PROMISSORY NOTE (Mount Attitash Ski Resort)
Exhibit 10.2
PROMISSORY NOTE
(Mount Attitash Ski Resort)
(Mount Attitash Ski Resort)
| $15,700,000.00 | April 4, 2007 |
FOR VALUE RECEIVED, PEAK RESORTS, INC., a Missouri corporation and L.B.O. HOLDING, INC., a
Maine corporation (jointly and severally, “Borrower”), hereby promise to pay to the order
of EPT MOUNT ATTITASH, INC., a Delaware corporation (together with any and all of its successors
and assigns and/or any other holder of this Note, “Lender”), without offset, in immediately
available funds in lawful money of the United States of America, at 00 Xxxx Xxxxxxxx Xxxx, Xxxxx
000, Xxxxxx Xxxx, Xxxxxxxx 00000, the principal sum of FIFTEEN MILLION SEVEN HUNDRED THOUSAND
DOLLARS ($15,700,000.00) 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 1 Payment. Commencing on May 4, 2007, and continuing on the same day of each
month thereafter until the Maturity Date, the Borrower 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 April 3, 2027 (the “Maturity Date”),
the final maturity of this Note.
Section 2 Security; Loan Documents. This Note evidences a loan made by Lender to the
Borrower pursuant to a Loan Agreement of even date herewith, by and between the Borrower and Lender
(as amended, modified or supplemented from time to time, the “Loan Agreement”). This Note shall be
secured by (a) that certain New Hampshire Mortgage, Assignment of Rents, and Security Agreement (as
the same may from time to time be amended, restated, modified or supplemented, the
“Mortgage”), of even date herewith, from LBO Holding, Inc. (“LBO”), to Lender,
conveying and encumbering certain real and personal property more particularly described therein
and located in Wilmington, Vermont and Dover, Vermont, and commonly known as the Mount Attitash Ski
Resort (the “Property”); (b) the Assignment of Rents, Leases and Leasing Agreements of even
date herewith executed by LBO; (c) the Assignment of Permits and Licenses of even date herewith
executed by Xxxxxxxx; (d) the Environmental Indemnity Agreement of even date herewith executed by
Xxxxxxxx; and (e) the Debt Service Reserve and Security Agreement by and between Lender and
Borrower of even date herewith. 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 3 Interest Rate.
(a) Initial Rate. The unpaid principal balance of this Note from day to day
outstanding shall initially bear interest at a rate of ten percent (10.00%) per annum.
(b) Annual Rate Adjustment. On April 1, 2008, and on the first day of April of each
year thereafter (the “Adjustment Date”) until the Maturity Date, the rate of interest shall
be increased each year by one and one-half percent (1.5%)(i.e., an amount equal to the rate of
interest in the previous year multiplied by 1.015). Notwithstanding the foregoing, at such time as
the Property achieves a Debt Service Coverage Ratio of 2.0 to 1.0, and maintains such Debt Service
Coverage Ratio for a period of two consecutive years, then the applicable interest for subsequent
years will be reduced by 100 basis points from the otherwise applicable interest rate, provided
that such Debt Service Coverage Ratio continues to be met at the end of each Loan Year (as defined
in the Loan Agreement). For the purposes hereof, Debt Service Coverage Ratio shall mean a
fraction, the numerator of which is the EBITDA for the previous
Loan Year for the Property decreased by 3% of the revenues for the Property, and the denominator of
which is the current annual payment under this Note, and EBITDA shall mean, for the period of
computation, earnings attributable to the Property before interest, taxes, depreciation and
amortization, determined in accordance with generally accepted accounting principles, consistently
applied.
