NOTE MODIFICATION AGREEMENT
Exhibit 10.3
THIS NOTE MODIFICATION AGREEMENT (the “Agreement”) is made and entered into as
of October 30, 2007 (the “Effective Date”) by and between PEAK RESORTS, INC., a
Missouri corporation and L.B.O. HOLDING, INC., a Maine corporation (collectively,
“Borrower”) and EPT MOUNT SNOW, INC., a Delaware corporation (‘‘Lender”).
WITNESSETH
WHEREAS, Borrower previously executed a promissory note in favor of Lender dated April 4,
2007, in the original principal amount of FIFTEEN MILLION SEVEN HUNDRED THOUSAND DOLLARS ($15,700,000.00) (the “Note”); and
WHEREAS, Borrower and Lender have agreed to modify the Note subject to the terms and
conditions set forth below.
NOW THEREFORE, by mutual agreement of the parties and in mutual consideration of the premises
and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree that the Note is modified as follows:
1. Note Modification. Effective as of the Effective Date, Section 3(b)
of the Note is hereby deleted and replaced by the following:
(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 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, in each case rounded to the nearest one-hundredth of a percent; or (y) one and
one-half percent (1.5%) (i.e., the rate of interest shall be increased to 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. 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).
2. Representations. Borrower acknowledges, represents and confirms to the
Lender that (a) the Note, the Loan Documents, as defined in the Note, and this Agreement are valid
and binding upon Borrower; (b) there are no defenses, set offs, counterclaims, actions or equities
in favor of Borrower to or against the enforcement of the Note or the Loan Documents and Borrower
does hereby expressly waive the same; (c) no agreement, oral or otherwise, has been made by any of
the Lender’s employees, agents, officers or directors to further extend or modify the Note; (d) the
Lender has in no way defaulted or performed any act or omission which would give rise to any
actions, causes of action, suits, damages, claims, expenses or demands at law or in equity by
Borrower against the Lender, and (e) Borrower does hereby release and hold harmless the Lender, its
officers, employees and agents, from and against any claim, action, suit, demand, cost, expense or
liability of any kind, relating in any way to the making of the loan evidenced by the Note or the
administration thereof or the communications and business dealings between the Lender and Borrower
through the date of execution of this Agreement.
3. No Other Modifications. This Agreement is a modification only and not a
novation. Except for the above stated modification(s), the Note, the Loan Documents, and all other
loan documents relating to the Note, and all the terms and conditions thereof, shall be and remain
in full force and effect and this Agreement shall not release or affect the liability of any
guarantors, sureties or endorsers on the Note. If the Note being modified by this Agreement is
signed by more than one person, the modified Note shall remain the joint and several obligation of
all signers of the Note and this Agreement.
4. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Missouri.
5. Counterparts. This Agreement may be executed in counterparts and by
different parties on different counterparts with the same effect as if the signatures thereto were
on the same instrument. This Agreement shall be effective and binding upon all parties hereto as
such time as all parties have executed a counterpart of this Agreement.
6. Defined Terms. All capitalized terms used in this Agreement but not
otherwise defined herein shall have the meanings assigned to them in the Note.
7. NO ORAL AGREEMENTS: 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 (CREDITOR)
FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS
ARE CONTAINED IN THIS WRITING AND THE OTHER LOAN DOCUMENTS, WHICH ARE 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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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
referenced above.
PEAK RESORTS, INC., a Missouri corporation |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Xxxxxxx X. Xxxxxxx, Vice-President | ||||
| L.B.O. HOLDING, INC., a Maine corporation |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Xxxxxxx X. Xxxxxxx, Vice-President | ||||
| EPT MOUNT ATTITASH, INC., a Delaware corporation |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Xxxxxxx X. Xxxxxxx, Vice-President | ||||
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