EXHIBIT 10.55
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SECOND AMENDMENT TO
CREDIT AGREEMENT
Dated as of May 30, 1997
Among
AMERICAN SKIING COMPANY
SUNDAY RIVER SKIWAY CORPORATION
SUNDAY RIVER LTD.
PERFECT TURN, INC.
SUNDAY RIVER TRANSPORTATION INC.
LBO HOLDING, INC.
CRANMORE, INC.
SUGARBUSH RESORT HOLDINGS INC.
SUGARBUSH LEASING COMPANY
SUGARBUSH RESTAURANTS, INC.
MOUNTAIN WASTEWATER TREATMENT, INC.
S-K-I LTD.
KILLINGTON, LTD.
MOUNT SNOW LTD.
WATERVILLE VALLEY SKI AREA LTD.
PICO SKI AREA MANAGEMENT COMPANY
RESORTS SOFTWARE SERVICES, INC.
KILLINGTON RESTAURANTS, INC.
RESORT TECHNOLOGIES, INC.
DOVER RESTAURANTS, INC.
DEERFIELD OPERATING COMPANY
SUGARLOAF MOUNTAIN CORPORATION
MOUNTAINSIDE
SUGARTECH
the Borrowers
and
FLEET NATIONAL BANK
BANKBOSTON, N.A.
KEYBANK NATIONAL ASSOCIATION
the Banks
and
FLEET NATIONAL BANK, AS AGENT
the Agent
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SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT is entered into as of May 30,
1997 by and among AMERICAN SKIING COMPANY, SUNDAY RIVER SKIWAY CORPORATION,
SUNDAY RIVER LTD., PERFECT TURN, INC., SUNDAY RIVER TRANSPORTATION INC., LBO
HOLDING, INC., CRANMORE, INC., SUGARBUSH RESORT HOLDINGS INC., SUGARBUSH LEASING
COMPANY, SUGARBUSH RESTAURANTS, INC., MOUNTAIN WASTEWATER TREATMENT, INC., S-K-I
LTD., KILLINGTON, LTD., MOUNT SNOW LTD., WATERVILLE VALLEY SKI AREA LTD., PICO
SKI AREA MANAGEMENT COMPANY, RESORTS SOFTWARE SERVICES, INC., KILLINGTON
RESTAURANTS, INC., RESORT TECHNOLOGIES, INC., DOVER RESTAURANTS, INC., DEERFIELD
OPERATING COMPANY, SUGARLOAF MOUNTAIN CORPORATION, MOUNTAINSIDE and SUGARTECH
(each a "Borrower" and collectively the "Borrowers"), FLEET NATIONAL BANK,
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston) and KEYBANK NATIONAL
ASSOCIATION (f/k/a KeyBank of Maine) as the Banks parties to the Credit
Agreement referred to below (the "Lenders"), and FLEET NATIONAL BANK, as Agent
(the "Agent") under the Credit Agreement referred to below.
Recitals
The Borrowers, the Lenders and the Agent are parties to a Credit Agreement
dated as of June 28, 1996 (as previously amended, the "Credit Agreement"). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement. The Borrowers desire to (a) increase the
Maximum Revolving Credit Amount under the Credit Agreement and (b) amend the
Credit Agreement in certain other respects. The Lenders and the Agent are
willing to amend the Credit Agreement on the terms and conditions set forth
herein.
NOW, THEREFORE, subject to the satisfaction of the conditions to
effectiveness specified in Section 6, the Borrowers, the Lenders and the Agent
hereby agree as follows:
Section 1. Definitions. Section 1.1 of the Credit Agreement is hereby
amended as follows:
(a) The definitions of "Consolidated Adjusted Cash Flow", "Hotel
Subsidiary" and "Maximum Revolving Credit Agreement" are hereby deleted in their
entirety and new definitions substituted therefor, as follows:
"Consolidated Adjusted Cash Flow" shall mean (a) Consolidated
EBITDA (before any adjustments to reflect acquisitions, sales and
exchanges of property during such period) for each fiscal year of
the Borrowers and their Restricted Subsidiaries less (b) the sum of
(i) $6,000,000, representing the Borrowers' and their Restricted
Subsidiaries estimated Capital
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Expenditures required to maintain their existing ski resorts, and
(ii) cash taxes paid.
"Hotel Subsidiary" shall mean Grand Summit Resort
Properties, Inc.
