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Section 1: 8-K (8-K)

20181121 8K

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): November 21, 2018

PEAK RESORTS, INC. 

(Exact name of registrant as specified in its charter)



 

 

 

 

Missouri

 

001-35363

 

43-1793922

(State or other jurisdiction of

 

(Commission

 

(I.R.S. Employer

incorporation)

 

File Number)

 

Identification No.)



 

 



 

 

17409 Hidden Valley Drive

 

 

Wildwood, Missouri

 

63025

(Address of principal executive offices)

 

(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.



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).     Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     



 

Item 1.01.Entry into a Material Definitive Agreement.

On November 21, 2018, Peak Resorts, Inc. (the “Company”), through its wholly owned subsidiary Snow Time Acquisition, Inc., completed the acquisition (the “Acquisition”) of 100% of the issued and outstanding common stock of Snow Time, Inc. (“Snow Time”) pursuant to the previously announced Stock Purchase Agreement (the “Purchase Agreement”) entered into with the stockholders of Snow Time (the “Sellers”), dated as of September 24, 2018.  Upon consummation of the Acquisition, the Company acquired the assets and businesses of Snow Time, including Liberty Mountain Resort, Roundtop Mountain Resort and Whitetail Resort, which are day and overnight drive ski resorts located in southern Pennsylvania serving the Baltimore and Washington, D.C. metropolitan areas. Such resorts include two 18-hole golf courses, a 115-room hotel and conference center and more than 20 food and beverage locations across the three resorts, among other amenities.

The consideration for the Acquisition totaled approximately $70.0 million in cash, which is subject to customary post-closing adjustments related to prepaid services, working capital and transaction expenses as described in the Purchase Agreement, and 1,183,432 shares of the Company’s common stock with a value equal to $6.0 million, which was determined based on a $5.07 average closing price of the common stock for the 20 trading days immediately preceding the Acquisition closing. The cash portion of the Acquisition purchase price was funded with (i) borrowings of $50.0 million pursuant to the Credit Agreement (as defined below) and (ii) $20.0 million in proceeds received from the sale of 20,000 shares of the Company’s Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”) and the Option Warrants (as defined below) to Cap 1 LLC (“Cap 1”).

The foregoing description of the Purchase Agreement and the Acquisition is a summary only and is subject to, and qualified in its entirety by, the full text of the Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on September 24, 2018 and incorporated herein by reference. The Purchase Agreement has been filed with the Commission to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, the Sellers or their respective businesses. The Purchase Agreement contains representations and warranties that are the product of negotiations among the parties thereto and made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered by the parties in connection with the Purchase Agreement. The representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which information may or may not be fully reflected in the Company’s public disclosures.

Credit Agreement

As noted above, $50.0 million of the Acquisition purchase price was funded with borrowings under the Credit Agreement entered into on November 21, 2018 among Snow Time Acquisition, Inc., as borrower (the “Borrower”), Snow Time, Inc. and subsidiaries, as guarantors, and Cap 1, as lender (the “Credit Agreement”).

Pursuant to the terms of the Credit Agreement, Cap 1 has provided a two-year senior secured term loan facility in the amount of $50.0 million (the “Term Loan”)  secured by all real property on which the Snow Time resorts are located and improvements thereon, together with related rights.

Interest on the Term Loan will be charged at a rate of 6.95%, subject to a 2.0% increase upon an event of default. Amounts due under the Term Loan may be prepaid without penalty.  Upon the incurrence of certain debt, the Borrower must repay the Term Loan with such funds. 

The Term Loan matures on November 30, 2020 and may be extended for an additional one-year period at the Borrower’s option, so long as no event of default has occurred. If extended, the Company has agreed to issue


 

Cap 1 a warrant to purchase 666,667 shares of Common Stock, exercisable immediately from the issuance date and for up to ten years from the date of issuance, at $7.50 per share (the “Extension Warrant”). 

As a condition to the funding of the Term Loan, and for aggregate consideration of $20.0 million, the Company exercised the existing option (the “Cap 1 Option”) to issue to Cap 1 an additional 20,000 shares of Series A Preferred Stock, along with additional warrants to purchase shares of Common Stock  that expire 12 years from the date of issuance, as follows: (i) 1,538,462 shares of 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.  The Cap 1 Option is provided for in the terms of the Securities Purchase Agreement between the Company and Cap 1, dated as of August 22, 2016, entered into in connection with the issuance of the initial 20,000 shares of Series A Preferred Stock and accompanying warrants to Cap 1 in November 2016 (the “2016 Private Placement”). The Company used the Cap 1 Option proceeds to fund the remainder of the cash portion of the Acquisition purchase price.

As consideration for the Term Loan and in lieu of fees, upon funding, the Company also issued Cap 1 an additional warrant to purchase 1,750,000 shares of Common Stock at $10.00 per share (the “Financing Warrant”), which shall be immediately exercisable and expire ten years from the date of issuance.

The exercise prices of the Option Warrants must be paid in cash. At the Company’s option, the exercise price of the Financing Warrant may be paid in whole or in part in cash or by withholding a number of shares of Common Stock issuable upon exercise with an aggregate fair market value as of the exercise date equal to such aggregate exercise price.  The exercise prices of each of the Option Warrants and Financing Warrant and the number of shares of Common Stock issuable upon their exercise are subject to adjustment in the event of a stock split, stock dividend, reorganization, reclassification, consolidation, merger, sale and similar transaction.

The Credit Agreement includes restrictions or limitations on certain transactions by the Borrower and subsidiary guarantors, including mergers, acquisitions, leases, asset sales, loans to third parties, affiliate transactions, and the incurrence or guaranty of certain additional debt and liens. The payment of cash dividends by the Borrower is also prohibited during the term of the Term Loan, provided that the Borrower may make distributions to the Company so long as no event of default has occurred.

Upon an event of default, as defined in the Credit Agreement, Cap 1 may declare all unpaid principal and interest due and payable.  An event of default will occur upon failure to make a payment under the Credit Agreement when due; breach of any representation, warranty or covenant under the Credit Agreement; failure by the Company or any of its subsidiaries to make payments due under existing credit facilities; and occurrence of a change in control, among other customary default circumstances. The Credit Agreement defines a change in control to have occurred at any time the Company ceases to own 100% of the ownership interests in the Borrower or when any person, other than Cap 1 or its affiliates, becomes the beneficial owner of more than 50% of the voting stock of the Company.

The Credit Agreement obligates each of the entities acquired by the Company in connection with the Acquisition as unconditional guarantors of all debt evidenced by the Credit Agreement. The Borrower and subsidiary guarantors have agreed to indemnify Cap 1 against any claims and losses incurred in connection with entry into the Credit Agreement.

The foregoing description of the Credit Agreement is qualified in its entirety by reference to the terms of the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.  The foregoing description of the Option Warrants is qualified in its entirety by reference to Warrant No. 4, Warrant No. 5 and Warrant No. 6, which are filed as Exhibits 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference. The foregoing description of the Financing Warrant is qualified in its entirety by reference to Warrant No. 7, which is filed as Exhibit 4.4 to this Current Report on Form 8-K and incorporated herein by reference.

Amended and Restated Stockholders’ Agreement


 

In connection with the Acquisition, the Company, Cap 1 and Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch (the “Management Stockholders”) entered into the Amended and Restated Stockholders’ Agreement, dated as of November 21, 2018.  The Amended and Restated Stockholders’ Agreement adds the new shares of Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the shares of Common Stock underlying such securities, to the scope of Stockholders’ Agreement, dated as of November 2, 2016, entered into by the parties in connection with the 2016 Private Placement (the “Original Stockholders’ Agreement”). The remaining provisions of the Amended and Restated Stockholders’ Agreement remain unchanged from the Original Stockholders’ Agreement and are summarized in the Company’s Current Report on Form 8-K filed with the Commission on November 8, 2016, which summary is incorporated herein by reference. 

The foregoing description of the Amended and Restated Stockholders’ Agreement is qualified in its entirety by reference to the terms of the Amended and Restated Stockholders’ Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Amended and Restated Voting Agreement

Also in connection with the Acquisition, the Company, Cap 1 and the Management Stockholders entered into the Amended and Restated Voting Agreement, dated as of November 21, 2018.  The Amended and Restated Voting Agreement adds the new shares of Series A Preferred Stock, Option Warrants, Financing Warrant and Extension Warrant, and the shares of Common Stock underlying such securities, to the scope of Voting Agreement, dated as of August 22, 2016, entered into by the parties in connection with the 2016 Private Placement. For so long as Cap 1 beneficially owns at least 20.0% of the issued and outstanding equity securities of the Company on a fully diluted, as-converted basis, the Amended and Restated Voting Agreement requires the parties to:

·

vote in favor of Cap 1’s nominee to the board of directors;

·

vote against the removal of Cap 1’s nominee to the board  of directors unless Cap 1 approves or the nominee no longer satisfies the qualifications set forth in the Amended and Restated Stockholders’ Agreement;

·

vote in favor of the removal of Cap 1’s nominee to the board of directors if requested by Cap 1; and

·

vote in favor of any increase in the authorized shares of Common Stock necessary to ensure that there are sufficient shares of Common Stock available for issuance upon conversion of the Series A Preferred Stock and exercise of all warrants held by Cap 1.

In addition, Cap 1 has agreed that for up to three years after the issuance date or until a change of control, it will vote any shares of Common Stock issued upon exercise of any warrants held by Cap 1 in favor of the board of directors’ recommendations as to the election, removal or replacement of directors and all other proposals submitted to the vote of stockholders, except in the case of non-routine matters such as tender offers, mergers, acquisitions and similar transactions.

Cap 1 and the Management Stockholders granted proxies for purposes of ensuring compliance with these voting obligations.  Except with respect to Cap 1’s warrant voting obligations, the Amended and Restated Voting Agreement will terminate upon Cap 1 no longer having the right to nominate a director in accordance with the Amended and Restated Stockholders’ Agreement. 

The foregoing description of the Amended and Restated Voting Agreement is qualified in its entirety by reference to the terms of the Amended and Restated Voting Agreement, which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.

Registration Rights Agreement

In connection with the issuance of the securities to Cap 1 pursuant to the terms of the Credit Agreement, on November 21, 2018, the Company entered into a Registration Rights Agreement with Cap 1 that grants the


 

following registration rights with respect to the common stock issuable upon conversion of the Series A Preferred Stock and exercise of the Option Warrants and Financing Warrant, exercisable by the holders of a majority of the registrable securities: (i) at any time after six months following the issuance date, demand registration rights on a Form S-3 (i.e., a short-form registration); (ii) at any time after six months following the  issuance date, demand registration rights on a Form S-1 (i.e., a long-form registration); and (iii) piggyback registration rights.

The Company is not required to effect more than four short-form registrations or two long-form registrations during any nine-month period or any demand registration unless the number of registrable securities sought to be registered is at least 30% of the registrable securities for a short-form registration or 50% of the registrable securities for a long-form registration and, in any event, not less than 100,000 registrable securities. The Company may delay the filing of or causing to be effective any registration statement if the Company determines in good faith that such registration will (i) materially and adversely affect the negotiation or consummation of any actual or pending material transaction; or (ii) otherwise have a material adverse effect, provided that the Company may not exercise such right to delay more than once in any consecutive 12 month period or for more than 90 days. The Registration Rights Agreement also includes customary provisions regarding market standoffs, registration procedures and expenses, blackout periods, indemnification, reporting required to comply with Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), and confidentiality.

The Company further agreed that the same registration rights provided under the terms of the Registration Rights Agreement would be granted to any shares of Common Stock issued upon exercise of the Extension Warrant if the Company exercises its right to extend the Term Loan.

The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the terms of the Registration Rights Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.01.Completion of Acquisition or Disposition of Assets.

The information set forth under Item 1.01 and Item 5.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.



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 3.02.Unregistered Sales of Equity Securities.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

The sale and issuance of the Common Stock to the Sellers as consideration for the Acquisition of Snow Time, and the sale and issuance of the Series A Preferred Stock, Option Warrants and Financing Warrant to Cap 1 pursuant to the terms of the Credit Agreement (including the issuance of shares of Common Stock upon conversion and exercise thereof),  have each been determined to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as transactions by an issuer not involving a public offering.

Each of the Sellers and Cap 1 is an accredited investor, as that term is defined in Regulation D, and has acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.  Each of the securities contains a restrictive legend advising that the securities may not be offered for sale, sold, transferred, or assigned without having first been registered under the Securities Act or pursuant to an exemption from the Securities Act.


 

Item 5.01.Changes in Control of Registrant.

On November 21, 2018, the Company announced the completion of the Acquisition of Snow Time.  The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

As disclosed in Item 1.01 above, the cash portion of the Acquisition purchase price was funded by the Term Loan from Cap 1 and proceeds from the sale of shares of Series A Preferred Stock and Option Warrants to Cap 1.  Prior to the Acquisition and consummation of the transactions contemplated by the Term Loan, Cap 1 and its affiliates beneficially owned (within the meaning of Rules 13d-3 and 13d-5 of the Securities Exchange Act of 1934, as amended) approximately 40% of the Company’s voting securities.  After consummation of the Acquisition, Cap 1 and its affiliates beneficially own (as defined above) approximately 54% of the Company’s voting securities. The percentage of the Company’s voting securities owned by Cap 1 includes (i) shares of Common Stock underlying 40,000 shares of Series A Preferred Stock held by Cap 1, as Cap 1 has the right to vote such shares on an as-converted basis, and (ii) shares of Common Stock underlying all warrants held by Cap 1 as of the date of this Current Report on Form 8-K.  Full exercise of all warrants currently held by Cap 1 (which excludes the Extension Warrant) would require Cap 1 to pay approximately $57.5 million in aggregate exercise prices, ranging from $6.50 per share to $10.00 per share.

As noted in Item 1.01 above, Cap 1 has entered into the Amended and Restated Stockholders’ Agreement and Amended and Restated Voting Agreement with the Company and the Management Stockholders. The description of these agreements included in Item 1.01 is incorporated herein by reference.

