EXECUTION COPY
================================================================================
$91,500,000
CREDIT AGREEMENT
among
AMERICAN SKIING COMPANY,
The Subsidiary Borrowers from Time to Time Parties Hereto,
The Several Lenders from Time to Time Parties Hereto
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
Dated as of February 14, 2003
================================================================================
GE CAPITAL MARKETS GROUP, INC., as Arranging Agent
TABLE OF CONTENTS
Page
SECTION I. DEFINITIONS........................................................1
1.1. Defined Terms................................................1
1.2. Other Definitional Provisions...............................19
SECTION II. AMOUNT AND TERMS OF COMMITMENTS..................................20
2.1. Term Commitments............................................20
2.2. Procedure for Term Loan Borrowing...........................20
2.3. Repayment of Term Loans and Supplemental Term Loans.........21
2.4. Revolving Commitments.......................................21
2.5. Procedure for Revolving Loan Borrowing......................21
2.6. Commitment Fees, etc........................................22
2.7. Termination or Reduction of Revolving Commitments...........22
2.8. Prepayments.................................................22
2.9. Prepayment Premium..........................................23
2.10. Interest Rates and Payment Dates............................24
2.11. Computation of Interest and Fees............................25
2.12. Pro Rata Treatment and Payments.............................25
2.13. Requirements of Law.........................................26
2.14. Taxes.......................................................27
2.15. Change of Lending Office....................................29
2.16. Additional Tranche B Term Loans.............................29
SECTION III. LETTERS OF CREDIT...............................................30
3.1. L/C Commitment..............................................30
3.2. Procedure for Issuance of Letter of Credit..................30
3.3. Fees and Other Charges......................................30
3.4. L/C Participations..........................................31
3.5. Reimbursement Obligation of the Borrowers...................31
3.6. Obligations Absolute........................................32
3.7. Letter of Credit Payments...................................32
3.8. Applications................................................32
SECTION IV. REPRESENTATIONS AND WARRANTIES...................................32
4.1. Financial Condition.........................................33
4.2. No Change...................................................33
4.3. Existence; Compliance with Law..............................33
4.4. Power; Authorization; Enforceable Obligations...............33
4.5. No Legal Bar................................................34
4.6. Litigation..................................................34
4.7. No Default..................................................34
4.8. Ownership of Property; Liens................................34
4.9. Intellectual Property.......................................34
4.10. Taxes.......................................................35
4.11. Federal Regulations.........................................35
4.12. Labor Matters...............................................35
4.13. ERISA.......................................................35
4.14. Investment Company Act; Other Regulations...................36
4.15. Subsidiaries................................................36
4.16. Use of Proceeds.............................................36
4.17. Environmental Matters.......................................36
4.18. Accuracy of Information, etc................................37
4.19. Security Documents..........................................38
4.20. Solvency....................................................38
4.21. Senior Indebtedness.........................................38
4.22. Regulation H................................................38
4.23. Certain Documents...........................................38
4.24. Forest Service Term Special Use Permits.....................39
4.25. Location....................................................39
SECTION V. CONDITIONS PRECEDENT..............................................39
5.1. Conditions to Initial Extensions of Credit..................39
5.2. Conditions to Each Extension of Credit......................42
SECTION VI. AFFIRMATIVE COVENANTS............................................43
6.1. Financial Statements........................................43
6.2. Certificates; Other Information.............................44
6.3. Payment of Obligations......................................45
6.4. Maintenance of Existence; Compliance........................45
6.5. Maintenance of Property; Insurance..........................45
6.6. Inspection of Property; Books and Records; Discussions;
Surveys...............................................45
6.7. Notices.....................................................46
6.8. Environmental Matters.......................................46
6.9. Additional Collateral, New Subsidiary Borrowers, etc........48
6.10. Asset Monetization Event....................................49
6.11. Forest Service Permits......................................49
6.12. Agreements with Respect to Excluded Subsidiaries............50
6.13. Post-Closing Obligations....................................50
SECTION VII. NEGATIVE COVENANTS..............................................51
7.1. Financial Condition Covenants...............................51
7.2. Indebtedness................................................52
7.3. Liens.......................................................52
7.4. Fundamental Changes.........................................54
7.5. Disposition of Property.....................................54
7.6. Restricted Payments.........................................55
7.7. Capital Expenditures........................................55
7.8. Investments.................................................55
7.9. Optional Payments and Modifications of Certain Debt
Instruments...........................................56
7.10. Transactions with Affiliates................................56
7.11. Sales and Leasebacks........................................57
7.12. Swap Agreements.............................................57
7.13. Changes in Fiscal Periods...................................57
7.14. Restrictive Agreements......................................57
7.15. Lines of Business...........................................57
7.16. Collateral Coverage.........................................57
SECTION VIII. EVENTS OF DEFAULT..............................................58
SECTION IX. THE ADMINISTRATIVE AGENT.........................................61
9.1. Appointment.................................................61
9.2. Delegation of Duties........................................61
9.3. Exculpatory Provisions......................................61
9.4. Reliance by Administrative Agent............................62
9.5. Notice of Default...........................................62
9.6. Non-Reliance on Administrative Agent and Other Lenders......62
9.7. Indemnification.............................................63
9.8. Administrative Agent in Its Individual Capacity.............63
9.9. Successor Administrative Agent..............................63
SECTION X. MISCELLANEOUS.....................................................64
10.1. Amendments and Waivers......................................64
10.2. Notices.....................................................64
10.3. No Waiver; Cumulative Remedies..............................65
10.4. Survival of Representations and Warranties..................66
10.5. Payment of Expenses and Taxes...............................66
10.6. Successors and Assigns; Participations and Assignments......67
10.7. Adjustments; Set-off........................................70
10.8. Counterparts................................................70
10.9. Severability................................................70
10.10. Integration.................................................70
10.11. Governing Law...............................................71
10.12. Submission To Jurisdiction; Waivers.........................71
10.13. Acknowledgments.............................................71
10.14. Releases of Guarantees and Liens............................72
10.15. Confidentiality.............................................72
10.16. Joint and Several Liability of Borrowers....................72
10.17. Appointment of ASC as Borrowers' Agent......................74
10.18. WAIVERS OF JURY TRIAL.......................................74
SCHEDULES:
1.1A Commitments
1.1B Excluded Immaterial Subsidiaries
1.1C Mortgaged Property
1.1D Existing Letters of Credit
4.1 Certain Dispositions
4.4 Consents, Authorizations, Filings and Notices
4.5 Certain Contractual Obligations
4.6 Certain Litigation
4.15 Subsidiaries
4.19(a) UCC Filings
4.19(b) Mortgage Filings
4.22 Certain Real Property
6.5(b) Insurance Requirements
6.12 Certain Excluded Subsidiaries
6.13(b) Certain Real Property Leases
7.2(b) Existing Indebtedness
7.3(e) Existing Liens
7.8(d) Existing Investments
7.14 Existing Restrictive Agreements
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 Form of Subsidiary Borrower Agreement
H Form of Intercreditor Agreement
I Form of Asset Monetization Power of Attorney
J Form of Pay-off Letter
CREDIT AGREEMENT (this "Agreement"), dated as of February 14,
2003, among AMERICAN SKIING COMPANY ("ASC"), the Subsidiary Borrowers (as
hereinafter defined) from time to time party to this Agreement, the several
banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION ("GECC"), as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative 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.
"Additional Tranche B Term Loans": defined in Section 2.15.
"Administrative Agent": GECC, together with its affiliates, as
the arranger of the Commitments and 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.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and
Supplemental Term Loans, (ii) the amount of such Lender's Supplemental Term
Commitment and (iii) the amount of such Lender's Revolving Commitment then in
effect or, if the Revolving Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Aggregate Facilities Amount": at any time, the aggregate
Aggregate Exposure of all Lenders at such time.
"Aggregate Tranche A/Supplemental/Revolving Exposure": (i)
until the Closing Date, the Tranche A Term Commitments, Supplemental Term
Commitments and Revolving Commitments then in effect and (ii) thereafter, the
sum of (x) the aggregate unpaid principal amount of the Tranche A Term Loans
then outstanding, (y) the aggregate unpaid principal amount of the Supplemental
Term Loans then outstanding and (z) the Total Revolving Commitments then in
effect or, if the Revolving Commitments have been terminated, the Total
Revolving Extensions of Credit then outstanding.
"Agreement": as defined in the preamble hereto.
"Applicable Margin": (a) in the case of the Tranche A Term
Loans, the Supplemental Term Loans and the Revolving Loans, 3.25% per annum,
and (b) in the case of the Tranche B Term Loans, 5% per annum.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Appraisal": an appraisal of the fair market value of property
and business, accepted and approved by the Administrative Agent, performed by SE
Group or another independent appraiser with appraisal experience in the ski
resort business selected by the Administrative Agent who is not employed by ASC,
any of its Subsidiaries or the Administrative Agent or any Lender, the form of
such appraisal and the identity of the appraiser to be acceptable to the
Administrative Agent.
"Appraised Value": the fair market value of the subject
property determined by the most recent Appraisal or Desktop Appraisal conducted
in accordance with Section 7.16. 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 Borrowers using EBITDA without
deductions for Capital Expenditures for the Ski Report Property and multiples of
EBITDA without deduction for Capital Expenditures, or other normally used
conventions, such as a discounted cash-flow analysis, where appropriate.
"Approved Fund": as defined in Section 10.6(b).
"ASCRP": American Skiing Company Resort Properties, Inc., a
Maine corporation.
"Asset Monetization Event": as defined in Section 6.10.
"Asset Monetization Powers of Attorney": the powers of
attorney in favor of the Administrative Agent with respect to the Disposition of
the Ski Resort Properties, to be executed and delivered by the applicable
Borrowers on the Closing Date substantially in the form of Exhibit I.
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit E.
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding.
"Balance Sheet Cash": as of any date, the amount of cash that
would be reflected on the consolidated balance sheet of ASC and its Restricted
Subsidiaries on such date in accordance with GAAP.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
2
"Borrower": as applicable, ASC or the relevant Subsidiary
Borrower and "Borrowers" mean, collectively, ASC and each Subsidiary Borrower.
"Borrowing Date": any Business Day specified by a Borrower as
a date on which a Borrower requests the relevant Lenders to make Loans hereunder
"Business": as defined in Section 4.17(b).
"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.
"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; provided, however, that Capital Expenditures shall not include amounts
paid or incurred in connection with (i) land payments due to, and a line of
credit made available to, Iron Mountain Associates through July 27, 2003, not
exceeding $6,000,000 and (ii) land payments of approximately $4,340,000 to
Wasatch Capital through July 27, 2003 (as such deadline may be extended). 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.
"CapitalSource": CapitalSource Finance LLC.
"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.
"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
3
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": a "Change of Control" (or any other
defined term having a similar purpose) as defined in the Senior Subordinated
Note Indenture.
"Closing Date": February 14, 2003.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Borrowers, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Tranche A Term Commitment,
the Supplemental Term Commitment, the Tranche B Term Commitment and the
Revolving Commitment of such Lender.
"Commitment Fee Rate": 1% per annum.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with any Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"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 10.5 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.
"Consent Leaseholds": those leases designated as Consent
Leases on Schedule 4.4.
"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 ASC 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
4
current liabilities" (or any like caption) on a consolidated balance sheet of
ASC and its Restricted Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of ASC and its Restricted Subsidiaries and (b)
without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period (a) net income or (loss)
of ASC 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 a ASC 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, plus (b) the sum of, without
duplication, (i) depreciation expense of ASC and its Restricted Subsidiaries,
(ii) amortization expense of ASC 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 ASC and its
Restricted Subsidiaries, (v) non-cash expenses associated with the Phantom Stock
Plan, (vi) other non-cash items of ASC and its Restricted Subsidiaries, and
(vii) non-recurring expenses incurred in connection with the consummation of the
transactions contemplated by the Loan Documents and the repayment of obligations
outstanding under, and the termination of, the Existing Credit Agreement.
"Consolidated Funded Debt" means, as of each date of
determination, without duplication (a) all Indebtedness for borrowed money of
ASC and its Restricted Subsidiaries on that date (including without limitation
all Capital Lease Obligations), (b) the aggregate amount available for drawing
under all letters of credit outstanding on that date (including the Letters of
Credit) for which ASC 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 (including the Letters of Credit) for which ASC 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 ASC 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 ASC or is merged into or consolidated with ASC or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of ASC) in which ASC or any of its Restricted Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by ASC or such Restricted Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any Subsidiary of
ASC 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.
"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.
5
"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.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"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 ASC 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.
"Event of Default": any of the events specified in Section 8,
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 ASC, 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, (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 ASC 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, (ii) the aggregate amount actually paid by ASC 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 during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
6
optional prepayments of the Term Loans and Supplemental Term Loans during such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including the Term Loans and Supplemental Term Loans)
of ASC 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, and (vi) the aggregate net
amount of non-cash gain on the Disposition of property by ASC 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.
