EXHIBIT 10.27.2
SECOND AMENDMENT TO AGREEMENT
TO AMEND, CONSOLIDATE AND LEND
This Second Amendment to Agreement to Amend, Consolidate and Lend
("AMENDMENT") is made as of January 30, 1996, by and among FIRST INTERSTATE BANK
OF NEVADA, N.A. ("BANK"), TRIMONT LAND COMPANY, a California corporation doing
business as Northstar-at-Tahoe ("TRIMONT"), SIERRA-AT-TAHOE, INC., a Delaware
corporation ("SIERRA") and BEAR MOUNTAIN, INC., a Delaware corporation ("BMI").
Trimont, Sierra, and BMI are referred to herein individually as "BORROWER" and
collectively as "BORROWERS."
FACTUAL BACKGROUND
A. Bank, Trimont, Sierra, and BMI entered into a certain Agreement to
Amend, Consolidate and Lend dated May 31, 1995 as previously amended by
Amendment to Agreement to Amend, Consolidate and Lend dated November 22, 1995
(the "ACL AGREEMENT") in which Bank agreed to extend credit (the "Loan") to
Borrowers in the aggregate amount of Thirty Million and no/100 Dollars
($30,000,000.00). All capitalized words not defined herein are used as defined
in the ACL Agreement.
B. Bank and Borrowers desire to further amend the ACL Agreement on the
terms and conditions provided in this Amendment.
AMENDMENT
1. INCREASE IN COMMITMENT. The amount of Thirty Million Dollars
($30,000,000.00) as stated in Recital C of the ACL Agreement is hereby changed
to Forty Million Dollars ($40,000,000.00).
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2. AMENDMENTS TO ACL AGREEMENT (OTHER THAN FINANCIAL COVENANTS AND
QUARTERLY COMPLIANCE CERTIFICATE).
A. The first paragraph of Section 1.3 of the ACL Agreement (through
and including the chart at the top of page 5 of the ACL Agreement) is amended to
read in full as follows:
"1.3 INTEREST RATE. Interest shall be calculated by applying a margin to
the LIBOR Rate corresponding to the Borrowers' Debt-to-Cash Flow Ratio as
follows:
DEBT-TO-CASH FLOW RATIO LIBOR MARGIN
less than 1.5:1.0 1.00%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 1.125%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 1.25%
greater than 2.5:1.0 1.375%
"Debt-to-Cash Flow Ratio" means consolidated interest-bearing indebtedness
of the Borrowers determined as of each fiscal quarter end in accordance
with GAAP, including (a) the daily average of capitalized lease
liabilities, (b)the daily average of the outstanding principal owing under
this Agreement for the ninety- (90-) day period immediately preceding each
fiscal quarter end, and (c) the daily average of all other interest-bearing
indebtedness as of the end of the applicable fiscal period under review,
DIVIDED BY Adjusted Consolidated EBITDA less capital expenditures.
"Adjusted Consolidated EBITDA" means the sum of (x)earnings before
interest, taxes, depreciation and amortization for the Borrowers on a
consolidated basis for the four consecutive fiscal quarters ending on the
determination date and (y) with respect to each acquisition, merger or
other business combination made by a Borrower during the four consecutive
fiscal quarters of such Borrower immediately preceding the fiscal quarter
end for which the ratio is then being calculated, the aggregate amount of
earnings before interest, taxes, depreciation and amortization of the
assets, capital stock, division or business group acquired in such
acquisition, merger or other business combination (as reasonably allocable
thereto) for the period beginning four fiscal quarters before the fiscal
quarter end for which the ratio is then being calculated and ending on the
date such acquisition, merger or other business combination was made."
B. Section 1.4 of the ACL Agreement is amended as follows:
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1. The first paragraph of Section 1.4 is amended to read in
full as follows:
"1.4 USE OF PROCEEDS; PERMITTED ACQUISITIONS. Unless the Bank has agreed
otherwise in a writing provided by it to the Borrowers, the Loan proceeds
may only be used for or with respect to:
"(i) non-hostile acquisitions, mergers or other business combinations
by a Borrower or an affiliate of a Borrower of an existing ski resort or
golf course, provided that the aggregate purchase price for each such
acquisition, merger or other business combination is less than or equal to
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or, if the purchase price
exceeds such amount, the Bank has consented thereto (which consent will be
reasonably granted) prior to the closing of such transaction (in connection
therewith, the Bank agrees to use its best efforts to respond to such
request within ten (10) Business Banking Days following the date of such
request);
"(ii) general working capital purposes of the Borrowers and their
subsidiaries; and
"(iii) repayment of Parent Obligations incurred on or after
September 3, 1995, to the extent permitted under the Subordination
Agreement dated May 31, 1995, as amended by Amendment to Subordination
Agreement dated November 22, 1995 and Second Amendment to Subordination
Agreement dated January 30, 1996 (the "Subordination Agreement")."