Rory A. Held is a member of the Company’s board of directors and was nominated for election by Cap 1 pursuant to the terms of the Original Stockholders’ Agreement. Mr. Held serves as Executive Vice President and Portfolio Manager of Summer Road LLC, which serves as a family office and provides investment management services to Cap 1. Mr. Held has no equity interest in, or other relationship with, Cap 1 or Summer Road LLC and is not compensated by Cap 1 or Summer Road LLC for his services as a director of the Company. Mr. Held has no direct or indirect interest in the Acquisition or the securities issuable to Cap 1 pursuant to the terms of the Credit Agreement.

Item 9.01.Financial Statements and Exhibits.

(a)Financial Statements of Business Acquired.

The Company intends to file financial statements required by this Item 9.01(a) under the cover of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Form 8-K was required to be filed.

(b)Pro Forma Financial Information.

The Company intends to file pro forma financial information as required by this Item 9.01(b) under the cover of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Form 8-K was required to be filed.

(c)Not applicable.

(d)Exhibits



 

 

Exhibit No.

 

Description of Exhibit

4.1

 

Warrant No. 4 issued to Cap 1 LLC, dated as of November 21, 2018.

4.2

 

Warrant No. 5 issued to Cap 1 LLC, dated as of November 21, 2018.

4.3

 

Warrant No. 6 issued to Cap 1 LLC, dated as of November 21, 2018.  

4.4

 

Warrant No. 7 issued to Cap 1 LLC, dated as of November 21, 2018.

10.1

 

Credit Agreement among Snow Time Acquisition, Inc., Snow Time, Inc. and Cap 1 LLC, dated as of November 21, 2018.  


 

10.2

 

Amended and Restated Stockholders’ Agreement among Peak Resorts, Inc., Timothy D. Boyd, Stephen J. Mueller, Richard K. Deutsch and Cap 1 LLC, dated as of November 21, 2018.

10.3

 

Amended and Restated Voting Agreement among Peak Resorts, Inc., Cap 1 LLC, Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch, dated as of November 21, 2018.  

10.4

 

Registration Rights Agreement between Peak Resorts, Inc. and Cap 1 LLC, dated as of November 21, 2018.  



Cautionary Note Concerning Forward-Looking Statements

Certain information contained herein and in the exhibits that are not statements of historical or current fact constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of words such as “may,” “will,” “expect,” “should,” “anticipate,” “intend,” “believe” and “plan.” The forward-looking statements contained in this Current Report on Form 8-K include, without limitation, statements related to: the expected impact of the Acquisition of Snow Time on the Company’s overall business, operations and results of operations; expectations regarding the sustained effect of the Acquisition on the Company’s season pass sales; and the realization of anticipated cost and operating synergies. These and other forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by factors such as: risks associated with acquisitions generally; failure to retain key management and employees; issues or delays in the successful integration of the Snow Time operations with those of the Company, including incurring or experiencing unanticipated costs and/or delays or difficulties; difficulties or delays in the successful transition of the operations, systems and personnel of Snow Time; future levels of revenues being lower than expected and costs being higher than expected; failure or inability to implement growth strategies in a timely manner; unfavorable reaction to the acquisition by resort visitors, competitors, vendors and employees; conditions affecting the industry generally; local and global political and economic conditions; conditions in the securities market that are less favorable than expected; and other risks described in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended April 30, 2018.

Actual results could differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.


 

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: November 23, 2018 



 

 



 

 



PEAK RESORTS, INC.
(Registrant)



 



 



By:

/s/ Christopher J. Bub



Name:

Christopher J. Bub



Title:

Chief Financial Officer






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Section 2: EX-4.1 (EX-4.1)

20181121 Ex 41

Exhibit 4.1

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.

Warrant Certificate No.: 4

Original Issue Date: November 21, 2018

FOR VALUE RECEIVED, Peak Resorts, Inc., a Missouri corporation (the “Company”), hereby certifies that CAP 1 LLC, a Delaware limited liability company, or its registered assigns (the “Holder”) is entitled to purchase from the Company 1,538,462 duly authorized, validly issued, fully paid and nonassessable Warrant Shares (as defined below and subject to adjustment as provided herein) at a purchase price per share of $6.50 (subject to adjustment as provided herein, the “Exercise Price”) at any time and from time to time during the Exercise Period (as defined below), all subject to the terms, conditions and adjustments set forth below in this Warrant.  Certain capitalized terms used herein are defined in Section 1 hereof. 

This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of August 22, 2016 (the “Purchase Agreement”), between the Company and the Holder, and the Credit Agreement, dated as of November 21, 2018 (the “Credit Agreement”), by and among Snow Time Acquisition, Inc., Snow Time, Inc. and the  Holder.  Holder acknowledges and agrees that this Warrant and the Warrant Shares are being offered and sold in reliance on specific exemptions from the registration requirements of federal and state law and the Company is relying on the truth and accuracy of the Holder’s representations, warranties and agreements contained herein and in the Purchase Agreement, each of which is affirmed by the Holder as of the date hereof, in order to determine the application of such exemptions.  

Definitions

.  As used in this Warrant, the following terms have the respective meanings set forth below:

 


 

Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

Board” means the board of directors of the Company.

Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in Missouri or New York are authorized or obligated by law or executive order to close.

Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

Company” has the meaning set forth in the preamble. 

Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options, this Warrant, the Investor Warrants and any Series A Preferred Shares held by the Holder. 

Credit Agreement” has the meaning set forth in the preamble.

Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., EST time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price. 

Exercise Agreement” has the meaning set forth in Section 3(a)(i).  

Exercise Period” has the meaning set forth in Section 2.  

Exercise Price” has the meaning set forth in the preamble. 

Holder” has the meaning set forth in the preamble.

Investor Warrants” means this Warrant, and any and all warrants to purchase shares of Common Stock that are held by the Holder as of the date hereof and at any time hereafter.

Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities other than this Warrant, the Investor Warrants and the Purchase Agreement.

Original Issue Date” means the date on which the Warrant was issued by the Company pursuant to the Purchase Agreement and the Credit Agreement.

Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof. 

Purchase Agreement” has the meaning set forth in the preamble.

Series A Preferred Shares” means the Series A Convertible Preferred Stock of the Company, par value $0.01 per share.

2


 

Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

Term of Warrant

.  Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., EST time, on the twelfth (12th) anniversary of the date hereof or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).  Upon the expiration of the Exercise Period, any portion of this Warrant not exercised shall be void and of no value.

Exercise of Warrant

.

(a) Exercise Procedure.  This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i) surrender of this Warrant to the Company at its then principal executive offices (or an affidavit of loss and indemnification undertaking with respect to this Warrant in accordance with Section 9 in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii) payment to the Company of the Aggregate Exercise Price by wire transfer of immediately available funds to an account designated in writing by the Company in the amount of such Aggregate Exercise Price.

(b) Delivery of Stock Certificates.  Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(c) hereof.  The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 7 below, such other Person's name as shall be designated in the Exercise Agreement.  This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c) Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant.  As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of  such fraction multiplied by  the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the Exercise Date.

(d) Delivery of New Warrant.  Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the

3


 

certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(b) hereof, deliver to the Holder a new Warrant evidencing the remaining rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant.  Such new Warrant shall in all other respects be identical to this Warrant.

(e) Valid Issuance of Warrant and Warrant Shares; Payment of Taxes.  With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i) This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii) All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be reasonably necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes (subject to and without limiting clause (iv) below), liens and charges.

(iii) Subject to the representations and warranties of the Holder and the covenants of the Holder in the Purchase Agreement, as affirmed as of the date hereof, and in this Warrant being fulfilled, the Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv) The Company shall pay all expenses in connection with, and all issue or transfer taxes, withholding taxes, transfer agent fees, or other incidental taxes or expenses that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

(f) Conditional Exercise.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

Reservation of Shares

.  During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price.  The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

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Adjustment to Exercise Price and Number of Warrant Shares

.  In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 5 (in each case, after taking into consideration any prior adjustments pursuant to this Section 5).

(g) Adjustment Upon Dividend, Subdivision or Combination of Common Stock.  If the Company shall, at any time or from time to time after the Original Issue Date, (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) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant 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 Exercise Price in effect immediately prior to such combination shall be proportionately increased (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased.  All such adjustments under this subsection (a) shall be calculated as follows:   the Exercise Price will be adjusted by multiplying the Exercise 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  the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Any adjustment under this Section 5(a) shall become effective  if a record date shall have been fixed for determining the stockholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such record date, or  otherwise, at the close of business on the date the dividend, subdivision or combination becomes effective. 

(h) Adjustment Upon Reorganization, Reclassification, Consolidation or Merger.  In the event of any  capital reorganization of the Company,  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),  consolidation or merger of the Company with or into another Person,  sale of all or substantially all of the Company’s assets to another Person, or  other similar transaction, including a tender offer (other than any such transaction covered by Section 5(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 Warrant 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 Warrant Shares then exercisable under this Warrant, 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 the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) if the Holder had exercised this Warrant 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 Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant) and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure

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that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant.

The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions (including a tender offer).  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 (including a tender offer), or Person making such tender offer, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant.  

Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 5(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 5(b) with respect to this Warrant.

(i) Certificate as to Adjustment

(i) As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the 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.

(ii) As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(j) Notices.  In the event:

(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 exercise of the Warrant) 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

(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 sale of all or substantially all of the Company's assets to another Person; or

(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 the Holder at least two (2) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the

6


 

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, 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 exercise of the Warrant) 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 Warrant and the Warrant Shares.  No such notice shall be given if the Company reasonably determines that the giving of such notice would require disclosure of material information which the Company has a bona fide purpose for preserving as confidential or the disclosure of which would not be in the best interests of the Company.

Stockholders’ Agreement

.  This Warrant and all Warrant Shares issuable upon exercise of this Warrant are and shall become subject to, and have the benefit of, the Stockholders’ Agreement, and the Holder shall be required, for so long as the Holder holds this Warrant or any Warrant Shares, to become and remain a party to the Stockholders’ Agreement.

Transfer of Warrant

.  Subject to the transfer conditions referred to in the legend endorsed hereon and the terms and conditions of the Stockholders’ Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(e)(iv) in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

Holder not Deemed a Stockholder

.  Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled, by virtue of this Warrant, to vote or  receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.   

Replacement on Loss; Division and Combination

.

(k) Replacement of Warrant on Loss.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement and affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

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(l) Division and Combination of Warrant.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice.  Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

No Impairment

.  The Company shall not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Compliance with the Securities Act

.

(m) Agreement to Comply with the Securities Act; Legend.  The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 11 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

Until the Stockholders’ Agreement is terminated or otherwise ceases to be applicable to this Warrant and the Warrant Shares in accordance with the terms of the Stockholders’ Agreement, this Warrant and all Warrant Shares issued upon exercise of this Warrant shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT,

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DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.”

(n) Representations of the Holder.  In addition to the representations and warranties set forth in the Purchase Agreement, in connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i) The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

(ii) The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances.  In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii) The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

Warrant Register

.  The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof.  The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

Notices

.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:   when delivered by hand (with written confirmation of receipt);  when received by the addressee if sent by a nationally recognized overnight courier (receipt requested);  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  on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13).

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If to the Company:

Peak Resorts, Inc.

Address:

17409 Hidden Valley Drive, Wildwood, MO 63025

E-mail:

timboyd@skihv.com

Attention:

Chief Executive Officer



 

with a copy to:

Armstrong Teasdale 

Address:

7700 Forsyth Blvd., Suite 1800, St. Louis, MO 63105

Facsimile:

314-552-4843

E-mail:

jpolk@armstrongteasdale.com

Attention:

Jill Polk



 

If to the Holder:

CAP 1 LLC

Address:

655 Madison Avenue, New York, NY 10065

Facsimile:

212-317-4169

E-mail:

rh@srllc.com

Attention:

Rory Held



 

with a copy to:

Norton Rose Fulbright US LLP

Address:

1301 Avenue of the Americas, New York, NY 10019 - 6022

Facsimile:

212-541-5369

E-mail:

frank.vellucci@nortonrosefulbright.com

Attention:

Frank S. Vellucci



Cumulative Remedies

.  Except to the extent expressly provided in this Warrant to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

Equitable Relief

.  Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

Entire Agreement

.  This Warrant, together with the Stockholders’ Agreement, the Purchase Agreement (and the other Transaction Documents referenced therein, as each may be amended), and the Credit Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.  In the event of any inconsistency between the statements in the body of this Warrant, the Stockholders’ Agreement, the Purchase Agreement, and the Credit Agreement, the statements in the body of this Warrant shall control.

Successor and Assigns

.  This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and assigns of the Holder.  Such successors and/or assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

No Third-Party Beneficiaries

.  This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing

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herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

Headings

.  The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

Amendment and Modification; Waiver

.  Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.  No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.  No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Severability

.  If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

Governing Law

.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.

Submission to Jurisdiction

.  Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of Manhattan, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.  Service of process, summons, notice or other document by certified or registered mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

Waiver of Jury Trial

.  Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

Counterparts

.  This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.  A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

No Strict Construction

.  This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.



PEAK RESORTS, INC.



 



 



By: /s/ Christopher J. Bub



Name:  Christopher J. Bub



Title: Vice President and Chief Financial Officer



 



Accepted and agreed,



 



CAP 1 LLC



 



 



By: /s/ David Sackler



Name:   David Sackler



Title:   President

 

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Exhibit 4.1

EXHIBIT A

EXERCISE AGREEMENT

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, par value $0.01 per share (“Common Stock”), of Peak Resorts, Inc., a Missouri corporation, pursuant to Warrant No.________, originally issued on ___________, 2018 (the “Warrant”).  The undersigned elects to utilize the following manner of exercise: 

Shares:

Full Exercise of Warrant



Partial Exercise of Warrant (in the amount of ______ Shares)

Exercise Price:

$

Payable in accordance with Section 3(a)(ii) of the Warrant

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

 

A-1


 

Exhibit 4.1

EXHIBIT B

ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ______ the right represented by the attached Warrant to purchase ___________ shares of Common Stock of Peak Resorts, Inc., a Missouri corporation (the “Company”), to which the Warrant relates and appoints ______________ as attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

Full Name of Transferee:

Address of Transferee:

In the presence of:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

† If applicable.

B-1


(Back To Top)

Section 3: EX-4.2 (EX-4.2)

20181121 Ex 42

Exhibit 4.2

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.

