PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of the 10th day of
November, 1997 between XXXXXX X. XXXXX, an individual whose
residence address is Sunday Xxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxx
00000 (the "Pledgor"), and ING (U.S.) CAPITAL CORPORATION, a
Delaware corporation (the "Pledgee").
WITNESSETH:
WHEREAS, the Pledgee proposes to enter into a Credit
Agreement, dated as of even date herewith (the "Credit
Agreement"), with Pledgor pursuant to which the Pledgee will
agree to make loans to the Pledgor in an aggregate principal
amount not exceeding $25,000,000 at any one time outstanding (the
"Loans");
WHEREAS, in order to induce the Pledgee to enter into
the Credit Agreement and make Loans to the Pledgor, the Pledgee
has required that the Pledgor execute, deliver and perform this
Pledge Agreement; and
WHEREAS, as of the date hereof, the Pledgor is the
registered and beneficial owner, directly or indirectly, of
14,760,530 shares of the Class A Common Stock, par value $0.01
per share ("Class A Stock"), of American Skiing Company, a Maine
corporation (the "Company") and 833,333 shares of the Common
Stock, par value $0.01 per share ("Common Stock"), of the Company
(collectively the "Shares");
NOW, THEREFORE, in consideration of the premi the
Pledgor agrees with the Pledgee as follows:
1. Unless otherwise defined herein, defined terms as
used herein shall have the same meanings as set forth in the
Credit Agreement.
2. As security for full and prompt payment to the
Pledgee of all sums owing by the Pledgor to the Pledgee under the
Credit Agreement, whether for principal, interest, fees, expenses
or otherwise, now or in the future (together called the
"Obligations"), the Pledgor hereby pledges, assigns and transfers
to the Pledgee, and hereby grants to the Pledgee a first lien on,
and first security interest in, all Shares from time to time and
at any time delivered to the Pledgee by the Pledgor in accordance
with the terms hereof and of the Credit Agreement (the "Pledged
Shares"), but excluding Shares released by the Pledgee from the
pledge hereof as herein provided.
3. Concurrently with the execution of this Pledge
Agreement, the Pledgor shall execute and deliver to the Pledgee
undated stock powers duly executed in blank for each certificate
representing the Pledged Shares, together with an Irrevocable
Proxy in favor of the Pledgee in respect of each stock
certificate representing the Pledged Shares in the form set out
in Exhibit A hereto (the "Irrevocable Proxy").
4. The Pledgor represents and warrants that:
(i) he is the legal and beneficial owner of, and
has good and marketable title to, the Pledged
Shares delivered to the Pledgee on the date
hereof, subject to no superior pledge, lien,
mortgage, hypothecation, security interest,
charge, option or other superior encumbrance
whatsoever, except the lien and security
interest created by this Pledge Agreement;
(ii) he has full power, authority and legal right
to execute, deliver and perform this Pledge
Agreement and to create the collateral
security interest for which this Pledge
Agreement provides, and has taken all
necessary action to authorize the execution,
delivery and performance of this Pledge
Agreement and the creation of the collateral
security interests for which this Pledge
Agreement provides;
(iii) the Pledged Shares have been duly and validly
issued and are fully paid and non-assessable;
(iv) there are no voting trusts or other agreements
or arrangements relating to the Pledged
Shares;
(v) this Pledge Agreement constitutes a valid
obligation of the Pledgor, legally binding
upon him and enforceable in accordance with
its terms;
(vi) the pledge, hypothecation, assignment and
delivery of the Pledged Shares pursuant to
this Pledge Agreement creates a valid first
perfected security interest in each of the
Pledged Shares and the proceeds thereof;
(vii) (A) no consent of any other party (including
the stockholders of the Company or any
creditor of the Pledgor or the Company) is
required in connection with the execution,
delivery, performance, validity,
2
enforceability or enforcement of this Pledge
Agreement, and (B) no consent, license,
approval or authorization of, or registration
or declaration with, any governmental
authority, bureau or agency is required in
connection with the execution, delivery,
performance, validity, enforceability or
enforcement of this Pledge Agreement; and
(viii) the execution, delivery and performance of
this Pledge Agreement will not violate or
contravene any provision of any existing law
or regulation or decree of any court,
governmental authority, bureau or agency
having jurisdiction in the premises or of the
Certificate of Incorporation of the Company or
of any mortgage, indenture, security
agreement, contract, undertaking or other
agreement to which the Pledgor or the Company
is a party or which purports to be binding
upon the Pledgor or the Company or any of
their respective properties or assets and will
not result in the creation or imposition of
any lien, charge or encumbrance on, or
security interest in, any of their respective
properties or assets pursuant to the
provisions of any such mortgage, indenture,
security agreement, contract, undertaking or
other agreement.