2. The third paragraph of Section 1.4 is amended by changing
"Ten Million and no/100 Dollars ($10,000,000.00)" to "Five Million and no/100
Dollars ($5,000,000.00)."
C. Section 1.9 of the ACL Agreement is amended to read in full as
follows:
"1.9 REPAYMENT; REDUCTION IN FACILITY; RIGHT OF PREPAYMENT. Borrowers
shall pay all accrued interest upon Reference Rate Advances quarterly in
arrears on the last day of each January, April, July and October (or, if
Bank is not open for business on that day, the next succeeding day on which
Bank is open for business). Interest on LIBOR loans is payable on the last
day of the applicable Interest Period, but in no case less frequently than
quarterly.
"The outstanding principal balance of each LIBOR Advance shall be payable
on the last day of the Interest Period applicable to such LIBOR Advance and
on the Maturity Date.
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"Borrowers may, from time to time in their discretion, seek advances under
the Loan in accordance with the provisions of Article III hereinbelow;
provided, however, that, except to the extent of accrued interest not yet
due for payment, the amount outstanding under the Loan may at no time
exceed the Maximum Permissible Loan Balance. The "Maximum Permissible Loan
Balance" shall initially be FORTY MILLION AND NO/100 DOLLARS
($40,000,000.00), but the Maximum Permissible Loan Balance shall be reduced
as follows:
EFFECTIVE DATE REDUCTION AMOUNT MAXIMUM PERMISSIBLE LOAN
BALANCE AFTER REDUCTION
April 30, 1996 $5,314,375.00 $34,685,625.00
April 30, 1997 $6,028,570.00 $28,657,055.00
April 30, 1998 $6,028,570.00 $22,628,485.00
April 30, 1999 $6,028,570.00 $16,599,915.00
"All remaining principal and accrued interest shall be due and payable on
the Maturity Date.
"Any amount outstanding under the Note may be prepaid at any time, without
penalty, but no such prepayment shall modify, reduce, or delay the
repayment obligations hereof.
"Prepayment may be made upon at least three (3) Business Banking Days'
prior written or faxed notice (or telephone notice promptly confirmed by
written or faxed notice) to the Bank; PROVIDED, HOWEVER, that each partial
prepayment shall be in an amount which is an integral multiple of ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00) and not less than ONE MILLION
AND NO/100 DOLLARS ($1,000,000.00). Each notice of prepayment shall
specify the prepayment date and the principal amount to be prepaid, shall
be irrevocable and shall commit the Borrowers to prepay such amount stated
therein on the date stated therein. All prepayments shall include accrued
interest on the principal amount being prepaid to the date of payment and
shall be applied to payment of interest before application to principal.
"On the date of any termination or reduction of the Maximum Permissible
Loan Balance pursuant to this Section 1.9, the Borrowers shall pay or
prepay so much of the outstanding balance as shall be necessary in order
that the aggregate principal amount of the outstanding balance will not
exceed the Maximum Permissible Loan Balance after giving effect to such
termination or reduction."
D. The chart in Section 1.13 of the ACL Agreement is amended to read
in full as follows:
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FEE
DEBT-TO-CASH FLOW RATIO (PER ANNUM)
less than 1.5:1.0 0.1875%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.25%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.3125%
greater than 2.5:1.0 0.375%
E. The chart contained in Section 1.14 of the ACL Agreement is
amended to read in full as follows:
LETTER OF CREDIT FEE
(PER ANNUM)
DEBT-TO-CASH FLOW RATIO (SET AT ISSUANCE OF CREDIT)
less than 1.5:1.0 1.00%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 1.125%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 1.25%
greater than 2.5:1.0 1.375%
F. Section 4.11 of the ACL Agreement is amended by adding, following
the word "in" in the first line, "that certain Environmental Site Audit: Bear
Mountain Ski Resort And Golf Course prepared by Xxx X. Xxxxxxx & Associates
dated October 12, 1995 and."
3. AMENDMENTS TO ACL AGREEMENT (FINANCIAL COVENANTS).
A. Section 5.17 of the ACL Agreement is amended to read in full as
follows:
"5.17 LEVERAGE. Borrowers will maintain a consolidated Leverage Ratio
not greater than 3.0 to 1.0 calculated on a rolling four-quarter basis.
