THIRD AMENDMENT TO CREDIT AGREEMENT
Dated as of March 3, 1999
Among
ASC UTAH
ASC WEST, INC.
STEAMBOAT SKI & RESORT CORPORATION
STEAMBOAT DEVELOPMENT CORPORATION
HEAVENLY VALLEY SKI & RESORT CORPORATION
HEAVENLY CORPORATION
HEAVENLY VALLEY, LIMITED PARTNERSHIP
as Borrowers,
AMERICAN SKIING COMPANY,
as Guarantor,
THE LENDERS PARTY HERETO,
and
BANKBOSTON, N.A.,
as Agent for the Lenders
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT is entered into as of March 3,
1999 by and among ASC UTAH, a Maine corporation ("ASC Utah"), ASC WEST, INC., a
Maine corporation ("ASC West"), STEAMBOAT SKI & RESORT CORPORATION, a Delaware
corporation, STEAMBOAT DEVELOPMENT CORPORATION, a Delaware corporation, HEAVENLY
VALLEY SKI & RESORT CORPORATION, a Delaware corporation, HEAVENLY CORPORATION, a
Delaware corporation, HEAVENLY VALLEY, LIMITED PARTNERSHIP, a Nevada limited
partnership of which Heavenly Valley Ski & Resort Corporation and Heavenly
Corporation own all of the partnership interests (each a "Borrower" and
collectively, the "Borrowers"), AMERICAN SKIING COMPANY, a Maine corporation
("American Ski"), the lenders from time to time party hereto (the "Lenders"),
and BANKBOSTON, N.A., a national banking association, as Agent (the "Agent") for
the lenders from time to time party to the Credit Agreement referred to below.
Recitals
The Borrowers, American Ski, the Lenders and the Agent are parties to a
Credit Agreement dated as of November 12, 1997 (as amended, the "Credit
Agreement"). The Borrowers and American Ski desire to amend the Credit Agreement
in various respects. The Agent and the Lenders are willing to amend the Credit
Agreement on the terms and conditions set forth herein. All capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement.
NOW, THEREFORE, subject to the satisfaction of the conditions to
effectiveness specified in Section 6, American Ski, the Borrowers, the Lenders
and the Agent hereby agree as follows:
Section 1. Definitions. Article 1 of the Credit Agreement is hereby
amended by inserting the following definitions in alphabetical order, as
follows:
"Base Capital Expenditure Amount" shall mean $30,000,000.
"Permitted Non-Strategic Asset Sales" shall mean sales or
other dispositions of assets of American Ski and its Restricted
Subsidiaries, between January 25, 1999 and January 30, 2000, for gross
proceeds not to exceed $30,000,000, which American Ski determines are
not strategic to the skiing and other resort activities of American
Ski and its Restricted Subsidiaries, with the specific assets so sold
or disposed of to be approved by the Agent, such approval not to be
unreasonably withheld.
Section 2. Amendment of Article 7. Effective January 24, 1999, Article
7 of the Credit Agreement is hereby deleted in its entirety and the following
substituted therefor:
Section 7.1 Ratio of Consolidated Total Debt to Consolidated EBITDA.
