FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this "Agreement") is made and entered into
as of November 22, 2002, by and among Fleet National Bank ("Fleet"), as Agent
for the lenders a party to the Credit Agreement (as hereinafter defined)
("Agent"), Fleet, as Tranche A Lender ("Fleet A"), Senior Debt Portfolio, as
Tranche A Lender ("Senior Debt"), Eaton Vance Senior Income Trust, as Tranche A
Lender ("Eaton Vance"), Ski Partners 2000, a Delaware general partnership, as
Tranche B Lender ("Ski 2000"), Fleet as Tranche B Lender ("Fleet B"; Fleet A,
Senior Debt, Eaton Vance, Ski 2000 and Fleet B are hereinafter referred to
collectively as the "A/B Lenders"), OHSF ASTC LLC, a Delaware limited liability
company, as Tranche C Lender ("OHSF"), Oak Hill Capital Partners, L.P., a
Delaware limited partnership as Tranche C Lender ("Oak Hill"; the A/B Lenders,
OHSF, and Oak Hill are hereinafter referred to collectively as the "Lenders"),
American Skiing Company Resort Properties, Inc., a Maine corporation
("Borrower"), and The Canyons Resort Properties, Inc., a Maine corporation
("Canyons"; Borrower and Canyons are hereinafter referred to collectively as the
"Borrower Parties").
STATEMENT OF BACKGROUND
On July 31, 2000 Borrower, Agent, and the Lenders party thereto entered
into that certain Second Amended and Restated Credit Agreement, as amended by
that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of August 20, 2001 by and among Borrower, the Lenders party thereto and
Agent, that certain Second Amendment to Second Amended and Restated Credit
Agreement dated as of March 29, 2002 by and among Borrower, the Lenders and
Agent and that certain Waiver of Events of Default (the "Conditional Waiver
Agreement") executed as of April 2, 2002 by and among Borrower, the Lenders and
Agent (as amended, and as affected by the Conditional Waiver Agreement, the
"Credit Agreement"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement.
Pursuant to the Credit Agreement the Lenders made a loan to Borrower
(the "Loan"). The Loan is evidenced by the notes described on Exhibit A attached
hereto and by this reference incorporated herein (collectively, the "Notes").
The Loan is secured by, among other things, the documents described on Exhibit B
attached hereto and incorporated herein (collectively, the "Security Documents";
the Credit Agreement, the Notes, the Security Documents, and all other documents
or instruments now or heretofore evidencing, securing or in any way relating to
the Loan are sometimes hereinafter referred to collectively as the "Loan
Documents"; and the real and personal property encumbered by the Loan Documents
is hereinafter referred to collectively as the "Collateral").
As Borrower acknowledged in the Conditional Waiver Agreement, an Event
of Default occurred under the Credit Agreement as a result of (a) the Borrower's
failure to pay to Agent, for the benefit of the Lenders, the mandatory principal
payment in the amount of $3,750,000.00 due on or before March 30, 2002 pursuant
to Section 2.2(a)(i) of the Credit Agreement (the "Payment Event of Default")
and (b) the failure of Grand Summit Resort Properties, Inc. ("GSRP"), a
subsidiary of Borrower, to pay in full on its maturity sums due under that
certain note dated August 20, 2001 to Colorado First/PCL, a Joint Venture (the
"GSRP Default"; the Payment Event of Default and the GSRP Default are referred
to collectively as the "Designated Events of Default"). Pursuant to the
Conditional Waiver Agreement, Agent and the A/B Lenders waived (the "Waiver")
the Events of Default under the Credit Agreement which occurred as a result of
the Designated Events of Default on and subject to the terms and conditions set
forth in the Conditional Waiver Agreement.
By letter to Borrower from Agent dated May 1, 2002 (the "Demand
Letter") Borrower was notified that, pursuant to Paragraph 1 of the Conditional
Waiver Agreement, Agent, on behalf of the A/B Lenders, rescinded the Waiver and
that, in accordance with the terms of the Conditional Waiver Agreement, each of
the Designated Events of Default would automatically be deemed Events of Default
as of May 3, 2002. Pursuant to the Demand Letter, Borrower was also notified
that Events of Default (collectively, the "Interest Payment Default"; the
Designated Events of Defaults and the Interest Payment Default are hereinafter
referred to collectively, as the "Existing Defaults") had occurred under the
Credit Agreement as a result of Borrower's failure to pay the monthly interest
payment due under Credit Agreement on April 1, 2002, in the amount of
$324,552.78 on account of accrued interest for March, 2002 and the monthly
interest payment due under the Credit Agreement on April 30, 2002, in the amount
of $314,083.32 on account of accrued interest for April 2002. In the Demand
Letter, Agent further notified Borrower that the A/B Lenders agreed that,
notwithstanding anything to the contrary contained in Paragraph 3 of the
Conditional Waiver Agreement or the Loan Documents, Borrower had the right to
cure the Existing Defaults at any time on or before 5:00 p.m. (Atlanta, Georgia
time) on May 17, 2002 (the "Cure Period Expiration Time") and Agent demanded,
among other things, that Borrower cure the Existing Defaults on or prior to the
Cure Period Expiration Time.
Borrower failed to cure the Existing Defaults on or prior to the Cure
Period Expiration Time. By letter to Borrower from Agent dated May 31, 2002 (the
"Acceleration Letter") Borrower was notified that the indebtedness evidenced by
the Credit Agreement, the Notes and the other Loan Documents had been and was
thereby accelerated and declared immediately due and payable in full and that
Agent and the Lenders were entitled to exercise any or all of Agent's and/or
Lenders' rights and remedies under the Loan Documents, at law or in equity in
connection with the Existing Defaults.
