MASTER CREDIT AND SECURITY AGREEMENT

Dated as of September 1, 2016

among

PEAK RESORTS, INC. AND MOUNT SNOW, LTD.  


as Borrowers,


and

EPT MOUNT SNOW, INC.

as Lender

 

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MASTER CREDIT AND SECURITY AGREEMENT

This Master Credit and Security Agreement is made as of September 1, 2016, by and among Peak Resorts, Inc., a Missouri corporation, and Mount Snow, Ltd., a Vermont corporation (each a “ Borrower ” and, collectively, “ Borrowers ”), and EPT Mount Snow, Inc., a Delaware corporation (“ Lender ”).

Each of the Borrowers and Lender hereby agree as follows:

.  Certain capitalized terms used in this Agreement and not otherwise defined herein are defined in Annex I attached hereto and incorporated herein by reference.

.  All accounting and financial terms not specifically defined herein shall be construed in accordance with GAAP as in effect from time to time.  All financial statements shall reflect the Borrowers adoption of FAS 143 (if applicable), and, if any change in GAAP in itself affects the calculation of any financial covenant set forth in this Agreement, the Borrower Representative may by written notice to the Lender, or the Lender may, by written notice to the Borrower Representative, require that such covenant thereafter be calculated in accordance with GAAP as in effect (and applied by the Borrowers) immediately before such change in GAAP occurs.  If any such notice is given, compliance certificates delivered pursuant to this Agreement after such change shall be accompanied by reconciliations of the difference between the calculation set forth therein and a calculation made in accordance with GAAP as in effect from time to time after such change occurs.

.  For purposes of this Agreement, each of the Borrowers hereby: (i) authorizes the Borrower Representative to make such requests, give such notices or furnish such certificates as may be required or permitted by this Agreement for the benefit of such Borrower and (ii) authorizes the Lender to treat such requests, notices, certificates or consents made, given or furnished by the Borrower Representative as having been made, given or furnished by such Borrower for purposes of this Agreement.  Each of the Borrowers agrees to be bound by all such requests, notices, certificates and consents and other such actions by the Borrower Representative and agrees that all notices to and demands upon the Borrower Representative in respect of any Borrower shall constitute effective notice to and demand upon such Borrower for all purposes hereof.

.  For purposes of this Agreement, each of the Borrowers hereby designates and appoints the Borrower Representative to act as the Borrowers’ agent for all purposes under this Agreement.

.  In this Agreement, for the purpose of computing periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.  Unless the context otherwise requires, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument, or other document as from time to time amended, supplemented or otherwise modified, (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not any particular provision hereof, and (d) any reference to payment, repayment, or prepayment shall be construed as referring to payment of immediately available funds in Dollars.

.  Each Borrower is hereby notified that federal Law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services

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product.  Each Borrower hereby represents that such Borrower is not subject to any anti-terrorism or anti-money laundering law, regulation, or list of any U.S. government agency (including, without limitation, Executive Order No. 13224, the USA Patriot Act and the U.S. Office of Foreign Asset Control SDN list) that prohibits or limits Lender from making the Loan or from otherwise conducting business with such Borrower.  Each Borrower agrees to provide such documentary and other evidence of such Borrower’s identity as may be reasonably requested by the Lender at any time to enable the Lender to verify such Borrower’s identity or to comply with any applicable Law or regulation, including, without limitation, the USA Patriot Act.

.  As a condition precedent to the making of the Loan, Borrowers shall execute and deliver or cause to be duly executed and delivered to Lender the following Loan Documents, all of which shall be in form and substance satisfactory to Lender:

Debt Service Reserve

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.  In addition to the documents described in Section 3.1 above, Borrower shall deliver or cause to be delivered to Lender, prior to the initial Advance, each of the following, all of which shall be in form and substance satisfactory to Lender.

Conditions to Initial Advance

.  On or about the Closing Date and subject to the conditions of this Agreement, Lender shall make the initial Advance under the Note to Borrowers in the amount of $4,000,000.00 to fund, in part, the Closing Fee set forth in Section 3.5 below, Lender’s attorneys’ fees and expenses, and the reserve payments for such Advance as provided in Section 6.3 below.    

.  Lender’s obligation to make each Advance shall also be subject to the satisfaction, in Lender’s judgment, of each of the following conditions precedent:

Borrowers agree that the making of a request by a Borrower for an Advance, whether in writing or otherwise, shall constitute a certification by Borrowers that all representations and warranties of any Borrower in the Loan Documents are true and complete in all material respects as of the date thereof (except any representation or warranty which was made expressly as of a specific earlier date need only be true as of such earlier date), and that all required conditions to the making of the Advance have been met.

.  Borrowers shall pay Lender (i) on the Closing Date a fee in the amount of $ 1 00,000 , and (ii) upon the date Lender approves Advances in excess of the Initial Loan Amount a fee in the amount of $100,000, which all such fees shall be deemed fully earned and non-refundable at such time , and which Borrowers hereby direct and authorize Lender to advance and remit to itself from the proceeds of the Loan .  Payment of such amount s shall be in addition to, and not in lieu of, Borrowers’ obligations under Section 16.3(a) of this Agreement to pay or reimburse the Lender for costs and expenses incurred by the Lender in connection with the preparation, execution or delivery of the Loan Documents.

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.  Commencing on the dates specified in the Note, and continuing on the same day of each month until the Loan Termination Date, Borrowers shall pay interest only on the unpaid principal balance of the Loan at the rate of interest set forth in the Note.  The entire principal balance of the Loan, together with all accrued and unpaid interest and all other amounts payable hereunder shall be due and payable in full on the Loan Termination Date.

.  Borrowers may prepay the Loan in whole or in part at any time without penalty or premium, provided that no such prepayment of principal shall be in an amount of less than $ 1,000,000.00 (or, if less, the then outstanding principal balance of the Loan) and Borrowers shall provide Lender at least one Business Day prior written notice of any such prepayment.  Borrowers shall use commercially reasonable efforts to prepay the Loan in its entirety before the Loan Termination Date.

.  Borrowers shall prepay the Loan to the extent required under Section 2(a) of this Agreement.

.  Item 5.1 of the Disclosure Schedule lists: (i) all present Lockboxes and all Deposit Accounts maintained by each Borrower and each Subsidiary thereof, (ii) the name and address of each such Lockbox and (iii) the account number of each such Deposit Account.

.  Each Borrower shall notify all remitters of Net Proceeds to forward such Net Proceeds directly to the Lender.  Any Remittances of Net Proceeds received directly by any Borrower shall be deemed held by such Borrower in trust and as fiduciary for the Lender.  Each Borrower agrees not to commingle any such Remittances of Net Proceeds with any of such Borrower’s other funds or property, but to hold such funds separate and apart in trust and as fiduciary for the Lender until such Remittances are transferred to the Lender.  Each Borrower hereby agrees to deliver immediately such directly received Remittances of Net Proceeds to the Lender for application to the Loan Account.

.  Upon request by the Lender during the existence of an Event of Default, each Borrower will forthwith, upon receipt, transmit and deliver to the Lender, in the form received, all cash, checks, drafts and other instruments or writings for the payment of money (properly endorsed, where required, so that such

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items may be collected by the Lender) which may be received by such Borrower at any time in full or partial payment or otherwise as Proceeds of any of the Collateral.  Except as the Lender may otherwise consent in writing, any such items which may be so received by such Borrower during the existence of an Event of Default will not be commingled with any other of its funds or property, but will be held separate and apart from its own funds or property and upon express trust for the Lender until delivery is made to the Lender.  Each Borrower will comply with the terms and conditions of any consent given by the Lender pursuant to the foregoing sentence.  Upon written notice by the Lender to the Borrower Representative during the existence of an Event of Default (a “ Control Election ”), all items or amounts which are delivered by each Borrower to the Lender on account of partial or full payment or otherwise as Proceeds of any of the Collateral shall be deposited to the credit of a Deposit Account (a “ Cash Collateral Account ”) of such Borrower maintained by the Lender, as security for payment of the Obligations.  During the existence of an Event of Default, the Lender shall also have the right to require the Borrowers to provide the Lender with exclusive control of all of their Lockboxes (and the Lender shall have the option, at its discretion to apply any items of payment received therein to the Obligations).  Following the Control Election, no Borrower shall have any right to withdraw any funds or checks or other items of payment deposited in any Cash Collateral Account or any Lockbox.  The Lender may, from time to time, in its discretion, and shall upon request of the Borrower Representative made not more than once in any week, apply all or any of the then balance, representing collected funds, in any Cash Collateral Account, toward payment of the Obligations, whether or not then due, in such order of application as the Lender may determine, and the Lender may, from time to time, in its discretion, release all or any of such balance to the Borrowers.

.  All reasonable costs of collection of each Borrower’s Accounts, including out-of-pocket expenses, administrative and record-keeping costs, reasonable attorney’s fees, and all service charges and costs shall be the responsibility of such Borrower, whether the same are incurred by the Lender or such Borrower.  To the extent that the Lender incurs any such costs, fees or charges in enforcing its rights hereunder, the Lender, in its sole discretion, may charge such costs, fees and charges against the Loan Account as an Obligation.  Each Borrower hereby indemnifies and holds the Lender harmless from and against any loss or damage with respect to any Collection deposited in any Cash Collateral Account which is dishonored or returned for any reason.  If any Collection or Remittance of Net Proceeds is dishonored or returned unpaid for any reason, the Lender, in its sole discretion, may charge the amount thereof against the Loan Account as an Obligation (but only if such amount was credited to the Loan Account prior thereto).  The Lender shall not be liable for any loss or damage resulting from any error, omission, failure or negligence on the part of the Lender, except losses or damages resulting from the Lender’s gross negligence, willful misconduct or bad faith as determined by a final judgment of a court of competent jurisdiction.

.  Each Borrower hereby authorizes the Lender, upon the occurrence of an Event of Default, to: (a) notify any or all Account Debtors that the Accounts have been assigned to the Lender, and the other holders of Obligations, and that the Lender has a security interest therein, and (b) direct such Account Debtors to make all payments due from them to such Borrower upon the Accounts directly to the Lender or to a Lockbox designated by the Lender; provided ,   however , with respect to the occurrence of a particular Event of Default, the Lender’s right to send such notice shall expire as to such Event of Default if the Lender has not exercised such right prior to the time that such Event of Default is no longer continuing.

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.  All computations of interest on the Loan hereunder and of fees and other compensation hereunder shall be made in all cases on the basis of a year of 360 days in each case for the actual number of days elapsed (commencing on the day the Loan was advanced but excluding the day the Loan shall be paid in full) occurring in the period for which such interest or fees are payable.  Each determination by the Lender of interest, fees or other amounts of compensation due hereunder shall be rebuttably presumed to be correct.

.     From the Closing Date and continuing until December 31, 2016, Lender shall withhold from each and every Advance an amount equal to the interest reasonably expected to accrue on the full amount of such Advance from the date of each such Advance until December 31, 2016, and all such amounts so withheld by Lender shall be held and disbursed pursuant to the Debt Service Reserve Agreement.  Beginning on January 1, 2017 and continuing until the Loan is paid in full, Borrowers shall pay interest on the Loan as required by the Note and the Debt Service Reserve Agreement. 

.  If, after the Closing Date, (a) the introduction of any Law, rule or regulation or any change therein, (b) any change in the interpretation or administration of any Law, rule or regulation by any central bank or other governmental authority or (b) the compliance by Lender with any guideline, request or directive from any central bank or other governmental authority (whether or not having the force of Law) shall increase the cost to Lender (other than any increase in the cost of the overhead of Lender) of agreeing to make or making, funding or maintaining the Loan to Borrowers, then Borrowers shall from time to time, upon demand by Lender to the Borrower Representative, pay to Lender additional amounts sufficient to indemnify Lender for such increased cost.

.  If Lender shall have determined that after the Closing Date, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged by law with the interpretation or administration thereof, or compliance by Lender or the parent corporation of any thereof with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, in each case made subsequent to the Closing Date, has or would have the effect of reducing by an amount reasonably deemed by Lender to be material to the rate of return on the capital or assets of Lender or the parent corporation thereof as a consequence of the obligations of Lender hereunder to a level below that which Lender or the parent corporation thereof could have achieved but for such adoption, effectiveness, change or compliance, then from time to time, within 15 Business Days after demand by Lender to the Borrower Representative, the Borrowers shall pay to Lender such additional amount or amounts as will compensate Lender or the parent corporation thereof for such reduction.

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.  To secure the prompt payment and performance of the Obligations, each Borrower hereby grants to the Lender, a continuing security interest in and a pledge of all of the tangible and intangible personal property and assets of such Borrower, whether now owned or existing or hereafter acquired or arising and wheresoever located including, without limitation: (a) all Accounts, (b) all Inventory, (c) all General Intangibles and Intellectual Property, (d) all Equipment and Fixtures, (e) all Investment Property, (f) all Deposit Accounts and any and all monies credited by or due from the Lender or any other depository to such Borrower, whether in a Cash Collateral Account, any other Deposit Account, or any Lockbox, (g) all Pledged Collateral and any Additional Pledged Collateral (arising after the date hereof), (h) all Instruments, Documents, documents of title, policies and certificates of insurance, securities, goods, choses in action, Chattel Paper, cash or other property, to the extent owned by such Borrower or in which such Borrower has an interest, (i) all Collateral of such Borrower which now or hereafter is at any time in the possession or control of any of the Lender or in transit by mail or carrier to or from any of the Lender or in the possession of any Person acting in Lender’s behalf, without regard to whether Lender received the same in pledge, for safekeeping, as agent for collection or transmission or otherwise or whether Lender had conditionally released the same, and any and all balances, sums, proceeds and credits of such Borrower with Lender, (j) all accessions to, substitutions for, and all replacements, Products and Proceeds of the herein above-referenced property of such Borrower described in this Section including, but not limited to, proceeds of insurance policies insuring such property, and proceeds of any insurance, indemnity, warranty or guaranty payable to such Borrower and (k) all books, records, and other property (including, but not limited to, credit files, programs, printouts, computer software, and disks, magnetic tape and other magnetic media, and other materials and records) of such Borrower pertaining to any such above-referenced property of such Borrower; provided ,   however , that in no event shall the Borrowers be required to pledge more than 65% of the voting power of all classes of the capital stock of a Subsidiary of any Borrower that is not a Domestic Subsidiary.

