$105,000,000
SECOND LIEN CREDIT AGREEMENT
among
AMERICAN SKIING COMPANY,
The Several Lenders from Time to Time Parties Hereto,
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Collateral Agent
Dated as of November 24, 2004
GECC CAPITAL MARKETS GROUP, INC. and CREDIT SUISSE FIRST BOSTON,
as Co-Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
SECTION I. DEFINITIONS........................................................1
1.1. Defined Terms................................................1
1.2. Other Definitional Provisions...............................18
SECTION II. AMOUNT AND TERMS OF COMMITMENTS..................................18
2.1. Commitments.................................................18
2.2. Procedure for Borrowing.....................................18
2.3. Repayment of Term Loans.....................................19
2.4. Fees, etc...................................................19
2.5. Optional Prepayments........................................19
2.6. Mandatory Prepayments.......................................19
2.7. Conversion and Continuation Options.........................20
2.8. Limitations on Eurodollar Tranches..........................21
2.9. Interest Rates and Payment Dates............................21
2.10. Computation of Interest and Fees............................21
2.11. Inability to Determine Interest Rate........................22
2.12. Pro Rata Treatment and Payments.............................22
2.13. Requirements of Law.........................................23
2.14. Taxes.......................................................24
2.15. Indemnity...................................................26
2.16. Change of Lending Office....................................26
2.17. Replacement of Lenders......................................26
SECTION III. REPRESENTATIONS AND WARRANTIES..................................27
3.1. Financial Condition.........................................27
3.2. No Change...................................................27
3.3. Existence; Compliance with Law..............................27
3.4. Power; Authorization; Enforceable Obligations...............28
3.5. No Legal Bar................................................28
3.6. Litigation..................................................28
3.7. No Default..................................................28
3.8. Ownership of Property; Liens................................28
3.9. Intellectual Property.......................................28
3.10. Taxes.......................................................29
3.11. Federal Regulations.........................................29
3.12. Labor Matters...............................................29
3.13. ERISA.......................................................29
3.14. Investment Company Act; Other Regulations...................29
3.15. Subsidiaries................................................30
3.16. Use of Proceeds.............................................30
3.17. Environmental Matters.......................................30
3.18. Accuracy of Information, etc................................31
3.19. Security Documents..........................................31
3.20. Solvency....................................................32
3.21. Senior Indebtedness.........................................32
3.22. Regulation H................................................32
3.23. Certain Documents...........................................32
3.24. Forest Service Term Special Use Permits.....................32
3.25. Location....................................................32
3.26. Water Rights................................................33
3.27. Grand Summit Resort Properties, Inc.........................33
i
SECTION IV. CONDITIONS PRECEDENT.............................................33
4.1. Conditions to Loans.........................................33
SECTION V. AFFIRMATIVE COVENANTS.............................................37
5.1. Financial Statements........................................37
5.2. Certificates; Other Information.............................38
5.3. Payment of Obligations......................................39
5.4. Maintenance of Existence; Compliance........................39
5.5. Maintenance of Property Insurance...........................39
5.6. Inspection of Property; Books and Records; Discussions;
Surveys...................................................39
5.7. Notices.....................................................39
5.8. Environmental Matters.......................................40
5.9. Additional Collateral, etc..................................41
5.10. Forest Service Permits......................................43
5.11. Agreements with Respect to Excluded Subsidiaries............43
5.12. Interest Rate Protection....................................43
5.13. Post-Closing Obligations....................................43
SECTION VI. NEGATIVE COVENANTS...............................................44
6.1. Minimum Consolidated EBITDA.................................44
6.2. Indebtedness................................................44
6.3. Liens.......................................................45
6.4. Fundamental Changes.........................................46
6.5. Disposition of Property.....................................46
6.6. Restricted Payments.........................................48
6.7. Capital Expenditures........................................48
6.8. Investments.................................................49
6.9. Optional Payments and Modifications of Certain Debt
Instruments...............................................49
6.10. Transactions with Affiliates................................50
6.11. Sales and Leasebacks........................................50
6.12. Swap Agreements.............................................50
6.13. Changes in Fiscal Periods...................................50
6.14. Restrictive Agreements......................................50
6.15. Lines of Business...........................................51
6.16. Maintenance Capital Expenditures Variance...................51
SECTION VII. EVENTS OF DEFAULT...............................................51
SECTION VIII. THE AGENTS.....................................................54
8.1. Appointment.................................................54
8.2. Delegation of Duties........................................54
8.3. Exculpatory Provisions......................................54
8.4. Reliance by Agents..........................................54
8.5. Notice of Default...........................................55
8.6. Non-Reliance on Agents and Other Lenders....................55
8.7. Indemnification.............................................55
8.8. Agents in Their Individual Capacities.......................56
8.9. Successor Agents............................................56
8.10. Syndication Agent...........................................56
ii
SECTION IX. MISCELLANEOUS....................................................56
9.1. Amendments and Waivers......................................56
9.2. Notices.....................................................57
9.3. No Waiver; Cumulative Remedies..............................58
9.4. Survival of Representations and Warranties..................58
9.5. Payment of Expenses and Taxes...............................58
9.6. Successors and Assigns; Participations and Assignments......59
9.7. Adjustments; Set-off........................................62
9.8. Counterparts................................................62
9.9. Severability................................................62
9.10. Integration.................................................63
9.11. GOVERNING LAW...............................................63
9.12. Submission To Jurisdiction; Waivers.........................63
9.13. Acknowledgments.............................................63
9.14. Releases of Guarantees and Liens............................64
9.15. Confidentiality.............................................64
9.16. WAIVERS OF JURY TRIAL.......................................64
iii
SCHEDULES:
1.1A Commitments
1.1B Owned and Leased Real Property
1.1C Excluded Immaterial Subsidiaries
1.1D [Intercreditor Agreement]
1.1E New Junior Subordinated Note Terms
1.1G Certain Non-Operating Assets
3.1 Certain Dispositions
3.4 Consents, Authorizations, Filings and Notices
3.6 Certain Litigation
3.15 Subsidiaries
3.19(a) UCC Filings
3.19(b) Mortgage Filings
3.22 Certain Real Property
3.24 Forest Service Permits
3.5(b) Insurance Requirements
3.11 Certain Excluded Subsidiaries
4.1(k)(vi) Post-Closing Landlord Certificates
5.13(b) Certain Real Property Leases
5.2(b) Existing Indebtedness
5.3(e) Existing Liens
6.8(d) Existing Investments
6.8(j) Contemplated Sunday River Investment
6.14 Existing Restrictive Agreements
9.9 Approved Successor Agents
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Assumption
F Form of Exemption Certificate
G [Intentionally Omitted]
H Form of Intercreditor Agreement
I Form of Prepayment Option Notice
iv
SECOND LIEN CREDIT AGREEMENT (this "Agreement"), dated as of
November 24, 2004, among AMERICAN SKIING COMPANY (the "Borrower"), the several
banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), CREDIT SUISSE FIRST BOSTON ("CSFB"), as syndication
agent for the Lenders hereunder (in such capacity, "Syndication Agent"), and
GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent") and as
Collateral Agent under the Security Documents (as defined below) (the
"Collateral Agent").
The parties hereto hereby agree as follows:
SECTION I.DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. Any change in the ABR due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Additional Non-Operating Asset Sale Amount": (a) for the
fiscal year of the Borrower ending July 2005, $3,000,000; (b) for the fiscal
year of the Borrower ending July 2006, $5,000,000; and (c) for each fiscal year
of the Borrower thereafter, $11,000,000.
"Administrative Agent": GECC, as the administrative agent for
the Lenders under this Agreement and the other Loan Documents, together with any
of its successors.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent,
the Administrative Agent and the Collateral Agent.
"Agreement": as defined in the preamble hereto.
"Applicable Margin": for ABR Loans, 7.00% and for Eurodollar
Loans, 8.00%.
"Appraisal": an appraisal of the fair market value of
property and business, performed by ResortNorth Valuation or another Independent
Appraiser, delivered pursuant to Section 4.1(q) and accepted and approved by the
Administrative Agent.
2
"Appraised Value": the fair market value of the subject
property determined by the Appraisal delivered pursuant to Section 4.1(q) or a
subsequent Appraisal or Desktop Appraisal. The fair market value of any Ski
Resort Property shall be determined based on the assumption that such Ski Resort
Property will be sold individually as a going concern to an unrelated third
party on an arms'-length basis within a twelve-month period. For the purposes of
the Desktop Appraisals, fair market value shall be determined based on the most
recently available financial information of the Restricted Group Members using
the same methodology as the September 2004 desktop appraisal based on EBITDA
after deduction for appropriate maintenance Capital Expenditures, as determined
by the appraiser, for the Ski Resort Properties and appropriate capitalization
rates as determined by the appraiser, or other normally used conventions, such
as a discounted cash-flow analysis, where appropriate.
"Approved Fund": as defined in Section 9.6(b).
"ASCRP": American Skiing Company Resort Properties, Inc., a
Maine corporation.
"Assignee": as defined in Section 9.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit E.
"Benefitted Lender": as defined in Section 9.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the Lenders to make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Salt Lake City, Utah, are
authorized or required by law to close; provided, that with respect to notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) that should be capitalized under GAAP on the balance sheet of such
Person. For the avoidance of doubt, "Capital Expenditures" does not include
capitalized interest on Indebtedness.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
3
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x Investors Service,
Inc. ("Moody's"), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within one year from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days, with respect to securities issued or
fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's; (f)
securities with maturities of one year or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market
mutual or similar funds that invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition; or (h) money market
funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
Moody's and (iii) have portfolio assets of at least $5,000,000,000.
"Change of Control": (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of Exchange Act), excluding the
Permitted Holders, shall become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more
than the greater of (x) 25% of the voting power of the outstanding Capital Stock
of the Borrower or (y) the combined voting power of such Capital Stock of the
Permitted Holders; or (ii) Continuing Directors shall cease to constitute a
majority of the members of the board of directors of the Borrower.
"Closing Date": November 24, 2004.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agent": as defined in the preamble hereto.
"Commitment": as to any Lender, the obligation of such Lender
to make a Loan to the Borrower in a principal amount equal to the amount set
forth under the heading "Commitment" opposite such Lender's name on Schedule
1.1A. The original aggregate amount of the Commitments is $105,000,000.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with any Restricted Group Member
within the meaning of Section 4001 of ERISA or is part of a group that includes
a Restricted Group Member and that is treated as a single employer under Section
414 of the Code.
4
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose corporation organized
and administered by any Lender for the purpose of making Loans otherwise
required to be made by such Lender and designated by such Lender in a written
instrument; provided that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the Conduit Lender) shall
have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall (a) be entitled to receive
any greater amount pursuant to Section 2.13, 2.14 or 9.5 than the designating
Lender would have been entitled to receive in respect of the extensions of
credit made by such Conduit Lender or (b) be deemed to have any Commitment.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated September 2004 and furnished to certain Lenders.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries at
such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Restricted Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Restricted
Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness
consisting of revolving loans under the First Lien Loan Documents to the extent
otherwise included therein.
"Consolidated EBITDA": for any period (a) net income or (loss)
of the Borrower and its Restricted Subsidiaries on a consolidated basis for such
period determined in accordance with GAAP without giving effect to extraordinary
gains and losses from sales, exchanges and other dispositions of property not in
the ordinary course of business, and nonrecurring items and excluding from the
calculation of net income all revenues from any Excluded Subsidiary except to
the extent received by the Borrower or any Restricted Subsidiary in cash as a
loan repayment, dividend or other distribution, plus, to the extent deducted in
calculating net income for such period, (b) the sum of, without duplication, (i)
depreciation expense of the Borrower and its Restricted Subsidiaries, (ii)
amortization expense of the Borrower and its Restricted Subsidiaries, (iii)
Consolidated Interest Expense plus the non-cash portion of consolidated interest
expense on Consolidated Funded Debt, (iv) income tax expense of the Borrower and
its Restricted Subsidiaries, (v) non-cash expenses associated with the Phantom
Stock Plan, (vi) other non-cash items of the Borrower and its Restricted
Subsidiaries, and (vii) non-recurring expenses incurred in connection with the
consummation of the transactions contemplated by the Loan Documents, the
repayment of obligations outstanding under, and the termination of, the Existing
Credit Agreement, the tender offer and consent solicitation with respect to, and
the redemption of, the Senior Subordinated Notes and the exchange of the Series
A Preferred Stock for, and the issuance of, the New Junior Subordinated Notes;
provided that, for the fiscal quarters of the Borrower ended January 2004, April
2004 and July 2004, "Consolidated EBITDA" shall be deemed to be $16,204,000,
$54,969,000 and $(14,335,000), respectively.
5
"Consolidated Funded Debt" means, as of each date of
determination, without duplication (a) all Indebtedness for borrowed money of
the Borrower and its Restricted Subsidiaries on that date (including all Capital
Lease Obligations), (b) the aggregate amount available for drawing under all
letters of credit outstanding on that date for which the Borrower or any
Restricted Subsidiary is the account party (excluding, however, the aggregate
amount available for drawing under letters of credit issued to lenders and
lessors of Indebtedness of the type described in clause (a) in support of such
Indebtedness), and (c) the aggregate amount drawn under all letters of credit
for which the Borrower or any Restricted Subsidiary is the account party and for
which the issuer of such letters of credit has not been reimbursed on that date.
"Consolidated Interest Expense" shall mean the cash portion of
consolidated interest expense (including commitment and letter of credit fees)
on Consolidated Funded Debt, as determined in accordance with GAAP.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Restricted Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Restricted Subsidiary
in the form of dividends or similar distributions and (c) the undistributed
earnings of any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Continuing Directors" means, as of any date of determination,
any member of the board of directors of the Borrower who (i) was a member of the
board of directors on the date of this Agreement or (ii) was nominated for
election to the board of directors by the Permitted Holders or with the approval
of at least two-thirds of the Continuing Directors who were members of the board
of directors at the time of such nomination or election.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"CSFB": as defined in the preamble hereto.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
6
"Desktop Appraisal": an appraisal of the fair market value of
property and business, performed by an Independent Appraiser without conducting
a site visit to such property or business, using the evaluation methodology
outlined in the definition of "Appraised Value".