On July 3, 2002, Paul W. Werner, Esq., as Trustee (the "Utah Trustee"),
for the benefit of Agent filed that certain Notice of Default and Election to
Sell dated and recorded on July 3, 2002 in the official records of the Summit
County, Utah Recorder as Entry No. 623986, in Book 1458, at Page 1360-1363 (the
"Sundial Notice of Default") with respect to that certain Deed of Trust,
Assignment of Leases and Rents, Fixture Filing and Security Agreement listed as
Item 1 on Exhibit A attached hereto (the "Sundial Deed of Trust"), and that
certain Notice of Default and Election to Sell dated and recorded on July 3,
2002 in the aforesaid records as Entry No. 623984, in Book 1458, at Pages
1350-1355, as amended by Amended Notice of Default and Election to Sell dated
July 18, 2002 and recorded on July 22, 2002 in the aforesaid records as Entry
No. 625688, in Book 1461, at Pages 544-567 (as amended, the "A-2 Notice of
Default"; the Sundial Notice of Default and the A-2 Notice of Default are
hereinafter referred to collectively as the "Notices of Default") with respect
to that certain Deed of Trust, Assignment of Leases and Rents, Fixture Filing
and Security Agreement listed as Item 8 on Exhibit A attached hereto (the "A-2
Deed of Trust"; the Sundial Deed of Trust and the A-2 Deed of Trust are
hereinafter referred to collectively as the "Utah Deeds of Trust").
On September 16, 2002, the following documents were provided to the
Routt County, Colorado Public Trustee (the "Colorado Trustee") in connection
with the Deed of Trust listed as Item 9 on Exhibit A attached hereto (the
"Steamboat Deed of Trust"): (a) Certificate of Ownership pursuant to C.R.S.
ss.38-38-101(1)(d), (b) Affidavit re Principal Balance pursuant to C.R.S.
ss.38-38-101(1)(e), (c) Notice of Public Trustee's Sale, (d) Public Trustee
Certificates of Mailing re Notice of Sale, (e) "Sale/Rule 120 Notice Mailing
List", (f) Notice of Rights to Cure or Redeem ("Cure Notice"), (g) Public
Trustee Certification of Mailing, and (h) "Rights Notice Mailing List"
(collectively, the "Initial Colorado Foreclosure Documents"). On September 30,
2002, the Colorado Trustee issued the Cure Notice. On October 14, 2002 the
following documents were provided to the Colorado Trustee in connection with the
Steamboat Deed of Trust: (a) Amended Notice of Public Election and Demand for
Sale by Public Trustee, (b) Affidavit Re Principal Balance, and (c) Notice of
Public Trustee's Sale (collectively, the "Amended Colorado Foreclosure
Documents"; the Initial Colorado Foreclosure Documents and the Amended Colorado
Foreclosure Documents are hereinafter referred to collectively as, the "Colorado
Foreclosure Documents"). On October 27, 2002, November 3, 2002, November 10,
2002 and November 17, 2002 the Colorado Trustee published the notice of the
trustee's foreclosure sale pursuant to the Steamboat Deed of Trust in the
Steamboat Pilot (the "Colorado Foreclosure Notice").
Borrower has requested, and Agent and the Lenders have agreed, that,
subject to the terms, conditions and provisions of this Agreement, Agent and the
Lenders shall forbear from publishing any notice of foreclosure sale with
respect to any of the Collateral and from exercising certain other rights and
remedies as expressly set forth herein and Agent shall request that the Utah
Trustee and the Colorado Trustee forbear from any such publication and from
otherwise pursuing any trustee sale or foreclosure sale until December 22, 2002
(the "Termination Date"), or the earlier occurrence of a "Termination Event" (as
defined in Section 5.01).
STATEMENT OF AGREEMENT
FOR AND IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00)
in hand paid, the mutual covenants herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do covenant and agree as
follows:
ARTICLE I
ACKNOWLEDGMENTS, WARRANTIES & REPRESENTATIONS
The Borrower Parties, and each of them, jointly and severally,
acknowledge, agree, warrant, and represent to Agent and the Lenders as follows:
1.01 Authority.
(a) Authority of Borrower. That Borrower is a duly organized,
validly existing corporation in good standing under the laws of the State of
Maine; that Borrower has the power and authority to execute, deliver, and
perform its obligations under this Agreement; that the execution, delivery, and
performance of this Agreement by Borrower have been consented to and approved by
all necessary parties; that the execution, delivery and performance of this
Agreement by Borrower does not and will not (i) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree, determination,
or award presently in effect having applicability to Borrower, or (ii) result in
a breach or constitute or cause a default under any indenture, agreement, lease,
or instrument to which Borrower is a party; and that Borrower is not in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award or, to the best of the Borrower Parties' knowledge and
belief, any indenture, agreement, lease, or instrument material to the operation
of the Borrower's business or the Collateral, except for the matters set forth
on Exhibit "C" attached hereto and made a part hereof.
(b) Authority of Canyons. That Canyons is a duly organized,
validly existing corporation in good standing under the laws of the State of
Maine; that Canyons has the power and authority to execute, deliver, and perform
its obligations under this Agreement; that the execution, delivery, and
performance of this Agreement by Canyons has been consented to and approved by
all necessary parties; that the execution, delivery and performance of this
Agreement by Canyons does not and will not (i) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to Canyons, or (ii) result in a
breach or constitute or cause a default under any indenture, agreement, lease,
or instrument to which Canyons is a party; and that Canyons is not in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award, or, to the best of the Borrower Parties' knowledge and
belief, any such indenture, agreement, lease, or instrument, except for the
matters set forth on Exhibit "C" attached hereto and made a part hereof material
to the operation of the Canyon's business or the Collateral.
1.02 Status of Loan.
(a) Loan Documents. That the Loan Documents to which each of the
Borrower Parties is a party constitute valid and legally binding obligations of
the Borrower Parties and are enforceable against the Borrower Parties and the
Collateral in accordance with their terms; that, except as may be expressly
provided in this Agreement, this Agreement is not intended to be, and shall not
be deemed or construed to be, a modification, amendment, or waiver of the Loan
or the Loan Documents, or any of them; that the Borrower Parties have no
defenses, setoffs, objections, claims, counterclaims, or causes of action of any
kind or nature whatsoever with respect to the Loan or the Loan Documents or the
indebtedness evidenced and secured thereby; and that the Borrower Parties do
hereby expressly waive, release, and relinquish any and all such defenses,
setoffs, objections, claims, counterclaims, and causes of action.