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Nothing contained in this Section shall be construed to narrow the scope of the Lender’s security interests or the perfection or priority thereof or to impair or otherwise limit any of the rights, powers, privileges, or remedies of the Lender under the Loan Documents.

.  No Borrower shall nor shall any Borrower permit any Subsidiary to, without giving the Lender at least 30 days’ prior written notice thereof: (a) make any change in any location where Inventory or Equipment of such Borrower or such Subsidiary is maintained, or locate any of such Inventory or Equipment at any location not listed on the Disclosure Schedule (other than in connection with sales of Inventory or Equipment in the ordinary course of business or Inventory or Equipment in transit), (b) change its jurisdiction of organization or make any change in the location of its chief executive office, principal place of business or the office where its records pertaining to its Accounts and General Intangibles are kept, (c) add any new places of business or (d) make any change in its legal name or corporate structure.

.  The provisions of this Section 8 and Section 9 of this Agreement shall remain in full force and effect in respect of the Borrowers should any petition be filed by or against any Borrower for liquidation or reorganization, should any Borrower become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any part of such Borrower’s assets or should any other Financial Impairment relating to such Borrower occur.  In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall, to the extent permitted by applicable law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

.  Each Borrower will, and will cause each of its Subsidiaries to, at the expense of such Borrower, make, execute, endorse, acknowledge, file or deliver to the Lender from time to time such conveyances, financing statements, transfer endorsements, powers of attorney, certificates, and other assurances or instruments and take such further steps relating to the Collateral, now existing or hereafter arising, covered by this Agreement and the other Loan Documents as the Lender may reasonably require.  Each Borrower will execute or cause to be executed and shall deliver the Lender any and all documents and agreements deemed necessary by the Lender to give effect to or carry out the terms or intent of the Loan Documents.  If at any time the Lender determines, based on applicable law, that all applicable taxes (including, without limitation, mortgage recording taxes or similar charges) were not paid in connection with the recordation of any mortgage or deed of trust, the Borrowers shall promptly pay the same upon demand.  Each Borrower will, if requested by the Lender at any time, in order to meet any legal requirement applicable to Lender, provide to the Lender and the Lender, at such Borrower’s expense, appraisals and other supporting documentation relating to any mortgage.  Each Borrower shall execute a mortgage or deed of trust, in form and substance satisfactory to the Lender, granting a lien on any real property acquired by such Borrower.  The Lender, in the reasonable exercise of its credit judgment, may order and obtain at the Borrowers’ expense, such new or updated title, lien, judgment, patent, trademark and UCC financing statement searches

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or reports as to the Borrowers or any Collateral as the Lender may deem reasonably appropriate; provided that prior to the occurrence and continuance of an Event of Default, the Borrowers shall be responsible for the cost of only one updated title, lien, judgment, patent, trademark and UCC financing statement search in each calendar year.  At any time during the existence of an Event of Default, the Lender may order and obtain at the Borrowers’ expense such surveys of real property owned or used by any Borrower as the Lender may deem appropriate, together with updated title searches and reports with respect to such real property.

.  Except as otherwise provided below, upon the payment in full of all of the Obligations (a) the security interests and the other Liens and licenses granted to the Lender shall terminate, (b) all rights to the Collateral shall revert to the Borrowers with rights therein, (c) the Lender will at the sole cost and expense of the Borrowers, (x) execute and deliver to the Borrowers all documents as the Borrowers may reasonably request to evidence the termination of such security interests and the release of such Collateral, and (y) take such other actions with respect to this Agreement, the other Loan Documents, the Liens created thereby as the Borrowers shall reasonably request, and (d) this Agreement and all of the other Loan Documents will be terminated, and the Borrowers will have no further liabilities or obligations thereunder (except any liabilities and/or obligations which under the terms of this Agreement or any Loan Document survive termination thereof).  Notwithstanding anything to the contrary in this Agreement or in any other agreement between or among any Borrower (or any of its Affiliates), on the one hand, and Lender (or any of its Affiliates), on the other hand, in no event shall Lender be obligated to release any lien on or security interest in (a) any real estate or other property owned by Mount Snow until receipt of the EB-5 Funding in respect of the West Lake Water Project, or (b) any real estate or other property of any Borrower if any Borrower (or any of its Affiliates) owes any principal, interest, rent or other amounts to Lender (or any of its Affiliates), including, without limitation, any such amounts owing under the 2014 Credit Agreement, the Hunter Mountain Credit Agreement and/or the Mad River Lease, or if Lender (or any of its Affiliates) has any duty to extend credit or lease property to or for the benefit of any Borrower (or any of its Affiliates).

.  All reasonable expenses of protecting, storing, warehousing, insuring, handling, maintaining, and shipping any Collateral, any and all excise, property, sales, use, or other taxes imposed by any federal, state, or local authority on any of the Collateral, or in respect of the sale thereof, or otherwise in respect of the Borrowers’ business operations shall be borne and paid by the Borrowers.  If any Borrower fails to pay any portion thereof promptly when due, the Lender, at its option, may, but shall not be required to, pay the same.  All sums so paid or incurred by the Lender for any of the foregoing shall be repayable on demand.  Beyond reasonable care in the custody thereof, the Lender shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Lender shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property.  Unless otherwise provided by Law, the Lender shall not be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other Person whomsoever.

.  Each Borrower will maintain, with financially sound and reputable companies satisfactory to the Lender, insurance policies: (a) insuring the Equipment, Inventory and other tangible personal property of such Borrower, and all Equipment subject to any lease, against loss by fire, explosion, theft and such other casualties as are usually insured against by companies engaged in the same or similar businesses, (b) insuring such Borrower against liability for personal injury, property damage relating to such Equipment, Inventory, other tangible personal property and Equipment covered by any equipment lease, and business

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interruption, such policies to be in such form and in such amounts and coverage as may be reasonably satisfactory to the Lender, (c) naming the Lender as additional insured and loss payee (as applicable) with respect to such insurance and (d) providing that no cancellation, reduction in amount, change in coverage or expiration shall be effective until at least 30 days after written notice to the Lender.

.  During regular business hours and after reasonable notice to the Borrower Representative, the Lender or its designee shall have the right (x) to conduct collateral audits of all books, records, journals, orders, receipts, or other correspondence related thereto (and to make extracts or copies thereof as the Lender may reasonably request), (y) to inspect the Collateral and premises upon which any of the Collateral is located for the purpose of appraising or verifying the amount, quality, quantity, value, and condition of, or any other matter relating to, the Collateral, and (z) to examine and make copies of each Borrower’s and its Subsidiaries’ financial records and to consult with such Borrower’s and its Subsidiaries’ officers, directors, accountants, actuaries, trustees and plan administrators, as the case may be, in respect of such Borrower’s and its Subsidiaries’ financial condition, each of which parties is hereby authorized by the Borrowers to make such information available to the Lender, to the same extent that it would to the Borrowers.  The Lender shall be permitted to require that the Borrower Representative deliver or cause to be delivered to Lender at the Borrowers’ expense written reports or appraisals as to the Collateral of the Borrowers and in form, scope and methodology reasonably acceptable to the Lender and by an appraiser reasonably acceptable to Lender, addressed to the Lender and upon which the Lender is expressly permitted to rely.  The Borrowers shall pay for all fees and expenses incurred by the Lender with respect to such audits and appraisals; provided that unless an Event of Default shall be continuing, the Borrowers shall only be responsible for the fees and expenses of one real property appraisal per calendar year.  Upon the occurrence of an Event of Default which is continuing, the Lender may exercise such access and other rights, at the Borrowers’ expense, at any time (with or without advance notice) as the Lender deems such action necessary or desirable.

.  (a) Each Borrower shall at all times maintain Inventory and Equipment records reasonably satisfactory to the Lender, itemizing and describing in reasonable detail the kind, type, quality and quantity of its Inventory and Equipment and such Borrower’s cost therefor and such Borrower shall furnish to the Lender, upon the Lender’s request (but, so long as no Event of Default exists, no more than annually), a current schedule containing the foregoing information and (b) each Borrower shall keep its Inventory in good and marketable condition and its Equipment in good and useable condition.

.  The Borrower Representative agrees to advise the Lender promptly, in sufficient detail, upon becoming aware of: (a) any substantial change relating to the type, quantity or quality of the Collateral (other than the ordinary course purchase and sale of Inventory consistent with past practice), or (b) any event which, singly or in the aggregate with other such events, could reasonably be expected to have an adverse effect on Collateral values in excess of $100,000, or (c) any event which, singly or in the aggregate with other such events, could reasonably be expected to adversely affect the security interests granted to the Lender herein in excess of $100,000.

.  In the event any Inventory or Equipment of any Borrower is at any time located on any real property not owned by such Borrower, such Borrower will use commercially reasonable efforts to obtain and maintain in effect at all times while any such Inventory or Equipment is so located valid and effective lien waivers in form and substance reasonably satisfactory to the Lender, whereby each owner, mortgagee or landlord having an interest in such real property shall waive, disclaim or subordinate any interest in such Inventory or Equipment, as applicable, and shall agree to allow the Lender reasonable access to such real property in connection with any enforcement of the security interest granted hereunder.  During the existence of an Event of Default, in the event that any Borrower stores any Inventory with a bailee, warehouseman or similar party, upon the request of the Lender, such Borrower will cause any such bailee,

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warehouseman or similar party to issue and deliver to the Lender, in form and substance satisfactory to the Lender, warehouse receipts for such Inventory in the Lender’s name.

.  Other than the Lockboxes and Deposit Accounts disclosed on the Disclosure Schedule, no Borrower shall maintain a post office box, lockbox or Deposit Account for any purpose.

.  If any amount payable under or in connection with any of the Collateral owned by any Borrower shall be or become evidenced by an Instrument or Chattel Paper, such Borrower shall immediately deliver such Instrument or Chattel Paper to the Lender, duly endorsed in a manner satisfactory to the Lender, or, if consented to by the Lender, shall mark all such Instruments and Chattel Paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of EPT Mount Snow, Inc., a Delaware corporation.”

.  With respect to the Pledged Collateral: (a) each Borrower is the record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting Instruments or Certificated Securities and does not own any other Investment Property, (b) all of the Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests have been duly and validly issued and are fully paid and nonassessable; (c) all Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests of each Borrower as of the Closing Date are listed on the Disclosure Schedule; (d) all Pledged Collateral consisting of Certificated Securities or Instruments has been delivered to the Lender; (e) other than the Pledged Partnership Interests and the Pledged LLC Interests that constitute General Intangibles, there is no Pledged Collateral other than that represented by Certificated Securities or Instruments in the possession of the Lender and (f) no Person other than the Lender has control over any Investment Property of any Borrower that is pledged to Lender.

.  Within 10 days after the occurrence of any Material Recovery Event, the Borrower Representative will furnish to the Lender written notice thereof.  If any Material Recovery Event results in Net Proceeds, the Lender is authorized at its discretion to collect such Net Proceeds and, if received by any Borrower, such Borrower will pay over or cause to be paid over such Remittance of Net Proceeds to the Lender, in each case if Lender so elects, for the application to the prepayment of Obligations; provided ,   however , if: (i) no Potential Default or Event of Default has occurred which is continuing and (ii) the Borrower Representative notifies the Lender in writing (the “ Material Recovery Notice ”) that such Borrower intends to rebuild or restore the affected property or acquire replacement assets useful in such Borrower’s or a Subsidiary’s business, that such rebuilding or restoration can be accomplished within six (6) months out of such Remittance of Net Proceeds and other funds available to such Borrower and Borrower shall have deposited such additional funds with Lender, then prepayment of the Loan in an amount equal to the Material Recovery Deferred Amount shall not be required and any such Net Proceeds collected by the Lender shall be paid over to the Borrower Representative or as otherwise directed by the Borrower Representative until the Material Recovery Payment Date for application of the cost of rebuilding or restoration in accordance with customary disbursement procedures.  Any amounts not so applied on the Material Recovery Prepayment Date to the costs of rebuilding or restoration shall, at Lender’s election, either be applied to the prepayment of the Obligations, or remitted to such Borrower.

Each Borrower represents and warrants to the Lender as follows:

.  Each Borrower and each Subsidiary thereof is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization.  No Borrower has any Subsidiaries other than as listed in the Disclosure Schedule.  Each Borrower and each Subsidiary thereof is duly qualified or licensed to transact business in its respective jurisdiction of organization and in each additional

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jurisdiction where such qualification or licensure is necessary, except where failure to do so will not have a Material Adverse Effect.

.  The execution, delivery and performance of this Agreement and the other Loan Documents to which each Borrower is a party: (a) are within such Borrower’s corporate powers, (b) have been duly authorized, and are not in contravention of Law applicable to such Borrower or the terms of such Borrower’s Charter Documents or any indenture or other document or instrument evidencing borrowed money or any other material agreement or undertaking to which such Borrower is a party or by which it or its property is bound.

.  This Agreement and the other Loan Documents constitute the legal, valid and binding obligations of each Borrower and each Subsidiary thereof which is a party thereto, enforceable against such Borrower and such Subsidiary in accordance with the terms thereof, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles including principles of commercial reasonableness, good faith and fair dealing (whether enforcement is sought by proceedings in equity or at law).

.  Each Borrower has good and indefeasible title (or marketable title in case of real property) to and ownership of the Collateral, free and clear of all Liens, except for Liens permitted under Section 11.3(d) .