5. The Pledgor hereby covenants that during the
continuance of this Pledge Agreement:
(i) he shall warrant and defend the right and
title of the Pledgee conferred by this Pledge
Agreement in and to the Pledged Shares at the
cost of the Pledgor against the claims and
demands of all persons whomsoever;
(ii) except as herein provided, without the prior
written consent of the Pledgee, he shall not
sell, assign, transfer, charge, pledge or
encumber in any manner any part of the Pledged
Shares or any other Shares owned, directly or
indirectly, by him, or suffer to exist any
encumbrance on the Pledged Shares or any other
Shares owned, directly or indirectly, by him;
and
(iii) without the prior written consent of Pledgee,
he shall not vote the Pledged Shares in favor
3
of the consolidation, merger, dissolution,
liquidation or any other reorganization of the
Company.
6. If the Pledgor shall become entitled to receive or
shall receive any equity interests, certificates (including,
without limitation, any certificate representing a dividend or a
distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any
reorganization), options or rights, in substitution of, in
respect of or in exchange for any of the Pledged Shares the
Pledgor agrees to hold the same in trust for the benefit of the
Pledgee and to deliver the same forthwith to the Pledgee in the
exact form received, with the endorsement of the Pledgor when
necessary and/or appropriate undated stock powers duly executed
in blank, and irrevocable proxies for any certificates or other
securities so received, in substantially the form of Exhibit A to
be held by the Pledgee, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Shares on the liquidation or
dissolution of the Company shall be paid over to the Pledgee to
be held by it as additional collateral security for the
Obligations.
7. All property at any time pledged with the Pledgee
hereunder by the Pledgor (whether described herein or not) and
not released in accordance with the terms hereof, and all income
therefrom and proceeds thereof, are herein collectively sometimes
called the "Collateral".
8. The Pledgor hereby consents that, without the
necessity of any reservation of rights against the Pledgor, and
without notice to or further assent by the Pledgor, any demand
for payment of any of the Obligations made by the Pledgee may be
rescinded by the Pledgee and any of the obligations continued,
and the Obligations, or the liability of the Pledgor upon or for
any part thereof, or any other collateral security therefor
(hereinafter referred to as the "Security Documents")) or right
of offset with respect thereto, may, from time to time, in whole
or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Pledgee, and
the Security Documents, any other guarantees and any other
collateral security documents executed and delivered by the
Pledgor may be amended, modified, supplemented or terminated, in
whole or in part, as the Pledgee may deem advisable, from time to
time, and any other collateral security at any time held by the
Pledgee for the payment of the Obligations (including, without
limitation, any collateral security held pursuant to any other
collateral security document executed and delivered pursuant to
the Security Documents) may be sold, exchanged, waived,
surrendered or released, all without notice to or further assent
4
by the Pledgor, which will remain bound hereunder,
notwithstanding any such renewal, extension, modification,
acceleration, compromise, amendment, supplement, termination,
sale, exchange, waiver, surrender or release. The Pledgor waives
any and all notices of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of
reliance by the Pledgee upon this Pledge Agreement, and the
Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this
Pledge Agreement, and all dealings between the Company and the
Pledgee shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Pledge Agreement. The
Pledgor waives diligence, presentment, protest, demand for
payment and notice of default of non-payment to or upon the
Pledgor with respect to the obligations.