(b) Indebtedness. That, as of November 20, 2002, (i) the
outstanding principal balance of the Loan was$53,799,999.16, (ii) interest,
default charges and late fees in the aggregate amount of $14,833,501.41 had
accrued and remained outstanding under the Loan Documents, and (iii) interest on
the foregoing principal balance continued to accrue and shall hereafter accrue
in accordance with the terms of the Credit Agreement at the default interest
rate provided for thereunder.
(c) No Satisfaction, Novation, Release or Waiver. That an Event of
Default has occurred and is continuing under the Credit Agreement as a result of
the Existing Defaults, that the Loan has been accelerated in accordance with the
terms of the Loan Documents and is now due and payable in full, that Agent was
authorized to and has properly initiated foreclosure proceedings under the Utah
Deeds of Trust, and the Steamboat Deed of Trust, and that any and all notices
thereof required to be sent to the Borrower Parties, or any of them, under the
Loan Documents and applicable law have been properly and timely provided by the
sending of the Demand Letter, the Acceleration Letter and the Colorado
Foreclosure Documents and the mailing and recording and service of the Notices
of Default; that the three (3) month statutory reinstatement period that
commenced with the filing of the Notices of Default has expired; that this
Agreement is not intended to be, and shall not be deemed or construed to be, a
cure, satisfaction, reinstatement, novation, or release of the Loan or the Loan
Documents, or any of them, or a waiver by Agent or the Lenders of any of the
rights of Agent or the Lenders under the Loan Documents, or any of them, or at
law or in equity; that the Loan is and shall remain immediately due and payable
in full notwithstanding this Agreement; and that, except as otherwise expressly
provided in this Agreement, Agent and the Lenders reserve all of their rights
and remedies under the Loan Documents, at law, and in equity in connection with
the Existing Defaults and any other Defaults or Events of Default that may now
or hereafter exist.
(d) Assignment of Leases and Rents. That the documents listed as
Items 1, 4, 8, 9, 10, 11, and 12 on Exhibit B attached hereto constitute an
unconditional, current, perfected assignment of rents, issues, and profits from
the Collateral encumbered by such Security Documents, and all actions, if any,
taken by Agent to exercise or invoke its rights to collect such rents, issues,
and profits have been duly and properly taken by Agent; that, except as
expressly provided in this Agreement, neither this Agreement nor any actions
taken by any parties pursuant to this Agreement shall be deemed in any way
whatsoever to revoke any such actions or to reinstate any rights of Borrower to
collect such rents, it being the express intent of Borrower and Agent that
Agent's security interests in such rents pursuant to such Security Documents
remain and shall at all times remain perfected; and that Agent's rights under
such Security Documents remain and shall at all times remain duly and properly
exercised to the extent so exercised.
1.03 Title to Collateral and Legal Proceedings. That except as set
forth on Exhibit "C" attached hereto and made a part hereof, there are no
pending or threatened suits, judgments, arbitration proceedings, administrative
claims, executions, or other legal or equitable actions or proceedings against
the Borrower Parties, or the Collateral or any liens, claims of lien, or other
encumbrances against the Collateral, or any pending or threatened condemnation
proceedings or annexation proceedings affecting the Collateral, or any
agreements to convey any portion of the Collateral, or any rights thereto to any
person or entity not disclosed herein, including, without limitation, any
government or governmental agency.
ARTICLE II
COVENANTS OF BORROWER PARTIES
The Borrower Parties, and each of them, jointly and severally, covenant
and agree with Agent and the Lenders that:
2.01 Notice of Proceedings. The Borrower Parties shall notify Agent in
writing, promptly upon learning thereof, of the institution of any suit,
administrative proceeding, adversary proceeding, or other legal proceedings
(including, without limitation, any garnishments, attachments, or similar
proceedings) which may affect the Collateral or the Borrower Parties.
2.02 Further Assurances. The Borrower Parties, and each of them, shall
execute and deliver to Agent such agreements, instruments, documents, financing
statements, and other writings as may be reasonably requested from time to time
by Agent to perfect and to maintain the perfection of Agent's security title and
security interest in and to the Collateral and to consummate the transactions
contemplated by or in the Loan Documents.
2.03 Access to Collateral, Etc. The Borrower Parties shall provide to
Agent and the Lenders, or their respective agents, representatives, or
designees, at all times during normal business hours, access to the Collateral
and to the books and records of the Borrower Parties relating to the Collateral.
2.04 Modifications. None of the Borrower Parties shall directly or
indirectly take any action of any kind or nature whatsoever seeking in whole or
in part to modify, alter, or diminish the force or effect of any of the terms
and conditions of this Agreement. The foregoing shall not be construed as
prohibiting any of the Borrower Parties from requesting that Agent agree to
modify this Agreement, but the Borrower Parties specifically understand and
agree that Agent shall have no obligation of any kind to consent to any such
requested modification and that no modification shall exist or be deemed to
exist unless and until such time as all parties have executed and delivered
complete documentation evidencing any such modification.
