CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 10, 1997, is
made between XXXXXX X. XXXXX (the "Borrower"), and ING (U.S.)
CAPITAL CORPORATION (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower desires to obtain a Commitment
from the Lender pursuant to which Loans will be made to the
Borrower from time to time prior to the Commitment Termination
Date;
WHEREAS, the Lender is willing, on the terms and subject
to the conditions hereinafter set forth (including Article V), to
extend such Commitment and make such Loans to the Borrower; and
WHEREAS, Loans will be used to acquire up to 1,250,000
shares of the Common Stock, $0.01 par value ("Common Stock"), of
American Skiing Company, a Maine corporation (the "Company"), in
connection with an initial public offering of the Company's
Common Stock for an aggregate purchase price of not more than
$15,000,000;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms
(whether or not underscored) when used in this Agreement,
including its preamble and recitals, shall have the following
meanings (such meanings to be equally applicable to the singular
and plural forms thereof):
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under
common control with such Person. A Person shall be deemed to
"control" another Person if such Person possesses, directly or
indirectly, the power
(a) to vote 10% or more of the securities (on a
fully diluted basis) having ordinary voting power for
the election of directors or managing general partners
of such other Person; or
(b) to direct or cause the direction of the
management and policies of such other Person whether by
contract or otherwise.
"Agreement" means, on any date, this Credit Agreement as
originally in effect on the Effective Date and as thereafter from
time to time amended, supplemented, restated, or otherwise
modified and in effect on such date.
"Assignee Lender" is defined in Section 9.12.
"Authorized Officer" means, relative to the Company,
those officers of the Company whose signatures and incumbency
shall have been certified to the Lender pursuant to Section
5.1.1.
"Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
(a) the Prime Rate; and
(b) the Federal Funds Rate most recently
determined by the Lender plus 1/2 of 1%.
The Base Rate is not necessarily intended to be the lowest rate
of interest determined by the Lender in connection with
extensions of credit. Changes in the rate of interest on that
portion of any Loans bearing interest at the Base Rate will take
effect simultaneously with each change in the Base Rate. The
Lender will give notice promptly to the Borrower of changes in
the Base Rate.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans made by the Lender on the
same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.1.
"Borrowing Base" means, at any time, an amount equal to
25% of the Fair Market Value of the Pledged Stock.
"Borrowing Request" means a loan request and certificate
duly executed by Borrower, substantially in the form of Exhibit B
hereto.
"Business Day" means any day which is neither a Saturday
or Sunday nor a legal holiday on which banks are authorized or
required to be closed in New York, New York.
"Change in Control" means the occurrence, at any time,
of the following event: the Borrower shall cease to have the
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ability to elect a majority of the board of directors of the
Company.
"Class A Stock" is defined in the Pledge Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, reformed or otherwise modified from time to time.
"Commitment" means the Lender's obligation to make loans
pursuant to Section 2.1.1.
"Commitment Amount" means, on any date, an amount not to
exceed $18,000,000, as such amount may be reduced from time to
time pursuant to Section 2.2.
"Commitment Fee" means an amount equal to 1/2 of 1% per
annum on the daily average of the difference between (a) the
Commitment Amount and (b) the aggregate outstanding principal
amount of the Loans.
"Commitment Termination Date" means the earliest of
(a) the Stated Maturity Date;
(b) the date on which the Commitment Amount is
terminated in full or reduced to zero pursuant to
Section 2.2; and
(c) the date on which any Commitment Termination
Event occurs.
Upon the occurrence of any event described in clause (b) or (c),
the Commitment shall terminate automatically and without any
further action.
"Commitment Termination Event" means
(a) the occurrence of any Default described in
Section 8.1.7; or
(b) the occurrence and continuance of any other
Event of Default and either
(i) the declaration of the Loans and other
Obligations to be due and payable pursuant to
Section 8.3, or
(ii) in the absence of such declaration, the
giving of notice by the Lender to the Borrower that
the Commitment has been terminated.
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"Common Stock" is defined in the preamble.
"Company" is defined in the preamble.
"Contingent Liability" means any agreement, undertaking
or arrangement by which any Person guarantees, endorses or
otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Credit Extension" means the making of a Loan.
"Default" means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or both,
would constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule
attached hereto as Schedule I, as amended, supplemented or
otherwise modified from time to time by the Borrower with the
written consent of the Lender.
"Dollar" and the sign "$" mean lawful money of the
United States
"Effective Date" means the date this Agreement becomes
effective pursuant to Section 9.8.
"Event of Default" is defined in Section 8.1.
"Extension Fee" means an amount equal to 1.00% of the
Commitment Amount in effect on the effective date of any
extension pursuant to Section 2.6.
"Fair Market Value" means with respect to any Pledged
Shares, at any time, (a) if the Common Stock is listed or
admitted to trading on any securities exchange, the closing
price, regular way, on such day on the principal securities
exchange on which the Common Stock is traded; or (b) if the
Common Stock is not then listed or admitted to trading on any
securities exchange, the last reported sales price on such day,
or if no sale takes place on such day, the average of the closing
bid and asked prices on such day, as reported by the Valuation
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Sources for the Common Stock; provided, that (i) if any Valuation
Source does not timely quote a sale or bid price therefor, the
Lender may determine such Fair Market Value by reference to the
arithmetic mean of sale and bid prices quoted by the remaining
Valuation Sources and (ii) if no Valuation Source timely quotes a
sale or bid price, the "Fair Market Value" of the Common Stock at
such time shall mean the fair market value thereof as determined
by the Lender in its sole discretion. Notwithstanding
clauses (i) and (ii), the Borrower may complete each Valuation
Certificate and make each Borrowing Request on the basis of
quotes of sale or bid prices for the Common Stock at the relevant
time from sources reasonably believed by it to be reliable and
the Lender may (but shall not be required to) rely upon such
determinations by the Borrower.
Notwithstanding any terms to the contrary contained in
this definition or in any Loan Document, the Lender may, from
time to time, provide the Borrower with notice of the Lender's
calculation of the Fair Market Value of the Pledged Shares. If
the Lender's calculation is less than that which would otherwise
be attributed to the Pledged Shares pursuant to the provisions
set forth in this definition, the Lender agrees to discuss such
difference with the Borrower; provided, however, that if such
difference is not resolved within two Business Days after such
notice (or such later date as the Lender may agree), the Lender's
determination shall be binding on the Borrower for purposes of
this Agreement.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to
(a) 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 for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by
The Wall Street Journal; or
(b) if such rate is not so published for any day
which is a Business Day, the average of the quotations
for such day on such transactions received by the Lender
from three federal funds brokers of recognized standing
selected by it.
"F.R.S. Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"GAAP" is defined in Section 1.4.
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"Hedging Obligations" means, with respect to any Person,
all liabilities of such Person under interest rate swap
agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to
protect such Person against fluctuations in interest rates or
currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar
terms contained in this Agreement or any other Loan Document
refer to this Agreement or such other Loan Document, as the case
may be, as a whole and not to any particular Section, paragraph
or provision of this Agreement or such other Loan Document.
"including" means including without limiting the
generality of any description preceding such term.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed
money and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise,
relative to the face amount of all letters of credit,
whether or not drawn, and banker's acceptances issued
for the account of such Person;
(c) all other items which, in accordance with
GAAP, would be included as liabilities on the liability
side of the balance sheet of such Person as of the date
at which Indebtedness is to be determined;
(d) net liabilities of such Person under all
Hedging Obligations;
(e) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to
pay the deferred purchase price of property or services,
and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased
by such Person (including indebtedness arising under
conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse; and
(f) all Contingent Liabilities of such Person in
respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
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venture in which such Person is a general partner or a joint
venturer.
"Indemnified Liabilities" is defined in Section 9.4.
"Initial Public Offering" means the initial public
offering by the Company of 14,750,000 shares of Common Stock, as
set forth in the Company's Prospectus dated November 6, 1997
filed with the Securities and Exchange Commission (the
"Prospectus").
"Interim Maintenance Base" means, at any time, an amount
equal to 29% of the Fair Market Value of the Pledged Shares.
"Lender" is defined in the preamble.
"Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property
to secure payment of a debt or performance of an obligation or
other priority or preferential arrangement of any kind or nature
whatsoever (exclusive, however, of any setoff rights that may be
held by the seller or grantor under a participation or
subparticipation agreement that qualifies as a Pledged Asset
hereunder).
"Loans" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Note, the
Pledge Agreement, the Registration Rights Agreement and each
other agreement, document or instrument delivered in connection
herewith or therewith, whether or not specifically mentioned
herein or therein.
"Maintenance Base" means, at any time, an amount equal
to 33-1/3% of the Fair Market Value of the Pledged Shares.
"Margin Stock" means "margin stock", within the meaning
of F.R.S. Board Regulations G, U or X.
"Monthly Payment Date" means the last Business Day of
each calendar month.
"Note" means a promissory note of the Borrower payable
to the Lender, in the form of Exhibit A hereto (as such
promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of the
Borrower to the Lender resulting from outstanding Loans, and also
means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
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"Obligations" means all obligations (monetary or
otherwise) of the Borrower arising under or in connection with
this Agreement, the Note, the Pledge Agreement and each other
Loan Document.
"Organic Document" means, relative to the Company, its
certificate of incorporation and any voting trusts and similar
arrangements applicable to any of its shares.
"Participant" is defined in Section 9.11.
"Person" means any natural person, corporation,
partnership, firm, association, government, governmental agency
or any other entity, whether acting in an individual, fiduciary
or other capacity.
"Pledge Agreement" means the Pledge Agreement dated as
of November 10, 1997, between the Borrower and the Lender, as the
same may be amended, supplemented, restated or otherwise modified
from time to time.
"Pledged Shares" is defined in the Pledge and Security
Agreement.
"Prime Rate" means, at any given time, the prime rate as
quoted in The Wall Street Journal as the base rate on corporate
loans posted as of such time by at least 75% of the nation's 30
largest banks (which rate is not necessarily the lowest rate
offered by such banks).
"Principal Office" means the principal office of the
Lender, presently located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
"Property" means any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.
"Registration Rights Agreement" means the Registration
Rights Agreement dated as of November 10, 1997 between the
Company and the Lender, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Shares" is defined in the Pledge Agreement.
"Stated Maturity Date" means November 9, 1998, or such
later date to which the Commitment may be extended pursuant to
Section 2.6.
"Taxes" is defined in Section 4.2.
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"United States" or "U.S." means the United States of
America, its fifty States and the District of Columbia.
"Valuation Certificate" shall mean a certificate of the
Borrower, substantially in the form of Exhibit C hereto and
appropriately completed.
"Valuation Sources" shall mean any of the Persons listed
on Schedule II hereto.
"Voting Stock" means any securities of the Company
entitled to vote generally in the election of directors of the
Company and any other securities (including rights, warrants and
options) convertible into, exchangeable for or exercisable for
any such securities, whether or not presently convertible,
exchangeable or exercisable.
SECTION 1.2. Use of Defined Terms. Unless otherwise
defined or the context otherwise requires, terms for which
meanings are provided in this Agreement shall have such meanings
when used in the Disclosure Schedule, the Note, the Pledge
Agreement and in each Borrowing Request, Loan Document, notice
and other communication delivered from time to time in connection
with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise
specified, references in this Agreement and in each other Loan
Document to any Article or Section are references to such Article
or Section of this Agreement or such other Loan Document, as the
case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to
such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations.
Unless otherwise specified, all accounting terms used herein or
in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with,
those generally accepted accounting principles in the United
States ("GAAP").
ARTICLE II
COMMITMENT, BORROWING PROCEDURES, NOTE
SECTION 2.1. Commitment. On the terms and subject to
the conditions of this Agreement (including Article V), the
Lender agrees to make Loans pursuant to the Commitment described
in Section 2.1.1.
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SECTION 2.1.1. Commitment to Make Loans. Subject to
Section 4.5, from time to time on any Business Day occurring
prior to the Commitment Termination Date, the Lender will make
loans (its "Loans") to the Borrower equal to the aggregate amount
of the Borrowing requested by the Borrower to be made on such
day. On the terms and subject to the conditions hereof, the
Borrower may from time to time prior to the Commitment
Termination Date, borrow, prepay and reborrow Loans.
SECTION 2.1.2. Lender Not Required to Make Loans. The
Lender shall not be required to make any Loan (a) if, after
giving effect thereto, the aggregate outstanding principal amount
of the Loans would exceed the lesser of (x) the Commitment Amount
and (y) the Borrowing Base then in effect, or (b) for any purpose
other than as set forth, and subject to the limitations set
forth, in Section 4.5.
SECTION 2.2. Optional Reduction of Commitment Amount.
Subject to the terms of clause (b) of Section 3.1, the Borrower
may, from time to time on any Business Day, voluntarily reduce
the aggregate Commitment Amount; provided, however, that all such
reductions shall require at least three Business Days' prior
notice to the Lender and be permanent, and any partial reduction
of such aggregate Commitment Amount shall be in a minimum amount
of $1,000,000 and in an integral multiple of $100,000; and
provided, further, that the Borrower may terminate the Commitment
in whole if, at the time of and as a condition of such
termination the Borrower shall have repaid in full all Loans,
together with all accrued interest thereon to the date of
termination and all other amounts payable in respect thereof.
SECTION 2.3. Borrowing Procedure and Funding
Maintenance. By delivering a Borrowing Request to the Lender on
or before 10:00 a.m., New York City time, on a Business Day, the
Borrower may from time to time irrevocably request, on not less
than one nor more than five Business Days' notice, that a
Borrowing be made in a minimum amount of $10,000, or in the
unused amount of the Commitment. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be made on the
Business Day specified in such Borrowing Request. On or before
11:00 a.m., New York City time, on such Business Day, the Lender
shall make funds in an amount equal to the requested Borrowing
available to the Borrower by wire transfer to the account(s) the
Borrower shall have specified in its Borrowing Request.
SECTION 2.4. Note. The Lender's Loans from time to
time outstanding under the Commitment shall be evidenced by a
Note in a maximum principal amount equal to the original
Commitment Amount. The Borrower hereby irrevocably authorizes
the Lender to make (or cause to be made) appropriate notations on
the grid attached to such Note (or on any continuation of such
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grid), which notations, if made, shall evidence, inter alia, the
date of, the outstanding principal of, and the interest rate
applicable to the Loans evidenced thereby. Such notations shall
be conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of the Lender to make any
such notations shall not limit, increase or otherwise affect any
Obligations of the Borrower.
