UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): J une 14 , 201 6
PEAK RESORTS, INC.
(Exact name of registrant as specified in its charter)
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Missouri |
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001-35363 |
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43-1793922 |
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(State or other jurisdiction of |
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(Commission |
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(I.R.S. Employer |
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incorporation) |
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File Number) |
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Identification No.) |
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17409 Hidden Valley Drive |
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Wildwood, Missouri |
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63025 |
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(Address of principal executive offices) |
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(Zip Code) |
(636) 938-7474
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act.
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
Letter Agreements
Peak Resorts, Inc. (the “Company”) is currently a party to the following previously disclosed credit agreements with affiliates of Entertainment Properties Trust, Inc.: (i) the Master Credit and Security Agreement, dated as of December 1, 2014, among the Company, Mount Snow, Ltd., Sycamore Lake, Inc., Brandywine Ski Resort, Inc., Boston Mills Ski Resort, Inc., Deltrecs, Inc., and JFBB Ski Areas, Inc . , as borrowers, and EPT Ski Properties, Inc. and EPT Mount Snow, Inc., as lender (the “2014 Credit Agreement”); (ii) the Master Credit and Security Agreement, dated as of January 6, 2016, among the Company, 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 borrowers, and EPT Ski Properties, Inc., as lender (the “Hunter Mountain Credit Agreement”); and (iii) the Master Credit and Security Agreement, dated as of September 1, 2016, among the Company and Mount Snow, Ltd., as borrowers, and EPT Mount Snow, Inc., as lender (the “Mount Snow Credit Agreement” and together with the 2014 Credit Agreement and the Hunter Mountain Credit Agreement, the “Credit Agreements”).
The terms of the 2014 Credit Agreement and Hunter Mountain Credit Agreement state that if the Company failed to maintain a consolidated fixed charge coverage ratio of 1.50:1.00 on a rolling four quarter basis, the Company must pay to the lenders an additional three months of lease payment obligations and debt service payments, as defined in the 2014 Credit Agreement and Hunter Mountain Credit Agreement (the “Additional Debt Service Deposits”), within 30 days of making such determination. The Mount Snow Credit Agreement requires the Company to comply with the Hunter Mountain Credit Agreement financial covenants, including the consolidated fixed charge coverage ratio covenant. By June 14, 2016, the Company and the lender had determined that the Company did not maintain the necessary consolidated fixed charge coverage ratio for the year ended April 30, 2016. The amount of the Additional Debt Service Deposits due to lender was approximately $3.23 million
On July 13, 2016, within the 30-day payment period, the Company and the lender entered into letter agreements with respect to the 2014 Credit Agreement (the “2014 Credit Agreement Letter”) and the Hunter Mountain Credit Agreement (the “Hunter Mountain Credit Agreement Letter” and together with the 2014 Credit Agreement Letter, the “Letter Agreements”) modifying the due date of the Additional Debt Service Deposits as follows: (i) one-third of such amount was due on January 31, 2017; (ii) one-third of such amount was due on February 28, 2017; and (iii) one-third of such amount was due on March 31, 2017.
The foregoing descriptions of the 2014 Credit Agreement Letter and Hunter Mountain Credit Agreement Letter are qualified in their entireties by reference to such documents, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Modification Agreement
As previously disclosed, on August 22, 2016, the Company entered into a securities purchase agreement with CAP 1 LLC in connection with the sale and issuance of $20 mi llion of Series A Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) , and three warrants (the “Warrants”), exercisable for 12 years, to purchase (i) 1,538,462 shares of the Company’s common stock at $6.50 per share; (ii) 625,000 shares of common stock at $8.00 per share; and (iii) 555,556 shares of common stock at $9.00 per share, in each case, subject to adjustments (the “Private Placement”).
Effective as of October 24, 2016, the Company, together with Mount Snow, Ltd., Sycamore Lake, Inc., Brandywine Ski Resort, Inc., Boston Mills Ski Resort, Inc., Deltrecs, Inc., JFBB Ski Areas, Inc., Hunter Mountain Acquisition, Inc., Hunter Mountain Ski Bowl Inc., Hunter Mountain Festivals, Ltd., Hunter Mountain Rentals Ltd., Hunter Mountain Resort Vacations, Inc., Hunter Mountain Base Lodge, Inc. and Frosty Land, Inc., as borrowers, entered into the Modification of Master Credit Agreements (the “Modification Agreement”) with EPT Mount Snow, Inc., EPT Ski Properties, Inc. and EPT Mad River, Inc., as lenders. The Modification Agreement eliminates the need of the Company to pay the Additional Debt Service Deposits , as required by the Credit Agreements and modified by the Letter Agreements, as described above. In lieu of the requirement to pay the Additional Debt Service Deposits, the
Modification Agreement provides that no later than 30 days after the closing of the Private Placement, the Company shall deliver to the lender either (the “One Month Interest Obligation”) (i) a letter of credit in favor of the lender in the amount equal to one month of the lease payment obligations and debt service payments, as defined in the Credit Agreements; or (ii) cash equal to the same amount. The terms further provide that the lender may draw upon any letter of credit issued pursuant to the Modification Agreement upon the occurrence of certain events (the “Letter of Credit Events”), including, but not limited to, (i) any event of default under the Credit Agreements; (ii) the Company’s failure to maintain a consolidated fixed charge coverage ratio of 1.50:1.00 on a rolling four quarter basis, as calculated pursuant to the terms of the Credit Agreements, on or after May 1, 2017; and (iii) at any time within 60 days prior to the expiration date of any letter of credit. In the event of the occurrence of any Letter of Credit Events, the Company must replace the One Month Interest Obligation with (i) a replacement letter of credit in favor of the lender in the amount equal to three months of lease payment obligations and debt service payments, as defined in the Credit Agreements; or (ii) cash in the same amount. Pursuant to the terms of the Modification Agreement, the Company must obtain the consent of the lender prior to redeeming any preferred or common stock.
The effectiveness of the Modification Agreement is contingent upon closing the Private Placement for no less than $15 million no later than November 15, 2016. As the Company’s stockholders approved the issuance of the shares of Series A Preferred Stock, Warrants and Additional Common Stock, as defined herein, in connection with the Private Placement at the Company’s 2016 Annual Meeting of Stockholders held on October 24, 2016 (the “2016 Annual Meeting”), the Company expects to close the Private Placement prior to November 15, 2016.
The foregoing description of the Modification Agreement is qualified in its entirety by reference to the Modification Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.04.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth under Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At the Company’s 2016 Annual Meeting held on October 24, 2016, the stockholders of the Company approved certain amendments to the Company’s Amended and Restated Articles of Incorporation (the “Articles”), as described herein. On October 26, 2016, the Company filed an amendment (the “Articles Amendment”) to its Articles with the Missouri Secretary of State which increased the number of authorized shares of common stock to 40,000,000 and authorized the creation of 40,000 shares of “blank check” preferred stock and certain conforming amendments to the Articles . The term “blank check” preferred stock refers to stock which gives the Board of Directors the flexibility to create one or more series of preferred stock, from time to time, and to determine the relative rights, preferences, powers and limitations of each series, including, without limitation: (i) the number of shares in each series; (ii) whether a series will bear dividends and whether dividends will be cumulative; (iii) the dividend rate and the dates of dividend payments; (iv) liquidation preferences and prices; (v) terms of redemption, including timing, rates and prices; (vi) conversion rights and prices; (vii) any sinking fund requirements; (viii) any restrictions on the issuance of additional
securities of any class or series; (ix) any voting rights; and (x) any other relative, participating, optional or other special rights, preferences, powers, qualifications, limitations or restrictions.
Also on October 26, 2016, the Company filed with the Missouri Secretary of State a Certificate of Designation of Series A Cumulative Convertible Preferred Stock, par value $0.01, designating the creation of 40,000 shares of Series A Preferred Stock. The rights and preferences of the Series A Preferred Stock include, among other things, the following:
Ranking; Seniority
The Series A Preferred Stock shall generally rank, with respect to liquidation, dividends and redemption, (i) senior to common stock and to any other junior capital stock; (ii) on parity with any parity capital stock; (iii) junior to any senior capital stock; and (iv) junior to all of the Company’s existing and future indebtedness (except indebtedness issued on or prior to the Expiration Date (as defined below) that is convertible into or exercisable for any class or series of capital stock) .
Additionally, until the earlier of (i) such date as no Series A Preferred Stock remains outstanding and (ii) January 1, 2027 (such earlier date, the “Expiration Date”), the Company is prohibited from (i) creating or issuing capital stock (or securities convertible into capital stock) that grants holders the right to receive dividends or interest prior to the Expiration Date when there are accrued or unpaid dividends with respect to the Series A Preferred Stock or the right to receive any liquidation payment prior to the Expiration Date at a time when the Series A Preferred Stock holders have not received their full liquidation value; (ii) paying any dividend or interest on capital stock (or securities convertible into capital stock) when there are accrued or unpaid dividends with respect to the Series A Preferred Stock; (iii) paying any liquidation payment on capital stock (or securities convertible into capital stock) at a time when the Series A Preferred Stock holders have not received their full liquidation value; or (iv) issuing any indebtedness convertible into or exercisable for capital stock.
T he Company shall not make any redemption payment on any capital stock (or any security convertible into capital stock) at any time prior to the Expiration Date when any shares of Series A Preferred Stock have not been redeemed except for the redemption of junior securities to the extent permitted under “Dividend Rights” below. The foregoing shall not restrict the Company’s ability to create, authorize the creation of, issue, sell, or obligate itself to issue (i) any indebtedness (other than, prior to the Expiration Date, indebtedness convertible into capital stock); or (ii) any common stock (or any capital stock convertible into common stock (other than any capital stock that is prohibited by this paragraph)).
Dividend Rights
From and after the date that is nine months from the date of issuance, cumulative dividends shall accrue on the Series A Preferred Stock on a daily basis in arrears at the rate of 8% per annum on the liquidation value of $1,000 per share. All accrued and accumulated dividends on the Series A Preferred Stock shall be paid prior and in preference to any dividend or distribution on or redemption of any junior securities, provided that the Company may, prior to the payment of all accrued and accumulated dividends on the Series A Preferred Stock, (i) declare or pay any dividend or distribution payable on the common stock in shares of common stock; or (ii) repurchase common stock held by employees or consultants of the Company upon termination of their employment or services pursuant to agreements providing for such repurchase. The Company may also redeem or repurchase junior securities at any time when there are no accrued or accumulated unpaid dividends on the Series A Preferred Stock.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company, the holders of Series A Preferred Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of junior securities, and subject to the rights of any parity or senior securities, an amount in cash equal to $1,000 per share plus all unpaid accrued and accumulated dividends. The Series A Preferred Stock shall not be entitled to any further payment or other participation in any distribution of the available assets of the Company. Neither the consolidation nor merger with or into any other person or entity, nor the voluntary sale,
lease, transfer or conveyance of all or substantially all of the Company’s property or business, shall be deemed to constitute a liquidation.
Redemption
The Series A Preferred Stock is subject to redemption at a price per share equal to 125% of the liquidation value, plus all unpaid accrued and accumulated dividends, whether or not declared, at any time on or after the third anniversary of the issuance of the Series A Preferred Stock that the average closing price of the common stock on the 30 trading days preceding notice of the exercise of the redemption right is greater than 130% of the conversion price.