.  From and after the Closing Date, by reason of the filing of financing statements, continuation statements, assignments of financing statements and termination statements in all requisite governmental offices, this Agreement and the other Loan Documents will create and constitute a valid and perfected first priority security interest (except as permitted by this Agreement or the other Loan Documents) in and Lien on that portion of the Collateral which can be perfected by such filing and by the execution and delivery of this Agreement and the other Loan Documents, which security interest will be enforceable against each Borrower and all third parties as security for payment of all Obligations.  From and after the Closing Date, by reason of the delivery to the Lender of all Collateral consisting of Instruments and Certificated Securities, in each case properly endorsed for transfer to the Lender or in blank and assuming the Lender had no notice of an adverse claim, this Agreement and the other Loan Documents will create and constitute a valid and perfected first priority security interest (except as permitted by this Agreement or the other Loan Documents) in and Lien on that portion of the Collateral which can be perfected by such possession and endorsement and by the execution and delivery of this Agreement and the other Loan Documents, which security interest will be enforceable against each Borrower and all third parties as security for payment of all Obligations.

.  Except as set forth in the Disclosure Schedule, there are no actions, suits, investigations or proceedings, and no orders, writs, injunctions, judgments or decrees, now pending, existing or, to the knowledge of any Borrower, threatened against any Borrower or any Subsidiary thereof affecting any property of such Borrower or such Subsidiary, this Agreement or any other Loan Document, whether at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any federal, state, local or foreign government or of any agency or subdivision thereof, or before any arbitrator or panel of arbitrators.  There is no action, suit, investigation, proceeding, order, writ, injunction, or decree against any Borrower or any Subsidiary thereof that, if adversely determined, when taken singly or with all other actions, suits, investigations, proceedings, orders, writs, injunctions or decrees currently pending, could reasonably be expected to result in a Material Adverse Effect.

.  The federal employer identification number for each Borrower and each Subsidiary thereof is set forth on the Disclosure Schedule.  Borrower and each of its Subsidiaries has, filed all federal, state and local tax returns which are required to be filed by any of them, and, except to the extent permitted by Section 11.2(h) of this Agreement, each of them has paid all taxes and assessments due and payable as shown on

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such returns, including interest, penalties and fees; provided ,   however , that no such tax, assessment, charge or levy need be paid so long as and to the extent that: (i) it is contested in good faith and by timely and appropriate proceedings effective, during the pendency of such proceedings, to stay the enforcement of such taxes, assessments and governmental charges and levies and (x) such stay prevents the creation of any Lien (other than inchoate Liens for property taxes) or (y) a bond has been provided which prevents the creation of any Lien (other than inchoate Liens for property taxes), (ii) appropriate reserves, as required by GAAP, are made on the books of such Borrower and its Subsidiaries, as appropriate and (iii) such tax, assessment, charge or levy is not material in nature compared to the overall net worth of such Borrower.  The name under which Peak  Resorts files consolidated federal tax returns for itself and its Subsidiaries is “Peak Resorts, Inc.” Peak Resorts has filed a consolidated federal tax return that has included all of its Subsidiaries in existence at such time for each of the previous 5 tax years.

.  No action, consent or approval of, registration or filing with or any other action by any governmental authority or other Person is or will be required in connection with the transactions contemplated by this Agreement and the other Loan Documents, except such as have been made or obtained and are in full force and effect and except for the filings required to create or perfect the Liens in favor of the Lender that are contemplated hereby and by the other Loan Documents.  Borrowers have not received any notice of default under any contract, agreement or commitment to which it is a party or by which it is bound, the effect of which will adversely affect the performance by Borrowers of their Obligations under or pursuant to this Agreement.  The use of the Properties does not violate and will not at any time violate (a) any permit or license issued with respect to the Properties, or any of them; or (b) any material condition, easement, right-of-way, covenant or restrictions affecting the Properties or any of them.

.  The operations of each Borrower and each Subsidiary thereof are in compliance in all material respects with applicable requirements imposed by Law, including without limitation, occupational safety and health laws, and zoning ordinances, except to the extent any such noncompliance, when taken singly or with all other such noncompliance, has not resulted, and could not reasonably be expected to result in a Material Adverse Effect.

.  Except as disclosed on the Disclosure Schedule, (a) each Borrower and each Subsidiary thereof are in compliance with Environmental Laws except for any noncompliance, when taken singly or with all other such noncompliance, which has not resulted, and could not reasonably be expected to result, in a Material Adverse Effect; (b) with respect to any of the Properties, there is no pending or, to the actual knowledge of such Borrower after due inquiry, threatened Environmental Claim against such Borrower or such Subsidiary, or any other environmental condition with respect to any Property which Environmental Claim or condition, when taken singly or with all other such Environmental Claims or conditions, has resulted, or could reasonably be expected to result, in a Material Adverse Effect; (c) such Borrower and such Subsidiary are in compliance with all Environmental Permits, except to the extent any such noncompliance, when taken singly or together with all other instances of such noncompliance, has not resulted, and could not reasonably be expected to result, in a Material Adverse Effect; (d) no Property is listed or to the knowledge of such Borrower, formally proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar federal or state list of sites requiring investigation or clean-up and to the knowledge of such Borrower, neither any Borrower nor any Subsidiary thereof has directly transported or directly arranged for the transportation of any Hazardous Material to any such listed location or location which is proposed for such listing, which could reasonably be expected to result such Borrower or such Subsidiary incurring material liabilities under Environmental Laws.

.  Without limiting the representations made in Section 10.10 above, to the best knowledge of each Borrower, there are no circumstances with respect to the Property or operations of any Borrower or any Subsidiary thereof that could reasonably be expected to: (i) form the basis of an Environmental Claim against such Borrower or such Subsidiary which would constitute a violation of Section 11.2(d) hereof, or

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(ii) cause any Property owned, leased or funded by such Borrower or such Subsidiary to be subject to any material restrictions on ownership, occupancy, use or transferability under any applicable Environmental Law.

.  The Disclosure Schedule sets forth a list of all of the Employee Benefit Plans of each Borrower, each Subsidiary thereof and each ERISA Affiliate thereof.  Each Employee Benefit Plan of each Borrower and each Subsidiary thereof which is intended to qualify under Section 401 of the Code does so qualify, and any trust created thereunder is exempt from tax under the provision of Section 501 of the Code, except where such failures in the aggregate would not have a Material Adverse Effect.  No Accumulated Funding Deficiency exists in respect of any Employee Benefit Plan that is subject to Code Section 412 and no Reportable Event has occurred in respect of any Employee Benefit Plan that is subject to Title IV of ERISA which is continuing and which, in the case of such Accumulated Funding Deficiency or Reportable Event, when taken singly or with all other such Reportable Events or Accumulated Funding Deficiencies, has resulted, or could reasonably be expected to result, in a Material Adverse Effect, or has otherwise resulted, or could reasonably be expected to result, in liabilities or claims against such Borrower in an amount exceeding $50,000.  No “prohibited transactions” (as defined in Section 406 of ERISA or Section 4975 of the Code), have occurred which, when taken singly or with all other such “prohibited transactions,” has resulted, or could reasonably be expected to result, in a Material Adverse Effect, or has otherwise resulted, or could reasonably be expected to result, in liabilities or claims against the Borrowers in an amount exceeding $50,000 in the aggregate.  No Borrower, nor any Subsidiary thereof, nor any ERISA Affiliate thereof has: (i) had an obligation to contribute to any Multiemployer Plan except as disclosed in the Disclosure Schedule or (ii) incurred or reasonably expects to incur any liability for the withdrawal from such a Multiemployer Plan which withdrawal liability, when taken singly or with all other such withdrawal liabilities, has resulted, or could reasonably be expected to result, in a Material Adverse Effect, or has otherwise resulted, or could reasonably be expected to result, in liabilities or claims against the Borrowers in an amount exceeding $50,000 in the aggregate.  No Borrower and, to the knowledge of the Borrowers, no fiduciary for any Employee Benefit Plan listed on the Disclosure Schedule, has engaged in any transaction with respect to such Employee Benefit Plan or failed to act in a manner with respect to such Employee Benefit Plan that could reasonably be expected to result in a Material Adverse Effect under ERISA or any other applicable law, except where such failures in the aggregate would not have a Material Adverse Effect and could not reasonably be expected to result in liabilities or claims against such Borrower and its Subsidiaries in an amount exceeding $50,000.

.  The Disclosure Schedule sets forth a list of all Material Business Agreements of each Borrower and each Subsidiary thereof as of the Closing Date.  The Material Business Agreements of such Borrower and such Subsidiary are in full force and effect and have not been revoked or otherwise modified since the execution thereof.  Each Borrower and each Subsidiary thereof is in material compliance with the terms of the Material Business Agreements.  No Borrower and no Subsidiary thereof is subject to any contract, agreement, or corporate restriction which could reasonably be expected to have a Material Adverse Effect.  No Borrower and no Subsidiary thereof is a party to any labor dispute (including any strike, slowdown, walkout or other concerted interruptions by its employees, but excluding grievance disputes) which could, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.  There are no material strikes, slow-downs, walkouts or other concerted interruptions of operations by employees of any Borrower or any Subsidiary thereof whether or not relating to any labor contracts.

.

.  Each Borrower and each Subsidiary thereof owns or has the legal and valid right to use, sell, and license all Intellectual Property necessary for the operation of its business as presently conducted, free from any Lien not permitted under Section 11.3(d) hereof and free of any restrictions which could reasonably be expected to have a Material Adverse Effect on the operation of its business as presently conducted.  Except as set forth in the Disclosure Schedule, neither any Borrower nor any Subsidiary thereof (a) owns any Intellectual Property, (b) licenses any Intellectual Property (whether as licensor or licensee) necessary for the operation of its business, or (c) is a party to any Material License Agreement with respect to such Intellectual Property.

.  The Borrower Representative has delivered to the Lender true and correct copies of Charter Documents for each Borrower.  The record and beneficial owners of the equity interests of the Borrowers and their Subsidiaries are as described in the Disclosure Schedule.  No Borrower has any Subsidiaries other than as described in the Disclosure Schedule.  Except as set forth in the Disclosure Schedule, there are no options, warrants or other rights to acquire any of the capital stock of any Borrower.  Peak Resorts and each

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of its Subsidiaries has and will continue to have a Fiscal Year end on the last day of April in each calendar year.

.  Each Borrower has received fair consideration and reasonably equivalent value for the Obligations and liabilities it has incurred to the Lender hereunder.  After giving effect to the transactions contemplated hereby, each Borrower and each Subsidiary of each Borrower is Solvent.

.  Neither any Borrower nor any Subsidiary of any Borrower is, an “investment company”, or an “affiliated person” of, or a “promoter” or “principal underwriter” for an “investment company” (as such terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.  § 80(a)(1), et   seq .).

.  Each Borrower represents that the Disclosure Schedule sets forth: (a) the jurisdiction of organization of each Borrower and each Subsidiary of each Borrower, the principal place of business of such Borrower and such Subsidiary and the office where the chief executive offices and accounting offices of such Borrower and such Subsidiary are located, (b) the office where such Borrower and such Subsidiary keeps its records concerning its Accounts and General Intangibles, (c) the location of such Borrower’s and such Subsidiary’s registered office and all locations of its respective operations and whether such locations are owned or leased, (d) all locations at which any Inventory, Equipment or other tangible property of such Borrower and such Subsidiary are located (other than Inventory or Equipment in transit), including, without limitation, the location and name of any warehousemen, bailee, processor or consignee at which such Borrower’s or such Subsidiary’s property are located and good faith estimated dollar value of such Borrower’s or such Subsidiary’s tangible property located at each such location, (e) the locations and addresses of all owned or leased real property of such Borrower or such Subsidiary, including the name of the record owner of such property (and a copy of its legal description) and (f) any other locations of such Borrower’s or such Subsidiary’s Inventory and Equipment during the five (5) years prior to the Closing Date.  No Borrower maintains any Securities Accounts or Commodities Accounts.

.  No Borrower, no Subsidiary of any Borrower nor any Affiliate of any Borrower, is any of the following (each a “Blocked Person”):

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No Borrower nor any Affiliate thereof (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No.  13224.

.  The proceeds of Loan will be used only for the purposes contemplated by Section 11.2(f) hereof.  No part of the proceeds of Loan will be used for a purpose which violates any applicable law, rule, or regulation including, without limitation, the provisions of Regulation U or X of the Board of Governors of the Federal Reserve System, as amended.

.  None of the written information, exhibits or reports furnished by any Borrower to the Lender contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements contained therein not materially misleading in light of the circumstances for which such information was provided.

.  No event has occurred which has had, or could reasonably be expected to have, a Material Adverse Effect.

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So long as any of the Obligations hereunder remain outstanding, each Borrower will comply, and (where applicable) will cause each of its Subsidiaries to comply, with the following provisions:

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In addition, no Borrower shall enter into any contract or agreement with any Person that would prohibit the Lender from acquiring a security interest, mortgage, or other Lien on, or a collateral assignment of, any of the property or assets of such Borrower (except for restrictions contained in agreements relating to permitted purchase money liens or Capitalized Leases so long as the restrictions under such agreements and Capitalized Leases are only with respect to the purchased or leased assets and the proceeds thereof).

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.  Borrowers shall comply with the provisions of Section 11.4 of the Hunter Mountain Credit Agreement and without regard to whether the indebtedness evidenced thereby has been repaid or the Hunter Mountain Credit Agreement has been terminated.

