SECOND AMENDMENT TO THE
AMENDED, RESTATED AND CONSOLIDATED CREDIT AGREEMENT
SECOND AMENDMENT dated as of April 29, 2001 (this "Amendment")
with respect to the Amended, Restated and Consolidated Credit Agreement dated as
of October 12, 1999 (as amended, the "Credit Agreement") by and among American
Skiing Company ("American Skiing") and the other borrowers party thereto
(collectively, the "Borrowers"), the lenders party thereto (the "Lenders") and
Fleet National Bank, N.A. (formerly known as BankBoston, N.A.), as agent (the
"Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have
made Loans and other financial accommodations to the Borrowers which remain
outstanding; and
WHEREAS, the Borrowers have requested that the Agent and the
Lenders amend the Credit Agreement as set forth herein, and the Agent and the
Lenders are willing to do so, but only on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein have the meanings assigned in the Credit Agreement
(as amended by this Amendment) and the following terms shall have the following
meanings:
"Additional Advance Fee": shall have the meaning set forth in
Section 6.2(c)
"Amendment Fee": shall have the meaning set forth in Section
6.2(b).
"Arranger's Fee": shall have the meaning set forth in Section
6.2(d).
"Closing Date": the first date on which the conditions
precedent specified in Article IV of this Amendment shall have been satisfied or
the satisfaction thereof shall have been waived in accordance with the terms
hereof.
"Current-Pay Rate": a rate per annum determined in accordance
with Sections 2.3 and 2.5 of the Credit Agreement.
"December Installment" : shall have the meaning set forth in
Section 6.2(b).
"Deferred Interest Spread": a rate per annum equal to 2.00%.
"Effective Date": shall be April 29, 2001 (except as
otherwise specified herein).
"Financial Advisor": shall have the meaning set forth in
Section 3.1(g).
"Gondola Guarantee": shall have the meaning set forth in
Section 3.1(j)(ii).
"Investment Banker": shall have the meaning set forth in
Section 3.1(f).
"January Installment": shall have the meaning set forth in
Section 6.2(b).
"July Installment": shall have the meaning set forth in
Section 6.2(b).
"June Installment": shall have the meaning set forth in
Section 6.2(b).
"March Installment": shall have the meaning set forth in
Section 6.2(b).
"Real Estate Transaction": shall have the meaning set forth
in Section 3.1(j)(i).
"Sale/Leaseback Transaction": shall have the meaning set
forth in Section 3.1(j)(ii).
"Securities Issuance": shall have the meaning set forth in
Section 3.1(j)(iii).
ARTICLE II
AMENDMENTS
Section 2.1. Amendments to Section 1.1 (Definitions). (a)
Section 1.1 of the Credit Agreement is hereby amended by (i) deleting the
definitions of EBITDA, Maximum Revolving Credit Amount, Swing Line Commitment
and (ii) inserting the following definitions in their proper alphabetical order:
"Additional Revolving Credit Advances" shall mean Revolving
Credit Advances in an aggregate amount not to exceed $7,200,000 the proceeds of
which are used solely to pay interest due on July 15, 2001 under the Senior
Subordinated Notes.
"Effective Date" shall have the meaning given such term in the
Second Amendment.
"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 non-recurring items and excluding from the
calculation of net income all revenues from Unrestricted Subsidiaries except to
the extent received by American Skiing or its Restricted Subsidiaries in cash as
a loan repayment, dividend, redemption, stock repurchase 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, less, to the extent included in
calculating net income, (c) the sum of, without duplication, (i) non-recurring
employee severance and stay-bonus expenses which are charged to operating
expenses when and as charged, (ii) expenses related to the financial
restructuring of the Borrowers which are charged to operating expenses when and
as charged, including, (x) fees to legal and financial advisors and (y)
amendment fees and other similar financing costs, and (iii) costs and expenses
associated with the termination of the proposed merger with MeriStar, in an
aggregate amount with respect to clause (c) not to exceed $11,000,000.
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"Existing Revolving Credit Advances" shall mean all Revolving
Credit Advances, other than the Additional Revolving Credit Advances.
"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)):
Effective Date - July 1, 2001 $72,000,000
July 2, 2001 - August 1, 2001 $87,000,000
August 2, 2001 - December 29, 2001 $100,000,000
December 30, 2001 - January 26, 2002 $87,000,000
January 27, 2002 - February 23, 2002 $67,000,000
February 24, 2002 - March 30, 2002 $47,000,000
March 31, 2002 - April 28, 2002 $22,000,000
April 29, 2002 - June 2, 2002 $52,000,000
June 3, 2002 - June 30, 2002 $67,000,000
July 1, 2002 - July 28, 2002 $77,000,000;
or (b) the amount to which the Maximum Revolving Credit Amount may have been
reduced pursuant to Section 2.12; provided that if the obligations 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. Notwithstanding anything to the contrary
set forth above, (x) in the event that the Borrowers consummate the Optional
Prepayment, the Maximum Revolving Credit Amount after such consummation shall at
no time exceed $50,000,000 and (y) in the event the Borrowers fail to consummate
the Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to Maximum Revolving Credit
Amounts for all periods beginning August 1, 2002 through the Revolving Credit
Termination Date. In the event the parties fail to agree on such Maximum
Revolving Credit Amounts on or before August 1, 2002, the Maximum Revolving
Credit Amount shall be deemed to be $0 as of August 1, 2002.