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common law)
regulating or imposing liability or standards of conduct concerning protection
of human health, natural resources or the environment, as have been, are now or
at any time hereafter are in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other authorization
required under any Environmental Law, including for the avoidance of doubt the
Forest Service Permits.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the "Eurodollar Base Rate" shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be reasonably selected by the Administrative Agent.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
--------------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
7
"Eurodollar Tranche": the collective reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income (in each case, determined in accordance with GAAP), (iii) decreases in
Consolidated Working Capital for such fiscal year, and (iv) the aggregate net
amount of non-cash loss on the Disposition of property by the Borrower and its
Restricted Subsidiaries during such fiscal year (other than sales of inventory
in the ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income over (b) the sum, without duplication, of (i) the amount
of all non-cash credits included in arriving at such Consolidated Net Income (in
each case, determined in accordance with GAAP), (ii) the aggregate amount
actually paid by the Borrower and its Restricted Subsidiaries (in cash during
such fiscal year on account of Capital Expenditures (excluding the principal
amount of Indebtedness incurred in connection with such expenditures and any
such expenditures financed with the proceeds of any Reinvestment Deferred
Amount), (iii) the aggregate amount of all prepayments of revolving loans under
the First Lien Loan Documents during such fiscal year to the extent accompanying
permanent optional reductions of the revolving commitments thereunder and all
optional prepayments of the Loans and the First Lien Term Loans during such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including the Loans and the First Lien Term Loans) of
the Borrower and its Restricted Subsidiaries made during such fiscal year (other
than in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) increases in
Consolidated Working Capital for such fiscal year, (vi) the aggregate net amount
of non-cash gain on the Disposition of property by the Borrower and its
Restricted Subsidiaries during such fiscal year (other than sales of inventory
in the ordinary course of business), to the extent included in arriving at such
Consolidated Net Income and (vii) non-recurring expenses incurred in connection
with the consummation of the transactions contemplated by the Loan Documents and
the First Lien Loan Documents, the repayment of obligations outstanding under
the Existing Credit Agreement, the tender offer and consent solicitation with
respect to, and the redemption of, the Senior Subordinated Notes and the
exchange of the Series A Preferred Stock for, and the issuance of, the New
Junior Subordinated Notes, to the extent deducted in arriving at such
Consolidated Net Income.
"Excluded Subsidiaries": (i) GSRP, Community Water Company,
Ski Insurance Company, Uplands Water Company, Walton Pond Apartments, Inc. and
their Subsidiaries, (ii) any Subsidiary formed for the purpose of receiving
Investments as described in clause (j) of Section 6.8 and (iii) the Subsidiaries
of the Borrower designated as Excluded Immaterial Subsidiaries on Schedule 1.1C
or designated by the Borrower and approved in writing by the Administrative
Agent after the date hereof as Excluded Immaterial Subsidiaries (the
Subsidiaries described in this clause (iii), the "Excluded Immaterial
Subsidiaries"), provided that any such Subsidiary shall cease to be an Excluded
Immaterial Subsidiary if it at any time holds assets with a fair market value of
greater than $1,000,000.
"Existing Credit Agreement": the Credit Agreement, dated as of
February 14, 2003, among the Borrower and the other borrowers party thereto, the
lenders party thereto, and GECC, as administrative agent, as amended,
supplemented or otherwise modified to the date hereof, together with all
instruments and other agreements entered into by the Borrower or its
Subsidiaries in connection therewith.
8
"Existing Junior Subordinated Note Indenture": the Indenture,
dated as of August 31, 2001, between the Borrower and Oak Hill Capital Partners,
L.P., as Trustee, as amended, supplemented or otherwise modified to the date
hereof, together with all instruments and other agreements entered into by the
Borrower or its Subsidiaries in connection therewith.
"Existing Junior Subordinated Notes": the subordinated notes
of the Borrower issued pursuant to the Junior Subordinated Note Indenture.
"Federal Funds Effective Rate": for any day, the rate equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter": as defined in Section 9.5.
"First Lien Collateral Agent": as defined in the
Intercreditor Agreement.
"First Lien Credit Agreement": the First Lien Credit
Agreement, dated as of the date hereof, among the Restricted Group Members, the
lenders party thereto, GECC, as administrative agent and collateral agent, and
the other agents party thereto, as such agreement may be refinanced, extended,
renewed, restructured or replaced in accordance with the terms hereof and of the
Intercreditor Agreement.
"First Lien Debt": (a) the extensions of credit to the
Restricted Group Members pursuant to the First Lien Credit Agreement and (b)
Guarantee Obligations of the Guarantors in respect thereof.
"First Lien Facilities Event of Default": an "Event of
Default" under the First Lien Loan Documents.
"First Lien Loan Documents": any agreement or instrument
(including any credit agreement, guarantee, security agreement or mortgage)
entered into by Borrower or any of its Subsidiaries in connection with the First
Lien Debt.
"First Lien Loans": the term loans made under the First Lien
Credit Agreement.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Forest Service Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other authorization,
including for the avoidance of doubt Forest Service Term Special Use Permits,
that are issued by, filed with, or granted, as the case may be, by the Forest
Service of the United States Department of Agriculture or by any similar state
agency, with respect to any use of or conduct concerning any land or resources
owned, managed, or under the jurisdiction of such agency.
"Forest Service Term Special Use Permits": the Term Special
Use Permits issued by the Forest Service of the United States Department of
Agriculture and listed on Schedule 3.24.
"Fully Satisfied" shall mean, with respect to the Obligations
as of any date, that, on or before such date, (a) the principal of and interest
accrued to such date on such Obligations shall have been paid in full in cash
and (b) all fees, expenses and other amounts then due and payable which
constituted Obligations shall have been paid in full in cash.
9
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent
specified in Section 9.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 6.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 3.1. In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"GECC": as defined in the preamble hereto.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Group Members": the collective reference to the Borrower and
its Subsidiaries.
"GSRP": Grand Summit Resort Properties, Inc., a Maine
corporation.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each
Guarantor, substantially in the form of Exhibit A.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
10
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantor": each Restricted Subsidiary of the Borrower.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, and (j) for the purposes of Section 7(e) only, all obligations of
such Person in respect of Swap Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.
"Independent Appraiser": an independent appraiser with
appraisal experience in the ski resort business who is not employed by the
Borrower, the Administrative Agent or any Lender or any of their respective
Affiliates and who has been approved by the Administrative Agent; provided,
however, that no independent appraiser shall be prevented from acting as an
"Independent Appraiser" or be prevented from rendering services to ASC unrelated
to those arising under this Agreement solely because such independent appraiser
was used or will be used by the Borrower in the future for services unrelated to
those arising under this Agreement, so long as the Borrower has given the
Administrative Agent notice of such unrelated services performed or to be
performed by such Independent Appraiser.
11
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to xxx at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Intercreditor Agreement": the Intercreditor Agreement to be
executed and delivered by the Restricted Group Members, the Collateral Agent and
the First Lien Collateral Agent (as defined in such Agreement), substantially in
the form of Exhibit I.
"Interest Payment Date": (a) as to any ABR Loan, the 15th day
of each April, July, October and January to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period, and the last day of such Interest Period
and (d) as to any Loan, the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six (or, if
agreed to by all Lenders, nine or twelve) months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period commencing on the
last day of the then current Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six (or, if agreed to by all Lenders, nine or
twelve) months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not later than 11:00 A.M., New York City time, on the
date that is three Business Days prior to the last day of the then current
Interest Period applicable thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period that would extend
beyond the date final payment is due on the Loans;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(iv) the first Interest Period selected for any Loan shall be required
to end on the last Business Day of a calendar month and the Borrower shall
be permitted to select an initial Interest Period of less than one month's
duration in order to satisfy this requirement.
12
"Investments": as defined in Section 6.8.
"Junior Subordinated Notes": the Existing Junior Subordinated
Notes and the New Junior Subordinated Notes.
"Junior Subordinated Note Indentures": the Existing Junior
Subordinated Note Indenture and the New Junior Subordinated Note Indenture.
"Landlord Certificate": as defined in Section 4.1(k)(vi).
"Lenders": as defined in the preamble hereto; provided that
unless the context otherwise requires, each reference herein to the Lenders
shall be deemed to include any Conduit Lender.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan":any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Notes, the Intercreditor Agreement and any amendment, waiver, supplement or
other modification to any of the foregoing.
"Loan Parties": each Group Member that is a party to a Loan
Document.
"LTM EBITDA": as defined in Section 6.1.
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Restricted Group Members taken as a whole, (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder or (c) the value of the Collateral.
"Material Asset Sale": any Disposition of property or series
of related Dispositions of property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (f) or (h) of Section 6.5) that yields gross proceeds
to the Borrower or any of its Restricted Subsidiaries in excess of $500,000,
provided that a disposition of Non-Operating Assets permitted by clause (e) of
Section 6.5, shall constitute a Material Asset Sale solely to the extent that
permission to make such Disposition is granted pursuant to the proviso to such
clause (e).
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea formaldehyde insulation, asbestos, molds,
pollutants, contaminants, radioactivity, and any substances of any kind, in each
case to the extent regulated pursuant to or that could give rise to liability
under any Environmental Law.
"Mortgaged Properties": the real properties listed on Part A
of Schedule 1.1B, as to which (or as to interests in which) the Collateral Agent
for the benefit of the Administrative Agent and the Lenders shall be granted a
Lien pursuant to the Mortgages as required by Section 3.19(b).
13
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Collateral Agent for the
benefit of the Administrative Agent and the Lenders, substantially in the form
of Exhibit D (with such changes thereto as shall be advisable under the law of
the jurisdiction in which such mortgage or deed of trust is to be recorded).
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Material Asset
Sale (including a Material Asset Sale made in compliance with the proviso to
clause (e) of Section 6.5) or other Disposition or any Recovery Event, the
proceeds thereof in the form of cash (including any such proceeds received by
way of a permitted deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such Disposition or Recovery Event (including any
cash received upon the Disposition of any a permitted non-cash consideration
received upon such Disposition), net of reasonable attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien expressly permitted hereunder on any asset
that is the subject of such Disposition or Recovery Event (other than any Lien
pursuant to a Security Document) and other reasonable and customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of Capital Stock
or any incurrence of Indebtedness, the cash proceeds received from such issuance
or incurrence, net of reasonable attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other reasonable
and customary fees and expenses actually incurred in connection therewith.
"New Junior Subordinated Notes": junior subordinated notes of
the Borrower having terms consistent with those set forth on Schedule 1.1E and
otherwise containing terms reasonably satisfactory to the Agents.
"New Junior Subordinated Note Indenture": the indenture
entered into by the Borrower in connection with the New Junior Subordinated
Notes.
"Non-Excluded Taxes": as defined in Section 2.14(a).
"Non-Operating Assets": (a) unused or obsolete inventory and
equipment, (b) real property specified on Part I of Schedule 1.1G which is not
currently used or contemplated to be used in ski resort operations of the
Borrower (or, to the extent so used, for which the Borrower retains a perpetual
easement for such use), (c) the assets comprising the Haystack ski area, (d) any
asset consisting of commercial or base lodge space generally used for
administrative, retail, or skier service purposes (but not consisting of Ski
Terrain) and specified on Part II of Schedule 1.1G which the Borrower certifies
to the Administrative Agent at the time of sale (i) will be replaced within
twelve (12) months from the sale date (x) by the Borrower with the applicable
Non-Operating Asset Sale Proceeds, or (y) by the purchaser as a contractual
obligation under the applicable sale documents, and (ii) may be temporarily
unavailable during the period from the sale date to the time of completion of
the replacement thereof pursuant to clause (i) above, or temporarily replaced
during such period, without materially affecting the Borrower's operations or
access to any portion of the Ski Terrain and (e) other assets of the Restricted
Group Members not listed on Schedule 1.1G which otherwise meet the requirements
of clause (b) or (d) of this definition, provided that the sales price of such
assets does not exceed $100,000 for any such asset individually or $500,000 in
the aggregate in any fiscal year. It is agreed that Schedule 1.1G shall not be
effective (and thus sales of Non-Operating Assets specified on such Schedule
shall not be permitted) until the date such schedule is approved by the Required
Lenders in the form in which originally delivered or as subsequently revised as
requested by the Required Lenders (and the Required Lenders shall use
commercially reasonable efforts to approve such schedule on or prior to the 30th
day after the Closing Date).
14
"Non-Operating Asset Sale Proceeds": as defined in Section
6.1(a).
"Non-U.S. Lender": as defined in Section 2.14(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Oak Hill": Oak Hill Capital Partners, L.P., a Delaware
limited partnership, Oak Hill Securities Fund, L.P., a Delaware limited
partnership, and their respective Control Investment Affiliates.
"Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative
Agent or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.
"Operating Assets": assets of the Borrower and its Restricted
Subsidiaries other than Non-Operating Assets.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 9.6(c).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Loans then outstanding constitutes of the
aggregate principal amount of the Loans then outstanding).
"Permitted Holder": Oak Hill.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Phantom Stock Plan": the American Skiing Company Phantom
Equity Plan dated as of December 1, 2001, as amended, supplemented or otherwise
modified from time to time.
15
"Plan": at a particular time, any employee benefit plan that
is subject to ERISA and in respect of which the Borrower or any Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Preferred Stock": the Borrower's 8.5% Series B Convertible
Participating Preferred Stock, the Borrower's 12% Series C-1 Convertible
Participating Preferred Stock, the Borrower's 15% Series C-2 Preferred Stock and
the Borrower's Series D Participating Preferred Stock, collectively.
"Prime Rate": for any day, a floating rate equal to the rate
publicly quoted from time to time by The Wall Street Journal as the "base rate
on corporate loans posted by at least 75% of the nation's 30 largest banks" (or,
if The Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent).
"Projections": as defined in Section 5.2(b).
"Purchase Money Indebtedness": as defined in Section 6.2(c).
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any Restricted Subsidiary.
