Subsidiary or any amendment thereof;
(c) do not and will not
(i) result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which American Ski, any Borrower or any Subsidiary is a party
or by which American Ski, any Borrower, any Subsidiary or any of their
respective properties are bound or affected, except for those breaches or
defaults which have been waived or consented to in writing or which will
not in the aggregate result in a Material Adverse Effect,
(ii) result in, or require, the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other
charge or encumbrance of any
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nature on any property now owned or hereafter acquired by American Ski, any
Borrower or any Subsidiary, except as provided in the Lender Agreements, or
(iii) result in a violation of or default under any law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award having applicability to American Ski, any Borrower or any
Subsidiary, or to any of their respective properties.
Section 5.6 VALID AND BINDING OBLIGATIONS. This Agreement, the Term
Loan Notes, the Revolving Credit Notes, the Security Agreements and all the
other Lender Agreements executed in connection herewith and therewith
constitute, or will constitute when delivered, the valid and binding obligations
of American Ski, the Borrowers and their Subsidiaries parties thereto, as the
case may be, enforceable in accordance with their respective terms, except as
the enforceability thereof may be subject to bankruptcy, insolvency, moratorium
and other laws affecting the rights and remedies of creditors and secured
parties and to the exercise of judicial discretion in accordance with general
equitable principles.
Section 5.7 OTHER AGREEMENTS. Neither American Ski nor any Restricted
Subsidiary is a party to any indenture, loan or credit agreement, or any lease
or other agreement or instrument, or subject to any charter or corporate
restriction or any judgment, decree, order, rule or regulation, which is likely
to have a Material Adverse Effect, or which restricts the ability of American
Ski, any Borrower or any Subsidiary to carry out any of the provisions of this
Agreement, the Term Loan Notes, the Revolving Credit Notes, the Security
Agreements or any of the Lender Agreements executed in connection herewith and
therewith.
Section 5.8 PAYMENT OF TAXES. American Ski and its Subsidiaries have
filed all tax returns which are required to be filed by them and have paid, or
made adequate provision for the payment of, all taxes which have or may become
due pursuant to said returns or to assessments received, except such as are
being contested in good faith by appropriate proceedings. All federal tax
returns of American Ski and its Subsidiaries through their fiscal year ended in
1991 have been audited by the Internal Revenue Service or are not subject to
such audit by virtue of the expiration of the applicable statute of limitation,
and the results of such audits are fully reflected in the balance sheet
contained in the 1997 Financial Statements. American Ski knows of no material
additional assessments since such date for which adequate reserves appearing in
the balance sheet contained in the 1997 Financial Statements have not been
established. American Ski and its Subsidiaries have made adequate provision for
all current taxes, and except as described on SCHEDULE 5.8, to the best of the
American Ski's knowledge there will not be any additional assessments for any
fiscal periods prior to and including that which ended on the date of said
balance sheet in excess of the amounts reserved therefor.
Section 5.9 FINANCIAL STATEMENTS.
(a) All balance sheets, statements and other financial
information furnished to the Agent and the Lenders in connection with this
Agreement and the transactions
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contemplated hereby (certain of which information is listed on SCHEDULE 5.9),
including, without limitation, the 1997 Financial Statements, have been prepared
in accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except for normal year-end adjustments and for
the absence of footnotes with interim statements) and present fairly the
consolidated financial condition of American Ski and its Subsidiaries reported
therein and all such information so furnished was true, correct and complete as
of the date thereof in all material respects.
(b) To the best knowledge of American Ski and each Borrower, no
facts exist that (individually or in the aggregate) would result in any material
change in any of such projections. The Management Projections are based upon
estimates and assumptions which the senior executive and financial officers of
American Ski and the Borrowers consider reasonable, have been prepared on the
basis of the assumptions stated therein and reflect the reasonable estimates of
American Ski and the Borrowers of the results of operations and other
information projected therein.
Section 5.10 OTHER MATERIALS FURNISHED. The written information,
exhibits, memoranda or reports furnished to the Agent or the Lenders by or on
behalf of American Ski or any of its Subsidiaries in connection with the
negotiation of this Agreement, taken as a whole, does not contain any material
misstatement of fact or omit to state a material fact necessary to make the
statements contained therein not misleading.
Section 5.11 STOCK. As of the date hereof, the issued and outstanding
capital stock of American Ski is as set forth on SCHEDULE 5.4(A) hereto. There
are presently issued by American Ski's Restricted Subsidiaries and outstanding
the shares of capital stock indicated on SCHEDULE 5.4(A). American Ski and its
Subsidiaries have received the consideration for which such stock was authorized
to be issued and have otherwise complied with all legal requirements relating to
the authorization and issuance of shares of stock and all such shares are
validly issued, fully paid and non-assessable. The Borrowers and their
Restricted Subsidiaries have no other capital stock of any class outstanding.
Section 5.12 CHANGES IN CONDITION. Since the date of the balance sheets
contained in the 1997 Financial Statements, except as described in the
Registration Statement, there has been no material adverse change in the
business or assets or in the condition, financial or otherwise, of American Ski
and its Restricted Subsidiaries taken as a whole, and neither American Ski nor
any Restricted Subsidiary has entered into any transaction outside of the
ordinary course of business which is material to American Ski and its Restricted
Subsidiaries taken as a whole except for the initial public offering of American
Ski. Neither American Ski nor any Restricted Subsidiary had, as of the date
thereof, any contingent liabilities of any material amount which are not
referred to in the 1997 Financial Statements.
Section 5.13 ASSETS, LICENSES, PATENTS, TRADEMARKS, ETC.
(a) American Ski and its Restricted Subsidiaries have good and
marketable title to, or valid leasehold interests in, all of their assets, real
and personal, including the assets
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carried on their books and reflected in the 1997 Financial Statements, subject
to no liens, charges or encumbrances, except for (i) liens, charges and
encumbrances described in SCHEDULE 5.16 and permitted by Section 9.2 hereof, and
(ii) assets sold, abandoned or otherwise disposed of in the ordinary course of
business.
(b) American Ski and its Restricted Subsidiaries own all
material licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, and trade names necessary to continue to
conduct their business as heretofore conducted by them, now conducted by them
and proposed to be conducted by them, each of which is listed, together with
Patent and Trademark Office application or registration numbers, where
applicable, on SCHEDULE 5.13 hereto. American Ski and its Restricted
Subsidiaries conduct their respective businesses without infringement or claim
of infringement of any material license, patent, copyright, service mark,
trademark, trade name, trade secret or other intellectual property right of
others. To the best knowledge of American Ski and the Borrowers, there is no
infringement or claim of infringement by others of any material license, patent,
copyright, service mark, trademark, trade name, trade secret or other
intellectual property right of American Ski and its Restricted Subsidiaries.
(c) Except as set forth on Schedule 5.13(c) no leasehold
personal property interest which any Borrower is prohibited by the lessor from
assigning and no interest in any personal property lease agreement which any
Borrower is prohibited from assigning is material, or taken as a whole are
material, to the operations of any such Borrower.
Section 5.14 LITIGATION. Except as described on SCHEDULE 5.14 or the
most recent Compliance Certificate, there is no litigation, at law or in equity,
or any proceeding before any federal, state, provincial or municipal board or
other governmental or administrative agency pending or, to the knowledge of
American Ski and the Borrowers, threatened, or any basis therefor, which
involves a material risk of any judgment or liability which could have a
Material Adverse Effect, and no judgment, decree, or order of any federal,
state, provincial or municipal court, board or other governmental or
administrative agency has been issued against American Ski or any of its
Restricted Subsidiaries which has or may have a Material Adverse Effect.
Section 5.15 PENSION PLANS. No employee benefit plan established or
maintained by American Ski or any of its Subsidiaries or any other Person a
member of the same "control group," as American Ski or any of its Subsidiaries
(a "Pension Affiliate"), within the meaning of Section 302(f)(6)(b) of ERISA,
(including any multi-employer plan to which American Ski or any of its
Subsidiaries contributes) which is subject to Part 3 of Subtitle B of Title I of
the ERISA, had a material accumulated funding deficiency (as such term is
defined in Section 302 of ERISA) as of the last day of the most recent fiscal
year of such plan ended prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of such plan to which Part 3 of Subtitle B of Title I of ERISA
applied, and no material liability under Title IV of ERISA has been, or is
expected by American Ski or any of its Subsidiaries to be, incurred with respect
to any such plan by American Ski or any of its Subsidiaries or any Pension
Affiliate. The execution, delivery and
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performance by American Ski and the Borrowers of this Agreement and the other
Lender Agreements executed on the date hereof will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code. American
Ski and its Subsidiaries have no Pension Plan other than those described on
SCHEDULE 5.15.
Section 5.16 OUTSTANDING INDEBTEDNESS. After application of the proceeds
of the Term Loans and the initial Revolving Credit Advance, the outstanding
amount of Consolidated Funded Debt and Guaranties of borrowed money of American
Ski and its Restricted Subsidiaries as of the date hereof is correctly set forth
on SCHEDULE 5.16 hereto, and said Schedule correctly describes the credit
agreements, guaranties, leases and other instruments pursuant to which such
Indebtedness has been incurred and all liens, charges and encumbrances securing
such Indebtedness. Said schedule also describes all agreements and other
arrangements pursuant to which American Ski or any of its Restricted Subsidiary
may borrow any money.
Section 5.17 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
5.17:
(a) Neither American Ski, any Restricted Subsidiary nor any
operator of any of their respective properties is in violation, or to American
Ski's or any Borrower's knowledge is in alleged violation, of any Environmental
Law, which violation would have a Material Adverse Effect.
(b) Neither American Ski, any Restricted Subsidiary nor any
operator of any of their respective properties has received notice from any
third party, including without limitation any federal, state, county, or local
governmental authority, (i) that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA") or any equivalent state law,
with respect to any site or location; (ii) that any Hazardous Materials which it
has generated, transported or disposed of, has been found at any site at which a
federal, state, county, or local agency or other third party has conducted or
has ordered American Ski, any Restricted Subsidiary or another third party or
parties (E.G. a committee of potentially responsible parties) to conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint (contingent or otherwise) or legal or
administrative proceeding arising out of any actual or alleged release or
threatened release of Hazardous Materials. For purposes of this Agreement,
"release" means any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping of any Hazardous Material into the Environment, or the
uncontained presence of any Hazardous Material in the Environment.
(c) (i) American Ski, each Restricted Subsidiary and each
operator of any real property owned or operated by any Borrower is in
compliance, in all material respects, with all provisions of the Environmental
Laws relating to the handling, manufacturing, processing, generation, storage or
disposal of any Hazardous Materials; (ii) to the best of American Ski's and each
Borrower's knowledge, no portion of property owned, operated or
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controlled by American Ski or any of its Restricted Subsidiaries has been used
for the handling, manufacturing, processing, generation, storage or disposal of
Hazardous Materials except in accordance with applicable Environmental Laws;
(iii) to the best of American Ski's and each Borrower's knowledge, there have
been no releases or threatened releases of Hazardous Materials on, upon, into or
from any property owned, operated or controlled by American Ski or any
Restricted Subsidiary, which releases could have a Material Adverse Effect; (iv)
to the best of American Ski's and each Borrower's knowledge, there have been no
releases of Hazardous Materials on, upon, from or into any real property in the
vicinity of the real properties owned, operated or controlled by American Ski or
any Restricted Subsidiary which, through soil or groundwater contamination, may
have come to be located on the properties of American Ski or any Restricted
Subsidiary; (v) to the best of American Ski's and each Borrower's knowledge,
there have been no releases of Hazardous Materials on, upon, from or into any
real property formerly but no longer owned, operated or controlled by American
Ski or any Restricted Subsidiary.
(d) None of the properties of American Ski or any Restricted
Subsidiary is or shall be subject to any applicable environmental cleanup
responsibility law or environmental restrictive transfer law or regulation by
virtue of the transactions set forth herein and contemplated hereby.
Section 5.18 FOREIGN TRADE REGULATIONS. Neither American Ski nor any
Restricted Subsidiary is (a) a person included within the definition of
"designated foreign country" or "national" of a "designated foreign country" in
Executive Order No. 8389, as amended, in Executive Order No. 9193, as amended,
in the Foreign Assets Control Regulations (31 C.F.R., Chapter V, Part 500, as
amended), in the Cuban Assets Control Regulations of the United States Treasury
Department (31 C.F.R., Chapter V, Part 515, as amended) or in the Regulations of
the Office of Alien Property, Department of Justice (8 C.F.R., Chapter II, Part
507, as amended) or within the meanings of any of the said Orders or
Regulations, or of any regulations, interpretations, or rulings issued
thereunder, or in violation of said Orders or Regulations or of any regulations,
interpretations or rulings issued thereunder; or (b) an entity listed in Section
520.101 of the Foreign Funds Control Regulations (31 C.F.R., Chapter V, Part
520, as amended).
Section 5.19 GOVERNMENTAL REGULATIONS. Neither American Ski nor any
Restricted Subsidiary or any Affiliate of American Ski is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, or is a common carrier under the Interstate
Commerce Act, or is engaged in a business or activity subject to any statute or
regulation which regulates the incurring by any Borrower of Indebtedness for
borrowed money, including statutes or regulations relating to common or contract
carriers or to the sale of electricity, gas, steam, water, telephone or
telegraph or other public utility services, except for Uplands Water, Alpine
Pipeline, Community Water Company and Mountain Water Company.
Section 5.20 MARGIN STOCK. Neither American Ski nor any Restricted
Subsidiary owns any "margin stock" within the meaning of Regulation U of the
Board of Governors of
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the Federal Reserve System, or any regulations, interpretations or rulings
thereunder, nor is American Ski or any Restricted Subsidiary engaged principally
or as one of its important activities in extending credit which is used for the
purpose of purchasing or carrying margin stock.
Section 5.21 SOLVENCY. American Ski and each Restricted Subsidiary,
before and after giving effect to the transactions contemplated by this
Agreement and the other Lender Agreements, including consummation of American
Ski's initial public offering and the Kamori Acquisition, is Solvent.
Section 5.22 COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.
(a) Neither American Ski nor any Restricted Subsidiary is in
violation of any provision of its charter documents, bylaws, or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in a
Material Adverse Effect.
(b) American Ski and its Restricted Subsidiaries have complied
in all respects with the requirements of the Hart-Scott-Rodino Anti-Trust
Improvement Act of 1976, as amended (the "HSR Act"), and have made all filings
with all Governmental Authorities required to be made thereunder in connection
with the Kamori Acquisition. All waiting periods required under the H-S-R Act
have expired in connection with the Kamori Acquisition. Neither American Ski
nor any of its Restricted Subsidiaries has any obligation or duty to take any
further action (or to refrain from taking any action) in order to be in
compliance with the H-S-R Act in connection with the Kamori Acquisition.
Section 5.23 ABSENCE OF FINANCING STATEMENTS, ETC. To the best knowledge
of American Ski and except with respect to Permitted Liens, there is no
financing statement, security agreement, chattel mortgage, real estate mortgage
or other document filed or recorded with any filing records, registry or other
public office, that purports to cover, effect or give notice of any present or
possible future lien on, or security interest in, any assets or property of
American Ski or any Restricted Subsidiary or any rights relating thereto.
Section 5.24 PERFECTION OF SECURITY INTERESTS. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are required under applicable law to establish and
perfect the Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any set-off,
claims, withholdings or other defenses. American Ski or its Restricted
Subsidiaries as specified in the Security Agreements, own the Collateral free
from any lien, security interest, encumbrance and any other claim or demand
except for Permitted Liens.
Section 5.25 BANK ACCOUNTS. SCHEDULE 2.17 sets forth the account
numbers, location and description of all bank accounts of American Ski and each
Restricted Subsidiary.
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Section 5.26 FISCAL YEAR. American Ski and each Restricted Subsidiary
other than the Heavenly Subsidiaries and the Steamboat Subsidiaries has a fiscal
year which is the twelve-months ending on the last Sunday of July of each year;
the Heavenly Subsidiaries and the Steamboat Subsidiaries each had a fiscal year
which was the twelve-months ending on May 31 of each year and effective with the
current fiscal year will have a fiscal year which is the twelve-months ending on
the last Sunday of July of each year.
Section 5.27 TAX STATUS. Each Borrower, except Heavenly Valley, Limited
Partnership, is a "C" corporation for all purposes under the Code.
Section 5.28 CONSUMMATION OF PUBLIC OFFERING. American Ski has
successfully completed its initial public offering, the gross proceeds of which
are equal to or greater than the Minimum IPO Gross Proceeds.
Section 5.29 CONSUMMATION OF KAMORI ACQUISITION. The Kamori Acquisition
has been consummated in accordance with the terms of the Kamori Acquisition
Documents. American Ski hereby confirms and restates to the Agent and the
Lenders as if set forth herein in full the representations and warranties set
forth in Sections 4 and 5 of the Kamori Stock Purchase Agreement.
Section 5.30 CERBERUS PURCHASE AGREEMENT; CERBERUS AMENDMENT AND WAIVER
LETTER AGREEMENT; CERTIFICATE OF DESIGNATION. A true and complete copy of the
Cerberus Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement
and the Certificate of Designation has been delivered to the Agent. The
Cerberus Purchase Agreement, Series A Exchangeable Preferred Shares, the Senior
Exchangeable Notes, the Cerberus Amendment and Waiver Letter Agreement and the
101/2% Repriced Convertible Exchangeable Preferred Stock constitute the entire
agreement between Cerberus, Madeleine LLC and their affiliates, on the one hand,
and American Ski and its Restricted Subsidiaries and other Affiliates, on the
other hand, and there are no other agreements, instruments or understandings by
or between them. The Cerberus Purchase Agreement has not been modified, amended
or supplemented and no consents or waivers have been granted thereunder except
for the Cerberus Amendment and Waiver Letter Agreement. The Cerberus Amendment
and Waiver Letter Agreement has been duly executed and delivered by Madeleine
LLC and is enforceable against Madeleine LLC in accordance with its terms. The
Certificate of Designation has been duly authorized and filed by American Ski
and is enforceable against American Ski in accordance with its terms.
Section 5.31 WOLF ACQUISITION AGREEMENT. A true and complete copy of the
Wolf Acquisition Agreement has been delivered to the Agent. The Wolf
Acquisition Agreement has not been modified, amended or supplemented and no
consents or waivers have been granted thereunder.
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ARTICLE 6. REPORTS AND INFORMATION
Section 6.1 INTERIM FINANCIAL STATEMENTS AND REPORTS.
(a) As soon as available, and in any event within forty-five
(45) days after the end of each quarter of each fiscal year of American Ski,
American Ski shall furnish to the Agent and each Lender: (i) consolidated and
consolidating balance sheets of (A) American Ski and its Restricted
Subsidiaries, (B) ASC East, Inc. and its Restricted Subsidiaries and (C)
American Ski - West and its Restricted Subsidiaries, as of the end of such
quarter and consolidated and consolidating statements of operations,
shareholders' equity and cash flow of American Ski and its Restricted
Subsidiaries for such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, all in reasonable detail; (ii) a Compliance
Certificate; and (iii) unconsolidated financial statements of the Unrestricted
Subsidiaries similar to the financial statements described in clause (i) above.
(b) As soon as available, but in any event not more than thirty
(30) days after the end of each month, American Ski shall furnish to the Agent
and each Lender (i) consolidated and consolidating profit and loss statements of
American Ski and each of its Restricted Subsidiaries for the period then ended
all in reasonable detail and (ii) unconsolidated profit and loss statements of
the Unrestricted Subsidiaries similar to the profit and loss statements
described in clause (i) above.
(c) Not more than seven (7) days after the end of each month,
the Borrowers shall furnish to the Agent and each Lender its then current year-
to-date internally prepared, unaudited profit plan report in the form currently
prepared by the Borrowers.
Section 6.2 ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within ninety (90) days after the end of each fiscal year of the
Borrowers, American Ski shall furnish to the Agent and each Lender: (a) audited
consolidated and consolidating balance sheets of (i) American Ski and its
Restricted Subsidiaries, (ii) ASC East, Inc. and its Restricted Subsidiaries,
(iii) American Ski - West and its Restricted Subsidiaries and (iv) American Ski
and its Subsidiaries, as of the end of such fiscal year, and consolidated and
consolidating statements of operations, shareholders' equity and cash flow of
(A) American Ski and its Restricted Subsidiaries and (B) American Ski and its
Subsidiaries, for such fiscal year, in each case (other than the consolidating
statements) reported on by Price Waterhouse LLP, or other independent certified
public accountants of recognized national standing acceptable to the Agent,
which report shall express, without reliance upon others, a positive opinion
regarding the fairness of the presentation of such financial statements in
accordance with generally accepted accounting principles consistently applied,
said report to be without qualification, except in cases of unresolved
litigation and accounting changes with which such accountants concur, together
with the statement of such accountants that they have caused the provisions of
this Agreement and the other Lender Agreements to be reviewed and that nothing
has come to their attention to lead them to believe that any Default exists
hereunder or specifying any
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Default and the nature thereof; (b) a Compliance Certificate; and (c)
unconsolidated audited financial statements of the Unrestricted Subsidiaries
similar to the financial statements described in clause (a) above. At the time
of delivery of the annual audited financial statements, American Ski shall
furnish to the Agent and each Lender copies of the written recommendations
concerning the management, finances, financial controls, or operations of any
Borrower or any Restricted Subsidiary received from American Ski's independent
public accountants.
Section 6.3 ANNUAL BUDGET. On or before June 1 of each year, American
Ski shall furnish to the Agent and each Lender (a) consolidated and
consolidating projections of American Ski and its Restricted Subsidiaries and
(b) consolidated and consolidating projections of the proposed Capital
Expenditures (which proposed expenditures shall be consistent with the
limitations set forth in Section 9.7 hereof) of American Ski and its Restricted
Subsidiaries, in each case, for the immediately following fiscal year, prepared
on a month-by-month and quarter-by-quarter basis in accordance with generally
accepted accounting principles consistently applied to the extent applicable to
such projections and in such detail as the Agent may reasonably request.
Section 6.4 REPORTS OF SKIER VISITS. At the time of each delivery by
American Ski of (a) interim financial statements and reports under Section 6.1
hereof and (b) annual financial statements under Section 6.2 hereof shall
furnish to the Agent and the Lenders information setting forth (i) the number of
paid skier visits and unpaid skier visits to each ski resort or skiing facility
owned or operated by American Ski or any Restricted Subsidiary during each month
of the applicable fiscal period and for the fiscal year-to-date and (ii) in
comparative form the corresponding figures for the corresponding fiscal period
of the previous fiscal and for the corresponding year-to-date of such previous
fiscal year.
Section 6.5 NOTICE OF DEFAULTS. As soon as possible, and in any event
within five (5) days after the occurrence of each Default, American Ski shall
furnish to the Agent and each Lender the statement of their chief executive
officers or chief financial officers setting forth details of such Default and
the action which American Ski has taken or propose to take with respect thereto.
Section 6.6 NOTICE OF LITIGATION. Promptly after the commencement
thereof, American Ski shall furnish to the Agent and each Lender written notice
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting American Ski or any Restricted Subsidiary, which, if
adversely determined, would have a Material Adverse Effect.
Section 6.7 COMMUNICATIONS WITH OTHERS. If and when any debt or equity
security of American Ski or any Restricted Subsidiary is or is proposed to be
traded publicly, promptly after filing the same, American Ski shall furnish to
the Agent and each Lender copies of all regular, periodic and special reports
and all registration statements which American Ski or such Borrower files with
the Commission or any Governmental Authority which may be substituted therefor,
or with any national or regional securities exchange.
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Section 6.8 REPORTABLE EVENTS. At any time that American Ski or any
Pension Affiliate has a Pension Plan, American Ski shall furnish to the Agent
and each Lender, as soon as possible, but in any event within thirty (30) days
after American Ski knows or has reason to know that any Reportable Event with
respect to any Pension Plan has occurred, the statement of the chief executive
officers or chief financial officers of American Ski setting forth the details
of such Reportable Event and the action which American Ski or any Pension
Affiliate has taken or proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event to the Pension Benefit Guaranty
Corporation.
Section 6.9 REPORTS TO OTHER CREDITORS. Promptly after filing the same,
American Ski shall furnish to the Agent and each Lender copies of any compliance
certificate and other information furnished to any other holder of the
securities (including the Senior Subordinated Notes, the Series A Exchangeable
Preferred Stock and the Senior Exchangeable Notes and any other debt
obligations) of American Ski or any Restricted Subsidiary pursuant to the terms
of any indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Agent or the Lenders pursuant to any other provision of
this Agreement.
Section 6.10 COMMUNICATIONS WITH INDEPENDENT PUBLIC ACCOUNTANTS. At any
reasonable time and from time to time upon reasonable request, American Ski
shall provide the Agent and the Lenders and any agents or representatives of the
Agent and the Lenders access to the independent public accountants of American
Ski and its Restricted Subsidiaries to discuss their financial condition,
including, without limitation any recommendations of such independent public
accountants concerning the management, finances, financial controls or
operations of American Ski and its Restricted Subsidiaries.
Section 6.11 ENVIRONMENTAL REPORTS. In the event that and to the extent
that any of the following provides notice of circumstances, occurrences or
events that have or could reasonably be expected to have a material impact on
the operations of any Borrower, American Ski or the Borrowers shall furnish to
the Agent and each Lender: (a) not later than seven (7) days after notice
thereof, notice of any enforcement actions, or, to the knowledge of American Ski
or any Borrower, threatened enforcement actions affecting American Ski or any
Restricted Subsidiary by any Governmental Authority related to Environmental
Laws; (b) copies, promptly after they are received, of all orders, notices of
responsibility, notices of violation, notices of enforcement actions, and
assessments, and other written communications pertaining to any such orders,
notices, claims and assessments received by American Ski or any Restricted
Subsidiary from any Governmental Authority; (c) not later than seven (7) days
after notice thereof, notice of any civil claims or threatened civil claims
affecting American Ski or any Restricted Subsidiary by any third party alleging
any violation of Environmental Laws or harm to human health, safety or the
environment; (d) copies of all cleanup plans, site assessment reports, response
plans, remedial proposals, or other submissions of American Ski or any
Restricted Subsidiary, other third party (e.g., committee of potentially
responsible parties at a Superfund site), or any combination of same, submitted
to a Governmental Authority in response to any communication referenced in
subsections (a) and (b) herein simultaneously with their submission to such
Governmental Authority; and (e) from time to
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time, on reasonable request of the Agent, evidence satisfactory to the Agent of
American Ski's and its Restricted Subsidiaries' insurance coverage, if any, for
any environmental liabilities.