"Optional Prepayment" shall mean the prepayment of at least
$90,000,000 of net proceeds, on or before December 24, 2001, from the proceeds
of (i) an issuance or sale of equity securities or junior debt securities or
instruments or (ii) a single asset sale (or a series of related asset sales), in
each case, on terms and conditions satisfactory to the Agent and the Lenders.
"Prepayment Period": the period beginning on the Closing Date
and ending on the date of consummation of the Optional Prepayment.
"Second Amendment" shall mean the Second Amendment, dated as
of April 29, 2001, to the Amended, Restated and Consolidated Credit Agreement,
dated as of October 12, 1999.
"Swing Line Commitment" shall mean $3,000,000.
(b) Section 1.1 of the Credit Agreement is hereby further
amended by inserting at the end of each of the definitions of "Consolidated
Senior Secured Debt" and "Consolidated Total Debt" the following:
"On any date of determination, the outstanding principal amount of the
Revolving Credit Advances shall be equal to the average daily Revolving
Credit Advances outstanding during the preceding 12-month period.".
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Section 2.2. Amendment to Section 2.1 (The Revolving Credit).
Section 2.1(b) of the Credit Agreement is hereby amended by deleting the second
proviso thereof and inserting in lieu thereof the following:
"and provided, further, that during each fiscal year of the Borrowers,
there shall be a period of thirty (30) consecutive days, which for
fiscal year 2002 shall include April 28, 2002, during which the sum of
(i) the outstanding principal amount of all Revolving Credit Advances
and (ii) Letter of Credit Exposure shall not exceed $20,000,000;
provided, however, in the event that the Borrowers consummate the
Optional Prepayment, the outstanding principal amount of Revolving
Credit Advances during such period shall not be greater than $0 and
Letter of Credit Exposure during such period shall not exceed
$5,000,000".
Section 2.3 Amendment to Section 2.3 (Interest on Revolving
Credit Advances). (a) Section 2.3 is hereby amended by (i) deleting the word
"quarterly" and inserting in lieu thereof the word "monthly" and (ii) deleting
the phrase "following the end of each fiscal quarter".
(b) Section 2.3 is hereby further amended by inserting at the end thereof
the following sentence:
"Notwithstanding anything to the contrary contained in this Section
2.3 or elsewhere in this Agreement, (i) the Borrowers, jointly and
severally, shall pay interest on the unpaid balance of the Additional
Revolving Credit Advances from time to time outstanding at a per annum
rate equal to 12.0% and (ii) until such time as the Borrowers shall
have consummated the Optional Prepayment, the Borrowers, jointly and
severally, shall pay interest on the unpaid balance of the Revolving
Credit Advances from time to time outstanding at the following rates:
(a) during the period from the Effective Date through December 31,
2001, the Base Rate plus 3.00%, (b) during the period from January 1,
2002 through April 30, 2002, the Base Rate plus 3.75%, and (c)
thereafter, the Base Rate plus 4.25%.".
Section 2.4 Amendments to Section 2.5 (Interest on Term
Loans). (a) Section 2.5 is hereby amended by (i) deleting the word "quarterly"
and inserting in lieu thereof the word "monthly" and (ii) deleting the phrase
"following the end of each fiscal quarter".
(b) Section 2.5 is hereby further amended by inserting at the
end thereof the following sentence:
"Notwithstanding anything to the contrary contained in this Section
2.5 or elsewhere in this Agreement, until such time as the Borrowers
shall have consummated the Optional Prepayment, the Borrowers, jointly
and severally, shall pay interest on the unpaid balance of the Term
Loans at the following rates: (a) during the period from the Effective
Date through December 31, 2001, the Base Rate plus 3.00%, (b) during
the period from January 1, 2002 through April 30, 2002, the Base Rate
plus 3.75%, and (c) thereafter, the Base Rate plus 4.25%.".
Section 2.5. Amendments to Section 2.16 (Letters of Credit).
Section 2.16 of the Credit Agreement is hereby amended by deleting the reference
to "$10,000,000" and inserting in lieu thereof a reference to "$5,000,000".
Section 2.6. Amendment to Section 4.1 (Mandatory Repayments
and Prepayments). (a) Section 4.1(c)(v) of the Credit Agreement is hereby
amended by deleting the last sentence thereof.
(b) Section 4.1 of the Credit Agreement is hereby amended by
inserting new Sections 4.1(d) and (e) at the end thereof as follows:
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" (d) Notwithstanding anything to the contrary contained in this
Section 4.1 or elsewhere in this Agreement, (i) (A) $50,000,000 in
proceeds from the Optional Prepayment shall be applied pro rata to
prepay the outstanding Additional Revolving Credit Advances in full,
and next, pro rata to reduce the Existing Revolving Credit Advances,
and (B) all remaining proceeds from the Optional Prepayment shall be
applied pro rata to the Term Loan, in inverse order of maturity and
(ii) to the extent unrelated to the Optional Prepayment, the proceeds
of any sale or disposition of the assets of the Steamboat Subsidiaries
shall be applied first, pro rata to the outstanding Additional
Revolving Credit Advances, and thereafter, according to the priority
set forth in Section 4.1(c)(v).
(e) Except as set forth in Section 4.1(d), mandatory
repayments and prepayments to the Revolving Credit Advances pursuant to
this Section 4.1 shall be applied first, to the Existing Revolving
Credit Advances and, second, to the Additional Revolving Credit
Advances.".