"Register": as defined in Section 9.6(b).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Restricted
Group Member in connection therewith that are not applied to prepay Loans
pursuant to Section 2.6(a) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Recovery Event in respect of which
the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of a Recovery Event to acquire or repair assets useful in the business of a
Restricted Group Member (such business as permitted pursuant to Section 6.15).
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date (in
accordance with Section 6.7, as applicable) to acquire or repair assets useful
in the business of a Restricted Group Member (such business as permitted
pursuant to Section 6.15).
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire or repair assets useful in
the Borrower's business (such business as permitted pursuant to Section 6.15)
with all or any portion of the relevant Reinvestment Deferred Amount.
16
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the aggregate unpaid principal amount of the Loans then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"Restricted Group Members": the collective reference to the
Borrower and its Restricted Subsidiaries.
"Restricted Payments": as defined in Section 6.6.
"Restricted Subsidiary": each Subsidiary of the Borrower other
than any Excluded Subsidiary.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Intercreditor Agreement
and all other security documents hereafter delivered to the Collateral Agent
granting a Lien on any property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture, dated as
of June 28, 1996, between the Borrower and U.S. Trust Company of New York, as
Trustee, as amended, supplemented or otherwise modified to the date hereof,
together with all instruments and other agreements entered into by the Borrower
or its Subsidiaries in connection therewith.
"Senior Subordinated Notes": the subordinated notes of the
Borrower issued pursuant to the Senior Subordinated Note Indenture.
"Series A Preferred Stock": the 10.5% Repriced Convertible
Exchangeable Preferred Stock of the Borrower.
17
"Single Employer Plan": any Plan that is subject to Title IV
of ERISA, but that is not a Multiemployer Plan.
"Ski Resort Properties": the ski resort properties of the
Restricted Subsidiaries constituting part of the Collateral, known as Attitash
Bear Peak, The Canyons, Killington/Pico, Mount Snow, Steamboat, Sugarloaf/USA
and Sunday River, in each case excluding any Non-Operating Assets.
"Ski Terrain": property used (or which is to be developed to
be used) to conduct snow skiing operations, including terrain used for skiing
and terrain used for supporting ski lift operations.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person, as of such date, exceeds the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person, as of such date, is greater than
the amount that will be required to pay the probable liability of such Person on
its debts as such debts become absolute and matured, (c) such Person does not
have, as of such date, an unreasonably small amount of capital with which to
conduct its business, and (d) such Person is able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Specified Swap Agreement": any Swap Agreement entered into by
any Restricted Group Member and any "Lender" under the First Lien Loan Documents
or affiliate thereof in respect of interest rates.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person, but with respect to any
Restricted Group Member, excluding non-profit homeowners associations and resort
village management associations controlled directly or indirectly by such
Restricted Group Member. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
"Supermajority Lenders": at any time, the holders of more than
66 2/3% of (a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the aggregate unpaid principal amount of the Loans then outstanding.
"Swap Agreement": any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or any of its Subsidiaries shall be a "Swap
Agreement".
18
"Syndication Agent": as defined in the preamble hereto.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"United States": the United States of America.
"Water Rights": rights to use water from surface sources,
groundwater, or other water sources, whether such rights are conferred by
statute, contract, common law or otherwise.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
1.2. Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
the other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to any Restricted Group Member not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation", (iii) the word "incur"
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words "incurred" and "incurrence"
shall have correlative meanings), (iv) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and
contract rights, and (v) references to agreements or other Contractual
Obligations shall, unless otherwise specified, be deemed to refer to such
agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION II.AMOUNT AND TERMS OF COMMITMENTS
2.1. Commitments. Subject to the terms and conditions hereof, each Lender
severally agrees to make a term loan (a "Loan") to the Borrower on the Closing
Date in an amount equal to the amount of the Commitment of such Lender. The
Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.7.
2.2. Procedure for Borrowing. The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 10:00 A.M., New York City time, one Business Day prior to the
19
anticipated Closing Date) requesting that the Lenders make the Loans on the
Closing Date. The Loans made on the Closing Date shall initially be ABR Loans
and, unless otherwise agreed by the Administrative Agent in its sole discretion,
no Loan may be converted into or continued as a Eurodollar Loan having an
Interest Period in excess of one month prior to the date that is 60 days after
the Closing Date. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender thereof. Not later than 12:00 Noon, New York City
time, on the Closing Date each Lender shall make available to the Administrative
Agent at the Funding Office an amount in immediately available funds equal to
the Loan to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Lenders in immediately available funds.
2.3. Repayment of Term Loans. The Borrower shall repay all outstanding
Loans on November 24, 2011.
2.4. Fees, etc. The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.
2.5. Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium (except as specified
below) or penalty, upon irrevocable notice delivered by the Borrower to the
Administrative Agent no later than 11:00 A.M., New York City time, three
Business Days prior thereto, in the case of Eurodollar Loans, and no later than
11:00 A.M., New York City time, one Business Day prior thereto, in the case of
ABR Loans, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.15; and, provided, further, that each optional prepayment
made on or prior to the first anniversary of the Closing Date shall be
accompanied by payment of a fee in an amount equal to 3% of the principal amount
prepaid, each optional prepayment made subsequent to the first anniversary of
the Closing Date and on or prior to the second anniversary of the Closing Date
shall be accompanied by payment of a fee in an amount equal to 2% of the
principal amount prepaid and each optional prepayment made subsequent to the
second anniversary of the Closing Date and on or prior to the third anniversary
of the Closing Date shall be accompanied by prepayment of a fee in an amount
equal to 1% of the principal amount prepaid. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
2.6. Mandatory Prepayments. (a) If any Capital Stock or Indebtedness shall
be issued or incurred by any Restricted Group Member (excluding any Indebtedness
incurred in accordance with Section 6.2), then, except to the extent such
amounts have been applied to prepay the First Lien Term Loans, an amount equal
to 50% (in the case of Capital Stock) or 100% (in the case of Indebtedness) of
the Net Cash Proceeds thereof shall be offered on the date of such issuance or
incurrence to the Lenders as a prepayment of the Loans in accordance with
paragraphs (d) and (e) of Section 2.6.
(b) If on any date the Borrower or any Restricted Subsidiary shall
receive Net Cash Proceeds from any Material Asset Sale or any Recovery
Event then, if no First Lien Term Loans or revolving commitments under the
First Lien Loan Documents remain outstanding, and unless a Reinvestment
Notice shall be delivered in respect thereof (provided that no Reinvestment
Notice may be delivered in respect of the Net Cash Proceeds of a Material
Asset Sale described in the proviso to clause (e) of Section 6.5), such Net
Cash Proceeds shall be offered on such date to the Lenders as a prepayment
of the Loans as set forth in paragraphs (d) and (e) of Section 2.6;
provided, that, notwithstanding the foregoing, on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be offered to the Lenders
as a prepayment of the Loans in accordance with paragraphs (d) and (e) of
Section 2.6.
20
(c) If, for any fiscal year of the Borrower, commencing with the
fiscal year ending July 31, 2005, there shall be Excess Cash Flow, then,
except to the extent such amount shall have been applied to prepay the
First Lien Term Loans in accordance with the mandatory prepayment
provisions of the First Lien Credit Agreement, the Borrower shall, on the
relevant Excess Cash Flow Application Date, offer to the Lenders an amount
equal to 50% of such Excess Cash Flow as a prepayment of the Loans as set
forth in Section 2.6(d) and (e). Such prepayment shall be made on a date
(an "Excess Cash Flow Application Date") no later than December 31 of the
subsequent fiscal year.
(d) With respect to the amount of any mandatory prepayment offer
required pursuant to paragraph (a), (b) or (c) of this Section (such
amount, the "Prepayment Amount"), the Borrower will, on or prior to the
date specified in this Section 2.6 for such offer, give the Administrative
Agent telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Lender a notice (each, a
"Prepayment Option Notice") in accordance with the following sentence. As
promptly as practicable after receiving such notice from the Borrower, the
Administrative Agent will send to each Lender a Prepayment Option Notice,
which shall be in the form of Exhibit I and shall include (i) an offer (the
"Offer") by the Borrower to prepay on the date (each, a "Mandatory
Prepayment Date") that is 10 Business Days after the date of the Prepayment
Option Notice, the Loans of such Lender by an amount equal to the portion
of the Prepayment Amount indicated in such Lender's Prepayment Option
Notice as being allocable to such Lender's Loans (with such portion
allocable to such Lender being equal to its Percentage of the Prepayment
Amount) and (ii) an additional offer (the "Additional Offer") to prepay on
the Mandatory Prepayment Date, from the portion, if any, of the Prepayment
Amount allocable to Lenders which do not accept the Offer, the Loans of
such Lender by an amount equal to the lesser of (x) such Lender's then
outstanding Loan (after deducting therefrom the amount allocable to the
prepayment thereof as a result of such Lender's acceptance of the Offer)
and (y) a maximum amount specified by such Lender in its acceptance of the
Additional Offer. Each Lender shall accept or reject such Offer and such
Additional Offer in accordance with the terms of the Prepayment Option
Notice received by it (and a failure to respond to such Prepayment Option
Notice within the required timeframe shall be deemed to be an acceptance of
such Offer and Additional Offer), it being understood that no Lender may
accept the Additional Offer made to it unless it accepts the Offer made to
it. On the Mandatory Prepayment Date, the Borrower shall pay to the
Administrative Agent, for the benefit of each Lender which has accepted the
Offer, (i) the prepayment amount specified in the Offer made to it and (ii)
if such Lender has also accepted the Additional Offer, such Lender's
ratable share (based upon the respective amounts accepted by each Lender
accepting the Additional Offer made to it) of the amounts specified in the
Offers made to Lenders, if any which reject the Offers made to them.
(e) The application of any prepayment pursuant to this Section 2.6
shall be made, first to ABR Loans and, second, to Eurodollar Loans, in each
case in accordance with Section 2.12(b). Each prepayment of the Loans under
this Section shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
2.7. Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by the Borrower giving the
Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding the proposed
conversion date. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans by the Borrower giving the Administrative Agent prior
irrevocable notice of such election no later than 11:00 A.M., New York City
time, on the third Business Day preceding the proposed conversion date (which
notice shall specify the length of the initial Interest Period therefor),
provided that no ABR Loan may be converted into a Eurodollar Loan when any Event
21
of Default has occurred and is continuing and the Administrative Agent or the
Required Lenders have determined in its or their sole discretion not to permit
such conversion. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower
giving irrevocable notice to the Administrative Agent, in accordance with
the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to
such Loan, provided that no Eurodollar Loan may be continued as such when
any Event of Default has occurred and is continuing and the Administrative
Agent has or the Required Lenders have determined in its or their sole
discretion not to permit such continuations, and provided, further, that if
the Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to ABR Loans
on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.8. Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $2,500,000 or a whole multiple of $500,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be
outstanding at any one time.
2.9. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) At the option of the Required Lenders (which option shall be
deemed exercised automatically if an Event of Default specified in clause
(i) or (ii) of paragraph (f) of Section VII has occurred with respect to
the Borrower, if any Event of Default shall occur and be continuing, all
outstanding Loans (whether or not overdue) shall bear interest during such
continuance at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section
plus 2%.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.10. Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
22
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative
Agent in determining any interest rate pursuant to Section 2.9(a).
2.11. Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(i) the Administrative Agent shall have determined (which
determination, in the absence of manifest error, shall be conclusive
and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Interest Period,
or
(ii) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent (and the
Administrative Agent hereby agrees that it shall promptly withdraw such notice
when the circumstances giving rise to such notice are no longer continuing), no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.
2.12. Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder and each payment by the Borrower on account of any
fee shall be made pro rata according to the respective Percentages of the
Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Loans shall be made pro rata
according to the respective Percentages of the Loans then held by the
Lenders (except as otherwise provided in Section 2.6(b)).
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise,
are absolute and unconditional, shall be made without setoff or
counterclaim or rescission or defense for any reason and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding
Office, in Dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt
in like funds as received. If any payment hereunder (other than in respect
of Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day. If
any payment on a Eurodollar Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the
case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable
rate during such extension.
23
(d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon, at a rate equal to the Federal
Funds Effective Rate, for the period until such Lender makes such amount
immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts
owing under this paragraph shall be conclusive in the absence of manifest
error. If such Lender's share of such borrowing is not made available to
the Administrative Agent by such Lender within three Business Days after
such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable
to ABR Loans under the relevant Facility, on demand, from the Borrower. If
such amounts are received by the Administrative Agent from the Borrower,
the applicable Lender shall have no obligations to make payment to the
Administrative Agent under this clause (e); provided that this sentence
shall not relieve such Lender from any liability of such Lender to the
Borrower resulting from any breach by such Lender of its obligations to the
Borrower under this Agreement.
(e) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the
Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within
three Business Days after such due date, the Administrative Agent shall be
entitled to recover, on demand, from each Lender to which any amount which
was made available pursuant to the preceding sentence, such amount with
interest thereon at the rate per annum equal to the daily average Federal
Funds Effective Rate. Nothing herein shall be deemed to limit the rights of
the Administrative Agent or any Lender against the Borrower.
2.13. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 2.14 and
changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
24
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable as
reasonably determined by such Lender. If any Lender becomes entitled to claim
any additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy)
by an amount reasonably deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy
to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.
(c) Any such claim made under Section 2.13(a) or (b) shall be
accompanied by a certificate setting forth the basis of such claim in
reasonable detail. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of
manifest error. Notwithstanding anything to the contrary in this Section,
the Borrower shall not be required to compensate a Lender pursuant to this
Section for any amounts incurred more than nine months prior to the date
that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; provided that, if the circumstances giving rise to
such claim have a retroactive effect, then such nine-month period shall be
extended to include the period of such retroactive effect. The obligations
of the Borrower pursuant to this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.14. Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
(i) net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document) and (ii) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any
other jurisdiction described in clause (i) above. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
25
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to
the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form
W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest", a statement
substantially in the form of Exhibit F and a Form W-8BEN, or any subsequent
versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes
a party to this Agreement (or, in the case of any Participant, on or before
the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender
shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.