Warrant Certificate No.: 5

Original Issue Date: November 21, 2018

FOR VALUE RECEIVED, Peak Resorts, Inc., a Missouri corporation (the “Company”), hereby certifies that CAP 1 LLC, a Delaware limited liability company, or its registered assigns (the “Holder”) is entitled to purchase from the Company 625,000 duly authorized, validly issued, fully paid and nonassessable Warrant Shares (as defined below and subject to adjustment as provided herein) at a purchase price per share of $8.00 (subject to adjustment as provided herein, the “Exercise Price”) at any time and from time to time during the Exercise Period (as defined below), all subject to the terms, conditions and adjustments set forth below in this Warrant.  Certain capitalized terms used herein are defined in Section 1 hereof. 

This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of August 22, 2016 (the “Purchase Agreement”), between the Company and the Holder, and the Credit Agreement, dated as of November 21, 2018 (the “Credit Agreement”), by and among Snow Time Acquisition, Inc., Snow Time, Inc. and the  Holder.  Holder acknowledges and agrees that this Warrant and the Warrant Shares are being offered and sold in reliance on specific exemptions from the registration requirements of federal and state law and the Company is relying on the truth and accuracy of the Holder’s representations, warranties and agreements contained herein and in the Purchase Agreement, each of which is affirmed by the Holder as of the date hereof, in order to determine the application of such exemptions.  

Definitions

.  As used in this Warrant, the following terms have the respective meanings set forth below:

 


 

Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

Board” means the board of directors of the Company.

Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in Missouri or New York are authorized or obligated by law or executive order to close.

Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

Company” has the meaning set forth in the preamble. 

Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options, this Warrant, the Investor Warrants and any Series A Preferred Shares held by the Holder. 

Credit Agreement” has the meaning set forth in the preamble.

Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., EST time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price. 

Exercise Agreement” has the meaning set forth in Section 3(a)(i).  

Exercise Period” has the meaning set forth in Section 2.  

Exercise Price” has the meaning set forth in the preamble. 

Holder” has the meaning set forth in the preamble.

Investor Warrants” means this Warrant, and any and all warrants to purchase shares of Common Stock that are held by the Holder as of the date hereof and at any time hereafter.

Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities other than this Warrant, the Investor Warrants and the Purchase Agreement.

Original Issue Date” means the date on which the Warrant was issued by the Company pursuant to the Purchase Agreement and the Credit Agreement.

Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof. 

Purchase Agreement” has the meaning set forth in the preamble.

Series A Preferred Shares” means the Series A Convertible Preferred Stock of the Company, par value $0.01 per share.

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Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

Term of Warrant

.  Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., EST time, on the twelfth (12th) anniversary of the date hereof or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).  Upon the expiration of the Exercise Period, any portion of this Warrant not exercised shall be void and of no value.

Exercise of Warrant

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(a) Exercise Procedure.  This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i) surrender of this Warrant to the Company at its then principal executive offices (or an affidavit of loss and indemnification undertaking with respect to this Warrant in accordance with Section 9 in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii) payment to the Company of the Aggregate Exercise Price by wire transfer of immediately available funds to an account designated in writing by the Company in the amount of such Aggregate Exercise Price.

(b) Delivery of Stock Certificates.  Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(c) hereof.  The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 7 below, such other Person's name as shall be designated in the Exercise Agreement.  This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c) Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant.  As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of  such fraction multiplied by  the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the Exercise Date.

(d) Delivery of New Warrant.  Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the

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certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(b) hereof, deliver to the Holder a new Warrant evidencing the remaining rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant.  Such new Warrant shall in all other respects be identical to this Warrant.

(e) Valid Issuance of Warrant and Warrant Shares; Payment of Taxes.  With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i) This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii) All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be reasonably necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes (subject to and without limiting clause (iv) below), liens and charges.

(iii) Subject to the representations and warranties of the Holder and the covenants of the Holder in the Purchase Agreement, as affirmed as of the date hereof, and in this Warrant being fulfilled, the Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv) The Company shall pay all expenses in connection with, and all issue or transfer taxes, withholding taxes, transfer agent fees, or other incidental taxes or expenses that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

(f) Conditional Exercise.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

Reservation of Shares

.  During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price.  The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

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Adjustment to Exercise Price and Number of Warrant Shares

.  In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 5 (in each case, after taking into consideration any prior adjustments pursuant to this Section 5).

(g) Adjustment Upon Dividend, Subdivision or Combination of Common Stock.  If the Company shall, at any time or from time to time after the Original Issue Date, (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) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant 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 Exercise Price in effect immediately prior to such combination shall be proportionately increased (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased.  All such adjustments under this subsection (a) shall be calculated as follows:   the Exercise Price will be adjusted by multiplying the Exercise 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  the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Any adjustment under this Section 5(a) shall become effective  if a record date shall have been fixed for determining the stockholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such record date, or  otherwise, at the close of business on the date the dividend, subdivision or combination becomes effective. 

(h) Adjustment Upon Reorganization, Reclassification, Consolidation or Merger.  In the event of any  capital reorganization of the Company,  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),  consolidation or merger of the Company with or into another Person,  sale of all or substantially all of the Company’s assets to another Person, or  other similar transaction, including a tender offer (other than any such transaction covered by Section 5(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 Warrant 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 Warrant Shares then exercisable under this Warrant, 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 the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) if the Holder had exercised this Warrant 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 Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant) and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure

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that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant.

The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions (including a tender offer).  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 (including a tender offer), or Person making such tender offer, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant.  

Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 5(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 5(b) with respect to this Warrant.

(i) Certificate as to Adjustment

(i) As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the 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.

(ii) As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(j) Notices.  In the event:

(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 exercise of the Warrant) 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

(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 sale of all or substantially all of the Company's assets to another Person; or

(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 the Holder at least two (2) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the

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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, 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 exercise of the Warrant) 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 Warrant and the Warrant Shares.  No such notice shall be given if the Company reasonably determines that the giving of such notice would require disclosure of material information which the Company has a bona fide purpose for preserving as confidential or the disclosure of which would not be in the best interests of the Company.

Stockholders’ Agreement

.  This Warrant and all Warrant Shares issuable upon exercise of this Warrant are and shall become subject to, and have the benefit of, the Stockholders’ Agreement, and the Holder shall be required, for so long as the Holder holds this Warrant or any Warrant Shares, to become and remain a party to the Stockholders’ Agreement.

Transfer of Warrant

.  Subject to the transfer conditions referred to in the legend endorsed hereon and the terms and conditions of the Stockholders’ Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(e)(iv) in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

Holder not Deemed a Stockholder

.  Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled, by virtue of this Warrant, to vote or  receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.   

Replacement on Loss; Division and Combination

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(k) Replacement of Warrant on Loss.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement and affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

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(l) Division and Combination of Warrant.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice.  Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

No Impairment

.  The Company shall not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Compliance with the Securities Act

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(m) Agreement to Comply with the Securities Act; Legend.  The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 11 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

Until the Stockholders’ Agreement is terminated or otherwise ceases to be applicable to this Warrant and the Warrant Shares in accordance with the terms of the Stockholders’ Agreement, this Warrant and all Warrant Shares issued upon exercise of this Warrant shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT,

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DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.”

(n) Representations of the Holder.  In addition to the representations and warranties set forth in the Purchase Agreement, in connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i) The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

(ii) The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances.  In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii) The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

Warrant Register

.  The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof.  The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

Notices

.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:   when delivered by hand (with written confirmation of receipt);  when received by the addressee if sent by a nationally recognized overnight courier (receipt requested);  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  on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13).

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If to the Company:

Peak Resorts, Inc.

Address:

17409 Hidden Valley Drive, Wildwood, MO 63025

E-mail:

timboyd@skihv.com

Attention:

Chief Executive Officer



 

with a copy to:

Armstrong Teasdale 

Address:

7700 Forsyth Blvd., Suite 1800, St. Louis, MO 63105

Facsimile:

314-552-4843

E-mail:

jpolk@armstrongteasdale.com

Attention:

Jill Polk



 

If to the Holder:

CAP 1 LLC

Address:

655 Madison Avenue, New York, NY 10065

Facsimile:

212-317-4169

E-mail:

rh@srllc.com

Attention:

Rory Held



 

with a copy to:

Norton Rose Fulbright US LLP

Address:

1301 Avenue of the Americas, New York, NY 10019 - 6022

Facsimile:

212-541-5369

E-mail:

frank.vellucci@nortonrosefulbright.com

Attention:

Frank S. Vellucci



Cumulative Remedies

.  Except to the extent expressly provided in this Warrant to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

Equitable Relief

.  Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

Entire Agreement

.  This Warrant, together with the Stockholders’ Agreement, the Purchase Agreement (and the other Transaction Documents referenced therein, as each may be amended), and the Credit Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.  In the event of any inconsistency between the statements in the body of this Warrant, the Stockholders’ Agreement, the Purchase Agreement, and the Credit Agreement, the statements in the body of this Warrant shall control.

Successor and Assigns

.  This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and assigns of the Holder.  Such successors and/or assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

No Third-Party Beneficiaries

.  This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing

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herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

Headings

.  The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

Amendment and Modification; Waiver

.  Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.  No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.  No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Severability

.  If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

Governing Law

.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.

Submission to Jurisdiction

.  Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of Manhattan, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.  Service of process, summons, notice or other document by certified or registered mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

Waiver of Jury Trial

.  Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

Counterparts

.  This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.  A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

No Strict Construction

.  This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.



PEAK RESORTS, INC.



 



 



By: /s/ Christopher J. Bub



Name:  Christopher J. Bub



Title: Vice President and Chief Financial Officer



 



Accepted and agreed,



 



CAP 1 LLC



 



 



By: /s/ David Sackler



Name:   David Sackler



Title:   President

 

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Exhibit 4.2

EXHIBIT A

EXERCISE AGREEMENT

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, par value $0.01 per share (“Common Stock”), of Peak Resorts, Inc., a Missouri corporation, pursuant to Warrant No.________, originally issued on ___________, 2018 (the “Warrant”).  The undersigned elects to utilize the following manner of exercise: 

Shares:

Full Exercise of Warrant



Partial Exercise of Warrant (in the amount of ______ Shares)

Exercise Price:

$

Payable in accordance with Section 3(a)(ii) of the Warrant

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

 

A-1


 

Exhibit 4.2

EXHIBIT B

ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ______ the right represented by the attached Warrant to purchase ___________ shares of Common Stock of Peak Resorts, Inc., a Missouri corporation (the “Company”), to which the Warrant relates and appoints ______________ as attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

Full Name of Transferee:

Address of Transferee:

In the presence of:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

† If applicable.

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(Back To Top)

Section 4: EX-4.3 (EX-4.3)

20181121 Ex 43

Exhibit 4.3

 

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.

Warrant Certificate No.: 6

Original Issue Date: November 21, 2018

FOR VALUE RECEIVED, Peak Resorts, Inc., a Missouri corporation (the “Company”), hereby certifies that CAP 1 LLC, a Delaware limited liability company, or its registered assigns (the “Holder”) is entitled to purchase from the Company 555,556 duly authorized, validly issued, fully paid and nonassessable Warrant Shares (as defined below and subject to adjustment as provided herein) at a purchase price per share of $9.00 (subject to adjustment as provided herein, the “Exercise Price”) at any time and from time to time during the Exercise Period (as defined below), all subject to the terms, conditions and adjustments set forth below in this Warrant.  Certain capitalized terms used herein are defined in Section 1 hereof. 

This Warrant has been issued pursuant to the terms of the Securities Purchase Agreement, dated as of August 22, 2016 (the “Purchase Agreement”), between the Company and the Holder, and the Credit Agreement, dated as of November 21, 2018 (the “Credit Agreement”), by and among Snow Time Acquisition, Inc., Snow Time, Inc. and the  Holder.  Holder acknowledges and agrees that this Warrant and the Warrant Shares are being offered and sold in reliance on specific exemptions from the registration requirements of federal and state law and the Company is relying on the truth and accuracy of the Holder’s representations, warranties and agreements contained herein and in the Purchase Agreement, each of which is affirmed by the Holder as of the date hereof, in order to determine the application of such exemptions.  

Definitions

.  As used in this Warrant, the following terms have the respective meanings set forth below:

 


 

Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

Board” means the board of directors of the Company.

Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in Missouri or New York are authorized or obligated by law or executive order to close.

Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

Company” has the meaning set forth in the preamble. 

Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options, this Warrant, the Investor Warrants and any Series A Preferred Shares held by the Holder. 

Credit Agreement” has the meaning set forth in the preamble.

Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., EST time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price. 

Exercise Agreement” has the meaning set forth in Section 3(a)(i).  

Exercise Period” has the meaning set forth in Section 2.  

Exercise Price” has the meaning set forth in the preamble. 

Holder” has the meaning set forth in the preamble.

Investor Warrants” means this Warrant, and any and all warrants to purchase shares of Common Stock that are held by the Holder as of the date hereof and at any time hereafter.

Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities other than this Warrant, the Investor Warrants and the Purchase Agreement.

Original Issue Date” means the date on which the Warrant was issued by the Company pursuant to the Purchase Agreement and the Credit Agreement.

Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof. 

Purchase Agreement” has the meaning set forth in the preamble.

Series A Preferred Shares” means the Series A Convertible Preferred Stock of the Company, par value $0.01 per share.

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Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

Term of Warrant

.  Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., EST time, on the twelfth (12th) anniversary of the date hereof or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).  Upon the expiration of the Exercise Period, any portion of this Warrant not exercised shall be void and of no value.

Exercise of Warrant

.

(a) Exercise Procedure.  This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i) surrender of this Warrant to the Company at its then principal executive offices (or an affidavit of loss and indemnification undertaking with respect to this Warrant in accordance with Section 9 in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii) payment to the Company of the Aggregate Exercise Price by wire transfer of immediately available funds to an account designated in writing by the Company in the amount of such Aggregate Exercise Price.

(b) Delivery of Stock Certificates.  Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(c) hereof.  The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 7 below, such other Person's name as shall be designated in the Exercise Agreement.  This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c) Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant.  As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of  such fraction multiplied by  the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the Exercise Date.

(d) Delivery of New Warrant.  Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the

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certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(b) hereof, deliver to the Holder a new Warrant evidencing the remaining rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant.  Such new Warrant shall in all other respects be identical to this Warrant.