Section 2.7. Amendment to Section 4.2 (Voluntary
Prepayments). Section 4.2 of the Credit Agreement is hereby amended by inserting
a new Section 4.2(d) at the end thereof as follows:
" (d) Notwithstanding anything to the contrary contained in this
Section 4.2 or elsewhere in this Agreement, the Borrowers may not
voluntarily prepay the Additional Revolving Credit Advances.".
Section 2.8. Amendment to Section 7.1 (Ratio of Consolidated
Total Debt to Consolidated EBITDA). Section 7.1 is hereby amended by deleting
the chart in said section and inserting in lieu thereof the following:
" Fiscal Quarter Ratio
2001 Quarter 4 7.00:1.00
2002 Quarter 1 7.00:1.00
2002 Quarter 2 6.75:1.00
2002 Quarter 3 6.00:1.00
2002 Quarter 4 5.75:1.00
2003 Quarter 1 5.50:1.00
2003 Quarter 2 5.00:1.00
2003 Quarter 3 4.50:1.00
2003 Quarter 4 4.80:1.00
2004 Quarter 1 4.50:1.00
2004 Quarter 2 4.50:1.00
2004 Quarter 3
and Thereafter 4.00:1.00;
provided, however, in the event the Borrowers shall fail to make the
Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to amend the
covenant levels for all quarterly periods beginning Q1 2003. The
failure to agree on amended covenant levels on or before August 1, 2002
shall be deemed to be an Event of Default.".
Section 2.9. Amendment to Section 7.2 (Ratio of Consolidated
Adjusted Cash Flow to Consolidated Debt Service). Section 7.2 is hereby amended
by deleting the chart in said section and inserting in lieu thereof the
following:
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" Fiscal Quarter Ratio
2001 Quarter 4 .80:1.00
2002 Quarter 1 .85:1.00
2002 Quarter 2 .85:1.00
2002 Quarter 3 1.00:1.00
2002 Quarter 4 1.00:1.00
2003 Quarter 1 1.00:1.00
2003 Quarter 2 1.00:1.00
2003 Quarter 3 1.20:1.00
2003 Quarter 4 1.25:1.00
2004 Quarter 1 1.25:1.00
2004 Quarter 2 1.25:1.00
2004 Quarter 3
and Thereafter 1.50:1.00;
provided, however, in the event the Borrowers shall fail to make the
Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to amend the
covenant levels for all quarterly periods beginning Q1 2003. The
failure to agree on amended covenant levels on or before August 1, 2002
shall be deemed to be an Event of Default.".
Section 2.10. Amendment to Section 7.3 (Ratio of Consolidated
EBITDA to Consolidated Interest Expense). Section 7.3 is hereby amended by
deleting the chart in said section and inserting in lieu thereof the following:
" Fiscal Quarter Ratio
2001 Quarter 4 1.35:1.00
2002 Quarter 1 1.45:1.00
2002 Quarter 2 1.70:1.00
2002 Quarter 3 1.75:1.00
2002 Quarter 4 1.80:1.00
2003 Quarter 1 1.90:1.00
2003 Quarter 2 1.90:1.00
2003 Quarter 3 2.00:1.00
2003 Quarter 4 2.00:1.00
2004 Quarter 1 2.00:1.00
2004 Quarter 2
and Thereafter 2.25:1.00;
provided, however, in the event the Borrowers shall fail to make the
Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to amend the
covenant levels for all quarterly periods beginning Q1 2003. The
failure to agree on amended covenant levels on or before August 1, 2002
shall be deemed to be an Event of Default.".
Section 2.11. Amendment to Section 7.4 (Minimum Consolidated
Net Worth). Section 7.5 hereby amending by deleting the text thereof in its
entirety and inserting in lieu thereof the following:
"In the event the Borrowers shall fail to make the Optional Prepayment,
the Borrowers, the Agent and the Required Lenders shall, on or before
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August 1, 2002, agree in writing to minimum Consolidated Net Worth
levels for all subsequent periods. The failure to agree on amended
covenant levels on or before August 1, 2002 shall be deemed to be an
Event of Default.".
Section 2.12. Amendment to Section 7.5 (Minimum Consolidated
EBITDA). Section 7.5 is hereby amended by deleting the chart in said section and
inserting in lieu thereof the following:
" Fiscal Quarter Amount
2001 Quarter 4 $(20,000,000)
2002 Quarter 1 $(18,500,000)
2002 Quarter 2 $18,000,000
2002 Quarter 3 $50,000,000
2002 Quarter 4 $(14,000,000)
2003 Quarter 1 $(14,000,000)
2003 Quarter 2 $19,000,000
2003 Quarter 3 $50,000,000
2003 Quarter 4 $(13,000,000)
2004 Quarter 1 $(13,000,000)
2004 Quarter 2 $20,000,000
2004 Quarter 3 $50,000,000;
provided, however, in the event the Borrowers shall fail to make the
Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to amend the
covenant levels for all quarterly periods beginning Q1 2003. The
failure to agree on amended covenant levels on or before August 1, 2002
shall be deemed to be an Event of Default.".