(e) A Lender (or Transferee) that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is
a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent) (or, in the case of a
Participant, to the Lender from which the related participant shall have
been purchased), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to
be made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and
in such Lender's judgment such completion, execution or submission would
not materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay
26
over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided,
that the Borrower, upon the request of the Administrative Agent or such
Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to
such Governmental Authority. This Section shall not be construed to require
the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.15. Indemnity. The Borrower agrees to indemnify each Lender for, and to
hold each Lender harmless from, any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans or a conversion of Eurodollar Loans into ABR
Loans on a day that is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest that would have accrued on the amount so prepaid
or converted, or not so borrowed, converted or continued, for the period from
the date of such prepayment or conversion or of such failure to borrow, convert
or continue to the last day of such Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.16. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.13 or 2.14(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.13 or 2.14(a).
2.17. Replacement of Lenders. The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.13 or 2.14(a), (b) defaults in its obligation to make Loans hereunder and does
not cure such default within five Business Days or (c) that has refused to
consent to any waiver or amendment with respect to any Loan Document that has
been consented to by the Required Lenders, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
27
continuing at the time of such replacement, (iii) prior to any such replacement
pursuant to clause (a) above, such Lender shall not have used reasonable efforts
in accordance with Section 2.16 so as to eliminate the continued need for
payment of amounts owing pursuant to Section 2.13 or 2.14(a) and shall not have
waived its rights to the payment of such amounts, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement (and, if such replacement
is pursuant to clause (c) above, all First Lien Term Loans and other amounts
owing to such Lender on or prior to such date under the First Lien Loan
Documents), (v) the Borrower shall be liable to such replaced Lender under
Section 2.15 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not a Lender, an affiliate of a
Lender or an Approved Fund, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 9.6 (provided that (x)
the Borrower shall be obligated to pay the registration and processing fee
referred to therein and (y) the Administrative Agent shall have the right for
such purpose to execute and deliver the relevant Assignment and Assumption on
behalf of the replaced Lender), (viii) until such time as such replacement shall
be consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.13 or 2.14(a), as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.
SECTION III. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender that:
3.1. Financial Condition. The audited consolidated balance sheets of the
Borrower as at July 27, 2003 and July 25, 2004, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates,
reported on by and accompanied by an unqualified report from KPMG LLP, present
fairly the consolidated financial condition of the Borrower as at such dates,
and the consolidated results of its operations and its consolidated and
consolidating cash flows for the respective fiscal years then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). No Restricted Group Member has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. Except as set forth on Schedule 3.1, during the
period from July 26, 2004 to and including the date hereof there has been no
Disposition by the Borrower or any Restricted Subsidiary of any material part of
its business or property.
3.2. No Change. Since July 25, 2004, there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect.
3.3. Existence; Compliance with Law. Each Restricted Group Member (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except for any failure to be so
qualified that could not reasonably be expected to have a Material Adverse
Effect, and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
28
3.4. Power; Authorization; Enforceable Obligations. Each Restricted Group
Member has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party, to obtain extensions of
credit hereunder and grant the Liens under the Security Documents. Each
Restricted Group Member has taken all necessary organizational action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party, to authorize the extensions of credit on the terms and conditions
of this Agreement and to grant the Liens under the Security Documents. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents, except (i) consents, authorizations, filings and notices
described in Schedule 3.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect and (ii) the filings
and acts referred to in Section 3.19. Each Loan Document has been duly executed
and delivered on behalf of each Restricted Group Member party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Restricted Group
Member party thereto, enforceable against each such Restricted Group Member in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of any Restricted Group Member
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents). Except as described on Schedule 3.5, no Requirement of Law
or Contractual Obligation applicable to any Restricted Group Member could
reasonably be expected to have a Material Adverse Effect.
3.6. Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of any
Restricted Group Member, threatened by or against the Borrower or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b)
except as described on Schedule 4.6, that could reasonably be expected to have a
Material Adverse Effect.
3.7. No Default. Except as described on Schedule 3.7, no Restricted Group
Member is in default under or with respect to (a) the Junior Subordinated Notes
or the Senior Subordinated Notes or (b) any of its other Contractual Obligations
in any respect that, in the case of this clause (b), could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8. Ownership of Property; Liens. Each Restricted Group Member has title
in fee simple to, or a valid leasehold interest in, all its real property, other
than real property with respect to which a valid Forest Service Permit is in
effect, and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien except as permitted
by Section 6.3.
3.9. Intellectual Property. Each Restricted Group Member owns, or is
licensed to use, all Intellectual Property necessary for the conduct of its
business as currently conducted. No material claim has been asserted and is
29
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
any Restricted Group Member know of any valid basis for any such claim, except,
in either case, to the extent that such claim could not reasonably be expected
to have a Material Adverse Effect. The use of Intellectual Property by any
Restricted Group Member does not infringe on the rights of any Person in any
material respect.
3.10. Taxes. Each Restricted Group Member has filed or caused to be filed
all Federal, state and other material tax returns that are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Restricted
Group Member); no tax Lien has been filed that is not permitted by Section
6.3(a), and, to the knowledge of any Restricted Group Member, as of the Closing
Date, no claim is being asserted, with respect to any such tax, fee or other
charge.
3.11. Federal Regulations. No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
3.12. Labor Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any Restricted Group Member pending or, to the knowledge
of any Restricted Group Member, threatened; (b) hours worked by and payment made
to employees of any Restricted Group Member have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters; and (c) all payments due from any Restricted Group Member on
account of employee health and welfare insurance have been paid or accrued as a
liability on the books of the relevant Restricted Group Member.
3.13. ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither any Restricted Group Member nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither any Restricted Group Member nor
any Commonly Controlled Entity would become subject to any material liability
under ERISA if any Restricted Group Member or any Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. To the Restricted Group Members' knowledge, no Multiemployer Plan
is in Reorganization or Insolvent.
3.14. Investment Company Act; Other Regulations. No Restricted Group Member
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Restricted Group Member is subject to regulation under any Requirement of Law
30
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness.
3.15. Subsidiaries. Except as disclosed to the Administrative Agent by any
Restricted Group Member in writing from time to time after the Closing Date, (a)
Schedule 3.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by any Restricted Group Member and (b) there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of any
Restricted Group Member, except as created by the Loan Documents or as described
on Schedule 3.15.
3.16. Use of Proceeds. The proceeds of the Loans shall be used to repay
amounts outstanding under the Existing Credit Agreement and to purchase or
redeem Senior Subordinated Notes and to pay related fees and expenses.
3.17. Environmental Matters. Except as set forth on Schedule 3.17 or as,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(a) each Restricted Group Member: (i) is in compliance with all, and
has not violated any, applicable Environmental Laws; (ii) holds all
Environmental Permits (each of which is in full force and effect) and
possesses all Water Rights required for any of its current or intended
operations or for any property owned, leased, or otherwise operated by it;
(iii) is in compliance with all, and has not violated any, of its
Environmental Permits, and has not acted or failed to act in any way that
could reasonably be expected to result in a diminution of its Water Rights;
and (iv) reasonably believes that: each of its Environmental Permits will
be timely renewed and complied with, and that its Water Rights and its
ability to use its Water Rights as needed will be maintained, without its
annual aggregate expenses for same exceeding its expenses for such renewal,
compliance and maintenance during the fiscal year ended immediately prior
to entering into this Agreement; any additional Environmental Permits that
may be required of it will be timely obtained and complied with, without
its annual aggregate expenses for same exceeding its expenses for such
obtaining and complying during the fiscal year ended immediately prior to
entering into this Agreement; and compliance with any Environmental Law
that is or is expected to become applicable to it will be timely attained
and maintained, without its annual aggregate expenses for same exceeding
its expenses for such compliance during the fiscal year ended immediately
prior to entering into this Agreement;
(b) Materials of Environmental Concern are not present at, on, under,
in, or about any real property now or formerly owned, leased or operated by
any Restricted Group Member or at any other location (including any
location to which Materials of Environmental Concern have been sent for
re-use or recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of any Restricted
Group Member under any applicable Environmental Law or otherwise result in
costs to any Restricted Group Member, or (ii) interfere with any Restricted
Group Member's continued operations, or (iii) impair the fair saleable
value of any of the Mortgaged Properties for continued use as it has been
used during the fiscal year ended immediately prior to entering into this
Agreement, and as planned;
(c) there is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating
to any Environmental Law, Environmental Permits, or Water Rights: (i) to
which any Restricted Group Member is, or to the knowledge of any Restricted
Group Member will become, a party that is pending or, to the knowledge of
31
any Restricted Group Member, threatened, or (ii) to the knowledge of any
Restricted Group Member, affecting or that could reasonably be expected to
affect any Restricted Group Member;
(d) no Restricted Group Member has received any written request for
information, or been notified that it is a potentially responsible party
under or relating to the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental Law, or with
respect to any Materials of Environmental Concern;
(e) no Restricted Group Member has entered into or agreed to any
consent decree, order, or settlement or other agreement, nor is subject to
any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law or Environmental Permits, or with
respect to any Water Rights; and
(f) no Restricted Group Member has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known
or unknown, under any Environmental Law or with respect to any Materials of
Environmental Concern.
3.18. Accuracy of Information, etc. No statement or information contained
in this Agreement, any other Loan Document, the Confidential Information
Memorandum or any other document, certificate or statement furnished by or on
behalf of any Restricted Group Member to the Administrative Agent or the
Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished (or,
in the case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading, in either case which has not been in the case of such statement,
information, document or certificate delivered or made prior to the Closing Date
corrected, supplemented or remedied by any subsequent statement, information,
document or certificate made or delivered prior to the Closing Date to the same
parties receiving such statement, information, document or certificate. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Restricted Group Members to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the Closing
Date, there is no fact known to any Restricted Group Member that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
3.19. Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the benefit of the
Administrative Agent and the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In the case
of the Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Stock are delivered to the First
Lien Collateral Agent, together with related stock powers executed in blank, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule
3.19(a) in appropriate form are filed in the offices specified on Schedule
3.19(a) (and, after the Closing Date, any additional filings required to be made
by the Loan Documents are made and the other actions specified on Schedule
3.19(a) are taken), the Lien created by the Guarantee and Collateral Agreement
32
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of any Restricted Group Member in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case prior and superior in right to any other
Person (except as provided in the Intercreditor Agreement and except, in the
case of Collateral other than Pledged Stock, Liens permitted by Section 6.3).
(b) Each of the Mortgages is effective to create in favor of the Collateral
Agent, for the benefit of the Administrative Agent and the Lenders, a legal,
valid and enforceable Lien on the Mortgaged Properties described therein and
proceeds thereof, and when the Mortgages are filed in the offices specified on
Schedule 3.19(b) (and, after the Closing Date, any additional filings required
to be made by the Loan Documents are made), each such Mortgage shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the Restricted Group Members in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant
Mortgage), in each case prior and superior in right to any other Person (except
as provided in the Intercreditor Agreement and except Liens permitted by Section
6.3). Parts A and B of Schedule 1.1B list, as of the Closing Date, each parcel
of owned real property and each leasehold interest in real property located in
the United States and held by any Restricted Group Member.
3.20. Solvency. Each Restricted Group Member, both before and after giving
effect to the incurrence of all Indebtedness and obligations being incurred
under this Agreement, is Solvent.
3.21. Senior Indebtedness. The Obligations of each Restricted Group Member
constitute "Designated Senior Debt" of the Borrower under and as defined in each
Junior Subordinated Note Indenture and the Senior Subordinated Note Indenture,
except to the extent such Obligations are held by an "Affiliate" (as defined in
the applicable indenture) of the Borrower. The obligations of each Restricted
Group Member under the Guarantee and Collateral Agreement constitute "Senior
Debt" of such Restricted Group Member under and as defined in each Junior
Subordinated Note Indenture and the Senior Subordinated Note Indenture, except
to the extent such Obligations are held by an "Affiliate" (as defined in the
applicable indenture) of the Borrower.
3.22. Regulation H. Except as set forth on Schedule 3.22, no Mortgage
encumbers improved real property that is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Act of 1968.
3.23. Certain Documents. The Restricted Group Members have delivered to the
Administrative Agent a complete and correct copy of the Senior Subordinated Note
Indenture, each Junior Subordinated Note Indenture and the Existing Credit
Agreement, including any amendments, supplements or modifications with respect
to any of the foregoing.
3.24. Forest Service Term Special Use Permits. The Forest Service Term
Special Use Permits are listed on Schedule 3.24 are each held by at least one of
the Restricted Group Members and constitute all the term special use permits
issued by the Forest Service of the United States Department of Agriculture that
are necessary or useful for the operations of any Restricted Group Member as
conducted during the fiscal year ended immediately prior to entering into this
Agreement and as planned to be operated.
3.25. Location. All material buildings, structures, fixtures, improvements,
and other assets that constitute each of the respective Ski Resort Properties
(including the lodge buildings, ski shelters, ski lifts, ski trails, snow making
equipment, golf courses, parking lots, and maintenance buildings) are located
entirely on land either (i) that is owned in fee simple by the applicable
Restricted Group Member, (ii) leased by the applicable Restricted Group Member
pursuant to a lease listed on Part B of Schedule 1.1B, (iii) subject to a
recorded easement in favor of the applicable Restricted Group Member, or (iv)
with respect to which a Forest Service Term Special Use Permit is in effect.
33
3.26. Water Rights. The Water Rights of the Restricted Group Members are
sufficient for the ongoing ski operations of the Restricted Group Members.
3.27. Grand Summit Resort Properties, Inc. No Restricted Group Member is
liable for any Indebtedness or other obligations of GSRP, nor has any Restricted
Group Member provided any material support for any Indebtedness or other
obligation of GSRP during the past four years other than indirectly through the
making of lease payments with respect to commercial units of GSRP leased to such
Restricted Group Member.