In addition, upon a change of control, any holder of Series A Preferred Stock shall have the right to elect to have all or any portion of its then outstanding Series A Preferred Stock redeemed for cash at the redemption price by the Company or the surviving entity of such change of control. The redemption price may, at the option of the Company, be paid in shares of common stock.
Conversion
Upon the earlier of a change of control or the nine-month anniversary of the date of issuance, the holders of the Series A Preferred Stock have the right to convert the Series A Preferred Stock into shares of common stock equal to the number of shares to be converted, times the liquidation value, divided by the conversion price and receive in cash all accrued and unpaid dividends. The initial conversion price per share is $6.29, subject to adjustment pursuant to the terms of the Certificate of Designation. Holders of the Series A Preferred Stock also have basic anti-dilution rights.
Voting Rights
Each holder of Series A Preferred Stock shall be entitled to vote, on an as-converted basis, with holders of outstanding shares of common stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company.
The foregoing descriptions of the Articles Amendment and Certificate of Designation are qualified in their entireties by reference to the Articles Amendment and Certificate of Designation which are filed with this Current Report on Form 8-K as Exhibits 3.1 and 4.1, respectively, and incorporated herein by reference.
Item 5.07. Submission of Matters to a Vote of Security Holders.
On October 24, 2016, the Company held its 2016 Annual Meeting. At the Annual Meeting, stockholders considered: (1) Proposal 1: the election of the seven directors, each to serve for a one-year term until the Company’s 2017 Annual Meeting of Stockholders; (2) Proposal 2: the ratification of the selection of RSM US LLP as the independent registered public accounting firm for the fiscal year ending April 30, 2017; (3) Proposal 3: the approval of the amendment to the Company’s Articles to effect an increase in the number of authorized shares of common stock to 40,000,000; (4) Proposal 4: the approval an amendment to the Articles to authorize 40,000 shares of “blank check” preferred stock to be designated in such series or class as the Board of Directors shall determine, including certain conforming amendments; (5) Proposal 5: the approval of the issuance of 20,000 shares of Series A Preferred Stock, the Warrants and shares of common stock upon the conversion of the Series A Preferred Stock and the exercise of the Warrants (the “Additional Common Stock”) in connection with the Private Placement for purposes of satisfying Nasdaq Rule 5635; and (6) Proposal 6: the approval of any motion properly brought before the Annual Meeting to adjourn the Annual Meeting, if necessary, to solicit additional votes in favor of Proposals 3, 4 and/or 5.
The Company's stockholders voted as follows on these matters:
The Company’s stockholders elected the seven director nominees as follows:
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Nominee |
For |
Withheld |
Broker Non-Votes |
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Timothy D. Boyd |
6,651,820 |
2,021,581 |
3,446,499 |
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Stephen J. Mueller |
5,133,788 |
3,539,613 |
3,446,499 |
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Richard K. Deutsch |
6,651,770 |
2,021,631 |
3,446,499 |
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Stanley W. Hansen |
5,235,777 |
3,437,624 |
3,446,499 |
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Carl E. Kraus |
6,688,620 |
1,984,781 |
3,446,499 |
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Christopher S. O’Connor |
8,337,803 |
335,598 |
3,446,499 |
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David W. Braswell |
5,194,937 |
3,478,464 |
3,446,499 |
The Company's stockholders ratified the selection of RSM US LLP as the Company's independent registered public accounting firm for the fiscal year ending April 30, 2017 as follows:
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For |
Against |
Abstain |
Broker Non-Votes |
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12,080,045 |
29,071 |
10,784 |
0 |
The Company’s stockholders approved the amendment to the Company’s Articles to effect an increase in the number of authorized shares of common stock to 40,000,000 as follows:
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For |
Against |
Abstain |
Broker Non-Votes |
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11,867,852 |
209,110 |
42,938 |
0 |
The Company’s stockholders approved an amendment to the Articles to authorize 40,000 shares of “blank check” preferred stock to be designated in such series or class as the Board of Directors shall determine, including certain conforming amendments, as follows:
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For |
Against |
Abstain |
Broker Non-Votes |
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8,501,486 |
143,090 |
28,825 |
3,446,499 |
The Company’s stockholders approved the issuance of the Series A Preferred Stock, the Warrants and the Additional Common Stock in connection with the Private Placement as follows:
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For |
Against |
Abstain |
Broker Non-Votes |
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8,522,911 |
123,665 |
26,825 |
3,446,499 |
The Company’s stockholders approved the motion to adjourn the Annual Meeting, if necessary, to solicit additional votes in favor of Proposals 3, 4 and/or 5 as follows:
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For |
Against |
Abstain |
Broker Non-Votes |
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11,831,287 |
232,095 |
56,518 |
0 |
Item 9.01. Financial Statements and Exhibits.
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10.3 |
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Modification of Master Credit Agreements, effective as of October 24, 2016, by and among Peak Resorts, Inc., Mount Snow, Ltd., Sycamore Lake, Inc., Brandywine Ski Resort, Inc., Boston Mills Ski Resort, Inc., Deltrecs, Inc., JFBB Ski Areas, Inc., Hunter Mountain Acquisition, Inc., Hunter Mountain Ski Bowl Inc., Hunter Mountain Festivals, Ltd., Hunter Mountain Rentals Ltd., Hunter Mountain Resort Vacations, Inc., Hunter Mountain Base Lodge, Inc. and Frosty Land, Inc., as borrowers, and EPT Mount Snow, Inc., EPT Ski Properties, Inc. and EPT Mad River, Inc. as lenders. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 28 , 201 6
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PEAK RESORTS, INC.
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By: |
/s/ Stephen J. Mueller |
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Name: |
Stephen J. Mueller |
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Title: |
Chief Financial Officer |
AMENDMENT OF ARTICLES OF INCORPORATION
OF
PEAK RESORTS, INC.
HONORABLE JASON KANDER
SECRETARY OF STATE
STATE OF MISSOURI
JEFFERSON CITY, MISSOURI 65101
Pursuant to the provisions of The General and Business Corporation Law of Missouri, the undersigned Corporation certifies the following:
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SECTION 1 |
The present name of the Corporation is Peak Resorts, Inc.
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SECTION 2 |
An amendment to the Corporation’s Articles of Incorporation was adopted by the shareholders on October 24, 2016.
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SECTION 3 |
Article III of the Articles of Incorporation is amended to read as follows:
The aggregate number, class and par value of shares which the Corporation shall have authority to issue is: (a) Forty Million (40,000,000) shares of Common Stock, all of which shall have a par value of One Cent ($0.01) per share and (b) Forty Thousand (40,000) shares of Preferred Stock, all of which shall have a par value of One Cent ($0.01) per share.
Article IV of the Articles of Incorporation is amended to read as follows:
The preferences, qualifications, limitations, restrictions, and the special or relative rights, including convertible rights, if any, in respect of the shares of each class are as follows:
1. Except to the extent granted to any holder of Common Stock or Preferred Stock pursuant to a written agreement between the Corporation and such holder, no holder of Common Stock or Preferred Stock shall be entitled to preemption or subscription rights with respect to the Common Stock or Preferred Stock.
2. All cumulative voting rights are hereby denied, so that the Common Stock and the Preferred Stock of the Corporation shall not carry with it and no holder or owner of any share or shares of the Common Stock or Preferred Stock shall have any right to cumulative voting in the election of directors or for any other purpose.
3. Subject to any other provisions of these Articles of Incorporation and/or any Certificate of Designation with respect to the Preferred Stock, as each may be amended from time to time, holders of shares of Common Stock and Preferred Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation when, as, and if declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.
4. Subject to any provisions of any Certificate of Designation with respect to the Preferred Stock, in the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Corporation, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution after payments to creditors, in proportion to the number of shares held by them, respectively.
5. In the event of a merger or consolidation of the Corporation with or into another entity (whether or not the Corporation is the surviving entity), the holders of each share of Common Stock shall be entitled to receive the same per share consideration on a per share basis.
6. The Board of Directors is hereby expressly authorized to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.
Of the 13,982,400 shares outstanding, 13,982,400 of such shares were entitled to vote on the amendment to Article III. The number of Common shares voted for such amendment 11,867,852, and the number of shares voted against such amendment 209,110.
Of the 13,982,400 shares outstanding, 13,982,400 of such shares were entitled to vote on the amendment to Article IV. The number of Common shares voted for such amendment 8,501,486, and the number of shares voted against such amendment 143,090.
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SECTION 4 |
If the amendment provides for an exchange, reclassification, or cancellation of issued shares, or a reduction of the number of authorized shares of any class below the value of issued shares of that class., the following is a statement of the manner in which such reduction shall be effected: N/A.
Dated this 24 th day of October, 2016.
IN AFFIRMATION THEREOF, the facts stated above are true and correct:
(The undersigned understands that false statements made in this filing are subject to the penalties provided under Section 575.040, RSMo)
By: /s/ Timothy D. Boyd
Name: Timothy D. Boyd
Title: President/CEO
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK OF
PEAK RESORTS, INC.
I, Timothy D. Boyd, President/CEO, of Peak Resorts, Inc., a corporation organized and existing under the General and Business Corporation Law of Missouri (the “ Company ”), in accordance with the provisions of Section 351.180 under the General and Business Corporation Law of Missouri (the “ Act ”) , DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Articles of Incorporation (the “ Articles of Incorporation ”) and the Amended and Restated Bylaws (the “ Bylaws ”) of the Company, the Board of Directors on October 24, 2016, 2016, adopted the following resolution (the “ Resolution ”) creating a series of Preferred Stock designated as Series A Cumulative Convertible Preferred Stock, par value $0.01 per share:
WHEREAS, the Amended and Restated Articles of Incorporation of the Company (the “ Articles of Incorporation ”) authorize the issuance of up to 40,000 shares of preferred stock, par value $0.01 per share, of the Company (“ Preferred Stock ”) in one or more series, and expressly authorizes the Board of Directors of the Company (the “ Board ”), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and
WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series.
NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (the “ Certificate of Designation ”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions and limitations of such series of Preferred Stock as follows:
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ARTICLE I
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There shall be a series of Preferred Stock that shall be designated as “Series A Cumulative Convertible Preferred Stock” (the “ Series A Preferred Stock ”) and the number of Shares constituting such series shall be forty thousand (40,000). Subject to the requirements of the Act, the Articles of Incorporation and this Certificate of Designation, the number of shares of Preferred Stock that are designated as Series A Preferred Stock may be increased or decreased by vote of the Board; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of such shares then outstanding. The rights, preferences, powers, restrictions and limitations of the Series A Preferred Stock shall be as set forth herein.
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ARTICLE II
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For purposes hereof, the following terms shall have the following meanings:
“ Affiliate ” means any person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person, as such terms are used in and construed under Rule 405 under the Securities Act.
“ Articles of Incorporation ” has the meaning set forth in the Recitals.
“ Board ” has the meaning set forth in the Recitals.
“ Bylaws ” shall have the meaning set forth in the preamble to this Certificate of Designations.
“ Capital Stock ” of any Person shall mean any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person.