Section 6.12. NOTICES UNDER CERTAIN AGREEMENTS. American Ski and its
Restricted Subsidiaries will provide the Agent with copies of all notices and
other written communications given or received by them under the Cerberus
Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement, the
Kamori Stock Purchase Agreement and the Wolf Acquisition Agreement to the extent
such notices relate to (a) defaults of American Ski or any Restricted Subsidiary
or any other party under such agreements, (b) events which with the giving of
notice or passage of time or both would constitute a default of American Ski or
any Restricted Subsidiary under such agreements, (c) indemnification claims of
American Ski or any Restricted Subsidiary or any other party under such
agreements or (d) other material transactions under such agreements. Without
limiting the generality of the foregoing, American Ski shall provide the Agent
with copies of the Preliminary September 30 Balance Sheets, the Cash Flow Notice
and the Capital Expenditure Notice (as such terms are defined in the Kamori
Stock Purchase Agreement) and written notice of any indemnification claims
pursuant to Section 10(b) of the Kamori Stock Purchase Agreement.
Section 6.13 MISCELLANEOUS. American Ski shall provide the Agent and the
Lenders with such other information as the Agent or the Lenders may from time to
time reasonably request respecting the business, properties, prospects,
condition or operations, financial or otherwise, of American Ski and its
Restricted Subsidiaries.
ARTICLE 7. FINANCIAL COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and its Restricted Subsidiaries shall
observe the following covenants:
Section 7.1 RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA.
(a) American Ski and its Restricted Subsidiaries shall maintain
as of the end of each fiscal quarter a ratio of (i) Consolidated Total Debt as
of such date to (ii) Consolidated EBITDA for the four-quarter period ending on
such date of not more than the following levels as of the fiscal quarters
indicated:
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FISCAL QUARTER RATIO FISCAL QUARTER RATIO
-------------- ----- -------------- -----
1998 Quarter 1 6.00-to-1.00 2000 Quarter 3 4.00-to-1.00
1998 Quarter 2 6.00-to-1.00 2000 Quarter 4 4.50-to-1.00
1998 Quarter 3 5.50-to-1.00 2001 Quarter 1 4.50-to-1.00
1998 Quarter 4 5.50-to-1.00 2001 Quarter 2 4.50-to-1.00
1999 Quarter 1 5.50-to-1.00 2001 Quarter 3 4.00-to-1.00
1999 Quarter 2 5.50-to-1.00 2001 Quarter 4 4.00-to-1.00
1999 Quarter 3 4.50-to-1.00 Thereafter 4.00-to-1.00
1999 Quarter 4 5.00-to-1.00
2000 Quarter 1 5.00-to-1.00
2000 Quarter 2 5.00-to-1.00
(b) American Ski - West and its Restricted Subsidiaries shall
maintain as of the end of each fiscal quarter a ratio of (i) American Ski - West
Consolidated Total Debt as of such date to (ii) American Ski - West Consolidated
EBITDA for the four-quarter period ending on such date of not more than the
following levels as of the fiscal quarters indicated:
FISCAL QUARTER RATIO FISCAL QUARTER RATIO
-------------- ----- -------------- -----
1998 Quarter 1 6.00-to-1.00 2000 Quarter 3 4.00-to-1.00
1998 Quarter 2 6.00-to-1.00 2000 Quarter 4 4.50-to-1.00
1998 Quarter 3 5.50-to-1.00 2001 Quarter 1 4.50-to-1.00
1998 Quarter 4 5.50-to-1.00 2001 Quarter 2 4.50-to-1.00
1999 Quarter 1 5.50-to-1.00 2001 Quarter 3 4.00-to-1.00
1999 Quarter 2 5.50-to-1.00 2001 Quarter 4 4.00-to-1.00
1999 Quarter 3 4.50-to-1.00 Thereafter 4.00-to-1.00
1999 Quarter 4 5.00-to-1.00
2000 Quarter 1 5.00-to-1.00
2000 Quarter 2 5.00-to-1.00
Section 7.2 RATIO OF CONSOLIDATED ADJUSTED CASH FLOW TO CONSOLIDATED
DEBT SERVICE. American Ski and its Restricted Subsidiaries shall maintain as of
the end of each fiscal quarter for the four-quarter period ending on such date a
ratio of (a) Consolidated Adjusted Cash Flow to (b) Consolidated Debt Service of
not less than the following levels as of the end of any fiscal quarter during
the year indicated:
FISCAL YEAR
ENDING JULY RATIO
----------- -----
1998 1.05-to-1.00
1999 1.10-to-1.00
2000 1.20-to-1.00
2001 and Thereafter 1.25-to-1.00
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Section 7.3 RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST
EXPENSE. American Ski and its Restricted Subsidiaries shall maintain as of the
end of each fiscal quarter for the four-quarter period ending on such date a
ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense of not
less than the following levels as of the end of any fiscal quarter during the
year indicated:
FISCAL YEAR
ENDING JULY RATIO
----------- -----
1998 1.75-to-1.00
1999 2.25-to-1.00
2000 and Thereafter 2.50-to-1.00
Section 7.4 MINIMUM CONSOLIDATED NET WORTH.
(a) American Ski and its Restricted Subsidiaries shall maintain
minimum Consolidated Net Worth at all times of not less than the sum of
(a) $240,000,000 PLUS (b) 75% of cumulative Consolidated Net Income of American
Ski and its Restricted Subsidiaries for the period after July 31, 1997 PLUS
(c) all amounts received by American Ski or the Borrowers after the Closing Date
from the issuance of equity interests.
(b) American Ski - West and its Restricted Subsidiaries shall
maintain at all times minimum consolidated net worth (excluding from assets
investments in Unrestricted Subsidiaries) determined in accordance with
generally accepted accounting principles, of not less than $150,000,000.
ARTICLE 8. AFFIRMATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and its Restricted Subsidiaries will,
comply with the following covenants and provisions:
Section 8.1 EXISTENCE AND BUSINESS. American Ski and each Restricted
Subsidiary will (a) preserve and maintain its corporate or partnership existence
and qualify and remain qualified as a foreign corporation or partnership in each
jurisdiction in which such qualification is required except to the extent that
any failure to remain qualified as a foreign corporation or partnership would
not have a Material Adverse Effect, (b) preserve and maintain in full force and
effect all material rights, licenses, patents and franchises, (c) comply in all
material respects with all valid and applicable statutes, rules and regulations
necessary for the conduct of business and (d) engage only in the businesses
which they are conducting on the date of this Agreement (operation of all-season
resort properties, including related restaurant and retail operations, but
excluding the real estate development prohibited by Section 9.13 hereof);
PROVIDED, HOWEVER that a Restricted Subsidiary may merge into another Restricted
Subsidiary.
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Section 8.2 TAXES AND OTHER OBLIGATIONS. American Ski and each
Restricted Subsidiary (a) will duly pay and discharge, or cause to be paid and
discharged, before the same shall become in arrears, all material taxes,
assessments and other governmental charges, imposed upon each of them and its
properties, sales and activities, or upon the income or profits therefrom, as
well as the claims for labor, materials, or supplies which if unpaid might by
law result in a lien or charge upon any of its properties; PROVIDED, HOWEVER,
that American Ski and any Restricted Subsidiary may contest any such charges or
claims in good faith so long as (i) an adequate reserve therefor has been
established and is maintained if and as required by generally accepted
accounting principles and (ii) no action to foreclose any such lien has been
commenced and (b) will promptly pay or cause to be paid when due, or in
conformance with customary trade terms (but not later than 60 days from the due
date in the case of trade debt), all material lease obligations, trade debt and
all other Indebtedness incident to its operations. American Ski and each
Restricted Subsidiary shall cause all applicable tax returns and all amounts due
thereunder to be filed and paid, as the case may be, in order to maintain its
good standing with the Internal Revenue Service and state, local and foreign tax
authorities.
Section 8.3 MAINTENANCE OF PROPERTIES AND LEASES. American Ski and each
Restricted Subsidiary shall maintain, keep and preserve all of its material
properties (tangible and intangible) in good repair and working order, ordinary
wear and tear excepted. American Ski and each Restricted Subsidiary shall
replace and improve its material properties as necessary for the conduct of its
business. American Ski and each Restricted Subsidiary shall comply in all
material respects with all leases naming it as lessee.
Section 8.4 INSURANCE. American Ski and each Restricted Subsidiary (a)
will keep its principal assets which are of an insurable character insured by
financially sound and reputable insurers against loss or damage by fire,
explosion or hazards, by extended coverage in an amount sufficient to avoid
co-insurance liability and (b) will maintain with financially sound and
reputable insurers insurance against other hazards and risks and liability to
persons and property to the extent and in a manner satisfactory to the Lenders,
and in any event as customary for companies in similar businesses similarly
situated; PROVIDED, HOWEVER, that on prior notice to the Agent and the Lenders
it may effect workmen's compensation and general liability insurance through an
insurance fund operated by such state or jurisdiction and may also be a
self-insurer with respect to workmen's compensation and with respect to group
medical benefits under any medical benefit plan. The provisions of the Security
Agreements relating to insurance shall not be limited by the provisions of this
Section 8.4. On request of the Agent from time to time, American Ski will
render to the Agent and the Lenders a statement in reasonable detail as to all
insurance coverage required by this Section 8.4. A description of the material
elements of insurance coverage of American Ski and its Restricted Subsidiaries
as of the date hereof is set forth on SCHEDULE 8.4.
Section 8.5 RECORDS, ACCOUNTS AND PLACES OF BUSINESS. American Ski and
each Restricted Subsidiary shall maintain comprehensive and accurate records and
accounts in accordance with generally accepted accounting principles
consistently applied. American Ski and each Restricted Subsidiary shall
maintain adequate and proper reserves. American Ski and each Restricted
Subsidiary shall promptly notify the Agent of (a) any changes in the places of
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business of American Ski and any Restricted Subsidiary and (b) any additional
places of business which may arise hereafter.
Section 8.6 INSPECTION. At any reasonable time and from time to time,
American Ski and the Borrowers shall permit the Agent and the Lenders and any of
the Agent's and the Lenders' agents or representatives to examine and make
copies of and abstracts from the records and books of account of, and visit the
properties of, American Ski and its Subsidiaries and to discuss the affairs,
finances and accounts of American Ski and any Subsidiary with any of their
officers or directors and with American Ski's and its Subsidiaries' independent
accountants. In addition, the Agent shall be entitled, and American Ski shall
permit the Agent, to conduct field examinations of American Ski and its
Restricted Subsidiaries, at the Borrowers' sole expense and at any time or times
in the Agent's sole discretion.
Section 8.7 MAINTENANCE OF ACCOUNTS. American Ski and its Restricted
Subsidiaries shall maintain their principal concentration and disbursement
accounts with the Agent.
Section 8.8 MAINTENANCE AND ASSIGNMENT OF LIFE INSURANCE. The
Restricted Subsidiaries shall maintain in full force and effect one or more life
insurance policies issued by insurers acceptable to the Agent (the "Otten Life
Insurance Policies") on the life of Leslie B. Otten in a minimum amount of
$14,000,000 and on other terms and conditions approved by the Agent, and such
policies shall be assigned to the Agent as security for the Lender Obligations.
Section 8.9 OWNERSHIP OF RESTRICTED SUBSIDIARIES. American Ski will
maintain legal and beneficial ownership, directly or indirectly, of 100% of the
equity interests of each of the Restricted Subsidiaries as described on SCHEDULE
8.9 hereto and with such exceptions as described on SCHEDULE 8.9 hereto.
Section 8.10 SURVEY AND SURVEYOR'S CERTIFICATE. Upon request of the
Agent upon a Default not cured within any applicable cure period, or in the
event that the Agent determines in its reasonable judgment that a survey is
required to assure the location of future improvements constructed by American
Ski or a Restricted Subsidiary on the Mortgaged Properties, American Ski shall
provide the Agent with an instrument survey of the affected Mortgaged Property,
such survey to be satisfactory to the Agent in form and substance and with
respect to each survey, a certificate executed by the surveyor who prepares such
survey dated as of a recent date and containing such information relating to the
affected Mortgaged Property as the Agent or the title insurance company may
require, such certificate to be satisfactory to the Agent in form and substance
and sufficient to obtain the deletion of the survey exception in the title
insurance policy furnished to the Agent with respect to the affected Mortgage
Property.
Section 8.11 APPRAISALS.
(a) The sum of (i) the Term Loans, (ii) the Maximum Revolving
Credit Amount, (iii) the Letter of Credit Exposure and (iv) the outstanding
amount of all other
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Indebtedness secured by any assets of the Borrowers (including secured
Subordinated Indebtedness) shall not at any time exceed seventy-five percent
(75%) of the Appraised Value of the Collateral (the "Loan to Value Ratio"). If
at any time the Loan to Value Ratio exceeds 75%, then the Borrowers, jointly and
severally, shall promptly (but no later than sixty (60) days thereafter, either
(i) reduce the sum of such outstanding commitments or Indebtedness to a point
where the Loan to Value Ratio is less than 75% or (ii) provide the Agent with
additional Collateral satisfactory to the Agent in its discretion, and at the
expense of American Ski, such that the 75% Loan to Value Ratio is satisfied.
(b) Upon the occurrence of and during any continuance of an
Event of Default, the Agent shall have the right to obtain, at the cost and
expense of the Borrowers and American Ski, updated appraisals of the Collateral,
PROVIDED that the Borrowers and American Ski shall not be obligated to pay for
the costs and expenses associated with more than one such appraisal during any
twelve (12) month period. The costs and expenses incurred by the Agent in
obtaining such appraisals shall be paid by the Borrowers and American Ski,
jointly and severally, forthwith upon billing or request by the Agent for
reimbursement therefor.
Section 8.12 LEASE RENEWAL. The Borrowers will renew all leases set forth
on SCHEDULE 8.12 in accordance with their terms.
Section 8.13 USE OF IPO PROCEEDS. American Ski will use all net proceeds
of the Minimum IPO Gross Proceeds and will use all Restricted Excess IPO
Proceeds (a) to make Investments in its Restricted Subsidiaries for use by them
in their ski and lodging operations including, without limitation, the
consummation of the Kamori Acquisition and (b) to redeem the 133/4% Subordinated
Notes in full on or before December 30, 1997. American Ski may use Unrestricted
Excess IPO Proceeds for any lawful purpose not expressly prohibited hereunder
with respect to the Unrestricted Excess IPO Proceeds.
Section 8.14 ENVIRONMENTAL AND LAND USE COMPLIANCE. American Ski and the
Borrowers, jointly and severally, will undertake and diligently pursue to
completion the environmental and land use cleanup, compliance and permit
requirements described on SCHEDULE 8.14 attached hereto and incorporated herein
by reference and will provide the Agent with documentation confirming the
completion of the specified tasks by the dates specified for each task
referenced on said SCHEDULE 8.14. In addition, with each Compliance
Certificate, American Ski shall provide the Agent with a report as to the status
of their compliance and their efforts to comply with the obligations specified
on SCHEDULE 8.14, and any information relevant to their ability or inability to
obtain compliance with a particular obligation by the requisite scheduled date,
any other environmental or land use cleanup, compliance or permit related matter
which arises subsequent to the date hereof and which remains unresolved to the
satisfaction of the Agent as of the date of the applicable Compliance
Certificate.
Section 8.15 INTEREST RATE PROTECTION. No later than 90 days after the
Closing Date, American Ski will enter into Interest Rate Protection Agreements
on notional amounts for not less than $52,500,000 at a rate and on terms
satisfactory to the Agent.
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Section 8.16 INDEPENDENCE OF UNRESTRICTED SUBSIDIARIES. American Ski and
its Restricted Subsidiaries will conduct their business and operations
separately from that of the Unrestricted Subsidiaries and will cause the
Unrestricted Subsidiaries to conduct their business and operations separately
from that of American Ski and its Restricted Subsidiaries, by (a) not
commingling funds or other assets, (b) maintaining separate corporate and
financial records and observing all corporate formalities, (c) paying their
respective liabilities from their respective assets, except pursuant to any
guarantees extended by the Restricted Subsidiaries of obligations of
Unrestricted Subsidiaries and permitted hereunder, (d) maintaining
capitalization adequate to meet their respective business needs and (e)
conducting contractual dealings with third parties in their respective names and
as separate and independent entities.
Section 8.17 FOREST SERVICE PERMITS. The Borrowers hold certain rights
under and by virtue of the Term Special Use Permits issued to the applicable
Borrower by the Forest Service of the United States Department of Agriculture
listed on SCHEDULE 8.17 hereto (individually a "Forest Service Permit" and
collectively the "Forest Service Permits"). The Borrowers will make no changes,
alterations or amendments to any Forest Service Permit without the prior written
consent of the Agent and except as would not have or reasonably be expected to
have a material impact on the operations of any Borrower; PROVIDED, HOWEVER,
that changes or alterations in any master plan provided under or incorporated by
reference in any Forest Service Permit will not constitute changes, alterations
or amendments under this Section 8.17. Each Borrower will well and truly
perform, or cause to be performed, all of its material obligations and
agreements under the Forest Service Permits and under any renewals or extensions
thereof and will not do or suffer anything which will impair any Forest Service
Permit or which would be a Default hereunder.
Section 8.18 FURTHER ASSURANCES. American Ski and each Restricted
Subsidiary will cooperate with the Agent and the Lenders and execute such
further instruments and documents as the Agent or the Lenders shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Lender Agreements.
ARTICLE 9. NEGATIVE COVENANTS
On and after the date hereof, until all of the Lender Obligations shall
have been paid in full and the Lenders shall have no commitment to make any
loans or advances hereunder, American Ski and the Borrowers, jointly and
severally, covenant that neither American Ski nor any Restricted Subsidiary
will:
Section 9.1 RESTRICTIONS ON INDEBTEDNESS. Create, incur, suffer or
permit to exist, or assume or guarantee, either directly or indirectly, or
otherwise become or remain liable with respect to, any Indebtedness, except the
following:
(a) Indebtedness to the Lenders and the Agent under this
Agreement, the Term Loan Notes, the Revolving Credit Notes, the other Lender
Agreements and the ASC East Credit Agreement, the notes issued thereunder and
the ASC East Security Documents.
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(b) Indebtedness (i) described on SCHEDULE 5.16 hereto and
(ii) any renewals, extensions and refundings thereof which do not increase the
amount thereof, extend the weighted average maturity of any thereof by more than
25%, provide any collateral in excess of collateral currently securing such
Indebtedness or grant or modify or amend any rights, remedies or interests of
the holders thereof in a manner materially adverse to the interests of the Agent
or the Lenders.
(c) The Senior Subordinated Notes and the subordinated
guaranties of the Borrowers with respect thereto.
(d) The Series A Exchangeable Preferred Stock, the Senior
Exchangeable Notes and the 101/2% Repriced Convertible Exchangeable Preferred
Stock.
(e) Subordinated Indebtedness incurred to the sellers of assets
or stock in connection with Permitted Acquisitions, PROVIDED that such
Indebtedness is unsecured, has a cash interest rate of not greater than 12% per
annum, has no scheduled amortization until after payment in full of all Lender
Obligations and is subordinated to the prior payment in full in cash of all
Lender Obligations on terms and conditions approved in writing by the Agent.
(f) (i) Real Estate Guaranties; provided that the sum of Real
Estate Guaranties and Direct Unrestricted Subsidiary Investments shall not
exceed $25,000,000 at any time;
(ii) (A) Capitalized Lease Obligations and (B)
Indebtedness of the Borrowers to purchase tangible assets to be used in the
Borrowers' operations in an amount not to exceed 100% of the purchase price
of such assets, which Indebtedness may be secured by the assets so
purchased but by no other assets; PROVIDED, HOWEVER, that the aggregate
amount under clauses (A) and (B) of this Section 9.1(f)(ii) shall not
exceed $50,000,000;
(iii) Indebtedness of Persons that become Restricted
Subsidiaries in connection with Permitted Acquisitions and not incurred in
anticipation of such Permitted Acquisitions in an aggregate amount not to
exceed $50,000,000; and
(iv) Other unsecured Indebtedness in an amount not to
exceed $25,000,000;
PROVIDED, HOWEVER, that the total amount of all Indebtedness outstanding at any
time under this clause (f) shall not exceed $100,000,000.
(g) Indebtedness consisting of indemnification and price
adjustment obligations incurred in connection with Permitted Acquisitions.
(h) Indebtedness on account of consolidated current liabilities
(other than for money borrowed) incurred in the normal and ordinary course of
business.
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(i) Indebtedness in respect of (i) taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment thereof shall not at the time be required to be made in
accordance with the provisions of Section 8.2 hereof, (ii) judgments or awards
which have been in force for less than the applicable appeal period so long as
execution is not levied thereunder or in respect of which American Ski or the
Restricted Subsidiary subject to such judgment or award shall at the time in
good faith be prosecuting an appeal or proceedings for review in a manner
satisfactory to the Agent and in respect of which a stay of execution shall have
been obtained pending such appeal or review and for which adequate reserves have
been established in accordance with generally accepted accounting principles and
(iii) endorsements made in connection with the deposit of items for credit or
collection in the ordinary course of business.
(j) Indebtedness consisting of intercompany loans among (i) ASC
East, Inc. and its Restricted Subsidiaries and (ii) American Ski - West and any
Restricted Subsidiaries PROVIDED that the aggregate outstanding principal amount
of all such loans shall not exceed $5,000,000 and no such loan shall be
evidenced by a promissory note or other instrument unless such note has been
pledged and delivered to the Agent as security for the Lender Obligations on
terms and conditions acceptable to the Agent.
(k) Indebtedness of American Ski and its Restricted Subsidiaries
under Interest Rate Protection Agreements entered into to protect American Ski
and its Restricted Subsidiaries against fluctuations in interest rates so long
as management of American Ski and its Restricted Subsidiaries has determined
that the entering into of such Interest Rate Protection Agreements are bona fide
hedging activities and the notional amount thereof does not exceed the principal
amount of the Consolidated Term Loans.
(l) Payment and performance bonds entered into in the ordinary
course of business in support of the activities of ASC East, Inc., ASC Utah, ASC
West and their Restricted Subsidiaries.
Section 9.2 RESTRICTION ON LIENS. Create or incur or suffer to be
created or incurred or permit to exist any encumbrance, mortgage, pledge, lien,
charge or other security interest of any kind upon any of its property or assets
of any character, whether now owned or hereafter acquired, or transfer any of
such property or assets for the purposes of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to payment of
its general creditors, or acquire or agree or have an option to acquire any
property or assets upon conditional sale or other title retention agreement,
device or arrangement (including Capitalized Leases) or suffer to exist for a
period of more than 30 days after the same shall have been incurred any
Indebtedness against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over the claims of
its general creditors, or sell, assign, pledge or otherwise transfer for
security any of its accounts, contract rights, general intangibles, or chattel
paper (as those terms are defined in the UCC) with or without recourse (each of
the foregoing, a "Lien"); PROVIDED, HOWEVER, that any Borrower or any Restricted
Subsidiary may create or incur or suffer to be created or incurred or permit to
exist the following (the "Permitted Liens"):
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(a) Liens described on SCHEDULE 5.16 securing certain existing
Indebtedness and any renewals, extensions and refundings thereof which do not
increase the amount thereof, extend such lien to any other property or assets of
American Ski or the Borrowers or grant to or modify or amend any rights,
remedies or interests of the holders thereof in a manner materially adverse to
the interests of the Agent or the Lenders.
(b) Purchase money security interests (which term shall include
mortgages, conditional sale contracts, Capitalized Leases and all other title
retention or deferred purchase devices) to secure the purchase price of property
acquired hereafter by any Borrower or any Restricted Subsidiary, or to secure
Indebtedness incurred solely for the purpose of financing such acquisitions;
PROVIDED, HOWEVER, that no such purchase money security interests shall extend
to or cover any property other than the property the purchase price of which is
secured by it, and that the principal amount of Indebtedness (whether or not
assumed) with respect to each item of property subject to such a security
interest shall not exceed the fair value of such item on the date of its
acquisition; and liens securing Indebtedness permitted under Section 9.1(f)(iii)
on assets acquired in connection with Permitted Acquisitions and subject to such
liens from the incurrence of such Indebtedness.
(c) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age pensions or
other social security; liens in respect of judgments or awards to the extent
such judgments or awards are permitted as Indebtedness by the provisions of
Section 9.1(i); and liens for taxes, assessments or governmental charges or
levies and liens to secure claims for labor, material or supplies and liens
securing obligations to carriers, warehousemen and mechanics to the extent that
payment thereof shall not at the time be required to be made in accordance with
Section 8.2.
(d) Encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property
which do not materially detract from the value of such property or impair its
use in the business of the owner or lessee.
(e) Liens (other than judgments and awards) created by or
resulting from any litigation or legal proceeding which has not yet resulted in
an Event of Default, PROVIDED that the execution or other enforcement thereof is
effectively stayed and the claims secured thereby are being actively contested
in good faith by appropriate proceedings satisfactory to the Agent.
(f) Liens arising by operation of law to secure landlords,
lessors or renters under leases or rental agreements made in the ordinary course
of business and confined to the premises or property rented.
(g) Liens in favor of the Agent for the benefit of the Lenders
securing the Lender Obligations and ASC East Lender Obligations to the Lenders
and the Agent, as and when such Liens are established.
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(h) Other Liens not otherwise permitted hereunder securing
Indebtedness in an amount not to exceed $5,000,000.
Nothing contained in this Section 9.2 shall permit American Ski, the Borrowers
or any Restricted Subsidiary to incur any Indebtedness or take any other action
or permit to exist any other condition which would be in contravention of any
other provision of this Agreement.
Section 9.3 INVESTMENTS. Have outstanding or hold or acquire or make or
commit itself to acquire or make any Investment except the following:
(a) Existing Investments in Subsidiaries described on SCHEDULE
5.4 and other existing Investments described on SCHEDULE 9.3.
(b) Investments having a maturity of less than one year from the
date thereof by the Borrower or any Restricted Subsidiary in: (i) obligations
of the Agent or any of the Lenders; (ii) obligations of the United States of
America or any agency or instrumentality thereof; (iii) repurchase agreements
involving securities described in clauses (i) and (ii) with the Agent or any of
the Lenders; and (iv) commercial paper which is rated not less than prime-one or
A-1 or their equivalents by Moody's Investor Service, Inc. or Standard & Poor's
Corporation, respectively, or their successors.