ARTICLE III
LENDER COVENANTS
3.01 Forbearance Covenant.
(a) Forbearance Covenant. Subject to the limitations set forth in
Section 3.01(b), (c) and (d) below, Agent and the Lenders covenant and agree
that, notwithstanding the rights provided to Agent and the Lenders under the
Loan Documents and the applicable laws of the states in which the Collateral is
located, until the earlier to occur of (a) December 22, 2002 or (b) a
Termination Event, neither Agent nor any Lender shall record, post, mail or
publish (or, in the case of the Steamboat Deed of Trust, other than successfully
completing the publication and notice requirements required under Colorado law
in connection with the foreclosure of the Steamboat Deed of Trust by having the
notice of trustee's foreclosure sale published in the Steamboat Pilot on
November 24, 2002, continue to publish) any notice of foreclosure sale of the
Collateral, notice a Rule 120 hearing or take any action to conduct a Rule 120
hearing in connection with the foreclosure of the Steamboat Deed of Trust,
conduct any foreclosure sale of the Collateral, take any action to realize on
any of the Collateral or file a lawsuit against the Borrower seeking payment of
the Loan, and Agent or its counsel shall request that the Utah Trustee and the
Colorado Trustee so forbear (the foregoing covenant, subject to the terms and
conditions of this Agreement, being herein referred to as the "Forbearance
Covenant"). Agent agrees that if the Utah Trustee or the Colorado Trustee fails
to so forbear, Agent shall take commercially reasonable action to cause the Utah
Trustee or Colorado Trustee, as applicable, to so forbear. The Borrower Parties
acknowledge that the Forbearance Covenant shall not prohibit Agent or its
counsel from requesting that the Colorado Trustee postpone the foreclosure sale
under the Steamboat Deed of Trust or the publication by the Colorado Trustee of
any such postponement or the taking of any other action by the Colorado Trustee
to postpone such foreclosure sale. Agent agrees to cause its counsel to request
that the Colorado Trustee postpone the foreclosure sale under the Steamboat Deed
of Trust to a date not earlier than December 23, 2002. NOTWITHSTANDING ANYTHING
IN THIS AGREEMENT TO THE CONTRARY, NEITHER THE AGENT NOR ANY OF THE LENDERS
COMMITS ITSELF TO ENTER INTO ANY ADDITIONAL AGREEMENTS OF ANY KIND WITH ANY OF
THE BORROWER PARTIES, INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS,
MODIFICATIONS, REINSTATEMENTS, ADDITIONAL FORBEARANCE AGREEMENTS, OR ANY OTHER
AGREEMENTS.
(b) Termination of Forbearance Covenant. The Borrower Parties
expressly acknowledge and agree that, immediately upon the earlier to occur of
(a) December 22, 2002 or (b) a Termination Event hereunder, Agent and the
Lenders shall have the right, at any time and from time to time, to exercise any
and all rights and remedies available against the Borrower Parties, or any of
them, and against the Collateral under this Agreement, the Loan Documents, and
at law or in equity, to the same extent as Agent and the Lenders would be
entitled if the Forbearance Covenant had never been part of this Agreement.
(c) Limitations on Applicability. The Borrower Parties understand
and specifically acknowledge and agree that the Forbearance Covenant does not
relate or extend to any actions that Agent or the Lenders may take under the
Loan Documents, at law or in equity, to preserve and protect any of the
Collateral or the interests of Agent and the Lenders in the Collateral,
including, without limiting the generality of the foregoing, the filing of
actions (other than foreclosure actions), or the defending of or intervention in
actions (such as foreclosure proceedings) brought by third parties or by any of
the Borrower Parties, relating to any such Collateral or the interests of Agent
or the Lenders therein and the sending of notices to any persons or entities
concerning the existence of security interests or liens in favor of Agent or the
Lenders relating to the Collateral.
(d) No Waiver with Respect to Notices of Default. Anything to the
contrary herein notwithstanding, the Borrower Parties acknowledge and agree that
neither the Forbearance Covenant nor any other provision of this Agreement shall
impair or invalidate the Notices of Default or the expiration of the three (3)
month reinstatement period that commenced with the recording of the Notices of
Default and shall not in any way waive any existing Event of Default or
diminish, alter, abrogate, or adversely affect any of Agent's or the Lender's
rights or remedies under the Loan Documents, the Notices of Default or
applicable law, including, without limitation the recording, posting, mailing or
publishing of a notice of foreclosure sale of the Collateral, on account of the
expiration of the reinstatement period under the Utah Deeds of Trust (except as
expressly limited by Section 3.01(a)). Without limiting the generality of the
foregoing, all waiver provisions contained in the Loan Documents shall remain in
full force and effect and no rights of Agent or the Lenders under the Loan
Documents or applicable law shall be deemed to have been waived by Agent, except
as expressly provided in Section 3.01(a) of this Agreement.
ARTICLE IV
CONTEMPORANEOUS EVENTS;
RELEASE AND COVENANT NOT TO SUE
4.01 Release and Covenant Not To Sue. The Borrower Parties, and each of
them, jointly and severally, on behalf of themselves and all of their respective
heirs, successors, and assigns, do hereby remise, release, acquit, waive,
satisfy, and forever discharge Agent and the Lenders, their
predecessors-in-interest, their respective subsidiaries and affiliates, and all
of their respective past, present, and future officers, directors, employees,
agents, representatives, servicers, attorneys, participants, heirs, successors,
and assigns (collectively, the "Lender Parties") from any and all manner of
debts, accountings, bonds, warranties, representations, covenants, promises,
contracts, controversies, agreements, liabilities, obligations, expenses,
damages, judgments, executions, objections, defenses, setoffs, actions, claims,
demands, and causes of action of any nature whatsoever, whether at law or in
equity, whether known or unknown, either now accrued or hereafter maturing,
which the Borrower Parties, or any of them, now has or hereafter can, shall, or
may have by reason of any matter, cause, or thing from the beginning of the
world to and including the date of this Agreement, including specifically, but
without limitation, matters arising out of or relating to (a) the Loan,
including, but not limited to, the administration or funding thereof, (b) the
Loan Documents or the indebtedness evidenced and secured thereby, (c) the
Collateral or the development, financing, and operation thereof, and (d) any
other agreement or transaction between the Borrower Parties, or any of them, and
Agent or the Lenders or any subsidiary or affiliate of Agent or the Lenders; and
the Borrower Parties, jointly and severally, for themselves and all of their
respective heirs, successors, and assigns, hereby covenant and agree never to
institute or cause to be instituted or continue prosecution of any suit or other
form of action or proceeding of any kind or nature whatsoever against any of the
Lender Parties, by reason of or in connection with any of the foregoing matters,
claims, or causes of action. Agent and the Lenders acknowledge and agree that
the foregoing release and covenant not to sue does not apply to any claims or
causes of action arising out of or resulting from any breach by Agent or the
Lenders of any of Agent's or the Lenders' obligations under this Agreement or
any other act of Agent or the Lenders first occurring after the date hereof.
ARTICLE V
TERMINATION EVENTS; REMEDIES
5.01 Termination Events. For purposes of this Agreement, each of the
following shall constitute a "Termination Event":
(a) Misrepresentations. Any representation or warranty of any of
the Borrower Parties in this Agreement shall be untrue or inaccurate in any
material respect.