"Maximum Revolving Credit Amount" shall mean as of any date of
determination, the lesser of (a)(i) $65,000,000 from May __, 1997
through Xxxxx 00, 0000, (xx) $57,500,000 from May 1, 1998 through
April 30, 1999, (iii) $50,000,000 from May 1, 1999 through June 30,
2000, and (iv) $42,500,000 from July 1, 2000 through the Revolving
Credit Termination Date, or (b) the amount to which the Maximum
Revolving Credit Amount may have been reduced pursuant to Section
2.10; provided that if the obligation of the Lenders to make further
Loans is terminated upon the occurrence of an Event of Default, the
Maximum Revolving Credit Amount as of any date of determination
thereafter shall be deemed to be $0.
(b) The definitions of "Asset Sale Permanent Reduction Date" and
"Asset Sale Reserve" are hereby deleted in their entirety.
(c) New definitions of "Capital Expenditure Test Period," "Second
Amendment" and "Wolf Mountain Development" shall be added in alphabetical order,
as follows:
"Capital Expenditure Test Period" shall mean each period
commencing April 1 of any year and ending March 31 of the following
year.
"Second Amendment" shall mean the Second Amendment to Credit
Agreement among the Borrowers, the Lenders and the Agent dated as of
May 30, 1997.
"Wolf Mountain Development" shall mean the acquisition and
development of Wolf Mountain ski resort in Park City, Utah by any
Borrower.
Section 2. Amendment of Article 2.
(a) Section 2.1 of the Credit Agreement is hereby amended by
deleting paragraphs (b) and (c) thereof in their entirety and substituting
therefor the following:
(b) Subject to the foregoing limitations and the provisions of
Section 4.2, the Borrowers shall have the right to make prepayments
reducing the outstanding
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balance of Revolving Credit Advances and to request further Revolving
Credit Advances, all in accordance with Section 2.2, without other
restrictions hereunder; provided that the Lenders shall have the absolute
right to refuse to make any Revolving Credit Advances for so long as there
exists any Default or any other condition which would constitute a Default
upon the making of such a Revolving Credit Advance; and provided further
that during each fiscal year of the Borrowers, commencing with the fiscal
year ending July, 1997, there shall be a period of 45 consecutive days,
including March 31 of each year, during which the outstanding principal
amount of all Revolving Credit Advances shall not exceed the amounts set
forth below:
-----------------------------------------
Maximum Outstanding
Clean-Down Period Revolving Credit
Including March 31 Advances
-----------------------------------------
1997 $25,000,000
-----------------------------------------
1998 $30,000,000
-----------------------------------------
1999 $25,000,000
-----------------------------------------
2000 $20,000,000
-----------------------------------------
2001 $15,000,000
-----------------------------------------
Promptly following the commencement of each clean-down period, American
Ski will notify the Agent that the clean-down period has begun.
(b) Article 2 of the Credit Agreement is hereby further amended by
deleting Section 2.10 thereof in its entirety and substituting therefor the
following:
Section 2.10 Reduction of Commitment by the Borrowers. The
Borrowers at their option may, at any time and from time to time,
(a) irrevocably reduce in part (in integral multiples of $1,000,000)
the unused portion of the Available Revolving Credit Amount or (b)
terminate the entire unused portion of the Available Revolving
Credit Amount, in each case on not less than five (5) Business Days'
prior written notice to the Agent and upon payment of any amounts
due under Section 4.2. No such reduction may be reinstated by the
Borrowers.
(c) Section 2.13 of the Credit Agreement is hereby amended to permit
the Borrowers to use the up to $1,320,000 of proceeds of Revolving Credit
Advances to fund certain costs relating to the Wolf Mountain Development,
consisting of (i) $1,000,000 as an installment of the purchase price of the
so-called "Condas parcel", (ii) $200,000 xxxxxxx
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money, (iii) $75,000 for acquisition of the Gorgoza Water Option, and (iv)
$45,000 for filing fees under the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvement Act
of 1976, as amended.
Section 3. Amendment of Covenants.
(a) Section 4.2(c) of the Credit Agreement is hereby amended by
deleting the last sentence thereof in its entirety and substituting therefor the
following: "For purposes of this Section 4.2(c), the Maximum Revolving Credit
Amount shall be deemed to be $65,000,000."
(b) Section 6.1 of the Credit Agreement is hereby amended by adding
the following new paragraph (c) thereto:
(c) Not more than seven (7) days after the end of each
month, the Borrowers shall furnish to the Agent and each
Lender its internally prepared, unaudited profit plan report
in the form currently prepared by the Borrowers.