(c) Investments of Unrestricted Excess IPO Proceeds in
accordance with the investment policy attached hereto as SCHEDULE 9.3 on or
before May 12, 1998 and any reinvestments thereof.
(d) Investments in Restricted Subsidiaries or other assets as a
result of Permitted Acquisitions.
(e) Investments received as consideration from the sale of
assets otherwise permitted hereunder, which Investments are pledged to the Agent
on terms and conditions acceptable to the Agent.
(f) Investments consisting of advances to employees in the
ordinary course of business in an amount not to exceed $2,000,000 in the
aggregate at any time outstanding.
(g) Investments consisting of Interest Rate Protection
Agreements to the extent permitted under Section 9.1(k).
(h) Guaranties to the extent permitted under Section 9.1(f)(i)
and (iv) and Section 9.5.
(i) Investments of American Ski in Unrestricted Subsidiaries, as
follows:
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(i) Direct Unrestricted Subsidiary Investments; PROVIDED
that the sum of Direct Unrestricted Subsidiary Investments and Real Estate
Guaranties shall not exceed $25,000,000 at any time;
(ii) Indirect Unrestricted Subsidiary Investments in an
amount not to exceed $25,000,000; PROVIDED that the aggregate amount of the
Investments under clauses (i) above and this clause (ii) shall not exceed
$40,000,000, except that if American Ski has Consolidated EBITDA in any
immediately preceding fiscal year of $75,000,000, this restriction shall
not apply to Investments made in the then current fiscal year; and
(iii) Investments in Unrestricted Subsidiaries, on or
before May 12, 1998, made from Unrestricted Excess IPO Proceeds in
accordance with the investment policy attached hereto as SCHEDULE 9.3.
(j) Investments acquired in connection with the bankruptcy or
workout of account debtors.
(k) Investments consisting of (i) Pico Ski Area Management
Company's ownership of (A) 2001 shares of the capital stock of Uplands Water,
constituting approximately 95% of the issued and outstanding capital stock
thereof and (B) 61 shares of the capital stock of Alpine Pipeline and all
related wastewater disposal units, (ii) Sugarloaf Mountain Corporation's
ownership of a 10% interest in Sugarloaf Land Partners I and a 10% interest in
Sugarloaf Land Partners II, (iii) Steamboat Ski & Resort Corporation's ownership
of a 50% interest in Country Club Highlands Partnership and (iv) ASC Utah's
rights to acquire stock in Community Water Company.
(l) Investments of American Ski in its Restricted Subsidiaries.
(m) Other Investments in an aggregate amount not to exceed
$5,000,000.
Section 9.4 MERGERS, ACQUISITIONS, ETC. Enter into any merger or
consolidation with or acquire all or substantially all of the assets of any
Person, or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, except for (a)
the merger of a Restricted Subsidiary into another Restricted Subsidiary, (b)
acquisitions approved in writing by the Majority Lenders and (c) Permitted
Acquisitions.
Section 9.5 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate, except that American Ski and its
Restricted Subsidiaries (a) may pay reasonable salaries, fees and bonuses to
their directors, officers and employees as are usual and customary in American
Ski's or its Restricted Subsidiaries' business, (b) may enter into transactions
among each other on terms that are not materially less favorable to American Ski
or any Restricted Subsidiary than those which could be obtained at the time from
Persons who
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are not Affiliates and which transactions (to the extent in excess of $250,000
for each transaction or a series of related transactions) are disclosed to the
Agent in Compliance Certificates, (c) may enter into Investments permitted under
Section 9.3(i) hereof and Real Estate Guaranties permitted under Section 9.1(h)
hereof, and (d) American Ski and its Restricted Subsidiaries may enter into and
perform their obligations under the Lender Agreements and the ASC East Lender
Agreements.
Section 9.6 DISTRIBUTIONS. Make any Distribution or make any other
payment on account of the purchase, acquisition, redemption, or other retirement
of any shares of stock, whether now or hereafter outstanding, except that (a)
American Ski may make Distributions not to exceed, in the aggregate, 50% of
cumulative Consolidated Net Income after July 31, 1997 PROVIDED, that after
giving pro forma effect to such Distribution, the ratio of Consolidated Total
Debt to Consolidated EBITDA does not exceed 4.0-to-1 and ASC East, Inc., ASC
West and ASC Utah may make lawful Distributions to American Ski in an aggregate
amount equal to the Distributions which American Ski is entitled to make under
this clause (a) and PROVIDED further that no Default shall exist at the time of
or be caused by any such Distribution, (b) Restricted Subsidiaries of American
Ski may make Distributions to other Restricted Subsidiaries of American Ski and
(c) American Ski - West may make Distributions to American Ski in an amount
sufficient to allow American Ski to pay operational expenses, including but not
limited to customary and reasonable salaries of employees and fees of American
Ski's directors.
Section 9.7 CAPITAL EXPENDITURES. Make any Capital Expenditure except
that:
(a) For the period commencing on the Closing Date and ending on
April 30, 1998, American Ski and its Restricted Subsidiaries may make or commit
to make Capital Expenditures of not more than $25,000,000, of which not more
than 25% may be used for Real Estate Capital Expenditures.
(b) For the trailing four-quarter period ending on April 30,
1999 and each April 30 thereafter, the following limits shall apply to the
Capital Expenditures of American Ski and its Restricted Subsidiaries:
(i) If the Capital Expenditure Ratio as of April 30, 1998
and any April 30 thereafter is less than 3.0-to-1, no overall limit shall
apply, except that Real Estate Capital Expenditures shall be limited to 25%
of the Additional Capital Expenditure Amount.
(ii) If the Capital Expenditure Ratio as of April 30, 1998
and any April 30 thereafter is equal to or greater than 3.0-to-1, the limit
shall be the sum of (A) the Base Capital Expenditure Amount PLUS (B) the
Capital Expenditure Reinvestment Amount PLUS (C) the Additional Capital
Expenditure Amount.
(c) American Ski and its Restricted Subsidiaries may use
Unrestricted Excess IPO Proceeds to make any Capital Expenditures.
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Section 9.8 DISPOSITIONS OF ASSETS. Sell, lease or otherwise dispose of
any assets except for (a) the sale, lease or other disposition of inventory,
including residential real property held for resale, in the ordinary course of
business and (b) the Permitted Dispositions.
Section 9.9 ASSUMPTIONS, GUARANTIES, ETC. OF INDEBTEDNESS OF OTHER
PERSONS. Assume, guarantee, endorse or otherwise be or become directly or
contingently liable (including, without limitation, by way of agreement,
contingent or otherwise, to purchase, provide funds for payment, supply funds to
or otherwise invest in any Person or otherwise assure the creditors of any such
Person against loss) in connection with any Indebtedness of any other Person,
except for (a) Real Estate Guaranties and (b) Guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
Section 9.10 ERISA. At any time while American Ski or any of its
Subsidiaries has a Pension Plan, permit any accumulated funding deficiency to
occur with respect to any Pension Plan or other employee benefit plans
established or maintained by American Ski or any of its Subsidiaries or to which
contributions are made by the American Ski or any of its Subsidiaries (the
"Plans"), and which are subject to the "Pension Reform Act" and the rules and
regulations thereunder or to Section 412 of the Internal Revenue Code, and at
all times comply in all material respects with the provisions of the Act and
Code which are applicable to the Plans. American Ski will not permit the
Pension Benefit Guaranty Corporation to cause the termination of any Pension
Plan under circumstances which would cause the lien provided for in Section 4068
of the Pension Reform Act to attach to the assets of American Ski or any of its
Subsidiaries.
Section 9.11 SALE AND LEASEBACK. Sell or transfer any of its properties
with the intention of taking back a lease of the same property or leasing other
property for substantially the same use as the property being sold or
transferred.
Section 9.12 RESTRICTIVE OR INCONSISTENT AGREEMENTS. Enter into any
agreement (a) other than the Lender Agreements, the ASC East Lender Agreements,
the Senior Subordinated Notes Indentures, the Cerberus Purchase Agreement and
the Cerberus Amendment and Waiver Letter Agreement which, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining or otherwise imposes any materially adverse or burdensome condition
upon, the declaration or payment of dividends or distributions, the incurrence
of Indebtedness, the granting of liens, the making of loans or advances to
American Ski or any of its Restricted Subsidiaries or the amendment or
modification of any of the Lender Agreements or (b) containing any provision
that would be violated or breached by any Loan or the performance by American
Ski or any of its Restricted Subsidiaries of its obligations hereunder or under
any of the Lender Agreements.
Section 9.13 LIMITATIONS ON REAL ESTATE OPERATIONS. Engage in any real
estate development activities involving acquisition of land intended for resale
(except incident to a Permitted Acquisition) or development of residential
subdivisions, condominium units, hotels
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or related infrastructure and utilities, except through the Unrestricted
Subsidiaries and except for the permitted Real Estate Capital Expenditures.
Section 9.14 FISCAL YEAR. Change their fiscal year from the twelve-month
period ending on the last Sunday of July of each year.
Section 9.15 NO AMENDMENT OF SUBORDINATED NOTES; CERBERUS PURCHASE
AGREEMENT; CERBERUS AMENDMENT AND WAIVER LETTER AGREEMENT. Enter into any
amendment, modification or waiver of any of the terms or provision of Senior
Subordinated Notes or the Senior Subordinated Notes Indentures without the prior
written consent of the Majority Lenders. American Ski will not modify, amend or
supplement, or agree to any consent or waiver of any of the provisions of, the
Cerberus Purchase Agreement, the Cerberus Amendment and Waiver Letter Agreement
and the Certificate of Designation without the prior written consent of the
Majority Lenders.
Section 9.16 EXCHANGE OF CERBERUS 101/2% REPRICED CONVERTIBLE
EXCHANGEABLE PREFERRED STOCK AND AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT PENALTIES. Exercise its rights under Section 7 of the Certificate of
Designation to convert the Cerberus 101/2% Repriced Convertible Exchangeable
Preferred Stock into 101/2% Repriced Subordinated Debentures (as defined in the
Certificate of Designation) without the prior written consent of the Majority
Lenders or incur any Registration Delay Fees (as defined in the Amended and
Restated Registration Rights Agreement) pursuant to Section 2.1(b) of the
Amended and Restated Registration Rights Agreement) without the prior written
consent of the Agent.
Section 9.17 LIMITATION ON ISSUANCE OF CAPITAL STOCK. American Ski will
not, and will not permit any of its Restricted Subsidiaries to, issue (a) any
class of preferred stock (other than the Series A Exchangeable Preferred Stock
or the 101/2% Repriced Convertible Exchangeable Preferred Stock) or (b) any
class of redeemable (except at the sole option of American Ski or such
Restricted Subsidiary) common stock.
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES
Section 10.1 EVENTS OF DEFAULT. Each of the following events shall be
deemed to be Events of Default hereunder:
(a) American Ski or any Restricted Subsidiary shall fail to make
any payment in respect of (i) the principal of any of the Lender Obligations as
the same shall become due, whether at the stated payment dates, required
prepayment or by acceleration, demand or otherwise, or (ii) interest or
commitment fees on or in respect of any of the Lender Obligations as the same
shall become due, and such failure shall continue for a period of five (5) days.
(b) American Ski or any Restricted Subsidiary shall fail to
perform or observe any of the terms, covenants, conditions or provisions of
Articles 6, 7, 8 or 9 hereof;
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PROVIDED, HOWEVER, that with respect to the terms, covenants, conditions and
provisions of Article 6 only (except for Sections 6.5, 6.6 and 6.11), the Agent
shall notify American Ski of American Ski's failure to provide the required
reports when due and the Agent shall allow American Ski five (5) days to comply
with the terms, covenants, conditions and provisions of Article 6.
(c) American Ski or any Restricted Subsidiary shall fail to
perform or observe any other term, covenant, condition or provision to be
performed or observed by American Ski or any Restricted Subsidiary under this
Agreement or any other Lender Agreement, and such failure shall not be rectified
or cured to the Agent's satisfaction within thirty (30) days after written
notice thereof to American Ski.
(d) Any representation or warranty of American Ski or any
Restricted Subsidiary herein or in any other Lender Agreement or any amendment
to any thereof shall have been materially false or misleading at the time made
or intended to be effective.
(e) American Ski or any Restricted Subsidiary (i) shall fail to
make any payment of principal of or interest on Indebtedness for money borrowed
of American Ski or any Restricted Subsidiary with an outstanding principal
amount of greater than $2,000,000 or any Guaranty of money borrowed with an
outstanding principal amount of greater than $2,000,000 when such payment is due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) or shall fail to perform or observe any provision of any agreement or
instrument relating to such Indebtedness, and such failure shall permit the
holder thereof to accelerate such Indebtedness or (ii) shall fail to observe or
perform its covenants, agreements and obligations under any other material lease
or other agreement by which it is bound.
(f) American Ski or any Restricted Subsidiary shall be involved
in financial difficulties as evidenced:
(i) by its commencement of a voluntary case under Title
11 of the United States Code as from time to time in effect, or by its
authorizing, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case;
(ii) by its filing an answer or other pleading admitting
or failing to deny the material allegations of a petition filed against it
commencing an involuntary case under said Title 11, or seeking, consenting
to or acquiescing in the relief therein provided, or by its failing to
controvert timely the material allegations of any such petition;
(iii) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
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(iv) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction relating to
the liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or by its consenting to or
acquiescing in such relief;
(v) by the entry of an order by a court of competent
jurisdiction (1) finding it to be bankrupt or insolvent, (2) ordering or
approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors or (3) assuming custody of, or appointing a
receiver or other custodian for all or a substantial part of its property
and such order shall not be vacated or stayed on appeal or otherwise stayed
within 30 days;
(vi) by the filing of a petition against American Ski or
any Restricted Subsidiary under said Title 11 which shall not be vacated
within 30 days; or
(vii) by its making an assignment for the benefit of, or
entering into a composition with, its creditors, or appointing or
consenting to the appointment of a receiver or other custodian for all or a
substantial part of its property.
(g) There shall have occurred a judgment against American Ski or
any Restricted Subsidiary in any court (i) for an amount in excess of $2,000,000
and from which no appeal has been taken or with respect to which all appeal
periods have expired, unless such judgment is, to the Agent's satisfaction,
insured against in full (less the applicable policy deductible) or (ii) which
shall have a Material Adverse Effect.
(h) Leslie B. Otten shall cease to serve actively as a director
and full-time chief executive officer of American Ski and each Borrower, whether
by reason of death, disability, resignation, action by the Board of Directors,
or otherwise, and in the case of his death or disability only, the passage of
120 days after such event.
(i) The Otten Shareholders shall cease to own of record and
beneficially at least 25% of the issued and outstanding capital stock of
American Ski, on a fully diluted basis.
(j) Any person or group of persons within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended, other than the
Otten Shareholders, shall own of record or beneficially more than 35% of the
issued and outstanding capital stock of American Ski.
(k) The Otten Shareholders shall cease to have the power to
elect two-thirds of the directors of American Ski.
(l) American Ski shall cease to own, directly or indirectly, of
record and beneficially all of the issued and outstanding capital stock of any
Material Restricted Subsidiary, except as a result of a Permitted Disposition or
the exercise of the Sugarloaf warrants described on SCHEDULE 8.9 hereto. For
purposes of this Section 10.1(l), a "Material
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Restricted Subsidiary" shall mean a Restricted Subsidiary (i) whose assets
constitute greater than 5% of the consolidated assets of American Ski and its
Restricted Subsidiaries or (b) whose revenues contributed greater than 5% of the
consolidated revenues of American Ski and its Restricted Subsidiaries for any
fiscal year during the preceding three fiscal years.
(m) Any "Event of Default" under any other Lender Agreement or
any of the ASC East Lender Agreements shall have occurred.
(n) Any of the Lender Agreements or the ASC East Lender
Agreements shall be canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Agent; or any Lender Agreement, or any Lien granted
thereunder, shall (except in accordance with its terms or the terms of this
Agreement), in whole or in part, terminate, cease to be effective or cease to be
the legally valid, binding and enforceable obligation of any Borrower or
Guarantor; or any Lien securing any Lender Obligation shall, in whole or in
part, cease to be a perfected first priority Lien, subject only to those
exceptions expressly permitted by a Lender Agreement or the terms of this
Agreement and except to the extent that any such Lien has ceased to be a
perfected first priority Lien solely due to an act or omission by the Agent or a
Lender; or any action at law suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Lender Agreements or the ASC East Lender
Agreements shall be commenced by or on behalf of American Ski or any Restricted
Subsidiary, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Lender Agreements or ASC East Lender Agreements is illegal, invalid or
unenforceable in accordance with the terms thereof.
(o) American Ski or any Restricted Subsidiary shall be indicted
for a federal crime, a punishment for which could include the forfeiture of any
assets of American Ski or such Restricted Subsidiary.
(p) American Ski or ASC West shall make a claim for
indemnification under the Kamori Stock Purchase Agreement in an amount in excess
of $250,000.
(q) The subordination provisions relating to any Subordinated
Indebtedness shall fail to be enforceable by the Lenders (which have not
effectively waived the benefits thereof) in accordance with the terms thereof,
or the principal or interest on any Lender Obligation shall fail to constitute
Senior Indebtedness (or similar term, as defined in any such Subordinated
Indebtedness) or any Borrower, Guarantor, Restricted Subsidiary or any holder of
Subordinated Indebtedness shall, directly or indirectly, disavow or contest in
any manner (i) the effectiveness, validity or enforceability of any of the
provisions of the Subordinated Indebtedness, (ii) that any of such provisions of
Subordinated Indebtedness exist for the benefit of the Agent and each Lender or
(iii) that all payments of principal or interest with respect to any such
Subordinated Indebtedness made by the Borrower, any Guarantor or any Restricted
Subsidiary, or realized from the liquidation of any property of the Borrower,
any Guarantor or
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any Restricted Subsidiary, shall be subject to any of such provisions of
Subordinated Indebtedness.
Section 10.2 REMEDIES. Upon the occurrence of an Event of Default, in
each and every case, the Agent may, and upon the request of the Majority Lenders
shall, proceed to protect and enforce the rights of the Agent and the Lenders by
suit in equity, action at law and/or other appropriate proceeding either for
specific performance of any covenant or condition contained in this Agreement or
any other Lender Agreement or in any instrument delivered to the Agent or the
Lenders pursuant hereto or thereto, or in aid of the exercise of any power
granted in this Agreement, any Lender Agreement or any such instrument, and
(unless there shall have occurred an Event of Default under Section 10.1(f), in
which case the unpaid balance of the Lender Obligations shall automatically
become due and payable without notice or demand) by notice in writing to the
Borrowers (a) declare the obligations of the Lenders to make Revolving Credit
Advances, the obligation of the Swing Line Lender to make Swing Line Loans and
the obligations of the Issuing Bank to issue, extend or renew Letters of Credit
to be terminated, whereupon such obligations shall be terminated, (b) declare
all or any part of the unpaid balance of the Lender Obligations then outstanding
to be forthwith due and payable, whereupon such unpaid balance or part thereof
shall become so due and payable without presentation, protest or further demand
or notice of any kind, all of which are hereby expressly waived, and the Agent
may proceed to enforce payment of such balance or part thereof in such manner as
the Agent may elect, and the Agent and each Lender may offset and apply toward
the payment of such balance or part thereof any Indebtedness of the Agent or any
Lender to any Borrower or to any Subsidiary, or to any obligor of the Lender
Obligations, including any Indebtedness represented by deposits in any general
or special account maintained with the Agent or any Lender or with any other
Person controlling, controlled by or under common control with the Agent or any
Lender and (c) demand that the Borrowers provide cash collateral to the Agent as
security for the Revolving Credit Lenders in an amount equal to 105% of the
Letter of Credit Exposure which the Borrowers shall provide to the Agent
immediately upon such demand.
Section 10.3 DISTRIBUTION OF PROCEEDS. Notwithstanding anything to the
contrary contained herein, in the event that following the occurrence or during
the continuance of any Event of Default, the Agent or any Lender receives any
monies on account of the Lender Obligations from the Borrowers or otherwise,
such monies shall be distributed for application as follows:
(a) First, to the payment of or the reimbursement of, the Agent
for or in respect of all costs, expenses, disbursements and losses which shall
have been incurred or sustained by the Agent in connection with the collection
of such monies by the Agent, or in connection with the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent or the Lenders under this Agreement or any other Lender
Agreement;
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(b) Second, to the payment of all interest, including interest
on overdue amounts, and late charges, then due and payable with respect to the
Loans, allocated among the Lenders in proportion to their respective Commitment
Percentages;
(c) Third, to the payment of the outstanding principal balance
of the Loans, allocated among the Lenders in proportion to their respective
Commitment Percentages;
(d) Fourth, to any other outstanding Lender Obligations,
allocated among the Lenders in proportion to their respective Commitment
Percentages; and
(e) Fifth, to the extent that the Agent receives any monies
pursuant to the ASC East Lender Agreements, to the payment of the ASC East
Lender Obligations in accordance with the provisions of Section 10.3 of the ASC
East Credit Agreement.
(f) Sixth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
ARTICLE 11. CONSENTS; AMENDMENTS; WAIVERS; REMEDIES
Section 11.1 ACTIONS BY LENDERS. Except as otherwise expressly set forth
in any particular provision of this Agreement, any consent or approval required
or permitted by this Agreement to be given by the Lenders, including without
limitation under Section 11.2, may be given, and any term of this Agreement or
of any other instrument related hereto or mentioned herein may be amended, and
the performance or observance by American Ski or any Restricted Subsidiary of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of American Ski, the Borrowers and the Majority Lenders;
PROVIDED, HOWEVER, that (a) no amendment of Section 2.18 may be made without the
consent of the Swing Line Lender, (b) no amendment of Article 13 may be made
without the consent of the Agent and (c) without the written consent of all
Lenders:
(i) no reduction in the interest rates on or any fees or
refinancing premium relating to the Loans shall be made;
(ii) no extension or postponement shall be made of the
stated time of payment of the principal amount of, interest on, or fees
payable to the Lenders or the Swing Line Lender relating to the Term Loans
and the Revolving Credit Advances or the Swing Line Loans, respectively;
(iii) no change in the Maximum Revolving Credit Amount or
the principal amount of the Term Loans and extension of the Revolving
Credit Termination Date or the Term Loan Maturity Date shall be made;
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(iv) no release of all or substantially all of the
collateral security for, or any guarantor of, the Lender Obligations shall
be made;
(v) no change in the definition of the term "Majority
Lenders" shall be made; and
(vi) no change in the provisions of Section 12.1(a) or
this Section 11.1 shall be made.
Section 11.2 ACTIONS BY BORROWERS. No delay or omission on the Agent's
or the Lenders' part in exercising their rights and remedies against American
Ski, the Borrowers or any other interested party shall constitute a waiver. A
breach by American Ski or any Borrower of its obligations under this Agreement
may be waived only by a written waiver executed by the Agent and the Lenders in
accordance with Section 11.1. The Agent's and the Lenders' waiver of American
Ski's or a Borrower's breach in one or more instances shall not constitute or
otherwise be an implicit waiver of subsequent breaches. To the extent permitted
by applicable law, American Ski and the Borrowers, jointly and severally, hereby
agree to waive, and do hereby absolutely and irrevocably waive, (a) all
presentments, demands for performance, notices of protest and notices of
dishonor in connection with any of the Indebtedness evidenced by the Term Loan
Notes, the Revolving Credit Notes and the Swing Line Note (b) any requirement of
diligence or promptness on the Agent's or the Lenders' part in the enforcement
of their rights under the provisions of this Agreement or any Lender Agreement
and (c) any and all notices of every kind and description which may be required
to be given by any statute or rule of law with respect to its liability (i)
under this Agreement or in respect of the Indebtedness evidenced by the Term
Loan Notes, the Revolving Credit Notes and the Swing Line Note, or any other
Lender Obligation or (ii) under any other Lender Agreement. No course of
dealing between any American Ski or any Borrower or American Ski and the
Borrowers collectively and the Agent or the Lenders shall operate as a waiver of
any of the Agent's or the Lenders' rights under this Agreement or any Lender
Agreement or with respect to any of the Lender Obligations. This Agreement
shall be amended only by a written instrument executed by the Agent and the
Lenders in accordance with Section 11.1 making explicit reference to this
Agreement. The Agent's and the Lenders' rights and remedies under this
Agreement and under all subsequent agreements between the Agent, the Lenders,
American Ski and the Borrowers shall be cumulative and any rights and remedies
expressly set forth herein shall be in addition to, and not in limitation of,
any other rights and remedies which may be applicable to the Agent and the
Lenders in law or at equity.
ARTICLE 12. SUCCESSORS AND ASSIGNS
Section 12.1 GENERAL. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
(which shall include in the case of the Agent or any Lender any entity resulting
from a merger or consolidation) and assigns, except that (a) neither American
Ski nor any Borrower may assign its rights or obligations
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under this Agreement and (b) each Lender may assign its rights in this Agreement
only as set forth below in this Article 12.
Section 12.2 ASSIGNMENTS.
(a) ASSIGNMENTS. In compliance with applicable laws with
respect to such assignment and with the consent of the Agent and, so long as no
Event of Default has occurred and except for assignments between and among the
Lenders, affiliates of the Lenders or an Approved Fund, American Ski on behalf
of the Borrowers (which consents shall not be unreasonably withheld), a Lender
may assign to one or more financial institutions (each a "Successor Lender") a
proportionate part of its rights and obligations in connection with this
Agreement, its Term Loan Note, its Revolving Credit Note and the related Lender
Agreements and its ASC East Term Loan Note, ASC East Revolving Credit Note and
the related ASC East Lender Agreements and each such Successor Lender shall
assume such rights and obligations pursuant to an Assignment and Acceptance
Agreement ("Assignment and Acceptance Agreement") duly executed by such
Successor Lender and such assigning Lender and acknowledged and consented to by
the Agent and, so long as no Event of Default has occurred and except for
assignments between and among the Lenders, affiliates of the Lenders or an
Approved Fund, American Ski on behalf of the Borrowers, substantially in the
form of EXHIBIT P attached hereto. Any assignment under this Section 12.2(a)
shall be of the Consolidated Maximum Revolving Credit Amount and the
Consolidated Term Loans in an aggregate minimum amount of $5,000,000 except that
there shall be no minimum assignment amount in the case of (i) assignments
between and among the Lenders, affiliates of the Lenders or an Approved Fund and
(ii) an assignment of a Lender's total remaining interest that is in an amount
less than $5,000,000. In connection with any assignment under this Section
12.2(a) there shall be paid to the Agent by the assigning Lender or the
Successor Lender an administrative processing fee in the amount of $2,500.