SECTION IV. CONDITIONS PRECEDENT
4.1. Conditions to Loans. The agreement of each Lender to make the Loan
requested to be made by it is subject to the satisfaction, prior to or
concurrently with the making of such Loan on the Closing Date, of the following
conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by the Administrative Agent, the Borrower and each initial
Lender, (ii) the Guarantee and Collateral Agreement, executed and delivered
by the Borrower and each Guarantor and (iii) an Acknowledgement and Consent
in the form attached to the Guarantee and Collateral Agreement, executed
and delivered by each Issuer (as defined therein), if any, that is an
Excluded Subsidiary.
(b) Intercreditor Agreement. The Administrative Agent shall have
received the Intercreditor Agreement, executed and delivered by each
Restricted Group Member and the First Lien Collateral Agent.
(c) Financial Statements. The Lenders shall have received the
financial statements and audit report described in the first sentence of
Section 3.1, and such financial statements shall not, in the reasonable
judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
(d) Approvals. All governmental and third party approvals (other than
those covered by Section 4.1(k)(v)) necessary in connection with the
transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose adverse conditions on the
financing contemplated hereby.
(e) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Restricted Group Members are located, and such search shall reveal
no liens on any of the assets of the Restricted Group Members except for
Liens permitted by Section 6.3 or discharged on or prior to the Closing
Date pursuant to documentation satisfactory to the Administrative Agent.
(f) Environmental and Health and Safety Assessments. The
Administrative Agent shall have received an environmental assessment and a
health and safety assessment by Environ with respect to the Borrower and
its Subsidiaries, and a memorandum from Vermont counsel with respect to
water supply issues at Mount Snow, in each case in scope, form and
substance reasonably satisfactory to the Administrative Agent.
34
(g) Closing Certificate; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Restricted Group Member, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments, including the certificate of incorporation of each Restricted
Group Member that is a corporation certified by the relevant authority of
the jurisdiction of organization of such Restricted Group Member, and (ii)
a long form (or short form, if such jurisdiction does not issue long form)
good standing certificate for each Restricted Group Member from its
jurisdiction of organization.
(h) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions addressed to the Administrative Agent and
the Lenders, in form and substance satisfactory to the Administrative
Agent:
(i) the legal opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
LLP, special counsel to the Loan Parties; and
(ii) the legal opinion of local counsel to the Loan Parties in
each of Colorado, Utah, Vermont, New Hampshire and Maine, and each
other special and local counsel as may be required by the
Administrative Agent.
Each such legal opinion shall cover such matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.
(i) Pledged Stock; Stock Powers; Pledged Notes. The First Lien
Collateral Agent (as defined in the Intercreditor Agreement) shall have
received (i) the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together with
an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory
note (if any) pledged to the Collateral Agent pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof.
(j) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than as provided in the Intercreditor Agreement or with
respect to Liens expressly permitted by Section 6.3), shall be in proper
form for filing, registration or recordation and shall have been delivered
to the Administrative Agent.
(k) Mortgages, etc. (i) The Administrative Agent shall have received a
Mortgage with respect to each Mortgaged Property, executed and delivered by
a duly authorized officer of each party thereto.
(ii) The Administrative Agent shall have received, for each
Mortgaged Property, (a) a surveyor's report and statement which
certifies that the buildings, improvements and other assets of the
respective Ski Resort Properties, in each case which are referred to
in Section 3.25, are located entirely on land that constitutes the
Mortgaged Property or land with respect to which a Forest Service Term
Special Use Permit is in effect (including land subject to an easement
in favor of a Restricted Group Member), and (b) all compilation plans
on which the foregoing surveyors reports and statements are based.
35
(iii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder for such insurance. Each
such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that
the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (D) name the Administrative Agent for the
benefit of the Lenders as the insured thereunder; (E) be in the form
of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies); (F) contain such endorsements and affirmative
coverage as the Administrative Agent may reasonably request and (G) be
issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been
paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1)
covers any parcel of improved real property that is encumbered by any
Mortgage (2) is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such Mortgage that is
reasonably allocable to such real property or the maximum limit of
coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is
less, and (3) has a term ending not later than the maturity of the
Indebtedness secured by such Mortgage and (B) confirmation that the
Borrower has received the notice required pursuant to Section
208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in clause (iii) above and a
copy of all other material documents affecting the Mortgaged
Properties.
(vi) The Administrative Agent shall have received, with respect
to each material leasehold for which a Restricted Group Member is the
lessee other than the leaseholds listed on Schedule 4.1(k)(vi), a
certificate executed by the landlord of such leasehold that includes
leasehold mortgagee protection and estoppel provisions reasonably
satisfactory to the Administrative Agent (a "Landlord Certificate").
(l) Material Agreements; Permits and Water Rights. The Administrative
Agent shall have received, and be satisfied with its review of, copies of
(a) each agreement, instrument or other undertaking, including all leases,
to which each Restricted Group Member is a party and the failure to comply
therewith could reasonably be expected to have a Material Adverse Effect,
(b) each governmental permit to which any Restricted Group Member is a
party, and (c) evidence of all Water Rights required for any Restricted
Group Member's current or intended operations or for any property owned,
leased, or otherwise operated by any Restricted Group Member.
(m) Forest Service Permits. The Administrative Agent shall have
received tripartite agreements from the United States Forest Service with
respect to the Forest Service Term Special Use Permits, in accordance with
the United States Forest Service's standard form for such documents.
36
(n) First Lien Loans. The Borrower shall have received $85,000,000 in
gross proceeds from the borrowing of First Lien Term Loans.
(o) Termination of Existing Credit Agreement. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that
the Existing Credit Agreement shall be simultaneously terminated, all
amounts thereunder shall be simultaneously paid in full and arrangements
satisfactory to the Administrative Agent shall have been made for the
termination of Liens and security interests granted in connection
therewith.
(p) Tender of Senior Subordinated Notes. The Administrative Agent
shall have received evidence reasonably satisfactory to it that (i) at
least $118,500,000 aggregate principal amount of outstanding Senior
Subordinated Notes shall have been repurchased, repaid or redeemed in full
pursuant to a tender offer therefor made by the Borrower prior to the
Closing Date and (ii) if any of the Senior Subordinated Notes shall not
have been so repurchased, repaid or redeemed pursuant to such tender offer,
the Borrower shall have initiated the procedures specified in the Senior
Subordinated Note Indenture for the mandatory redemption of such remaining
Senior Subordinated Notes.
(q) Appraisals. The Administrative Agent shall have received
Appraisals of Ski Resort Properties, satisfactory in form and substance to
the Administrative Agent, demonstrating an aggregate Appraised Value of
such properties of at least the Required Value (as defined in the First
Lien Credit Agreement).
(r) Fees. The Lenders and the Administrative Agent shall have received
all fees required to be paid, and all expenses required to be paid for
which invoices have been presented (including the reasonable fees and
expenses of legal counsel), on or before the Closing Date, including
pursuant to any Fee Letter. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before
the Closing Date.
(s) Solvency Analysis. The Lenders shall have received a reasonably
satisfactory solvency analysis certified by the chief financial officer of
the Borrower which shall document the solvency of the Borrower and its
Subsidiaries considered as a whole after giving effect to the transactions
contemplated hereby but disregarding any assets or liabilities of any
Excluded Subsidiary.
(t) Extension of Existing Junior Subordinated Notes. The maturity of
the Existing Junior Subordinated Notes shall have been extended to a date
at least six months after the final maturity of the Loans, and the
Administrative Agent shall have received reasonably satisfactory evidence
thereof.
(u) Exchange of Series A Preferred Stock. The holder(s) of the Series
A Preferred Stock of the Borrower shall have exchanged such Capital Stock
on a dollar-for-dollar basis for New Junior Subordinated Notes of the
Borrower.
(v) PATRIOT Act. The Lenders shall have received, at least five
Business Days prior to the Closing Date, all documentation and other
information required by bank regulatory authorities under applicable "know
your customer" and anti-money laundering rules and regulations, including
the United States PATRIOT Act.
37
(w) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
(x) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
SECTION V. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, until the Obligations have
been Fully Satisfied, the Borrower shall, and shall cause each of its Restricted
Subsidiaries to:
5.1. Financial Statements. Furnish to the Administrative Agent for
distribution to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower (i) a copy of the audited
consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
with an unqualified opinion thereon, by KPMG LLP or other independent
certified public accountants of nationally recognized standing and (ii) the
unaudited consolidated and consolidating balance sheets of the Borrower and
its consolidated Subsidiaries as at the end of such year and the related
unaudited consolidated and consolidating statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments); and
(c) as soon as available, but in any event not later than 45 days
after the end of each fiscal month occurring during each fiscal year of the
Borrower (or 90 days thereafter in the case of July and 60 days thereafter
in the case of August of each such fiscal year), copies of the unaudited
consolidated balance sheets of the Restricted Subsidiaries as at the end of
such fiscal month and the related unaudited consolidated statements of
income and of cash flows for such Persons for such fiscal month and the
portion of the fiscal year through the end of such fiscal month, in each
case as the Borrower prepares internally with respect to the Restricted
Subsidiaries and setting forth in comparative form the figures for the
previous year.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
38
5.2. Certificates; Other Information. Furnish to the Administrative Agent
for distribution to each Lender (or, in the case of clause (g), to the relevant
Lender):
(a) concurrently with the delivery of any financial statements
pursuant to Section 5.1(a) or (b), (i) a certificate of a Responsible
Officer of the Borrower stating that, to the best of such Responsible
Officer's knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied every
required condition contained in this Agreement and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate, (ii) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by each Restricted Group Member with the provisions
of this Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of the Borrower, as the case may be, (iii) a
certificate of a Responsible Officer of the Borrower certifying
Consolidated EBITDA for the four fiscal quarter period ended as of the last
day of the fiscal quarter or fiscal year of the Borrower, as the case may
be, and (iv) to the extent not previously disclosed to the Administrative
Agent, a description of any change in the jurisdiction of organization or
legal name of any Restricted Group Member and a list of any Intellectual
Property acquired by any Restricted Group Member since the date of the most
recent report delivered pursuant to this clause (iv) (or, in the case of
the first such report so delivered, since the Closing Date);
(b) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Restricted Group Members as of the end of the following fiscal
year, the related consolidated statements of projected cash flow, projected
changes in financial position and projected income and a description of the
underlying assumptions applicable thereto), and, as soon as available,
significant revisions, if any, of such budget and projections with respect
to such fiscal year (collectively, the "Projections"), which Projections
shall in each case be accompanied by a certificate of a Responsible Officer
of the Borrower stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer
has no reason to believe that such Projections are incorrect or misleading
in any material respect;
(c) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Restricted Group Members for such fiscal
quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the
previous year;
(d) no later than three Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to either Junior
Subordinated Note Indenture;
(e) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to all the holders of any
class of its debt securities or public equity securities in their capacity
as such, or to any trustee for such holders, and, within five days after
the same are filed, copies of all financial statements and reports that the
Borrower may make to, or file with, the SEC;
(f) promptly, copies of any agreements of the kind described in clause
(a) of Section 4.1(l) not previously delivered hereunder; and
39
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material payment obligations of whatever nature (other than obligations in
respect of the principal of and interest on Indebtedness, which are covered by
Section 7(e)), except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the relevant
Restricted Group Member.
5.4. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep
in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business (including all applicable Forest
Service Permits), except, in each case, as otherwise permitted by Section 6.4
and except, in the case of clause (ii) above, to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations (other than obligations in respect of
Indebtedness, which are covered by Section VII(e)) and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.5. Maintenance of Property Insurance. (a) Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted (it being understood that such property may be temporarily out of
good working order and condition in connection with the repair or maintenance
thereof or improvements thereto provided that that such property is restored to
such condition as soon as commercially practicable subject to negative weather
conditions and ski season requirements), and (b) comply with the provisions of
Schedule 5.5(b).
5.6. Inspection of Property; Books and Records; Discussions; Surveys. (a)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities, (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Restricted Group
Members with officers and employees of the Restricted Group Members and with
their independent certified public accountants and (c) permit the Administrative
Agent to cause to be conducted surveys of the Mortgaged Properties as the
Administrative Agent may reasonably request, at the Lender's expense.
5.7. Notices. Promptly after obtaining knowledge of the same, give notice
to the Administrative Agent for distribution to each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Restricted Group Member or (ii) litigation, investigation
or proceeding that may exist at any time between any Restricted Group
Member and any Governmental Authority, that in either case, if not cured or
if adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
40
(c) any litigation or proceeding affecting any Restricted Group Member
(i) in which the amount involved is $1,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought or (iii)
which relates to any Loan Document;
(d) the following events, as soon as possible and in any event within
30 days after any Restricted Group Member knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or, in the reasonable
opinion of the Borrower's management, could reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the relevant Restricted Group Member proposes to take
with respect thereto.
5.8. Environmental Matters. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws; obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all Environmental
Permits; and obtain and maintain all Water Rights necessary for it in any
material respect;
(b) Conduct and complete in all material respects all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material
respects with all orders and directives of all Governmental Authorities
regarding Environmental Laws other than such orders or directives that have
been timely and properly challenged in good faith and diligently pursued,
provided that the pendency of any and all such challenges could not
reasonably be expected to give rise to a Material Adverse Effect and does
not materially and adversely affect the value or marketability of any
Mortgaged Properties;
(c) Generate, use, treat, store, release, dispose of, and otherwise
manage Materials of Environmental Concern in a manner that would not
reasonably be expected to result in a material liability to any Restricted
Group Member or any of its Subsidiaries or to affect materially and
adversely the value or marketability of any Mortgaged Properties; and take
reasonable efforts to prevent any other person from generating, using,
treating, storing, releasing, disposing of, or otherwise managing Hazardous
Materials in a manner that could reasonably be expected to result in a
material liability to any Restricted Group Member or any of its
Subsidiaries or to affect materially and adversely the value or
marketability of any Mortgaged Properties; and
(d) Maintain a program to facilitate that its and its Subsidiaries'
properties and operations comply with, and are prudently operated to
minimize liabilities under, all applicable Environmental Laws and
Environmental Permits (other than Forest Service Term Special Use Permits),
and are prudently operated to manage impacts on natural resources and the
environment ("EH&S Program"). The EH&S Program shall include maintenance of
a system to share information with respect to best management practices at
each Ski Resort Property with respect to attaining the compliance of its
properties and operations with, and minimizing the potential liability of
its properties and operations under, applicable Environmental Laws and
Environmental Permits (other than Forest Service Term Special Use Permits),
and managing the impacts of its properties and operations on natural
resources and the environment (including a meeting at least once each
calendar quarter, either in person or by telephone, of at least the person
at each Ski Resort Property with overall operational responsibility for
such matters).