SECTION 2.5. Prepayments Following Determination of
Fair Market Value. If after giving effect to the Lender's
determination of the Fair Market Value of the Pledged Shares as
provided in the last paragraph of the definition of "Fair Market
Value", the most recently delivered Valuation Certificate shows
the Borrower to be in violation of Section 7.2.5, or if after
giving effect to such determination the aggregate outstanding
principal amount of the Loans exceeds the amount that the
Borrower was entitled to have extended to it pursuant to Section
2.1.2, the Borrower shall immediately, at the Borrower's option,
either prepay Loans in accordance with clause (c) of Section 3.1
or deliver to the Lender additional Shares (which shall be shares
of Common Stock unless the Borrower owns no further shares of
Common Stock which are not Pledged Shares, in which case such
Shares may consist of Class A Stock) in accordance with the
Pledge Agreement.
SECTION 2.6. Extension of Stated Maturity Date.
Upon written request of the Borrower delivered not more than 60
nor less than 30 days prior to the initial Stated Maturity Date,
the Lender will extend the Stated Maturity Date for one
additional 364-day period, provided that, as of the effective
date of such extension (and, in the case of clauses (i) and (ii)
below, on the date of such requested extension), (i) no Default
has occurred and is existing, (ii) the Fair Market Value of the
Pledged Shares is at least 400% of the aggregate principal amount
of the Loans, and (iii) the Borrower shall pay the Lender the
Extension Fee on or prior to the effective date of such
extension.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower
shall repay in full the unpaid principal amount of each Loan upon
the Stated Maturity Date therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day,
make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Loans; provided,
however, that
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(i) all such voluntary prepayments shall
require at least one but no more than five Business
Days' prior written notice to the Lender, and
(ii) all such voluntary partial prepayments
shall be in an aggregate minimum amount of
$1,000,000 (or, if less, the aggregated outstanding
principal amount of the Loans) and an integral
multiple of $100,000;
(b) shall, on each date when any reduction in the
Commitment Amount shall become effective pursuant to
Section 2.2, make a mandatory prepayment of all Loans in
an amount equal to the excess, if any, of
(A) the outstanding principal amount of the
Loans at such date
over
(B) the Commitment Amount as so reduced;
(c) shall, on the first Business Day following
each date when the aggregate outstanding principal
amount of the Loans exceeds the Maintenance Base, either
make a mandatory prepayment of all Loans in an amount
equal to the excess of the aggregate outstanding
principal amount of Loans over the Interim Maintenance
Base or deliver additional Shares to the Lender (as
provided in Section 2.5) pursuant to the Pledge
Agreement having a Fair Market Value such that, when
added to the aggregate Fair Market Value of all other
Pledged Shares, the aggregate outstanding principal
amount of the Loans no longer exceeds the Interim
Maintenance Base;
(d) shall, within one Business Day following the
date on which the Lender has made a determination of the
Fair Market Value of the Pledged Shares pursuant to the
last paragraph of the definition of "Fair Market Value",
the effect of which is to reduce the Fair Market Value
of the Pledged Shares and consequently cause the
outstanding principal amount of the Loans to exceed the
then effective Maintenance Base, either make a mandatory
prepayment of all Loans in an amount equal to the excess
of the aggregate outstanding principal amount of Loans
over the then effective Interim Maintenance Base or
deliver additional Shares to the Lender (as provided in
Section 2.5) pursuant to the Pledge Agreement having a
Fair Market Value such that, when added to the aggregate
Fair Market Value of all other Pledged Shares, the
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aggregate outstanding principal amount of the Loan no
longer exceeds the Interim Maintenance Base; and
(e) shall, immediately upon any acceleration of
the Stated Maturity Date of any Loans pursuant to
Section 8.2 or Section 8.3, repay all Loans, unless,
pursuant to Section 8.3, only a portion of such Loans is
so accelerated.
Each prepayment of any Loans made pursuant to this Section shall
be without premium or penalty. No prepayment of principal of any
Loans pursuant to clause (a), (c) or (d) of this Section 3.1
shall cause a reduction in the Commitment Amount.
SECTION 3.2. Interest Provisions. Interest on the
outstanding principal amount of Loans shall accrue and be payable
in accordance with this Section 3.2.
SECTION 3.2.1. Rates. All Loans hereunder shall accrue
interest at a fluctuating rate equal to the Base Rate as in
effect from time to time, subject to Section 3.2.2.
SECTION 3.2.2. Post-Maturity Rates. After the date any
principal amount of any Loan is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become
due and payable, the Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment) on
such amounts (including interest on interest to the extent
permitted by applicable law) at a rate per annum equal to the
Base Rate plus a margin of 2.00%.
SECTION 3.2.3. Payment Dates. Interest accrued on each
Loan shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in
whole or in part, of principal outstanding on such Loan;
(c) on each Monthly Payment Date; and
(d) on that portion of any Loans the Stated
Maturity Date of which is accelerated pursuant to
Section 8.2 or Section 8.3, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations arising
under this Agreement or any other Loan Document after the date
such amount is due and payable (whether on the Stated Maturity
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Date, upon acceleration or otherwise) shall be payable upon
demand.
SECTION 3.3. Fees. (a) The Borrower agrees to pay to
the Lender, for the period (including any portion thereof when
its Commitment is suspended by reason of the Borrower's inability
to satisfy any condition of Article V) commencing on the
Effective Date and continuing through the final Commitment
Termination Date, the Commitment Fee. The Commitment Fee shall
be payable by the Borrower in arrears on each Monthly Payment
Date, commencing with the first such day following the Effective
Date, and on the final Commitment Termination Date.
(b) The Borrower further agrees to pay to the Lender the
fees set forth in a letter agreement between the Borrower and the
Lender at the times and in the amounts set forth therein.
ARTICLE IV
CAPITAL COSTS; TAXES; OTHER PAYMENT PROVISIONS
SECTION 4.1. Increased Capital Costs. If any
change made in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or
not having the force of law) of any court, central bank,
regulator or other governmental authority affects or would affect
the amount of capital required or expected to be maintained by
the Lender or any Person controlling the Lender, and the Lender
determines (in its sole and absolute discretion) that the rate of
return on its or such controlling Person's capital as a
consequence of its Commitment or the Loans made by the Lender is
reduced to a level below that which such Lender or such
controlling Person could have achieved but for the occurrence of
any such circumstance, then, in any such case upon notice from
time to time by the Lender to the Borrower, the Borrower shall
immediately pay directly to the Lender additional amounts
sufficient to compensate the Lender or such controlling Person
for such reduction in rate of return. In each such event, the
Lender shall provide the Borrower with a statement as to any such
additional amount or amounts (including calculations thereof in
reasonable detail) and such statement shall constitute prima
facie evidence of such amount. In determining such amount, the
Lender may use any method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable;
provided, that the Lender agrees that it shall utilize the same
method of calculation for the Borrower as it does for its other
similarly-situated borrowers.
SECTION 4.2. Taxes. All payments by the Borrower of
principal of, and interest on, the Loans and all other amounts
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payable hereunder (including in respect of fees) shall be made
free and clear of and without deduction for any present or future
income, excise, stamp or other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing
authority, other than franchise taxes and taxes imposed on or
measured by the Lender's net income or receipts (such non-
excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant
to any applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the
full amount required to be so withheld or deducted;
(b) promptly forward to the Lender an official
receipt or other documentation satisfactory to the
Lender evidencing such payment to such authority; and
(c) pay to the Lender such additional amount or
amounts as is necessary to ensure that the net amount
actually received by the Lender will equal the full
amount the Lender would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Lender
with respect to any payment received by the Lender hereunder, the
Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or
expenses) as are necessary in order that the net amount received
by the Lender after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount the
Lender would have received had such Taxes not been asserted.
If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the
required receipts or other required documentary evidence, the
Borrower shall indemnify the Lender for any incremental Taxes,
interest or penalties that may become payable by the Lender as a
result of any such failure.
Upon the request of the Borrower, the Lender (if
applicable) shall execute and deliver to the Borrower, on or
about the first scheduled payment date in each Fiscal Year, one
or more (as the Borrower may reasonably request) United States
Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents),
appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to the Lender is exempt from
withholding or deduction of Taxes.
15
SECTION 4.3. Payments, Computations, Notices. All
payments by the Borrower pursuant to this Agreement, the Note, or
any other Loan Document shall be made by the Borrower to the
Lender, without setoff, deduction or counterclaim, not later than
1:00 p.m., New York City time, on the date due, in same day or
immediately available funds, to such account as the Lender shall
specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by
the Lender on the next succeeding Business Day. All interest and
fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over
a year comprised of 365 or 366 days, as the case may be.
Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in computing interest and fees, if any, in connection
with such payment. The Lender shall not be entitled to any
amount under Section 4.1 or 4.2 unless the Lender gives the
Borrower notice of its obligation to pay such amount within 180
days from the date such obligation arises. The Lender agrees
that, upon the occurrence of any event specified in Section 4.1
and 4.2, it will, if requested by the Borrower, use its good
faith efforts to designate another office for any Loans affected
by such event with the objective of avoiding the consequences of
such event. Any such designation shall be made in the sole
discretion of the Lender and on terms that will ensure that the
Lender suffers no economic, legal, regulatory or other
disadvantages.
SECTION 4.4. Setoff. The Lender shall, upon the
occurrence of any Default described in clauses (a) through (d) of
Section 8.1.7 or any other Event of Default, have the right to
appropriate and apply to the payment of, and setoff against, the
Obligations owing to it, and (as security for such Obligations)
the Borrower hereby grants to the Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or
moneys of the Borrower then or thereafter maintained with the
Lender. The Lender agrees promptly to notify the Borrower after
any such setoff and application made by the Lender; provided,
however, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of the
Lender under this Section are cumulative and in addition to any
other rights and remedies (including other rights of setoff under
applicable law or otherwise) that may be available to the Lender.
SECTION 4.5. Use of Proceeds of Credit Extensions. The
Borrower shall only be permitted to utilize the proceeds of Loans
(1) to purchase up to 1,250,000 Shares in connection with the
Initial Public Offering for an aggregate amount not to exceed
16
$15,000,000 and (ii) to pay amounts due and owing with respect to
the Obligations.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligation
of the Lender to make the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Lender shall have
received from the Company a certificate, dated the date of the
initial Borrowing, of an Authorized Officer as to:
(a) any necessary corporate action authorizing the
execution, delivery and performance of the Registration
Rights Agreement and all Shares owned or to be acquired
by the Borrower in the Initial Public Offering;
(b) the incumbency and signatures of those
Authorized Officers authorized to execute the Shares and
to execute and act with respect to the Registration
Rights Agreement; and
(c) the certificate of incorporation and by-laws
of the Company, as in effect on the date of the initial
Borrowing, and accompanied by a certificate of good
standing for the Company issued by the jurisdictions in
which it is organized, and dated as of a date reasonably
close to the date of the initial Borrowing.
SECTION 5.1.2. Delivery of Note. The Lender shall
have received the Note duly executed by the Borrower.
SECTION 5.1.3. Pledge Agreement. The Borrower and the
Lender shall have executed and delivered the Pledge Agreement
substantially in the form attached hereto as Exhibit D, and the
Lender shall have received the certificates evidencing any
Pledged Shares initially to be pledged under the Pledge Agreement
(which shall consist of (i) all Shares acquired by the Borrower
in connection with the Initial Public Offering, (ii) Common Stock
owned by the Borrower and (iii) only if and after all shares of
Common Stock owned by the Borrower have been delivered as Pledged
Shares, shares of Class A Stock owned by the Borrower) together
with the additional documentation required under Pledge Agreement
relating thereto;
(a) acknowledgment copies of properly filed
Uniform Commercial Code financing statements (Form XXX-
00
1), dated a date reasonably near to the date of the
initial Credit Extension, or such other evidence of
filing as may be acceptable to the Lender, naming the
Borrower as the debtor and the Lender as the secured
party, or other similar instruments or documents, filed
under the Uniform Commercial Code of all jurisdictions
as may be necessary or, in the opinion of the Lender,
desirable to perfect the security interest of the Lender
pursuant to the Pledge and Security Agreement; and
(b) certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-11), or a
similar search report certified by a party acceptable to
the Lender, dated a date reasonably near to the date of
the initial Credit Extension, listing all effective
financing statements which name the Borrower (under his
present name and any previous names) as the debtor and
which are filed in the jurisdictions in which filings
were made pursuant to clause (b) above, together with
copies of such financing statements (none of which
(other than those described in clause (b), if such Form
UCC-11 or search report, as the case may be, is current
enough to list such financing statements described in
clause (b)) shall cover any collateral described in the
Pledge Agreement).
SECTION 5.1.4. Opinions of Counsel. The Lender shall
have received opinions, dated the date of the initial Borrowing
and addressed to the Lender, from Xxxxxxxxxxx X. Xxxxxx, Esq.,
counsel to the Borrower and Xxxxxx Xxxxxx, counsel to the
Company, in form and substance reasonably satisfactory to the
Lender.
SECTION 5.1.5. Initial Public Offering. The Lender
shall have received evidence satisfactory to it that the Initial
Public Offering shall have been consummated.
SECTION 5.1.6. Registration Rights Agreement. The
Lender and the Company shall have executed and delivered the
Registration Rights Agreement, substantially in the form attached
hereto as Exhibit E.
SECTION 5.1.7. Closing Fees, Expenses, etc. The Lender
shall have received all fees, costs and expenses due and payable
pursuant to Sections 3.3 and 9.3, if then invoiced.
Section 5.1.8. Margin Stock. The Lender shall have
received with respect to any Margin Stock being supplied as
Pledged Shares an executed Form FR G-3 relating thereto.
18
Section 5.1.9. Xxxxxxxxx Consent. The Lender shall
have received the written consent of Xxxxxxxxx L.L.C. under that
certain Amended and Restated Registration Rights Agreement, dated
as of November 3, 1997, by and between the Company and Xxxxxxxxx
L.L.C., to the execution, delivery and performance of the
Registration Rights Agreement by the Company.
SECTION 5.2. All Credit Extensions. The obligation of
the Lender to fund any Loan on the occasion of any Borrowing
(including the initial Credit Extension), shall be subject to the
satisfaction of each of the conditions precedent set forth in
this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default,
etc. Both before and after giving effect to any Credit Extension
the following statements shall be true and correct:
(a) the representations and warranties set forth
in Article VI (excluding, however, those contained in
Section 6.7) and Section 2.1 of the Pledge Agreement
shall be true and correct in all material respects with
the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such
representations and warranties shall be true and correct
in all material respects as of such earlier date);
(b) except as disclosed by the Borrower to the
Lender pursuant to Section 6.7
(i) no labor controversy, litigation,
arbitration or governmental investigation or
proceeding shall be pending or, to the knowledge of
the Borrower, threatened against the Borrower or
the Company which is reasonably likely to
materially adversely affect the Borrower's
business, operations, assets, revenues, properties,
or prospects, or which purports to affect the
legality, validity or enforceability of this
Agreement, the Note, the Pledge Agreement or any
other Loan Document, and
(ii) no development shall have occurred in
any labor controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 which is reasonably likely
to materially adversely affect the business,
operations, assets, revenues, properties or
prospects of the Borrower or the Company; and
(c) no Default shall have then occurred and be
continuing, and the Borrower is not in violation of any
19
law or governmental regulation or court order or decree
the consequences of which are reasonably likely to be
materially adverse to the Borrower.