9. Upon the occurrence and during the continuance of
an Event of Default, the Pledgee shall as the Pledgee and as the
holder of the Irrevocable Proxy receive notice from the Pledgor
of all notices received by the Pledgor from the Company as the
holder of record of the Pledged Shares and have the right to vote
the Pledged Shares at its own discretion at any annual or special
meeting of the stockholders of the Company. Prior to the
occurrence and continuance of an Event of Default, the Pledgor
shall retain all voting rights with respect to the Collateral.
10. Upon the occurrence of any Event of Default, the
security constituted by this Pledge Agreement shall become
enforceable, and the Pledgee shall be entitled without further
notice to the Pledgor to exercise all voting and other corporate
rights at any meeting of the Company and exercise any and all
rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of the Pledged Shares as
if it were the absolute owner thereof, including, without
limitation, the right to exchange atits discretion, any and all
of such Pledged Shares upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the
Company or, upon the exercise by the Company or the Pledgee of
any right, privilege or option pertaining to any of the Pledged
Shares, and in connection therewith, to deposit and deliver any
and all certificates evidencing the Pledged Shares with any
committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may
determine, all without liability except to account for property
actually received by it.
11. At any time after the security constituted by this
Pledge Agreement shall have become enforceable as aforesaid, the
Pledgee shall be entitled without further notice to the Pledgor
to sell, assign or convert into money all or any part of the
Collateral in such manner and upon such terms and for such
5
consideration (whether in cash, securities or other assets,
whether deferred or not and whether at public or private sale) as
is commercially reasonable with the right to the Pledgee upon
such sale to purchase the whole or any part of the Collateral,
free of any right or equity of redemption in the Pledgor, which
right and/or equity is hereby expressly waived to the extent
permitted by applicable law.
12. The Pledgee shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing. In the
custody of the Collateral, the Pledgee shall exercise the same
care as it exercises with respect to the management of its own
affairs and property. Except as provided herein, the Pledgee
shall not sell, transfer, pledge, hypothecate or otherwise
encumber any of the Collateral.
13. The Pledgee shall apply the net proceeds of any
collection, recovery, receipt, approximation, realization or sale
of the Collateral after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the
care, safe-keeping or otherwise of any and all of the Collateral,
or in any way relating to the rights of the Pledgee hereunder,
including attorney's fees and legal expenses, to the payment, in
whole or in part, of the Obligations, and only after so applying
such net proceeds and after the payment by the Pledgee of any
other amount required by any provisions of law, the Pledgee shall
account as required by the Uniform Commercial Code for the
surplus, if any, to the Pledgor. The Pledgor agrees that the
Pledgee need not give more than twenty (20) days written notice
of the time and place of any public sale or of the time after
which a private sale may take place and that such notice is
commercially reasonable notification of such matters. In addition
to the rights and remedies granted to it in this Pledge Agreement
and in any other instrument or agreement securing, evidencing or
relating to any of the Obligations, the Pledgee shall have the
rights and remedies of a secured party under the Uniform
Commercial Code of the State of New York (the "UCC"). All of the
Pledgee's rights hereunder shall be limited by, and in accordance
with, the UCC.
14. When all of the Obligations shall have been fully
satisfied, the Pledgee agrees that it shall forthwith release the
Pledgor from its Obligations hereunder and the Irrevocable Proxy
shall terminate forthwith and be delivered to the Pledgor
forthwith.