The occurrence of any one or more of the following events shall constitute an “Event of Default” hereunder:

.  Failure by any Borrower (a) to make payment of principal on the Loan when due or (b) pay any interest on the Obligations when due to the extent such failure is not remedied within five Business Days after such required date of payment or (c) to pay any other Obligation when required to be paid hereunder to the extent such failure is not remedied within five Business Days after such required date of payment; or

.  Any warranty or representation made or deemed made by any Borrower in respect of any Borrower or any of its Subsidiaries in this Agreement, any other Loan Document or any certificate furnished at any time in compliance with this Agreement shall prove to have been false or inaccurate in any material respect when made or deemed made; or

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.  Failure by any Borrower in any material respect to perform, keep or observe any other, provision, condition or covenant contained in this Agreement (other than those provisions, terms or conditions referenced in Sections 12.1 ,   12.2 , and 12.4 of this Agreement) that is required to be kept or observed by such Borrower and such failure shall continue without remedy for a period of 15 days; or

.  Failure by any Borrower to perform, keep, or observe any other term, provision, condition or covenant contained in Sections 8.2 ,   8.3 or Section 9 of this Agreement, or Sections 11.1 ,   11.2(a) ,   11.2(b) ,   11.2(c) ,   11.2(d) ,   11.2(e) ,   11.2(f) ,   11.2(h) ,   11.2(i) ,   11.2(l) ,   11.3 or 11.4 of this Agreement; or

.  If Borrowers fail to continuously operate the improvements on the Properties or any material portion thereof, as ski resorts and related purposes, other than temporary cessation in connection with making repairs and renovations pursuant to the terms of this Agreement or with the prior consent of Lender; or

.  An event of default under any other Loan Document or any failure by any Borrower to comply with, keep, or perform any of its undertakings, covenants, agreements, conditions or warranties under any of the other Loan Documents (after giving of any required notice and expiration of any applicable cure period); or

.  (i) Failure by Peak Resorts or any of its Subsidiaries to pay, perform or observe any obligation to Royal Banks of Missouri beyond any applicable grace, cure or notice period, or the occurrence of any default or event of default under any agreement between or among Peak Resorts and/or any one or more of its Subsidiaries, on the one hand, and Royal Banks of Missouri, on the other hand, in each case beyond any applicable grace, cure or notice period, (ii) failure by any Borrower to make any payment on any Indebtedness of such Borrower having a principal amount in excess of $200,000, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), or (iii) the occurrence of any other event or the existence of any condition under any agreement or instrument relating to any such Indebtedness, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness, or (iv) the declaration of any such Indebtedness to be due and payable, or the requiring of any such Indebtedness to be prepaid or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof, or (v) default by any Borrower or any Subsidiary thereof in respect of any Material Business Agreement or any Material License Agreement where such default (A) would permit the other party or parties to such agreement to terminate such agreement and (B) has resulted or could reasonably be expected to result in a Material Adverse Effect; or

.  (i) the occurrence of an Event of Default (as such term is defined in the 2014 Credit Agreement or the Hunter Mountain Credit Agreement), (ii) Mad River shall fail to pay, perform or observe any obligation of Mad River under or in connection with the Mad River Lease, in each case beyond any applicable grace, cure or notice period, or (iii) any Borrower or any Affiliate of any Borrower shall fail to pay, perform or observe any obligation to Lender or any Affiliate of Lender, in each case beyond any applicable grace, cure of notice period, or the occurrence of any default or event of default under any agreement between or among any Borrower or any Affiliate of any Borrower, on the one hand, and Lender or any Affiliate of Lender, on the other hand, in each case beyond any applicable grace, cure or notice period.

.  The loss, theft, damage or destruction of any portion of the Collateral having an aggregate value in excess of $100,000, to the extent not insured by an insurance carrier which has acknowledged coverage in the amount of the claim without any reservation of rights or which has been ordered by a court of competent jurisdiction to pay such claim (excluding any loss of Intellectual Property by reason of

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abandonment where such abandonment is undertaken in good faith, pursuant to prudent business practice and such abandonment would not reasonably be expected to result in a Material Adverse Effect); or

.  The occurrence of any Material Adverse Effect or the occurrence of any Change of Control; or

.  The dissolution or termination of existence of any Borrower; or

.  If: (a) any covenant, material agreement or any Obligation of any Borrower contained in or evidenced by this Agreement or any of the other Loan Documents shall cease to be enforceable, or shall be determined to be unenforceable, in accordance with its terms, or (b) any Borrower shall deny or disaffirm its obligations under this Agreement or any of the other Loan Documents or any of the Liens granted in connection therewith, or (c) any Liens in favor of the Lender granted in this Agreement or any of the other Loan Documents shall be determined to be void, voidable or invalid, or are subordinated or not otherwise given the priority contemplated by this Agreement, or (d) any perfected Liens granted in favor of the Lender pursuant to this Agreement or any other Loan Document shall be determined to be unperfected except in connection with sales of Inventory in the normal course of the business of the Borrowers or their Subsidiaries; or

.  If: (a) any Borrower, any Subsidiary thereof, or any of their ERISA Affiliates or any other Person institutes any steps to terminate an Employee Benefit Plan of such Borrower, such Subsidiary, or such ERISA Affiliates, which Employee Benefit Plan is subject to Title IV of ERISA and, as a result of such termination, such Borrower, its Subsidiaries, or ERISA Affiliate is required to make or could reasonably be expected to be required to make, a contribution to such Employee Benefit Plan the payment of which, when taken together with all like termination payments suffered by, such Borrower, such Subsidiaries or such ERISA Affiliates, either has resulted in, or could reasonably be expected to result in, a Material Adverse Effect, or (b) such Borrower, such Subsidiary or such ERISA Affiliate fails to make a contribution to any Employee Benefit Plan which failure would be sufficient to give rise to a Lien under Section 302(f) of ERISA; or

.  Any money judgment, writ or warrant of attachment or similar process involving an amount, when aggregated with all such money judgment, writ or warrant of attachment or similar process outstanding at such time, in excess of $100,000, to the extent not insured by an insurance carrier which has acknowledged coverage in the amount of the claim without any reservation of rights or which has been ordered by a court of competent jurisdiction to pay such claim, is entered or filed against any Borrower thereof or against any of their respective assets and is not released, discharged, vacated, fully bonded or stayed within 45 days after such judgment, writ or warrant of attachment or similar proceeding is entered; or

.  An adjudication against any Borrower in any criminal proceedings requiring such Borrower’s forfeiture of any asset; or

.  The Financial Impairment of any Borrower or any Subsidiary thereof.

.  Upon the occurrence of an Event of Default, the Lender may and, without presentment, demand or notice of any kind all of which are hereby expressly waived by the Borrowers, declare all of the Obligations due or to become due from the Borrowers to the Lender and the Lender, whether under this Agreement, the Note or otherwise, immediately due and payable, anything in the Note or other evidence of the Obligations or in any of the other Loan Documents to the contrary notwithstanding.

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.  With respect to the Collateral, the Lender shall have all of the rights and remedies of a secured party under the UCC or under other applicable Law.  The Lender shall have all other legal and equitable rights to which it may be entitled, all of which rights and remedies shall be cumulative, and none of which shall be exclusive, to the extent permitted by law, in addition to any other rights or remedies contained in this Agreement or in any of the other Loan Documents.

.  After the Obligations shall have been declared by the Lender to be or shall have otherwise hereunder become immediately due and payable, the Lender may, in its sole discretion, exercise the following rights and remedies to the extent permitted by applicable law and in addition to any other right or remedy provided for in this Agreement:

.  If any Event of Default shall occur which is continuing, Lender and each Affiliate thereof shall have the right (in addition to such other rights as it may have by operation of Law or otherwise) to the extent permitted by applicable law, but subject to Section 13.8 of this Agreement, at any time to set off against and to appropriate to and apply toward the payment of the Obligations, and all other liabilities under this Agreement and the other Loan Documents then owing to it (and any participation purchased or to be purchased pursuant to Section 13.8 below) whether or not the same shall then have matured, any and all deposits (general or special) and any other Indebtedness at any time held or owing by Lender or each Affiliate thereof (including branches and agencies thereof wherever located) to or for the credit or account of the Borrowers, all without notice to or demand upon the Borrowers or any other Person, all such notices and demands being hereby expressly waived.

.  Without limitation of any authorization granted to the Lender hereunder, each Borrower also hereby authorizes the Lender, upon the occurrence of an Event of Default which is continuing, to execute, in connection with the exercise by the Lender of its remedies hereunder, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

.  Each Borrower hereby grants to the Lender, for the benefit of itself and the Lender: (a) a non-exclusive, royalty-free license or other right to use, without charge, all of such Borrower’s Intellectual Property (including all rights of use of any name or trade secret) as it pertains to the Collateral, in manufacturing, advertising for sale and selling any Collateral and (b) to the extent permitted thereunder, all of such Borrower’s rights under all licenses and all franchise agreements, which shall inure to the Lender for the benefit of itself and the Lender without charge.

.  The above-stated remedies are not intended to be exhaustive and the full or partial exercise of any of such remedies shall not preclude the full or partial exercise of any other remedy by the Lender under this Agreement, under any Loan Document, or at equity or under law.

.  The Lender shall hereby have the right, and each Borrower hereby irrevocably makes, constitutes, and appoints the Lender (and all officers, employees, or agents designated by the Lender) as its true and lawful attorney-in-fact and agent, with full power of substitution, from time to time following the occurrence of an Event of Default which is continuing and without assent by such Borrower: (a) to effectuate, in such Borrower’s name, such Borrower’s obligations under this Agreement, (b) in such Borrower’s or Lender’s name: (i) to demand payment of the Accounts of such Borrower, (ii) to enforce

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payment of such Accounts, by legal proceedings or otherwise, (iii) to exercise all of such Borrower’s rights and remedies with respect to the collection of such Accounts and any other Collateral, (iv) to settle, adjust, compromise, extend, or renew such Accounts, (v) to settle, adjust, or compromise any legal proceedings brought to collect such Accounts, (vi) if permitted by applicable Law, to sell or assign such Accounts and other Collateral, (vii) to take control, in any manner, of any item of payment or Proceeds relating to any Collateral, (viii) to prepare, file, and sign such Borrower’s name on a proof of claim in a bankruptcy against any Account Debtor or on any notice of Lien, assignment, or satisfaction of Lien in connection with such Accounts, (ix) to do all acts and things reasonably necessary, in the Lender’s good faith discretion, to fulfill such Borrower’s obligations under this Agreement, (x) to endorse the name of such Borrower upon any of the items of payment or Proceeds relating to any Collateral and apply the same to the Obligations, (xi) to endorse the name of such Borrower upon any Chattel Paper, document, Instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to such Accounts, such Borrower’s Inventory and any other Collateral, (xii) to use such Borrower’s stationery and sign the name of such Borrower to verifications of such Accounts and notices thereof to Account Debtors, (xiii) to use the information recorded on or contained in any data processing equipment and computer hardware and software relating to such Accounts, such Inventory, and any other Collateral to which such Borrower has access, (xiv) to make and adjust claims under such policies of insurance insuring the Collateral, receive and endorse the name of such Borrower on any check, draft, instrument or other item of payment for the proceeds of such policies, and make all determinations with respect to such policies, and (xvi) to notify post office authorities to change the address for delivery of such Borrower’s mail to an address designated by the Lender, receive and open all mail addressed to such Borrower, and, after removing all Collections, forward the mail to such Borrower, (c) to pay or discharge taxes or Liens levied against the Collateral; (d) to take all action necessary to grant the Lender sole access to any Lockbox or Deposit Account of such Borrower, (e) contact Account Debtors to pay any Collections to the Lockbox, (f) upon notice to the Borrower Representative, to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral and to enforce any other right in respect of any Collateral; (g) upon notice to the Borrower Representative, to defend any suit, action or proceeding brought against the Borrower with respect to any Collateral; (h) upon notice to the Borrower Representative to settle, compromise or adjust any such suit, action or proceeding; (i) to sell, transfer, pledge, or make any agreement with respect to the Collateral; and (j) to do, at the Lender’s option and such Borrower’s expense, at any time, or from time to time, all acts and things which the Lender reasonably deems necessary to protect, preserve or realize upon the Collateral.

Each Borrower hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.  This power of attorney is a power coupled with an interest and shall be irrevocable.  The expenses of the Lender incurred in connection with such the exercise of such power of attorney, together with interest thereon at a the rate then applicable hereunder the Loan, shall be payable by the Borrowers to the Lender on demand.

.  Upon the occurrence of any Event of Default hereunder or under any other Loan Document, then and in any such event, Lender may (but shall in no event be required to) make any payment or perform any term, provision, condition, covenant or agreement required of Borrowers, and/or cure any such Event of Default.  In such event, Lender shall promptly notify the Borrower Representative of the actions taken or amounts expended by Lender.  Any amounts expended by Lender in so doing, or in exercising its rights and remedies hereunder, shall constitute advances hereunder, the payment of which is additional indebtedness secured by the Loan Documents due and owing at Lender’s demand, within interest at the Past-Due Rate from the date of disbursement thereof until fully paid.  No further direction or authorization from Borrowers shall be necessary for such disbursements, and all such disbursements shall satisfy pro tanto the obligations of Lender with respect to the funds so disbursed.  The execution of this Agreement by

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Borrowers shall and hereby does constitute an irrevocable direction and authorization to Lender so disburse such funds and make such performance.

.  To induce the Lender to make the Loan to the Borrowers, and in consideration thereof, each of the Borrowers hereby unconditionally and irrevocably: (a) guarantees, jointly and severally, to the Lender the due and punctual payment in immediately available funds of all Obligations owing by any or all of the other Borrowers hereunder (whether by acceleration or otherwise) and the other Loan Documents, and (b) agrees, jointly and severally, to pay any and all reasonable expenses which may be incurred by the Lender in enforcing its rights with respect to such Obligations (collectively, the “ Borrower Guaranteed Obligations ”).  To the extent that the Obligations of a Borrower are construed to be a Borrower Guaranty of the Obligations of any other Borrower to the Lender, and to the extent it is necessary for the enforceability of such a Borrower Guaranty, the maximum liability of a Borrower Guarantor under its Borrower Guaranty shall be the greatest amount which, after taking into consideration all other valid and enforceable debts and liabilities of such Borrower Guarantor, an applicable court has determined (after any appeals) would not render such Borrower Guarantor insolvent, unable to pay its debts as they become due, inadequately capitalized for the business which it intends to conduct (in all such cases, within the meaning of Section 548 of the Bankruptcy Code, 11 U.S.C.  §101, et .  seq ., or any other similar state Law), or unable to pay a judgment rendered upon a claim that is the subject of an action or proceeding pending at the time when the obligations of this Borrower Guaranty are incurred or increased. In addition to the foregoing, each Borrower shall also execute the Guaranty, as a Guarantor.