SECTION 5.2.2. Borrowing Request; Valuation
Certificate. The Lender shall have received a Borrowing Request
for such Credit Extension, in addition to a Valuation Certificate
(to be received not later than 9:30 a.m., New York City time, on
the date of the making of such Credit Extension) as to the
aggregate Fair Market Value of all Pledged Shares at the opening
of business on the date such Credit Extension is to be made,
including pro forma adjustments reflecting additions to and
withdrawals from the Pledged Shares to take place on such date,
and, if applicable, stating the Fair Market Value of Pledged
Shares to be so withdrawn. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of a
Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Credit Extension (both
immediately before and after giving effect to such Borrowing and
the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
SECTION 5.2.3. Satisfactory Legal Form. All documents
executed or submitted pursuant hereto by or on behalf of the
Borrower shall be satisfactory in form and substance to the
Lender and its counsel; the Lender and its counsel shall have
received all information, approvals, opinions, documents or
instruments as the Lender or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this
Agreement and to make Credit Extensions hereunder, the Borrower
represents and warrants unto the Lender as set forth in this
Article VI.
SECTION 6.1. Authority, etc. The Borrower is an
individual having his place of residence at Sunday Xxxxx Xxxxxx
Xxxx, Xxxxxx, Xxxxx 00000 and has full power and authority to
enter into and perform his Obligations under this Agreement, the
Note, the Pledge Agreement and the other Loan Documents to which
he is a party.
SECTION 6.2. Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by the Borrower of this
Agreement, the Note and each other Loan Document executed by him
do not
20
(a) contravene the Company's Organic Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding
on or affecting the Borrower or the Company; or
(c) result in, or require the creation or
imposition of, any Lien on any of the Borrower's or the
Company's properties, other than pursuant to the terms
of the Pledge Agreement.
SECTION 6.3. Government Approval, Regulation, etc.
Other than the filings by the Borrower under Section 13 or 16(a)
of the Securities Exchange Act of 1934, no authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person is
required for the due execution, delivery or performance by the
Borrower or the Company of this Agreement, the Note or any other
Loan Document.
SECTION 6.4. Validity, etc. This Agreement
constitutes, and the Note and each other Loan Document executed
by the Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms.
SECTION 6.5. Financial Information. The financial
statement of the Borrower heretofore furnished to the Lender
presents fairly the financial condition of the Borrower as at the
date thereof.
SECTION 6.6. No Material Adverse Change. Since the
date of the financial statement described in Section 6.5, there
has been no material adverse change in the financial condition,
operations, assets, business, properties or prospects of the
Borrower.
SECTION 6.7. Litigation, Labor Controversies, etc.
There is no pending or, to the knowledge of the Borrower,
threatened litigation, action, proceeding or labor controversy
affecting the Borrower or the Company or any of their respective
properties, assets or revenues, which are reasonably likely to
materially adversely affect the financial condition, operations,
assets, business, properties or prospects of the Borrower or the
Company or which purports to affect the legality, validity or
enforceability of this Agreement, the Note, the Pledge Agreement,
the Registration Rights Agreement or any other Loan Document,
except as disclosed in Item 6.7 ("Litigation") of the Disclosure
Schedule.
21
SECTION 6.8. Ownership of Shares. The Borrower owns
good and marketable title to all of the Shares owned by him, free
and clear of all Liens, charges or claims except as permitted
pursuant to Section 7.2.3.
SECTION 6.10. Taxes. The Borrower has filed all tax
returns and reports required by law to have been filed by him and
has paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings.
SECTION 6.11. Accuracy of Information. All factual
information heretofore or contemporaneously furnished by or on
behalf of the Borrower or the Company in writing to the Lender
for purposes of or in connection with this Agreement or any
transaction contemplated hereby (including, without limitation,
the Prospectus) is, and all other such factual information
hereafter furnished by or on behalf of the Borrower or the
Company to the Lender will be, true and accurate in every
material respect on the date as of which such information is
dated or certified and as of the date of execution and delivery
of this Agreement by the Lender, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state
any material fact necessary to make such information not
misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower
agrees with the Lender that, until the Commitment has terminated
and all Obligations have been paid and performed in full, the
Borrower will perform the obligations set forth in this Section
7.1.
SECTION 7.1.1. Financial Information, Reports, Notices,
etc. The Borrower will furnish, or will cause to be furnished,
to the Lender (a) a financial statement on such form and at such
times as the Lender shall reasonably request, and (b) copies of
the following reports, notices and information:
(i) as soon as possible and in any event
within three days after the occurrence of each
Default, a statement of the Borrower setting forth
details of such Default and the action which the
Borrower has taken and proposes to take with
respect thereto;
(ii) as soon as possible and in any event
within three days after (x) the occurrence of any
22
materially adverse development with respect to any
litigation, action, proceeding or labor controversy
described in Section 6.7 or (y) the commencement of
any labor controversy, litigation, action or
proceeding of the type described in Section 6.7,
notice thereof and copies of all documentation
relating thereto;
(iii) not later than 10:00 a.m., New York City
time, on the last Business Day of each month, a
Valuation Certificate as to the aggregate Fair
Market Value of all Pledged Shares as at the close
of business on the last Business Day of the
preceding week;
(iv) not later than 10:00 a.m., New York City
time, on the date of each requested withdrawal of
collateral under the Pledge Agreement, a Valuation
Certificate as to the aggregate Fair Market Value
of all Pledged Shares at the opening of business on
such date, including pro forma adjustments
reflecting additions to and withdrawals from the
portfolio of Pledged Shares to take place on such
date and stating the Fair Market Value of Pledged
Shares to be so withdrawn; and
(v) such other information respecting the
condition or operations, financial or otherwise, of
the Borrower or the Company (which, in the case of
the Company, is made available to the Company's
shareholders generally), together with a Valuation
Certificate as to the aggregate Fair Market Value
of all Pledged Shares as at a recent time specified
by the Lender, in each case as the Lender may from
time to time reasonably request.
The Borrower will furnish to the Lender, at the time he furnishes
each set of financial statements with respect to the Borrower
pursuant to Section 7.1.1(a), a certificate to the effect that no
Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable
detail and describing the action that the Borrower has taken and
proposes to take with respect thereto).
SECTION 7.1.2. Compliance with Laws, etc. The Borrower
will comply in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include
(without limitation) the payment, before the same become
delinquent, of all taxes, assessments and governmental charges
imposed upon him or upon his property except to the extent being
diligently contested in good faith by appropriate proceedings.
23
SECTION 7.2. Negative Covenants. The Borrower agrees
with the Lender that, until the Commitment has terminated and all
Obligations have been paid and performed in full, the Borrower
will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Liens. The Borrower will not create,
incur, assume or suffer to exist any Lien upon any Shares owned
by him or any of his Affiliates, except Liens securing payment of
the Obligations, granted pursuant to any Loan Document.
SECTION 7.2.2. Asset Dispositions, etc. The Borrower
will not sell, transfer, lease, contribute or otherwise convey,
or grant options, warrants or other rights with respect to, all
or any part of the Shares owned by him or any Affiliate without
the prior written consent of the Lender.
SECTION 7.2.3. Negative Pledges, etc. The Borrower
will not enter into any agreement (excluding this Agreement or
any other Loan Document) prohibiting the creation or assumption
of any Lien upon his properties, revenues or properties, whether
now owned or hereafter acquired or the ability of the Borrower to
amend or otherwise modify this Agreement or any other Loan
Document.
SECTION 7.2.4. Maintenance Base. The Borrower will not
at any time permit the aggregate outstanding principal amount of
the Loans to exceed the Maintenance Base.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the
following events or occurrences described in this Section 8.1
shall constitute an "Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. The
Borrower shall default in the payment or prepayment when due of
any principal of or interest on any Loan, or the Borrower shall
default (and such default shall continue unremedied for a period
of five days after receipt by the Borrower of written notice
thereof) in the payment when due of any commitment fee or of any
other Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation
or warranty of the Borrower or the Company made or deemed to be
made hereunder or in any other Loan Document or any other writing
or certificate furnished by or on behalf of the Borrower or the
Company to the Lender for the purposes of or in connection with
this Agreement or any such other Loan Document (including any
24
certificates delivered pursuant to Article V) is or shall be
incorrect when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and
Obligations. The Borrower shall default in the due performance
and observance of any of his obligations under Section 7.2, or
the Company shall default in the performance of any of its
obligations under the Registration Rights Agreement, and such
default shall continue unremedied for a period of five Business
Days after the earlier of (i) notice thereof given by the Lender
to the Borrower or the Company, as the case may be, or
(ii) discovery thereof by the Borrower or an officer of the
Company, as the case may be.
SECTION 8.1.4. Non-Performance of Other Covenants and
Obligations. The Borrower shall default in the due performance
and observance of any other agreement contained herein or in any
other Loan Document, and such default shall continue unremedied
for a period of 30 days after notice thereof shall have been
given to the Borrower by the Lender.
SECTION 8.1.5. Judgments. Any judgment or order for
the payment of money in excess of $500,000 shall be rendered
against the Borrower and either
(a) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order;
or
(b) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise,
shall not be in effect.
SECTION 8.1.6. Control of the Company. Any Change in
Control shall occur.
SECTION 8.1.7. Bankruptcy, Insolvency, etc. Either of
the Borrower or the Company shall
(a) become "insolvent" (as such term is defined in
the United States Bankruptcy Code);
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or
other custodian for itself or any of its property, or
make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment
of a trustee, receiver, sequestrator or other custodian
25
for itself or for a substantial part of its property,
and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days,
provided that each of the Borrower and the Company
hereby expressly authorizes the Lender to appear in any
court conducting any relevant proceedings during such
60-day period to preserve, protect and defend its rights
under the Loan Documents; or
(d) permit or suffer to exist the commencement of
any bankruptcy, reorganization, debt arrangement or
other case or proceeding under any bankruptcy or
insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Borrower or
the Company, as the case may be, and, if any such case
or proceeding is not commenced by the Borrower or the
Company, as the case may be, such case or proceeding
shall be consented to or acquiesced in by the Borrower
or the Company, as the case may be, or shall result in
the entry of an order for relief or shall remain for 60
days undismissed, provided that each of the Borrower and
the Company hereby expressly authorizes the Lender to
appear in any court conducting any such case or
proceeding during such 60-day period to preserve,
protect and defend its rights under the Loan Documents.
SECTION 8.1.8. Impairment of Security, etc. Any Loan
Document, or any Lien granted thereunder, shall (except in
accordance with its terms), in whole or in part, terminate, cease
to be effective or cease to be the legally valid, binding and
enforceable obligation of the Borrower or the Company, as the
case may be; the Borrower, the Company or any other party shall,
directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability; or any Lien securing
any Obligation shall, in whole or in part, cease to be a
perfected first Lien, subject only to those exceptions (if any)
expressly permitted by such Loan Document.
SECTION 8.2. Action if Bankruptcy. If any Event of
Default described in Section 8.1.7 shall occur, the Commitment
(if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all Loans and all other
Obligations shall automatically be and become immediately due and
payable, without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any
Event of Default (other than any Event of Default described in
Section 8.1.7) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Lender may by notice to the
Borrower declare all or any portion of the outstanding principal
amount of all Loans and other Obligations to be due and payable
26
and/or the Commitment (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the
Commitment shall terminate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Waivers, Amendments. etc. The provisions
of this Agreement and of each other Loan Document may from time
to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by each of
the parties hereto. No failure or delay on the part of either
party hereto or the holder of the Note in exercising any power or
right under this Agreement or any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No
notice to or demand on the Borrower in any case shall entitle it
to any notice or demand in similar or other circumstances. No
waiver or approval by either party hereto or the holder of the
Note under this Agreement or any other Loan Document shall except
as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
SECTION 9.2. Notices. All notices and other
communications provided to any party hereto under this Agreement
or any other Loan Document shall be in writing and shall be
delivered or transmitted to such party at its address(es) or
facsimile number(s) set forth below its signature hereto or at
such other address or facsimile number as may be designated by
such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed
given when received; any notice, if transmitted by facsimile,
shall be deemed given when transmitted.
SECTION 9.3. Payment of Costs and Expenses. The
Borrower agrees to pay on demand all expenses of the Lender
(including all reasonable fees and out-of-pocket expenses of
counsel to the Lender) in connection with
(a) the negotiation, preparation, due diligence,
execution and delivery of this Agreement and of each
other Loan Document, including schedules and exhibits,
and any amendments, waivers, consents, supplements or
27
other modifications to this Agreement or any other Loan
Document (whether or not the same shall be consummated
or become effective) as may from time to time hereafter
be required, whether or not the transactions
contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording
of the Pledge Agreement and/or any Uniform Commercial
Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof
and any and all other documents or instruments of
further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or of the
Pledge Agreement; and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any
other Loan Document.
The Borrower further agrees to pay, and to save the Lender
harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of
this Agreement, the Credit Extensions hereunder, or the issuance
of the Note or any other Loan Documents. The Borrower also
agrees to reimburse the Lender upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal
expenses) incurred by the Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not
consummated, of any Obligations and (y) the enforcement of any
Obligations.
SECTION 9.4. Indemnification. In consideration of the
execution and delivery of this Agreement by the Lender and the
extension of the Commitment, the Borrower hereby indemnifies,
exonerates and holds the Lender and each of its officers,
directors, employees, and agents (collectively the "Indemnified
Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages,
and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party of the action for
which indemnification is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified
Liabilities") incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the
proceeds of any Credit Extension;
(b) the entering into and performance of this
Agreement and any other Loan Document by any of the
28
Indemnified Parties (including any action brought by or
on behalf of the Borrower as the result of any
determination by the Lender pursuant to Article V not to
make any Credit Extension), except to the extent such
Indemnified Liabilities arise from an action, suit or
proceeding brought by the Borrower in which a court of
competent jurisdiction has rendered a final, non-
appealable decision in favor of the Borrower; or
(c) any investigation of, or litigation or
proceeding brought against, the Lender in connection
with any acquisition or proposed acquisition by the
Borrower of all or any portion of the Shares, whether or
not the Lender is party thereto,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence, willful misconduct
or bad faith, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 9.5. Survival. The obligations of the Borrower
under Sections 3.3, 4.1, 4.2, 9.3 and 9.4 shall in each case
survive any termination of this Agreement, the payment in full of
all Obligations and the termination or expiration of the
Commitment. The representations and warranties made by the
Borrower in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each
such other Loan Document.
