Exhibit 10.2

 

 

 

 

PROMISSORY NOTE

 

 

 

 

 

$21,000,000

 

January 6, 2016

 

For value received, Peak Resorts, Inc., Hunter Mountain Acquisition, Inc.,
Hunter Mountain Ski Bowl Inc., Hunter Mountain Festivals, Ltd., Hunter Mountain
Rentals Ltd., Hunter Resort Vacations, Inc., Hunter Mountain Base Lodge, Inc.,
Frosty Land, Inc. (each a "Borrower" and, collectively, "Borrowers"), jointly
and severally promise to pay to the order of EPT Ski Properties, Inc. (together
with its successors and assigns and/or any other holder of this Note, "Lender"),
without offset, deduction or counterclaim, in immediately available funds in
lawful money of the United States of America, at 909 Walnut Street, Suite 200,
Kansas City, Missouri 64106, the principal sum of TWENTY-ONE MILLION AND 00/100
DOLLARS ($21,000,000.00) together with interest on the unpaid principal balance
of this Note as hereinafter provided.  Interest shall be calculated on the basis
of a 360 day year.

Section 2 Payment.  Commencing on February 1, 2016, and continuing on the same
day of each month thereafter until the Maturity Date (as defined below),
Borrowers shall pay interest only on the unpaid principal balance of this Note
at the rate of interest set forth in Section 3 below.  The entire principal
balance of this Note, together with all accrued and unpaid interest and all
other amounts payable hereunder, shall be due and payable in full on January 5,
2036 (the "Maturity Date").

Section 3 Security; Loan Documents.  This Note evidences a loan made by Lender
to Borrowers pursuant to a Master Credit and Security Agreement of even date
herewith, by and among Borrowers and Lender (as amended, modified or
supplemented from time to time, the "Loan Agreement").  This Note shall be
secured by, inter alia, that certain Mortgage, Assignment of Rents, Security
Agreement, and Fixture Filing (as the same may from time to time be amended,
restated, modified or supplemented, the "Mortgage"), of even date herewith, from
the Borrowers (other than Peak Resorts, Inc.), to Lender, conveying and
encumbering certain real and personal property more particularly described
therein and located in or near Hunter, New York and commonly known as Hunter
Mountain Ski Resort (the "Property").  This Note, the Mortgage, the Loan
Agreement and all other documents now or hereafter securing, guaranteeing or
executed in connection with the loan evidenced by this Note (the "Loan"), as the
same may from time to time be amended, restated, modified or supplemented, are
herein sometimes called individually a "Loan Document" and together the "Loan
Documents."

Section 4 Interest Rate.    

(a) Initial Rate.  Subject to the terms and conditions of this Note, the unpaid
principal balance of this Note from day to day outstanding shall initially bear
interest at a rate of eight percent (8.0%) per annum.

(b) Annual Rate Adjustment.  On February 1, 2017, and on the first day of
February of each year thereafter (the "Adjustment Date") until the Maturity
Date, the rate of interest shall be increased each year by the lesser of the
following: (x) three (3) times the percentage increase in the CPI (as
hereinafter defined) from the CPI in effect on the applicable Adjustment Date
over the CPI in effect on the immediately preceding Adjustment Date (or, in the
case of the initial Adjustment Date, one year before the initial Adjustment
Date), in each case rounded to the nearest one-hundredth of a percent; or (y)
one and three-quarters percent (1.75%) (i.e., for purposes of this clause (y),
the rate of interest shall be increased to an amount equal to the rate of
interest in the previous year multiplied by 1.0175).  For the purposes hereof,
"CPI" shall mean the Consumer Price Index for all Urban Consumers, U.S. City
Average, published by the Bureau of Labor Statistics of the United States
Department of Labor (base year 1982-84=100). 

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Exhibit 10.2

(c) Past Due Rate.  Any principal of, and to the extent permitted by applicable
law, any interest on this Note, and any other sum payable hereunder, which is
not paid when due (without regard to any applicable grace periods), shall bear
interest, from the date due and payable until paid, payable on demand, at a rate
per annum (the "Past Due Rate") equal to the per annum interest rate from time
to time publicly announced by Citibank, N.A., New York, New York as its base
rate, plus four percent (4%), but in no event shall the Past Due Rate ever be
less than the rate of interest set forth in subsection (a) above, (as adjusted
pursuant to subsection (b) above and sometimes referred to herein as the
"standard rate of interest") plus 200 basis points (2.00%).  If Citibank, N.A.
discontinues reporting a base rate, then the base rate shall be such other base
rate as Lender designates to be the successor base rate.