(c) Article 6 of the Credit Agreement is hereby amended by deleting
Section 6.2 thereof in its entirety and substituting therefor the following:
Section 6.2. Annual Financial Statements. As soon as
available, but in any event within ninety (90) days after the end of
each fiscal year of the Borrowers, the Borrowers shall furnish to
the Agent and each Lender: (a) audited consolidated and
consolidating balance sheets of (i) the Borrowers and their
Restricted Subsidiaries and (ii) the Borrowers and their
Subsidiaries, as of the end of such fiscal year, and consolidated
and consolidating statements of income, shareholders' equity and
cash flow of (i) the Borrowers and their Restricted Subsidiaries and
(ii) the Borrowers and their Subsidiaries, for such fiscal year, in
each case (other than the consolidating statements) reported on by
Price Waterhouse LLP, or other independent certified public
accountants of recognized national standing acceptable to the Agent,
which report shall express, without reliance upon others, a positive
opinion regarding the fairness of the presentation of such financial
statements in accordance with generally accepted accounting
principles consistently applied, said report to be without
qualification, except in cases of unresolved litigation and
accounting changes with which such accountants concur, together with
the statement of such accountants that they have caused the
provisions of this Agreement and the other Lender Agreements to be
reviewed and that nothing has come to their attention to lead them
to believe that any Default exists hereunder or specifying
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any Default and the nature thereof; (b) a Compliance Certificate;
and (c) unconsolidated audited financial statements of the Hotel
Subsidiary and the Insurance Subsidiary similar to the financial
statements described in clause (a) above. At the time of delivery of
the annual audited financial statements, the Borrowers shall furnish
to the Agent and each Lender copies of the written recommendations
concerning the management, finances, financial controls, or
operations of any Borrower or any Restricted Subsidiary received
from the Borrowers' independent public accountants.
(d) Section 6.5 of the Credit Agreement is hereby amended by adding
the words "paid skier visits and unpaid" before the words "skier visits" in
clause (i) thereof.
(e) Article 7 of the Credit Agreement is hereby amended by deleting
Sections 7.3 and 7.4 thereof in their entirety and substituting therefor the
following:
Section 7.3. Ratio of Consolidated Adjusted Cash Flow to
Consolidated Debt Service. The Borrowers and their Restricted
Subsidiaries shall maintain as of the end of each fiscal quarter
commencing with the fourth fiscal quarter of the Borrowers' fiscal
year 1997 for the four-quarter period ending on such date a ratio of
(a) Consolidated Adjusted Cash Flow to (b) Consolidated Debt Service
of not less than the following levels as of the end of any fiscal
quarter during the year indicated:
Fiscal Year
Ending July Ratio
----------- -----
1997 1.20-to-1.00
1998 1.40-to-1.00
1999 1.50-to-1.00
2000 1.40-to-1.00
2001 1.75-to-1.00
Section 7.4. Minimum Consolidated Tangible Net Worth. The
Borrowers and their Restricted Subsidiaries shall maintain minimum
Consolidated Tangible Net Worth as of the last day of each fiscal
year of the Borrowers of not less than the sum of (a) $10,000,000
plus (b) 50% of cumulative Consolidated Net Income (without
deduction for any losses) for each fiscal year, commencing with the
fiscal year ending July 1997 plus (c) all amounts received by the
Borrowers after June 28, 1996 from the issuance of equity interests.
5
(f) Section 8.11 of the Credit Agreement is hereby amended by adding
the following sentence at the end thereof: "The Borrowers and their Restricted
Subsidiaries will conduct their business and operations separately from that of
the Unrestricted Subsidiaries, and will cause the Unrestricted Subsidiaries to
conduct their business and operations separately from that of the Borrowers and
their Restricted Subsidiaries, including without limitation (i) not commingling
funds or other assets, (ii) maintaining separate corporate and financial records
and observing all corporate formalities, (iii) paying their respective
liabilities from their respective assets, except pursuant to any guarantees
extended by the Borrowers and their Restricted Subsidiaries of obligations of
Unrestricted Subsidiaries with the approval of the Lenders, (iv) maintaining
capitalization adequate to meet their respective business needs, and (v)
conducting dealings with third parties in their respective names and as separate
and independent entities."