SECTION 9.6. Severability. Any provision of this
Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or
affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 9.7. Headings. The various headings of this
Agreement and of each other Loan Document are inserted for
convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 9.8. Execution in Counterparts, Effectiveness,
etc. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an
29
original and all of which shall constitute together but one and
the same agreement. This Agreement shall become effective when
counterparts hereof executed on behalf of the Borrower and the
Lender (or notice thereof satisfactory to the Lender) shall have
been received by the Lender and notice thereof shall have been
given by the Lender to the Borrower.
SECTION 9.9. Governing Law: Entire Agreement. THIS
AGREEMENT, THE NOTE AND EACH OTHER LOAN DOCUMENT SHALL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK. This Agreement, the Note and the
other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
SECTION 9.10. Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign or transfer
its rights or obligations hereunder without the prior written
consent of the Lender.
SECTION 9.11. Participations. The Lender may at any
time sell to one or more commercial banks or other Persons (each
of such commercial banks and other Persons being herein called a
"Participant") participating interests in any of the Loans, its
Commitment or other interests of the Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section
9.11 shall relieve the Lender from its Commitment or its
other obligations hereunder or under any other Loan
Document,
(b) the Lender shall remain solely responsible for
the performance of its Commitment and such other
obligations,
(c) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's
rights and obligations under this Agreement and each of
the other Loan Documents,
(d) no Participant, unless such Participant is an
Affiliate of the Lender, shall be entitled to require
the Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that
the Lender may agree with any Participant that the
Lender will not, without such Participant's consent,
take any of the following actions: (i) increase the
30
Commitment Amount, reduce any fees described in Article
III, or extend the Commitment Termination Date, or (ii)
extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or
interest on any Loan (or reduce the principal amount of
or rate of interest on any Loan), and
(e) the Borrower shall not be required to pay any
amount under Section 4.1 or 4.2 that is greater than the
amount which it would have been required to pay had no
participating interest been sold.
The Borrower acknowledges and agrees that each
Participant, for purposes of Sections 4.1, 4.2, 4.4, 9.3 and 9.4,
shall be considered a Lender. Notwithstanding anything to the
contrary herein, the Lender may assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the F.R.S. Board
and any operating circular issued by such Federal Reserve Bank,
and such Loans and Note shall be fully transferable as provided
therein. No such assignment shall release the Lender from its
obligations hereunder.
SECTION 9.12. Assignments. The Lender may at any time
assign and delegate to its Affiliates and with the prior consent
of the Borrower (which consent shall not be unreasonably
withheld) to one or more commercial banks or other financial
institutions (each Person described above as being the Person to
whom such assignment and delegation is to be made, being
hereinafter referred to as an "Assignee Lender") all or any
fraction of the Lender's total Loans and Commitment; provided,
however, that the Borrower shall be entitled to continue to deal
solely and directly with the Lender in connection with the
interests so assigned and delegated to an Assignee Lender until
(a) written notice of such assignment and
delegation, together with payment instructions,
addresses and related information with respect to such
Assignee Lender, shall have been given to the Borrower
by the Lender and such Assignee Lender, and
(b) such Assignee Lender shall have executed and
delivered to the Borrower and the Lender such documents
as the Lender shall reasonably request, accepted by the
Lender.
From and after the date of such assignment, (x) the Assignee
Lender thereunder shall be deemed automatically to have become a
party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee
Lender in connection with such assignment, shall have the rights
31
and obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights
and obligations hereunder have been assigned and delegated by it
in connection with such assignment, shall be released from its
obligations hereunder and under the other Loan Documents. Within
five Business Days following such assignment, the Borrower shall
execute and deliver to the Lender (for delivery to the relevant
Assignee Lender) a new promissory note (in the form of the Note)
evidencing the Assignee Lender's assigned Loans and Commitment
and, if the assignor Lender has retained Loans and any portion of
the Commitment hereunder, a replacement Note in the principal
amount of the Loans and the portion of the Commitment retained by
the assignor Lender hereunder (such Note to be in exchange for,
but not in payment of, the Note then held by such assignor
Lender). Each such Note shall be dated the date of the
predecessor Note. The assignor Lender shall xxxx the predecessor
Note "exchanged" and deliver it to the Borrower. Accrued
interest on that part of the predecessor Note evidenced by the
new Note, and accrued fees, shall be paid as agreed to between
the assignor Lender and the Assignee Lender. Accrued interest on
that part of the predecessor Note evidenced by the replacement
Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in
the predecessor Note and in this Agreement. Prior to such
assignment, the Borrower and Lender agree to negotiate in good
faith to amend and modify this Agreement and related Loan
Documents to reflect such additional lender as a party hereto.
The Borrower shall not be required to pay any amount under
Section 4.1 or 4.2 that is greater than the amount which it would
have been required to pay had no assignment been made.
SECTION 9.13. Other Transactions. Nothing contained
herein shall preclude the Lender from engaging in any
transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrower or any of its
Affiliates in which the Borrower or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 9.14. Forum Selection and Consent to
Jurisdiction. ANY LITIGATION BASED ON, ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE BORROWER SHALL
BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
32
YORK AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH PARTY
HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT EITHER PARTY HERETO HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OR EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 9.15. Waivers of Jury Trial, Damages. (a) THE
LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE
BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT HE HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH HE
IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE LENDER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN
DOCUMENT.
(b) THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW,
ANY RIGHT HE MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
SECTION 9.16. Confidentiality. The Lender shall hold
all non-public information (either in the form of non-public
documentation relating to the Shares or which otherwise has been
identified as non-public information by the Borrower) obtained
pursuant to the requirements of this Agreement in accordance with
its customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking
practices and in any event shall have the right to make
disclosure to any of its examiners, Affiliates, outside auditors,
counsel and other professional advisors in connection with this
Agreement or as reasonably required by any bona fide transferee,
33
participant or assignee or as required or requested by any
governmental agency or representative thereof or pursuant to
legal process; provided, however, that
(a) unless specifically prohibited by applicable
law or court order, the Lender shall notify the Borrower
of any request by any governmental agency or
representative thereof (other than any such request in
connection with an examination of the financial
condition of the Lender by such governmental agency) for
disclosure of any such non-public information prior to
disclosure of such information;
(b) prior to any such disclosure pursuant to this
Section 9.16, the Lender shall require any such bona
fide transferee, participant and assignee receiving a
disclosure of non-public information to agree in writing
(i) to be bound by this Section 9.16; and
(ii) to require such Person to require any
other Person to whom such Person discloses such
non-public information to be similarly bound by
this Section 9.16; and
(c) except as may be required by an order of a
court of competent jurisdiction and to the extent set
forth therein, the Lender shall not be obligated or
required to return any materials furnished by the
Borrower.
SECTION 9.17. Acknowledgments. The Borrower hereby
acknowledges that:
(a) he has been advised by counsel in the
negotiation, execution and delivery of this Agreement
and the other Loan Documents;
(b) the Lender has no fiduciary relationship with
or fiduciary duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan
Documents, and the relationship between the Lender, on
the one hand, and the Borrower, 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 Borrower
and the Lender.
34
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
/s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
Address:
c/o American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
ING (U.S.) CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
Address and Principal Office:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Senior Vice President
35
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 6.7 Litigation.
None.
_____________________
Item numbers are keyed to refer to Sections where the item is
principally referred to.
SCHEDULE II
VALUATION SOURCES
Xxxxxxxxx Lufkin & Xxxxxxxx Securities Corporation
Schroders & Co. Inc.
Xxxxxx Xxxxxxx Xxxx Xxxxxx
EXHIBIT A
NOTE
$18,000,000 November 10, 1997
FOR VALUE RECEIVED, the undersigned, XXXXXX X. XXXXX
(the "Borrower"), promises to pay to the order of ING (U.S.)
CAPITAL CORPORATION (the "Lender") on November 9, 1998 the
principal sum of EIGHTEEN MILLION DOLLARS ($18,000,000) or, if
less, the aggregate unpaid principal amount of all Loans shown on
the schedule attached hereto (and any continuation thereof) made
by the Lender pursuant to that certain Credit Agreement, dated as
of November 10, 1997 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto,
the "Credit Agreement"), between the Borrower and the Lender.
Unless otherwise defined, terms used herein have the meanings
provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding from the
date hereof until maturity (whether by acceleration or otherwise)
and, after maturity, until paid, at the rates per annum and on
the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made
in lawful money of the United States of America in same day or
immediately available funds to the account designated by the
Lender pursuant to the Credit Agreement.
This Note is the Note referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which
reference is made for a description of the security for this Note
and for a statement of the terms and conditions on which the
Borrower is permitted and required to make prepayments and
repayments of principal of the Indebtedness evidenced by this
Note and on which such Indebtedness may be declared to be
immediately due and payable.
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
_______________________________
Xxxxxx X. Xxxxx
LOANS AND PRINCIPAL PAYMENTS
Amount of Unpaid Notation
Amount of Loan Principal Principal Made
Date Made Repaid Balance Total By
----- -------------- ---------- --------- ----- ---------
EXHIBIT B
BORROWING REQUEST
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Senior Vice President
Gentlemen and Ladies:
Re: XXXXXX X. XXXXX
This Borrowing Request is delivered to you pursuant to
Section 2.3 of the Credit Agreement, dated as of November 10,
1997 (as amended, supplemented, restated or otherwise modified,
the "Credit Agreement"), between Xxxxxx X. Xxxxx (the
"Borrower"), and you. Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
The Borrower hereby requests that a Loan be made in the
aggregate principal amount of $________ on _________, 19__. The
aggregate outstanding principal amount of Loans (after giving
effect to the making of Loans requested hereby), equals1
$[________ ]. The proceeds of the Loan will be used as provided
in Section 4.5 of the Credit Agreement.
The Borrower hereby acknowledges that, pursuant to Section
5.2.2 of the Credit Agreement, each of the delivery of this
Borrowing Request and the acceptance by the Borrower of the
proceeds of the Loans requested hereby constitutes a
representation and warranty by the Borrower that, on the date of
such Loans, and before and after giving effect thereto and to the
application of the proceeds therefrom, all statements set forth
in Section 5.2.1 are true and correct in all material respects.
_________________
1. Not to exceed $18,000,000 ($15,000,000 in the aggregate, in
the case of Loans to acquire Shares).
The Borrower agrees that if prior to the time of the
Borrowing requested hereby any matter certified to herein by it
will not be true and correct at such time as if then made, it
will immediately so notify you. Except to the extent, if any,
that prior to the time of the Borrowing requested hereby you
shall receive written notice to the contrary from the Borrower,
each matter certified to herein shall be deemed once again to be
certified as true and correct at the date of such Borrowing as if
then made.
Please wire transfer the proceeds of the borrowing to the
accounts of the following persons at the financial institutions
indicated respectively:
Amount to be Person to be Paid Name, Address, ABA#,
Transferred Name of Payee Account No. and Attn: For Bank
----------- ------------------------- --------------------
$___________ __________ __________ ____________________
____________________
Attention:__________
$___________ __________ __________ ____________________
____________________
Attention:__________
Balance of The Borrower __________ ____________________
such proceeds ____________________
Attention:__________
The Borrower has caused this Borrowing Request to be executed
and delivered, and the certification and warranties contained
herein to be made, by its duly Authorized Member this ___ day of
____________, 19___.
____________________________
Xxxxxx X. Xxxxx
EXHIBIT C
XXXXXX X. XXXXX
Valuation Certificate
as at
__________, 199__
Reference is made to the Credit Agreement, dated as of
November 10, 1997 (as amended, supplemented, restated or
otherwise modified, the "Credit Agreement"), between Xxxxxx X.
Xxxxx (the "Borrower"), and ING (U.S.) Capital Corporation. Terms
defined in the Credit Agreement are used herein as defined
therein.
Pursuant to clause [(c)(d)(e)] of Section 7.1.1 of the Credit
Agreement, the Borrower hereby certifies that:
(i) attached hereto as Annex 1 is a true and accurate
calculation of the aggregate Fair Market Value of all Pledged
Shares as at the close of business on the date indicated above
determined in accordance with the requirements of the Credit
Agreement; and
(ii) as of the date hereof, no Event of Default has
occurred.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the ______ day of
___________________, 199__.
______________________________
Xxxxxx X. Xxxxx
ANNEX 1 to
Valuation Certificate
Total
Fair
Market
A. # of Shares Fair Market Value (and Source) Value
----------- ----------------------------- ------
$
B. Borrowing Base ((.25) x Fair Market Value of all
Pledged Shares)...................... $______________
C. Maintenance Base
1. ((.333) x Fair Market Value of all
Pledged Shares) .................... $______________
D. Interim Maintenance Base
1. ((.29) x Fair Market Value of all
Pledged Shares)...................... $______________
E. Loans Outstanding......................... $______________
F. Availability
Item B. - Item E. ........................ $______________
G. Margin Violation (if any)
Item E - Item C........................... $______________
H. Amount Needed to Cure Margin
Violation (if any)
Item E - Item D........................... $______________
EXHIBIT D
[Form of Pledge Agreement]
THIS PLEDGE AGREEMENT is made as of the 10th day of
November, 1997 between XXXXXX X. XXXXX, an individual whose
residence address is Sunday Xxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxx
00000 (the "Pledgor"), and ING (U.S.) CAPITAL CORPORATION, a
Delaware corporation (the "Pledgee").
WITNESSETH:
WHEREAS, the Pledgee proposes to enter into a Credit
Agreement, dated as of even date herewith (the "Credit
Agreement"), with Pledgor pursuant to which the Pledgee will
agree to make loans to the Pledgor in an aggregate principal
amount not exceeding $25,000,000 at any one time outstanding (the
"Loans");
WHEREAS, in order to induce the Pledgee to enter into
the Credit Agreement and make Loans to the Pledgor, the Pledgee
has required that the Pledgor execute, deliver and perform this
Pledge Agreement; and
WHEREAS, as of the date hereof, the Pledgor is the
registered and beneficial owner, directly or indirectly, of
14,760,530 shares of the Class A Common Stock, par value $0.01
per share ("Class A Stock"), of American Skiing Company, a Maine
corporation (the "Company") and 833,333 shares of the Common
Stock, par value $0.01 per share ("Common Stock"), of the Company
(collectively the "Shares");
NOW, THEREFORE, in consideration of the premi the
Pledgor agrees with the Pledgee as follows:
1. Unless otherwise defined herein, defined terms as
used herein shall have the same meanings as set forth in the
Credit Agreement.
