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FOURTH AMENDMENT TO
CREDIT AGREEMENT
Dated as of September 24, 1997
Among
ASC EAST
SUNDAY RIVER SKIWAY CORPORATION
SUNDAY RIVER LTD.
PERFECT TURN, INC.
SUNDAY RIVER TRANSPORTATION INC.
LBO HOLDING, INC.
CRANMORE, INC.
SUGARBUSH RESORT HOLDINGS INC.
SUGARBUSH LEASING COMPANY
SUGARBUSH RESTAURANTS, INC.
MOUNTAIN WASTEWATER TREATMENT, INC.
S-K-I LTD.
KILLINGTON, LTD.
MOUNT SNOW LTD.
WATERVILLE VALLEY SKI AREA LTD.
PICO SKI AREA MANAGEMENT COMPANY
RESORTS SOFTWARE SERVICES, INC.
KILLINGTON RESTAURANTS, INC.
RESORT TECHNOLOGIES, INC.
DOVER RESTAURANTS, INC.
DEERFIELD OPERATING COMPANY
SUGARLOAF MOUNTAIN CORPORATION
MOUNTAINSIDE
SUGARTECH
the Borrowers
and
FLEET NATIONAL BANK
BANKBOSTON, N.A.
KEYBANK NATIONAL ASSOCIATION
the Banks
and
FLEET NATIONAL BANK, AS AGENT
the Agent
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FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT is entered into as of September
24, 1997 by and among ASC EAST (f/k/a American Skiing Company), SUNDAY RIVER
SKIWAY CORPORATION, SUNDAY RIVER LTD., PERFECT TURN, INC., SUNDAY RIVER
TRANSPORTATION INC., LBO HOLDING, INC., CRANMORE, INC., SUGARBUSH RESORT
HOLDINGS INC., SUGARBUSH LEASING COMPANY, SUGARBUSH RESTAURANTS, INC., MOUNTAIN
WASTEWATER TREATMENT, INC., S-K-I LTD., KILLINGTON, LTD., MOUNT SNOW LTD.,
WATERVILLE VALLEY SKI AREA LTD., PICO SKI AREA MANAGEMENT COMPANY, RESORTS
SOFTWARE SERVICES, INC., KILLINGTON RESTAURANTS, INC., RESORT TECHNOLOGIES,
INC., DOVER RESTAURANTS, INC., DEERFIELD OPERATING COMPANY, SUGARLOAF MOUNTAIN
CORPORATION, MOUNTAINSIDE and SUGARTECH (each a "Borrower" and collectively the
"Borrowers"), FLEET NATIONAL BANK, BANKBOSTON, N.A. (f/k/a The First National
Bank of Boston) and KEYBANK NATIONAL ASSOCIATION (f/k/a KeyBank of Maine) as the
Banks parties to the Credit Agreement referred to below (the "Lenders"), and
FLEET NATIONAL BANK, as Agent (the "Agent") under the Credit Agreement referred
to below.
RECITALS
The Borrowers, the Lenders and the Agent are parties to a Credit Agreement
dated as of June 28, 1996 (as previously amended, the "Credit Agreement"). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement. Events of Default have occurred and are
continuing under the Credit Agreement, and the Borrowers desire to amend the
Credit Agreement in certain respects and to have outstanding Events of Default
waived. The Lenders and the Agent are willing to amend the Credit Agreement and
waive such Events of Default on the terms and conditions set forth herein.
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree as
follows:
Section 1. AMENDMENT OF ARTICLE 6. Article 6 of the Credit Agreement
is hereby amended by adding a new Section 6.14 as follows:
Section 6.14 WEEKLY REPORTS. As soon as practicable, and in any
event by Wednesday of each week, the Borrowers shall furnish, from the date
hereof through October 30, 1997, to the Agent and each Lender weekly cash
flow reports showing receipts and disbursements in such detail as the
Lenders may reasonably request.
Section 2. AMENDMENT OF ARTICLE 9.
(a) Section 9.12 of the Credit Agreement is hereby amended by
deleting Section 9.12 thereof in its entirety and substituting therefor the
following:
Section 9.12. LIMITATIONS ON REAL ESTATE OPERATIONS. Engage in any
real estate development, or similar activities, including acquisition of
land intended for resale or development of residential subdivisions,
condominium units, golf courses, tennis courts, hotels or related
infrastructure and utilities, except through the Development Subsidiary,
the Hotel Subsidiary and any Unrestricted Subsidiary and except for the
completion of the Xxxxx Mountain development at Sunday River; provided,
however, the Borrowers may engage in such development activities relating
to the development of hotels at the Sunday River, Killington, Sugarbush and
Mount Snow resorts so long as all costs incurred for such activities (the
"Development Expenditures") do not exceed (a) $12,000,000 at any time from
May 30, 1997 through August 31, 1997, and (b) $8,000,000 at any time from
August 31, 1997 through October 10, 1997; and provided, further, that the
Development Expenditures relating to the hotels at Sunday River, Killington
and Mount Snow will be repaid (with the exception of unreimburseable
capital costs for marketing) to the Borrowers on or before October 10,
1997. It is understood that the Development Expenditures for Sugarbush and
that operational marketing expenses for all hotels will not be repaid on or
before October 10, 1997 and that those amounts will not exceed $4,000,000
at any time.