.  The obligations of the Borrower Guarantors under the Borrower Guaranty shall be joint and several, irrevocable, unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by, except for payment of Obligations and to the extent permitted by applicable Law (i) any extension, renewal, settlement, compromise, waiver or release in respect of the Loan or any other obligation under this Agreement or any Loan Document by operation of Law or otherwise; (ii) any modification or amendment of or supplement to this Agreement or any Loan Document; (iii) any modification, amendment, waiver, release, non-perfection or invalidity of any direct or indirect security, or of any guarantee or other liability of any third party, of the Obligations of any Borrower or its Subsidiary with respect to which the Borrower Guaranty relates; (iv) any change in the corporate existence, structure, or ownership of, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Borrower Guarantor or its assets or any resulting release or discharge of any of the Obligations of the Borrower Guarantors contained in this Agreement or any Loan Document; (v) the existence of any claim, set-off or other rights which any Borrower Guarantor may have at any time against the Lender or any other Person, whether or not arising in connection with this Agreement or any Loan Document, provided ,   however , that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (vi) any invalidity or unenforceability relating to or against any Borrower or its Subsidiary for any reason of this Agreement or any Loan Document or any provision of applicable Law or regulation purporting to prohibit the payment by any Borrower under this Agreement or any Loan Document; or (vii) to the extent permitted by applicable Law, any other act or omission to act or delay of any kind by a Borrower, a Borrower Guarantor, the Lender or any other Person or any other circumstance whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Borrower Guaranteed Obligations under this Section 14 .

.  The obligations of each Borrower Guarantor under this Section 14 shall remain in full force and effect until the Obligations of the Borrowers under this Agreement or any other Loan Document have been paid in full.  If at any time any payment of any amount payable by Borrower Guarantor under this Section 14 , any other section of this Agreement or other Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower Guarantor or otherwise, the

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other Borrower Guarantors’ obligations under this Section 14 with respect to such payment shall be reinstated at such time as though such payment had become due but had not been made at such time.  This Section 14 shall survive the termination of this Agreement until the payment in full of all amounts payable under this Agreement and any other Loan Documents.

.  No Borrower Guarantor shall be entitled to enforce any remedy which the Lender now has or may hereafter have against any Borrower, any endorser or any Guarantor or other Borrower Guarantor in respect of all or any part of the Borrower Guaranteed Obligations paid by such Borrower Guarantor until all of the Obligations shall have been fully and finally paid to the Lender.  Each Borrower Guarantor hereby waives any benefit of, and any right to participate in, any security or collateral given to the Lender and to secure payment of the Borrower Guaranteed Obligations or any other liability of any Borrower, any Guarantor or any Borrower Guarantor to the Lender.  Each Borrower Guarantor also waives all setoffs and counterclaims and all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Borrower Guaranty.  Each Borrower Guarantor further waives all notices of the existence, creation or incurring of additional Obligations by any other Borrower, and also waives all notices that the principal amount, or any portion thereof, and/or any interest on any instrument or document evidencing all or any part of the Borrower Guaranteed Obligations is due, notices of any and all proceedings to collect all or any part of the Borrower Guaranteed Obligations, and, to the extent permitted by Law, notices of exchange, sale, surrender or other handling of any Collateral given to the Lender to secure payment of the Borrower Guaranteed Obligations.

.  If acceleration of the time for payment of any amount payable by any Borrower or Borrower Guarantor under this Agreement or any other Loan Document in respect of a Borrower Guaranteed Obligation is stayed upon the insolvency, bankruptcy or reorganization of any Borrower or Borrower Guarantor all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the other Borrower Guarantors hereunder forthwith on demand by the Lender.

.  If any Borrower Guarantor makes a payment in respect of the Borrower Guaranteed Obligations, it shall be subrogated to the rights, if any, of the payees against the other Borrower Guarantors with respect to such payment and shall have the rights of contribution set forth below against the other Borrower Guarantors; provided ,   however , that such Borrower Guarantor shall not enforce its rights to any payment by way of subrogation or by exercising its right of contribution until all the Obligations, as the case may be, owing to the Lender, shall have been finally paid in full and may not under applicable insolvency laws be required to be repaid by the Lender.

.  Subject to all of the Obligations owing to the Lender having been finally paid in full and not subject to required repayment under applicable insolvency laws, each Borrower Guarantor shall make, and agrees with each of the other Borrower Guarantors (and the successors and assigns of such Borrower Guarantors) to make, payments in respect of the Obligations of such Borrower Guarantor to which such other Borrower Guarantors are subrogated or contribution payments to which such other Borrower Guarantors are entitled, such that, taking into account all such payments on account of subrogation or contribution rights.

.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent Lender.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 15.2 and, to the extent expressly contemplated hereby, the Affiliates of the Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

.  Lender may assign, negotiate, pledge or otherwise hypothecate all or any portion of this Agreement or grant participations herein, or in any of its rights and security hereunder, including, without limitation, the Note and, in case of such assignment, Borrowers will accord full recognition thereto and agree that all rights and remedies of Lender in connection with the interest so assigned shall be enforceable against Borrowers by such assignee with the same force and effect and to the same extent as the same would have been enforceable by Lender but for such assignment. In connection with any such assignment, participation or other transfer, Borrowers agree that Lender may deliver copies to any potential participant or other transferee of all documents, instruments, financial statements and other information from time to time furnished to Lender pursuant hereto or in connection therewith.

.  Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release Lender from any of its obligations hereunder or substitute any such pledgee or assignee for Lender as a party hereto.

.

.  Each Borrower shall indemnify and hold harmless the Lender, and the respective directors, officers, employees and Affiliates thereof, from and against any and all liabilities, obligations, losses,

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damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever including, without limitation, reasonable fees and disbursements of counsel and settlements costs, which may be imposed on, incurred by, or asserted against the Lender, or the respective directors, officers, employees and Affiliates thereof in connection with any investigative, administrative or judicial proceeding by a third party (whether the Lender is or is not designated as a party thereto) directly relating to or arising out of: (x) this Agreement or any other Loan Document, (y) the transactions contemplated thereby or any actual or proposed use of proceeds hereunder, or (z) any Environmental Claims against such Borrower or any Subsidiary thereof or any Environmental Claims against the Lender pursuant to the transactions contemplated hereby or the exercise of any remedies hereunder; except that neither the Lender, nor any such directors, officers, employees and Affiliates thereof shall have the right to be indemnified hereunder for its own gross negligence, willful misconduct or bad faith as determined by a court of competent jurisdiction.

.  Each demand by the Lender for payment pursuant to this Section 15 shall be accompanied by a certificate setting forth the reason for the payment, the amount to be paid, and the computations and assumptions in determining the amount, which certificate shall, absent manifest error, be presumed to be correct.  In determining the amount of any such payment thereunder, the Lender may use reasonable averaging and attribution methods, so long as such methods are set forth in the certificate referred to in the preceding sentence.  The failure to give any such notice shall not release or diminish any of the Borrowers’ obligations to pay additional amounts pursuant to this Section 15 upon the subsequent receipt of such notice.

.  No amendment or waiver of any provision of this Agreement or the Note or any other Loan Document, nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender and the Borrowers; provided that the Borrowers may, with the written consent of the Lender, supplement or amend the Disclosure Schedule (other than information contained on Items 11.3(a), 11.3(c)(iii) and 11.3(d) thereon).

.  This Agreement shall become effective on the date and as of the time on and as of which the Borrowers and the Lender shall have signed a copy hereof (whether the same or different copies) and the Borrowers shall have delivered the same to the Lender.  As of such time, this Agreement shall be binding upon and inure to the benefit of the Borrowers, the Lender and their respective successors and assigns, except that no Borrower shall have any right to assign its rights hereunder or any interest herein without the prior written consent of the Lender.

.  Each Borrower agrees to pay on demand all reasonable costs and expenses (a) of the Lender (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Lender) in connection with the preparation, execution, delivery, administration, modification, amendment, forbearance and waiver of this Agreement and the other Loan Documents, and (b) of the Lender in connection with the enforcement of, the exercise of remedies under, or the preservation of rights and remedies under this Agreement or any of the other Loan Documents (including any collection, bankruptcy or other enforcement proceedings arising with respect to the Borrowers, this Agreement, or any Event of Default under this Agreement).

.  All representations and warranties made in or pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents.  The provisions of Sections 7 and 11.3(g)(ii) of this Agreement shall survive the payment of the Obligations and any other Indebtedness owed by the Borrowers hereunder and the termination of this Agreement (whether by acceleration or otherwise).

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.  The Lender shall have the right to furnish to its Affiliates, its accountants, its employees, its officers, its directors, its legal counsel, potential participants, and to any governmental agency having jurisdiction over the Lender information concerning the business, financial condition, and property of the Borrowers, the amount of the Loan hereunder, and the terms, conditions and other provisions applicable to the respective parts thereof.

.  Notwithstanding anything herein to the contrary, if at any time the applicable interest rate, together with all fees and charges that are treated as interest under applicable law as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, taken, received or reserved by the Lender shall exceed the maximum lawful rate that may be contracted for, charged, taken, received or reserved by -Lender in accordance with applicable law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest and all such charges payable, contracted for, charged, taken, received or reserved in respect of the Loan of the Lender to the Borrowers shall be equal to the Maximum Lawful Rate.

.  To the extent permitted by applicable law, no claim may be made by Borrowers hereto against the Lender or the Affiliates, directors, officers, employees, agents, attorneys and consultants of Lender, for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith.  Each of the Borrowers hereto hereby waive, release and agree not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

.  If any provision in this Agreement or any other Loan Document shall for any reason be or become illegal, void or unenforceable, that illegality, voidness or unenforceability shall not affect any other provision.

.  All notices, requests, demands and other communications provided for hereunder shall be in writing and shall be given solely: (a) by hand delivery or by overnight courier delivery service, with all charges paid, (b) by facsimile transmission, if confirmed same day in writing by first class mail, (c) by registered or certified mail, postage prepaid and addressed to the parties, or (d) electronic mail.  For the purposes of this Agreement, such notices shall be deemed to be given and received: (i) if by hand or by overnight courier service, upon actual receipt, (ii) if by facsimile transmission, upon receipt of machine-generated confirmation of such transmission (and provided the above-stated written confirmation is sent), (iii) if by registered or certified mail, upon the first to occur of actual receipt or the expiration of 72 hours after deposit with the U.S.  Postal Service, or (iv) if by electronic mail, when transmitted to an electronic email address (or by another means of electronic delivery); provided ,   however , that notices from the Borrower Representative to the Lender shall not be effective until actually received thereby.  Notices or other communications hereunder shall be addressed: if to any Borrower or the Borrower Representative, at the address specified on the signature pages of this Agreement with respect to such Borrower or the Borrower Representative; if to the Lender, to the address specified on the signature pages of this Agreement.

.  This Agreement and the other Loan Documents and the respective rights and obligations of the parties hereto shall be governed by and construed in accordance with the internal laws of the State of Missouri (without giving effect to the conflict of laws rules thereof and except to the extent perfection of the Lender’s security interests and Liens and the effect thereof are otherwise governed pursuant to the UCC or the applicable Law of any foreign jurisdiction).

.  This Agreement and the other Loan Documents referred to in or otherwise contemplated by this Agreement set forth the entire agreement of the parties as to the transactions contemplated by this Agreement.

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.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.  Delivery of an executed counterpart hereof by facsimile shall be effective as manual delivery of such counterpart; provided ,   however , that, each party hereto will promptly thereafter deliver counterpart originals of such counterpart facsimiles delivered by or on behalf of such party.

BORROWERS WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) under this agreemenT or under any other Loan document or any amendment, instrument, document or agreement which may be delivered in the future in connection herewith or (ii) arising from any banking relationship existing in connection with this agreement, and agrees that any such action or proceeding shall be tried before a court and not before a jury.

THE FOLLOWING NOTICE IS PROVIDED PURSUANT TO SECTION 432.047, R.S.Mo.   AS USED IN THIS PARAGRAPH, “CREDITOR” MEANS LENDER, AND “THIS WRITING ” MEANS THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS:  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, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE LOAN AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) 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.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY MISSOURI STATE COURT OR FEDERAL COURT OF THE UNITED STATES SITTING IN JACKSON COUNTY, MISSOURI, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH MISSOURI STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN

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ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTE OR ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT IN ANY MISSOURI STATE OR FEDERAL COURT SITTING IN MISSOURI.  EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.  THE PARTIES CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed by their respective officers or agents thereunto duly authorized, as of the date first above written.

BORROWERS:





Borrowers’ Address for Notices:

c/o Peak Resorts, Inc., as Borrower Representative

17409 Hidden Valley Drive

Eureka, MO 63025

Attn: Stephen J. Mueller

Telecopy: (636) 938-6936

E-mail: smueller@skihv.com

 

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LENDER:





Lender’s Address for Notices and Payments:

c/o EPR Properties

909 Walnut Street, Suite 200

Kansas City, Missouri  64106



 

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ANNEX I

to

CREDIT AND SECURITY AGREEMENT

DEFINITIONS

As used in this Agreement and all other Loan Documents, the following Uniform Commercial Code terms shall have the meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined) ascribed to such terms in the UCC: “Account”, “Account Debtor”, “Certificated Security”, “Chattel Paper”, “Deposit Account”, “Document”, “Commodity Account”, “Commodity Contract”, “Commodity Customer”, “Commodity Intermediary”, “Control”, “Entitlement Holder”, “Entitlement Order”, “Equipment”, “Financial Asset”, “Fixture”, “General Intangible”, “Instrument”, “Inventory”, “Issuer”, “Investment Property”, “Record”, “Proceeds”, “Sale”, “Secured Party”, “Securities Account”, “Securities Act”, “Securities Intermediary”, “Security”, “Security Agreement”, “Security Certificate”, “Security Entitlement”, “Security Interest”, and “Uncertificated Security”.