Section 2.13. Amendment to Section 7.6 (Consolidated Senior
Debt to Consolidated EBITDA). Section 7.6 is hereby amended by deleting the
chart in said section and inserting in lieu thereof the following:
" Fiscal Quarter Ratio
2001 Quarter 4 3.25:1.00
2002 Quarter 1 3.25:1.00
2002 Quarter 2 2.50:1.00
2002 Quarter 3 2.25:1.00
2002 Quarter 4 2.00:1.00
2003 Quarter 1 2.00:1.00
2003 Quarter 2 1.20:1.00
2003 Quarter 3 1.20:1.00
2003 Quarter 4 1.20:1.00
2004 Quarter 1 1.20:1.00
2004 Quarter 2 1.20:1.00
2004 Quarter 3
and Thereafter 1.20:1.00;
provided, however, in the event the Borrowers shall fail to make the
Optional Prepayment, the Borrowers, the Agent and the Required Lenders
shall, on or before August 1, 2002, agree in writing to amend the
covenant levels for all quarterly periods beginning Q1 2003. The
failure to agree on amended covenant levels on or before August 1, 2002
shall be deemed to be an Event of Default.".
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Section 2.14. Amendment to Section 8.15 (Interest Rate
Protection). Section 8.15 of the Credit Agreement is hereby amended (effective
as of November 1, 2000) by deleting said section in its entirety and inserting
in lieu thereof the following:
"Section 8.15 [Intentionally Deleted].".
Section 2.15. Amendment to Section 9.7 (Capital
Expenditures). Section 9.7 of the Credit Agreement is hereby amended by
inserting a new Section 9.7(e) at the end thereof as follows:
"(e) Notwithstanding anything to the contrary contained in this Section
9.7 or elsewhere in this Credit Agreement, for each fiscal year
beginning fiscal year 2001, American Skiing and its Restricted
Subsidiaries may make Capital Expenditures of not more than
$13,800,000; provided, however, in the event that the Borrowers shall
have consummated the Optional Prepayment, American Skiing and its
Restricted Subsidiaries may make additional Capital Expenditures in
connection with the completion of the second phase of the construction
of the gondola ski lift at the Heavenly Valley Ski Resort in an
aggregate amount not to exceed $30,000,000 ".
Section 2.16. Amendments to Schedule 2 (Pricing Schedule).
Schedule 2 to the Credit Agreement is hereby amended by deleting said Schedule
in its entirety and inserting in lieu thereof the Schedule 2 attached hereto as
Exhibit A.
ARTICLE III
AGREEMENTS
Section 3.1. Agreements. (a) Notice of Borrowing.
Notwithstanding anything to the contrary in the Credit Agreement, each Notice of
Borrowing shall be made directly to the attention of Daniel D. Butler (Fleet
National Bank, 111 Westminster Street Providence, Rhode Island 02903; Fax:
401-278-6004) with a copy to Audrey Reder (Fleet National Bank, 111 Westminster
Street Providence, Rhode Island 02903; Fax: 401-278-6005) and shall be
accompanied by a certificate of the Borrowers signed on their behalf by the
Borrowers' Chief Executive Officer or Chief Financial Officer stating that, as
of the date of the Borrowing, the Borrowers are in compliance with the terms of
the Credit Agreement and this Amendment.
(b) Deferred Interest Spread. Notwithstanding anything to the
contrary in the Credit Agreement, interest shall accrue (effective on May 1,
2001) at the Deferred Interest Spread. The Deferred Interest Spread that has
accrued as of August 1, 2002 shall be payable on such date; provided, however,
that if the Borrowers shall consummate the Optional Prepayment, the Deferred
Interest Spread that has accrued through the date of the Optional Prepayment,
shall be waived, and, as of the date of the Optional Prepayment, the Deferred
Interest Spread shall cease to accrue. In the event the Borrowers fail to
consummate the Optional Prepayment, the Deferred Interest Spread shall be paid
in cash, monthly in arrears.
(c) Additional Capital. In the event that the Borrowers shall
have not consummated the Optional Prepayment, the Borrowers shall, on or before
December 31, 2001, raise not less than $7,200,000 through the issuance or sale
of equity securities or junior debt securities or instruments upon terms and
conditions satisfactory to the Agent and the Required Lenders.
(d) Covenant Restrictions. (i) The Borrowers hereby agree
that, during the Prepayment Period, notwithstanding the provisions of Section
9.1 of the Credit Agreement, neither the Borrowers nor any Restricted Subsidiary
shall create, incur, suffer or permit to exist, or assume or guarantee, directly
or indirectly, Indebtedness permitted pursuant to Section 9.1(f) of the Credit
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Agreement, except the following: (A) Capitalized Lease Obligations and
Indebtedness to purchase tangible assets (which Indebtedness may be secured by
the assets so purchased) in an aggregate amount not to exceed $15,000,000, and
(B) other unsecured Indebtedness in an amount not to exceed $15,000,000.
(ii) The Borrowers hereby agree that, during the Prepayment
Period, notwithstanding the provisions of Section 9.3 of the Credit Agreement,
neither the Borrowers nor any Restricted Subsidiary shall make or commit to
make, directly or indirectly, Investments permitted pursuant to Section 9.3(h)
of the Credit Agreement, except in connection with the Real Estate Transaction.
(iii) The Borrowers hereby agree that, during the Prepayment
Period, notwithstanding the provisions of Section 9.4 of the Credit Agreement,
neither the Borrowers nor any Restricted Subsidiary shall make or commit to
make, directly or indirectly, any Permitted Acquisitions.