"Excess Cash Flow Prepayment Period": within five days after
the earlier of (a) date on which the financial statements of ASC referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are delivered to the Lenders and (b) the date on which such statements are
required to be delivered to the Lenders.
"Excluded Appraised Collateral": at any time, any property
that is part of a Ski Resort Property that includes a lease listed on Schedule
4.4 for which a Borrower is a lessee and with respect to which the landlord has
not executed and delivered a Landlord Certificate; provided, however, that if
any lease listed on Schedule 4.4 for which such a Landlord Certificate is not
obtained constitutes skiable terrain of any Ski Resort Property, the entire Ski
Resort Property shall constitute Excluded Appraised Collateral.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of ASC, result in adverse tax
consequences to ASC.
"Excluded Subsidiary": (i) any Excluded Foreign Subsidiary,
(ii) ASCRP and its Subsidiaries and (iii) the Subsidiaries of ASC designated as
Excluded Immaterial Subsidiaries on Schedule 1.1C or designated by ASC 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 ceases to
be an "Unrestricted Subsidiary" as defined in the Senior Subordinated Notes
Indenture or (other than Walton Pond Apartments Inc., Ski Insurance Company and
Blunder Bay Development Inc.) if it at any time holds assets with a fair market
value of greater than $1,000,000.
"Existing Credit Agreement": the Amended, Restated and
Consolidated Credit Agreement, dated as of October 12, 1999, among ASC and the
other borrowers party thereto, the lenders party thereto and Fleet National
Bank, N.A. (formerly known as BankBoston, N.A.), as administrative agent, as
amended, supplemented or otherwise modified to the date hereof, together with
all instruments and other agreements entered into by ASC or its Subsidiaries in
connection therewith.
"Existing Letters of Credit": the letters of credit issued
under the Existing Credit Agreement which are outstanding as of the date hereof
and listed on Schedule 1.1D.
"Facility": each of (a) the Tranche A Term Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Facility"), (b) the
Tranche B Term Commitments and the Tranche B Term Loans made thereunder (the
"Tranche B Term Facility"), (c) the Revolving Commitments and the extensions of
credit made thereunder (the "Revolving Facility") and (d) the Supplemental Term
Commitments and the Supplemental Term Loans made thereunder (the "Supplemental
Term Facility").
7
"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
JPMorgan Chase Bank from three federal funds brokers of recognized standing
selected by it.
"Fee Letters": (a) the Fee Letter, dated as of the date
hereof, between the Administrative Agent and ASC, and (b) the Fee Letter, dated
as of the date hereof, between CapitalSource Finance LLC and ASC.
"Fee Payment Date": (a) the 15th day of each month and (b)
the last day of the Revolving Commitment Period.
"Fleet Swap Agreement": the ISDA Master Agreement, dated May
12, 1998, between Fleet National Bank and ASC, as supplemented by two
confirmations dated February 6, 1998 (and revised February 9, 1998) and one
confirmation dated January 1, 2000, as amended, supplemented and otherwise
modified from time to time.
"Foreign Subsidiary": any Subsidiary of ASC 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 4.24.
"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 (other than the aggregate undrawn
amount of Letters of Credit then outstanding) shall have been paid in full in
cash, (b) all fees, expenses and other amounts then due and payable which
constituted Obligations (other than the aggregate undrawn amount of Letters of
Credit then outstanding) shall have been paid in full in cash, (c) the
Commitments shall have expired or irrevocably been terminated and (d) the
aggregate undrawn amount of Letters of Credit then outstanding shall have been
Fully Secured.
"Fully Secured" shall mean, with respect to the aggregate
undrawn amount of Letters of Credit outstanding as of any date, that, on or
before such date, such amount shall have been secured by the grant to the
Issuing Lender by the Borrowers of a first priority, perfected security interest
in, and Lien on, (a) cash or Cash Equivalents in an amount at least equal to the
excess of the amount of the aggregate undrawn amount of Letters of Credit
outstanding over the amount equal to the maximum commitment to issue Letters of
Credit on such date or (b) other collateral security which is acceptable to such
Issuing Lender and the Required Lenders.
"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
8
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 Borrowers, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent
specified in Section 10.2 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 7.1,
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 4.1. 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 ASC 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 ASC'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
Borrowers, 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 ASC and its
Subsidiaries.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by ASC and each Borrower,
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,
(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
9
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 ASC in good faith.
"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 8(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 ASC, the
Administrative Agent or any Lender or any of their respective Affiliates.
"Initial Funding Date": February 18, 2003.
"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 Administrative Agent and each initial Lender,
substantially in the form of Exhibit H.
10
"Interest Payment Date": (a) as to any Tranche A Term Loan,
Supplemental Term Loan or Revolving Loan, the 21st day of each month occurring
while such Loan is outstanding, (b) as to any Tranche B Term Loan, the first day
of each March, June, September and December to occur while such Loan is
outstanding, and (c) as to any Loan, the final maturity date of such Loan and
the date of any repayment or prepayment made in respect thereof.
"Investments": as defined in Section 7.8.
"Issuing Lender": GECC or any agent acting on its behalf, or
any other Revolving Lender willing to act as such which is designated by the
Administrative Agent after the date hereof with, so long as no Event of Default
is continuing, the consent of the Borrower (such consent not to be unreasonably
withheld), in each case in its capacity as issuer of any Letter of Credit.
"Junior Subordinated Note Indenture": the Indenture, dated as
of August 31, 2001, between ASC 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 ASC or its Subsidiaries in
connection therewith.
"Junior Subordinated Notes": the subordinated notes of ASC
issued pursuant to the Junior Subordinated Note Indenture.
"L/C Commitment": $5,000,000.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Lenders other than the Issuing Lender.
"Landlord Certificate": as defined in Section 5.2(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.
"Letters of Credit": as defined in Section 3.1(a).
"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 Fee Letters and any amendment, waiver, supplement or other
modification to any of the foregoing.
"Loan Party": each Borrower that is a party to a Loan
Document.
"LTM EBITDA": as defined in Section 7.1(a).
11
"Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Borrowers 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) or (d) of Section 7.5) that yields gross proceeds to ASC or
any of its Restricted Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $500,000 (or, in the case of Dispositions of
Non-Operating Assets as permitted by clause (e) of Section 7.5, $2,000,000).
"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 Administrative
Agent for the benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages as required by Section 4.19(b); provided, however, that in no event
shall the term "Mortgaged Properties" include a Consent Leasehold (or the
properties subject thereto) unless and until a Landlord Certificate has been
received with respect to such Consent Leasehold and the applicable Borrower
Subsidiary has delivered a Mortgage with respect to such Consent Leasehold as
required under Section 6.13(c).
"Mortgages": each of the mortgages and deeds of trust made by
any Borrower in favor of, or for the benefit of, the Administrative Agent for
the benefit of 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 or other Disposition or any Recovery Event, the proceeds thereof in the
form of cash (including any such proceeds received by way of 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, without limitation, any cash received
upon the Disposition of any non-cash consideration received upon such
Disposition), net of 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 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 attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.19(a).
12
"Non-Operating Assets" shall mean (a) unused or obsolete
inventory and equipment, (b) real property not currently used or contemplated to
be used in ski resort operations of a Borrower and (c) developed real estate
units or residential real property held for resale in the ordinary course of
business in an aggregate amount, together with amounts under clause (b) hereof.
"Non-Operating Asset Sale Proceeds": as defined in Section
7.1(a).
"Non-U.S. Lender": as defined in Section 2.19(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": with respect to any Borrower, the unpaid
principal of and interest (including all PIK Interest Amounts) on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
such 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 such 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, the Letters of Credit 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 such Borrower pursuant hereto) or otherwise. Unless otherwise specified,
"Obligations" shall refer to the Obligations of all Borrowers.
"Operating Assets": assets of ASC and its Restricted
Subsidiaries other than Non-Operating Assets.
"Osguthorpe Lease": the Lease Agreement dated as of August
14, 1996 by and between X.X. Xxxxxxxxxx and X.X. Xxxxxxxxxx Family Partnership
as lessors and Wolf Mountain Resorts, L.C. as lessee, as amended.
"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 10.6(c).
"Pay-Off Letter": a letter executed and delivered by the agent
for the Lenders under the Existing Credit Agreement, substantially in the form
of Exhibit J.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"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.
13
"Phantom Stock Plan" shall mean the American Skiing Company
Phantom Equity Plan dated as of December 1, 2001, as amended, supplemented or
otherwise supplemented from time to time.
"PIK Condition": (a) Consolidated EBITDA for any period of
four consecutive fiscal quarters shall be less than $34,000,000, or (b) the
Revolving Loans shall not have been reduced to zero (other than Revolving Loans
borrowed on such date to repay Reimbursement Obligations due on such date) on
April 1 of any year unless at least 90 days have elapsed since such April 1 and
no Event of Default has occurred and is then continuing.
"PIK Interest Amount": as defined in Section 2.10(d).
"Plan": at a particular time, any employee benefit plan that
is subject to ERISA and in respect of which any Borrower or 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 Series A Preferred Stock, ASC's 8.5%
Series B Convertible Participating Preferred Stock, ASC's 12% Series C-1
Convertible Participating Preferred Stock, ASC's 15% Series C-2 Preferred Stock
and ASC's Series D Participating Preferred Stock, collectively.
"Prepayment Premium": with respect to any prepayment of the
Term Loans or the Supplemental Term Loan or any permanent reduction of Revolving
Commitments occurring (a) during the period from Closing Date to and including
September 30, 2003, 4%, (b) during the period from and including October 1, 2003
to and including June 30, 2004, 2%, or (c) July 1, 2004 or thereafter, 0%.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by JPMorgan Chase Bank in connection with
extensions of credit to debtors); provided that, notwithstanding the foregoing,
with respect to the Tranche B Term Loans only, the "Prime Rate" for such Loans
shall in no event be less than 7.25%.
"Projections": as defined in Section 6.2(c).
"Properties": as defined in Section 4.17(a).
"Purchase Money Indebtedness": as defined in Section 7.2(c).
"Purchase Money Liens": as defined in Section 7.3(g).
"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 ASC or any Restricted Subsidiary.
"Register": as defined in Section 10.6(b).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of each Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
14
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Borrower
(other than ASCRP and its Subsidiaries) in connection therewith that are not
applied to prepay Loans or reduce the Revolving Commitments pursuant to Section
2.9(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Material Asset Sale or Recovery
Event in respect of which ASC 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 ASC (directly or indirectly through a Subsidiary) intends
and expects to use all or a specified portion of the Net Cash Proceeds of a
Material Asset Sale or Recovery Event to acquire or repair assets useful in its
business (such business as permitted pursuant to Section 7.15).
"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 7.7, as applicable) to acquire or repair assets useful
in the Borrowers' business (such business as permitted pursuant to Section
7.15).
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring nine months after such
Reinvestment Event and (b) the date on which ASC shall have determined not to,
or shall have otherwise ceased to, acquire or repair assets useful in ASC's
business (such business as permitted pursuant to Section 7.15) with all or any
portion of the relevant Reinvestment Deferred Amount.
"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 Xxx.xx. 4043.
"Required Lenders": (a) at any time while any Revolving
Commitment, Tranche A Term Commitment or Supplemental Term Commitment remains in
effect, any Letter of Credit remains outstanding or any Tranche A Term Loan,
Supplemental Term Loan or Revolving Loan or any interest, fee or other amount is
owing to any Tranche A Term Lender, Supplemental Term Lender or Revolving Lender
hereunder (other than in its capacity as a Tranche B Term Lender), the holders
of more than 50% of the Aggregate Tranche A/Supplemental/Revolving Exposure; and
(b) at all other times, the holders of more than 50% of the unpaid principal
amount of the Tranche B Term Loans then outstanding.
"Required Value": at any time, (a) if there is any Tranche A
Term Loan, Supplemental Term Loan, Revolving Loan or Letter of Credit
outstanding or the Supplemental Term Commitments and Revolving Commitments have
not been terminated, an amount equal to the greater of (i) the product of (A)
the Aggregate Facilities Amount at such time and (B) 2.0 and (ii) the sum of (x)
$72,500,000 plus (y) the product of (1) 1.5 and (2) the amount by which the
aggregate outstanding principal amount of Tranche B Term Loans at such time
exceeds $20,000,000, or (b) if there is no Tranche A Term Loan, Supplemental
Term Loan, Revolving Loan or Letter of Credit outstanding and the Supplemental
Term Commitments and Revolving Commitments have been terminated, an amount equal
to (i) $72,500,000 plus (or minus) (ii) the product of (X) 1.5 and (Y) the
amount by which the aggregate outstanding principal amount of Tranche B Term
Loans at such time exceeds (or is less than) $20,000,000.