“ Certificate of Designation ” has the meaning set forth in the Recitals.
“ Change of Control ” means (a) any “person” or “group” (each as used in Sections 13(d) and 14(d) of the Exchange Act) other than the Permitted Holders shall beneficially own (within the meaning of Rules 13d-3 and 13d-5 of the Exchange Act) more than 50% of the Common Stock; (b) any sale, lease or transfer or series of sales, leases or transfers of all or substantially all of the consolidated assets of the Company and its Subsidiaries taken as a whole; (c) any sale, transfer or issuance (or series of sales, transfers or issuances) of capital stock by the Company or the holders of Common Stock (or other voting stock of the Company) that results in the inability of the holders of Common Stock (or other voting stock of the Company) immediately prior to such sale, transfer or issuance to designate or elect a majority of the board of directors (or its equivalent) of the Company; or (d) any merger, consolidation, recapitalization or reorganization of the Company with or into another Person (whether or not the Company is the surviving corporation) that results in the inability of the holders of Common Stock (or other voting stock of the Company) immediately prior to such merger, consolidation, recapitalization or reorganization to designate or elect a majority of the board of directors (or its equivalent) of the resulting entity or its parent company.
“ Common Stock ” means the common stock, par value $0.01 per share, of the Company.
“ Company ” has the meaning set forth in the Preamble.
“ Conditional Conversion ” has the meaning set forth in Section 8.02(a) .
“ Convertible Securities ” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options, the Warrants and the Series A Preferred Stock purchased pursuant to the Purchase Agreement.
“ Conversion Price ” has the meaning set forth in Section 8.01 .
“ Conversion Shares ” means the shares of Common Stock or other capital stock of the Company then issuable upon conversion of the Series A Preferred Stock in accordance with the terms of Article VIII .
“ Date of Issuance ” means, for any Share of Series A Preferred Stock, the date of issuance of such Share.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“ Expiration Date ” has the meaning set forth in Section 6.02 .
“ Initial Investor ” means CAP1 LLC.
“ Junior Securities ” has the meaning set forth in Section 3.01(a) .
“ Liquidation ” has the meaning set forth in Section 5.01(a) .
“ Liquidation Value ” means, with respect to any Share on any given date, $1,000 (as adjusted for any stock splits, stock dividends, recapitalizations or similar transaction with respect to the Series A Preferred Stock).
“ Market Price ” means the average closing price of the Common Stock on the twenty (20) trading days preceding the date such market price is calculated.
“ Options ” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities other than the Warrants and the Purchase Agreement.
“ Permitted Holders ” means the Initial Investor, Mr. Timothy D. Boyd, Mr. Stephen J. Mueller, Mr. Richard K. Deutsch, Mr. Glenn E. Boyd, Ms. Robin Graham, the Initial Investor and their respective Affiliates.
“ Person ” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association or other entity.
“ Preferred Stock ” has the meaning set forth in the Recitals.
“ Purchase Agreement ” means the Securities Purchase Agreement dated as of August 22, 2016 between the Company and the Initial Investor.
“ Requisite Holders ” means at least a majority of the then outstanding shares of Series A Preferred Stock, voting or consenting as a separate class with one vote per Share, in person or by proxy.
“ Securities Act ” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.
“ Series A Preferred Stock ” has the meaning set forth in Article I .
“ Series A Redemption ” means a redemption by the Company of all Shares of Series A Preferred Stock in accordance with Section 7.01 and the repurchase of any Shares of Series A Preferred Stock at the election of holders in accordance with Section 7.02 .
“ Series A Redemption Date ” means the date of the closing of a Series A Redemption.
“ Series A Redemption Notice ” has the meaning set forth in Section 7.01.
“ Series A Redemption Price ” has the meaning set forth in Section 7.01.
“ Share ” means a share of Series A Preferred Stock.
“ Stock Price ” means $4.95.
“ Subsidiary ” means, with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.
“ Warrants ” means the following warrants issued by the Company: Warrant Certificate No. 1 dated as of the date of closing of the initial issuance of Series A Preferred Stock to the Initial Investor (the “Closing”) exercisable for 1,538,462 shares of Common Stock at an exercise price of $6.50 per share, Warrant Certificate No. 2 dated as of the Closing exercisable for 625,000 shares of Common Stock at an exercise price of $8.00 per share and Warrant Certificate No. 3 dated as of the Closing exercisable for 555,556 shares of Common Stock at an exercise price of $9.00 per share.
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ARTICLE III
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Section 3.01 Rank . |
The Series A Preferred Stock shall, with respect to dividend rights or rights upon liquidation, dissolution or winding up of the Company (whether voluntary or involuntary), rank:
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(a) senior to all classes or series of common stock and to any other class or series of Capital Stock of the Company, the terms of which expressly provide that such class or series ranks junior to the Series A Preferred Stock with respect to payment of dividends and the distribution of assets upon the liquidation, dissolution or winding-up of the Company (collectively, the “Junior Securities”); |
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(b) on parity with any other class or series of Capital Stock of the Company, the terms of which expressly provide that such class or series ranks on parity with the Series A
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Preferred Stock with respect to payment of dividends and the distribution of assets upon the liquidation dissolution or winding up of the Company’s affairs; |
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(c) junior to any other class or series of Capital Stock of the Company, the terms of which expressly provide that such class or series ranks senior to the Series A Preferred Stock with respect to payment of dividends and the distribution of assets upon the liquidation, dissolution or winding up of the Company’s affairs; and |
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(d) junior to all of the Company’s existing and future indebtedness (except indebtedness issued on or prior to the Expiration Date that is convertible into or exercisable for any class or series of capital stock ). |
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ARTICLE IV
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Section 4.01 Accrual and Payment of Dividends . From and after the date that is nine (9) months from the Date of Issuance, cumulative dividends on each Share shall accrue, whether or not declared by the Board and whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the rate of 8% per annum on the sum of the Liquidation Value thereof. All accrued dividends on any Share shall be paid in cash only when, as and if declared by the Board out of funds legally available therefor or upon a liquidation or redemption of the Series A Preferred Stock in accordance with the provisions of Article V or Article VII . All accrued and accumulated dividends on the Shares shall be paid prior and in preference to any dividend or distribution on or redemption of any Junior Securities, provided that the Company may, prior to the payment of all accrued and accumulated dividends on the Shares, (a) declare or pay any dividend or distribution payable on the Common Stock in shares of Common Stock or (b) repurchase Common Stock held by employees or consultants of the Company upon termination of their employment or services pursuant to agreements providing for such repurchase. For the avoidance of doubt, the Company may redeem or repurchase Junior Securities at any time when there are no accrued or accumulated unpaid dividends on the Series A Preferred Stock. The Company shall not be obligated to and shall not pay holders of the Series A Preferred Stock any interest or sum of money in lieu of interest if dividends are not declared with respect to any dividend period. The amount of dividends payable on the Series A Preferred Stock shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Dollar amounts resulting from that calculation shall be rounded to the nearest cent, with one-half cent being rounded upward. Holders of Series A Preferred Stock shall not be entitled to any dividends in excess of the full cumulative dividends on the Series A Preferred Stock, as herein provided. |
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Section 4.02 Partial Dividend Payments . When dividends are to be paid but not in full by the Company (or a sum sufficient to pay them in full is not set apart by the Company) on the Series A Preferred Stock and any other class or series of Capital Stock ranking, as to dividends, on parity with the Series A Preferred Stock, the Company, out of funds legally available therefor, shall declare any dividends on the Series A Preferred Stock and such other class or series of Capital Stock ranking, as to dividends, on parity with the Series A Preferred Stock pro rata, so that the amount of dividends so declared per share of Series A Preferred Stock and such other class or series of Capital Stock shall in all cases bear to each other the same ratio that
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accumulated and unpaid dividends per share on the Series A Preferred Stock and such other class of series of Capital Stock (which shall not include any accumulation in respect of unpaid dividends on such other class or series of Capital Stock for prior dividend periods if such other class or series of Capital Stock does not have a cumulative dividend) bear to each other. |
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ARTICLE V
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Section 5.01 Liquidation . In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company (a “ Liquidation ”), the holders of Shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of Junior Securities by reason of their ownership thereof, and subject to the liquidation rights and preferences of any other class or series of Capital Stock ranking, as to liquidation rights, on parity with or senior to the Series A Preferred Stock in the distribution of assets, an amount in cash equal to the aggregate Liquidation Value of all Shares held by such holder, plus all unpaid accrued and accumulated dividends on all such Shares (whether or not declared) to, but excluding, the date of payment, but, shall not be entitled to any further payment or other participation in any distribution of the available assets of the Company. |
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Section 5.02 Insufficient Assets . If upon any Liquidation the remaining assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of the Shares of Series A Preferred Stock and the corresponding amounts payable on all shares of each other class or series of Capital Stock ranking, as to liquidation rights, on parity with the Series A Preferred Stock in the distribution of assets, then holders of shares of Series A Preferred Stock and each such other class or series of Capital Stock ranking, as to liquidation rights, on parity with the Series A Preferred Stock shall share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. |
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Section 5.03 Notice . In the event of any Liquidation, the Company shall, within ten (10) days of the date the Board approves such action, or no later than twenty (20) days of any stockholders’ meeting called to approve such action, or within twenty (20) days of the commencement of any involuntary proceeding, whichever is earlier, give each holder of Shares of Series A Preferred Stock written notice of the proposed action. Such written notice shall describe the material terms and conditions of such proposed action, including a description of the stock, cash and property to be received by the holders of Shares upon consummation of the proposed action and the date of delivery thereof. If any material change in the facts set forth in the initial notice shall occur, the Company shall promptly give written notice to each holder of Shares of such material change. |
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Section 5.04 No Deemed Liquidation . Neither the consolidation or merger with or into any other Person, nor the voluntary sale, lease, transfer or conveyance of all or substantially all of the Company’s property or business shall be deemed to constitute a Liquidation. |
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Section 5.05 No Participation . Subject to the rights of the holders of any shares of any class or series of Capital Stock ranking, as to liquidation rights, on parity with the Series A
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Preferred Stock, after payment has been made in full to the holders of the Series A Preferred Stock, as provided in this Article V , holders of shares of Common Stock and any other class or series of Capital Stock ranking, as to rights upon any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, junior to the Series A Preferred Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of Series A Preferred Stock shall not be entitled to share therein. |
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ARTICLE VI
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Section 6.01 Voting Generally . Each holder of outstanding Shares of Series A Preferred Stock shall be entitled to vote with holders of outstanding shares of Common Stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration (whether at a meeting of stockholders of the Company, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law or by the provisions of this Article VI and Article XI below. In any such vote, each Share of Series A Preferred Stock shall be entitled to a number of votes equal to the number of shares of Common Stock into which the Share is convertible pursuant to Article VIII herein as of the record date for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Series A Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). Each holder of outstanding Shares of Series A Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the Company’s bylaws. |
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Section 6.02 Additional Preferred Stock . Until the earlier of (x) such date as no shares of Series A Preferred Stock remain outstanding and (y) January 1, 2027 (the first to occur of which shall be the “ Expiration Date ”), the Company and its Subsidiaries shall not (A) create, or authorize the creation of, any additional class or series of capital stock (or any security convertible into or exercisable for any class or series of capital stock) or issue or sell, or obligate itself to issue or sell, any capital stock (or any security convertible into or exercisable for any class or series of capital stock) that grants to the holder thereof the right to (i) receive any dividend or interest payment at any time prior to the Expiration Date when there are any accrued or accumulated unpaid dividends with respect to the Series A Preferred Stock or (ii) receive any payment upon any Liquidation prior to the Expiration Date at a time when the holders of any shares of Series A Preferred Stock have not received all amounts payable under Article V with respect to the Series A Preferred Stock, (B) pay or permit to be paid any dividend or interest payment on any capital stock (or any security convertible into or exercisable for capital stock) when there are any accrued or accumulated unpaid dividends with respect to the Series A Preferred Stock, (C) pay or permit to be paid any liquidation payment on any capital stock (or any security convertible into or exercisable for capital stock) at a time when the holders of any shares of Series A Preferred Stock have not received all amounts payable under Article V with respect to the Series A Preferred Stock or (D) issue any indebtedness convertible into or exercisable for capital stock. In addition, prior to the Expiration Date, the Company shall not make any redemption payment on any capital stock (or any security convertible into or exercisable for capital stock) at any time prior to the Expiration Date when any shares of
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Series A Preferred Stock have not been redeemed except for the redemption of Junior Securities to the extent permitted by Section 4.01. The foregoing shall not prohibit the Company’s ability to create, authorize the creation of, issue, sell, or obligate itself to issue (i) any indebtedness (other than, prior to the Expiration Date, indebtedness convertible into or exercisable for capital stock) or (ii) any common stock (or any capital stock convertible into or exercisable for common stock (other than any capital stock that is prohibited by this Section 6.02)). |
