First Amendment to
CONSTRUCTION LOAN AGREEMENT
This FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT is made by and
between THE CANYONS RESORT PROPERTIES, INC., a Maine corporation authorized to
do business in Utah (collectively the "Borrower") having its principal place of
business and mailing address at Sunday River Access Road, P.O. Box 450, Bethel,
ME 04217 and KEYBANK NATIONAL ASSOCIATION, a national bank with a place of
business at 70 Federal Street, Boston, Massachusetts 02110 (the "Lender" or
"Bank").
Whereas Borrower and Lender entered into a Construction Loan Agreement
dated December 18, 1998 (the "Loan Agreement"), the terms of which are
incorporated herein by reference;
Whereas Borrower and Lender desire to amend certain provisions of the
Loan Agreement identified below.
NOW THEREFORE, the parties hereby agree as follows:
I. Project Budget
The budget for total estimated Project Costs originally attached to the
Loan Agreement as Exhibit D is hereby amended to include Exhibit D-1, which
shall control in the event of any conflict.
Amended Section 9.19 re Financial Covenants
Section 9.19 of the of the Loan Agreement is hereby amended and
restated as follows:
"SECTION 9.19. Financial Covenants. The Borrower covenants and agrees that,
so long as the Loan is outstanding:
a) Appraised Value. The outstanding balance of the Loan shall not at any
time exceed seventy-seven percent (77%) of the Appraised Value of the
entire Mortgaged Property. If as a result of any such Appraisal such
ratio is greater than the percentages of the Loan specified above and
Borrower fails to reduce the outstanding Loan balance or provide
additional collateral securing the Loan then such event shall be an
Event of Default under this Agreement at the option of Lender, which
shall entitle Lender to exercise any one or more default remedies
under the Loan Documents as set forth in said documents and this
Agreement.
b) Borrower's Liquidity. [deleted]
c) Guarantor Tangible Net Worth. Guarantor shall maintain a Tangible Net
Worth equal to or greater than Sixty Million Dollars ($60,000,000).
"Tangible Net Worth" shall mean the excess of (i) all assets of
Borrower excluding intangible assets such as goodwill, over (ii) all
liabilities of Borrower excluding Intercompany Debt and excluding the
Senior Note Guaranty for so long as it is a contingent liability, all
as determined in accordance with generally accepted accounting
principles consistently applied. "Intercompany Debt" shall mean the
Indebtedness of Guarantor to American Ski Company. "Senior Note
Guaranty" shall mean the guaranty by Borrower of the Series A and
Series B 12% Senior Subordinated Notes due 2006 pursuant to the
Indenture dated June 28, 1996.
d) Guarantor's EBITDA. [deleted]
e) Guarantor's Liquidity. Guarantor shall obtain and maintain a minimum
average of Seven Million Five Hundred Thousand Dollars ($7,500,000.00)
over the course of each fiscal quarter consisting of the sum of: (i)
Guarantor's unrestricted cash; (ii) funds which Guarantor is entitled
to borrow under Guarantor's Amended and Restated Credit Agreement
dated January 8, 1999 with BankBoston, N.A. as Agent for the lenders
in the amount of $58,000,000, inclusive of any cash in cash collateral
accounts; and (iii) Guarantor's marketable securities consisting
obligations of the United States of America or securities listed and
regularly traded national securities exchanges in the United States
(i.e., New York or NASDAQ national market securities) other than the
securities of an Affiliate and which are acceptable to Lender
(collectively the "Guarantor's Liquidity"). Lender shall have the
right to confirm with BankBoston N.A. or its successors and assigns
the availability of such funds under the Amended and Restated Credit
Agreement. The Guarantor's Liquidity shall be reported at the end of
each fiscal quarter of Guarantor, but be a measured average determined
on a weekly basis. Notwithstanding anything to the contrary contained
within, the minimum average of the Guarantor's Liquidity required for
the fiscal quarter ending October, 1999, under the foregoing formula
shall be reduced to Three Million Dollars ($3,000,000) for that one
fiscal quarter only, after which the required Guarantor's Liquidity
minimum of 7,500,000 shall be reinstated."
III. Additional Fee
In addition to the commitment fee in the amount of $217,500.00
previously paid, Borrower shall pay Lender an additional fee of $200,000 at the
time of the execution of this Agreement, and drawable from proceeds of the Loan.
IV. SECTION 10.7(d) re Wolf Mountain Subordination.
The provisions of SECTION 10.7(d) regarding Wolf Mountain Resort L.C., a
Utah limited liability company (the "Junior Creditor") is hereby amended and
restated as follows:
(d) junior mortgage in favor of Junior Creditor, subject however
to the Subordination Agreement, which agreement shall include
provisions as follows:
(i) requiring the Junior Creditor to join in the creation
of the Condominium Units to the extent required to
validly form a condominium under the Utah Condominium
Act.