15
"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 ASC, but in any event, with respect to financial
matters, the chief financial officer of ASC.
"Restricted Payments": as defined in Section 7.6.
"Restricted Subsidiary": each Subsidiary of ASC other than
any Excluded Subsidiary.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Letters of
Credit in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Assumption pursuant to which such Lender
became a party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original amount of the Total Revolving Commitments is
$40,000,000.
"Revolving Commitment Period": the period from and including
the Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding and (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding.
"Revolving Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loan Rate Increase PIK Amount": as defined in
Section 2.10(g).
"Revolving Loans": as defined in Section 2.4(a).
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments. If the Revolving Commitments have expired or
terminated, the Revolving Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any assignments.
"Revolving Termination Date": April 15, 2006.
"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 Administrative Agent
granting a Lien on any property of any Person to secure the obligations and
liabilities of any Borrower under any Loan Document.
16
"Senior Subordinated Note Indenture": the Indenture, dated as
of June 28, 1996, between ASC 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 ASC or its Subsidiaries in
connection therewith.
"Senior Subordinated Notes": the subordinated notes of ASC
issued pursuant to the Senior Subordinated Note Indenture.
"Series A Preferred Stock": the 10.5% Repriced Convertible
Exchangeable Preferred Stock of ASC.
"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
Borrowers constituting part of the Collateral, known as Attitash Bear Peak, The
Canyons, Killington/Pico, Mount Snow/Haystack, Steamboat, Sugarloaf/USA and
Sunday River.
"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.
"Subordinated Debt": the collective reference to the Senior
Subordinated Notes and the Junior Subordinated Notes.
"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
Borrower, excluding non-profit homeowners associations and resort village
management associations controlled directly or indirectly by such Borrower.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
ASC.
"Subsidiary Borrower": collectively, (i) the Restricted
Subsidiaries of ASC as of the date hereof and (ii) each new Restricted
Subsidiary of ASC that becomes a party to this Agreement in accordance with
Section 6.9(c).
"Supplemental Term Amortization Date": January 15 and July 15
of each year.
17
"Supplemental Term Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Supplemental Term Loan to ASC in a
principal amount not to exceed the amount set forth under the heading
"Supplemental Term Commitment" opposite such Lender's name on Schedule 1.1A, as
such amount may be reduced from time to time pursuant to Section 2.8(d). The
original aggregate amount of the Supplemental Term Commitments is $6,500,000.
"Supplemental Term Loan": as defined in Section 2.1(b).
"Supplemental Term Loan Amount": the amount due under the
Fleet Swap Agreement pursuant to Section 6(e)(i)(3) of the Fleet Swap Agreement
related thereto resulting from a Swap Event of Default.
"Supplemental Term Loan Date": the Business Day specified in
the notice delivered by ASC pursuant to Section 2.2(b), which date shall occur
(i) on or after the Closing Date but prior to April 15, 2006 and (ii) within ten
(10) days after the occurrence of a Swap Event of Default.
"Supplemental Term Percentage": as to any Supplemental Term
Lender at any time, the percentage which such Lender's Supplemental Term
Commitment then constitutes of the aggregate Supplemental Term Commitments (or,
at any time after the Supplemental Term Loan Date, the percentage which the
aggregate principal amount of such Lender's Supplemental Term Loans then
outstanding constitutes of the aggregate principal amount of the Supplemental
Term 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".
"Swap Event of Default": an event of default under the Fleet
Swap Agreement as described in Part 5(d) of the Schedule to the Fleet Swap
Agreement.
"Term Lenders": the collective reference to the Tranche A
Term Lenders and the Tranche B Term Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Tranche A Term Commitment": as to any Lender, the obligation
of such Lender, if any, to make a Tranche A Term Loan to ASC in a principal
amount not to exceed the amount set forth under the heading "Tranche A Term
Commitment" opposite such Lender's name on Schedule 1.1A. The original aggregate
amount of the Tranche A Term Commitments is $25,000,000.
18
"Tranche A Rate Increase PIK Amount": as defined in Section
2.10(f).
"Tranche A Term Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche A Term Lender": each Lender that has a Tranche A
Term Commitment or that holds a Tranche A Term Loan.
"Tranche A Term Loan": as defined in Section 2.1(a).
"Tranche A Term Percentage": as to any Tranche A Term Lender
at any time, the percentage which such Lender's Tranche A Term Commitment then
constitutes of the aggregate Tranche A Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Rate Increase PIK Amount": as defined in Section
2.10(e).
"Tranche B Term Commitment": as to any Lender, the obligation
of such Lender, if any, to make a Tranche B Term Loan to ASC in a principal
amount not to exceed (excluding in respect of any PIK Interest Amounts added to
such principal in accordance with Section 2.10(d)) the amount set forth under
the heading "Tranche B Term Commitment" opposite such Lender's name on Schedule
1.1A. The original aggregate amount of the Tranche B Term Commitments is
$20,000,000.
"Tranche B Term Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche B Term Lender": each Lender that has a Tranche B
Term Commitment or that holds a Tranche B Term Loan.
"Tranche B Term Loan": as defined in Section 2.1(a). Also, any
Additional Tranche B Term Loans made in accordance with Section 2.16 shall, once
made, be deemed to be "Tranche B Term Loans".
"Tranche B Term Percentage": as to any Tranche B Term Lender
at any time, the percentage which such Lender's Tranche B Term Commitment then
constitutes of the aggregate Tranche B Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Transferee": any Assignee or Participant.
"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.
19
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 Borrower 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. Term Commitments. (a) Subject to the terms and conditions hereof, (i)
each Tranche A Term Lender severally agrees to make a term loan (a "Tranche A
Term Loan") to ASC on the Closing Date in an amount equal to the amount of the
Tranche A Term Commitment of such Lender and (ii) each Tranche B Term Lender
severally agrees to make a term loan (a "Tranche B Term Loan") to ASC on the
Closing Date in an amount equal to the amount of the Tranche B Term Commitment
of such Lender.
(b) Subject to the terms and conditions hereof, each Supplemental Term
Lender agrees to make a term loan (a "Supplemental Term Loan") to ASC on the
Supplemental Term Loan Date in an amount equal to the lesser of (i) the
Supplemental Term Commitment of such Lender and (ii) such Lender's Supplemental
Term Percentage of the Supplemental Term Loan Amount.
2.2. Procedure for Term Loan Borrowing. (a) ASC 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 anticipated Closing Date) requesting that the Term Lenders make the
Term Loans on the Closing Date. Upon receipt of such notice the Administrative
Agent shall promptly notify each Term Lender thereof. Not later than 12:00 Noon,
New York City time, on the Closing Date each Term Lender shall make available to
the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan(s) to be made by such Lender. The
Administrative Agent shall credit the account of ASC on the books of such office
of the Administrative Agent with the aggregate of the amounts made available to
the Administrative Agent by the Term Lenders in immediately available funds.
(b) ASC shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent prior to 10:00 A.M., New
20
York City time, one Business Day prior to the Supplemental Term Loan Date)
requesting that the Supplemental Term Lenders make the Supplemental Term Loan on
the Supplemental Term Loan Date, certifying that a Swap Event of Default has
occurred and the Supplemental Term Loan Amount and including a copy of the
written notice of the occurrence of such Swap Event of Default from the
counterparty thereto and of such counterparty's election to exercise remedies.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Supplemental Term Lender thereof. Not later than 12:00 Noon, New York City time,
on the Supplemental Term Loan Date each Supplemental Term Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Supplemental Term Loan to be made by
such Lender. The Administrative Agent shall credit the account of ASC on the
books of such office of the Administrative Agent with the aggregate of the
amounts made available to the Administrative Agent by the Supplemental Term
Lenders in immediately available funds.
2.3. Repayment of Term Loans and Supplemental Term Loans. (a) ASC shall
repay all outstanding Tranche A Term Loans on April 15, 2006.
(b) ASC shall repay all outstanding Tranche B Term Loans on June 15, 2006.
(c) ASC shall repay all outstanding Supplemental Term Loans on April 15,
2006.
2.4. Revolving Commitments. (a)Subject to the terms and conditions hereof,
each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to ASC and the Subsidiary Borrowers from time to time during
the Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the L/C
Obligations then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period each Borrower may
use the Revolving Commitments by borrowing, prepaying the Revolving Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) Each Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2.5. Procedure for Revolving Loan Borrowing. ASC and the Subsidiary
Borrowers may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that ASC shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City time, on the requested
Borrowing Date (provided that any such notice of a borrowing of Loans under the
Revolving Facility to finance payments required by Section 3.5 may be given not
later than 10:00 A.M., New York City time, on the date of the proposed
borrowing), specifying (i) the amount of Revolving Loans to be borrowed by each
applicable Borrower and (ii) the requested Borrowing Date; and provided further
that borrowings under the Revolving Commitments (other than borrowings to
finance payments required by Section 3.5) may be made not more frequently than
once per day. Each borrowing under the Revolving Commitments shall be in an
amount that does not exceed the then aggregate Available Revolving Commitments.
Upon receipt of any such notice from ASC, the Administrative Agent shall
promptly notify each Revolving Lender thereof. Each Revolving Lender will make
the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the relevant Borrower(s) at the Funding
Office prior to [12:00 Noon], New York City time, on the Borrowing Date
requested by ASC in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the relevant Borrower(s) by the
Administrative Agent crediting the account of the relevant Borrower(s) on the
books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.
21
2.6. Commitment Fees, etc. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Initial Funding Date to the last day of
the Revolving Commitment Period, computed at the Commitment Fee Rate on the
average daily amount of the sum of the Available Revolving Commitment and the
Supplemental Term Commitment of such Lender during the period for which payment
is made, payable monthly in arrears on each Fee Payment Date, commencing on the
first such date to occur after the date hereof, provided that no commitment fee
shall be earned or payable with respect to any Revolving Commitment of Oak Hill
Capital Partners, L.P., or any Control Investment Affiliate thereof.
(b) The Borrowers agree to pay to the Administrative Agent for its own
account a revolving credit administration fee of $50,000 for the period from and
including the Initial Funding Date to the day on which the Revolving Commitment
is terminated, payable annually in advance on the Initial Funding Date and on
each anniversary of the Initial Funding Date thereafter; provided, that for the
period between the third anniversary of the Initial Funding Date and the
Revolving Commitment Termination Date, the amount of such fee due and payable on
the third anniversary of the Initial Funding Date shall be pro-rated for the
actual number of days in such period.
(c) The Borrowers agree to pay the fees in the amounts and on the dates set
forth in the Fee Letters and to perform any other obligations contained therein.
2.7. Termination or Reduction of Revolving Commitments. Subject to Section
2.9, ASC shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments; provided that no
such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $500,000, or a multiple of $100,000 in
excess thereof, shall be made pro rata to the Revolving Commitments of all
Revolving Lenders and shall reduce permanently the Revolving Commitments then in
effect.
2.8. Prepayments. (a) Subject to the terms of this paragraph, the Borrowers
may at any time and from time to time prepay the Loans, in whole or in part,
provided that the Borrowers may prepay Term Loans and Supplemental Term Loans
only (x) with the Net Cash Proceeds of any issuance of Capital Stock or
incurrence of Indebtedness after the Closing Date by any Borrower, (y) the Net
Cash Proceeds of any Disposition of assets of any Borrower, or (z) with Excess
Cash Flow for any fiscal year, during the relevant Excess Cash Flow Prepayment
Period. Prepayments of Term Loans shall be subject to the payment of a
Prepayment Premium to the extent required by Section 2.9. ASC shall deliver
irrevocable notice of each such prepayment to the Administrative Agent no later
than 11:00 A.M., New York City time, one Business Day prior to the date of such
prepayment, which notice shall specify which Borrower's Loans are being prepaid
and the date and amount of prepayment. 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 of Term Loans and Revolving
Loans shall be in an aggregate principal amount of $500,000 or a multiple of
$100,000 in excess thereof. Notwithstanding the forgoing, the Borrowers may not
make any prepayment of the Tranche B Term Loans pursuant to this paragraph (a)
while any Tranche A Term Loan, Supplemental Term Loan or Revolving Loan or
Letter of Credit remains outstanding, or any Supplemental Term Commitment or
Revolving Commitment remains in effect, or any other amount is owing to any
Tranche A Term Loan Lender, Supplemental Term Lender or Revolving Lender (except
in its capacity as a Tranche B Term Lender).
22
(b) If on any date ASC or any Restricted Subsidiary shall receive Net Cash
Proceeds from any Material Asset Sale or any Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Term Loans
and the reduction of the Revolving Commitments as set forth in Section 2.8(c);
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 applied toward the prepayment of the Term
Loans, Supplemental Term Loans and the reduction of the Revolving Commitments as
set forth in Section 2.8(c).