(e) Valid Issuance of Warrant and Warrant Shares; Payment of Taxes.  With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i) This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii) All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be reasonably necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes (subject to and without limiting clause (iv) below), liens and charges.

(iii) Subject to the representations and warranties of the Holder and the covenants of the Holder in the Purchase Agreement, as affirmed as of the date hereof, and in this Warrant being fulfilled, the Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv) The Company shall pay all expenses in connection with, and all issue or transfer taxes, withholding taxes, transfer agent fees, or other incidental taxes or expenses that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

(f) Conditional Exercise.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

Reservation of Shares

.  During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price.  The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

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Adjustment to Exercise Price and Number of Warrant Shares

.  In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 5 (in each case, after taking into consideration any prior adjustments pursuant to this Section 5).

(g) Adjustment Upon Dividend, Subdivision or Combination of Common Stock.  If the Company shall, at any time or from time to time after the Original Issue Date, (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) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant 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 Exercise Price in effect immediately prior to such combination shall be proportionately increased (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased.  All such adjustments under this subsection (a) shall be calculated as follows:   the Exercise Price will be adjusted by multiplying the Exercise 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  the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Any adjustment under this Section 5(a) shall become effective  if a record date shall have been fixed for determining the stockholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such record date, or  otherwise, at the close of business on the date the dividend, subdivision or combination becomes effective. 

(h) Adjustment Upon Reorganization, Reclassification, Consolidation or Merger.  In the event of any  capital reorganization of the Company,  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),  consolidation or merger of the Company with or into another Person,  sale of all or substantially all of the Company’s assets to another Person, or  other similar transaction, including a tender offer (other than any such transaction covered by Section 5(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 Warrant 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 Warrant Shares then exercisable under this Warrant, 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 the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) if the Holder had exercised this Warrant 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 Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant) and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure

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that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant.

The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions (including a tender offer).  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 (including a tender offer), or Person making such tender offer, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant.  

Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 5(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 5(b) with respect to this Warrant.

(i) Certificate as to Adjustment

(i) As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the 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.

(ii) As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(j) Notices.  In the event:

(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 exercise of the Warrant) 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

(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 sale of all or substantially all of the Company's assets to another Person; or

(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 the Holder at least two (2) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the

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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, 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 exercise of the Warrant) 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 Warrant and the Warrant Shares.  No such notice shall be given if the Company reasonably determines that the giving of such notice would require disclosure of material information which the Company has a bona fide purpose for preserving as confidential or the disclosure of which would not be in the best interests of the Company.

Stockholders’ Agreement

.  This Warrant and all Warrant Shares issuable upon exercise of this Warrant are and shall become subject to, and have the benefit of, the Stockholders’ Agreement, and the Holder shall be required, for so long as the Holder holds this Warrant or any Warrant Shares, to become and remain a party to the Stockholders’ Agreement.

Transfer of Warrant

.  Subject to the transfer conditions referred to in the legend endorsed hereon and the terms and conditions of the Stockholders’ Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(e)(iv) in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

Holder not Deemed a Stockholder

.  Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled, by virtue of this Warrant, to vote or  receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.   

Replacement on Loss; Division and Combination

.

(k) Replacement of Warrant on Loss.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement and affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

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(l) Division and Combination of Warrant.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice.  Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

No Impairment

.  The Company shall not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Compliance with the Securities Act

.

(m) Agreement to Comply with the Securities Act; Legend.  The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 11 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

Until the Stockholders’ Agreement is terminated or otherwise ceases to be applicable to this Warrant and the Warrant Shares in accordance with the terms of the Stockholders’ Agreement, this Warrant and all Warrant Shares issued upon exercise of this Warrant shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT,

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DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.”

(n) Representations of the Holder.  In addition to the representations and warranties set forth in the Purchase Agreement, in connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i) The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

(ii) The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances.  In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii) The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

Warrant Register

.  The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof.  The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

Notices

.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:   when delivered by hand (with written confirmation of receipt);  when received by the addressee if sent by a nationally recognized overnight courier (receipt requested);  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  on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13).

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If to the Company:

Peak Resorts, Inc.

Address:

17409 Hidden Valley Drive, Wildwood, MO 63025

E-mail:

timboyd@skihv.com

Attention:

Chief Executive Officer



 

with a copy to:

Armstrong Teasdale 

Address:

7700 Forsyth Blvd., Suite 1800, St. Louis, MO 63105

Facsimile:

314-552-4843

E-mail:

jpolk@armstrongteasdale.com

Attention:

Jill Polk



 

If to the Holder:

CAP 1 LLC

Address:

655 Madison Avenue, New York, NY 10065

Facsimile:

212-317-4169

E-mail:

rh@srllc.com

Attention:

Rory Held



 

with a copy to:

Norton Rose Fulbright US LLP

Address:

1301 Avenue of the Americas, New York, NY 10019 - 6022

Facsimile:

212-541-5369

E-mail:

frank.vellucci@nortonrosefulbright.com

Attention:

Frank S. Vellucci



Cumulative Remedies

.  Except to the extent expressly provided in this Warrant to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

Equitable Relief

.  Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

Entire Agreement

.  This Warrant, together with the Stockholders’ Agreement, the Purchase Agreement (and the other Transaction Documents referenced therein, as each may be amended), and the Credit Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.  In the event of any inconsistency between the statements in the body of this Warrant, the Stockholders’ Agreement, the Purchase Agreement, and the Credit Agreement, the statements in the body of this Warrant shall control.

Successor and Assigns

.  This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and assigns of the Holder.  Such successors and/or assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

No Third-Party Beneficiaries

.  This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing

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herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

Headings

.  The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

Amendment and Modification; Waiver

.  Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.  No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.  No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Severability

.  If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

Governing Law

.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.

Submission to Jurisdiction

.  Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of Manhattan, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.  Service of process, summons, notice or other document by certified or registered mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

Waiver of Jury Trial

.  Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

Counterparts

.  This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.  A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

No Strict Construction

.  This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.



PEAK RESORTS, INC.



 



 



By: /s/ Christopher J. Bub



Name:  Christopher J. Bub



Title: Vice President and Chief Financial Officer



 



Accepted and agreed,



 



CAP 1 LLC



 



 



By: /s/ David Sackler



Name:   David Sackler



Title:   President

 

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Exhibit 4.3

 

EXHIBIT A

EXERCISE AGREEMENT

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, par value $0.01 per share (“Common Stock”), of Peak Resorts, Inc., a Missouri corporation, pursuant to Warrant No.________, originally issued on ___________, 2018 (the “Warrant”).  The undersigned elects to utilize the following manner of exercise: 

Shares:

Full Exercise of Warrant



Partial Exercise of Warrant (in the amount of ______ Shares)

Exercise Price:

$

Payable in accordance with Section 3(a)(ii) of the Warrant

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

 

A-1


 

Exhibit 4.3

 

EXHIBIT B

ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ______ the right represented by the attached Warrant to purchase ___________ shares of Common Stock of Peak Resorts, Inc., a Missouri corporation (the “Company”), to which the Warrant relates and appoints ______________ as attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

Full Name of Transferee:

Address of Transferee:

In the presence of:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

† If applicable.

B-1


(Back To Top)

Section 5: EX-4.4 (EX-4.4)

20181121 Ex 44

Exhibit 4.4

 

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST. 

Warrant Certificate No.: 7

Original Issue Date: November 21, 2018

FOR VALUE RECEIVED, Peak Resorts, Inc., a Missouri corporation (the “Company”), hereby certifies that CAP 1 LLC, a Delaware limited liability company, or its registered assigns (the “Holder”) is entitled to purchase from the Company 1,750,000 duly authorized, validly issued, fully paid and nonassessable Warrant Shares (as defined below and subject to adjustment as provided herein) at a purchase price per share of $10.00 (subject to adjustment as provided herein, the “Exercise Price”) at any time and from time to time during the Exercise Period (as defined below), all subject to the terms, conditions and adjustments set forth below in this Warrant.  Certain capitalized terms used herein are defined in Section 1 hereof. 

This Warrant has been issued pursuant to the terms of the Credit Agreement, dated as of November 21, 2018 (the “Credit Agreement”), by and among Snow Time Acquisition, Inc., Snow Time, Inc. and the  Holder.  Holder acknowledges and agrees that this Warrant and the Warrant Shares are being offered and sold in reliance on specific exemptions from the registration requirements of federal and state law and the Company is relying on the truth and accuracy of the Holder’s representations, warranties and agreements contained herein in order to determine the application of such exemptions.  

Definitions

.  As used in this Warrant, the following terms have the respective meanings set forth below:

Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

Board” means the board of directors of the Company.

 


 

Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in Missouri or New York are authorized or obligated by law or executive order to close.

Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

Company” has the meaning set forth in the preamble. 

Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options, this Warrant, the Investor Warrants and any Series A Preferred Shares held by the Holder.

Credit Agreement” has the meaning set forth in the preamble.

Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., EST time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price. 

Exercise Agreement” has the meaning set forth in Section 3(a)(i).  

Exercise Period” has the meaning set forth in Section 2.  

Exercise Price” has the meaning set forth in the preamble. 

Fair Market Value” shall mean (i) if the Company’s Common Stock is publicly traded, the per share fair market value of the Warrant Shares shall be the average reported closing price of the Common Stock for the five trading days ending on the day prior to the date of exercise of the Warrant; and (ii) if the Company’s Common Stock is not so publicly traded, the per share fair market value of the Warrant Shares shall be such fair market value as is determined in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s length.

Holder” has the meaning set forth in the preamble.

Investor Warrants” means this Warrant, and any and all warrants to purchase shares of Common Stock that are held by the Holder as of the date hereof and at any time hereafter.

Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities other than this Warrant and the Investor Warrants.

Original Issue Date” means the date on which the Warrant was issued by the Company pursuant to the Credit Agreement.

Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.  

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Registration Rights Agreement” means the Registration Rights Agreement, dated as of November 21, 2018, between the Company and the Holder, as may be amended.

Series A Preferred Shares” means the Series A Convertible Preferred Stock of the Company, par value $0.01 per share.

Stockholders’ Agreement” means the Amended and Restated Stockholders’ Agreement, dated as of November 21, 2018, among the Company, Timothy D. Boyd, Stephen J. Mueller, Richard K. Deutsch and the Holder, as may be amended.

Transaction Documents” means this Warrant, the Credit Agreement, the Certificate of Designation of Series A Cumulative Convertible Preferred Stock of Peak Resorts, Inc., the Stockholders’ Agreement, the Registration Rights Agreement, and the Voting Agreement, each as may be amended.

Voting Agreement” means the Amended and Restated Voting Agreement, dated
November 21, 2018 among the Company, the Holder, Timothy D. Boyd, Stephen J. Mueller and Richard K. Deutsch, as amended.

Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

Term of Warrant

.  Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., Eastern time, on the tenth (10th) anniversary of the date hereof or, if such day is not a Business Day, on the next succeeding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).  Upon the expiration of the Exercise Period, any portion of this Warrant not exercised shall be void and of no value.

Exercise of Warrant

.

(a) Exercise Procedure.  This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

(i) surrender of this Warrant to the Company at its then principal executive offices (or an affidavit of loss and indemnification undertaking with respect to this Warrant in accordance with Section 9 in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii) payment to the Company of the Aggregate Exercise Price by wire transfer of immediately available funds to an account designated in writing by the Company in the amount of such Aggregate Exercise Price, if paid in cash.

At the option of the Company, payment of the Aggregate Exercise Price by the Holder may be made, in whole or in part, in cash or by withholding a number of shares of Common Stock issuable upon exercise of the Warrant with an aggregate Fair Market Value as of the exercise date equal to the Aggregate Exercise Price.

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(b) Delivery of Stock Certificates.  Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(c) hereof.  The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 7 below, such other Person's name as shall be designated in the Exercise Agreement.  This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

(c) Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant.  As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of  such fraction multiplied by  the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the Exercise Date.

(d) Delivery of New Warrant.  Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(b) hereof, deliver to the Holder a new Warrant evidencing the remaining rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant.  Such new Warrant shall in all other respects be identical to this Warrant.

(e) Valid Issuance of Warrant and Warrant Shares; Payment of Taxes.  With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i) This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

(ii) All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be reasonably necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes (subject to and without limiting clause (iv) below), liens and charges.

(iii) Subject to the representations and warranties of the Holder and the covenants of the Holder in this Warrant being fulfilled, the Company shall take all such actions as may be reasonably necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

(iv) The Company shall pay all expenses in connection with, and all issue or transfer taxes, withholding taxes, transfer agent fees, or other incidental taxes or expenses that may be imposed

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with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

(f) Conditional Exercise.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

Reservation of Shares

.  During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price.  The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

Adjustment to Exercise Price and Number of Warrant Shares

.  In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 5 (in each case, after taking into consideration any prior adjustments pursuant to this Section 5).

(g) Adjustment Upon Dividend, Subdivision or Combination of Common Stock.  If the Company shall, at any time or from time to time after the Original Issue Date, (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) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant 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 Exercise Price in effect immediately prior to such combination shall be proportionately increased (but the aggregate Exercise Price payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall remain the same) and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased.  All such adjustments under this subsection (a) shall be calculated as follows:   the Exercise Price will be adjusted by multiplying the Exercise 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  the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Any adjustment under this Section 5(a) shall become effective  if a record date shall have been fixed for determining the stockholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such

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record date, or  otherwise, at the close of business on the date the dividend, subdivision or combination becomes effective. 

(h) Adjustment Upon Reorganization, Reclassification, Consolidation or Merger.  In the event of any  capital reorganization of the Company,  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),  consolidation or merger of the Company with or into another Person,  sale of all or substantially all of the Company’s assets to another Person, or  other similar transaction, including a tender offer (other than any such transaction covered by Section 5(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 Warrant 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 Warrant Shares then exercisable under this Warrant, 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 the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction (including a tender offer) if the Holder had exercised this Warrant 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 Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant) and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of this Section 5 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant.

The provisions of this Section 5(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions (including a tender offer).  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 (including a tender offer), or Person making such tender offer, shall assume, by written instrument substantially similar in form and substance to this Warrant and satisfactory to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant.  

Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 5(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 5(b) with respect to this Warrant.