As used in this Agreement and all other Loan Documents, the following terms shall have the meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined) set forth below:

“2014 Credit Agreement” means the Master Credit and Security Agreement, dated as of December 1, 2014, among Peak Resorts, Mount Snow, Sycamore Lake, Inc., Brandywine Ski Resort, Inc., Boston Mills Ski Resort, Inc., Deltrecs, Inc. and JFBB Ski Areas, Inc. and Lender, as amended , renewed, restated, consolidated, replaced or otherwise modified from time to time.

“Accumulated Funding Deficiency” has the meaning ascribed thereto in Section 302(a)(2) of ERISA.

“Additional Pledged Collateral” means all shares of, limited and/or general partnership interest in, and limited liability company interests in, and all securities convertible into, and warrants, options and other rights to purchase or otherwise acquire, stock of, either (i) any Person that, after the Closing Date of this Agreement, as a result of any occurrence, becomes a Subsidiary of any Borrower, or (ii) any issuer of Pledged Stock, any Partnership or any LLC that are acquired by any Borrower after the Closing Date; all certificates or other instruments representing any of the foregoing; all Security Entitlements of any Borrower in respect of any of the foregoing; all additional Indebtedness from time to time owed to any Borrower by any obligor on the Pledged Notes and the instruments evidencing such indebtedness; and all interest, cash, instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing.  Additional Pledged Collateral may be General Intangibles or Investment Property.

“Affiliate” means, with respect to a specified Person, any other Person: (a) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with such Person (“control” meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the

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ownership of voting securities, by contract or otherwise), (b) which beneficially owns or holds with power to vote ten percent (10%) or more of any class of the Voting Stock or similar interest of such Person, (c) ten percent (10%) or more of the Voting Stock or similar interest of which other Person is beneficially owned or held by such Person, or (d) who is an executive officer or director of such Person or of such other Person.

“Agreement” means this Master Credit and Security Agreement and any amendment, supplement or modification, if any, to this Master Credit and Security Agreement.

“Anti-Terrorism Laws” shall mean any laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced).

“Blocked Person” shall have the meaning assigned to such term in Section 10.20 hereof.

“Borrower Guaranteed Obligations” has the meaning set forth in Section 14.1 .

“Borrower Guarantor” means any Borrower with respect to the Obligations owing to the Lender by the other Borrowers.

“Borrower Guaranty” means the joint and several obligation of each Borrower Guarantor to pay the Obligations of the other Borrowers pursuant to Section 14 of this Agreement.

“Borrower Representative” means Peak Resorts.

“Borrowers” has the meaning set forth in the introductory paragraph of this Agreement.

“Business Day” means a day of the year on which the Lender is not required or authorized to close in the city in which the applicable Payment Office of the Lender is located.

“Capitalized Leases” means, in respect of any Person, any lease of property imposing obligations on such Person, as lessee of such property, which are required in accordance with GAAP to be capitalized on a balance sheet of such Person.

“Cash Collateral Account” has the meaning specified in Section 5.3 of this Agreement.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. §§ 9601 et seq.

“Change of Control” means an event or series of events (occurring for whatever reason) following which:

(a) within two (2) years after the Closing Date, so long as the Key Shareholders are employed by any Borrower in any capacity, the Key Shareholders shall cease to directly or indirectly, own beneficially and control less than 50% of the outstanding shares of Voting Stock of Peak Resorts that they own as of the Closing Date; or

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(b) Peak Resorts shall, directly or indirectly, own beneficially and control less than all of the outstanding shares of Voting Stock of Mount Snow.

“Charter Documents” means, as to any Person (other than a natural person), the charter, certificate or articles of incorporation, by-laws, regulations, general or limited partnership agreement, certificate of limited partnership, certificate of formation, operating agreement, or other similar organizational or governing documents of such Person.

“Closing Date” means the date of this Agreement as reflected in the introductory paragraph hereof.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all assets of the Borrowers, consisting of both real property and personal property, in which a security interest or Lien is granted to the Lender pursuant to Section 8.1 hereof or any other Loan Document to secure repayment of the Obligations and all other property of the Borrowers in which a Lien is granted to the Lender to secure repayment of the Obligations, including the Properties.

“Collections” means all payments to a Person from Account Debtors in respect of Accounts, Chattel Paper, and General Intangibles owing to such Person.

“Control Election” has the meaning specified in Section 5.3 of this Agreement.

“Debt Service Reserve Agreement” means that certain Amended and Restated Master Debt Service Reserve and Security Agreement of even date herewith among Borrowers ,  Lender and the other parties thereto .

“Default under ERISA” means: (a) the occurrence or existence of a material Accumulated Funding Deficiency in respect of any Employee Benefit Plan within the scope of Section 302(a) of ERlSA, or (b) any failure by any Borrower or any Subsidiary to make a full and timely payment of premiums required by Section 4001 of ERlSA in respect of any Employee Benefit Plan, or (c) the occurrence or existence of any material liability under Section 4062, 4063, 4064, 4069, 4201, 4217 or 4243 of ERlSA in respect of any Employee Benefit Plan, or (d) the occurrence or existence of any material breach of any other law or regulation in respect of any such Employee Benefit Plan, or (e) the institution or existence of any action for the forcible termination of any such Employee Benefit Plan which is within the scope of Section 4001(a)(3) or (15) of ERlSA.

“Disclosure Schedule” means the schedule which is attached hereto as Annex II and is incorporated into this Agreement, as the same may amended from time to time with the consent of the Lender to the extent permitted by Section 16.1 .

“Distribution” means a payment made, liability incurred or other consideration (other than any stock dividend or stock split payable solely in capital stock of the Person making such payment or other distribution) given by a Person for the purchase, acquisition, redemption or retirement of any capital stock (whether added to treasury or otherwise) of such Person or as a dividend, return of capital or other distribution in respect of the capital stock of such Person.

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“Dollars” and the sign “$” each means lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary of Peak Resorts organized under the laws of any state of the United States or the District of Columbia.

“EB-5 Funding ” means the proceeds from an unsecured loan from Carinthia Group 1, L.P., a Vermont limited partnership, to Subsidiaries of Borrower, in the approximate principal amount of $ 52,000,000.00 . 

“EB-5 Indebtedness” means Indebtedness incurred by a Subsidiary of Borrower for the development of real property owned or leased by such Subsidiary of Borrower under the EB-5 immigrant investor program administered pursuant to the United States Immigration Act of 1990.

“Employee Benefit Plan” means an “employee benefit plan” as defined in Section 3 of ERISA of any Borrower or any of its ERISA Affiliates or any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA or any “pension plan” as defined in Section 3(2) of ERISA or any “welfare plan” as defined in Section 3(1) of ERISA.

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, complaints, liens, notices of non-compliance, investigations, proceedings alleging non-compliance with or liabilities under any Environmental Law or any Environmental Permit, instituted by any Person, including, without limitation, (a) by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law or (b) by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health or the environment.

“Environmental Laws” means any applicable federal, state or local law, regulation, ordinance, or order pertaining to the protection of the environment, including (but not limited to) applicable provision of CERCLA, RCRA, the Hazardous Materials Transportation Act, 49 USC §§ 1801 et seq., the Federal Water Pollution Control Act (33 USC §§ 1251 et seq.), the Toxic Substances Control Act (15 USC §§ 2601 et seq.) and the Occupational Safety and Health Act (29 USC §§ 651 et seq.), and all similar state, regional or local laws, treaties, regulations, statutes or ordinances, common law, civil laws, or any case precedents, rulings, requirements, directives or requests having the force of law of any foreign or domestic governmental authority, agency or tribunal, and all foreign equivalents thereof, as the same have been or hereafter may be amended, and any and all analogous future laws, treaties, regulations, statutes or ordinances, common law, civil laws, or any case precedents, rulings, requirements, directives or requests having the force of law of any foreign or domestic governmental authority, agency and which govern: (a) the existence, cleanup and/or remedy of contamination on property; (b) the emission or discharge of Hazardous Materials into the environment; (c) the control of hazardous wastes; (d) the use, generation, transport, treatment, storage, disposal, removal or recovery of Hazardous Materials; or (e) the maintenance and development of wetlands.

“Environmental Permits” means all permits, approvals, certificates, notifications, identification numbers, licenses and other authorizations required under any applicable

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Environmental Laws or necessary for the conduct of business, including without limitation, any and all permits or other authorizations relating to water rights, usage or withdrawal.

“ERISA” means the Employee Retirement Income Security Act of 1974 (public Law 93-406), as amended, and in the event of any amendment affecting any Section thereof referred to in this Agreement, that reference shall be a reference to that Section as amended, supplemented, replaced or otherwise modified.

“ERISA Affiliate” means, with respect to any Person, any other Person that is under common control with such Person within the meaning of Section 4001(a)(l4) of ERISA, or is a member of a group which includes such Person and which is treated as a single employer under Sections 414(b) or (c) of the Code. In addition, for provisions of this Agreement that relate to Section 412 of the Code, the term “ERISA Affiliate” of any Person shall mean any other Person aggregated with such Person under Sections 414(b), (c), (m) or (o) of the Code.

“ERISA Regulator” means any governmental agency (such as the Department of Labor, the IRS and the Pension Benefit Guaranty Corporation) having any regulatory authority over any Employee Benefit Plan.

“Event of Default” has the meaning specified in Section 12 of this Agreement.

“Excluded Indebtedness” means any Indebtedness of a Subsidiary of Peak Resorts with respect to which each of the following conditions is satisfied: (a) the assets of such Subsidiary are not a part of the Collateral, (b) the Indebtedness of such Subsidiary is non-recourse to any Borrower (other than certain recourse carve-outs for fraud, waste and similar “bad-boy” actions), and (c) Peak Resorts and Lender shall have received a non-consolidation opinion with respect to such Subsidiary from legal counsel and in form approved by Lender in Lender’s reasonable discretion, that if such Subsidiary were to become insolvent, neither the Borrowers, nor any of Borrowers’ other Subsidiaries or their assets or liabilities, would be substantively consolidated with those of such Subsidiary.

“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist Financing effective September 24, 2001, as the same has been or hereafter may be renewed, extended, amended or replaced.

“Financial Impairment” means, in respect of a Person, the distressed economic condition of such Person manifested by anyone or more of the following events:

“Financial Projections” has the meaning specified in Section 10.14 of this Agreement.

“Fiscal Quarter” means any of the four consecutive three-month fiscal accounting periods collectively forming a Fiscal Year of a Person.

“Fiscal Year” means a Person’s regular annual accounting period for federal income tax purposes.

“GAAP” means generally accepted accounting principles, consistently applied; provided, however, if there shall occur any change in accounting principles from GAAP as in effect on the Closing Date, then the Borrowers and the Lender shall make adjustments to such financial covenants as are determined in good faith to be appropriate to reflect such changes so that the criteria for evaluating the financial condition and operations of the Borrowers shall be the same after such changes as if such changes had not been made.

“Guarantor” shall mean collectively, (a) Peak Resorts, Mount Snow, Ltd., Sycamore Lake, Inc., Brandywine Ski Resort, Inc., Boston Mills Ski Resort, Inc., Deltrecs, Inc., JFBB Ski Areas, Inc., Mad River, SNH Development, Inc., Hidden Valley Golf and Ski, Inc., Snow Creek, Inc., Paoli Peaks, Inc., L.B.O. Holding, 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., (b) all other current

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Subsidiaries of Peak Resorts other than the Liquor Subsidiaries and those Subsidiaries of Mount Snow that were formed for the sole purpose of incurring EB-5 Indebtedness, and (c) subject to Section11.3(n) , all future Subsidiaries of Peak Resorts and their resp ective successors in interest.

“Guaranty” shall mean an amendment to, or an amendment and restatement of, that certain Guaranty Agreement dated as of January 6, 2016 in favor of Lender and an Affiliate of Lender, to be executed by the Guarantors in favor of Lender, guaranteeing payment of the Loan and performance of all the Obligations and guaranteeing all loans and other obligations of the borrowers under the 2014 Credit Agreement and the Hunter Mountain Credit Agreement and all obligations of Mad River under the Mad River Lease.

“Guaranty Obligations” means, with respect to any Person, without duplication, any obligation of such Person guaranteeing any Indebtedness (“Primary Indebtedness”) of any other Person (the ‘primary obligor’) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether contingent or not contingent, (a) to purchase any such Primary Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Primary Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Primary Indebtedness of the ability of the primary obligor to make payment of such Primary Indebtedness, or (d) otherwise to assure or hold harmless the owner of such Primary Indebtedness against loss in respect thereof; provided, however, that the term “Guaranty Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Primary Indebtedness in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Hazardous Material” means and includes: (a) any asbestos or other material composed of or containing asbestos which is, or may become, even if properly managed, friable, (b) petroleum and any petroleum product, including crude oil or any fraction thereof, and natural gas or synthetic natural gas liquids or mixtures thereof, or (c) any hazardous or toxic waste, substance or material defined as such in (or for purposes of) CERCLA or RCRA, any so-called “Superfund” or “Superlien” law, or any other applicable Environmental Laws.

“Hunter Mountain Credit Agreement” means the Master Credit and Security Agreement, dated as of January 6, 2016, among EPT Ski Properties, Inc. and Peak Resorts, 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., and Frosty Land, Inc., as amended , renewed, restated, consolidated, replaced or otherwise modified from time to time.

“Improvements” shall have the meaning given in Section 10.24 of this Agreement.

