EXHIBIT 10.107
▇▇▇▇▇▇▇▇▇ LLC
c/o Cerberus Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
American Skiing Company
Sunday ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman
Re: Amendment and Waiver
To the Board of Directors:
Reference is made to (i) that certain Securities Purchase Agreement dated
as of July 2, 1997, as amended by that certain First Amendment dated July 25,
1997 (the "Securities Purchase Agreement") by and between ▇▇▇▇▇▇▇▇▇ LLC
("Purchaser" ) and American Skiing Company, a Maine corporation (the "Company"),
formerly known as "ASC Holdings, Inc."; (ii) that certain Registration Rights
Agreement dated as of July 2, 1997 (the "Registration Rights Agreement") by and
between Purchaser and the Company; (iii) the Statement of Resolution
Establishing Series of Shares with respect to the Company's Series A
Exchangeable Preferred Stock (the "Certificate of Designation") filed with the
Secretary of State of Maine on July 16, 1997; and (iv) the Notes (as defined
below). The Securities Purchase Agreement, the Registration Rights Agreement,
the Certificate of Designation and the Notes and the other agreements,
instruments and documents relating to Purchaser's purchase of the Preferred
Stock and the Notes are referred to herein, collectively, as the "Purchaser
Closing Documents." Capitalized terms used in this letter agreement and not
otherwise defined herein shall have the respective meanings given them in the
Securities Purchase Agreement and the Registration Rights Agreement.
You have advised us that the Company has filed a Registration Statement on
Form S-1 (the "IPO Registration Statement") with the Securities and Exchange
Commission (the "SEC") with respect to an initial public offering (the "IPO") of
its common stock, par value $.01 per share ("Common Stock"). Purchaser
acknowledges that it has received a copy of the Registration Statement,
including Amendment No. 2 thereto filed on October 10, 1997 and a copy of the
Subject to Completion Prospectus dated October 14, 1997 relating to the IPO.
Purchaser represents and warrants that it is the sole record and beneficial
owner of 17,500 shares of Series A Exchangeable Preferred Stock (the "Preferred
Stock") and $17,500,000
aggregate principal amount of ASC's 14% Senior Exchangeable Notes due 2002 (the
"Notes" and, together with the Preferred Stock, the "Securities"). In
connection with the IPO and as contemplated by the Securities Purchase
Agreement, the Company is required to offer to exchange such Preferred Stock and
Notes for the Company's Repriced Converts (as defined in the Securities Purchase
Agreement). Purchaser and the Company have had discussions with respect to
amending or waiving certain provisions of the Purchaser Closing Documents
relating to such exchange. This Letter Agreement ("Letter Agreement") sets
forth the entire agreement between Purchaser and the Company with respect to the
subject matter of such discussions. In consideration of the mutual agreements
contained herein, Purchaser hereby agrees with the Company as follows:
1. AMENDMENT OF SECURITIES PURCHASE AGREEMENT.
(a) The Company and Purchaser agree that Section 1 of the
Securities
Purchase Agreement is hereby amended by deleting the definition
of "Repriced Converts" in its entirety and substituting the
following therefor:
"Repriced Converts" shall mean the 101/2% Repriced
Convertible Exchangeable Preferred Stock issued pursuant to
the Repriced Converts Certificate of Designation or 101/2%
Repriced Convertible Subordinated Debentures of the Company
issued pursuant to the Repriced Converts Indenture in
exchange for the 101/2% Convertible Exchangeable Preferred
Stock, with dividends or interest payable in cash or
compounding quarterly at the Company's option at a rate per
annum equal to 101/2%, Convertible into Conversion Shares
and with a maturity or mandatory redemption date on the
fifth anniversary of their date of issuance.
(b) The Company and Purchaser agree that the Securities Purchase
Agreement is hereby amended by deleting Exhibits C and D attached
thereto in their entirety and replacing them with EXHIBITS C AND
D, respectively, attached hereto.