Section 5 Prepayment.  No Borrower shall have the right to prepay all or any
part of the principal of this Note prior to the Maturity Date in each case
without first obtaining Lender’s written consent, which consent may be withheld
in Lender's sole and absolute discretion.

Section 6 Late Charges.  If Borrowers shall fail to make any payment under the
terms of this Note (other than the payment due at maturity) within fifteen (15)
days after the date such payment is due, Borrowers shall jointly and severally
pay to Lender on demand a late charge equal to four percent (4%) of the amount
of such payment.  Such fifteen (15) day period shall not be construed as in any
way extending the due date of any payment.  The late charge is imposed for the
purpose of defraying the expenses of Lender incident to handling such delinquent
payment.  This charge shall be in addition to, and not in lieu of, any other
amount that Lender may be entitled to receive or action that Lender may be
authorized to take as a result of such late payment.

Section 6Certain Provisions Regarding Payments.  All payments made under this
Note shall be applied, to the extent thereof, to late charges, to accrued but
unpaid interest, to unpaid principal, and to any other sums due and unpaid to
Lender under the Loan Documents, in such manner and order as Lender may elect in
its sole discretion, any instructions from any Borrower or anyone else to the
contrary notwithstanding.  Remittances shall be made without offset, demand,
counterclaim, deduction, or recoupment (each of which is hereby waived) and
shall be accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks.  Acceptance by Lender of any payment in an amount less than the amount
then due on any indebtedness shall be deemed an acceptance on account only,
notwithstanding any notation on or accompanying such partial payment to the
contrary, and shall not in any way (a) waive or excuse the existence of an Event
of Default (as hereinafter defined), (b) waive, impair or extinguish any right
or remedy available to Lender hereunder or under the other Loan Documents, or
(c) waive the requirement of punctual payment and performance or constitute a
novation in any respect.  Payments received after 2:00 o'clock p.m., central
time, shall be deemed to be received on, and shall be posted as of, the
following business day.  Whenever any payment under this Note or any other Loan
Document falls due on a Saturday, a Sunday or another day on which the offices
of Lender are not open for the conduct of its banking business at the place
where this Note is payable, such payment may be made on the next succeeding day
on which the offices of Lender are open for such business.

Section 7Events of Default.  The occurrence of any one or more of the following
shall constitute an "Event of Default" under this Note:

(a) Borrowers fail to pay when and as due and payable any amounts payable by
Borrowers to Lender under the terms of this Note and such amount remains unpaid
beyond a period of ten (10) days after written notice of such default is given
by Lender to any Borrower.

(b) Any covenant, agreement or condition in this Note is not fully and timely
performed, observed or kept, subject to any applicable grace or cure period set
forth in the Loan Documents.

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Exhibit 10.2

(c) An Event of Default (as therein defined) occurs under any of the Loan
Documents other than this Note (subject to any applicable grace or cure period),
including the Mortgage and Loan Agreement.

Section 8Remedies.  Upon the occurrence of an Event of Default, Lender may at
any time thereafter exercise any one or more of the following rights, powers and
remedies:

(a) Lender may accelerate the Maturity Date and declare the unpaid principal
balance and accrued but unpaid interest on this Note, and all other amounts
payable hereunder and under the other Loan Documents, at once due and payable,
and upon such declaration the same shall at once be due and payable.

(b) Lender may set off the amount due against any and all accounts, credits,
money, securities or other property now or hereafter on deposit with, held by or
in the possession of Lender to the credit or for the account of any Borrower,
without notice to or the consent of any Borrower.

(c) Lender may exercise any of its other rights, powers and remedies under the
Loan Documents or at law or in equity.

Section 9Remedies Cumulative.  All of the rights and remedies of Lender under
this Note and the other Loan Documents are cumulative of each other and of any
and all other rights at law or in equity, and the exercise by Lender of any one
or more of such rights and remedies shall not preclude the simultaneous or later
exercise by Lender of any or all such other rights and remedies.  No single or
partial exercise of any right or remedy shall exhaust it or preclude any other
or further exercise thereof, and every right and remedy may be exercised at any
time and from time to time.  No failure by Lender to exercise, nor delay in
exercising, any right or remedy shall operate as a waiver of such right or
remedy or as a waiver of any Event of Default.