“Indebtedness” means, with respect to any Person, without duplication, (a) Indebtedness for Borrowed Money (including EB-5 Indebtedness), (b) obligations to pay the deferred purchase

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price of property or services (other than accrued liabilities incurred in the ordinary course of business), (c) Capital Expenditures or other obligations as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (d) all obligations of such Person as an account party in respect of letters of credit or banker’s acceptances, (e) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA, (f) obligations secured by any Lien on the properties or assets of the Person, (g) Guaranty Obligations of such Person in respect of currency or interest rate swap or comparable transactions, (h) long-term operating lease obligations, and (i) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (a) through (h) above.  Notwithstanding the foregoing, Excluded Indebtedness of a Subsidiary of Peak Resorts shall not be included as part of the Indebtedness of Peak Resorts or the other Borrowers.

“Indebtedness for Borrowed Money” means, with respect to any Person, without duplication, all obligations of such Person for money borrowed including, without limitation, all notes payable, drafts accepted representing extensions of credit, obligations evidenced by bonds, debentures, notes or other similar instruments, and obligations upon which interest charges are customarily paid or discounted, and all Guaranties of such obligations.

“Intellectual Property” means all inventions, designs, patents, and applications therefor, trademarks, service marks, trade names, and registrations and applications therefor, copyrights, any registrations therefor, and any licenses thereof, whether now owned or existing or hereafter arising or acquired.

“IRS” means the Internal Revenue Service of the United States.

“Key Shareholders” shall mean Timothy D. Boyd, Richard Deutsch and Stephen J. Mueller, any trust created or controlled by such individuals, the spouse or children of such individuals, and any trust created or controlled by any such spouse or child.

“Law” means any law, treaty, regulation, statute or ordinance, common law, civil law, or any case precedent, ruling, requirement, directive or request having the force of law of any foreign or domestic governmental authority, agency or tribunal.

“Lender” has the meaning set forth in the introductory paragraph of this Agreement.

“ Letter Agreement” means a letter agreement between Lender, EPT Ski Properties, Inc., Peak Resorts and various Subsidiaries of Peak Resorts whereby, among other things, (i) upon the occurrence of any default by any Borrower (or any of its Affiliates) under any agreement with Royal Banks of Missouri (“ RBMO ”) , or under any agreement with Lender (or any of its Affiliates), Lender (or any of its Affiliates) shall have the right to request Peak Resorts pay off any and all loans and other indebtedness then owing by any Borrower (or any of its Affiliates) to RBMO (collectively, the “ RBMO Debt ” ), and upon such payoff of the RBMO Debt, Borrower (or any of its Affiliates) shall provide Lender with all collateral, guarantees and other credit assurances as Borrower (or any of its Affiliates) had in respect of the RBMO Debt (collectively, the “ RBMO Collateral ” ), on terms and conditions consistent with past loan transactions between Borrower and

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Lender , and (ii) Borrower covenants not to increase the outstanding principal amount of the RBMO Debt or make any other material changes to the RBMO Debt without in each case obtaining Lender’s prior written consent.

“Lien” means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, mortgage lien, right of way or other encumbrance on title to real property.

“Liquor Subsidiaries” means JFBB LQ, Inc., a Pennsylvania corporation, BBJF LQ, Inc., a Pennsylvania corporation, or Boulder View Tavern, Inc., a Pennsylvania corporation, and any other Subsidiary of Peak Resorts formed under the laws of the State of Pennsylvania for the sole purpose of holding liquor licenses.

“LLC” means each limited liability company in which any Borrower has an interest, including those set forth on Item 9.9 of the Disclosure Schedule.

“LLC Agreement” means each operating agreement governing an LLC, as each such agreement has heretofore been and may hereafter be amended, restated, supplemented or otherwise modified.

“Loan” shall have the meaning given in Section 2(a) of this Agreement.

“Loan Account” has the meaning set forth in Section 4.1 of this Agreement.

“Loan Documents” means this Agreement, the Note and the other documents described in Section 3 of this Agreement, and all other instruments, agreements or other documents that evidence, secure, guarantee or otherwise relate to the Loan or this Agreement or any other obligation of any Borrower or any Affiliate of Borrower to Lender or any Affiliate of Lender, as each of the foregoing may be amended, renewed, restated, replaced, consolidated or otherwise modified from time to time.

“Loan Termination Date” means March 31, 2017; provided ,   however , that, (a) if the EB-5 Funding is not received by March 31, 2017, Borrowers may elect, if no Potential Default or Event of Default then exists, to extend the maturity of the Loan until March 31, 2018 by giving written notice of such election to Lender by March 31, 2017 and by paying Lender a fee of $125,000 by March 31, 2017, which fee must be paid by wire transfer or other immediately available funds and which fee shall be deemed fully earned and nonrefundable at such time (in which event the Loan Termination Date shall mean March 31, 2018), and (b) if the maturity of the Loan has been extended pursuant to the preceding clause (a) and the EB-5 Funding is not received by March 31, 2018, Borrowers may elect, if no Potential Default or Event of Default then exists, to extend the maturity of the Loan until March 31, 2019 by giving written notice of such election to Lender by March 31, 2018 and by paying Lender a fee of $125,000 by March 31, 2018, which fee must be paid by wire transfer or other immediately available funds and which fee shall be deemed fully earned and nonrefundable at such time (in which event the Loan Termination Date shall mean March 31, 2019).

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“Lockbox” means any post office box rented by and in the name of a Borrower and as to which, after the Lender’s Control Election during an Event of Default which is continuing, as to which the Lender has exclusive access pursuant to the requirements of this Agreement.

“Mad River” means Mad River Mountain, Inc., a Missouri corporation and a Subsidiary of Peak Resorts.

“Mad River Lease” means the Lease Agreement, dated as of November 17, 2005, by and between EPT Mad River, Inc., a Missouri corporation, and Mad River, as amended by that certain First Amendment to Lease Agreement dated June 30, 2006 , as further modified by that certain Second Amendment to Lease Agreement dated December 1, 2014 and as further amended by that certain Third Amendment to Lease Agreement dated June 8, 2016 .

“Material Adverse Effect” means: (a) a material adverse effect on the business, properties, operations, condition (financial or otherwise) or prospects of any Borrower, or a material adverse effect on the business, properties, operations, condition (financial or otherwise) or prospects of the Borrowers taken as a whole, (b) an impairment of a material portion of the Collateral, (c) a material impairment of any Borrower’s ability to perform in any respect its obligations under the Loan Documents or to repay the Obligations, (d) a material impairment to the Lender’s security interest and Lien on the Collateral or the priority thereof, or (e) a material adverse effect on the legality, validity or enforceability of this Agreement, the other Loan Documents or any Lien created hereby or thereby. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other th e n existing events would result in a Material Adverse Effect.

“Material Business Agreement” means each agreement or contract (not including Material License Agreements) of any Borrower or any Subsidiary thereof (other than any agreement that by its terms may be terminated upon 60 days’ notice or less by such Borrower or such Subsidiary) which: (a) involves consideration to such Person of $200,000 or more in any year, (b) involves consideration by such Person of $200,000 or more in any year, (c) imposes financial obligations on such Person of $200,000 or more in any year, (d) involves such Borrower’s leasing as lessee any real property under any operating or Capitalized Lease, or (e) the termination of which could reasonably be expected to result in a Material Adverse Effect.

“Material License Agreement” means each license agreement of any Borrower in respect of Third Party Intellectual Property set forth on the Disclosure Schedule as being a license agreement the termination of which could reasonably be expected to result in a Material Adverse Effect.

“Material Recovery Deferred Amount” means, with respect to any Net Proceeds of any Material Recovery Event, the portion of such Net Proceeds intended to be used to rebuild or restore the affected property or to acquire replacement assets useful in the business of any Borrower and any of its Subsidiaries, as set forth in the applicable Material Recovery Notice, minus the amount of such Net Proceeds used or committed to be used therefor pursuant to a contractual obligation entered into prior to the Material Recovery Prepayment Date; provided that such amount shall not

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exceed $100,000 for any single Material Recovery Event or $500,000 in the aggregate in any calendar year.

“Material Recovery Event” means (i) any casualty loss in respect of assets of any Borrower covered by casualty insurance, (ii) any compulsory transfer or taking under threat of compulsory transfer of any asset of any Borrower by any agency, department, authority, commission, board, instrumentality or political subdivision of the United States, any state or municipal government and (iii) any recovery in good funds by such Borrower by reason of a nonappealable judgment against any other Person to the full extent thereof.

“Material Recovery Notice” has the meaning set forth in Section 9.10 of this Agreement.

“Material Recovery Prepayment Date” means, with respect to any Net Proceeds of any Material Recovery Event, the earlier of (a) the date occurring 180 days after such Material Recovery Event and (b) the date that is five Business Days after the date on which the Borrower Representative shall have notified the Lender of the applicable Borrower’s determination not to rebuild or restore the affected property or to acquire replacement assets useful in the business or such Borrower or any of its Subsidiaries with all or any portion of the relevant Material Recovery Deferred Amount for such Net Proceeds.

“Maximum Lawful Rate” has the meaning specified in Section 16.6 of this Agreement.

“Maximum Loan Amount” has the meaning specified in Section 2(a) of this Agreement.

“Mortgage Amendments” means amendments to each of the mortgages referred to in Section 3.1(b) of the 2014 Credit Agreement and Section 3.1(b) of the Hunter Mountain Credit Agreement, reasonably satisfactory in form and content to Lender, whereby the obligations secured thereby are amended to include, in addition to the other obligations already secured thereby, all obligations of the mortgagors thereunder with respect to the Guaranty (including, without limitation, that portion of the guaranteed obligations under the Guaranty that relates to the Loan).

“Mount Snow” means Mount Snow, Ltd., a Vermont corporation.

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as such term is defined in Section 4001(a)(3) of ERISA.

“Net Proceeds” means: (i) the cash proceeds (including cash proceeds subsequently received in respect of non-cash consideration initially received) from any sale, lease, transfer or other disposition of any Collateral of any Borrower to a Person (other than Collections in respect of Accounts) received by such Borrower, including, without limitation, cash payments in respect of Inventory sales, payments in respect to other dispositions of Collateral (other than the sale of Inventory in the ordinary course of business to the extent giving rise to Accounts) (net in each case of (x) selling expenses, including without limitation any reasonable broker’s fees or commissions and sales, transfer and similar taxes and (y) the repayment of any Indebtedness secured by a purchase money Lien on such assets that is permitted under this Agreement), insurance proceeds, condemnation awards and tax refunds, and (ii) the cash proceeds from any Material Recovery Event.

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“Note” means the Promissory Note of even date herewith in the stated principal amount of $10,000,000 from the Borrowers, as makers, to the Lender, as payee, and all amendments, restatements, modifications and replacements thereof.

“Obligations” means the present and future obligations of the Borrowers to the Lender and its Affiliates under this Agreement or any other Loan Document including without limitation (a) the outstanding principal and accrued interest (including interest accruing after a petition for relief under the federal bankruptcy laws has been filed) in respect of the Loan; (b) all fees owing to the Lender under this Agreement and the other Loan Documents, (c) any costs and expenses reimbursable to the Lender pursuant to this Agreement, and (d) Taxes, Other Taxes, compensation, indemnification obligations or other amounts owing by the Borrowers to the Lender under this Agreement, the Note or any Loan Document.

“Other Taxes” has the meaning specified in Section 15.4(b) of this Agreement.

“Partnership” means each partnership in which any Borrower has an interest.

“Partnership Agreement” means each partnership agreement governing a Partnership, as each such agreement has heretofore been and may hereafter be amended, restated, supplemented or otherwise modified.

“Payment Office” means, with respect to the Lender, such office of the Lender specified as its “payment office” under its name on the signature pages hereto, or such other office as the Lender may from time to time specify in writing to the Borrower Representative and the Lender as the office to which payments are to be made by the Borrowers or funds are to be-made accessible to the Lender by the Lender, as the case may be.

“PBGC” means the Pension Benefit Guaranty Corporation or any other governmental authority succeeding to any of its functions.

“Peak Resorts” means Peak Resorts, Inc., a Missouri corporation.

“Permitted Exceptions” shall have the meaning given in Section 10.24 of this Agreement.

“Person” means an individual, partnership, limited partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Pledged Collateral” means, collectively, the Pledged Notes, the Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any other Investment Property of the Borrowers all certificates or other instruments representing any of the foregoing, all Security Entitlements of the Borrowers in respect of any of the foregoing, all dividends, interest distributions, cash, warrants, rights, instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing.  Pledged Collateral may be General Intangibles or Investment Property.

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“Pledged LLC Interests” means all of each Borrower’s right, title and interest as a member of any LLCs and all of such Borrower’s right, title and interest in, to and under any LLC Agreement to which it is a party.

“Pledged Notes” means all right, title and interest of each Borrower in the Instruments evidencing all Indebtedness owed to such Borrower, issued by the obligors named therein, and all interest, cash, Instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Indebtedness.

“Pledged Partnership Interests” shall mean all of each Borrower’s right, title and interest as a limited and/or general partner in all Partnerships and all of each Borrower’s right, title and interest in, to and under any Partnership Agreements to which it is a party.

“Pledged Stock” means the shares of capital stock owned by each Borrower; provided ,   however , that with respect to a Subsidiary that is not a Domestic Subsidiary only outstanding capital stock possessing up to but not exceeding 65% of the voting power of all classes of capital stock of such controlled foreign corporation entitled to vote shall be deemed to be pledged hereunder; provided, further that “Pledged Stock” shall not include the shares of the Liquor Subsidiaries.