"Leverage Ratio" means the sum of (a) the Maximum Permissible Loan Balance,
plus (b) the aggregate principal amount of all interest-bearing debt
(excluding Intercompany Debt) other than the Loan ("Other Permitted
Indebtedness"), divided by Adjusted Consolidated EBIDTA. "Intercompany
Debt" means all Parent Obligations as defined in the Subordination
Agreement, to the extent permitted under the Subordination Agreement, and
any debts, obligations, or credit extended by any of the Borrowers to any
other Borrower."
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B. Section 5.19 of the ACL Agreement is amended to read in full as
follows:
"5.19(a) FIXED CHARGE COVERAGE RATIO. Borrowers will maintain a minimum
consolidated Fixed Charge Coverage Ratio, calculated on a rolling four-
quarter basis, not less than:
Quarters ending on or before September 30, 1996 1.35 to 1.00
Thereafter 1.50 to 1.00
"5.19(b) ADJUSTED FIXED CHARGE COVERAGE RATIO. Borrowers will maintain a
minimum consolidated Adjusted Fixed Charge Coverage Ratio, calculated on a
rolling four-quarter basis, not less than 1.00 to 1.00.
"5.19(c) DEFINITIONS. As used in this Section 5.19:
"Adjusted Fixed Charge Coverage Ratio" means Adjusted Consolidated EBITDA
less Excluded Items, less tax distributions, less dividends, less
Maintenance Capital Expenditures, plus Capital Injections, DIVIDED by Fixed
Charges.
"Capital Injections" means the sum of any amounts contributed or loaned to
a Borrower by a shareholder of Borrower as equity or as debt subordinated
to the Loan by the Subordination Agreement."
"Excluded Items" means (i) any gain or loss arising from the sale of
capital assets (real estate sales are not excluded), (ii) any gain arising
from any write-up of assets, (iii) earnings of any other Person,
substantially all of the assets of which have been acquired by Borrowers in
any manner to the extent that such earnings were realized by such other
person prior to the date of such acquisition, (iv) net earnings of any
Person in which Borrowers has an ownership interest, unless such earnings
have actually been received by Borrowers in the form of cash distributions,
(v) the earnings of any Person to which assets of Borrowers shall have been
sold, transferred, or disposed of, or into which Borrowers shall have
merged, to the extent that such earnings arise prior to the date of such
transaction, and (vi) any gain arising from the acquisition of any
securities of Borrowers.
"Fixed Charge Coverage Ratio" means Adjusted Consolidated EBITDA less
Excluded Items, less tax distributions, DIVIDED by Fixed Charges.
"Fixed Charges" means the sum of (i) amounts to be required to be repaid
pursuant to scheduled facility reductions hereunder (if any), plus (ii)
cash interest expense,
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plus (iii) principal and interest expenses on Other Permitted Indebtedness
plus (iv) payments on capitalized leases and other fixed noncontingent
obligations.
"Maintenance Capital Expenditures" means four percent (4%) of Borrowers'
consolidated gross revenues."
C. Section 5.20 of the ACL Agreement is amended by deleting the
period at the end of the Section and adding ", or (e) Intercompany Debt."
D. Section 5.22 of the ACL Agreement is amended by striking the
words "TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00)" and inserting in
their place "FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00), or (h)
Liens securing Intercompany Debt."
4. QUARTERLY COMPLIANCE CERTIFICATE. Notwithstanding any provisions of
the ACL Agreement, the form of Quarterly Compliance Certificate or other
Compliance Certificate shall be that form attached as Exhibit C to this
Amendment.
5. ADDITIONAL AMENDMENTS TO ACL AGREEMENT UPON FIBREBOARD GUARANTY. Upon
Bank's receipt of (i) a guaranty of the Loan by Fibreboard Corporation, a
Delaware corporation, in form and substance acceptable to Bank, and (ii)
notwithstanding and in addition to any fee payable under Section 1.13 of the ACL
Agreement, a fee in the amount of five one-hundredths of one percent (0.05%) of
the Maximum Permissible Loan Balance, then:
(a) the pricing of the loan, as stated in Paragraphs 1.3, 1.13, and
1.14 of the ACL Agreement, shall be amended as follows:
DEBT-TO-CASH FLOW RATIO LIBOR MARGIN
less than 1.5:1.0 0.45%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.60%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.80%
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greater than 2.5:1.0 0.925%
FEE
DEBT-TO-CASH FLOW RATIO (PER ANNUM)
less than 1.5:1.0 0.175%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.20%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.25%
greater than 2.5:1.0 0.30%
LETTER OF CREDIT FEE
(PER ANNUM)
DEBT-TO-CASH FLOW RATIO (SET AT ISSUANCE OF CREDIT)
less than 1.5:1.0 0.45%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.60%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.80%
greater than 2.5:1.0 0.925%
(b) the amount of "25 basis points" in Section 1.3 of the ACL
Agreement shall be changed to "Zero (0) basis points;" and
(c) the form of Quarterly Compliance Certificate attached as Exhibit
C to this Amendment shall be revised accordingly.