(c) The Company and Purchaser agree that Section 8.1 of the
Securities Purchase Agreement is hereby amended by deleting
such section in its entirety and substituting the following
therefor:
8.1 CONVERSION AND EXCHANGE OF SECURITIES;
REGISTRATION.(i) In connection with the Company's initial
public offering of its Common Stock, par value $.01 per
share (the "IPO"), pursuant to a Registration Statement on
Form S-1 Reg. No. 333-33493 (the "IPO Registration
Statement") filed with the Securities and Exchange
Commission the Company hereby notifies Purchaser that:
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(1) that the Company is offering (the "IPO Offer") to
exchange (the "IPO Exchange") effective upon the
consummation of the IPO for all, but not less than all, of
the Preferred Stock and Notes owned by Purchaser, a number
of shares of the Company's 101/2% Repriced Convertible
Exchangeable Preferred Stock, having a liquidation
preference of $1,000 per share, equal to the aggregate
Liquidation Preference and Principal Amount of the Preferred
Stock and Notes being exchanged; and (2) that the Repriced
Converts will be issued pursuant to the Repriced Converts
Certificate of Designation, that the Repriced Converts have
been duly authorized by the Company and, upon issuance
thereof, will be legal, valid and binding obligations of the
Company enforceable in accordance with their terms, and that
the Conversion Shares of the Company will be, upon
conversion of the Repriced Coverts, legally and validly
issued, fully-paid and non-assessable, free of pre-emptive
rights. The Purchaser hereby irrevocably accepts the IPO
Offer, in whole, and agrees to exchange all of the
Securities owned by it for Repriced Converts provided that,
(i) the obligations of the Company and the Purchaser to
consummate the IPO Exchange shall be subject to the
condition precedent the IPO shall have closed within 180
days of November 3, 1997 and (ii) the price to the public
for the Common Stock issued in the IPO shall not be less
than $15.30 nor more than $22.00 per share. Purchaser
agrees to deliver certificates representing its shares of
Preferred Stock and Notes to the Company at the closing of
the IPO, and to execute such other documents or instruments
necessary to effect the IPO Exchange.
(b) The Repriced Converts shall be issued on the date
of closing of the IPO, pursuant to a Statement of Resolution
Establishing Series of Shares in the form of the Repriced
Convert Certificate of Designations and shall have an
aggregate Liquidation Preference equal to the aggregate
Principal Amount and Liquidation Preference of the
Securities being exchanged. The Repriced Converts shall be
convertible into IPO Common Stock at an initial conversion
price (subject to adjustment as provided in the Repriced
Converts Certificate of Designations) per share of IPO
Common Stock equal to the IPO Price multiplied by the
difference between one (1) minus the Conversion Discount
Percentage. As promptly as practicable thereafter, the
Company shall issue and deliver to the Purchaser
certificates for the Repriced Converts being issued.
(c) Purchaser acknowledges and agrees that the IPO
Exchange shall be effected as a private placement pursuant
to Section 3(a)(9) under the Securities Act of 1933, as
amended (the "1933 Act"), or other applicable exemption from
the registration
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requirements of the 1933 Act. Purchaser represents and
warrants that (i) it is acquiring the 101/2% Repriced
Convertible Exchangeable Preferred Stock for investment and
not with a view to distribution thereof: (ii) it has
received a copy of the Registration Statement; (iii) it is
an "accredited investor" within the meaning of Rule 502
under the 1933 Act and has such knowledge and experience so
as to be able to be capable of evaluating the IPO Exchange;
and (iv) it understands that each certificate evidencing the
101/2% Repriced Convertible Exchangeable Preferred Stock and
the Common Stock or 101/2% Repriced Subordinated Debentures
issuable upon conversion or exchange thereof shall bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT
PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO
SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE
144 UNDER SUCH ACT, OR (iii) ANY OTHER EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES.
2. The Company and Purchaser have entered into the Amended and Restated
Registration Rights Agreement in the form attached hereto as Exhibit F
(the "Amended and Restated Registration Rights Agreement"), which
shall become effective solely upon the closing of the IPO Exchange.