41
(e) At the request of the Administrative Agent (not more frequently
than once in any 12-month period, unless a Default shall have occurred and
be continuing), provide the Administrative Agent with a briefing regarding
the EH&S Program; and, within thirty days of the end of each fiscal year,
deliver a report certified by an officer of the Borrower with
responsibility therefor and the Borrower's chief financial officer
summarizing material developments involving matters concerning the EH&S
Program (the "Annual EH&S Report") together with, where appropriate, a copy
of the relevant documents. At a minimum, the Annual EH&S Report shall
include: (1) a summary of any material investigation or remediation
undertaken during the prior year to address environmental contamination
(including a description of the contamination, the proposed action, the
expected time line for completion, and a cost estimate); (2) a summary of
any material inspections by Governmental Authorities regulating matters
concerning the EH&S Program during the fiscal year just ended and any
notices of violation issued to a Restricted Group Member or any of its
Subsidiaries by such Governmental Authorities during such fiscal year
(including the authority issuing the notice, the subject matter thereof,
the relief sought, and whether the Restricted Group Member believes that
such notice could reasonably result in a fine or penalty in excess of
$50,000); (3) a summary of any administrative and judicial proceedings
brought against the Restricted Group Member or any of its Subsidiaries
regarding matters concerning the EH&S Program pending at any time during
the fiscal year ended (including the entity bringing the proceeding, the
subject thereof, the relief sought, and whether the Restricted Group Member
believes that such proceeding could reasonably result in a fine or penalty
in excess of $50,000); (4) a summary of any material violations of
Environmental Laws or Environmental Permits identified by the Borrower or
any of its Subsidiaries and reported to a Governmental Authority during the
past fiscal year, and a brief description of the violations and whether the
Restricted Group Member believes that such notice or combination thereof,
could reasonably be expected to result in a fine or penalty in excess of
$50,000; (5) a description of any material modifications or enhancements
made to the EH&S Program during the fiscal year just ended; (6) a copy of
any compliance audit and corrective action documentation prepared pursuant
to or with respect to any matter concerning the EH&S Program during the
fiscal year just ended; and (7) a description of any legislative,
regulatory, or enforcement initiatives of which a Restricted Group Member
is aware regarding matters concerning the EH&S Program that could
reasonably be expected to materially affect the Restricted Group Member's
costs, revenues, or business plans in the current fiscal year or the
remaining term of the Facilities (or, if a Default has occurred and is
continuing, the four succeeding fiscal years).
5.9. Additional Collateral, etc. (a) With respect to any property acquired
after the Closing Date by any Restricted Group Member (other than (x) any
property described in paragraph (b), (c) or (d) below and (y) any property
subject to a Lien expressly permitted by Section 6.3(f) as to which the
Collateral Agent, for the benefit of the Lenders, does not have a perfected
Lien) promptly (i) execute and deliver to the Collateral Agent such amendments
to the Guarantee and Collateral Agreement or such other documents as the
Collateral Agent reasonably deems necessary or advisable to grant to the
Collateral Agent, for the benefit of the Administrative Agent and the Lenders, a
security interest in such property and (ii) take all actions necessary or
advisable to grant to the Collateral Agent, for the benefit of the
Administrative Agent and the Lenders, a perfected first priority security
interest in such property (subject to the provisions of the Intercreditor
Agreement and to Liens permitted by Section 6.3), including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Collateral Agent.
(b) With respect to any fee interest in any real property comprising
ski terrain or having a value (together with improvements thereof) of at
least $100,000 (including the projected value of any improvements being
42
constructed) or any leasehold interest in any real property comprising ski
terrain or having improvements thereon with a value of at least $100,000
(or with improvements to be constructed thereon with a projected value of
at least $100,000), in each case acquired after the Closing Date by any
Restricted Group Member (other than any such real property subject to a
Lien expressly permitted by Section 6.3(f)), promptly (i) execute and
deliver a first priority Mortgage (subject to the provisions of the
Intercreditor Agreement and to Liens permitted by Section 6.3), in favor of
the Collateral Agent, for the benefit of the Administrative Agent and the
Lenders, covering such real property, (ii) if requested by the Collateral
Agent, provide the Lenders with (x) title insurance covering such real
property in an amount at least equal to the purchase price of such real
property (or such other greater amount as shall be reasonably specified by
the Collateral Agent) as well as a surveyor's report and statement which
certifies that the buildings, improvements and other assets pertaining to
such real property are located entirely on land that constitutes such real
property and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Collateral Agent in connection with such Mortgage, each of
the foregoing in form and substance reasonably satisfactory to the
Collateral Agent and (iii) if requested by the Collateral Agent, deliver to
the Collateral Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Collateral Agent.
(c) With respect to any new Restricted Subsidiary created or acquired
after the Closing Date by any Restricted Group Member (which, for the
purposes of this paragraph (c), shall include any existing Subsidiary that
ceases to be an Excluded Subsidiary), promptly (i) execute and deliver to
the Collateral Agent such amendments to the Guarantee and Collateral
Agreement as the Collateral Agent deems necessary or advisable to grant to
the Collateral Agent, for the benefit of the Administrative Agent and the
Lenders, a perfected first priority security interest in the Capital Stock
of such new Restricted Subsidiary that is owned by any Restricted Group
Member (subject to the provisions of the Intercreditor Agreement and to
Liens permitted by Section 6.3), (ii) deliver to the Collateral Agent (or,
if the First Lien Loan Documents are then in effect, the First Lien
Collateral Agent) the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Restricted Group Member, (iii)
cause such new Restricted Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement, by executing and delivering to the Collateral
Agent an Assumption Agreement in the form attached as Annex 1 to the
Guarantee and Collateral Agreement, (B) to take such actions necessary or
advisable to grant to the Collateral Agent for the benefit of the
Administrative Agent and the Lenders a perfected first priority security
interest (subject to the provisions of the Intercreditor Agreement and to
Liens permitted by Section 6.3) in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in
such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be reasonably requested by the Collateral
Agent and (C) to deliver to the Collateral Agent a certificate of such
Subsidiary, substantially in the form of Exhibit C, with appropriate
insertions and attachments, and (iv) deliver to the Administrative Agent
and the Collateral Agent legal opinions relating to such new Subsidiary and
the matters described above, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent and
the Collateral Agent (it being agreed that opinions of substantially the
same scope, and from the same counsel, as the opinions delivered pursuant
to Section 4.1(h) shall be satisfactory).
(d) With respect to any new Excluded Subsidiary created or acquired
after the Closing Date that is a direct Subsidiary of any Restricted Group
Member, promptly (i) execute and deliver to the Collateral Agent such
amendments to the Guarantee and Collateral Agreement as the Collateral
Agent deems necessary or advisable to grant to the Collateral Agent, for
the benefit of the Administrative Agent and the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that
is owned by any Restricted Group Member (subject to the provisions of the
Intercreditor Agreement and to Liens permitted by Section 6.3), (ii)
deliver to the Collateral Agent (or, if the First Lien Loan Documents are
43
then in effect, the First Lien Collateral Agent) the certificates
representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the relevant
Restricted Group Member, and take such other action as may be necessary or,
in the opinion of the Collateral Agent, desirable to perfect the Collateral
Agent's security interest therein, and (iii) if requested by the Collateral
Agent, deliver to the Collateral Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Collateral Agent (it being
agreed that opinions of substantially the same scope, and from the same
counsel, as the opinions delivered pursuant to Section 4.1(h) shall be
satisfactory).
5.10. Forest Service Permits. Comply with all of its material obligations
and agreements under the Forest Service Permits and under any renewals or
extensions thereof and not do or suffer anything which will impair any Forest
Service Term Special Use Permit. Make no changes, alterations or amendments to
any Forest Service Permit except with the prior written consent of the
Administrative Agent or as would not have or reasonably be expected to have a
material impact on the operations of any Restricted Group Member; provided,
however, that changes or alterations in any master plan provided under or
incorporated by reference in any Forest Service Term Special Use Permit will not
constitute changes, alterations or amendments under this Section.
5.11. Agreements with Respect to Excluded Subsidiaries. (a) Conduct its
business and operations separately from that of the Excluded Subsidiaries and
cause the Excluded Subsidiaries to conduct their business and operations
separately from that of any Restricted Group Member, by (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 Restricted Group Members of obligations of Excluded Subsidiaries
and permitted hereunder, (iv) except in the case of GSRP, maintaining
capitalization adequate to meet their respective business needs and (v)
conducting contractual dealings with third parties in their respective names and
as separate and independent entities.
(b) Cause each Excluded Subsidiary not to conduct any business other
than the business indicated for such Excluded Subsidiary on Schedule 5.11
and matters incidental thereto.
(c) Not permit any Excluded Immaterial Subsidiary to Dispose of any
material assets, except Dispositions for fair market value consideration
which is dividended or distributed to the Restricted Group Member that owns
such Excluded Immaterial Subsidiary.
5.12. Interest Rate Protection. In the case of the Borrower, within 180
days after the Closing Date, enter into, and thereafter maintain for a period of
not less than three years, Swap Agreements to the extent necessary to provide
that 50% of the aggregate outstanding principal amount of the Loans and the
First Lien Term Loans is subject to interest rate protection for a period of not
less than three years, which Swap Agreements shall have terms and conditions
reasonably satisfactory to the Agents.
5.13. Post-Closing Obligations. (a) Use commercially reasonable efforts
promptly to obtain Landlord Certificates for the leases listed on Schedule
5.1(k)(vi).
(b) Within 60 days after the Closing Date, cause the operating leases
of the Restricted Group Members listed on Schedule 5.13 to be converted
into capital leases.
44
SECTION VI. NEGATIVE COVENANTS
The Borrower hereby agrees that, until the Obligations are Fully Satisfied,
the Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly:
6.1. Minimum Consolidated EBITDA. Permit Consolidated EBITDA for any period
of four fiscal quarters of the Borrower ending with any fiscal quarter set forth
below ("LTM EBITDA") to be less than the amount set forth below opposite such
fiscal quarter:
Fiscal Quarter Minimum LTM EBITDA
FY2005 Quarter 2 $35,000,000
FY2005 Quarter 3 $35,000,000
FY2005 Quarter 4 $35,000,000
FY2006 Quarter 1 $35,000,000
FY2006 Quarter 2 $35,000,000
FY2006 Quarter 3 and thereafter $38,250,000
provided that, for the purpose of calculating Consolidated EBITDA for the first
and second fiscal quarters of the Borrower's fiscal year 2005, Consolidated
EBITDA shall be determined as if all operating leases set forth on Schedule 5.13
has been converted into capital leases during all relevant time periods in such
fiscal quarter.
6.2. Indebtedness. Create, issue, incur, assume, become liable in respect
of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Restricted Group Member pursuant to any Loan
Document;
(b) Indebtedness (including Purchase Money Indebtedness (as defined
below)) outstanding on the date hereof and listed on Schedule 6.2(b) and
any refinancings, refundings, renewals or extensions thereof (without
increasing, or shortening the maturity of, the principal amount thereof
(after giving effect to any repayments) except for increases to the extent
of any premium and reasonable costs and expenses or capitalized interest);
(c) (i) Indebtedness (including Capital Lease Obligations) secured by
Liens permitted by Section 6.3(f) ("Purchase Money Indebtedness") in an
aggregate principal amount at any one time outstanding, which when added to
the aggregate then outstanding principal amount of any secured Indebtedness
specified on Schedule 6.2(b) and any refinancings, refundings, renewals or
extensions thereof, is not greater than $30,000,000 during the Borrower's
2005 and 2006 fiscal years, $27,500,000 during the Borrower's 2007 and 2008
fiscal years, and $25,000,000 thereafter;
(d) Indebtedness in respect of the Senior Subordinated Notes (so long
as all Senior Subordinated Notes remaining outstanding after the Closing
Date are repurchased, redeemed or defeased in full within 60 days after the
Closing Date and the requirements of Section 4.1(p) have been met) and the
Existing Junior Subordinated Notes;
(e) Indebtedness of any Loan Party to any other Loan Party;
(f) Payment and performance bonds entered into in the ordinary course
of business in support of the activities of any Restricted Group Member in
conjunction with Capital Expenditures permitted hereunder; provided, that
the aggregate amount of such payment and performance bonds outstanding at
any time shall not exceed $2,000,000;
45
(g) Indebtedness constituting First Lien Debt and any refinancing,
refunding, renewal or extension thereof (without increasing, or shortening
the maturity of, the principal amount thereof (after giving effect to any
repayments) except for increases to the extent of any premium and
reasonable costs and expenses or capitalized interest), subject to the
Intercreditor Agreement;
(h) Indebtedness in respect of the New Junior Subordinated Notes
issued in exchange for or as a conversion of the Series A Preferred Stock
on a dollar-for-dollar basis; and
(i) Indebtedness incurred in connection with the financing of
insurance premiums for insurance policies obtained in the ordinary course
of business.