Section 10Costs and Expenses of Enforcement.  Borrowers jointly and severally
agree to pay to Lender on demand all costs and expenses incurred by Lender in
seeking to collect this Note or to enforce any of Lender's rights and remedies
under the Loan Documents, including court costs and reasonable attorneys' fees
and expenses, whether or not suit is filed hereon, or whether in connection with
bankruptcy, insolvency or appeal.

Section 11Service of Process.  Each Borrower hereby consents to process being
served in any suit, action, or proceeding instituted in connection with this
Note by the mailing of a copy thereof by certified mail, postage prepaid, return
receipt requested, to Peak Resorts, Inc., at its address specified in the Loan
Agreement.  Each Borrower irrevocably agrees that such service shall be deemed
to be service of process upon each party executing this Note as Borrower in any
such suit, action, or proceeding.  Nothing in this Note shall affect the right
of Lender to serve process in any manner otherwise permitted by law and nothing
in this Note will limit the right of Lender otherwise to bring proceedings
against any Borrower in the courts of any jurisdiction or jurisdictions, subject
to any provision or agreement for arbitration or dispute resolution set forth in
the Loan Agreement.

Section 12Heirs, Successors and Assigns.  The terms of this Note and of the
other Loan Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties.  The foregoing sentence
shall not be construed to permit any Borrower to assign the Loan except as
otherwise permitted under the Loan Documents.

Section 13General Provisions.  Time is of the essence with respect to Borrowers'
obligations under this Note.  Each Borrower hereby severally (a) waives demand,
presentment for payment, notice of

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Exhibit 10.2

dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document), filing
of suit and diligence in collecting this Note or enforcing any of the security
herefor; (b) agrees to any substitution, subordination, exchange or release of
any such security or the release of any party primarily or secondarily liable
hereon; (c) agrees that Lender shall not be required first to institute suit or
exhaust its remedies hereon against any Borrower or others liable or to become
liable hereon or to perfect or enforce its rights against them or any security
herefor; (d) consents to any extensions or postponements of time of payment of
this Note for any period or periods of time and to any partial payments, before
or after maturity, and to any other indulgences with respect hereto, without
notice thereof to any of them; and (e) submits (and waive all rights to object)
to non-exclusive personal jurisdiction of any state or federal court sitting in
the state and county in which the Property is located for the enforcement of any
and all obligations under this Note and the other Loan Documents; (f) agrees
that its liability under this Note shall not be affected or impaired by any
determination that any title, security interest or lien taken by Lender to
secure this Note is invalid or unperfected; and (g) subordinates to the Loan and
the Loan Documents any and all rights against any other Borrower and any
security for the payment of this Note, whether by subrogation, agreement or
otherwise, until this Note is paid in full.  A determination that any provision
of this Note is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.  This Note may not be amended
except in a writing specifically intended for such purpose and executed by the
party against whom enforcement of the amendment is sought.  Captions and
headings in this Note are for convenience only and shall be disregarded in
construing it.  This Note and its validity, enforcement and interpretation shall
be governed by the laws of the State of Missouri (without regard to any
principles of conflicts of laws) and applicable United States federal law.  The
words "include" and "including" shall be interpreted as if followed by the words
"without limitation."

Section 14Notices.  Any notice, request, or demand to or upon any Borrower or
Lender shall be deemed to have been properly given or made when delivered in
accordance with the terms of the Loan Agreement regarding notices. 

Section 15[intentionally omitted]