(a) American Ski and its Restricted Subsidiaries
shall maintain as of the end of each fiscal quarter, commencing with
2000 Fiscal Quarter 2, a ratio of (i) Consolidated Total Debt as of
such date to (ii) Consolidated EBITDA for the four-quarter period
ending on such date of not more than the following levels as of the
fiscal quarters indicated:
Fiscal Quarter Ratio Fiscal Quarter Ratio
2000 Quarter 2 5.75-to-1.00 2002 Quarter 1 5.00-to-1.00
2000 Quarter 3 5.75-to-1.00 2002 Quarter 2 5.00-to-1.00
2000 Quarter 4 5.75-to-1.00 2002 Quarter 3 4.50-to-1.00
2001 Quarter 1 5.75-to-1.00 2002 Quarter 4 4.50-to-1.00
2001 Quarter 2 5.50-to-1.00 2003 Quarter 1 4.50-to-1.00
2001 Quarter 3 5.00-to-1.00 2003 Quarter 2 4.50-to-1.00
2001 Quarter 4 5.00-to-1.00 2003 Quarter 3 4.00-to-1.00
and Thereafter
(b) American Ski - West and its Restricted
Subsidiaries shall maintain as of the end of each fiscal quarter a
ratio of (i) American Ski - West Consolidated Total Debt as of such
date to (ii) American Ski - West Consolidated EBITDA for the
four-quarter period ending on such date of not more than the following
levels as of the fiscal quarters indicated:
Fiscal Quarter Ratio Fiscal Quarter Ratio
2000 Quarter 2 5.75-to-1.00 2002 Quarter 1 5.00-to-1.00
2000 Quarter 3 5.75-to-1.00 2002 Quarter 2 5.00-to-1.00
2000 Quarter 4 5.75-to-1.00 2002 Quarter 3 4.50-to-1.00
2001 Quarter 1 5.75-to-1.00 2002 Quarter 4 4.50-to-1.00
2001 Quarter 2 5.50-to-1.00 2003 Quarter 1 4.50-to-1.00
2001 Quarter 3 5.00-to-1.00 2003 Quarter 2 4.50-to-1.00
2001 Quarter 4 5.00-to-1.00 2003 Quarter 3 4.00-to-1.00
and Thereafter
Section 7.2 Ratio of Consolidated Adjusted Cash Flow to
Consolidated Debt Service. American Ski and its Restricted Subsidiaries shall
maintain as of the end of each fiscal quarter, commencing with 2000 Fiscal
2
Quarter 2, for the four-quarter period ending on such date a ratio of (a)
Consolidated Adjusted Cash Flow to (b) Consolidated Debt Service of not less
than the following levels as of the end of each fiscal quarter indicated:
Fiscal Quarter Ratio
2000 Quarter 2 1.10-to-1.00
2000 Quarter 3 1.10-to-1.00
2000 Quarter 4 1.10-to-1.00
2001 Quarter 1 1.10-to-1.00
2001 Quarter 2 1.10-to-1.00
2001 Quarter 3 1.25-to-1.00
and Thereafter
Section 7.3 Ratio of Consolidated EBITDA to Consolidated
Interest Expense. American Ski and its Restricted Subsidiaries shall maintain as
of the end of each fiscal quarter for the four-quarter period ending on such
date a ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense of
not less than the following levels:
Fiscal Quarter Ratio Fiscal Quarter Ratio
1999 Quarter 2 1.20-to-1.00 2001 Quarter 1 1.75-to-1.00
1999 Quarter 3 1.20-to-1.00 2001 Quarter 2 1.75-to-1.00
1999 Quarter 4 1.20-to-1.00 2001 Quarter 3 2.00-to-1.00
2000 Quarter 1 1.20-to-1.00 2001 Quarter 4 2.00-to-1.00
2000 Quarter 2 1.50-to-1.00 2002 Quarter 1 2.00-to-1.00
2000 Quarter 3 1.50-to-1.00 2002 Quarter 2 2.00-to-1.00
2000 Quarter 4 1.75-to-1.00 2002 Quarter 3 2.25-to-1.00
and Thereafter
Section 7.4 Minimum Consolidated Net Worth.
(a) American Ski and its Restricted Subsidiaries
shall maintain minimum Consolidated Net Worth at all times of
not less than the sum of (a) $200,000,000 plus (b) 75% of
cumulative Consolidated Net Income of American Ski and its
Restricted Subsidiaries for the period after January 24, 1999
plus (c) all amounts received by American Ski or the Borrowers
after the Closing Date from the issuance of equity interests.
(b) American Ski - West and its Restricted
Subsidiaries shall maintain at all times the minimum
consolidated net worth (excluding from assets investments in
Unrestricted Subsidiaries) determined in accordance with
generally accepted accounting principles, of not less than
$165,000,000.
3
Section 7.5 Minimum EBITDA. American Ski and its Restricted
Subsidiaries shall have EBITDA of not less than the amounts set forth
below for the applicable fiscal quarter.