(iv) The Borrowers hereby agree that, during the Prepayment
Period, notwithstanding the provisions of Section 9.6 of the Credit Agreement,
neither the Borrowers nor any Restricted Subsidiary shall make or commit to
make, directly or indirectly, any Distribution or any other payment on account
of the purchase, acquisition, redemption or other retirement of any shares of
stock, except in connection with the Securities Issuance.
(v) The Borrowers hereby agree that, during the Prepayment
Period, notwithstanding the provisions of Section 9.8 of the Credit Agreement,
neither the Borrowers nor any Restricted Subsidiary shall make or commit to
make, directly or indirectly, any Permitted Disposition, except the following:
(A) American Skiing's transfer of ownership in Community Water Company to Summit
Water Company and (B) sales or dispositions for fair market value in aggregate
amount not in excess of $1,000,000; provided, however, that individual sales or
dispositions (or a series of individual sales or dispositions) in excess of
$100,000 shall require the consent of the Agent.
(e) Certain Payments. Except for the paid-in-kind dividends on
the Series B Preferred Stock, the Series C-1 Preferred Stock of American Skiing
and the Series C-2 Preferred Stock of American Skiing, the payment of dividends
and other distributions contemplated in connection with the Securities Issuance,
and any payments in respect of interest on the Senior Subordinated Notes, the
Borrowers hereby agree that, during the Prepayment Period, neither the Borrowers
nor any Restricted Subsidiary shall make any payment to Oak Hill Capital
Partners, L.P., Oak Hill Securities Fund, L.P., or any affiliate thereof on
account of any management fees or any other amounts (other than the
reimbursement of reasonable out-of-pocket costs and expenses, including, without
limitation, reasonable fees and disbursements of counsel, for which the
Borrowers are liable in respect thereof) owing to Oak Hill Capital Partners,
L.P., Oak Hill Securities Fund, L.P. or any such affiliate; provided that all
such amounts not paid as aforesaid shall be deemed to accrue.
(f) Investment Banker. The Borrowers shall continue to retain
during the Prepayment Period Credit Suisse First Boston, or another
nationally-recognized investment banker reasonably acceptable to the Agent and
the Lenders (the "Investment Banker"). The Investment Banker shall be retained
for the purpose of formulating alternative business strategies on behalf of the
Borrowers. The Investment Banker shall (i) furnish the Borrowers with monthly
written reports on the status of asset disposition on the last Friday of each
month (which will then be forwarded by the Borrowers to the Lenders promptly
upon the completion of their review) and (ii) provide weekly verbal reports on
the status of asset disposition in conjunction with a regularly scheduled
conference call among the Agent, the Lenders and the Borrowers.
(g) Financial Advisor. The Borrowers shall continue to retain
during the Prepayment Period Ernst & Young, or another nationally-recognized
financial advisor reasonably acceptable to the Agent and the Lenders (the
"Financial Advisor"). The scope of the Financial Advisor's retention shall, from
to time, be reasonably acceptable to the Agent and the Lenders.
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(h) Agent's Advisors. The Borrowers hereby agree that, in the
event the Agent or its counsel determines to retain a financial advisor and/or
an investment banker, the Borrowers shall cooperate in all respects with any
such financial advisor or investment banker and shall pay or reimburse the Agent
for all reasonable fees and out-of-pocket expenses incurred in connection
therewith.
(i) Reporting. The Borrowers hereby agree to provide during
the Prepayment Period, as promptly as possible but no later than Thursday of
each week, an income statement which shall detail revenues and expenses for the
prior week, in form and substance satisfactory to the Agent.
(j) Consents. (i) Notwithstanding anything to the contrary set
forth in the Credit Agreement (including, without limitation, Sections 9.5 and
9.13 thereof), the Agent and the Lenders hereby consent to the purchase by one
or more of the Borrowers of up to $12,500,000 in real property and improvements
from American Skiing Company Resort Properties, Inc., and/or one of its
subsidiaries; provided, however, (x) that the Borrowers shall provide to the
Agent an appraisal or appraisals, in form and substance reasonably satisfactory
to the Agent, appraising all such real property and improvements at not less
than $12,500,000 in the aggregate and (y) that such purchase may only be made
with proceeds of the debt issuance referenced in clause (iii) hereof, and
provided further, that all such real property and improvements purchased
hereunder shall immediately be made subject to mortgages, deeds of trust and
security agreements, as applicable, in favor of the Agent and the Lenders and in
form and substance reasonably acceptable to the Agent and the Lenders (the "Real
Estate Transaction").
(ii) Notwithstanding anything to the contrary set forth in
the Credit Agreement (including, without limitation, Sections 9.5 and 9.11), the
Agent and the Lenders hereby consent to the sale/leaseback by Heavenly Valley,
Limited Partnership, of the assets constituting the Gondola at Heavenly, in a
capital lease transaction of up to $14,000,000 (the "Sale/Leaseback
Transaction"), and the Agent and the Lenders further consent to the guaranty of
such capital lease transaction by an Affiliate of the Borrowers (the "Gondola
Guarantee"); provided, however, the Sale/Leaseback Transaction and the Gondola
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Guarantee and underlying documentation shall be in form and substance
satisfactory to the Agent. Notwithstanding anything to the contrary set forth in
the Credit Agreement, the proceeds from the Sale/Leaseback Transaction shall be
applied to the prepayment of Revolving Credit Advances; provided, however, such
prepayments shall not constitute a permanent reduction of the aggregate Maximum
Revolving Credit Amount.