(i) Certificate as to Adjustment

(i) As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the 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 the Holder, but in any event not later than two (2) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(j) Notices.  In the event:

(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 exercise of the Warrant) 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

(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 sale of all or substantially all of the Company's assets to another Person; or

(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 the Holder at least two (2) 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, 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 exercise of the Warrant) 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 Warrant and the Warrant Shares.  No such notice shall be given if the Company reasonably determines that the giving of such notice would require disclosure of material information which the Company has a bona fide purpose for preserving as confidential or the disclosure of which would not be in the best interests of the Company.

Stockholders’ Agreement

.  This Warrant and all Warrant Shares issuable upon exercise of this Warrant are and shall become subject to, and have the benefit of, the Stockholders’ Agreement, and the Holder shall be required, for so long as the Holder holds this Warrant or any Warrant Shares, to become and remain a party to the Stockholders’ Agreement.

Transfer of Warrant

.  Subject to the transfer conditions referred to in the legend endorsed hereon and the terms and conditions of the Stockholders’ Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(e)(iv) in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in

7


 

such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

Holder not Deemed a Stockholder

.  Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled, by virtue of this Warrant, to vote or  receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.   

Replacement on Loss; Division and Combination

.

(k) Replacement of Warrant on Loss.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement and affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

(l) Division and Combination of Warrant.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys.  Subject to compliance with the applicable provisions of this Warrant and the Stockholders’ Agreement as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice.  Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

No Impairment

.  The Company shall not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

Compliance with the Securities Act

.

(m) Agreement to Comply with the Securities Act; Legend.  The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 11 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not

8


 

offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”).  This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

Until the Stockholders’ Agreement is terminated or otherwise ceases to be applicable to this Warrant and the Warrant Shares in accordance with the terms of the Stockholders’ Agreement, this Warrant and all Warrant Shares issued upon exercise of this Warrant shall be stamped or imprinted with a legend in substantially the following form:

“THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) IS SUBJECT TO AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, DATED AS OF THE DATE HEREOF, BY AND AMONG PEAK RESORTS, INC. (THE “COMPANY”), CERTAIN STOCKHOLDERS OF THE COMPANY, AND THE ORIGINAL HOLDER HEREOF (AS AMENDED FROM TIME TO TIME, THE “STOCKHOLDERS’ AGREEMENT”).  NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS’ AGREEMENT.  A COPY OF THE STOCKHOLDERS’ AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON REQUEST.”

(n) Representations of the Holder.  In addition to the representations and warranties set forth in the Credit Agreement, in connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i) The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.  The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act. The Holder is not a broker-dealer registered under Section 15 of the Securities Exchange Act of 1934, as amended. The Holder is acting alone in its determination as to whether to invest in the Warrant and Warrant Shares. The Holder is not party to any voting agreements or similar arrangements with respect the Warrant and Warrant Shares, except pursuant to the Transaction Documents. The Holder is not a member of a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, voting or disposing of the Warrant or Warrant Shares.

(ii) The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws

9


 

inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances.  In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii) The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.  Based thereon and on its own knowledge, the Holder has formed an independent judgment concerning the advisability of the investment. The Holder is able to afford a complete loss of such investment.

(iv) The Holder has full power and authority to enter into the Transaction Documents to which the Holder is a party and to carry out its obligations hereunder and thereunder. The execution and delivery by the Holder of the Transaction Documents to which the Holder is a party and the performance by the Holder of its obligations hereunder and thereunder have been duly authorized by all requisite limited liability company action on the part of the Holder. When each other Transaction Document to which the Holder is or will be a party has been duly executed and delivered by the Holder (assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and binding obligation of the Holder enforceable against it in accordance with its terms except as may be limited by applicable law.

(v) The execution, delivery and performance by the Holder of the Transaction Documents to which it is a party do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of formation, operating agreement or other organizational documents of the Holder; (b) conflict with or result in a violation or breach of any provision of any law or governmental order applicable to the Holder; or (c) require the consent or waiver of, notice to or other action by any person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any contract to which the Holder is a party or by which it is bound or to which any of its properties and assets are subject except for (solely in regards to the foregoing clause (c)) any such consent, waiver, notice, conflict, violation, breach, default, acceleration, right to accelerate, terminate, modify or cancel that would not reasonably be expected to, individually or in the aggregate, materially interfere with the Holder’s ability to comply with its obligations under any Transaction Document.  No consent, approval, permit, governmental order, declaration or filing with, or notice to, any governmental authority is required by or with respect to the Holder in connection with the execution and delivery of the Transaction Documents.

(vi) No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Holder’s investment in the Warrant and Warrant Shares, or the transactions contemplated by the Credit Agreement, based upon arrangements made by or on behalf of the Holder.

(vii) Except for and solely to the extent of the representations and warranties expressly set forth in the Transaction Documents, the Holder hereby acknowledges that neither the Company nor any of its subsidiaries, nor any other person, has made or is making, and the Holder has not relied on and is not relying on, any other representation or warranty of any kind whatsoever, whether oral or written, express or implied, statutory or otherwise, with respect to the Warrant and Warrant Shares, the

10


 

Company or any of its subsidiaries or their respective businesses, operations, assets, liabilities, condition (financial or otherwise) or prospects, including with respect to any information provided or made available to the Holder or any of its representatives or any information developed by the Holder or any of its representatives. The Holder, on behalf of itself and on behalf of its affiliates, expressly waives any such claim relating to any such other representations or warranties, except with respect to fraud.

(viii) The Holder (a) is not relying on the Company for any legal, tax, investment, accounting or regulatory advice with respect to the Warrant and Warrant Shares, (b) has consulted with its own advisors concerning such matters, and (c) shall be responsible for making its own independent investigation and appraisal of such investment.

(ix) The Holder is not subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).

Warrant Register

.  The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof.  The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

Notices

.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:   when delivered by hand (with written confirmation of receipt);  when received by the addressee if sent by a nationally recognized overnight courier (receipt requested);  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  on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.  Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 13).

If to the Company:

Peak Resorts, Inc.

Address:

17409 Hidden Valley Drive, Wildwood, MO 63025

E-mail:

timboyd@skihv.com

Attention:

Chief Executive Officer



 

with a copy to:

Armstrong Teasdale 

Address:

7700 Forsyth Blvd., Suite 1800, St. Louis, MO 63105

Facsimile:

314-552-4843

E-mail:

jpolk@armstrongteasdale.com

Attention:

Jill Polk



 

If to the Holder:

CAP 1 LLC

Address:

655 Madison Avenue, New York, NY 10065

Facsimile:

212-317-4169

E-mail:

rh@srllc.com

Attention:

Rory Held



 

with a copy to:

Norton Rose Fulbright US LLP

Address:

1301 Avenue of the Americas, New York, NY 10019 - 6022

11


 

Facsimile:

212-541-5369

E-mail:

frank.vellucci@nortonrosefulbright.com

Attention:

Frank S. Vellucci



Cumulative Remedies

.  Except to the extent expressly provided in this Warrant to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

Equitable Relief

.  Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

Entire Agreement

.  This Warrant, together with the other Transaction Documents, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.  In the event of any inconsistency between the statements in the body of this Warrant and any of the other Transaction Documents, the statements in the body of this Warrant shall control.

Successor and Assigns

.  This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and assigns of the Holder.  Such successors and/or assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

No Third-Party Beneficiaries

.  This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

Headings

.  The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

Amendment and Modification; Waiver

.  Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.  No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving.  No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver.  No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Severability

.  If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

12


 

Governing Law

.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of New York.

Submission to Jurisdiction

.  Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of Manhattan, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.  Service of process, summons, notice or other document by certified or registered mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

Waiver of Jury Trial

.  Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

Counterparts

.  This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.  A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

No Strict Construction

.  This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

13


 

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.



PEAK RESORTS, INC.



 



 



By: /s/ Christopher J. Bub



Name:  Christopher J. Bub



Title: Vice President and Chief Financial Officer



 



Accepted and agreed,



 



CAP 1 LLC



 



 



By: /s/ David Sackler



Name:   David Sackler



Title:   President

 

14


 

Exhibit 4.4

 

EXHIBIT A

EXERCISE AGREEMENT

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, par value $0.01 per share (“Common Stock”), of Peak Resorts, Inc., a Missouri corporation, pursuant to Warrant No.________, originally issued on ___________, 2018 (the “Warrant”).  The undersigned elects to utilize the following manner of exercise: 

Shares:

Full Exercise of Warrant



Partial Exercise of Warrant (in the amount of ______ Shares)

Exercise Price:

$

Payable in accordance with Section 3(a)(ii) of the Warrant

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

 

A-1


 

Exhibit 4.4

 

EXHIBIT B

ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ______ the right represented by the attached Warrant to purchase ___________ shares of Common Stock of Peak Resorts, Inc., a Missouri corporation (the “Company”), to which the Warrant relates and appoints ______________ as attorney to transfer said right on the books of the Company with full power of substitution in the premises. 

Date:

Full Name of Holder*:

Signature of Holder or Authorized Representative:

Name and Title of Authorized Representative†:

Additional Signature of Holder (if jointly held):

Social Security or Tax Identification Number:

Address of Holder:

Full Name of Transferee:

Address of Transferee:

In the presence of:

* Must conform in all respects to name of holder as specified on the face of the Warrant.

† If applicable.

B-1


(Back To Top)

Section 6: EX-10.1 (EX-10.1)

20181121 Ex 101

Exhibit 10.1



CREDIT AGREEMENT

dated as of November 21, 2018,

among

SNOW TIME ACQUISITION, INC.

as Borrower,

SNOW TIME, INC.

as Subsidiary Guarantor,

THE OTHER SUBSIDIARY GUARANTORS PARTY HERETO

and

CAP 1 LLC

as Lender







 

 


 

 

TABLE OF CONTENTS

SectionPage

ARTICLE I

DEFINITIONS

SECTION 1.01Defined Terms.1

SECTION 1.02Terms Generally.16

SECTION 1.03Accounting Terms; GAAP.16

SECTION 1.04Resolution of Drafting Ambiguities.16

ARTICLE II

THE CREDITS

SECTION 2.01Loan.17

SECTION 2.02Borrowing Procedure.17

SECTION 2.03Evidence of Debt; Repayment of Loan.17

SECTION 2.04Interest on Loan.18

SECTION 2.05Termination of Commitment.18

SECTION 2.06Optional and Mandatory Prepayments of Loan.18

SECTION 2.07Taxes.19

SECTION 2.08Extension20

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.01Organization; Powers.20

SECTION 3.02Authorization; Enforceability.20

SECTION 3.03No Conflicts.20

SECTION 3.04Financial Statements; Projections.21

SECTION 3.05Properties.21

SECTION 3.06Equity Interests and Subsidiaries.21

SECTION 3.07Litigation; Compliance with Laws.21

SECTION 3.08Agreements.22

SECTION 3.09Investment Company Act.22

SECTION 3.10Use of Proceeds.22

2

 


 

 

SECTION 3.11Taxes.22

SECTION 3.12No Material Misstatements.22

SECTION 3.13Solvency.23

SECTION 3.14Employee Benefit Plans.23

SECTION 3.15Insurance.23

SECTION 3.16Security Documents.23

ARTICLE IV

CONDITIONS TO CLOSING AND FUNDING OF THE LOAN

SECTION 4.01Conditions to Closing and Funding of the Loan.25

ARTICLE V

AFFIRMATIVE COVENANTS

SECTION 5.01Financial Statements, Reports, etc.30

SECTION 5.02Litigation and Other Notices.31

SECTION 5.03Existence; Businesses and Properties.32

SECTION 5.04Insurance.32

SECTION 5.05Obligations and Taxes.32

SECTION 5.06Maintaining Records; Access to Properties and Inspections.33

SECTION 5.07Use of Proceeds.33

SECTION 5.08Accounts33

SECTION 5.09Separateness..33

ARTICLE VI

NEGATIVE COVENANTS

SECTION 6.01Indebtedness.33

SECTION 6.02Liens.34

SECTION 6.03Investment, Loan, Advances and Acquisition.34

SECTION 6.04Mergers and Consolidations.35

SECTION 6.05Asset Sales.35

SECTION 6.06Dividends.35

SECTION 6.07Transactions with Affiliates.35

SECTION 6.08Negative Negative Pledge36

SECTION 6.09Modifications of Organizational Documents36

SECTION 6.10Limitation on Creation of Subsidiaries.36

-3-

 


 

 

SECTION 6.11Accounts.36

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01Events of Default.37

SECTION 7.02Application of Proceeds.39

ARTICLE VIII

GUARANTY

SECTION 8.01The Guaranty of the Obligations.40

SECTION 8.02Guaranty Unconditional.40

SECTION 8.03Discharge Only Upon Payment In Full.41

SECTION 8.04Additional Waivers; General Waivers.42

SECTION 8.05Stay of Acceleration.43

SECTION 8.06Reinstatement.43

SECTION 8.07Subrogation..43

SECTION 8.08Subordination of Intercompany Indebtedness.44

ARTICLE IX

MISCELLANEOUS

SECTION 9.01Notices.44

SECTION 9.02Waivers; Amendment.45

SECTION 9.03Expenses; Indemnity; Damage Waiver.46

SECTION 9.04Successors and Assigns.47

SECTION 9.05Survival of Agreement.47

SECTION 9.06Counterparts; Integration; Effectiveness.47

SECTION 9.07Severability.48

SECTION 9.08Right of Setoff.48

SECTION 9.09Governing Law; Jurisdiction; Consent to Service of Process.48

SECTION 9.10Waiver of Jury Trial.49

SECTION 9.11Headings.49

SECTION 9.12Treatment of Certain Information; Confidentiality.49

SECTION 9.13Interest Rate Limitation.50

SECTION 9.14Obligations Absolute.50

-4-

 


 

 

SCHEDULES

Schedule 3.15  Insurance
Schedule 4.01(h)(iii)Title Insurance Amount
Schedule 4.01(o)Existing Indebtedness to be Paid Off
Schedule 5.09  Separateness Covenants

EXHIBITS

Exhibit AForm of Borrowing Request
Exhibit B
Form of Mortgage
Exhibit CForm of Note
Exhibit DForm of Security Agreement
Exhibit EForm of Leasehold Mortgage



 

-5-

 


 

 

CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”) dated as of November 21, 2018, among SNOW TIME ACQUISITION, INC., a Missouri corporation  (the “Borrower”), Snow Time, Inc., a Delaware corporation (“Snow Time”) and the other subsidiaries of the Borrower party hereto (Snow Time and each other subsidiary, a “Subsidiary Guarantor”) and CAP 1 LLC, a Delaware limited liability company (the “Lender”).