6.3. Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the applicable Restricted
Group Member in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which secure
payment of obligations (other than Indebtedness) that are not overdue for a
period of more than 30 days or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the applicable Restricted Group
Member in conformity with GAAP;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance (other than ERISA) and other social security
legislation;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of any
Restricted Group Member;
(e) Liens in existence on the date hereof listed on Schedule 6.3(e),
provided that no such Lien is spread to cover any additional property after
the Closing Date (except for additional property in the nature of
improvements to property already subject to any such Lien or additions to
accounts receivable or inventory, as the case may be, already subject to
such Lien) and that, if securing Indebtedness, the principal amount of
Indebtedness secured thereby is not increased;
(f) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 6.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness (except for additional property
in the nature of improvements to property already subject to any such Lien
or additions to accounts receivable or inventory, as the case may be,
already subject to such Lien) and (iii) the amount of Indebtedness secured
thereby is not increased;
46
(g) Liens created pursuant to the Security Documents;
(h) any interest or title of a lessor under any lease entered into by
any Restricted Group Member in the ordinary course of its business and
covering only the assets so leased;
(i) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(j) Liens (other than judgments and awards) created by or resulting
from any litigation or legal proceeding which has not yet resulted in an
Event of Default, provided that the execution or other enforcement thereof
is effectively stayed and the claims secured thereby are being actively
contested in good faith by appropriate proceedings satisfactory to the
Administrative Agent and adequate reserves with respect thereto are
maintained on the books of the applicable Restricted Group Member in
conformity with GAAP;
(k) possessory Liens in favor of securities intermediaries, commodity
intermediaries, brokers and dealers arising in connection with the
acquisition or disposition of Investments of the type permitted by Section
6.8(b), provided that such Liens (i) attach only to such Investments and
(ii) secure only obligations incurred in the ordinary course of business of
the relevant Restricted Group Member and arising in connection with the
acquisition or disposition of such Investments and not any obligation in
connection with margin financing;
(l) leases permitted by Section 6.5;
(m) Liens on Collateral securing Indebtedness incurred pursuant to
Section 6.2(g), which Liens may also secure Specified Swap Agreements, in
each case subject to the Intercreditor Agreement; and
(n) Liens on insurance policies and the proceeds thereof securing the
financing of the insurance premiums with respect thereto.
6.4. Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a) any Restricted Group Member may be merged or consolidated with or
into any other Restricted Group Member (provided that, in the case of any
such merger or consolidation involving the Borrower, the Borrower shall be
the continuing or surviving corporation);
(b) any Restricted Subsidiary may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) in a Disposition permitted by
Section 6.5(c) or (ii) pursuant to any other Disposition permitted by
Section 6.5; and
(c) any Investment expressly permitted by Section 6.8 may be
structured as a merger, consolidation or amalgamation.
6.5. Disposition of Property. Dispose of any of its property, whether now
owned or hereafter acquired, or, in the case of any Restricted Subsidiary, issue
or sell any shares of such Subsidiary's Capital Stock to any Person, except:
47
(a) the Disposition in the ordinary course of business of obsolete or
worn out property with an aggregate book value or fair market value,
whichever is less, not in excess of $500,000 in any fiscal year;
(b) the sale, lease or other disposition of inventory in the ordinary
course of business;
(c) Dispositions to any other Restricted Group Member (upon voluntary
liquidation or otherwise); provided that any Disposition of Collateral
included therein shall be made subject to the Liens of the Collateral Agent
thereon and, prior to any such Disposition, the applicable Restricted Group
Members shall have taken all action required by the Collateral Agent to
create, perfect and protect such Liens and the priority thereof;
(d) the sale or issuance of any Restricted Subsidiary's Capital Stock
to any Restricted Group Member;
(e) the Disposition of Non-Operating Assets for fair market value
(measured in the case of Dispositions of Non-Operating Assets for
consideration in excess of $5,000,000 based on the appraised value of such
Non-Operating Assets) cash consideration not to exceed in the aggregate for
any fiscal year of the Borrower, $4,000,000; provided that in any fiscal
year of the Borrower, the $4,000,000 amount may be increased by the
Additional Non-Operating Asset Sale Amount for such fiscal year if:
(i) LTM EBITDA for the period ending on the last day of the third
fiscal quarter of the preceding fiscal year was not less than the LTM
EBITDA required for such period pursuant to Section 6.1, and
(ii) an amount equal to at least 50% (or, if at the time of any
Disposition pursuant to this clause (e) the aggregate amount of cash
proceeds of Dispositions of Non-Operating Assets by the Restricted
Group Members since the Closing Date exceeds $45,000,000, 75%) of the
excess, if any, of (x) the aggregate amount Non-Operating Asset Sale
Proceeds received by the Borrower in any fiscal year from Dispositions
pursuant to this clause (c) over (y) $4,000,000 is applied in
accordance with Section 2.6(b) (and such amount will be deemed to
constitute Net Cash Proceeds of a Material Asset Sale for purposes of
Section 2.6(b));
(f) the license of intellectual property in the ordinary course of
business;
(g) dispositions of Capital Stock of Grand Summit Resort Properties,
Inc. and Community Water Company;
(h) Leases that have a lease term of three years or less (or no more
than five years with a five-year renewal term in the case of subclause (ii)
below) that are (i) retail space leases to third-party retailers, (ii)
other leases covering spaces of 10,000 square feet or less, or (iii) ground
leases of real property other than (x) Skiable Terrain, (y) improved real
property (except in the case of a replacement or renewal of any lease on
such property existing as of the Closing Date) or (z) any other property
necessary for the operation of any Ski Resort Properties in the ordinary
course of business;
(i) Dispositions of Non-Operating Assets consisting of capital
contributions permitted by Section 6.8(j)
48
(j) transfers to Wolf Mountain Resorts, LC ("Wolf") of (i) 100
hotel/lodging unit undeveloped lots in Red Pine Village at The Canyons,
together with associated water rights and utilities, in accordance with
Section 12 of the Second Amendment to Ground Lease between ASC Utah and
Wolf and (ii) ASC Utah's interest in the land underlying the Willow Draw
subdivision, consisting of 35 undeveloped residential lots, in accordance
with Section 9 of the Second Amendment to Ground Lease between ASC Utah and
Wolf, together with associated water rights and utilities; and
(k) modifications of the "Premises" under the Ground Lease between
Wolf and ASC Utah to facilitate property re-alignment and base area
development at The Canyons, on terms disclosed to and approved by the
Administrative Agent.
6.6. Restricted Payments. Declare or pay any dividend (other than dividends
payable solely in common stock of the Person making such dividend) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of any Restricted Group Member, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of any Restricted
Group Member (collectively, "Restricted Payments"), except that (a) any
Restricted Group Member may make Restricted Payments to any other Restricted
Group Member and (b) the Borrower shall be permitted make Restricted Payments of
up to $5,000,000 in the aggregate since the Closing Date, whether in a single
transaction or a series of related transactions, to purchase or acquire common
stock of the Borrower not held by Oak Hill so long as (i) the ratio of (x) the
sum of the outstanding amount of the Loans and the aggregate outstanding amount
of the First Lien Debt and all available commitments in respect thereof on the
date of any such Restricted Payment to (y) Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended as of such date for which
financial statements have been delivered in accordance with Section 5.1(a) or
(b) shall not be greater than 4.20:1.00, (ii) no Default or Event of Default
shall have occurred and be continuing and (iii) after the consummation of such
single transaction, the Borrower will no longer be subject to the reporting
requirements of the Securities Exchange Act of 1934 (or such obligations shall
be suspended) or, in any case where such purchases or acquisitions are being
effected pursuant to a series of related transactions, it is reasonable to
conclude that, after completion of all transactions in such series, (and the
termination of any applicable suspension period) the Borrower will no longer be
subject to such reporting requirements and, after completion of the final
transaction in such series, the Borrower is, in fact, no longer subject to such
reporting requirement.
6.7. Capital Expenditures. Make or commit to make any Capital Expenditure,
except Capital Expenditures of the Restricted Group Members in the ordinary
course of business made while no Event of Default has occurred and is continuing
not exceeding in any fiscal year of the Borrower the sum of (i) $18,000,000,
(ii) an amount equal to 50% of the aggregate excess of LTM EBITDA for the prior
fiscal year over the minimum LTM EBITDA required by Section 6.1(a) for such
fiscal year (without adding in any Non-Operating Asset Sale Proceeds as
permitted by the proviso to such Section), (iii) an amount equal to
Non-Operating Asset Sale Proceeds received during such fiscal year, up to a
maximum of $4,000,000 for this clause (iii), and (iv) an amount equal to 50% of
the Non-Operating Asset Sale Proceeds received during such fiscal year from any
additional Disposition of Non-Operating Assets permitted pursuant to the proviso
to Section 6.5(e); provided, that any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year; and provided, further, that the
Restricted Group Members shall be permitted to make additional Capital
Expenditures (A) as described on Schedule 6.7 so long as (x) such Capital
Expenditures do not exceed in any such fiscal year the amount set forth for such
fiscal year on Schedule 6.7 (provided that if the amount set forth on such
Schedule to be expended for any such item in any fiscal year is not expended in
such fiscal year for such item, the amount for such item not so expended in such
49
fiscal year may be expended for such item in any subsequent fiscal year) and are
for the items described on such Schedule 6.7 and (y) for each such described
item, the amount expended on such item does not exceed the amount set forth on
such Schedule for such item; (B) in respect of the conversion of operating
leases existing on the Closing Date and listed on Schedule 6.13 into Capital
Leases within 60 days after the Closing Date and (C) with the Net Cash Proceeds
of any Recovery Event with respect to which a Reinvestment Notice has been
delivered in accordance with Section 2.9(b).
6.8. Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), or have outstanding any Investment,
except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 6.2;
(d) (i) existing Investments in the Capital Stock of Subsidiaries that
are not Restricted Group Members, as described on Schedule 3.15, (ii)
outstanding intercompany loans and advances, as listed as Indebtedness on
Schedule 6.2(b) and permitted by Section 6.2, and (iii) other existing
Investments described on Schedule 6.8(d);
(e) Capital Expenditures permitted by Section 6.7 that are structured
as Investments;
(f) Restricted Payments permitted under Section 6.6;
(g) intercompany Investments by any Restricted Group Member in any
other Restricted Group Member;
(h) Investments acquired in connection with the bankruptcy or workout
of account debtors; and
(i) Investments in respect of Swap Agreements permitted under Section
6.12;
(j) the Investments described on Schedule 7.8(j); and
(k) Investments in SS Associates, LLC in connection with the call by
Killington, Ltd., or the put by TMG Associates, LLC to Killington, Ltd., of
TMG Associates, LLC's membership interest in SS Associates, LLC in
accordance with the terms of the Limited Liability Company Operating
Agreement of SS Associates, LLC dated October 15, 2004 as such agreement is
in effect on the date hereof.
6.9. Optional Payments and Modifications of Certain Debt Instruments. (a)
Make or offer to make any optional or voluntary payment, prepayment, repurchase
or redemption of or otherwise optionally or voluntarily defease or segregate
funds with respect to any Junior Subordinated Notes; (b) amend, modify, waive or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of any Junior Subordinated Notes (other than
any such amendment, modification, waiver or other change that (i) would extend
the maturity or reduce the amount of any payment of principal thereof or reduce
the rate or extend any date for payment of interest thereon or waive any default
or make any covenant less restrictive and (ii) does not involve the payment of a
consent fee); (c) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
50
any Preferred Stock (other than any such amendment, modification, waiver or
other change that (x) would extend the scheduled redemption date or reduce the
amount of any scheduled redemption payment or reduce the rate or extend any date
for payment of dividends thereon and (y) does not involve the payment of a
consent fee); or (d) designate any Indebtedness (other than obligations of the
Restricted Group Members pursuant to the Loan Documents and the First Lien Loan
Documents) as "Designated Senior Debt" (or any other defined term having a
similar purpose) for the purposes of the Junior Subordinated Note Indentures.
6.10. Transactions with Affiliates. Enter into any transaction, including
any purchase, sale, lease or exchange of property, the rendering of any service
or the payment of any management, advisory or similar fees, with any Affiliate
(other than any Loan Party) except that a Restricted Group Member (a) may pay
reasonable salaries, fees and bonuses (including the reimbursement of expenses
and the granting of stock options and phantom stock awards) to its directors,
officers and employees in accordance with prudent and customary business
practices, (b) may enter into transactions with an Affiliate on terms that are
not materially less favorable to such Restricted Group Member taken as a whole
than those which could be obtained at the time from Persons who are not
Affiliates and which transactions (x) to the extent in excess of $250,000 for
each transaction or a series of related transactions are disclosed to the
Administrative Agent in writing and (y) to the extent in excess of $5,000,000
for each transaction or a series of related transactions are approved by the
Supermajority Lenders, in each case prior to the consummation of such
transactions, (c) may amend, modify, waive or otherwise change the terms of any
Junior Subordinated Notes or Preferred Stock to the extent permitted by (i)
Section 6.9, (ii) the Loan Documents as permitted by the terms thereof, and
(iii) the First Lien Loan Documents to the extent permitted by the Intercreditor
Agreement, (d) may enter into and perform their obligations under the Loan
Documents and (e) enter into such other transactions with Affiliates that have
been approved in advance in writing by the Administrative Agent. Notwithstanding
the foregoing, so long as no Event of Default is continuing, the Restricted
Group Members may pay management fees to Affiliates in an aggregate amount for
all such Affiliates not to exceed $100,000 in any fiscal year of the Borrower.
6.11. Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by any Restricted Group Member of real or personal
property that has been or is to be sold or transferred by such Restricted Group
Member to such Person or to any other Person to whom funds have been or are to
be advanced by such Person on the security of such property or rental
obligations of such Restricted Group Member, except in connection with a
Disposition of Non-Operating Assets which otherwise complies with this
Agreement.
6.12. Swap Agreements. Enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which such Restricted
Group Member has actual exposure (other than those in respect of Capital Stock)
and (b) Swap Agreements entered into in order to effectively cap, collar or
exchange interest rates (from fixed to floating rates, from one floating rate to
another floating rate or otherwise) with respect to any interest-bearing
liability or investment of such Restricted Group Member.
6.13. Changes in Fiscal Periods. Permit the fiscal year of the Borrower to
end on a day other than the last Sunday in July or change the Borrower's method
of determining fiscal quarters.