(iii) Notwithstanding anything to the contrary set forth in
the Credit Agreement (including, without limitation, Sections 9.1, 9.5, 9.16 and
9.18 thereof), the Agent and the Lenders hereby consent to (A) the issuance of
up to $12,500,000 of Junior Convertible Subordinated Debt (the "Junior Subdebt")
by American Ski and the accrual of interest thereon by accretion in an aggregate
amount, together with such Junior Subdebt, of up to $25,000,000, all of which
Junior Subdebt shall be subordinate to the Senior Subordinated Notes and the
conversion of the Junior Subdebt into shares of Series D Preferred Stock of
American Skiing, (B) (i) the issuance of up to $185,000,000, in the aggregate,
of Series C-1 Preferred Stock of American Skiing and C-2 Preferred Stock of
American Skiing, the accretion of dividends thereon, and the conversion of the
Series C-1 Preferred Stock of American Skiing into shares of Common Stock, and,
if necessary, Series D Preferred Stock, of American Skiing, (ii) the issuance of
Series D Preferred Stock of American Skiing in an amount to convert all of the
Junior Subdebt into Series D Preferred Stock of American Skiing, and (iii) the
issuance of up to 5,000,000 shares of common stock in connection with the Junior
Subdebt issuance and the issuance of additional shares of Common Stock of
American Skiing in an amount to convert all of the Series D Preferred Stock of
American Skiing into Common Stock of American Skiing, and (C) the contractual
amendment of the terms of the Series B Preferred Stock only in a manner pursuant
to which the holders of such Series B Preferred Stock waive certain of their
rights thereunder (collectively, the "Securities Issuance"); provided, however,
the Securities Issuance and underlying documentation shall be in form and
substance satisfactory to the Agent. Notwithstanding anything to the contrary
set forth in the Credit Agreement, any proceeds from such Securities Issuance
shall not be required to be applied as a mandatory prepayment of the Loans.
(k) Cash Management. The Borrowers' cash management systems
shall be, from time to time, satisfactory to the Agent. As of the Closing Date,
the Borrowers' cash management systems are satisfactory to the Agent.
Section 3.2. Agreements Deemed Agreements under the Credit
Agreement. For purposes of the Credit Agreement, the agreements of the Borrowers
contained in this Article III shall be deemed to be, and shall be, agreements
under the Credit Agreement. Any breach on the part of the Borrowers of any
agreement contained in this Article III shall constitute an Event of Default.
ARTICLE IV
CLOSING DATE
Section 4.1 Closing Date. This Amendment shall become
effective as of the date hereof upon receipt by the Agent of (a) counterparts of
this Amendment, duly executed and delivered by the Borrowers, the Agent and the
Lenders, (b) those portions of the Amendment Fee and the Additional Advance Fee
due on the Closing Date, (c) payment of the Arranger's Fee, (d) payment in full
in cash of the invoiced and unpaid fees and expenses of the Agent's
professionals as of May 1, 2001 and as set forth on the Schedule of Fees
attached hereto, and (e) all documents requested by the Agent in respect of the
Collateral (as defined in the Security Agreements); provided, however, that this
Amendment shall terminate and cease being effective (x) as of August 15, 2001,
if the consummation of the Real Estate Transaction has not occurred on or prior
to such date and (y) as of October 15, 2001, if the consummation of either (i)
the Sale/Leaseback Transaction or (ii) the Gondola Guarantee has not occurred on
or prior to such date.
ARTICLE V
INTERPRETATION
Section 5.1. Continuing Effect of the Credit Agreement. The
Borrowers, the Agent and each Lender hereby acknowledges and agrees that the
Credit Agreement shall continue to be and shall remain unchanged and in full
force and effect in accordance with its terms, except as expressly modified
hereby.
Section 5.2. No Waiver. Nothing contained in this Amendment
shall be construed or interpreted or is intended as a waiver of any Default or
Event of Default or of any rights, powers, privileges or remedies that the Agent
or the Lenders have or may have under the Credit Agreement, any other related
document or applicable law on account of such Default or Event of Default.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Representations and Warranties. The Borrowers
hereby represent and warrant as of the date hereof that, after giving effect to
this Amendment, (a) no Default or Event of Default has occurred and is
continuing, and (b) all representations and warranties of the Borrowers
contained in the Credit Agreement are true and correct in all material respects
with the same effect as if made on and as of such date.
Section 6.2. Payment of Fees and Expenses. (a) The Borrowers
hereby agree to pay or reimburse the Agent on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation and
11
execution of this Amendment, including, without limitation, the reasonable fees
and disbursements of counsel to the Agent. In furtherance of the provisions of
this Section 6.2 and Section 14.5 of the Credit Agreement, the Borrowers hereby
agree that the Agent shall be entitled, upon one Business Day's written notice
to the Borrowers, to debit any operating account of any Borrower to collect
costs and expenses to which the Agent is entitled pursuant to this Section 6.2
and Section 14.5 of the Credit Agreement. Any such written notice shall identify
the operating account to be debited.