WITNESSETH:

WHEREAS, the Borrower has requested the Lender to extend credit in the form of a Loan to be made on the Closing Date, in an aggregate principal amount at any time outstanding not in excess of fifty million dollars ($50,000,000).

WHEREAS, the proceeds of the Loan are to be used in accordance with Section 5.07.

NOW, THEREFORE, the Lender is willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Defined Terms.

As used in this Agreement, the following terms shall have the meanings specified below:

 “Acquired Companies” shall mean Snow Time, Roundtop, Ski Liberty and Whitetail.

Additional Warrant” means a warrant to purchase 666,667 shares of common stock of the Parent exercisable immediately at an exercise price of $7.50 per share and expiring ten years from its issuance substantially in the form of the Closing Date Warrant. 

Acquisition Transactions” shall mean the acquisition by the Borrower of all of the outstanding capital stock of the Acquired Companies pursuant to the Stock Purchase Agreement. 

Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified.

Agreement” shall have the meaning assigned to such term in the preamble hereto.

Asset Sale” shall mean any conveyance, sale, lease, sublease, assignment, transfer or other disposition (including by way of merger or consolidation and including any Sale and Leaseback Transaction) of any property excluding sales of inventory and dispositions of cash and cash equivalents, in each case, in the ordinary course of business, by any  Loan Party.

 


 

 

Assignment Agreement” shall mean the Assignment of Stock Purchase Agreement, dated as of November 6, 2018, between the Parent and the Borrower. 

Attributable Indebtedness” shall mean, when used with respect to any Sale and Leaseback Transaction, as at the time of determination, the present value (discounted at a rate equivalent to the Borrower’s then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

Board of Directors” shall mean, with respect to any person, (i) in the case of any corporation, the board of directors of such person, (ii) in the case of any limited liability company, the board of managers or governors of such person or if there is none, the board of directors of the managing member of such person, (iii) in the case of any partnership, the board of directors of the general partner of such person and (iv) in any other case, the functional equivalent of the foregoing.

Borrower” shall have the meaning assigned to such term in the preamble hereto.

Borrowing Request” shall mean a request by the Borrower in accordance with the terms of Section 2.02 and substantially in the form of Exhibit A, or such other form as shall be approved by the Lender.

Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in New York City are authorized or required by law to close.

Cap 1 Concentration Account” shall mean the deposit account of the Borrower maintained at Royal Banks of Missouri with account number XXXXXX, together with any subaccounts or re-numbered or replacement accounts. 

Capex Reserve Account” shall mean the deposit account of the Borrower maintained at Royal Banks of Missouri with account number XXXXXX together with any subaccounts or re-numbered or replacement accounts

Capital Lease Obligations” of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

Cash Equivalents” shall mean, as to any person, (a) securities issued, or directly, unconditionally and fully guaranteed or insured, by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such person; (b) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia having, capital and surplus aggregating in

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excess of $500.0 million and a rating of “A” (or such other similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) with maturities of not more than one year from the date of acquisition by such person; (c) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above, which repurchase obligations are secured by a valid perfected security interest in the underlying securities; (d) commercial paper issued by any person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s Ratings Group or at least P-1 or the equivalent thereof by Moody’s Investors Service Inc., and in each case maturing not more than one year after the date of acquisition by such person; (e) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (d) above; and (f) demand deposit accounts maintained in the ordinary course of business.

Casualty Event” shall mean any involuntary loss of title, any involuntary loss of, damage to or any destruction of, or any condemnation or other taking (including by any Governmental Authority) of, the Mortgaged Property.  “Casualty Event” shall include but not be limited to any taking of all or any part of the Mortgaged Property or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any Requirements of Law, or by reason of the temporary requisition of the use or occupancy of all or any part of the Mortgaged Property of any person or any part thereof by any Governmental Authority, civil or military, or any settlement in lieu thereof.

A “Change in Control” shall be deemed to have occurred if:

(a)Parent at any time ceases to own one hundred percent (100%) of the Equity Interests of the Borrower; or

(b)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Lender or any of its Affiliates, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock of Parent representing more than fifty percent (50%) of the voting power of the total outstanding Voting Stock of Parent. 

Charges” shall have the meaning assigned to such term in Section 9.13.

Closing Date” shall mean the date on which all conditions precedent set forth in Article IV hereof have been satisfied or waived.

Closing Date Warrant” means the warrant to purchase 1,750,000 shares of common stock of the Parent exercisable immediately at an exercise price of $10.00 per share and expiring ten years from its issuance  issued by the Parent in favor of the Lender on the Closing Date in consideration of the services provided by the Lender in arranging and structuring the Loan to be made hereunder.

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Code” shall mean the Internal Revenue Code of 1986.

Collateral” shall mean, collectively, all of the Security Agreement Collateral, the Mortgaged Property and all other property of whatever kind and nature subject or purported to be subject from time to time to a Lien under any Security Document.

Commitment” shall mean the Lender’s commitment to make a Loan hereunder up to fifty million dollars ($50,000,000). 

Contingent Obligation” shall mean, as to any person, any obligation, agreement, understanding or arrangement of such person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; (d) with respect to bankers’ acceptances, letters of credit and similar credit arrangements, until a reimbursement obligation arises (which reimbursement obligation shall constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business or any product warranties.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such person may be liable, whether singly or jointly, pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder) as determined by such person in good faith.

Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

Control Agreement” means the deposit account control agreement, dated the Closing Date, among the Borrower, Royal Banks of Missouri, as depositary bank and the Lender, with respect to the Cap 1 Concentration Account, the Capex Reserve Account and the Interest Reserve Account and any other deposit accounts maintained by the Borrower with the Royal Banks of Missouri. 

Debt Incurrence” shall mean the incurrence by any Loan Party after the Closing Date of any Indebtedness other than any Permitted Indebtedness incurred by any Subsidiary Guarantor.  

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Debtor Relief Laws” shall mean Title 11 of the United States Code, as now and hereafter in effect, or any successor statute, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect

 “Default” shall mean any event, occurrence or condition which is, or upon notice, lapse of time or both would constitute, an Event of Default.

Dividend” with respect to any person shall mean that such person has declared or paid a dividend or returned any equity capital to the holders of its Equity Interests or authorized or made any other distribution, payment or delivery of property or cash to the holders of its or any of its parent companies’ Equity Interests as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for consideration any of its Equity Interests outstanding (or any options or warrants issued by such person or any of its parent companies with respect to its Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for consideration any of the Equity Interests of such person or any of its parent companies outstanding (or any options or warrants issued by such person or any of its parent companies with respect to its Equity Interests).  Without limiting the foregoing, “Dividends” with respect to any person shall also include all payments made or required to be made by such person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

dollars” or “$” shall mean lawful money of the United States.

Environmental Indemnity” means that certain Environmental Indemnity Agreement executed by Borrower as of the Closing Date, as the same may from time to time be amended, restated, replaced, supplemented or otherwise modified in accordance herewith.

Environmental Laws” means any and all present and future federal, state and local laws, statutes, ordinances, orders, rules, regulations and the like, as well as common law, any judicial or administrative orders, decrees or judgments thereunder, and any permits, approvals, licenses, registrations, filings and authorizations, in each case as now or hereafter in effect, relating to (i) the pollution, protection or cleanup of the environment, (ii) the impact of Hazardous Substances on property, health or safety, (iii) the use or release of Hazardous Substances, (iv) occupational safety and health, industrial hygiene or the protection of human, plant or animal health or welfare (each solely to the extent related to the Use or Release of Hazardous Substances) or (v) the liability for or costs of other actual or threatened danger to health or the environment. The term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any successors thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act (including Subtitle I relating to underground storage tanks); the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Con

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trol Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. The term “Environmental Law” also includes, but is not limited to, any present and future federal state and local laws, statutes ordinances, rules, regulations and the like, as well as common law, conditioning transfer of property upon a negative declaration or other approval of a Governmental Authority of the environmental condition of a property, or requiring notification or disclosure of Releases of Hazardous Substances or other environmental conditions of a property to any Governmental Authority or other Person, whether or not in connection with transfer of title to or interest in property.

Environmental Reports” means “Phase I Environmental Site Assessments” as referred to in the ASTM Standards on Environmental Site Assessments for Commercial Real Estate, E 1527-13 (and, if necessary, “Phase II Environmental Site Assessments”), prepared by an independent environmental auditor approved by Lender and delivered to Lender in connection with the Loan and any amendments or supplements thereto delivered to Lender, and shall also include any other environmental reports delivered to Lender pursuant to this Agreement and the Environmental Indemnity.

Equity Interest” shall mean, with respect to any person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such person, including, if such person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of property of, such partnership, whether outstanding on the date hereof or issued after the Closing Date, but excluding debt securities convertible or exchangeable into such equity.

ERISA” shall mean the Employee Retirement Income Security Act of 1974.

ERISA Affiliate” shall mean, with respect to any person, any trade or business (whether or not incorporated) that, together with such person, is treated as a single employer under Section 414 of the Code.

ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived by regulation); (b) with respect to a Plan, the failure to satisfy the minimum funding standard of Section 412 of the Code and Section 302 of ERISA, whether or not waived; (c) the failure to make by its due date a required installment under Section 430(j) of the Code  with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the filing pursuant to Section 412(c) of the Code or Section 303(d) of ERISA (or after the effective date of the Pension Protection Act of 2006, Section 412(c) of the Code and Section 302(c) of ERISA) of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, or the occurrence of any event or condition which could reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee

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to administer, any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal from any Plan or Multiemployer Plan; (h) the receipt by the Borrower or its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) the “substantial cessation of operations” within the meaning of Section 4062(e) of ERISA with respect to a Plan; (j) the making of any amendment to any Plan which could result in the imposition of a lien or the posting of a bond or other security; and (k) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in liability to the Borrower.

Event of Default” shall have the meaning assigned to such term in Section 7.01.

Exchange Act” shall mean the Securities Exchange Act of 1934.

Excluded Taxes” shall mean, with respect to the Lender or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder, taxes imposed on or measured by its overall net income or profits and franchise taxes imposed on it (in lieu of net income taxes), however denominated, by a jurisdiction as a result of the recipient being organized or having its principal office in such jurisdiction.

Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System of the United States arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Lender from three federal funds brokers of recognized standing selected by it.

Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis.

Governmental Authority” shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union, the European Central Bank or the Organisation for Economic Co-operation and Development).

Guaranteed Obligations” shall have the meaning assigned to such term in Section 8.01.

Hazardous Substances” means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, toxic substances, toxic pollutants, contaminants, pollutants or words of similar meaning or regulatory effect under any present or future Environmental Laws or

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the presence of which on, in or under the Real Property is prohibited or requires monitoring, investigation or remediation under Environmental Law, including petroleum and petroleum by-products, asbestos and asbestos-containing materials, toxic mold, polychlorinated biphenyls, lead and radon, and compounds containing them (including gasoline, diesel fuel, oil and lead-based paint), pesticides and radioactive materials, flammables and explosives and compounds containing them, but excluding those substances commonly used in the operation and maintenance of properties of kind and nature similar to those of the Real Property that are used at the Real Property in compliance with all Environmental Laws in all material respects and in a manner that does not result in contamination of the Property or in a Material Adverse Effect.

Hedging Agreement” shall mean any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies. 

Hedging Obligations” shall mean obligations under or with respect to Hedging Agreements. 

Improvements” shall mean the improvements to the Resorts on the Mortgaged Properties. 

Indebtedness” of any person shall mean, without duplication, (a) all obligations of such person for borrowed money or advances; (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such person upon which interest charges are customarily paid or accrued; (d) all obligations of such person under conditional sale or other title retention agreements relating to property purchased by such person to the extent of the value of such property if the rights and remedies of seller or lender under such agreement in the event of default are limited solely to repossession or sale of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business); (e) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business on normal trade terms and not overdue by more than ninety (90) days or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such person); (f) all Indebtedness of others secured by any Lien on property owned or acquired by such person, whether or not the obligations secured thereby have been assumed, but limited to the fair market value of such property; (g) all Capital Lease Obligations, Purchase Money Obligations and synthetic lease obligations of such person; (h) all Hedging Obligations to the extent required to be reflected on a balance sheet of such person; (i) all Attributable Indebtedness of such person; (j) all obligations of such person for the reimbursement of any obligor in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions; and (k) all Contingent Obligations of such person in respect of Indebtedness or obligations of others of the kinds referred to in clauses (a) through (j) above.  The Indebtedness of any person shall include the Indebtedness of any other entity (including any partnership in which such person is a general partner) to the extent such person is liable therefor as a result of such person’s ownership interest in or other relationship with such entity, except (other than in the case of general partner liability) to the extent that terms of such Indebtedness expressly provide that such person is not liable therefor.

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Indemnified Taxes” shall mean all Taxes other than Excluded Taxes.

Indemnitee” shall have the meaning assigned to such term in Section 9.03(b).

Insurance Requirements” means, collectively, (i) all material terms of any insurance policy required pursuant to this Agreement and (ii) all material regulations and then current standards applicable to or affecting the Real Property or any portion thereof or any use or condition thereof, which may, at any time, be recommended by the board of fire underwriters, if any, having jurisdiction over the Real Property, or any other body exercising similar functions.

Intercompany Indebtedness” shall mean any Indebtedness of the Borrower owed to any Subsidiary Guarantor and any Indebtedness of any Subsidiary Guarantor owed to the Borrower or any other Subsidiary Guarantor.

Intrecreditor Agreement” means that Intercreditor Agreement, dated as of the date hereof, among the Lender, Royal Banks of Missouri, EPT Ski Properties, Inc., EPT Mount Snow, the Parent and certain subsidiaries of the Parent party thereto, including the Loan Parties. 

Interest Payment Date” shall mean the last Business Day of each March, June, September and December to occur during any period in which Loan is outstanding.