(b) Defaults Under Loan Documents. Except as expressly provided
below, the occurrence or existence of any default or event of default, "Default"
or "Event of Default" under any of the Loan Documents or the breach, default
under, or failure to fully perform any of the covenants, agreements, or
obligations under any of the Loan Documents, other than the failure to make
payment of the full amount of the indebtedness evidenced and secured thereby (or
any payments of principal, interest or fees required under the terms of the Loan
Documents), and the failure of the applicable Borrower Party to cure such
default, event of default, "Default" or "Event of Default" or breach within any
applicable cure period specified therein. Notwithstanding the foregoing, the
occurrence of any of the following events shall not constitute a Termination
Event: (i) the failure of the Borrower Parties to pay taxes or due diligence
expenses when as and if required under the Loan Documents, (ii) any default
arising from the failure of the Borrower Parties to timely submit a Budget or
from the fact that no Approved Budget exists, (iii) any mechanic's or
materialman's lien having been placed on the Collateral which is junior to the
lien of the Lenders or any tax lien is filed against the Collateral as a result
of the non-payment of taxes, (iv) the filing of a lis pendens against the
Collateral encumbered by the Steamboat Deed of Trust as a result of the lawsuit
pertaining to the alleged breach of the sales contract pertaining thereto, (v)
the existence of the GSRP Default, (vi) the non-compliance of the Borrower
Parties with the financial covenants of Article VIII of the Credit Agreement,
(vii) the failure of the Borrower Parties to have heretofore delivered the
financial reports required under Article VII of the Credit Agreement, (viii) the
occurrence of a material adverse effect on the Borrower Parties resulting from
any of the foregoing or the acceleration of the Loan, (ix) the modification by
GSRP of the Textron loan documents in September, 2002 pursuant to and as
evidenced by documentation previously provided to Agent, or (x) the occurrence
of any non-monetary default under the Textron loan documents which does not
result in the acceleration of the indebtedness thereunder. The Borrower Parties
acknowledge and agree that notwithstanding the fact that the occurrence of any
of the foregoing events does not constitute a Termination Event, Agent and the
Lenders are not waiving and have not waived any "Default" or "Event of Default"
under any of the Loan Documents heretofore occurred or hereafter occurring as a
result of any such event or events and Agent and the Lenders reserve all rights
and remedies as a result thereof.
(c) Judgments Any judgment in an amount in excess of $75,000 shall
be rendered against the Borrower Parties, or any of them.
(d) Certain Insolvency Events. Any of the Borrower Parties shall
file any voluntary petition under any chapter of the United States Bankruptcy
Code, Title 11 U.S.C.A. (the "Bankruptcy Code"), or shall file any petition for
dissolution or liquidation, or shall in any manner seek any relief under any
local, state, federal, or other insolvency laws or other laws providing for
relief of debtors; or any of the Borrower Parties shall directly, or in concert,
collusion or cooperation with others, cause any involuntary petition under any
chapter of the Bankruptcy Code to be filed against any of the Borrower Parties,
or shall cause any of the Borrower Parties to become the subject of any
dissolution, liquidation, or insolvency proceeding or any other proceeding
pursuant to any local, state, federal, or other insolvency laws or other laws
providing for relief of debtors; or any of the Borrower Parties shall directly,
or in concert, collusion, or cooperation with others, cause the Collateral or
any portion thereof or interest therein to become the property of any bankruptcy
estate or the subject of any local, state, federal, or other bankruptcy,
dissolution, liquidation, or insolvency proceedings; or any of the Borrower
Parties shall breach any of the covenants relating to bankruptcy contained in
Article VI, below; or any involuntary petition under the Bankruptcy Code shall
be filed against any of the Borrower Parties, and such involuntary petition
shall remain undismissed for a period of thirty (30) days; or any of the
Borrower Parties shall become the subject of any dissolution, liquidation, or
insolvency proceeding or any other similar proceeding pursuant to any local,
state, federal, or other insolvency laws or other laws providing for relief of
debtors, which proceeding is not dismissed within thirty (30) days of the
commencement of such proceeding; or the Collateral, or any portion thereof or
interest therein, shall become the property of any bankruptcy estate or the
subject of any local, state, federal, or other bankruptcy, dissolution,
liquidation, or insolvency proceedings and shall not be released from such
estate or proceedings within thirty (30) days from the date upon which the
Collateral became the property of such estate or the subject of such
proceedings.
(e) Breach of Other Covenants. Any of the Borrower Parties shall
breach, default under, or fail to fully perform any of their respective
covenants, agreements, and obligations under this Agreement.
5.02 Lender's Rights Upon Occurrence of Termination Event. Upon the
earlier to occur of (a) December 22, 2002 or (b) the occurrence of a Termination
Event hereunder, the Forbearance Covenant and all of Agent's other obligations
under this Agreement shall immediately and without further notice to any of the
Borrower Parties terminate and be of no further force or effect, and Agent and
the Lenders shall immediately be entitled, without further notice to any of the
Borrower Parties, to exercise any or all of Agent's or the Lenders' rights and
remedies under this Agreement, the Loan Documents, and at law and in equity (all
of such rights and remedies being cumulative), including specifically, but
without limitation, the right to take any and all actions which Agent or the
Lenders deem necessary or appropriate to foreclose on the Collateral pursuant to
the terms of the Loan Documents and applicable law, including, without
limitation, noticing the earliest possible nonjudicial foreclosure sale of the
Collateral encumbered by the Utah Deeds of Trust (the "Utah Collateral")
pursuant to the powers of sale contained in the Utah Deeds of Trust, and
proceeding with a notice or notices of foreclosure sale of the Utah Collateral
pursuant to the powers of sale contained in the Utah Deeds of Trust without
demand or notice to the Borrower Parties except such notice or notices of
foreclosure sale as may be required pursuant to the Utah Code Annotated 57-1-25
and 26 (2002 Supplement), to the same extent as Agent and the Lenders would be
entitled if the Forbearance Covenant had never been part of this Agreement, and
to take any and all other actions deemed necessary or appropriate by Agent or
the Lenders in order to vest complete and exclusive ownership, possession, and
control of the Collateral in the purchaser or purchasers at any nonjudicial
foreclosure sale of the Collateral.