(b) Article 9 of the Credit Agreement is hereby further amended by
deleting Section 9.14 thereof in its entirety and substituting therefor the
following:
Section 9.14. CAPITAL EXPENDITURES. Make any Capital
Expenditure except that (a) for the fifteen-month period from May 1,
1996 through February 28, 1997, the Borrowers and their Restricted
Subsidiaries may make Capital Expenditures of not more than
$21,000,000, of which not less than $9,500,000 shall be funded from
the proceeds of Capital Asset Financing, (b) for the Capital
Expenditure Test Period commencing April 1, 1997, the Borrowers and
their Restricted Subsidiaries may make Capital Expenditures of not
more than the sum of (i) (A) $27,500,000 LESS (B) the aggregate amount
of Development Expenditures (as defined in Section 9.12) which have
not been repaid to the Borrowers on or before October 10, 1997, LESS
(C) all amounts expended by the Borrowers, directly or indirectly, in
connection with the acquisition and development of Wolf Mountain in
Park City, Utah, which have not been repaid to the Borrowers on or
before October 10, 1997, PLUS (ii) up to $5,000,000 for Capital
Expenditures for the Killington/Pico interconnect project, or such
other projects as may be approved by the Lenders in writing and (c)
during each Capital Expenditure Test Period thereafter, the Borrowers
and their Subsidiaries may make Capital Expenditures not to exceed the
sum of (i) $6,000,000, which amount is intended to be used for
maintenance Capital Expenditures, PLUS (ii) the Discretionary Capital
Expenditure Allowance, to be used for discretionary Capital
Expenditures in accordance with the Capital Expenditure budget
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delivered under Section 6.4 hereof. Attached as Exhibit A to the Second
Amendment is a description of the Borrowers' proposed capital expenditures
for the Capital Expenditure Test Period commencing April 1, 1997 and those
expenditures which will not be made if the deductions referred to in
clauses (b)(i)(B) and (C) above are required to be made.
Section 3. AMENDMENT OF ARTICLE 10. Section 10.1 of the Credit
Agreement is hereby amended by adding a new subclause (t) and (u) as follows:
(t) Holdings shall have failed to receive not less than $250,000,000
in gross proceeds from the sale of its common stock in an initial public
offering on or before November 30, 1997.
(u) The Borrowers shall fail to deliver to the Agent by October 10,
1997 satisfactory written evidence of a lending commitment to the Borrowers
in an amount sufficient to repay the obligations under or in connection
with this Credit Agreement by a date certain (the "Commitment Letter") and
further, the Borrowers shall fail to close the transaction proposed in the
Commitment Letter by December 15, 1997.
Section 4. AMENDMENT OF ARTICLE 11. Section 11.1 of the Credit
Agreement is hereby amended by adding a new subclause (vii) as follows:
(vii) no waiver of an Event of Default under the Credit Agreement
as a result of the occurrence of either of the events set forth in Section
10.1(t) and Section 10.1(u) shall be made.
Section 5. WAIVER OF DEFAULTS.
(a) The Lenders and the Agent hereby waive the Events of Default existing
under the Credit Agreement as of July 31, 1997 as a result of the Borrowers'
failure to maintain (i) the ratio of Consolidated Total Debt to Consolidated
EBITDA required under Section 7.1 of the Credit Agreement for the four fiscal
period ending July 31, 1997, (ii) the ratio of Consolidated Adjusted Cash Flow
to Consolidated Debt Service required under Section 7.3 of the Credit Agreement
as of the end of the fiscal quarter ending July 31, 1997, and (iii) Consolidated
Tangible Net Worth required under Section 7.4 of the Credit Agreement as of the
last day of fiscal year 1997. The Borrowers hereby represent and warrant that
(i) Consolidated EBITDA as determined under Section 7.1 of the Credit Agreement
for the four-quarter period ending July 31, 1997 was not less than $32,094,552,
(ii) Consolidated Debt Service as determined under Section 7.3 of the Credit
Agreement as of the end of the fiscal quarter ending July 31, 1997 was not less
than $35,663,994, and (iii) Consolidated Tangible Net Worth as of the last date
of fiscal year 1997 was not less than $2,906,095.
(b) The Lenders and the Agent hereby waive the Events of Default existing
under the Credit Agreement as of July 31, 1997 as a result of the Borrowers'
failure to comply with:
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(i) the notice requirement set forth in Section 6.6 relating to notice of
defaults described in paragraph (a) hereof and clause (ii) below, and (ii) the
covenants set forth in Section 9.12 and 9.14.