Interest Reserve Account” shall mean the deposit account of the Borrower maintained at Royal Banks of Missouri with account number XXXXXX,  together with any subaccounts or re-numbered or replacement accounts

Interest Reserve Account Required Balance” means one million seven hundred thirty-seven thousand and five hundred dollars ($1,737,500). 

Investments” shall have the meaning assigned to such term in Section 6.03.

Leasehold Mortgage” shall mean any Mortgage creating and evidencing a first priority Lien on a leasehold estate held by any Loan Party or any Affiliate of any Loan Party pursuant to any Lease, which Leasehold Mortgage shall be substantially in the form of Exhibit E.  

 “Leases” shall mean any and all leases, subleases, tenancies, options, concession agreements, rental agreements, occupancy agreements, franchise agreements, access agreements and any other agreements (including all amendments, extensions, replacements, renewals, modifications and/or guarantees thereof), whether or not of record and whether now in existence or hereafter entered into, affecting the use or occupancy of all or any portion of the Mortgaged Property.

Lender” shall have the meaning assigned to such term in the preamble hereto. 

Lien” shall mean, with respect to any property, (a) any mortgage, deed of trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation, security interest or encumbrance of any kind or any arrangement to provide priority or preference or any filing of any financing statement under the UCC or any other similar notice of lien under any similar notice or recording statute of any Governmental Authority, including any easement, right-of-way or other encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or im

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posed by law, and any agreement to give any of the foregoing; (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such property; and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

Loan Documents” shall mean this Agreement, the Notes (if any), and the Security Documents.

Loan Party” or “Loan Parties” shall mean the Borrower and each Subsidiary Guarantor.

Loan” shall have the meaning assigned to such term in Section 2.01

Local Account Control Agreement” means with respect to each deposit account of a Subsidiary Guarantor, a control agreement, in form and substance satisfactory to the Lender, executed and delivered by the relevant Subsidiary Guarantor, the Lender and the relevant financial institution with which such deposit account is maintained. 

Material Adverse Effect” shall mean (a) a material adverse effect on the business, properties, operations, condition, financial or otherwise, prospects or material agreements of any Loan Party or the Parent and its Subsidiaries taken as a whole; (b) material impairment of the ability of any Loan Party to fully and timely perform any of its obligations under any Loan Document; (c) material impairment of the rights of or benefits or remedies available to the Lender under any Loan Document; or (d) a material adverse effect on the Collateral or the Liens in favor of the Lender on the Collateral or the priority of such Liens.

Material Indebtedness” shall mean (i) Indebtedness of Parent and its Subsidiaries incurred under the Credit Facility, Loan and Security Agreement dated as of December 22, 2015, by and between Parent, Hidden Valley Golf and Ski Inc., Paoli Peaks, Inc., Snow Creek, Inc., LBO Holding, Inc., and SNH Development, Inc., as borrowers, and Royal Banks of Missouri, as lender; (ii) Indebtedness of Parent and its Subsidiaries incurred under the Master Credit and Security Agreement dated as of December 1, 2014, among Parent, 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. & EPT Mount Snow, Inc., as lenders; (iii) Indebtedness of Parent and its Subsidiaries incurred under Master Credit and Security Agreement dated as of January 6, 2016, among Parent, Hunter 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, (iv) the EB-5 Development Notes (as defined in the Parent’s Form 10-K for the fiscal year ended April 30, 2018), and (v) other Indebtedness of Parent and its Subsidiaries in an aggregate outstanding principal amount exceeding $12,500,000.  For the purposes of determining Material Indebtedness, the “principal amount” in respect of any Hedging Obligations of Parent and its Subsidiaries at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Parent and its Subsidiaries would be required to pay if the related Hedging Agreement were terminated at such time. 

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Maturity Date” shall mean the earliest to occur of (a) the Scheduled Maturity Date; provided that the Scheduled Maturity Date may be extended pursuant to Section 2.08, (b) the date of termination of the Commitment and repayment of the Loan in full, and (c) the date on which the Commitment is terminated and the Loan becomes due in accordance with Section 7.01, and in each case, if such date is not a Business Day, the first Business Day thereafter.

Maximum Rate” shall have the meaning assigned to such term in Section 9.13.

Mortgage” shall mean a mortgage, leasehold mortgage, leasehold deed of trust, deed of trust or similar instrument granting Lender a first priority Lien on (ii) fee owned real property owned by any Loan Party or an Affiliate of any Loan Party or (ii) leased real property leased by an Loan Party or an Affiliate of any Loan Party.  Any fee mortgage shall be substantially in the form of Exhibit B; any Leasehold Mortgage (defined below) shall be substantially in the form of Exhibit E.

Mortgaged Property” shall have the meaning assigned to such term in each Mortgage, as applicable. 

Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which the Borrower or any ERISA Affiliate is then making or accruing an obligation to make contributions; (b) to which the Borrower or any ERISA Affiliate has within the preceding five plan years made contributions; or (c) with respect to which the Borrower could incur liability.

Net Cash Proceeds” means, in the case of a Debt Incurrence, the aggregate amount of all cash received by the Parent or any Loan Party in respect of such Debt Incurrence, net of reasonable expenses incurred by the Parent and its Subsidiaries in connection therewith. 

Notes” shall mean any notes evidencing the Loan issued pursuant to this Agreement, if any, substantially in the form of Exhibit C.

Obligations” shall mean (a) obligations of a Loan Party from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any proceeding commenced under any Debtor Relief Law, regardless of whether allowed or allowable in such proceeding) on the Loan, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any proceeding commenced under any Debtor Relief Law, regardless of whether allowed or allowable in such proceeding), of a Loan Party under this Agreement and the other Loan Documents, and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of a Loan Party under or pursuant to this Agreement and the other Loan Documents.

Operating and Maintenance Expenses” means, for any period, the sum, computed without duplication, of the following: (a) expenses for operating each Resort and maintaining it in good repair and operating condition payable during such period, including fees and costs payable under material contracts, costs to procure consumables, spare parts, equipment, materials,

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utilities, repair and maintenance services and capital expenditures and general and administrative expenses of each Loan Party; plus (b) insurance costs under the insurance maintained by the Loan Parties in the ordinary course of business and identified on Schedule 3.15  and in each case payable during such period (including any applicable interest charges, if any); plus (c) applicable sales, excise, state commercial activity and franchise Taxes (if any) payable or reimbursable by any Loan Party during such period; plus (d) property Taxes (real and personal) and payments in lieu of property Taxes payable by each Loan Party during such period; plus (e) any other Taxes (if any) payable by each Loan Party during such period; plus (f) costs and fees attendant to the obtaining and maintaining in effect any Governmental Approvals  payable during such period; plus (g) legal, accounting and other professional fees attendant to any of the foregoing items payable during such period; plus (i) expenses to keep the Collateral free and clear of all Liens; plus (k) all other cash expenses payable by each Loan Party in the ordinary course of business.

Organizational Documents” shall mean, with respect to any person, (i) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such person, (ii) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such person, (iii) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such person, (iv) in the case of any general partnership, the partnership agreement (or similar document) of such person and (v) in any other case, the functional equivalent of the foregoing.

Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise, property or similar taxes, charges or levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document (and any interest, additions to tax or penalties applicable thereto).

Parent” shall mean Peak Resorts, Inc., a Missouri corporation. 

PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

Permitted Indebtedness” shall mean, collectively:

(a)Indebtedness incurred under this Agreement and the other Loan Documents;

(b)Indebtedness for the deferred purchase price of property or services, including trade accounts payable or purchase-money obligations, or capital lease obligations, in either case, incurred in the ordinary course of business and incurred in connection with the ownership and operation of the Resorts; provided that (i) Indebtedness for the deferred purchase price of property or services is (A) not more than 90 days past due or (B) being contested in good faith and by appropriate proceedings and in respect of which adequate reserves are in place in form and substance reasonably acceptable to the Lender, and (ii) such Indebtedness does not at any time exceed $5,000,000 in the aggregate;

(c)trade or other similar indebtedness incurred in the ordinary course of business (but not for borrowed money) and (i) not more than 90 days past due, or (ii) being contested in good

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faith and by appropriate proceedings and in respect of which adequate reserves are in place in form and substance reasonably acceptable to the Lender;

(d)Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five (5) Business Days of incurrence;  and

(e)Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business.

Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

person” shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA which is maintained or contributed to by the Borrower or its ERISA Affiliate or with respect to which the Borrower could incur liability (including under Section 4069 of ERISA).

property” shall mean any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests or other ownership interests of any person and whether now in existence or owned or hereafter entered into or acquired, including all Real Property.

Purchase Money Obligation” shall mean, for any person, the obligations of such person in respect of Indebtedness (including Capital Lease Obligations) incurred for the purpose of financing all or any part of the purchase price of any property (including Equity Interests of any person) or the cost of installation, construction or improvement of any property and any refinancing thereof; provided, however, that (i) such Indebtedness is incurred within one year after such acquisition, installation, construction or improvement of such property by such person and (ii) the amount of such Indebtedness does not exceed one hundred percent (100%) of the cost of such acquisition, installation, construction or improvement, as the case may be.

Real Property” shall mean, collectively, all right, title and interest (including any leasehold, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

Reconciling Financial Statements” means with respect to any consolidated financial statements of Parent delivered pursuant to Section 5.01(a) and (b), a reconciliation of the Borrower’s financial results to the equity method of accounting reflected in such financial statements. 

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Related Parties” shall mean, with respect to any person, such person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such person and of such person’s Affiliates.

Release” with respect to any Hazardous Substance means any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances into the indoor or outdoor environment (including the movement of Hazardous Substances through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), and “Released” has the meaning correlative thereto.

Requirements of Law” shall mean, collectively, any and all applicable requirements of any Governmental Authority including any and all laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes or case law.

Reserve Accounts Agreement” shall mean the Reserve Accounts Agreement, dated as of the date hereof, between the Borrower and the Lender.

Resorts” shall mean the mountain resorts owned by the Subsidiary Guarantors and known as Roundtop Mountain Resort, Liberty Mountain Resort and Whitetail Resort. 

Roundtop” means Ski Roundtop Operating Corp., a Pennsylvania corporation.

Sale and Leaseback Transaction” shall mean any arrangement, whether entered into directly or indirectly, whereby a person sells or transfers any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rents or leases such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

Scheduled Maturity Date” means November 30, 2020. 

Securities Act” shall mean the Securities Act of 1933.

Securities Purchase Agreement” shall mean the Securities Purchase Agreement dated as of August 22, 2016, by and between the Parent and the Lender.

Security Agreement” shall mean the Pledge and Security Agreement substantially in the form of Exhibit D between the Loan Parties and the Lender.

 “Security Agreement Collateral” shall mean all property pledged or granted as collateral pursuant to the Security Agreement.

Security Documents” shall mean the Security Agreement, Mortgages, the Leasehold Mortgages, the Reserve Accounts Agreement, the Control Agreement, each Local Account Control Agreement and each other security document or pledge agreement delivered in accordance with applicable local or foreign law to grant a valid, perfected security interest in any property as collateral for the Obligations, and all UCC or other financing statements or instruments of perfection required by this Agreement, the Security Agreement, the Mortgage or any other such se

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curity document or pledge agreement to be filed with respect to the security interests in property and fixtures created pursuant to the Mortgages and any other document or instrument utilized to pledge or grant or purport to pledge or grant a security interest or Lien on any property as collateral for the Obligations.

Ski Liberty” means Ski Liberty Operating Corp., a Pennsylvania corporation.

Stock Purchase Agreement” shall mean the Stock Purchase Agreement dated as of September 20, 2018, among Scott Romberger, Bradley Leber, and Robert Black, trustees of the Irvin S. Naylor Trust U/D/T dated 12/11/2003 F/B/O Leah R. Naylor, Irvin S. Naylor Trust U/D/T dated 12/11/2003 F/B/O S. Chester Naylor, II, and Irvin S. Naylor Trust U/D/T dated 12/11/2003 F/B/O Sarah R. Naylor, as Sellers of all of the outstanding capital stock of Subsidiary Guarantor, and the Borrower (as assignee of the Parent pursuant to the Assignment Agreement), as buyer. 

Subsidiary” shall mean, with respect to any person (the “parent”) at any date, (i) any person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, (ii) any other corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than fifty percent (50%) of the voting power of all Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are, as of such date, owned, controlled or held by the parent and/or one or more subsidiaries of the parent, (iii) any partnership (a) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (b) the only general partners of which are the parent and/or one or more subsidiaries of the parent and (iv) any other person that is otherwise Controlled by the parent and/or one or more subsidiaries of the parent. 

Subsidiary Guarantor” shall mean each Acquired Company in its capacity as a guarantor hereunder. 

Tax Return” shall mean all returns, statements, filings, attachments and other documents or certifications required to be filed in respect of Taxes.

Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Termination Conditions” shall have the meaning assigned to section term in Section 8.03.

Title Company” shall mean any title insurance company as shall be retained by the Borrower and reasonably acceptable to the Lender.

Title Policy” shall have the meaning assigned to such term in Section 4.01(h)(iii).

UCC” shall mean the Uniform Commercial Code as in effect from time to time (except as otherwise specified) in any applicable state or jurisdiction.

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United States” shall mean the United States of America.

Voting Stock” shall mean, with respect to any person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors of such person.

Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Whitetail” means Whitetail Mountain Operating Corp., a Pennsylvania corporation.

Terms Generally.

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. 

Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. 

The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” 

The word “will” shall be construed to have the same meaning and effect as the word “shall.” 

Unless the context requires otherwise (i) any definition of or reference to any Loan Document, agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in the other Loan Documents), (ii) any reference herein to any person shall be construed to include such person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (v) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time, (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (g) “on,” when used with respect to the Mortgaged Property or any property adjacent to the Mortgaged Property, means “on, in, under, above or about.”

Accounting Terms; GAAP.

Except as otherwise expressly provided herein, all financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from time to time and all terms of an accounting or financial nature shall be construed and interpreted in ac

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cordance with GAAP, as in effect on the date hereof unless otherwise agreed to by the Borrower and the Lender.

Resolution of Drafting Ambiguities.

The Borrower acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of the Loan Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.

ARTICLE II

THE CREDITS

Loan.

(a)Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, the Lender shall make a term loan (the “Loan”) to the Borrower in an aggregate principal amount of up to fifty million Dollars ($50,000,000).  Amounts repaid or prepaid in respect of the Loan may not be reborrowed

(b)The Loan shall be in an aggregate principal amount that is an integral multiple of one hundred thousand dollars ($100,000) and not less than one million dollars ($1,000,000).