(g) Article 9 of the Credit Agreement is hereby amended by deleting
Section 9.12 thereof in its entirety and substituting therefor the following:
Section 9.12. Limitations on Real Estate Operations. Engage in
any real estate development, or similar activities, including
acquisition of land intended for resale or development of
residential subdivisions, condominium units, golf courses, tennis
courts, hotels or related infrastructure and utilities, except
through the Development Subsidiary, the Hotel Subsidiary and any
Unrestricted Subsidiary and except for the completion of the Xxxxx
Mountain development at Sunday River; provided, however, that from
the date hereof through July 31, 1997, the Borrowers may conduct
pre-development activities, excluding construction costs, related to
the development of hotels so long as all costs incurred for such
activities (the "Pre-Construction Expenditures") do not exceed
$4,000,000 and all such expenditures will be repaid to the
Borrowers.
(h) Article 9 of the Credit Agreement is hereby further amended by
deleting Section 9.14 thereof in its entirety and substituting therefor the
following:
Section 9.14. Capital Expenditures. Make any Capital
Expenditure except that (a) for the fifteen-month period from May 1,
1996 through February 28, 1997, the Borrowers and their Restricted
Subsidiaries may make Capital Expenditures of not more than
$21,000,000, of which not less than $9,500,000 shall be funded from
the proceeds of Capital Asset Financing, (b) for the Capital
Expenditure Test Period commencing April 1, 1997, the Borrowers and
their Restricted Subsidiaries may make Capital Expenditures of not
more than the sum of (i) (A) $27,500,000 less (B) the aggregate
amount of Pre-Construction Expenditures
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(as defined in Section 9.12) which have not been repaid to the
Borrowers on or before July 31, 1997, less (C) all amounts expended
by the Borrowers, directly or indirectly, in connection with the
acquisition and development of Wolf Mountain in Park City, Utah,
which have not been repaid to the Borrowers on or before July 31,
1997, plus (ii) up to $5,000,000 for Capital Expenditures for the
Killington/Pico interconnect project, or such other projects as may
be approved by the Lenders in writing and (c) during each Capital
Expenditure Test Period thereafter, the Borrowers and their
Subsidiaries may make Capital Expenditures not to exceed the sum of
(i) $6,000,000, which amount is intended to be used for maintenance
Capital Expenditures, plus (ii) the Discretionary Capital
Expenditure Allowance, to be used for discretionary Capital
Expenditures in accordance with the Capital Expenditure budget
delivered under Section 6.4 hereof. Attached as Exhibit A to the
Second Amendment is a description of the Borrowers' proposed capital
expenditures for the Capital Expenditure Test Period commencing
April 1, 1997 and those expenditures which will not be made if the
deductions referred to in clauses (b)(i)(B) and (C) above are
required to be made.
Section 4. Treatment of Asset Sales under Subordinated Notes Indentures.
The Borrowers hereby represent and warrant that (a) the aggregate amount of Net
Proceeds received from Asset Sales (each as defined in the Subordinated Notes
Indentures) from June 25, 1996 through the date hereof, including without
limitation the DOJ Divestiture, does not exceed $16,500,000; (b) since the
receipt of such Net Proceeds from each such Asset Sale, the Borrowers have
applied such Net Proceeds to the making of capital expenditures or the
acquisition of long-term assets in the same line of business as any Borrower was
engaged immediately prior to such Asset Sale, in an aggregate amount not less
than $17,900,000; and (c) in the absence of any further such Asset Sale, the
Borrowers will have no obligation under the Subordinated Notes Indenture to
permanently reduce Senior Debt (as defined in the Subordinated Notes Indentures)
of the Borrowers.
Section 5. Security Interest in Utah Assets. Promptly following the
acquisition by any Borrower of any assets, real or personal, tangible or
intangible, relating to or in connection with the Wolf Mountain Development,
including without limitation the so-called "Condas parcel," such Borrower will
grant to the Agent, upon the Agent's request, a first priority mortgage on or
security interest in all such assets so acquired, and in connection therewith
such Borrower shall execute and deliver to the Agent such agreements,
instruments, certificates, opinions, title insurance policies, and other
documents reasonably requested by the Agent.
7
Section 6. Effectiveness; Conditions to Effectiveness. This Second
Amendment to Credit Agreement shall become effective as of May 30, 1997 upon
execution hereof by the Borrowers, the Lenders and the Agent and satisfaction of
the following conditions:
(a) Resolutions. Copies of the resolutions of the Board of Directors
of the Borrowers authorizing the execution, delivery and performance of this
Third Amendment and the other Lender Agreements executed in connection herewith
to which any Borrower is a party, certified by the Secretary or an Assistant
Secretary (or Clerk or Assistant Clerk) of each Borrower (which certificate
shall state that such resolutions are in full force and effect).