(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%). In recent history, the past due rate, at Prime + 4%, would be lower than the standard
rate. 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 4 Prepayment. Borrower shall have no right to prepay all or any part of the
principal of this Note prior to its scheduled Maturity Date without Lender’s consent, which consent
shall be held by Lender in its sole discretion. Notwithstanding the foregoing, subject to the
terms and conditions set forth in this Section 4, Lender hereby grants to Borrower a right of first
offer (“First Offer Right”) relating to the Lender’s sale of this Note. If, at any time
during the term hereof, Lender desires to sell this Note to another Lender, Lender shall first
deliver to Borrower written notice (the “Notice of Transfer”), which Notice of Transfer
shall state Lender’s desire to sell this Note. If Borrower elects to make an offer to purchase the
Note, Borrower shall deliver to Lender within 120 days following the date the Notice of Transfer
was received by Borrower (the “Offer Date”) a written offer (the “Offeree Offer”),
which Offeree Offer shall offer to purchase the Note on the terms and conditions, including price,
timing and lease terms (if applicable), specified therein. The Offeree Offer shall disclose all
material facts relating to the proposed transaction and, at Borrower’s option, may include a form
of Note purchase agreement. Each Offeree Offer shall be an irrevocable commitment by Borrower to
purchase this Note on the terms and conditions set forth therein. If Borrower does not elect to
make an offer to purchase this Note by the Offer Date or if Borrower makes an offer to purchase the
Note by the Offer Date and Lender elects not to sell the Note on the terms offered by Borrower,
Lender (X) shall be under no obligation to sell the Note to any person, unless Lender so elects,
and (Y) may, within a period of 6 months from and after the Offer Date, solicit offers relating to
the sale of this Note. The First Offer Right granted to Borrower under the terms and conditions of
this Section 4 shall revive in the event that Lender fails to sell the Note within the 6 months
from and after the Offer Date.
Section 5 Late Charges. If Borrower 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, Borrower shall 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 6 Certain 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 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
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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 standard 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 7 Events of Default. The occurrence of any one or more of the following shall
constitute an “Event of Default” under this Note:
(a) Borrower fails to pay when and as due and payable any amounts payable by Borrower 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 Xxxxxx to 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.
(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 without limitation the
Mortgage and Loan Agreement.
Section 8 Remedies. 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 Borrower, without notice to or the consent of Borrower.
(c) Lender may exercise any of its other rights, powers and remedies under the Loan Documents
or at law or in equity.
Section 9 Remedies 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.
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Section 10 Costs and Expenses of Enforcement. Xxxxxxxx agrees to pay to Lender on
demand all costs and expenses incurred by Xxxxxx in seeking to collect this Note or to enforce any
of Xxxxxx’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 11 Service of Process. 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. 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 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 12 Heirs, 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
Borrower to assign the Loan except as otherwise permitted under the Loan Documents.
Section 13 General Provisions. Time is of the essence with respect to Xxxxxxxx’s
obligations under this Note. Borrower and each party executing this Note as Borrower hereby
severally (a) waive demand, presentment for payment, notice of 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)
agree to any substitution, subordination, exchange or release of any such security or the release
of any party primarily or secondarily liable hereon; (c) agree that Lender shall not be required
first to institute suit or exhaust its remedies hereon against Borrower or others liable or to
become liable hereon or to perfect or enforce its rights against them or any security herefor; (d)
consent 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) submit (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) agree that their 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) hereby subordinate to the Loan and the Loan
Documents any and all rights against 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. Whenever
a time of day is referred to herein, unless otherwise specified such time shall be the local time
of the place where payment of this Note is to be made. The words “include” and “including” shall
be interpreted as if followed by the words “without limitation.”
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Section 14 Notices. Any notice, request, or demand to or upon 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. Joint and Several Liability. 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, without limitation, 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, without limitation, 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 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 16. Authority. Each of the undersigned representatives of Borrower represent
that 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 Borrower.
Section 17 No Usury. It is expressly stipulated and agreed to be the intent of
Xxxxxxxx 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
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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 Xxxxxx’s exercise of the option to accelerate the Maturity Date, or if any prepayment
by Borrower results in Borrower having paid any interest in excess of that permitted by applicable
law, then it is Xxxxxx’s express intent that all excess amounts theretofore collected by Xxxxxx
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 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) 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.
BORROWER AND XXXXXX XXXXXX 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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IN WITNESS WHEREOF, Xxxxxxxx has duly executed this Note as of the date first above written.
| Borrower: PEAK RESORTS, INC., a Missouri corporation |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx, Vice-President | |||
| Xxxxxxx X. Xxxxxxx, Vice-President | ||||
| L.B.O. HOLDING, INC., a Maine corporation |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx, Vice-President | |||
| Xxxxxxx X. Xxxxxxx, Vice-President | ||||
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