(b) ASSIGNMENT PROCEDURES. In the event of an assignment in
accordance with Section 12.2(a), upon execution and delivery of such an
assignment at least five (5) Business Days prior to the proposed assignment
date, and payment by such Successor Lender to the assigning Lender of an amount
equal to the purchase price agreed between such assigning Lender and such
Successor Lender, such Successor Lender shall become party to this Agreement as
a signatory hereto and shall have all the rights and obligations of a Lender
under this Agreement and the other Lender Agreements with an interest therein as
set forth in such assignment, and such assignor making such assignment shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any such assignment, the assigning Lender, the Successor Lender and the
Borrowers shall make appropriate arrangements so that, if required, a new Term
Loan Note, ASC East Term Loan Note, Revolving Credit Note and ASC East Revolving
Credit Note, as appropriate, is issued to the Successor Lender and a replacement
Term Loan Note and/or Revolving Credit Note is issued to the assigning Lender in
principal amounts reflecting their respective revised interests.
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(c) REGISTER. The Agent shall maintain a register (the
"Register") for the recordation of (i) the names and addresses of all Successor
Lenders that enter into Assignment and Acceptance Agreements, (ii) the interests
of each Lender, (iii) the principal amount of the Term Loans owing to each Term
Loan Lender from time to time, (iv) the amounts of the Revolving Credit Advances
owing to each Revolving Credit Lender from time to time and (v) the amounts of
the Swing Line Loans owing to the Swing Line Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Lenders may treat each Person whose name is
registered therein for all purposes as a party to this Agreement. The Register
shall be available for inspection by the Borrowers and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) FURTHER ASSURANCES. American Ski and the Borrowers shall
sign such documents and take such other actions from time to time reasonably
requested by the Agent or a Lender to enable any Successor Lender to share in
the benefits and rights created by the Lender Agreements.
(e) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender at any time
may assign all or any portion of its rights under this Agreement, its Term Loan
Note and/or its Revolving Credit Note to a Federal Reserve Bank. No such
assignment shall release the transferor Lender from its obligations hereunder.
(f) ASSIGNMENTS OF SECURITY AGREEMENTS/ENDORSEMENTS TO TITLE
POLICIES. In connection with the assignment by a Lender of its rights under
this Agreement, its Term Loan Note and/or its Revolving Credit Note, such Lender
shall assign all of its rights under the Security Agreements to the applicable
Successor Lender. In connection with the assignment of the Mortgages and the
Collateral Assignment of Leases from such Lender to such Successor Lender,
American Ski and the Borrowers shall provide the Agent with appropriate and
acceptable endorsements to the title policies insuring the Lien of the Mortgages
reflecting the Assignment of the Mortgages and the Assignment of Leases to such
Successor Lender in form and substance acceptable to the Agent and the Successor
Lender.
Section 12.3 PARTICIPATIONS. Any Lender may, without the consent of the
Borrowers or the Agent, at any time grant or offer to grant to one or more
financial institutions ("Credit Participants") participating interests in such
Lender's rights and obligations in this Agreement, its Term Loan Note, its
Revolving Credit Note and the related Lender Agreements, and each such Credit
Participant shall acquire such participation subject to the terms set forth
below.
(a) PROCEDURE. Each Lender granting such participation shall
comply with all applicable laws with respect to such transfer and shall remain
responsible for the performance of its obligations hereunder and under the other
Lender Agreements and shall retain the sole right and responsibility to exercise
its rights and to enforce the obligations of American Ski and the Borrowers
hereunder and under the other Lender Agreements, including the right to consent
to any amendment, modification or waiver of any provision of any Lender
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Agreement, except for those matters referred to in Section 11.1 which require
the consent of all Lenders and which may also require the consent of each Credit
Participant.
(b) DEALING WITH LENDERS. American Ski and the Borrowers shall
continue to deal solely and directly with the Lenders in connection with their
rights and obligations under this Agreement and the other Lender Agreements.
(c) RIGHTS OF CREDIT PARTICIPANTS. The Borrowers agree that
each Credit Participant shall, to the extent provided in its participation
instrument, be entitled to the benefits of Sections 2.9, 2.10, 2.11, 2.13, 2.14
and 14.5, and the set-off rights in Section 10.2 with respect to its
participating interest; PROVIDED, HOWEVER, that no Credit Participant shall be
entitled to receive any greater payment under such Sections than the Lender
granting such participation would have been entitled to receive with respect to
the interests transferred.
(d) NOTICE. At the time of granting any participation, the
Lender granting such participation shall notify the Agent and the Borrowers.
ARTICLE 13. THE AGENT
Section 13.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Agreement and the other Lender Agreements as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement and the other Lender Agreements (including, without limitation,
enforcement or collection of the Term Loan Notes and the Revolving Credit
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action which
exposes the Agent to liability or which is contrary to this Agreement or the
other Lender Agreements or applicable law. Subject to the foregoing provisions
and to the other provisions of this Article 13, the Agent shall, on behalf of
the Lenders: (a) execute any documents on behalf of the Lenders providing
collateral for or guarantees of the Lender Obligations; (b) hold and apply any
collateral for the Lender Obligations, and the proceeds thereof, at any time
received by it, in accordance with the provisions of this Agreement and the
other Lender Agreements; (c) exercise any and all rights, powers and remedies of
the Lenders under this Agreement or any of the other Lender Agreements,
including the giving of any consent or waiver or the entering into of any
amendment, subject to the provisions of Section 11.1; (d) at the direction of
the Lenders, execute, deliver and file UCC financing statements, mortgages,
deeds of trust, lease assignments and such other agreements in respect of any
collateral for the Lender Obligations, and possess instruments included in the
collateral on behalf of the Lenders; and (e) in the event of acceleration of
American Ski's or the Borrowers' Indebtedness hereunder, act at the direction of
the Majority Lenders to exercise the rights of the Lenders hereunder and under
the other Lender Agreements.
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Section 13.2 AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Lenders for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Lender Agreements, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Agent: (a) may treat the payee of any Term Loan Note or any
Revolving Credit Note as the holder thereof until the Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
required under Article 12 hereof; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representations to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Lender Agreements; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Lender
Agreements on the part of American Ski or the Borrowers or any other Person or
to inspect the property (including the books and records) of American Ski or the
Borrowers or any other Person; (e) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Lender Agreements or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall incur
no liability under or in respect of this Agreement or the other Lender
Agreements by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopy or telegram) believed by the Agent to be
genuine and signed or sent by the proper party or parties.
Section 13.3 AGENT AS A LENDER. With respect to its interest in its
Commitment Percentage of the Loans hereunder, BankBoston, N.A. shall have the
same rights and powers under this Agreement and the other Lender Agreements as
any other Lender and may exercise the same as though it were not the Agent; and
the term "Lender" or "Lender(s)" shall, unless otherwise expressly indicated,
include BankBoston, N.A. in its individual capacity. BankBoston, N.A. and its
affiliates may lend money to, and generally engage in any kind of business with,
American Ski, any Borrower, any Affiliate of American Ski and any Person who may
do business with or own securities of American Ski or any such Affiliate of
American Ski, all as if BankBoston, N.A. were not the Agent and without any duty
to account therefor to the Lenders.
Section 13.4 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 5.9 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
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Section 13.5 INDEMNIFICATION OF AGENT. Each Lender agrees to indemnify
the Agent and its directors, officers, employees and agents (to the extent that
the Agent is not reimbursed by American Ski or the Borrowers), ratably according
to each Lender's Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent or its directors,
officers, employees or agents in any way relating to or arising out of this
Agreement or any other Lender Agreement or any action taken or omitted by the
Agent in such capacity under this Agreement; PROVIDED that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or wilful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Lender
Agreement, to the extent that the Agent is not reimbursed for such expenses by
American Ski the Borrowers.
Section 13.6 SUCCESSOR AGENT. Except as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and American
Ski. Upon any such resignation, the Lenders shall have the right to appoint a
successor Agent which shall be reasonably acceptable to American Ski. If no
successor Agent shall have been so appointed by the Lenders (other than the
resigning Agent), and shall have accepted such appointment, within thirty (30)
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank or financial institution organized under the laws of the United
States of America or of any state thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the other Lender Agreements.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 13 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Lender
Agreements.
Section 13.7 AMENDMENT OF ARTICLE 13. American Ski and the Borrowers
hereby agree that the foregoing provisions of this Article 13 constitute an
agreement among the Agent and the Lenders (and the Agent and the Lenders
acknowledge that except for the provisions of Section 13.6, American Ski and the
Borrowers are not parties to or bound by such foregoing provisions) and that any
and all of the provisions of this Article 13 (excepting Section 13.6) may be
amended at any time by the Lenders and the Agent without the consent or approval
of, or notice to, American Ski and the Borrowers (other than the requirement of
notice to American Ski and the Borrowers of the resignation of the Agent and the
appointment of a successor Agent).
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Section 13.8 DOCUMENTATION AGENT. Each Lender hereby designates and
appoints DLJ Capital Funding, Inc. as the documentation agent (the
"Documentation Agent") under this Agreement. The Documentation Agent shall
undertake such responsibilities with respect to the credits extended under this
Agreement as directed from time to time by the Agent. In administering its
duties hereunder, the Documentation Agent shall be entitled to the provisions of
this Article 13 governing the actions of the Agent.
ARTICLE 14. MISCELLANEOUS
Section 14.1 NOTICES. All notices and other communications made or
required to be given pursuant to this Agreement shall be in writing and shall be
mailed by United States mail, postage prepaid, or sent by hand, by telecopy or
by nationally-recognized overnight carrier service, addressed as follows:
(a) If to the Agent, at 100 Federal Street, Boston, MA 02110,
Telecopier No. 617/434-8102, Attention: Mr. Carlton F. Williams, Director, with
a copy to: Goodwin, Procter & Hoar LLP, Exchange Place, Boston, MA 02109,
Telecopier No. 617/523-1231, Attention: Edward Matson Sibble, Jr., P.C., or at
such other address(es) or to the attention of such other Person(s) as the Agent
shall from time to time designate in writing to American Ski and the Lenders.
(b) If to American Ski or the Borrowers, c/o American Skiing
Company, P.O. Box 450, Bethel, ME 04217, or for overnight delivery service,
Sunday River Road, Bethel, ME 04217, Telecopier No. 207/824-0192, Attention:
Christopher E. Howard, Esq., Senior Vice President and Chief Administrative
Officer and Thomas M. Richardson, Chief Financial Officer, with a copy to: David
J. Champoux, Esq., Pierce Atwood, One Monument Square, Portland, ME 04101 or at
such other address(es) or to the attention of such other Person(s) as American
Ski shall from time to time designate in writing to the Agent and the Lenders.
(c) If to any Lender, at the address(es) and to the attention of
the Person(s) specified below such Lender's name on the execution page of this
Agreement (or in the case of a Successor Lender, at the address(es) and to the
attention of the Person(s) specified in the Assignment and Acceptance Agreement
executed by such Successor Lender), or at such other address(es) and to the
attention of such other Person(s) as any Lender shall from time to time
designate in writing to the Agent and American Ski.
Any notice so addressed and mailed by registered or certified mail shall be
deemed to have been given when mailed. Any notice so addressed and sent by
hand, by telecopy or by overnight carrier service shall be deemed to have been
given when received.
A notice from the Agent stating that it has been given on behalf of the
Lenders shall be relied upon by American Ski and the Borrowers as having been
given by the Lenders.
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Section 14.2 MERGER. This Agreement and the other Lender Agreements and
documents contemplated hereby constitute the entire agreement of American Ski,
the Borrowers, the Agent and the Lenders and express their entire understanding
with respect to credits advanced or to be advanced by the Lenders to the
Borrowers.
Section 14.3 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed and enforced under the laws of The
Commonwealth of Massachusetts. American Ski, each of its Subsidiaries and each
Lender hereby irrevocably submits itself to the non-exclusive jurisdiction of
the courts of The Commonwealth of Massachusetts and to the non-exclusive
jurisdiction of any Federal court of the United States located in the District
of Massachusetts for the purpose of any suit, action or other proceeding arising
out of this Agreement or any other Lender Agreement or any of the transactions
contemplated hereby or thereby.
Section 14.4 COUNTERPARTS. This Agreement and all amendments to this
Agreement may be executed in several counterparts, each of which shall be an
original. The several counterparts shall constitute a single Agreement.
Section 14.5 EXPENSES AND INDEMNIFICATION.
(a) American Ski and the Borrowers agree, jointly and severally,
to pay, on demand, all of the Agent's reasonable expenses in preparing,
executing, delivering and administering this Agreement, the Lender Agreements,
all related instruments and documents and any requested amendment, waiver or
consent relating hereto or thereto, including, without limitation, the
reasonable fees and out-of-pocket expenses of the Agent's third-party
consultants, special counsel, Goodwin, Procter & Hoar LLP, and local counsel in
each jurisdiction in which American Ski or any Restricted Subsidiary has assets
and the Agent's and Lenders' reasonable expenses in connection with periodic
audits of American Ski and its Restricted Subsidiaries. American Ski and the
Borrowers also agree, jointly and severally, to pay, on demand, all reasonable
out-of-pocket expenses incurred by the Agent and the Lenders, including, without
limitation, reasonable legal, accounting and third-party consultant fees, in
connection with the collection of amounts due hereunder and under all other
Lender Agreements upon the occurrence of a Default hereunder, the revision,
protection or enforcement of any of the Agent's or the Lenders' rights against
American Ski and the Borrowers under this Agreement, the Notes, the Security
Agreements, and all other Lender Agreements and the administration of special
problems that may arise under this Agreement or any other Lender Agreement.
American Ski and the Borrowers also agree, jointly and severally, to pay all
stamp and other taxes in connection with the execution and delivery of this
Agreement and related instruments and documents.
(b) Without limitation of any other obligation or liability of
American Ski and the Borrowers or right or remedy of the Agent or the Lenders
contained herein, American Ski and the Borrowers hereby covenant and agree,
jointly and severally, to indemnify and hold the Agent, the Lenders, and the
directors, officers, subsidiaries, shareholders, agents, affiliates and Persons
controlling the Agent and the Lenders, harmless from and against any and all
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damages, losses, settlement payments, obligations, liabilities, claims,
including, without limitation, claims for finder's or broker's fees, actions or
causes of action, and reasonable costs and expenses incurred, suffered,
sustained or required to be paid by any such indemnified party in each case by
reason of or resulting from any claim, investigation, litigation or other
proceeding related to the entering into of this Agreement or any other Lender
Agreement, the use of any Letter of Credit or the proceeds of any Loans, the
consummation of the transactions contemplated herein, the exercise by the Agent
and the Lenders of their rights and remedies, or otherwise relating to the
transactions contemplated hereby, other than any such claims which are
determined by a final, non-appealable judgment or order of a court of competent
jurisdiction to be the result of the gross negligence or willful misconduct of
such indemnified party. Promptly upon receipt by any indemnified party
hereunder of notice of the commencement of any action against such indemnified
party for which a claim is to be made against American Ski and the Borrowers
hereunder, such indemnified party shall notify American Ski in writing of the
commencement thereof, although the failure to provide such notice shall not
affect the indemnification rights of any such indemnified party hereunder unless
and only to the extent American Ski demonstrates to the reasonable satisfaction
of such party that such failure to provide notice prejudiced American Ski and
the Borrowers in their defense of such claim. American Ski and the Borrowers
shall have the right, at their option upon notice to the indemnified parties, to
defend any such matter at their own expense and with their own counsel, except
as provided below, which counsel must be reasonably acceptable to the
indemnified parties. The indemnified party shall cooperate with American Ski
and the Borrowers in the defense of such matter. The indemnified party shall
have the right to employ separate counsel and to participate in the defense of
such matter at its own expense. In the event that (a) the employment of
separate counsel by an indemnified party has been authorized in writing by
American Ski, (b) American Ski and the Borrowers have failed to assume the
defense of such matter within fifteen (15) days of notice thereof from the
indemnified party, or (c) the named parties to any such action (including
impleaded parties) include any indemnified party who has been advised by counsel
that there may be one or more legal defenses available to it or prospective
bases for liability against it, which are different from those available to or
against American Ski and the Borrowers, then American Ski and the Borrowers
shall not have the right to assume the defense of such matter with respect to
such indemnified party. American Ski and he Borrowers shall not compromise or
settle any such matter against an indemnified party without the written consent
of the indemnified party, which consent may not be unreasonably withheld or
delayed.
Section 14.6 CONFIDENTIALITY. The Agent and the Lenders agree to use
commercially reasonable efforts to keep in confidence all financial data and
other information relative to the affairs of American Ski and its Subsidiaries
heretofore furnished or which may hereafter be furnished to them pursuant to the
provisions of this Agreement; PROVIDED, HOWEVER, that this Section 14.6 shall
not be applicable to information otherwise disseminated to the public by
American Ski or any of its Subsidiaries or any of their Affiliates; and PROVIDED
FURTHER, that such obligation of the Agent and the Lenders shall be subject to
the Agent's or the Lenders', as the case may be, (a) obligation to disclose such
information pursuant to a request or order under applicable laws and regulations
or pursuant to a subpoena or other legal process, (b)
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right to disclose any such information to bank or other regulatory examiners,
affiliates, auditors, accountants and counsel or to any Person who evaluates,
approves, structures or administers the Loans on behalf of a Lender who agree to
keep such information confidential and (c) right to disclose any such
information (i) in connection with the transactions set forth herein including
assignments or the sale of participation interests pursuant to Article 12, so
long as such potential assignees or participants shall agree in writing to be
bound by the terms of this Section 14.6 or (ii) in connection with any
litigation or dispute involving the Agent or any transfer or other disposition
by the Agent or the Lenders, as the case may be, of any of the Lender
Obligations; PROVIDED that information disclosed pursuant to this provision
shall be so disclosed subject to such procedures as are reasonably calculated to
maintain the confidentiality thereof.
Section 14.7 RELIANCE ON REPRESENTATIONS AND ACTIONS OF AMERICAN SKI.
The Borrowers hereby appoint American Ski as the Borrowers' agent to execute,
deliver and perform, on behalf of the Borrowers, any and all notices,
certificates, documents and actions to be executed, delivered or performed
hereunder or under any of the other Lender Agreements, and the Borrowers hereby
agree that the Agent and the Lenders may rely upon any representation, warranty,
certificate, notice, document or telephone request which purports to be executed
or made or which the Agent or the Lenders in good faith believe to have been
executed or made by American Ski or any of its executive officers, and the
Borrowers hereby further, jointly and severally, agree to indemnify and hold the
Agent and the Lenders harmless for any action, including the making of the Term
Loans, the Revolving Credit Advances or the Swing Line Loans hereunder, and any
loss or expense, taken or incurred by any of them as a result of their good
faith reliance upon any such representation, warranty, certificate, notice,
document or telephone request.
Section 14.8 JOINT AND SEVERAL OBLIGATIONS. All obligations of the
Borrowers hereunder and under the Notes and all other Lender Agreements shall be
joint and several obligations. The Borrowers waive presentment, demand,
protest, notice of acceptance, notice of indebtedness incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshaling of assets of the Borrowers and their
Restricted Subsidiaries, and all suretyship defenses generally.
Section 14.9 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS, AMERICAN SKI
AND THE BORROWERS AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL
(A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
ACTION INVOLVING THE AGENT OR ANY LENDER AS A PARTY BASED UPON OR ARISING OUT
OF, THIS AGREEMENT, THE TERM LOAN NOTES, THE REVOLVING CREDIT NOTES, THE SWING
LINE NOTE, ANY LENDER AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE
DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
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DISCUSSED BY EACH OF THE AGENT, THE LENDERS, AMERICAN SKI AND THE BORROWERS WITH
THEIR RESPECTIVE COUNSEL, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NONE OF THE AGENT, THE LENDERS, AMERICAN SKI OR THE BORROWERS HAVE
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
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IN WITNESS WHEREOF, American Ski, the Borrowers, the Agent and the Lenders
have caused this Agreement to be executed by their duly authorized officers as
of the date set forth above.
AMERICAN SKIING COMPANY
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
ASC UTAH
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
ASC WEST, INC.
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
STEAMBOAT SKI & RESORT CORPORATION
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
STEAMBOAT DEVELOPMENT CORPORATION
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
HEAVENLY VALLEY SKI & RESORT
CORPORATION
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
HEAVENLY CORPORATION
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
HEAVENLY VALLEY, LIMITED
PARTNERSHIP, a Nevada Limited
Partnership
By: HEAVENLY CORPORATION, a
DELAWARE CORPORATION, General
Partner
By: /s/ Christopher E. Howard
--------------------------------
Name: Christopher E. Howard
Title: Senior Vice President
BANKBOSTON, N.A., as Agent
By: /s/ Carlton F. Williams
--------------------------------
Name: Carlton F. Williams
Title: Director
100 Federal Street
Boston, MA 02110
Telecopier: (617) 434-8102
Attention: Mr. Carlton F.
Williams, Director
DLJ CAPITAL FUNDING, INC.,
as Documentation Agent
By: /s/ Harold J. Philipps
--------------------------------
Name: Harold J. Philipps
Title: Managing Director
277 Park Ave., 17th Floor
New York, NY 10172
Telecopier: (212) 892-5286
Attention: Ms. Tania Holman
BANKBOSTON, N.A.
By: /s/ Carlton F. Williams
--------------------------------
Name: Carlton F. Williams
Title: Director
100 Federal Street
Boston, MA 02110
Telecopier: (617) 434-8102
Attention: Mr. Carlton F.
Williams, Director
DLJ CAPITAL FUNDING, INC.
By: /s/ Harold J. Philipps
--------------------------------
Name: Harold J. Philipps
Title: Managing Director
277 Park Ave., 17th Floor
New York, NY 10172
Telecopier: (212) 892-5286
Attention: Ms. Tania Holman
NORWEST BANK COLORADO, NATIONAL
ASSOCIATION
By: /s/ Sandra A. Sauer
--------------------------------
Name: Sandra A. Sauer
Title: Vice President
1740 Broadway
Denver, CO 80274-8673
Telecopier: (303) 863-6670
Attention: Ms. Sandra A. Sauer,
Vice President
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By: /s/ Daniel Adams
--------------------------------
Name: /s/ Daniel Adams
Title: Vice President
400 Capital Mall, 7th Floor
Sacramento, CA 95814
Telecopier: (916) 444-2869
Attention: Mr. Dan Adams, Vice
President
U.S. BANK NATIONAL ASSOCIATION
d/b/a COLORADO NATIONAL BANK
By: /s/ William J. Sullivan
--------------------------------
Name: William J. Sullivan
Title: Vice President
918 17th Street
Denver, CO 80202
Telecopier: (303) 585-4135
Attention: Mr. William J. Sullivan,
Vice President
FIRST SECURITY BANK, N.A.
By: /s/ Dick van Klaveren
----------------------------------
Name: Dick van Klaveren
Title: Vice President
15 East 100 South, 2nd Floor
Salt Lake City, Utah 84111
Telecopier: (801) 246-5532
Attention: Mr. Dick Van Klaveren,
Vice President
FLOATING RATE PORTFOLIO
By: CHANCELLOR LGT SENIOR SECURED
MANAGEMENT, INC., as Attorney
in Fact
By: /s/ Timothy Daileader
--------------------------------
Name: Timothy Daileader
Title: Assistant Vice President
ADDRESS FOR ADMINISTRATIVE NOTICES:
Chancellor LGT Asset Management,
Inc.
50 California Street, 27th Floor
San Francisco, CA 94111-4624
Telecopier: (415) 296-0511
Attention: Ms. Linda DiNapoli
ADDRESS FOR NOTICES REGARDING
AMENDMENT AND WAIVERS:
GT Global Floating Rate Fund, Inc.
c/o Chancellor LGT Senior Secured
Management, Inc.
1166 Avenue of the Americas
New York, NY 10036
Telecopier: (212) 278-9847
Attention: Ms. Susan McKofke
KZH HOLDING CORPORATION III
By: /s/ Virginia R. Conway
--------------------------------
Name: Virginia R. Conway
Title: Authorized Agent
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10001
Telecopier: (212) 946-7776
Attention: Ms. Virginia Conway
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: Merrill Lynch Asset
Management, L.P., as
Investment Advisor
By: /s/ Gilles Marchand
--------------------------------
Name: Gilles Marchand
Title: Authorized Signatory
800 Scudders Mill Road, Area 1B
Plainsboro, NJ 08536
Telecopier: (609) 282-3542
Attention: Ms. Jill Montanye
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
--------------------------------
Name: Jeffrey W. Maillet
Title: Sr. Vice President & Director
c/o Van Kampen American Capital
One Parkview Plaza, 5th Floor
Oakbrook Terrace, IL 60181
Telecopier: (630) 684-6740
Attention: Mr. Jeffrey W. Maillet
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company,
as Attorney in Fact
By: /s/ Jonathan R. Insull
--------------------------------
Name: Jonathan R. Insull
Title: Vice President
By: /s/ Justin L. Driscoll
--------------------------------
Name: Justin L. Driscoll
Title: Senior Vice President
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Telecopier: (212) 297-4159
Attention: Mr. Justin L. Driscoll,
Vice President
Exhibit 3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this
"Agreement") is made and entered into as of November 10,
1997 by and between AMERICAN SKIING COMPANY, a Maine
corporation ("Company") and ING (U.S.) CAPITAL CORPORATION,
a Delaware corporation (together with its permitted
successors and assigns hereunder, "Holder"), which has
agreed to take as security for certain loans made to Mr.
Leslie B. Otten ("Otten"), the President and Chief Executive
Officer of Company, pursuant to a Credit Agreement dated as
of November 10, 1997 between Holder and Otten (the "Credit
Agreement"), certain shares of Company's common stock, par
value $.01, and Class A Common Stock, par value $0.01, owned
by Otten and delivered to Holder from time to time pursuant
to the Pledge Agreement (hereinafter defined) (collectively,
together with any securities into which such shares may be
converted, the "Registrable Securities").