Section 16.Joint and Several Liability.  Notwithstanding anything in this Note
to the contrary, the liabilities and obligations of each of the undersigned
shall be joint and several liabilities and obligations.  The joint and several
obligations of each of the undersigned under this Note shall be absolute and
unconditional and shall remain in full force and effect until the entire
principal, interest, penalties, premiums and late charges, if any, on this Note
and all additional payments, if any, due pursuant to any other Loan Document
(collectively, the "Obligations") shall have been paid and, until such payment
has been made, shall not be discharged, affected, modified or impaired on the
happening from time to time of any event, including any of the following,
whether or not with notice to or the consent of any of the undersigned: (a) the
waiver, compromise, settlement, release, termination or amendment (including any
extension or postponement of the time for payment or performance or renewal or
refinancing) of any or all of the Obligations or agreements of any of the
undersigned under this Note or any other Loan Document; (b) the failure to give
notice to any or all of the undersigned of the occurrence of a default under the
terms and provisions of this Note or any other Loan Document; (c) the release,
substitution or exchange by the holder of this note of any collateral securing
any of the Obligations (whether with or without consideration) or the acceptance
by the holder of this Note of any additional collateral or the availability or
claimed availability of any other collateral or source of repayment or any
nonperfection or other impairment of any collateral; (d) the release of any
person primarily or secondarily liable for all or any part of the Obligations,
whether by Lender or any other holder of the note or in connection with any
voluntary or involuntary liquidation, dissolution, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors or similar event

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Exhibit 10.2

or proceeding affecting any or all of the undersigned or any other person or
entity who, or any of whose property, shall at the time in question be obligated
in respect of the Obligations or any part thereof; or (e) to the extent
permitted by law, any other event, occurrence, action or circumstance that
would, in the absence of this clause, result in the release or discharge of any
or all of the undersigned from the performance or observance of any obligation,
covenant or agreement contained in this Note.  The joint and several Obligations
of the undersigned to Lender under this Note shall remain in full force and
effect (or be reinstated) until Lender has received payment in full of all
Obligations and the expiration of any applicable preference or similar period
pursuant to any bankruptcy, insolvency, reorganization, moratorium or similar
law, or at law or equity, without any claim having been made before the
expiration of such period asserting an interest in all or any part of any
payment(s) received by Lender. The undersigned expressly agree that Lender shall
not be required first to institute any suit or to exhaust its remedies against
any of the undersigned or any other person or party to become liable hereunder
or against any collateral, in order to enforce this Note; and expressly agree
that, notwithstanding the occurrence of any of the foregoing, the undersigned
shall be and remain, directly and primarily liable for all sums due under this
note and under the loan documents.  On disposition by Lender of any property
encumbered by any collateral, the undersigned shall be and shall remain jointly
and severally liable for any deficiency.

Section 17. Authority.  Each of the undersigned representatives of the Borrowers
represents that such Borrower has full power, authority and legal right to
execute, deliver and perform its obligations pursuant to this Note, the
Mortgage, and the other Loan Documents and they constitute the valid and binding
obligations of such Borrower.

Section 18No Usury.  It is expressly stipulated and agreed to be the intent of
Borrowers and Lender at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve, or receive a greater amount of interest
than under state law) and that this Section shall control every other covenant
and agreement in this Note and the other Loan Documents.  If applicable state or
federal law should at any time be judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved, or received with respect
to the Loan, or if Lender's exercise of the option to accelerate the Maturity
Date, or if any prepayment by Borrowers results in any Borrower having paid any
interest in excess of that permitted by applicable law, then it is Lender's
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of this Note and all other indebtedness
secured by the Mortgage, and the provisions of this Note and the other Loan
Documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new documents, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
or thereunder.  All sums paid or agreed to be paid to Lender for the use or
forbearance of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan.

ORAL OR UNEXECUTED AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE.  TO PROTECT YOU (BORROWER(S)) AND US (LENDER)
FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.

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Exhibit 10.2

BORROWERS AND LENDER HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL LOAN
AGREEMENT BETWEEN BORROWER AND LENDER WITH RESPECT TO THE SUBJECT MATTER HEREOF.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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Exhibit 10.2

IN WITNESS WHEREOF, Borrowers have duly executed this Note as of the date first
above written.

Borrowers:

PEAK RESORTS, INC.,

a Missouri corporation

By: /s/ Stephen J. Mueller

     Stephen J. Mueller, Vice President

 

 

HUNTER MOUNTAIN ACQUISITION, INC.,  

a Missouri corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

 

HUNTER MOUNTAIN SKI BOWL INC.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

 

HUNTER MOUNTAIN FESTIVALS, LTD.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

HUNTER MOUNTAIN RENTALS LTD.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

HUNTER RESORT VACATIONS, INC.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

HUNTER MOUNTAIN BASE LODGE, INC.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

 

7

 

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Exhibit 10.2

FROSTY LAND, INC.,  

a New York corporation

By: /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President

 

8

 

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