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ARTICLE VII
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Section 7.01 Redemption by the Company . Subject to Section 7.03 , at any time on or after the third anniversary of the Date of Issuance that the average closing price of the Common Stock on the thirty (30) trading days preceding written notice by the Company of its exercise of the redemption right hereunder to the holders of Series A Preferred Stock (the “ Series A Redemption Notice ”) is greater than 130% of the Conversion Price, the Company shall have the right to call for redemption pursuant to such Series A Redemption Notice, out of funds legally available therefor, all or any portion of the then outstanding Shares of Series A Preferred Stock for a price per Share equal to 125% of the Liquidation Value for such Share, plus all unpaid accrued and accumulated dividends on such Share, whether or not declared (the “ Series A Redemption Price ”). The Series A Redemption Price shall be paid only in cash. Subject to the holders of Shares of Series A Preferred Stock right to convert any Shares called for redemption in accordance with Article VIII , any such Series A Redemption shall occur on the date that is forty-five (45) days following receipt by the holders of Shares of Series A Preferred Stock of such Series A Redemption Notice from the Company. |
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Section 7.02 Redemption Upon a Change of Control . Upon occurrence of a Change of Control, any holder of Shares of Series A Preferred Stock shall have the right to elect to have all or any portion of its then outstanding Shares of Series A Preferred Stock redeemed for cash at the Series A Redemption Price by the Company or the surviving Person of such Change of Control. The Series A Redemption Price may, at the option of the Company, be paid in shares of Common Stock (valued at a price per share equal to the price to be paid in such Change of Control transaction). Any such Series A Redemption shall occur immediately prior to the consummation of such Change of Control. The Company shall not consummate any Change of Control unless immediately prior thereto the Company or the surviving Person of such Change of Control shall have paid the full Series A Redemption Price to all holders of Shares of Series A Preferred Stock who have elected to have their Shares redeemed pursuant to this Section 7.02 . |
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Section 7.03 Remedies For Nonpayment; Condition for Redemption Pursuant to Section 7.01 . |
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(a) Condition For Redemption by the Company . Notwithstanding anything herein to the contrary, the right of the Company to call for a Series A Redemption pursuant to Section 7.01 shall be subject to the Company having sufficient funds legally available to immediately pay, at the closing of such Series A Redemption, the Series A Redemption Price for all outstanding Shares of Series A Preferred Stock to be called for redemption. |
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(b) Remedies For Nonpayment . If on any Series A Redemption Date, all of the Shares to be redeemed are not redeemed in full by the Company (or by the surviving Person in the case of a redemption upon a Change of Control) by paying the entire Series A Redemption Price, until such unredeemed Shares are fully redeemed and the aggregate Series A Redemption Price is paid in full, (i) all of such unredeemed Shares shall remain outstanding and continue to have the rights, preferences and privileges expressed herein, including the accrual and accumulation of dividends thereon as provided in Article IV and (ii) interest on the portion of the aggregate Series A Redemption Price applicable to the unredeemed Shares shall accrue daily in arrears at a rate equal to 8% per annum, compounded quarterly. |
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Section 7.04 Surrender of Certificates . On or before the Series A Redemption Date with respect to a Series A Redemption pursuant to Section 7.01 , each holder of Shares of Series A Preferred Stock not otherwise electing prior to the Series A Redemption Date to convert its Shares pursuant to Article VIII shall surrender the certificate or certificates representing such Shares to the Company, in the manner and place designated in the Series A Redemption Notice, duly assigned or endorsed for transfer to the Company (or accompanied by duly executed stock powers relating thereto), or, in the event the certificate or certificates are lost, stolen or missing, shall deliver an affidavit of loss, in the manner and place designated in the Series A Redemption Notice. Each surrendered certificate shall be canceled and retired and the Company shall thereafter make payment of the applicable Series A Redemption Price by certified check or wire transfer to the holder of record of such certificate. |
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Section 7.05 Rights Subsequent to Redemption . If on the applicable Series A Redemption Date, the Series A Redemption Price is paid (or tendered for payment) for any of the Shares to be redeemed on such Series A Redemption Date, then on such date all rights of the holder in the Shares so redeemed and paid or tendered, including any rights to dividends on such Shares, shall cease, and such Shares shall no longer be deemed issued and outstanding. |
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ARTICLE VIII
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Section 8.01 Right to Convert . Subject to the provisions of this Article VIII , upon the earlier of (x) a Change of Control and (y) (at any time and from time to time) on or after the date that is nine (9) months from the Date of Issuance, any holder of Series A Preferred Stock shall have the right by written election to the Company to (a) convert all or any portion of the outstanding Shares of Series A Preferred Stock held by such holder into an aggregate number of shares of Common Stock (including any fraction of a share) as is determined by (i) multiplying the number of Shares to be converted by the Liquidation Value thereof, and then (ii) dividing the result by the Conversion Price in effect immediately prior to such conversion and (b) receive in cash the aggregate accrued or accumulated and unpaid dividends thereon. The initial conversion price per Share (the “ Conversion Price ”) shall be $6.29 subject to adjustment as applicable in accordance with Section 8.06 below. Notwithstanding the foregoing, if any shares of Series A Preferred Stock are called for redemption pursuant to Article VII , unless exercised prior thereto in accordance with this Article VIII, such conversion right shall cease and terminate, as to the shares of the Series A Preferred Stock to be redeemed, at 5:00 p.m., New York City time, on the Business Day immediately preceding the Redemption Date, unless the Company shall default in the payment of the Redemption Price therefor, as provided herein. |
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Section 8.02 Procedures for Conversion; Effect of Conversion |
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(a) Procedures for Holder Conversion . In order to effectuate a conversion of Shares of Series A Preferred Stock pursuant to Section 8.01 , a holder shall (i) submit a written election to the Company that such holder elects to convert Shares, the number of Shares elected to be converted and whether or not such conversion shall be conditioned upon a Change of Control (a “ Conditional Conversion ”), and (ii) surrender, along with such written election, to the Company the certificate or certificates representing the Shares being converted, duly assigned or endorsed for transfer to the Company (or accompanied by duly executed stock powers relating thereto) or, in the event the certificate or certificates are lost, stolen or missing, accompanied by an affidavit of loss executed by the holder. The conversion of such Shares hereunder (other than a Conditional Conversion) shall be deemed effective as of the date of surrender of such Series A Preferred Stock certificate or certificates or delivery of such affidavit of loss. Upon the receipt by the Company of a written election of conversion of Shares (other than a Conditional Conversion) and the surrender of such certificate(s) and accompanying materials, the Company shall as promptly as practicable (but in any event within ten (10) days thereafter) deliver to the relevant holder (i) a certificate in such holder’s name (or the name of such holder’s designee as stated in the written election) for the number of shares of Common Stock to which such holder shall be entitled upon conversion of the applicable Shares as calculated pursuant to Section 8.01 and, if applicable, (ii) a certificate in such holder’s (or the name of such holder’s designee as stated in the written election) for the number of Shares of Series A Preferred Stock represented by the certificate or certificates delivered to the Company for conversion but otherwise not elected to be converted pursuant to the written election and (c) cash in an amount equal to all accrued and accumulated and unpaid dividends on the Shares of Series A Preferred Stock to be converted. |
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(b) Any shares of Common Stock issuable upon a Conditional Conversion shall be issued to the applicable holder of Shares of Series A Preferred Stock in sufficient time to permit such holder to participate in the applicable Change of Control transactions (including, if applicable, to permit such holder to tender its shares of Common Stock issuable upon such Conditional Conversion into any related tender offer). To the extent any such Change of Control transaction shall be terminated without being consummated, any shares of Common Stock previously issued upon the related Conditional Conversion shall be immediately converted back into the number of Shares of Series A Preferred Stock that were initially converted into such shares of Common Stock. In addition, to the extent the terms and conditions of any Change of Control transaction are amended in any material respect after any holder of Shares of Series A Preferred Stock has provided a written election to convert its Shares in a Conditional Conversion, such election to convert may be revoked by such holder and any shares of Common Stock previously issued upon the related Conditional Conversion shall be immediately converted back into the number of Shares of Series A Preferred Stock that were initially converted into such shares of Common Stock. |
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(c) All shares of capital stock issued hereunder by the Company shall be duly and validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof. |
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(d) Effect of Conversion . Subject to the provisions of Section 8.02(a) , all Shares of Series A Preferred Stock converted as provided in this Section 8.01 shall no longer be deemed outstanding as of the effective time of the applicable conversion and all rights with respect to such Shares shall immediately cease and terminate as of such time other than the right of the holder to receive shares of Common Stock and payment in lieu of any fraction of a Share and any accrued and accumulated and unpaid dividends (to the extent such holder has elected not to convert such dividends) in exchange therefor. |
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Section 8.03 Fractional Shares; Total Shares . In connection with the conversion of any shares of the Series A Preferred Stock, no fractions of shares of Common Stock shall be issued, but the Company shall pay cash in lieu of any fractional interest in a share in an amount equal to the product of (i) such fraction multiplied by (ii) the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the date of surrender of such Series A Preferred Stock certificate or certificates or delivery of such affidavit of loss. If more than one share of Series A Preferred Stock shall be surrendered for conversion by the same holder at the same time, the number of whole shares of Common Stock issuable on conversion of those shares of Series A Preferred Stock shall be computed on the basis of the total number of shares so surrendered. |
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Section 8.04 Reservation of Stock . The Company shall at all times when any Shares of Series A Preferred Stock is outstanding reserve and keep available out of its authorized but unissued shares of capital stock, solely for the purpose of issuance upon the conversion of the Series A Preferred Stock, such number of shares of Common Stock issuable upon the conversion of all outstanding Series A Preferred Stock pursuant to this Article VIII , taking into account any adjustment to such number of shares so issuable in accordance with Section 8.05 hereof. The Company shall take all such actions as may be necessary to assure that all such shares of Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company shall not close its books against the transfer of any of its capital stock in any manner which would prevent the timely conversion of the Shares of Series A Preferred Stock. |
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Section 8.05 No Charge or Payment . The issuance of certificates for shares of Common Stock upon conversion of Shares of Series A Preferred Stock pursuant to Section 8.01 shall be made without payment of additional consideration by, or other charge, cost or tax to, the holder in respect thereof. |
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Section 8.06 Adjustment to Conversion Price and Number of Conversion Shares . In order to prevent dilution of the conversion rights granted under this Article VIII , the Conversion Price and the number of Conversion Shares issuable on conversion of the Shares of Series A Preferred Stock shall be subject to adjustment from time to time as provided in this Section 8.06 . |
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(a) Adjustment Upon Dividend, Subdivision or Combination of Common Stock . If the Company shall, at any time or from time to time after the Date of Issuance, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii)
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subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced and the number of Conversion Shares issuable upon conversion of the Series A Preferred Stock shall be proportionately increased. If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased and the number of Conversion Shares issuable upon conversion of the Series A Preferred Stock shall be proportionately decreased. All such adjustments under this subsection (a) shall be calculated as follows: (i) the Conversion Price will be adjusted by multiplying the Conversion Price then in effect by a fraction, the numerator of which equals the number of shares of Common Stock outstanding immediately prior to such event (excluding treasury shares, if any), and the denominator of which equals the number of shares of Common Stock outstanding immediately after such event (excluding treasury shares, if any), and (ii) the number of shares of Common Stock issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Any adjustment under this Section 8.06(b) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective. |
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(b) Adjustment for Merger or Reorganization, Etc . In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction, including a tender offer (other than any such transaction covered by Section 8.06(a) ), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, each Share of Series A Preferred Stock shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer), remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Conversion Shares then convertible for such Share, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of the successor Person resulting from such transaction to which such Share would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) if the Share had been converted in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) and acquired the applicable number of Conversion Shares then issuable hereunder as a result of such conversion (without taking into account any limitations or restrictions on the convertibility of such Share, if any), and, in such case, appropriate adjustment (in form and substance satisfactory to the holder of such Share) shall be made with respect to such holder's rights under this Certificate of Designation to insure that the provisions of this Section 8 hereof shall thereafter be applicable as nearly as possible in relation to any shares of stock, securities or assets thereafter acquirable upon conversion of Series A Preferred Stock. |
The provisions of this Section 8.06(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions (including tender offers).