6.14. Restrictive Agreements. Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Restricted Group Member to create, incur
or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Restricted Subsidiary to pay dividends or other distributions
with respect to any shares of its Capital Stock or to make or repay loans or
advances to any other Restricted Group Member or to guarantee Indebtedness of
any other Restricted Group Member; provided that (i) the foregoing shall not
51
apply to restrictions and conditions imposed by law or by the Loan Documents or
the First Lien Loan Documents, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
6.14 (but shall apply to any extension or renewal of any such restriction, or
any amendment or modification of any such restriction or condition making such
restriction or condition more restrictive), (iii) the foregoing shall not apply
to customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary or assets or stock pending such sale, provided such
restrictions and conditions apply only to the Subsidiary or assets or stock that
is to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
6.15. Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related thereto.
6.16. Maintenance Capital Expenditures Variance. Permit the actual amount
of maintenance Capital Expenditures of the Restricted Group Members in any
fiscal year of the Borrower to be less than the maintenance Capital Expenditures
of the Restricted Group Members budgeted for such fiscal year in the budget
delivered for such fiscal year pursuant to Section 5.2(b) by more than 10%.
SECTION VII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or (ii) the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder or
under any other Loan Document, within, in the case of subclause (ii) only,
five days after any such interest or other amount becomes due in accordance
with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or performance
of any agreement contained in Section 5.4, Section 5.5(b), Section 5.7(a),
Section 5.10, Section 5.11 or Section 5.12 or Section 6 of this Agreement
or Section 5.4 or 5.6(b) of the Guarantee and Collateral Agreement or (ii)
an "Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or the Required Lenders; or
52
(e) any Loan Party shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation with
respect to Indebtedness, but excluding the Loans) on the scheduled or
original due date with respect thereto; or (ii) default in making any
payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance
of any other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on behalf
of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
(in the case of any such Indebtedness constituting a Guarantee Obligation)
to become payable; provided, that a default, event or condition described
in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and (iii)
of this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds,
individually, $2,000,000, or in the aggregate, $5,000,000; provided,
further that a First Lien Facilities Event of Default shall not constitute
an Event of Default under this clause (e) unless such First Lien Facilities
Event of Default shall continue uncured and unwaived for 60 days; or
(f) (i) any Restricted Group Member shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or any Restricted Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Restricted Group Member any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against any Restricted Group Member any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any
Restricted Group Member shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) any Restricted Group
Member shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
53
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against one or
more Restricted Group Members involving in the aggregate a liability (to
the extent not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $2,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party, shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) a Change of Control shall occur; or
(l) any Junior Subordinated Notes shall cease, for any reason, to be
validly subordinated to the Obligations, as provided in the relevant Junior
Subordinated Note Indenture, or any Restricted Group Member, any Affiliate
of any Restricted Group Member, the trustee in respect of the Junior
Subordinated Notes or the holders of a majority in aggregate principal
amount of the Junior Subordinated Notes shall so assert;
(m) any license, approval or permit held by any Restricted Group
Member is terminated, withdrawn or not renewed, or suspended for more than
twenty Business Days and such termination, withdrawal, non-renewal or
suspension could, in the judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect;
(n) any material term of the Intercreditor Agreement shall cease, for
any reason, to be in full force and effect, or any Restricted Group Member,
any Affiliate of any Restricted Group Member, the First Lien Collateral
Agent or the First Lien Required Lenders (as each such term is defined in
the Intercreditor Agreement) shall so assert.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower, declare the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.
54
SECTION VIII. THE AGENTS
8.1. Appointment. Each Lender hereby irrevocably designates and appoints
each Agent as the agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent. Each Lender (a) acknowledges that
it has received a copy of the Intercreditor Agreement, (b) consents to the terms
thereof, (c) agrees that it will be bound by the Intercreditor Agreement
(including the provisions of Section 7.05 thereof) and will take no actions
contrary to the provisions of the Intercreditor Agreement and (d) authorizes and
instructs the Collateral Agent to enter into the Intercreditor Agreement as
Collateral Agent and on behalf of such Lender. The foregoing provisions are
intended as an inducement to the lenders under the First Lien Loan Documents to
extend credit to the Borrower, and such lenders are intended third party
beneficiaries of these provisions.
8.2. Delegation of Duties. Each Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3. Exculpatory Provisions. Neither any Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Loan Document (except to
the extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by such Agent under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder. No Agent shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.
8.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by such Agent.
Each Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
55
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
8.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless such Agent
has received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. Each
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all Lenders); provided that unless and until such Agent shall
have received such directions, such Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
8.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates have made any representations
or warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of the Borrower or any affiliate of the Borrower, shall be
deemed to constitute any representation or warranty by such Agent to any Lender.
Each Lender represents to each Agent that it has, independently and without
reliance upon such Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder, no Agent shall have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any affiliate of
the Borrower that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7. Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Percentages in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
56
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
8.8. Agents in Their Individual Capacities. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though it were not an Agent. With respect to its
Loans made or renewed by it, each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include each Agent in its individual capacity.
8.9. Successor Agents. Each of the Administrative Agent and the Collateral
Agent may resign in such capacity upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent or the Collateral Agent fails to perform
its obligations under the Loan Documents, such Agent may be removed by the
Required Lenders upon 10 days' notice to such Agent and the Borrower. If such
Agent shall resign or be removed in such capacity under this Agreement and the
other Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall, unless
an Event of Default shall have occurred and be continuing, be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent or Collateral Agent, as the case may be, and
the term "Administrative Agent" or "Collateral Agent", as applicable, shall mean
such successor agent effective upon such appointment and approval, and the
former Agent's rights, powers and duties as such Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as the applicable Agent by the date that is 10
days following the applicable retiring Agent's notice of resignation or removal,
the applicable retiring Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of such
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Agent's resignation as
such Agent or its removal pursuant to this Section 8, the provisions of this
Section VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement and the other Loan
Documents. Notwithstanding the foregoing, the replacement of GECC as Collateral
Agent by CSFB or any affiliate thereof, if agreed between GECC and CSFB, shall
not require the consent of the Borrower or any Lender.
8.10. Syndication Agent. Notwithstanding the foregoing provisions of this
Section VIII, the Syndication Agent shall not have any duties or
responsibilities hereunder in its capacity as such.
SECTION IX. MISCELLANEOUS
9.1. Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Agents and each Loan
Party party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent (with the consent of the Required Lenders), as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
57
supplement or modification shall (i) forgive the principal amount or extend any
date of any payment on any Loan, reduce the stated rate of any interest or fee
payable hereunder (except in connection with the waiver of applicability of any
post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders) or extend the date of any payment thereof,
in each case without the written consent of each Lender directly affected
thereby; (ii) eliminate or reduce the voting rights of any Lender under this
Section 9.1 or under any other Loan Document without the written consent of such
Lender; (iii) change the definition of Required Lenders or Supermajority
Lenders, consent to the assignment or transfer by any Restricted Group Member of
any of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release any
Guarantor from its obligations under the Guarantee and Collateral Agreement
(except in accordance with Section 9.14(b)), in each case without the written
consent of all Lenders; (iv) amend, modify or waive any provision of Section
VIII without the written consent of each Agent affected thereby; or (v) change
the definition of the term "Obligations", "Excess Cash Flow" or "Net Cash
Proceeds", expand the obligations secured by any of the Security Documents to
include those other than the Obligations, amend, modify or waive any provision
of Section 2.6, Section 6.2, Section 6.3, Section 6.5, Section 6.8 or the last
two sentences of Section 8.1 of this Agreement, any provision of the
Intercreditor Agreement or Section 6.5 of the Guarantee and Collateral
Agreement, in each case described in this clause (v) without the consent of the
Supermajority Lenders. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
9.2. Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered, or three Business Days after being deposited in
the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of any Loan Party and the Administrative Agent,
and as set forth in an administrative questionnaire delivered to the
Administrative Agent and the Borrower in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
58
The Loan Parties: c/o American Skiing Company
000 Xxxxx Xxxxxx, #000
Xxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: American Skiing Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Administrative Agent: General Electric Capital Corporation
000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
9.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4. Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
9.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Syndication Agent for all their
respective reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
59
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including reasonable appraisal fees and expenses, the reasonable fees
and disbursements of counsel to the Administrative Agent and filing and
recording fees and expenses (but excluding costs and expenses of surveys
conducted pursuant to Section 5.6(c)), with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the case
of amounts to be paid on the Closing Date) and from time to time thereafter on a
quarterly basis or such other periodic basis as the Administrative Agent shall
deem appropriate (provided that the agreement by the Borrower to reimburse any
such costs and expenses incurred by the Administrative Agent in connection with
the development, preparation and execution of the Loan Documents and any other
documents prepared in connection therewith shall be subject to the limitations
and further agreements contained in the fee letter with the Co-Lead Arrangers
and Joint Bookrunners (the "Fee Letter")), (b) to pay or reimburse each Lender
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent, (c)
to pay, indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an
"Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of any Restricted Group Member or any of the properties it owns,
operates or leases and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Restricted Group Member under any Loan Document (all the foregoing in this
clause (d), collectively, the "Indemnified Liabilities"), provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waive and agree to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them may have by statute or otherwise against any Indemnitee, except to the
extent resulting from the gross negligence or willful misconduct of such
Indemnitee. All amounts due under this Section shall be payable not later than
10 days after receipt of written demand therefor. Statements payable by the
Borrower pursuant to this Section 9.5 shall be submitted to Xxxxx Xxxxxxx
(Telephone No. (000) 000-0000) (Telecopy No. (000) 000-0000), at the address of
the Borrower set forth in Section 9.2, or to such other Person or address as may
be hereafter designated by the Borrower in a written notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
9.6. Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and the attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section.
60
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee")
all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time
owing to it) with the prior written consent of:
(A) the Borrower (such consent not to be unreasonably withheld),
provided that no consent of the Borrower shall be required for an
assignment to a Lender, an affiliate of a Lender, an Approved Fund (as
defined below) or, if an Event of Default has occurred and is continuing,
any other Person; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of all or any
portion of a Loan to a Lender, an Affiliate of a Lender or an Approved
Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount
of the assigning Lender's Commitments or Loans under any Facility, the
amount of the Commitments or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $1,000,000 unless the Borrower and the
Administrative Agent otherwise consent, provided that (1) no such consent
of the Borrower shall be required if an Event of Default has occurred and
is continuing and (2) such amounts shall be aggregated in respect of each
Lender and its affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; and
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.
For the purposes of this Section, "Approved Fund" means any Person (other
than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified
in each Assignment and Assumption the Assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.2, 2.3, 2.4 and 9.5). Any assignment or
transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this
Section.
61
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent, and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the
Assignee's completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it
has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender's
obligations under this Agreement shall remain unchanged, (B) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 9.1 and (2) directly affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agree that each Participant shall be entitled to the benefits of Sections
2.13, 2.14 and 2.16 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.7(b) as though it were a Lender,
provided such Participant shall be subject to Section 9.7(a) as though it
were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.14 than the applicable Lender would
have been entitled to receive with respect to the participation sold
to such Participant, unless the sale of the participation to such
Participant is made with the Borrower' prior written consent. Any
Participant that is a Non-U.S. Lender shall not be entitled to the
benefits of Section 2.14 unless such Participant complies with Section
2.14(d).
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to any such pledge
or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.
62
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 9.6(b). The Borrower, each
Lender and the Administrative Agent hereby confirms that it will not
institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any state bankruptcy or similar
law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided,
however, that each Lender designating any Conduit Lender hereby agrees to
indemnify, save and hold harmless each other party hereto for any loss,
cost, damage or expense arising out of its inability to institute such a
proceeding against such Conduit Lender during such period of forbearance.
9.7. Adjustments; Set-off. (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender, if any
Lender (a "Benefitted Lender") shall, at any time after the Loans and other
amounts payable hereunder shall have become immediately due and payable pursuant
to Section 7, receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, while any Event of Default is
continuing, to set off and appropriate and apply against any amount then
due and payable any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness
or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by
such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the Borrower
and the Administrative Agent after any such setoff and application made by
such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
9.8. Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
9.9. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
63
9.10. Integration. This Agreement and the other Loan Documents represent
the entire agreement of the Borrower, the Administrative Agent and the Lenders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
9.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12. Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of
process in any other manner permitted by law or shall limit the right
to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
9.13. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
64
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
9.14. Releases of Guarantees and Liens. (a) Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 9.1)
to take any action requested by the Borrower having the effect of releasing any
Collateral or guarantee obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 9.1 or (ii) under the circumstances
described in paragraph (b) below.
(b) At such time as the Obligations shall have been Fully Satisfied,
the Collateral shall be released from the Liens created by the Security
Documents, and the Security Documents and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent
and each Restricted Group Member under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act
by any Person. The Administrative Agent agrees to execute such further
agreements, instruments and other documents as may be reasonably requested
by the Borrower, at the expense of the Borrower, to evidence and effect
such termination.
9.15. Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential all non-public information provided to it by any
Restricted Group Member, the Administrative Agent or any Lender pursuant to or
in connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority (including any Governmental Authority having
regulatory oversight of any Lender, including the FDIC and the Federal Home Loan
Bank), (e) in response to any order of any court or other Governmental Authority
or as may otherwise be required pursuant to any Requirement of Law, (f) if
requested or required to do so in connection with any litigation or similar
proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender or to any Lender's funding source or lender, or (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document.
9.16. WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
65
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
AMERICAN SKIING COMPANY
By: /s/ Xxxxxx X Xxxxxxx, Xx
---------------------------------------
Name: Xxxxxx X Xxxxxxx, Xx
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative
Agent, as Collateral Agent and as a Lender
By: /s/ Xxxxx X Xxxxx
---------------------------------------
Name: Xxxxx X Xxxxx
Title: Duly Authorized Signatory
CREDIT SUISSE FIRST BOSTON, as Syndication Agent and as a
Lender
By: /s/ Xxxxxx Xxxx
---------------------------------------
Name: Xxxxxx Xxxx
Title: Director
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
NATEXIS BANQUES POPULARIES, as a Lender
By: /s/ Xxxxxx Xxxx
---------------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Tifta Ghilaga
Title: Vice President
XXXXX FARGO BANK, N.A., as a Lender
By: /s/ Xxxx X Xxxx
---------------------------------------
Name: Xxxx X Xxxx
Title: Sr Vice President