This Agreement is made pursuant to the Credit
Agreement. In order to induce Holder to extend credit to
Otten secured by the Registrable Securities, Company has
agreed to provide the registration rights set forth in this
Agreement.
The parties hereby agree as follows:
1. Definitions.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such
specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities,
by agreement or otherwise; provided, however, that
beneficial ownership of 10% or more of the voting securities
of a Person shall be deemed to be control.
"Agreement" has the meaning assigned to that term
in the preamble.
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"Business Day" means any day other than a Saturday,
a Sunday or a day on which banking institutions in the City
of New York, Borough of Manhattan are not required to be
open.
"Commission" has the meaning assigned to that term
in Section 2(c).
"Company" has the meaning assigned to that term in
the preamble.
"Credit Agreement" has the meaning assigned to that
term in the preamble.
"Event of Default" has the meaning assigned to such
term in the Credit Agreement.
"Exchange Act" has the meaning assigned to that
term in Section 2(e).
"Inspectors" has the meaning assigned to that term
in Section 2(c).
"Person" means any corporation, individual, joint-
stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state
or political subdivision thereof, trust, municipality or
other entity.
"Pledge Agreement" means that certain Pledge
Agreement dated as of November 10, 1997 between Otten and
Holder, as the same may from time to time be amended,
modified or supplemented and in effect.
"Priority Securities" has the meaning assigned to
that term in Section 2(a).
"Registration Expenses" means any and all expenses
incident to performance of or compliance with this
Agreement, including without limitation: (i) all Commission,
stock exchange, or National Association of Securities
Dealers, Inc. registration and filings fees, (ii) all fees
and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees
and disbursements of counsel for any underwriters in
connection with blue sky qualifications of any of the
Registrable Securities), (iii) all expenses of any Persons
in preparing or assisting in preparing, word processing,
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printing and distributing the registration statement
relating to any of the Registrable Securities, any
underwriting agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all
fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any
securities exchange or exchanges pursuant to Section
2(c)(vii) hereof, (v) all rating agency fees, (vi) the fees
and disbursements of counsel for Company and of Company's
independent public accountants, including the expenses of
any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (vii) the
reasonable fees and disbursements of one law firm reasonably
acceptable to Company retained by Holder in connection with
the registration statement relating to any of the
Registrable Securities and (viii) any fees and disbursements
of any underwriters customarily paid by issuers or sellers
of securities and the reasonable fees and expenses of any
special experts retained in connection with the registration
statement relating to any of the Registrable Securities, but
excluding underwriting discounts and commissions and
transfer taxes, if any.
"Registrable Securities" has the meaning assigned
to that term in the preamble.
"Securities Act" has the meaning assigned to that
term in Section 2.
"Shares" has the meaning assigned to that term in
Section 2(b).
"Holder" has the meaning assigned to that term in
the preamble.
2. Registration Rights.
Holder shall have the right to have all Registrable
Securities at any time pledged to it pursuant to the Pledge
Agreement registered under the Securities Act of 1933, as
amended (the "Securities Act") and applicable United States
state securities laws on up to three occasions in accordance
with the following provisions.
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(a) Registration on Request.
(i) At any time and from time to time after
the occurrence of an Event of Default, upon the written
request of Holder, Holder may request that Company effect
the registration under the Securities Act for an
underwritten public offering of all or part of the
Registrable Securities held by Holder; provided, however,
that in the event that such Event of Default is cured
in accordance with the provisions of the Credit Agreement
prior to the taking of any action by Holder to sell or
otherwise dispose of all or any part of the Registrable
Securities, then Holder shall not have the right to request
the registration of all or part of the Registrable Securities
under this Section 2(a) unless and until the occurrence of a
subsequent Event of Default. Subject to the provisions of
this Section 2, Company will use its best efforts to cause the
prompt registration under the Securities Act of the
Registrable Securities, and in connection therewith, subject
to subsection 2(a)(ii) hereof, will prepare and file on such
appropriate form as Company in its reasonable discretion shall
determine a registration statement under the Securities Act to
effect such registration.
Notwithstanding the foregoing, Company will not be
required to file a registration statement in any of the
following situations:
(1) during any period of time (not to exceed
ninety (90) days in the aggregate with respect to each
request) when Company has determined to proceed with a public
offering and, in the judgment of the managing underwriter
thereof, the requested filing would have an adverse effect on
the public offering;
(2) during any period of time (not to exceed
sixty (60) days with respect to each request) when Company is
in possession of material non-public information that it deems
is in its best interest not to disclose publicly;
(3) during any period of time (not to exceed
sixty (60) days with respect to each request) when Company is
engaged in any program for the repurchase of Shares, unless
the repurchase program and the requested registration may
proceed concurrently pursuant to an exemption under Regulation
M under the United States Securities Exchange Act of 1934; or
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(4) during the 180-day period following the
effectiveness of any previous registration statement filed at
the request of Holder or otherwise (including without
limitation the registration statement filed by the Company on
Form S-1 (No. 333-33483) or filed by the Company under the
Amended and Restated Registration Rights Agreement, dated as
of November 3, 1997, by and between the Company and Madeleine
L.L.C. (the "Madeleine Agreement")).
Notwithstanding the foregoing, the aggregate period
of time during which Company will be relieved of the
requirement to file a registration statement pursuant to
clauses (1) through (4) above will in no event exceed one
hundred and eighty (180) consecutive days with respect to
each request.
Holder may, at any time prior to the effective date
of the registration statement relating to such registration,
revoke such request, without liability to Company or any other
Person, by providing a written notice to Company revoking such
request.
(ii) Number of Registrations: Expenses. Company
shall not be obligated to effect more than one registration in
any 180-day period of Registrable Securities pursuant to
requests from Holder under this Section 2(a). Company shall
pay all Registration Expenses in connection with the first
three registrations that Holder requests pursuant to this
Section 2(a). Holder shall pay all Registration Expenses in
connection with later registrations pro rata according to the
number of Registrable Securities it registered pursuant to
such registration. However, in connection with each such
registration, Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale
or disposition of its Registrable Securities pursuant to this
Section 2(a).
(iii) Effective Registration Statement. A
registration requested pursuant to this Section 2(a) shall not
be deemed to have been effected unless the registration
statement relating thereto (A) has become effective under the
Securities Act and any of the Registrable Securities included
in such registration have actually been sold thereunder and
(B) has remained effective for a period of at least 180 days
(or such shorter period in which all Registrable Securities of
Holder and, if applicable, Company included in such
registration have actually been sold thereunder); provided,
however, that if any effective
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registration statement requested pursuant to this
Section 2(a) is not carried out by reason of any of the four
situations noted in Section 2(a)(i) above under which
Company will not be required to file or may delay filing a
registration statement under this Section 2(a)(i), such
registration statement shall not be included as one of the
registrations for which Company will pay expenses pursuant
to this Section 2(a) hereof; provided, further, that if
after any registration statement requested pursuant to this
Section 2(a) becomes effective such registration statement
is subject to a stop order, injunction or other order or
requirement of the Commission or other governmental agency
or court solely due to the actions or omissions to act of
Company, such registration statement shall not be included
as one of the registrations for which Company will pay
expenses pursuant to Section 2(a)(ii).
(iv) Selection of Underwriters. Holder shall
have the right to select the investment banker and manager
or co-managers that will administer the offering; provided,
however, that such selection shall be subject to approval by
Company, which approval shall not be unreasonably withheld;
provided further, that Company shall have the right to
appoint a co-manager in all cases.
(v) Pro Rata Participation in Requested
Registrations. If a requested registration pursuant to this
Section 2(a) involves an underwritten offering and the
managing underwriter advises the Company in writing that, in
its view, the number of equity securities requested to be
included in such registration exceeds the largest number of
securities which can be sold without having an adverse
effect on such offering, including the price at which such
securities can be sold, the number of Registrable Securities
requested to be registered by Holder in such registration
shall be reduced; provided, however, that:
(A) if the Company intends to issue Shares
and to include them in such registration,
the Holder's allocation will be subject
to reduction prior to any reduction in
the amount of the Shares proposed to be
issued by the Company;
(B) Holder may elect not to sell any
Registrable Securities pursuant to the
registration statement; and
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(C) if such registration includes less than
fifty percent (50%) of the Registrable
Securities requested to be included
therein by Holder, then such registration
shall not be included as one of the
registrations for which Company is
required to pay for expenses pursuant to
Section 2(a)(ii).
(b) Incidental Registration.
(i) If Company at any time following the
occurrence of an Event of Default proposes to register any
of its shares of Common Stock ("Shares") or any options,
warrants or other rights to acquire, or securities
convertible into or exchangeable for Shares (the "Priority
Securities") under the Securities Act (other than a
registration, (A) relating to shares issuable upon exercise
of employee share options or in connection with any employee
benefit or similar plan of Company, (B) in connection with
an acquisition by Company of another company, or (C)
pursuant to the Madeleine Agreement) in a manner which would
permit registration of Registrable Securities for sale to
the public under the Securities Act (whether or not for sale
for its own account), it shall each such time give prompt
written notice to Holder of its intention to do so and of
Holder's rights under this Section 2(b), at least 30
calendar days prior to the anticipated filing date of the
registration statement relating to such registration. Such
notice shall offer Holder the opportunity to include in such
registration statement such number of Registrable Securities
as Holder may request. Upon the written request of Holder
made within 20 calendar days after the receipt of Company's
notice (which request shall specify the number of
Registrable Securities intended to be disposed of by Holder
and the intended method of disposition thereof), Company
will use its best efforts to effect the registration under
the Securities Act of all Registrable Securities that
Company has been so requested to register by Holder;
provided, however, that (A) if such registration involves an
underwritten offering, Holder must sell its Registrable
Securities to the underwriters selected by Company on the
same terms and conditions as apply to Company, and (B) if,
at any time after giving written notice pursuant to this
Section 2(b)(i) of its intention to register any Priority
Securities and prior to the effective date of the
registration statement filed in connection with such
registration, Company shall determine for any reason not to
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register such Priority Securities, Company shall give
written notice to Holder and shall thereupon be relieved of
its obligation to register any Registrable Securities in
connection with such registration. If a registration
pursuant to this Section 2(b) involves an underwritten
public offering, Holder may elect, in writing prior to the
effective date of the registration statement filed in
connection with such registration, not to register such
Registrable Securities in connection with such registration.
Company shall pay all Registration Expenses in connection
with each registration of Registrable Securities requested
pursuant to this Section 2(b). However, Holder shall pay
all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of its
Registrable Securities pursuant to a registration statement
effected pursuant to this Section 2(b). Notwithstanding the
foregoing, in the event that such Event of Default giving
rise to the registration rights under this Section 2(b) is
cured in accordance with the provisions of the Credit
Agreement prior to the taking of any action by Holder to
sell or otherwise dispose of all or any part of the
Registrable Securities, then Holder shall not have the right
to request the registration of all or part of the
Registrable Securities under this Section 2(b) (a) unless
and until the occurrence of a subsequent Event of Default.
(ii) Priority in Incidental Registrations. If
a registration pursuant to this Section 2(b) involves an
underwritten offering and the managing underwriter advises
Company in writing that, in its good faith view, the number
of equity securities (including all Registrable Securities)
that Company and Holder intend to include in such
registration exceeds the largest number of securities that
can be sold without having an adverse effect on such
offering, including the price at which such Registrable
Securities can be sold, Company will include in such
registration (A) first, all the Priority Securities to be
sold for Company's own account; and (B) second, to the
extent that the number of Priority Securities is less than
the number of Registrable Securities that the underwriter
has advised Company can be sold in such offering without
having the adverse effect referred to above, as many
Registrable Securities as are requested to be included in
such registration by Holder pursuant to Section 2(b)(i)
hereof.
(iii) If Company at any time proposes to effect
a public offering in a jurisdiction other than the United
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States of any of its Shares or any options, warrants or
other rights to acquire, or securities convertible into or
exchangeable for Shares (other than a public offering,
(A) relating to shares issuable upon exercise of employee
share options or in connection with any employee benefit or
similar plan of Company or (B) in connection with an
acquisition by Company of another company) Company and
Holder will have the rights and be subject to the
obligations agreed in this Section 2(b) to the extent and
where applicable.
(c) Holdback Agreements.
(i) If any registration of Registrable
Securities shall be in connection with an underwritten
public offering, Holder agrees not to effect any sale or
distribution, including any private placement or any sale
pursuant to Rule 144A (or any successor provision) or
otherwise or any sale pursuant to Rule 144 (or any successor
provision), under the Securities Act, of any Registrable
Securities, other than by pro-rata distribution to its
shareholders, partners or other beneficial holders, and not
to effect any such sale or distribution of any other equity
security of Company or of any security convertible into or
exchangeable or exercisable for any equity security of
Company (in each case, other than as part of such
underwritten public offering) during the ten calendar days
prior to, and during the 180 calendar day period (or such
lesser period as may be agreed upon between such holders and
the managing underwriter of such offering) that begins on
the effective date of such registration statement (except as
part of such registration), without the consent of the
managing underwriter of such offering; provided, however,
that Holder has received written notice of such registration
at least two Business Days prior to the anticipated
beginning of the ten calendar day period referred to above.
(ii) If any registration of Registrable
Securities shall be in connection with an underwritten
public offering, Company agrees (A) not to effect any public
sale or distribution of any of its equity securities or of
any security convertible into or exchangeable or exercisable
for any equity security of Company (other than any such sale
or distribution of such securities in connection with any
merger or consolidation by Company or any Affiliate of
Company or the acquisition by Company or an Affiliate of
Company of the shares or substantially all the assets of any
other Person or in connection with an employee stock
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ownership or other benefit plan) during the ten days prior
to, and during the 180-day period (or such lesser period as
may be agreed upon between such holders and the managing
underwriter of such offering) which begins on, the effective
date of such registration statement (except as part of such
registration), and (B) that any agreement entered into after
the date hereof pursuant to which Company issues or agrees
to issue any privately placed equity securities shall
contain a provision under which the holders of such
securities agree not to effect any public sale or
distribution of any such securities during the period and in
the manner referred to in the foregoing clause (A),
including a private placement pursuant to Rule 144A under
the Securities Act (or any successor provision) or otherwise
and any sale pursuant to Rule 144 under the Securities Act
(except as part of such registration, if permitted).
(d) Registration Procedures. In connection with
any offering of Registrable Securities registered pursuant
to this Section 2, Company shall:
(i) Prepare and file with the Securities and
Exchange Commission (the "Commission") within 60 calendar
days after receipt of a request for registration, a
registration statement on any form for which Company then
qualifies or which counsel for Company shall deem
appropriate, and which form shall be available for the sale
of the Registrable Securities in accordance with the
intended methods of distribution thereof, and use its best
efforts to cause such registration statement to become and
remain effective as provided herein, provided that before
filing with the Commission a registration statement or
prospectus or any amendments or supplements thereto, Company
will (A) furnish to one counsel selected by Holder copies of
all such documents proposed to be filed for said counsel's
review and comment, and (B) notify Holder of any stop order
issued or threatened by the Commission and take all
reasonable actions required to prevent the entry of such
stop order or to remove it if entered.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for
a period of not less than 180 days or such shorter period
that will terminate when all Registrable Securities covered
by such registration statement have been sold (but not
before the expiration of the time periods referred to in
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Section 4(3) of the Securities Act and Rule 174, or any
successor thereto, if applicable), and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such registration statement.
(iii) Furnish to Holder and each underwriter,
if any, of Registrable Securities covered by such
registration statement such number of copies of such
registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto), and
the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with
the requirements of the Securities Act, and such other
documents as Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities
owned by Holder.
(iv) Use its best efforts to register or
qualify such Registrable Securities under such other state
securities or "blue sky" laws of such jurisdictions as
Holder, and each underwriter, if any, of Registrable
Securities covered by such registration statement reasonably
requests and do any and all other acts and things that may
be reasonably necessary or advisable to enable Holder and
each underwriter, if any, to consummate the disposition in
such jurisdictions of the Registrable Securities owned by
Holder; provided that Company will not be required to
(A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for
this clause (iv), (B) subject itself to taxation or
regulation of its business in any such jurisdiction other
than Bermuda, or (C) consent to general service of process
in any such jurisdiction.
(v) Use its best efforts to cause the
Registrable Securities covered by such registration
statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by
virtue of the business and operations of Company to enable
Holder to consummate the disposition of such Registrable
Securities.
(vi) Immediately notify Holder at any time
when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any
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event that comes to Company's attention if as a result of
such event the prospectus included in such registration
statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; and Company will promptly prepare and furnish to
Holder a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading.
(vii) Use its best efforts to cause all such
Registrable Securities to be listed on a national securities
exchange in the United States or NASDAQ and on each
securities exchange on which similar securities issued by
Company may then be listed, and enter into such customary
agreements including a listing application and
indemnification agreement in customary form, and to provide
a transfer agent and registrar for such Registrable
Securities covered by such registration statement no later
than the effective date of such registration statement.
(viii) Enter into such customary agreements
(including an underwriting agreement or qualified
independent underwriting agreement, in each case, in
customary form) and take all such other actions as Holder or
the underwriters retained by Holder, if any, reasonably
request in order to expedite or facilitate the disposition
of such Registrable Securities, including customary
representations, warranties, indemnities and agreements.
(ix) Make available for inspection, during
business hours of Company, by Holder, any underwriter
participating in any disposition pursuant to such
registration statement, and any attorney, accountant or
other agent retained by Holder or any such underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of
Company and its subsidiaries, if any, as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility, and cause Company's officers, directors and
employees, and those of Company's affiliates, if any, to
supply all information and respond to all inquiries
reasonably requested by any such Inspector in connection
with such registration statement.
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(x) Use its best efforts to obtain a "cold
comfort" letter from Company's appointed auditors in
customary form and covering such matters of the type
customarily covered by "cold comfort" letters as Holder
reasonably requests.
(xi) Otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission,
and make available to Holder, as soon as reasonably
practicable, an earnings statement covering a period of at
least twelve months beginning after the effective date of
the registration statement (as the term "effective date" is
defined in Rule 158(c) under the Securities Act) which
earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
It shall be a condition precedent to the obligation
of Company to take any action with respect to any
Registrable Securities that Holder shall furnish to Company
such information regarding the Registrable Securities and
any other Shares in Company held by Holder and the intended
method of disposition of the Registrable Securities held by
Holder as Company shall reasonably request and as shall be
required in connection with the action taken by Company.
Holder agrees that, upon receipt of any notice from
Company of the happening of any event of the kind described
in Section 2(d)(vi) hereof, Holder will forthwith
discontinue disposition of Registrable Securities until
Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2(d)(vi) hereof,
and, if so directed by Company Holder will deliver to
Company (at Company's expense) all copies (including,
without limitation, any and all drafts), other than
permanent file copies, then in Holder's possession, of the
prospectus covering such Registrable Securities current at
the time of receipt of such notice. In the event that
Company shall give any such notice, the period mentioned in
Section 2(d)(ii) hereof shall be extended by the greater of
(A) three months or (B) the number of days during the period
from and including the date of the giving of such notice
pursuant to Section 2(d)(vi) hereof to and including the
date when Holder shall have received the copies of the
supplemented or amended prospectus contemplated by Section
2(d)(vi) hereof.
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(e) Indemnification.
(i) Indemnification by Company. In the event
of any registration of any Shares of Company under the
Securities Act pursuant to this Agreement, Company will
indemnify and hold harmless, to the full extent permitted by
law, Holder, its directors and officers, general partners,
limited partners and managing directors, each other Person
who participates as an underwriter in the offering or sale
of such securities and each other Person, if any, who
controls, is controlled by or is under common control with
Holder or any such underwriter within the meaning of the
Securities Act (and directors, officers, controlling
Persons, partners and managing directors of any of the
foregoing) against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including any
amounts paid in any settlement effected with Company's
consent, which consent will not be unreasonably withheld) to
which Holder, any such director or officer or general or
limited partner or managing director or any such underwriter
or controlling Person may become subject under the
Securities Act, United States state securities "blue sky"
laws, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) or expenses arise out of or are based upon
(A) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in
any registration statement under which such securities were
registered under the Securities Act, any preliminary, final
or summary prospectus contained therein, or any amendment or
supplement thereto, (B) any omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
or (C) any violation or alleged violation by Company of any
United States federal, state or common law rule or
regulation applicable to Company and relating to action
required of or inaction by Company in connection with any
such registration. Company shall reimburse Holder and each
such director, officer, general partner, limited partner,
managing director or underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them
in connection with investigating or defending such loss,
claim, liability, action or proceeding; provided, however,
that Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in
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such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity with written
information furnished to Company through an instrument duly
executed by Holder in its capacity as a shareholder in
Company or any such director, officer, general or limited
partner, managing director, underwriter or controlling
Person specifically stating that it is for use in the
preparation thereof; and, provided, further, that Company
shall not be liable to Holder, any Person who participates
as an underwriter in the offering or sale of Registrable
Securities, if any, or any other Person, if any, who
controls such underwriter within the meaning of the
Securities Act, pursuant to this Section 2(e)(i) with
respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or
supplemented as the case may be, to the extent that any such
loss, claim, damage or liability of such underwriter or
controlling Person results from the fact that such
underwriter sold Registrable Securities to a Person to whom
there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or
of the final prospectus as then amended or supplemented,
whichever is most recent, if Company has previously
furnished copies thereof to such underwriter and such final
prospectus, as then amended or supplemented, had corrected
any such misstatement or omission. The indemnity provided
for herein shall remain in full force and effect regardless
of any investigation made by or on behalf of Holder or any
such director, officer, general partner, limited partner,
managing director, underwriter or controlling Person and
shall survive the transfer of such securities by Holder.
(ii) Indemnification by Holder and
Underwriters. Company will require, as a condition to
including any Registrable Securities in any registration
statement filed in accordance with the provisions hereof,
that Company shall have received an undertaking reasonably
satisfactory to it from Holder or any underwriter, to
indemnify and hold harmless (in the same manner and to the
same extent as set forth in paragraph (i) above) Company and
its directors, officers, controlling Persons and all other
prospective sellers and their respective directors,
officers, general and limited partners, managing directors,
and their respective controlling Persons with respect to any
statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any
15
<PAGE>
amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in
reliance upon and in conformity with written information
furnished to Company or its representatives through an
instrument duly executed by or on behalf of Holder or any
underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary,
final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the
foregoing. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf
of Company or Holder, any underwriters or any of their
respective directors, officers, general or limited partners,
managing directors or controlling Persons and shall survive
the transfer of such securities by Holder, provided,
however, that Holder shall not be liable in the aggregate
for any amounts exceeding the product of the sale price per
Registrable Security and the number of Registrable
Securities being sold pursuant to such registration
statement or prospectus by Holder.
(iii) Notices of Claims, Etc. Promptly after
receipt by an indemnified party hereunder of written notice
of the commencement of any action or proceeding with respect
to which a claim for indemnification may be made pursuant to
this Section 2(e), such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying
party, promptly give written notice to the indemnifying
party of the commencement of such action, provided, however,
that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of
its obligations under the preceding subsections of this
Section 2(e), except to the extent that the indemnifying
party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such
indemnified party and indemnifying parties may exist in
respect of such claim, the indemnifying party will be
entitled to participate in and, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified
party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof, unless
16
<PAGE>
in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption
of the defense thereof, and the indemnifying party will not
be subject to any liability for any settlement made without
its consent (which consent shall not be unreasonably
withheld). No indemnifying party will consent to entry of
any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to
pay the fees and expenses of more than one counsel in any
single jurisdiction for all parties indemnified by such
indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any
other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional
counsel or counsels as may be reasonably necessary.
Notwithstanding anything to the contrary set forth herein,
and without limiting any of the rights set forth above, in
any event any party will have the right to retain, at its
own expense, counsel with respect to the defense of a claim.
(iv) Other Indemnification. Indemnification
similar to that specified in the preceding subsections of
this Section 2(e) (with appropriate modifications) shall be
given by Company and Holder, to the full extent permitted by
applicable law, with respect to any required registration or
other qualification of securities under any United States
federal or state law or regulation or governmental authority
other than the Securities Act.
(v) Contribution. In order to provide for
just and equitable contribution in circumstances in which
the indemnity agreement provided for in this Section 2(d) is
for any reason held to be unenforceable although applicable
in accordance with its terms, Company, Holder and the
underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by
Company, Holder and the underwriters, in such proportions
that the underwriters are responsible for that portion
represented by the percentage that the underwriting discount
appearing on the cover page of the prospectus bears to the
17
<PAGE>
initial public offering price appearing thereon and Company
and Holder are responsible for the balance; provided,
however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent
misrepresentation. As between Company and Holder, such
parties shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion
as shall be appropriate to reflect (A) the relative benefits
received by Company, on the one hand, and Holder on the
other hand, from the offering of the Registrable Securities
and any other securities included in such offering, and
(B) the relative fault of Company, on the one hand, and
Holder on the other, with respect to the statements or
omissions that resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact relates to information supplied by Company or
Holder, the intent of the parties and their relative
knowledge, access to information and opportunity to correct
or prevent such statement or omission. Company and Holder
agree that it would not be just and equitable if
contribution pursuant to this Section 2(e) were to be
determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to herein. Notwithstanding anything
to the contrary contained herein, Company and Holder agree
that any contribution required to be made by Holder pursuant
to this Section 2(e) shall not exceed the net proceeds from
the offering of Registrable Securities (before deducting
expenses) received by Holder with respect to such offering.
For purposes of this Section 2(e), each Person, if any, who
controls Holder or an underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights
to contribution as Holder or such underwriter, and each
director of Company, each officer of Company who signed the
registration statement, and each Person, if any, who
controls Company within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as
Company.
(f) Rule 144. At all times after a public
offering of any of Company's Shares, Company agrees that it
18
<PAGE>
will file in a timely manner all reports required to be
filed by it pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and, if at any time Company
is not required to file such reports, it will make available
to the public, to the extent required to permit the sale of
Shares by Holder pursuant to Rule 144, current information
about itself and its activities as contemplated by Rule 144
under the Securities Act, as such Rule may be amended from
time to time. Notwithstanding the foregoing, Company may
deregister any class of its equity securities under Section
12 of the Exchange Act or suspend its duty to file reports
with respect to any class of its securities pursuant to
Section 15(d) of the Exchange Act if it is then permitted to
do so pursuant to the Exchange Act and the rules and
regulations thereunder.
3. Representations, Warranties and Certain
Covenants.