“Polluting Substance” means all pollutants, contaminants or chemicals or industrial, toxic or hazardous substances or wastes and shall include, without limitation, any flammable explosives, radioactive materials, oil, hazardous materials, hazardous or solid wastes, hazardous or toxic substances or related materials defined in CERCLA, the Superfund Amendments and Reauthorization Act of 1986, RCRA, the Hazardous and Solid Waste Amendments of 1984 and the Hazardous Materials Transportation Act, as any of the same are hereafter amended, and in the regulations adopted and publications promulgated thereto; provided in the event any of the foregoing Environmental Laws is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and, provided further, to the extent that the applicable laws of any state establish a meaning for “hazardous substance,” “hazardous waste,” “hazardous material,” “solid waste” or “toxic substance” that is broader than that specified in any of the foregoing Environmental Laws, such broader meaning shall apply.

“Potential Default” means an event, condition or thing which with the lapse of any applicable grace period or with the giving of notice or both would constitute, an Event of Default and which has not been appropriately waived in writing in accordance with this Agreement or fully corrected, prior to becoming an actual Event of Default.

“Products” means property directly or indirectly resulting from any manufacturing, processing, assembling or commingling of any Inventory.

“Properties” means any and all property owned or leased by any Borrower.

“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.

“Remittances” means all payments in respect of Net Proceeds.

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“Reportable Event” means any of the events set forth in Section 4043 of ERISA excluding those events for which the requirement of notice has been waived by the PBGC.

“Responsible Officer” means, with respect to a Person, the President, Chief Executive Officer or Chief Financial Officer of such Person.

“Restrictive Agreements” shall have the meaning given in Section 10.24 of this Agreement.

“Right of First Refusal” means that certain Right of First Refusal for Financing Agreement dated December 1, 2014 among the Guarantors and Lender whereby Guarantors grant Lender the first right of refusal on all new secured financing and sale leaseback transactions.

“Solvent” means, with respect to any Person, as of any date of determination, that: (a) the fair value of the assets of the Person as of such date is greater than the total amount of the liabilities of the Person, (b) the present fair salable value of the assets of the Person as of such date is not less than the amount that will be required to pay the probable liabilities of the Person on its debts as they become absolute and matured, (c) the Person is able to pay all liabilities of the Person as those liabilities mature, and (d) the Person does not have unreasonably small amount of capital for the business in which it is engaged or for any business or transaction in which it is about to engage. The determination of whether a Person is Solvent shall take into account all such Person’s assets and liabilities regardless of whether, or the amount at which, any such asset or liability is included on a balance sheet of such Person prepared in accordance with GAAP, including assets such as contingent contribution or subrogation rights, business prospects, distribution channels and goodwill. In computing the amount of contingent or unrealized assets or contingent or unliquidated liabilities at any time, such assets and liabilities will be computed at the amounts which, in light of all the facts and circumstances existing at such time, represent the amount that reasonably can be expected to become realized assets or matured liabilities, as the case may be. In computing the amount that would be required to pay a Person’s probable liability on its existing debts as they become absolute and matured, reasonable valuation techniques, including a present value analysis, shall be applied using such rates over such periods as are appropriate under the circumstances, and it is understood that, in appropriate circumstances, the present value of contingent liabilities may be zero.

“Subordinated Indebtedness” means (x) all Indebtedness of any Borrower, or any of its Subsidiaries, now or hereafter existing, and (y) any monetary obligations of any Borrower or any of its Subsidiaries in connection with any repurchase or redemption of preferred membership units, equity securities or warrants of such Borrower or any Subsidiary, in each case, (A) that is consented to in writing by the Lender, in its sole discretion, and (B) that is expressly subordinated and made junior to, pursuant to the terms of a written subordination agreement to which the Lender is a party, the payment and performance in full of the Obligations by the Borrowers.

“Subsidiary” means, in respect of a corporate Person, a corporation or other business entity the shares constituting a majority of the outstanding capital stock (or other form of ownership) or constituting a majority of the voting power in any election of directors (or shares constituting both majorities) of which are (or upon the exercise of any outstanding warrants,

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options or other rights would be) owned directly or indirectly at the time in question by such Person or another subsidiary of such Person or any combination of the foregoing.

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of Missouri; provided ,   however , that in the event that, by reason of mandatory provisions of law, including the Missouri Uniform Commercial Code, any or all of the attachment, perfection or priority of the Lender’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Missouri, the term “UCC” shall mean the Uniform Commercial Code as from time to time in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for the purposes of definitions related to such provisions; provided ,   further , that if the UCC is amended, after the date hereof, such amendment will not be given effect for the purposes of this Agreement if and to the extent the result of such amendment would be to limit or eliminate any item of Collateral.

“United States” and “ U.S .” each means United States of America.

“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Voting Stock” means capital stock of a corporation, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or persons performing similar functions).

“West Lake Water Project” means the construction project undertaken by Mount Snow , or one of its Subsidiaries, commonly known as the West Lake water project under which Mount Snow, or one of its Subsidiaries, is developing and constructing a new water storage reservoir for snowmaking with capacity of up to 120 million gallons, three new pump houses and the installation of new snowmaking pipelines and ancillary equipment .

“West Lake Water Project Mechanic’s Lien” means, so long as no action has been taken to foreclose upon or otherwise enforce such Lien (or, if such action has been taken, the Borrowers shall have satisfied such Lien and caused it to be released within 20 days after the taking of such action), a mechanic’s lien in favor of a contractor retained by Mount Snow relating to the construction of the West Lake Water Project.

“Withdrawal Liability” means (in respect of the Borrowers, their Subsidiaries and their ERISA Affiliates), at any date of determination, the amount equal to the aggregate present value (as defined in Section 3 of ERISA) at such date of the amount claimed to have been incurred as a result of a withdrawal less any portion thereof as to which any Borrower reasonably believes, after appropriate consideration of the possible adjustments arising under subtitle E of Title IV of ERISA, such Borrower, its Subsidiaries and their ERISA Affiliates will have no liability; provided ,   however , that such Borrower shall obtain promptly written advice from independent actuarial consultants supporting such determination.

“Wholly-Owned Subsidiary” means, in respect of any Person, a Subsidiary of such Person in which such Person owns all of the outstanding capital stock (or other form of ownership) and controls all of the voting power in any election of directors or otherwise.

 

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ANNEX II

(see attached Disclosure Schedules)



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PROMISSORY NOTE







For value received, Peak Resorts, Inc., a Missouri corporation, and Mount Snow, Ltd., a Vermont corporation (each a " Borrower " and, collectively, " Borrowers "), jointly and severally promise to pay to the order of EPT Mount Snow, Inc., a Delaware corporation (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 maximum principal sum of TEN MILLION AND 00/100 DOLLARS ($10,000,000.00), or, if less, the principal amount of this Promissory Note (the " Note ") advanced to or for the benefit of either Borrower, together with interest on the unpaid principal balance of this Note.  Capitalized terms used and not defined in this Note have the meanings given to them in the Loan Agreement (as defined below).

(a) Subject to the terms and conditions of this Note, the outstanding principal balance of the Note shall accrue interest at a rate of nine percent (9.0%) per annum.

(b) Notwithstanding the foregoing, upon the occurrence and during the continuation of any Event of Default (as defined below), the outstanding principal balance of this Note and, to the extent permitted by applicable law, all accrued but unpaid interest on this Note and any other amounts payable by a Borrower under the Loan Documents, shall bear interest, 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 plus two percent (2%).  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.

(c) Interest shall be calculated on the basis of a 360 day year for the actual number of days elapsed.  

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

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:

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,

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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 10 Costs 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 thereon, or whether in connection with bankruptcy, insolvency or appeal.

Section 11 Service 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 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 any 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 Borrowers' obligations under this Note.  Each Borrower hereby severally (a) waives 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) 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; (e) 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 (f) 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."

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Section 14 Notices .  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 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 and the other Loan Documents and they constitute the valid and binding obligations of such Borrower.

Section 18 No 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

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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 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.

Section 17. Governing Law; Consent to Jurisdiction; Jury Trial Waiver .  Without limiting the provisions of the Loan Agreement, the Borrowers agree that the provisions of Section 16.10, Section 17 and Section 19 of the Loan Agreement shall apply with equal force and effect to this Note.

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.

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

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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





MOUNT SNOW, LTD.,  

a Vermont corporation

By:  /s/ Stephen J. Mueller

    Stephen J. Mueller, Vice President





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FIRST ADDENDUM TO AMENDED AND RESTATED MASTER CROSS-DEFAULT AGREEMENT

This First Addendum to the Amended and Restated Master Cross-Default Agreement (this " Addendum ") is entered into as of September 1, 2016 by and between EPT Properties and the Debtors (including, without limitation, the entity or entities referred to below that are being added to the definition of "Borrowers").  All capitalized terms used herein shall have the meaning given in the Amended and Restated Master Cross-Default Agreement dated January 6, 2016 (the " Cross-Default Agreement "), between EPT Properties and Debtors.



By this Addendum, EPT Properties and Debtors hereby (i) incorporate the terms of this Addendum into the Cross-Default Agreement, and (ii) add the following Transaction Documents to the Cross-Default Agreement pursuant to Section 4 of the Cross-Default Agreement.



Documents added to definition of "Transaction Documents":	Lease Agreement dated November 15, 2005, by and between EPT Mad River, as landlord, and Mad River, as tenant, as amended by that certain First Amendment to Lease Agreement dated June 30, 2006 and as further amended by that certain Second Amendment to Lease Agreement dated December 1, 2014 and as further amended by that certain Third Amendment to Lease Agreement date June 8, 2016;
	Promissory Note dated even date herewith in the maximum principal amount of Ten Million and no/Dollars ($10,000,000.00) made by Peak Resorts and Mount Snow, as co-borrowers, to EPT Mount Snow;

 

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IN WITNESS WHEREOF , the Borrowers have caused this First Addendum to Amended and Restated Master Cross-Default Agreement to be executed and delivered the day and year first above written.



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IN WITNESS WHEREOF , EPT Properties have caused this First Addendum to Amended and Restated Master Cross-Default Agreement to be executed and delivered the day and year first above written.





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IN WITNESS WHEREOF , the Guarantors have caused this First Addendum to Amended and Restated Master Cross-Default Agreement to be executed and delivered the day and year first above written.







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GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this “ Guaranty ”), is made as of September 1, 2016, by Peak Resorts, Inc ., a Missouri corporation (“ Peak Resorts ”), HUNTER MOUNTAIN ACQUISITION, INC., a Missouri corporation (“ HMA ”), HUNTER MOUNTAIN SKI BOWL INC., a New York corporation (“ Hunter Ski ”), HUNTER MOUNTAIN FESTIVALS, LTD., a New York corporation (“ Hunter Festivals ”), HUNTER MOUNTAIN RENTALS LTD., a New York corporation (“ Hunter Rentals ”), HUNTER RESORT VACATIONS, INC., a New York corporation (“ Hunter Vacations ”), HUNTER MOUNTAIN BASE LODGE, INC., a New York corporation (“ Hunter Lodge ”), FROSTY LAND, INC.,  a New York corporation (“ Frosty ” and together with Peak Resorts, HMA, Hunter Ski, Hunter Festivals, Hunter Rentals, Hunter Vacations and Hunter Lodge, collectively, the “ Hunter Borrowers ”),   JFBB Ski Areas, Inc. , a Missouri corporation (“ JFBB ”), Boston Mills Ski Resort, Inc. , an Ohio corporation (“ Boston Mills ”), Brandywine Ski Resort, Inc. , an Ohio corporation (“ Brandywine ”), Sycamore Lake, Inc. , an Ohio corporation (“ Sycamore Lake ”), Mount Snow, Ltd. , a Vermont corporation (“ Mount Snow ”), Deltrecs, Inc. , an Ohio corporation (“ Deltrecs ” and together with Peak Resorts, JFBB, Boston Mills, Brandywine, Sycamore Lake, Mount Snow and Deltrecs, collectively, the “ 2014 Borrowers ”; the Hunter Borrowers and the 2014 Borrowers are collectively referred to herein as the “ Borrowers ”), Mad River Mountain, Inc. , a Missouri corporation (“ Mad River ”), S N H Development, Inc. , a Missouri corporation (“ SNH ”), L.B.O Holding, Inc. , a Maine corporation (“ LBO ”), Hidden Valley Golf and Ski, Inc. , a Missouri corporation (“ Hidden Valley ”), Snow Creek, Inc. , a Missouri corporation (“ Snow Creek ”), Paoli Peaks, Inc. , a Missouri corporation (“ Paoli ”), WC ACQUISITION CORP., a New Hampshire corporation (“ WCA ”), RESORT HOLDINGS, L.L.C., a Missouri limited liability company (“ Resort Holdings ”), and BLC OPERATORS, INC., a Pennsylvania corporation (“ BLC ” and together with the 2014 Borrowers, Mad River, SNH, LBO, Hidden Valley, Snow Creek, Paoli, WCA, and Resort Holdings, collectively, the “ 2014 Guarantors ”; the Hunter Borrowers and the 2014 Guarantors are collectively, jointly and severally, referred to herein as the “ Guarantor ”), for the benefit of EPT SKI PROPERTIES, INC., a Delaware corporation (“ EPT Ski ”) and EPT MOUNT SNOW, a Delaware corporation   (“ EPT Mount Snow ” and together with EPT Ski, collectively, “ Lender ”).

W I T N E S S E T H

NOW, THEREFORE, to induce EPT Mount Snow to extend the Bridge Loan to Mount Snow and Peak Resorts, and in consideration of the foregoing premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, Guarantor hereby covenants and agrees for the benefit of Lender, as follows:

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Upon demand by Lender following the occurrence of an Event of Default under any Loan Documents, Guarantor will cause all Improvements (as defined in any Loan Documents) to be completed in accordance with the requirements of the Loan Agreements and will pay all bills in connection therewith.  The liability and obligations under this Section 3 shall not be limited or restricted by the existence of, or any terms of, the guaranty of payment under Section 2.

Guarantor hereby expressly waives and surrenders any defense to its liability under this Guaranty based upon any of the foregoing acts, omissions, agreements, waivers or matters.  It is the purpose and intent of this Guaranty that the obligations of Guarantor under this Guaranty shall be absolute and unconditional under any and all circumstance.

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