(b) The Borrowers shall pay to the Agent, for the account of
each Lender on a pro rata basis, an amendment fee (the "Amendment Fee") payable
(and subject to being waived) as follows: (i) $500,000 on the Closing Date, (ii)
$1,500,000 on the earlier of the date of the Optional Prepayment or December 27,
2001 (the "December Installment"), (iii) $1,500,000 on January 2, 2002 (the
"January Installment"), (iv) $500,000 on March 24, 2002 (the "March
Installment"), (v) $500,000 on June 24, 2002 (the "June Installment"), and (vi)
$1,500,000 on July 31, 2002 (the "July Installment"); provided, however, that if
the Borrowers shall at any time before December 27, 2001 consummate the Optional
Prepayment, the January, March, June and July Installments of the Amendment Fee
shall be waived in their entirety. The aggregate amount of the Amendment Fee
shall be deemed to be earned on the Closing Date.
(c) The Borrowers shall pay to the Agent, for the account of
each Lender that chooses to participate in the Additional Revolving Credit
Advance, on a pro rata basis, a fee (the "Additional Advance Fee") which shall
be payable as follows: (i) $175,000 on the Closing Date and (ii) (a) in the
event the Borrowers consummate the Optional Prepayment, $75,000 on the date of
such prepayment or (b) in the event the Borrowers fail to consummate the
Optional Prepayment, $250,000 on December 27, 2001; provided, however, in the
event that the proceeds of the Sale/Leaseback Transaction is less than
$14,000,000, then, in addition to all amounts paid pursuant to clauses (i) and
(ii) above, the Borrower shall pay (x) $75,000 on October 15, 2001 and (y) (a)
in the event the Borrowers consummate the Optional Prepayment, $25,000 on the
date of such prepayment or (b) in the event the Borrowers fail to consummate the
Optional Prepayment, $100,000 on December 27, 2001. The aggregate amount of the
Additional Advance Fee shall be deemed to be earned on the Closing Date.
(d) The Borrowers shall pay to the Agent, for its own
account, on the first Business Day of each month, an agency fee in the amount of
$10,000. This monthly payment shall be in lieu of the annual agency fee
otherwise due under the Credit Agreement. In addition, the Borrowers shall pay
to the Agent, for its own account, an arranger's fee in an amount equal to
$25,000, payable on the Closing Date (the "Arranger's Fee").
Section 6.3. Counterparts. This Amendment may be executed by
the parties hereto in any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
Section 6.4. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS.
Section 6.5. Reservation of Rights. Notwithstanding anything
contained in this Amendment, the Borrowers acknowledge that the Agent and the
Lenders do not waive, and expressly reserve, the right to exercise, at any time,
any and all of their rights and remedies under the Credit Agreement, any other
related document and applicable law on account of any Default or Event of
Default.
Section 6.6. Confirmation of Indebtedness. The Borrowers
hereby confirm and acknowledge that, as of the Closing Date, (i) the Borrowers
are truly and justly indebted to the Lenders, without defense, counterclaim or
12
offset of any kind and (ii) the Borrowers are liable to the Lenders in respect
of Loans in the aggregate principal amount of $129,024,851.
Section 6.7. Waiver. The Borrowers hereby release, waive, and
forever relinquish all claims, demands, obligations, liabilities and causes of
action of whatever kind or nature, whether known or unknown, which any of them
have, may have, or might assert at the time of execution of this Amendment or in
the future against the Agent, the Lenders and/or their respective parents,
affiliates, participants, officers, directors, employees, agents, attorneys,
accountants, consultants, successors and assigns (collectively, the "Lender
Group"), directly or indirectly, which occurred, existed, was taken, permitted
or begun prior to the execution of this Amendment, arising out of, based upon,
or in any manner connected with (i) any transaction, event, circumstance,
action, failure to act or occurrence of any sort or type, whether known or
unknown, with respect to the Credit Agreement, any other Lender Agreement and/or
the administration thereof or the obligations created thereby; (ii) any
discussions, commitments, negotiations, conversations or communications with
respect to the refinancing, restructuring or collection of any obligations
related to the Credit Agreement, any other Lender Agreement and/or the
administration thereof or the obligations created thereby, or (iii) any matter
related to the foregoing; provided, however, that the provisions of this Section
6.7 shall not apply to any such matters of which the Borrowers are presently
unaware and which constitute or result from the gross negligence and/or willful
misconduct of any member of the Lender Group.
13
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
AMERICAN SKIING COMPANY
By: /s/ Mark J. Miller
Title:
SUNDAY RIVER SKIWAY CORPORATION
By:/s/ Mark J. Miller
Title:
SUNDAY RIVER LTD.
By:/s/ Mark J. Miller
Title:
PERFECT TURN, INC.
By:/s/ Mark J. Miller
Title:
SUNDAY RIVER TRANSPORTATION INC.
By:/s/ Mark J. Miller
Title:
L.B.O. HOLDING, INC.
By:/s/ Mark J. Miller
Title:
SUGARBUSH RESORT HOLDINGS, INC.
By:/s/ Mark J. Miller
Title
14
SUGARBUSH LEASING COMPANY
By:/s/ Mark J. Miller
Title:
SUGARBUSH RESTAURANTS, INC.
By:/s/ Mark J. Miller
Title:
MOUNTAIN WASTEWATER TREATMENT, INC.
By:/s/ Mark J. Miller
Title:
S-K-I, LTD.
By:/s/ Mark J. Miller
Title:
KILLINGTON, LTD.
