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): June 15, 2000
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United Park City Mines Company
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
1-3753 87-0219807
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(Commission File Number (IRS Employer Identification No.)
P.O. Box 1450, Park City, Utah 84060
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(Address of Principal Executive Offices) (Zip Code)
801.649.8011
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(Registrant's Telephone Number, Including Zip Code)
None
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Items.
On June 15, 2000, the registrant and DMB Park City ("DMB"), an
affiliate of DMB Realco, LLC, formed a limited liability company under the laws
of the State of Delaware, to develop and market land for a luxury, multi-use
development pursuant to certain of the registrant's rights and interests in
approximately 4,200 acres of property located in the Deer Valley and Park City
ski resort areas of Utah. The development is expected to consist of single and
multi-family residences and commercial, retail, resort hotel and recreational
facilities.
The rights and obligations of the registrant and DMB with respect to
the joint venture are set forth in an operating agreement (the "Operating
Agreement"), which is filed as an exhibit to this report, and a related
Contribution Agreement, which is also filed as an exhibit to this report. The
following is a summary of the principal terms of the Operating Agreement. This
summary does not purport to explain all of the material terms of the Operating
Agreement or the related Contribution Agreement, and is qualified in its
entirety by the provisions of each described instrument. Each of the Operating
Agreement and the Contribution Agreement should be read in its entirety for a
more detailed understanding of its respective terms and conditions, and are
incorporated herein by this reference.
Under the terms and conditions of the Operating Agreement, and upon the
satisfaction of certain conditions, the registrant expects to contribute certain
of its properties to the newly-formed entity and receive a credit to its capital
account for such contribution in an amount negotiated by the parties and more
particularly described in the Operating Agreement. There can be no assurance
that any credit to the registrant's capital account in the joint venture by
reason of the registrant's contribution are reflective of the value of such
properties. The costs and expenses of the development of the properties
contributed to the joint venture shall generally be borne by DMB, subject to the
limitation that such costs do not exceed the negotiated amount of the credit to
the capital account for registrant's contribution of land to the joint venture.
The joint venture will be managed by DMB, under the direction of an
Executive Committee. The Executive Committee will be comprised of one member
appointed by DMB and one member appointed by the registrant. Any action or
proposal brought by DMB for approval by the Executive Committee must be approved
by each member of the Executive Committee. DMB is expected to implement the
conceptual plan and the business plan of the joint venture in accordance with a
budget approved by the Executive Committee, and will be responsible for
supervising and implementing the operational affairs of the Company in
accordance with the terms of the Operating Agreement. The initial conceptual
plan, business plan and budgets will be prepared by DMB and subject to the
approval of the registrant, and amendments thereto will be subject to the
approval of the Executive Committee. Disagreements among the Executive Committee
members will be subject to arbitration.
On not less than a quarterly basis, the joint venture will distribute
to the registrant and DMB the net cash flow of the joint venture, less a reserve
determined by DMB, in proportion to their respective capital contributions,
until their respective contributions have been returned. Thereafter, the net
cash flow will be distributed to the parties in accordance with the terms of the
Operating Agreement. Under certain circumstances, the capital accounts and
allocations of cash flow to the registrant and DMB described above could be
re-allocated if either the registrant or DMB fail to satisfy their respective
obligations under the Operating Agreement and the Contribution Agreement.
The consummation of the transactions contemplated by the Operating
Agreement and Contribution Agreement are subject to certain termination
provisions, including without limitation, the rights of the parties to terminate
the joint venture under certain circumstances relating to land use approvals for
the project, business plans and budgets for the project and the physical
conditions and land available for development of the properties. In the event
the joint venture is terminated, under certain circumstances, the registrant
will be obligated to reimburse DMB for certain expenses incurred in connection
with the joint venture.
In addition to the risk factors detailed in the 2000 Annual Report of
the registrant filed on Form 10-KSB on March 29, 2000, and in the proxy
statement filed on Form 14A on April 27, 2000, which are incorporated herein by
this reference, the success of the joint venture may depend upon, among other
things, the skills, experience and efforts of DMB, which is responsible for the
development of the collaborative project, its commitment to the arrangement, and
its financial condition, all of which are beyond the control of the registrant.
If DMB defaults on its obligations under the Operating Agreement or Contribution
Agreement, the registrant may elect to terminate the joint venture or could be
forced to engage in litigation to enforce those obligations (which could be time
consuming and costly). The registrant may then also seek to enter into
agreements with other parties upon similar terms. There can be no assurance that
the registrant will be able to enforce the terms of the Operating Agreement or
Contribution Agreement through litigation, and there can be no assurance that,
if forced to terminate the joint venture, the registrant would be able to enter
into other contractual arrangements with other parties on terms which would not
be materially different from the terms of the Operating Agreement and
Contribution Agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. Not Applicable.
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(b) Pro Forma Financial Information. Not Applicable
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(c) Exhibits.
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10.16 Operating Agreement, dated June 15, 2000, by and between
United Park City Mines Company and DMB Park City, LLC.
10.17 Contribution Agreement, dated June 15, 2000, by and
among UPK/DMB, L.L.C., United Park City Mines Company, and DMB
Park City, LLC.
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.
United Park City Mines Company
Date: June 29, 2000 By: /s/ Michael R. Salmond
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Michael R. Salmond, Chief Financial Officer