Borrowing Procedure.

(a)To request the Loan, the Borrower shall deliver, by hand delivery, e-mail through a “pdf” copy or telecopier, a duly completed and executed Borrowing Request to the Lender not later than 11:00 a.m., New York City time, on the Closing Date.  The Borrowing Request shall specify the following information:

the aggregate amount of the proposed Loan;

the loan disbursement instructions; and

that the conditions set forth in Section 4.01 have been satisfied as of the date of the notice.

The Borrower hereby authorizes the Lender to disburse the proceeds of the Loan as specified in the Borrowing Request by wire transfer of immediately available funds in accordance with the wire transaction instructions included in the Borrowing Request.  The Borrower acknowledges and agrees that the Lender may rely solely on any bank routing number or identifying bank account number or name provided by the Borrower to effect a wire or funds transfer even if the information provided by the Borrower identifies a different bank or account holder than named by the Borrower.  The Lender is not obligated or required in any way to take any actions to detect errors in information provided by the Borrower.  

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Evidence of Debt; Repayment of Loan.

Promise to Repay.  The Borrower hereby unconditionally promises to pay to the Lender the aggregate unpaid principal amount of the Loan, together with all accrued and unpaid interest and all other amounts payable under this Agreement on the Maturity Date.

Promissory Note.  The Loan may be evidenced by a promissory note.  If requested by the Lender, the Borrower shall prepare, execute and deliver to the Lender a promissory note payable to the order of the Lender in the form of Exhibit C.  Thereafter, the Loan evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

Interest on Loan.

Interest.  Subject to the provisions of Section 2.04(b), the Loan shall bear interest from the date made at a rate per annum equal to 6.95%.

Default Rate.  Notwithstanding the foregoing, if there is an Event of Default or if any principal of or interest on the Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, the Lender may elect, by written notice delivered to the Borrower, that the Obligations, to the extent permitted by applicable law, bear interest, after as well as before judgment, at a rate per annum equal to two percent (2%) plus the rate otherwise applicable to Loan as provided in Section 2.04(a).

Interest Payment Dates.  Accrued interest on the Loan shall be payable in arrears on each Interest Payment Date; provided that (i) interest accrued pursuant to Section 2.04(b) shall be payable on demand and, (ii) in the event of any repayment or prepayment of any principal amount of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.

Interest Calculation.  All interest hereunder shall be computed on the basis of a year of three hundred sixty (360) days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

Termination of Commitment.

The Commitment shall automatically terminate upon the funding of the Loan on the Closing Date. 

Optional and Mandatory Prepayments of Loan.

Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay the Loan, in whole or in part, subject to the requirements of this Section 2.06;  provided that each partial prepayment shall be in an amount that is an integral

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multiple of one hundred thousand dollars ($100,000) or, if less than one hundred thousand dollars ($100,000), the outstanding principal amount of the Loan.

Mandatory Prepayments.  Upon any Debt Incurrence, the Borrower shall prepay the Loan in an aggregate principal amount equal to 100% of the Net Cash Proceeds of such Debt Incurrence. 

Application of Prepayments.  Any prepayments of the Loan pursuant to Section 2.06 shall be applied in accordance with Section 7.02

Notice of Prepayment. The Borrower shall notify the Lender by written notice of any prepayment under Section 2.06(a) not later than 12:00 p.m., New York City time, one Business Day before the date of prepayment.  Each such notice shall specify the prepayment date, the principal amount to be prepaid.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.04.

Taxes.

Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the applicable withholding agent shall be required by applicable Requirements of Law (as determined in the good faith discretion of the applicable withholding agent) to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased by the Borrower as necessary so that after all required deductions have been made (including deductions applicable to additional sums payable under this Section) the Lender, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable withholding agent shall make such deductions and (iii) the applicable withholding shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Requirements of Law.

Payment of Other Taxes by Borrower.  Without limiting the provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.

Indemnification by Borrower.  The Borrower shall indemnify the Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) payable by the Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Borrower shall not be obligated to indemnify the Lender for any amount in respect of any such penalties, interest or reasonable expenses if written demand therefor was not made by the Lender within one-hundred eighty (180) days from the date on which the Lender makes payment for such penalties, interest or expenses.  A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.

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Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender.

Payments.  For purposes of this Section 2.07, if the Lender is treated as a partnership by a jurisdiction imposing an Indemnified Tax, any withholding or payment of such Indemnified Tax by the Lender in respect of any of the Lender’s partners shall be considered a withholding or payment of such Indemnified Tax by the Borrower.

Extension. The Borrower may, at its option, make a request by written notice to the Lender to extend the Scheduled Maturity Date for a period of one year.  Such request shall be made no later than 60 days prior to the Scheduled Maturity Date.  The Lender shall consent to such request if, (a) at the time of such request and on the date of such extension, no Default or Event of Default shall have occurred and be continuing, (b) at the time of such request and on the date of such extension, the representations and warranties contained in this Agreement are true and correct, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) and (c) the Additional Warrant shall have been issued to the Lender on or prior to the Scheduled Maturity Date. 



ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Lender that:

Organization; Powers.

It (a) is duly organized and validly existing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to carry on its business as now conducted and to own and lease its property and (c) is qualified and in good standing to do business in every jurisdiction where such qualification is required, except in such jurisdictions where the failure to so qualify or be in good standing, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  There is no existing default under any Organizational Document of a Loan Party or any event which, with the giving of notice or passage of time or both, would constitute a default by any party thereunder.

Authorization; Enforceability.

The execution, delivery and performance of this Agreement by each Loan Party are within its powers and have been duly authorized by all necessary action on the part of such Loan Party.  This Agreement has been duly executed and delivered by the Loan Party and constitutes, and each other Loan Document to which such Loan Party is to be a party, when executed and delivered by the Loan Party, will constitute, a legal, valid and binding obligation of such Loan Party,

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enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

No Conflicts.

The execution, delivery and performance of this Agreement (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) filings necessary to perfect Liens created by the Loan Documents, (b) will not violate the Organizational Documents of the Loan Party, (c) will not violate any Requirements of Law, (d) will not violate or result in a default or require any consent or approval under any indenture, agreement or other instrument binding upon the Loan Party or any of their respective property, or give rise to a right thereunder to require any payment to be made by the Loan Party and (e) will not result in the creation or imposition of any Lien on any property of the Loan Party, except Permitted Liens.

Financial Statements; Projections.

Historical Financial Statements.  The Borrower has heretofore delivered to the Lender the balance sheets and statements of operations, stockholder’s equity and cash flow of the Acquired Companies as of and for the fiscal years ended March 31, 2016, March 31, 2017 and March 31, 2018, as delivered to the Borrower pursuant to the Stock Purchase Agreement.  Such financial statements have been prepared in accordance with GAAP and present fairly and accurately in all material respects the financial condition and results of operations and cash flows of the Acquired Companies on a consolidated basis, as of the dates and for the periods to which they relate.

No Liabilities.  Except as may be reflected in financial statements prepared and delivered to the Lender after the date hereof, there are no liabilities of the Loan Party of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise, which could reasonably be expected to result in a Material Adverse Effect, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability, other than liabilities under the Loan Documents. 

Properties.

The Loan Party has good title to, or valid leasehold interests in, all its property, free and clear of all Liens except for, Permitted Liens and minor irregularities or deficiencies in title that, individually or in the aggregate, do not interfere with its ability to conduct its business as currently conducted or to utilize such property for its intended purpose.  The property of the Loan Party, taken as a whole, (i) is in good operating order, condition and repair (ordinary wear and tear excepted) and (ii) constitutes all the property which is required for the business and operations of the Loan Party as presently conducted.

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Equity Interests and Subsidiaries.

All Equity Interests of the Borrower are owned directly by Parent.  Upon consummation of the Acquisition Transactions, the Borrower will own directly or indirectly all of the Equity Interests of  the Acquired Companies. 

Litigation; Compliance with Laws.

There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending or, to the knowledge of the Loan Party, threatened against or affecting such Loan Party or any business, property or rights of such Loan Party (i) that involve any Loan Document or (ii) that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.  Each Loan Party is in compliance in all material respects with all Requirements of Law.

Agreements.

The Loan Party is not a party to any agreement or instrument or subject to any corporate or other constitutional restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect.  The Loan Party is not in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other agreement or instrument to which it is a party or by which it or any of its property is or may be bound, where such default could reasonably be expected to result in a Material Adverse Effect, and no condition exists which, with the giving of notice or the lapse of time or both, would constitute such a default.  

Investment Company Act.

The Loan Party is not an “investment company” or a company “controlled” by an “investment company,” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.



Use of Proceeds.

The Borrower will use the proceeds of the Loan solely to pay part of the consideration and transactions expenses required in connection with the Acquisition Transactions. 

Taxes.

The Loan Party has (a) timely filed or caused to be timely filed all federal Tax Returns and all material state, local and foreign Tax Returns required to have been filed by it and all such Tax Returns are true and correct in all material respects, (b) duly and timely paid, collected or remitted or caused to be duly and timely paid, collected or remitted all Taxes (whether or not shown on any Tax Return) due and payable, collectible or remittable by it and all assessments received by it, except Taxes (i) that are being contested in good faith by appropriate proceedings and for which such Loan Party has set aside on its books adequate reserves in accordance with GAAP or (ii) which could not, individually or in the aggregate, have a Material Adverse Effect 

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and (c) satisfied all of its withholding tax obligations except for failures that could not be reasonably expected to, individually or in the aggregate, result in a Material Adverse Effect.  Each Loan Party has made adequate provision in accordance with GAAP for all material Taxes not yet due and payable.  No Loan Party is aware of any proposed or pending tax assessments, deficiencies or audits that could be reasonably expected to, individually or in the aggregate, result in a Material Adverse Effect.

No Material Misstatements.

No information, report, financial statement, certificate, Borrowing Request, exhibit or schedule furnished by or on behalf of the Borrower to the Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole contained or contains any material misstatement of fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading as of the date such information is dated or certified; provided that to the extent any such information, report, financial statement, exhibit or schedule was based upon or constitutes a forecast or projection, the Borrower represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information, report, financial statement, exhibit or schedule.

Solvency.

As of the Closing Date and immediately following the making of the Loan and after giving effect to the application of the proceeds of the Loan, each Loan Party is Solvent.  For purposes of this representation, Solvent means:  (a)  the present fair saleable value of the assets of such Loan Party is not less than the amount that will be required to pay the probable liability of such Loan Party on its debts (including contingent, unmatured and unliquidated liabilities) as they become absolute and matured; and (b) such Loan Party will not have unreasonably small capital with which to conduct its business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

Employee Benefit Plans.

Each Loan Party and each of its respective ERISA Affiliates, if any, is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in material liability of a Loan Party or any of its respective ERISA Affiliates or the imposition of a Lien on any of the property of such Loan Party.  The present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than two hundred fifty thousand dollars ($250,000) the fair market value of the property of all such underfunded Plans.  Using actuarial assumptions and computation methods consistent with subpart I of subtitle E of Title IV of ERISA, the aggregate liabilities of the Loan Parties or their ERISA Affiliates to all Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most

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recent fiscal year of each such Multiemployer Plan, could not reasonably be expected to result in a Material Adverse Effect.

Insurance.

Schedule 3.15 sets forth a true, complete and correct description of all insurance maintained by, or which it is an insured under, each Loan Party as of the Closing Date.  All insurance maintained by each Loan Party is in full force and effect, all premiums have been duly paid, and no Loan Party has received notice of violation or cancellation thereof.  Each Loan Party has insurance in such amounts and covering such risks and liabilities as are customary for companies of a similar size engaged in similar businesses in similar locations.

Security Documents.

The Security Documents are effective to create, in favor of the Lender, a legal, valid and enforceable Lien on and security interest in all of the Collateral purported to be covered thereby, and all necessary recordings and filings have been made (or arrangements satisfactory to the Lender to make any necessary recordings or filings on or immediately following the Closing Date have been made) in all necessary public offices, and all other necessary and appropriate action has been taken, so that the security interest created by each Security Document is a perfected Lien on and security interest in all right, title and interest of the Loan Parties in the Collateral purported to be covered thereby and that can be perfected by filing, possession or control, prior and superior to all other Liens.  The descriptions of the Collateral set forth in each Security Document are true, complete, and correct in all material respects and are adequate for the purpose of creating, attaching and perfecting the Liens in the Collateral granted or purported to be granted in favor of the Lender.

Compliance with Law.

Borrower and, to Borrower’s knowledge, the Real Property (including the use thereof) comply in all material respects with all applicable Insurance Requirements and Requirements of Law, including building and zoning ordinances and codes.  To Borrower’s knowledge, the Real Property conforms to current zoning requirements (including requirement relating to parking) and is neither an illegal nor a legal nonconforming use except as specified in the zoning report delivered to Lender in connection with the origination of the Loan.  Borrower is not in default or violation of any order, write, injunction, decree or demand of any Governmental Authority the violation of which would reasonably be expected to adversely affect the Real Property or the condition (financial or otherwise) or business of Borrower.  There has not been committed by or on behalf of Borrower or, to Borrower’s knowledge, any other person in occupancy of or involved with the operation or use of the Property, any act or omission affording any federal Governmental Authority or any state or local Governmental Authority the right of forfeiture as against the Real Property or any portion thereof or any monies paid in performance of its obligations under any of the Loan Documents. Borrower has not purchased any portion of the Real Property with proceeds of any illegal activity.

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Environmental Matters. Except as disclosed in the Environmental Reports:

To Borrower’s and Subsidiary Guarantor’s knowledge, no Hazardous Substances are located at, on, in or under the Real Property or have been handled, manufactured, generated, stored, processed, or disposed of at, on, in or under, or have been Released from, the Real Property. Without limiting the foregoing, there is not present at, on, in or under the Real Property, any PCB containing equipment, asbestos or asbestos containing materials, underground storage tanks or surface impoundments for any  Hazardous Substance, lead in drinking water (except in concentrations that comply with all Environmental Laws), or lead-based paint.

To Borrower’s knowledge, there is no threat of any Release of any Hazardous Substance migrat