ARTICLE VI
BANKRUPTCY
6.01 Material Inducement. The Borrower Parties, and each of them,
jointly and severally, acknowledge and agree that the representations,
warranties, covenants, and agreements contained in this Article VI constitute a
material inducement to Agent and the Lenders to enter into this Agreement and
the transactions contemplated hereby and that without the inclusion of this
Article VI herein Agent and the Lenders would not have entered into this
Agreement.
6.02 No Fraudulent Intent. The Borrower Parties, and each of them,
jointly and severally, hereby acknowledge, warrant, represent, and agree that
neither the execution and delivery of this Agreement nor the performance of any
actions required hereunder is being consummated by the Borrower Parties with or
as a result of any actual intent by the Borrower Parties, or any of them, to
hinder, delay, or defraud any entity to which the Borrower Parties, or any of
them, are now or will hereafter become indebted.
6.03 No Bankruptcy Intent. The Borrower Parties represent, covenant,
and agree that they do not have any present intent to file any voluntary
petition in bankruptcy under any chapter of the Bankruptcy Code or in any manner
to seek relief, protection, reorganization, liquidation, dissolution, or similar
relief for debtors under any local, state, federal, or other insolvency laws or
laws providing for relief of debtors, or in equity, or directly or in concert,
collusion, or cooperation with others to cause any of the other Borrower Parties
to file any such petition or to seek any such relief.
6.04 Cash Collateral. The Borrower Parties, and each of them, jointly
and severally, hereby acknowledge and agree that the Loan Documents grant Agent
fully perfected, choate, and complete first-priority liens on and security
interests in, inter alia, all cash, leases, income, rents, issues, and profits
of the Collateral, whether existing before or after the commencement of any
proceeding under the Bankruptcy Code involving Borrower or the Collateral and
that such cash, income, rents, issues, and profits of the Collateral shall
constitute cash collateral of Lender within the meaning of Bankruptcy Code
Section 363(a) without the necessity of Lender's taking any further action of
any kind or nature whatsoever.
ARTICLE VII
MISCELLANEOUS
7.01 Agent and Lenders. Nothing in this Agreement is intended to, and
nothing in this Agreement shall, affect the agreements, rights, duties or
obligations of Agent or the Lenders to or among each other under the Credit
Agreement and the other Loan Documents. Each Lender represents and agrees that
all actions heretofore taken by Agent in connection with the Loan, including
without limitation the administration of the Loan, the enforcement of rights and
remedies, and the negotiation of this Agreement have been taken at the direction
of, or with the consent of, the Required Lenders and otherwise in accordance
with the terms of the Loan Documents and no Lender has any claim or cause of
action against Agent in connection with or relating to the Loan or the
administration thereof.
7.02 Survival of Provisions. Except as expressly herein provided, the
covenants, acknowledgments, representations, agreements, and obligations
contained in this Agreement shall survive the consummation of the transactions
contemplated by this Agreement.
7.03 No Limitation of Remedies. No right, power, or remedy conferred
upon or reserved to or by Agent or Lenders in this Agreement is intended to be
exclusive of any other right, power, or remedy conferred upon or reserved to or
by Agent or Lenders hereunder or under the Loan Documents or at law or in
equity, but each and every remedy shall be cumulative and concurrent and shall
be in addition to each and every other right, power, and remedy given hereunder
or under the Loan Documents or now or hereafter existing at law or in equity.
7.04 No Waivers. Except as specifically and expressly set forth in this
Agreement, nothing contained in this Agreement shall constitute a waiver of any
rights or remedies of any party under the Loan Documents or at law or in equity.
No delay or failure on the part of any party hereto in the exercise of any right
or remedy hereunder shall operate as a waiver thereof, and no single or partial
exercise of any right or remedy hereunder shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action or
forbearance by any party contrary to the provisions of this Agreement shall be
construed to constitute a waiver of any of the express provisions hereof. Any
party may in writing expressly waive any of such party's rights under this
Agreement without invalidating this Agreement or any portion hereof.
7.05 No Partnership, Joint Venture, or Agency. This Agreement shall not
in any respect be interpreted, deemed, or construed as making Agent or the
Lenders a partner or joint venturer with the Borrower Parties or any of them,
nor shall it be interpreted, deemed, or construed as making Agent or the Lenders
the agent or representative of any of the Borrower Parties. In no event shall
Agent or the Lenders be liable for debts or claims accruing or arising against
the Borrower Parties or any of them. The relationship of Agent and the Lenders
to Borrower is that of "lender" and "borrower."
7.06 Successors or Assigns. Whenever in this Agreement any party is
named or referred to, the heirs, executors, legal representatives, successors,
successors-in-title, and assigns of such parties shall be included, and all
covenants and agreements contained in this Agreement shall bind and inure to the
benefit of their respective heirs, executors, legal representatives, successors,
successors-in-title, and assigns, whether so expressed or not.
7.07 Construction of Agreement. Each party to this Agreement
acknowledges that such party has participated in the negotiation of this
Agreement and no provision of this Agreement shall be construed against or
interpreted to the disadvantage of any party hereto or thereto by any court or
other governmental or judicial authority by reason of such party's having or
being deemed to have structured, dictated, or drafted such provision; that the
Borrower Parties, and each of them, at all times have had access to an attorney
in the negotiation of the terms of and in the preparation and execution of this
Agreement, and the Borrower Parties, and each of them, has had the opportunity
to review and analyze this Agreement for a sufficient period of time prior to
the execution and delivery thereof; that no representations or warranties have
been made by or on behalf of Agent or the Lenders, or relied upon by the
Borrower Parties, or any of them, pertaining to the subject matter of this
Agreement, other than those that are set forth in this Agreement, and all prior
statements, representations, and warranties, if any, are totally superseded and
merged into this Agreement, which represent the final and sole agreement of the
parties with respect to the matters which are the subject hereof; that all of
the terms of this Agreement were negotiated at arm's length and that this
Agreement was prepared and executed without fraud, duress, undue influence, or
coercion of any kind exerted by any of the parties upon the others; and that the
execution and delivery of this Agreement is the free and voluntary act of each
of the Borrower Parties.