(c) Amounts to be applied in connection with prepayments and Commitment
reductions made pursuant to Section 2.8(b) shall be applied, first, to the
prepayment of the Tranche A Term Loans in accordance with Section 2.12(b),
second, to the prepayment of Supplemental Term Loans in accordance with 2.12(b),
third, to reduce permanently the Revolving Commitments, and, fourth, to the
prepayment of the Tranche B Term Loans. Any such reduction of the Revolving
Commitments shall be accompanied by ratable prepayment of the Revolving Loans of
each Borrower to the extent, if any, that the Total Revolving Extensions of
Credit exceed the amount of the Total Revolving Commitments as so reduced,
provided that if the aggregate principal amount of Revolving Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrowers shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent. Each prepayment of the Loans under Section 2.8 shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
(d) On each Supplemental Term Amortization Date, (i) if the Supplemental
Term Loans have not been borrowed, the Supplemental Term Loan Commitment of each
Supplemental Term Lender shall be reduced by an amount equal to the product of
(A) such Lender's Supplemental Term Percentage and (B)(1) if the Supplemental
Term Loan Amortization Date is July 15, 2003, $341,750 or (2) if the
Supplemental Term Loan Amortization Date occurs thereafter, $1,026,375 or (ii)
if the Supplemental Term Loans have been borrowed, ASC shall be required to make
a scheduled repayment of the aggregate outstanding principal amount of
Supplemental Term Loans of (x) if the Supplemental Term Loan Amortization Date
is July 15, 2003, $341,750 or (y) ) if the Supplemental Term Loan Amortization
Date occurs thereafter, $1,026,375.
2.9. Prepayment Premium. On the date of any prepayment in whole or in part
of the Tranche A Term Loans, Supplemental Term Loans or Tranche B Term Loans
pursuant to Section 2.8 or any permanent reduction of the Revolving Commitments
in accordance with Section 2.7 or Section 2.8(b), the Borrowers shall pay to the
Administrative Agent, for the ratable benefit of the applicable Lenders, the
applicable Prepayment Premium, if, in the case of any prepayment, (a) such
prepayment is made pursuant to clause (x) or (y) of Section 2.8(a) (provided
that up to $1,000,000 of Non-Operating Asset Sale Proceeds in excess of the
amount of such proceeds applied to meet the requirements of Section 7.1(a) and
in excess of any amount of such proceeds allocated to permitted Capital
Expenditures in accordance with Section 7.7 may be applied to the prepayment of
the Term Loans and reductions of the Revolving Commitments, in each case without
any Prepayment Premium) or (b) such prepayment is made pursuant to Section
2.8(b).
2.10. Interest Rates and Payment Dates. (a) Each Loan shall bear interest
at a rate per annum equal to the Prime Rate from time to time plus the
Applicable Margin; provided, that if the Applicable Margin with respect to
Tranche A Term Loans, Supplemental Term Loans or Revolving Loans is increased at
any time after the date hereof (other than by operation of Section 2.10(b)), the
23
Applicable Margin in respect of the Tranche B Term Loans shall be automatically
increased by an equal amount.
(b) At the option of, with respect to the Tranche A Term Loans,
Supplemental Term Loans and Revolving Loans, the Administrative Agent or the
Required Lenders or, with respect to the Tranche B Term Loans, at the option of
the Tranche B Term Lenders, if any Event of Default shall have occurred and be
continuing, all outstanding Loans and Reimbursement Obligations (whether or not
overdue) under the relevant Facilities shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
or (y) in the case of Reimbursement Obligations, the rate applicable to
Revolving Loans plus 2% (such increased rate, as applicable, the "Default
Rate"); provided that if all Events of Default shall not have been cured or
waived within 180 days after the date of initial occurrence of an Event of
Default, the margin contained in the Default Rate shall be increased to 3%.
(c) Interest shall be payable in arrears on each Interest Payment Date,
subject to paragraphs (d), (e), (f) and (g) of this Section, provided that
interest accruing pursuant to paragraph (b) of this Section shall be payable
from time to time on demand.
(d) Subject to the terms of Section 6 of the Intercreditor Agreement, on
any Interest Payment Date for the Tranche B Term Loans on which a PIK Condition
has occurred and is continuing, instead of making a cash interest payment for
accrued interest on the Tranche B Term Loans, ASC shall pay the interest due on
the Tranche B Term Loans on such Interest Payment Date through an increase on
such date in the principal amount of the Tranche B Term Loans (the amount of
such increase, the "PIK Interest Amount"). If requested by any Tranche B Term
Lender that holds a Note, ASC shall issue an additional Note to such Lender in
an aggregate principal amount equal to such PIK Interest Amount.
(e) If the Applicable Margin in respect of Tranche B Term Loans is
increased after the date hereof other than pursuant to Section 2.10(b), on any
Interest Payment Date for the Tranche B Term Loans occurring after the
effectiveness of such increase, instead of making a cash interest payment for
accrued interest on the Tranche B Term Loans attributable to such increase in
the Applicable Margin in respect of Tranche B Term Loans (the "Tranche B Rate
Increase PIK Interest Amount"), ASC shall pay the Tranche B Rate Increase PIK
Interest Amount on such Interest Payment Date through an increase on such date
in the principal amount of the Tranche B Term Loans by an amount equal to the
Tranche B Rate Increase PIK Interest Amount. If requested by any Tranche B Term
Lender that holds a Note, ASC shall issue an additional Note to such Lender in
an aggregate principal amount equal to such Tranche B Rate Increase PIK Interest
Amount.
(f) If the Applicable Margin in respect of Tranche A Term Loans or
Supplemental Term Loans is increased by greater than 2.0% per annum after the
date hereof other than pursuant to Section 2.10(b), on any Interest Payment Date
for the Tranche A Term Loans and Supplemental Term Loans occurring after the
effectiveness of such increase in excess of 2.0% per annum, instead of making a
cash interest payment for accrued interest on the Tranche A Term Loans or
Supplemental Term Loans attributable to such increase in the Applicable Margin
in respect of Tranche A Term Loans or Supplemental Term Loans in excess of 2.0%
(the "Tranche A Rate Increase PIK Interest Amount" or "Supplemental Rate
Increase PIK Interest Amount", respectively), ASC shall pay the Tranche A Rate
Increase PIK Interest Amount and Supplemental Rate Increase PIK Interest Amount
on such Interest Payment Date through an increase on such date in the principal
amount of the Tranche A Term Loans and Supplemental Term Loans by an amount
equal to the Tranche A Rate Increase PIK Interest Amount or the Supplemental
Rate Increase PIK Interest Amount, as the case may be. If requested by any
Tranche A Term Lender or Supplemental Term Lender that holds a Note, ASC shall
issue an additional Note to such Lender in an aggregate principal amount equal
24
to such Tranche A Rate Increase PIK Interest Amount or Supplemental Rate
Increase PIK Interest Amount.
(g) If the Applicable Margin in respect of Revolving Loans is increased by
greater than 2.0% per annum after the date hereof other than pursuant to Section
2.10(b), on any Interest Payment Date for the Revolving Loans occurring after
the effectiveness of such increase in excess of 2.0% per annum, instead of
making a cash interest payment for accrued interest on the Revolving Loans
attributable to such increase in the Applicable Margin in respect of Revolving
Loans in excess of 2.0% (the "Revolving Loan Rate Increase PIK Interest
Amount"), ASC shall pay the Revolving Loan Rate Increase PIK Interest Amount by
on such Interest Payment Date by borrowing additional Revolving Loans in an
aggregate principal amount equal to the Revolving Loan Rate Increase PIK
Interest Amount.
2.11. 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. Any change in the interest rate on a Loan resulting from a
change in the Prime Rate 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 relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
each Borrower and the Lenders in the absence of manifest error.
2.12. Pro Rata Treatment and Payments. (a) Each borrowing by any Borrower
from the applicable Lenders hereunder, each payment by any Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the respective Tranche A Term Percentages, Tranche
B Term Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.
(b) Each payment (including each prepayment) by any Borrower on account of
principal of and interest on the Tranche A Term Loans, Supplemental Term Loans
or the Tranche B Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the Tranche A Term Loans, Supplemental Term
Loans or Tranche B Term Loans, as the case may be, then held by the applicable
Term Lenders or Supplemental Term Lenders. Amounts prepaid on account of the
Term Loans or Supplemental Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by any Borrower on account of
principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
of such Borrower then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by any 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 becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding 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.
25
(e) 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 applicable 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 greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, 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 Loans under the
relevant Facility, on demand, from the relevant Borrower.
(f) Unless the Administrative Agent shall have been notified in writing by
ASC prior to the date of any payment due to be made by a Borrower hereunder that
such Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that such 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 relevant 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 any 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, any Letter of Credit, any Application or any
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; or
(iii) shall impose on such Lender any other condition;
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 or maintaining
Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrowers
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
26
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 ASC (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 or under or in respect of any Letter of Credit 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 ASC (with a copy to the Administrative Agent) of a written
request therefor, the Borrowers 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 ASC (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 Borrowers 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 ASC 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 Borrowers 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 Borrowers 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 no Borrower shall 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 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
27
additional amounts from the Borrowers with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrowers 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 any
Borrower, as promptly as possible thereafter such 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 such Borrower showing payment thereof. If any 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 Borrowers 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 ASC 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 Borrowers
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 ASC at any time it determines that it is no longer in a
position to provide any previously delivered certificate to ASC (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
any Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to such 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 ASC, 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 2.17, it shall pay
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 2.17 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
28
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. 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 ASC, 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 Borrowers or the rights of any Lender pursuant to Section
2.13 or 2.14(a).
2.16. Additional Tranche B Term Loans. At any time when an Event of Default
is continuing and the Administrative Agent or the Required Lenders have
terminated the Revolving Commitments or otherwise denied a request for a
borrowing of Revolving Loans based on the Borrowers having failed to meet the
conditions precedent contained in Section 5.3, the Tranche B Lenders shall have
the right, but not the obligation, to fund any such request for Revolving Loans,
if a Borrower so requests, by making loans hereunder ("Additional Tranche B Term
Loans"), ratably based on their respective Tranche B Term Commitments, up to an
aggregate amount for all such loans which, when added to the aggregate amount of
the Revolving Extensions of Credit then outstanding and the aggregate Available
Revolving Commitments (including any such Commitments not then available because
of then failure of the Borrowers to meet the conditions precedent contained in
Section 5.3), does not exceed $45,000,000. Any Additional Tranche B Term Loans,
once made by the Tranche B Lenders pursuant to this Section, shall be subject to
all the terms applicable to Tranche B Term Loans hereunder, and shall be
"Tranche B Term Loans" for all purposes of the Loan Documents.
SECTION III.LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Revolving Lenders set
forth in Section 3.4(a), agrees to issue letters of credit ("Letters of Credit")
for the account of ASC or any Subsidiary Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Issuing Lender; provided that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date that is five
Business Days prior to the Revolving Termination Date, provided that any Letter
of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
29
(b) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2. Procedure for Issuance of Letter of Credit. Any Borrower may from time
to time request that the Issuing Lender issue a Letter of Credit by delivering
to the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the relevant Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to such Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the issuance of
each Letter of Credit (including the amount thereof).
3.3. Fees and Other Charges. (a) The Borrowers shall pay a fee on all
outstanding Letters of Credit at the rate of 3.25% per annum, shared ratably
among the Revolving Lenders and payable monthly in arrears on each Fee Payment
Date after the issuance date.
(b) In addition to the foregoing fees, the Borrowers shall pay or reimburse
the Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4. L/C Participations. (a) The Issuing Lender irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions set forth below, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Percentage in
the Issuing Lender's obligations and rights under and in respect of each Letter
of Credit and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant agrees with the Issuing Lender that, if a draft is paid
under any Letter of Credit for which the Issuing Lender is not reimbursed in
full by the Borrowers in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing Lender's
address for notices specified herein an amount equal to such L/C Participant's
Revolving Percentage of the amount of such draft, or any part thereof, that is
not so reimbursed. Each L/C Participant's obligation to pay such amount shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such L/C Participant may have against the Issuing Lender, any Borrower or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5, (iii) any adverse change in the condition
(financial or otherwise) of any Borrower, (iv) any breach of this Agreement or
any other Loan Document by any Borrower or any other L/C Participant or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
30
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to the Loans under the Revolving Facility. A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from any
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5. Reimbursement Obligation of the Borrowers. If any draft is paid under
any Letter of Credit, the relevant Borrower shall reimburse the Issuing Lender
for the amount of (a) the draft so paid and (b) any taxes, fees, charges or
other costs or expenses incurred by the Issuing Lender in connection with such
payment, not later than 12:00 Noon, New York City time, on (i) the Business Day
that such Borrower receives notice of such draft, if such notice is received on
such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above
does not apply, the Business Day immediately following the day that such
Borrower receives such notice. Each such payment shall be made to the Issuing
Lender at its address for notices referred to herein in Dollars and in
immediately available funds. Interest shall be payable on any such amounts from
the date on which the relevant draft is paid until payment in full at the rate
set forth in (x) Section 2.10(a) until the Business Day next succeeding the date
of the relevant notice and (y) Section 2.10(b) thereafter.