15. The Pledgor shall from time to time, and at all
times after the security constituted by this Pledge Agreement
shall have become enforceable, execute all such further
instruments and documents and do all such things as the Pledgee
6
may reasonably deem desirable for the purpose of obtaining the
full benefit of this Pledge Agreement and of the rights, title,
interest, powers, authorities and discretions conferred on the
Pledgee by this Pledge Agreement including (without limitation)
causing the Company to execute any such instruments and documents
as aforesaid. The Pledgor hereby irrevocably appoints the Pledgee
its attorney-in-fact for it and in its name and on its behalf and
as its act and deed to execute, seal and deliver and otherwise
perfect any deed, assurance, agreement, instrument or act which
it may reasonably deem desirable for any of the purposes of this
Pledge Agreement; provided that the Pledgee shall not exercise
such power until the security constituted by this Pledge
Agreement shall have become enforceable. The Pledgee shall have
full power to delegate this power of attorney but no such
delegation shall preclude the subsequent exercise of such power
by the Pledgee itself or preclude the Pledgee from subsequent
delegation to some other person and any delegation may be revoked
by the Pledgee at any time.
16. (a) The Pledgee shall release Collateral having a
Fair Market Value of at least $1,000,000 from time to time upon
request of the Pledgor if (i) no Default exists or would result
therefrom and (ii) after giving effect to such release, the
aggregate outstanding principal amount of the Loans does not
exceed the Borrowing Base.
(b) In order to effect a release of Collateral as
contemplated by clause (a) above, the Pledgee will (i) confirm
the release in a certificate, if necessary, and (ii) deliver, or
cause to be delivered, to the Pledgor the certificate evidencing
the Pledged Shares to be released hereunder.
(c) In connection with any release of Pledged
Shares, no shares of Common Stock shall be released unless and
until there are no Pledged Shares consisting of Class A Stock.
17. IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES
HERETO THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMNT.
18. The Pledgee shall not by any act, delay, omis- sion
or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in
writing, signed by the Pledgee, and then only to the extent
therein set forth. A waiver by the Pledgee of any right or remedy
hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Pledgee would otherwise have had on
any future occasion. No failure to exercise nor any delay in
exercising on the part of the Pledgee, any right, power or
7
privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
19. None of the terms or provisions of this Pledge
Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the Pledgee and the
Pledgor. This Pledge Agreement and all obligations of the Pledgor
hereunder shall be binding upon the successors and permitted
assigns of the Pledgor and shall, together with the rights and
remedies of the Pledgee hereunder, inure to the benefit of the
Pledgee, its respective successors and permitted assigns.
20. Notices and other communications hereunder shall be
telefaxed and confirmed by certified mail if domestic (by federal
express, express mail or courier, if international) as follows:
8
If to the Pledgor - Xxxxxx X. Xxxxx
c/o American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxxx X. Xxxxxx, Esq.
American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Pledgee - ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Every notice or demand shall, except so far as otherwise
expressly provided by this Pledge Agreement, be deemed to have
been received in the case of a telefax. with confirmed answerback
at the time of dispatch thereof (provided that if the date of
dispatch is not a Business Day in the locality of the party to
whom such notice or demand is sent it shall be deemed to have
been received on the next following Business Day in such
locality).
21. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
22. THE PLEDGOR (I) HEREBY IRREVOCABLY SUBMITS HIMSELF
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL
COURT OF THE UNITED STATES LOCATED IN NEW YORK STATE, FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS PLEDGE AGREEMENT, THE SUBJECT MATTER HEREOF OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY BROUGHT BY THE PLEDGEE, OR ITS
SUCCESSORS OR ASSIGNS, AND (II) HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS PLEDGE AGREEMENT
9
OR THE SUBJECT MATTER HEREOF OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY MAY NOT BE ENFORCED IN OR BY SUCH COURTS. THE
PLEDGOR HEREBY IRREVOCABLY AND GENERALLY CONSENTS TO SERVICE OF
PROCESS BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT THE
PLEDGOR'S ADDRESS SET FORTE HEREIN IN ANY ACTION, SUIT OR
PROCEEDING WITH RESPECT TO ANY MATTER AS TO WHICH IT SUBMITS TO
JURISDICTION AS SET FORTH ABOVE. THE PLEDGOR HEREBY AGREES THAT
HIS SUBMISSION TO JURISDICTION SET FORTH ABOVE IS MADE FOR THE
EXPRESS BENEFIT OF THE PLEDGEE. FINAL JUDGMENT AGAINST THE
PLEDGOR IN ANY SUIT IN ANY COURT REFERRED TO ABOVE SHALL BE
CONCLUSIVE, AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE
CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF ANY
INDEBTEDNESS OR LIABILITY OF THE PLEDGOR THEREIN DESCRIBED;
PROVIDED, ALWAYS THAT THE PLAINTIFF MAY AT ITS OPTION BRING SUIT,
OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE PLEDGOR OR
ANY OF HIS ASSETS IN THE COURTS OF ANY COUNTRY OR PLACE WHERE THE
PLEDGOR OR SUCH ASSETS MAY BE FOUND.