6. CONDITIONS PRECEDENT. As a condition to the effectiveness of this
Amendment and each of the documents described below to be executed by Bank, Bank
shall have received, on or before January 31, 1996 (except as otherwise provided
below), in form and substance acceptable to Bank, duly executed by the
appropriate parties, each of the following:
a. Second Amendment to Secured Reducing Revolving Line of Credit
Promissory Note;
b. Second Amendment to the Subordination Agreement;
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c. Deed of Trust and Assignment of Rents, Issues and Profits and
Leases ("BMI DEED OF TRUST"), affecting certain real property owned by BMI
described in EXHIBIT A to this Amendment (the "BMI DEED OF TRUST PROPERTY");
d. Agreement Concerning First Interstate Bank of Nevada Loan for
Holder of Term Special Use Permit No. 4267-01 executed by the United States
Department of Agriculture, Forest Service, Bank, and BMI pertaining to certain
real property described in EXHIBIT B to this Amendment, which is owned by the
Forest Service and subject to Permit No. 4267-01 (with the BMI Deed of Trust
Property, the "BMI REAL PROPERTY").
e. Special Covenants and Agreements Regarding Ski Permit pertaining
to Term Special Use Permit No. 4267-01, executed by Bank and BMI;
f. Assignment of Permits, Licenses, Variances, Approvals, Plans and
Specifications;
g. Environmental Indemnity pertaining to the BMI Real Property
executed by Borrowers;
h. Assignment of Agreement For Water Service and UCC-2 amendment
relating thereto; and on or before February 29, 1996, a Consent to such
Assignment executed by Big Bear Municipal Water District;
i. Third Amendment to Deed of Trust executed by Trimont amending a
certain Deed of Trust and Assignment of Rents, Issues and Profits and Leases
dated May 3, 1993 and
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recorded May 4, 1993, in the Official Records of Placer County, California, as
Document No. 93-031617 (the "TRIMONT DEED OF TRUST");
j. Corporate Resolutions to Borrow certified by the corporate
secretaries of each of the Borrowers authorizing them respectively to enter into
this Amendment and to borrow the increased amount under the ACL Agreement;
k. Amended and Restated Undertaking;
l. An ALTA Loan Policy of title insurance insuring the validity and
priority of the BMI Deed of Trust as a lien on the BMI Deed of Trust Property,
issued by an issuer acceptable to Bank, subject only to exceptions approved by
Bank and with any endorsements reasonably requested by Bank;
m. Endorsements to the Policy of Title Insurance insuring the
Trimont Deed of Trust, insuring that the Trimont Deed of Trust, as modified,
continues to secure the secured obligations as provided therein, subject only to
exceptions approved by Bank; and
n. Payment of Bank's reasonable costs and expenses, including
attorney's fees, in connection with this Amendment and the transactions
contemplated hereby.
7. MISCELLANEOUS. Except as expressly amended herein, the ACL Agreement
and the Loan Documents shall remain in full force and effect. This Amendment is
a Loan Document and is governed by California law. This Amendment and the
agreements, documents and instruments to be delivered hereunder fully state the
agreements of the parties hereto and thereto relating to their subject matter,
and supersede all prior discussions, negotiations, and communications, written
or oral, including but not limited to the commitment letter by Bank to Xxxxxxx
Xxxxxx and Xxxxx Xxxxxxxx dated October 26, 1995.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
stated above.
FIRST INTERSTATE BANK OF
NEVADA, N.A.
By /S/ XXXXX XXXXXX
---------------------
Its VICE PRESIDENT
---------------------
TRIMONT LAND COMPANY, a
California corporation doing business as
Northstar-at-Tahoe
By /S/ XXXXX X. XXXXXXX
---------------------
Its VICE PRESIDENT
---------------------
SIERRA-AT-TAHOE, INC., a Delaware
corporation
By /S/ XXXXX X. XXXXXXX
---------------------
Its VICE PRESIDENT
---------------------
BEAR MOUNTAIN, INC., a Delaware
corporation
By /S/ XXXXX X. XXXXXXX
---------------------
Its VICE PRESIDENT
---------------------
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