2. As security for full and prompt payment to the
Pledgee of all sums owing by the Pledgor to the Pledgee under the
Credit Agreement, whether for principal, interest, fees, expenses
or otherwise, now or in the future (together called the
"Obligations"), the Pledgor hereby pledges, assigns and transfers
to the Pledgee, and hereby grants to the Pledgee a first lien on,
and first security interest in, all Shares from time to time and
at any time delivered to the Pledgee by the Pledgor in accordance
with the terms hereof and of the Credit Agreement (the "Pledged
Shares"), but excluding Shares released by the Pledgee from the
pledge hereof as herein provided.
3. Concurrently with the execution of this Pledge
Agreement, the Pledgor shall execute and deliver to the Pledgee
undated stock powers duly executed in blank for each certificate
representing the Pledged Shares, together with an Irrevocable
Proxy in favor of the Pledgee in respect of each stock
certificate representing the Pledged Shares in the form set out
in Exhibit A hereto (the "Irrevocable Proxy").
4. The Pledgor represents and warrants that:
(i) he is the legal and beneficial owner of, and
has good and marketable title to, the Pledged
Shares delivered to the Pledgee on the date
hereof, subject to no superior pledge, lien,
mortgage, hypothecation, security interest,
charge, option or other superior encumbrance
whatsoever, except the lien and security
interest created by this Pledge Agreement;
(ii) he has full power, authority and legal right
to execute, deliver and perform this Pledge
Agreement and to create the collateral
security interest for which this Pledge
Agreement provides, and has taken all
necessary action to authorize the execution,
delivery and performance of this Pledge
Agreement and the creation of the collateral
security interests for which this Pledge
Agreement provides;
(iii) the Pledged Shares have been duly and validly
issued and are fully paid and non-assessable;
(iv) there are no voting trusts or other agreements
or arrangements relating to the Pledged
Shares;
(v) this Pledge Agreement constitutes a valid
obligation of the Pledgor, legally binding
upon him and enforceable in accordance with
its terms;
(vi) the pledge, hypothecation, assignment and
delivery of the Pledged Shares pursuant to
this Pledge Agreement creates a valid first
perfected security interest in each of the
Pledged Shares and the proceeds thereof;
(vii) (A) no consent of any other party (including
the stockholders of the Company or any
creditor of the Pledgor or the Company) is
required in connection with the execution,
delivery, performance, validity,
enforceability or enforcement of this Pledge
Agreement, and (B) no consent, license,
approval or authorization of, or registration
or declaration with, any governmental
authority, bureau or agency is required in
connection with the execution, delivery,
performance, validity, enforceability or
enforcement of this Pledge Agreement; and
(viii) the execution, delivery and performance of
this Pledge Agreement will not violate or
contravene any provision of any existing law
or regulation or decree of any court,
governmental authority, bureau or agency
having jurisdiction in the premises or of the
Certificate of Incorporation of the Company or
of any mortgage, indenture, security
agreement, contract, undertaking or other
agreement to which the Pledgor or the Company
is a party or which purports to be binding
upon the Pledgor or the Company or any of
their respective properties or assets and will
not result in the creation or imposition of
any lien, charge or encumbrance on, or
security interest in, any of their respective
properties or assets pursuant to the
provisions of any such mortgage, indenture,
security agreement, contract, undertaking or
other agreement.
5. The Pledgor hereby covenants that during the
continuance of this Pledge Agreement:
(i) he shall warrant and defend the right and
title of the Pledgee conferred by this Pledge
Agreement in and to the Pledged Shares at the
cost of the Pledgor against the claims and
demands of all persons whomsoever;
(ii) except as herein provided, without the prior
written consent of the Pledgee, he shall not
sell, assign, transfer, charge, pledge or
encumber in any manner any part of the Pledged
Shares or any other Shares owned, directly or
indirectly, by him, or suffer to exist any
encumbrance on the Pledged Shares or any other
Shares owned, directly or indirectly, by him;
and
(iii) without the prior written consent of Pledgee,
he shall not vote the Pledged Shares in favor
of the consolidation, merger, dissolution,
liquidation or any other reorganization of the
Company.
6. If the Pledgor shall become entitled to receive or
shall receive any equity interests, certificates (including,
without limitation, any certificate representing a dividend or a
distribution in connection with any reclassification, increase or
reduction of capital, or issued in connection with any
reorganization), options or rights, in substitution of, in
respect of or in exchange for any of the Pledged Shares the
Pledgor agrees to hold the same in trust for the benefit of the
Pledgee and to deliver the same forthwith to the Pledgee in the
exact form received, with the endorsement of the Pledgor when
necessary and/or appropriate undated stock powers duly executed
in blank, and irrevocable proxies for any certificates or other
securities so received, in substantially the form of Exhibit A to
be held by the Pledgee, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Shares on the liquidation or
dissolution of the Company shall be paid over to the Pledgee to
be held by it as additional collateral security for the
Obligations.
7. All property at any time pledged with the Pledgee
hereunder by the Pledgor (whether described herein or not) and
not released in accordance with the terms hereof, and all income
therefrom and proceeds thereof, are herein collectively sometimes
called the "Collateral".
8. The Pledgor hereby consents that, without the
necessity of any reservation of rights against the Pledgor, and
without notice to or further assent by the Pledgor, any demand
for payment of any of the Obligations made by the Pledgee may be
rescinded by the Pledgee and any of the obligations continued,
and the Obligations, or the liability of the Pledgor upon or for
any part thereof, or any other collateral security therefor
(hereinafter referred to as the "Security Documents")) or right
of offset with respect thereto, may, from time to time, in whole
or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Pledgee, and
the Security Documents, any other guarantees and any other
collateral security documents executed and delivered by the
Pledgor may be amended, modified, supplemented or terminated, in
whole or in part, as the Pledgee may deem advisable, from time to
time, and any other collateral security at any time held by the
Pledgee for the payment of the Obligations (including, without
limitation, any collateral security held pursuant to any other
collateral security document executed and delivered pursuant to
the Security Documents) may be sold, exchanged, waived,
surrendered or released, all without notice to or further assent
by the Pledgor, which will remain bound hereunder,
notwithstanding any such renewal, extension, modification,
acceleration, compromise, amendment, supplement, termination,
sale, exchange, waiver, surrender or release. The Pledgor waives
any and all notices of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of
reliance by the Pledgee upon this Pledge Agreement, and the
Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this
Pledge Agreement, and all dealings between the Company and the
Pledgee shall likewise be conclusively presumed to have been had
or consummated in reliance upon this Pledge Agreement. The
Pledgor waives diligence, presentment, protest, demand for
payment and notice of default of non-payment to or upon the
Pledgor with respect to the obligations.
9. Upon the occurrence and during the continuance of
an Event of Default, the Pledgee shall as the Pledgee and as the
holder of the Irrevocable Proxy receive notice from the Pledgor
of all notices received by the Pledgor from the Company as the
holder of record of the Pledged Shares and have the right to vote
the Pledged Shares at its own discretion at any annual or special
meeting of the stockholders of the Company. Prior to the
occurrence and continuance of an Event of Default, the Pledgor
shall retain all voting rights with respect to the Collateral.
10. Upon the occurrence of any Event of Default, the
security constituted by this Pledge Agreement shall become
enforceable, and the Pledgee shall be entitled without further
notice to the Pledgor to exercise all voting and other corporate
rights at any meeting of the Company and exercise any and all
rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of the Pledged Shares as
if it were the absolute owner thereof, including, without
limitation, the right to exchange atits discretion, any and all
of such Pledged Shares upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the
Company or, upon the exercise by the Company or the Pledgee of
any right, privilege or option pertaining to any of the Pledged
Shares, and in connection therewith, to deposit and deliver any
and all certificates evidencing the Pledged Shares with any
committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it may
determine, all without liability except to account for property
actually received by it.
11. At any time after the security constituted by this
Pledge Agreement shall have become enforceable as aforesaid, the
Pledgee shall be entitled without further notice to the Pledgor
to sell, assign or convert into money all or any part of the
Collateral in such manner and upon such terms and for such
consideration (whether in cash, securities or other assets,
whether deferred or not and whether at public or private sale) as
is commercially reasonable with the right to the Pledgee upon
such sale to purchase the whole or any part of the Collateral,
free of any right or equity of redemption in the Pledgor, which
right and/or equity is hereby expressly waived to the extent
permitted by applicable law.
12. The Pledgee shall have no duty to exercise any of
the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing. In the
custody of the Collateral, the Pledgee shall exercise the same
care as it exercises with respect to the management of its own
affairs and property. Except as provided herein, the Pledgee
shall not sell, transfer, pledge, hypothecate or otherwise
encumber any of the Collateral.
13. The Pledgee shall apply the net proceeds of any
collection, recovery, receipt, approximation, realization or sale
of the Collateral after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the
care, safe-keeping or otherwise of any and all of the Collateral,
or in any way relating to the rights of the Pledgee hereunder,
including attorney's fees and legal expenses, to the payment, in
whole or in part, of the Obligations, and only after so applying
such net proceeds and after the payment by the Pledgee of any
other amount required by any provisions of law, the Pledgee shall
account as required by the Uniform Commercial Code for the
surplus, if any, to the Pledgor. The Pledgor agrees that the
Pledgee need not give more than twenty (20) days written notice
of the time and place of any public sale or of the time after
which a private sale may take place and that such notice is
commercially reasonable notification of such matters. In addition
to the rights and remedies granted to it in this Pledge Agreement
and in any other instrument or agreement securing, evidencing or
relating to any of the Obligations, the Pledgee shall have the
rights and remedies of a secured party under the Uniform
Commercial Code of the State of New York (the "UCC"). All of the
Pledgee's rights hereunder shall be limited by, and in accordance
with, the UCC.
14. When all of the Obligations shall have been fully
satisfied, the Pledgee agrees that it shall forthwith release the
Pledgor from its Obligations hereunder and the Irrevocable Proxy
shall terminate forthwith and be delivered to the Pledgor
forthwith.
15. The Pledgor shall from time to time, and at all
times after the security constituted by this Pledge Agreement
shall have become enforceable, execute all such further
instruments and documents and do all such things as the Pledgee
may reasonably deem desirable for the purpose of obtaining the
full benefit of this Pledge Agreement and of the rights, title,
interest, powers, authorities and discretions conferred on the
Pledgee by this Pledge Agreement including (without limitation)
causing the Company to execute any such instruments and documents
as aforesaid. The Pledgor hereby irrevocably appoints the Pledgee
its attorney-in-fact for it and in its name and on its behalf and
as its act and deed to execute, seal and deliver and otherwise
perfect any deed, assurance, agreement, instrument or act which
it may reasonably deem desirable for any of the purposes of this
Pledge Agreement; provided that the Pledgee shall not exercise
such power until the security constituted by this Pledge
Agreement shall have become enforceable. The Pledgee shall have
full power to delegate this power of attorney but no such
delegation shall preclude the subsequent exercise of such power
by the Pledgee itself or preclude the Pledgee from subsequent
delegation to some other person and any delegation may be revoked
by the Pledgee at any time.
16. (a) The Pledgee shall release Collateral having a
Fair Market Value of at least $1,000,000 from time to time upon
request of the Pledgor if (i) no Default exists or would result
therefrom and (ii) after giving effect to such release, the
aggregate outstanding principal amount of the Loans does not
exceed the Borrowing Base.
(b) In order to effect a release of Collateral as
contemplated by clause (a) above, the Pledgee will (i) confirm
the release in a certificate, if necessary, and (ii) deliver, or
cause to be delivered, to the Pledgor the certificate evidencing
the Pledged Shares to be released hereunder.
(c) In connection with any release of Pledged
Shares, no shares of Common Stock shall be released unless and
until there are no Pledged Shares consisting of Class A Stock.
17. IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES
HERETO THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO
AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMNT.
18. The Pledgee shall not by any act, delay, omis- sion
or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in
writing, signed by the Pledgee, and then only to the extent
therein set forth. A waiver by the Pledgee of any right or remedy
hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Pledgee would otherwise have had on
any future occasion. No failure to exercise nor any delay in
exercising on the part of the Pledgee, any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
19. None of the terms or provisions of this Pledge
Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the Pledgee and the
Pledgor. This Pledge Agreement and all obligations of the Pledgor
hereunder shall be binding upon the successors and permitted
assigns of the Pledgor and shall, together with the rights and
remedies of the Pledgee hereunder, inure to the benefit of the
Pledgee, its respective successors and permitted assigns.
20. Notices and other communications hereunder shall be
telefaxed and confirmed by certified mail if domestic (by federal
express, express mail or courier, if international) as follows:
If to the Pledgor - Xxxxxx X. Xxxxx
c/o American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxxx X. Xxxxxx, Esq.
American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Pledgee - ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Every notice or demand shall, except so far as otherwise
expressly provided by this Pledge Agreement, be deemed to have
been received in the case of a telefax. with confirmed answerback
at the time of dispatch thereof (provided that if the date of
dispatch is not a Business Day in the locality of the party to
whom such notice or demand is sent it shall be deemed to have
been received on the next following Business Day in such
locality).
21. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
22. THE PLEDGOR (I) HEREBY IRREVOCABLY SUBMITS HIMSELF
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL
COURT OF THE UNITED STATES LOCATED IN NEW YORK STATE, FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS PLEDGE AGREEMENT, THE SUBJECT MATTER HEREOF OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY BROUGHT BY THE PLEDGEE, OR ITS
SUCCESSORS OR ASSIGNS, AND (II) HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS PLEDGE AGREEMENT
OR THE SUBJECT MATTER HEREOF OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY MAY NOT BE ENFORCED IN OR BY SUCH COURTS. THE
PLEDGOR HEREBY IRREVOCABLY AND GENERALLY CONSENTS TO SERVICE OF
PROCESS BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT THE
PLEDGOR'S ADDRESS SET FORTE HEREIN IN ANY ACTION, SUIT OR
PROCEEDING WITH RESPECT TO ANY MATTER AS TO WHICH IT SUBMITS TO
JURISDICTION AS SET FORTH ABOVE. THE PLEDGOR HEREBY AGREES THAT
HIS SUBMISSION TO JURISDICTION SET FORTH ABOVE IS MADE FOR THE
EXPRESS BENEFIT OF THE PLEDGEE. FINAL JUDGMENT AGAINST THE
PLEDGOR IN ANY SUIT IN ANY COURT REFERRED TO ABOVE SHALL BE
CONCLUSIVE, AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE
CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF ANY
INDEBTEDNESS OR LIABILITY OF THE PLEDGOR THEREIN DESCRIBED;
PROVIDED, ALWAYS THAT THE PLAINTIFF MAY AT ITS OPTION BRING SUIT,
OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE PLEDGOR OR
ANY OF HIS ASSETS IN THE COURTS OF ANY COUNTRY OR PLACE WHERE THE
PLEDGOR OR SUCH ASSETS MAY BE FOUND.
IN WITNESS whereof the parties hereto have caused this
Pledge Agreement to be duly executed as of the day and year first
above written.