3. WAIVER. In order to permit the Company to complete the IPO,
Purchaser consents to the IPO and irrevocably and forever waives any
and all rights it may have under the Purchaser Closing Documents
(i) relating to notice of the IPO; (ii) except as provided in the
Amended and Restated Registration Rights Agreement to require the
Company to register any securities held by Purchaser, or issuable to
the Purchaser upon conversion or exchange of any other securities,
under the 1933 Act, including, without limitation, any registration of
securities for sale in the IPO, or to require the Company to cause the
Repriced Converts or underlying Common Stock issuable upon conversion
thereof to be freely tradeable at the closing of the IPO, including,
without limitation, the rights set forth in Sections 8.1(a), 8.1(b)
and 8.1(c) of the Securities Purchase Agreement; (iii) relating to
notice or response periods with respect to its rights to exchange the
Securities for the Repriced Converts in connection with the IPO; and
(iv) relating to any Change of Control including, without limitation,
any and all rights to receive notice of, or exchange or require the
redemption of Securities as a result of, any such Change of Control,
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provided that this waiver shall be effective only if the IPO shall
have been consummated within 180 days of the date hereof.
Notwithstanding the foregoing, effective upon the closing of the IPO
Exchange, the Purchaser shall have the registration rights set forth
in the Amended and Restated Registration Rights Agreement.
4. LOCK-UP. Purchaser agrees to enter into the Lock-Up Letter Agreement
which is attached hereto as EXHIBIT A at the effective time of the IPO
Registration Statement, and the terms of the Lock-Up Agreement are
incorporated herein by reference and are deemed to be a part hereof as
if stated in their entirety.
5. CONSENT TO AMENDMENT TO ARTICLES OF INCORPORATION. Purchaser hereby
consents to and approves the Amended and Restated Articles of
Incorporation of the Company attached hereto as EXHIBIT B.
6. WAIVER OF ANY CONFLICTS. Purchaser hereby irrevocably, waives
compliance with the covenants contained in the Purchaser Closing
Documents to the extent necessary to permit, and waives any Events of
Default existing or arising under the Purchaser Closing Documents as
a result of , and consents to, the following: (i) the filing of the
IPO Registration Statement and the consummation of the IPO; and (ii)
subject to the consummation of the IPO within 180 days of the date
hereof, the occurrence on or after the consummation of the IPO of the
events or transactions described or contemplated in the IPO
Registration Statement, including, without limitation: (A) the
granting of stock options covering 2,475,235 shares of Common Stock
to certain officers of the Company and the granting of additional
stock options from time to time pursuant to the Company's Stock
Option Plan, (B) the exchange by the Company of 1,000,000 shares
of the Company's Common Stock held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ for 14,760,530
shares of the Company's Class A Common Stock, (C) the consummation
on or after the consummation of the IPO of the New Credit Facility
(as defined in the Registration Statement) substantially in accordance
with the terms of the commitment letter for such financing attached
hereto as EXHIBIT E, (D) the redemption of the Discount Notes on the
terms described in the IPO Registration Statement and (E) the exchange
offer for the 4% minority interests in ASC East, Inc.
7. SECURITIES PURCHASE AGREEMENT COVENANTS. Purchaser acknowledges and
agrees that the following sections of the Securities Purchase
Agreement shall terminate effective upon the closing of the IPO and be
of no further force or effect: Sections 2.3, 2.5, 2.6(b), 2.7,
Section 6 (other than Sections 6.4, 6.8 and 6.22(a), which shall
continue in effect) and Section 7.
8. LETTER DATED OCTOBER 9, 1997. The letter between the Company and
Purchaser dated October 9, 1997 (the "Initial Letter") and any
and all prior oral or written expressions, agreements or
understandings with respect to the subject matter hereof and of
the Initial Letter are superseded in their entirety by this
Letter Agreement,
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which constitutes the parties' entire understanding with respect to
such subject matter, and may be amended only by a writing duly
executed by both parties.
9. GOVERNING LAW. This Letter Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
10. COUNTERPARTS. This Letter Agreement may be signed in any number of
counterparts, each executed counterpart constituting an original, but
all together only one agreement.
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To the extent the foregoing correctly reflects the understanding and
agreements of ASC please kindly execute the acknowledgment below and return one
original agreement to Purchaser.
Very truly yours,
▇▇▇▇▇▇▇▇▇ LLC
By: ____________________________________
Name:
Title:
Date: ___________________, 1997
Agreed to and Acknowledged by
AMERICAN SKIING COMPANY
(Formerly ASC HOLDINGS, INC.)
By: ___________________________
Name:
Title:
Date: ___________________, 1997
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