Fiscal Quarter Minimum EBITDA
1999 Quarter 3 $60,000,000
1999 Quarter 4 $21,000,000)
2000 Quarter 1 ($21,000,000)
2000 Quarter 2 $25,000,000
Section 3. Amendment of Article 9. Article 9 of the Credit Agreement is
hereby amended as follows:
(A) Article 9 of the Credit Agreement is hereby amended by
deleting Section 9.7 in its entirety and substituting therefor the following:
"Section 9.7 Capital Expenditures. Make any Capital Expenditure except
that:
(a) for the fiscal year ending in July, 2000, American Ski and
its Restricted Subsidiaries may make Capital expenditures not to exceed
the sum of (i) $15, 000,000 plus (ii) $5,000,000 after American Ski and
its Restricted Subsidiaries have consummated, or entered into binding
commitments for, not less than $10,000,000 of Permitted Non-Strategic
Asset Sales.
(b) Thereafter, American Ski and its Restricted Subsidiaries
may make Capital Expenditures in each fiscal year, commencing with the
fiscal year ending in July 2001, of not more than the lesser of (a)
$35,000,000 or (b) (i) Consolidated EBITDA for the four fiscal quarters
ended in April of the previous fiscal year less (ii) Consolidated Debt
Service for the four fiscal quarters ended in April of the previous
fiscal year."
(B) Article 9 of the Credit Agreement is hereby further
amended by deleting Section 9.8 thereof in its entirety and substituting
therefor the following:
"Section 9.8 Disposition of Assets. Sell, lease or otherwise dispose
of any assets except for (a) the sale, lease or other disposition of inventory,
including residential real property held for resale, in the ordinary course of
business, (b) Permitted Dispositions, and (c) Permitted Non-Strategic Asset
Sales."
4
Section 4. Pricing Schedule. Schedule 2 to the Credit
Agreement is hereby amended by deleting that Schedule in its entirety and
substituting therefor the Pricing Schedule attached hereto as Exhibit A.
Section 5. Fees and Expenses. Upon the execution and delivery
hereof by the Majority Lenders, the Borrowers and American Ski hereby agree to
pay to the Agent in cash all of the Agent's reasonable expenses in preparing,
executing and delivering this Third Amendment to Credit Agreement and all
related instruments and documents, including, without limitation, the reasonable
fees and out-of-pocket expenses of the Agent's special counsel, Goodwin, Procter
& Hoar LLP.
Section 6. Effectiveness; Conditions to Effectiveness. This
Third Amendment to Credit Agreement shall become effective upon execution hereof
by the Borrowers, the Majority Lenders and the Agent and satisfaction of the
following conditions:
(a) Officer's Certificate. The Borrowers and
American Ski shall have delivered to the Agent
an Officer's Certificate in the form of Exhibit
B hereto.
(b) Execution of the Third Amendment to East Credit
Agreement. Execution of the Third Amendment to
Amended and Restated Credit Agreement among the
American Ski - East Borrowers, the Agent and
the Lenders party thereto simultaneously
herewith and the compliance by the American Ski
- East Borrowers with all agreements contained
in the Third Amendment to Amended and Restated
Credit Agreement, including satisfaction of all
conditions precedent to effectiveness
thereunder.
Section 7. Representations and Warranties; No Default.
American Ski and the Borrowers, jointly and severally, hereby confirm to the
Agent and the Lenders, the representations and warranties of American Ski and
the Borrowers set forth in Article 5 of the Credit Agreement (as amended hereby)
as of the date hereof, as if set forth herein in full (unless stated to relate
solely to an earlier date, in which case they were true and correct as of such
earlier date). American Ski and the Borrowers hereby certify that, after giving
effect to this Third Amendment Credit Agreement, no Default exists under the
Credit Agreement.
Section 8. Lender Agreement. All references to the Credit
Agreement in the Credit Agreement, the other Lender Agreements or any other
document shall be deemed to refer to the Credit Agreement as amended hereby.
This Third Amendment to Credit Agreement shall be a Lender Agreement and shall
be governed by and construed and enforced under the laws of The Commonwealth of
Massachusetts.
5
IN WITNESS WHEREOF, American Ski, the Borrowers, the Lenders
and the Agent have caused this Third Amendment to Credit Agreement to be
executed by their duly authorized officers as of the date first set forth above.
