AMERICAN SKIING COMPANY
EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") is made and entered into as of
October 12, 2004, by and between American Skiing Company (the "Company") and
Xxxxxxxxx LLC (the "Holder"), the holder of 10.5% Repriced Convertible
Exchangeable Preferred Stock (the "Preferred Stock") of the Company.
RECITALS
WHEREAS, the Holder currently holds 36,626 shares of Preferred Stock of the
Company, representing all outstanding shares of Preferred Stock (the
"Outstanding Preferred Stock"), on behalf of investment funds and accounts
managed by Cerberus Capital Management, L.P. (such funds and accounts,
collectively, the "Beneficiary Owners"); and
WHEREAS, the Holder and the Company desire to exchange the Outstanding Preferred
Stock for Junior Subordinated Notes due 2012 of the Company (the "Notes") on the
terms and conditions set forth in this Agreement (the "Exchange").
NOW, THEREFORE, in consideration of the mutual agreements and obligations set
forth herein, the parties hereby agree as follows:
1. Exchange of Preferred Stock.
(a) Subject to the terms and conditions herein, the Holder shall sell,
transfer, surrender and assign to the Company the Outstanding Preferred Stock
and in exchange therefor, the Company shall issue to the Holder the Notes with a
principal amount equal to the aggregate liquidation preference of such shares of
Preferred Stock plus, without duplication, accrued and unpaid dividends thereon
(rounded to the nearest multiple of $100).
(b) Subject to the terms and conditions herein, the closing of the Exchange
(the "Closing") shall occur immediately following the closing of the New Credit
Agreement (as defined in Section 3(b)) at the offices of Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx LLP or such other time and place as the parties agree.
(c) At the Closing, (i) the Holder shall deliver to the Company one or more
certificates or other instruments representing the Outstanding Preferred Stock
duly endorsed in blank or accompanied by appropriate instruments of transfer
duly endorsed in blank, (ii) the Company and the Holder, as trustee shall enter
into an indenture governing the Notes (the "Indenture") which Indenture shall be
in the form attached hereto as Exhibit A (with such changes as the parties may
agree), (iii) the Company shall issue the Notes (which shall be in substantially
the form attached as an exhibit to the Indenture attached hereto as Exhibit A)
in certificated form registered in the name of the Holder and (iv) the Holder,
as trustee under the Indenture, shall authenticate the Notes.
(d) The Company shall notify the Holder of the proposed closing date and
the principal amount of the Notes to be issued at least two days prior to the
Closing.
(e) Each of the Company and the Holder agrees to execute and deliver such
other documents and instruments of transfer as may be necessary to carry out the
Exchange.
2. Representations, Warranties and Covenants.
(a) The Holder, for itself and for each of the Beneficiary Owners, hereby
represents, warrants, acknowledges and agrees with the Company as follows:
(i) The Holder is the sole legal owner of the Outstanding Preferred
Stock, and holds the shares of Outstanding Preferred Stock on behalf of the
Beneficiary Owners. The shares of Outstanding Preferred Stock being
transferred hereunder are free and clear of any liens, charges or
encumbrances and upon completion of the Exchange, the Holders will convey
to the Company good title to the shares of Outstanding Preferred Stock free
and clear of all liens, charges and encumbrances.
(ii) The Holder and each of the Beneficiary Owners are "qualified
institutional buyers" as defined in Rule 144A under the Securities Act of
1933, as amended (the "Securities Act").
(iii) The Holder and each of the Beneficiary Owners are acquiring the
Notes for the Holder's own account for investment only, and not with a view
towards their distribution in violation of the Securities Act.
(iv) The Holder and each of the Beneficiary Owners have sufficient
experience in business, financial and investment matters to be able to
evaluate the risks involved in the investment in the Notes.
(v) The Holder and each of the Beneficiary Owners understand that the
Notes have not been registered under the Securities Act and, therefore, may
not be transferred, resold or otherwise disposed of except as permitted
under the Securities Act and applicable state securities laws, pursuant to
registration or exemption therefrom.