3.6. Obligations Absolute. Each Borrower's obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that any Borrower
may have or have had against the Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. Each Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and such Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among any Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of any Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. Each Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on such Borrower and
shall not result in any liability of the Issuing Lender to such Borrower.
31
3.7. Letter of Credit Payments. If any draft shall be presented for payment
under any Letter of Credit, the Issuing Lender shall promptly notify the
relevant Borrower of the date and amount thereof. The responsibility of the
Issuing Lender to the relevant Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8. Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, ASC and each Subsidiary Borrower hereby jointly and severally
represent and warrant to the Administrative Agent and each Lender that:
4.1. Financial Condition. The audited consolidated balance sheets of ASC as
at July 30, 2000 and July 29, 2001, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates, reported on
by and (except in the case of the consolidated balance sheets of ASC as at July
30, 2000) accompanied by an unqualified report from Xxxxxx Xxxxxxxx LLP or KPMG
LLP, present fairly the consolidated financial condition of ASC 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. The
unaudited consolidated balance sheet of ASC as at October 27, 2002, and the
related unaudited consolidated statements of income and cash flows for the
3-month period ended on such date, present fairly the consolidated financial
condition of ASC as at such date, and the consolidated results of its operations
and its consolidated cash flows for the 3-month period then ended (subject to
normal year-end audit adjustments). 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 Borrower 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 4.1, during the period from July 28, 2002 to and including the date
hereof there has been no Disposition by ASC or any Restricted Subsidiary of any
material part of its business or property.
4.2. No Change. As of the Closing Date, except as disclosed in the
financial statements delivered pursuant to Section 5.1(c) (and the notes
thereto), since July 28, 2002, there has been no development or event that has
had or could reasonably be expected to have a Material Adverse Effect.
4.3. Existence; Compliance with Law. Each Borrower (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.
32
4.4. Power; Authorization; Enforceable Obligations. Each Borrower 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 Borrower 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 4.4, which
consents, authorizations, filings (other than those designated as "Pending
Landlord Consents" on Schedule 4.4) and notices have been obtained or made and
are in full force and effect and (ii) the filings and acts referred to in
Section 4.19. Each Loan Document has been duly executed and delivered on behalf
of each Borrower party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Borrower party thereto, enforceable against each such Borrower 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).
4.5. 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 Borrower 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 4.5, as of the Closing Date, no Requirement of
Law or Contractual Obligation applicable to any Borrower could reasonably be
expected to have a Material Adverse Effect.
4.6. Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of any
Borrower, threatened by or against any 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) as of the
Closing Date, except as described on Schedule 4.6, that could reasonably be
expected to have a Material Adverse Effect.
4.7. No Default. Except as described on Schedule 4.7, as of the Closing
Date, no Borrower 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. As of the
Closing Date, no Default has occurred and is continuing. No Event of Default has
occurred and is continuing.
4.8. Ownership of Property; Liens. Each Borrower 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 7.3.
The "Pledge and Disbursement Agreement" as defined in the Senior Subordinated
Note Indenture has been terminated and all Liens thereunder released.
4.9.Intellectual Property. Each Borrower owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently
conducted. As of the Closing Date, no material claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
33
Property or the validity or effectiveness of any Intellectual Property, nor does
any Borrower know of any valid basis for any such claim. The use of Intellectual
Property by each Borrower does not infringe on the rights of any Person in any
material respect.
4.10. Taxes. Each Borrower 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 Borrower); no tax Lien has
been filed that is not permitted by Section 7.3(a), and, to the knowledge of any
Borrower, as of the Closing Date, no claim is being asserted, with respect to
any such tax, fee or other charge.
4.11. 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, each 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.
4.12. 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 Borrower pending or, to the knowledge of any
Borrower, threatened; (b) hours worked by and payment made to employees of each
Borrower 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 Borrower on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the relevant Borrower.
4.13. 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 Borrower 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 Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if any Borrower 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 Borrowers' knowledge, no
Multiemployer Plan is in Reorganization or Insolvent.
4.14. Investment Company Act; Other Regulations. No Borrower 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
Borrower is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
34
4.15. Subsidiaries. Except as disclosed to the Administrative Agent by ASC
in writing from time to time after the Closing Date, (a) Schedule 4.15 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
Borrower 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 Borrower, except as created by the
Loan Documents or as described on Schedule 4.15.
4.16. Use of Proceeds. The proceeds of the Term Loans shall be used to
repay amounts outstanding under the Existing Credit Agreement and to pay related
fees and expenses. The proceeds of the Supplemental Term Loans shall be used to
pay the Supplemental Term Loan Amount due and payable under the Fleet Swap
Agreement. The proceeds of the Revolving Loans and the Letters of Credit shall
be used to repay amounts outstanding under the Existing Credit Agreement and for
general corporate purposes.
4.17. Environmental Matters. Except as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) each Borrower: (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
Borrower or at any other location (including, without limitation, 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 Borrower under any applicable
Environmental Law or otherwise result in costs to any Borrower, or (ii)
interfere with any Borrower'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
Borrower is, or to the knowledge of any Borrower will become, a party that is
pending or, to the knowledge of the Borrower, threatened, or (ii) to the
knowledge of any Borrower, affecting or that could reasonably be expected to
affect any Borrower;
35
(d) no Borrower 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 Borrower 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 Borrower 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.
4.18. Accuracy of Information, etc. No statement or information contained
in this Agreement, any other Loan Document or any other document, certificate or
statement furnished by or on behalf of any Borrower 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, 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 Borrowers 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 Borrower that could reasonably be expected to have a Material Adverse Effect
that has not been expressly disclosed herein, in the other Loan Documents 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.
4.19. Security Documents. (a)The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of 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 Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule
4.19(a) in appropriate form are filed in the offices specified on Schedule
4.19(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
4.19(a) are taken), the Lien created by the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Borrowers 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, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 7.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of 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
4.19(b) (and, after the Closing Date, any additional filings required to be made
36
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 Borrowers 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 Liens permitted by Section
7.3). 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 Borrower.
4.20. Solvency. Each Borrower, both before and after giving effect to the
incurrence of all Indebtedness and obligations being incurred under this
Agreement, is Solvent.
4.21. Senior Indebtedness. The Obligations of each Borrower constitute
"Senior Debt" of such Borrower under and as defined in the Senior Subordinated
Note Indenture and the Junior Subordinated Note Indenture, except to the extent
such Obligations are held by an "Affiliate" (as defined in the applicable
indenture) of ASC. The obligations of each Borrower under the Guarantee and
Collateral Agreement constitute "Senior Debt" of such Borrower under and as
defined in the Senior Subordinated Note Indenture and the Junior Subordinated
Note Indenture, except to the extent such Obligations are held by an "Affiliate"
(as defined in the applicable indenture) of ASC.
4.22. Regulation H. Except as set forth on Schedule 4.22, 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.
4.23. Certain Documents. The Borrowers have delivered to the Administrative
Agent a complete and correct copy of the Senior Subordinated Note Indenture, the
Junior Subordinated Note Indenture and the Existing Credit Agreement, including
any amendments, supplements or modifications with respect to any of the
foregoing.
4.24. Forest Service Term Special Use Permits. The Forest Service Term
Special Use Permits are listed on Schedule 4.24, are each held by at least one
of the Borrowers, 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 Borrower as conducted during the fiscal year
ended immediately prior to entering into this Agreement and as planned to be
operated.
4.25. Location. All material buildings, structures, fixtures, improvements,
and other assets that constitute each of the respective Ski Resort Properties
(including, without limitation, 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 Borrower, (ii) leased by the applicable Borrower pursuant to a
lease listed on Schedule 1.1B, (iii) subject to a recorded easement in favor of
the applicable Borrower, or (iv) with respect to which a Forest Service Term
Special Use Permit is in effect.
SECTION V. CONDITIONS PRECEDENT
5.1. Conditions to Initial Extensions of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Initial Funding Date, of the following conditions
precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement, executed and
37
delivered by the Administrative Agent, ASC, each Subsidiary Borrower listed
on Schedule 1.1D and each initial Lender, (ii) the Guarantee and Collateral
Agreement, executed and delivered by ASC, the Subsidiary Borrowers 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 not a Borrower.
(b) Intercreditor Agreement. The Administrative Agent shall have
received the Intercreditor Agreement, executed and delivered by the
Administrative Agent and each initial Lender.
(c) Financial Statements. The Lenders shall have received (i) the
financial statements and audit report described in the first sentence of
Section 4.1, (ii) draft audited consolidated balance sheets of ASC as at
July 28, 2002, and the related consolidated statements of income and of
cash flows for the fiscal years ended on such date, reported on by and
accompanied by a draft unqualified report from KPMG LLP and (iii) unaudited
interim consolidated financial statements of ASC for each fiscal quarter
ended after the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available, and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material
adverse change in the consolidated financial condition of ASC, as compared
to (x) the consolidated and consolidating financial statements of ASC
audited by Xxxxxx Xxxxxxxx LLP for the fiscal years ended July 2000 and
July 2001 and (y) the projections for the fiscal year ended July 2002
provided by ASC to the Administrative Agent prior to the date hereof, it
being understood by the Lenders that material non-cash adjustments may have
been made to ASC's financial statements during the aforementioned years for
impairment changes associated with the Borrowers' real estate activities.
(d) Approvals. All governmental and third party approvals (including
landlords' and other consents) 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 Borrowers are located, and such search shall reveal no liens on any
of the assets of the Borrowers except for liens permitted by Section 7.3 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 with respect to ASC and its Subsidiaries in
scope, form and substance reasonably satisfactory to the Administrative
Agent.
(g) Closing Certificate; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Borrower, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments, including
the certificate of incorporation of each Borrower that is a corporation
certified by the relevant authority of the jurisdiction of organization of
such Borrower, and (ii) a long form (or short form, if such jurisdiction
does not issue long form) good standing certificate for each Borrower from
its jurisdiction of organization.
38
(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 Borrowers; and
(ii) the legal opinion of local counsel 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) [Intentionally omitted.]
(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 with respect to Liens expressly permitted by Section
7.3), 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) [Intentionally omitted.]
(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
39
(B) confirmation that ASC 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 Borrower is the lessee that is included
in the Killington/Pico, Attitash and Steamboat Ski Resort Properties, 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) Certain Due Diligence. The Administrative Agent shall have
completed and be satisfied with the results of its due diligence review
with respect to the United States Forest Service's process for and history
of transferring Forest Service Permits and similar authorizations, and
litigation relating to the cancelled sale of the Steamboat resort.
(m) Asset Monetization Powers of Attorney. The Administrative Agent
shall have received Asset Monetization Powers of Attorney covering each Ski
Resort Property, executed and delivered by a duly authorized officer of the
applicable Borrowers.
(n) Material Agreements; Permits and Water Rights. The Administrative
Agent and each Lender shall have received, and be satisfied with its review
of, copies of (a) each agreement, instrument or other undertaking,
including without limitation all leases, to which each Borrower is a party
and the failure to comply therewith could reasonably be expected to have a
Material Adverse Effect and (b) each governmental permit to which any
Borrower is a party, and evidence of all Water Rights required for any
Borrower's current or intended operations or for any property owned,
leased, or otherwise operated by any Borrower.
(o) 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.
(p) Termination of Existing Credit Agreement. The Administrative Agent
shall have received a signed copy of the Pay-Off Letter.
(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 $190,000,000.
(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 Initial Funding Date,
including pursuant to any Fee Letter. All such amounts will be paid with
proceeds of Loans made on the Initial Funding Date and will be reflected in
the funding instructions given by ASC to the Administrative Agent on or
before the Initial Funding Date.
(s) Minimum Availability. The Administrative Agent shall have
determined that, immediately after the Lenders have made the initial Loans
40
and the Issuing Bank has issued the initial Letters of Credit on the
Initial Funding Date, and the Existing Credit Agreement has been repaid and
retired in full and all fees and expenses required to be paid or reimbursed
in accordance with paragraph (r) of this Section 5.1 have been paid or
reimbursed, and after deeming to be drawn a portion of the Revolving Credit
Facility equal to the Administrative Agent's reasonable estimate of the
amount of transaction expenses, if any, which will be required to be
reimbursed by the Borrowers but which have not been billed on or prior to
the Initial Funding Date, but not including amounts of up to $4,470,810
drawn for the purpose of cash-collateralizing the Existing Letters of
Credit, the aggregate Available Revolving Commitments will be at least
$15,000,000.
5.2. Conditions to Each Extension of Credit. The agreement of each Lender
to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Borrower 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.