In order to induce Holder to enter into the Credit
Agreement and this Agreement, Company represents and
warrants unto the Lender, and covenants with the Lender, as
set forth in this Section 3:
(a) Organization, etc. Company is a corporation
validly organized and existing and in good standing under
the laws of the State of its organization, is duly qualified
to do business and is in good standing as a corporation in
each jurisdiction where the nature of its business requires
such qualification, and has full power and authority and
holds all requisite governmental licenses, permits and other
approvals to enter into and perform its obligations under
this Agreement and to own and hold under lease its property
and to conduct its business substantially as currently
conducted by it.
(b) Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by Company of this
Agreement are within Company's corporate powers, have been
duly authorized by all necessary corporate and shareholder
(if any) action, and do not
(i) contravene the certificate of
incorporation or by-laws of Company;
(ii) contravene any contractual restriction,
law or governmental regulation or court decree or order
binding on or affecting Company; or
19
<PAGE>
(iii) result in, or require the creation or
imposition of, any Lien on any of Company's properties.
(c) Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution,
delivery or performance by Company of this Agreement.
Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935,
as amended.
(d) Validity, etc. This Agreement constitutes the
legal, valid and binding obligation of Company enforceable
in accordance with its terms.
(e) Financial Information. The balance sheet of
Company as at July 27, 1997, certified by Price
WaterhouseLLP, and the related statements of earnings and
cash flow of Company, certified by Price WaterhouseLLP,
copies of which have been furnished to Holder, have been
prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of
Company as at the date thereof.
(f) No Material Adverse Change. Since the date of
the financial statements described in Section 3(e), there
has been no material adverse change in the financial
condition, operations, assets, business, properties or
prospects of Company.
(g) Litigation, Labor Controversies, etc. There
is no pending or, to the knowledge of Company threatened
litigation, action, proceeding or labor controversy
affecting Company or any of its properties, assets or
revenues, which is reasonably likely to materially adversely
affect the financial condition, operations, assets,
business, properties or prospects of Company or which
purports to affect the legality, validity or enforceability
of this Agreement.
(h) Taxes. Company has filed all tax returns and
reports required by law to have been filed by it and has
20
<PAGE>
paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
(i) Accuracy of Information. All factual
information heretofore or contemporaneously furnished by or
on behalf of Company in writing to Holder for purposes of or
in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of Company
to Holder will be, true and accurate in every material
respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of
this Agreement by Holder, and such information is not, or
shall not be, as the case may be, incomplete by omitting to
state any material fact necessary to make such information
not misleading.
(j) Financial Information, Reports, Notices, etc.
So long as this Agreement shall remain in effect, Company
will furnish, or will cause to be furnished, to Holder
copies of the following financial statements, reports,
notices and information:
(i) as soon as available and in any event within
45 days after the end of each fiscal quarter of each
fiscal year of Company, a consolidated balance sheet of
Company and its consolidated subsidiaries as of the end
of such fiscal quarter and statements of earnings and
cash flow of Company and its consolidated subsidiaries
for such fiscal quarter and for the period commencing at
the end of the previous fiscal year and ending with the
end of such fiscal quarter, certified by the chief
financial officer of Company;
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of Company, a
copy of the annual audit report for such fiscal year for
Company and its consolidated subsidiaries, including
therein a balance sheet of Company and its consolidated
subsidiaries as of the end of such fiscal year and
statements of earnings and cash flow of Company for such
fiscal year, in each case certified (without
qualification) in a manner acceptable to Holder by Price
WaterhouseLLP or other independent public accountants
acceptable to Holder;
21
<PAGE>
(iii) such other information respecting the
condition or operations, financial or otherwise, of
Company which is made available to the Company's
shareholders generally as Holder may from time to time
reasonably request.
4. Miscellaneous.
(a) Remedies. Holder, in addition to being
entitled to exercise all rights provided herein, in the
Stock Purchase Agreement or granted by law, including
recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement.
Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by
it of the provisions of this Agreement and hereby agrees to
wave the defense in any action for specific performance that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Company will not
on or after the date of this Agreement enter into any
agreement with respect to its securities that is
inconsistent with the rights granted to Holder in this
Agreement or otherwise conflicts with the provisions hereof.
No Person, other than Holder and Madeleine L.L.C. pursuant
to the Madeleine Agreement, has the right, contractual or
otherwise, to require the registration of any securities of
Company by virtue of any transaction contemplated by this
Agreement or the Credit Agreement. The rights granted to
Holder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of
Company's securities under any agreement in effect on the
date hereof.
(c) Amendments and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions
hereof may not be given unless Company has obtained the
written consent of Holder.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing
by hand-delivery, first-class mail (registered or certified,
return receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:
22
<PAGE>
(i) if to Holder, at:
ING (U.S.) Capital Corporation
135 East 57th Street
New York, New York 10022
Telephone No. (212) 409-1712
Facsimile No.: (212) 593-3362
Attention: Barry A. Iseley
Senior Vice President
with a copy to:
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
Attention: Russell C. Prince, Esq.
(ii) if to Company, at:
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Telephone No.: (207) 824-8100
Facsimile No.: (207) 824-5158
Attention: Christopher E. Howard, Esq.
All such notices and communications shall be deemed
to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto, including without
limitation and without the need for an express assignment,
subsequent holders of Registrable Securities; provided,
however, that this Agreement shall not inure to the benefit
of or be binding upon a successor or assign of Holder unless
and to the extent such successor or assign acquired
Registrable Securities from Holder.
(f) Counterparts. This Agreement may be executed
in any number of counterparts and by the parties hereto in
23
<PAGE>
separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
RULES THEREOF.
(i) Severability. In the event that any one or
more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the
remaining provisions contained herein shall not be affected
or impaired thereby.
(j) Entire Agreement. This Agreement together
with the Stock Purchase Agreement is intended by the parties
as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration
rights granted by Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such
subject matter.
24
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first written above.
AMERICAN SKIING COMPANY
By: /s/ Christopher E. Howard
----------------------------
Name: Christopher E. Howard
Title: Senior Vice President
ING (U.S.) CAPITAL CORPORATION
By: /s/ Barry A. Iseley
---------------------------
Name: Barry A. Iseley
Title: Senior Vice President
25
Exhibit 4
- ------------------------------------------------------------------
CONTRACT OF SALE
BY AND BETWEEN
ORLANDO RESORT CORPORATION,
a Delaware corporation
("Seller")
AND
ELW GOLF GROUP, INC.,
a Florida corporation
("Purchaser")
- ------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Article Page
INTRODUCTION / WITNESSETH 1
1. DEFINITIONS
Definitions .............................................1
2. PURCHASE AND SALE OF THE PROPERTY
Agreement to Purchase and Sell ..........................1
Independent Consideration ...............................1
Earnest Money Deposit ...................................2
3. REQUIREMENTS AND CONDITIONS OF CLOSING
Performance Prior to Closing ............................2
4. PAYMENT OF PURCHASE PRICE
Payment of Purchase Price ...............................6
5. CLOSING
Date and Location .......................................6
Delivery by Seller ......................................6
Delivery by Purchaser ..................................7
Recordation .............................................7
Closing Costs ...........................................8
6. CLOSING STATEMENT
Closing Statement .......................................8
7. PRORATIONS
Ad Valorem Taxes and Special Assessments ...............8
Prepaid Expenses, Deposits, and Deferred Income .........8
Accounts Receivable .....................................9
Accounts Payable .......................................9
Utilities ..............................................9
Insurance ..............................................10
[PAGE]
8. POSSESSION OF THE PROPERTY
Possession of the Property .............................10
9. RISK OF LOSS
Damage or Destruction .................................10
Repair .................................................10
10. CONDEMNATION
Effect of Taking ......................................11
11. SELLER'S REPRESENTATIONS AND WARRANTIES 11
12. .SELLER'S COVENANTS 14
13. .PURCHASER'S COVENANTS, REPRESENTATIONS, AND WARRANTIES 16
14. LIABILITIES AND INDEMNIFICATIONS
Liabilities ............................................17
Indemnification by Seller ..............................17
Indemnification by Purchaser ...........................17
15. PURCHASER'S OBLIGATIONS
Independent Corporation ................................18
Affiliate Companies ....................................18
16. DEFAULT
Event of Default .......................................18
17. REMEDIES
Seller's Remedies Prior to Closing .....................18
Seller's Remedies After Closing ........................19
Purchaser's Remedies Prior to Closing ..................19
Purchaser's Remedies After Closing .....................19
18. ARBITRATION
Arbitration ............................................19
<PAGE>
19. NOTICES
Notices ................................................20
20. MISCELLANEOUS
Entire Agreement .......................................21
Exhibits ...............................................21
Bulk Sales Act .........................................21
Assignment .............................................21
Severability ...........................................22
Confidentiality ........................................22
Approvals ..............................................22
Construction and Interpretation of Agreement ..........22
Amendment and Waiver ...................................22
No Partnership or Joint Venture ........................23
Access and Information .................................23
Counterparts ...........................................23
Successors and Assigns .................................23
Time ...................................................23
Documentation ..........................................23
Brokers ................................................23
Captions ...............................................24
Governing Document .....................................24
Food and Beverage Management Agreement .................24
Attorneys' Fees ........................................24
EXECUTION / ATTESTATION 25
<PAGE>
EXHIBITS TO CONTRACT OF SALE
BY AND BETWEEN
ORLANDO RESORT CORPORATION
AND
ELW GOLF GROUP, INC.
A:\b5102.1\c.wpd
DEFINITIONS ....................................................A
SELLER'S NONFOREIGN STATUS AFFIDAVIT .......................... B
CONTRACTS ......................................................C
CLUB MEMBERSHIP REPRESENTATIONS ................................D
[INTENTIONALLY OMITTED] ........................................E
ASSIGNMENT OF BONDS, WARRANTIES, AND GUARANTIES ................F
ASSIGNMENT OF CONTRACTS ........................................G
ASSIGNMENT OF WATER RIGHTS .....................................H
BILL OF SALE ..................................................I
SELLER'S BRINGDOWN CERTIFICATE ................................ J
PURCHASER'S BRINGDOWN CERTIFICATE ............................. K
DEED ...........................................................L
EXISTING PERSONAL PROPERTY CONDITIONS ..........................M
EXISTING REAL PROPERTY CONDITIONS ............................. N
REAL PROPERTY ..................................................O
TANGIBLE PERSONAL PROPERTY .....................................P
<PAGE>
CONTRACT OF SALE
THIS AGREEMENT, made on this 5th day of December, 1997, by and
between ORLANDO RESORT CORPORATION, a Delaware corporation (hereinafter
referred to as "Seller"), and ELW GOLF GROUP, INC., a Florida
corporation (hereinafter referred to as "Purchaser"), is as follows:
W I T N E S S E T H
WHEREAS, Seller desires to sell to Purchaser the country club
complex generally known as "Sabal Point Country Club," located in
Seminole County, Florida, consisting of one (1) 18-hole golf course,
clubhouse, cart storage building, and maintenance building, together
with all furniture, fixtures, equipment, licenses, permits, tangible and
intangible assets, and rights related thereto and/or used in connection
with the operation and use thereof, and Purchaser desires to purchase
from Seller said country club complex, together with all furniture,
fixtures, licenses, permits, tangible and intangible assets, and rights
related thereto and/or used in connection with the operation and use
thereof,
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are mutually acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. Definitions. All capitalized terms referenced or used in
this Agreement and not specifically defined herein shall have the
meaning set forth on Exhibit A, which is attached hereto.
ARTICLE 2.
PURCHASE AND SALE OF THE PROPERTY
2.1. Agreement to Purchase and Sell. In consideration of the
payment by Purchaser to Seller of the sum of FIVE MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($5,800,000.00) (the "Purchase Price"), Seller hereby
agrees to sell the Property to Purchaser and Purchaser hereby agrees to
purchase the Property from Seller upon the terms and conditions set
forth herein.
2.2. Independent Consideration. Contemporaneously with the
execution of this Agreement, Purchaser hereby delivers to Seller and
Seller hereby acknowledges the receipt of a monetary sum in the amount
of ONE HUNDRED DOLLARS ($100.00) (the "Independent Consideration"),
which amount the parties bargained for and agreed to as consideration of
Purchaser's exclusive option to purchase the Property as provided
herein, and for Seller's execution, delivery, and performance of this
page 1
<PAGE>
Agreement. The Independent Consideration is in addition to and
independent of any other consideration or payment provided in this
Agreement, is nonrefundable, and shall be retained by Seller,
notwithstanding any other provision of this Agreement. Notwithstanding
anything herein to the contrary, Purchaser's option to purchase the
Property hereunder shall terminate upon the termination of this
Agreement by its own terms or by Purchaser or Seller pursuant to any
right to terminate provided herein.
2.3. Earnest Money Deposit. Contemporaneously with the Effective
Date, Purchaser shall deliver the Earnest Money Deposit to the Title
Company and it shall be placed in an interest bearing account in the
name of the Title Company. The proceeds shall be tendered by the Title
Company to Seller or Purchaser, as the case may be, in accordance with
the terms and conditions hereof. In addition to any other provisions
hereof, if this Agreement is terminated by Purchaser, at its sole
option, pursuant to Article 3, Article 9, Paragraph 12.1.1, or
Section 17.3, the Title Company shall promptly return the Earnest Money
Deposit and accrued interest to Purchaser after receiving notice of such
termination from Purchaser.
ARTICLE 3.
REQUIREMENTS AND CONDITIONS OF CLOSING
3.1. Performance Prior to Closing. Upon execution of this
Agreement, Purchaser and/or Seller, as the case may be, agree to perform
the following within the time stated, each of which shall be a condition
precedent to Closing (collectively, the "Conditions Precedent"):
3.1.1. Title Commitment. Purchaser shall obtain the Commitment, if
any. Purchaser shall have until the expiration of December 19, 1997, to
examine the conditions of the title and the Existing Real Property
Conditions, and approve or disapprove the same. In the event the title
to the Real Property, as shown on the Commitment, or any of the Existing
Real Property Conditions, shall be disapproved in writing by Purchaser,
Seller shall have a period of thirty (30) days from receipt of
Purchaser's written notice of disapproval in which to cure any title
defect or exception specified by Purchaser or not permitted under this
Agreement (the "Title Objections"), and Seller agrees to use reasonable
efforts to do so; provided, however, in no event shall Seller's
liability to cure such defects or exceptions, other than mortgages or
deeds of trust granted by Seller, exceed FIFTEEN THOUSAND DOLLARS
($15,000.00) in the aggregate. If Seller shall be unable to cure the
Title Objections within the time period permitted above, Seller shall
advise Purchaser in writing. If Seller does not cure the Title
Objections to Purchaser's personal satisfaction within the permitted
time, Purchaser may (i) terminate this Agreement upon written notice to
Seller, and the parties hereto shall be released from all obligations
hereunder, or (ii) waive in writing those Title Objections which Seller
is unable to cure after a good faith effort by Seller to cure same and
proceed to close this Agreement pursuant to the provisions hereof, or
(iii) extend the time for an amount of time Purchaser, in its sole
discretion, deems necessary for Seller to cure the Title Objections.
page 2
<PAGE>
3.1.2. Survey. Purchaser shall obtain the Survey, if any, at
Purchaser's sole cost. Purchaser shall have until the expiration of
December 19, 1997, to approve or disapprove the Survey. If Purchaser
shall disapprove such Survey in writing, Seller shall have a period of
thirty (30) days after receipt of Purchaser's written notice of
disapproval in which to cure any defect to the Survey specified by
Purchaser or not permitted under this Agreement (the "Survey
Objections"), and Seller agrees to use reasonable efforts to do so;
provided, however, in no event shall Seller's liability to cure such
defects exceed FIFTEEN THOUSAND DOLLARS ($15,000.00) in the aggregate.
If Seller shall be unable to cure the Survey Objections within the time
period permitted above, Seller shall advise Purchaser in writing. If
Seller does not cure the Survey Objections to Purchaser's personal
satisfaction within the permitted time, Purchaser may (i) terminate this
Agreement upon written notice to Seller, and the parties hereto shall be
released from all obligations hereunder, or (ii) waive in writing those
Survey Objections which Seller is unable to cure after a good-faith
effort by Seller to cure same and proceed to close this Agreement
pursuant to the provisions hereof, or (iii) extend the time for an
amount of time Purchaser, in its sole discretion, deems necessary for
Seller to cure the Survey Objections.
3.1.3. UCC Search on Personal Property. Purchaser shall obtain the
Uniform Commercial Code search, if any, for each county and state in
which any of the Real Property, Improvements, or Tangible Personal
Property is located and where Seller has its principal place of business
(collectively, the "UCC Searches"). Purchaser shall have until the
expiration of December 19, 1997, to examine the UCC Searches and the
Existing Personal Property Conditions, and approve or disapprove the
same in writing. In the event Purchaser disapproves in writing any of
the UCC Searches or any of the Existing Personal Property Conditions,
Seller shall have a period of thirty (30) days after receipt of
Purchaser's written notice of disapproval in which to cure any defect or
exception specified by Purchaser or not permitted under this Agreement
(the "Personal Property Objections"), and Seller agrees to use
reasonable efforts to do so. If Seller shall be unable to cure the
Personal Property Objections within the time period permitted above,
Seller shall advise Purchaser in writing. If Seller does not cure the
Personal Property Objections to Purchaser's personals satisfaction
within the permitted time, Purchaser may (i) terminate this Agreement
upon written notice to Seller, and the parties hereto shall be released
from all obligations hereunder, or (ii) waive in writing those Personal
Property Objections which Seller is unable to cure after a good faith
effort by Seller to cure same and proceed to close this Agreement
pursuant to the provisions hereof, or (iii) extend the time for an
amount of time Purchaser, in its sole discretion, deems necessary for
Seller to cure the Personal Property Objections.
3.1.4. Contracts and Agreements. On or before fifteen (15) days
after the Effective Date, Seller shall deliver to Purchaser, at Seller's
sole cost, true, correct, and complete copies of all the contracts and
other instruments, contracts, licenses, and agreements which affect the
ownership, operation, or use of the Property (the "Contracts"),
including, but not limited to, (i) any and all leases, security deposit
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agreements, letters of credit, service contracts, utility agreements,
construction contracts, licenses, permits (including water, waste water
and underground storage tanks, if any), and employment agreements, if
any, (ii) all development permits and insurance policies applicable to
the Real Property, Improvements, or Tangible Personal Property,
(iii) all documents evidencing, affecting, or relating to loans secured
by liens against the Real Property or the Personal Property, (iv) a
current profit and loss statement, balance sheet, and the general ledger
relating to the operation of the Club and the Real Property, (v) tax
bills and receipts for current real estate and personal property taxes,
and (vi) all development plans, plats, architectural drawings, plans,
specifications, renderings, floor plans, engineering plans and studies,
environmental and toxic waste studies and information (including
wetlands and endangered species habitat located on the Real Property),
surveys, site plans, soil and substrata studies, utility schemes, and
landscape plans available to Seller covering, affecting, or relating to
any of the Real Property or the Improvements. Purchaser shall have
until the expiration of December 19, 1997, to examine such documents.
All agreements with business terms reasonably acceptable to Purchaser,
shall be assigned to Purchaser at Closing pursuant to the Assignment of
Contracts (the "Approved Contracts"). In the event Purchaser
disapproves any of the items delivered by Seller to Purchaser above,
Seller shall have a period of ten (10) days from receipt of Purchaser's
written notice of disapproval in which to cure any defect or exception
specified by Purchaser or not permitted under this Agreement (the
"Contract Objections"), and Seller agrees to use reasonable efforts to
do so. If Seller shall be unable to cure the Contract Objections within
the time period permitted above, Seller shall advise Purchaser in
writing. If Seller does not cure the Contract Objections, to
Purchaser's personal satisfaction, within the permitted time, Purchaser
may (i) terminate this Agreement upon written notice to Seller, and the
parties hereto shall be released from all obligations hereunder, or
(ii) waive in writing those Contract Objections which Seller is unable
to cure after a good faith effort by Seller to cure same and proceed to
close this Agreement pursuant to the provisions hereof, or (iii) extend
the time for an amount of time Purchaser, in its sole discretion, deems
necessary for Seller to cure the Contract Objections.
3.1.5. Feasibility Period. For the period commencing with the
Effective Date until the expiration of December 19, 1997 (the
"Feasibility Period"), Seller shall permit Purchaser and any of its
officers, employees, agents, attorneys, accountants, appraisers,
architects, engineers, consultants, lenders, or other representatives as
designated by Purchaser (collectively, "Purchaser's Representatives")
access to Seller's books and records relating to the ownership and
operation of the Property and access to and entry upon the Real
Property, to examine, inspect, measure, and test the Property and to
conduct such financial audits and verifications as they shall deem
reasonably necessary (collectively, the "Inspections"). Seller through
the Seller's Representatives and upon request from Purchaser shall
cooperate with Purchaser and Purchaser's Representatives in conducting
the foregoing activities. Without limitation of the foregoing, it is
acknowledged that Purchaser and Purchaser's Representatives shall have
the right to conduct financial audits with respect to Seller's current
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fiscal year operations. Seller hereby consents to Purchaser or
Purchaser's Representatives (i) conducting a Phase I environmental site
assessment of the Property (the "Phase I Study"), and (ii) a structural
review of the Improvements (the "Structural Report"). The costs of
conducting and obtaining the Phase I Study and the Structural Report
shall be the responsibility of Purchaser. In the event any of
Purchaser's Representatives recommends additional environmental review
after conducting the Phase I Study, Seller through Seller's
Representatives, shall permit Purchaser and Purchaser's Representatives'
access to and entry upon the Real Property for such additional review;
provided, however, that no invasive inspection shall be performed
without one of Seller's Representatives' prior written consent (which
consent shall not be unreasonably withheld or delayed). Purchaser shall
give not less than twenty-four (24) hours prior written or oral notice
to Seller's Representatives prior to any entry upon the Real Property or
Improvements for the purpose of conducting such Inspections, and such
entry shall be scheduled and coordinated with Seller's Representatives.
At Seller's election, a representative of Seller shall be present during
any entry by Purchaser or Purchaser's Representative upon the Property
for conducting said Inspections. Purchaser shall not cause or permit
any mechanic's liens, materialmen's liens, or other liens to be filed
against the Property as a result of the Inspections. Purchaser shall
repair and restore any damage to the Property caused by entry upon the
Real Property or Improvements by Purchaser or the other Purchaser's
Representatives, except to the extent Seller's negligence or willful
acts contributed to such damage. Purchaser shall indemnify, defend, and
hold harmless Seller and Seller's officers, directors, shareholders,
partners, tenants, agents, and employees (collectively, the "Indemnified
Parties"), from and against any and all actions, losses, costs, damages,
claims, liabilities, and expenses (including court costs and reasonable
attorneys' fees) brought, sought, or incurred by or against any of the
Indemnified Parties resulting from, arising out of, or relating to,
entry upon the Real Property or Improvements by Purchaser or any of the
other Purchaser's Representatives, except to the extent Seller's
negligence or willful acts contributed to same. The foregoing
indemnification and repair and restoration obligations (collectively,
"Purchaser's Indemnity") shall expressly survive the termination of this
Agreement for a period of one (1) year after the termination of this
Agreement or Closing. If Purchaser notifies Seller in writing on or
before the end of the Feasibility Period that the Property or any other
item is unsatisfactory for any reason whatsoever, in Purchaser's sole
discretion, Purchaser may, upon written notice to Seller, terminate this
Agreement, and the parties hereto shall be released from all obligations
hereunder. If Purchaser fails to terminate this Agreement in accordance
with its right to terminate on or before the end of the Feasibility
Period, Purchaser shall have no further right to terminate this
Agreement pursuant to this Paragraph.
3.1.6. Inventory. Not earlier than five (5) days or later than two
(2) days prior to the Closing Date, Seller shall conduct a complete,
itemized, and detailed inventory of the Tangible Personal Property.
Seller shall give Purchaser at least two (2) days actual notice prior to
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such inventory, and Purchaser shall be entitled to have a representative
present for the inventory. Seller and Purchaser shall certify the
inventory to be true and accurate as of the day of taking. After such
inventory is taken, Seller shall make changes thereto only in the normal
and ordinary course of business.
ARTICLE 4.
PAYMENT OF PURCHASE PRICE
4.1. Payment of Purchase Price. The Purchase Price shall be payable
in cash, cashier's check, or wire transfer at Closing.
ARTICLE 5.
CLOSING
5.1. Date and Location. Provided Purchaser has not exercised
Purchaser's right to terminate as set forth herein, Closing shall be
held at 10:00 a.m. on or before January 31, 1998, if all of the
Conditions Precedent to Closing set forth herein shall have been
satisfied or waived, or such earlier or later date as may be mutually
agreed upon in writing by the parties hereto. In the event Purchaser
elects to extend any of the time periods set forth in Article 3 to allow
Seller additional time to cure any objection raised by Purchaser, the
Closing Date shall be extended for the same period, but in no event
shall the Closing Date be extended more than sixty (60) days unless
agreed to in writing by both parties. Closing shall be held at the
offices of the Title Company, or such other location mutually acceptable
to Seller and Purchaser.
5.2. Delivery by Seller. At Closing, Seller shall cause to be
delivered to Purchaser the following documents and instruments, all of
which shall be dated on or effective as of the Closing Date (the
"Closing Documents"):
5.2.1. The Deed, duly executed and acknowledged by Seller,
conveying to Purchaser good, marketable, and indefeasible title to the
Real Property and the Improvements, subject only to the Permitted
Exceptions;
5.2.2. The Assignment of Contracts, duly executed by Seller,
assigning to Purchaser all of Seller's interest in the Approved
Contracts;
5.2.3. The Bill of Sale, duly executed by Seller, conveying to
Purchaser good, indefeasible, and marketable title to the Personal
Property, subject only to the Permitted Exceptions;
5.2.4. The Assignment of Bonds, Warranties, and Guaranties, duly
executed by Seller, assigning to Purchaser all guaranties and warranties
pertaining to the Property such as they exist;
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5.2.5. The Assignment of Water Rights, duly executed by Seller,
assigning to Purchaser all water rights held by Seller and related to
the Property;
5.2.6. A Bringdown Certificate, duly executed by Seller;
5.2.7. A nonforeign status affidavit from Seller in favor of
Purchaser in the form of Exhibit B attached hereto;
5.2.8. The Earnest Money Deposit, including any interest accrued
thereon to be paid to Seller and credited against the Purchase Price;
5.2.9. An IRS Allocation Form, duly executed by Seller;
5.2.10. A resolution authorizing the consummation of the purchase
and sale transaction contemplated hereby and delivery of the closing
documents on behalf of Seller; and
5.2.11. All other documents reasonably required to be effectuate the
transaction contemplated hereby in the manner described herein.