IN WITNESS whereof the parties hereto have caused this
Pledge Agreement to be duly executed as of the day and year first
above written.
/s/Xxxxxx X. Xxxxx
_____________________________
Xxxxxx X. Xxxxx
ING (U.S.)CAPITAL CORPORATION
By:__________________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
10
WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT,
ACTION OR PROCEEDING, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS PLEDGE AGREE NT OR THE SUBJECT MATTER
HEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. THE PLEDGOR HEREBY IRREVOCABLY AND
GENERALLY CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL,
RETURN RECEIPT REQUESTED, AT THE PLEDGOR'S ADDRESS SET FORTE
HEREIN IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY
MATTER AS TO WHICH IT SUBMITS TO JURISDICTION AS SET FORTE ABOVE.
THE PLEDGOR HEREBY AGREES THAT HIS SUBMISSION TO JURISDICTION SET
FORTH ABOVE IS MADE FOR THE EXPRESS BENEFIT OF THE PLEDGEE. FINAL
JUDGMENT AGAINST THE PLEDGOR IN ANY SUIT IN ANY COURT REFERRED TO
ABOVE SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT, A CERTIFIED OR TRUE COPY
OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE
AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF THE PLEDGOR THEREIN
DESCRIBED; PROVIDED, ALWAYS THAT THE PLAINTIFF MAY AT ITS OPTION
BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE
PLEDGOR OR ANY OF HIS ASSETS IN THE COURTS OF ANY COUNTRY OR
PLACE WHERE THE PLEDGOR OR SUCH ASSETS MAY BE FOUND.
IN WITNESS whereof the parties hereto have caused this
Pledge Agreement to be duly executed as of the day and year first
above written.
________________________
Xxxxxx X. Xxxxx
ING (U.S.)CAPITAL CORPORATION
/s/Xxxxx X. Xxxxxx
By:______________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
11
EXHIBIT A
IRREVOCABLE PROXY
The undersigned, (the "Pledgor"), the registered owner
of the shares of American Skiing Company, a Maine corporation
(the "Company"), described in Schedule 1 hereto (the "Pledged
Shares"), hereby makes, constitutes and appoints ING (U.S.)
Capital Corporation (the "Pledgee") with full power to appoint a
nominee or nominees to act hereunder from time to time, upon the
occurrence and during the continuance of an Event of Default (as
defined in the Pledge Agreement referred to herein) the true and
lawful attorney and proxy of the undersigned to vote all of the
Pledged Shares at all annual and special meetings of stockholders
of the Company or take any action by written consent with the
same force and effect as the undersigned might or could do,
hereby ratifying and confirming all that he said attorney or
their nominee or nominees shall do or cause to be done by virtue
hereof.
The said interests have been pledged (the "Pledge") to
the Pledgee pursuant to the terms and conditions of that certain
Pledge Agreement dated as of November 10, 1997, between the
Pledgor and the Pledgee.
This power and proxy is coupled with an interest and is
irrevocable and shall remain irrevocable so long as the Pledge is
outstanding and is in full force and effect.
IN WITNESS whereof the undersigned has caused this
instrument to be executed by its duly authorized representative
this ___ day of _________, 1997.
_________________________
Xxxxxx X. Xxxxx
00
SCHEDULE 1
LEDGED SHARES
13
01531013.AD2