The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, or Person making such tender offer shall assume, by written instrument substantially similar in form and substance to this Certificate of Designation (in form and substance satisfactory to the holder of such Share), the obligation to deliver to the holders of Series A Preferred Stock such shares of stock, securities or assets which, in accordance with the foregoing provisions, such holders shall be entitled to receive upon conversion of the Series A Preferred Stock.
Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 8.06(b) , each holder of Shares of Series A Preferred Stock shall have the right to elect prior to the consummation of such event or transaction, to give effect to the provisions of Section 8.01 or Section 7.02 hereunder (assuming that the transaction constitutes a Change of Control) instead of giving effect to the provisions contained in this Section 8.06(b) with respect to such holder’s Series A Preferred Stock.
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(c) Certificate as to Adjustment . |
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(i) As promptly as reasonably practicable following any adjustment of the Conversion Price, but in any event not later than ten (10) days thereafter, the Company shall furnish to each holder of record of Series A Preferred Stock at the address specified for such holder in the books and records of the Company (or at such other address as may be provided to the Company in writing by such holder) a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof. |
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(ii) As promptly as reasonably practicable following the receipt by the Company of a written request by any holder of Series A Preferred Stock, but in any event not later than ten (10) days thereafter, the Company shall furnish to such holder a certificate of an executive officer certifying the Conversion Price then in effect and the number of Conversion Shares or the amount, if any, of other shares of stock, securities or assets then issuable to such holder upon conversion of the Shares of Series A Preferred Stock held by such holder. |
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(d) Notices . In the event: |
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(i) that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series A Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or |
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(ii) of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person or other Change of Control transactions, or sale of all or substantially all of the Company’s assets to another Person; or |
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(iii) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; |
then, and in each such case, the Company shall send or cause to be sent to each holder of record of Series A Preferred Stock at the address specified for such holder in the books and records of the Company (or at such other address as may be provided to the Company in writing by such holder) at least ten (10) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, other Change of Control transactions, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon conversion of the Series A Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series A Preferred Stock and the Conversion Shares.
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ARTICLE IX
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Any Shares of Series A Preferred Stock redeemed, converted or otherwise acquired by the Company or any Subsidiary shall, automatically and without further action, be cancelled and retired promptly after the acquisition thereof and shall become authorized but unissued shares of Preferred Stock and may be reissued as part of any class or series of Preferred Stock in accordance with the Articles of Incorporation and this Certificate of Designation.
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ARTICLE X
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Except as otherwise provided herein, all notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent (a) to the Company, at its principal executive offices and (b) to any stockholder, at such holder’s address at it appears in the stock records of the Company (or at such other address for a stockholder as shall be specified in a notice given in accordance with this Article X ).
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ARTICLE XI
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No provision of this Certificate of Designation may be amended, modified or waived in any manner without the affirmative vote (or written consent as permitted by the Act, the Articles of Incorporation and Bylaws) of the Requisite Holders.
[SIGNATURE PAGE FOLLOWS]
Peak Resorts, Inc.,
as Borrower Representative
under the Credit Agreement
referred to below
17409 Hidden Valley Drive
Eureka, MO 63205-
Attn: Stephen J. Mueller
Re: Fixed Charge Coverage Ratio; 2014 Credit Agreement
Ladies and Gentlemen:
This letter concerns the Master Credit and Security Agreement, dated as of December 1, 2014, among Peak Resorts, Inc. and certain of its affiliates, as borrowers, and EPT Ski Properties, Inc. and EPT Mount Snow, Inc., as lender (each a “ Lender ” and, collectively, the “ Lenders ”), as amended by the Amendment to Master Credit Security Agreement, dated as of December 1, 2014, among such parties (as so amended, “ Credit Agreement ”). Capitalized terms used and not defined in this letter have the meanings given to them in the Credit Agreement.
The, Borrower Representative has advised the Lenders that, for the four fiscal quarters of the Borrowers ending April 30, 2016, the Consolidated Fixed Charge Coverage Ratio was less than 1.50 to 1.00. The Borrower Representative has requested of the Lenders that the Borrowers have an additional period of time in which to make the additional Debt Service Deposits required by Section 11.4(a) of the Credit Agreement, as a result of the Consolidated Fixed Charge Coverage Ratio being less than 1.50 to 1.00 for the period referenced above.
In light of the foregoing, the parties agree as follows:
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The Borrowers shall make the additional Debt Service Deposits required by Section 11.4(a) of the Credit Agreement as a result of the Consolidated Fixed Charge Coverage Ratio being less than 1.50 to 1.00 for the period referenced above on the following dates and in the following amounts: (i) 1/3 rd of such amount on January 31, 2017, (ii) 1/3 rd of such amount on February 28, 2017, and (iii) 1/3 rd of such amount on March 31, 2017. |
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From and after the date hereof, all Debt Service Deposits (whether regularly scheduled, additional or otherwise) shall be made directly to a Lender, for the benefit of both Lenders, and not to a bank or other third-party intermediary, to be held as cash collateral by the Lenders, and the Borrowers hereby grant to the Lenders a security interest in, and a right of setoff against, all such Debt Service Deposits and all proceeds thereof as security for all existing and future obligations of each Borrower (and/or their respective affiliates) to each Lender (and/or their respective affiliates). No Lender shall be required to segregate, or pay interest on, such Debt Service Deposits. Any Debt ·Service Deposits previously made by a Borrower and deposited with a bank or other third-party intermediary, shall remain subject to such deposit account control agreements or other agreements as may govern such previously made Debt Service Deposits. |
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This letter shall be considered a Loan Document and its provisions shall prevail over any conflicting provisions in any other Loan Documents. |
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If the Borrowers fail to pay or perform any of their respective obligations under this letter, such failure shall constitute an immediate Event of Default under the Credit Agreement, and under any other agreement between or among any Borrower or any affiliate of any Borrower, on the one hand, and any Lender or any affiliate of any Lender, on the other hand, in each case without regard to any grace, cure, notice or other right a Borrower or its affiliate may otherwise have. |
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The Borrowers further agree as follows: |
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The Borrowers agree to reimburse the Lenders on demand for the reasonable out-of-pocket fees and expenses (including, without limitation, attorneys ’·fees and expenses) incurred by the Lenders in connection with their review of the matters set forth herein, the preparation of this letter and the consummation of the matters set forth herein. |
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The Borrowers ratify and reaffirm their respective obligations under the Credit Agreement and the other Loan Documents, and represent, warrant and covenant to the Lenders, as a material inducement to the Lenders to enter into this letter, that the Borrowers have no and in any event hereby waive any defense, claim or right of setoff or recoupment with respect to their respective obligations under, or in any other way relating to, the Credit Agreement, any of the other Loan Documents, any other agreement between or among any one or more of the Borrowers or any of their respective affiliates, on the one hand, and either or both of the Lenders or any of their respective affiliates, on the other hand, and/or any actions or inactions by either or both of the Lenders or any of their respective affiliates. |
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Nothing in this letter shall constitute a waiver by any Lender of any Default or Event of Default which may exist on the date hereof; and nothing in this letter shall require any Lender to waive any Default or Event of Default which may arise in the future. Without limiting the foregoing, the Borrowers acknowledge and agree that nothing in this letter waives or otherwise affects the Borrowers’ obligations under Section 11.4(a) of the Credit Agreement with respect to any time period (other than as expressly provided above with respect to the Borrowers’ four fiscal quarters ending April 30, 2016). |
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EPT Mad River, Inc. shall be a third party beneficiary of this letter and shall be entitled to enforce its terms. Without limiting the provisions of paragraph number 2 above, all Debt Service Deposits made or to be made to or for the benefit of any Lender shall also act as security for all obligations of Mad River Mountain, Inc. to EPT Mad River, Inc,; and EPT Mad River, Inc. hereby appoints each Lender, and each Lender hereby agrees, to act as agent for EPT Mad River, Inc. for lien perfection and any other purposes relating to such Debt Service Deposits or any other collateral. |
This letter, including any agreements, consents or other attachments hereto, may be validly executed and delivered by fax, e-mail or other means, and by use of multiple counterpart signature pages. No waiver or other concession by any Lender set forth in this letter shall be effective unless this letter is promptly executed by the Borrower Representative and each of the Borrowers and Guarantors identified below, and delivered to the Lenders.