(b) No Default. No Event of Default, and, in the case of the initial
extensions of credit made on the Closing Date, no 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.
Each borrowing by and issuance of a Letter of Credit on behalf of any Borrower
hereunder shall constitute a representation and warranty by the relevant
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION VI. AFFIRMATIVE COVENANTS
The Borrowers hereby jointly and severally agree that, until
the Obligations have been Fully Satisfied, each Borrower shall:
6.1. Financial Statements. Furnish to the Administrative Agent and each
Lender:
(a) as soon as available, but in no event within 30 days after the
Closing Date, the audited consolidated balance sheet of ASC as at July 28,
2002, and the related consolidated statements of income and cash flows for
the fiscal year ended on such date, reported on by and accompanied by an
unqualified report from KPMG LLP, such financial statements, including the
related schedules and notes thereto, being prepared in accordance with GAAP
applied consistently throughout the period involved (except as approved by
KPMG LLP and disclosed therein). Such financial statements shall not
reflect any material adverse change in the financial condition of ASC and
the Restricted Subsidiaries taken as a whole, as compared to the draft
financial statements delivered to the Lenders pursuant to clause (ii) of
Section 5.1(c).
(b) as soon as available, but in any event within 90 days after the
end of each fiscal year of ASC (i) a copy of the audited consolidated
balance sheets of ASC 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, by KPMG LLP
or other independent certified public accountants of nationally recognized
standing and (ii) the unaudited consolidated and consolidating balance
sheets of ASC and its consolidated Subsidiaries as at the end of such year
and the related unaudited consolidated and consolidating statements of
41
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;
(c) 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 ASC, the unaudited consolidated balance sheets of ASC 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
(d) as soon as available, copies of any monthly balance sheets,
statements of income and cash flows that ASC prepares internally with
respect to the Borrowers.
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.
6.2. Certificates; Other Information. Furnish to the Administrative Agent
and 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 6.1, (i) a certificate of a Responsible Officer of ASC
stating that, to the best of such Responsible Officer's knowledge, each
Borrower 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
Borrower with the provisions of this Agreement referred to therein as of
the last day of the fiscal quarter or fiscal year of ASC, as the case may
be, (iii) a certificate of a Responsible Officer of ASC certifying
Consolidated EBITDA for the four fiscal quarter period ended as of the last
day of the fiscal quarter or fiscal year of ASC, 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 of any
Borrower and a list of any Intellectual Property acquired by any Borrower
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 ASC, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of
the Borrowers 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 ASC
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;
42
(c) within 45 days after the end of each fiscal quarter of ASC, a
narrative discussion and analysis of the financial condition and results of
operations of the Borrowers 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 the Senior
Subordinated Note Indenture, the Junior Subordinated Note Indenture;
(e) within five days after the same are sent, copies of all financial
statements and reports that ASC 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 ASC may make
to, or file with, the SEC;
(f) promptly, copies of any agreements of the kind described in clause
(a) of Section 5.1(n) not previously delivered hereunder; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3. 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 8(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
Borrower.
6.4. 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 7.4
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 8(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.
6.5. 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 6.5(b).
6.6. 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
43
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrowers with
officers and employees of the Borrowers 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.
6.7. Notices. Promptly after obtaining knowledge of the same, give notice
to the Administrative Agent and 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 Borrower or (ii) litigation, investigation or proceeding
that may exist at any time between any Borrower 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;
(c) any litigation or proceeding affecting any Borrower (i) in which
the amount involved is $100,000 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 Borrower 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
ASC 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 ASC's management, could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this Section 6.7 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 Borrower proposes to take with
respect thereto.
6.8. 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
44
expected to result in a material liability to any Borrower or any of its
Subsidiaries or to materially and adversely affect 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 Borrower or any of its
Subsidiaries or to materially and adversely affect the value or marketability of
any Mortgaged Properties; and
(d) Establish and 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: (1) within 180
days after the Closing Date, implementation 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); and (2) within 180 days after the Closing Date, submission to
the Administrative Agent of a report indicating, with respect to each matter
identified in the environmental assessments and health and safety assessments
prepared pursuant to Section 5.1(f) of this Agreement as being potentially out
of compliance with applicable Environmental Laws or otherwise noteworthy, how
such matter has been addressed.
(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 ASC with responsibility therefor and ASC'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
Borrower 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 Borrower 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
Borrower 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
Borrower 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, a brief description of the violations and whether the Borrower believes
that such notice or combination thereof, could reasonably be expected to result
in a fine or penalty in excess of $50,000; (5) 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) any legislative, regulatory, or enforcement
initiatives of which Borrower is aware regarding matters concerning the EH&S
Program that could reasonably be expected to materially affect Borrower's costs,
45
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).
6.9. Additional Collateral, New Subsidiary Borrowers, etc. (a) With respect
to any property acquired after the Closing Date by any Borrower (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 7.3(f) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent reasonably deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property (subject to Liens permitted by Section 7.3),
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 Administrative 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 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 Borrower (other than any such real
property subject to a Lien expressly permitted by Section 7.3(f)), promptly (i)
execute and deliver a first priority Mortgage (subject to Liens permitted by
Section 7.3), in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Administrative
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 amount as shall be reasonably specified by the Administrative Agent) as
well as a current ALTA survey thereof, together with a surveyor's certificate
and (y) any consents or estoppels reasonably deemed necessary or advisable by
the Administrative Agent in connection with such Mortgage, each of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Restricted Subsidiary created or acquired after
the Closing Date by any Borrower (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 Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
of such new Restricted Subsidiary that is owned by any Borrower (subject to
Liens permitted by Section 7.3), (ii) deliver to the Administrative 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 Borrower, (iii) cause such new Restricted Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement, by executing and delivering to
the Administrative Agent an Assumption Agreement in the form attached as Annex 1
to the Guarantee and Collateral Agreement, and to become a party to this
Agreement as a Borrower, by executing and delivering to the Administrative Agent
a Subsidiary Borrower Agreement substantially in the form of Exhibit G, (B) to
take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected first priority security interest
(subject to Liens permitted by Section 7.3) 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
46
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be reasonably requested by the Administrative Agent and (C) to
deliver to the Administrative 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 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 (it being agreed that opinions of substantially the same
scope, and from the same counsel, as the opinions delivered pursuant to Section
5.1 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 Borrower, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any Borrower (provided that no more than 66% of the
total outstanding voting Capital Stock of any new Excluded Foreign Subsidiary be
required to be so pledged if a pledge of more than 66% of such Capital Stock
would result in adverse tax consequences to ASC) (subject to Liens permitted by
Section 7.3), (ii) deliver to the Administrative 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 Borrower,
and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent's security
interest therein, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent (it being agreed that opinions of
substantially the same scope, and from the same counsel, as the opinions
delivered pursuant to Section 5.1 shall be satisfactory).
6.10. Asset Monetization Event. By September 30, 2005, either (a) deliver
written evidence to the Administrative Agent in form satisfactory to it that the
Borrowers have obtained third party committed funding to repay the Loans in full
and terminate the Revolving Commitments on or prior to December 31, 2005 or (b)
if the Borrowers have been unable to obtain such a commitment, deliver to the
Administrative Agent a plan, reasonably satisfactory to the Administrative
Agent, providing for the Disposition within the following six months of specific
Ski Resort Properties that represent an aggregate Appraised Value of at least
1.47 times the Aggregate Facilities Amount, which Ski Resort Properties, upon
approval of such plan by the Administrative Agent, shall thereafter be permitted
to be sold and proceeds thereof applied in accordance with Section 2.8(b). If
the Obligations have not been Fully Satisfied on or prior to December 31, 2005
(such failure, an "Asset Monetization Event"), then the Administrative Agent
shall have the right to use the Asset Monetization Powers of Attorney to
initiate, direct and consummate the Disposition of Ski Resort Properties from
and after the occurrence of such Asset Monetization Event, until such time as
all Obligations have been paid in full and the Commitments and Revolving Credit
Commitments have been reduced to $0. Upon the request by the Administrative
Agent, the Borrowers shall promptly issue such additional asset monetization
powers of attorney, comparable in substance to the Asset Monetization Power of
Attorney, as may be necessary to meet the requirements of applicable local law
(including, without limitation, for proper recording and such requirements
imposed by a national title insurance company).
6.11. 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 without the prior written consent of the
Administrative Agent and except as would not have or reasonably be expected to
have a material impact on the operations of any Borrower; provided, however,
that changes or alterations in any master plan provided under or incorporated by
47
reference in any Forest Service Term Special Use Permit will not constitute
changes, alterations or amendments under this Section 6.11.
6.12. 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 Borrower, 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 Borrowers
of obligations of Excluded Subsidiaries and permitted hereunder, (iv)
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 listed on Part I of Schedule 6.12 to (i)
be merged to consolidated into its direct parent or be added to this Agreement
as a Borrower pursuant to Section 6.9(c) within six months after the Closing
Date and (ii) not hold any material assets.
(c) Cause each Excluded Subsidiary listed on Part II of Schedule 6.12 to
not conduct any business other than the business indicated for such Excluded
Subsidiary on such Schedule and matters incidental thereto.
(d) 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 Borrower that owns such Excluded Immaterial
Subsidiary.
6.13. Post-Closing Obligations. (a) Cause all Existing Letters of Credit to
be returned to the issuer thereof and terminated as soon as commercially
practicable after the Closing Date.
(b) The Borrowers shall use commercially reasonable efforts promptly to
obtain Landlord Certificates for the leases designated as Pending Landlord
Consent on Schedule 4.4 annexed hereto. If a Landlord Certificate shall be
received for either of the Consent Leaseholds, then promptly after such receipt,
the applicable Borrower shall deliver to the Administrative Agent (i) an
amendment to the Mortgage covering the applicable Ski Resort Property, in form
reasonably satisfactory to the Administrative Agent, adding the Consent
Leasehold to the Mortgaged Property thereunder, (ii) an endorsement to Lender's
title insurance policy with respect to such Mortgage, in form reasonably
satisfactory to the Administrative Agent, adding the Consent Leasehold to the
property covered by such title insurance policy and (iii) if requested by the
Administrative Agent, a legal opinion with respect to such mortgage amendment in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent. As used herein, the term "Landlord Certificate" shall mean
with respect to each lease described in Schedule 6.13(b) annexed hereto, a
certificate substantially in the form heretofore submitted to the lessor
thereunder, or containing language of similar import to that contained in such
form and reasonably acceptable to the Administrative Agent.
(c) The Administrative Agent shall within 20 days after the Closing Date
provide to the Administrative Agent (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 Administrative 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.
48
(d) Deliver to the Administrative Agent as soon as commercially practicable
after the Closing Date, for each Mortgaged Property, a surveyors 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 4.25, 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 Borrower
Subsidiary), and (b) all compilation plans on which the foregoing surveyors
reports and statements are based.
(e) Borrower agrees to cooperate with Administrative Agent in obtaining
from the fee mortgagees of the landlords under the leases covered by the
Mortgages and the Consent Leaseholds which are subordinate to the lien held by
such fee mortgagees a customary non-disturbance agreement reasonably
satisfactory to the Administrative Agent; provided that Borrower shall have no
obligation tomake any payment or incur any obligation to any such fee mortgagee
or any landlord in order to obtain any such agreement.
SECTION VII. NEGATIVE COVENANTS
The Borrowers hereby jointly and severally agree that, until
the Obligations are Fully Satisfied, each Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1. Financial Condition Covenants.
(a) Minimum Consolidated EBITDA. Permit Consolidated EBITDA for any period
of four fiscal quarters of ASC 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
2003 Quarter 3 $34,000,000
2003 Quarter 4 $34,000,000
2004 Quarter 1 $34,000,000
2004 Quarter 2 $34,000,000
2004 Quarter 3 $36,000,000
2004 Quarter 4 $36,000,000
2005 Quarter 1 $36,000,000
2005 Quarter 2 $36,000,000
2005 Quarter 3 and thereafter $38,000,000;
provided that, to the extent LTM EBITDA for any fiscal quarter is less than the
minimum amount specified above for such fiscal quarter, amounts received by the
Borrowers during the relevant period consisting of the proceeds of Dispositions
of Non-Operating Assets in accordance with Section 7.5(e) ("Non-Operating Asset
Sale Proceeds") shall be deemed to be added to LTM EBITDA (in an aggregate
amount of up to $2,000,000 in any fiscal year) for the purpose of determining
the Borrowers' compliance with this covenant. In connection with any Disposition
of Operating Assets in accordance with Section 7.5(f), the Administrative Agent
and the Lenders agree to negotiate in good faith with ASC to revise the Minimum
Consolidated EBITDA requirements of this Section to reflect such Disposition.
(b) Annual Liquidity Test. On April 1 of any year prior to the Maturity
Date, permit any Revolving Credit Loans to be outstanding other than Revolving
Loans borrowed on such date to repay Reimbursement Obligations due on such date.