(ii) that insurance proceeds and condemnation awards with
respect to the Mortgaged Property shall be applied in
such manner as Lender may direct, including
applicable to the expenses of reconstruction and
rebuilding of the Mortgaged Property or to reduction
of the Loan balance;
(iii) providing that 100% of the net sale proceeds of the
Condominium Units shall be applied to the Loan until
the Loan is paid in full, and that Junior Creditor
shall deliver into escrow with the Title Company
discharges and terminations of its junior mortgage to
be released upon payment in full of its $2,097,495.60
loan secured by the junior mortgage, subject to the
Guarantor's agreement to repay the Loan from Lender
to the level where the net available proceeds of sale
under the Purchase and Sale Agreements are sufficient
to repay in full the Junior Loan and the Loan; and
(iv) contain such other provisions as Lender may require.
V. Section 13.1 (g) . Revised Event of Default
Section 13.1 (g) regarding Events of Default" is hereby amended and
restated as follows:
"(g) Borrower or Guarantor or American Skiing Company ("ASC") fails to pay
at maturity or within any applicable grace period any obligation for
money borrowed or credit advanced, or any other material agreement by
which it is bound, evidencing or securing money borrowed or credit
advanced, including without limitation the loan from the Junior
Creditor to Borrower, and such failure or default shall continue
without waiver thereof beyond any period of grace provided with
respect thereto, which failure or default shall or could have a
material adverse effect upon the financial condition of Borrower or
Guarantor or ASC, provided, however, that Borrower and Guarantor or
ASC shall not be required to pay any such third party debt, tax,
assessment, charge or levy if the same shall not at the time be due
and payable or can be paid thereafter without penalty or if the
validity thereof shall currently be contested in good faith by
appropriate proceedings and in addition, except as to debts, if
adequate reserves with respect to such judgment, tax, assessment,
charge or levy have been established to the reasonable satisfaction of
Lender; or"
VI. Post Closing Easement Agreement and Other Matters
Borrower acknowledges that it has not provided the Easement Agreement
consisting of The Canyons Village Resort Easement and Management Agreement to be
entered into among ASC Utah, Inc., Guarantor and Borrower in form and substance
acceptable to Lender all to be recorded in the Summit County, Utah Public
Records with releases or subordinations from all other parties with liens or
interests therein, all to be in form and substance acceptable to Lender as of
the date of the execution of this Amendment.
As an interim measure, Borrower shall obtain and record the Interim
Easement Agreement with ASC Utah, Inc., Guarantor and Borrower. On or before May
30, 1999, Borrower shall obtain a consent and subordination from the mortgagees
of Guarantor and ASC Utah, Inc. in form and substance acceptable to Lender. On
or before June 30, 1999, Borrower shall be in full compliance with the foregoing
master Easement Agreement requirement identified in the first paragraph of this
section. In the event that Borrower fails to comply with the foregoing, Lender
may suspend subsequent advances on the Loan.
The Borrower further acknowledges that Lender's initial advance shall
not constitute a waiver of Lender's right to require that Borrower fully comply
with all other requirements for the initial advance under the Loan Agreement.
VII. Ratification.
Except as expressly set forth above, the Loan Agreement shall remain in
full force and effect. In requesting this First Amendment Borrower and Guarantor
hereby represents to Lender, and Lender in agreeing to this Agreement relies
upon the representation of Borrower and Guarantor, that: (i) the Loan Agreement,
Note and all other loan documents governing or securing the Loan Agreement and
Note delivered by Borrower and Guarantor to Lender are each legal, valid and
enforceable according to their respective terms; (ii) the Borrower and Guarantor
have no defenses or claims against Lender with respect to its obligations under
the Loan Agreement, Note or other loan documents; (iii) other than as are
reflected in any written, signed agreements between Lender and Borrower or
Guarantor in existence as of the date hereof and still in effect, there are no
amendments or modifications of the Loan Agreement, Note or the loan documents.
Nothing contained herein shall be deemed to waive, forgive or otherwise
relieve Borrower and Guarantor from their continuing obligations to comply with
the Loan Agreement, the Note and all other Loan Documents, including without
limitation compliance with the conditions precedent to the initial advance set
forth in Article 11 of the Loan Agreement. which Borrower acknowledges remains
unsatisfied as of this date.
IN WITNESS WHEREOF, the undersigned have duly executed this First
Amendment as a sealed instrument as of April ____, 1999 at Portland, Maine.
The Canyons Resort Properties, Inc.
By: /s/ Mark P. Girard
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Witness Its Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ John Shea
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Witness Its Vice President
Seen and agreed as guarantor:
AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
By: /s/ Mark P. Girard
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Witness Its Vice President