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Very truly yours, |
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EPT SKI PROPERTIES, INC. |
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EPT MOUNT SNOW, INC. |
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By: /s/ Michael L. Hirons |
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Print: Michael L. Hirons |
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Title: Senior Vice President |
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AGREED TO: |
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PEAK RESORTS, INC., as Borrower Representative |
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By: /s/ Stephen Mueller______________ |
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Stephen Mueller, Vice President |
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EPT MAD RIVER, INC. |
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By: /s/ Michael L. Hirons |
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Print: Michael L. Hirons |
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Title: Senior Vice President |
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Consent of Borrowers and Guarantors
Each of the undersigned, whether in its capacity as a borrower· or a guarantor under or in connection with the Credit Agreement, jointly and severally (a) consents to the Borrower Representative and the Lender entering into the above letter, (b) agrees to abide by those terms of the letter that are stated to apply to the undersigned, (c) with respect to each of the undersigned that is a guarantor under or in connection with the Credit Agreement, ratifies and reaffirms its obligations under any guaranty from the undersigned in favor of the Lender and under any other Loan Documents to which it is a party, and represents, warrants and covenants to the Lender, as a material inducement to the Lender to enter into the above letter, that such guarantor has no and in any event hereby waives any defense, claim or right of setoff or recoupment with respect to its obligations under, or in any other way relating to, such guaranty, any other Loan Documents to which it is a party, any other agreement between or among, such guarantor or any of its affiliates, on the one hand, and the Lender or any of its affiliates, on the other hand, and/or any actions or inactions by the Lender or any of its affiliates, and (d) capitalized terms used and not defined in this consent shall have the meanings given to them in the above letter.
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PEAK RESORTS, INC. |
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JFBB SKI AREAS, INC. |
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MAD RIVER MOUNTAIN, INC. |
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S N H DEVELOPMENT, INC. |
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L.B.O. HOLDING, INC. |
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MOUNT SNOW, LTD. |
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SYCAMORE LAKE, INC. |
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HIDDEN VALLEY GOLF AND SKI, INC. |
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SNOW CREEK, INC. |
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PAOLI PEAKS, INC. |
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DELTRECS, INC. |
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BRANDYWINE SKI RESORT, INC. |
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BOSTON MILLS SKI RESORT, INC. |
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WC ACQUISITION CORP. |
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RESORT HOLDINGS, L.L.C. |
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BLC OPERATORS, INC. |
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HUNTER RESORT VACATIONS, INC. |
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HUNTER MOUNTAIN SKI BOWL INC. |
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HUNTER MOUNTAIN BASE LODGE, INC. |
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HUNTER MOUNTAIN FESTIVALS, LTD. |
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FROSTY LAND, INC. |
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HUNTER MOUNTAIN RENTALS INC. |
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HUNTER MOUNTAIN ACQUISITION, INC. |
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By: /s/ Stephen Mueller |
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Stephen Mueller, Vice President |
Peak Resorts, Inc.,
as Borrower Representative
under the Credit Agreement
referred to below
11409 Hidden Valley Drive
Eureka, MO 63205
Attn: Stephen J. Mueller
Re: Fixed Charge Coverage Ratio; Hunter Mountain Credit Agreement
Ladies and Gentlemen:
This letter concerns the Master Credit and Security Agreement, dated as of January 6, 2016 (the “ Credit Agreement ”), among Peak Resorts, Inc. and certain of its affiliates, as borrowers, and EPT Ski Properties, Inc., as lender (the “ Lender ”). Capitalized terms used and not defined in this letter have the meanings given to them in the Credit Agreement.
The Borrower Representative has advised the Lender that, for the four fiscal quarters of Peak Resorts ending April 30, 2016, the Consolidated Fixed Charge Coverage Ratio was less than 1.50 to 1.00. The Borrower Representative has requested of the Lender that the Borrowers have an additional period of time in which to make the additional Debt Service Deposits required by Section 11.4(a) of the Credit Agreement, as a result of the Consolidated Fixed Charge Coverage Ratio being less than 1.50 to 1.00 for the period referenced above.
In light of the foregoing, the parties agree as follows:
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The Borrowers shall make the additional Debt Service Deposits required by Section 11.4(a) of the Credit Agreement as a result of the Consolidated Fixed Charge Coverage Ratio being less than 1.50 to 1.00 for the period referenced above on the following dates and in the following amounts: (i) 1/3 rd of such amount on January 31, 2017, (ii) 1/3 rd of such amount on February 28, 2017, and (iii) 1/3 rd of such amount on March 31, 2017. |
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From and after the date hereof, all Debt Service Deposits (whether regularly scheduled, additional or otherwise) shall be made directly to Lender, for the benefit of Lender, and not to a bank or other third-party intermediary, to be held as cash collateral by the Lender, and the Borrowers hereby grant to the Lender a security interest in, and a right of setoff against, all such Debt Service Deposits and all proceeds thereof as security for all existing and future obligations of each Borrower (and/or their respective affiliates) to the Lender (and/or its affiliates). Lender shall not be required to segregate, or pay interest on, such Debt Service Deposits. Any Debt Service Deposits previously made by a Borrower and deposited with a bank or other third-party intermediary, shall remain subject to such deposit account control agreements or other agreements as may govern such previously made Debt Service Deposits. |
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This letter shall be considered a Loan Document and its provisions shall prevail over any conflicting provisions in any other Loan Documents. |
Peak Resorts, Inc.,
as Borrower Representative
July 13, 2016
Page 2
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If the Borrowers fail to pay or perform any of their respective obligations under this letter, such failure shall constitute an immediate Event of Default under the Credit Agreement, and under any other 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 without regard to any grace, cure, notice or other right a Borrower or its affiliate may otherwise have. |
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The Borrowers further agree as follows: |
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The Borrowers agree to reimburse the Lender on demand for the reasonable out-of-pocket fees and expenses (including, without limitation, attorneys’ fees and expenses) incurred by the Lender in connection with its review of the matters set forth herein, the preparation of this letter and the consummation of the matters set forth herein. |
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The Borrowers ratify and reaffirm their respective obligations under the Credit Agreement and the other Loan Documents, and represent, warrant and covenant to the Lender, as a material inducement to the Lender to enter into this letter, that the Borrowers have no and in any event hereby waive any defense, claim or right of setoff or recoupment with respect to their respective obligations under, or in any other way relating to, the Credit Agreement, any of the other Loan Documents, any other agreement between or among any one or more of the Borrowers or any of their respective affiliates, on the one hand, and the Lender or any of its affiliates, on the other hand, and/or any actions or inactions by the Lender or any of its affiliates. |
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Nothing in this letter shall constitute a waiver by Lender of any Default or Event of Default which may exist on the date hereof; and nothing in this letter shall require the Lender to waive any Default or Event of Default which may arise in the future. Without limiting the foregoing, the Borrowers acknowledge and agree that nothing in this letter waives or otherwise affects the Borrowers’ obligations under Section 11.4(a) of the Credit Agreement with respect to any time period (other than as expressly provided above with respect to the Borrowers’ four fiscal quarters ending April 30, 2016). |
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EPT Mad River, Inc. and EPT Mount Snow, Inc. shall be third party beneficiaries of this letter and either one or both of them shall be entitled to enforce its terms. Without limiting the provisions of paragraph number 2 above, all Debt Service Deposits made or to be made to or for the benefit of the Lender shall also act as security for all obligations of Mad River Mountain, Inc. and/or Mount Snow, Ltd., on the one hand, to EPT Mad River, Inc. and/or EPT Mount Snow, Inc., on the other hand; and EPT Mad River, Inc. and EPT Mount Snow, Inc. hereby appoint the Lender, and the Lender hereby agrees, to act as agent for EPT Mad River, Inc. and EPT Mount Snow, Inc. for lien perfection and any other purposes relating to such Debt Service Deposit or any other collateral. |
This letter, including any agreements, consents or other attachments hereto, may be validly executed and delivered by fax, e-mail or other means, and by use of multiple counterpart signature pages. No waiver or other concession by the Lender set forth in this letter shall be effective unless this letter is
Peak Resorts, Inc.,
as Borrower Representative
July 13, 2016
Page 3
promptly executed by the Borrower Representative and each of the Borrowers and Guarantors identified below, and delivered to the Lender.
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Very truly yours, |
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EPT SKI PROPERTIES, INC. |
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By: /s/ Michael L. Hirons |
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Print: Michael L. Hirons |
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Title: Senior Vice President |
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AGREED TO: |
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PEAK RESORTS, INC., as Borrower Representative |
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By: /s/ Stephen Mueller |
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Stephen Mueller, Vice President |
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EPT MAD RIVER, Inc. |
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By: /s/ Michael L. Hirons |
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Print: Michael L. Hirons |
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Title: Senior Vice President |
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Peak Resorts, Inc.,
as Borrower Representative
July 13, 2016
Page 4
Consent of and Guarantors
Each of the undersigned, whether in its capacity as a borrower or a guarantor under or in connection with the Credit Agreement, jointly and severally (a) consents to the Borrower Representative and the Lenders entering into the above letter, (b) agrees to abide by those terms of the letter that are slated to apply to the undersigned, (c) with respect to each of the undersigned that is a guarantor under or in connection with the Credit Agreement, ratifies and reaffirms its obligations under any guaranty from the undersigned in favor of either or both of the Lenders and under any other Loan Documents to which it is a party, and represents, warrants and covenants to each Lender, as a material inducement to the Lenders to enter into the above letter, that such guarantor has no and in any event hereby waives any defense, claim or right of setoff or recoupment with respect to its obligations under, or in any other way relating to, such guaranty, any other Loan Documents to which it is a party, any other agreement between or among, such guarantor or any of its affiliates, on the one hand, and either or both of the Lenders or any of their respective affiliates, on the other hand, and/or any actions or inactions by either or both of the Lenders or any of their respective affiliates, and (d) capitalized terms used and not defined in this consent shall have the meanings given to them in the above letter.