ASC UTAH
ASC WEST, INC.
STEAMBOAT SKI & RESORT CORPORATION
STEAMBOAT DEVELOPMENT CORPORATION
HEAVENLY VALLEY SKI & RESORT CORPORATION
HEAVENLY CORPORATION
By: /s/ Mark J. Miller
-----------------------------------
Name: Mark J. Miller
Title: Chief Financial Officer
HEAVENLY VALLEY, LIMITED PARTNERSHIP
Heavenly Corporation, its general partner
By: /s/ Mark J. Miller
-----------------------------------
Name: Mark J. Miller
Title: Chief Financial Officer
AMERICAN SKIING COMPANY, as Guarantor
By: /s/ Mark J. Miller
-----------------------------------
Name: Mark J. Miller
Title: Chief Financial Officer
6
BANKBOSTON, N.A., as Agent
By: /s/ Carlton F. Williams
---------------------------------
Name: Carlton F. Williams
Title: Director
BANKBOSTON, N.A.
By: /s/ Carlton F. Williams
---------------------------------
Name: Carlton F. Williams
Title: Director
NORWEST BANK COLORADO, NATIONAL ASSOCIATION
By:Unreadable
---------------------------------
Name:
Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By:Unreadable
---------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
d/b/a COLORADO NATIONAL BANK
By:Unreadable
---------------------------------
Name:
Title:
FIRST SECURITY BANK, N.A.
By:Unreadable
---------------------------------
Name:
Title:
FLOATING RATE PORTFOLIO
By:INVESCO SENIOR SECURED MANAGEMENT, INC., as
Attorney in Fact
By:Unreadable
---------------------------------
Name:
Title:
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:Unreadable
---------------------------------
Name:
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By:Unreadable
---------------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By:Unreadable
---------------------------------
Name:
Title:
EATON VANCE SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as
Investment Advisor
By:Unreadable
---------------------------------
Name:
Title:
By:Unreadable
---------------------------------
Name:
Title:
HOWARD BANK
By:Unreadable
---------------------------------
Name:
Title:
CAPTIVA II FINANCE, LTD.
By:Unreadable
---------------------------------
Name:
Title:
KZH-PAMCO LLC
By:Unreadable
---------------------------------
Name:
Title:
PAM CAPITAL FUNDING, L.P.
By: Highland Capital Management L.P., as
Collateral Manager
By:Unreadable
---------------------------------
Name:
Title:
KZH III LLC
By:Unreadable
---------------------------------
Name:
Title:
PAMCO CAYMAN, LTD.
By: Highland Capital Management L.P., as
Collateral Manager
By:Unreadable
---------------------------------
Name:
Title:
DEBT STRATEGIES FUND II, INC.
By:Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By: Unreadable
---------------------------------
Name:
Title:
MORGAN STANLEY SENIOR FUNDING, INC.
By: Unreadable
---------------------------------
Name:
Title:
OASIS COLLATERALIZED HIGH
INCOME PORTFOLIOS-I, LTD.
By: Unreadable
---------------------------------
Name:
Title:
SCHEDULE 2 Exhibit A
Pricing Schedule
Through April 30, 2000, 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 TERM LOANS
Consolidated
Total Debt/ Base
Consolidated Rate LIBOR Rate Commitment Base Rate LIBOR Rate
EBITDA Margin Margin Fee Margin Margin
- ------ ------ ------ --- ------ ------
>/-7.00x 2.00% 3.50% 0.500% 2.50% 4.00%
>/-6.00x<7.00x 1.50% 3.00% 0.500% 2.00% 3.50%
>/-5.50x<6.00x 1.25% 2.75% 0.500% 1.75% 3.25%
>/-5.00x<5.50x 1.00% 2.50% 0.500% 1.50% 3.00%
>/-4.50x<5.00x 0.75% 2.25% 0.500% 1.25% 2.75%
>/-4.00x<4.50x 0.50% 2.00% 0.375% 1.25% 2.50%
>/-3.50x<4.00x 0.25% 1.75% 0.375% 1.25% 2.50%
<3.50x 0.00% 1.50% 0.375% 1.25% 2.50%
From and after May 1, 2000, 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 TERM LOANS
Consolidated
Total Debt/ Base
Consolidated Rate LIBOR Rate Commitment Base Rate LIBOR Rate
EBITDA Margin Margin Fee Margin Margin
------ ------ ------ --- ------ ------
>/- 5.75x 1.25% 2.75% 0.500% 1.75% 3.25%
>/- 5.00x<5.75x 1.00% 2.50% 0.500% 1.50% 3.00%
>/- 4.50x<5.00x 0.75% 2.25% 0.500% 1.25% 2.75%
>/- 4.00x<4.50x 0.50% 2.00% 0.375% 1.25% 2.50%
>/- 3.50x<4.00x 0.25% 1.75% 0.375% 1.25% 2.50%
< 3.50x 0.00% 1.50% 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 ten days of the Agent's
receipt of the unaudited financial statements and the Compliance Certificate for
each fiscal quarter then ended and within ten days of the Agent's receipt of the
audited financial statements and the 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 periods.