(b) Officers' Certificate. A certificate of the Secretary or an
Assistant Secretary (or Clerk or Assistant Clerk) of each Borrower certifying
(i) the name and signatures of the officers of such Borrower authorized to sign
this Second Amendment and the other Lender Agreements executed in connection
herewith to which any Borrower is a party and (ii) as to no change in the
charter documents or By-laws of the Borrowers previously certified to the Agent.
(c) Opinion of Counsel. The Agent shall have received an opinion of
Xxxxxx Xxxxxx, general counsel to the Borrowers, with respect to such matters as
the Agent may request.
(d) Amendment Fee. The Agent shall have received for the benefit of
the Lenders pro rata, an amendment fee of $50,000, which shall be deemed earned
in full by the Lenders upon their execution and delivery hereof.
Section 7. Representations and Warranties; No Default. The Borrowers
hereby confirm to the Agent and the Lenders the representations and warranties
of 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. The Borrowers
hereby further represent and warrant that the activities of the Borrowers with
respect to the Wolf Mountain Development, taken prior hereto and all such
activities expected to be undertaken after the date hereof and financed,
directly or indirectly, with proceeds of Revolving Credit Advances, including
without limitation the acquisition of the Condas parcel, the payment of xxxxxxx
money and the acquisition of the Gorgoza Water option, do not constitute a
default under the Senior Subordinated Notes Indenture and, to the extent they
constitute the incurrence of Indebtedness (as defined under the Senior
Subordinated Notes Indenture), such Indebtedness is permitted purchase money
Indebtedness. The Borrowers hereby certify that no Default exists under the
Credit Agreement.
Section 8. Miscellaneous. The Borrowers agree, jointly and severally, to
pay on demand all the Agent's reasonable expenses in preparing, executing and
delivering this Second 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, Xxxxxxx, Procter &
Xxxx LLP. This Second Amendment to Credit Agreement shall
8
be a Lender Agreement and shall be governed by and construed and enforced under
the laws of The Commonwealth of Massachusetts.
9
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have caused
this Second Amendment to Credit Agreement to be executed by their duly
authorized officers as of the date first set forth above.
AMERICAN SKIING COMPANY
By: /s/ [Illegible]
---------------------------------
SUNDAY RIVER SKIWAY CORPORATION
By: /s/ [Illegible]
---------------------------------
SUNDAY RIVER LTD.
By: /s/ [Illegible]
---------------------------------
PERFECT TURN, INC.
By: /s/ [Illegible]
---------------------------------
SUNDAY RIVER TRANSPORTATION INC.
LBO HOLDING, INC.
By: /s/ [Illegible]
---------------------------------
CRANMORE, INC.
By: /s/ [Illegible]
---------------------------------
SUGARBUSH RESORT HOLDINGS INC.
By: /s/ [Illegible]
---------------------------------
10
SUGARBUSH LEASING COMPANY
By: /s/ [Illegible]
---------------------------------
SUGARBUSH RESTAURANTS, INC.
By: /s/ [Illegible]
---------------------------------
MOUNTAIN WASTEWATER TREATMENT,
INC.
By: /s/ [Illegible]
---------------------------------
S-K-I LTD.
By: /s/ [Illegible]
---------------------------------
KILLINGTON, LTD.
By: /s/ [Illegible]
---------------------------------
MOUNT SNOW LTD.
By: /s/ [Illegible]
---------------------------------
WATERVILLE VALLEY SKI AREA LTD.
By: /s/ [Illegible]
---------------------------------
PICO SKI AREA MANAGEMENT COMPANY
By: /s/ [Illegible]
---------------------------------
11
RESORTS SOFTWARE SERVICES, INC.
By: /s/ [Illegible]
---------------------------------
KILLINGTON RESTAURANTS, INC.
By: /s/ [Illegible]
---------------------------------
RESORT TECHNOLOGIES, INC.
By: /s/ [Illegible]
---------------------------------
DOVER RESTAURANTS, INC.
By: /s/ [Illegible]
---------------------------------
DEERFIELD OPERATING COMPANY
By: /s/ [Illegible]
---------------------------------
SUGARLOAF MOUNTAIN CORPORATION
By: /s/ [Illegible]
---------------------------------
MOUNTAINSIDE
By: /s/ [Illegible]
---------------------------------
SUGARTECH
By: /s/ [Illegible]
---------------------------------
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FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
BANKBOSTON, N.A.
By:
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, AS AGENT
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
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FLEET NATIONAL BANK
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By:
------------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, AS AGENT
By:
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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FLEET NATIONAL BANK
By:
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
BANKBOSTON, N.A.
By:
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, AS AGENT
By:
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
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