5.3. Delivery by Purchaser. At Closing, Purchaser shall cause to
be delivered to Seller the following documents, instruments, and items,
all of which shall be dated on or effective as of the Closing Date:
5.3.1. The Purchase Price;
5.3.2. The Assignment of Contracts, duly executed by Purchaser;
5.3.3. A Bringdown Certificate, duly executed by Purchaser;
5.3.4. An IRS Allocation Form, duly executed by Purchaser;
5.3.5. A board resolution authorizing the consummation of the
purchase and sale transaction contemplated hereby and delivery of the
closing documents on behalf of Purchaser; and
5.3.6. All other documents reasonably required to effectuate the
transaction contemplated hereby in the manner described herein.
5.4. Recordation. Upon the completion of the deliveries specified
in this Article, the Title Company shall be authorized to cause the
appropriate closing documents to be immediately recorded in Seminole
County, Florida.
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5.5. Closing Costs. At or prior to Closing, Seller shall pay
(i) one-half (1/2) of all premium and other charges and costs incident to
the issuance of the Commitment and the Owner's Title Policy,
(ii) recording fees for UCC terminations, (iii) recording fees for any
Easements, and (iv) all documentary transfer taxes, deed stamps, fees,
or any other costs associated with the sale of the Property and
recording of the Deed. At Closing, Purchaser shall pay (i) one-half (/)
of all premium and other charges and costs incident to the issuance of
the Commitment and Owner's Title Policy, (ii) any survey endorsements,
(iii) Mortgage Documentary Stamp Fares, (iv) recording fees for
Purchaser's Mortgage, and (v) recording fees for UCC filings.
Prorations shall be in accordance with the provisions of this Agreement.
All other escrow and costs of Closing shall be allocated to and paid by
Seller and Purchaser at Closing in accordance with the manner in which
such costs are customarily borne by such parties in Seminole County,
Florida; provided, however, each party shall be responsible for the
payment of the fees and expenses of its respective legal counsel.
ARTICLE 6.
CLOSING STATEMENT
6.1. Closing Statement. A closing statement, in a form acceptable to
both parties, shall be prepared by the Title Company and executed by the
parties hereto at Closing, which closing statement shall evidence the
monetary terms of this transaction.
ARTICLE 7.
PRORATIONS
7.1. Ad Valorem Taxes and Special Assessments. General ad valorem
taxes and special assessments, if any, shall be prorated as of the
Closing Date. If Closing shall occur before the tax rate is fixed for
the tax year in which Closing shall occur, the apportionment shall be
based on the tax rate for the previous tax year applied to the latest
assessed valuation of the Property. In such event, at such time as the
tax rate is fixed for the tax year in which Closing shall occur, general
ad valorem taxes and special assessments shall be readjusted. If the
amount that Seller would have paid had such tax rate been fixed at the
time of Closing exceeds the amount which Seller actually paid at the
time of Closing, Seller shall immediately pay over to Purchaser the
amount of such excess upon Purchaser's written request for same. If the
amount that Seller would have paid had such tax rate been fixed at the
time of Closing is less than the amount actually paid by Seller at the
time of Closing, Purchaser shall immediately pay over to Seller the
amount of such overpayment, upon Seller's written request for same. All
taxes and assessments of any nature whatsoever attributable to the
period prior to Closing because of a change in the use of the Property
shall be the obligation of Seller, regardless of when they are assessed.
7.2. Prepaid Expenses, Deposits, and Deferred Income. All prepaid
expenses, deposits, and deferred income, including, but not limited to,
dues, fees, locker rentals, and bag storage charges, which arose by
virtue of the operation of the Club and which Seller has collected or
received a credit for, shall be prorated as of the Closing Date.
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7.3. Accounts Receivable. All of Seller's Receivables shall remain
the property of Seller. In order to facilitate the collection of
Seller's Receivables, Purchaser agrees to attempt to collect same for
the benefit of Seller for a period of one hundred twenty (120) days
following the Closing Date. Purchaser shall account for and pay to
Seller all of Seller's Receivables collected by Purchaser within fifteen
(15) days following each billing date which occurs after the Closing
Date, but before one hundred twenty (120) days following the Closing
Date. Purchaser shall make a final accounting and payment to Seller
within one hundred thirty five (135) days following the Closing Date.
Purchaser's obligation to collect Seller's Receivables shall not be
greater than Purchaser's efforts to collect accounts receivable owing to
Purchaser, and if any of Seller's Receivables shall remain unpaid one
hundred thirty five (135) days after the Closing Date, Purchaser shall
advise Seller of such accounts receivable, including the name of the
debtor and the amount owing, and Purchaser shall thereafter have no
further obligation with respect to Seller's Receivables.
7.3.1. Regardless of payee designation, all payments received on
account by Purchaser or Seller from a Club member who has an outstanding
Seller's Receivable shall be presumed to be payments in respect to the
oldest accounts receivable then outstanding.
7.3.2. Seller shall have the right to review Purchaser's books and
records at reasonable intervals and on reasonable notice to verify
Purchaser's compliance with this Section.
7.3.3. Seller may, in its sole discretion and in addition to the
obligations of Purchaser as hereinabove defined, exercise any and all
efforts to collect delinquent Seller's Receivables, including resort to
legal action, subject to the Club's bylaws and accounts receivable
procedure. All such efforts by Seller shall be at its sole cost and
expense.
7.4. Accounts Payable. All of Seller's Payables shall be Seller's
sole responsibility. At the request of Purchaser, Seller shall, within
ten (10) days following such request, furnish Purchaser satisfactory
evidence that any account payable received has been paid when due or is
being contested in good faith by Seller or, in the absence of such
satisfactory evidence, Purchaser may, (ii) offset against any amounts
due from Purchaser to Seller (including, but not limited to, Seller's
Receivables) any amounts needed to pay Seller's Payables, or
(iii) pursue any other remedy granted herein. Notwithstanding anything
to the contrary recited herein, in no event shall Seller delay the
payment of any of Seller's Payables that would interfere or disrupt the
operation of the Club.
7.5. Utilities. Seller shall cause the companies and
municipalities furnishing utility services to the Real Property and the
Improvements to make termination readings on the morning of the Closing
Date, or on a date as soon thereafter as possible, and to submit final
statements for utility services, which Seller agrees to pay in a timely
manner.
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7.6. Insurance. Insurance, if any, carried by Seller on the Real
Property, Improvements, and Tangible Personal Property shall be
terminated effective as of Closing. Purchaser shall be solely
responsible for acquiring insurance coverage on the Real Property,
Improvements, and Tangible Personal Property after Closing.
ARTICLE 8.
POSSESSION OF THE PROPERTY
8.1. Possession of the Property. Possession of the Real
Property, Improvements, and Tangible Personal Property shall be
transferred by Seller to Purchaser at Closing.
ARTICLE 9.
RISK OF LOSS
9.1. Damage or Destruction. Risk of loss until Closing shall be
borne by Seller. In the event that damage or destruction of the Real
Property, Improvements, or Tangible Personal Property, or any part
thereof, by fire or other casualty occurs prior to Closing, Purchaser
shall elect in writing, at its option, one of the following:
9.1.1. To terminate this Agreement, in which event each party shall
be released from all obligations hereunder and the Earnest Money Deposit
shall immediately be returned to Purchaser by the Title Company; or
9.1.2. To request that Seller repair and/or replace such damaged or
destroyed Real Property, Improvements, or Tangible Personal Property.
If Seller, at its sole option, elects to do so, the Closing Date shall
be extended for a reasonable time in order to allow Seller to repair
such damage to the Real Property, Improvements, or Tangible Personal
Property, and Seller shall proceed diligently to complete such repairs.
If Seller, at its sole option, elects not to do so, Purchaser may
terminate this Agreement as provided in Paragraph 9.1.1; or
9.1.3. To accept from Seller the assignment of any insurance
proceeds payable by reason of such damage or destruction and to proceed
with Closing.
9.2. Repair. In the event that Seller is required to repair any
damage whatsoever to the Real Property, Improvements, or Tangible
Personal Property, Seller shall repair and restore the Real Property,
Improvements, or Tangible Personal Property to the condition in which it
existed immediately prior to such damage or destruction.
<PAGE> page 10
ARTICLE 10.
CONDEMNATION
10.1. Effect of Taking. In the event that any portion of the Real
Property or the Improvements is taken by right of eminent domain or
condemnation prior to Closing, Purchaser shall elect in writing, at its
option, one of the following:
10.1.1. To terminate this Agreement, in which event each party shall
be released from all obligations hereunder and the Earnest Money Deposit
shall immediately be returned to Purchaser by the Title Company; or
10.1.2. To accept the condemnation proceeds and to proceed with
Closing.
ARTICLE 11.
SELLER'S REPRESENTATIONS AND WARRANTIES
11.1. Seller makes the following representations and warranties to
Purchaser, which representations and warranties shall survive the
execution and delivery of this Agreement and shall be true and correct
in all material respects on the Closing Date:
11.1.1. Corporate Status. Seller is a Delaware corporation duly
organized, validly existing, and in good standing under the laws of the
State of Florida, with full corporate power to enter into this Agreement
and execute all documents required hereunder.
11.1.2. Authorization. The making, execution, delivery, and
performance of this Agreement by Seller has been duly authorized and
approved by the Board of Directors of Seller and constitutes a valid and
binding obligation, enforceable in accordance with its terms.
11.1.3. Violation of Agreement. Neither the execution and delivery
of this Agreement by Seller nor Seller's performance of any obligation
hereunder (i) will constitute a violation of any law, ruling,
regulation, or order to which Seller is subject, or (ii) shall
constitute a default of any term or provision or shall cause an
acceleration of the performance required under any other agreement or
document to which (a) Seller is a party or is otherwise bound, or
(b) the Property or any part thereof is subject.
11.1.4. Governmental Agencies. To the best of Seller's knowledge,
there are no existing conditions in or about the Real Property,
Improvements, or Tangible Personal Property, or otherwise, which are in
material violation of any city, county, state, or federal law,
ordinance, or regulation. Seller has not received any notice, written
or otherwise, from any governmental agency requiring the correction of
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any condition with respect to the Real Property, Improvements, or
Tangible Personal Property which is in material violation of any law,
ordinance, or regulation.
11.1.5. Title to Property. Seller shall have at the time of Closing
good, marketable, and indefeasible title to the Property, free and clear
of all liens, claims, and encumbrances of any nature, except for (i) the
Existing Real Property Conditions, and (ii) the Existing Personal
Property Conditions.
11.1.6. Litigation, Claims, or Proceedings. To the best of Seller's
knowledge, there are no existing or pending actions, suits, litigation,
claims, proceedings, or governmental investigations with respect to any
aspect of the Property or the Club or affecting Seller's right to enter
or perform this Agreement, nor, to the knowledge of Seller, have any
such actions, suits, litigation, claims, proceedings, or governmental
investigations been threatened or asserted.
11.1.7. Contracts. To the best of Seller's knowledge, there are no
outstanding contracts, commitments, leases, or agreements of any nature
to which the Club, Seller, or the Property is or may become subject,
except the Contracts. If, subsequent to the date of this Agreement,
Seller or Purchaser determines that there are contracts to which the
Club, Seller, or the Property is or may become subject and such
contracts are not included in Exhibit C attached hereto, Purchaser may,
at its option, elect to have all or less than all of such contracts
deemed to be included in Exhibit C attached hereto.
11.1.8. Club Membership. To the best of Seller's knowledge, except
as set forth on Exhibit D attached hereto, there are no representations,
covenants, restrictions, or agreements, whether express or implied
(including any rule, regulation, or bylaw relating to membership), made
by Seller concerning (i) the total allowable number of members or
classes of membership in the Club, (ii) qualifications or approval
required for new members, (iii) the amount of initiation fees, deposits,
restrictions, or waiver of monthly dues, court fees, or other fees to be
charged to the membership for their usage of the Real Property and the
Improvements, or (iv) the rights of members of the Club.
11.1.9. Environmental Laws. To the best of Seller's knowledge, for
the period from November 12, 1997 through the Closing Date, Seller has
and will not dispose or release any hazardous substance or solid waste
on or to the Property (the terms "hazardous substance" and "release"
shall have the meanings specified in Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 [as amended from
time to time, hereinafter referred to as "CERCLA"], and the terms "solid
waste" and "disposal," or "disposed," shall have the meanings specified
in the Resource Conservation and Recovery Act of 1976, the Sold Waste
Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1986 [as amended from time to time, hereinafter referred
to as "RCRA"]; provided to the extent that the laws of the State of
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Florida, as currently enacted, establish a meaning for "hazardous
substance," "release," "solid waste" or "disposal" which is broader than
that specified in either CERCLA or RCRA, such broader meaning shall
apply). If Seller receives notice of any such pending claim or action,
it shall provide Purchaser with a copy thereof within three (3) days of
its receipt.
11.1.10. Employees. Seller acknowledges that Purchaser is acquiring
only the Property and the Club and is not obligated to retain any
employee and is not assuming any employment agreement of any nature
between Seller and its employees. Seller shall indemnify and hold
Purchaser harmless against any claims arising out of the terminations of
any employees by Seller and related to such terminations, including,
without limitation, any claims filed with the Equal Employment
Opportunity Commission.
11.1.11. Retirement Plan; Deferred Compensation. Purchaser shall not
assume or be responsible for, and Seller shall indemnify Purchaser and
save Purchaser harmless from, liability for any claims, coverages,
reimbursements, or any other liabilities to any employee, beneficiary,
or other person or entity in connection with any of Seller's employee
plans (including, without limitation, any welfare benefit plans) or by
reason of any action by Seller or any of its subsidiaries or other
affiliates, or any administrator or fiduciary or other person or entity,
with respect to any of Seller's employee plans, whether before, on, or
after Closing. Seller shall be solely liable and responsible for any
and all assets, liabilities, and benefits accrued under Seller's
qualified pension and savings plans as of Closing. Purchaser shall not
assume, and Seller shall indemnify Purchaser and save Purchaser harmless
from, any liability or obligation whatsoever with respect to Seller's
pension and savings plans prior to, on, or after Closing.
Notwithstanding anything to the contrary contained herein, any
representation made in this Paragraph by Seller concerning Seller's
employees shall be limited to those persons employed at the Club.
11.1.12. COBRA. Seller agrees to pay and be liable to Purchaser and
its affiliates and shall assume, indemnify, defend, and hold harmless
Purchaser and its affiliates from and against and in respect of any and
all losses, damages, liabilities, taxes, sanctions that arise under
Section 4980B of the Internal Revenue Code of 1986 (the "Code"),
interest and penalties, costs and expenses (including, without
limitation, disbursements and reasonable legal fees incurred in
connection therewith and in seeking indemnification therefor, and any
amounts or expenses required to be paid or incurred in connection with
any action, suit, proceeding, claim, appeal, demand, assessment, or
judgment) imposed upon, incurred by, or assessed against Purchaser or
any of its affiliates or any of their respective employees arising by
reason of or relating to any failure by Seller to comply with the
continuation health care coverage requirements of Section 4980B of the
Code and Sections 601 through 608 of the Employee Retirement Income
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Security Act of 1974 ("ERISA") which failure occurred with respect to
any current or prior employee of Seller from November 12, 1997 forward
or any qualified beneficiary of such employee (as defined in Section
4980B(g)(1) of the Code) on or prior to the Closing Date.
Notwithstanding anything to the contrary contained herein, any
representation made in this Paragraph by Seller concerning Seller's
employees shall be limited to those persons employed at the Club.
11.1.13. Disclosure. Seller has disclosed and made available to
Purchaser all due diligence information and materials related to the
Club (i) provided to Seller by the seller of the Property to Seller,
(ii) discovered or obtained by Seller, and (iii) provided to Seller by
third parties, agents, or contractors of Seller.
ARTICLE 12.
SELLER'S COVENANTS
12.1. Seller covenants and agrees to the following, which
covenants and agreements shall survive Closing, shall have been fully
complied with as of the Closing Date, and shall not be deemed merged in
the conveyance contemplated herein:
12.1.1. Litigation, Claims, or Proceedings. In the event
a lien, claim, or cause of action affecting the Property or the
Club should arise prior to Closing, Seller shall advise Purchaser
in writing. If Seller elects to not satisfy any such claim prior
to Closing, and such claim has a material adverse effect on
Purchaser's ability to operate the Club after Closing, Purchaser
may, in its sole discretion, elect to terminate this Agreement and
both parties shall be released from all obligations hereunder and
the Earnest Money Deposit shall be immediately returned to
Purchaser by the Title Company.
12.1.2. Assessments. If any governmental agency or
authority gives notice prior or subsequent to Closing of any
improvements, liens, or special assessments made or to be made
against the Real Property, Improvements, or Tangible Personal
Property which relate to time periods prior to Closing, Seller
shall satisfy and indemnify Purchaser from any such claim and shall
furnish Purchaser evidence thereof.
12.1.3. Permits. Seller shall cooperate fully with Purchaser
as necessary to enable Purchaser, at Purchaser's cost, unless
otherwise specified herein, to procure and/or to transfer all
licenses, permits, or authorizations necessary for the operation of
the Real Property or the Improvements, including, if permitted by
law, transferring the existing liquor licenses from Seller to
Purchaser. Seller shall not let any existing license or permit
lapse without first notifying Purchaser in writing.
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12.1.4. Taxes. All payroll taxes, sales taxes, license
taxes, liquor taxes, use taxes, and all other obligations arising
from and as a result of the operation of the Club and due or to
become due to any governmental or quasi-governmental authority,
whether municipal, state, county, or federal, accruing prior to
Closing shall be paid in full by Seller, and Seller shall not take
nor omit to take any action with respect to said taxes which would
prevent Purchaser's performance of its obligations hereunder or
impose upon Purchaser any material obligation not contemplated
herein.
12.1.5. Liens. From the date hereof and until Closing,
Seller shall not sell, assign, or create any right, title, or
interest whatsoever in or to any of the Property, or create or
permit to exist any liens, encumbrance, or charge thereon, other
than the Existing Real Property Conditions, Existing Personal
Property Conditions, and Permitted Exceptions, without promptly
discharging same.
12.1.6. Mechanic's Liens. Seller shall satisfy any and all
claims for mechanic's or materialmen's liens for work performed or
materials supplied prior to Closing; provided, however, Seller
shall have the right to contest any such claim so long as a bond is
posted by Seller and/or other procedures reasonably acceptable to
Purchaser are followed in order to protect the Real Property,
Improvements, and Tangible Personal Property and so long as no
exception therefor appears in the Title Policy.
12.1.7. Contracts. Seller agrees not to enter into any
contracts, commitments, leases, or agreements after the date hereof
to which the Club, Purchaser, or the Property may be or may become
subject without giving Purchaser notice of the terms of and third
party for such matters. Seller agrees not to enter into any
contracts, commitments, leases, or agreements after the expiration
of the Feasibility Period to which the Club, Purchaser, or the
Property may be or may become subject without the express written
approval of Purchaser. Notwithstanding anything herein to the
contrary, nothing herein shall be construed as prohibiting or
limiting Seller from entering into any (i)contract or agreement
which is performable and terminates by its own terms prior to
Closing, or (ii) any banquet, tournament, or other function
agreement if entered into in the ordinary course of business.
12.1.8. Business Practices. From the Effective Date until
the Closing Date, Seller shall cause the business of the Club and
the Real Property to be conducted in accordance with Seller's
stated operating plan and budget previously delivered to Purchaser,
and Seller shall diligently attempt to cause the Club to preserve
and maintain the goodwill of the Club, including relationships with
suppliers, members, and customers. In addition, Seller shall cause
the Club to maintain financial records and books of account
consistent with Seller's past practices and to maintain all
existing insurance on the Property.
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12.1.9. Violation of Representations. From the Effective
Date and until Closing, Seller shall not take any action or omit to
take any action which action or omission would have the effect of
violating any of the representations, warranties, or covenants of
Seller contained in this Agreement. Seller shall also update
Seller's Representations and Warranties, as contained in
Article 11, as is necessary to make such representations and
warranties accurate.
12.1.10. Club Operation Restrictions. From the expiration of
the Feasibility Period and until Closing, Seller shall not, except
pursuant to existing agreements to which Seller is bound and copies
of which have been delivered to Purchaser, (i) increase the salary
of any employee of the Club, (or) (ii) hire any management level
employee for employment at the Club. Except for matters in the
ordinary course of the business of the Club, from the Effective
Date and until Closing, Seller shall not enter into any agreement
with the Club membership or modify the Club's membership bylaws or
rules and regulations (or their equivalents).
ARTICLE 13.
PURCHASER'S
COVENANTS, REPRESENTATIONS, AND WARRANTIES
13.1. Purchaser makes the following covenants, representations,
and warranties to Seller. Each covenant, representation, and warranty
shall survive the execution and delivery of this Agreement and shall be
true and correct in all material respects on the Closing Date, and no
covenant, representation, or warranty shall be deemed to be merged with
the conveyance herein contemplated:
13.1.1. Corporate Status. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Florida, with full corporate power to enter into this
Agreement and execute all documents required hereunder.
13.1.2. Authorization. The making, execution, delivery, and
performance of this Agreement by Purchaser has been duly
authorized and approved by the board of directors of Purchaser and
constitutes a valid and binding obligation, enforceable in
accordance with its terms.
13.1.3. Insurance. Purchase shall at all times maintain
general liability insurance naming Seller as an additional insured
for matters related to the Club.
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ARTICLE 14.
LIABILITIES AND INDEMNIFICATIONS
14.1. Liabilities. It is expressly agreed and recognized that
Purchaser, in acquiring the Property, does not assume any responsibility
or liability whatsoever for any commitments, obligations, or debts made
or incurred by Seller, its predecessors, or the Club arising from the
ownership of the Property or the operation of the Club prior to Closing,
regardless of whether fixed, accrued, or contingent, except for
obligations arising under the Approved Contracts and the Permitted
Exceptions after Closing. It is further expressly agreed and recognized
that Seller, in disposing of the Property to be conveyed hereby, does
not assume any responsibility or liability whatsoever for any
commitments, obligations, or debts made or incurred by Purchaser, its
successors, or the Club arising from the ownership of the Property or
the operation of the Club subsequent to Closing, regardless of whether
fixed, accrued, or contingent.
14.2. Indemnification by Seller. Seller shall pay, defend, and
hold Purchaser and the Club harmless, except for obligations arising
under the Approved Contracts and Permitted Exceptions arising after
Closing, from and against all liability of any nature whatever,
regardless of the nature in which such liability may arise, from any and
all claims, actions, demands, expenses, attorneys' fees, damages,
losses, liabilities, suits, and/or judgments, costs, and expenses,
including those of any employee of Seller or the Club, or any customer,
member, invitee, or licensee of Seller or the Club, whether past or
present (collectively, "Damages"), arising from (i) possession,
ownership, or operation of the Property or the Club by Seller after
November 12, 1997, (ii) any third party relationship with Seller or the
Club prior to Closing, (iii) any misrepresentation, breach or warranty
and/or covenant, or nonfulfillment of any agreement on the part of
Seller under this Agreement, or (iv) any misrepresentation in or
omission in any Closing Document executed by Seller and delivered to
Purchaser; provided, however, the above indemnity shall expire upon the
expiration of one (1) year from Closing. Seller shall also pay, defend,
and hold harmless Purchaser and the Club from and against Damages, to
the extent such Damages are covered by any indemnity in favor of Seller
pursuant to Seller's purchase of the Property.
14.3. Indemnification by Purchaser. Except for the obligations
and liabilities retained by Seller pursuant to the terms and conditions
of this Agreement, Purchaser shall pay, defend, and hold Seller harmless
from and against all liability of any nature whatever, regardless of the
nature in which such liability may arise, for any and all claims,
actions, demands, expenses, reasonable attorneys' fees, damages, losses,
liabilities, suits, and/or judgments, costs, and expenses arising from
Purchaser's actions in connection with Purchaser's conducting the
Inspections on the Real Property; provided, however, the above indemnity
shall expire upon the expiration of one (1) year from the termination of
this Agreement or Closing.
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ARTICLE 15.
PURCHASER'S OBLIGATIONS
15.1. Independent Corporation. Seller recognizes and acknowledges
that Purchaser is an independent corporation, chartered under the laws
of the State of Florida, to whom Seller will solely look and who is
solely responsible for the obligations and liabilities of Purchaser
recited herein, arising hereunder, or in any manner related to the
transactions contemplated hereby. Seller further recognizes and
acknowledges that no other entity or entities, including (i) Purchaser's
parent corporation, (ii) any individual, or (iii) any corporation
affiliated with Purchaser which may form, organize, provide services to,
provide loans and funds to, negotiate for, provide personnel to, make
representations on behalf of, and from time to time take actions on
behalf of or for the benefit of Purchaser, by direct dealings with
Seller or those acting for it, is in any manner liable or responsible
for the obligations and liabilities of Purchaser, whether recited
herein, arising hereunder, or in any manner related to the transactions
contemplated hereby.
15.2. Affiliate Companies. It is agreed and understood between
the parties hereto that the parent and affiliated corporations of
Purchaser will provide services for a fee to Purchaser and that the
providing of such services for a fee and the actions taken in providing
such services shall in no manner be construed to constitute the
undertaking by such parent or affiliated corporation of any obligation,
duty, or liability of Purchaser to Seller under the terms of this
Agreement or any other relationship existing between Purchaser and
Seller, unless specifically set forth in a document executed by the
party to be charged with such obligation, duty, or liability.
ARTICLE 16.
DEFAULT
16.1. Event of Default. Except as otherwise expressly
provided herein, either party hereto shall be deemed to be in default of
this Agreement if such party fails or refuses to comply with the terms
and conditions set forth herein for any reason other than the prior
termination of this Agreement pursuant to a right to so terminate
expressly set forth in this Agreement and said default continues for
a period of ten (10) days after written notice from the nondefaulting
party to the defaulting party specifying the default (an "Event
of Default").
ARTICLE 17.