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PEAK RESORTS, INC. |
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JFBB SKI AREAS, INC. |
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MAD RIVER MOUNTAIN, INC. |
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S N H DEVELOPMENT, INC. |
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L.B.O. HOLDING, INC. |
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MOUNT SNOW, LTD. |
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SYCAMORE LAKE, INC. |
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HIDDEN VALLEY GOLF AND SKI, INC. |
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SNOW CREEK, INC. |
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PAOLI PEAKS, INC. |
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DELTRECS, INC. |
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BRANDYWINE SKI RESORT, INC. |
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BOSTON MILLS SKI RESORT, INC. |
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WC ACQUISITION CORP. |
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RESORT HOLDINGS, L.L.C. |
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BLC OPERATORS, INC. |
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HUNTER RESORT VACATIONS, INC. |
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HUNTER MOUNTAIN SKI BOWL INC. |
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HUNTER MOUNTAIN BASE LODGE, INC. |
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HUNTER MOUNTAIN FESTIVALS, LTD. |
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FROSTY LAND, INC. |
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HUNTER MOUNTAIN RENTALS INC. |
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HUNTER MOUNTAIN ACQUISITION, INC. |
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By: /s/ Stephen Mueller |
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Stephen Mueller, Vice President |
MODIFICATION OF MASTER CREDIT AGREEMENTS
THIS MODIFICATION OF MASTER CREDIT AGREEMENTS (this “ Modification ”) is made effective as of October 24, 2016 (the “ Effective Date ”), by and among PEAK RESORTS, INC., a Missouri corporation (“ Peak Resorts ”), MOUNT SNOW, LTD., a Vermont corporation (“ Mt. Snow ”), SYCAMORE LAKE, INC., an Ohio corporation (“ Sycamore Lake ”), BRANDYWINE SKI RESORT, INC., an Ohio corporation (“ Brandywine ”), BOSTON MILLS SKI RESORT, INC., an Ohio corporation (“ Boston Mills ” ), DELTRECS, INC., an Ohio corporation (“ Deltrecs ”) , JFBB SKI AREAS, INC., a Missouri corporation (“ JFBB ”; each of JFBB, Peak Resorts, Mt. Snow, Sycamore Lake, Brandywine, Boston Mills and Deltrecs are referred to herein individually as a “ 2014 Borrower ” and collectively as “ 2014 Borrowers ”), HUNTER MOUNTAIN ACQUISITION, INC., a New York 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 MOUNTAIN 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 ”; each of Frosty, HMA, Hunter Festivals, Hunter Ski, Hunter Rentals, Hunter Vacations, Hunter Lodge and Peak Resorts are referred to herein individually as a “ Hunter Mountain Borrower ” and collectively as “ Hunter Mountain Borrowers ”), EPT MOUNT SNOW, INC., a Delaware corporation (“ EPT Mount Snow ”), EPT SKI PROPERTIES, INC., a Delaware corporation (“ EPT Ski ”) and EPT MAD RIVER, INC. (“ EPT Mad River ”).
A. EPT Ski, EPT Mount Snow and EPT Mad River (collectively, “ Lenders ”), have provided certain loans and other credit accommodations to 2014 Borrowers and Hunter Mountain Borrowers (collectively, “ Borrowers ”) pursuant to (i) that certain that certain Master Credit and Security Agreement dated as of December 1, 2014, by and among the 2014 Borrowers and EPT Ski and EPT Mount Snow (together with any amendment thereto, the “ 2014 Credit Agreement ”), (ii) that certain Master Credit and Security Agreement dated as of January 6, 2016, by and among the Hunter Mountain Borrowers and EPT Ski (together with any amendment thereto, the “ Hunter Mountain Credit Agreement ”), (iii) that certain Master Credit and Security Agreement dated as of September 1, 2016, by and among Peak Resorts, Mount Snow and EPT Mount Snow (together with any amendment thereto, the “ Mount Snow Credit Agreement ”), (iv) that certain letter pertaining to the 2014 Credit Agreement from EPT Ski and EPT Mount Snow to Peak Resorts dated July 13, 2016 (the “ 2014 Credit Agreement Letter ”), and (v) that certain letter pertaining to the Hunter Mountain Credit Agreement from EPT Ski to Peak Resorts dated July 13, 2016 (the “ Hunter Mountain Credit Agreement Letter ” and together with the 2014 Credit Agreement Letter, collectively the “ Credit Agreement Letters ”).
B. Borrowers have requested certain modifications to the 2014 Credit Agreement, the Hunter Mountain Credit Agreement and the Mount Snow Credit Agreement (each, a “ Credit Agreement ” and collectively the “ Credit Agreements ”) as described herein
C. Lenders are willing to agree to the foregoing requests by Borrowers, subject, however, to the terms, conditions and agreements set forth in this Modification.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, and other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, Borrowers and Lenders agree as follows:
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1. Definitions; Effect of Amendment; Recitals . All capitalized terms used but not defined in this Modification shall have the meanings given to them in that certain Amended and Restated Master Cross-Default Agreement dated as of January 6, 2016, by and among Lenders, Borrowers and the Guarantors referred to therein (together with any amendment or addenda thereto, the “ Agreement ”) . As used in this Modification, the term “ Credit Documents ” means, collectively, the “Loan Documents” as defined in each of the Credit Agreements, together with the “Transaction Documents” as defined in the Agreement. If any of the terms and conditions of this Modification conflict with the terms and conditions of the Agreement, then the terms and conditions of this Modification shall govern. The foregoing Recitals are hereby incorporated into this Modification as if fully set forth below. |
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2. Amendments to the Credit Agreements . |
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a) 2014 Credit Agreement . Upon the satisfaction of the contingency set forth in Section 4 of this Modification, the requirements of Peak Resorts in paragraph number 1 of the 2014 Credit Agreement Letter shall be terminated and of no further force or effect and the terms and provisions set forth in this Modification shall control and govern in lieu thereof. |
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(i) Section 11.2 of the 2014 Credit Agreement is amended by inserting the following text as new Section 11.2(l) therein, to read in its entirety as follows: |
“No later than thirty (30) days after the closing of any Summer Road Investment, Peak Resorts shall deliver to Lender either (the “ One Month Interest Obligation ”) (1) the Initial Letter of Credit or (2) cash in the amount of the sum of one (1) month of Lease Payment Obligations and Debt Service Payments . Lender and EPT Mad River, Inc. (collectively, “ EPT Beneficiaries ”), and any of them, shall have the right to draw on any Letter of Credit upon the occurrence of any of the following (each, a “ Letter of Credit Event ”): (i) upon any failure of the Letter of Credit issuer to maintain an Investment Grade Rating, (ii) upon any Event of Default, (iii) upon any failure by Borrowers to comply with the covenant set forth in Section 11.4 hereof on or after May 1, 2017 or any failure by Hunter Mountain Borrowers to comply with Section 11.4 of the Hunter Mountain Credit Agreement on or after May 1, 2017, (iv) at any time within sixty (60) days prior to the expiration date of any Letter of Credit, or (v) the issuer of the Letter of Credit gives notice Lender notice of nonrenewal or any other similar document. The Initial Letter of Credit shall be in the amount (the “ Initial Letter of Credit Amount ”) of not less than the sum of one (1) month of Lease Payment Obligations and Debt Service Payments. U pon the occurrence of any Letter of Credit Event, Peak Resorts shall deliver to Lender in replacement of the One Month Interest Obligation either (the “ Three Month's Interest Obligation ”) (1) a Replacement Letter of Credit in the stated amount (the “ Replacement Letter of Credit Amount ”) of not
less than the sum of three (3) months of Lease Payment Obligations and Debt Service Payments or (2) cash in the amount of the sum of three (3) months of Lease Payment Obligations and Debt Service Payments . For the avoidance of doubt, following the closing of a Summer Road Investment, Borrower shall at all times satisfy the One Month Interest Obligation or the Three Month's Interest Obligation as the case may be.”
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(ii) Annex I to the 2014 Credit Agreement is hereby amended to insert the following definitions, each to read in their respective entirety as follows: |
“ Initial Letter of Credit ” means an irrevocable unconditional standby letter of credit in favor of EPT Beneficiaries in the stated amount of the Initial Letter of Credit Amount and meeting the requirements of a “Letter of Credit” as set forth herein, and otherwise acceptable to Lender in its sole discretion.
“ Investment Grade Rating ” means ratings from each of Moody’s Investor Services and Standard & Poor’s of not less than Baa3 (Moody’s) and BBB- (Standard & Poor’s).
“ Hunter Mountain Borrowers ” has the meaning given such term in the Hunter Mountain Credit Agreement.
“ Hunter Mountain Credit Agreement ” has the meaning given such term in the Master Credit and Security Agreement dated as of September 1, 2016, by and among Peak Resorts, Mount Snow and Mount Snow Lender.
“ Letter of Credit ” means the Initial Letter of Credit and any Replacement Letter of Credit, which in each case shall be an irrevocable unconditional standby letter of credit (a) in the stated amount of not less than the Letter of Credit Amount, (b) payable to EPT Beneficiaries, (c) issued by an issuer having an Investment Grade Rating and in a form approved by Administrative Agent, (d) providing EPT Beneficiaries the absolute and unconditional right to draw thereon as provided in Section 11.2(l) hereof, and (e) otherwise acceptable to Lender in its sole discretion.
“ Letter of Credit Amount ” means (i) with respect to the Initial Letter of Credit, the Initial Letter of Credit Amount, and (ii) with respect to any Replacement Letter of Credit, the Replacement Letter of Credit Amount.
“ Replacement Letter of Credit ” means an irrevocable unconditional standby letter of credit in favor of EPT Beneficiaries in the stated amount of the Replacement Letter of Credit Amount and meeting requirements of a “Letter of Credit” as set forth herein, and otherwise acceptable to Lender in its sole discretion.
“ Summer Road Investment ” means a Peak Resorts private equity offering to Summer Road, LLC for no less than Fifteen Million and 00/100 Dollars ($15,000,000.00).
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b) Hunter Mountain Credit Agreement . Upon the satisfaction of the contingency set forth in Section 4 of this Modification, the requirements of Peak Resorts in paragraph number 1 of the Hunter Mountain Credit Agreement Letter shall be terminated and of no further force or effect and the terms and provisions set forth in this Modification shall control and govern in lieu thereof. |
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(i) Section 11.2 of the Hunter Mountain Credit Agreement is amended by inserting the following text as new Section 11.2(l) therein, to read in its entirety as follows: |
“No later than thirty (30) days after the closing of any Summer Road Investment, Peak Resorts shall deliver to Lender either (the “ One Month Interest Obligation ”) (1) the Initial Letter of Credit or (2) cash in the amount of the sum of one (1) month of Lease Payment Obligations and Debt Service Payments . Lender, EPT Mount Snow, Inc. and EPT Mad River, Inc. (collectively, “ EPT Beneficiaries ”), and any of them, shall have the right to draw on any Letter of Credit upon the occurrence of any of the following (each, a “ Letter of Credit Event ”): (i) upon any failure of the Letter of Credit issuer to maintain an Investment Grade Rating, (ii) upon any Event of Default, (iii) upon any failure by Borrowers to comply with the covenant set forth in Section 11.4 hereof on or after May 1, 2017 or any failure by 2014 Borrowers to comply with Section 11.4 of the 2014 Credit Agreement on or after May 1, 2017, (iv) at any time within sixty (60) days prior to the expiration date of any Letter of Credit, or (v) the issuer of the Letter of Credit gives notice Lender notice of nonrenewal or any other similar document. The Initial Letter of Credit shall be in the amount (the “ Initial Letter of Credit Amount ”) of not less than the sum of one (1) month of Lease Payment Obligations and Debt Service Payments . U pon the occurrence of any Letter of Credit Event, Peak Resorts shall deliver to Lender in replacement of the One Month Interest Obligation either (the “ Three Month's Interest Obligation ”) (1) a Replacement Letter of Credit in the stated amount (the “ Replacement Letter of Credit Amount ”) of not less than the sum of three (3) months of Lease Payment Obligations and Debt Service Payments or (2) cash in the amount of the sum of three (3) months of Lease Payment Obligations and Debt Service Payments . For the avoidance of doubt, following the closing of a Summer Road Investment, Borrower shall at all times satisfy the One Month Interest Obligation or the Three Month's Interest Obligation as the case may be.”