7.08 No Admissions. The Borrower Parties expressly acknowledge and
agree that the waivers, estoppels, releases, and covenants not to sue contained
in this Agreement shall not be construed as an admission of wrongdoing,
liability, or culpability on the part of Agent or the Lenders or as an admission
by Agent or the Lenders of the existence of any claims of any of the Borrower
Parties against Agent or the Lenders.
7.09 Notices. Unless and except as otherwise specifically provided
herein, any and all notices, elections, approvals, consents, demands, requests,
and responses thereto (individually, "Communication") permitted or required to
be given under this Agreement shall be in writing, signed by or on behalf of the
party giving the same, and shall be deemed to have been properly given and shall
be effective upon the earlier of receipt thereof or deposit thereof in the
United States mail, postage prepaid, and certified with return receipt requested
to the other party at the address of such other party set forth hereinbelow or
at such other address within the continental United States as such other party
may designate by notice specifically designated as a notice of change of address
and given in accordance herewith. Any Communication, if given to Agent, must be
addressed as follows, subject to change as provided hereinabove:
Fleet National Bank
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Mr. Steven Selbo
Phone: (770) 390-6522
Facsimile: (770) 390-8434
With a copy to:
Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
Facsimile: (617) 434-7108
And with a copy to:
James Barkin, Esq.
McKenna, Long & Aldridge LLP
303 Peachtree Street
Suite 5300
Atlanta, Georgia 30308
and, if given to any of the Borrower Parties, must be addressed as follows,
subject to change as provided hereinabove:
American Skiing Company Resort Properties, Inc.
c/o American Skiing Company
136 Heber Avenue, #303
Park City, Utah 84060
Attn: Mr. William Fair
With a copy to:
American Skiing Company Resort Properties, Inc.
One Monument Way, 2nd Floor
Portland, Maine 04101
Attention: Foster Stewart, General Counsel
7.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
7.11 Waiver of Trial by Jury. AS PART OF THE CONSIDERATION FOR NEW
VALUE THIS DAY GIVEN AND RECEIVED BY AGENT, THE LENDERS AND THE BORROWER
PARTIES, EACH OF AGENT, THE LENDERS AND THE BORROWER PARTIES HEREBY EXPRESSLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE LOAN
DOCUMENTS.
7.12 Headings. The headings of the articles, sections, and subsections
of this Agreement are for the convenience of reference only, are not to be
considered a part hereof, and shall not limit or otherwise affect any of the
terms hereof or thereof.
7.13 Modifications. The terms of this Agreement may not be changed,
modified, waived, discharged, or terminated orally but only by an instrument or
instruments in writing and signed by the party against whom the enforcement of
the change, modification, waiver, discharge, or termination is asserted.
7.14 Time of Essence. Time is of the essence of this Agreement.
7.15 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement under seal, as of the day and year first above written.
AGENT:
FLEET NATIONAL BANK, as Agent
By:/s/Steven P. Selbo
--------------------------------
Name: Steven P. Selbo
Title: Director
LENDERS:
FLEET NATIONAL BANK, as Tranche A
Lender and Tranche B Lender
By:/s/Steven P. Selbo
--------------------------------
Name: Steven P. Selbo
Title: Director
SENIOR DEBT PORTFOLIO, as Tranche A
Lender
By: Boston Management and Research,
as Investment Advisor
By:/s/Payson F.Swaffield
--------------------------------
Name: Payson F. Swaffield
Title: Vice President
EATON VANCE SENIOR INCOME TRUST, as
Tranche A Lender
By: Eaton Vance Management, as
Investment Advisor
By:/s/Payson F. Swaffield
--------------------------------
Name: Payson F. Swaffield
Title: Vice President
SKI PARTNERS 2000, a Delaware
general partnership, as Tranche B
Lender
By: Eiger Inc., a Delaware
corporation, its managing
partner
By:/s/Paul E. Rowsey III
--------------------------------
Name: Paul E. Rowsey III
Title: President
OHSF ASTC, LLC, a Delaware limited
liability company, as Tranche C
Lender
By:/s/Scott Krase
--------------------------------
Name: Scott Krase
Title:
OAK HILL CAPITAL PARTNERS, L.P., a
Delaware limited partnership
By:/s/Kevin G. Levy
--------------------------------
Name: Kevin G. Levy
Title: Vice President of OHCP
MGP, LLC, General Partner
of OHCP GenPar, L.P.,
General Partner
BORROWER:
AMERICAN SKIING COMPANY RESORT
PROPERTIES, INC., a Maine
corporation
By:/s/William J. Fair
--------------------------------
Name: William J. Fair
Title: President
CANYONS:
THE CANYONS RESORT PROPERTIES,
INC., a Maine corporation
By:/s/William J. Fair
--------------------------------
Name: William J. Fair
Title: President
SCHEDULE OF EXHIBITS
EXHIBIT "A" - Notes
EXHIBIT "B" - Security Documents
EXHIBIT "C" - Legal Proceedings
1
EXHIBIT "A"
THE NOTES
1. That certain Tranche A Promissory Note dated July 31, 2000 from Borrower to
the order of Fleet National Bank ("Fleet") in the original principal amount of
TWENTY MILLION and NO/100 Dollars ($20,000,000.00);
2. That certain Tranche A Promissory Note dated July 31, 2000 from Borrower to
the order of Eaton Vance Senior Income Trust in the original principal amount of
ONE MILLION FIVE HUNDRED THOUSAND and NO/100 Dollars ($1,500,000.00);
3. That certain Tranche A Promissory Note dated July 31, 2000 from Borrower to
the order of Senior Debt Portfolio in the original principal amount of THIRTEEN
MILLION FIVE HUNDRED THOUSAND and NO/100 Dollars ($13,500,000.00);
4. That certain Tranche B Promissory Note dated July 31, 2000 from Borrower to
the order of Fleet in the original principal amount of FIVE MILLION and NO/100
Dollars ($5,000,000.00);
5. That certain Tranche B Promissory Note dated July 31, 2000 from Borrower to
the order of Ski Partners 2000 in the original principal amount of TWENTY
MILLION and NO/100 Dollars ($20,000,000.00);
6. That certain Tranche C Promissory Note dated July 31, 2000 from Borrower to
the order of OHSF ASTC, LLC in the original principal amount of TWO HUNDRED
FORTY SIX THOUSAND SIX HUNDRED SIXTY SIX and 67/100 Dollars ($246,666.67); and
7. That certain Tranche C Promissory Note dated July 31, 2000 from Borrower to
the order of Oak Hill Capital Partners, L.P. in the original principal amount of
ELEVEN MILLION SEVEN HUNDRED FIFTY THREE THOUSAND THREE HUNDRED THIRTY THREE and
33/100 Dollars ($11,753,333.33).