Section 6. EFFECTIVENESS; CONDITIONS TO EFFECTIVENESS. This Fourth
Amendment to Credit Agreement shall become effective upon execution hereof by
the Lenders, the Agent and the Borrowers and satisfaction of the following
conditions:
(a) TEXTRON. The Borrowers shall have delivered to the Agent a letter from
Textron Financial Corp. ("Textron") confirming that the financial arrangement
between the Borrowers and Textron will close on or before September 30, 1997.
(b) DLJ. The Borrowers shall have delivered to the Agent a letter from
Xxxxxxxxx, Xxxxxx & Xxxxxxxx ("DLJ") confirming that the proposed initial public
offering of the common stock of Holdings is proceeding and DLJ is not aware of
any circumstance or reason that would prevent the initial public offering from
closing on or about November 30, 1997.
(c) PRICE WATERHOUSE. The Borrowers shall have delivered to the Agent a
letter from Price Waterhouse confirming that this Fourth Amendment is sufficient
to allow Price Waterhouse to render an unqualified opinion with respect to the
Borrowers' financial statements for their fiscal year ending July 31, 1997.
(d) AMENDMENT FEE. An amendment fee in an amount equal to $60,000 will be
payable to the Agent, for the account of each Lender, on the date of execution
of this Fourth Amendment.
(e) COUNSEL FEES. All fees and expenses of the Agent's special counsel,
Xxxxxxx, Procter & Xxxx LLP, will be paid on the date of execution of this
Fourth Amendment which fees and expenses consist of (i) outstanding invoices in
the amount of $26,167.38, and (ii) fees and expenses incurred through the date
hereof in the amount of $6,698.58.
Section 7. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The Borrowers
hereby confirm to the Agent and the Lenders the representations and warranties
of the Borrowers set forth in Article 5 of the Credit Agreement (as amended
hereby) as of the date hereof, as if set forth herein in full. The Borrowers
hereby certify that, after giving effect to this Fourth Amendment to Credit
Agreement, no Default exists under the Credit Agreement.
Section 8. MISCELLANEOUS. The Borrowers agree, jointly and severally,
to pay on demand all the Agent's reasonable expenses in preparing, executing and
delivering this Fourth Amendment to Credit Agreement, and all related
instruments and documents, including, without limitation, the reasonable fees
and out-of-pocket expenses of the Agent's special counsel, Xxxxxxx, Procter &
Xxxx LLP. This Fourth Amendment to Credit Agreement shall be a Lender
Agreement and shall be governed by and construed and enforced under the laws of
The Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have caused
this Fourth Amendment to Credit Agreement to be executed by their duly
authorized officers as of the date first set forth above.
ASC EAST
By: /s/ Xxxxxx Xxxxxxxxxx
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SUNDAY RIVER SKIWAY CORPORATION
By: /s/ Xxxxxx Xxxxxxxxxx
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SUNDAY RIVER LTD.
By: /s/ Xxxxxx Xxxxxxxxxx
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PERFECT TURN, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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SUNDAY RIVER TRANSPORTATION INC. LBO
HOLDING, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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CRANMORE, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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SUGARBUSH RESORT HOLDINGS INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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SUGARBUSH LEASING COMPANY
By: /s/ Xxxxxx Xxxxxxxxxx
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SUGARBUSH RESTAURANTS, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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MOUNTAIN WASTEWATER TREATMENT, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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S-K-I LTD.
By: /s/ Xxxxxx Xxxxxxxxxx
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KILLINGTON, LTD.
By: /s/ Xxxxxx Xxxxxxxxxx
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MOUNT SNOW LTD.
By: /s/ Xxxxxx Xxxxxxxxxx
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WATERVILLE VALLEY SKI AREA LTD.
By: /s/ Xxxxxx Xxxxxxxxxx
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PICO SKI AREA MANAGEMENT COMPANY
By: /s/ Xxxxxx Xxxxxxxxxx
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RESORTS SOFTWARE SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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KILLINGTON RESTAURANTS, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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RESORT TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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DOVER RESTAURANTS, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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DEERFIELD OPERATING COMPANY
By: /s/ Xxxxxx Xxxxxxxxxx
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SUGARLOAF MOUNTAIN CORPORATION
By: /s/ Xxxxxx Xxxxxxxxxx
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MOUNTAINSIDE
By: /s/ Xxxxxx Xxxxxxxxxx
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SUGARTECH
By: /s/ Xxxxxx Xxxxxxxxxx
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FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. McAvliffe
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Name: Xxxxxxx X. McAvliffe
Title: Executive Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Director
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK, AS AGENT
By: /s/ Xxxxxxx X. McAvliffe
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Name: Xxxxxxx X. McAvliffe
Title: Executive Vice President
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