______________________________
Xxxxxx X. Xxxxx
ING (U.S.) CAPITAL CORPORATION
By:___________________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of November 10, 1997 by and between AMERICAN
SKIING COMPANY, a Maine corporation ("Company") and ING (U.S.)
CAPITAL CORPORATION, a Delaware corporation (together with its
permitted successors and assigns hereunder, "Holder"), which has
agreed to take as security for certain loans made to Xx. Xxxxxx
X. Xxxxx ("Xxxxx"), the President and Chief Executive Officer of
Company, pursuant to a Credit Agreement dated as of November 10,
1997 between Holder and Xxxxx (the "Credit Agreement"), certain
shares of Company's common stock, par value $.01, and Class A
Common Stock, par value $0.01, owned by Xxxxx and delivered to
Holder from time to time pursuant to the Pledge Agreement
(hereinafter defined) (collectively, together with any securities
into which such shares may be converted, the "Registrable
Securities").
This Agreement is made pursuant to the Credit Agreement. In
order to induce Holder to extend credit to Xxxxx secured by the
Registrable Securities, Company has agreed to provide the
registration rights set forth in this Agreement.
The parties hereby agree as follows:
1. Definitions.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such
specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities,
by agreement or otherwise; provided, however, that
beneficial ownership of 10% or more of the voting securities
of a Person shall be deemed to be control.
"Agreement" has the meaning assigned to that term
in the preamble.
"Business Day" means any day other than a Saturday,
a Sunday or a day on which banking institutions in the City
of New York, Borough of Manhattan are not required to be
open.
"Commission" has the meaning assigned to that term
in Section 2(c).
"Company" has the meaning assigned to that term in
the preamble.
"Credit Agreement" has the meaning assigned to that
term in the preamble.
"Event of Default" has the meaning assigned to such
term in the Credit Agreement.
"Exchange Act" has the meaning assigned to that
term in Section 2(e).
"Inspectors" has the meaning assigned to that term
in Section 2(c).
"Person" means any corporation, individual, joint-
stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state
or political subdivision thereof, trust, municipality or
other entity.
"Pledge Agreement" means that certain Pledge
Agreement dated as of November 10, 1997 between Xxxxx and
Holder, as the same may from time to time be amended,
modified or supplemented and in effect.
"Priority Securities" has the meaning assigned to
that term in Section 2(a).
"Registration Expenses" means any and all expenses
incident to performance of or compliance with this
Agreement, including without limitation: (i) all Commission,
stock exchange, or National Association of Securities
Dealers, Inc. registration and filings fees, (ii) all fees
and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees
and disbursements of counsel for any underwriters in
connection with blue sky qualifications of any of the
Registrable Securities), (iii) all expenses of any Persons
in preparing or assisting in preparing, word processing,
printing and distributing the registration statement
relating to any of the Registrable Securities, any
underwriting agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all
fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any
securities exchange or exchanges pursuant to Section
2(c)(vii) hereof, (v) all rating agency fees, (vi) the fees
2
and disbursements of counsel for Company and of Company's
independent public accountants, including the expenses of
any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (vii) the
reasonable fees and disbursements of one law firm reasonably
acceptable to Company retained by Holder in connection with
the registration statement relating to any of the
Registrable Securities and (viii) any fees and disbursements
of any underwriters customarily paid by issuers or sellers
of securities and the reasonable fees and expenses of any
special experts retained in connection with the registration
statement relating to any of the Registrable Securities, but
excluding underwriting discounts and commissions and
transfer taxes, if any.
"Registrable Securities" has the meaning assigned
to that term in the preamble.
"Securities Act" has the meaning assigned to that
term in Section 2.
"Shares" has the meaning assigned to that term in
Section 2(b).
"Holder" has the meaning assigned to that term in
the preamble.
2. Registration Rights.
Holder shall have the right to have all Registrable
Securities at any time pledged to it pursuant to the Pledge
Agreement registered under the Securities Act of 1933, as
amended (the "Securities Act") and applicable United States
state securities laws on up to three occasions in accordance
with the following provisions.
(a) Registration on Request.
(i) At any time and from time to time after
the occurrence of an Event of Default, upon the written
request of Holder, Holder may request that Company effect
the registration under the Securities Act for an
underwritten public offering of all or part of the
Registrable Securities held by Holder; provided, however,
that in the event that such Event of Default is cured in
accordance with the provisions of the Credit Agreement prior
to the taking of any action by Holder to sell or otherwise
dispose of all or any part of the Registrable Securities,
then Holder shall not have the right to request the
registration of all or part of the Registrable Securities
under this Section 2(a) unless and until the occurrence of a
3
subsequent Event of Default. Subject to the provisions of
this Section 2, Company will use its best efforts to cause
the prompt registration under the Securities Act of the
Registrable Securities, and in connection therewith, subject
to subsection 2(a)(ii) hereof, will prepare and file on such
appropriate form as Company in its reasonable discretion
shall determine a registration statement under the
Securities Act to effect such registration.
Notwithstanding the foregoing, Company will not be
required to file a registration statement in any of the
following situations:
(1) during any period of time (not to exceed
ninety (90) days in the aggregate with respect to each
request) when Company has determined to proceed with a
public offering and, in the judgment of the managing
underwriter thereof, the requested filing would have an
adverse effect on the public offering;
(2) during any period of time (not to exceed
sixty (60) days with respect to each request) when Company
is in possession of material non-public information that it
deems is in its best interest not to disclose publicly;
(3) during any period of time (not to exceed
sixty (60) days with respect to each request) when Company
is engaged in any program for the repurchase of Shares,
unless the repurchase program and the requested registration
may proceed concurrently pursuant to an exemption under
Regulation M under the United States Securities Exchange Act
of 1934; or
(4) during the 180-day period following the
effectiveness of any previous registration statement filed
at the request of Holder or otherwise (including without
limitation the registration statement filed by the Company
on Form S-1 (No. 333-33483) or filed by the Company under
the Amended and Restated Registration Rights Agreement,
dated as of November 3, 1997, by and between the Company and
Xxxxxxxxx L.L.C. (the "Xxxxxxxxx Agreement")).
Notwithstanding the foregoing, the aggregate period
of time during which Company will be relieved of the
requirement to file a registration statement pursuant to
clauses (1) through (4) above will in no event exceed one
hundred and eighty (180) consecutive days with respect to
each request.
Holder may, at any time prior to the effective date
of the registration statement relating to such registration,
4
revoke such request, without liability to Company or any
other Person, by providing a written notice to Company
revoking such request.
(ii) Number of Registrations: Expenses.
Company shall not be obligated to effect more than one
registration in any 180-day period of Registrable Securities
pursuant to requests from Holder under this Section 2(a).
Company shall pay all Registration Expenses in connection
with the first three registrations that Holder requests
pursuant to this Section 2(a). Holder shall pay all
Registration Expenses in connection with later registrations
pro rata according to the number of Registrable Securities
it registered pursuant to such registration. However, in
connection with each such registration, Holder shall pay all
underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of its
Registrable Securities pursuant to this Section 2(a).
(iii) Effective Registration Statement. A
registration requested pursuant to this Section 2(a) shall
not be deemed to have been effected unless the registration
statement relating thereto (A) has become effective under
the Securities Act and any of the Registrable Securities
included in such registration have actually been sold
thereunder and (B) has remained effective for a period of at
least 180 days (or such shorter period in which all
Registrable Securities of Holder and, if applicable, Company
included in such registration have actually been sold
thereunder); provided, however, that if any effective
registration statement requested pursuant to this
Section 2(a) is not carried out by reason of any of the four
situations noted in Section 2(a)(i) above under which
Company will not be required to file or may delay filing a
registration statement under this Section 2(a)(i), such
registration statement shall not be included as one of the
registrations for which Company will pay expenses pursuant
to this Section 2(a) hereof; provided, further, that if
after any registration statement requested pursuant to this
Section 2(a) becomes effective such registration statement
is subject to a stop order, injunction or other order or
requirement of the Commission or other governmental agency
or court solely due to the actions or omissions to act of
Company, such registration statement shall not be included
as one of the registrations for which Company will pay
expenses pursuant to Section 2(a)(ii).
(iv) Selection of Underwriters. Holder shall
have the right to select the investment banker and manager
or co-managers that will administer the offering; provided,
however, that such selection shall be subject to approval by
5
Company, which approval shall not be unreasonably withheld;
provided further, that Company shall have the right to
appoint a co-manager in all cases.
(v) Pro Rata Participation in Requested
Registrations. If a requested registration pursuant to this
Section 2(a) involves an underwritten offering and the
managing underwriter advises the Company in writing that, in
its view, the number of equity securities requested to be
included in such registration exceeds the largest number of
securities which can be sold without having an adverse
effect on such offering, including the price at which such
securities can be sold, the number of Registrable Securities
requested to be registered by Holder in such registration
shall be reduced; provided, however, that:
(A) if the Company intends to issue Shares
and to include them in such registration,
the Holder's allocation will be subject
to reduction prior to any reduction in
the amount of the Shares proposed to be
issued by the Company;
(B) Holder may elect not to sell any
Registrable Securities pursuant to the
registration statement; and
(C) if such registration includes less than
fifty percent (50%) of the Registrable
Securities requested to be included
therein by Holder, then such registration
shall not be included as one of the
registrations for which Company is
required to pay for expenses pursuant to
Section 2(a)(ii).
(b) Incidental Registration.
(i) If Company at any time following the
occurrence of an Event of Default proposes to register any
of its shares of Common Stock ("Shares") or any options,
warrants or other rights to acquire, or securities
convertible into or exchangeable for Shares (the "Priority
Securities") under the Securities Act (other than a
registration, (A) relating to shares issuable upon exercise
of employee share options or in connection with any employee
benefit or similar plan of Company, (B) in connection with
an acquisition by Company of another company, or (C)
pursuant to the Xxxxxxxxx Agreement) in a manner which would
permit registration of Registrable Securities for sale to
the public under the Securities Act (whether or not for sale
6
for its own account), it shall each such time give prompt
written notice to Holder of its intention to do so and of
Holder's rights under this Section 2(b), at least 30
calendar days prior to the anticipated filing date of the
registration statement relating to such registration. Such
notice shall offer Holder the opportunity to include in such
registration statement such number of Registrable Securities
as Holder may request. Upon the written request of Holder
made within 20 calendar days after the receipt of Company's
notice (which request shall specify the number of
Registrable Securities intended to be disposed of by Holder
and the intended method of disposition thereof), Company
will use its best efforts to effect the registration under
the Securities Act of all Registrable Securities that
Company has been so requested to register by Holder;
provided, however, that (A) if such registration involves an
underwritten offering, Holder must sell its Registrable
Securities to the underwriters selected by Company on the
same terms and conditions as apply to Company, and (B) if,
at any time after giving written notice pursuant to this
Section 2(b)(i) of its intention to register any Priority
Securities and prior to the effective date of the
registration statement filed in connection with such
registration, Company shall determine for any reason not to
register such Priority Securities, Company shall give
written notice to Holder and shall thereupon be relieved of
its obligation to register any Registrable Securities in
connection with such registration. If a registration
pursuant to this Section 2(b) involves an underwritten
public offering, Holder may elect, in writing prior to the
effective date of the registration statement filed in
connection with such registration, not to register such
Registrable Securities in connection with such registration.
Company shall pay all Registration Expenses in connection
with each registration of Registrable Securities requested
pursuant to this Section 2(b). However, Holder shall pay
all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of its
Registrable Securities pursuant to a registration statement
effected pursuant to this Section 2(b). Notwithstanding the
foregoing, in the event that such Event of Default giving
rise to the registration rights under this Section 2(b) is
cured in accordance with the provisions of the Credit
Agreement prior to the taking of any action by Holder to
sell or otherwise dispose of all or any part of the
Registrable Securities, then Holder shall not have the right
to request the registration of all or part of the
Registrable Securities under this Section 2(b) (a) unless
and until the occurrence of a subsequent Event of Default.
7
(ii) Priority in Incidental Registrations. If
a registration pursuant to this Section 2(b) involves an
underwritten offering and the managing underwriter advises
Company in writing that, in its good faith view, the number
of equity securities (including all Registrable Securities)
that Company and Holder intend to include in such
registration exceeds the largest number of securities that
can be sold without having an adverse effect on such
offering, including the price at which such Registrable
Securities can be sold, Company will include in such
registration (A) first, all the Priority Securities to be
sold for Company's own account; and (B) second, to the
extent that the number of Priority Securities is less than
the number of Registrable Securities that the underwriter
has advised Company can be sold in such offering without
having the adverse effect referred to above, as many
Registrable Securities as are requested to be included in
such registration by Holder pursuant to Section 2(b)(i)
hereof.
(iii) If Company at any time proposes to effect
a public offering in a jurisdiction other than the United
States of any of its Shares or any options, warrants or
other rights to acquire, or securities convertible into or
exchangeable for Shares (other than a public offering,
(A) relating to shares issuable upon exercise of employee
share options or in connection with any employee benefit or
similar plan of Company or (B) in connection with an
acquisition by Company of another company) Company and
Holder will have the rights and be subject to the
obligations agreed in this Section 2(b) to the extent and
where applicable.
(c) Holdback Agreements.
(i) If any registration of Registrable
Securities shall be in connection with an underwritten
public offering, Holder agrees not to effect any sale or
distribution, including any private placement or any sale
pursuant to Rule 144A (or any successor provision) or
otherwise or any sale pursuant to Rule 144 (or any successor
provision), under the Securities Act, of any Registrable
Securities, other than by pro-rata distribution to its
shareholders, partners or other beneficial holders, and not
to effect any such sale or distribution of any other equity
security of Company or of any security convertible into or
exchangeable or exercisable for any equity security of
Company (in each case, other than as part of such
underwritten public offering) during the ten calendar days
prior to, and during the 180 calendar day period (or such
lesser period as may be agreed upon between such holders and
8
the managing underwriter of such offering) that begins on
the effective date of such registration statement (except as
part of such registration), without the consent of the
managing underwriter of such offering; provided, however,
that Holder has received written notice of such registration
at least two Business Days prior to the anticipated
beginning of the ten calendar day period referred to above.
(ii) If any registration of Registrable
Securities shall be in connection with an underwritten
public offering, Company agrees (A) not to effect any public
sale or distribution of any of its equity securities or of
any security convertible into or exchangeable or exercisable
for any equity security of Company (other than any such sale
or distribution of such securities in connection with any
merger or consolidation by Company or any Affiliate of
Company or the acquisition by Company or an Affiliate of
Company of the shares or substantially all the assets of any
other Person or in connection with an employee stock
ownership or other benefit plan) during the ten days prior
to, and during the 180-day period (or such lesser period as
may be agreed upon between such holders and the managing
underwriter of such offering) which begins on, the effective
date of such registration statement (except as part of such
registration), and (B) that any agreement entered into after
the date hereof pursuant to which Company issues or agrees
to issue any privately placed equity securities shall
contain a provision under which the holders of such
securities agree not to effect any public sale or
distribution of any such securities during the period and in
the manner referred to in the foregoing clause (A),
including a private placement pursuant to Rule 144A under
the Securities Act (or any successor provision) or otherwise
and any sale pursuant to Rule 144 under the Securities Act
(except as part of such registration, if permitted).