By:/s/ Mark J. Miller
Title:
MOUNT SNOW LTD.
By:/s/ Mark J. Miller
Title:
PICO SKI AREA MANAGEMENT COMPANY
By:/s/ Mark J. Miller
Title:
15
RESORT SOFTWARE SERVICES, INC.
By:/s/ Mark J. Miller
Title:
KILLINGTON RESTAURANTS, INC.
By:/s/ Mark J. Miller
Title:
DOVER RESTAURANTS, INC.
By:/s/ Mark J. Miller
Title:
SUGARLOAF MOUNTAIN CORPORATION
By:/s/ Mark J. Miller
Title:
MOUNTAINSIDE
By:/s/ Mark J. Miller
Title:
ASC UTAH
By:/s/ Mark J. Miller
Title:
STEAMBOAT SKI & RESORT CORPORATION
By:/s/ Mark J. Miller
Title:
16
HEAVENLY SKI & RESORT CORPORATION
By:/s/ Mark J. Miller
Title:
HEAVENLY CORPORATION
By:/s/ Mark J. Miller
Title:
HEAVENLY VALLEY, LIMITED PARTNERSHIP
By: Heavenly Corporation, its general
partner
By:/s/ Mark J. Miller
Title:
17
FLEET NATIONAL BANK (successor in interest
to BankBoston, N.A.), as Agent
By: /s/ Daniel Butler
Title: Vice President
FLEET NATIONAL BANK (successor in interest
to BankBoston, N.A.), as a Lender
By:/s/ Daniel Butler
Title: Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
a Lender
By: illegible
Title: Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION,
successor by merger to First Security
Bank, N.A., as a Lender
By: illegible
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: illegible
Title: Vice President
18
THE HOWARD BANK, N.A., as a Lender
By: illegible
Title: Vice President
BLACK DIAMOND CLO 1998-1 LTD., as a Lender
By: David Egglishaw
Title: Director
BLACK DIAMOND CLO 2000-1 LTD., as a Lender
By: David Egglishaw
Title: Director
BLACK DIAMOND INTERNATIONAL FUNDING, LTD.,
as a Lender
By: David Egglishaw
Title: Director
By:___________________________________
Title:
19
MERRILL LYNCH PRIME RATE PORTFOLIO,
as a Lender
By: Merrill Lynch Asset
Management, L.P., as Investment
Advisor
By: /s/ Michael Brown
Title: Authorized Signatory
DEBT STRATEGIES FUND, INC., as a Lender
By: /s/ Michael Brown
Title: Authorized Signatory
CAPTIVA II FINANCE LTD., as a Lender
By: /s/ David Egglishaw
Title:
KZH-PAMCO LLC, as a Lender
By: /s/ Susan Lee
Title: Authorized Agent
KZH HIGHLAND-2 LLC, as a Lender
By: /s/ Susan Lee
Title: Authorized Agent
20
PAM CAPITAL FUNDING L.P., as a Lender
By: Highland Capital Management,
L.P., as Collateral Manager
By: /s/ Todd Travers
Title: Senior Portfolio Manager
PAMCO CAYMAN, LTD., as a Lender
By: Highland Capital Management,
L.P., as Collateral Manager
By: /s/ Todd Travers
Title: Senior Portfolio Manager
VAN KAMPEN PRIME RATE INCOME TRUST, as a
Lender
By: Van Kampen Investment
Advisory Corp.
By:/s/ Darvin D. Pierce
Title: Principal
21
GLENEAGLES TRADING LLC, as a Lender
By: Ann E. Morris
Title: Assit. Vice President
SRV-HIGHLAND, INC., as a Lender
By:/s/ Ann E. Morris
Title: Assistant Vice President
22
LONG LANE MASTER TRUST IV, as a Lender
By: /s/ illegible
Title: Managing Director
23
SCHEDULE OF FEES
TO BE PROVIDED
24
EXHIBIT A
SCHEDULE 2
Pricing Schedule
The LIBOR Rate Margin, the Base Rate Margin and the Commitment
Fee for any day are the respective percentages set forth below in the applicable
column in the row corresponding to the ratio of Consolidated Total Debt to
Consolidated EBITDA that exists on such day as set forth below:
Revolving Credit Advances
and Term Loans
Consolidated
Total Debt/ Base Rate LIBOR Rate
Consolidated Commitment Fee Margin Margin
EBITDA
6.00x<7.00x 0.500% 2.25% 3.75%
5.50x<6.00x 0.500% 2.00% 3.50%
5.00x<5.50x 0.500% 1.75% 3.25%
4.50x<5.00x 0.500% 1.25% 2.75%
4.00x<4.50x 0.375% 1.25% 2.50%
3.50x<4.00x 0.375% 1.25% 2.50%
<3.50x 0.375% 1.25% 2.50%
The ratio of Consolidated Total Debt to Consolidated EBITDA
shall be determined on a date selected by the Agent within 10 days of the
Agent's receipt of the unaudited financial statements and the Compliance
Certificate for each fiscal quarter then ended and within 10 days of the Agent's
receipt of the audited financial statements and Compliance Certificate for each
fiscal year end and shall be equal to the ratio of Consolidated Total Debt to
Consolidated EBITDA in effect as of the end of such previous fiscal quarter or
year as reflected in the audited financial statements and the Compliance
Certificate for such period.