(vi) (A) The Holder is duly formed, validly existing and in good
standing under the laws of its jurisdiction of formation, (B) the Holder
has all of the power and authority necessary to enter into this Agreement
and to consummate the transactions contemplated hereunder and (C) this
Agreement has been duly authorized, executed and delivered by the Holder
and is a valid and binding obligation of the Holder, enforceable against
the Holder in accordance with its terms, except (x) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors' rights and (y)
as limited by general principles of equity that restrict the availability
of equitable remedies.
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(vii) Upon consummation of the Exchange, the Holder, for itself and
each of the Beneficiary Owners, solely in their capacity as owners of the
Outstanding Preferred Stock, hereby releases and forever discharges the
Company, its subsidiaries, affiliates, officers, directors, shareholders
and employees from any and all actions, causes of action, damages,
responsibilities and liabilities arising from or related to the failure by
the Company to redeem the Outstanding Preferred Stock on or prior to the
Closing.
(b) The Company hereby represents, warrants, acknowledges and agrees with
the Holder as follows:
(i) (A) The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, (B) it has all of the
corporate power and authority necessary to enter into this Agreement and to
consummate the transactions contemplated hereunder, (C) this Agreement has
been duly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights and (b) as limited by general
principles of equity that restrict the availability of equitable remedies.
(ii) (A) the Company has all necessary power and authority to enter
into the Indenture and perform its obligations thereunder; (B) the
Indenture has been duly authorized by the Company and, when executed and
delivered to the Company and the Holder, as trustee, pursuant to the terms
thereof, will constitute a valid and binding obligation of the Company and
enforceable against the Company in accordance with its terms, except (x) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors'
rights and (y) as limited by general principles of equity that restrict the
availability of equitable remedies.
(iii) (A) the Company has all necessary power and authority to
execute, issue and deliver the Notes and perform its obligations
thereunder; (B) the Notes have been duly authorized by the Company and,
when executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to the Holder pursuant to this Agreement at the
Closing, will constitute valid and binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the
Company in accordance with their terms, except (x) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights and (y) as limited
by general principles of equity that restrict the availability of equitable
remedies.
3. Conditions Precedent.
(a) The obligations of the Holder hereunder to consummate the Exchange
shall be subject to satisfaction (or waiver by the Holder) of the following
conditions:
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(i) all of the representation and warranties of the Company contained
in Section 2(b) are true and correct in all material respects as of the
Closing as if made on such date; and
(ii) the Company shall have accepted for payment and paid for a
majority of the outstanding 12% Senior Subordinated Notes due 2006 (the
"Senior Notes") pursuant to the terms of the Offer to Purchase dated
October 12, 2004 (the "Offer to Purchase"), the supplemental indenture for
the proposed amendments to the indenture relating to the Senior Notes
described in the Offer to Purchase shall have been executed and delivered
and such proposed amendments shall have become operative.
(b) The obligations of the Company hereunder to consummate the Exchange
shall be subject to the satisfaction (or waiver by the Company) of the following
conditions:
(i) all of the representations and warranties of the Holder contained
in Section 2(a) are true and correct in all material respects as of the
Closing, as if made on such date;
(ii) the Company shall have entered into new credit agreements on
substantially the terms set forth in the commitment letter (including the
term sheets delivered in conjunction therewith), dated September 28, 2004,
with General Electric Capital Corporation, GECC Capital Markets Group, Inc.
and Credit Suisse First Boston (collectively, the "New Credit Agreement"),
and the closing of, and the initial funding under, the New Credit Agreement
shall have occurred; and
(iii) the Company shall have accepted for payment and paid for a
majority of the outstanding Senior Notes pursuant to the terms of the Offer
to Purchase, the supplemental indenture for the proposed amendments to the
Indenture relating to the Senior Notes described in the Offer to Purchase
shall have been executed and delivered and such proposed amendments shall
have become operative.
4. Termination. If the Closing shall not have occurred prior to January 11,
2005, either party may terminate this Agreement by written notice to the
other party; provided, however (i) that any party hereto that breaches its
obligations hereunder shall have no right to terminate this Agreement; and
(ii) the termination of this Agreement shall not relieve any breaching
party from any liability arising from the breach of its obligations under
this Agreement.