49
7.2. Indebtedness. Create, issue, incur, assume, become liable in respect
of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Borrower pursuant to any Loan Document;
(b) Indebtedness (including Purchase Money Indebtedness (as defined
below)) outstanding on the date hereof and listed on Schedule 7.2(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 with respect to any premium
and reasonable costs and expenses or capitalized interest);
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(f) ("Purchase Money
Indebtedness") in an aggregate principal amount of up to $2,000,000 at any
one time outstanding;
(d) (i) Indebtedness of ASC in respect of the Senior Subordinated
Notes or the Junior Subordinated Notes and (ii) Guarantee Obligations of
any Subsidiary Borrower in respect of such Indebtedness, provided that such
Guarantee Obligations are subordinated to the same extent as the
obligations of ASC in respect of the Senior Subordinated Notes or the
Junior Subordinated Notes, as the case may be;
(e) Indebtedness of any Borrower to any other Borrower; and
(f) Payment and performance bonds entered into in the ordinary course
of business in support of the activities of any Borrower 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 $1,750,000 until such time as the bonds in favor of the
Department of Taxes of the State of Vermont have been released, and
$1,000,000 thereafter.
7.3. 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 Borrower 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 Borrower 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
Borrower;
50
(e) Liens in existence on the date hereof listed on Schedule 7.3(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 ASC or any other Subsidiary
incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or
capital assets ("Purchase Money Liens"), 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;
(g) Liens created pursuant to the Security Documents;
(h) any interest or title of a lessor under any lease entered into by
any Borrower 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 Borrower 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
7.8(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 Borrower and arising in connection with the acquisition or
disposition of such Investments and not any obligation in connection with
margin financing; and
(l) leases permitted by Section 7.5.
7.4. 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 Borrower may be merged or consolidated with or into any other
Borrower (provided that, in the case of any such merger or consolidation
involving ASC, ASC shall be the continuing or surviving corporation);
(b) any Subsidiary of ASC may Dispose of any or all of its assets (i)
to any Borrower or any Wholly Owned Subsidiary Guarantor (upon voluntary
liquidation or otherwise) or (ii) pursuant to a Disposition permitted by
Section 7.5; and
51
(c) any Investment expressly permitted by Section 7.8 may be
structured as a merger, consolidation or amalgamation.
7.5. 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 Restricted Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition 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 an fiscal year in the ordinary course of business;
(b) the sale, lease or other disposition of inventory in the ordinary
course of business;
(c) Dispositions permitted by clause (i) of Section 7.4(a);
(d) the sale or issuance of any Restricted Subsidiary's Capital Stock
to any Borrower;
(e) the Disposition of Non-Operating Assets for fair market value cash
consideration not to exceed $2,000,000 in the aggregate for any fiscal year
of ASC, provided that such $2,000,000 limit may be exceeded in any fiscal
year with the written consent of the Administrative Agent;
(f) Dispositions of Operating Assets with the written consent of the
Required Lenders or as permitted or required pursuant to Section 6.10;
(g) the license of intellectual property in the ordinary course of
business;
(h) Dispositions of the Capital Stock of ASCRP;
(i) Dispositions of Investments consisting of Cash Equivalents; and
(j) Leases that have a lease term of five years or less 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 skiable terrain.
7.6. 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 Borrower, 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 Borrower (collectively,
"Restricted Payments"), except that any Borrower may make Restricted Payments to
any other Borrower.
7.7. Capital Expenditures. Make or commit to make any Capital Expenditure,
except Capital Expenditures of the Borrowers in the ordinary course of business
made while no Event of Default has occurred and is continuing not exceeding in
any fiscal year of ASC the sum of (x) $8,500,000, (y) 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 7.1(a) for such quarter (without adding in any
Non-Operating Asset Sale Proceeds as specified in the proviso to such Section)
and (z) an amount equal to Non-Operating Asset Sale Proceeds received during
such fiscal year in excess of the aggregate amount of such proceeds applied to
satisfy the minimum LTM EBITDA requirements of Section 7.1(a) for each quarter
52
of such fiscal year, up to a maximum of $1,000,000 for this clause (z);
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 first fiscal quarter of the next succeeding fiscal year; and provided,
further, that, in addition to Capital Expenditures otherwise permitted by the
foregoing, to the extent that ASCRP has made or has agreed to make, and the
Borrowers have been contractually relieved of their obligation to make,
aggregate payments of up to $2,000,000 to Wasatch Capital on behalf of the
Borrowers instead of any Borrower making such payments, the Borrowers shall be
permitted to make Capital Expenditures in an aggregate amount of $2,000,000, (or
such lesser amount actually paid by ASCRP) during the term of this Agreement,
with no more than $1,000,000 of such Capital Expenditures to be made in 2003.
7.8. 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 7.2;
(d) (i) existing Investments in the Capital Stock of Subsidiaries that
are not Borrowers, as described on Schedule 4.15, (ii) outstanding
intercompany loans and advances, as listed as Indebtedness on Schedule
7.2(b) and permitted by Section 7.2, and (iii) other existing Investments
described on Schedule 7.8(d);
(e) Capital Expenditures permitted by Section 7.7 that are structured
as Investments;
(f) Restricted Payments permitted under Section 7.6;
(g) intercompany Investments by any Borrower in any other Borrower;
(h) Investments acquired in connection with the bankruptcy or workout
of account debtors; and
(i) Investments in respect of Swap Agreements permitted under Section
7.12.
7.9. 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 Subordinated Debt; (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 Subordinated Debt (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
any Preferred Stock (other than any such amendment, modification, waiver or
other change that (i) 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 (ii) does not involve the payment of a
53
consent fee); or (d) designate any Indebtedness (other than obligations of the
Borrowers pursuant to the Loan Documents) as "Senior Debt" (or any other defined
term having a similar purpose) for the purposes of the Senior Subordinated Note
Indenture or the Junior Subordinated Note Indenture.
7.10. 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 other Borrower) except that a Borrower (a) may pay reasonable
salaries, fees and bonuses (including the reimbursement of expenses and the
granting of stock options and phantom stock awards) to their 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 Borrower taken as a whole than those which could be
obtained at the time from Persons who are not Affiliates and which transactions
(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 prior to the
consummation of such transactions, (c) may amend, modify, waive or otherwise
change the terms of Subordinated Debt or Preferred Stock to the extent permitted
by Section 7.9, (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 Borrowers may
pay management fees to (x) Meristar Management Company, L.L.C. pursuant to the
Management Consulting Agreement dated as of July 30, 2001 among ASC, certain
Subsidiaries thereof and Meristar Management Company, L.L.C., as such agreement
is in effect on the date hereof, as such fees may be determined from time to
time in accordance with the procedures set forth therein and (y) other
Affiliates in an aggregate amount for all such other Affiliates not to exceed
$100,000 in any fiscal year of ASC. 7.11. Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by any Borrower of real or
personal property that has been or is to be sold or transferred by such Borrower
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 Borrower.
7.12. Swap Agreements. Enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which ASC or any
Subsidiary 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 ASC or any Subsidiary.
7.13. Changes in Fiscal Periods. Permit the fiscal year of ASC to end on a
day other than the last Sunday in July or change ASC's method of determining
fiscal quarters.
7.14. 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 Borrower to create, incur or permit to
exist any Lien upon any of its property or assets, or (b) the ability of any
Subsidiary Borrower 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
Borrower or to guarantee Indebtedness of any other Borrower; provided that (i)
the foregoing shall not apply to restrictions and conditions imposed by law or
by the Loan Documents, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.14 (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
54
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.
7.15. Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which ASC and its
Subsidiaries are engaged on the date of this Agreement or that are reasonably
related thereto.
7.16. Collateral Coverage. Subject to the terms and conditions of this
Section 7.16, permit the aggregate Appraised Value of the Ski Resort Properties
(other than any Excluded Appraised Ski Resort Properties) at any time to be less
than the Required Value. Subject to the following sentence, the Appraised Value
of the Ski Resort Properties (other than any Excluded Appraised Ski Resort
Properties) for the purposes of determining compliance with this Section 7.16
shall be (a) based initially upon the Appraisals obtained by the Administrative
Agent in connection with closing and (b) thereafter based on the most recent
Desktop Appraisals conducted with respect to the Ski Resort Properties (other
than any Excluded Appraised Ski Resort Properties) at the request of the
Administrative Agent by an Independent Appraiser selected by the Administrative
Agent, which Desktop Appraisals shall be at the Lenders' expense and shall be
obtained annually on or about each anniversary of the Closing Date. Such Desktop
Appraisals shall be conducted with respect to Ski Resort Properties in such
order as the Administrative Agent may determine and the Administrative Agent
shall provide ASC with preliminary results of such Desktop Appraisals and
preliminary indications of variances from ski resort industry multiples employed
by the Independent Appraiser promptly as such results or variances become
available. If the Appraised Value of the Ski Resort Properties (other than any
Excluded Appraised Ski Resort Properties) determined pursuant to clause (b)
above is less than the Required Value at such time, ASC may elect by written
notice to the Administrative Agent to have the Appraised Value of the Ski Resort
Properties (other than any Excluded Appraised Ski Resort Properties) determined
by another Independent Appraiser selected by ASC and reasonably acceptable to
the Administrative Agent and CapitalSource, which Desktop Appraisals shall be
conducted using a similar methodology and completed at the Borrower's expense
within 45 days after the receipt of the applicable Desktop Appraisals described
in clause (b) above, in which case the Appraised Value of the Ski Resort
Properties (other than any Excluded Appraised Ski Resort Properties) for the
purposes of determining compliance with this Section 7.16 shall be the average
of the Appraised Values of the Ski Resort Properties (other than any Excluded
Appraised Ski Resort Properties) determined by the Desktop Appraisals described
in clause (b) above and the corresponding Desktop Appraisals conducted pursuant
to this sentence. The Administrative Agent may obtain Appraisals at the
Borrowers' expense at any time when an Event of Default has occurred and is
continuing.
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) any Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
(ii) any Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, 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 Borrower
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
55
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 Borrower shall default in the observance or performance of
any agreement contained in Section 6.4, Section 6.5(b), Section 6.7(a),
Section 6.10, Section 6.11, Section 6.12, Section 6.13 or Section 7 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 Borrower 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 ASC from the Administrative Agent or the Required Lenders; or
(e) any Borrower 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, $1,000,000, or in the aggregate, $2,000,000 (or with respect
to any Subordinated Debt regardless of whether the outstanding principal
amount of such Indebtedness at such time exceeds any such threshold); or
(f) (i) any Borrower 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 Borrower shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against any Borrower 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 Borrower 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
Borrower 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
56
(i), (ii), or (iii) above; or (v) any Borrower 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 any
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) any 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
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 any
Borrower 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 $1,000,000 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 Borrower or any Affiliate of any Borrower,
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 Borrower or any Affiliate of any Borrower shall so assert; or
(k) a Change of Control shall occur; or
(l) any Subordinated Debt or any guarantees thereof shall cease, for
any reason, to be validly subordinated to the Obligations or the
obligations of the Guarantors under the Guarantee and Collateral Agreement,
as the case may be, as provided in the Senior Subordinated Note Indenture
or the Junior Subordinated Note Indenture, as the case may be, or any
Borrower, any Affiliate of any Borrower, the trustee in respect of the
Senior Subordinated Notes or the Junior Subordinated Notes or the holders
of a majority in aggregate principal amount of the Senior Subordinated
Notes or the Junior Subordinated Notes shall so assert; or
(m) any license, approval or permit held by any Borrower is
terminated, withdrawn or not renewed, or suspended for more than ten
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;
57
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 any 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 (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) 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 ASC, declare the Revolving
Commitments to be terminated forthwith, whereupon the Revolving Commitments
shall immediately terminate; and (ii) 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 ASC, declare the Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrowers shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other Obligations
shall have been fully satisfied, the balance, if any, in such cash collateral
account shall be returned to the relevant Borrower (or such other Person as may
be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrowers.
SECTION IX.THE ADMINISTRATIVE AGENT
9.1. Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative 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 the
Administrative 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, the
Administrative Agent shall not 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 the Administrative Agent.
9.2. Delegation of Duties. The Administrative 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. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
9.3. Exculpatory Provisions. Neither the Administrative 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
58
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 any 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 the Administrative 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 Borrower a party thereto to perform its obligations
hereunder or thereunder. The Administrative Agent shall not 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 Borrower.
9.4. Reliance by Administrative Agent. The Administrative 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 Borrowers), independent accountants and other experts
selected by the Administrative Agent. The Administrative 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. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
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. The Administrative 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.
9.5. Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender, or any
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. The Administrative 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 the Administrative Agent shall have
received such directions, the Administrative 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.