ASC UTAH
ASC WEST, INC.
STEAMBOAT SKI & RESORT CORPORATION
STEAMBOAT DEVELOPMENT CORPORATION
HEAVENLY VALLEY SKI & RESORT CORPORATION
HEAVENLY CORPORATION
HEAVENLY VALLEY, LIMITED PARTNERSHIP
as Borrowers,
AMERICAN SKIING COMPANY,
as Guarantor,
THE LENDERS PARTY HERETO,
and
BANKBOSTON, N.A.,
as Agent for the Lenders
Certificate of Officer
Reference is made to the Credit Agreement dated as of November 12,
1997, by and among ASC UTAH, a Maine corporation ("ASC Utah"), ASC WEST, INC., a
Maine corporation ("ASC West"), STEAMBOAT SKI & RESORT CORPORATION, a Delaware
corporation, STEAMBOAT DEVELOPMENT CORPORATION, a Delaware corporation, HEAVENLY
VALLEY SKI & RESORT CORPORATION, a Delaware corporation, HEAVENLY CORPORATION, a
Delaware corporation, HEAVENLY VALLEY, LIMITED PARTNERSHIP, a Nevada limited
partnership of which Heavenly Valley Ski & Resort Corporation and Heavenly
Corporation own all of the partnership interests (each a "Borrower" and
collectively, the "Borrowers"), AMERICAN SKIING COMPANY, a Maine corporation
("American Ski"), the lenders from time to time party hereto (the "Lenders"),
and BANKBOSTON, N.A., a national banking association, as Agent (the "Agent") for
itself and the other lenders from time to time party thereto, as amended through
the date hereof (the "Credit Agreement"). Capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Credit Agreement.
The undersigned, being the Chief Financial Officer of each of the
Borrowers, hereby certifies to the Agent and the Lenders that:
1. I am familiar with and have access to all of the records regarding
its business and financial affairs of American Ski and the Borrowers, including,
without limitation, all of the matters and things hereinafter described.
2. The representations and warranties of American Ski and the Borrowers
contained in the Credit Agreement are true and correct on and as of the date
hereof.
3. All covenants and agreements of American Ski and the Borrowers
required to be performed by them on or before the date hereof have been duly
performed by it or them on or prior to the date hereof.
4. No Default or Event of Default under the Credit Agreement exists as
of the date hereof after giving effect to the execution and delivery of the
Third Amendment to Credit Agreement and the other transactions contemplated
thereby.
5. Since January 24, 1999, there has been no material adverse change in
the financial condition, operations or any material assets of American Ski and
the Borrowers, taken as a whole.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, I have hereunto set my hand this third day of
March, 1999.
ASC UTAH
ASC WEST, INC.
STEAMBOAT SKI & RESORT CORPORATION
STEAMBOAT DEVELOPMENT CORPORATION
HEAVENLY VALLEY SKI & RESORT CORPORATION
HEAVENLY CORPORATION
HEAVENLY VALLEY, LIMITED PARTNERSHIP
as Borrowers,
AMERICAN SKIING COMPANY,
as Guarantor,
By:_________________________
Name: Mark J. Miller
Title: Chief Financial Officer