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(ii) Annex I to the Hunter Mountain Credit Agreement is hereby amended to insert the following definitions, each to read in their respective entirety as follows: |
“ Initial Letter of Credit ” means an irrevocable unconditional standby letter of credit in favor of EPT Beneficiaries in the stated amount of the Initial Letter of Credit Amount and meeting requirements of a “Letter of Credit” as set forth herein, and otherwise acceptable to Lender in its sole discretion.
“ Investment Grade Rating ” means ratings from each of Moody’s Investor Services and Standard & Poor’s of not less than Baa3 (Moody’s) and BBB- (Standard & Poor’s).
“ 2014 Borrowers ” means the “Borrowers” referred to in the 2014 Credit Agreement.
“ Letter of Credit ” means the Initial Letter of Credit and any Replacement Letter of Credit, which in each case shall be an irrevocable unconditional standby letter of credit (a) in the stated amount of not less than the Letter of Credit Amount, (b) payable to EPT Beneficiaries, (c) issued by an issuer having an Investment Grade Rating and in a form approved by Administrative Agent, (d) providing EPT Beneficiaries the absolute and unconditional right to draw thereon as provided in Section 11.2(l) hereof, and (e) otherwise acceptable to Lender in its sole discretion.
“ Letter of Credit Amount ” means, (i) with respect to the Initial Letter of Credit, the Initial Letter of Credit Amount, and (ii) with respect to any Replacement Letter of Credit, the Replacement Letter of Credit Amount.
“ Replacement Letter of Credit ” means an irrevocable unconditional standby letter of credit in favor of EPT Beneficiaries in the stated amount of the Replacement Letter of Credit Amount and meeting requirements of a “Letter of Credit” as set forth herein, and otherwise acceptable to Lender in its sole discretion.
“ Summer Road Investment ” means a Peak Resorts private equity offering to Summer Road, LLC for no less than Fifteen Million and 00/100 Dollars ($15,000,000.00).
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c) Mount Snow Credit Agreement . Without limiting the generality of Section 3(c) below, the reference to the Hunter Mountain Credit Agreement contained in Section 11.4 of the Mount Snow Credit Agreement is amended to refer to the Hunter Mountain Credit Agreement as amended by this Modification. |
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3. Modification of all Credit Documents . The applicable provisions of all Credit Documents are modified as follows: |
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a) all references to the 2014 Credit Agreement are amended to be references to the 2014 Credit Agreement as modified by this Modification; |
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b) all references to the Hunter Mountain Credit Agreement are amended to be references to the Hunter Mountain Credit Agreement as modified by this Modification; |
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c) all references to the Mount Snow Credit Agreement are amended to be references to the Mount Snow Credit Agreement as modified by this Modification; |
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d) the definition of “Security Documents” contained in the Agreement shall be deemed to include the Letter of Credit (as defined in the 2014 Credit Agreement or the Hunter Mountain Credit Agreement, as each is modified hereby); |
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e) the definition of “Loan Documents” contained in the Credit Agreements shall be deemed to include the Letter of Credit, and all references to the “Loan Documents” or any “Loan Document” are amended to be references to the Credit Documents as modified hereby; and |
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f) the terms of this Modification are hereby incorporated into the Agreement, and this Modification is added as a “Transaction Document” pursuant to Section 4 of the Agreement. |
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4. Contingency . The effectiveness of this Modification is contingent upon Peak Resorts closing on a private equity offering to Summer Road, LLC for no less than Fifteen Million and 00/100 Dollars ($15,000,000.00) no later than November 15, 2016, otherwise, this Modification shall automatically terminate and none of the parties hereto shall have any further obligations under this Modification and the terms of the Credit Agreements and the Credit Agreement Letters shall remain in full force and effect as if this Modification was never entered into among the parties hereto. |
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5. Redemption . Notwithstanding anything in the Credit Agreements, the Credit Agreement Letters or any of the Credit Documents to the contrary, neither Peak Resorts nor any of the Borrowers shall redeem any preferred stock, or common stock converted from preferred stock, without the prior approval from the Lenders. |
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6. Counterparts . This Modification may be executed at different times and in any number of counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Modification by electronic mail or portable document format (pdf) shall be as effective as delivery of a manually executed counterpart of this Modification. In proving this Modification, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. |
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7. Entire Agreement . The Credit Documents, as amended hereby, constitute the entire agreement between Borrowers and Lenders , and any other prior written or oral understandings or representations of any kind shall not be deemed binding upon either Borrowers or Lenders except to the extent reflected in the express terms of the Credit Documents, as so amended. |
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8. Not a Novation . This Modification constitutes an amendment of the Credit Documents and not a novation thereof. |
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9. No Oral Modifications . This Modification, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrowers or Lenders, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. |
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10. Representations and Warranties . Each Borrower represents and warrants to the Lenders as follows: (a) it is a validly existing corporation under the laws of its jurisdiction of incorporation as indicated in the first paragraph above and each Borrower and the undersigned Guarantors have full corporate power and authority to enter into this Modification and any documents or transactions contemplated hereby and to pay and perform any obligations it may have in respect of the foregoing; (b) its execution, delivery and performance of this Modification and any documents or transactions contemplated hereby do not violate or conflict with, or require any consent under, (1) its organizational documents or any other agreement or document relating to its formation, existence or authority to act, (2) any agreement or instrument by which it or any its properties is bound, (3) any court order, judicial proceeding or any administrative or arbitral order or decree, or (4) any applicable law, rule or regulation; (c) no authorization, approval or consent of or by, and no notice to or filing or registration with, any governmental authority or any other person or entity is necessary for it to enter into this Modification or any document or transaction contemplated hereby or to perform any of its obligations with respect to any of the foregoing and (d) no default or event of default currently exists under the Credit Documents (or any of them) . |
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11. No Impairment . Nothing in this Modification shall be deemed to or shall in any manner prejudice or impair the Credit Documents. This Modification shall not be deemed to be nor shall it constitute any alteration, waiver, annulment or variation of the liens and encumbrances of the Credit Documents, or the terms and conditions of or any rights, powers, or remedies under the Credit Documents, except as expressly set forth herein. |
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12. Successors and Assigns . This Modification shall inure to the benefit of, and be binding upon Borrowers and Lenders , and their respective successors and assigns. |
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13. Affirmation of the Agreement . Each Borrower reaffirms its obligations under the Credit Agreements, as amended hereby, and the other Credit Documents to which it is a party or by which it is bound, and represents, warrants and covenants to the Lenders, as a material inducement to the Lenders to enter into this Modification, that: (a) such Borrower has no and in any event waives any defense, claim or right of setoff or recoupment with respect to its obligations under, or in any other way relating to, the Credit Agreements, as amended hereby, or any of the other Credit Documents to which it is a party, or any Lenders' actions or inactions, and (b) except as otherwise expressly provided in this Modification, all representations and warranties made by such Borrower in the Credit Agreements or the other Credit Documents to which it is a party are true and complete on the date hereof as if made on the date hereof. |
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14. No Other Modifications; Ratification of Loan Documents . Except as expressly set forth herein, or necessary to incorporate the modifications and amendments herein, all the terms and conditions of the Credit Documents shall remain unmodified and in full force and effect, and
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Borrowers and the consenting Guarantors confirm and ratify all such documents and agree to perform and comply with the terms and conditions of the Credit Documents, as modified herein. Nothing in this Modification shall constitute a waiver by any of the Lenders of any Default or Event of Default which may exist on the date hereof; and nothing herein shall require any Lender to waive any Default or Event of Default which may arise hereafter. Nothing herein shall act to release any Lien on any Collateral (as such terms are defined in each respective Credit Agreement) or limit the scope or amount of the obligations secured thereby. |
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15. Further Assurance . Borrowers agree to execute such other and further documents and instruments as Lenders may request to implement the provisions of this Modification and to perfect and protect the liens and security interests created by the Credit Documents. |
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16. Expenses . The Borrowers shall jointly and severally pay the reasonable out-of-pocket legal fees and expenses incurred by the Lenders in connection with the preparation and closing of this Modification and any other documents referred to herein and the consummation of any transactions referred to herein or therein. |
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17. No Unwritten Agreements . The following statement is given pursuant to Mo.Rev.Stat. Section 432.047: "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 credit 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." For purposes of the preceding statement, the other Credit Documents are hereby incorporated in and made a part of this Modification; provided, however , that, insofar as any direct conflict exists between the terms of the other Credit Documents and those of this Modification, the terms of this Modification shall prevail and govern. |
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrowers and Lenders have caused this Modification to be duly executed.
BORROWERS:
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/s/ Stephen Mueller Stephen Mueller Vice President
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/s/ Stephen Mueller Stephen Mueller Vice President
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PEAK RESORTS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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JFBB SKI AREAS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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BOSTON MILLS SKI RESORT, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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BRANDYWINE SKI RESORT, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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DELTRECS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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MOUNT SNOW, LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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SYCAMORE LAKE, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN ACQUISITION, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN SKI BOWL INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN FESTIVALS, LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN RENTALS LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER RESORT VACATIONS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN BASE LODGE, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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FROSTY LAND, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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IN WITNESS WHEREOF, Borrowers and Lenders have caused this Modification to be duly executed.
LENDERS:
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EPT SKI PROPERTIES, INC.
By: /s/ Morgan G. Earnest II Print: Morgan G. Earnest II Title: Vice President
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EPT MOUNT SNOW, INC.
By: /s/ Morgan G. Earnest II Print: Morgan G. Earnest II Title: Vice President
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EPT MAD RIVER, INC.
By: /s/ Morgan G. Earnest II Print: Morgan G. Earnest II Title: Vice President
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GUARANTOR'S CONSENT
The undersigned Guarantors under the Credit Agreements hereby (i) acknowledges and consents to the terms of this Modification, (ii) reaffirms the full force and effect of its respective Guaranty as of the day and year first above written, (iii) agrees that the Guaranty guarantees repayment of the Debt, as defined in the Guaranty, as such obligations and liabilities have been modified pursuant to this Modification, (iv) waives any defense, claim or right of setoff or recoupment each Guarantor may have in respect of the Guaranty, the Credit Agreement, any other Credit Documents, or any Lenders' actions or inactions, and (v) agrees that no Lender has any duty to give any Guarantor notice of or obtain the Guarantor's consent to the transactions described in the Modification, and that the giving of notice to each Guarantor and the obtainment of its consent in this instance shall not impose any similar or other duty upon the Lenders in any future matter or transaction.
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PEAK RESORTS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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JFBB SKI AREAS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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MAD RIVER MOUNTAIN, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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S N H DEVELOPMENT, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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L.B.O. HOLDING, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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MOUNT SNOW, LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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SYCAMORE LAKE, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HIDDEN VALLEY GOLF AND SKI, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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SNOW CREEK, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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PAOLI PEAKS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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DELTRECS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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BRANDYWINE SKI RESORT, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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BOSTON MILLS SKI RESORT, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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WC ACQUISITION CORP.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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RESORT HOLDINGS, L.L.C.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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BLC OPERATORS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN ACQUISITION, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN SKI BOWL INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN FESTIVALS, LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN RENTALS LTD.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER RESORT VACATIONS, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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HUNTER MOUNTAIN BASE LODGE, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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FROSTY LAND, INC.
By: /s/ Stephen Mueller Print: Stephen Mueller Title: Vice President
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