9.6. Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative 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 the
Administrative Agent hereafter taken, including any review of the affairs of a
Borrower or any affiliate of a Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative 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 Borrowers 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 the Administrative 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
59
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not 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 any Borrower or any affiliate of a Borrower that may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
9.7. Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according to
their respective Aggregate Exposure 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 Aggregate Exposure
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 the Administrative 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 the
Administrative Agent under or in connection with any of the foregoing; provided
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 the
Administrative 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.
9.8. Administrative Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Borrower as though it were not the
Administrative Agent. With respect to its Loans made or renewed by it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative 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 the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
9.9. Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Lenders and ASC. If the
Administrative Agent shall resign as Administrative Agent 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 under Section 8(a) or Section 8(f) with respect to
any Borrower shall have occurred and be continuing) be subject to approval by
ASC (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, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
60
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
SECTION X. MISCELLANEOUS
10.1. 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 10.1. The
Required Lenders and each Borrower party to the relevant Loan Document may, or,
with the written consent of the Required Lenders, the Administrative Agent and
each Borrower 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 for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrowers hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, 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,
supplement or modification shall (i) forgive the principal amount or extend any
scheduled date of maturity or amortization of any Loan, reduce the stated rate
of any interest or fee payable hereunder (except that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes of
this clause (i)) or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Lender's Revolving
Commitment, 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 10.1 without the written consent of such Lender; (iii) reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by any Borrower 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 all or substantially all of the Guarantors from
their obligations under the Guarantee and Collateral Agreement (except in
accordance with Section 10.14(b)), in each case without the written consent of
all Lenders; (iv) amend, modify or waive any provision of Section 9 without the
written consent of the Administrative Agent; (v) amend, modify or waive any
provision of Section 3 without the written consent of the Issuing Lender; or
(vi) amend, modify or waive any provision of Sections 6, 7 and 8 and related
definitions of the Intercreditor Agreement without the written consent of ASC.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Borrowers, 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.
10.2. 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 Borrower and the Administrative Agent,
61
and as set forth in an administrative questionnaire delivered to the
Administrative Agent and ASC in the case of the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto:
The Borrowers: 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 Xxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Manager of Operations
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 ASC
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.
10.3. 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.
10.4. 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.
10.5. Payment of Expenses and Taxes. The Borrowers agree (a) to pay or
reimburse the Administrative Agent and CapitalSource for all their respective
reasonable out-of-pocket costs and expenses incurred in connection with the
62
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
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 6.6(c) and Appraisals conducted pursuant
to clause (b) of Section 7.16), with statements with respect to the foregoing to
be submitted to ASC 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 Borrowers 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 Administrative
Agent), (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 Borrower or any
of the Properties and the reasonable fees and expenses of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against any
Borrower under any Loan Document (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"), provided, that the Borrowers 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
Borrowers agree not to assert and to cause their respective Subsidiaries not to
assert, and hereby waive and agree to cause their respective 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 10.5 shall be payable not
later than 10 days after receipt of written demand therefor. Statements payable
by the Borrowers pursuant to this Section 10.5 shall be submitted to Xxxxx
Xxxxxxx (Telephone No. (000) 000-0000) (Telecopy No. (000) 000-0000), at the
address of the Borrowers set forth in Section 10.2, or to such other Person or
address as may be hereafter designated by ASC in a written notice to the
Administrative Agent. The agreements in this Section 10.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6. 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
(including any affiliate of the Issuing Lender that issues any Letter of
63
Credit), except that (i) no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by any 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.
(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 (such consent not to be unreasonably withheld) of:
(A) the Borrowers, provided that no consent of the Borrowers shall be
required for an assignment to a Lender, an affiliate of a Lender, an
Approved Fund (as defined below) or, if a 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 (x) any
Revolving Commitment to an assignee that is a Lender with a Revolving
Commitment immediately prior to giving effect to such assignment or (y) all
or any portion of a Term Loan or Supplemental Term 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 $3,000,000 unless each of the Borrowers and the
Administrative Agent otherwise consent, provided that (1) no such consent
of the Borrowers 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) no assignment shall be permitted that would result in GECC holding
50% or less of the Aggregate Tranche A/Supplemental/Revolving Exposure,
except assignments by GECC while any Default or Event of Default has
occurred and is continuing; and
(C) 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
(D) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire.
For the purposes of this Section 10.6, the term "Approved Fund" has the
following meaning:
"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.
64
(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
2.13, 2.14 and 10.5 in respect of the period to the effective date of such
Assignment and Assumption). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
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.
(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, 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 and L/C Obligations 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 Borrowers, the Administrative Agent, the Issuing Lender 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 Borrowers 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 Borrowers, the Administrative Agent, the Issuing Lender 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 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.13 and 2.14 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 10.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 10.7(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
65
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers'
prior written consent. No Participant shall be entitled to the benefits of
Section 2.14 unless such Participant complies with the requirements of Section
2.14(d) and (e).
(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.
(e) Each 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 Borrowers or the Administrative Agent and without regard to the
limitations set forth in Section 10.6(b). Each 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.
(g) Notwithstanding anything in the Loan Documents to the contrary (i)
CapitalSource and its Affiliates shall not be required to execute and deliver an
Assignment and Assumption in connection with any transaction involving its
Affiliates or lenders of financing or funding sources, (ii) no lender to or
funding or financing source of CapitalSource or its Affiliates shall be
considered an Assignee and (iii) there shall be no limitation or restriction on
(A) CapitalSource's ability to assign or otherwise transfer its rights and
obligations under any Loan Document or any of its Obligations to any such
Affiliate or lender or financing or funding source, or (B) such lenders' or
financing or funding sources' ability to assign or otherwise transfer any Loan
Document or any Obligation; provided, however, CapitalSource shall continue to
be liable as a "Lender" under the Loan Documents unless such Affiliate or lender
executes an Assignment and Assumption and thereby becomes a "Lender."
10.7. Adjustments; Set-off. (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, 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 8, 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 8(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.
66
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender (other than any Tranche B Term Lender prior to the payment in full
of all Obligations in respect of the Tranche A Term Loans, Supplemental Term
Loans and the Revolving Loans) shall have the right, without prior notice to any
Borrower, any such notice being expressly waived by each 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 such Borrower. Each Lender agrees
promptly to notify the relevant 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.
10.8. 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.
10.9. 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.
10.10. Integration. This Agreement and the other Loan Documents represent
the entire agreement of the Borrowers, 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.
10.11. 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.
10.12. Submission To Jurisdiction; Waivers. Each 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;
67
(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 such
Borrower at its address set forth in Section 10.2 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.
10.13. Acknowledgments. Each 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 any 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
Borrowers, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(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 Borrowers and the Lenders.
10.14. 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 10.1)
to take any action requested by any 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 10.1 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
Borrower 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 Borrowers, at the expense of the Borrowers,
to evidence and effect such termination.
10.15. Confidentiality. (a) Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Borrower, 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
68
advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority, (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.
(b) Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the structure and tax aspects of the transactions contemplated by this
Agreement, and all materials of any kind (including opinions or other tax
analyses) related to such structure and tax aspects. Further, each party hereto
acknowledges that it has no proprietary rights to any tax matter or tax idea
related to the transactions contemplated by this Agreement.
10.16. Joint and Several Liability of Borrowers. Each Borrower hereby
irrevocably and unconditionally agrees that it is jointly and severally liable
for all of the liabilities, obligations, covenants and agreements of the
Borrowers hereunder and under the other Loan Documents, whether now or hereafter
existing or due or to become due. The obligations of the Borrowers under the
Loan Documents may be enforced by the Administrative Agent and the Lenders
against any one or more Borrowers or all of them in any manner or order selected
by the Administrative Agent or the requisite Lenders in their sole discretion.
Each Borrower hereby irrevocably waives (i) any rights of subrogation and (ii)
any rights of contribution, indemnity or reimbursement, in each case, that it
may acquire or that may arise against any other Borrower due to any payment or
performance made under this Agreement, in each case until all Obligations shall
have been Fully Satisfied. Without limiting the foregoing provisions of this
Section 10.16, each Borrower acknowledges and agrees that:
(a) its obligations under this Agreement shall remain enforceable
against it even though such obligations may be unenforceable or not
allowable against any other Borrower due to the existence of an insolvency
proceeding involving any other Borrower;
(b) its obligations under this Agreement are independent of the
obligations of each other Borrower, and a separate action or actions may be
brought and prosecuted against it in respect of such obligations
irrespective of whether any action is brought against any other Borrower or
any other Borrower is joined in any such action or actions;
(c) it hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the following:
(i) any lack of validity or enforceability of this Agreement or
any agreement or instrument relating thereto in respect of any other
Borrower;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of any other Borrower
under or in respect of this Agreement, or any other amendment or
waiver of or any consent to departure from this Agreement, in respect
of any other Borrower;
(iii) any change, restructuring or termination of the structure
or existence of any other Borrower;
69
(iv) the failure of any other Person to execute or deliver any
other agreement or the release or reduction of liability of any other
Person with respect to any obligations of the Borrower under this
Agreement; or
(v) any other circumstance (including, without limitation, any
statute of limitations but other than the Obligations having been
Fully Satisfied) or any existence of or reliance on any representation
by any other Person that might otherwise constitute a defense
available to, or a discharge of, any other Borrower;
(d) its obligations under this Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment
of any such obligations is rescinded or must otherwise be returned by any
Person upon the insolvency, bankruptcy or reorganization of any other
Borrower, all as though such payment had not been made; and
(e) it hereby unconditionally and irrevocably waives any right to
revoke its joint and several liability under the Loan Documents and
acknowledges that such liability is continuing in nature and applies to all
obligations of the Borrowers under the Loan Documents, whether existing now
or in the future.
10.17. Appointment of ASC as Borrowers' Agent. ASC is hereby appointed as
the Borrowers' agent hereunder by each Borrower (in such capacity, the
"Borrowers' Agent"). Each Borrower hereby authorizes, directs and empowers ASC
to act for and in the name of such Borrower and as its agent hereunder and under
the Loan Documents and other instruments and agreements referred to herein. ASC
hereby accepts each such appointment. Each Borrower hereby irrevocably
authorizes ASC to take such action on such Borrower's behalf and to exercise
such powers hereunder, under the other Loan Documents, and under the other
agreements and instruments referred to herein or therein as may be contemplated
being taken or exercises by such Borrower by the terms hereof and thereof,
together with such powers as may be incidental thereto, including, without
limitation, to borrow hereunder and deliver notices of borrowing, Letter of
Credit requests and Compliance Certificates hereunder, to repay or prepay Loans
made hereunder, to reduce the Commitments, to pay interests, fees, costs and
expenses incurred in connection with the Loans, this Agreement, the other Loan
Documents, and the other agreements and instruments referred to herein, to
receive from or deliver to the Administrative Agent any notices, statements,
reports, certificates or other documents or instruments contemplated herein, in
the other Loan Documents or in any other agreement or instrument referred to
herein and to receive from or transmit to the Administrative Agent any Loan
proceeds or payments. The Administrative Agent and each Lender shall be entitled
to rely on the appointment and authorization of ASC with respect to all matters
related to this Agreement, the other Loan Documents and any other agreements or
instruments referred to herein whether or not any particular provision hereof or
thereof specifies that such matters may or shall be undertaken by Borrowers'
Agent. In reliance hereon, the Administrative Agent and each Lender may deal
only with ASC with the same effect as if the Administrative Agent or such
Lenders had dealt with each Borrower separately and individually.
10.18. WAIVERS OF JURY TRIAL. EACH 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.
70
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
---------------------------------------------------------
Name: Xxxxxx X Xxxxxxx
Title:Senior Vice President,
General Counsel and Secretary
ASC LEASING, INC.
ASC UTAH
DOVER RESTAURANTS, INC.
KILLINGTON, LTD.
KILLINGTON RESTAURANTS, INC.
L.B.O. HOLDING, INC.
MOUNT SNOW LTD.
MOUNTAINSIDE
PERFECT TURN, INC.
PICO SKI AREA MANAGEMENT COMPANY
S-K-I LTD.
SEAMBOAT SKI & RESORT CORPORATION
SUGARLOAF MOUNTAIN CORPORATION
SUNDAY RIVER LTD.
SUNDAY RIVER SKIWAY CORPORATION, as
Subsidiary Borrower
By: /s/Xxxxxx X Xxxxxxx
---------------------------------------------------------
Name: Xxxxxx X Xxxxxxx
Title:Senior Vice President,
General Counsel and Secretary
GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent and as a Lender
By: /s/Xxxx X Xxxx
---------------------------------------------------------
Name: Xxxx X Xxxx
Title:Manager of Operations
CAPITALSOURCE FINANCE LLC, as a Lender
By: /s/Xxxxxx X Xxxxxxx
---------------------------------------------------------
Name:Xxxxxx X Xxxxxxx
Title:Senior Vice President
71