(d) Registration Procedures. In connection with
any offering of Registrable Securities registered pursuant
to this Section 2, Company shall:
(i) Prepare and file with the Securities and
Exchange Commission (the "Commission") within 60 calendar
days after receipt of a request for registration, a
registration statement on any form for which Company then
qualifies or which counsel for Company shall deem
appropriate, and which form shall be available for the sale
of the Registrable Securities in accordance with the
intended methods of distribution thereof, and use its best
efforts to cause such registration statement to become and
remain effective as provided herein, provided that before
filing with the Commission a registration statement or
9
prospectus or any amendments or supplements thereto, Company
will (A) furnish to one counsel selected by Holder copies of
all such documents proposed to be filed for said counsel's
review and comment, and (B) notify Holder of any stop order
issued or threatened by the Commission and take all
reasonable actions required to prevent the entry of such
stop order or to remove it if entered.
(ii) Prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for
a period of not less than 180 days or such shorter period
that will terminate when all Registrable Securities covered
by such registration statement have been sold (but not
before the expiration of the time periods referred to in
Section 4(3) of the Securities Act and Rule 174, or any
successor thereto, if applicable), and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such registration statement.
(iii) Furnish to Holder and each underwriter,
if any, of Registrable Securities covered by such
registration statement such number of copies of such
registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto), and
the prospectus included in such registration statement
(including each preliminary prospectus), in conformity with
the requirements of the Securities Act, and such other
documents as Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities
owned by Holder.
(iv) Use its best efforts to register or
qualify such Registrable Securities under such other state
securities or "blue sky" laws of such jurisdictions as
Holder, and each underwriter, if any, of Registrable
Securities covered by such registration statement reasonably
requests and do any and all other acts and things that may
be reasonably necessary or advisable to enable Holder and
each underwriter, if any, to consummate the disposition in
such jurisdictions of the Registrable Securities owned by
Holder; provided that Company will not be required to
(A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for
this clause (iv), (B) subject itself to taxation or
regulation of its business in any such jurisdiction other
10
than Bermuda, or (C) consent to general service of process
in any such jurisdiction.
(v) Use its best efforts to cause the
Registrable Securities covered by such registration
statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by
virtue of the business and operations of Company to enable
Holder to consummate the disposition of such Registrable
Securities.
(vi) Immediately notify Holder at any time
when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any
event that comes to Company's attention if as a result of
such event the prospectus included in such registration
statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; and Company will promptly prepare and furnish to
Holder a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading.
(vii) Use its best efforts to cause all such
Registrable Securities to be listed on a national securities
exchange in the United States or NASDAQ and on each
securities exchange on which similar securities issued by
Company may then be listed, and enter into such customary
agreements including a listing application and
indemnification agreement in customary form, and to provide
a transfer agent and registrar for such Registrable
Securities covered by such registration statement no later
than the effective date of such registration statement.
(viii) Enter into such customary agreements
(including an underwriting agreement or qualified
independent underwriting agreement, in each case, in
customary form) and take all such other actions as Holder or
the underwriters retained by Holder, if any, reasonably
request in order to expedite or facilitate the disposition
of such Registrable Securities, including customary
representations, warranties, indemnities and agreements.
(ix) Make available for inspection, during
business hours of Company, by Holder, any underwriter
participating in any disposition pursuant to such
registration statement, and any attorney, accountant or
11
other agent retained by Holder or any such underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of
Company and its subsidiaries, if any, as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility, and cause Company's officers, directors and
employees, and those of Company's affiliates, if any, to
supply all information and respond to all inquiries
reasonably requested by any such Inspector in connection
with such registration statement.
(x) Use its best efforts to obtain a "cold
comfort" letter from Company's appointed auditors in
customary form and covering such matters of the type
customarily covered by "cold comfort" letters as Holder
reasonably requests.
(xi) Otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission,
and make available to Holder, as soon as reasonably
practicable, an earnings statement covering a period of at
least twelve months beginning after the effective date of
the registration statement (as the term "effective date" is
defined in Rule 158(c) under the Securities Act) which
earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
It shall be a condition precedent to the obligation
of Company to take any action with respect to any
Registrable Securities that Holder shall furnish to Company
such information regarding the Registrable Securities and
any other Shares in Company held by Holder and the intended
method of disposition of the Registrable Securities held by
Holder as Company shall reasonably request and as shall be
required in connection with the action taken by Company.
Holder agrees that, upon receipt of any notice from
Company of the happening of any event of the kind described
in Section 2(d)(vi) hereof, Holder will forthwith
discontinue disposition of Registrable Securities until
Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2(d)(vi) hereof,
and, if so directed by Company Holder will deliver to
Company (at Company's expense) all copies (including,
without limitation, any and all drafts), other than
permanent file copies, then in Holder's possession, of the
prospectus covering such Registrable Securities current at
the time of receipt of such notice. In the event that
Company shall give any such notice, the period mentioned in
Section 2(d)(ii) hereof shall be extended by the greater of
(A) three months or (B) the number of days during the period
12
from and including the date of the giving of such notice
pursuant to Section 2(d)(vi) hereof to and including the
date when Holder shall have received the copies of the
supplemented or amended prospectus contemplated by Section
2(d)(vi) hereof.
(e) Indemnification.
(i) Indemnification by Company. In the event
of any registration of any Shares of Company under the
Securities Act pursuant to this Agreement, Company will
indemnify and hold harmless, to the full extent permitted by
law, Holder, its directors and officers, general partners,
limited partners and managing directors, each other Person
who participates as an underwriter in the offering or sale
of such securities and each other Person, if any, who
controls, is controlled by or is under common control with
Holder or any such underwriter within the meaning of the
Securities Act (and directors, officers, controlling
Persons, partners and managing directors of any of the
foregoing) against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including any
amounts paid in any settlement effected with Company's
consent, which consent will not be unreasonably withheld) to
which Holder, any such director or officer or general or
limited partner or managing director or any such underwriter
or controlling Person may become subject under the
Securities Act, United States state securities "blue sky"
laws, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof) or expenses arise out of or are based upon
(A) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in
any registration statement under which such securities were
registered under the Securities Act, any preliminary, final
or summary prospectus contained therein, or any amendment or
supplement thereto, (B) any omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
or (C) any violation or alleged violation by Company of any
United States federal, state or common law rule or
regulation applicable to Company and relating to action
required of or inaction by Company in connection with any
such registration. Company shall reimburse Holder and each
such director, officer, general partner, limited partner,
managing director or underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them
in connection with investigating or defending such loss,
claim, liability, action or proceeding; provided, however,
that Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or
13
action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in
such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary
prospectus in reliance upon and in conformity with written
information furnished to Company through an instrument duly
executed by Holder in its capacity as a shareholder in
Company or any such director, officer, general or limited
partner, managing director, underwriter or controlling
Person specifically stating that it is for use in the
preparation thereof; and, provided, further, that Company
shall not be liable to Holder, any Person who participates
as an underwriter in the offering or sale of Registrable
Securities, if any, or any other Person, if any, who
controls such underwriter within the meaning of the
Securities Act, pursuant to this Section 2(e)(i) with
respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or
supplemented as the case may be, to the extent that any such
loss, claim, damage or liability of such underwriter or
controlling Person results from the fact that such
underwriter sold Registrable Securities to a Person to whom
there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus or
of the final prospectus as then amended or supplemented,
whichever is most recent, if Company has previously
furnished copies thereof to such underwriter and such final
prospectus, as then amended or supplemented, had corrected
any such misstatement or omission. The indemnity provided
for herein shall remain in full force and effect regardless
of any investigation made by or on behalf of Holder or any
such director, officer, general partner, limited partner,
managing director, underwriter or controlling Person and
shall survive the transfer of such securities by Holder.
(ii) Indemnification by Holder and
Underwriters. Company will require, as a condition to
including any Registrable Securities in any registration
statement filed in accordance with the provisions hereof,
that Company shall have received an undertaking reasonably
satisfactory to it from Holder or any underwriter, to
indemnify and hold harmless (in the same manner and to the
same extent as set forth in paragraph (i) above) Company and
its directors, officers, controlling Persons and all other
prospective sellers and their respective directors,
officers, general and limited partners, managing directors,
and their respective controlling Persons with respect to any
statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any
14
amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in
reliance upon and in conformity with written information
furnished to Company or its representatives through an
instrument duly executed by or on behalf of Holder or any
underwriter specifically stating that it is for use in the
preparation of such registration statement, preliminary,
final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the
foregoing. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf
of Company or Holder, any underwriters or any of their
respective directors, officers, general or limited partners,
managing directors or controlling Persons and shall survive
the transfer of such securities by Holder, provided,
however, that Holder shall not be liable in the aggregate
for any amounts exceeding the product of the sale price per
Registrable Security and the number of Registrable
Securities being sold pursuant to such registration
statement or prospectus by Holder.
(iii) Notices of Claims, Etc. Promptly after
receipt by an indemnified party hereunder of written notice
of the commencement of any action or proceeding with respect
to which a claim for indemnification may be made pursuant to
this Section 2(e), such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying
party, promptly give written notice to the indemnifying
party of the commencement of such action, provided, however,
that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of
its obligations under the preceding subsections of this
Section 2(e), except to the extent that the indemnifying
party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such
indemnified party and indemnifying parties may exist in
respect of such claim, the indemnifying party will be
entitled to participate in and, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified
party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof, unless
in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption
15
of the defense thereof, and the indemnifying party will not
be subject to any liability for any settlement made without
its consent (which consent shall not be unreasonably
withheld). No indemnifying party will consent to entry of
any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release
from all liability in respect to such claim or litigation.
An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to
pay the fees and expenses of more than one counsel in any
single jurisdiction for all parties indemnified by such
indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any
other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional
counsel or counsels as may be reasonably necessary.
Notwithstanding anything to the contrary set forth herein,
and without limiting any of the rights set forth above, in
any event any party will have the right to retain, at its
own expense, counsel with respect to the defense of a claim.
(iv) Other Indemnification. Indemnification
similar to that specified in the preceding subsections of
this Section 2(e) (with appropriate modifications) shall be
given by Company and Holder, to the full extent permitted by
applicable law, with respect to any required registration or
other qualification of securities under any United States
federal or state law or regulation or governmental authority
other than the Securities Act.
(v) Contribution. In order to provide for
just and equitable contribution in circumstances in which
the indemnity agreement provided for in this Section 2(d) is
for any reason held to be unenforceable although applicable
in accordance with its terms, Company, Holder and the
underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by
Company, Holder and the underwriters, in such proportions
that the underwriters are responsible for that portion
represented by the percentage that the underwriting discount
appearing on the cover page of the prospectus bears to the
initial public offering price appearing thereon and Company
and Holder are responsible for the balance; provided,
however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent
16
misrepresentation. As between Company and Holder, such
parties shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion
as shall be appropriate to reflect (A) the relative benefits
received by Company, on the one hand, and Holder on the
other hand, from the offering of the Registrable Securities
and any other securities included in such offering, and
(B) the relative fault of Company, on the one hand, and
Holder on the other, with respect to the statements or
omissions that resulted in such loss, liability, claim,
damage or expense, or action in respect thereof, as well as
any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact relates to information supplied by Company or
Holder, the intent of the parties and their relative
knowledge, access to information and opportunity to correct
or prevent such statement or omission. Company and Holder
agree that it would not be just and equitable if
contribution pursuant to this Section 2(e) were to be
determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to herein. Notwithstanding anything
to the contrary contained herein, Company and Holder agree
that any contribution required to be made by Holder pursuant
to this Section 2(e) shall not exceed the net proceeds from
the offering of Registrable Securities (before deducting
expenses) received by Holder with respect to such offering.
For purposes of this Section 2(e), each Person, if any, who
controls Holder or an underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights
to contribution as Holder or such underwriter, and each
director of Company, each officer of Company who signed the
registration statement, and each Person, if any, who
controls Company within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as
Company.
(f) Rule 144. At all times after a public
offering of any of Company's Shares, Company agrees that it
will file in a timely manner all reports required to be
filed by it pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and, if at any time Company
is not required to file such reports, it will make available
to the public, to the extent required to permit the sale of
Shares by Holder pursuant to Rule 144, current information
about itself and its activities as contemplated by Rule 144
under the Securities Act, as such Rule may be amended from
time to time. Notwithstanding the foregoing, Company may
17
deregister any class of its equity securities under Section
12 of the Exchange Act or suspend its duty to file reports
with respect to any class of its securities pursuant to
Section 15(d) of the Exchange Act if it is then permitted to
do so pursuant to the Exchange Act and the rules and
regulations thereunder.
3. Representations, Warranties and Certain
Covenants.
In order to induce Holder to enter into the Credit
Agreement and this Agreement, Company represents and
warrants unto the Lender, and covenants with the Lender, as
set forth in this Section 3:
(a) Organization, etc. Company is a corporation
validly organized and existing and in good standing under
the laws of the State of its organization, is duly qualified
to do business and is in good standing as a corporation in
each jurisdiction where the nature of its business requires
such qualification, and has full power and authority and
holds all requisite governmental licenses, permits and other
approvals to enter into and perform its obligations under
this Agreement and to own and hold under lease its property
and to conduct its business substantially as currently
conducted by it.
(b) Due Authorization, Non-Contravention, etc.
The execution, delivery and performance by Company of this
Agreement are within Company's corporate powers, have been
duly authorized by all necessary corporate and shareholder
(if any) action, and do not
(i) contravene the certificate of
incorporation or by-laws of Company;
(ii) contravene any contractual restriction,
law or governmental regulation or court decree or order
binding on or affecting Company; or
(iii) result in, or require the creation or
imposition of, any Lien on any of Company's properties.
(c) Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution,
delivery or performance by Company of this Agreement.
Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding
18
company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935,
as amended.
(d) Validity, etc. This Agreement constitutes the
legal, valid and binding obligation of Company enforceable
in accordance with its terms.
(e) Financial Information. The balance sheet of
Company as at July 27, 1997, certified by Price
WaterhouseLLP, and the related statements of earnings and
cash flow of Company, certified by Price WaterhouseLLP,
copies of which have been furnished to Holder, have been
prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of
Company as at the date thereof.