A-1
EXHIBIT "B"
SECURITY DOCUMENTS
1. Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated July 31, 2000 between Canyons and Agent recorded on August 4,
2000 in the official records of Summit County Recorder, Utah, as Entry No.
00570358 in Book 1328, at Page 723 (Sundial).
2. Collateral Assignment of Declarant's Rights Re: Sundial Lodge at the
Canyons Condominiums dated July 31, 2000 between Canyons and Agent recorded
August 4, 2000 as Entry No. 570-360, in Book 1328, at Pages 760-767, aforesaid
records.
3. Collateral Assignment of Agreements dated July 31, 2000 between Canyons and
Agent.
4. Collateral Assignment of Income, Revenues and Rentals dated July 31, 2000
between Canyons and Agent recorded August 4, 2000 as Entry No. 00570359, in Book
1328, at Pages 747-759, aforesaid records.
5. Collateral Assignment of Water Rights and Security Agreement dated July 31,
2000 by Borrower in favor of Agent.
6. Water Stock Pledge Agreement dated July 31, 2000 between Canyons in favor
of Agent and Fleet.
7. Water Stock Pledge Agreement dated July 31, 2000 by Borrower in favor of
Agent.
8. Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated September 4, 1998 between Borrower and Agent recorded December
11, 1998 as Entry No. 524975 in Book 1210, at Page 181, aforesaid records, as
amended by as modified and amended by First Modification of Term Loan Notes and
Other Lender Documents dated December 4, 1998 recorded January 21, 1999 as Entry
No. 528201, in Book 1222, at Page 601, aforesaid records, Second Modification of
Lender Agreements dated January 8, 1999 recorded January 21, 1999 as Entry No.
528202, in Book 1222, at Page 608, aforesaid records, First Amendment to Deed of
Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement
dated April 30, 1999 recorded April 30, 1999 as Entry No. 00537603 in Book 1253,
at Pages 332-336, aforesaid records, and July 2000 Modification of Lender
Agreements dated July 31, 2000 recorded October 24, 2000 as Entry No. 575376, in
Book 1339, at Page 36, aforesaid records (A-2).
9. Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security
Agreement dated September 4, 1998 between Borrower and Agent recorded December
11, 1998 at Reception No. 503248 in Deed Book 753, Page 387, Routt County,
Colorado records, as modified and amended by First Modification of Term Loan
Notes and Other Lender Documents dated December 4, 1998 recorded January 18,
1999 at Reception No. 505021 in Deed Book 754, Page 649, aforesaid records,
Second Modification of Lender Agreements dated January 8, 1999 recorded January
18, 1999 at Reception No. 505023 in Deed Book 754, Page 651, aforesaid records,
Modification of Deed of Trust, Assignment of Leases and Rents, Fixture Filing
and Security Agreement dated January 8, 1999 recorded January 18, 1999 at
Reception No. 505022 in Deed Book 754, Page 650, aforesaid records and July 2000
Modification of Lender Agreements dated July 31, 2000 recorded August 28, 2000
at Reception No. 532165, aforesaid records (Steamboat).
10. Mortgage Assignment of Leases and Rents, Financing Statement and Security
Agreement dated January 8, 1999 between Borrower and Agent recorded February 3,
1999 in Deed Book 177, Page 421, Town of Sherburne, Vermont records, as amended
by July 2000 Modification of Lender Agreements dated July 31, 2000 recorded
August 30, 2000 in Deed Book 192, Page 530, aforesaid records (Killington).
B-1
11. Mortgage Assignment of Leases and Rents, Financing Statement and Security
Agreement dated August 20, 2001 between Borrower and Agent recorded September 7,
2001 in Volume 192, Dover, Vermont records (Mt. Snow).
12. Collateral Assignment of Income Revenues and Rentals dated August 20, 2001
between Borrower and Agent (Mt. Snow).
13. Collateral Assignment of Agreements dated August 20, 2001 between Borrower
and Agent (Mt. Snow).
14. Pledge Agreement dated July 31, 2000 between Borrower and Agent (deposit
accounts).
15. Amended and Restated Stock Pledge Agreement dated January 8, 1999 between
Borrower and Agent, as amended by Second Modification of Lender Agreements dated
January 8, 1999 and July 2000 Modification of Lender Agreements dated July 31,
2000.
16. Collateral Assignment of Agreements dated September 4, 1998 between
Borrower and Agent, as amended by First Modification of Term Loan Notes and
Other Lender Documents dated December 4, 1998, Second Modification of Lender
Agreements dated January 8, 1999 and July 2000 Modification of Lender Agreements
dated July 31, 2000.
17. Grant of Security Interest in Trademarks by Borrower in favor of Agent
dated January 8, 1999, as amended by July 2000 Modification of Lender Agreements
dated July 31, 2000.
B-2
EXHIBIT "C"
LEGAL PROCEEDINGS
1. Westgate Resorts, Ltd. has alleged that Borrower is in default of the April
12, 2000 Purchase and Sale Agreement among the parties for failure to construct
certain off-site improvements necessary for Westgate to receive certificates of
occupancy for its project.
2. Summit County, Utah has alleged that Borrower is in "potential default" of
certain of its obligations under The Canyons SPA Development Agreement dated
November, 1999.
C-1