5. Supplemental Indenture. (a) At or immediately prior to the Closing, the
Company and Oak Hill Capital Partners, L.P. as trustee shall enter into a
supplement to the indenture, dated as of August 31, 2001, between the
Company and Oak Hill Capital Partners, L.P. (the "Convertible Notes
Indenture") that, among other things, extends the maturity of the 11.3025%
Convertible Subordinated Notes due 2007 (the "Convertible Subordinated
Notes") to the same date as the maturity date of the Notes in the form of
Exhibit B hereto (the "Convertible Notes Supplemental Indenture") and (b)
at or prior to the Closing, the Company and Oak Hill Capital Partners, L.P.
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shall not amend, modify or alter any terms of Convertible Subordinated
Notes or the Convertible Subordinated Notes Indenture other than as
provided for in the Convertible Notes Supplemental Indenture; provided,
however, that neither party shall be obligated to enter into the
Convertible Notes Supplemental Indenture if the conditions set forth in
Section 3(b) hereof are not satisfied or waived.
6. Successor Trustee. If the Holder transfers, sells, assigns or conveys any
Notes to any person that is not an Affiliate (as defined in the Indenture)
of the Holder or the Beneficiary Owners and if the trustee under the
Indenture either resigns or is removed pursuant to Section 8.08 of the
Indenture, the Company hereby agrees to promptly appoint a successor
trustee that complies with the terms of the Indenture and is not an
Affiliate of the Company, Oak Hill Capital Partners, L.P. or Oak Hill
Securities Fund, L.P. at the Company's expense, which trustee shall be
reasonably satisfactory to the Holder.
7. Successors and Assigns; No Third Party Beneficiary. This Agreement may not
be assigned or transferred by either party without the prior written
consent of the other party. Nothing in this Agreement is intended or shall
be construed to confer upon, or give to, any person other than the parties
hereto and their respective successors and assigns any rights whatsoever
and all of the terms, covenants, conditions, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of
the parties hereto and their respective successors and assigns.
8. Entire Agreement; Amendment. This Agreement constitutes the entire
understanding and agreement among the parties with regard to all matters
herein, and there are no other agreements, conditions or representations,
oral or written, express or implied, with regard thereto. This Agreement
may be amended only by an instrument in writing signed by each party.
9. Notice. All notices and other communications required or permitted under
this Agreement must be in writing and will be deemed to have been duly
given: (a) upon personal delivery to the party to be notified, (b) when
sent by confirmed facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one business day after deposit with a nationally
recognized overnight courier, specifying next business day delivery, with
written verification of receipt. All notices to a party hereto must be sent
to the addresses set forth below or to such other address or person as such
party may designate by notice to each other party.
If to the Company:
American Skiing Company
P. O. Box 4552
000 Xxxxx Xxx.
Xxxx Xxxx, XX 00000
Telecopy: (000) 000 0000
Attention: Chief Financial Officer
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with a copy to:
American Skiing Company
Xxx Xxxxxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
and a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
If to the Holder:
Xxxxxxxxx, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Neporent
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
10. Governing Law. This Agreement shall be governed by the laws of the State of
New York applicable to agreements made and to be performed entirely within
such State.
11. Headings. The headings of the sections of this Agreement are inserted for
convenience only and shall not control or effect the meaning or
construction of any of the provisions of this Agreement.
12. Counterparts. This Agreement may be executed by the parties hereto in one
or more counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and
the same instrument.
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AMERICAN SKIING COMPANY
By: /s/ Xxxxxx X Xxxxxxx, Xx
------------------------------------------------
Name: Xxxxxx X Xxxxxxx, Xx
Title: Senior Vice President, Secretary and
General Counsel
XXXXXXXXX LLC
By: /s/ Xxxx X Xxxxxxxx
------------------------------------------------
Name: Xxxx X Xxxxxxxx
Title: Vice President and Chief Operating Officer
Accepted and agreed with respect to Section 5 hereof only:
Oak Hill Capital Partners, L.P.,
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By: /s/ Xxxxx X Xxxx
------------------------------------------------
Name: Xxxxx X Xxxx
Title: Vice President
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