REMEDIES
17.1. Seller's Remedies Prior to Closing. Upon the occurrence of
an Event of Default by Purchaser, Seller shall be entitled to terminate
this Agreement by giving Purchaser written notice of termination in
writing, and the parties hereto shall be released from all obligations
to each other hereunder, whereupon Seller shall have the right to
request the Title Company to convert the Earnest Money Deposit to cash
and to receive the Earnest Money Deposit from the Title Company. Seller
and Purchaser agree that Seller's actual damages, in the event of a
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failure or refusal of Purchaser to comply with the terms and conditions
hereof, would be difficult to ascertain because of the uncertainties of
the real estate market and the fluctuations of property values between
the date of this Agreement and the date of an Event of Default, and
because of differences of opinion. Therefore, Seller agrees and
acknowledges receiving and taking the Earnest Money Deposit as Seller's
sole and total relief and exclusive remedy hereunder, and that the
Earnest Money Deposit is, as to both Seller and Purchaser, a reasonable
amount as liquidated damages and is not a penalty.
17.2. Seller's Remedies After Closing. Except as otherwise
provided in this Agreement, upon the occurrence of an Event of Default
by Purchaser after Closing which is not cured within the time permitted,
Seller's sole and exclusive remedy shall be limited to arbitration, as
set forth herein.
17.3. Purchaser's Remedies Prior to Closing. Upon the occurrence
of an Event of Default by Seller prior to Closing, Purchaser shall be
entitled to (i) terminate this Agreement by giving Seller notice of
termination in writing, whereupon the parties hereto shall be released
from all obligations to each other hereunder, and the Earnest Money
Deposit shall immediately be returned to Purchaser by the Title Company,
and Purchaser shall be entitled to liquidated damages in the amount of
ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000.00) (the "Liquidated
Damages"), or (ii) bring suit for specific performance. Seller and
Purchaser agree that Purchaser's actual damages, in the event of a
failure or refusal of Seller to comply with the terms and conditions
hereof, would be difficult to ascertain because of the uncertainties of
the real estate market and the fluctuations of property values between
the date of this Agreement and the date of an Event of Default, and
because of differences of opinion. Therefore, Purchaser agrees and
acknowledges receiving and taking the Liquidated Damages as Purchaser's
sole and total relief and exclusive remedy for damages hereunder, and
that the Liquidated Damages is, as to both Seller and Purchaser, a
reasonable amount as liquidated damages and is not a penalty.
17.4. Purchaser's Remedies After Closing. Except as otherwise
provided in this Agreement, upon the occurrence of an Event of Default
by Seller after Closing which is not cured within the time permitted,
Purchaser sole and exclusive remedy shall be limited to arbitration, as
set forth herein.
ARTICLE 18.
ARBITRATION
18.1. Arbitration. Any controversy arising out of, or relating
to, this Agreement, or the breach thereof, shall be settled by binding
arbitration administered by the American Arbitration Association in
accordance with its rules, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction. The
initiating party shall give written notice to the other party of its
intention to arbitrate, which notice shall contain a statement setting
forth the nature of the dispute, the amount involved, if any, the remedy
sought, and the hearing locale requested, and shall file at any regional
office of the American Arbitration Association three (3) copies of the
notice and three (3) copies of this arbitration provision, together with
the appropriate filing fee, as provided by the American Arbitration
Association. The arbitrator shall be selected by using the listing
process under the American Arbitration Association's arbitration rules.
The arbitrator shall award to the prevailing party, if any, as
determined by the arbitrator, all of its costs and expenses. "Costs and
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expenses" shall mean all reasonable pre-award expenses of the
arbitration, including the arbitrator's fees, administrative fees,
travel expenses, out-of-pocket expenses, such as copying and telephone,
witness fees, and attorneys' fees. The consideration of the parties to
be bound by arbitration is not only the waiver of trial by jury, but
also the waiver of any rights to appeal the arbitration finding.
ARTICLE 19.
NOTICES
19.1. Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing and
(i) hand delivered, including delivery by courier service, (ii) sent by
facsimile, or (iii) sent by certified mail, return receipt requested,
postage prepaid, addressed as shown below, or to such other address as
the party concerned may substitute by written notice to the other. If
the notice is sent by facsimile, it must be properly addressed,
reflecting the facsimile phone number of the addressee(s), and must be
transmitted by a facsimile which produces a dated message completed
confirmation. All notices hand delivered shall be deemed received on
the date of delivery. All notices forwarded by mail shall be deemed
received on a date three (3) days (excluding Sundays and legal holidays
when the U.S. mail is not delivered) immediately following date of
deposit in the U.S. mail. Provided, however, the return receipt
indicating the date upon which all notices were received shall be prima
facie evidence that such notices were received on the date on the return
receipt. Notwithstanding the foregoing, any notice of termination given
by Purchaser by certified mail and facsimile and sent prior to the end
of the Feasibility Period shall be effective when mailed.
If to Seller: ORLANDO RESORT CORPORATION
Sunday River Road
P.O. Box 450
Bethel, Maine 04217
Attention: Mr. Michael Krongel
Facsimile: (207) 824-5158
With a copy to:
American Skiing Company
Sunday River Road
Bethel, Maine 04217
Attention: Mr. Christopher E. Howard
Facsimile: (207) 824-5158
If to Purchaser: ELW GOLF GROUP, INC.
3702 Via de la Valle, Suite 202
Del Mar, California 92104
Attention: Mr. Andrew Crosson
Facsimile: (619) 794-7805
page 20
<PAGE>
With a copy to:
ADDISON LAW FIRM,
a Professional Corporation
14901 Quorum Drive, Suite 650
Dallas, Texas 75240
Attention: Mr. Randolph D. Addison
Facsimile: (972) 960-7719
The addresses and addressees may be changed by giving notice of
such change in the manner provided herein for giving notice. Unless and
until such written notice is received, the last address and addressee
given shall be deemed to continue in effect for all purposes. No notice
to either Purchaser or Seller shall be deemed given or received unless
the entity noted "With a copy to" is simultaneously delivered notice in
the same manner as any notice given to either Seller or Purchaser, as
the case may be.
ARTICLE 20.
MISCELLANEOUS
20.1. Entire Agreement. This Agreement and the Exhibits embody
the entire agreement and understanding of Seller and Purchaser relating
to the subject matter hereof and supersedes all prior representations,
agreements, and understanding, oral or written, relating to such subject
matter.
20.2. Exhibits. All Exhibits attached hereto are incorporated
herein by this reference as if fully set forth herein; provided,
however, in the event that at the time of the execution of this
Agreement any of the Exhibits to be attached are incomplete, the parties
shall use their best efforts to complete such Exhibits at the earliest
possible date, but in any event such Exhibits shall be completed and
attached to this Agreement prior to the Closing Date. To the extent
this Agreement may be rendered unenforceable by the lack of completion
of any of the Exhibits, such defect shall be cured as such incomplete
Exhibits are made complete in accordance with this Section, except to
the extent that such Exhibits are deemed and stipulated by Purchaser and
Seller to be complete on the execution of this Agreement by the parties
hereto. If any Exhibits are subsequently changed by the mutual written
agreement of the parties, the Exhibits shall be modified to reflect such
change or changes and initialed by the parties.
20.3. Bulk Sales Act. Purchaser and Seller hereby jointly waive
any and all provisions of the Florida Bulk Sales Act that may be
applicable to the sale and purchase herein contemplated.
20.4. Assignment. Except as expressly provided herein, this
Agreement and any documents executed in connection therewith shall not
be assigned by Seller or Purchaser without the prior written consent of
the other party, and any assignment without such prior written consent
shall be null and void. Notwithstanding anything herein to the
contrary, Purchaser may assign this Agreement to a wholly owned
subsidiary of Purchaser and, upon such assignment, Purchaser shall have
no further rights or obligations hereunder and such subsidiary entity
shall be the "Purchaser" herein for all purposes.
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20.5. Severability. Except as expressly provided to the contrary
herein, each section, part, term, or provision of this Agreement shall
be considered severable, and if for any reason any section, part, term,
or provision herein is determined to be invalid and contrary to or in
conflict with any existing or future law or regulation by a court or
governmental agency having valid jurisdiction, such determination shall
not impair the operation of or have any other affect on other sections,
parts, terms, or provisions of this Agreement as may remain otherwise
intelligible, and the latter shall continue to be given full force and
effect and bind the parties hereto, and said invalid sections, parts,
terms, or provisions shall not be deemed to be a part of this Agreement.
20.6. Confidentiality. Except as required by any applicable
securities or other law or as needed in order to consummate the
transaction contemplated herein to each respective party's agents,
employees, or contractors, both parties covenant and agree that unless
the transaction contemplated by this Agreement actually closes and
Purchaser receives the Deed at Closing, neither party will disclose to
any person or entity any information received or discovered concerning
this Agreement or the intentions of either party hereunder. If either
party discloses any such information, such disclosure shall constitute
an Event of Default, whereupon the other party shall be entitled to
exercise the remedies available to it under this Agreement as well as
any other remedies available to it at law or in equity for the violation
of this Section, without any prior notice whatsoever; both parties
hereby waive notice for purposes of this Section. The provisions of
this Section shall survive Closing.
20.7. Approvals. Any consent or approval referred to herein (by
whatever words used) of either party shall not be unreasonably withheld
or delayed, and neither party shall seek or obtain any payment in
connection therewith as a condition therefor. Except as otherwise
expressly provided herein, whenever either party has called upon the
other to execute and deliver a consent or approval in accordance with
the terms of this Agreement, the failure of such party to respond to the
demand within fifteen (15) days after written request therefor is given
in accordance with the terms of Section 19.1, or such other period as
specifically set forth herein, shall be deemed to be a consent or
approval. In the event that either party refuses to give its consent or
approval to any request by the other, such refusing party shall indicate
by written notice to the other the reason for such refusal.
20.8. Construction and Interpretation of Agreement. This
Agreement is to be performed in the State of Florida and shall be
governed by and construed in accordance with the laws of the State of
Florida. Any action brought to enforce or interpret this Agreement
shall be brought in the court of appropriate jurisdiction in the county
in which the Real Property is located. Should any provision of this
Agreement require judicial interpretation, it is agreed that the court
interpreting or considering same shall not apply the presumption that
the terms hereof shall be more strictly construed against a party by
reason of the rule or conclusion that a document should be construed
more strictly against the party who itself or through its agent prepared
the same. It is agreed and stipulated that all parties hereto have
participated equally in the preparation of this Agreement and that legal
counsel was consulted by each party before the execution of this
Agreement.
20.9. Amendment and Waiver. This Agreement may not be amended or
modified in any way except by an instrument in writing executed by all
parties hereto; provided, however, either Seller or Purchaser may, in
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writing, (i) extend the time for performance of any of the obligations
of the other, (ii) waive any inaccuracies and representations by the
other contained in this Agreement, (iii) waive compliance by the other
with any of the covenants contained in this Agreement, and (iv) waive
the satisfaction of any condition that is precedent or subsequent to the
performance by the party so waiving of any of its obligations under this
Agreement.
20.10. No Partnership or Joint Venture. Nothing contained herein
shall be deemed or construed by the parties hereto or by any third party
as creating the relationship of (i) principal and agent, (ii) a
partnership, or (iii) a joint venture between the parties hereto; it
being understood and agreed that neither any provisions contained herein
nor any acts of the parties hereto shall be deemed to create any
relationship between the parties hereto other than the relationship of
seller and purchaser.
20.11. Access and Information. Seller shall permit Purchaser and
Purchaser's representatives, employees, agents, or independent
contractors of Purchaser access to the Property and all books, records,
and documents pertaining to the Property, the Club, and the Club's
operations at all times during normal business hours from the date
hereof to the Closing Date. Seller shall cooperate to the fullest
extent in securing and providing to Purchaser all information which may
be in the possession of others concerning the Property, the Club, and
the Club's operations.
20.12. Counterparts. This Agreement may be executed in any number
of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
20.13. Successors and Assigns. This Agreement and the terms and
provisions hereof shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns whenever the
context so requires or permits.
20.14. Time. Time is of the essence in this Agreement and each
and all of its provisions. Any extension of time granted for the
performance of any duty under this Agreement shall not be considered an
extension of time for the performance of any other obligation under this
Agreement.
20.15. Documentation. If necessary to carry out the intent of
this Agreement, Purchaser and Seller agree to execute and provide to the
other party on or after Closing any and all other instruments,
documents, conveyances, assignments, and agreements which such other
party may reasonably require.
20.16. Brokers. Seller shall indemnify and hold harmless
Purchaser against and from all loss, cost, damage, or expense, including
attorneys' fees, incurred by Purchaser in any action based upon a claim
by a broker that Seller has employed or otherwise engaged such broker in
connection with the transaction contemplated by this Agreement; and
Purchaser shall indemnify and hold harmless Seller against and from all
loss, cost, damage, or expense, including attorneys' fees, incurred by
Seller in any action based upon the claim of a broker that Purchaser has
employed or otherwise engaged such broker in connection with the
transaction contemplated by this Agreement. The term "broker" as used
herein shall include any party who claims a commission because of the
sale of the Property contemplated hereby.
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20.17. Captions. Captions, titles to sections, and paragraph
headings used herein are for convenience of reference and shall not be
deemed to limit or alter any provision hereof.
20.18. Governing Document. This Agreement shall govern in the
event of any inconsistency between this Agreement and any of the
Exhibits attached hereto or any other document or instrument executed or
delivered pursuant hereto or in connection herewith.
20.19. Food and Beverage Management Agreement. At Purchaser's
request, Seller shall cause the license holder of the Club, at Closing,
to enter into a management agreement with Purchaser, in a form mutually
acceptable to Seller and Purchaser, covering such portion of the food
and beverage operation of the Club and for such duration as may be
reasonably required to allow for continued alcohol, food and beverage
service at the Club, or transfer of or reissuance of any necessary
alcohol, liquor, or other license or permit.
20.20. Attorneys' Fees. In the event either party hereto should
default under any of the provisions of this Agreement and the parties
should employ attorneys or incur other expenses for the enforcement of
performance or observance of any obligation or assessment on the part of
the defaulting party or the defense of said allegations, the prevailing
party shall be entitled to recover reasonable attorneys' fees and
expenses incurred.
[Signatures are on following page.]
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this instrument on
the date first written above.
Seller:
ORLANDO RESORT CORPORATION,
Attest: a Delaware corporation
By: /s/ Michael J. Krongel
----------------------- -----------------------------
Title: Title: Vice President
Date: 12/5/97
Purchaser:
ELW GOLF GROUP, INC.,
Attest: a Florida corporation
By: /s/ Andrew Crosson
----------------------- -----------------------------
Title: Title: Vice President
Date: 12/3/97
The undersigned acknowledges receipt of this Agreement and agrees
to comply with all obligations of the Title Company described herein
with respect to the Earnest Money Deposit.
Title Company:
--------------------------------
By:
-----------------------------
Title:
Date:
page 25
Exhibit 5
REAL ESTATE PURCHASE AGREEMENT
This Real Estate Purchase Agreement ("Agreement") is made and
entered into as of December 8, 1997, by and between WMR Investment
Company, L.L.C., a Utah limited liability company, as Seller, and Alpine
Resort Properties, Inc., a Maine corporation and a subsidiary of
American Skiing Company, as Buyer.
1. Purchase and Sale of Property. Buyer hereby agrees to purchase
and Seller hereby agrees to sell that certain unimproved real property
commonly known as Parcel A-2 at the Canyons Resort Summit County, Utah,
as more particularly described in Exhibit "A" attached hereto (the
"Property"), on the terms and conditions set forth in this Agreement,
together with all water rights of any nature associated therewith,
whether appurtenant to the Property or owned by Seller.
2. Purchase Price. The Purchase Price for the Property is Seven
Million and no/100 Dollars ($7,000,000), which shall be paid as follows:
(a) $250,000 cash, as an Earnest Money Deposit, paid to Gary
W. Nielsen, as escrow agent ("Escrow Agent") concurrently with the
execution of this Agreement. The Earnest Money Deposit will be
held in the Escrow Agent's Client Trust Account and applied by the
Escrow Agent as follows: (i) at closing to be paid to Seller as a
portion of the purchase price, (ii) in the event the sale does not
close due to Buyer's failure to perform its obligations hereunder,
to be paid to Seller as liquidated damages in full satisfaction of
any claims hereunder; and (iii) in the event the sale does not
close due to Seller's failure to satisfy or perform its obligations
hereunder, to be refunded in full to Buyer. Any interest earnings
on the Earnest Money Deposit shall be paid to the recipient of the
principal.
(b) $3,230,000 cash to be paid to Seller at the Closing.
(c) Buyer will assume the existing first, second, third and
fourth priority trust deed loans on the Property at the Closing
pursuant to the terms of the Agreement of Assumption, Release and
Modification Re: Notes and Trust Deeds in the form attached hereto
as Exhibit "B," which shall be executed by all the parties thereto
concurrently with the execution of this Agreement. Any and all
costs and expenses related to Buyer's assumption and extension of
such loans shall be paid solely by Buyer. All accrued interest on
the loans to the date of Closing shall be paid by Seller.
3. Special Condition. Buyer's and Seller's obligation to close
the transaction described herein shall be conditioned upon C and M
Properties, L.L.C. executing and delivering the documents and materials
required under the C and M Easement Agreement attached hereto as Exhibit
C.
<PAGE>
4. Other Consideration. As additional consideration for the
transaction described herein. Seller hereby grants to Buyer the right
to use the Property during the interim period from the date hereof
through Closing for the following purposes:
(i) Parking of motor vehicles for resort staff and guests; and
(ii) Access to Buyer's property located generally westerly of the
Property for both resort staff and guests.
The Buyer shall have the right to perform surface grading on the
Property to facilitate the foregoing uses.
Buyer indemnifies and holds Seller harmless from and against all
costs, expenses, and liability incurred as a result of Buyer's
activities on the Property exercised pursuant to this paragraph. Buyer
agrees to name Seller as an additional insured on Buyer's general
liability insurance policy with coverage of at least $5 million to be
evidenced by an insurance certificate with a 30"day cancellation clause.
5. Non-Contingent Transaction. Except as otherwise specifically
set forth in this Agreement, the purchase of the Property by Buyer is
not conditioned or contingent upon Buyer's approval of any inspection,
test or evaluation of the Property, any appraisal or other report
concerning the Property, any governmental approval relating to the
Property, or any act or event under the control of any third party.
6. Closing and Closing Costs. This transaction shall be closed on
January 15, 1998 (the "Closing" or the "Closing Date"), through Old
Republic Title Company of Utah, 1912 Sidewinder Drive, Park City, Utah
84060 (the "Closing Office"). Upon demand, Buyer and Seller shall
deposit with the closing office all documents necessary to complete the
purchase and sale of the subject property in accordance with this
Agreement. Closing shall occur when: (x) Buyer and Seller have signed
and delivered to each other all documents required by this Agreement;
(y) the monies required to be paid under this Agreement have been
delivered to the closing office in the form of a cashier's check,
collected or cleared funds; and (z) all required documents have been
recorded. Buyer and Seller shall each pay one-half of the fee charged
by the Closing Office to act as escrow holder for this transaction.
Real estate taxes shall be prorated through the Closing Date. Seller
shall purchase an ALTA Owners standard title insurance policy to be
isssued by Old Republic Title Company of Utah in the name of Buyer
insuring Buyer in the full amount of the purchase price. Buyer and
Seller shall each pay such other closing costs, such as recording fees,
as is customary in Summit County, Utah, for real estate transactions.
2
<PAGE>
7. Representations and Warranties.
(a) Seller hereby represents and warrant, as follows:
(i) Seller has full power and authority to
execute and deliver this Agreement and to sell the
Property to Buyer on the terms and conditions set of
herein. The person or persons signing this Agreement on
behalf of Seller have full power and authority to bind
Seller to the terms of this Agreement.
(ii) Seller has fee title to the subject property
and will convey good and marketable title to Buyer at the
Closing by General Warranty Deed free of all liens,
encumbrances and restrictions except those easements,
deed restrictions, covenants, conditions and
restrictions, rights-of-way and other matters of record
as shown on Title Commitment No. 971100361, Effective
Date: November 4, 1997, issued by Old Republic Title
Company of Utah, and such liens as are specifically
assumed by Buyer pursuant to paragraph 2(c) hereof.
(iii) Seller shall vacate the existing plat and
road filed with Summit County at Closing.
(b) Buyer represents and warrants that Buyer has full power
and authority to execute and deliver this Agreement and to purchase
the Property from Seller on the terms and conditions set forth
herein. The person or persons signing this Agreement on behalf of
Buyer have full power and authority to bind Buyer to the terms of
this Agreement.
8. Unavoidable Delay; Time is of the Essence. In the event that
this sale cannot be closed by the Closing Date, or any act performed
within the time period provided herein, solely due to the interruption
of transport, strikes, fire, flood extreme weather, government
regulations, acts of God, or similar occurrences beyond the control of
Buyer and Seller, then the Closing Date or such other time period
provided herein shall be extended beyond the cessation of such
condition, but in no event by more than three (3) days of such
cessation. Thereafter, time is of the essence. Other than as stated in
this paragraph, al extensions of time must be agreed to in writing by
the parties.
9. Possession. Seller shall deliver possession of the Property
upon recording of the General Warranty Deed to Buyer.
10. No Changes During Transaction. During the pendency of this
Agreement, Seller agrees not to make any alterations or improvements to
the Property without the written consent of Buyer.
11. Right of Entry. Buyer and its engineers and other agents
shall have access to the Property at reasonable times after execution of
this Agreement for the purpose of conducting geological, soil, drainage,
engineering, building inspection environmental tests and other studies
and surveys which Buyer, in its reasonable discretion , deems necessary
in connection with the development of the Property. All such activities
shall be at Buyer's sole cost and expense. Buyer shall indemnify and
hold Seller harmless from and against all costs, expenses, and liability
incurred as a result of Buyer's activities on the Property exercised
pursuant to this paragraph. Any activities undertaken by Buyer as
described in this paragraph and Buyer's satisfaction or dissatisfaction
3
<PAGE>
with the results and findings resulting therefrom shall not constitute
or be deemed to represent a condition or contingency to Buyer's
obligations under this Agreement.
12. Finder's Fee. In the event that Buyer, or any affiliate of
Buyer, sells, or enters into any agreement to sell all, any portion of,
or any interest in the Property (the "Transaction") to the Aspen Group,
L.L.C., a Utah limited liability company, or its principals, including,
without limitation, F. Lynn Fadan, or to any affiliated entity, or to
Westin Hotels and Resorts, or to any principals or affiliates thereof,
within twenty (20) months of the Closing Date, Seller agrees to pay to
Buyer a finder's fee equal to ten percent (10%) of the total sales price
or other value of the Transaction concurrently with the closing thereof
in consideration of Seller having introduced said parties to Buyer.
13. Complete Agreement - No Oral Agreements. This Agreement
constitutes the complete and entire agreement between the parties and
supersedes and cancels any and all prior negotiations, representations,
warranties, understandings or agreement between the parties. There are
no oral agreements which modify or affect this Agreement. This
Agreement cannot be changed, altered modified or amended except by
mutual written agreement of the parties.
14. Agreement Not Assignable By Buyer. Buyer shall have no right
to assign its rights or duties under this Agreement without the prior
written consent of Seller first had and obtained. Any attempted
assignment by Buyer shall render this Agreement void.
15. Risk of Loss. All risk of loss or damage to the Property
shall be borne by Seller until the Closing.
16. No Brokerage. Neither Buyer nor Seller are represented by a
real estate broker in this transaction and each party agrees to
indemnify and hold harmless the other from any claims, cost and expense,
including attorney's fees, made through such party against the other for
a real estate brokerage commission or other fee related to this
transaction.
17. Facsimile (FAX) Documents. Facsimile transmission of any
signed original document, and the retransmission of any signed facsimile
transmission, shall be the same as delivery of an original.
18. Notices. All notices under this Agreement shall either hand
delivered or be sent by certified mail, return receipt requested,
addressed as follows:
If to seller: WMR Investment Company, L.L.C.
72 Starview Drive
Park City, Utah 84098
Attention: Mr. Raymond O. Klein,
Manager
4
<PAGE>
with a copy to:
Gary W. Nielsen
Attorney At Law
4970 North 400 West
Park City, Utah 84098
If to Buyer: Alpine Resort Properties, Inc.
4000 Park West Drive
Park City, Utah 84098
Attention: Mr. Blaise Carrig
Vice President
19. Default: Attorney's Fees.
(a) In the event of default by Buyer under this Agreement,
Seller shall retain the Earnest Money Deposit as liquidated
damages, and this Agreement shall be canceled without any further
action or consent of Buyer. In the event of default by Seller under
this Agreement, Buyer may elect to either accept from Seller, as
liquidated damages, a sum equal to the Earnest Money Deposit and
cancel this Agreement without any further action or consent of
Seller, or to sue Seller for specific performance and/or damages.
If Buyer elects to accept liquidated damages, Seller agrees to pay
the liquidated damages to Buyer upon demand.
(b) Both parties agree that should either party default in
any of the covenants and agreements herein contained, the
defaulting party shall pay all costs and expenses, including
reasonable attorney's fees, which may arise or accrue from
enforcing or terminating this Agreement, or in pursuing any remedy
provided hereunder or by applicable law, whether such remedy is
pursued by filing suit or otherwise.
20. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Utah without
regard to its conflicts o flaws provisions.
21. Survival. Except as otherwise provided herein, all covenants,
agreements, representations and warranties set forth in this Agreement
shall survive the Closing and shall not merge into any deed, assignment
or other instrument executed or delivered pursuant to this Agreement.
22. Non-Foreign Entity. Seller shall execute and deliver to Buyer
at the Closing an affidavit as required by Internal Revenue Code Section
1145(b)(2) setting forth Seller's taxpayer identification Number,
Seller's address, and stating that Seller is not a foreign person for
purposes of said Section.
5
<PAGE>
23. Countersignature. This Agreement may be executed in separate
copies, which together shall constitute a single, integrated document.
Executed by Buyer and Seller as of the date first above written.
WMR INVESTMENT COMPANY, L.L.C.,
a Utah limited liability company
By: /s/ Raymond O. Klein
------------------------------
Raymond O. Klein, Manager
By: /s/ John Shirley
------------------------------
John Shirley, Manager
ALPINE RESORT PROPERTIES, INC.
By: /s/ Christopher E. Howard
------------------------------
Its Senior Vice President
6
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<FISCAL-YEAR-END> JUL-26-1998
<PERIOD-START> JUL-28-1997
<PERIOD-END> OCT-26-1997
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19,252
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