(f) No Material Adverse Change. Since the date of
the financial statements described in Section 3(e), there
has been no material adverse change in the financial
condition, operations, assets, business, properties or
prospects of Company.
(g) Litigation, Labor Controversies, etc. There
is no pending or, to the knowledge of Company threatened
litigation, action, proceeding or labor controversy
affecting Company or any of its properties, assets or
revenues, which is reasonably likely to materially adversely
affect the financial condition, operations, assets,
business, properties or prospects of Company or which
purports to affect the legality, validity or enforceability
of this Agreement.
(h) Taxes. Company has filed all tax returns and
reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
(i) Accuracy of Information. All factual
information heretofore or contemporaneously furnished by or
on behalf of Company in writing to Holder for purposes of or
in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of Company
to Holder will be, true and accurate in every material
respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of
19
this Agreement by Holder, and such information is not, or
shall not be, as the case may be, incomplete by omitting to
state any material fact necessary to make such information
not misleading.
(j) Financial Information, Reports, Notices, etc.
So long as this Agreement shall remain in effect, Company
will furnish, or will cause to be furnished, to Holder
copies of the following financial statements, reports,
notices and information:
(i) as soon as available and in any event within
45 days after the end of each fiscal quarter of each
fiscal year of Company, a consolidated balance sheet of
Company and its consolidated subsidiaries as of the end
of such fiscal quarter and statements of earnings and
cash flow of Company and its consolidated subsidiaries
for such fiscal quarter and for the period commencing at
the end of the previous fiscal year and ending with the
end of such fiscal quarter, certified by the chief
financial officer of Company;
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of Company, a
copy of the annual audit report for such fiscal year for
Company and its consolidated subsidiaries, including
therein a balance sheet of Company and its consolidated
subsidiaries as of the end of such fiscal year and
statements of earnings and cash flow of Company for such
fiscal year, in each case certified (without
qualification) in a manner acceptable to Holder by Price
WaterhouseLLP or other independent public accountants
acceptable to Holder;
(iii) such other information respecting the
condition or operations, financial or otherwise, of
Company which is made available to the Company's
shareholders generally as Holder may from time to time
reasonably request.
4. Miscellaneous.
(a) Remedies. Holder, in addition to being
entitled to exercise all rights provided herein, in the
Stock Purchase Agreement or granted by law, including
recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement.
Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by
it of the provisions of this Agreement and hereby agrees to
20
wave the defense in any action for specific performance that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Company will not
on or after the date of this Agreement enter into any
agreement with respect to its securities that is
inconsistent with the rights granted to Holder in this
Agreement or otherwise conflicts with the provisions hereof.
No Person, other than Holder and Xxxxxxxxx L.L.C. pursuant
to the Xxxxxxxxx Agreement, has the right, contractual or
otherwise, to require the registration of any securities of
Company by virtue of any transaction contemplated by this
Agreement or the Credit Agreement. The rights granted to
Holder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of
Company's securities under any agreement in effect on the
date hereof.
(c) Amendments and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions
hereof may not be given unless Company has obtained the
written consent of Holder.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing
by hand-delivery, first-class mail (registered or certified,
return receipt requested), telex, telecopier, or air courier
guaranteeing overnight delivery:
(i) if to Holder, at:
ING (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Senior Vice President
with a copy to:
Xxxxxx & Xxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
21
(ii) if to Company, at:
American Skiing Company
Sunday Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed
to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto, including without
limitation and without the need for an express assignment,
subsequent holders of Registrable Securities; provided,
however, that this Agreement shall not inure to the benefit
of or be binding upon a successor or assign of Holder unless
and to the extent such successor or assign acquired
Registrable Securities from Holder.
(f) Counterparts. This Agreement may be executed
in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
RULES THEREOF.
(i) Severability. In the event that any one or
more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the
remaining provisions contained herein shall not be affected
or impaired thereby.
22
(j) Entire Agreement. This Agreement together
with the Stock Purchase Agreement is intended by the parties
as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration
rights granted by Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first written above.
AMERICAN SKIING COMPANY
By:_______________________
Name:
Title:
ING (U.S.) CAPITAL CORPORATION
By:_______________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
23
AMENDMENT
THIS AMENDMENT, dated as of August 6, 1999 (this
"Amendment"), is made between XXXXXX X. XXXXX (the "Borrower")
and ING (U.S.) CAPITAL LLC f/k/a ING (U.S.) Capital Corporation
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are parties to that
certain Credit Agreement, dated as of November 10, 1997 (together
with all amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement");
WHEREAS, in order to evidence his obligations under the
Credit Agreement, the Borrower executed and delivered to the
Lender a Note, dated November 10, 1997 in the original principal
amount of $18,000,000, made payable to the Lender by the Borrower
(the "Note"); and
WHEREAS, the parties hereto have agreed, subject to the
conditions and terms hereinafter set forth, to amend the Credit
Agreement and the Note to (i) provide for a decrease in the
Commitment Amount and the face amount of the Note from
$18,000,000 to $14,000,000, (ii) extend the Stated Maturity Date,
and (iii) make certain other amendments;
NOW, THEREFORE, in consideration of the agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS
SECTION 1.01. Amendment to the Credit Agreement.
(a) The definition of "Change in Control" set forth in
Section 1.1 of the Agreement is hereby amended in its entirety to
read as follows:
"Change in Control" means the occurrence, at any time,
of the following event: the Borrower and the
"Stockholders" party to that certain Stockholders'
Agreement dated as of August 6, 1999 among the Company,
the Borrower, Oak Hill Capital Partners, L.P., Oak Hill
Capital Management Partners, L.P., Oak Hill Securities
Fund, L.P. and OHCP Ski, L.P. and/or one or more of such
Stockholders' affiliates, shall cease to have the
ability to elect a majority of the board of directors of
the Company."
(b) The definition of "Commitment Amount" set forth in
Section 1.1 of the Agreement is hereby amended in its entirety to
read as follows:
"Commitment Amount" means, on any date, an amount not to
exceed $14,000,000, as such amount may be reduced from
time to time pursuant to Section 2.2."
(c) The definition of "Stated Maturity Date" set forth in
Section 1.1 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Stated Maturity Date" means November 30, 2000, or such
later date to which the Commitment may be extended
pursuant to Section 2.6."
(c) The definition of "Fair Market Value" set forth in
Section 1.1 of the Credit Agreement is hereby amended in its
entirety to read as follows:
"Fair Market Value" means with respect to any
Pledged Shares, at any time, (a) if the Common Stock is
listed or admitted to trading on any securities
exchange, the closing price, regular way, on such day on
the principal securities exchange on which the Common
Stock is traded; or (b) if the Common Stock is not then
listed or admitted to trading on any securities
exchange, the last reported sales price on such day, or
if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by
the Valuation Sources for the Common Stock; provided,
that (i) if any Valuation Source does not timely quote a
sale or bid price therefor, the Lender may determine
such Fair Market Value by reference to the arithmetic
mean of sale and bid prices quoted by the remaining
Valuation Sources and (ii) if no Valuation Source timely
quotes a sale or bid price, (A) first, the Lender shall
use commercially reasonable efforts to locate other
sources that do timely quote a sale or bid price, and
use such sources for purposes of determining "Fair
Market Value," or (B) if the Lender is unable to locate
other sources as contemplated in clause (A), the "Fair
Market Value" of the Common Stock at such time shall
mean the fair market value thereof as determined by the
Lender in its reasonable discretion. Notwithstanding
clauses (i) and (ii), the Borrower may complete each
Valuation Certificate and make each Borrowing Request on
the basis of quotes of sale or bid prices for the Common
Stock at the relevant time from sources reasonably
believed by it to be reliable and the Lender may (but
2
shall not be required to) rely upon such determinations
by the Borrower."
(d) Section 2.5 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"SECTION 2.5 Prepayments Following Determination
of Fair Market Value. If the Fair Market Value of the
Pledged Shares as determined by the Lender in accordance
with the definition of "Fair Market Value" establishes
that the most recently delivered Valuation Certificate
shows the Borrower to be in violation of Section 7.2.4,
or if after giving effect to such determination the
aggregate outstanding principal amount of the Loans
exceeds the amount that the Borrower was entitled to
have extended to it pursuant to Section 2.1.2, the
Borrower shall immediately, at the Borrower's option,
either prepay Loans in accordance with clause (c) of
Section 3.1 or deliver to the Lender additional Shares
(which shall be shares of Common Stock unless the
Borrower owns no further shares of Common Stock which
are not Pledged Shares, in which case such Shares may
consist of Class A Stock) in accordance with the Pledge
Agreement."
(d) Section 2.6 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"SECTION 2.6. Extension of Stated Maturity Date.
Upon written request of the Borrower delivered not more
than 60 nor less than 30 days prior to the Stated
Maturity Date, the Lender will extend the Stated
Maturity Date through August 31, 2001, provided that, as
of the effective date of such extension (and, in the
case of clauses (i) and (ii) below, on the date of such
requested extension), (i) no Default has occurred and is
then continuing, (ii) the Fair Market Value of the
Pledged Shares is at least 400% of the aggregate
principal amount of the Loans, and (iii) the Borrower
shall pay the Lender the Extension Fee on or prior to
the effective date of such extension."
(e) Paragraph (d) of Section 3.1 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"(d) shall, within five (5) Business Days
following the date on which the Lender has made a
determination of the Fair Market Value of the Pledged
Shares, the effect of which is to reduce the Fair Market
Value of the Pledged Shares and consequently result in
the outstanding principal amount of the Loans exceeding
3
the then effective Maintenance Base, either make a
mandatory prepayment of all Loans in an amount equal to
the excess of the aggregate outstanding principal amount
of Loans over the then effective Interim Maintenance
Base or deliver additional Shares to the Lender (as
provided in Section 2.5) pursuant to the Pledge
Agreement having a Fair Market Value such that, when
added to the aggregate Fair Market Value of all other
Pledged Shares, the aggregate outstanding principal
amount of the Loan no longer exceeds the Interim
Maintenance Base; and"
SECTION 1.02. Amendment to Note. The Note shall be
amended and restated in its entirety by the delivery of a
replacement note by the Borrower in the form of Exhibit A
attached hereto (the "Replacement Note").
ARTICLE II
CONDITIONS TO EFFECTIVENESS
This Amendment and the amendments set forth herein shall
become effective as of the date first written above on the date
when the Lender shall have received (i) a cash payment, in
immediately available funds, in respect of the Loan outstanding
on the date hereof in the amount of $5,000,000, (ii) the
Stockholders' Agreement referred to in Section 1.01(a) hereof, in
form and substance satisfactory to the Lender, has been executed
and delivered by all parties thereto and the transactions
contemplated thereby have been consummated, and (iii) a
counterpart of this Amendment and the original of the Replacement
Note, each of which shall have been duly executed on behalf of
the Borrower.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Document Pursuant to Credit Agreement.
This Amendment is a document executed pursuant to the Credit
Agreement and shall be construed, administered and applied in
accordance with all of the terms and conditions of the Credit
Agreement. Unless otherwise expressly set forth herein, all
capitalized terms used herein shall have the meanings ascribed
thereto in the Credit Agreement.
SECTION 3.2. Representations and Warranties. Except as
may have resulted from a decline in the market value of the
Pledged Shares, the Borrower hereby reaffirms, as of the date
hereof, each and every representation and warranty made by him in
the Loan Documents, except that the representation set forth in
Section 6.5 of the Credit Agreement shall refer to the latest
financial statements supplied by the Borrower to the Lender.
4
SECTION 3.3. No Default or Event of Default. The
Borrower hereby represents and warrants that as of the date
hereof there exists no Default or Event of Default.
SECTION 3.4. Performance of Covenants. The Borrower
hereby affirms that he has duly performed and observed the
covenants and undertakings set forth in the Loan Documents on his
part to be performed, and covenants and undertakes to continue to
duly perform and observe such covenants and undertakings so long
as the Loan Documents, as amended hereby, shall remain in effect.
SECTION 3.5. No Other Amendment or Waiver. Except for
the amendments set forth herein, the text of the Credit Agreement
shall remain unchanged and in full force and effect, and is
hereby ratified and confirmed by the parties.
SECTION 3.6. Successors and Assigns. This Amendment
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
SECTION 3.7. Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of
which when executed and delivered shall be deemed to be an
original and all of which shall constitute together but one and
the same agreement.
SECTION 3.8. Governing Law. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the day and year first above
written.
/s/ Xxxxxx X. Xxxxx
__________________________
XXXXXX X. XXXXX
ING (U.S.) CAPITAL LLC
By: /s/ Xxxxxx X. Xxxxxxx
_________________________
Name: Xxxxxx X. Xxxxxxx
Title: Director
5
EXHIBIT A
FORM OF REPLACEMENT NOTE
REPLACEMENT NOTE
$14,000,000 August 6, 1999
FOR VALUE RECEIVED, the undersigned, XXXXXX X. XXXXX (the
"Borrower"), promises to pay to the order of ING (U.S.) CAPITAL
LLC f/k/a ING (U.S.) Capital Corporation (the "Lender") on the
Stated Maturity Date the principal sum of FOURTEEN MILLION
DOLLARS ($14,000,000) or, if less, the aggregate unpaid principal
amount of all Loans shown on the schedule attached hereto (and
any continuation thereof) made by the Lender pursuant to that
certain Credit Agreement, dated as of November 10, 1997 (together
with all amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement"), between
the Borrower and the Lender. Unless otherwise defined, terms used
herein have the meanings provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding from the
date hereof until maturity (whether by acceleration or otherwise)
and, after maturity, until paid, at the rates per annum and on
the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in
lawful money of the United States of America in same day or
immediately available funds to the account designated by the
Lender pursuant to the Credit Agreement.
This Replacement Note is the Note referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to
which reference is made for a description of the security for
this Replacement Note and for a statement of the terms and
conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the Indebtedness
evidenced by this Replacement Note and on which such Indebtedness
may be declared to be immediately due and payable.
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor.
THIS REPLACEMENT NOTE IS GIVEN IN REPLACEMENT OF A NOTE,
DATED NOVEMBER 10, 1997, IN THE ORIGINAL PRINCIPAL AMOUNT OF
$18,000,000, ISSUED BY THE BORROWER TO THE ORDER OF THE LENDER,
AND IS NOT INTENDED TO BE A NOVATION. THE PREDECESSOR NOTE,
MARKED "EXCHANGED", WILL BE RETURNED TO THE BORROWER UPON THE
LENDER'S RECEIPT OF THIS REPLACEMENT NOTE.
______________________
XXXXXX X. XXXXX
2
LOANS AND PRINCIPAL PAYMENTS
Amount of Unpaid
Amount of Loan Interest Principal Principal Notation
Made Period Repaid Balance Made By
-------------- --------- ---------- ---------- --------
Date Total
---- -----
3
01531013.AD1
